Best (or Worst?) of This Year’s Complaints

Following is my annual select assortment of questionable products, services, pitches and practices, as reflected in one year’s calls and letters from consumers. Many were already familiar, involving utilities, banks, insurance, time share properties, prize giveaway promotions, the IRS, retail service, credit cards, telemarketing and, of course, the invariable problems with new cars and car repairs.

First, a twist on the tired old sweepstakes promotion, introduced by Reader’s Digest in 1962 and so consistently the company’s primary method of pitching magazines, books and videocassettes that an entire generation associates Reader’s Digest less with publishing than with lotteries. This year, some of the Digest sweepstakes letters came from executives at Pennsylvania’s Mellon Bank, heralding the imminent mailing of official entry cards for a $5 million or $10 million sweepstakes (preferably to be returned with subscription order as well). One such letter assured recipients--who had “already made it through the first two stages of the sweepstakes”--that the funds were already on deposit. The other discussed the financial plan that Mellon could devise for the winner.

Reader’s Digest wanted the recipient’s attention and trust, drawn by the “third party endorsement” implicit in a “letter signed by an officer of a well-known bank,” says Digest spokesman Craig Lowder. Mellon wanted “the opportunity to be introduced to the winner,” says Mellon spokesman Norma Buhrman, “to offer them some financial planning.” Meantime, it gets those funds on deposit.

The public wanted to know whether Mellon was indeed endorsing the contest and whether this was proper; some wondered whether any credibility somehow given to the sweepstakes didn’t also diminish the bank’s credibility. I want to know whether magazine marketing will ever again try to sell a product on its own merit, rather than by some gimmick that has nothing to do with reading, writing or entertainment.

Next, a challenge to all retailing in the suit just filed by New York’s state attorney general against Sears, Roebuck & Co., charging that its new and heavily advertised “everyday low prices” are no lower than its old “sale” prices, which were actually the store’s regularly charged prices on many goods. Indeed, Sears had settled a previous false advertising action in 1986, paying $75,000 and promising to cease deceptive sales practices--specifically, said the attorney general, comparing “sale” prices to inflated, rarely charged, essentially fictitious “regular” prices.

Sears’ announcement this year that everyday prices were being lowered across the board is just more false advertising, says the attorney general. Sears’s new prices, say attorney general investigators, while naturally lower than the old fictitious “regular” prices, are often equal to or higher than previous “sale” prices.

The nation’s biggest retailer has special troubles now--unable to find a niche between today’s attractive discounters and upscale department stores. But the offense with which it is charged is an old story in retailing, where comparative price advertising is more semantics than a statement of value. The Sears case best serves to remind consumers that constant sales and special purchases and “XX% Off” promotions are evidence of advertising policy, not pricing structure.

Next, the most over-mailed mailer mailed this year: TRW’s relentless offer of Credentials Service, which for $35 a year provides unlimited copies of one’s credit report, notification whenever someone orders the report and the chance to store a filled-in credit application in TRW’s computer. The nation’s biggest credit reporting bureau, TRW is thus burning its candle at both ends--selling credit grantors information on consumers and selling nervous consumers a look at the information it has on them.

Since its 1986 introduction, Credentials Service has been widely offered--up to 10 million pieces in a mailing--and widely subscribed, with 1 million members now. It’s also of questionable value: One should review one’s credit report periodically, but such reports (which list all recent orders for copies) are available to consumers for the asking ($8 in California, $2 to $15 in other states). Anyone denied credit gets one free. Moreover, most people want one only when they’re about to apply for a loan, and even Credential Service members only order a couple a year, on average: Why bother subscribing?

Obviously there’s money in nervous consumers--for TRW and for co-marketers like Chase Manhattan Bank, Broadway stores, Charles Schwab and others willing to tout the service to their customers in return for commissions from TRW. And now TRW and other credit reporting bureaus never will feel obliged to verify adverse information provided by creditors, or to notify consumers (free) of faulty information that’s about to cause them trouble.

Finally, we must give recognition to marketing ploys so widely practiced now that they’ve become traditions, and consumer inquiries have virtually stopped. One is the persuasive offer of a “pre-approved” credit line or loan, which nevertheless requires income information, employer’s name and address, and a credit check to see whether the applicant’s “credit status has changed since pre-approval” (Chase Manhattan’s wording).

Another is the credit card “protection” pressed on every cardholder, providing “registration” (listing) of all one’s cards, creditor notification of lost or stolen cards and some extra junk (accident insurance, emergency cash, etc.). All too often now, automatic enrollment and urgency are implied (“Detach and mail the top portion of this form right away,” says Robinson’s in Los Angeles), and fees are obscured, buried perhaps in a small-print list of benefits that one is getting.

But if consumers have learned enough suspicion now to protect themselves from such small persuasions, why do so many, presented with an obviously suspect deal, so willingly throw all suspicion away? There seemed an unusually high number of calls this year from people who had bought everything from trash bags to gems to computer systems over the phone and everything from audio speakers to car repairs from strangers who approached them in parking lots or on sidewalks.

All their stories began with “I know I was stupid” and ended with a request for help. Sigh . . .