Ethics in Business: Silence is a Sign of Approval!

In today's world, consumers are constantly bombarded with marketing promotions, gimmicks and subscriptions that companies use as a tool to gain a greater market share and obviously lock in more consumers into their network. While some companies do it the traditional way by sending promotion material either in print or by presenting it on the internet, there are a lot more companies that seem to adopt a shady version of it that I call the "silent parasite".

The "silent parasite" is a tool that companies seem to use to attract an unwilling consumer to their network through some means and then hold on to the consumer forever assuming that he/she has accepted their presence. Mostly the "means" end up being a free offering or subscription that eventually turns out into a trap laid by the company to grow its customer network.

A typical example of this was one that I had faced with the site-freecreditreport.com, way back when it started and before it changed some of its practices later on. When this site initially began, nobody knew who started this site, but it launched a pretty heavy ad campaign to promote the idea that your credit report is for free. When I signed up for the free report, I was led to believe that I was entering credit card details so that my identity could be verified. Without a clear indication of what was in store, I did manage to get my free report and was happy that I didn't have to access the monopolistic ring of the the three leading credit agencies to get a report that talks about my credit worthiness. What I wasn't aware of was that I had also automatically signed myself into being charged a monthly fee to get some regular updates on my credit report because I somehow did not disapprove the idea of being charged in the first place! After a few credit card bills that showed money being siphoned off account, I eventually had to call them up to cancel my "subscription". I soon realized I wasn't alone in this silent approval trickery. Consumers immediately exposed the fact that this site belonged to one of the three large credit agencies-Experian. Also, the fine print that was possibly concealed well enough was also exposed and the site received some flak. Soon, the website was revamped and as you can see the current version today, it not only shows clearly that it is an Experian company but it also has a clearly highlighted "important information" section in the home page that warns that not canceling the free membership within 7 days automatically implies subscription to a monthly fee based program.

This company is not alone in sucking customers through this trick. Several companies often have these clauses showing up in fine print- a practice I think gives businesses a legal option to smartly whip the unsuspecting consumer. How many times do you think consumers get to read fine prints in the first place, and read and understand the Shakespearean language used to explain what the consumer is getting into in the second place? Assuming that the law requires even consumers to be smart enough to look around, identify and understand what they are getting into, the bigger question is how can businesses assume that since a consumer did not say no to something that they imagined the consumer will say "yes" to, the consumer has in effect authorized to part with their money?

Magazine/newspaper companies are also a good example of a place where such practices are common. Don't stop a free subscription and you will automatically be billed from the time the freebie ends. Why this trick works for businesses is because of the nature of human behavior when it is influenced by time and space. This is the fuel to the marketer's promotional instincts that guarantees that a consumer in a large number of cases does not reject something once he is knee deep into it.

To explain this further, we need to understand how people behave. A majority of us are not the kind of people who maintain a strict regimen in life. A life that is filled with a time bound activity of what all needs to be tracked and completed in the future. A good amount of people who are of that kind are mostly those who tend to track and complete activities of prime importance for them. That is where, the marketing programs of businesses seep in through the cracks. Given the growing responsibilities of the average human being, it is becoming largely difficult for them to keep track of every event that they participate in or every action that they have taken in the past, which has a future implication that is strictly time bound. How many times can a consumer remember that before the seventh day from today, she needs to call freecreditreport.com to cancel an automatic subscription that will immediately sign her up for a fee-based subscription??

Companies are smart enough to understand this human dilemma- a general disposition towards laziness when it comes to remembering a particular time in the future to carry out a series of not so familiar non-daily actions to prevent themselves from getting into something that they are not in approval of to begin with. As one can see, none of these "silent approval" programs have an easy way for the consumer to one: pre-cancel a membership/subscription while signing up for something free and two: post-cancel a membership/subscription through the click of a button, the same easy means by which the consumer signed up in the first place. These cancellations are largely done when the consumer ends up calling a 800 number and wait for some time before they end talking with an agent to get rid of the parasite. In my opinion, what companies I believe have realized is the economic benefit that comes with this trivial human nature.

