Business: THE U.S.'s TOUGHEST CUSTOMER

  • Share
  • Read Later

(5 of 11)

for chemical additives in gasoline and toothpaste, by food and soap that are packaged to defy easy comparison with the prices of competitive products. Though the poor and the uneducated are more systematically bilked than other groups, the current upwelling of consumer protest comes primarily from the comfortable middle class. The anger rises from the irritation of the telephone caller who cannot get a dial tone, the commuter whose dilapidated train runs 45 minutes late, or anyone at all who tries to get his auto, dishwasher or TV set properly repaired.

The Most Serious Theft

It is almost impossible to estimate the dollar loss to consumers through unscrupulous practices. The chairman of the Senate Commerce Committee, Washington's Warren Magnuson, argues that deceptive selling is the nation's "most serious form of theft," accounting for more dollars lost each year than robbery, larceny, auto thefts, embezzlement and forgery combined. An idea of its scope comes from the case of some major drug manufacturers, which have admitted entering into a long-term price-fixing scheme that netted them at least $100 million before they were caught. Three large plumbing-fixture manufacturers were convicted not long ago, and twelve others pleaded "no contest" in a similar conspiracy involving $1 billion worth of sinks, tubs and toilets.

The human costs of unsafe products and practices are even harder to measure, though Nader can almost endlessly cite alarming statistics. "Do you realize that there are 2,000,000 needless cases of salmonella food poisoning a year?" he says. "Just think of it. And that's only one aspect. Do you realize that more Americans died on the highways by mid-October of this year than have been killed in all of the Viet Nam War? Consumers are being manipulated, defrauded and injured, not just by marginal businesses or fly-by-night hucksters but by blue-chip business firms."

The bulk of complaints against business falls into four broad categories:

> DECEPTIVE PROMOTION. The U.S. Food and Drug Administration has reported that commercial mouthwashes—a $212-million-a-year business—are useless for curing "bad breath," and that more than 300 other patent drug items are useless for the purposes for which they are advertised. Chicago officials recently fined 121 service-station operators who had put out curbside signs advertising gasoline at one price but charged more at the pump. Another advertising abuse involves the "bait and switch" routine. Salesmen lure customers by advertising an extremely low-priced product; but when the time comes to buy, the product is "not available" and the customer is induced or coerced to accept a costlier one. In California, the attorney general's office has found this practice used by swimming-pool contractors, home-freezer-and-meat-supply operations, and by a dealer who specialized in collecting advance payments from G.I.s serving in Viet Nam.

> HIDDEN CHARGES. A subtler method of parting consumers from their dollars is to tack on additional, often vaguely named charges. Lenders, for example, collect "service charges" and "points" that add substantially to borrowing costs. Often such charges would amount to usury under state laws if they were labeled as interest, which they

  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  6. 6
  7. 7
  8. 8
  9. 9
  10. 10
  11. 11