WEBVTT

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It's says 5-ft-1. He should fit in our

00:00:02.640 --> 00:00:09.200
server rack. No, it's starting at

00:00:05.480 --> 00:00:11.520
5-ft-1. And here it's listed as up to 7

00:00:09.200 --> 00:00:14.520
ft. Hold on. I found the same guy on

00:00:11.520 --> 00:00:15.200
Amazon and it says compare at 6-ft-2.

00:00:14.520 --> 00:00:17.600
What does that mean?

00:00:15.200 --> 00:00:18.960
>> He's an organic match. We just want him

00:00:17.600 --> 00:00:21.960
to fit in the server rack. Max, what are

00:00:18.960 --> 00:00:21.960
you even talking about? No.

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>> [music]

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>> This type of deceptive marketing has

00:00:26.400 --> 00:00:31.200
existed for as long as I've been 4-ft-1.

00:00:29.000 --> 00:00:34.240
But more recently it's become an even

00:00:31.200 --> 00:00:37.520
bigger problem. For example, just last

00:00:34.240 --> 00:00:39.640
year bestbuy.com decided to change how

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they present promotional prices. Instead

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of calculating discounts compared to

00:00:41.160 --> 00:00:47.720
their typical everyday price, or you

00:00:43.760 --> 00:00:50.120
know, MSRP, they now use a compare at

00:00:47.720 --> 00:00:53.960
reference price that is from what we can

00:00:50.120 --> 00:00:56.160
tell at best optimistic and at worst an

00:00:53.960 --> 00:00:58.200
outright lie. And the worst part is Best

00:00:56.160 --> 00:00:59.920
Buy seems to know this given that they

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haven't brought this practice to other

00:00:59.920 --> 00:01:03.800
regions where they have stricter

00:01:01.840 --> 00:01:06.160
regulations on this behavior. So let's

00:01:03.800 --> 00:01:08.800
talk about how retailers are trying to

00:01:06.160 --> 00:01:10.760
avoid pricing transparency, how this

00:01:08.800 --> 00:01:13.560
plague is spreading, and what we can do

00:01:10.760 --> 00:01:16.880
as consumers to push back against it.

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This problem runs much deeper than just

00:02:12.160 --> 00:02:15.600
one retailer, and we're going to get

00:02:13.640 --> 00:02:17.760
into that later. But, I want to start

00:02:15.600 --> 00:02:18.861
with Best Buy's recent changes. This

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monitor, for instance,

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>> [music]

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>> is listed for $260 off compared to Best

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Buy's comparable value. Compared to

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what, though? At a glance, this seems to

00:02:27.120 --> 00:02:30.600
suggest that it is compared to their

00:02:28.560 --> 00:02:32.840
normal retail price, but

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why don't we dig into the fine print

00:02:32.840 --> 00:02:36.546
here? Oh, and dig into the fine print

00:02:35.400 --> 00:02:37.959
here, shall we?

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>> [clears throat]

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>> Our comparable value prices are based on

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the price at which the product or a

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comparable item

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Wait. The reference price can be for

00:02:48.720 --> 00:02:53.320
another product entirely? Who decides

00:02:51.400 --> 00:02:55.400
what's comparable? Oh, wait. Okay, hold

00:02:53.320 --> 00:02:58.680
on. There's more. It can also be a price

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that was or in the future will be

00:02:58.680 --> 00:03:02.080
offered for sale by Best Buy marketplace

00:03:00.600 --> 00:03:04.680
sellers, manufacturers, suppliers, or

00:03:02.080 --> 00:03:06.840
other retailers online or in store.

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Let me get this straight. Best Buy's new

00:03:06.840 --> 00:03:12.440
policy is that it can reference the

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price of any product at any time, even

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in the future, sold by anyone anywhere,

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and use that to calculate how much money

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I'm saving? And they think that that's a

00:03:20.160 --> 00:03:24.640
useful reference? No, of course they

00:03:22.519 --> 00:03:27.280
don't. Why would they make this change?

