IGCSE Business Studies - 3.4.1 Legal Controls Related to Marketing

The Purpose of Legal Controls to Protect Customers

Legal controls are in place to safeguard consumers from unfair and potentially harmful business practices during the marketing process. These controls aim to ensure transparency, accuracy, and safety in the marketplace.

Why are Legal Controls Necessary?

Without legal controls, businesses could engage in practices that mislead customers, sell unsafe products, or exploit vulnerable individuals. Legal frameworks establish minimum standards of conduct and provide avenues for redress when these standards are breached.

Legal Controls Related to Marketing: Protecting Customers

Misleading Promotion

Misleading promotion refers to marketing activities that contain false or deceptive information, leading consumers to make decisions they wouldn't otherwise make. Legal controls aim to prevent this.

• Consumer Protection Act: This act prohibits businesses from making false or misleading claims about their products or services.
• Advertising Standards Authority (ASA): The ASA is an independent body that enforces advertising codes of practice. They investigate complaints about misleading advertisements and can order businesses to withdraw or modify their ads.
• Examples of Misleading Promotion:
  • False claims about product performance (e.g., "miracle cure").
  • Hidden or small print terms and conditions.
  • Deceptive pricing tactics (e.g., falsely inflating the original price to make a discount seem larger).
  • Misrepresenting the origin or quality of a product.

Faulty Goods

Faulty goods are products that have defects or are not fit for their intended purpose. Legal controls address the issue of faulty goods to protect consumers from purchasing unsatisfactory items.

• Consumer Rights Act: This act sets out the rights of consumers when they buy goods. It guarantees that goods must be of satisfactory quality, fit for purpose, and as described.
• Implied Terms: Under the Consumer Rights Act, there are implied terms about the quality and fitness of goods. These terms automatically apply to every sale, even if they are not explicitly stated.
• Consumer Remedies: If a product is faulty, consumers have several remedies available to them:
  • Right to Repair: The seller has a legal obligation to repair or replace faulty goods within a reasonable timeframe.
  • Right to Refund: If repair or replacement is not possible, the consumer is entitled to a full refund.
  • Right to Replacement: The consumer can request a replacement product of the same type.
  • Right to Compensation: In some cases, consumers may be entitled to compensation for losses suffered as a result of a faulty product.

Legal Control	Purpose	Examples
Consumer Protection Act	Prohibits false or misleading claims in marketing.	False claims about product performance, hidden terms and conditions.
Advertising Standards Authority (ASA)	Enforces advertising codes of practice.	Investigates complaints about misleading ads and can order withdrawal.
Consumer Rights Act	Guarantees goods are of satisfactory quality, fit for purpose, and as described.	Right to repair, refund, replacement, or compensation for faulty goods.

By implementing and enforcing these legal controls, governments and regulatory bodies aim to create a fair and trustworthy marketplace where consumers can make informed purchasing decisions without fear of being misled or harmed.