Features

Debate on a new bankruptcy law isn’t just about credit card abuses, as it sometimes seems, but over a much larger issue, that of the power of professional marketers over amateur consumers. 

Credit cards are the current focus their role in bankruptcies, their indiscriminate issuance, the questionable enticements offered, the targeting of the poor and student groups — but the issue is decades old. 

As old, at least, as the consumer revolt of the 1970s and the movement leading to the creation of consumer magazines, advocates, adult education courses, lobbying groups, research institutions and legislation. 

Issues then were rudimentary. With inflation raging, consumers felt exploited, and sought answers from grocery chains and others. Questions then spread to product quality, services, lending practices. Seeking to level the playing field, consumers demanded an education in marketing. 

They received it, and succeeded in shrinking the gap between them and the more sophisticated marketers. But gradually their zeal waned as living standards rose. All the same, the issue’s been there. And maybe growing. 

Critics find it difficult to argue against a strengthening of the personal bankruptcy law, which the credit card issuers seek, since clearly it is being misused by many consumers to avoid paying bills they incurred. 

But that’s just one side of the issue, the other being that many of these people were enticed into opening credit accounts by means of highly sophisticated marketing efforts that, some argue, bordered on deception. 

The intensity of the issuers’ effort, which reached a crescendo of as many as 3 billion solicitations a year, was unmatched by that of any other industry, except perhaps by magazine subscription sweepstakes. 

So intense was the quest for new users that eventually the poorest were seen as a relatively untapped market. Individuals with little credit history were offered minimal credit amounts, and those amounts raised if they managed to pay on time. Small print sometimes disguised terms. 

Students with little income or marketplace experience were cultivated in hopes they’d remain bonded to a card later in life. Colleges sometimes cooperated for a price, lending their names, an imprimatur of sorts. 

Going the limit without exceeding it has become an art among marketing people, one that perhaps can be practiced without dire consequences on educated consumers. 

The question, however and always, is whether or not the recipient is an informed consumer. 

Thanks to the consumer movement, the mass of consumers are vastly more informed than those of the 1970s. But times have changed, and maybe consumers haven’t changed with the times, as professional marketers have. 

The marketers have continued to grow in knowledge of the consumer, who is analyzed as never before, but the consumer may not be as industrious in analyzing the marketers. 

When you join a food chain’s in-house club you may receive discounts, but your purchases may be analyzed and profiled. In using your personal computer, you may leave a trail of your buying habits and interests for the edification of marketing people. When you buy a direct mail product, your name and address may be sold to another merchandizer. 

The gap may have widened again. Consumers may have to make a renewed effort. 

John Cunniff is a business analyst for The Associated Press