Bait & Switch: Household Alarms
Home alarm companies so overuse bait and switch that they need an entire section to themselves. The large national companies’ advertisements appear to offer a free or inexpensive home alarm system, but once you get to the sales pitch, with a salesman in your living room or kitchen, you discover it only covers a few doors and perhaps no windows (substituting an interior motion sensor that supposedly covers all windows). Then they offer small add-ons at “low cost,” which, once added up, comes to a substantial selling price. Your house, no matter who you are or where you live, is always more complex than the initial basic system. But if you do not purchase it today you will not be able to get all of the great side products they are offering at the same price tomorrow.
ADT is a national alarm company that has ads in magazines, mailers, on television, and on the Internet. A typical ad states that their “state-of-the-art system includes”
a) Front and back door protection. If you have any additional exterior doors they are extra.
b) Infrared motion detector. Singular. One is included in the package. These are line of site detectors only, so if an intruder bypasses the area covered by the motion detector they will not set off the alarm.
c) Lots of add-ons such as a way of turning the alarm on and off, window and lawn signs, emergency buttons, and a siren.
There are no window alarms included. No glass breakage. Their initial system is free, except for a $99 installation fee and a 36-month monitoring contract that costs $35.99 monthly, or $1,295.64. How good is this system? So good that as soon as they come to your house (we actually invited them in) they prepare a list of things you need to add on. In our case they ignored the basement window, our glass-enclosed sunroom, and the garage. Strange, as the salesman was working on commission.
Consider your house. Calculate the number of entry doors you need to alarm, and the number of windows that an intruder can enter. Do not forget to include basement and second story windows that can be accessed, no matter how difficult it may seem to you, from a garage or add-on roof. Does their two-door and a motion sensor system cover your house?
Their online site does supply one price. Their top-rated alarm panel costs an extra $349. Every other product has this statement “Click Here To Schedule Your FREE Risk Assessment. “ The salesman will count every window on your first floor and basement as well as potential points of entry elsewhere. For each window he will recommend, at an additional price, a window alarm and glass breakage alarm (because a thief can break your window and disconnect the alarm). How much more will this add to your cost?
Because California has strict liability laws, there is, hidden in their web site, the required “Contract for our California Customers.” Most likely these apply to every state. Here are a few things you need to know copied directly from their site. This is lengthy, but, as with all fine print contracts, please read it through completely. As you go through these statements, ask yourself why they feel they have to include them.
a) You agree that: if you terminate this contract during the first year, you will pay us $450.00, if you terminate this contract during the second year, you will pay us $200.00. These amounts are agreed upon damages and are not a penalty.
b) We have the right to increase the annual service charge at any time after the first year.
c) You agree to pay all directly or indirectly imposed false alarm assessments, taxes, fees or other charges of any police or fire department, or any other governmental body. You agree to pay all telephone or signal transmission company charges for area code, telephone numbering or other changes. You agree to pay us to reprogram the system if necessary to comply with any area code, telephone numbering or other changes. You agree to pay to us any increases in our cost for facilities used for transmitting alarm signals under this Contract. You agree to pay a service charge if our representative responds to a service call or alarm at your premises because you improperly followed operating instructions, failed to properly lock or close a window, door or other protected point or improperly adjusted CCTV cameras, monitors or accessories.
d) It will be extremely difficult to determine the actual damages that may result from our failure to perform our duties under this contract. You agree that we and our agents, employees, subsidiaries, affiliates and parent companies are exempt from liability for any loss, damage, injury or other consequence arising directly or indirectly from the services we perform or the systems we provide under this contract. If it is determined that we or any of our agents, are directly or indirectly responsible for any such loss, damage, injury or other consequence, you agree that damages shall be limited to the greater of $500 or 10% of the annual service charge you pay under this contract. [Editor’s note: The annual service charge under this contract would be $360.] These agreed upon damages are not a penalty. They are your sole remedy no matter how the loss, damage, injury or other consequence is caused, even if caused by our negligence, gross negligence, failure to perform duties under this contract, strict liability, failure to comply with any applicable law, or other fault. At your request, we may assume additional liability by attaching an amendment to this contract stating the extent of our additional liability and the additional cost to you. You agree that we are not an insurer even if we enter into any such an amendment.
e) In the event any lawsuit or other claim is filed by any other party against us arising out of the services we perform or the systems we provide under this contract, you agree to be solely responsible for, and to indemnify and hold us completely harmless from, such lawsuit or other claim including your payment of all damages, expenses, costs and attorneys' fees. These obligations will survive the expiration or earlier termination of this contract. These obligations will apply even if such lawsuit or other claim arises out of our negligence, gross negligence, failure to perform duties under this contract, strict liability, failure to comply with any applicable law, or other fault.
f) If the system is ADT Owned, we have the right upon termination of this Contract, to remove, disable or abandon all or any portion of the ADT Owned system. You are required to provide us access to the system for removal and we have no obligation to repair or redecorate your premises after any such removal. We do not waive our right to collect any unpaid charges by such removal, disablement or abandonment of the ADT Owned system. If the "Customer-Owned" box is checked, the equipment will become the property of the Customer upon payment of the Total Installation Charge including Sales Tax in full. ADT yard signs and window stickers shall remain the property of and may be removed by ADT, even if the "Customer -Owned" box is checked. Your right to display them on your property during the term of this Contract is not transferable.
