The Value of Consumer Protection

I had the opportunity on Thursday, July 29, 2010 to attend a briefing at the Eisenhower Executive Office Building (formerly the “Old Executive Office Building”) to hear Federal Trade Commission Chairman Jon Liebowitz and Vice President Joe Biden speak about some new consumer protection initiatives and a statement about the Vice-President’s Middle Class Task Force. I attended in my role as Secretary of the Board of the National Consumers League, the oldest consumer group in America.

It was good to hear the commitment of the administration to strong consumer protections.  In particular I found compelling the Vice President’s arguments that the middle class has been the target during these recessionary times of scam and rip off artists. Chairman Liebowitz used the occasion to announce new rules aimed at companies to offer debt and mortgage relief to consumers. The new rules will prohibit these companies from collecting any fees for their services until (or unless) they get the consumer some relief.

What got my attention the most, however, was when the Vice President came to the end of his prepared remarks and made the comment that during this recessionary time we “are all in this together.”  He said that we are a community and thus need to deal with each other with honest, honor and acknowledging that our promises to one another are “sacred.”

It seems my ears are attuned to noticing whenever values pop into a conversation about economics these days, and the Vice-President’s choice to talk about core values of honesty, honor and “sacred” promises in business relationships resonated with me.   As someone who has been involved in consumer advocacy and protection for over 40 years—I started my career with Ralph Nader in 1970—I am familiar with the myriad of complicated legal and regulatory issues involved in economic regulation.  We didn’t spend much time in 1970 articulating our value sets.  As young men and women we marched off to court or to file petitions with regulatory agencies about the causes we were perusing.

At the meeting, the Vice-President was talking in the context of the new rule that was being adopted to limit how “debt relief” firms     operated.  In the current, difficult economic environment many people are having trouble paying their bills. Many of them are preyed upon by “debt relief” firms that promise consumers to clear many of their debts, but require a big up-front payment. Then, when they were not successful, the consumer is worse off than before they started. The new rule is simple; it requires that the consumer does not have to pay unless in fact the debts can be mitigated.  In other words, the debt relief companies need to stand behind their promises, implied or explicit.

At the end of the day, in most consumer protection issues, that is all that is being asked. Merchants keep their promises –implicit or explicit -- and to treat their customers with honor.