Deceptive marketing - what recourse do I have

January 28, 2013 8:29 AM

An advertising company called my place of business and basically deceived one of my employees over the phone. Long story short, they made it sound like they were confirming an existing advertisement, rather than making it clear that they were soliciting new business. The charge for the service is $599. The advertising company is located in the state of NY and my business is in OR. I have submitted a complaint through the Better Business Bureau, but we have no resolution yet and the Advertising business in question is holding steady on their position that I owe them the money. I feel that their tactics were deceitful, and we would have never signed up with them if they had made it clear that is what they were trying to do. Since it looks like the BBB route is going to fail, what are my other options?
posted by walmerhoz to Law & Government (22 answers total)

and the Advertising business in question is holding steady on their position that I owe them the money

Have they been paid? Or are they threatening to send your business or collections or something? What cash and/or leverage do they currently hold, if any?
posted by Inspector.Gadget at 8:33 AM on January 28, 2013

Have you asked your lawyer?
posted by jon1270 at 8:33 AM on January 28, 2013 [1 favorite]

Tell them to submit everything in writing, and give it to your lawyer.
posted by mikepop at 8:34 AM on January 28, 2013 [3 favorites]

(If they are holding your cash or issuing legal threats, definitely consult your lawyer and stop payment if at all technically possible, but if they have nothing and are just making noise I'd be inclined to merely explain to the highest-ranking person you can reach each and every way that these people can go fuck themselves.

I would also be inclined to send a letter to Eric Schneiderman's office explaining in neutral tones and great detail exactly how this company attempted to rip you off. The circumstances you describe seem to be a variation of the "preventative maintenance" scam detailed here, and we're all far too familiar by now with the ethics of your average self-styled marketing gurus.

IANYL, TINLA)
posted by Inspector.Gadget at 8:44 AM on January 28, 2013

IAL - yes, talk to your lawyer. The first question that comes to mind is: Did the employee who spoke to them have authority to bind the company in contract? If I called and spoke to that employee and they agree that the company will pay me a retainer of $x per month to be its lawyer - would you feel bound to honor that promise?

What I'm getting at is you have a defense based upon the employee's actual or apparent authority which you should discuss with your lawyer. Ask your lawyer if you can tell them to pound sand.
posted by BrooksCooper at 8:44 AM on January 28, 2013

Response by poster: I should have mentioned - I have not paid them anything. As the bill sits unpaid, it is accruing various late charges, admin fees, etc. They indicate that they will be sending it to Collections.
posted by walmerhoz at 9:01 AM on January 28, 2013

FYI, many people don't understand that the Better Business Bureau is not a regulatory or enforcement body. It's simply a professional association that attempts to mediate disputes between businesses and consumers. If the BBB's mediation fails, the business gets a black mark on their "permanent record". Other than that, the BBB has no teeth.

To an ethical business that values its reputation in the marketplace, the BBB matters. But guess how much it matters to a sleazebag business that uses these kinds of sales tactics? Even their business names are often deceptive -- knock-offs of the names of reputable firms -- and if they run into trouble under one name, they'll be back in business again under another in weeks.

If you haven't paid them, don't. If they do send the account to collections (unlikely), dispute the report with the credit bureau. Meanwhile, see a lawyer or contact your state's Attorney General.
posted by peakcomm at 9:06 AM on January 28, 2013 [6 favorites]

As the bill sits unpaid, it is accruing various late charges, admin fees, etc. They indicate that they will be sending it to Collections.

It is time to gather your documents and notes on telephone correspondence (if any) and consult your lawyer (preferably with the scammed employee in tow to be interviewed). He or she can advise you on the best course of action here. This is sounding more and more like a scam and with any luck you'll also get consumer protection agencies interested.
posted by Inspector.Gadget at 9:06 AM on January 28, 2013 [3 favorites]

Seconding peakcomm's comment that if fraud or deceit is involved, the Attorney General is the office with actual legal power (not the BBB). Oregon's Consumer Protection Division exists to protect residents of Oregon.
posted by hsieu at 9:13 AM on January 28, 2013

Did you tell them that the person they spoke to is not authorized to approve any such contracts?
posted by Dansaman at 9:24 AM on January 28, 2013

All those "accruing fees" is them bluffing in the hope that you pay - I'd be willing to bet that they will not follow it up.

I know because years ago, I was the poor office junior on the end of a scam like this. My boss wrote them a letter saying that he entirely believed my account of not having attempted to "authorise" anything of the kind, and that their tactics were shabby at best if not criminal, and in no way would we be paying them a penny. They never replied, we never paid!