g) However, there may be areas where we determine, in our sole discretion, it is impractical to conceal the wiring. In such areas, wiring will be exposed. Upon completion of the installation of the alarm system, we shall thoroughly instruct you in the proper use of the alarm system. We shall not be liable for loss due to water intrusion, mold, fungi, wet or dry rot or bacteria.
h) During the first three (3) months after installation, we will repair or, at our option, replace any defective part of the System, including wiring, and will make any needed mechanical adjustments, all at no charge to you. We will use new or functionally operative parts for replacements. At your request we will repair or replace the equipment we provided at our then-prevailing prices.
Most likely all national home alarm companies have similar policies. From what we can tell, all similar alarm companies use the same lack of pricing formula and also provide only a very basic system.
We do recommend home alarm systems, but believe it is far better to deal with a local alarm company. They usually know what is happening in the area and can recommend a system that is best for your neighborhood rather than a generic anywhere-in-the-country setup. If possible get at least three estimates. While they are looking over you house, ask questions about your current home situation – alarm experts love to point out weaknesses in your security. They will spot where you need to add a lock, an outside light, or other simple and inexpensive solutions to problems you might not even realize you have.
You have all heard of the medical alert alarms offered by various companies, especially useful when an elderly or sick person is living alone. Many of the home alarm companies can provide such remote pendants that do the same thing for a considerably lower cost. They work anywhere in your house. Now you can also get such systems in the form of a brooch or a wristwatch. Most of them are waterproof so can even be taken into the shower, but ask before you do so. They are tied into the home monitoring system and while they have an initial reasonable cost, there should be no extra monthly monitoring fee. When the alarm buttons are pressed, it sends a signal through your home system to alert the monitors. They can be used in case of injury, fire, home invasion, or any other emergency. They are far more reasonably priced than the nationally advertised security products for which you have to pay additional monthly fees. For what those national medic alert companies charge for monthly service, you can have your entire house monitored for break-in, fire, and medical assistance. So if you are planning on getting a home alarm, it is wise to pay the extra for fire monitoring and purchase one or two of the remote personal pendants.
Monday, February 9, 2009
Monday, February 2, 2009
Consumer Safety & Awareness Part 6
Household Bait & Switch
Bait and Switch has many variations. Some service franchise companies use this technique to get you to sign an annual contract, then they inform you that what you have is bare minimum and will not satisfy your needs. Since they already have you under contract, their new sales pitch is worded so you think you are getting something special.
Lawn care companies promise to do monthly fertilization, using chemicals specifically formulated for your needs. Each month they alter what they use to attack early spring weeds, long-term problems, and even provide special pre-winter care. What they do not offer, and charge extra for includes grub control, shrub and tree fertilization, and dethatching. They push you to have these services. Their service is usually only for limited lawn space. To do your entire yard may double the advertised cost.
I have a personal problem with these services. My yard consists of half lawn and half flower and shrub areas. I once tried a lawn care service that promised that their technique would do no harm to my plants, yet the serviceman destroyed an area of pachysandra, a mugu pine, and some hosta. When I complained they said there was nothing they could do.
Pest control companies also offer annual contracts, but they rarely cover everything. There are many established and documented scams involved in insect control, such as finding evidence of infestation without finding any insects (because the insects are under your foundation or inside the wood), using improper or short-lasting chemicals, or even dropping insect pests from bottles and then showing you that you need extra service.
The South Carolina Consumer Affairs Bureau handles a large number of complaints against pest control companies. Their web site has this warning, “Pest control fraud is prevalent in areas where you are more likely to have problems with insects. This con game usually takes the form of a termite inspector who appears and informs you that termites have infested your home and if you contract for his services today, you will receive a discount. Always avoid such pressures. It is extremely doubtful that your house will start tumbling down around your ears that very day. Besides not applying pesticides properly, the pest control con artist may not use a recognized or effective pesticide. As a matter-of-fact, they may apply nothing but some chemically smelling liquid. Don't deal with door-to-door pest control operators. If you need their services check the yellow pages, call them and ask for an estimate based on your needs.”
You can have problems with companies that service inside the house as well. National carpet installation services offer low prices and quick installation. They, though, may attempt to get you to purchase better quality, explaining that the one on sale is not good for your situation, and charge extra for the under pads. The same can apply to companies that install or refurbish cabinets, wallpaper, or do household cleaning.
Bathroom refinishing companies have been cited many times for bait and switch, poor material, and refusal to stand by warrantees. Here is one example from the Internet consumer organization, CTV: “On May 31, 2006 {company} reglazed my bathtub, at a cost of $175.00, giving me a 5 year guarantee. It is now September 29, 2007, and the bathtub finish is peeling. I called the company, speaking to Will and was told to call him the next week and he would make an appointment to come and repair it. I phoned 4 times in the past two weeks and he has an answering machine, so I left a message. He is never in to take my call and he never returns my call.”
