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Government Regulation Agencies for Consumer Protection

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  • 0:54 Consumer Financial…
  • 1:30 Consumer Product…
  • 2:05 Federal Trade Commission (FTC)
  • 2:41 Food and Drug…
  • 3:05 National Highway…
  • 4:07 Security Exchange…
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Lesson Transcript
Instructor: Jennifer Lombardo
You will learn about the government regulatory agencies that protect consumers. We'll discuss what the acronyms CFPB, CPSC, FTC, FDA, NHTSA, and SEC stand for and their organizations' responsibilities.

Protection of Consumers

Did you know that there are six government regulatory agencies that exist just to protect you from dangerous products? This hexagon of protection is responsible for informing and protecting consumers and monitoring businesses for poorly designed products. In this lesson, you will learn about the government agencies that protect consumers.

Consumer protection regulatory agencies fight to ensure that individuals are treated fairly, receive the necessary information to make informed decisions, are protected against product hazards, and have the ability to use legal recourse if needed. Certain types of products attract more regulation due to their higher risk of consumer injury or death, such as food, drugs, children's products, and automobiles.

Let's take a look at exactly how the different regulatory agencies accomplish this task of protecting consumers.

Consumer Financial Protection Bureau (CFPB)

This regulatory agency's purpose is to protect consumers from deceptive financial products. The Consumer Financial Protection Bureau (CFPB) ensures consumers have the information needed to select the best financial services, such as credit cards, student loans, and mortgages. The CFPB works with companies to eliminate fine print add-ons that can confuse and hurt consumer finances. In addition, the CFPB will help consumers who are having difficulty paying their mortgage by putting them in touch with a counselor to help provide financial planning and assistance.

Consumer Product Safety Commission (CPSC)

The Consumer Product Safety Commission is responsible for consumer product safety. In 1972, Congress passed the Consumer Product Safety Act, which gave the CPSC powers to protect individuals from unsafe consumer products. They accomplish this task through evaluating the safety of consumer products, developing standards, and conducting research as it pertains to safety. For example, the CPSC recently issued a recall on folding lounge chairs because consumers have reported falls when using them.

Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) was initially created in 1914 as an agency that wielded a weapon against antitrust. Eventually, the commission's powers were enlarged to also protect consumers against false advertising and fraud. There are many specific areas that the FTC has targeted in respect to the protection of the public. For example, the most recent areas of concern have been towards businesses advertising to children. The FTC was able to fine a large technology company $19 million for unfairly billing parents for their children's authorized app purchases.

Food and Drug Administration (FDA)

The Food and Drug Administration is responsible for the safeguarding of public health by monitoring drugs, medical devices, and cosmetics. The administration also helps improve consumers' health through advancing drug innovation. Lastly, they also protect our food supply. For example, the FDA recently published a list of online pharmacy websites that were selling fake drugs to consumers.

National Highway Traffic Safety Administration (NHTSA)

The National Highway Traffic Safety Administration (NHTSA) was created by the U.S. Department of Transportation in 1970 to protect consumers by reducing death, injuries, and monetary losses through vehicle accidents. It also plays a huge role in the investigation of defects in motor vehicle design, equipment, and laws. Lastly, the NHTSA provides training to communities to educate drivers about driving drunk.

They also educate consumers on safety belts, air bags, and child restraint seats. For example, the NHTSA's latest public announcement to consumers was to educate them regarding a leading car manufacturer having defective air bags installed in their vehicles. The NHTSA posted a recall bulletin to let consumers know that the air bag could explode and propel metal shards into the car cabin, seriously injuring or killing passengers.

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