Consumer protection is important for protecting consumers and instilling confidence in different institutions within the country. The laws are able to guarantee safety and quality of the products and services consumers use. A country can only experience a growth in economic activities when consumers have trust in the producers, so the producers must work to provide the assurance required to win the trust of consumers.
Inexperienced consumers are more vulnerable to being sold poor quality products and to illegitimate sales. Consumer protection laws take into account the challenges faced by such consumers to ensure that they are protected from fraudulent sellers and unsafe products. There are also several agencies and services that help to ensure consumer protection. For example, online companies use services, such as Verisign, BBBOnline and TrustE, to earn the trust of their customers.
In the service industry, the consumers interact with the producers regularly when hiring their services. In this type of situation, there must be assurance that the person a consumer is dealing with is reputable and legitimate. This creates an opportunity for the existence of middlemen to serve as a link of trust between the consumer and the producer. Typically, consumer protection policies are important to protect consumers from cons, misleading advertisements, poor services and unsafe goods.
