Are these deep discounts advertised really bargains?

April 27, 2016 18:27 by Consumer Ed

Dear Consumer Ed:

I am shopping for a new refrigerator, and many of the ads I read say 50% to 90% off. It seems like everyone has the same deep discounts.  What’s going on?

Consumer Ed says:  

Oftentimes, a retail seller will induce a buyer to purchase one of its products by comparing that product’s advertised sale price with some prior or existing reference price in a way that leads the buyer to believe that by purchasing from that specific seller he or she is saving the difference between the reference price and the advertised sale price.  Consequently, so-called “comparative pricing” can be a powerful advertising tool, and when coupled with the seller’s own incentives to maximize sales (and the prospective buyer’s desire to obtain a bargain), it may provide the seller with power to take advantage of consumers.

In response to these concerns, federal and state legislators have enacted deceptive pricing statutes that essentially prohibit sellers from advertising their products’ prices in ways that may mislead a buyer.  Generally speaking, it is deceptive for a seller to compare sale prices with some other reference price unless the seller can somehow show that the reference price is bona fide.  If, in fact, the reference price is the actual, bona fide price at which the article was offered to the public on a regular basis for a substantial period of time, this provides a legitimate basis for the advertising of a price comparison, and the item being advertised is a true bargain. 

The advertised sales you are seeing regarding refrigerators may well be legitimate, but be cautious when you see sales with such deep discounts.  The best thing you can do to protect yourself from phony bargains is to do your own price comparing.  See what other retailers are charging for the same product, and thereby determine if the store is really offering you a great deal or not. 

Again, both federal and state laws prohibit retail companies from advertising discounts if the discounts are not legitimate.  If you believe that a particular store is deceptively offering discounts, please make a complaint to the Georgia Department of Law’s Consumer Protection Unit by calling  404-651-8600 or visiting www.consumer.ga.gov


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Merchant turned my account over to collections after I reversed charges on a faulty product

April 21, 2016 14:20 by Consumer Ed

Dear Consumer Ed:  

I purchased a product that was faulty and disputed the charge with my credit card company. I had the charge successfully removed from my account. Now the merchant has turned the matter over to a collection agency. Can they do that?

Consumer Ed says:  

Generally, once the credit card company has reversed the charge, it’s between the credit card company and the merchant to determine whether the charge was valid.  Since the credit card company did remove the charge, the merchant likely lost that fight. 

If the merchant has turned the account over to a collection agency, you should strongly consider disputing the charge with the collector. You must do so, in writing, within 30 days of receiving notice of the debt from the collection agency.  You should verify that the letter from the collection agency informs you that you have 30 days to dispute the charge.  If the letter does not inform you of this right, the letter itself may violate the Fair Debt Collection Practices Act and, as a result, the debt may also be uncollectable for that reason.  If you dispute the charge, the collection agency must ask the merchant for proof of the debt.  The merchant has 30 days to produce this evidence. During these 30 days, the collection agency cannot proceed to collect the alleged debt from you if you have informed the agency that you are disputing the charge.


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Dealer won't refund my deposit

March 15, 2016 15:21 by Consumer Ed

Dear Consumer Ed:

I paid a car dealer $300 as a deposit to confirm that I was interested in buying a particular car. He assured me that the car had a clean title and had not been in any accidents. He also assured me that he would return my deposit if I found any problems with the car. I got the VIN number from him and found out from CARFAX that the car had been in an accident.  I showed the CARFAX report to the dealer and asked him for my deposit back, but he refused to return it. What can I do?

Consumer Ed says:  

While many consumers are under the impression that there is a law which entitles them to a refund for a car deposit if they choose not to buy the car, this is not the case.  Usually, whether a deposit is refundable or non-refundable depends on what's written in a contract, on a receipt, or posted at the dealership.  But if there’s nothing that states otherwise, or if you agreed with the dealer that the funds would be returned in the event that the car had previously been in an accident, then the dealer should be required to refund the money.

In this case, if you believe that the dealer has no right to keep your deposit, you have several options.  The first thing you should do is write a letter to the dealer requesting that your money be returned. Send the letter via “Certified Mail, Return Receipt Requested,” and pay the small additional fee to obtain proof of delivery. You should also submit a complaint to the Better Business Bureau (www.bbb.org), and ask their mediation department to contact the dealer to attempt to get your deposit back.  You can also submit a complaint to the Georgia Department of Law’s Consumer Protection Unit at www.consumer.ga.gov, or by calling 404-651-8600 or 1-800-869-1123 (outside metro Atlanta).  If you used a credit card to pay the deposit, you should also consider disputing the charge with your credit card company.  Even if you take this route, the assistance of the Better Business Bureau and the Georgia Department of Law’s Consumer Protection Unit described above may still be helpful.  

If none of the above options result in the return of your deposit, you may want to consult with an attorney who can help you explore other legal options you may have. 

To avoid such issues in the future, and to help you avoid doing business with companies that use deceptive tactics, make sure you select a reputable auto dealer before you begin shopping for a car. You can research dealerships through the Better Business Bureau’s website (www.bbb.org).  In addition, make sure that before you give a deposit to a dealer, you require that he or she create a written document stating the purpose of the payment, and under what circumstances, if any, you are entitled to a partial or full refund.  Finally, make certain that you read that document carefully and in its entirety before you sign it or hand over any money for a deposit. 


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