In a new article, CEO Magazine reports how the information consumers is receiving from sellers “is not always all it’s cracked up to be.” For example, if I was selling low fat pasta and people gain weight, should I have disclosed it was high in calories when my goal was just to produce a low fat pasta?
CEO says, “that’s the bottom line”, according a “landmark” October report they covered by Australian and Dutch regulatory authorities. The report applies to world regulations and cover “all sorts of industries – anywhere in which sellers know far more about their services than consumers do.”
In the past, consumers were offered fewer products with heavy regulations. That practice was abandoned on the 1970s for one that adopted more choice, better options and sellers who gave buyers lots of information, or “disclosure.”
Now, according to CEO, “it’s becoming clear that disclosure isn’t enough for the consumer.” This will wade through the of what now appears to be a cesspool of murky waters and “trigger a long new reshaping” of how consumer products are regulated in the years to come.
CEO predicts this process to be “messy for buyers, sellers and rule-makers alike.”
According to CEO, “for consumers, disclosure and warnings ‘can be less effective than expected, or even ineffective, in influencing consumer behaviour’. It doesn’t get rid of the complexity; often gives us too much information to analyse; its effects vary from person to person; and it sometimes backfires.”
Too many consumers, abandon analysis for simpler courses of action – like “I’ll trust my adviser.” They may even just trust other consumer reviews, consider that person’s bad experience as an isolated incident or pervasive problem that is totally unrelated to the product or service.
One of the study’s most shocking findings when conflicted financial advisers disclosed their conflict, 81% of people followed the advice anyway with – consumers frequently didn’t know how badly they’d messed up; 86% of consumers rated financial received advice as “good,” even when competent, “independent” assessors rated 39% of it as “poor”.
Many of the shysters have moved into auto financing and insurance because it is easier to fleece these customers here than over the actual cars, though many honorable and ethical people work in these industries, too.
In the meantime, CEO reports, we’re likely to see more regulation in complex consumer industries, some of it perhaps in surprising new shapes, particularly in the digital industries because the desire for making money has not changed, the game by which it is played in order to make the money has.
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About the Author: Aisha K. Staggers is a writer, lecturer, political analyst and literary agent. She appears weekly for “Staggers’ State of Things” on the Dr. Vibe Show. Her work has been published by Paper Magazine, AfroPunk, The Spool, GREY Journal, MTV News, HuffPost, Blavity, Atlanta Blackstar, For Harriet, New York Review of Books and a host of other first-run publications and syndicated outlets. Find her on Twitter @AishaStaggers. For more of her work, check out her page here!