By the way, several companies offer spray-on bathroom refinishing kits for old and worn baths and showers. Attorney generals in several states have filed suits against a few stating that the products are short lasting and nearly useless. It is often less expensive to have a contractor install a new bathtub than to refinish an old one.
One thing to watch for in bathroom remodeling, especially for seniors and those with medical problems, are the advertisements for improved units where no price is listed. Once the salesperson is in your home, you are subject to both bait and switch and high pressure sales pitches for products that cost many times their value.
Window remodeling also attracts bait and switch tactics. The low advertised prices might be for poor quality windows that do not meet the building code in your area. The sizes offered may be irregular, and to fit your windows there is an additional fee. The salesperson may talk you into including features that you do not need.
Home alarm companies so overuse bait and switch that they need an entire section to themselves.
Bait and Switch has many variations. Some service franchise companies use this technique to get you to sign an annual contract, then they inform you that what you have is bare minimum and will not satisfy your needs. Since they already have you under contract, their new sales pitch is worded so you think you are getting something special.
Lawn care companies promise to do monthly fertilization, using chemicals specifically formulated for your needs. Each month they alter what they use to attack early spring weeds, long-term problems, and even provide special pre-winter care. What they do not offer, and charge extra for includes grub control, shrub and tree fertilization, and dethatching. They push you to have these services. Their service is usually only for limited lawn space. To do your entire yard may double the advertised cost.
I have a personal problem with these services. My yard consists of half lawn and half flower and shrub areas. I once tried a lawn care service that promised that their technique would do no harm to my plants, yet the serviceman destroyed an area of pachysandra, a mugu pine, and some hosta. When I complained they said there was nothing they could do.
Pest control companies also offer annual contracts, but they rarely cover everything. There are many established and documented scams involved in insect control, such as finding evidence of infestation without finding any insects (because the insects are under your foundation or inside the wood), using improper or short-lasting chemicals, or even dropping insect pests from bottles and then showing you that you need extra service.
The South Carolina Consumer Affairs Bureau handles a large number of complaints against pest control companies. Their web site has this warning, “Pest control fraud is prevalent in areas where you are more likely to have problems with insects. This con game usually takes the form of a termite inspector who appears and informs you that termites have infested your home and if you contract for his services today, you will receive a discount. Always avoid such pressures. It is extremely doubtful that your house will start tumbling down around your ears that very day. Besides not applying pesticides properly, the pest control con artist may not use a recognized or effective pesticide. As a matter-of-fact, they may apply nothing but some chemically smelling liquid. Don't deal with door-to-door pest control operators. If you need their services check the yellow pages, call them and ask for an estimate based on your needs.”
You can have problems with companies that service inside the house as well. National carpet installation services offer low prices and quick installation. They, though, may attempt to get you to purchase better quality, explaining that the one on sale is not good for your situation, and charge extra for the under pads. The same can apply to companies that install or refurbish cabinets, wallpaper, or do household cleaning.
Bathroom refinishing companies have been cited many times for bait and switch, poor material, and refusal to stand by warrantees. Here is one example from the Internet consumer organization, CTV: “On May 31, 2006 {company} reglazed my bathtub, at a cost of $175.00, giving me a 5 year guarantee. It is now September 29, 2007, and the bathtub finish is peeling. I called the company, speaking to Will and was told to call him the next week and he would make an appointment to come and repair it. I phoned 4 times in the past two weeks and he has an answering machine, so I left a message. He is never in to take my call and he never returns my call.”
By the way, several companies offer spray-on bathroom refinishing kits for old and worn baths and showers. Attorney generals in several states have filed suits against a few stating that the products are short lasting and nearly useless. It is often less expensive to have a contractor install a new bathtub than to refinish an old one.
One thing to watch for in bathroom remodeling, especially for seniors and those with medical problems, are the advertisements for improved units where no price is listed. Once the salesperson is in your home, you are subject to both bait and switch and high pressure sales pitches for products that cost many times their value.
Window remodeling also attracts bait and switch tactics. The low advertised prices might be for poor quality windows that do not meet the building code in your area. The sizes offered may be irregular, and to fit your windows there is an additional fee. The salesperson may talk you into including features that you do not need.
Home alarm companies so overuse bait and switch that they need an entire section to themselves.
Monday, January 26, 2009
Consumer Safety & Awareness Part 5
The Four Steps
One of the most common scams, one that is totally illegal in every state, is called Bait and Switch. A simple definition of this is when a merchant advertises for a product at an attractive price knowing that no one will purchase it. There are two general reasons – either it will not be available or it will be of poor quality. The advertisement is the bait, to attract you to the store, so that the merchant can then switch you to a more expensive and more profitable item.
Former New York Attorney General, Elliot Spitzer, in a decision involving a Newburgh mattress company, provided the reasons why this technique is illegal. “My office is fighting to protect the integrity of the marketplace, to level the playing field for competitors and to ensure that consumers have clear, non-misleading information from which to make purchasing decisions.”
