The Importance of Consumer Protection - Report Example

Introduction In the current complex and technical world, it is every individual’s expectation that the products they purchase be designed and manufactured in such a way that they are safe for use and that they perform their duties according to the manner they are promoted. According to Moore (2001) annually, thousands of lives are lost due to the purchase of dangerous or defective products. This move contributes to serious intestinal injuries to individuals. The purchase of these products requires customers to incur a lot of expenses to repair the damages caused. It is therefore important for every consumer to be careful on the products they purchase since even those who are conscious can be affected by a defective product. Consumer rights stipulate that every customer is entitled to get what they have paid for. This means that consumers who find it difficult to purchase new products may be encouraged to use protective measures such as lemon, warranty and consumer fraud laws and this depends on the kind of product purchased. Bogus (2001) describes that a consumer therefore has a right to demand a refund of the product or replacement. This will be possible if the product has a defect which substantially reduces its performance or damages the consumer. The product can also be replaced if it lacks market value and in cases where the product can not be repaired or fixed back to normal. Such kind of products and in this case those that work opposite from how they are promoted or represented are termed as defective. They not only cause consumers to lose their savings but they also harm consumers’ body or skin for example if the product is facial crème. Other examples of defective products include an expensive high definition flat screen television that lack the picture quality hat is advertised on the box or store display. The other example includes a washing machine having a defective motor that easily breaks down due to problems with its design or the computer circuits may be defective and blow out. Such products force the consumer to spend many expenses on repair bills or the product may not be repaired thus requiring them to purchase an entirely new machine. Most of these manufacturers know about the defects found in their products before selling these products (The Malta independent 2010). They however continue selling hoping that the cost of complaints and lawsuits reported will be lower than the large profits they generate through ignoring known defects and selling out. Such circumstances deprive consumers of their rights and are forced to throw dollars that they have earned through the hard way out. According to The Malta independent (2010) consumers find it difficult to bring suit to recover damages for some products for instance television sets, household appliances, computers and products that are less expensive and of which purchasing another one is far much easier. Cases of products that fail to perform as advertised should be reported to the attorney to file a law suit. There are several state laws that are specifically designed to provide compensation for damages caused after purchasing defective product. These laws oblige replacement of the product or a return of the monies paid for goods such as toys that contain dangerous lead paint. The defective product can also include food products such as contaminated pet food. It is unfortunate that the manufacturers or the sellers do not leave to their promise of selling safe products as it is required by law. It is important for the manufacturers to provide warning signs of any product that may be dangerous. These manufacturers also have a right to compensate any consumer who is injured or killed due to the sale of defective product. A product may be said to be defective if it contains certain characteristics such as; if its design flaw was manufactured with a defect. The manufacturer may also have failed to use other specifications in the process of assembling the product such as a computer. The other characteristic is where the manufacturer fails to give clear warnings or directions on how the product is to be used. Product liability claims is used to safeguard consumers who purchase defective products. However, these consumers have to prove several facts; one is that they have to show that the product was defective; they also show that the defect existed before the product was purchased and finally is that the defect on the product has cause major damages to the consumer. There are various organizations that deal with filing suits to such cases; one example is the BISNAR CHASE who has reputable experience in safeguarding victims of defective products. A claim is filed against the manufacturer and the person responsible will be forced to compensate for the damages caused (Moore 2001). In order for consumers to be successful in their compensation claims, these consumers have to prove that someone else was responsible for the damages. The products should be returned to the manufacturers, write a note about the condition of the product and have a witness if possible. The receipt of the bought product should also be kept. The defective product should be kept by the consumer and photographs should be taken to act as evidence. This should happen as soon as one notices that the product is dangerous. This is because certain products have strict time limits for instance in food products. In U.S for example there are several claims that are linked with product liability. These include negligence, the breach of warranty, strict liability and consumer protection. Some of these product laws vary from country to country and so different concepts have to be proven before filing a claim. The importance of consumer protection The main importance providing adequate safeguards on consumers is to force producers to internalize their external costs they require consumers to pay. These costs affect the entire society. If manufacturers are forced to compensate the consumers, they will be careful in their business dealings. This include in their production level as they will be accountable for the loss. Once the internalized harm is great on the manufacturer, in that they gain no profit from producing the product, the product will not be sold. It can only be sold to consumers who value it and at a higher price. Strict liability therefore provides an approach used to ensure that the societal benefit of products in the market environment outweighs their societal dangers. Strict liability concepts introduced for defective products show that strict liability is logical since it involves two parties who are very careful in their dealings and these parties include the manufacturer and the consumer. However, one of the parties has to undergo the economic cost of the damages. It is argued that the economic costs be placed on the manufacturer. This is because they can better recover the money by passing the damages on to other consumers by increasing their prices for other products. In this sense, the manufacturer becomes the insurer of all their consumers that are injured by defective products. The premiums of the insurer are however paid by other consumers in the market environment (Jay 2006). The other argument about the product liability emerges from the fact that the distribution of information about any given product is highly asymmetrical. This shows that manufacturers have to be aware about their products and if these products can cause danger after sale. Lawrence (2004) describes that a consumer is not in a better position to know about any dangers. As a result, to execute the public policy of minimizing injury, it is necessary to force the burden of compensation upon the manufacturer as opposed to imposing it upon the consumer. The above argument is only applied in cases of design of the product and warning defects. In the case of manufacturing defects, the argument is less used since design and warning defects are said to be less preventable by the manufacturer. It has also been criticised that the incentives given by strict liability damage and creates a moral hazard problem on the part of potential buyers. This shows that consumers take less care about the products they purchase. This leads to a lowered level of care as compared to that the standardised care needed while purchasing. It has also been criticised that though manufacturers can recover their money through other customers, the assertion is said to ignore the theory of economic which shows inelasticity in the demand curve. Due to the effect of strict liability, most manufacturers fail to produce the socially optimal amount of goods. This mostly affects manufacturers in the elastic market environment. These markets are characterised by where price-sensitive consumers. In this case, the manufacturer is unable to pass on the economic costs to the consumers as a form of insurance. Since consumers may not always be willing to pay for this insurance, the supporter of strict liability argues that this method is well used in products whose harm outweighs their good. In this case the product can even be eliminated from the market. It is also argued that applying strict liability to consumer products brings about substantial and higher transaction costs. On the other hand, strict liability reduces litigation costs since a plaintiff only needs to prove causation, not imprudence. If it clearly shows the harm caused to the plaintiff, parties under a strict liability regime have to settle out of court, because only damages are in dispute. References Moore, M., Product liability entering the 21st century, The U.S. perspective, Brookings Institution Press, 2001. Bogus, C., Why lawsuits are good for America, Disciplined democracy, big business, and the common law, NYU Press, 2001. The Malta independent, Consumer rights when purchasing a defective and dangerous product, vol. 3, no. 4, 2010, retrieved on 24 August 2010, < http://www.independence.com.mt> Jay, M., Law 101, Everything you need to know about the American legal system, New York: Oxford University Press, 2006, pp. 168-165. Lawrence, M., American Law in the 20th Century, Yale University Press, New Haven, 2004, pp. 357-356. Read More