00:03:24.640 --> 00:03:29.840
The simple answer is to capitalize on

00:03:27.280 --> 00:03:32.440
the FOMO of shoppers who might not

00:03:29.840 --> 00:03:34.800
obsessively track prices and might not

00:03:32.440 --> 00:03:37.480
realize that the discounts they're being

00:03:34.800 --> 00:03:39.840
offered are kind of BS. If you want me

00:03:37.480 --> 00:03:41.320
to illustrate why this matters and why

00:03:39.840 --> 00:03:44.040
it needs to be stopped, I've got a

00:03:41.320 --> 00:03:46.280
perfect example for you. lttstore.com

00:03:44.040 --> 00:03:48.480
sometimes discounts our legendary

00:03:46.280 --> 00:03:50.360
ratcheting multibit screwdriver. $10

00:03:48.480 --> 00:03:52.720
off, though, doesn't sound like that big

00:03:50.360 --> 00:03:56.000
of a deal. But, hold on a second. What

00:03:52.720 --> 00:03:59.240
if I compare at some other multi-bit

00:03:56.000 --> 00:04:01.920
screwdriver from, say, Wera Tools? No,

00:03:59.240 --> 00:04:04.360
no. Not the price on their site. How

00:04:01.920 --> 00:04:07.040
about this one from a random seller?

00:04:04.360 --> 00:04:09.880
NOW, look at the LTT screwdriver. What a

00:04:07.040 --> 00:04:12.800
deal! But, wait, there's more. I think

00:04:09.880 --> 00:04:15.000
that that Red Bull edition could

00:04:12.800 --> 00:04:18.480
double in price in the future. Well,

00:04:15.000 --> 00:04:21.320
now, you're saving $940

00:04:18.480 --> 00:04:24.000
on your purchase from LTTstore.com,

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which sounds ridiculous because it is.

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But, if we don't do something, that's

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the direction we could be headed. And

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look, I fully recognize that the

00:04:30.000 --> 00:04:35.360
slippery slope argument may be a

00:04:31.880 --> 00:04:38.080
fallacy, but Best Buy is obviously out

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there icing the hill right now. So,

00:04:38.080 --> 00:04:42.200
isn't any of this against the law? Well,

00:04:40.400 --> 00:04:44.440
I'm not a lawyer and this isn't legal

00:04:42.200 --> 00:04:46.800
advice, but the short version is it

00:04:44.440 --> 00:04:48.880
seems like it is and it seems like Best

00:04:46.800 --> 00:04:51.200
Buy knows it. You might have noticed

00:04:48.880 --> 00:04:53.520
that I keep using the words reference

00:04:51.200 --> 00:04:55.520
price. And that's because reference

00:04:53.520 --> 00:04:57.400
pricing is a common phrase used in legal

00:04:55.520 --> 00:05:00.400
documents for what the American FTC

00:04:57.400 --> 00:05:02.840
calls retail price comparisons. And

00:05:00.400 --> 00:05:05.560
false reference pricing or deceptive

00:05:02.840 --> 00:05:07.840
pricing is a practice that is regulated

00:05:05.560 --> 00:05:09.800
by the FTC. How do I know that Best Buy

00:05:07.840 --> 00:05:12.919
knows this? Because they've been sued

00:05:09.800 --> 00:05:15.400
over it as recently as just last year.

00:05:12.919 --> 00:05:17.760
That suit claimed that Best Buy enticed

00:05:15.400 --> 00:05:20.680
shoppers with discounted prices that

00:05:17.760 --> 00:05:23.600
would either not change after the sale

00:05:20.680 --> 00:05:26.440
period, were not lower than the regular

00:05:23.600 --> 00:05:28.760
price 90 days before the sale, or even

00:05:26.440 --> 00:05:31.080
were higher than another recently

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advertised price. Now, that case was

00:05:31.080 --> 00:05:34.800
voluntarily dismissed by the plaintiffs,

00:05:33.400 --> 00:05:36.960
but that doesn't mean that Best Buy is

00:05:34.800 --> 00:05:39.160
in the right. It is possible that they

00:05:36.960 --> 00:05:40.800
were right, but it's also possible that

00:05:39.160 --> 00:05:42.800
the plaintiffs were dissuaded by the

00:05:40.800 --> 00:05:45.000
cost of litigation, or it's possible

00:05:42.800 --> 00:05:46.280
that Best Buy settled out of court.

