Congress is fighting right now over an issue of tremendous importance to consumers. A lot of your money rides on the outcome, as does your chance of getting a fairer break in the marketplace. Yet the terms of the argument are so bureaucratic that few voters realize how deeply this matter affects them. Few of you, therefore, have told your congressmen where you stand.
The battleground is the Federal Trade Commission -- the agency charged with fighting unfair and deceptive practices in the marketplace. Certain businesses and their allies in Congress think the FTC has gone too far. There's legislation afoot to cripple its authority to act.
Among the companies allied against the FTC are many mobile-home manufacturers, debt-collection agencies, food advertisers, over-the-counter-drug companies, TV toy advertisers, used-car salesmen, hearing-aid makers and funeral directors. Investigations of dubious sales techniques, or new regulations, are pending against all of them. If they win their fight in Congress, the FTC may be unable to halt certain practices that you and I would consider deceptive.
The rules in most immediate jeopardy are those requiring 1) used-car dealers to disclose the car's condition, 2) funeral directors to give prices over the telephone and charge separately for the various services they offer, 3) hearing-aid sellers to take back hearing aids that don't work and 4) an expansion of your rights not to pay for shoddy or misrepresented goods.
At issue is something called legislative veto. But before getting into the details, a brief history of FTC enforcement is in order.
In the bad old days, the FTC took action against deceptive companies one by one. If an encyclopedia salesman misrepresented himself and high-pressured you into buying, the FTC could proceed against his company. Other companies, however, might continue those tactics until the FTC brought separate actions against them.
Due exactly to this kind of selective enforcement, Encyclopedia Britannica salesmen now have to present a card to people they call on, explaining that they are indeed salesmen and will use their best efforts to get you to buy. Salesmen for other encyclopedias, although subject to the general rules against deception, don't have to present cards.
Clearly, piecemeal enforcement is unfair not only to consumers, but also to business. So in 1975, Congress gave the FTC new authority to write specific antideception rules that would apply equally to everyone. The commission now holds hearings on practices considered deceptive, draws up proposed rules, circulates them for comment, revises the rules and then issues them in final form.
Recent rules prevent deceptive claims for home insulation, require pro-rata refunds for people who drop out of vocational schools without completing the course and force franchise companies to give more facts about the business to prospective franchisees.
This may sound reasonable to most consumers. But the affected businesses have persuaded a two-thirds majority of the House to weaken the FTC's right to issue trade rules. The Senate still backs the FTC, but support there is weakening.
Under the proposed legislative veto, either house of Congress could veto any FTC trade rule within 60 days. The other house would have 30 more days to override the veto. But given the legislative logjam and the possibility of filibuster, that 30-day deadline might be hard to meet.
The House Appropriations Committee just voted to prevent the FTC from issuing the final version of any pending trade rule while this issue is being decided. The Senate is holding hearings.
In its mea culpas, the FTC concedes that it has made some mistakes. Early versions of some rules have required unreasonable record-keeping. Some proposals, while morally sound, have been unenforceable. A spokesman says, "We are now focusing more narrowly on what can realistically be done." They'd settle for stricter congressional oversight, as long as it didn't include legislative veto.
At bottom, however, the agency is in trouble for doing its consumer protection job too well. Whether the FTC can continue this good work depends now on the votes of your senators and mine.