Week 5 Consumer Protection PDF

· cansorship n. net neutrality Chinese got Content · Tikton Preview -. lower response rate a near. Mgtm 1302 Business Government Society Week 5 Consumer Pro...

· cansorship n. net neutrality Chinese got Content · Tikton Preview -. lower response rate a near. Mgtm 1302 Business Government Society Week 5 Consumer Protection Dr. Joann Liew [email protected] rare earth : jobs ⑧ Residents want - infrastructure & proof that it's safe & Residents air stil of living it water pollution - , dur -waste of energy & food supply disruptions I I no no pt trust in in $if he rusia got dies. ↳ external auditor- neutral music international laws - not from rust in usiagort - since no -who handle-re ext -pollution. ↳ $ can be used to - - ↑ sid of living. ↳ loc tra cities & crops. of processing is far away -. the risk - Jos creation - low stilled + not worth how to is normalized -Maine got is v. corrupt , Sideny will work - what will be diff. ensure regulations trust es ernteater. - Week 5 readings Lawrence & Weber Chap 12: Regulating and Managing Technology Lawrence & Weber Chap 14: Consumer Protection Today’s class Protecting consumers Regulations Defective products Financial protection Data protection Product safety and quality Protecting consumers Rights of Consumers The right to be informed. Protection against fraudulent, deceitful, or misleading information given to make an informed purchasing decision. The right to safety. Protection against the marketing of goods that are hazardous to health or life. The right to choose. Assurance of access to a variety of products and services at competitive prices. The right to be heard. Assurance that consumer interests receive full and sympathetic consideration in government policy and the courts. The right to privacy. Assurance that information disclosed is not shared with others. Lawrence & Webber (2022) Four Methods of Protecting Consumers Lawrence & Webber (2022), Figure 14.1 Thi s Photo by Unknown Author i s l icensed under CC BY-SA SG - Consumer Protection (Fair Trading) Act [CPFTA] Consumer protection laws are designed to safeguard the five rights of consumers. Took effect 1 March 2004 Accords the right to consumers to seek civil redress against suppliers engaging in unfair business practices. Exclusion: Business-to-business dealings Sale and purchase of property (only claims against real estate agents for services rendered are covered) Contracts of employment Ministry involved: Ministry of Trade and Industry & Monetary Authority of Singapore (MAS) Competition and Consumer Commission of Singapore (CCCS) Mediating institutions: Singapore Tourism Board (statutory board) CASE [Consumer Association of Singapore] (not-for-profit) Financial Industry Disputes Resolution Centre [FIDReC] (not-for-profit) Protection against defective product – Lemon Law Covers physical products (including second-hand products) Only applicable for B2C sale Does not cover services, consumers’ negligence and wear and tear Consumers have the right to request repair, replacement, reduction in price or rescission of contract for goods that do not conform to the contract. Source : CASE (https://www.case.org.sg) 17 Financial protection Financial protection a financial institution claiming to be licensed by the Monetary Authority of Singapore when it is not; a financial advisor representing that a product has performance characteristics, qualities or benefits that it does not have; a financial institution taking advantage of a consumer by including terms that are "harsh, oppressive or excessively one-sided so as to be unconscionable"; a financial advisor has through an action or lack of action caused a consumer to reasonably be deceived or misled. https://www.fidrec.com.sg/knowledgebase/article/KA-01262/en- us#:~:text=For%20financial%20products%20or%20services,a%20settlement%20without%20legal%20action.  Those aged 51 years and older continued to form the largest group, with 51 per cent of total claims. The median claim amount was $8,808, while the largest claim amount stood at $1.62 million. Among the claims filed against banks and finance companies, 42 per cent related to unauthorised transactions, frauds and scams, while 31 per cent involved inappropriate advice, misrepresentation or disclosure issues, said Fidrec. Among the claims filed against life insurers, 41 per cent were disputes over inappropriate advice, misrepresentation or disclosure issues, and 22 per cent were disputes on liability. The majority of the claims (72 per cent) against general insurers were mostly related to disputes on liability. https://www.straitstimes.com/business/banking/over-half-of-financial-disputes-filed-in-singapore-were-against-banks-finance  Fidrec has proposed to raise the claim limit by 50 per cent, from $100,000 now to $150,000 Fidrec's mediation service is free for claimants, while those who go for adjudication in such cases have to pay only a small fee of $54.50, including GST. Consider a recent case where Fidrec helped a 75-year-old woman recover her investment losses after she was duped into