Crackdown on shifty sellers

A glossary of words as well as an exercise related to this article are also published online.

(Source: SME)

A glossary of words as well as an exercise related to this article are also published online.

MANIPULATION, deception and aggression are the primary tactics used by a subset of salespeople targeting the elderly with overpriced goods. Lured by promises of gifts, trips or free lunches, victims often end up buying goods costing much more than they can afford.

A Czech documentary called Šmejdi (Trashes), which appeared in cinemas in April, first exposed the deceptive practices at these product demonstrations, where the elderly are often lured or even taken by bus to a certain location, where they are pressured into buying products. The Slovak media soon began reporting on similar events, and the government has responded by preparing new legislation designed to regulate door-to-door selling.

The Slovak Trade Inspection (SOI) received 369 complaints about 25 firms which organised suspicious demonstration events from January to August 2013, Danuša Krkošová, an SOI spokeswoman, told The Slovak Spectator. During the investigations of those firms, SOI inspectors uncovered evidence of misleading advertisements, false information provided during the selling, ignoring reclamation requests and unfair trade practices, like a €120 penalty for people returning unused, undamaged products in an opened package.

Iveta Gáborová, a 77-year-old pensioner, attended a demonstration event where a company was offering unique cooking utensils and encountered aggressive sellers who forced her to buy some of their products, the Pravda daily reported in May.

“They [the sellers] invited us individually into the room where they wanted us to sign a purchase contract. However, they asked for an advance payment, so I told them that I do not have €50 in cash,” Gáborová said, as quoted by Pravda. “Suddenly, they started to yell at me: You do not [have money]? Does this mean that you came here to feed yourself for free?”
Some elderly people return to these events, even after being deceived in the past, as a way of dealing with social isolation, and such behaviour may even resemble a form of addiction, the president of the Slovak Psychologists Chamber, Martin Miler, told The Slovak Spectator.

“Every month, hundreds of consumers across Slovakia have ended up with unusable products and signed credit contracts,” says the report on the proposed new rules submitted to parliament. The legislation was drafted by Otto Brixi and Anton Martvoň, MPs from the ruling Smer party. The law is now in its second reading, State Secretary of the Justice Ministry Monika Jankovská told The Slovak Spectator. The rules could become effective at the end of 2013, according to the Sme daily.

Luring people in

Such scams usually begin with a flyer promising any number of gifts to potential attendees of such events – free laundry detergent, wine or a trip to some castle, are among the common promises. In some cases organisers only provide a meeting place. People expect that the organisers will take them to a castle but suddenly they realise that they are in some culture centre, Silvie Dymáková, the director of the film Šmejdi, told Sme in September.

At the beginning sellers are very kind, offering alcohol and pretending that the event is just about presentation, not selling. Later, they get aggressive. Many times sellers try to scare customers, sometimes exploiting their anxieties about health with manipulative threats like “if you do not buy this blanket your grandchildren will die”. They also manipulate people into saying that a particular product is perfect and then pressure them into buying it.

“Sellers can create an image of an extraordinary product that is impossible to buy anywhere else. They brainwash them,” Dymáková said. “They also claim that high price indicates high quality.”

Then, sellers degrade attendants unwilling to buy their products, calling them fools and saying that they came to the event just for the free lunch. Sometimes the sellers refuse to take unwilling customers home, Dymáková said.

After the sellers persuade people to buy something, they separate them from the others and force them to sign a contract. Sometimes when buyers realise that the price is bad they are faced with more pressure and deception from the sellers if they try to back out of the sale. For example, sellers may give people a purchase contract, but hide the header with their hands and tell them it is statement saying that the customer refused to take the offered gift.

Since sellers need information from a customer’s ID to make a contract, they take it from people in advance and pretend that they cannot give it to them back because they are in a rush. People’s IDs are returned to them on the bus ride home.

New regulations

In practice, the character of these demonstration events significantly complicates the SOI’s ability to monitor them, since it is impossible to inspect them in real time, according to the report to the revision. “This is because the SOI does not have information about the time and place where such events take place.”