00:05:45.000 --> 00:05:48.000
I don't really consider the matter

00:05:46.280 --> 00:05:49.640
resolved one way or the other, and

00:05:48.000 --> 00:05:51.520
neither should you. It is worth noting,

00:05:49.640 --> 00:05:53.520
by the way, that outside of the US, Best

00:05:51.520 --> 00:05:55.400
Buy Canada doesn't use this language,

00:05:53.520 --> 00:05:58.160
and that appears to be because Canada's

00:05:55.400 --> 00:06:02.400
Competition Bureau requires retailers to

00:05:58.160 --> 00:06:04.600
pass a certain volume or time test in

00:06:02.400 --> 00:06:06.200
order to count something as an ordinary

00:06:04.600 --> 00:06:08.160
selling price. Although it is worth

00:06:06.200 --> 00:06:10.680
noting that even then, recent lawsuits

00:06:08.160 --> 00:06:13.280
have cropped up accusing Best Buy Canada

00:06:10.680 --> 00:06:13.960
of misrepresenting regular prices and

00:06:13.280 --> 00:06:16.160
savings. [music]

00:06:13.960 --> 00:06:17.919
Now, I've picked on Best Buy a lot so

00:06:16.160 --> 00:06:19.960
far, but I promised to touch on the

00:06:17.919 --> 00:06:23.120
others, and now it's time to do just

00:06:19.960 --> 00:06:25.200
that because this is a widespread issue.

00:06:23.120 --> 00:06:27.400
Walmart's reference pricing appears to

00:06:25.200 --> 00:06:30.600
be based on the median price within 90

00:06:27.400 --> 00:06:32.560
days offered by Walmart or its

00:06:30.600 --> 00:06:35.640
marketplace sellers. That's a little

00:06:32.560 --> 00:06:37.600
better, but that bit at the end, knowing

00:06:35.640 --> 00:06:40.280
how marketplace sellers tend to price

00:06:37.600 --> 00:06:42.840
items, that clearly gives Walmart a lot

00:06:40.280 --> 00:06:45.520
of leeway for representing their uh

00:06:42.840 --> 00:06:48.840
discounts. Then, of course, there is

00:06:45.520 --> 00:06:49.379
Amazon. They do use a suggested retail

00:06:48.840 --> 00:06:49.440
price,

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>> [music]

00:06:49.440 --> 00:06:53.080
>> which can be provided by the

00:06:50.440 --> 00:06:55.480
manufacturer, supplier, or seller if the

00:06:53.080 --> 00:06:57.960
reference price is labeled list price.

00:06:55.480 --> 00:06:59.880
But if it's the typical price, like on

00:06:57.960 --> 00:07:01.880
Walmart, that's just the 90-day median

00:06:59.880 --> 00:07:04.560
price that customers have paid with no

00:07:01.880 --> 00:07:07.400
real auditing or transparency from our

00:07:04.560 --> 00:07:08.919
side to actually verify [music] it.

