CONSUMER EDUCATION

An alarming number of American consumers have not been adequately prepared to function as consumers in their local communities and the nation. There is a need for consumers to learn the skills necessary to make rational and informed decisions, to cope with their present economic circumstances, and to participate as citizens to influence social, political, and economic change. Consumer education has been largely neglected by governments and the business community even in the best of times. This is unwise because consumer illiteracy:

  • drains the family budget and the public treasury;
  • contributes to inflation, waste, and malfunction in the economy;
  • frustrates the consumer;
  • contributes to stress and conflict within the family;
  • contributes to the inefficient conduct of business; and
  • contributes to unfair business practices and consumer fraud.

The importance of consumer education as broad-ranging and lifelong must be supported in order to prepare and maintain citizens' awareness of their role in the economic and political system.

Consumer education will not only reduce the effects of consumer illiteracy, but will also accomplish things such as:

  • lead to greater self-confidence and a sense of personal worth;
  • enable people to be more self-sufficient as individuals functioning in a complex society;
  • strengthen households and family units; and
  • create communities that are economically strong and socially responsible.

Our society devotes large expenditures of public funds to teaching people how to make money, but we spend tragically little of our formal education learning how to manage our resources. The difficult skills that help us transform earnings into a fulfilling way of life must be taught. In our complex economy, a person who has not been taught such skills cannot be considered educated. When citizens are confronted with such things as a volatile economy, impacts of deregulation, political initiatives that impact the marketplace, changing international markets, chronic unemployment and underemployment, increasingly complex and confusing choices in investments and financial options, and inadequate federal and state support for human services, the public's need for information and education is even greater.

CFA recognizes that consumer complaints represent a special problem requiring the attention of educators. Consumers armed with and confident of the knowledge of the means of resolving complaints on their own or through third parties and the courts, as needed, are more self-sufficient and effective in their consumer activities.

Efforts to transmit practical information to consumers should also seek to use the already existing direct channel to consumers as represented by the many organizations at the local level through which people have joined together to address consumer needs of various kinds.

CFA supports these efforts and the work of consumer education organizations. CFA calls on all branches of government, the business community, media, consumer groups, the educational community, labor organizations, and other organizations to join these organizations and to commit resources to the development and delivery of consumer education and information to our nation's citizens.

The media is a unique resource for consumers offering a means of exposing issues and disseminating information. Consumers and educators should encourage increased media involvement in consumer problems.

CFA further will continue to provide leadership for the Consumer Literacy Consortium. The chief goal of the Consortium is to develop and disseminate essential consumer knowledge. CFA urges consumers and community groups, government, education and business organizations to support the projects the Consortium proposes.

I. GOVERNMENT COMMITMENT

We call upon federal, state and local governments to make a massive public education commitment to develop an efficient and effective consumer force in our economy.

It is vitally important that people continually be educated to become more effective consumers. In today's complex marketplace, coping skills are essential. But alone they are not sufficient. The changing world and economic system demand that the consumer/citizen also be educated to assume greater responsibilities for affecting economic policies, not merely reacting to their appearance in the market. The consumer/citizen must be heard in regulatory and administrative proceedings. The human service sector of our economy also demands that the consumers of health, education, welfare, and other social service systems be heard.

We call on Congress and the Administration to acknowledge the national imperative to educate the consumer/citizen for a changing economy and increasingly deregulated marketplace. This will require a high level policy-making process, a federal clearinghouse function for educators and others, as well as support for research. We call for the restoration and refunding of the original legislative mandate of 1972 for "adequate resources for educating and informing consumers about their role as participants in the marketplace." (Public Law 95-561). We also call for specific government support for personal and family financial education/training programs that enhance consumers’ abilities to effectively manage their financial resources.

We call on state governments and local boards to set aside a portion of the state education block grant funds to initiate and expand consumer education in the public schools, the community, and for adult education.

CFA encourages the President to reinstate and fund the Office of Consumer Affairs, and to continue National Consumers Week and the Consumer’s Resource Handbook.

CFA encourages the President to expand Federal Agencies' use of the services of the ConsumerInformationCenter to make available at more reasonable prices more of the valuable consumer information developed by the federal agencies.

CFA promotes the creation of advisory councils in all settings (governmental, private sector, local) to assure input by consumer educators and individual consumers.

CFA supports the efforts of the Cooperative Extension System (such as its base programs in family development and resource management, and diet, nutrition and health) and other governmental efforts in offering consumer education programs for adults and youth. Continued governmental funding at adequate levels is essential for these efforts, and CFA urges state and local governments to restore major funding that have particularly harmed programs for individuals and families.

