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December 14, 2005

Court Orders Seller of $2,000 Vaccum Cleaners to Clean Up Its Act

AG's lawsuit alleged "Carlson Technologies" of Clive used deception to gain access to consumer households and failed to provide refunds under Iowa's Door-to-Door Sales Act.

DES MOINES.   Roger T. Carlson and his Clive-based company, Carlson Technologies, Inc., have used deceptive and unfair sales practices in door-to-door sales of home care products, including Tri-Star vacuum cleaners sold for up to $2,000 apiece, according to an order issued by Polk County District Court Judge Richard G. Blane II.

The Attorney General's Office filed a lawsuit in August alleging that Carlson used deceptive means to gain access to consumers' homes for sales presentations, failed to provide refunds after consumers cancelled sales under Iowa's Door-to-Door Sales Act, and failed to provide a promised travel-voucher "prize" within 30 days as required by the Iowa Prize Promotions Act.

Blane ordered Carlson to reimburse consumers who had filed complaints with the Attorney General's Consumer Protection Division and he voided financing contracts that Carlson had induced consumers to sign and then sold to third party lenders. Blane also ordered Carlson to change business practices or face being fined up to $5,000 per day or jailed for contempt of court. Blane also ordered Carlson to pay $15,000 to the State to be used for consumer education and enforcement.

The suit alleged that the defendants engaged in deception by (among other things) calling consumers and saying consumers had won a voucher for a free hotel stay when, in fact, there was no actual contest, every consumer was promised a voucher, consumers were told they had to meet with a Carlson representative to receive the "prize," and many consumers later determined that the vouchers had too many use limitations or requirements to be useful.

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Additional details of the Court Order:

The court order was entered Dec. 9 by Polk County District Court Judge Richard G. Blane II. Under the order, the defendants must: disclose the real purpose of a telephone call or other contact as soon as the call or contact is made, honor a consumer's request not to be contacted, comply with all requirements of the Door-to-Door Sales Act and the Prize Promotions Act, provide any promotional prize at the start of a sales presentation, honor all warranties in a timely manner, respond to all future complaints within ten days, and cease high pressure sales tactics.

The State's lawsuit:

Carlson Technologies, Inc., and Carlson had resolved earlier disputes with the Attorney General's Office by signing an agreement called an "Assurance of Voluntary Compliance" in 2004 which was designed to prevent future violations. However, the lawsuit alleged, Carlson and Carlson Technologies, Inc., violated the agreement by failing to respond to consumer complaints in a timely manner, failing to make required disclosures upon first contact with consumers, and failing to follow Iowa's Door-to-Door Sales Act. Among other things, the suit alleged that the "prize"voucher was just a means to gain access to the consumer's home for a sales call.

Iowa's "Door-to-Door Sales Act":

The Door-to-Door Sales Act applies if a sale is for more than $25, if the sale is made at a location other than the seller's place of business, and if the goods or services will be used for personal, family or household purposes. Under the Door-to-Door Sales Act, Iowa consumers must be given written and oral notice that they have three business days to cancel a purchase, and they must be told the procedure for cancellation.

Consumer tips on door-to-door sales:

Attorney General Tom Miller cautioned people about letting door-to-door sellers into their homes, including to collect so-called prizes. "It may be a sign you will experience a 'hard-sell,'" he said. "We hear complaints, especially from older Iowans, that sellers sometimes refuse to leave until they have made a sale. That can amount to trespassing. Consumers should call local law enforcement if a sales person refuses to leave."

Miller also encouraged consumers to insist on written notification of their three-day right to cancel. "Iowa law gives you three business days to cancel a purchase at your door, and to receive a full refund for any unused product," he said. "The law also requires the seller to tell you of this right, and to give you two written notices of the right. Don't buy from any door-to-door seller who does not give you the proper cancellation notices."


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