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Consumer Problems

Consumer Problems. Mrs. Wilson Career & Financial Management. Fraudulent & Deceptive Marketing Practices. Marketplace is full of deceptive and misleading ways for suppliers to increase demand for a product Dishonest sellers deny wrongdoing

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Consumer Problems

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  1. Consumer Problems Mrs. Wilson Career & Financial Management

  2. Fraudulent & Deceptive Marketing Practices • Marketplace is full of deceptive and misleading ways for suppliers to increase demand for a product • Dishonest sellers deny wrongdoing • Consumers MUST educate themselves to recognize a potential fraud before they become victims

  3. Bait & Switch • Illegal sales technique in which a seller advertises a product with the intention of persuading consumers to buy a more expensive product • Bait—bargain product

  4. Referral Sales • Promise of a money rebate, prize, or discount in exchange for providing names of friends as prospective customers • Such promises are ILLEGAL

  5. Fake Sales • Most common of all frauds • Merchant advertises a big sale but keeps the items at regular price • Merchant may increase the price before the sale to decrease it • SUPER SAVINGS doesn’t mean the prices have been reduced

  6. Low-Balling • Offer an unrealistically low price for a trade-in as a part of negotiating a new car deal • Repair shops also use this deceptive practice

  7. Pyramid Schemes • Illegal multi-level marketing plans that promise distributors commissions from their own sales • Cash investment is usually required • Remember if it looks too good to be true it IS too good to be true

  8. Pigeon Drop • Any method by which a con artist convinces a vulnerable person to invest in a phony thing—swampland, companies, etc. • Funds usually loaned out at high interest rates • Contact local BBB if unsure

  9. Fraudulent Representation • Telephone or door-to-door sales made my people who CLAIM to represent well-known or reputable companies are another type of swindle • Check with the company before buying

  10. Health & Medical Product Frauds • Miracle pills, creams, and devices that enhance the consumer’s health and beauty • Magazines, newspapers, web sites, and flashy tabloids usually carry these ads • Products are ineffective

  11. Infomercials • Lengthy paid commercial TV advertisement that includes testimonials, product demonstrations, and presentation of product features • Last 15-30 minutes • Usually emotional • Richard Simmons!!!

  12. Internet Fraud • They can appear genuine • Don’t assume that a professional-looking web site means that the company is legitimate • Stick with businesses you know

  13. Telemarketing Fraud • About 140,000 telemarketing firms operating in the US today. • Over 10% of these or 10,000 are fraudulent and the FBI estimates that consumers lose over $40 billion each year to criminal telemarketers

  14. Shop Smart, Including Online • Be aware of prices • Shop at several stores • Comparative shopping • Understand sale terminology • Avoid impulse buying • Plan your purchases • Compute unit prices (see page 811)

  15. More Advice • Read labels • Check containers carefully • Read contracts • Keep receipts & warranties • Compute total cost • Ask for references • Be loyal • Wait a day for major purchases

  16. Redress • Remedy to a problem • When you have a complaint, you have the right to seek redress • First go to the store • Put your complaint in writing • File a complaint with BBB • Seek legal recourse

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