Analysis of Consumer Protection - Case Study Example

Name: Subject: Tutor: Date: Consumer Protection Case Study Section A Laws formulated to protect consumers from the risk of incurring loss or sustaining an injury have a long history but they have become a subject of controversy in the United States just in the past three decades. The controversies arise because of the issues involved such as why the consumer should be protected. This has resulted in many questions being raised and it is clear that many government institutions usually fail in fulfilling their roles as the providers of particular protections. Inasmuch as there are consumer protection laws, consumers are still subjected to circumstances that deprive them of their peace when they get involved in certain transactions with sellers or producers. This is the reason why many professional economists have been criticizing governments on the need to promote public consumer safety. But this seems be falling on deaf ears (Asch 3). Quoting Barber, Asch further notes that in many transactions, consumers are usually “besieged by advertising, deceived by packages, confronted with an expanding range of highly complex goods (or property), and limited time”… and simply do not qualify to buy wisely and discriminately (4). This statement presents a number of ideas. One, that if consumers are well informed, they require very little or no government protection. Two, that gullible buyers can be carried the appearance of a product and buy it without doing enough research on the attributes of the commodity or property. But even the “informed buyers” can become “gullible at times.” This makes it difficult to predict the nature of a transaction between a buyer and a seller. Along this line, Howells and Weatherill note that consumers do not know the nature of commodities offered by seller, or even if the information is available, it is common for the consumers to misread it (2). The above state of affairs can be related to Casey’s case. Casey has just moved to Texas from France, and has been looking for a new house for six months. She has never owned a house and is therefore excited to buy her first home. She has viewed about 20 houses which have not pleased her. But one advertisement struck her: a new house in a perfect and excellent condition costing $300,000 lower than most of the apartments she had viewed earlier. Although she spent an hour viewing the property, which was “perfect” she did not understand some of the seller’s words because of the Texas accent. She would be told a week later that the seller’s mother was brutally murdered in the house that house’s walls were stained with blood all over, necessitating the painting that made the house “new.” Casey was traumatized and tried to sell the house but no buyer was willing to part with more than half of what she paid. Casey’s scenario is a case of buying stigmatized property. The Akron Area Board of Realtors defines stigmatized properties as any of the assets that were present at a scene of murder, suicide or rape, or which were occupied by a person with a dreaded disease. The law stipulates that dealers disclose the details of any property to a buyer or tenant whether the property is bought or its part used affected the user, but it is not mandatory to disclose suicide or murder that occurred within the property. Texas law regarding stigmatized property is similar to the Annotated Section 44-1-16 part B which states that no action can be taken against a real property owner who fails to disclose in a transaction detail such as the property having been related to a death case. The general rule is therefore caveat emptor or “buyers beware of the property being sold” (Georgia Real Estate Commission). Under the law, Casey cannot sue the seller for the sale of stigmatized house because the seller was not required by the law to the brutal murder that occurred in the house. A murder within given a promise is not considered to cause physical damage to the property, which would need to be disclosed. Only damage that would cause physical injuries that would affect Casey’s stay in the house would warrant suing of the seller. But Casey purchased the house in good condition- well painted and looking as good as new. Considering the fact that Casey became distraught after learning of the death, the Golden Rule can be used for claims. Casey can file for claims on the basis of the fact that the seller knew that an unlucky death had occurred in the house but failed to disclose the information (Pivar and Harlan 55). While death itself is not a pointer to claims, the fact that Casey was adversely affected on learning of the house’s condition forms the basis of the suit. Casey can also capitalize on the fact that the house was sold within less than three years after the death, going by the neighbor’s account. Nondisclosure of death details is only possible if a property is sold three years after the death as was the case of Reed v. King in 1987 (Wilson). Section B Essentially, Casey has limited opportunities of making claims because the property she bought was in good condition, and she even viewed it in the presence of the seller and accepted is as a good property. Moreover, the seller is not required to have revealed the fact that murder occurred in the house in spite of