In order to sell a product, there are four steps any merchant, honest or not, needs to go through. The first is to get the potential consumers aware of the product. So many new items are introduced every week that it is generally impossible for people to know about even a fraction of them. This is why advertising is used. Ads are issued specifically to people who may use the product: a consumer buying in a supermarket, a merchant who might increase sales or efficiency by using it, a teacher who may find it easier to teach a concept through use of the item, or the United States Air Force which might employ the new product to more easily spot an enemy or to make it easier to shoot a target.
Once the consumers are aware that the product exists, the second step is to make them aware of the value of the product. We are faced with a huge selection of things that can satisfy our needs and wants. Why, then, should we switch from what we currently use, or from our traditional methods, to this new item? The merchant must give us a desire to try the product. Again, this step uses advertising.
You see it daily on television and print media ads. This new or improved, or larger item will make you more lovely, stronger, happier, healthier, better able to do your tasks, or more popular. These ads may appeal to vanity more than to logic. Consider automotive ads that use sex appeal to sell a hunk of metal. People will look up to you if you own this particular brand, your life will be easier, your ride smoother, you’ll have more leg room, or the vehicle will get better mileage.
You are now aware of the product and you recognize that it might provide some sort of benefit or advantage to you. All that does no good if the product is not available. One of the weaknesses of new technology, such as a cell phone, computer game console, or similar device, is that manufacturers need to sell it to the public before sufficient quantities of the product are on the market. Manufacturers can use that to their advantage, though, creating tension, the need to possess, and to be among the first. It really does not matter if the item is not yet fully tested, if there are known bugs, or if the initial selling price far exceeds the true value.
The last step in selling an item is making it available at an attractive price. Only the manufacturer, and other companies that make similar products, has any idea what it costs to make and where their sales tipping point is. This phrase has several meanings. It is commonly used to indicate the point where a product is considered mainstream, where the majority of the population sees a need for it. It can also indicate the zero profit point of an item, where all the costs added up come together and anything above that is profit.
Consider a teeter-totter, the children’s playground see-saw, or a balance scale. The tipping point is when the fulcrum is totally balanced. Move it a bit more and the balance swings to one side. To the left there is a financial loss, to the right a profit. Obviously the company does best when it makes the greatest possible profit.
Since the general public can only compare a new product to similar ones that already exist, they depend on the manufacturer, the advertisements, and the merchants to set a value on new or improved items. In general, the initial price, often called the “list price,“ is set considerably higher than it needs to be. The primary reasons given for this is that the company has put a lot of their own financial resources into development, paying for experimentation, testing, salaries, prototypes, and related expenses. To do so they have either borrowed money, and are paying interest, or have taken money from other areas of their business to pay for research and development. They need to recoup their investment and pay off their loans as quickly as possible.
As the product becomes more popular, and they can sell it in greater quantity, several things happen that help reduce the cost, lowering the tipping point. Mass production is less expensive than making fewer items. Shipping larger quantities to the same destination is less expensive. Fewer people are needed in the R&D aspect, so cost for salaries and benefits decline. As bugs are fixed, less money is spent on customer services. Inexpensive ways to produce the product are found. Parts, bought in larger quantity, also result in lower costs.
It is nearly impossible for anyone, including the manufacturer, to point to a time when they can lower the price they must charge and still maintain the profit level they need. It is just as hard to determine when the volume has increased so much that the company has what outsiders may consider excessive profit. A manufacturer will not lower a price until it is forced to, as indicated by a reduction in sales or a pending competitive product that may reduce its market share.
We now have the four steps needed to sell a product: awareness, desire to possess, availability, and acceptable cost.
Like honest merchants, scammers use these to get their marks to buy a product. In bait and switch, they offer something you are aware of, that you have a desire to own, that they make available to you at an attractive price. The problem is, they set out from the beginning to deceive you. There is either no product or the one offered is of substandard quality. The scammer has a solution: for a little bit more we can move you up to a product that is of better quality and is available. Their definition of “a little bit more,” though, may not be the same as yours.
Let’s get back to Attorney General, Elliot Spitzer’s mattress rip-off. Here is the actual decision from November 13, 2000:
Spitzer found that Resnick's Mattress Outlet, Inc., repeatedly ran advertisements offering specifically displayed mattresses for $29.95 to $59.95. When customers sought to purchase the advertised mattresses, Resnick's would discourage them by disparaging the quality of the mattress or by not stocking enough to meet demand. Resnick's sales people would then steer those customers to more expensive mattresses.
"Bait and switch advertising involves the advertising of an item at a very low price to lure consumers into the store and then switching the customer to a far more expensive model by stating that the advertised product is unfit or unavailable. It's an age-old sales tactic that gives an unfair competitive advantage to a business over its competitors by using false promises in its advertising to entice customers into its stores," Spitzer said.
