Remember Earth Day? Lots of noise, much hoopla, companies protesting how good they were, guides and gimmicks being hawked, whole reservoirs of ink spilled. It was a long time coming, but it disappeared with hardly any aftertaste.
Still, the battle goes on. In what may turn out to be one of the few developments of any consequence arising out of Earth Day, the nonprofit organization Green Seal has begun the long trek to a national environmental label.
One day, manufacturers of approved products will proudly and aggressively use the little Green Seal symbol; consumers will indicate a preference for saving the natural world by buying them; the righteous shall be rewarded and the slackers will reform. That, at least, is the ambitious plan.
As a modest start, Green Seal will evaluate products in five categories: light bulbs, laundry cleaners, house paint, toilet paper and facial tissue.
"We wanted to start with items where consumers might have some degree of indifference between competing brands, and where environmental considerations might be the dominant consideration," says Green Seal chair Denis Hayes, who was also the chair of Earth Day. "If you're buying an automobile, you compare everything from sex appeal to fuel efficiency. But I don't know anyone who can utter a coherent reason for one laundry cleaner versus another."
Products in the five categories will be examined on a "cradle-to-grave" basis, from the raw materials used for manufacture up through disposal or recycling. Companies will pay a testing fee; only the brands they submit will be tested. Green Seal hopes to issue its first recommendations at the beginning of next year.
"In the early years," Hayes says, "it's likely that the majority of products will fail to gain approval. But as the process has its impact on the marketplace, failing manufacturers will make the necessary changes so that they, too, will qualify."
Green Seal will use a carrot rather than a stick. There won't, in other words, be any censure for products that don't make the grade. The furthest Green Seal will go is to say, "Eleven types of facial tissues were submitted; the following four received the seal." But the identity of the other seven won't be made public.
Is the whole process going to work? In a poll done by Research & Forecasts Inc. for Green Seal, 79 percent of the respondents said they would be more likely to purchase a product with the seal if the products were of equal price and quality. (It must be a comment on either the contrariness or perverseness of Americans that nearly one in 10 of the respondents said that even with all else being equal they'd be as likely to choose the more ecologically destructive product.)
While Green Seal aims to be the most comprehensive environmental label, attempts have been made to preempt the field by a variety of other organizations, companies and government agencies. In one such program, developed by four Western supermarket chains, even the name is similar: Green Cross. This has given rise to fears that consumers will end up bewildered and annoyed.
In response, Green Seal -- which includes on its board officials of the Natural Resources Defense Council, Worldwatch Institute, Public Citizen, Sierra Club, Council on Economic Priorities and other consumer groups -- is intending to outlast the competition.
"Part of a free enterprise system is that people will do whatever they can get away with," says Hayes. "While there may be some confusion among the various marketplace claims, we will ultimately have something that will have the authority of a kosher seal or an Underwriters Laboratory seal."
That remains to be seen. A closer examination of Green Seal's testing process and corporate America's response will come with the release of the results in the first categories.
Credit Life Insurance
You can't take it with you. More important, you can't pay for it after you go -- a matter of special concern to the people who lent you the money to buy it. So they devised a solution that not only assures them of compensation if you do unexpectedly expire but also cuts them a commission right now: credit life insurance.
Here's how it works: You buy a new car, redo your home or purchase a furniture set. Somewhere near the bottom of the paperwork is a line asking whether you want a bit of insurance, just in case you soon come to an untimely end. Otherwise, your family will be stuck with the bill, which may prove painful if they never liked your remodeling scheme in the first place.
The Consumer Federation of America and the National Insurance Consumer Organization have a label for this: "consumer rip-off." In a report released earlier this month, the two organizations argue that credit life is "exorbitantly priced in most states and not needed by most consumers."
Says Stephen Brobeck, the report's author and CFA executive director: "This is permitted by ignorance -- consumer ignorance and even some ignorance by state insurance regulators. At the same time, those receiving the commissions -- banks, car dealers, finance companies -- are not eager for reform, since it would clearly come at their expense."
When set against the total cost of, say, a new car and the accompanying finance charge, credit life and its finance charge don't seem overwhelming -- just a couple bucks more a month.
That's one reason why many people don't think too much about buying it, Brobeck says. "But there are few loan defaults because of the death of the wage earner. Either the surviving spouse pays off the loan, or the estate has assets to cover the debt. If a consumer strongly believes he needs more protection, we recommend purchasing additional coverage on their life insurance policy."
The cost of life insurance can vary with age, health and other factors. Credit life, on the other hand, is the same for everyone buying the product, which means that it could be a good idea to find the relative costs of different types of insurance and whether you are under-insured. All this is not much fun, of course, but could come in handy.
Studies cited in the report indicate that not every purchaser is aware of just what he is getting. According to a 1978 Purdue study, 30 percent were not aware they had purchased credit life; a 1977 Federal Trade Commission study said 12 percent didn't know. The report cited other studies that indicate between 14 percent and 45 percent of purchasers thought credit life was required in order to obtain the loan.
Such figures are disputed by a trade group, the Consumer Credit Insurance Association. "Studies we have indicate that 90 percent of the people knew about the coverage, knew it was optional, understood there was a separate charge for it and, most interestingly, would buy it again," says William Burfeind, the association's executive vice president.
The real money-makers with credit life aren't so much the insurance companies as the lenders who get the commissions. Which brings up the old problem: Isn't it going to be in a salesman's best interest to encourage you to buy this product? "Any product that an individual has for sale," Burfeind concedes, "I'm sure he's encouraged to sell."
A particular problem with this type of insurance, the report points out, lies in the fact that "in normal markets, sellers compete with each other to sell to consumers. In the credit life insurance market, however, lenders are the real shoppers. They shop insurance companies for the best deal for themselves, especially for high commissions ... They are then passed on by lenders to 'captive borrowers.' "
Maryland, the District and Virginia all rank near the middle in terms of credit life costs, neither as cheap as New York nor as expensive as Alabama and Louisiana. Prompted by consumer action, some states are beginning to look into their regulation of the issue.
In Virginia, for instance, insurance commissioner Steven Foster ordered a review of credit life regulation this spring. He is particularly concerned about the loss ratios, which indicate the proportion of the premium paid out in claims.
The National Association of Insurance Commissioners' model regulation calls for a loss ratio of 60 percent, a level achieved by only four states. In Virginia, Foster says, there are some credit life companies with loss ratios as low as 30 percent. "It bears our looking into," he says. A recommendation to the State Corporation Commission is expected this fall.