II. FORMAL CONSUMER EDUCATION

Consumer spending accounts for two-thirds of the nation's gross national product. In our technological marketplace, those consumers who might have been trained in consumer skills while in elementary and secondary school graduate into the real world of responsibility without the skills necessary to deal with everyday consumer decision-making. We should lose no time in committing some of our education resources to educate consumer professionals to research problems on the consumer's behalf and to develop consumer education programs for our elementary and secondary schools. State Departments of Public Instruction should fund the development of consumer programs. Consumer education programs, including units to enhance personal financial management and budgeting skills, should be mandatory in elementary and secondary schools. Adult courses should be available from community and four-year colleges to assist in updating consumers and enhancing financial management and budgeting skills. Specialized training should be available for consumer leaders, teachers, and counselors so they may keep up with rapid technological and economic changes in our society.

All contributing disciplines should incorporate in their curricula the ethical considerations in the consumer-provider relationship. Individuals and organizations must understand the responsibilities of business, government, and consumers to respect the rights of other participants in the marketplace.

CFA supports a massive consumer education program with special emphasis on the informational and educational needs of the low-income, immigrant, elderly, minority, disabled persons living alone and other vulnerable segments of the population. Concentrated efforts in the mass media may be an advisable part of this program.

CFA supports the development and incorporation of geriatrics/gerontology subject matter into the curriculum for training consumer professionals and suggests that curriculum planners identify existing resources and networks for obtaining these materials.

Given the prevalence of electronic payments and billing, CFA calls for consumer education and awareness of the need to review all financial statements promptly to prevent incorrect billing and/or fraudulent activity.

III. COMMUNITY CONSUMER EDUCATION

Consumers should be educated as to the availability of resources and have easy access to relevant, complete information when they need it. Educational programs and information should encompass a wide variety of consumer issues including programs and information to enhance personal and family financial management and budgeting skills. Federal and state agencies as well as other organizations, need to be aware that their existing materials are of little, if any, value to recent immigrants and others with limited English language ability, or who are educated in other legal cultures. Pamphlets must be printed in languages relevant to target populations. Delivery systems should be established for informing consumers and consumer organizations about their options. Many groups, including consumer cooperatives, have ongoing successful programs that can be models for others and are working on the development of this information. Much information exists in the community itself, but it is unknown or unavailable because of lack of outreach programs and funding for wider distribution.

CFA calls on government and business to fund local agencies, community organizations, and libraries to make this information and training available to:

A. Consumers.

B. Consumer professionals and consumers active in community organizations with special emphasis on providing training for consumer leaders.

C. Teachers of consumers in the public schools through in-service programs.

D. The community as a whole through the use of prepared material (including online, mass media and printed material) with special emphasis on precise and timely buying information. We encourage business to provide complete and accurate information about its products and services. In addition, special attention should be paid to groups with special consumer education needs including children, the elderly, people with limited English language skills, people with limited reading skills, people living alone, minority groups, and single parents.

E. Efforts should be make to debunk myths regarding the civil justice process that lay the basis for legislative restrictions to access to the civil justice system and to legislative caps on jury awards.

IV. CONSUMER ORGANIZATIONS

Expertise exists in the consumer movement to achieve the goals enumerated above. We call upon the government and the business community at all levels to make use of that knowledge by:

A. Funding consumer organizations to provide independent programs.

B. Stressing training of consumer leaders so that consumers will have expertise available locally.

C. Helping independent organizations develop and disseminate consumer information.

V. BUSINESS INVOLVEMENT

CFA urges the business community to direct more resources toward efforts that result in a better informed consumer. The business community has untapped resources that could be utilized for the purposes of objective consumer education. Active involvement by the business community is needed.

In addition to funding as described in Sections III and IV, CFA encourages businesses to increase activity in areas such as:

  • producing objective educational material in electronic, print and audio-visual formats; and
  • co-sponsoring conferences, seminars and training sessions.

CFA supports the efforts of credit unions and other financial institutions in educating consumers on the best way to shop for a loan, specifically in relation to 0.0% auto financing. CFA calls on all lenders to make clear and accurate disclosures so consumers know that the lowest rates are only available to qualified buyers, on select models, and for limited terms, such as 36 months. Additional disclosures should be made including application fees, pre-payment penalties and additional fees that may be charged.

VI.GOVERNMENTAL WEBSITES

CFA encourages federal, state and local government entities to host clear and comprehensive, multilingual websites about consumer protection, professional regulation and disciplinary bodies.

