Misrepresentation of Facts
Complaint
Andrea
Country: United States
Hello,
When I first signed up for my Direct Buy membership, I was told that they were able to work with 203k loans, which was a complete lie. I was also told during my New Member Orientation that I had seven days to cancel my membership. After our orientation we attempted to cancel the membership but were told that it would be impossible because our time was out. After sending a rather disgruntled survey I received an email from the owner of my store. After basically bashing me in the email he told me this, "but we do have a cancellation policy by extending the cancellation period for 3 days - and we’d also consider a cancellation if a member were to request it even after they’ve attended the new member orientation – which you did. We have no record of your request – which we always ask for in writing – to avoid situations like this." So I wrote an official letter asking for the cancellation of the membership, and this was his reply: " Any and all membership cancellation requests MUST be in writing - not that it's not allowed, not that is impossible - that it needs to be in writing - for this exact reason. This is the official response to your request. I sorry, but we do not accept cancellation of memberships after the right to cancel as outlined on the back of your membership agreement. Again, I hope you take advantage of your membership - we provide a great service and we help people save allot of money." So I am getting the complete run around, and am interested to find out if legally there is anyway to remedy my situation. I know in Colorado that verbal agreements are binding, and in the first email he seems to be telling me that I can cancel my agreement and then flip flops in the second email saying I can't. What can I do?
Thank you for your time and help
When I first signed up for my Direct Buy membership, I was told that they were able to work with 203k loans, which was a complete lie. I was also told during my New Member Orientation that I had seven days to cancel my membership. After our orientation we attempted to cancel the membership but were told that it would be impossible because our time was out. After sending a rather disgruntled survey I received an email from the owner of my store. After basically bashing me in the email he told me this, "but we do have a cancellation policy by extending the cancellation period for 3 days - and we’d also consider a cancellation if a member were to request it even after they’ve attended the new member orientation – which you did. We have no record of your request – which we always ask for in writing – to avoid situations like this." So I wrote an official letter asking for the cancellation of the membership, and this was his reply: " Any and all membership cancellation requests MUST be in writing - not that it's not allowed, not that is impossible - that it needs to be in writing - for this exact reason. This is the official response to your request. I sorry, but we do not accept cancellation of memberships after the right to cancel as outlined on the back of your membership agreement. Again, I hope you take advantage of your membership - we provide a great service and we help people save allot of money." So I am getting the complete run around, and am interested to find out if legally there is anyway to remedy my situation. I know in Colorado that verbal agreements are binding, and in the first email he seems to be telling me that I can cancel my agreement and then flip flops in the second email saying I can't. What can I do?
Thank you for your time and help
Comments
There is a common thread that links many "membership" businesses such as campground membership resorts, resort membership resale businesses, travel clubs, video dating services and some "business opportunities".
The consumer is sold a future service contract (membership) and told that they have three days in which to cancel.
Actually, where there is a statutory cancellation period, the statute allows the consumer to cancel within 3 (or 7 or 10 depending on the statute) without paying ANY damages whatsoever. The 3-day period is a "super remedy" that doesn't allow the business to keep any money. After three days, normal contract damage law still applies.
If the consumer hasn't caused $5,000 in damages, they are not obligated to pay a $5,000 sales price, or the business is not allowed to keep the full $5,000 if already paid. The business can only keep actual damages (for instance, the cost of a 1 hour sale pitch and a glossy brochure).
Many consumers are really beat up with this misrepresentation. Many state Assistant AGs, and at least one FTC attorney, has said that after three days, that's it, you lose everything.
Mark Fleming, a class action attorney from Seattle has yet to find a judge that agrees.
Leisure Time Resorts of America (now Thousand Trails), paid out over $1,000,000.00 in consumer refunds in a class action lawsuit he finished last year. LTRA said the consumer had to pay the full sales price whether the consumer wanted to keep the membership or not.
The judge disagreed and the consumers won.
The court ruled that a business that requires full forfeiture on a future services contract has engaged in a deceptive trade practice.
As a matter of common sense, the business has been relieved from performing years of membership services. Therefore, how can it be entitled to full payment?
Nor does it make sense for the business to argue that the consumer should be forced to remain a member against their will. Unfortunately, we are used to the concept of having to pay in full on a contract because we have driven the vehicle off the lot, taken the TV home, etc.
When "you have the goods," you pay the price. When it's a future services contract, you only pay the damages (if any).
It was discovered from reviewing financial statements that the campground membership industry considers its satisfied customers as "loss leaders." The profit is in the ones who are disgusted with misrepresentations made at the point of sale, or move, and simply walk away from their money because of the "no refund" language in the contract.
Fleming feels that one area that doesn't get enough press is the successful individual consumer lawsuit. If an individual sues, proves a deceptive trade practice, and gets their money back, nobody really knows.
Only appellate cases are reported so that other attorneys can find them, and a business is not likely to appeal and have everyone know that one of its business practices is deceptive.
Consumers are constantly "reinventing the wheel" when it comes to proving that a particular business practice is illegal. Many "traditionally suspect businesses" (membership sales, furnace installers, dating services, etc.) do not even show up to defend a lawsuit.
They will pound their chests until the day of trial and then not show.
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