Consumer Law

Does An Unread Disclosure Somehow Lead to Consumer Justice?

By Sam Glover

Most consumer law and regulations are—basically—an attempt to level the playing field between those with knowledge and power and those without knowledge, or power, or both.

I mean corporations and consumers, of course. The general idea is that since consumers are generally clueless about things like amortization, APR, and most financial jibber jabber, they can still make intelligent decisions as long as corporations make disclosures that consumers can understand.

The dirty little secret, however, is that nobody reads disclosures, not even distinguished, well-respected federal appellate judges like Frank Easterbrook and Richard Posner. Seriously, how many contracts have you ever read?

So if the foundation of the common law of fraud, along with the foundation of the U.S. consumer regulatory scheme, is disclosing stuff about cars, loans, credit cards, houses, etc., render the marketplace fair, then our system of consumer justice is just an exercise in self-deception, isn’t it?

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Full post as published by Caveat Emptor on January 28, 2011 (boomark / email).