We buy goods and services every day to live. This is called consumer life, and systems have been established to protect consumer rights.
Basic Knowledge
Households earn income and allocate it to consumption, savings, and taxes. Income includes earned income (wages), business income (self-employment), and property income (interest and dividends).
Laws that protect consumers include: Consumer Basic Act (2004), Product Liability Act (PL Act) (1995, responsibility when defective products cause harm), Consumer Contract Act (2000), and the cooling-off system (door-to-door sales contracts can be canceled within 8 days).
The four consumer rights proposed by President Kennedy are: the right to safety, the right to be informed, the right to choose, and the right to have one's views reflected.
The Consumer Affairs Agency (established in 2009) coordinates consumer administration.
Household (the主体 of economic activity carried out at home)
Product Liability Act (PL Act) (manufacturers are responsible when defective products cause harm)
Cooling-off (a system allowing a contract to be canceled without conditions within a certain period)
Consumer Basic Act (2004, clarifying consumer rights)
Consumer Affairs Agency (established in 2009, the command center for consumer administration)
Distribution (the route by which goods reach consumers from producers)
In Depth (Background and Significance)
In a market economy, consumers and producers trade freely. However, because of information asymmetry (sellers possess more information), consumers are likely to be disadvantaged. Therefore, developing laws to protect consumers became important.
In recent years, new forms of consumption, such as cashless payments, subscriptions, and flea-market apps, have spread, and problems have increased. People are expected to act as wise consumers and develop the ability to judge information (the consumer civic society). Ideas about consumption that has a positive effect on society, such as fair trade and ethical consumption, are also spreading.
- Households = income (earned, business, and property income) allocated to consumption, savings, and taxes
- PL Act 1995 = responsibility for defective products
- Cooling-off = within 8 days for door-to-door sales
- Four consumer rights = safety, information, choice, and having one's views reflected
- Consumer Affairs Agency established in 2009
- Rationalization of distribution = reduction of intermediaries
- Ethical consumption = consumption based on ethics
Points to Note (Easily Confused)
① Distinguish the PL Act (Product Liability Act, 1995) from the Consumer Contract Act (2000). ② The cooling-off period differs depending on the type of transaction (8 days for door-to-door sales, 20 days for pyramid schemes, and so on). ③ The Consumer Basic Act (2004) revised the Consumer Protection Basic Act (1968). ④ Mail-order sales are generally not subject to cooling-off.
Practice
- Explain what kind of law the Product Liability Act (PL Act) is.
- How many days is the cooling-off period for door-to-door sales?
- In what year was the Consumer Affairs Agency established?