Deceptive Sales Practices Chapter 26

Door-to-Door Sales  There are some door-to-door and telephone salespeople who place intense pressure on people to buy items they do not really want. State and federal laws give customers protection from these kinds of practices and some of the unfair deals that could result.  Federal Trade Commission (FTC) allows for a “cooling off” period of 3 days after signing a contract worth more than $25 from a door-to-door salesperson.  Seller must notify the buyer of this rule  The buyer must notify the seller in writing to cancel the contract

Telephone Sales Telephone Sales  FTC and the Federal Communications Commission have the following rules regarding telemarketers.  Call only between 8 AM and 9PM  Once you tell them not to call you, it is illegal for them to call you again  Computerized or prerecorded calls are prohibited  FCC prevents “slamming”, changing a person’s long distance carrier without consent  Must tell you who they are  Must tell the total cost of the product and any restrictions  Must tell you the cost of numbers they induce you to call  Illegal to lie or misrepresent any information

Referral Sales Referral Sales  A seller may tell consumers that they can save money by telling other customers to buy items from that seller. The consumer then enters into a sales contract that explains the details of this arrangement.  Sellers like this practice, because it gets them more business without advertising. Consumers should generally avoid this type of arrangement, but it is legal

Advertising and the Consumer Advertising and the Consumer  The First Amendment to the Constitution protects most advertising as a form of free speech. However, companies are not free to lie to consumers about their products.  The government can prohibit and punish false or misleading advertising.  The government may also regulate, and even prohibit certain types of advertisement  Tobacco- no advertisement on TV or Radio  Legal in magazines, newspapers, direct mail, but must include the Surgeon General’s Warning.  The FCC can order corrective advertising when a seller uses deceptive advertisement

Bait and Switch Bait and Switch  Bait and switch is a deceptive advertising practice in which the "bait" gets the customer to the store to buy a particular item, and then the seller tries to "switch" the customer to a more expensive item. Federal rules prohibit this type of practice.

Mail-Order Sales Mail-Order Sales  Mail-order shopping is a convenient way for customers to shop from home. However, mail-order shopping can cause problems when the wrong items are sent or the products are damaged in the mail.  There are federal laws that give you the right to know when your item will be shipped.  Sellers must comply with the shipping terms of their ads.  If the ad has no shipping date, then the product must be shipped within 30 days  These FTC rules also apply to on-line sales and infomercials.  Be cautious of mailing offering products for free  If a product is mailed to you without you ordering it, you may keep it as a gift

Internet Commerce Internet Commerce  E-commerce refers to sales and purchases that take place over the Internet. Although it is very convenient, it is important to be careful that the information you provide on the Internet, such as a credit card number, is handled securely.

Repairs and Estimates Repairs and Estimates  Because even the highest quality items can sometimes require repair, you should investigate the return, replacement, and repair policies before making a purchase. It is also important to do some research and ask the right questions when you bring an item to a repair shop to ensure that you are not charged for unnecessary services.