Friday, 26 July 2013

Guard yourself against stupidity

I saw a comment on Facebook that amused me.

Source: Who knows where, somewhere on Facebook
We all know that there are organisations out there that rely on our stupidity to make money. Ok, maybe it’s not always stupidity. Sometimes it’s ignorance, other times it’s naiveté, sometimes it’s greed. Whatever it is, it’s about exploiting a consumer’s weakness in order to make money.

It’s not a minor thing either. It can be, like with the Eurextrade Ponzi scheme, a massive amount of money at stake. We heard of people who cashed in insurance policies, emptied their saving accounts, people who even sold cars and houses to raise the money to “invest” in the scheme. We know of people who “invested” over P500,000 and I have suspicions that some hit as much as P1 million. I know that much of this was because people were greedy, believing, despite what was being said by critics, that it was possible to earn “up to 2.9%” interest every day on their investment. Despite this element of greed, there was also a level of ignorance at play. Many people had never heard of Ponzi schemes, they’d never been told how scams like that operate, they’d never been taught to be skeptical.

Admittedly Eurextrade was an extreme example but there are others that, while smaller in scale, affect even more people. Store credit is one of them. I don’t just think store credit exploits our ignorance, I KNOW it. We hear every week from people who have misunderstood how store credit works.

The unfortunate truth is that stores make their store credit agreements difficult to understand and even difficult to see. In a recent experiment we sent mystery shoppers out to investigate. Each of them visited a store and expressed an interest in a household item and in buying it on credit. Every time they asked to see a copy of the credit agreement they were told no, they could only see that when they sign it, not before. Without exception.

Why do stores do this? Why do they want to keep their customers in the dark? That’s easy. They do it because they don’t want their customers to know what the agreements contain because if they did they wouldn’t sign them. Given that furniture stores make most of their profits from moneylending they have to protect that part of their business above all things.

Most importantly the stores never take the time to warn customers what will happen if things go wrong. They fail to explain that if the customer has a problem paying his or her instalments and the goods are repossessed they will still be lumbered with the debt. Repossession of the goods doesn’t mean the agreement is cancelled, it just means you’ll owe the store slightly less money. Until debt collectors get involved when the debt will just get bigger and bigger.

Another example. Store security.

We’ve heard from readers many times about how irritated they are by excessive store security. Most often the irritation is at its worst as you try to leave a store when the security guard insists on stopping you and checking your belongings.

I should begin by saying that I’m very sympathetic towards stores. Stores face an enormous problem presented by our less than respectable neighbours who steal things. It really is a genuine problem that costs them a lot of money and effort, the cost of which they pass directly back to us in higher prices. However that doesn’t mean they can abuse our rights and exploit our ignorance.

Here’s a simple act that is often overlooked by stores, security companies and consumers. Security guards are not police officers, they’re just ordinary people in uniforms. They have no special rights or powers, they have to follow exactly the same rules the rest of us do.

The law is quite simple. Any of us can arrest a person who we reasonably believe has committed a serious crime and we have the power to detain such a person using the minimum force necessary. But we have no right to search that person, just to detain them and only if you have reason to suspect they have committed a serious offence. You can’t arrest someone just because you feel like it or because you don’t like the way they look. You can’t arrest someone just because they refused to be searched.

In fact a security guard who detains you without good cause and who then searches you and your goods against your will might himself be committing a crime. Often security guards and the stores that employ them forget that they’re just civilians in uniforms and that they don’t have the right to take away our civil rights.

We’ve heard from many people who are incredibly irritated by the behaviour of store security guards and hugely offended by the way they’re treated and the insult implied by being stopped and treated like a thief.

So here’s Consumer Watchdog’s simple advice on dealing with store security guards.

Don’t let them stop you and search you. Simply refuse. If they try, politely tell them that they have no right to search your bags, no right to stop you and if they persist, demand that they call the police. Remind them that only a police officer can search you.

Security guards need to guard us, not harass us and they and their employers need to learn that.

And as for the stores that let this happen, they need to understand that their right to protect themselves from theft doesn’t allow them to steal our civil rights.

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