Duped consumers - who is to blame?


It is fitting in this Christmas period - after all an homage to shopping – that there are lots of interesting consumer stories about.  The Times reports that US tobacco companies are to be sued for making false claims about the health benefits of low tar cigarettes.  The appellants claim that the companies knew those who switched to low tar simply smoked more fags and inhaled more deeply. 

This raises an interesting question.  On the one hand, if the companies knew from their extensive research on smokers’ behaviour that moving to low tar would have no health benefits, then they displayed a deeply cynical and irresponsible attitude to their loyal customers.  On the other, those who smoked low tar (and I was one) were presumably capable of moderating their intake and the intensity of their smoking. 

When I go north for Christmas, I enjoy drinking ‘mild’, a dark beer which is usually low in alcohol.  I like it precisely because I can drink several pints without getting sloshed, but I can hardly blame the volume of my drinking on the brewery.

Marketing is inherently manipulative – it is based on discovering our habits, insecurities, and irrationalities and exploiting them.  As I said yesterday, some brands have successfully duped us into systematically underestimating how expensive they are.  If marketeers exploit us, where does the responsibility lie?  And if we are to start holding companies responsible for the way their products are used, what reason will Rizzla give for manufacturing those large cigarette papers?


And while we are on the subject of duped consumers, the papers and news channels are full of the Madoff scam.  Again, much of the debate is about whether those who trusted him and his promises are responsible for the losses they are now incurring.  But one lesson is surely clear – given that some of Madoff’s biggest investors were pension funds, this is yet more evidence of the terrible value for money that savers get from the exorbitant fees they pay ‘expert’ fund managers.  This is an issue we will be highlighting in our Tomorrow’s Investor report, published tomorrow.

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