00:07:07.400 --> 00:07:10.280
Now, I can continue to give examples,

00:07:08.919 --> 00:07:11.800
but I think at this point it'd be better

00:07:10.280 --> 00:07:14.800
to lay out what we feel needs to be

00:07:11.800 --> 00:07:18.360
done. Starting with compare at reference

00:07:14.800 --> 00:07:20.040
prices simply being banned or required

00:07:18.360 --> 00:07:22.640
to be the manufacturer's advertised

00:07:20.040 --> 00:07:25.080
MSRP. This move is unlikely to make

00:07:22.640 --> 00:07:28.120
anything cheaper, see GPUs that

00:07:25.080 --> 00:07:30.480
regularly retail for well above NVIDIA's

00:07:28.120 --> 00:07:32.280
supposed MSRPs, but at least this would

00:07:30.480 --> 00:07:34.760
give consumers the transparency to

00:07:32.280 --> 00:07:37.160
understand what is a deal and what just

00:07:34.760 --> 00:07:39.480
plain is not a deal. With that out of

00:07:37.160 --> 00:07:41.240
the way, compare at, though, is just one

00:07:39.480 --> 00:07:44.280
of the three horsemen of the deceptive

00:07:41.240 --> 00:07:46.680
marketing apocalypse. Up to can be just

00:07:44.280 --> 00:07:49.200
as bad. Whether it's sales where the

00:07:46.680 --> 00:07:51.240
deeply discounted items are all garbage

00:07:49.200 --> 00:07:53.640
or product specifications that would be

00:07:51.240 --> 00:07:56.080
better represented as your mileage may

00:07:53.640 --> 00:07:58.960
vary. Up to has turned into this

00:07:56.080 --> 00:08:01.960
catch-all butt-covering clause that just

00:07:58.960 --> 00:08:04.200
absolves manufacturers and retailers of

00:08:01.960 --> 00:08:05.800
any responsibility for products or

00:08:04.200 --> 00:08:07.960
offers that don't live up to their

00:08:05.800 --> 00:08:10.080
promises. And the funny thing about it

00:08:07.960 --> 00:08:12.720
is that guidelines around this one

00:08:10.080 --> 00:08:15.120
totally do exist as well. They just need

00:08:12.720 --> 00:08:16.880
to be adopted by regulatory bodies and

00:08:15.120 --> 00:08:19.720
then enforced. The Better Business

00:08:16.880 --> 00:08:21.680
Bureau for instance prohibits up to sale

00:08:19.720 --> 00:08:24.120
claims where at least 10% of the items

00:08:21.680 --> 00:08:25.960
in the sale don't meet the advertised

00:08:24.120 --> 00:08:28.000
discount threshold. That sounds pretty

00:08:25.960 --> 00:08:29.960
sensible to me. As for the last one,

00:08:28.000 --> 00:08:31.840
starting at, I'm not going to get into

00:08:29.960 --> 00:08:34.080
too much detail since we've got a whole

00:08:31.840 --> 00:08:36.320
video dedicated to dunking on companies

00:08:34.080 --> 00:08:37.719
for advertising an awful configuration

00:08:36.320 --> 00:08:40.320
you shouldn't buy that gets you in the

00:08:37.719 --> 00:08:43.520
door then upselling you something usable

00:08:40.320 --> 00:08:45.040
often for a lot more money. So,

00:08:43.520 --> 00:08:46.280
with the three out there, what can we do

00:08:45.040 --> 00:08:48.440
about them?

