Unethical Marketing … How Should It Be Handled?

By | December 14, 2014

The Issue

unethicalAround mid August 2014, the owner/seller of a brand new company released a sales video which claimed that the seller had a “cutting edge technology” that would enable customers to receive a certain level of quality services based on the customer’s membership or package ownership level.  The prices of the packages ranged from a one time price of $250 to $10,000.  In addition, a superior special package was offered at $5,000.

After two months of actually receiving the service, the results were nothing close to what was advertised in the sales video. Consequently, a segment of the customers felt that “false advertisement” or “unethical marketing” had been committed by the seller.  Because of this, they felt that they should be entitled to a partial refund of their investments.

The seller, on the other hand, maintained that he is under no obligation to give any refunds since the customers have signed the seller’s terms and conditions.  These documents state that once commissions have been paid out into the field from the customer’s transaction, then no refunds would be given; and indeed, commissions have been paid out.

The Customers’ View

In the August 2014 version of the sales video, the seller clearly stated that the customer would receive “at least” a certain level of services that would correspond to the package purchased.  In addition, while there  was an income disclosure which essentially said that no earnings would be guaranteed, other statements were made in the sales video that the services would be provided by “experts” who have a success track record of an impressive level of over 70%.  The sales video went on to state that even if the success rate drops to just 60%, the customer, “without having to lift a finger,” would still be able to “make crazy money.”

The whole idea behind the service was to enable people, especially those who would never be able to participate, to simply plug in and let the system do the work for them; and indeed, this point was made repeatedly in the video.  This appealed greatly to many people who had no skills and no knowledge of the industry that the seller would be taking the customers into.  As a result, a good number of people purchased the $5,000 package due to what was stated in the sales video.

downtrendBut after two months  of receiving services from the seller, instead of experiencing success at the level advertised which was to be over 70%, the actual success rate had been around only 49%, and the actual level of service provided had been only at a level of a $500 package owner instead of a $5,000 package owner for those customers who purchased the special $5,000 package.

The seller also changed the wordings in a new sales video and updated the terms and conditions around October 2014.  The words in the new sales video were modified to now simply say that customers would be receiving services on “an average” of so and so.  The wordings used in other corporate written documents such as the package descriptions, the compensation plan and terms and conditions were also changed to say services would be provided “up to” so and so.

On top of the above, the seller went on to change the “experts” without giving any clear explanation as to why they have performed so poorly.  It appeared as if the seller had not been working closely with them.  When the customers asked the seller about the backgrounds of the “new experts,” the seller would not divulge any information other than that they are people who are now “in-house.”  This worried the customers because the old experts were supposedly people who have been in the industry for more than 20 years combined and now they know nothing about the “new experts” backgrounds.

All of the above lead many $5,000 package owner customers feeling that they have been mislead and that the seller should give them a partial refund.

The Seller’s View

While the customers claim as stated above, the seller maintains that he has not breached the contract and that he never guaranteed success and so forth.  Therefore, he will not offer refunds because the customers have signed his terms and conditions which stated that once commissions have been paid out into the field, there would be no refunds.

Who is Right?

business man shrugWhat are your thoughts on the situation? Do the customers have a right to some sort of refund despite the fact that they’ve signed the seller’s terms and conditions? Does the seller have any obligations to give refunds even though he has not been able to deliver services as advertised via his sales video?

Please share your thoughts in the comments section below.

Category: Marketing Ethics

About Yang Xiong

My personal mission is to elevate the financial well being of families across the globe through working with people individually and as a team so they can live their lives how they see fit. If they want to be an employee for someone or become their own boss, let that be because of their own choosing. Although money is not the main thing, it can allow us to be able to make these kind of life changing choices so that we can enjoy the kind of lifestyle that we choose.

15 thoughts on “Unethical Marketing … How Should It Be Handled?

  1. wang k thao

    We have to stand together and report this to the state or consult with an attorney.

    1. Glenn Huitton

      Hey there, It’s Glenn a two month old premium member following up on your bureaucratic experience in the field. I served as a training petty officer on board a US Navy air craft carrier where I trained new comers in air port runway lighting systems. I got a 3.6 evaluation and people that I trained got 4.0 from our superiors. I pledged that despite an obvious bias and injustice that I would be the only one to be promoted by the captain and it did come to past. So, to cut a long story short I think it’s a two way street with the customer and the seller. How do you sell something and not be liable for a percentage of customer satisfaction. The customer should be awarded consideration even after signing on the dotted. I hope those that support you are for real

    2. Yang

      Most of those whom we have spoken to about the issue are pretty much of the same thinking as you but it would be a last resort and there would need to be enough people willing to go through with it.

  2. Koy Phan

    We need to stand together and support each other and do our part. We all deserve the refund of $4,500. We only receive the services at $500 level and the seller should refund the difference.

    1. Yang

      I think $4,500 would be asking a bit too much as $1,250 in commissions had been paid out into the field and other expenses have been incurred by the company; but before discussion on how much should be refunded, the seller would first have to agree to the idea.

  3. Kwasi Mensah

    This is a clear case of a contractual breech because of the false advertising.
    Legal action should be brought to bear on the seller and the business entity and some restitution must be paid to those who suffered loses.

    1. Yang

      How would one take legal action so that it would be cost effective and worthwhile?

  4. Oladejo Richard

    I will suggest that we all give the seller a little more time before we begin to judge the quality of delivery. Every system needs time to prove itself. Let’s look at it this way, if we take the seller to court and a refund is ordered and he is forced to pay and he did, what next? It becomes a story and everybody go their different ways and nobody is able to make any profit out of the whole thing. But if you give it time and it did deliver its promises to you? We all smile and become the better for it.

    1. Yang

      Thank you for sharing your thoughts on the need to give the seller more time. There are always more than one way to look at the situation. It’s important that all asides are considered. But for discussion purposes, what if things don’t get better and as time passes, the seller uses all the money and cannot give anything back to those who should be entitled to something back (of course, this is assuming that they are entitled)?

  5. Sanity Seng

    Here is my opinion – I knew that there was some level of risk involved on emerging businesses, such as Seers, hence I didn’t want to dive in with the bigger package. After testing the water for 3 months with Seers, the first two was okay, but the last month I lose almost all my account balance in gOption. This is a small lost to me, compare to other losses I encountered. As an entrepreneur we play with risk everyday; I would say know your level of risk. My point, when you put in the amount you did, it was at risk from the start – always be cautious.

    As for the false advertisement and service, I believe that Seers failed on these to aspect, it promised to delivered. For this those who gotten the higher package should get a portion of their money back. Again look at your court and litigation cost, you will pay more for that than getting your money back.

    My thoughts (and please don’t get offended) don’t focus on what you lost, concentrate on how you can generate more. If we knew how to make more money, we wouldn’t worry about the money we lost.

    1. Yang

      Seng, your comment speaks to the need for both customers and sellers to be responsible for the decisions and risks that they take.

      I agree with your last point that “If we knew how to make more more money, we wouldn’t worry about the money we lost.” While that is true, it is also precisely the fact that some people don’t know how to make more money that even just a very small risk to some people is a major risk to those who do not know how to make more money.

      In addition, it appears that the seller needs to offer some sort of refund as well despite his terms and conditions if he is actually being a responsible seller. The situation so far is that he has claimed to be able to deliver a certain level of service, but he has not been able to do it.

      For some people, it’s not a problem… they can wait and see how things turn out as time passes… for others, they feel that they’ve been mislead and they are not getting anything close to what they paid for.

  6. dang

    Sad for the hmong community. Binary options trading robots are all scams 99,999% … Now we have the proofs … No comment !


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