Friday 21 March 2008

A Consumer's Self Defence Class

How can we defend ourselves as consumers? Well, first, do we need to?

Yes, we do, sometimes. To be fair most companies do treat consumers with some respect. They are NOT trying to abuse us, they’re not trying to rip us off or try and they’re not trying to give us something less than value for money. These companies recognise that if they are honest and open about their products and services then we’ll recognise that and if we ever need a similar product we’ll go back to them again. We all have favourite shops, restaurants, mechanics and even banks who in the past have delivered what we want and, as importantly, in the way we want. They have earned our loyalty.

However there are exceptions. There are companies that prefer to operate by deception, distortions and misrepresentations. I really can’t understand why they do this because sooner or later people will hear about the way they do business and will avoid them. Unless they have a ready supply of new victims.

I was thinking about this recently after listening to a podcast from NESS, the New England Skeptical Society. They produce a fascinating weekly podcast called “The Skeptics' Guide to the Universe” that covers all sorts of deceptions, medical frauds, pseudoscience and New Age nonsense. If you have the technology then take a look at their web site at or search for them using iTunes. You’ll find it hugely informative.

Anyway, one of their presenters reported on a timeshare experience while on holiday in Hawaii and there followed a discussion of some of the techniques that are used in selling timeshares. My point isn’t specifically about timeshares although I confess I’m sceptical about the whole idea. The point is that some of the techniques they discussed can be used in selling almost anything. The lessons are universal.

Often timeshare companies will try to persuade you that timeshares are a good investment. They’ll try and tell you that they are a good place to put your money and you’ll see some sort of wonderful financial return. I don’t buy this one at all. I’ve never heard of a timeshare that turned out to be anything like a good investment. If they were really that good wouldn’t we see banks, investment companies and pension schemes buying into them?

They also tell you that the timeshare is something you can leave to your children. This really is silly. Remember that most timeshares aren’t cost-free. Most of them require you to pay an annual fee in return for a chance of holidays. Do you really want to leave your children a debt?

They’ll tell you that if you change your mind you can sell your timeshare or the points you’ve bought towards holidays to other people. But why would someone want to buy it from you if they can buy it from the company along with all the fancy gifts and special offers they seduce new purchasers with? Also, if you assume that the salespeople the company employ are paid on commission why would they encourage you to bypass their monthly bonus opportunity?

We’ve actually heard from loads of people who have tried for years to sell their timeshare points but all to no avail. Nobody seems to want to buy them second-hand.

Of course the really dangerous time is the initial sales pitch. That’s when you really must be on your guard. Remember that their sales people are almost certainly on commission and they may bend the truth to get your signature on a contract.

They’ll offer some sort of incentive in exchange for attending a sales function. You then find yourself stuck in a presentation lasting a couple of hours which is constructed to seduce you. You’ll find it difficult to leave without embarrassment. The pressure will be on and the delights of the scheme will appear undeniable. The presentation, like the sales functions of multi-level marketing companies like Amways will be high-energy, almost religious or cult-like in it’s intensity. An inspirational speaker and exciting presentation will be followed by the personal, very hard sell.

The salesperson will try to make you seem inconsistent. “You’re a smart, professional person, how could you turn down this obviously fantastic deal? How can you refuse an opportunity to save money on your holidays?” They’ll use centuries-old psychological tricks to persuade you that the only option is to sign up.

One of their favourite sales tricks is The Final Objection. They’ll say something like “What’s the one thing that’s stopping you taking this offer?” You’ll say something like “Price” or “Flexibility”. They will then focus on that single objection, come up with a very well-rehearsed, extremely persuasive answer and then you are left with no objections left. You after all told them the ONE thing that was stopping you from buying and they have demolished it. You either have to confess that you were lying and there are other objections or appear illogical, neither of which you are likely to do.

Some companies have even been known to fake sales in front of prospective customers. A pair of good-looking customers will pretend to be persuaded and will make a big show of signing up in front of you. In fact they’re nothing more than sale people acting as customers.

The most important thing is first of all not to be tempted to attend these seductive presentations. If by any chance you do end up there don’t take a pen with you. Get some sticking plaster and stick all your fingers together so you can’t possibly sign anything. Guys, take your wife with you. Girls, take your husband. If you’re single take your Mum or the grumpiest aunt you can find. Better still, stay at home and watch TV. It’s cheaper.

This week’s stars!

Solomon at Timber City. Our reader said that Solomon is “really passionate about what he does. He takes time explaining things and giving options. While he was serving me 3 other customers waited for him patiently, but there were other salesmen who were free. It goes to show how good this guy is”.

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