00:08:46.280 --> 00:08:50.839
Well, it's tough because there are cases

00:08:48.440 --> 00:08:52.640
where these terms do make sense. Apple's

00:08:50.839 --> 00:08:55.280
Mac mini would be a great example of a

00:08:52.640 --> 00:08:57.320
product that is an awesome value even at

00:08:55.280 --> 00:08:59.200
its starting at configuration. Let's

00:08:57.320 --> 00:09:02.120
pick on ourselves again. Our own True

00:08:59.200 --> 00:09:05.360
Spec USB-C cables are starting at

00:09:02.120 --> 00:09:07.120
$21.99. But like Apple, I'm not going to

00:09:05.360 --> 00:09:09.240
apologize for that product being a great

00:09:07.120 --> 00:09:12.240
value especially when the one that's 40

00:09:09.240 --> 00:09:14.440
times faster costs just $5 more than

00:09:12.240 --> 00:09:16.280
that starting at price. And so with

00:09:14.440 --> 00:09:18.400
everyone setting their own line in the

00:09:16.280 --> 00:09:19.960
sand, I don't know how you would police

00:09:18.400 --> 00:09:22.200
something like that. So, let's come back

00:09:19.960 --> 00:09:24.720
to compare at because here there's

00:09:22.200 --> 00:09:27.080
something that we can or at least should

00:09:24.720 --> 00:09:28.800
be able to do to fight back. PC Part

00:09:27.080 --> 00:09:30.400
Picker is an incredibly useful tool

00:09:28.800 --> 00:09:33.440
because they track pricing across

00:09:30.400 --> 00:09:35.280
multiple retailers over time which helps

00:09:33.440 --> 00:09:37.680
shoppers determine what an item is

00:09:35.280 --> 00:09:40.560
actually worth and how a current price

00:09:37.680 --> 00:09:42.480
compares to uh historical pricing. But,

00:09:40.560 --> 00:09:44.480
we've noticed a pattern of behavior,

00:09:42.480 --> 00:09:47.640
especially here in North America, where

00:09:44.480 --> 00:09:49.440
retailers are actively fighting against

00:09:47.640 --> 00:09:51.280
similar services.

00:09:49.440 --> 00:09:53.560
Similar websites that have tried to do

00:09:51.280 --> 00:09:55.680
what PC Part Picker did, but more

00:09:53.560 --> 00:09:58.040
broadly, have crumbled under the

00:09:55.680 --> 00:09:59.800
pressure, like Price Zombie, a tool that

00:09:58.040 --> 00:10:01.840
tracked price history across multiple

00:09:59.800 --> 00:10:03.200
online retailers, and then collected

00:10:01.840 --> 00:10:04.920
affiliate money from the traffic that

00:10:03.200 --> 00:10:06.240
their links generated. That actually

00:10:04.920 --> 00:10:07.920
sounds like a business model that would

00:10:06.240 --> 00:10:09.880
be beneficial for everyone, right? Well,

00:10:07.920 --> 00:10:11.560
Amazon didn't think so, and allegedly,

00:10:09.880 --> 00:10:13.520
they barred Price Zombie from their

00:10:11.560 --> 00:10:16.000
affiliate program for violating its

00:10:13.520 --> 00:10:18.520
rules that prohibit showing Amazon

00:10:16.000 --> 00:10:21.360
prices that are more than 24 hours old.

00:10:18.520 --> 00:10:23.200
Given that Amazon Affiliate was 90% of

00:10:21.360 --> 00:10:25.200
Price Zombie's revenue, it was a death

00:10:23.200 --> 00:10:27.760
blow. Then, there's CamelCamelCamel,

00:10:25.200 --> 00:10:30.960
whose CEO has said outright that they

00:10:27.760 --> 00:10:33.960
live or die by Amazon, and that they

00:10:30.960 --> 00:10:35.600
also prohibit showing Amazon prices next

00:10:33.960 --> 00:10:37.880
to pricing from a competitor, which is

00:10:35.600 --> 00:10:40.080
why they decided to only display Amazon

00:10:37.880 --> 00:10:41.640
data, despite originally also tracking

00:10:40.080 --> 00:10:44.520
Best Buy and Newegg on separate

00:10:41.640 --> 00:10:46.800
websites. How does Amazon wield so much

00:10:44.520 --> 00:10:49.280
power here? In the EU, for instance,

00:10:46.800 --> 00:10:52.080
Idealo is a huge website that somehow

00:10:49.280 --> 00:10:54.600
manages to display and compare prices,

00:10:52.080 --> 00:10:57.200
even historical prices, across a ton of

00:10:54.600 --> 00:11:00.000
retailers, including Amazon. What are

00:10:57.200 --> 00:11:02.640
our alternatives? Well, there is one,

00:11:00.000 --> 00:11:04.720
but I'm not recommending it.

00:11:02.640 --> 00:11:06.760
It's Honey.

00:11:04.720 --> 00:11:09.320
Those blood suckers, with their PayPal

00:11:06.760 --> 00:11:12.200
money, have somehow managed to build and

00:11:09.320 --> 00:11:14.000
keep alive a tool called Droplist that

00:11:12.200 --> 00:11:16.440
seems to do a pretty decent job of

00:11:14.000 --> 00:11:18.040
scraping prices and tracking price

00:11:16.440 --> 00:11:20.200
history. It's not as good at showing

00:11:18.040 --> 00:11:22.640
price history across retailers all in

00:11:20.200 --> 00:11:24.880
one place like Idealo is or Price Zombie

00:11:22.640 --> 00:11:28.000
was, and it seems to glitch out a bit

00:11:24.880 --> 00:11:31.560
with certain retailers, but it is there.

