Mgtm 1302 Week 5 Consumer Protection

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Questions and Answers

What is the primary concept of net neutrality?

Users should pay for access to select content.

All internet data should be treated equally by organizations. (correct)

Internet service providers should prioritize certain data.

They should restrict access to illegal content only.

Upon the sale of a product, who becomes the legal owner of the product?

Ownership is shared between the producer and consumer.

Ownership is only transferred after a contract is signed.

The producer remains the owner until the product is used.

The consumer becomes the owner after the sale. (correct)

In the context of product safety, which responsibility is typically associated with the producer?

Providing clear instructions on product use.

Monitoring consumer usage of the product.

Ensuring the product is safe during manufacturing. (correct)

Assuming liability for all product injuries.

What does 'command and control' regulation imply for product safety?

Strict standards are imposed on producers. Signup and view all the answers

If a consumer is injured while using a product, which of the following might be a factor in determining responsibility?

Previous safety records of the producer. Signup and view all the answers

Which stakeholder is primarily responsible for ensuring product safety during the design phase?

The producer. Signup and view all the answers

What factor influences the regulation of product safety in the marketplace?

Government-imposed safety standards. Signup and view all the answers

What is a potential challenge regarding the distribution of responsibility between producers and consumers in product safety?

Evaluating consumer understanding of product risks. Signup and view all the answers

What does the concept of 'social costs' refer to in relation to injuries prevented?

The combined costs for consumers and producers. Signup and view all the answers

Which factor does NOT contribute to product safety problems?

Consumer awareness Signup and view all the answers

What must consumers consider before purchasing a product according to the social cost concept?

Whether the benefits outweigh the costs of use. Signup and view all the answers

What regulatory approach imposes standards on producers for safety in design and manufacturing?

Command and control regulation Signup and view all the answers

What is the role of liability rules in product safety?

To create incentives for safety among producers and consumers. Signup and view all the answers

What is a potential outcome of shifting food expiry limits from producers to consumers?

Greater consumer responsibility for food safety. Signup and view all the answers

What is the main intention behind preventive regulation in product safety?

To impose strict guidelines on the market. Signup and view all the answers

In the context of product lifecycles, which stage involves marketing the product to consumers?

Marketing phase Signup and view all the answers

What factor primarily contributed to the risk associated with Takata airbags?

Flawed design and manufacturing processes Signup and view all the answers

What was the result of the preliminary US government report regarding accidents caused by faulty accelerator pedals?

It indicated that human error was a likely cause. Signup and view all the answers

During which years did Takata acknowledge the airbag defect?

2013 Signup and view all the answers

What was a significant challenge faced during the Takata airbag recall process?

Difficulty in identifying affected vehicles Signup and view all the answers

What element in the Takata airbag inflators is responsible for generating gas upon impact?

Ammonium nitrate Signup and view all the answers

What does the decrease in injury costs relate to in terms of care costs?

Increased costs of care Signup and view all the answers

What were the consequences faced by Toyota due to their initial response to claims about faulty accelerator pedals?

They attracted more negative publicity. Signup and view all the answers

What is a key environmental factor contributing to the degradation of ammonium nitrate in airbag inflators?

High humidity Signup and view all the answers

What is an aspect of contract theory regarding business responsibilities?

Complying with the terms of sale Signup and view all the answers

What was the reported number of complaints received regarding Toyota's vehicle issues?

2,000 complaints Signup and view all the answers

According to due care theory, what factor influences the responsibility of the firm?

The vulnerability of the customer Signup and view all the answers

What responsibility does the social costs view suggest businesses should adopt?

Internalizing negative externalities Signup and view all the answers

In the MacPherson vs Buick Motor case, what was the primary charge against the manufacturer?

Negligence Signup and view all the answers

What is a key consideration for firms in the context of quality beyond business interests?

Legal responsibilities toward the finished product Signup and view all the answers

What cost aspect do manufacturers extend when designing a product?

Costs of care Signup and view all the answers

What does the term 'due care' imply about customer knowledge?

Customers have less information and expertise than the firm Signup and view all the answers

What does the Consumer Protection (Fair Trading) Act (CPFTA) primarily safeguard?

The five rights of consumers Signup and view all the answers

Which of the following is excluded from the coverage of CPFTA?

Contracts of employment Signup and view all the answers

Under the Lemon Law, what are consumers entitled to for defective physical products?

Repair, replacement, reduction in price or rescission of contract Signup and view all the answers

What is one of the dangers associated with the collection of personal data by businesses?

Fraudulent unethical use of information Signup and view all the answers

What is a requirement for the Lemon Law to be applicable?

It is applicable for business-to-consumer sales Signup and view all the answers

Who is involved in mediating consumer issues in Singapore?

Singapore Tourism Board, CASE, and FIDReC Signup and view all the answers

What is one proposed self-help method for consumers to protect their privacy online?

Limit browser tracking Signup and view all the answers

What constitutes financial protection under the described legislation?

Financial advisors misrepresenting product qualities to consumers Signup and view all the answers

What does the right to be forgotten allow individuals to do?

Ask search engines to delist certain search results Signup and view all the answers

Which consumer right is related to the assurance of privacy over disclosed information?

