Merely Changing Your Mind About a Costly Product Doesn't Entitle You to a Refund

By CARLA LAZZARESCHI

Oct. 27, 1996 12 AM PT

Q Shellshocked from a recent and unexpected layoff, I fell prey to one of those “how to make a fortune” promotions and purchased a program. I tried to return it within two weeks of purchase but was told by the company that all sales were absolutely final. My credit card company says it can do nothing since the receipt clearly says that all sales are final. Do I have any recourse with either the promoter of the program or my credit card company?

--C.L.W.

A Simply stated, your “get rich quick” plan was a bad investment that, absent some apparently unexpected munificence from the program operator, you’re not going to recoup. Sad as it is to say so bluntly, your best bet now is to pay the bill and file it under “expensive life lessons.”

What about those vaunted consumer protections you’ve heard about? They don’t apply to the situation you’re in. Here’s why.

There are laws to protect you against fraud and unfair or deceptive trade acts or practices, but the facts you’ve offered here wouldn’t seem to qualify you as a victim of that. (After all, you got what you paid for; you simply decided after receiving the materials that you really didn’t want them.)

Even the protection that most closely fits your situation, the Federal Trade Commission’s three-day cooling-off rule, doesn’t apply to your situation. This provision allows consumers to cancel contracts made by door-to-door salespeople for more than $25 and a contract for more than $25 made anywhere other than the seller’s normal place of business--such as a hotel, restaurant, outdoor exhibit or trade show--within three days of purchase.

Furthermore, companies not falling into these admittedly narrow categories are completely within their legal rights to enforce a “no return” policy so long as they properly notify the consumer of that at the time of sale. Unfortunately, this is the slipper most closely fitting your foot.

Not to make your situation any more bleak, but you should know that bringing your credit card company into this problem will only make matters worse for you. Why? Because credit card companies are obliged to investigate credit problems arising from “good faith disputes” between buyers and sellers. Usually these matters include defective goods or incomplete services the buyer has tried to get the seller to remedy either by replacing the merchandise or redoing the service. Changing your mind about a purchase isn’t going to qualify as a good-faith dispute, and your credit card company isn’t going to accept your refusal to pay your credit card charges on those grounds.

Simply refusing to pay those charges won’t work, either. If you pay off your entire balance except the charge in question and stop using the card with that balance remaining, the credit card company will at the very least report you to a credit bureau, thereby putting a blotch on your record, or, in the worst case, will sue you. And if you simply refuse to pay the amount and continue to use the card, your credit card company won’t know that and will simply put your account on a revolving payment basis. You will accrue ever greater interest charges every time you use the card until you pay off the balance.

In sum, it’s time to accept the fact that you made a mistake. And what did you learn from it? How someone else makes a fortune!

Explaining Data From Consumer Price Index

Q I’m well aware of the importance of including a calculation for inflation in any long-term financial planning. But isn’t it true that some factors in the overall consumer price index won’t be as important as others, depending on my specific financial objectives? For example, college education costs have risen far faster than the general inflation rate, so any savings plan tailored to that index would fall far short of its goal. Is there a source that shows how various factors are weighted and then how individual items have changed historically? This could help me tailor an inflation rate pertinent to my own life.

--P.B.

A Of all the statistics the government churns out each month, the country’s inflation rate is arguably the most misunderstood and, perhaps, misused. The nation’s official measurement of inflation is the consumer price index, a statistic created in 1919 to help set wages for dockworkers. Today this figure is used to calculate, among other things, adjustments in Social Security, disability, welfare and pension payments. Shifts in the number can literally move billions of dollars within the economy virtually overnight.

The issue you raise, the relative movements of components within the CPI and their importance to the average American’s lifestyle, is at the heart of a raging controversy about whether the CPI systematically overstates the nation’s inflation rate. Why? Because the CPI doesn’t really measure the “cost of living” but rather a set sample of 80,000 goods and services. In essence it measures what things cost, not what real consumers buy when faced with price variations in the marketplace. However, changes in the way the government collects the data are costly to implement and not expected any time soon.

That said, you are wise to create your own CPI to guide your financial planning. However, it won’t be easy. For starters, all the data you’ll be collecting are historical and not necessarily keen predictors of the future.

Furthermore, you’ll have to evaluate which data are pertinent to your goals. The best source of the data you’ll need is published by the Bureau of Labor Statistics through its Office of Prices and Living Conditions. The data published here are from the report “Relative Importance of Components to the CPI” and the monthly Detailed Report of the CPI. Both are available from the bureau by calling (202) 606-7000 in Washington or (415) 975-4350 in San Francisco. The agency’s address on the Internet is stats.bls.gov; its home page on the World Wide Web is at https://stats.bls.gov

Carla Lazzareschi cannot answer mail individually but will respond in this column to financial questions of general interest. Write to Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053. Or send e-mail to carla.lazzareschi@latimes.com

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What’s Up

Medical services have far outstripped other components of the consumer price index for urban residents in the last 10 years:

Food/beverage:

1986: 110.9

1996: 155.0

Rent/shelter

1986: 122.5

1996: 179.0

Medical services:

1986: 125.7

1996: 233.6