the fact that any buyer would obviously be traumatized on realization of the matter. But the fact that Casey underwent psychological torture after realizing the nature of the commodity or property she bought puts her in a position to file claims. To begin with the, Restatement Section 402 A and Section 402 B are clearly related to this matter. Restatement Section 402 A, which deals with special liabilities of the seller of a product that causes physical harm to any user or consumer of a commodity, is very clear that a seller of a defective product or one that is unreasonably dangerous to a consumer is liable for the damage caused to the consumer (LSU Law Center's). This applies if according to Sectin1 (a), it is known that the seller was engaged in the sale of the products, and part (b) of the same section, that it is proved that the product sold reached the buyer or consumer without any significant change in its defective condition (LSU Law Center's). Inasmuch as the house did not cause physical harm to Casey, she was traumatized and even lost her job. She resented the house and wished that she moved out of it despite having invested significantly in buying it. Casey can use the clause in Section 402 A to make claims against the seller of the house because whereas the house was in a way “defective,” the issue was not revealed to the buyer. The product though ended up causing severe distress to Casey because she had not known its condition on the day of purchase and for the short time she stayed in the house. This however may be done in contradiction to the property law which states that only physical damages of the property sold should be disclosed but leaves murder and suicide revelation to the discretion the seller of a property as aforementioned. Restatement Section 402 B also offers reprieve to Casey. This section deals with misrepresentation of chattels by a seller during and agreement with a buyer (LSU Law Center's). At the time selling the house, the seller or his accomplices had painted the house finely to disguise the blood stains that resulted from the murder of the seller’s mother as reported by Casey’s neighbor. It is clear that the painting was meant to disguise the house a new property. Yet, Restatement Section 402 B clearly that states that a seller is liable to claims if he or she sells given chattels while disguising its real form through advertising, using labels or any other form of misrepresentation (LSU Law Center's). If such misrepresentation causes harm of any nature to the buyer immediately or in the future the, seller is decidedly responsible for the damage. A number of issues are evident in Casey’s case. One, that the house she bought was advertised and the advertisement said the house had just been painted and was “a perfect house, in excellent condition.” This was clearly a misrepresentation since although the house was in perfect condition, it had just been recently painted to conceal the murder that was done it. Secondly, as a selling ploy, the house was significantly cheaper (by $300, 000) compared to the other houses in the same area. This was meant to lure a customer into buying it fast because of its hidden defect that the seller never reported. Thirdly, the agreement was made in a rush and the seller capitalized on Casey’s inability to clearly understand Texas English to hide the murder issue. Section C Both public laws and private law aid some protection to the consumer. Private enforcement is a term that describes the utilization of national courts by individuals or firms that shun anticompetitive actions to secure damages for losses or seek injunction in order to prevent them “harmful” actions from occurring again. With public enforcement the government is responsible for ensuring that fair play exists between consumers and sellers (U.S. Department of Justice). Public enforcement also protects consumers from unscrupulous business practices performed by sellers. Both public and private enforcement have merits and demerits as discussed further in the following section. Public enforcement outlines several laws such as the antitrust law that protect competition. As a result, trade practices become competitive and extent benefits to consumers in terms of lower prices of commodities and new as well as advanced products (U.S. Department of Justice). Public enforcement thus creates a situation whereby producers and sellers are encouraged to compete in order to win the trust of consumers. Ultimately, this competition leads to innovativeness and better methods of production. Therefore, with public enforcement the consumer stands to be the better beneficiary. Consumers can choose what they desire and what they think is good for them. Not only this, they can also get what they want at the price they think is most appropriate having made comparison of substitute products from different consumers. On the hand, public enforcement may tend to favor only giant companies that have the ability to compete to prosper. Too much competition is not good in view of the fact that unstable companies may collapse for bending too low as is the case with General Motors and the more vibrant and highly competitive automakers in the United States As earlier mentioned, private enforcement means that firms can rush to court any time it deems appropriate