And bless his heart - I remember the horrible feeling I got when I thought I'd dropped that small, family business in it. The people running the companies that do this should be rounded up and sent to the salt mines.
posted by greenish at 9:31 AM on January 28, 2013 [3 favorites]

Response by poster: Well, it is a well-run program - they call "on a recorded line" and specifically ask if the employee is authorized as they are going through their call. I can't remember the exact verbage that they used, but they did play back the call for me when I called to ask what was going on.

They have clearly put together a fairly well run program that is set up to deceive, yet have some sort of backup - they were all to willing to play back the call for me where they say that authorization was given.
posted by walmerhoz at 9:36 AM on January 28, 2013

If it's the same outfit as this, http://www.popehat.com/2011/09/25/anatomy-of-a-scam-chapter-index, Ken White at popehat.com wants to hear about it.
posted by Bruce H. at 10:12 AM on January 28, 2013 [2 favorites]

In my small NGO, we get scam calls ALL the time, where they try to trick you into signing up for something. Mostly it's to try to switch our phone provider, or to scam-sell us toner*, but I know I've had the "reconfirm your advertisement" calls too.

It doesn't matter if they have a recording that maybe sounds like it's the employee giving authorization. They record it just so that they can do exactly what they did - play it back to you in an attempt to scare you so you will pay. And yes, the "accruing fees" are also intended as a scare-tactic that will make you pay. This is how these types of shady places operate - scare you into paying for something you never ordered. Don't fall for it!

Write them back a professional letter that says A) Your employee wasn't authorized to make these arrangements. B) All contracts for your business have to be in writing, and you don't have a written contract with them. C) Because of this, you don't consider that they have anything to bill you for, and you don't intend to pay.

Then toss any new invoices into a folder with the letter, and forget about them. They will either have to take you to court, which they are highly unlikely to do given the low amount and doubtful legal standing, or give up on scamming you.

Take this as a learning opportunity - everyone who answers the phone in a small business should be aware of these types of scams, to prevent it from ever happening again.


*The other day, when I declined to tell a particular caller the model number for our copier (the precursor to the toner scam), he called me "a fucking idiot" and hung up, which had me giggling for hours!
posted by gemmy at 10:22 AM on January 28, 2013 [4 favorites]

Definitely call the Oregon Consumer Protection Division as noted above, as well as the New York State Attorney General's office (1-800-771-7755). I've always found the AG's office super-helpful -- you'll be on the phone with someone within minutes and they'll give you good advice.
posted by ourobouros at 10:47 AM on January 28, 2013 [2 favorites]

Stick to your guns that the employee did not have authorization to agree to any sort of contract. I would also say a strongly worded letter from a lawyer would help, of course.
posted by shinynewnick at 11:16 AM on January 28, 2013

and specifically ask if the employee is authorized as they are going through their call.

This does not matter at all, even with the recording. Nobody is going to act on "but some person on the other end of the phone said I could bill them!"
posted by rhizome at 11:42 AM on January 28, 2013 [1 favorite]

Doubtful your employee consented to being recorded (which technically is illegal) so you could throw that back at them, preferably on an attorney's letterhead!!!
posted by kuppajava at 11:55 AM on January 28, 2013

Yep just jumping back in to say that when this scam happened to me, they not only recorded it without my consent (illegal) but actually edited the recording so that it ended up as me saying yes to them charging us however much it was.

All I remember from the call was that they kept asking me to confirm the address and when I said "that's the address, yes" they would say "please answer yes or no" - figures, huh, as that made it easier to edit!

Like i said - salt mines.
posted by greenish at 12:18 PM on January 28, 2013 [3 favorites]

Most states (including Oregon and and New York) are one-party notification states. Meaning since one party (the scammers) knew about and agreed to the recording, it was legal for them to record the call. (They're still scum and I encourage you to fight them, just not by saying it's illegal to record a call. We also get those calls all. the. time.)
posted by anaelith at 4:10 PM on January 28, 2013

If you don't have a lawyer, visit the Oregon State Bar's website and contact the Lawyer Referral Service. They can help you find a lawyer who will discuss this with you for about $35.

I am not a lawyer.
posted by tacodave at 4:38 PM on January 28, 2013 [1 favorite]

Same thing happened to me a few years back (I didn't agree to the fee, but they kept sending official-looking invoices) and I had great results from the NY Attorney General's office. I wasn't in NY but the business was based in NY.
posted by Atom12 at 1:47 PM on January 29, 2013 [1 favorite]