Download 26-Deceptive Sales Practices - Liberty Union High School District

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
 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
 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
 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 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 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
 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
 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.