One early form of consumer protection in the United States was the 1890 Sherman Antitrust Act. This act expanded consumer rights by focusing on preventing monopolies and thereby providing more consumer choice and lower prices overall. The government has supported this right by interceding in any monopolistic business opportunities through the Sherman Antitrust Act.
Although there were some consumer protections in place before the 20th century, such as Sherman Antitrust Act, the modern consumer protection movement began in the 1960s. At this time, there was a growing distrust of big business and a spreading belief that the government needed to do more to protect consumers. There were many factors involved in this, including anti-war sentiment regarding Vietnam, racial issues, a burgeoning women's rights movement, growing social unrest, higher levels of distrust of the government, and recent increases in disposable consumer income.
In the 1960s, President John F. Kennedy introduced the idea of the four consumer rights. Consumer rights can be defined as the right to safety, the right to be informed, the right to choose, and the right to be heard. These rights were meant to ensure consumers' fair treatment and that they had the information they needed to make informed decisions about the products and services they bought. A fifth right was added by President Nixon, known as the right to redress, or the right to seek compensation from businesses that have wronged them. These consumer rights were important in establishing the cornerstone of modern consumer protection and also helped lead to the initial wave of consumer protection legislation enacted in the United States in the 1960s and 1970s.
Safety
The first consumer right is the right to safety which requires businesses to provide consumers with products and services that are safe for their intended use. This right gives consumers the right to be protected against products and services that are dangerous or defective. The right to safety stipulates that businesses must provide detailed instructions on how to use their products and services safely. Businesses are also required to test their products and services to ensure that they are safe for consumers to use and of a minimum standard quality. A final requirement of this right is that companies are expected to place warning labels on harmful products, such as cigarettes. However, this right does not protect against risks inherent in the use of the product or service. Additionally, this right does not protect consumers against risks caused by their own negligence.
For example, if a consumer were to purchase a new car, they would have the right to expect that the car is safe for them to drive. The company would be required to provide the consumer with instructions on how to operate the car safely. The company would also be required to test the car to ensure it meets minimum safety standards. However, if the consumer were to get into an accident due to their own negligence, the company would not be held liable.
Information
The second consumer right is the right to be informed, which requires businesses to provide accurate and truthful information about their products and services. This means that businesses are not allowed to make false or misleading claims about their products or services. Additionally, businesses are required to provide consumers with the information necessary for them to make informed decisions about the products and services they purchase. For example, if a business is selling a new type of food, it must provide accurate information about the ingredients, nutrition facts, and any potential allergens. This right also requires businesses to disclose any information that might be material to a consumer's decision to purchase a product or service. For example, if a business is selling a used car, they may be required to disclose any information about the car's history, such as accidents or repairs that have been made.
Choice
The third consumer right is the right to choose, which gives consumers the right to have a variety of products and services to choose from. This means that businesses are not allowed to monopolize markets or engage in practices that would limit consumer choice. Additionally, this right protects consumers from unfair sales practices, such as bait-and-switch, that seek to pressure them into purchasing products or services that they do not want.
Voice
The fourth right is the right to be heard, which gives consumers the right to have a voice in products that are produced and sold. Before the 1960s, there were few mechanisms for consumers to voice their concerns about the products they purchased and few mechanisms for consumers to voice their desires for new products. As consumer power has grown, businesses have been forced to listen to consumer demand and give consumers a say in the products they produce. Many companies have now developed public relations and marketing departments to listen to and respond to consumer concerns and desires. An example would be if a company introduced several new cellphones and then made minor changes to them based on the consumer response they received through social media.
Redress
The fifth and final consumer right is the right to redress, which gives consumers the right to seek redress from businesses that have wronged them. This means that consumers have the right to seek compensation from businesses for any damages they have suffered. Additionally, this right gives consumers the right to seek injunctions from courts that would require businesses to stop engaging in practices that are harmful to consumers. Redress can be sought through the legal system, arbitration, or mediation.
A common modern example of redress can be seen in class-action lawsuits. Class-action lawsuits are filed on behalf of a group of consumers who have all been harmed by the same business practice. These lawsuits allow consumers to pool their resources and seek redress from businesses that would otherwise be too powerful to take on individually.
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