If freecreditreport.com captures 1000 consumers, who do not wish to hold on to their subscriptions to end up paying for it, the company has a computer based time bomb ticking away and waiting for day 7 (0 hours o minutes 0 seconds) to pounce upon them. Assuming that a rare 95% of these consumers called in to cancel their subscription, it leaves the remaining 5% of consumers who are still exposed to this parasite. Given that the monthly subscription is $15, 50 unwilling consumers end up registering $750 into the companies bank account. This is free money for the company that no consumer can claim as lost through any legal means. If this continues for another month, the company pockets $1500 of free money. By scaling up these numbers, one can imagine the kind of free money that a company can make by simply taking advantage of the principle that "silence is a sign of approval"!

Marijuana and Dogs: The Strange Case of Two Michaels

Two interesting events happened in the American sporting world in the past two years. It involved two famous sportsmen, but it had nothing to do with sports. Michael Vick, a footballer for the Atlanta Falcons, was caught running a dog fighting ring. The uproar was tremendous as public opinion flowed in to protest the ghastly crime committed by the player. The law was also not slow in slapping him with some strong felony charges and he was rightly sent packing to prison.
Until recently, Vick served his prison term, lost his NFL berth, became bankrupt, was not easily forgiven by the law and still struggles to get back to his life. Now, all is well and good in this story. A man deserves to be punished for his crimes, in this case, the death of dogs. Even today, public opinion is largely skewed towards punishing him more by denying him a start to his NFL career. Great media coverage, great legal prosecution, great punishment and a great public reaction.

Now, fast forwarding it to another incident that involved the best swimming sensation the planet has ever seen so far, was another Michael, whose last name Phelps was being associated with everything good that people can think of either in the sporting world, in the business world, the media or the public in general. Michael Phelps was caught smoking Marijuana largely by accident when someone clicked away and shared photos that were probably not meant for public viewing. This is when the big "WHAT!!!?" sparked in my mind. The public protested but it just lasted a few days and seemed more of something done out of embarrassment than anger. The media covered it too. But, they too were caught up with news that was not getting enough attention from the public and to make matters worse even the law. The law did start investigating the matter, but soon enough, "public" opinion emphasized on the fact that this is "just" news and it is "just" drugs. In the words of the Sheriff who investigated the matter - "We had a photo and we had him saying he was sorry for his inappropriate behavior. That behavior could have been going to a party". He never said, 'I smoked marijuana.' He never confessed that". Phelps own statement went this way - "For me, it's all about recognizing that I used bad judgment and it's a mistake I won't make again". Great choice of words for something that Phelps did that nobody knew about! What was he feeling bad about? Nevertheless, people grew tired of the investigation, the law never followed up, Phelps got punished by not being allowed to swim in one of the pools and everyone was happy that the embarrassment didn't last long.
This is where the big question arises - if something that affects dogs could evoke such genuine reaction and swift action, why can't something that can tremendously affect people the world over not get the right response. Although personally there is nothing against Phelps, I fail to understand why Phelps and Vick couldn't end up being on the same side of the fence. One obvious reason why it wasn't that way is because people in general do not understand the number of lives that Marijuana takes in its way as it reaches the hands of a society that still fantasizes its use and struggles to outright criminalize its consumption.
Marijuana comes from several domestic and largely international sources. According to the US DEA, Marijuana is the most widely abused and readily available illicit drug in the USA. About 30% of the US population has used Marijuana sometime in their lives. This could potentially explain the lukewarm reaction to the "Phelps show", but the dangers are not exposed enough. Organized crime groups and cartels run these operations in different countries possibly eliminating a few people before a pound of Marijuana makes its way to US shores. A high quality Marijuana sells for about $6000 per pound. I believe it is safe to assume that on its way to the US, a pound of Marijuana must have eliminated at least one person in a so called "third world" country. No price can be set for life, whether it is a person or an animal. That price is definitely not as low as $6000 or $10000 a pound. If a person consumes a gram of marijuana, he is in effect paying $12 for ecstasy and $0 for one human life. The question becomes who needs to pay for the "free" life that one consumes when smoking this drug. Given that this is designated as a gateway drug to more powerful drugs, the bloodshed on the way is immeasurable but yet more significant. If Vick paid up millions in fines and lost his job for the "life" that he consumed, why couldn't a user of drugs also be responsible for a similar fate?
The war against drugs has been ongoing for several years and there has always been a debate over who the "criminal" is and who needs to be punished for the selling and consumption of drugs. Nevertheless, public reaction and debate are the only triggers that can create laws that protect the weak - a dog or a human being. By remaining silent or worse not even bothering to react, we people have probably exposed our inability to value human life beyond the life of a dog by refusing to think and question the actions around us.

