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Archive for December 27th, 2007

No Contract for Old Men

Posted by The Situationist Staff on December 27, 2007

No Contract for Old MenIn July, Situationist Fellow Kate Hill wrote a post (“When Thieves See Situation“) about how marketers are exploiting the situation of elderly people, many of whom are especially vulnerable to manipulative practices that have become common among telemarketers. Her post was based on a New York Times article by Charles Duhigg.

Duhigg just published a related article (“Shielding Money Clashes with Elders’ Free Will“) describing how some of those elderly victims are beginning to fight back, with a little help from their lawyers. Elderly individuals who appear to be making “bad choices” and entering “bad contracts” are, according to Duhigg’s latest piece, claiming that they should be shielded from some of their contracts.

That sort of argument is, of course, very unusual and unpopular in contemporary American culture, which teaches (1) that we are less than fully human if we admit that we’re not good choosers for ourselves or (2) that we are paternalistic or elitist if we suggest that anyone else is vulnerable to situational manipulation.

To be sure, there are categories of people for whom we accept the idea that the “free choice” model doesn’t apply, or at least not fully — children and the insane, for instance, are often said to “lack capacity” to contract and, therefore, are sometimes not held to the terms of a contract, particularly when that contract seems exploitative. But that’s the point, to declare that some other group “lacks capacity” is equivalent to saying that they are like children or otherwise incompetent.

Perhaps our presumptions should change. If we accepted that all of us are vulnerable to situational manipulations, we might be more willing to shift responsibility to the large entities who spend vast resources to manipulate our situation instead of looking to assign responsibility entirely to the the individual on the other side of the contract.

Below we excerpt a few sections of Duhigg’s excellent article, which raises some of those issues.

* * *

Eight years ago, when Robert J. Pyle was 73 years old, he had about $500,000 in the bank and owned a house in Northern California worth about $650,000. He was looking forward to a comfortable retirement.

Today, at 81, he has lost everything. Mr. Pyle, a retired aerospace engineer, now lives in his stepdaughter’s tiny, mountainside home in a room not much larger than his bed.

By his own admission, Mr. Pyle willingly made every decision that led to his financial problems. He gave away large sums to people he thought were friends, and then, in need of money, sold his house at a deep discount to the first person who offered to buy it.

Even so, he claims in a lawsuit that he should be compensated for some of his losses for a simple reason: he is old, and should not bear the full responsibility for his choices.

“I still make pretty good decisions about most things,” said Mr. Pyle, who shows no signs of dementia. “But for others, I guess I’m not as sharp as I was before, and people take advantage of that.”

In the last few years, thousands of older Americans like Mr. Pyle have filed suits against companies and salespeople who have promoted dubious offers and schemes. These suits are unusual because the victims typically do not say they were intimidated or lied to, and they concede they freely made what turned out to be unwise decisions.

But because the plaintiffs are older, they argue, they should be less accountable for their mistakes.

These lawsuits raise controversial questions: In the eyes of the law, should the elderly be treated like adolescents, who are not entirely responsible for their poor decisions, but are also barred from making certain choices on their own? Or should they have autonomy, and therefore be accountable for their blunders?

* * *

Although national figures are hard to collect, more than 760 civil lawsuits were filed last year in California alone contending elder abuse (most of them claim financial abuse, though some assert other kinds of abuse, including physical). That is an increase of 98 percent from five years earlier, according to a search of court filings. At least a dozen other states show similar trends.Many of the legal theories at the core of these suits draw on recently passed laws that are often ambiguously worded.

woman-on-phone.jpegCalifornia’s elder abuse statute, for instance, does not specify how sales agents should treat older customers. Instead, the law recognizes that the elderly are vulnerable to “abuse, neglect or abandonment,” and indicates that an older person has been financially abused when “it is obvious to a reasonable person” that fraud has occurred. These broad laws, argues Mr. Pyle’s lawyer, Kathryn A. Stebner, creates special protections for the elderly, even if they are not specifically spelled out.

* * *

As growing numbers of elderly consumers begin citing such legislation to undo contracts or get refunds, some companies and executives are warning of possible repercussions.

“Either someone has the mental capacity to make a decision, and therefore live with the consequences, or they don’t, in which case they shouldn’t be managing their own finances,” said Terry J. Dyer, president of Jett Financial Services, a defendant in Mr. Pyle’s suit. Mr. Dyer said his company, which helped Mr. Pyle refinance his home, did nothing wrong.

“There is no business on earth that can function if its customers can say, ‘I’m tired of abiding by this contract, so I want out because I’m old,’” he added.

* * *

To read all of the Duhigg article, go to Shielding Money Clashes with Elders’ Free Will.”

Posted in Choice Myth, Marketing, Public Policy | 1 Comment »

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