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Ralph Nader > In the Public Interest > Consumer Frauds and the Network Project

When sellers have dreams of riches, beware of schemes that look like glitches. What is emerging from the complaints of consumers who write to us is that small rip-offs amount to big business because they are applied to large numbers of customers. What is also clear is that most consumers do not know they are being taken by these sly frauds and those few who do are given the “oh, sorry, it was a computer error or just a mistake that we’ll clear up right away.” There is, however, no “sorry” extended to the consumers who don’t challenge the same bilk by the same seller. The result is a mountain of cash purloined for no services rendered.

Here are some examples:

More people are writing about supermarket prices on a grocery shelf which differ from the price bar that is run through the computer at the check-out stand. Mr. and Mrs. W. Jones of Union City, California wrote and asked “Who nowadays can really go over every item at the check-out stand to verify prices? We have often thought about using a calculator to see how close we come to the check-out prices.”

This discerning couple found that their supermarket marked cantaloupes at $.79/1b., while at the check-out stand the price was $1.29/1b. More than a trivial discrepancy! Muffins were marked at $.59/pkg., while at the check-out stand the price was $.77/pkg.

When the discrepancy was pointed out to the clerk, the grocery tag was readjusted (a copy was attached to the Jones’ letter) and they promised that the prices would be harmonized. Four days later, Mr. Jones returned to find that nothing had changed — the same prices were there.

Oreste Canal of Sicklerville, New Jersey, found comparable price changes between the shelves and the computer. When she objected, the manager came and became very angry. He finally let her have the food marked at the lower shelf price but demanded to have her name and address. What gall?

Amy Barken of Washington, D.C. had another infuriating experience when she took her 1987 Audi to a Hyundai dealer to have the water pump replaced, plus some minor additional fixings. When she picked up her car, she noticed that she “was charged for 6 hours of work when, in fact, the repairs had been completed in approximately 2 hours.” She was told that the bill reflected the approved “flat rate fee.” This maneuver happens all over the country. Dealers use the self-serving “flat rate manual”, published by a self-serving company and sold to auto dealers. This manual estimates quite loosely the amount of time certain repair jobs should take and that is what the customer is charged, regardless of the actual lesser time applied to the vehicle.

J. Lee Browne of Little Rock, Arkansas, rented an Avis car at Atlanta airport. He was using a “free rental certificate” issued by Delta Airlines, so the only charge was to be for the fuel. He used a half a tank of gas and was charged $24.90 which he calculated came to almost $3.00 per gallon.

And so it goes. What can be done about these and thousands of other daily scams by supposedly legitimate businesses — scams which are systematic and premeditated?

Two reforms are needed. Consumer class action law needs to be made useful and usable. In most states, these class action rights have been encumbered with so many obstructions as to prevent consumers from applying them to achieve wholesale justice.

Second, small crimes legislation needs to be passed that will authorize legal structures and procedures which facilitate catching these culprits. Such a law ‘would authorize judges, in cases where fines are imposed, to place these

monies into perpetual trust funds which finance further law enforcement, studies and investigations.

A similar trust fund idea for private civil class action suits can be contained in that reform law as well. Called “fluid recoveries” for cases involving small amounts of dollar cheats per person that would be too costly to locate for refund purposes, these funds mild be used for qualified and experienced consumer groups to deter similar theft in the future.

Readers interested in information about billing frauds or in communicating examples of such frauds may write to Network Project., P. 0. Box 1736, Santa Monica, California 90406.