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Scams & Fraud
by Emily Sachar, AARP Bulletin, July 2, 2007
The case: At what point do high-pressure sales tactics cross the line?
Several years ago, Ida Robinson of San Francisco was delighted to see a sweepstakes promotion in a local newspaper to win a Craftmatic bed. She phoned an 800 number, spoke to a clerk and waited for the entry form to arrive in the mail. It didn't.
"Instead, a salesman came, and that did not make me happy," Robinson, 89, says. "I didn't want to buy a bed. I wanted to win one."
The salesman insisted on entering Robinson's home, she says. Pushing her to buy a bed, according to Robinson, he kept dropping the price until she agreed to $1,799 plus tax. Then, she says, he demanded she sign paperwork that she didn't realize was a finance agreement, committing her to pay $39 a month, only $2 of which applied to the loan principal; the rest was interest. When she later decided she was dissatisfied with the bed, she says, Craftmatic wouldn't let her return it.
Marjorie Ricca, 77, who lives outside Sacramento, Calif., endured a similar experience. For four hours several years ago, a Craftmatic salesman sat in her living room playing sales videos and pushing her to buy a bed. She did, signing papers and handing over a $100 deposit. Still, she says, she wouldn't have signed if she hadn't been pushed so hard.
"I had only one goal: winning the bed. I knew I couldn't afford to buy one."
Ricca and Robinson were members of a class-action suit filed against Craftmatic by a team of lawyers that included AARP Foundation Litigation. Without admitting any wrongdoing, Craftmatic reached settlements with Ricca and Robinson in December 2005. In Ricca's case, the company agreed to pay off the almost $3,000 remaining of her debt and to allow her to return the bed. According to AARP Foundation Litigation attorney Deborah Zuckerman, it also agreed not to use sweepstakes entry forms that contain a space for the consumer's phone number unless the form indicates the consumer may be contacted about receiving more information about Craftmatic beds.
In its settlement with Robinson, Craftmatic agreed to change the way it uses words such as "free" and "gift," which typically are used to attract people who don't realize they'll be asked to buy something. Craftmatic also agreed that its salespeople would make more explicit price disclosures.
Emily Sachar is a journalist and author based in Brooklyn, N.Y.
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