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Ralph Nader > In the Public Interest > How They Screw You in the Marketplace

The Republican run Congress is determined to sweep aside much of the existing federal law and order against business fraud on consumers, investors and small shareholders. Before they plunge forward, with their ignorance and callousness at full throttle, they should read Mark Green’s soon-to-be-released book about what is confronting shoppers these days in the sleazy part of the marketplace.

Green is not just the author of many books on business and consumers. For over three years (1990-1993), he was Consumer Affairs Commissioner of New York City — a tough cop against sellers who steal and deceive. Here are some examples from his case files:

“An elderly woman from Brooklyn signed a blank contract with a door-to-door salesman for $3,700 worth of home-improvement work. Later the contractor claimed the contract was for $37,000, and the fine print on the contract included an interest rate that boosted the cost of the entire project to $119,629 — or more than the value of the home being repaired.” This is an extreme but not an isolated case by any means.

“A couple bought a cordless telephone for a quoted price of $99. After they signed the credit slip, they noticed that the sales clerk had altered it — to $999, plus tax.”

“Two-thirds of all home improvement contractors fail to obtain legally required licenses.”

“When Consumer Affairs inspectors went out to cite an electronics store for selling used goods as new, they caught employees red-handed using razors to cut out the word “refurbished” from cardboard boxes containing old VCRs.”

“In an inspection sweep of 150 gas stations, one in six was caught committing “octane fraud” — deceptively selling inexpensive regular gas as more pricey premium (average overcharge per tank: $2.25).”

“Supermarket scanners charged regular prices for advertised sale items 10% of the time.”

“Labeling on 90% of independent pay telephones illegally failed to disclose information required by the state’s Public Service Commission, such as their exorbitant, hidden rates.”

The Federal Trade Commission (FTC) has many of these patterns of commercial thievery documented in its files. Yet although this federal agency is twenty times larger than Green’s agency, he brought more deceptive advertising cases against culprits than did the FTC in his three years as Commissioner.

Lest readers think that the need for strong law and order against companies is based on a string of unrepresentative anecdotes having little quantitative significance, (a technique used by the anti-corporate law and order lobby), consider Green’s totals.

In 1985 he gathered the leading studies on the costs of price-fixing, securities fraud, auto repair fraud, product defects, pollution, bribery, and kickbacks, etc. His conclusion: “the rough total cost consumers $862 billion a year (in 1985 dollars) to waste, abuse, and outright fraud — or 20% of consumer purchasing.” (see his book, The Challenge of Hidden Profits) This sum amounts to 20% of all consumer purchasing dollars.

Green’s new book, (published by Workman Publishing, New York, New York), is a self-help manual for consumers. Reading through its pages of practical advice to avoid both the pitfalls of fraud and ignorance, one repeatedly asks “Where are the cops on the business beat?”

You may wish to send for a free copy of an analysis of Newt Gingrich’s grotesquely titled “Job Creation and Wage Enhancement Act” which is designed to tie-up and thereby dismantle the federal cops on the business crime and fraud beat. If you care about the safety of your food, water, cars, repairs; if you are concerned about the quality and price of your insurance, credit, housing, health and other services, send a self-addressed envelope to OMB Watch, 1742 Connecticut Avenue, Northwest, Washington, D.C. 20009 requesting this free report.

With its contents, you’ll be able to communicate with your members of Congress at a depth that will, perhaps jolt them into a more sensitive sobriety.