The right to privacy Signup and view all the answers

Which criteria are part of the right to be forgotten in relation to search results?

Inaccuracy and public interest Signup and view all the answers

What type of dealings does the CPFTA exclude?

Business-to-business dealings Signup and view all the answers

What significant regulation did the EU adopt in 2018 regarding data protection?

The General Data Protection Regulation (GDPR) Signup and view all the answers

Which of the following countries has NOT adopted legislation similar to the right to be forgotten?

United States Signup and view all the answers

Which of the following is a possible justification for removing certain search results under the right to be forgotten?

Inaccuracy of the information Signup and view all the answers

What is a common concern regarding industry self-regulation in protecting consumer privacy?

Potential conflicts of interest Signup and view all the answers

Study Notes

Week 5 Consumer Protection

Course: Mgtm 1302 Business Government Society
Instructor: Dr. Joann Liew
Email: [email protected]

Censorship vs. Net Neutrality

Tiktok preview → Chinese government content
Laws regarding net neutrality

Consumer Protection

Protecting consumers
Regulations
Defective products
Financial protection
Data protection
Product safety and quality
Rights of Consumers
- Right to be informed
  - Protection against fraudulent, deceitful, or misleading information
- Right to safety
  - Protection against the marketing of hazardous goods
- Right to choose
  - Assurance of access to a variety of products at competitive prices
- Right to be heard
  - Assurance that interests are considered in government policy & courts
- Right to privacy
  - Assurance that disclosed information is not shared with others
Four Methods of Protecting Consumers
- Consumerism
- Government Regulation
- Law/Courts
- Industry "self-regulation"
SG - Consumer Protection (Fair Trading) Act [CPFTA]
- Designed to safeguard five consumer rights
  - Took effect March 1, 2004
  - Right to seek redress against unfair business practices
  - Exclusions: business-to-business dealings, sale/purchase of property (specific services only), employment contracts
  - Ministry involved: Ministry of Trade and Industry, Monetary Authority of Singapore (MAS), Competition and Consumer Commission of Singapore (CCCS)
  - Mediating institutions: Singapore Tourism Board, Consumer Association of Singapore (CASE), Financial Industry Disputes Resolution Centre (FIDReC)
Protection against defective products (Lemon Law)
- Covers physical products
- Only applies to Business-to-Consumer (B2C) sales
- Does not include services or use-related issues
- Consumers can seek repair, replacement, price reduction or rescission
Financial Protection
- Financial institution claiming to be licensed by Monetary Authority of Singapore but not
- Financial advisor misrepresenting product performance
- Financial institution taking advantage of consumers with harsh or oppressive terms
- Financial advisor has actions/inaction causing consumer deception or misuse
Over half of financial disputes in Singapore are against banks and finance companies
- Claims by individuals aged 51+ (51%)
- Highest claim: $1.62 million
- Main issues: unauthorized transactions/fraud/scams, inappropriate advice/misrepresentation
- Disputes against general insurers are mostly related to liability
Claim limit for victims of mis-selling by financial institutions to go up to $150,000
Data protection
- Technologies allow businesses to collect/use vast amounts of personal data
- Dangers: fraudulent/unethical information use, unwarranted privacy violations, and data leaks
Protecting consumer privacy while fostering internet commerce
- Consumer self-help: Internet users using technology to protect their own privacy
- Industry self-regulation: Internet-related businesses advocating for self-regulation
- Favoring government legislation for consumer privacy online
The right to be forgotten
- Individuals can ask search engines like Google to delist results related to their name (inaccurate, inadequate, irrelevant, excessive, public interest)
- The owner of a website has the right to remove content (not search engines)
Net Neutrality Act
- Organizations need to treat internet data equally
- Promotes a free/open internet where anyone can access content
Net Neutrality Act (For/Against)
- For: free/open access to all users (promotes equality, digitalization, smart nation progression). Preventing undue power to broadband providers
- Against: freedom of competition based on quality of services, freedom to practice tiered pricing, unfair business competition, impediments to innovation/investment, difficulty in prioritizing internet traffic
Product Safety and Quality
- Minimum requirement for product safety
Product safety problem: Liability and regulation
Social costs of injuries prevented
Quality is more than a business issue — ethical responsibility
Quality is more than a business issue — legal responsibility
Controversies of airbags
Cough syrup killed scores of children
Toyota recalls
Takata Airbags Scandal Timeline
- 2008-2014: Reports of airbag ruptures/injuries prompt investigations
- 2013: Takata acknowledges airbag defect & recalls
- 2014 – 2015: Expansion of recalls by various manufacturers
- 2015 – 2017: Increased recall efforts for higher-risk vehicles
Takata Airbags - The scale of the problem
Product Safety Best Practices
- Practice safety by design
- Build safety into supply chain
- Be knowledgeable of business/regulatory environment & review consumer feedback
- Be prepared (recall plan)
- Document compliance standards & seek outside perspective
Factors Contributing to Product Attribution

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Description

Explore the essential aspects of consumer protection in this quiz. Dive into the rights of consumers, regulations, and the methods used to safeguard against defective products and misleading information. Understand the significance of privacy and safety in the market.