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This is the information that was posted at acpai.com [Wayback archive]

Text in italics is the Cagey Consumer's commentary.

A message to our valued customers....

The Attorney Generalís office of the State of Oregon has initiated a lawsuit against Dennis Simpson, A. C. P. A., and I. C. Marketing with the primary objective to protect the consumer against dishonest and unscrupulous business practices. The underlying premise to their suit is that if left to their own devices, it is alleged, these entities would continue to attempt the sell of magazines utilizing fraudulent methods. Thus the States argument can be summarized that in this instance the Oregon Consumer Protection Act is indispensable and applicable here if the consumer is to be protected from the greed of I. C. Marketing, A. C. P. A. or Dennis Simpson.

I. C. Marketing? Who the heck are they? Never mind the typos, grammatical errors, and peculiar structure: they seem to have figured out the basic idea behind the lawsuit.

It is our argument that it is precisely their greed or more appropriately, their profit seeking which is the unexcelled protector of the consumer. What the State of Oregon refuses to recognize is that it is in the self-interest of I. C. Marketing, et al to have a reputation for honest dealings and a quality product. Since the market value of I. C. Marketing, et al is measured by its money making potential, reputation or good will it is as much an asset as its physical assets, buildings and equipment. For I. C. Marketing et al the value of its reputation, as reflected in the salability of its brand name PSE, is a major asset. The loss of reputation through the sale of fraudulent subscriptions would sharply reduce its market value, though their physical resources would remain intact. The slightest doubt as to the trustworthiness of I. C. Marketing et al and its commitment would put them out of business overnight.

Does I. C. Marketing (or whatever other names they may go by) have any significant level of recognition among consumers? PSE? Publishers Services Exchange? People may recognize Publishers Clearing House or American Family Publishers, largely because of the sweepstakes these companies offer and the use of celebrities to promote those sweepstakes, but who recognizes PSE, unless they've heard about it in terms of a lawsuit or complaints about their method of operation?

Reputation, in the magazine business, is thus a major competitive tool. Agents who have acquired a reputation for top quality sales and service take the market away from their less scrupulous or less conscientious competitors. I. C. Marketing et al brand names have been developed to be synonymous with high quality and service. In fact, in one way or another, every producer or distributor of goods and services is caught up in the competition for reputation.

I. C. Marketing is synonymous with high quality and sevice? How can that be when there's no evidence of widespread recognition of these brands? "Less scrupulous" competitors? Who are they talking about? American Family Publishers and Publishers Clearing House, companies that let you canel your subscription whenever you feel like it, without penalty? And what evidence is there to suggest these competitors have lower standards of service and quality than I. C. Marketing?

It requires years, for a magazine agent, of consistently excellent performance to acquire a reputation and to establish it as a financial asset. Thereafter, a still greater effort is required to maintain it. I. C. Marketing et al cannot afford to risk its years of investment by letting down its standards of service for one moment or one fraudulent mailer; nor would it be tempted by any potential quick killing. New magazine agents entering the field cannot compete immediately with the established, reputable I. C. Marketing et al, and must spend years working on a smaller scale in order to earn an equal reputation. Therefore, the incentive for honest performance operates in all levels of the magazine industry. It is a built in safeguard to the direct mail enterprise system and the only real protection for consumers against dishonest magazine agents.

Dishonest magazine agents... there sure seem to be a bunch of them out there: telemarketers, youth field sales, direct mail such as offers with your credit card bill from NewSub Magazine Service, and who knows who else. So IC Marketing is apparently able to succeed with no reputation to speak of, and managed to send out solicitations which caused numerous publishers to repudiate any assertion that IC Marketing was even authorized to handle their subscriptions.

Publishers don't turn down paid subscriptions if they don't absolutely have to. Why would they do that??? There must be some reason.

The Oregon Consumer Protection Act is not an alternative means of protecting the consumer. It does not build accuracy into the mailers. Its sole contribution is to substitute force and fear for incentive as the protector of the consumer. The basis for the Consumer Protection Act, notwithstanding information to the contrary by the Oregon Attorney Generalís office, is extortion and ultimately armed force. At the bottom of all the legislation, bills, lawsuits, and paperwork is a gun in the end. What are the end results of this activity?

We're so glad to see that the folks at I.C. Marketing have figured it out: if you try to deceive people as a way to take their money, then you're going to be dragged off to jail. You can come peacefully or the cops can come with weapons in hand. You'll lose your ass and your assets if you base your business on this kind of behavior. These people aren't nearly as stupid as they would like us to believe.