sinking $100,000 in a risky product. The woman had wanted to put her money in a fixed deposit account but a bank employee sweet-talked her into investing it instead by lying that she not only would get better returns, but her initial capital would also remain intact. She learnt she had been fooled only about a year later when she noticed that her $100,000 deposit had plunged by about 20 per cent. Fidrec's adjudicator found that the woman, who could speak only Mandarin, was misled by the bank employee who stated in her records that the woman was a seasoned investor even though this was not true. Data protection World Economic Forum Global Risks 2024 ~ ~ Behavioral advertising: targeted/tailored advertising to specific customers Benefits: The buyer is more likely to receive messages that are relevant. The seller is more likely to reach prospective customers. Risks: The consumer may be denied opportunities, such as credit, based on their online profiles. Information collected by behavioral advertisers may not be kept private and secure. 25 Consumer Privacy in the Digital Age Technologies enabled businesses to collect and use vast amounts of personal data about their customers. The dangers: Fraudulent unethical use of information. Unwarranted violation of personal privacy. Data leaks. 26 Protect consumer privacy while fostering Internet commerce Consumer Internet users should use technologies that enable them to self-help: protect their own privacy. Industry self- Internet-related businesses advocate being allowed to regulate regulation: themselves. Privacy Favor new government regulations legislation: protecting consumer privacy online. 27  br tat this read U prove to google to > The right to be forgotten - result for then to take it down · - “gives individuals the right to ask search engines like Google to delist certain results for queries related to a person’s name.” -- 5 criteria: “inaccurate, inadequate, irrelevant or excessive”, and whether there is a -public interest in the information remaining available in search results. The owner of the website has the right to remove content (not search engines) In 2018, the EU adopted the General Data Protection Regulation (the GDPR). Article 17 of the GDPR sets out a ‘right to erasure’ Some countries outside the European Union have adopted similar laws as well. e.g., Russia, Turkey and Serbia have also established their versions of right to be forgotten. Google (2024), https://support.google.com/legal/answer/10769224?hl=en https://www.youtube.com/watch?v=0f78OI5Ijr4  > abt accessibility not gat Net Neutrality Act - , censorship. ↑ restrictions “the concept that states that organizations, such as Internet service - providers, - should treat all data on the Internet equally. Proponents argue it promotes a free and open internet, where users can access content without restriction, provided the content does not violate any laws.” https://www.investopedia.com/terms/n/net- neutrality.asp#:~:text=Net%20neutrality%20is%20the%20concept,does%20not%20violate%20any%20laws. Product Safety and Quality Minimum requirement - Product Safety The product now becomes the property of The producer conceptualize the the consumer after the sale. product, conduct R&D, design, If the consumer is injured using the product, manufacture, and market the product. whose responsibility should it be? Producer Consumer TIME Idea R&D Design Manufacturing Marketing Use Injury Who should bear the responsibility? Baron (2012), Figure 12.4 Product safety problem: Liability and Regulation Regulation Preventive: Command and control imposes standards on producers in designing, manufacturing and marketing Producer of the products. Consumer TIME Idea R&D Design Manufacturing Marketing Use Injury Baron (2012), Figure 12.4  ? who bears more responsibility Producer is.. Consumes & > - Aircraft QC > - regulate. No mill. Of samples in a batch. > - TOYS Factors : -Barrier to knowledge complexity of polt. p - can license issue  that factors contribute : can -Food expiry data , · Date is 34 actual expired date , to shift linlits from produce to consumer. The controversies of airbags https://www.youtube.com/watch?v=dJAMkoiLYZY Product safety problem: Liability and Regulation Regulation Preventive: Command and control imposes standards on producers in designing, manufacturing and marketing Producer of the products. Consumer TIME Idea R&D Design Manufacturing Marketing Use Injury Attributing duty of care Liability Liability rules create incentives for producers and consumers to achieve socially-efficient safety Baron (2012), Figure 12.4 Social Costs of Injuries Prevented Social costs are the total costs bore by Social consumers and producers. Costs The total costs will be eventually passed Total down to consumers. Hence consumers will Costs buy the product only if the benefits of use are greater than the costs of use. Injury costs decrease as costs of care increase Preventive costs (costs of care) 1. Manufacturers extend costs of care in designing, manufacturing and marketing of the product 2. Users extend costs of care