AARP Hearing Center
Background
Federal, state, and local consumer protection agencies all have a role in safeguarding consumers against fraud, deception, and unfair practices. To be effective, they need sufficient resources and authority to carry out their responsibilities. In addition, consumer participation in administrative, legislative, and judicial processes is essential in ensuring that laws and regulations are responsive to the needs of the public.
The Federal Trade Commission (FTC) and the Department of Justice (DOJ) both enforce federal antitrust laws. The FTC and DOJ also review proposed mergers and acquisitions to assess their effects on competition. As companies grow and merge, some industries have become particularly concentrated, with only a small number of firms selling products or services. In some cases, this market concentration has resulted in higher prices and fewer choices for consumers.
The FTC has the authority to prohibit unfair and deceptive trade practices, but the regulatory process it must follow is more complicated than that of other agencies. It can also prevent unfair business practices that reduce competition and thus harm consumers. Such practices can increase prices, reduce quality, prevent accountability, inhibit innovation, or result in a mix of these. Nevertheless, enforcement has been inconsistent.
Rulemaking for all agencies, including the FTC, may become more challenging now that the Supreme Court has overturned the so-called Chevron doctrine. This doctrine previously required courts to follow federal agencies’ interpretations of unclear laws, as long as those interpretations were reasonable. Now courts have the power to interpret laws themselves. This could limit federal agencies’ authority to interpret laws.
State and local governments also play an active role in protecting consumers. State laws complement federal laws in areas such as antitrust, unfair trade practices, and consumer health and safety. State laws prohibiting unfair and deceptive acts and practices are among the most effective tools in fighting consumer fraud and abuse. These statutes provide remedies for consumers, encourage merchants to resolve disputes fairly, and deter misconduct. In many cases, state initiatives provide a model for needed improvements at the federal level.
Local governments also help protect consumers. For example, licensing, taxing, and zoning authorities enable local governments to provide oversight and respond to competition or consumer protection challenges. Local governments may also protect consumers through public education and outreach efforts.
CONSUMER PROTECTION FRAMEWORK: Policy
CONSUMER PROTECTION FRAMEWORK: Policy
Consumer laws and regulations
Policymakers at all levels of government should safeguard consumers against unfair, deceptive, or abusive practices. They should also defend against anticompetitive practices, promote robust competition, and protect against excessive market concentration.
All federal agencies should effectively and efficiently advance new rules while considering public comment. The Federal Trade Commission should be given streamlined rulemaking authority to prohibit unfair and deceptive practices.
States should actively use their legislative, regulatory, and enforcement powers to protect consumers. They should also be permitted to enforce federal consumer protection laws. Where appropriate, local governments should also advance fair and vibrant markets through oversight, regulation, public outreach, and education.
States should enact or strengthen laws that prohibit unfair and deceptive acts and practices in trade or commerce. State consumer protection laws related to specific industries should specify that laws on unfair and deceptive acts and practices also apply.
State consumer protection laws should not exempt certain types of merchants, such as insurance companies and utilities. Violations should not be limited to situations in which the merchant acts with intent.
Public participation
Consumers should be able to take part in the processes that make laws and regulations to protect their rights and interests. They should have the right to challenge violations of these laws and regulations.
Preemption
In general, consumer protection laws and regulations should not preempt the ability of lower levels of government to put in place stronger consumer protections. Federal consumer protection laws and regulations should serve as the floor, not the ceiling, of consumer protections. States should be able to provide additional consumer protections. Likewise, state consumer protection laws and regulations should enable local governments to put in place stronger consumer protection standards.
Redress
Consumers should have access to the full range of legal remedies when they have been harmed (see also Private Enforcement of Legal Rights and Pre-Dispute Mandatory Binding Arbitration). Policymakers should prohibit contract terms that waive legal rights or impose other unreasonable terms as a condition of receiving a good or service. These include the use of mandatory binding arbitration, non-disparagement clauses, waivers of class actions or jury trials, and requirements that people travel long distances to assert their legal rights.
Paper statements
Consumers should be able to receive, free of charge, paper statements and disclosures for essential products and services, such as utilities and financial accounts.