The Ghost of Andy Rooney

Have you noticed how the fine print is getting ever longer and finer in just about every purchase contract? Almost everyone has surely experienced clicking OK on lengthy terms and conditions windows when downloading software. Have you ever read all of that stuff? Do you know anybody who has? Not me. My reasoning on it is:

1. I’m going to end up agreeing to it anyway because, clearly, I won’t get the download without it.
2. Nothing awful is going to happen by agreeing to it, otherwise I’d be reading about it in the press.
3. There are government laws limiting the excesses that might be hidden in all those words.

Over the holidays we had occasion to purchase a major appliance at a big box store. In the process of the purchase we were told that if we applied for a credit card we would get a 5% discount on the purchase. Since we are talking over $2,000 here, that would be over $100, so I agreed. The whole thing went surprisingly fast because the store already knew all about me. I gave my name and my land-line phone number and up jumped my life history. Bada, bada, bing. I got a sales slip, complete with a bar code allowing us to shop, in that store only, on the new card immediately. Credit limit $5,000. And we got one more thing with it – the “Card Agreement”.

I took a picture of the Agreement – it was on pink flimsy paper and ran two columns over a length of about 4 feet. I estimate, based on 13 words per column line and 60 lines per foot, that it is about 6,240 words long. (At first I thought it was twice that long, but it turned out the other side was just duplication – in Spanish.)

Now that the dust has settled I see that the terms are actually pretty readable. Topics include how they compute interest charges based on APR’s, fees, payments, credit reporting, arbitration procedures (you can’t sue them), debt collection, small claims court, and so on. That they use the Annual Percentage Rate method is of course due to a government mandate rigidly defining that. Thank goodness. And this is the heart of the matter. If there were not laws defining consumer rights in the matter of credit, there would be no limits to manipulation of the vigorish. Further, I think it very significant that signing me up for this account should be worth more than $100 to the store. I actually feel a little guilty about it because we always pay our full balance on credit cards. Always have. It’s a legacy from our depression-era parents – if you can’t afford it you do without it.

Credit is dangerous. It is well established psychologically that people spend money much more readily with plastic than with cash. The simple act of having to pull bills out of a wallet and lay them on the counter is painful compared with swiping a card, and now even that is being replaced by the simple waving of a smart phone over a terminal. Bada, bada, bing. Novocaine was never so efficient. Pleasure now, pain later.

So, it was with satisfaction that I read last week about the President’s recess appointment of a man to head the new Consumer Financial Protection Bureau.  I have always been a fan of financial education for the consumer. Capitalism is great, the engine of wealth unimagined before America led the way, but it is fundamentally a contest between buyers and sellers, and those most at risk in the process are the least educated and the least disciplined, and unfortunately there are far too many in that category in America today. And not only that, but fine print now routinely appears, massively, in every transaction. Whether you take a cruise, board a commercial plane, or ride a horse on a dude ranch, your rights, obligations and vulnerabilities are defined by unread fine print. It is not unreasonable then, in my opinion, that government should take a role as a referee for fairness in the game and give us some assurance that we don’t have to stop and read every word. Who’s got the time?

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About Jim Wheeler

U. S. Naval Academy, BS, Engineering, 1959; Naval line officer and submariner, 1959 -1981, Commander, USN; The George Washington U., MSA, Management Eng.; Aerospace Engineer, 1981-1999; Resident Gadfly, 1999 - present. Political affiliation: Independent, tending progressive as the GOP recedes from its Eisenhower roots.
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3 Responses to The Ghost of Andy Rooney

  1. ansonburlingame says:

    Jim,

    It is 8:45 AM on Sunday morning. I have read today’s Globe and was getting ready to blog on the lead front page story. The title will be BAD CHOICES MADE BY GOOD PEOPLE.

    Your support of the new government consumer protection “guy” caught my eye just as I was preparing to write the blog. I am going to use a quote from what you wrote above as part of my overall point which will be that there is not all that much that government can or should do to prevent the title of the blog, BAD CHOICES……. The blog will be “up” in an hour or so.

    Anson

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  2. Jim Wheeler says:

    Something came to us in the mail yesterday which prompts me to add a post script. (Pun intended.) It was an automotive safety recall notice and courtesy of the federal government it was in a standard format and straightforward language. Just to show how a sensible format can be mandated, I will lay it out here:

    What is the condition?
    What will Lexus do?
    What should you do?
    What if you have other questions?
    What if you have previously paid for repairs to your vehicle for this specific condition?

    That’s it, those questions and straightforward answers to same, all on one page. The condition, by the way, is a serious-sounding one having to do with a possibly-defective adhesive used in the assembly of a crankshaft pulley, the failure of which could disable the vehicle’s power steering. Now if it were not for government assuming the consumer-protective role that it does, it is easy for me to imagine that there would have been no such recall. After all, nothing lasts indefinitely and our vehicle’s warranty has long since expired – it is six years old. And yet, thanks to consumer laws the nation’s highways are operating at an historically-safe statistical level. The nation’s airlines are similar in terms of safety. Would anyone care to argue that consumer safety is not a proper role of government?

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  3. ansonburlingame says:

    Jim,

    You bet I will so argue. And I begin by asking the simple question of “How safe is safe enough”.

    Loss of power steering does not mean loss of steering entirely. And of course the question is exactly how many cars would be likely to encur such a loss of power steering. Is one too many?

    We have grown to expect GOVERNMENT to protect us all. Well I buy cars with the expectation that the designers and builders of cars bear that responsibility first and foremost. When a “defective” car causes harm WHO is ultimately responsible for the defective car? Many would “jump” to the conclusion that government did something wrong and try hard to hold “bad” government accountable.

    To me that is like saying Adm Rickover was responsible if I ran my nuclear powered submarine agound and caused release of radioactive material to the environment!!!!

    So before you launch a campaign for government to intervene more and more into any affairs, consider who really is responsible for “safety’ as a matter of priority. And for sure, please define with some precision exactly what the goal of “safety” mandated by government should become. Is zero the goal in terms of “unsafety”?

    Anson

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