The FDA Should Ban Foreign Clinical Studies of Drugs

Among several relatively unknown activities that lead to exploitation of the innocents, foreign clinical studies or drug trials is one such act carried out by giant multinational pharmaceutical firms. The big name pharmaceutical firms in the US and UK depend on conducting clinical trials in nations such as India and other poor countries to reduce their overall drug development costs by about 40-60%. By 2010, it is assumed that the total spend on outsourcing clinical trials to India is to exceed $2Billion. Having seen how doctors and hospitals behave in a country like India, it is pretty certain how the ignorant (it doesn't matter whether you are poor or rich) can be taken undue advantage of to satisfy the needs of these companies.
Doctors and Hospitals in India have less at stake when it comes to safe recommendation and regulation of medication for patients. In a World that wakes up and sleeps to the music of money, the only stick that holds greed at bay is confirmation to strict legal regulations. Without a strong legal base in a country, the law remains powerless when it comes to monitoring the greedy acts of companies. When a doctor prescribes a "special" medicine to an ignorant patient on the behest of a pharmaceutical firm working to test those drugs, there is nothing within the legal rights of the patient to stop such acts. India has a lot of laws that prescribe the right conduct of such trials and these companies make sure that these legal edicts are safely followed on paper. Unfortunately, in countries where issues do not even reach the doors of the law for justice to be served, the end result is the lack of any law in the first place. India and several other materialistically poor nations suffer from this incurable disease. I have personally observed how daunting an experience it is talking with doctors and hospital/clinic staff who literally have a free ride in not only recommending any number of medications they like without fear of being legally sued, but also have the audacity to scold or threaten patients if things are not to their liking. Several of these doctors are constantly approached by medical representatives, who act as a sales front for the pharmaceutical firms. Sometimes, in the guise of an informed consent, they literally dump new medications or slow-moving medications to unwary patients. One can only imagine how it would look like for the largely poorer or ignorant sections that constitutes about 70% of the Indian population.
In all this melee hides a silent and often ignorant sleeping giant - the FDA. The FDA authorizes foreign clinical studies as long as it abides by the regulations set by the host country (where the trial is conducted mostly in secrecy) or to other ethical principles under the Declaration of Helsinki (which I believe is no longer relevant), whichever protects human rights better. This unfortunately is a mere fallacy that has no practical meaning whatsoever. All the profit making pharmaceutical firms in the World look forward to the FDA as the gate keeper who opens them to the mecca of blockbuster drug sales - the USA. The US is one of the largest consumers of prescription drugs and one of the most profitable markets for any drug company. Fortunately, this country has the FDA to hopefully regulate the kind of drugs brought out into the market and its long term use and existence. Also, a network of well organized lawyers later ensure that these firms are selling what they promise they cure or else slap them with multi-million dollar law suits that usually work in favor of the "cheated" patient. Unfortunately, the FDA is not thinking in clear terms when it comes to how these companies work to meet the requirements of their strong codes of conduct.
The FDA does not have the resources nor a nationalistic purpose to clearly monitor the often obscure methods employed by these large drug companies in conducting their trials in remote areas of Asia or Africa. The FDA has to answer the US government and its citizens and that is all it is driven by as a daily mantra for ensuring that quality foods and drugs enter the US. In such a state of affairs, the FDA should be morally more inclined to not accept any foreign clinical trials unless it has it own people closely monitoring that process. In fact, to take it a step further, it is completely wrong on the part of the FDA to allow such foreign tests on human guinea pigs when it as an agency does not have the power to dictate how other countries should regulate the action of drug companies in their soil. The guiding principle of "informed consent" as a signature on a blank check for legally authorizing companies to conduct tests on people is an entirely weak argument when it is easily realized that poor people hardly have the power or the knowledge to understand their rights in the first place. It is very unfortunate that this greedy act that largely benefits profit seeking multinational drug companies is allowed to continue in the name of giving healthy, "well tested" drugs to the "developed" nations of the world.
After all, these well tested and safe drugs are either heavily expensive or never reach the poor countries that largely test it. It is usually the cheap ripoffs or generics that are either affordable or available to large sections of the population in countries such as India. To make matters worse, in the name of protecting so called patents, the large drug companies have used the WTO to force countries like India from reverse-engineering these drugs to create cheaper alternatives. So now, not only do people in India test themselves with these drugs but never get to use them if they really need it.

