Who can you trust these days?
With the understanding that any time you have something negative to say about big business you open yourself up to be called a socialist, here’re a few stories that got stuck in my craw this week.
FTC to Reebok: Tone it down
You could see that one coming.
The athletic gear retailer Reebok is being forced to pay out $25 million in refunds to consumers who bought shoes that the company said would shape and tone legs and backsides.
Now, there are plenty of these silly looking shoes that claim to make your rear look better, but Reebok got into trouble with the Federal Trade Commission (FTC) for making specific claims that they couldn’t back up.
The Reebok ads told (gullible) consumers that the funky-looking shoes could increase strength by 11-28 percent in their calves, legs, and butt muscles compared to exercising in regular old shoes. The FTC, meanwhile, said that was hokum; Reebok just pulled them out of their impressively toned butt. (I know, I know. I couldn’t resist. I’ll tone it down or shape up and ship out.)
According to the Associated Press, the company marketed the shoes with “ads featuring women in short shorts and with shapely bottoms; one ad even said the shoes would ‘make your boobs jealous’.” (Best sentence in an AP story — ever.) It’s unclear if the FTC plans to make the company pay for false claims about the ability for breasts to experience feelings.
Even though the FTC called them liars, the $25 million settlement doesn’t mean Reebok is feeling contrite. “Settling does not mean we agree with the FTC’s allegations,” Dan Sarro, a Reebok spokesman, said in a statement Wednesday. “We do not. We have received overwhelmingly enthusiastic feedback from thousands of EasyTone customers.”
After all, why wouldn’t we trust a company that makes specific claims of a product’s benefits without actual proof to back them up?
Of course, Reebok’s claims mean the company is trusting the word of people who believe that you can get into shape by buying special shoes. (It could be worse, they could be listening to the people who buy those ridiculous bracelets that “give you better balance.”)
Bank to America: Fork it over
Are you kidding me?
Bank of America, one of the nation’s largest banks, plans to start charging customers a $5 monthly fee for using their debit card for purchases.
Five dollars. A month. To use a debit card. For those keeping score at home, that’s $60 a year. (Using a debit card may just be digital but, hey, 1s and 0s don’t grow on trees, you know.)
According to media reports, this kind of fee for using debit cards is still a new concept for consumers, but “there are signs it will soon become an industry norm.” In fact, a number of banks have either rolled out or are testing such fees; Bank of America is by far the largest to do so. Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets but hasn’t made a decision on a wider rollout.
The new debit card charges are being widely blamed on banks trying to find ways to recoup revenue lost to new regulations that cap the amount banks can charge merchants whenever customers swipe their debit cards.
Banks used to charge stores an average of 44 cents every time you paid with a debit card, now they can’t charge more than 24 cents. (As a side note, there’s no limit on the fees banks can charge retailers when you use your credit card, so expect your bank to start trying to push you to put it on the plastic.)
The idea behind this new regulation was that the bank’s fees on the retailers were being passed on to consumers. So, the government wanted to cut those fees to put more money in our pockets. (You know, since consumption is the real job creator.)
Now, the banking industry is looking to make up the expected loss of billions of dollars from those reduced swipe fees by raising fees and scaling back rewards on you and me.
Another “perk” that we used to consider a standard offering is also under fire: free checking. If you’re still one of the lucky ones, expect to see banks add a cost for giving you the privilege of accessing your money. According to reports, almost two-thirds of big banks have eliminated free checking since the end of 2009.
See, even when regulations are designed to protect consumers, corporations find other ways to get our money. Yay, capitalism.
If you’d like to know how much he’s raising the rate to read this column, Brandon Szuminsky can be reached at bszuminsky@heraldstandard.com.