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CONSUMER AFFAIRS / DENISE GELLENE

Brokers' Bias Costly to HomeBuyers

July 30, 1993|DENISE GELLENE

Discriminating brokers: Real estate brokers often harass or discriminate against "alternative" competitors, practices that cost home buyers and sellers money, the Consumer Federation of America says.

The Washington-based organization said a 17-city survey showed that consumers who don't use "buyer brokers," who represent only home buyers, pay up to 5% more for a house. Consumers who don't use discount brokers pay commissions between 1% and 3% higher than what discounters charge.

The study showed that while discrimination against alternative brokers had declined since the 1970s, it was still fairly common. Of the 85 discounters and buyer brokers polled, 60% reported disparagement of their business by regular brokers, 35% reported pirating of their clients by regular brokers and 30% reported that regular brokers refused to show homes listed by alternative brokers.

The study said the worst discrimination was reported in Minneapolis, but cities in the survey weren't otherwise ranked. California cities included in the survey were San Diego, San Francisco and Oakland.

Commenting on the survey, the National Assn. of Realtors didn't directly challenge the findings. In a statement, it said that its code of ethics ensures "proper business practices are followed by all agents and brokers who are realtors."

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Dialing saves dollars: Consumer Action of San Francisco estimates that more than one-quarter of Asian and Latino immigrants nationwide pay too much for telephone calls because they use operator assistance instead of dialing direct.

The consumer organization said that calling collect can add $1.05 to the cost of in-state calls and $1.88 to the cost of out-of-state calls. Person-to-person charges for operator-assisted calls placed to a specific person can come to $3.50, the organization said.

Consumer Action is distributing a booklet, "Using the Services of Operators: What to Know Before Dialing O," that explains how immigrants can save by placing calls themselves. It is available in five languages: Chinese, English, Korean, Spanish and Vietnamese.

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Privacy legislation: Legislation expected to come before the state Senate soon would allow consumers to delete their names from mailing lists that credit card companies compile and sell to direct marketers.

The legislation, sponsored by Assemblyman Sal Cannella (D-Modesto) and approved in the Assembly with a 64-0 vote, would require card issuers to give cardholders an opportunity to scratch their names off marketing lists drawn up using credit card purchasing information.

The issue got national attention in May, 1992, when the New York state attorney general investigated American Express' practice of selling lists that sorted customers based on buying habits into such categories as "Rodeo Drive Chic" and "Fifth Avenue Sophisticated." As a result, American Express became one of the few card issuers to allow cardholders to opt out of marketing programs. According to a spokesman for Cannella, no other state has passed similar legislation.

The bill gives card issuers a year to comply. The only opposition is from the Discover card. A spokesman for Discover would not specify why the issuer is opposed.

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Odds and ends: Inno-Scents of Chatsworth donated 1,400 packets of incense sticks to Iowa flood victims to relieve "musky and terrible odors emitted from flooded homes.". . . Not going for gold: Dallas-based Credicard has agreed to drop its nationwide mailings offering a "gold card" for $29.95, which some consumers mistake for a credit card. As previously reported in this space, the card was good only for the direct marketer's catalogue . . . Color coordinated: The maker of market leader Just For Men hair dye is coming out with a special color gel for beards and mustaches.

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