The Ethics of Swiss Bank Secrecy Laws

Recently, the Swiss Bank firm UBS was directed by the US Justice department to give access to some of its customers who "used" the Swiss Bank secrecy laws in hiding billions of assets, thereby evading taxes. This was followed by another lawsuit filed by the US in Miami asking for bank information on 52000 US customers who could have potentially stashed away billions of dollars from the eyes of the IRS.
This is however nothing new for US lawmakers. In the 80s, during the height of the Wall Street insider trading days, Swiss bank accounts in safe havens like the Caribbean Islands served as popular destinations for hiding millions of dollars swindled by greedy Wall Street traders. The SEC during its investigations struggled hard in accessing the details of these account holders as the banks were unwilling to cooperate. Although, they eventually succeeded in arm twisting some banks to comply, we never know how many got unnoticed.
Swiss bank laws support a very strong secrecy pact that in effect prevents anyone not authorized by the account holder, from accessing account details. This applies even to governments seeking information on any suspected individuals. The reasoning as one Swiss official put it in a NPR radio interview is to protect the privacy of the account holder and the safety of his assets. This has been evangelized over the years by the Swiss government and still continues to be their selling point. However, I think this is one among the many bad aspects of nations that can deviate from ethics as long as money flows into their pockets. Unfortunately, Switzerland is considered as one among the most "developed" nations in this world while they have virtually created a scheme to attract "bad" money from greedy people around the world.
There is enough information in the internet talking about the kind of people that Swiss banks attract. On the contrary, Swiss banks have also come up with how clean their customers are and the controversy around their practices. Swiss banks have come a long way in better monitoring their operations and the background of their customers. Unfortunately, this only came about after all the pressure generated by other nations in exposing their banking practices over the past 40 years.
Unfortunately, the banks have not realized the ethics of their practices from a human perspective. When Swiss laws do not act immediately on tax avoidance but only on tax fraud issues, this just becomes a greedy game of money laundering. For example, if a celebrity client from a "developing" nation deposits $10 MM in a Swiss bank account, he could possibly be doing it without the knowledge of the local government's tax department. There could be no other reason why someone would put huge sums of money into a foreign bank. The argument that these banks provide a greater return cannot be true as they are mostly comparable to other banks in the world. "Secrecy" in maintaining a bank account is desirable only when you don't want a greater authority to know what you are doing with your money or from where you are getting it. Any other kind of privacy or secrecy is provided even by a rural bank in a struggling "developing" nation.
By making a glaring distinction on legal grounds between tax avoidance and tax fraud, this country had been largely benefiting itself and rapidly growing it's economy by attracting money from abroad. Although proponents of capitalism have legally and morally justified human greed, they have not figured a way to identify the limits of ethical behavior. If a celebrity in India deposits 10 crores in Indian currency (which is easy for them to earn in a year), an equivalent of $2MM dollars is being deposited in a Swiss bank. That money through the banking system will eventually reach Wall Street or fund bonds offered by a Swiss global corporation. The Indian government on the other hand is sitting to lose 30% of that amount (given the high tax rate the government charges due to its inability to raise money through other resources) or the equivalent of $600K, which in Indian currency is a respectable sum. Less than 5% of the country pays taxes in the first place. Even with an insensible government in place, $600K can be used to fund huge infrastructure projects in the country to truly alleviate "materialistic" poverty. Swiss bank accounts are hardly opened by a middle class person in any "developing" nation. I don't even believe any ordinary person will go out of the way to deposit a few 1000 dollars in such banks. By having countries act like safe havens for rich tax evaders (or avoiders), these banks are severly violating the ethics of human behavior that would be so well expected from a nation that belongs to a World group that recommends how other countries should run their lives. It is time Swiss banks stop this so called secrecy pratice and actually promote a more open banking system that benefits the entire World in moving forward.

