Boiler Room and Misleading Sales Schemes

Maybe you’ve seen the recent news about a store in a Mandaluyong mall that was the subject of numerous consumer complaints. I can’t recall the name of the store, but I recall the modus operandi because this is not the first time that the misleading scheme is used. Back in 2003, the Department of Trade and Industry (DTI) padlocked an outlet in a Cebu mall because of the same scheme.

We previously discussed this scheme, in relation to boiler room schemes. This is not necessarily illegal, but the end result makes it highly irregular and questionable.

The modus is used by some salespeople, usually strategically stationed in lobbies of malls. A number of salespeople would often swarm around the potential “client”. These salespeople may offer promotional coupons for a chance to win products for “free”, with the customers subsequently discovering that they actually paid for these “freebies.”

There are also “raffles”, allegedly with no obligation to buy anything. Almost always, the victim wins the grand prize. The salespeople would then maximize the frenzy that follows by asking the “winner” to buy any product to be able to claim the grand prize. (Source: SunStar Cebu)

This high-pressure tactic affects the consumers’ decision-making. By the time the consumer realizes that he/she has been duped, the transaction is already done. Please proceed to the previous post on Boiler Room Schemes for more discussions.

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