“Don’t underestimate the power of the vigilante consumer.”

— Anita Roddick

Free and open markets are the foundation of a vibrant economy. A competitive market exists where there is a healthy balance between organizations and consumers. Consumers shop among offers to make good purchase decisions, and organizations compete to attract consumers. This balance is upset when organizations acquire too much market share. They become dictatorial in their offerings, inflexible in their service, and conceal product and pricing information.

Foundations, principles, and values

Organizations generate revenue when they identify unaddressed opportunities in the market, either by adding new value to a marketplace (positive sum market) or reducing costs in a mature marketplace (negative sum market). Some organizations typically outperform their competitors over time, commanding a larger share of their market(s).

When a company gains too much power in a market, and consumers’ normal corrections to this imbalance no longer work, the government intervenes to restore balance in the market. This is managed in the U.S. through consumer protection regulations and by the FTC through antitrust legislation and action.

For a consumer to make an informed decision, they need information, typically prices for the goods or services offered and information about the quality of those goods and services. The consumer’s bill of rights laid a foundation with four rights: to safety, to be informed, to choose, and to be heard. Consumer power has diminished in recent years, as evidenced by more aggressive organizational behaviors and the scaling back of regulatory constraints. 

Status: Issues & Challenges

Power in our economy is currently over-weighted towards organizations; individuals must make consumer decisions without adequate information. For example, healthcare consumers have no access to prices they will pay for healthcare services, and there is poor or non-existent information about the quality of healthcare providers or institutions.

Accessing human service agents is impossible in many – and complicated in most – organizations. Agile methodology, where companies build tools rapidly and incrementally – pushing them into the market to get customer feedback – has delegated responsibility for user training and product quality to the consumer. Consumers must train themselves using help pages, user communities, and chatbots. The blind spot here is that organizations are becoming out of touch with their customers, leaving openings for competition.

Data privacy is the ability of a person to determine when, how, and to what extent personal information about them is gathered and shared with others. This personal information, where regulation and enforcement struggle to keep pace, represents significant threats such as identity theft, cyberstalking, and hacking.  Isn’t our information ours?

Information technology has created opportunities for organizations to conceal pricing and to provide incomplete and confusing product/service information. Pricing can also vary by time, day, or other conditions, undermining consumers’ ability to make clear comparisons and purchase decisions.

How tech companies deceive you into giving up your data and privacy

A contract is a legally binding agreement between two or more parties. Contracts now greatly advantage organizations and the authors of contracts themselves. The ability of an individual to negotiate or contest a contract is diminished through trends such as arbitration clauses, which favor the financial resources of organizations and eliminate the option of class action suits, and by industry-wide accepted terms overtly favoring organizations. The length and complexity of legalese in contracts have far exceeded individuals’ ability to understand the terms and conditions of a contract clearly. Additionally, online contract signing services (DocuSign, for example) made reading and negotiating agreements nearly impossible for the average citizen.

Program Opportunities

The PSA will educate, empower, and engage people to become intelligent and savvy shoppers and to work towards a more equitable balance with companies through collective and individual consumer action, advocacy, and legislation.

Suggestions for action:

  • Teach a course on the Consumer’s Bill of Rights.
  • Develop Expert Groups to advocate for improvements in products and services.
  • Build Action groups to call out bad policies and practices of over-empowered organizations.
  • Develop an opt-in platform where consumers choose to receive offers for products and services they actually want.
  • Build courses and workshops in financial literacy and consumer math.
Michael Freedman

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