The Attorney General found that Resnick’s advertising was misleading because it left the impression with consumers that all mattress purchases qualified for its advertised free frame, free delivery and free removal policy, when in fact, the offer did not apply to the advertised mattresses, but was limited to only certain specifically prepackaged mattress sets. Spitzer's office also found that Resnick's deceptively claimed that it would double someone's money back if a consumer could buy a mattress for less from a competitor within 100 miles. Resnick's stores are primarily stocked with mattresses manufactured by and exclusively for Resnick's stores. The few remaining non-Resnick manufactured mattresses carried in Resnick's stores are only rarely available at competitor stores within a 100-mile radius.
Most mattress company commercials use a similar ploy – they state they will give you a free mattress or additional cash, or something special if you can find the same mattress at a lower price anywhere else. For them it’s a safe bet. You see, all mattress companies put a different identification number on mattresses sold to different stores. They may sell the exact same product to Sleepeze, 1-800-Mattress, Macy’s, Penny’s, or whatever store you are dealing with, but each company receives its mattresses with a different code. Therefore it is impossible for a consumer to prove that the exact same mattress is being sold for less elsewhere.
One of the most common scams, one that is totally illegal in every state, is called Bait and Switch. A simple definition of this is when a merchant advertises for a product at an attractive price knowing that no one will purchase it. There are two general reasons – either it will not be available or it will be of poor quality. The advertisement is the bait, to attract you to the store, so that the merchant can then switch you to a more expensive and more profitable item.
Former New York Attorney General, Elliot Spitzer, in a decision involving a Newburgh mattress company, provided the reasons why this technique is illegal. “My office is fighting to protect the integrity of the marketplace, to level the playing field for competitors and to ensure that consumers have clear, non-misleading information from which to make purchasing decisions.”
In order to sell a product, there are four steps any merchant, honest or not, needs to go through. The first is to get the potential consumers aware of the product. So many new items are introduced every week that it is generally impossible for people to know about even a fraction of them. This is why advertising is used. Ads are issued specifically to people who may use the product: a consumer buying in a supermarket, a merchant who might increase sales or efficiency by using it, a teacher who may find it easier to teach a concept through use of the item, or the United States Air Force which might employ the new product to more easily spot an enemy or to make it easier to shoot a target.
Once the consumers are aware that the product exists, the second step is to make them aware of the value of the product. We are faced with a huge selection of things that can satisfy our needs and wants. Why, then, should we switch from what we currently use, or from our traditional methods, to this new item? The merchant must give us a desire to try the product. Again, this step uses advertising.
You see it daily on television and print media ads. This new or improved, or larger item will make you more lovely, stronger, happier, healthier, better able to do your tasks, or more popular. These ads may appeal to vanity more than to logic. Consider automotive ads that use sex appeal to sell a hunk of metal. People will look up to you if you own this particular brand, your life will be easier, your ride smoother, you’ll have more leg room, or the vehicle will get better mileage.
You are now aware of the product and you recognize that it might provide some sort of benefit or advantage to you. All that does no good if the product is not available. One of the weaknesses of new technology, such as a cell phone, computer game console, or similar device, is that manufacturers need to sell it to the public before sufficient quantities of the product are on the market. Manufacturers can use that to their advantage, though, creating tension, the need to possess, and to be among the first. It really does not matter if the item is not yet fully tested, if there are known bugs, or if the initial selling price far exceeds the true value.
The last step in selling an item is making it available at an attractive price. Only the manufacturer, and other companies that make similar products, has any idea what it costs to make and where their sales tipping point is. This phrase has several meanings. It is commonly used to indicate the point where a product is considered mainstream, where the majority of the population sees a need for it. It can also indicate the zero profit point of an item, where all the costs added up come together and anything above that is profit.
Consider a teeter-totter, the children’s playground see-saw, or a balance scale. The tipping point is when the fulcrum is totally balanced. Move it a bit more and the balance swings to one side. To the left there is a financial loss, to the right a profit. Obviously the company does best when it makes the greatest possible profit.
Since the general public can only compare a new product to similar ones that already exist, they depend on the manufacturer, the advertisements, and the merchants to set a value on new or improved items. In general, the initial price, often called the “list price,“ is set considerably higher than it needs to be. The primary reasons given for this is that the company has put a lot of their own financial resources into development, paying for experimentation, testing, salaries, prototypes, and related expenses. To do so they have either borrowed money, and are paying interest, or have taken money from other areas of their business to pay for research and development. They need to recoup their investment and pay off their loans as quickly as possible.
As the product becomes more popular, and they can sell it in greater quantity, several things happen that help reduce the cost, lowering the tipping point. Mass production is less expensive than making fewer items. Shipping larger quantities to the same destination is less expensive. Fewer people are needed in the R&D aspect, so cost for salaries and benefits decline. As bugs are fixed, less money is spent on customer services. Inexpensive ways to produce the product are found. Parts, bought in larger quantity, also result in lower costs.
It is nearly impossible for anyone, including the manufacturer, to point to a time when they can lower the price they must charge and still maintain the profit level they need. It is just as hard to determine when the volume has increased so much that the company has what outsiders may consider excessive profit. A manufacturer will not lower a price until it is forced to, as indicated by a reduction in sales or a pending competitive product that may reduce its market share.
We now have the four steps needed to sell a product: awareness, desire to possess, availability, and acceptable cost.
