Consumer Protection Laws

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Consumer protection laws safeguard purchasers of goods and services against defective products and deceptive, fraudulent business practices. Historically, under the common law doctrine of caveat emptor, consumers had very little protection from misleading sales, requiring consumers to inspect all transactions themselves. As modern economies developed, laws slowly evolved to protect consumers from large corporations and practices like adhesion contracts which common law fraud did not address. Consumer protection law is made up of a large patchwork of Federal and state laws governing everything from products like cosmetics and medicine to services like lending practices. The Federal government oversees antitrust law and consumer protection through the Federal Trade Commission which inspects complaints of scams and fraud against businesses. States use a variety of agencies and statutes to enforce consumer protection, expanding on the Federal law in many areas. Consumers face high cost and time barriers to taking action against a business, resulting in low usage of consumer protections. However, consumer protection laws and actions have steadily increased since the 1970s, and more consumer and lawyer awareness may lead to a more active employment of consumer protection laws. 

[Last updated in June of 2021 by the Wex Definitions Team]