Consumer awareness is key, advocates say

As the incoming administration begins appointing new leaders to fill federal agency roles that directly impact consumers, what remains to be seen is how the next four years will play out in terms of consumer safety and protection.

Consumer advocates, however, are paying attention, and keeping a wide range of issues in their line of sight, such as food and product recalls, the future of the Consumer Finance Protection Bureau and the reduction of federal workers who help with enforcement.

While there have been some consumer wins during Bidens tenure, there are some rules that are tied up in court. Advocates are hoping that consumer protection remains a priority for the current administration, but they also have a clear common message for consumers pay attention.

Food and product recalls

Food recalls and products such as unsafe toys, remain a lingering concern, said Teresa Murray, consumer watchdog director at U.S. Public Interest Research Group.

According to PIRGs Trouble in Toyland 2024 report, more toys that ship from abroad directly to the consumer, puts unsafe and untested toys directly into the hands of children.

Toys have to meet more than a hundred different safety standards, and so any toys that are sold in this country have to meet the same safety standards, regardless of where they were manufactured. Well thats not happening, she said.

She advises that consumers refrain from buying from companies they have never heard of, as they may be skipping a safety step.

Last year also proved to be big on food recalls with some big name brand foods affected, such as McDonalds Quarter Pounder hamburgers and Boars Head deli meats.

According to the U.S. Food & Drug Administration data dashboard, there were 1,908 food or cosmetics recalls last year, an increase from 1,563 in 2023. Murray expressed concern that there could be a lapse in funding for regulators like the FDA, the U.S. Department of Agriculture and Centers for Disease Control and Prevention, all of whom work with local and state governments to keep consumers safe.

Food and product recalls remain a growing problem, but its also a bipartisan issue, Murray said, and consumers should continue to have heightened awareness.

We do think that consumers are going to need to take more responsibility for themselves, especially product safety, but also with food safety, she said.

Consumer FinancialProtection Bureau

The current administration has been critical of the Consumer FinancialProtection Bureaus reach despite its enforcement actions that have protected consumers.

We know that Trump has the CFPB in his line of sight, said Erin E. Witte, director of consumer protection at Consumer Federation of America.

Witte pointed out that CFPB's enforcement actions are supported across the board by different voters and have made the marketplace safer for consumers by proposing steps such as capping overdraft fees and removing medical debt from credit reports.

But these two proposals could also be at risk.

These are two rules that we know are going to be pretty high on the priority list of the chopping block, Witte said. But we're certainly prepared to fight back and make sure that those critical protections stay in place and actually get implemented.

The CFPB recently posted a video on Facebook about receiving a milestone of 10 million complaints.

Cryptocurrency fraud

Prior to the inauguration, President Trump and First Lady Melania Trump each launched their own memecoin cryptocurrencies, according to announcements on each of their X accounts.

A few days into taking office, Trump signed an executive order to make the U.S. the crypto capital of the planet.

But the cryptocurrency world is also rife with fraud, and use of it as a payment method by crooks has been exploding, said John Breyault, vice president of public policy, telecommunication, and fraud, at National Consumers League.

Its a significant worry, Breyault said, as there are few rules to rein in fraud on the usage of cryptocurrency. He does not expect the administration to do much to put guardrails on crypto.

Unfortunately, that is going to lead to significant harm for everyday consumers, he said.

According to the Federal Trade Commission, of the $10 billion lost to fraud, $1.4 billion in cryptocurrency accounted for the payment method in 2023.

CARS Rule

The FTC finalized the Combating Auto Retail Scams (CARS) Rule in December 2023 to prohibit car dealers from using bait-and-switch tactics on car buyers regarding car discounts, financing, availability, and hidden junk fees.

But the rule was held up pending litigation in The 5th Circuit Court of Appeals. On Monday, the courts threw out the rules, and Reuters reported it was found that the FTC violated procedural rules in writing the regulation without giving advance notice of the planned regulation.

Witte, of the Consumer Federation of America, said the pending litigation had given them pause about how the FTC would rein in predatory car dealers going forward.

We'll definitely be monitoring that issue very closely, and again, being very vocal when we need to and reminding the Federal Trade Commission that giving car dealers a free pass is not going to be acceptable, Witte said.

Personal finances

Incomes have not kept up with inflation, and thatis often reflected in consumers'bank accounts. Working class consumers often bear the brunt of this, paying financial institutions overdraft and nonsufficient fund fees, said Mitria Spotser, vice president and federal policy director at Center for Responsible Lending.

It has led to some taking on short-term loans like payday lending, just to get by. Spotser also expects that the administration will decrease disclosures surrounding these, which means consumers will need to be aware of the true costs associated with getting a short-term loan and read the fine print in the terms and conditions.

Consumers will have to be very savvy to make sure that they are getting the best deal when they are looking for small dollar credit, she said.

These loans require access to a consumers bank account, authorizing automatic withdrawals that can lead to bank charges. Its a cycle that will continue to drive the consumer deeper and deeper into debt, Spotser said.