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Consumer Advocacy and Protection

legacy of federal legislation and agencies intended to pro- This situation led to the consumer movement of the
tect consumers in the United States. The rights of con- 1960s. One of the country’s most outspoken and contro-
sumers have expanded to include product safety, the versial consumer advocates, lawyer Ralph Nader, came to
legitimacy of advertising claims, the satisfactory resolution the forefront during this time. Nader’s effective and well-
of grievances, and a say in government decisions. In the publicized denunciations of the American automobile
early days of industry, companies could afford to ignore industry included class-action lawsuits and calls for recalls
consumers’ wishes because there was so much demand for of allegedly defective products, and many of his actions
their goods and services. As a result, they were often able served as a tactical model for future advocacy organiza-
to command high prices for products of poor quality. The tions.
earliest consumer advocates to point out such abuses were The efforts of Nader and other activists led to the for-
called muckrakers, and their revelations of underhanded mation of several federal agencies designed to protect con-
business practices spurred the creation of several federal sumer interests. The U.S. Office of Consumer Affairs,
agencies and a flurry of legislation designed to curb some created in 1971, investigates and resolves consumer com-
of the most serious abuses. At the same time, increased plaints, conducts consumer surveys, and disseminates
competition began to provide consumers with more product information to the public. The Consumer Prod-
choices among a variety of products of higher quality. uct Safety Commission, formed in 1973, sets national
Still, some notable cases of corporations neglecting the standards for product safety and testing procedures, coor-
public welfare for their own gain continued, and corpo- dinates product recalls, and ensures that companies
rate influence in American politics enabled many busi- respond to valid consumer complaints. Other government
nesses to resist calls for reform in advertising, worker or agencies that benefit consumers include the Federal Trade
consumer safety, and pollution control. Commission (FTC) and state consumer agencies.

Richard Romero, general manager of a California Toyota dealership, shows the same contract written in English, Chinese, Korean,
Vietnamese, and Tagalog. The Consumer Protection for New Californians bill requires that certain businesses including car dealers,
apartment owners, bankers, and legal service providers have contracts available in four major Asian languages and Spanish. AP IMAGES

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 137