CFA urges states to improve the content and user-friendliness of their probate court Web sites. Consumers should be able to go online and easily find plain-language information and forms for settling a small estate.

VII. CONCLUSION

Consumer education skills are essential life skills. No child is too young nor adult too old to benefit. The purpose of consumer education policies and programs should be to assure a well-informed consumer population. Consumers should understand comparative decision making practices. Consumers should know where to get information and how to use it. Consumers should be aware of their rights and responsibilities and how to assert them. Consumers should be actively involved in the delivery of consumer education as well as in policies and decisions affecting the regulation and operation of the marketplace.

CONSUMER PROTECTION

CFA supports effective consumer protection at the federal, state, and local levels to safeguard consumers against fraud, deception, and unfair practices. Federal, state, and local regulatory agencies must be given sufficient resources, authority, and enforcement tools to pursue their missions vigorously.

CFA supports the following consumer protection principles:

Choice: The marketplace must give consumers the opportunity to make informed choices among services, goods, and sellers.

Safety: Consumers should be able to purchase goods and services that are safe or that carry appropriate warnings if they put the user at risk.

Fair Play: Contracts, advertisements, telemarketing, warranties, mailing envelopes, sweepstakes, and other written materials should not be designed to confuse, mislead, or frighten the public. Cooling-off periods should be available to consumers in transactions that have high financial risks or involve extended periodic payments.

Information Disclosure: The marketplace must make available to consumers complete and accurate information regarding the goods and services they purchase. Information should be communicated in plain language, with written information printed in type that is legible and readable or, if broadcast, is audible and understandable, to a reasonable consumer. Consumers should have reasonable time to review disclosures before consummation of the transaction.

Privacy: Consumers have a right to personal privacy and should be able to reject intrusive marketing practices, communications, technology, and unauthorized use of records. Consumers have a right to control individually identifiable transaction information and to decide to whom and for what purposes that information may go. Consumers' records, such as financial and medical information, should not be released to a third party without permission and disclosure. Children's privacy interests deserve special protections.

Redress: When consumers are wronged in a marketplace transaction, appropriate and adequate redress must be available. Clear disclosures identifying how and where aggrieved consumers can complain must be provided. Redress must be provided in a timely manner and with a right of appeal.

Enforcement: There must be strong federal, state, and local enforcement of consumer protection laws and regulations. The full range of enforcement actions (e.g., administrative, enforcement, individual and class action lawsuits, and civil and criminal prosecutions) should be available and utilized where appropriate by government officials and individuals.

I. UNFAIR AND DECEPTIVE TRADE PRACTICES

CFA supports Federal Trade Commission rulemaking to establish industry-wide standards of behavior to ensure that consumers are adequately protected against unfair and deceptive trade practices.

CFA supports adoption by all states of Unfair and Deceptive Acts and Practices laws ("little FTC" laws) so that both unfair and deceptive trade practices are prohibited. State laws should allow consumers to bring a private right of action for treble damages and allow for a minimum recovery of $500 per consumer. State UDAP laws should require the seller to pay the consumer's attorneys' fees if the consumer prevails in the action. State agencies should have enforcement and regulatory authority under UDAP laws. There should be no exemptions under UDAP laws, such as those for utilities or insurance companies. Federal law should not preempt state law where the state law provides greater consumer protections.

CFA is committed to extending protection for consumers of death care goods and services by encouraging Congress to pass legislation codifying the Federal Trade Commission’s Funeral Rule and expanding it to cover crematories, cemeteries and third party providers. Currently, only funeral directors are included. CFA believes all segments of the funeral and burial industries should be held to similar standards of transparency and fairness. CFA supports the expansion and increased enforcement of state and federal laws and regulations that protect consumers of death care goods and services, including but not limited to: providing consumers printed price information; copies of any rules or regulations; and choice in purchasing unbundled goods and services.

CFA urges state legislatures to allow consumers (recipients of services) to seek meaningful recourse from all service professionals under consumer protection statutes. When a service professional defrauds, deceives or misleads a consumer, he or she should be held accountable under the state’s consumer fraud statute.

II. TELEMARKETING

CFA supports vigorous enforcement by the Federal Trade Commission of the Telemarketing Sales Rule. Future rulemaking efforts should address problems that remain in the telemarketing industry. For example, no consumer's bank, savings, trust, stock, or bond account should be directly accessed by a telemarketer as a form of payment for goods or services.

CFA urges states to require that all telemarketing businesses and their agents that operate in the state be registered and licensed, with all licensees bonded to compensate consumers who may be defrauded by the licensee's actions.