Wednesday, December 17, 2003

Capitalism & Law: Regulatory Overkill

The FTC is cracking down on a perennial scam: work-at-home envelope stuffing schemes. We've all seen the ads promising large incomes stuffing and sending envelopes. In reality, these are glorified chain letters that usually end up costing the work-at-home senders more money then they'll ever make. I certainly won't challenge the FTC's decision to go after the companies responsible for these scams, but I do question whether the FTC's presence is really needed. Consider this item from the FTC's own press release:
Targeting the sellers of work-at-home schemes who were taking money out of consumers’ pockets with their deceptive pitches, the Federal Trade Commission today announced a joint federal and state law enforcement sweep cracking down on purveyors of fraudulent envelope-stuffing business opportunities. Joining the Commission in announcing its two federal district court complaints in “Operation Pushing the Envelope” were the U.S. Postal Inspection Service, which announced five criminal and 22 civil cases; the Illinois Attorney General’s Office, which announced two state complaints; and 23 states and four other government agencies that participated in a nationwide consumer education and outreach initiative about the potential costs of such work-at-home opportunities.
If the Postal Inspection Service and 28 other agencies have a hand in this, then why do we need the FTC? The agency seems a redundant player here. And it's not like we needed the 4th Infantry Division to catch these scammers. A first-year lawyer at the Justice Department could have handled this case with a minimum of time and effort.

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