Individuals are well intentioned in wanting to save money, but under certain conditions these objectives actually have the effect of costing more in the long run. This is the classic printer paradox, as described below.
Jeff needs a new printer and wants to get the best value for his dollar. He goes to the local office supply store where he finds Printer A and Printer B. Both printers have the same features and functionality, but Printer A is $30 and Printer B is $50. Presented with the opportunity to buy essentially the same printer for $20 less, Jeff happily purchases Printer A and heads home.
Over the next six months Jeff has to purchase three ink cartridges to meet the printing needs out of his home office. Each ink cartridge costs $20, bringing Jeff’s six-month total to $90. What Jeff does not realize is that cartridges for Printer B are only $10 each. If Jeff had bought Printer B with three cartridges he would have only spent $80 over the same six-month period.
Consumer protection laws do not tell companies how they must price their products and ancillary services, but they do try to combat information asymmetry—the same type of situation that gives rise to the printer paradox. If Jeff took a little more time, and used the information in the marketplace before buying Printer A, he may have bought Printer B instead. Laws like the Colorado Consumer Protection Act (CCPA) work to prevent misrepresentations in sales and marketing so that the information you use to purchase goods and services helps you make sound decisions.
There are a range of services that help you ascertain the information you need. Typically most consumer agreements have, by law, specific provisions addressing everything from termination rights to collection of payments. Even though products or services may be similar in nature, the specific requirements for each may be different. For example, in Colorado you generally have a minimum three-day period to rescind a new gym membership. A buyer’s club membership, however, has only a minimum one-day cancellation period. Instead of trying to memorize the various requirements for the different products and services you may buy, you should utilize the following resources:
Boulder County Community Services (BCCS) – www.bouldercountyhc.org
BCCS has a great team of individuals that specialize in individual counseling and workshops. Topics that they assist with include personal finance, foreclosure information, housing education, and more. Free services like those offered at BCCS should be a top priority when making the large financial decisions in your life. At their counseling appointments and workshops you will learn about properly budgeting the purchase of your home, reducing your debt, and what to look out for before signing up for that next credit card.
Department of Regulatory Agencies – www.dora.colorado.gov
DORA is a dedicated agency in Colorado charged with curbing deceptive trade practices and promoting fairness in the marketplace. Whenever you hire a service provider in Colorado who is required to be licensed by the state (e.g. plumber, barber, insurance agent, etc.) you should double check to make sure that their license is current, and review any disciplinary history. Contracting with current licensees with a clean history will better protect you down the road if something goes wrong.
In addition to verifying licensure, the AskDORA feature enables you to ask questions about consumer protection questions you may have. If you need to know more about financial services for example, this is a great place to start.
Colorado Attorney General Consumer Protection Section – www.coloradoattorneygeneral.gov
The Consumer Protection Section of the AG’s office helps enforce laws like the CCPA. If you have a complaint regarding a consumer protection issue, this is the office to contact. In addition to being an outlet to field complaints, their website has a long list of resources relating to specific consumer protection issues. In addition to a “Consumer Questions” section—which offers answers to common questions the office receives—the Consumer Resource Guide offers information related to specific topics, including automobiles, scams, credit and lending, health issues, and more. The Consumer Resource guide can be accessed at www.coloradoattorneygeneral.gov/initiatives/consumer_resource_guide.
As always, make sure you use consumer protection laws to your advantage by gathering the information you need to continue making informed decisions. If there is something you do not know, but would help you feel confident about your choices, start with the resources listed above.