00:11:28.000 --> 00:11:33.120
It is insane to me that this is the only

00:11:31.560 --> 00:11:36.000
tool we could find that could do this

00:11:33.120 --> 00:11:39.360
job outside of tech. And it wasn't just

00:11:36.000 --> 00:11:41.400
us. It seems like you just need to have

00:11:39.360 --> 00:11:42.168
major financial muscle in order to get

00:11:41.400 --> 00:11:42.920
away with this.

00:11:42.168 --> 00:11:45.080
>> [music]

00:11:42.920 --> 00:11:47.408
>> On that note, the next closest thing has

00:11:45.080 --> 00:11:49.160
probably got to be Google Shopping, but

00:11:47.408 --> 00:11:51.000
[music] even that doesn't prominently

00:11:49.160 --> 00:11:52.920
display the best deal, and while its

00:11:51.000 --> 00:11:55.200
price tracking does exist, it also

00:11:52.920 --> 00:11:57.360
doesn't seem to show you Amazon in any

00:11:55.200 --> 00:11:59.120
of its results in the US. Finally,

00:11:57.360 --> 00:12:01.240
there's Capital One Shopping, which does

00:11:59.120 --> 00:12:03.600
a good job of showing multiple retailers

00:12:01.240 --> 00:12:05.240
with the best price up top, but doesn't

00:12:03.600 --> 00:12:07.160
track [music] price history. Now, there

00:12:05.240 --> 00:12:09.200
are a lot of other services that claim

00:12:07.160 --> 00:12:10.880
to do this job, but we usually found

00:12:09.200 --> 00:12:12.680
that they simply didn't give us the best

00:12:10.880 --> 00:12:14.400
price. With that said, if you know of

00:12:12.680 --> 00:12:16.520
one we missed, hey, leave a comment

00:12:14.400 --> 00:12:19.040
below and help to spread the word. With

00:12:16.520 --> 00:12:21.240
all that said, what can you do to stop

00:12:19.040 --> 00:12:23.920
retailers from using deceptive practices

00:12:21.240 --> 00:12:25.400
like false reference pricing and going

00:12:23.920 --> 00:12:26.920
after tools that help you make more

00:12:25.400 --> 00:12:28.920
informed purchasing decisions?

00:12:26.920 --> 00:12:30.600
Unfortunately, the only answer is the

00:12:28.920 --> 00:12:32.680
one that's going to be work. You've got

00:12:30.600 --> 00:12:35.160
to get involved. Follow websites like

00:12:32.680 --> 00:12:36.880
classaction.org and participate wherever

00:12:35.160 --> 00:12:38.440
you can. You can also advocate for

00:12:36.880 --> 00:12:40.040
stricter regulations and better

00:12:38.440 --> 00:12:42.400
enforcement by touching base with

00:12:40.040 --> 00:12:44.393
consumer advocacy groups or by writing

00:12:42.400 --> 00:12:46.560
your government representative. I know,

00:12:44.393 --> 00:12:48.839
[music] that's not a convenient or

00:12:46.560 --> 00:12:50.400
especially fulfilling solution, but it's

00:12:48.839 --> 00:12:52.280
what you can do.

00:12:50.400 --> 00:12:54.160
Another thing you can do is steer your

00:12:52.280 --> 00:12:56.183
hard-earned money toward businesses that

00:12:54.160 --> 00:12:56.480
don't participate in these practices.

00:12:56.183 --> 00:12:59.400
>> [music]

00:12:56.480 --> 00:13:01.600
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enjoyed this video, why not check out

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the one that we did on starting at? It's

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a little more tech focused, but I think

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it does a good job of outlining why it

00:14:00.880 --> 00:14:05.080
can be so problematic.