Like honest merchants, scammers use these to get their marks to buy a product. In bait and switch, they offer something you are aware of, that you have a desire to own, that they make available to you at an attractive price. The problem is, they set out from the beginning to deceive you. There is either no product or the one offered is of substandard quality. The scammer has a solution: for a little bit more we can move you up to a product that is of better quality and is available. Their definition of “a little bit more,” though, may not be the same as yours.
Let’s get back to Attorney General, Elliot Spitzer’s mattress rip-off. Here is the actual decision from November 13, 2000:
Spitzer found that Resnick's Mattress Outlet, Inc., repeatedly ran advertisements offering specifically displayed mattresses for $29.95 to $59.95. When customers sought to purchase the advertised mattresses, Resnick's would discourage them by disparaging the quality of the mattress or by not stocking enough to meet demand. Resnick's sales people would then steer those customers to more expensive mattresses.
"Bait and switch advertising involves the advertising of an item at a very low price to lure consumers into the store and then switching the customer to a far more expensive model by stating that the advertised product is unfit or unavailable. It's an age-old sales tactic that gives an unfair competitive advantage to a business over its competitors by using false promises in its advertising to entice customers into its stores," Spitzer said.
The Attorney General found that Resnick’s advertising was misleading because it left the impression with consumers that all mattress purchases qualified for its advertised free frame, free delivery and free removal policy, when in fact, the offer did not apply to the advertised mattresses, but was limited to only certain specifically prepackaged mattress sets. Spitzer's office also found that Resnick's deceptively claimed that it would double someone's money back if a consumer could buy a mattress for less from a competitor within 100 miles. Resnick's stores are primarily stocked with mattresses manufactured by and exclusively for Resnick's stores. The few remaining non-Resnick manufactured mattresses carried in Resnick's stores are only rarely available at competitor stores within a 100-mile radius.
Most mattress company commercials use a similar ploy – they state they will give you a free mattress or additional cash, or something special if you can find the same mattress at a lower price anywhere else. For them it’s a safe bet. You see, all mattress companies put a different identification number on mattresses sold to different stores. They may sell the exact same product to Sleepeze, 1-800-Mattress, Macy’s, Penny’s, or whatever store you are dealing with, but each company receives its mattresses with a different code. Therefore it is impossible for a consumer to prove that the exact same mattress is being sold for less elsewhere.
Monday, January 12, 2009
Consumer Safety & Awareness Part 4
Why Scams Work
There are several types of scammers, each with their own specialty. Some work on the road, hitting and running away so rapidly that you see them only for a few moments. Some specialize in mail, telephone, or e-mail fraud. Generally what works in one of these media does well in others, although some variations are easier in a particular mode. Others work in offices, and they rob you with their pens, computers, calculators, and contracts. They include lawyers, financial advisors, tax consultants, government workers, and all sorts of white-collar workers.
Every occupation provides opportunity for people to work scams, from within and without. They can rob you with a gun, through trickery, or with a piece of paper. They can assist you in fooling yourself. Scammers provide the opportunity for you to fall into their traps.
No one knows how many CEOs sit in their offices, perhaps playing computer games, raking in their millions. It is impossible to estimate how many hackers transfer money from one account to another or use other people’s computers to make their fortunes. Large corporations have so many layers of security, that it’s impossible for them to see the individual twigs in their vast forests.
Who steals from others? Principals and school superintendents misdirect funds or lie on their expense vouchers. Little league managers and supervisors obscure their income totals and fib about what they spend money on. Community and school tax collectors pocket cash given by homeowners. Politicians, contractors, and people who make purchases for all sorts of companies and institutions accept kickbacks or look the other way when poor quality material is used.
Insurance companies, cable and telephone services, lawn care and pest control franchises all create contracts so obscure that they can easily add on fees for what you thought was covered by contract. Auto repair shops use sub-standard inexpensive parts, or replace good ones with used. Gas stations and deli counters rig their weights and measures. Homeowners hide defects when they sell their houses. Building inspectors accept bribes.
Think back on episodes of Law & Order, Monk, NCIS, or any television show or movie involving people, money, and possessions. They are not outlandish. Well, “Men in Black” was a bit extreme. Situational dramas are based on real life happenings.
Every day, from morning to night, you give scammers the opportunity to rob you. Every time your telephone rings, it could be someone testing to see if you are home. When the doorbell chimes there could be someone waiting to sneak into your house. In the streets and stores there are teams of pickpockets, people who stage accidents, and others looking to provide you with the opportunity to purchase things at highly inflated costs. In your work place there are those who know just what you need to cure your sniffles, or to provide the best health care, or to give you a chance to improve yourself.
There are frauds dealing with education, daycare, and repairs of all sorts. There are con artists waiting to explain why you need a new roof or fresh blacktop. There are gas stations and home heating fuel companies that purchase the dregs from the bottom of those huge storage tanks, and their products are more likely to contain water or sediment that will ruin your engine or furnace.
