The rights and interests of consumers are protected on both state and federal levels. There are multiple laws governing various industries to ensure that rights of consumers, fair trade practices and competition are duly observed and the truthful information is freely disclosed and exchanged in the marketplace. Federal, state and
local organizations supervise business activities in their respective jurisdictions to ensure that companies fully comply with the applicable consumer and market protection laws. The applicability of one or the other regulation depends both on the type of the business and on the nature of its commercial activities. For example, there are laws that regulate the sale of various goods and services, advertising and marketing, credit issuance and debt collection, privacy and security of consumer information, and many other business activities. Almost every industry is regulated by the consumer protection laws.
These laws are designed to prevent businesses that engage in fraud or deceptive and unfair practices from gaining advantage over prospective clients and customer as well as over their competitors. The rationale of protecting not only consumers, but other businesses as well is that the observance of fair business practices and healthy competition is beneficial to the development of marketplace and efficient economy, which in its turn will benefit the final consumers by delivering the quality products and services at reasonable prices.
Federal consumer protection laws are mainly enforced by the United States Federal Trade Commission (“FTC”) and the U.S. Department of Justice.
At the state level, the majority of states have a Department of Consumer Affairs which functions are similar to the FTC. State consumer protection agencies parallel the FTC’s activities to ensure that businesses and consumers are well protected within their territories. The local laws are as important to business owners as federal ones, because they can contain more regulations, restrictions, or obligations on the part of a company and provide broad remedies to the consumers for violations, including punitive damages (money used to punish a wrongdoer, as opposed to money used to compensate for harm suffered).
As there are various Acts that regulate different industries and address many aspects of commercial activities, the business owners and managerial personnel should be familiar with the laws applicable to their particular industry.