Avoiding Deceptive Sales

deceptive sales

Deceptive sales are when companies or agencies sell products, services or policies that are not in fact legitimate. This can occur in a variety of lines of insurance, including auto, homeowners, health, life, workers’ compensation and medical malpractice.

If you are a consumer who has received a high-pressure sales pitch from an insurance company or agent, avoid them immediately and contact your state’s Department of Insurance. They will have information on companies and agents that sell illegal insurance. They will also provide tips for avoiding deceptive insurance sales practices.

Some of the common tactics used by deceptive salespeople are:

One tactic is to make grandiose claims. These claims are often used to make people think that the product or service will save them money, cure a disease or help them protect themselves financially from illness or injury. This is deceptive marketing and can be dangerous.

Another tactic is to offer products for a lower price than they are actually worth. These kinds of offers are typically referred to as “drip pricing” and can lead to consumers buying products that they would not otherwise purchase.

This can be particularly dangerous in the area of home security and safety products. ADT, for example, has faced over 4,200 complaints in 2014 alone from customers who say they were tricked into buying products from other companies.

The company has a long history of addressing these issues and has worked with the Better Business Bureau to clean up its act. The company has a track record of winning deceptive sales lawsuits and is dedicated to keeping consumers safe from unscrupulous salespeople.

In addition to being a violation of federal law, deceptive sales practices can be a significant financial burden for consumers who have to pay for a product or service that does not work as advertised. ADT estimates that a typical customer loses anywhere from $150 to $500 when purchasing a fraudulent product or service.

There are many different forms of deceptive sales, including misleading product or service claims and unfair and deceptive advertising practices. This article explores how these practices are rife in the insurance industry and what they do to erode trust between consumers and insurance agents.

It is important to remember that even though insurance sales are regulated, the laws are not perfect and companies do not always do the right thing. This is why it is important to do your homework and to use the following tips:

A representation may be misleading if it conveys two or more meanings to a reasonable consumer, one of which is not intended. It may be misleading if the consumer’s interpretation of the representation is reasonable under the circumstances and if a significant minority of consumers in the relevant class are misled.

SS 233.3

This provision prohibits an advertiser from advertising retail prices that have been established or suggested by manufacturers or nonretail distributors, unless substantial sales at that price have actually been made. Generally, however, this rule is not as strict as it should be for the reason that list or suggested prices are more often influenced by changing competition conditions than they were in the past.

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