in order to stop “harmful” aspects of business such to much competition and trade practice that tend to damage their status. Whereas this is good for business in view of the fact they need to shelve themselves from practices that hinder their progress, it also has limitations. One limitation is that the shields created by firms bar them from becoming competitive and thus they lose innovativeness. As such, they avail to consumers commodities that can only be considered to be good because they are available. Consumers thus get into a miasma of no choice because they have to buy what is available, which in most cases has inflated price because of less competition. Private enforcement also encourages competing firms to come together in order to avoid each other’s competition. As such, they can fix prices, and subject consumers to malpractice. In such cases, it becomes difficult to apply consumer laws since consumers become highly susceptible to exploitation by sellers. For instance, it becomes difficult for one consumer to go to court against a multiplicity of giant firms operating as amalgams. Section D Casey suspects that her identity has been stolen. There are a number of facts to confirm whether the identity has indeed been stolen. One is that Casey may find herself being billed on her credit card for transactions she was never engaged in. This can occur because she has a card but the thief is now capitalizing on her revealed name as well as personal information, which are important parts of her identity. Important personal information that the thief could have taken includes the Social Security number or SSN and number of credit card, which an impostor can use to access Casey’s account. As such, Casey may realize debts where she never borrowed, inflated charge on bills, or billing cycles that have no receiving statements. Additionally, many unauthorized bills may arise abruptly (Federal Trade Commission). If in deed Casey’s identity has been stolen she should take appropriate measures to limit the impostor’s use of her details. The first step is to submit a fraud report on her credit reports and view the reports. The fraud alerts will substantially limit other people using her details. The alert can be placed through a consumer reporting company. Secondly, Casey should close all the accounts that she thinks have been tampered with or opened without her consents. This should entail calling the fraud department where each account is operated and informing them of the instance. Thirdly, Casey should report the matter to the police in her locality. She should get a copy of the report or at least secure the report’s number for use as proof of the crime. Fourthly, she should place a complaint with the Federal Trade Commission (Federal Trade Commission). If the credit bureau fails to correct the mistakes regarding Casey’s loss of identity, Casey has rights against it with reference to the Fair Credit Reporting Act that promotes the privacy and accuracy of information in consumers’ credit reports. The law also regulates the use of credit reports and states that consumer reporting bureaus should maintain complete and correct files. Thus, according to the law, Casey has a right to have her stolen details revised or corrected (Federal Reserve Bank of San Francisco). Whereas Casey’s case can be resolved, it is possible for the identity loss to recur. She should therefore take appropriate measures to prevent subsequent loss. Such measures include monitoring of credit reports and reading financial accounts. These have to be supported with safe custody of personal details such that they are not available to other people. Additionally, Casey should be wary of bills she did not authorize, receiving cards that are not applied for, and getting calls from unfamiliar people (Federal Trade Commission). Casey the details she uses frequently such as bank cards have identity numbers that cannot be easily guessed by other people. Many credit bureaus have the Personal Identity Theft facility that enables reimbursement of identity theft victims for the losses incurred as a result of another party’s access to one’s personal details. Casey should pursue this service in order to be compensated. But the credit card bureau has to first carry out investigations together with the police in order to determine the circumstances under which Casey’s identity was lost. References Asch, Peter. Consumer safety regulation: putting a price on life and limb. Oxfords: Oxford University Press.1988. Federal Reserve Bank of San Francisco. 22 Jul 2009.Your Credit Rights. Federal Trade Commission. 22 Jul 2009. Facts for Consumers. Howells, Geraint G. and Stephen Weatherill. Consumer protection law. London: Ashgate Publishing, Ltd. 2005 http://abclocal.go.com/ktrk/channel?section=news/peoples_lawyer&id=575... LSU Law Center's. Product Liability: s 402A. 23 Jul 2009. Pivar, William H. and Harlan Donald L. Real Estate Ethics: Good Ethics = Good Business New York: Dearborn Real Estate. 1995 The Akron Area Board of Realtors. 23 Jul 2009. Disclosure-Stigmatized Property . U.S. Department of Justice. 22 Jul 2009.Antitrust Enforcement and the Consumer..http://www.usdoj.gov/atr/public/div_stats/211491.htm Wilson, Stephanie M. Arizona's Stigmatized Property Law The Legal Advisor - October, 2004. Read More