Before starting a business, understand there are many laws you must know and understand. Otherwise, you can land in legal troubles that cost you financially and could lead to the closure of the business. It is wise to hire a business attorney who can walk you through the legalities and ensure you are protected.
One topic you want to know about is consumer protection laws governed by the Consumer Protection Agency.
Doing business is more than providing a service or product. How you treat your customers and their data is important, not only to the consumer but also to your brand.
Keep reading to learn more about five things to avoid that will keep you out of trouble.
What is the Consumer Protection Agency?
The Bureau of Consumer Protection falls under the Federal Trade Commission. The agency is responsible for:
- Developing and enforcing fair practices in the marketplace
- Educating both businesses and consumers on fair practices
- Investigating consumer complaints
- Taking legal action against a business that break consumer protection laws
The agency had eight divisions focusing on specific laws. They also have offices in major cities around the country.
1. Identity Breaches
Identity theft is at the forefront of both consumers and businesses. When people provide their personal data and financial information, they expect companies to keep that data secure.
The cost of each data breach hit $8.19 million in 2019. This number does not include represent both direct and indirect costs and fines imposed on businesses.
Misrepresentation in advertising is on the rise due to the enormous growth of online businesses. Just because you’re dealing with people online vs. in person, doesn’t mean you can be deceptive in your product offering.
Types of fraud include failure to disclose defects in motor vehicles and not mailing items purchased online. Contractors can also be fined for not being licensed or insured.
3. Truth in Lending
If you have a business that involves providing services through a financial agreement, you must fully disclose the terms and conditions. It is your responsibility to provide clear and understandable language in contracts.
4. Fair Credit Reporting
When a customer enters into a financial agreement the business owner has the right to report the debt to all credit bureaus. Business owners have a legal obligation to ensure the information they report is factual. They must also provide timely updates on payments and balances.
5. Anticompetitive Practices
According to consumer protection laws, businesses cannot participate in practices that give them an unfair advantage in the marketplace. This includes price fixing, supplier deals designed to shut-out competitors, and false advertising about competitors.
Treat Your Customers How You Want to be Treated
The best way to avoid a visit from the Consumer Protection Agency is to treat your customers the way you would want a business to treat you. When someone complains about their service or product address their concern immediately. Next, provide an amicable solution.
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