Consumer Protection

Report Outline
Advertising Abuses and the Government
Schemes for Defrauding Consumers
Federal Standards for Buyer Protection

Advertising Abuses and the Government

Increased Government Concern for Consumers

Recent disclosure of shady practices in the broadcasting industry—rigging of television quiz shows and handing out of secret payments to disk jockeys to plug particular records—gave public confidence in the honesty of broadcasters and broadcasting a blow whose repercussions are still being felt. Viewers and listeners deceived in one quarter grew more than ordinarily wary of deception in another. They began to cock critical eyes or ears at TV and radio commercials, sometimes at advertising in general. Meanwhile, federal regulatory agencies went to special pains to give consumers pointers on how to protect themselves against those who would take advantage of them; they moved also to step up action to put a stop to false or misleading advertising. And the Department of Justice asked all state attorneys general to meet in Washington, March 10–11, to consider means of combating more effectively the activities of racketeers and swindlers.

Concern for the interests of the consuming public has been shown likewise by the Senate Judiciary Committee's Antitrust and Monopoly subcommittee, headed by Sen. Estes Kefauver (D Tenn.), which has been giving wide publicity to prices and profits in the pharmaceutical industry. Testimony before the Kefauver committee has pointed to extreme disparities between the prices charged American purchasers and the prices charged foreign purchasers of identical drugs. Evidence of high mark-ups and high profits in the drug industry has spread the impression, despite attempts at justification by the manufacturers, that consumers may be in need of protection in this field.

These developments have strengthened a long-standing demand that consumer interests be accorded broader recognition within the federal government. Creation of a new department in the Executive Branch, it is asserted, not only would give consumers stronger influence over government policies on regulation of business but also would keep enforcement authorities on their toes to detect and prosecute those who make a business of fleecing the consuming public.