It's a complex marketplace out there. There are more options, more choices that ever before. That can be good news - to savvy consumers. But the proliferation of products and services in recent years has also added confusion. It also means there are more opportunities to make costly errors.

How well are consumers meeting the challenge?Not well at all, if a recent survey sponsored by the Consumer Federation of America (CFA) is any indication. CFA designed a test of 249 questions dealing with six major areas of consumption: banking, housing, insurance, food, product safety and durable goods such as autos and appliances. The test was given to consumers at shopping centers around the country.

Most consumers received a failing grade on the test. The average consumer answered only 54 percent of the multiple choice questions correctly - results that were particularly "appalling," since random guessing would have yielded a 25 percent correct score, according to CFA executive director Stephen Brobeck.

"The fact that consumers are inadequately prepared to deal with the marketplace costs them billions of dollars a year," Brobeck said at a news conference. "It also threatens their health and safety."

For example, only 38 percent of the consumers knew that a certificate of deposit usually pays higher yields than a money market account. Only 21 percent knew the extent to which auto insurance rates vary between companies; 26 percent knew about the decreasing importance of life insurance with age; 25 percent knew when and how to remove asbestos; 33 percent knew that real estate agents legally represent the sellers; 36 percent understood the basis for food ingredient labeling.

There were some areas where consumers did better: 87 percent understood the significance of cosigning a loan; 78 percent understood the relation of salt consumption to high blood pressure; 76 percent knew the meaning of a full warranty; and 77 percent knew how to save gas while driving. Consumers seemed to have the most knowledge in the areas of automobiles and insurance.

At meetings of the National Coalition for Consumer Education earlier this year, Bonnie Guiton, then-director of the U.S. Office of Consumer Affairs (she has since resigned to take another position), talked about the problems of consumer literacy.

"I see consumerism as survival skills - skills for life. These skills go beyond the three Rs and balancing a checkbook," she said.

Consumers need to be armed with an array of tools, from making wise purchase decisions to protecting their privacy. They need to know where to go when they have a problem, she said, but many don't.

Those groups with particular problems include minorities, recent immigrants, the young and the old. "The minority population has slipped through the cracks (of consumer education)." On a scale of 1 to 10, minorities score a 2 or 3 on her scorecard of consumer literacy.

But even Middle America, the target of most consumer education to date, has more to learn, she said.

Gary Hansen, director of the Utah Division of Consumer Protection, sees consumer education as one of the most important aspects of his job.

"Well-informed, intelligent consumers can avoid most of the pitfalls," says Hansen. "Ideally, consumers would become so educated there would be no need for our government role."

When it comes to looking out for their own best interests, he says, consumers can't be overeducated. "While there is some outright fraud out there, a lot of the problems we handle are the result of a lack of information on the part of consumers."

There are lots of sources of consumer information, he says. "Our office is only one of them." But consumers have to take some responsibility for seeking out that information.


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Test your consumer savvy

Here's a sampling of questions asked in multiple-choice tests on consumers in shopping centers.

1. Which of the following institutions usually charges the highest rate of interest on an unsecured consumer loan?

a. an insurance company

b. a local bank

c. a finance company

d. a credit union

2. A real estate agent's sales commission is generally what percent of the sales price on a house?

a. 2 percent

b. 4 percent

c. 6 percent

d. 10 percent

3. The presence of radon gas in homes can be detected by:

a. unusual odors

b. stain on walls

c. readings on Geiger counter

d. results of a special test

4. To find the best buy among similar products, a consumer should check the:

a. universal product code

b. size of the package

c. item price

d. unit price

5. If a person files a complaint in a small claims count against a television repair shop, which of the following statements is true?

a. the case will be heard by a jury.

b. the person will need an attorney.

c. the person can represent himself or herself.

d. the person can win an award of up to $5,000.

6. Mr. and Mrs. O'Brien sign a one-year lease for an apartment at $400 a month but change their minds and never move in. Legally, they owe the landlord:

a. $400

b. $800

c. $1,200

d. $4,800

7. Which of the following drugs can cause drowsiness and therefore should not be taken before driving?

a. aspirin

b. antihistamines

c. antacids

d. laxatives

8. When a check bounces, who, if anyone is charged a fee?

a. the check writer only

b. the person to whom the check is written only

c. both the check writer and the person to whom the check is written

d. neither the check writer nor the person to whom the check is written


1. c; 2. c; 3. d; 4. d; 5. c; 6. d; 7. b; 8. c.


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Where to find information

Sometimes, knowing where to find information is more important than knowing all the answers. Here's a brief rundown of some places to get consumer information:

- Utah Division of Consumer Protection is charged with enforcing a number of consumer laws. The office handles complaints and investigates abuses in the marketplace. The address: Heber M. Wells Building, 160 E. 300 South, P.O. Box 45802, Salt Lake City, Utah 84145-0802; 530-6601.

- Utah State University Extension Service is a division of the U.S. Department of Agriculture. Some people call this agency "everybody's mother" because the specialists and experts can provide help in a wide variety of areas. They also have a number of low-cost and no-cost publications. Each county in the state has an extension office. In Salt Lake, it is located in the county complex at 2001 S. State; 451-3043.

- Better Business Bureau can tell you about complaints it has received about local businesses and provides other useful consumer information. It is located at 1588 South Main, Salt Lake City, 84115; 487-4656.

- The Federal Information Center, 1-800-359-3997, can provide information about federal government agencies, direct complaints and tell you how to get in touch with agency offices.

Federal agencies that provide consumer information and help include the Food and Drug Administration, the Federal Trade Commission, the Consumer Product Safety Commission and the U.S. Department of Agrigulture.

- The Consumer Information Center, P.O. Box 100, Pueblo, CO 81002, publishes a wealth of no-cost and low-cost consumer information. You can get a free catalog by writing to them.