REMEDIES FOR CONSUMER PROTECTION - PREVENTION, RESTITUTION, OR PUNISHMENT

• NCJ Number: 50943
• Author(s): D COHEN
• Date Published: 1975
• Length: 8 pages
• Corporate Author: American Marketing Assoc
• Publication Format: Article
• Language: English
• Country: United States of America
• Note: REPRINTED FROM AMERICAN MARKETING ASSOCIATION, V 39, N 4 (OCTOBER 1975), P 24-31

Annotation

THE MAJOR ELEMENTS OF FEDERAL REGULATORY MEASURES DESIGNED AS REMEDIES FOR UNFAIR OR DECEPTIVE PRACTICES AGAINST CONSUMERS ARE DISCUSSED, WITH ATTENTION TO PREVENTION, RESTITUTION, AND PUNISHMENT.

Abstract

REMEDIES THAT INCORPORATE EFFORTS TO PREVENT CONSUMER ABUSE HAVE BEEN DEVELOPED BY FEDERAL AGENCIES SUCH AS THE FOOD AND DRUG ADMINISTRATION AND THE FEDERAL TRADE COMMISSION (FTC) AND INCLUDE THE ESTABLISHMENT OF CODES OF CONDUCT, PROCEDURES FOR DISCLOSURE OF INFORMATION, AND REQUIREMENTS FOR SUBSTANTIATION OF CLAIMS. THE FTC HAS INTRODUCED A NUMBER OF REMEDIAL PROCEDURES DESIGNED NOT ONLY TO HALT DECEPTIVE PRACTICES, BUT ALSO TO PROVIDE JUST COMPENSATION THROUGH FINANCIAL OR PHYSICAL REPARATIONS. MANY OF THESE PROCEDURES RELATE TO ADVERTISING PRACTICES AND INCLUDE AFFIRMATIVE DISCLOSURES AND CORRECTIVE ADVERTISING. OTHERS DEAL WITH SELLING PRACTICES AND INCLUDE REPAYMENT OF FUNDS AND LIMITATIONS ON CONTRACTS. PUBLIC POLICY SPOKESPERSONS IN THE FIELD OF CONSUMER PROTECTION OFFER NO CLEAR CONSENSUS ON THE EXTENT TO WHICH PUNITIVE MEASURES SHOULD BE INCORPORATED IN REMEDIAL ACTIONS. ALTHOUGH THE FUNCTIONS OF THE REGULATORY AGENCIES ARE NOT PUNITIVE, THE COURTS HAVE FREQUENTLY DECLARED IN CASES INVOLVING THE FTC THAT THE AGENCY'S DECISIONS SHOULD COMPRISE PRESCRIPTIVE AND NOT PROSCRIPTIVE ELEMENTS. HOWEVER, SOME REMEDIES IMPOSED BY FEDERAL REGULATORY AGENCIES CONTAIN PUNITIVE ASPECTS. SOME OF THE PUNITIVE COMPONENTS IN REMEDIES IMPOSED FOR CONSUMER PROTECTION INCLUDE FINES AND INCARCERATION, LOSS OF PROFIT, AND MANDATES FOR CLASS ACTION LAW SUITS. IT IS CONCLUDED THAT: (1) WHILE PREVENTION IS THE MOST DESIRABLE PUBLIC POLICY GOAL, THE HISTORY OF CONSUMER PROTECTION ACTIVITIES INDICATES THAT IT IS INSUFFICIENT AS A SOLE REMEDIAL ACTION; (2) PUNISHMENT, ABOVE AND BEYOND THE REMEDIAL CONTEXT OF RESTITUTION, HAS A PLACE IN THE CONSUMER PROTECTION PROCESS; AND (3) ARBITRATION, E.G, THE REFERRAL OF A DISPUTE TO ONE OR MORE IMPARTIAL ARBITRATORS FOR A FINAL AND BINDING DECISION, IS ONE FIELD OF RESTITUTION THAT HAS NOT BEEN ADEQUATELY EXPLORED BY FEDERAL REGULATORY AGENCIES. REFERENCES ARE FOOTNOTED. (KBL)