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home / ftcr / commentary

Feb 09, 2004

Consumer Protection Week Or Weak On Consumer Protection?

by Jamie Court
 
Imagine the uproar if George W. Bush declared it "Give Peace A Chance Week." Arnold Schwarzenegger's dedication of this week as "California Consumer Protection Week" should be met with similar jeers.

It's not simply that the Governor has appointed big business leaders opposed to regulation to top regulatory posts or that he has yet to even meet with consumer groups. What's particularly perilous for Californians is that Schwarzenegger is using his celebrity status to test a dangerous new formula for "consumer protection."

Since taking office, Arnold has ruled from the premise that the needs of big business define the rights of consumers.

On his first day, Schwarzenegger froze all pending state regulation for six months to be reassessed for their "impact on business." The governor then recalled indefinitely every executive branch guideline, rule and bulletin -- the unofficial rules that keep industries honest -- so that they exist "on an opinion-only basis which will not carry the force of law." Schwarzenegger's reasoning: "State Government should be dedicated to provide certainty for the regulated communities" a.k.a. big business.

A recent Public Records Act request exposed the type of consumer protections shelved by Schwarzenegger's order. These include a rule not allowing HMOs to deny benefits retroactively; a guide about appropriate cemetery and funeral pricing; a program to informally mediate disputes between consumers and new car dealers under lemon laws; policies for public disclosure of complaints at the Department of Consumer Affairs; and reference guides for smog check technicians and brake adjusters.

In one outrageous case, the Respiratory Care Board of California can no longer provide advice to respiratory care practitioners about patient sedation, blood product administration, and medication.

It's just such details that make consumer protection work, but they have been subsumed by a new facile philosophy of governance.

For Arnold, the free market is the same thing as the free society. The less restrictions corporations face the freer all individuals are. The importance of the government making certain the market endures, expands, and thrives is no less than the future of society itself.

Under this logic, there can be no limit on corporate intrusions in our private life, commercialization of our children's schools, on corporate publication of private information, or on companies charging whatever they like. The consumer is only as free as the market.

This dangerous paradigm is one big corporations have long espoused, but for which they had not found a charismatic celebrity salesman.

Traditionally, regulation and legal deterrence have been the pillars of consumer protection. Given Schwarzenegger's hostility to regulation, the litmus test of whether Arnold will protect consumers at all will be his stand on protecting consumers' legal remedies and that test is coming soon.

Car dealers -- which have contributed more than $750,000 to Schwarzengger's campaigns -- have turned to the Governor as a celebrity spokesman for their new campaign to eviscerate California's most important consumer protection -- the state's Unfair Business Practices Act.

When the supermarket Safeway changed the date on old meat and resold it, consumer groups stopped the practice by bringing a case under this Act. Community groups sued oil companies for polluting California drinking water supplies under the law and forced oil companies to pay for the cleanup of the water before anyone got hurt. Car dealers have been repeatedly held legally accountable under the Unfair Business Practices Act for their bait-and-switch schemes.

Now car dealers have joined with drug companies, HMOs and banks in spending millions for a November ballot initiative to take away consumer groups' right to use the law and to stop the use of the Act in order to prevent harms from occurring. These special interest groups know Schwarzenegger is a far better salesman for their cause than a guy in a cowboy hat on a used car lot.

Schwarzenegger is reportedly taking up the car dealers' cause in the legislature, but it's not yet known how far his proposals go. Where the governor draws the line for consumers deceived by car dealer scams and HMO abuse will say a lot about whether there is cause to celebrate Consumer Protection Week next year -- or whether the governor's record on consumer protection will simply be weak.

With an eye toward a better record, Schwarzenegger should also return the force of law to common-sense consumer protection rules now on "opinion-only" status and account for every frozen regulation. He should meet with consumer groups who hear about consumers' problems daily.

The public understands consumer protection to be ways in which consumers are protected from loss, injury, or annoyance. It's a common definition and one Schwarzenegger cannot ignore if he wants to be a governor of the people and not just of the business people.
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Jamie Court is author Corporateering: How Corporate Power Steals Your Personal Freedom And What You Can Do About It (Tarcher/Putnam) and president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

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