There are “honest” businesses with good reliable names that sell substandard material, put impurities in their product, and sell medications that have no value or may even be harmful. Trusted advisors will bill you for work not performed or will sell your personal information for a profit. Judges take bribes, cops take bribes, teachers take bribes, and contractors take bribes.
Have I insulted your profession yet? Sorry I missed it. You probably know someone who does exactly what you do who is a bit shady. People cut corners, they get even with their bosses, they feel they are not paid enough or not appreciated. Human nature.
Enough paranoia. Yes, there are people out to get you, and if you let them they’ll jump at the opportunity. Let’s see what we can do to put you in bulletproof armor; a scam-resistant vest of knowledge that will prevent, deflect, reduce opportunities and make it less likely you’ll be chosen as a mark.
Next week we will start looking at specific con situations.
There are several types of scammers, each with their own specialty. Some work on the road, hitting and running away so rapidly that you see them only for a few moments. Some specialize in mail, telephone, or e-mail fraud. Generally what works in one of these media does well in others, although some variations are easier in a particular mode. Others work in offices, and they rob you with their pens, computers, calculators, and contracts. They include lawyers, financial advisors, tax consultants, government workers, and all sorts of white-collar workers.
Every occupation provides opportunity for people to work scams, from within and without. They can rob you with a gun, through trickery, or with a piece of paper. They can assist you in fooling yourself. Scammers provide the opportunity for you to fall into their traps.
No one knows how many CEOs sit in their offices, perhaps playing computer games, raking in their millions. It is impossible to estimate how many hackers transfer money from one account to another or use other people’s computers to make their fortunes. Large corporations have so many layers of security, that it’s impossible for them to see the individual twigs in their vast forests.
Who steals from others? Principals and school superintendents misdirect funds or lie on their expense vouchers. Little league managers and supervisors obscure their income totals and fib about what they spend money on. Community and school tax collectors pocket cash given by homeowners. Politicians, contractors, and people who make purchases for all sorts of companies and institutions accept kickbacks or look the other way when poor quality material is used.
Insurance companies, cable and telephone services, lawn care and pest control franchises all create contracts so obscure that they can easily add on fees for what you thought was covered by contract. Auto repair shops use sub-standard inexpensive parts, or replace good ones with used. Gas stations and deli counters rig their weights and measures. Homeowners hide defects when they sell their houses. Building inspectors accept bribes.
Think back on episodes of Law & Order, Monk, NCIS, or any television show or movie involving people, money, and possessions. They are not outlandish. Well, “Men in Black” was a bit extreme. Situational dramas are based on real life happenings.
Every day, from morning to night, you give scammers the opportunity to rob you. Every time your telephone rings, it could be someone testing to see if you are home. When the doorbell chimes there could be someone waiting to sneak into your house. In the streets and stores there are teams of pickpockets, people who stage accidents, and others looking to provide you with the opportunity to purchase things at highly inflated costs. In your work place there are those who know just what you need to cure your sniffles, or to provide the best health care, or to give you a chance to improve yourself.
There are frauds dealing with education, daycare, and repairs of all sorts. There are con artists waiting to explain why you need a new roof or fresh blacktop. There are gas stations and home heating fuel companies that purchase the dregs from the bottom of those huge storage tanks, and their products are more likely to contain water or sediment that will ruin your engine or furnace.
There are “honest” businesses with good reliable names that sell substandard material, put impurities in their product, and sell medications that have no value or may even be harmful. Trusted advisors will bill you for work not performed or will sell your personal information for a profit. Judges take bribes, cops take bribes, teachers take bribes, and contractors take bribes.
Have I insulted your profession yet? Sorry I missed it. You probably know someone who does exactly what you do who is a bit shady. People cut corners, they get even with their bosses, they feel they are not paid enough or not appreciated. Human nature.
Enough paranoia. Yes, there are people out to get you, and if you let them they’ll jump at the opportunity. Let’s see what we can do to put you in bulletproof armor; a scam-resistant vest of knowledge that will prevent, deflect, reduce opportunities and make it less likely you’ll be chosen as a mark.
Next week we will start looking at specific con situations.
Monday, January 5, 2009
Consumer Safety & Awareness Part 3
Who Scammers Target
All types of people are subject to being scammed. They attack the rich and poor, men and women, young and old. Scammers do not discriminate – they do not care about your race, religion, or nationality. It makes no difference where you live. They even try to con other scammers.
There are, though, specific groups of people that are more susceptible to scammers simply because of their background, culture, age, or knowledge. There used to be a commercial that stated, “A well informed consumer is our best customer.” A knowledgeable consumer is less susceptible to a scam. This has nothing to do with education or intelligence.
The more you know about any aspect of life, the better you do at it. I am a teacher by trade, and was fairly successful. But do not ask me to build a bookshelf, work with plumbing, or drive a truck. Since the 1980s I have been researching scams. During that time I have been exposed, through reading and actual active participation as a supposedly unsuspecting mark . I may still fall for one of these cons, but it’s very unlikely.
So, to protect yourself, you need to be aware of the main scams, those you are most likely to come across. This includes knowing who the scammers go after, what they are seeking, how they study their intended targets, and generally how they operate. In each case you should look at a variety of examples of actually successful scams. Just reading about a few in the newspaper and wondering how anyone can be taken in, is not going to do it.
