Costco Connection - September 2009

CONSUMERconnection
Also:
■ Phone talk time
■ Credit-card rules
Truth in labeling
Ask David
Horowitz
Organic versus natural
equals confusion

Many people mistakenly believe that “natural” is a greener term than “organic,” and that “natural” products are regulated by the government but organic products aren’t. In fact, it’s just the opposite.

Certified-organic food products are regulated by the U.S. Department of Agriculture and are produced by farmers and manufacturers under a strict set of rules. The agency uses the term “natural” for meat and poultry only, in which case they state: “A product containing no artificial ingredient or added color and ... only minimally processed (a process which does not fundamentally alter the raw product) may be labeled natural.” In the rest of the food industry, the meaning is largely up to the producer.

“Natural” doesn’t mean that a product is regulated, or that it was produced without pesticides, herbicides, antibiotics or other drugs. The term isn’t related to ruling out genetically modified feed crops, and doesn’t indicate that the cows or chickens were required to graze in pastures rather than being confined to factory farm feedlots. Those are factors that differentiate organic or free-range agriculture production from conventional methods.

When the “natural” label is applied to more processed foods, it’s even more misunderstood. The term “all natural” was the second-most-common claim on food products launched in 2008. However, in an area that is poorly regulated, the term “ natural” has been applied to products containing ingredients not found in nature, such as “all natural” ice cream containing partially hydrogenated soybean oil, soya lecithin and cocoa processed with alkali; or fish fillets with tocopherol and guar gum.

I suggest ignoring label buzzwords. Check the ingredients and make an informed choice, so that you’re not paying extra for what can be a meaningless word on a label.

more than 50 cents per minute, and 11 percent pay more than $10 per minute. The average is $3.02.

Check out your plan, and make sure you’re not overpaying for wasted minutes. If you are, change plans to one that best suits your cellphone usage.

I JUST SOLD my RV through consignment. The dealer sent me a letter indicating the gross sale price was $124,900, of which they get a 10 percent commission. Purely by coincidence, I came in contact with the buyer, who told me he actually paid $129,900 (and then faxed me a copy of the invoice)! I spoke with the owner of the RV dealership, who insisted that the sale price was $124,900 and that he doesn’t owe me any more money.

Difficult credit-card rules

If you think the new federal credit guidelines will spell relief from more debt, you might be surprised. Banks are moving fast to get around the new regulations before they take effect next year.

Moody’s Investors Services says their figures show that the rate at which banks are writing off card debt as “unpaid” rose to 10. 6 percent in May, a 65 percent jump in one year and the highest rate since 1989. It’s clear that banks are trying to make up for the charge-offs by raising prices. For example, Citibank raised interest rates on some cards as high as

29.99 percent; Chase is close behind at 23.99 percent.

Across the board, bank cards are raising the minimum due at payment, tightening the noose on many consumers already struggling to meet the monthly obligation.

Lawmakers are criticizing banks for clearly taking advantage of the grace period before the new law is enacted.

So far, though, they have done nothing to stop the banks from making an end run around what was intended to be consumer protection legislation. C

S.P. Paradise, CA

Wasted phone talk time

A consumer advocacy group has found that cellphone customers use only 33 percent of their monthly allotment, ending up paying an average of $3 per minute. The results were “Surprising, very surprising,” according to the director of the Utility Consumers’ Action Network. The study found the average customer made 193 minutes of calls per month. Dividing the total bills by the number of minutes used, only 25 percent of customers pay less than 10 cents per minute. About 41 percent pay

AMY CAN TRELL

David Horowitz is a leading consumer advocate ( www.fightback.com).

Contact the dealership
owner and politely insist
that he show you
the actual sales
paperwork to
prove the actual
selling price.
Compare it to
the buyer’s
invoice. If it
doesn’t match
up and the
dealer refuses to
pay you the extra
money due on the
$5,000 balance—or if
he refuses to show you
the sales statement—
file a complaint with
the Department of
Motor Vehicles, which
regulates sales in
California. If you have
proof that the buyer paid
the higher price, you
might want to take your
case to small claims court.

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