Book Review: Autobiography of a Yogi - A Story of Mysticism and Spirituality

Reading through the pages of the book "Autobiography of a Yogi" by Swami Paramahansa Yogananda is like a magical journey through times past, present and uknown! A journey that describes the pursuit of a yogi towards God realization and the adventure he embarks upon in a mystical India that is relatively diminishing over time.
The yogi's tale is a very engaging account of how the science of Kriya yoga was initiated by a God saint "Babaji" (and originally by Lord Krishna in the Bhagavad Gita) and passed on to his mortal disciples who in turn carried on the tradition of passing this art to the following generations, in turn becoming masters in their own right.
The biggest challenge with anything that the human senses cannot easily perceive becomes unscientific as per the modern world. Walking along this trend, it is very difficult to ascertain the "truth" or "reality" of the various superhuman and God-like saints Swami Yogananda talks about. Nevertheless, it is very comforting to know that there have always been people on this earth renouncing materialistic gains and seeking unison with their spiritual self.
The book as such however meanders into areas that makes one doubt the seriousness of the Kriya yoga initiative. The Self Realization Fellowship (SRF) founded by the Yogi in the US is described in grand details- materialistic acquisition of property the exotic locations of the Pacific West. Sometimes, the book seems more like a sales pitch for Christians to join the SRF. However, I liked the subtle references to Christ's sayings in the Bible, the yogi's interpretation of them, and how all spiritual teachings were meant to be the same for the entire people of the World.
No matter what mistakes a skeptical human mind can come up with, there were unique perceptions of the yogi on some topics that were a delight to read. He laments on how the true form and value of education embedded in the ancient guru-shishya form is lost in today's world. Education by rote has become the order of the day and there is no genuine pursuit of knowledge and wisdom. His comments on India's misinterpreted history and true wealth (spiritual superiority) also delves into how misguided Historians created an Aryan invasion "theory" to discredit its unique past.
The yogi also studies the power of human beings in achieving superhuman capabilities for non-materialistic purposes. His explanation of some of the abilities of yogis to materialize objects out of thin air is fascinating. The base theory that objects are made of atoms, packed into matter and emanating energy is used as a basis for explaining how certain highly trained yogis (who control prana) could recreate the same objects from thin air by rearranging those atoms. He also delves into the Law of Miracles by explaining how certain yogis can materialize themselves in different places at the same time and as and when they wanted.
Quoting straight from the book, "Einstein proved that energy in any particle of matter is equal to its mass or weight multiplied by the square of the velocity of light. The release of atomic energies is brought through annihilation of these material particles. The velocity of light is 186000 miles/sec. Only a material body whose mass is infinite can equal the velocity of light! Great yogis achieve materialization and de-materialization by utilizing this concept of light to manifest themselves in any form they want - their mass is infinite." All this has supposedly been explained in the acient texts of the vedas. According to the yogi, "The Law of Miracles is operable by any man who has realized that the essence of creation is light"!
Yogi Paramhansa Yogananda has indeed opened up a new insight into a forgotten history and lost cause. I'm not sure how the Self Realization Foundation is truly working today to help people use Kriya yoga (never explained anywhere in detail) as a path to human upliftment, but the yogi's biography is worth knowing about. It is definitely delightful to read the life account of people who came and left the Earth with a unique purpose in mind.