Thirty companies in the state of Washington received a letter from the assistant attorney general with the above heading in the last year. Seven of the companies and one manufacturer signed consent decrees. Some are left with severe damage to their reputation and staggering legal bills.
Charges Made
Some issues outlined in the letter:
- False reference pricing scheme, i.e., deep-drop discounts: "A misrepresentation that a product or service sells for an inflated price but is offered at a special discount price..."
- High-pressure sales tactics. Creating a false sense of urgency by misrepresenting the scarcity of a product ? or a "limited time" offer; exaggerating the dangers posed by mold; scheduling presentations so they last late into the night; wearing customers down until they say "yes."
- Unlawful practices. Representing ? without competent support ? that customers will realize specific energy savings; failing to provide proper notices of cancellation/rescission; interfering with customers' rights to cancel or obtain refunds.
- Harassing/intimidating or tormenting. Making repeated phone calls; sending multiple e-mails or repeated canvassing to those who have indicated that they are "not interested."
At Risk
These are the highlights. There are lots more. And we believe that similar actions are about to take place in other states. Most of these companies felt they were doing "the right thing." In truth, many of the actions described could have become defensible if done correctly.
Selling and marketing in this industry requires ingenuity and some aggressiveness. Companies that fail to strike the proper balance in their sales and marketing practices put themselves at risk. Most of what these companies face could have been corrected with an overview of their practices prior to being cited.
?Dave Yoho is president of the oldest, largest consulting company representing small business and specializing in the home improvement industry (daveyoho.com). His newest album is The Science of Successful In-Home Selling.
