Consumer law is the group of laws that protect the public at large from unfair and predatory business practices.
Consumer laws protect the public from unscrupulous ways of doing business.
The area of law requires compliance from the corporations that consumer laws regulate.
What Does Consumer Law Regulate?
The practice of consumer law concerns itself with protecting individuals from unfair trade, inaccurate information, and unethical ways of doing business.
Say the phrase consumer law and most people probably think of banks and fair debt collection practices.
However, consumer laws regulate a wide variety of industries.
Some of the major pieces of federal consumer protection legislation include:
- Federal Food, Drug, and Cosmetic Act – The Act gives the federal government the power to regulate a range of products including medications, food, and tobacco. The Food and Drug Administration has the power to require consumers to get a prescription from a medical professional to get certain drugs. They can require warnings on products. Some rules require manufacturers to truthfully report the ingredients in their products. Even things like assigning names to food coloring additives fall under regulations created by the Federal Food, Drug, and Cosmetic Act.
- Fair Debt Collection Practices Act – This 1977 legislation restricts the actions of debt collectors. A company trying to collect a debt can’t call in the middle of the night. They can’t make repeated or harassing phone calls. A consumer can communicate in writing to demand that a debt collector stop making contact to collect the debt. The debt collection company can still file a formal lawsuit in an attempt to collect a legitimate debt.
- Fair Credit Reporting Act – The Fair Credit Reporting Act requires companies to accurately report information on individual credit reports. Consumers can review a copy of their credit report for free. There’s a formal procedure to dispute inaccurate information in a report. The creditor must provide complete and accurate information about an individual’s payment history. The creditor must investigate disputes and resolve them within 30 days.
- Truth in Lending Act – When they passed the Truth in Lending Act in 1968, lawmakers wanted to ensure that creditors honestly and fairly make loans and extend credit. Lenders must use standardized costs associated with lending. They must use a set, standardized APR or annual percentage rate. Lenders can’t mislead consumers or use bait-and-switch tactics to lure in customers. They must make required disclosures when they make loans.
- Fair Credit Billing Act – This Act protects consumers from unfair billing practices. Consumers can dispute charges on their credit cards that they didn’t make. They can also dispute the amount if it’s incorrect or if it’s not as they agreed on with the seller. A consumer must initiate a dispute by sending a written notice to the billing inquiries address on their credit card statement. The corporation must investigate disputes and make corrections as appropriate.
- Gramm Leach Biley Act – This 1999 Act is also called the Financial Services Modernization Act. It allows some banks to consolidate and offer a wider range of services than they could offer before. Because consumers tend to invest in a strong economy and save in a weak economy, this Act allows a financial institution to offer both savings and investment services.
- There are several federal agencies that are tasked with enforcing consumer protection laws. The Federal Trade Commission, the Consumer Financial Protection Bureau, the Food and Drug Administration, and the Department of Justice all play a role in enforcing consumer protection laws on a federal level. In addition, most states have some level of consumer protection laws. A state attorney general and even local prosecutors may work to enforce state laws.
In addition to these agencies, if you’re hurt by a corporation’s failure to comply with consumer laws, you may bring a claim against them directly.
You may be able to ask for financial compensation, or you may be able to ask for an injunction that stops certain behaviors.
Victims don’t have to wait for a government agency to act to enforce their rights under consumer protection laws.
Products Liability Claims
In addition to the laws that direct corporate behavior, there are also legal actions that exist in statutory and common law.
When an individual brings a claim against a corporation because of a defective product, it’s called a product liability claim.
An individual who suffers an injury and other losses because of a defective product can bring a compensation claim.
They may ask for compensation for financial losses, pain and suffering, and other losses.
There are three theories of product liability cases:
- Failure to warn – The corporation didn’t adequately warn consumers about the dangers associated with the product.
- Defective design – The product was designed in a way that’s too likely to cause harm. The corporation could have designed the product in a better way.
- Manufacturing defect – An error in the manufacturing process made a specific product defective.
Class Action Cases
When lots of people suffer the same kind of harm because of the actions of a corporation, the victims may pool their resources together and bring a claim together.
The claim is called a class action claim.
A group of consumers can bring their claims to a federal or state court.
Class action cases require a large number of plaintiffs with a common legal interest.
The purpose of class action status is to conserve judicial resources and help plaintiffs save on legal expenses when plaintiffs have similar injuries because of a product.
Who Practices Consumer Law?
Lawyers who practice consumer law work in a wide variety of practices and settings:
- Advocacy groups – As a consumer lawyer, you might work on behalf of a public interest organization that fights for consumer rights. With a non-profit consumer rights group, you might represent individuals on specific cases. You may also work on legislative efforts to change laws in ways that are consistent with your group’s mission.
- Large law firms – Corporations that must comply with consumer laws are often large banks and credit institutions. They have large legal needs, and they often need a team of counsel. Companies choosing to use outside counsel often work with large law firms to meet their needs. You might help the corporation understand and implement best practices for compliance with federal and state consumer rights laws. You may also help the corporation defend against allegations of wrongdoing including formal legal actions.
- Small and solo law firms – Lawyers in small firms and solo practice work in consumer law on behalf of consumers. Handling everything from a simple credit card collection to a complex product liability case, small and solo firm lawyers ensure that consumer rights are enforced as they work on behalf of individual clients. Small firm and solo attorneys may also handle local court appearances on behalf of credit companies attempting to collect a debt in their area.
- In-house counsel – Consumer lawyers may also work directly for credit companies. Banks, credit card companies, and other manufacturers that must comply with consumer laws may prefer to employ lawyers directly rather than contract through law firms. Lawyers may work on implementing laws, or they may work to handle complaints and formal litigation. They may also lobby lawmakers to change laws in ways that are advantageous to their clients.
- Government agencies – Many consumer lawyers work for the government. They work to enforce consumer laws through executive enforcement proceedings and judicial actions. A state attorney general is a consumer lawyer. They investigate consumer complaints and take actions that they believe are necessary to protect the public. Many government consumer lawyers are long-term employees, but some are also elected to their positions.
Why Become a Consumer Lawyer?
Whatever your goals and motivation, you may be able to find a satisfying practice in consumer law.
Consumer laws change quickly.
Consumers and businesses alike rely on attorneys to stay up to date on these changes.
Many lawyers find ongoing and stable employment with large financial institutions for their entire careers.
Positions with government agencies are also often stable and long-term.
However, if you’re looking for a career in politics, an attorney general position can serve as a high-profile launching point for a run for governor or Congress.
Other lawyers enjoy consumer law because they enjoy helping individuals. Individuals throughout the United States need help with consumer law.
All Americans interact with financial institutions.
Anyone can be hurt by a defective product.
Lawyers work for individuals or the public interest.
Representing individuals in product liability law can be lucrative as well as personally rewarding.
No matter what you hope to accomplish or who you hope to serve, you may be able to find a niche practicing consumer law.
Striking the Balance
Corporations and consumers alike need lawyers to help them with consumer law.
Consumers need protection from unfair practices.
Corporations need to be able to do business, and they need to be able to implement laws as they change.
By representing their clients, lawyers work to arrive at the right balance between protecting consumers and allowing corporations to function freely and independently.
Consumer lawyers work in a variety of settings and locations.
Some lawyers enter the field primarily for public interest and the opportunity to make a positive difference.
Others enjoy the area of practice because it often provides for a steady career and income.
In all cases, consumer law focuses on allowing corporations to do business on fair terms while keeping the public safe.