in using the products, including 0 Injuries Socially efficient time to learn and safety Prevented numbers of injuries precautions prevented Steiner & Steiner (2012), Figure 12.5  Quality is more than a business issue – ethical responsibility Contract theory Firms are responsible to comply with the terms of the sale, inform customers about the product, avoid misrepresentation of any kind, and not coerce the customers in any way. Due care theory Relative vulnerability of the customer, who has less information and expertise than the firm, and the ethical responsibility this places on the firm or its salesperson. Social costs view Businesses should consider the broader impact of their actions to society, e.g., internalizing negative externalities. If a product causes harm, the firm should pay the costs of injury. Carroll and Brown (2022), p.352  Quality isofmore Responsibility than a business the manufacturer forissue – legal responsibility the finished product MacPherson vs Buick Motor in 1916 https://www.youtube.com/watch?v=YdWG-7wjKfs The charge is one of negligence. The manufacturer “was responsible for the finished product”. https://www.youtube.com/watch?v=JgtNROT92tY  A class action lawsuit filed in the US in late 2008 alleged that the company had known about the problem for four years and had received 2,000 complaints. In total, lawsuits allege that the problem accounts for around 100 deaths in the US. But a preliminary US government report investigating 58 accidents said to have been caused by faulty accelerator pedals which was released in September suggests that they were more likely to have been caused by human error. Paul Newton, automotive analyst from IHS Global Insight, said Toyota was paying the price for not taking the claims seriously at first, so that when it issues recalls now – which are common in the industry – they attract more negative publicity. Business reasons for ensuring quality Takata airbags scandal timeline 2008-2014: Reports of airbag ruptures and injuries prompt investigations into Takata airbags. 2013: Takata acknowledges the airbag defect and initiates limited recalls. 2014-2015: Expansion of recalls by various automotive manufacturers as investigations continue. 2015-2017: Increased efforts to replace defective airbag inflators and prioritize higher-risk vehicles in the recall. 2017-present: Ongoing recalls, efforts to reach affected vehicle owners, and continued research and development of improved replacement inflators. The response to the Takata airbag recalls involved massive logistical challenges, including identifying affected vehicles, procuring replacement inflators, and ensuring that vehicle owners were notified and could have their airbags repaired or replaced. Source: https://www.thecallahanlawfirm.com/takata-airbag-recall-explosion/ Takata airbags The initial indications of airbag defects and related injuries occurred in the early 2000s. The root cause of the issue lay in the design and manufacturing of the airbag inflators. The inflators contained a propellant, ammonium nitrate, used to generate the gas that inflated the airbag upon impact. Ammonium nitrate degrades under certain environmental factors, such as high temperatures and humidity, leading to excessive pressure within the inflator. When the airbag is deployed, it ruptures the metal casing resulting in shrapnel-like metal fragments propelled into the vehicle’s cabin, increasing the risk of severe injuries and fatalities. The scope of the Takata airbag recall is extensive, with millions of vehicles affected worldwide. https://www.autoweek.com/news/a1908701/all-takata-airbag-recall-vehicles-one-handy-list/ The recall process has involved collaboration between automotive manufacturers, dealerships, and regulatory bodies to facilitate the repair or replacement of defective airbags. Source: https://www.thecallahanlawfirm.com/takata-airbag-recall-explosion/ Lessons learned - Takata airbags Lessons learned from the Takata airbag recall have led to enhanced testing protocols, stricter quality control measures, and increased transparency in reporting safety defects. The recall has spurred advancements in airbag technology, including developing new inflator designs with alternative propellants – not ammonium nitrate. Source: https://www.thecallahanlawfirm.com/takata-airbag-recall-explosion/ Takata airbags – the scale of the problem https://www.youtube.com/watch?v=2KVGwCcJpf0 Product Safety Best Practices Practice safety by design. Make safety a priority at the product design state. Build safety in the supply chain. Use suppliers who can reliably and consistently provide compliant materials and subassemblies. Be knowledgeable and aware of the business and regulatory environment. Review and monitor consumer feedback reported by customers. Be prepared. Have a recall plan in place should you need to act quickly. Document the work done toward meeting compliance standards. Challenge the manufacturing process and go above and beyond the mandatory and voluntary standards. Seek an outside perspective. Carroll and Brown (2022)