The absolutely perfect victim for a scam is an elderly religious person, living alone with few outside contacts. This takes into account several factors. Scammers use psychology, sociology, human traits, reactions, and tendencies. Like a gambler, they play the odds. Older people were brought up in a more trusting environment. Their childhood and younger lives were protected from fraudulent activities. In many cases they cannot conceive of anyone wanting to take advantage of them.
A person who lives alone, even by choice, is subject to feelings of loneliness. People have a desire to belong, to be needed and liked. Thus an elderly person who does not have constant human companionship, is more likely to believe in someone who demonstrates a concern. Elder abuse is almost always caused by a relative, a friend, a caretaker, or someone the person has put trust in, such as a lawyer or financial advisor.
Religions teach people to trust others, especially those who have nearly the same beliefs. Add this factor to living alone and being elderly, and you have a perfect mark.
Other human traits scammers count on include the desire to have the best possessions and the willingness to take risks to obtain them. Some call it the greed factor. Others blame advertising companies who bombard us with the latest and greatest, displayed in perfectly clean homes with wonderful furnishings. Everyone in ads is healthy, beautiful, young, and can afford anything they want.
It makes no difference if you are already wealthy, or are just making it from day to day. There are scams created to appeal to the greed in all of us. Although poorer people have less available money, they can be conned over and over simply because they have a greater desire for the wealth they see around them. Those who already have plenty are conned less frequently, but for bigger prizes.
Each of the scams, frauds, and other illegal practices we will be looking at has been tailored to meet the susceptibility in all of us. No one is immune. You may never see it coming, or it may be staring you in the face so blatantly that you can’t recognize it for what it is. On the other hand, you may be so absolutely certain that it’s a scam that you feel you can beat it. Yet again, you’re falling for their deceptions.
Scammers are not smarter than you, but they have more experience. They know when a scam is worth pursuing and when it’s time to run. And they run so fast, and hide so well, that they are almost never caught.
All types of people are subject to being scammed. They attack the rich and poor, men and women, young and old. Scammers do not discriminate – they do not care about your race, religion, or nationality. It makes no difference where you live. They even try to con other scammers.
There are, though, specific groups of people that are more susceptible to scammers simply because of their background, culture, age, or knowledge. There used to be a commercial that stated, “A well informed consumer is our best customer.” A knowledgeable consumer is less susceptible to a scam. This has nothing to do with education or intelligence.
The more you know about any aspect of life, the better you do at it. I am a teacher by trade, and was fairly successful. But do not ask me to build a bookshelf, work with plumbing, or drive a truck. Since the 1980s I have been researching scams. During that time I have been exposed, through reading and actual active participation as a supposedly unsuspecting mark . I may still fall for one of these cons, but it’s very unlikely.
So, to protect yourself, you need to be aware of the main scams, those you are most likely to come across. This includes knowing who the scammers go after, what they are seeking, how they study their intended targets, and generally how they operate. In each case you should look at a variety of examples of actually successful scams. Just reading about a few in the newspaper and wondering how anyone can be taken in, is not going to do it.
The absolutely perfect victim for a scam is an elderly religious person, living alone with few outside contacts. This takes into account several factors. Scammers use psychology, sociology, human traits, reactions, and tendencies. Like a gambler, they play the odds. Older people were brought up in a more trusting environment. Their childhood and younger lives were protected from fraudulent activities. In many cases they cannot conceive of anyone wanting to take advantage of them.
A person who lives alone, even by choice, is subject to feelings of loneliness. People have a desire to belong, to be needed and liked. Thus an elderly person who does not have constant human companionship, is more likely to believe in someone who demonstrates a concern. Elder abuse is almost always caused by a relative, a friend, a caretaker, or someone the person has put trust in, such as a lawyer or financial advisor.
Religions teach people to trust others, especially those who have nearly the same beliefs. Add this factor to living alone and being elderly, and you have a perfect mark.
Other human traits scammers count on include the desire to have the best possessions and the willingness to take risks to obtain them. Some call it the greed factor. Others blame advertising companies who bombard us with the latest and greatest, displayed in perfectly clean homes with wonderful furnishings. Everyone in ads is healthy, beautiful, young, and can afford anything they want.
It makes no difference if you are already wealthy, or are just making it from day to day. There are scams created to appeal to the greed in all of us. Although poorer people have less available money, they can be conned over and over simply because they have a greater desire for the wealth they see around them. Those who already have plenty are conned less frequently, but for bigger prizes.
Each of the scams, frauds, and other illegal practices we will be looking at has been tailored to meet the susceptibility in all of us. No one is immune. You may never see it coming, or it may be staring you in the face so blatantly that you can’t recognize it for what it is. On the other hand, you may be so absolutely certain that it’s a scam that you feel you can beat it. Yet again, you’re falling for their deceptions.
Scammers are not smarter than you, but they have more experience. They know when a scam is worth pursuing and when it’s time to run. And they run so fast, and hide so well, that they are almost never caught.
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