Consumer Defense in a 21st Century Environment

Consumer defense focuses on the legal remedies available for consumers in the event of a breach of their contractual obligations. Typically, these remedies are provided by courts of law and government agencies.

There is a growing belief that these remedies are insufficient to address many consumer concerns. This is based on a mismatch between the legal framework of consumer rights and the markets that have developed in this century.

The mismatch is not only a matter of justice, but also of market innovation. The Internet has provided an opportunity for a new generation of intermediaries to provide warranty and redress services to consumers in ways that were not feasible before.

These specialized services can be especially useful in a situation where the business in question is unresponsive to consumer complaints or where it is too expensive for consumers to band together to assert their rights. Intermediaries, such as SquareTrade, can supplement the warranties and redress terms provided by retailers or manufacturers by providing easy to use service that is relatively inexpensive and hassle free.

What can we do to improve consumer protection in this environment?

The primary challenge is separating meritorious claims from frivolous shakedown suits. This has a bearing on both the development of enforcement-based remedies and on consumer advocacy efforts.

For instance, a class action lawsuit brought by a class of people against a credit card company in a state in which consumers are not permitted to sue in a class action under state consumer protection laws has been successful only in very few cases. The same is true of other class actions, including class-action claims against retailers in the United States for deceptive sales practices.

In addition, the threat of frivolous claims has discouraged consumers from taking the steps that would allow them to pursue their rights. In many jurisdictions, it is even illegal for consumers to file a lawsuit against a business without an attorney.

This is particularly the case in the United States, where a class action lawsuit for deceptive sales practices can cost a consumer up to $20,000 in lost profits and attorneys’ fees.

There are a number of resources for consumers to learn more about their rights, including those offered by the National Consumer Law Center (NCLC). These resources can help you protect your privacy, manage money and debt, avoid identity theft, make informed decisions, and steer clear of scams and fraudulent offers.

Some of these resources are available for free online, while others can be obtained through a membership in an organization like NCLC. You can also find free consumer law treatises and resources in our Digital Library.

Identifying the right stock for you

The most important thing to remember when looking for a consumer defensive stock is that these companies tend to be less volatile than other types of stocks and are often able to pay dividends, which can provide income in times of stock market turbulence. Unlike cyclical stocks, consumer defensive stocks are often more established companies and have a high barrier to entry, so they are usually priced at a premium. In addition, these companies have a strong brand name and reputation that can help their shares price go up in difficult economic times.