To paraphrase Grashamís law: Bad protection drives out good. The attempt by the State of Oregon to protect the consumer by force undercuts the protection they would get from incentive. The primary issue is it undercuts the value of reputation by placing I. C. Marketing et al on the same basis as the unknown, the newcomer, or the fly by nighter. It declares, in effect, that all magazine agents are equally suspect and that years of evidence to the contrary do not free a company or individual from that suspicion. The secondary issue is that it grants some form of an automatic guarantee, though not achievable, of safety to the consumer who responds to a mail piece from a magazine agent that complies with its arbitrarily set minimum standards. The value of I. C. Marketingís reputation rested on the fact that it was necessary for the consumer to exercise judgment in the choice of the magazines and services they purchased. The State of Oregonís guarantee undermines this necessity. It declares to the consumer, in effect, that no choice or judgment is required, and that I. C. Marketing et alís record, its years of achievement, is irrelevant.

The minimum standard of the Consumer Protection Act has gradually become the maximum in the magazine business. Because the current law has set minimum standards of what must be on a mail piece, the magazine agent does not get very much competitive advantage by exceeding those standards. Therefore most direct mail companies typically meet only the minimums. Because minimum specifications are set for direct mail, there is little profit for any company to produce something of above average quality.

Ultimately, the attempt by the State to maintain minimum standards is becoming impossible. Since the draining of incentives to improve the information on the mail pieces has begun even the erosion in this instance, of the minimums.

The guiding purpose of the Consumer Protection Act, in this instance, is to prevent rather than to create compliance. I. C. Marketing et al, gets no credit if it adds a toll free number to its mail piece to enhance disclosure and communication, but he does if he bans the mail piece altogether. Such emphasis on the negative has set the framework under which the State of Oregon operates. The result is a growing body of restrictive regulation on direct mail. As in all businesses it is impossible to add restriction to the development of new business with-out simultaneously cutting off the secondary rewards of improved quality and innovation which are inseparable.

The Oregon Consumer Protection Act, which is based on force and fear, undermines the moral base of business dealing. It becomes cheaper to pay a fine than to meet the higher standards required of good business. A fly by night magazine agent can quickly meet all the minimum C. P. A. requirements, gain the inference of respectability, and proceed to fleece the public. In a less restrictive enforcement, this new agent would have had to spend a number of years in reputable dealings before he could earn a position of trust sufficient to reduce investors to place capitol for expansion.

Protection of consumers from the direct mail magazine industry is thus illusory. Rather than isolating the consumer from the dishonest magazine agent, it is gradually destroying the only reliable protection the consumer has, competition for reputation. While the consumer is thus endangered, the primary victim of this protective regulation is I. C. Marketing et al. The Consumer Protection Act, therefore, destroys the competition of I. C. Marketing et al for reputation thereby undermining the market value of the good will which I. C. Marketing et al has built up over the years. It is an act of expropriation of wealth created by integrity. Since the value of I. C. Marketing et al is its wealth, which rests on its ability to make money. The act of the Oregon Attorney Generalís office of seizing a companies plant or revaluing it reputation are in the same category: Both are acts of expropriation.

More over, this Consumer Protection Act falls in the category of preventative law. I. C. Marketing et al is being subjected to the Attorney Generalís coercion prior to the commission of any crime. Their efforts, through the media, to defame and discredit the company are evidence of this policy.

The Consumer Protection Act will not eliminate potentially dishonest individuals or businesses, but merely make their activities harder to detect or easier to hush up. Furthermore, the possibility of individual dishonesty applies to the Oregon Attorney Generalís office employees fully as much as to any other group of people. There is nothing to guarantee the superior judgement, knowledge, and integrity of an investigator or Assistant Attorney General, and the deadly consequences of entrusting them with arbitrary power are obvious.

The hallmark of the Oregon Attorney Generalís office is their deep rooted distrust of the free market process; but it is their advocacy of so called consumer protection that exposes the nature of their basic premise with particular clarity. By preferring force and fear to incentive and reward as a means of human motivation, they confess their view to companies like I. C. Marketing et al as mindless brutes functioning on the range of the moment whose actual self interest lies in flying by night and making quick kills.

They confess their ignorance of the role of intelligence in the magazine business, of the wide intellectual context and long range vision required to maintain business in this modern environment. They confess their inability to grasp the crucial importance of the moral values that are the motive power I. C. Marketing et al implements. I. C. Marketing, holds integrity and trustworthiness as cardinal virtues and requires them to pay off in the market place by demanding that men and consumers survive by means of virtues not vices. This, is the superlatively moral system that the State of Oregon proposes to improve upon by means of preventative unscrupulous agencies and the constant goad of fear.

As always you may contact us at info@acpai.com.


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