Consumer Protection Without Law
5 Pages Posted: 29 Jun 2010
Date Written: June 29, 2010
Conventional wisdom holds that consumer well being is best advanced by expansive consumer protection laws that frame a rigorous two-way contract between buyer and seller. But experience suggests that the more these laws grow, the less careful consumers become and the less attention sellers give to earning consumers’ trust. This paper theorizes that a regime of one-way contracts that binds consumers but not sellers may ultimately better serve consumer interests. In such a world, alternative consumer protection devices would likely emerge: transactions will be redesigned to limit consumers’ exposure to breach, insurance and bond services would emerge that would protect aggrieved consumers, and reputation and rating services would gain prominence.
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