Guide to Consumer Law in the U.S.

 

Guide to Laws for Consumers and Shoppers in the United States

Here are the important federal laws relating to consumers and shopping. Your state may also have consumer laws, which generally provide even stronger consumer rights than the federal law. (See here for California).

Tip: If you have a consumer dispute with a company, here are some options for exercising your rights!

1. General Consumer Rights

What are my rights regarding debt collection?

See our Guide to What Happens if Your Account is Sent to Collections?

Are there any rules about shipping time?

When you buy something on the internet, the seller must ship the goods within the time frame it gives you (or if not specified, within 30 days), otherwise you have the right to cancel the purchase.1Federal Trade Commission rule found at Code of Federal Regulations, Title 16, Part 435

What is a deceptive business practice?

In general, businesses may not engage in deceptive or unfair marketing or other business practices.2Section 5 of Federal Trade Commission Act, 15 U.S.C. Sec 45 This can mean many things, but essentially it means that companies must be truthful about their products. See here and here for examples.

Are hidden “junk fees” illegal?

See our Guide to the Law on Junk Fees.

Can a business require me to agree not to criticize them on Yelp, social media, or other places?

No. Many businesses are starting to put in a non-disparagement clause in contracts to prevent consumers who use their products or services from writing negative reviews. But these clauses are illegal and a business cannot prevent a consumer from sharing their “honest opinions” about the business’s products or services.3Consumer Fairness Review Act But that does NOT mean you can post things that are harassing, abusive, or false or misleading.

How can I get out of a contract? Are there “cooling off” contract cancellation periods?

See our Guide to Getting Out of a Contract.

Is it illegal for a store to refuse to accept cash payment?

Some stores around the country are starting to go “cashless.” In general, stores, restaurants, or other retail establishments have the right to refuse cash from customers, and may require the use of a credit or debit card, or other type of payment. However, some cities and states are starting to ban this practice, requiring all businesses in the jurisdiction to accept cash. As of January 2020 this includes the cities of Philadelphia, New York City, San Francisco, and the states of New Jersey and Massachusetts.

Washington, D.C. and other locations are also considering cashless business bans. So far, cities such as Los Angeles, Chicago, Houston, Denver, Boston, Miami, and others are not considering such bans, but it appears to be a fast moving issue. We will keep this up to date.

Is it legal for a store security or other employee to arrest me?

In general, stores have what is usually called “shopkeeper’s privilege” to hold or detain someone they suspect of stealing something. See more at our Guide to Laws about Retail.

What is an arbitration agreement and what are my rights?

When you buy a product or service, you may be asked to signed a mandatory arbitration agreement. This will generally make it harder to sue the company if your consumer rights are violated. See more at our Guide to Arbitration.

What are my rights when shopping online?

See our Guide to Online Shopping Laws.

2. Spam and Telemarketing

What are the rules regarding telemarketing?

Companies must check the national “Do Not Call” registry before calling you, and if you and if you are on the list they cannot call you. However, this does not apply to non profits or charities, political calls, debt collectors, or surveys.

What is a robocall and is it illegal?

A robocall or “robo call” (as in, a call from a robot) is a recorded message that plays when you answer the phone or which is left on your voicemail. The calls are made through an autodial device. The rules for robocalls are different for cell phones vs landlines (non cell).

For calls to cell phones:

Robocalls to cell phones are NOT permitted without the recipients’ prior consent. This applies to for profit companies as well as non profits, charities, and political organizations.4Telephone Consumer Protection Act; 47 U.S.C. § 227(b)(1)(A)

For calls to landlines:

Many states have stronger restrictions than the federal rules here so check your state. For example, California prohibits any robocall unless there is an existing relationship.

Under federal law, some robocalls are allowed, including messages that are:

  • purely informational, for example to let you know your flight’s been cancelled, reminders about an appointment, or messages about a delayed school opening.
  • from political campaigns or non profits or charities547 C.F.R. § 64.1200(a)(2) [2007] permits non-commercial and tax-exempt nonprofit calls.
  • from banks
  • from phone carriers
  • from pharmacies
  • about collecting a debt

The robocalls that are NOT allowed are:

  • any message that promotes the sale of any goods or services

See more at the FTC website and FCC website.

