Essay, Research Paper: Consumer Protection

In 1997, if the Tylenol corporation sold a pain killer which, instead of relieving
pain, actually killed people, the medicine (as well as the company) wouldn't exist
for long; but that wasn't always the case. Prior to end of the nineteenth century, the
consumer was almost powerless to stop any wrong doing it was receiving at the
hands of con-artists, manufacturers of shoddy goods and dishonest salesmen.
However, when our country entered the Progressive Era, reformists began to
demand that the rights and safety of the American consumers be considered in a
new way. Ever since then, consumers' rights advocates and the government have
been trying and succeeding little by little to make America a place where consumer
protection comes before profit.
Consumer protection can be defined as "All the activities of government,
business and consumer organizations designed to insure consumers' rights in the
marketplace."1/ Five of the basic rights associated with consumer protection are:
*the right to safety- to be protected against the marketing of goods that are
hazardous to health or life;
*the right to be informed- to be protected against fraudulent, deceitful or
grossly misleading information, advertising, labeling or other practices;
*the right to choose- to be assured, wherever possible, of access to a variety of
products and services at competitive prices;
*the right to be heard- to be assured that consumer interests will receive full
and sympathetic consideration in the formulation of government policies. 2/
These principals for consumer protection were developed over more than a
hundred years of efforts by consumer rights activists and legislators throughout the
country.
The serious need for consumer protection was first identified in the late
eighteen hundreds: a time when many Americans still felt that the federal
government didn't have the right to control businesses. Therefore, there were few
formal regulations for conducting business. "Let the buyer beware" was the
underlying principal of most business transactions. The idea that it was up to the
consumer to protect himself dated from a time where most trade consisted of
bartering with one's neighbor. As the industrial revolution changed the way
America did business, that outdated maxim left consumers at a serious
disadvantage to big business and unscrupulous merchants. In order to make more
money, corporations would get a virtual monopoly on a product by joining together
with other like corporations and forming huge trusts that controlled the price of the
goods they produced. Then to make even more money they would cut corners in
producing their product. Since these trusts had almost complete control of the
market, consumers had very few choices among which products to buy. They could
no longer be sure that the product was in good condition or that it could perform as
advertised. In his book, The Jungle, Upton Sinclair tells of the horrendously
hazardous practices of the meat companies in Chicago. What they claimed to be
"potted ham" in actuality may have been diseased carcass, rat poison, rope ends,
potato waste and other chemicals. Since the consumers had no way to avoid buying
from the Beef trust (because it controlled almost all meat sold) , their only option
was to purchase these horrible products. As more authors wrote of these
injustices, the public became more aware and pressure for change increased.

The first victory for the consumer came in 1872 with the passage of the Mail
Fraud Law. This law allowed the Postmaster General to investigate and prosecute
mail-order fraud. Although it did help prevent fraud through false advertising, it did
nothing to protect the public from unsafe and hazardous products. Was there no
way to stop these dangerous products from reaching the market? Congress hoped
to halt these abuses with the passage of the Sherman Anti Trust Act of 1890, by
attempting to curb monopolies. However it had little effect on the quality of
consumer products. Because of the failure of this law, people reasoned that if
monopolies couldn't be stopped, they would have to be regulated. In 1906
Congress passed the Pure Food and Drug Act which was designed to ban the sale of
adulterated and mislabeled food and drugs. Then in 1912, the Sherly amendment
was passed to further prevent mislabeling. But, the real victory came in 1914 when
the Federal Trade Commission was established to investigate businesses involved
in interstate trade.
These laws made the market place a safer place for consumers for a while.
However, the trusts, forever trying to find ways to make more money, found
loopholes in the laws. For example, to avoid being penalized for mislabeling
products, companies would simply ship the products without labels, planning to
put them on later 3/. Since the battle was not yet won by the consumers,
legislation was necessary in order to stop the growing ways of deception that
business were developing. To combat this problem, the Food and Drug
Administration (FDA) was created in 1931. It set the health standards which a
product must meet in order to be sold. This commission was effective in combating
the safety problems of foods and drugs. There became fewer and fewer ways in
which business could harm or cheat the consumer. Finally, in 1938 the Federal
Food, Drug and Cosmetic Act was passed which allowed the FDA to test new drugs
before they hit the market. People could now rest more easily that the food and
medication they bought would not kill or otherwise hurt them.
Big problems arose again in the mid nineteen hundreds. The influx of new
technology after world war two caused many issues in safety and fraud to come up
again in the never ending battle of big business verses the consumer. Two men lead
the crusade to bring consumer protection into the modern era. These people were
president John F. Kennedy and Ralph Nader. Although Kennedy is best
remembered for being killed, his benefit to the consumer was immense. On March
15, 1962 in a message to Congress, Kennedy first outlined the rights of the
consumer (see page one). These rights gave people the knowledge that they had the
right to fight business abuse. This new sense of the power to beat big business
caused people to begin to crusade for their rights. One of the leaders of this crusade
was the lawyer Ralph Nader. His book, written in 1967, Unsafe At Any Speed,
highlighted the fact that automobile makers' defective merchandise caused many
accidents. This lead to the passage of The National Traffic and Motor Vehicle
Safety Act in 1966 which brought car design under federal control. Mr. Nader
didn't stop there. He was instrumental in the passage of several more laws including
the Wholesome Meat Act of 1967. He also established the consumer lobbying
group, Public Citizen Inc. and became head of the Consumer Federation of
America (CFA). Still, to this day Ralph Nader and many other citizens continue to
fight for consumer rights. In 1994 a bill was passed, requiring the ingredients on
foods to be listed. Also, new technologies, such as the internet, have created the
need for more protection laws.
In the hundred and twenty seven years since the Mail Fraud Act was passed
the economic situation in our country has gone from the consumer serving the
manufacturer to the manufacturer serving the consumer. But it was an uphill battle
the whole way. After all it is not easy to over come greed. With dedication,
however, it has been possible to seize the power from the hands of the corrupt and
return it to the hands of the people. But, the battle for consumer protection is never
over. As long as big business continues to find ways to increase profits by cutting
costs at the expense of the consumer, there will always need to insure that the
saying "the customer is always right" remains a reality.