The amendment proposal requires demonstration event organisers to report such events to the SOI 20 days in advance and to show the inspectorate the proposed contracts and the prices of the goods and services they plan to offer. Organisers will be forbidden to sell anything else or for a higher prices than they reported. SOI inspectors will have the right to be present at the events to inform people about their rights and cancel events when they see that consumers’ rights are being violated.

Organisers will be forbidden to separate consumers from other people or create conditions which will affect a visitor’s economic decisions. If organisers provide transportation to consumers, they will be obliged to transport people back regardless of whether or not they bought something, according to the proposal.

Furthermore, the Justice Ministry discovered that sellers offer consumers significantly overpriced credit with interest rates sometimes exceeding 50 percent per year. Therefore, the law proposes to limit credit offers so they will not exceed normal market rates, according to Jankovská.

If the seller or organiser violates the abovementioned rules, the contract signed during the event will be considered invalid.

“I consider this change as the most important benefit of the proposed amendment,” Jankovská said. “The judicial protection philosophy will change so that consumers will not need to demand [authorities] to declare a contract invalid, but the seller or organiser of a presentation event will have to sue the consumer and demand fulfilment of the contract if he considers it to be valid.”

People who are willing to cancel the contract will be able to do that without the obligation to provide justification 15 days after signing it. Currently people can do that only in the first seven days after signing a contract, according to Jankovská.

Lonely get addicted to such events

Some pensioners are drawn to these events because it gives them a chance to socialise, particularly those who live in social isolation, according to Miler. When someone offers the possibility of a free dinner where they can meet other people, it starts to seem like a social event. Moreover, elderly people who lived in the communist era were required to attend various events when they were asked to do so. This habit may persist subconsciously, he added.

“When they receive a flyer saying that they will receive something for free they just go. They do not want to be at home alone,” Dymáková said, as quoted by Sme. “They want to receive something for free or make their grandchildren happy by bringing them gifts…. But this is nonsense.”

These events may show signs in common with cults, which offer people a sense of community and a chance to socialise. Such behaviour is not that different from those exhibited by drug or alcohol addicts. “The [addicted] person does not see or does not want to see this disproportion,” Miler said.

Miler’s advice is to refuse such invitations right at the beginning; for example, turn the phone off after hearing such an offer. If at such an event sellers behave assertively, do not be afraid to say no. However, friends and family are also very important, according to Miler. Pensioners should not be afraid of telling their relatives that they attended such an event and were deceived, and their family should accept them and express concern.

“They go there because we – younger people - are not concerned about them,” Dymáková told Sme. “We ignore them, so it is also our fault.”

What we buy

THE AVERAGE gross income per person in a household where the head is employed was €5,344.54 in 2012. The gross private expenditures in those households totalled €4,857.45 per person per year. Of those expenditures, €821.31 went to food and non-alcoholic beverages, €112.39 to alcoholic beverages and tobacco, €212.24 to clothing and footwear, €143.31 to furnishings, household equipment and regular maintenance of the house, and €268.20 to miscellaneous goods and services.

Breaking down food alone the average person spent €92.01 on bread, €22.76 on fine pastries, €66.31 on smoked, salted and dried meat, €52.32 on convenience food and poultry products, €141.01 for milk, cheese and eggs and €43.14 on fruit. He or she also spent €84.03 on non-alcoholic beverages.

On alcoholic beverages people spent €51.26 of which €19.60 was for spirits, €13.58 for wine and €18.08 for beer on average. People also spent €61.13 on tobacco products per person per year 2012.

Households where the head is an employed person spent €141.85 for clothes with €67.38 going for women’s clothes, €44.30 for men and €23.39 for clothes for infants or children. People spent €70.39 per person on shoes in 2012.

Furniture, furnishings and decorations, carpets and other floor coverings cost one person on average €41.89, household appliances cost €22.35, glassware, tableware and household utensils cost €9.83, and tools and equipment for the home and garden cost €10.50.

In general, Slovaks spent €9.39 on books and €13.11 on newspapers and other periodicals.

Source: Statistics are provided by Slovak Statistics Office (ŠÚ) which collected data in 4,704 randomly selected households which were ready willing to offer information about their budgets.

This article is published as part of Spectator College, a programme created by The Slovak Spectator with the support of Union poisťovňa.

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