Are spam texts illegal?

Yes, the same rules for robocalls to cell phones apply to “robotexts” text messages. Companies and organizations may not robotext without your prior consent.

3. Banking & Credit

For more on banking and finance, see our Guide to Finance and Banking Regulations.

Does my bank need to ask me before signing me up for overdraft protection?

Yes. If you attempt to pay for something but don’t have enough money in your bank account, your bank is not allowed to automatically let the transaction to go through and then charge you an overdraft fee. It MUST ask you whether you want to make the overdraft & pay the fee OR have the bank decline the transaction.6Federal Reserve regulations found in 12 CFR Part 205

When must my bank legally make my deposited funds available?

If you make a deposit to a bank in person, the bank must make the funds available by the next business day. If you make a deposit electronically after business hours, the bank must make the funds available by the second business day.712 CFR 229.10

Are there any rules about reporting deposits of large amounts of money?

Yes. See our Guide to IRS reporting requirements.

Is it illegal to discriminate against an applicant for credit?

When applying for credit, you have the right to be free from discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because you get public assistance.

NOTE: This is based on the federal Equal Credit Opportunity Act of 1974. Your state laws may provide further credit protections.8CITATION: 15 U.S. Code Sec. 1691

4. Gift certificates, gift cards, and prepaid cards

Are gift cards or prepaid cards allowed have an expiration date?

Any expiration date generally must be at least 5 years from the date on which funds were last loaded.912 CFR 205.20 But some types of such cards are exempt (see footnote).10Exempt cards are those that are: (1) Useable solely for telephone services; (2) Reloadable and not marketed or labeled as a gift card or gift certificate. For purposes of this paragraph (b)(2), the term “reloadable” includes a temporary non-reloadable card issued solely in connection with a reloadable card, code, or other device; (3) A loyalty, award, or promotional gift card; (4) Not marketed to the general public; (5) Issued in paper form only; or (6) Redeemable solely for admission to events or venues at a particular location or group of affiliated locations, or to obtain goods or services in conjunction with admission to such events or venues, at the event or venue or at specific locations affiliated with and in geographic proximity to the event or venue.

Are gift cards and prepaid cards allowed to charge service fees?

Only if there has been no activity for at least 1 year.1112 CFR 205.20 But again, some of these types of cards are exempt (see above).
See more on gift card and prepaid card rules here.

5. Cell phones

Unlocking your phone. After you have fully paid for your cell phone (which may include finishing your phone service contract), you have the right to “unlock” your phone in order to switch carriers.12Unlocking Consumer Choice and Wireless Competition Act of 2014

Your cell phone bill. Cell phone companies may not add charges to your bill from outside companies without your clear consent, must clearly identify these charges as from outside companies, and must give you the option to block the charges. This practice is called “cramming.”

For more on cell phones see our Guide to Laws About Cell Phones

6. Drones (aka Unmanned Aircraft Systems)

Do I need to register my drone?

Most drones for recreational purposes no longer need to be registered with the Federal Aviation Administration. Find out more at our Guide to Drone Laws.

7. Other Tech products

What’s the deal with the “Warranty void if removed” labels?

Even though it may seem like they are everywhere, if a label that says “warranty void if removed,” you can generally ignore these. They are generally illegal, since the law says warranties must be honored even if you open a product to attempt to repair it.13FTC guidance; Magnuson-Moss Warranty Act

What is the right to repair?

All consumers have a “right to repair” or right to attempt to repair their products, without the possibility that this will void the warranty. In July 2021, the Federal Trade Commission (FTC) voted unanimously to enforce laws around the right to repair (particularly the Magunuson-Moss Warranty Act), so that consumers will be able to repair their own electronic and automotive devices.

Exercise Your Rights

To exercise your other consumer rights: If you feel that one or more of the above laws applies to you, you should first talk to the seller/bank about it and tell them you know the law. If they won’t fix the issue, you can do any of the following:

Related Pages


Photo credit: Photo by charlesdeluvio on Unsplash

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