"How to
Protect Yourself from Rip-off Artists,Con-men, Frauds, and Unethical
Negotiators."
By Peter Wink
Here's a startling fact - while you're reading
this notice,millions of vulnerable people are being ripped off
on cars,homes, clothes, jewelry, businesses, and every other type
of purchase you can imagine. And it doesn't stop there!
Rip off artists are everywhere! There in restaurants, hospitals,
furniture stores, taxicabs, and even the local car mechanic may
be taking you to the cleaners. And sadly enough, these con-men
aren't going away anytime soon! In other words...you have to know
how to defend yourself?
The following are two of the most notorious strategies used by
rip off artists and unethical negotiators - and how you can defend
yourself:
1. Contract Additions or Omissions - This refers
to clauses, amendments, and various other types of verbiage that
seem to mysteriously show up in contracts, warranties, and guarantees
without your consent or any other warning. This usually happens
when the "other side" prepares the contract.
The following all need to be checked and then double checked:
* Price of the product - Always check to make
sure the price you agreed to pay is the same as the price you're
being charged. Always check your purchase orders and contracts
very closely. Rip off artists and unethical negotiators will
try to change prices on contracts.
* Exclusive agreements - Sometimes fraudulent
businesspeople will try to get you to agree to let them exclusively
sell your product or service. This means that they're the only
vendor that can sell the product or service on your behalf. By
agreeing to exclusives, you may lose all rights to your own product!
Beware of these types of agreements!
* Discount rates - Make sure the contract clearly
spells out the discount rate that you previously negotiated. Many
times you'll negotiate discounts based on the quantity purchased.
For instance, you may buy 100 units at $50 each and if you purchase
150 units, the price drops to $45. Sometimes they'll be expressed
in terms of percentages like 50% or 75% off. Many con artists
will write the contract using a smaller discount rate, hoping
you won't catch the change.
There are two types of discounts you can negotiate:
A. Cumulative Discounts - To have a cumulative
discount means the quantity for each order is added for a specified
time period. The discount will be based on the running total.
The typical duration for this type of discount is one year. This
means if you place three orders over a year, one for 50 units,
another for 75 units, and the last for 200 units, your final discount
is adjusted by adding the total quantity already purchased to
the new order quantity. Your discount would be based on a total
of 325 units.
B. Per Order Discounts - This means you only
get a discount based on the quantity you purchase at one time.
(All previous purchases are irrelevant.)
* Payment terms - Make sure your agreement contains
payment guidelines. Payment terms refer to how many days the "other
side" has to pay you for products and services. On the other
hand it also refers to the amount of time you have to pay your
suppliers for their products and services.
Make sure a con artist doesn't try sneaking terms like 90 or 120
days into the agreement. Many businesses go bankrupt everyday
due to insufficient cash flow. At the same time, you should request
60 or 90-day payment terms for yourself. Why? In many cases, you
can sell the merchandise before you put out any of your own money.
You'd be surprised how many companies will issue you 60 or 90-day
terms just because you ask.
* Indemnity clauses - These clauses guarantee
that if one of the parties is in breach, or does something illegal,
they're responsible for all damages. Many rip off artists enter
into illegal agreements for products and services they have no
right to. And when lawsuits fly, you'll be named! With an indemnity
clause, you're protected. Always get the "other side"
to agree to an indemnity clause. If the "other side"
refuses to add an indemnity clause or omits it from the contract,
you know you're dealing with a classic con! Run in the other direction.
* Guarantees - Guarantees (written or implied)
are formal promises or assurances that a product or service will
meet the promised or implied expectation. A guarantee will usually
state the refund, return, or maintenance procedure. Rip off artists
will do everything possible to omit guarantees from contracts.
There are two types of guarantees you must know and understand:
A. Written Guarantee - This is a formal written
document thatcomes from the manufacturer or distributor. Written
guarantees usually state some sort of promise (100% satisfaction
guaranteed), and return procedure (if you're not satisfied, we'll
issue you a prompt, courteous refund). Cons will rarely put a
guarantee in writing. And if they do, they never sign their name
to it!
B. Implied Guarantee - Implied guarantees are
either verbal or tacit. If a salesperson states that you can return
merchandise you're not satisfied with, it's considered an implied
verbal guarantee. Con artists will never usually make any sort
of promise whatsoever. This is a sure sign that you're dealing
with an unethical person or company.
BEWARE: Because we live in such a litigious society,
you have to do everything possible to make sure that you obtain
all guarantees in writing. Implied guarantees are not as stable
in court as a written one. If someone doesn't want to issue you
a written guarantee, then you have to question their reasoning.
Usually, it's because they know they're selling you a product
or service that's inferior or won't meet your expectations.
Now that you understand the difference between written and implied
guarantees, I want alert you to a subset of them. They are conditional
and unconditional guarantees.
To protect yourself from con artists, you have to know and understand
each of these guarantees:
A. Unconditional Guarantee - An unconditional
guarantee is a written or implied guarantee stating that you can
return merchandise and receive a refund for any reason whatsoever. Unconditional
guarantees vary with the purchase, but for the most part, you
can receive a refund for any reason.
B. Conditional Guarantee - A conditional guarantee
is a written or implied guarantee that requires you to meet some
sort of obligation before returning merchandise or obtaining a
refund. Some of the conditions include obtaining return
authorization numbers (stores will be hoping that you're too lazy),
trying the product, or paying stocking and re-handling fees. Many
con artists will try to get you to all sorts of ridiculous things,
hoping you'll not meet their requirements to return the product!
* Purchase orders - Make sure that every part
of a purchase order is filled out correctly and draw a line through
any blank areas. Never let the "other side" have an
opportunity to write in information on your behalf.
* Ownership clauses - Check to make sure the
"other side" has legal right to sell you their goods
and services. You'd be surprised how many fraudulent negotiators
distribute product illegally to unsuspecting companies in the
United States and abroad. Always make sure the "other side"
agrees (in writing) to a clause in the agreement or contract stating
they have full right to distribute and sell merchandise to you
for redistribution.
* Down payments - Check to make sure the amount
of the down payment that is written on the contract or agreement,
matches the agreed upon amount. Rip off artists are notorious
for changing figures.
* Contract duration and expiration date - Always
make sure you and the "other side" agree on the duration
of the contract. Keep in mind, many contracts will work
out and many won't. By setting the duration, you can adjust your
business strategy if you run into any problems. Most contracts
run between one and two years. Usually high priced goods and services
require a longer contract duration.
BEWARE: Make sure that your contracts always
have an expiration date. It's not enough to know the duration.
You need to know the exact expiration date so you can have plenty
of time to renegotiate terms in the future. (This is especially
important in union and labor contracts.) * Handling damages or
faulty merchandise - Make sure that the "other side"
agrees on terms for handling merchandise that's delivered broken
or contains imperfections. You'll find that a great deal of rip
off artists will send your merchandise that's smashed, cracked,
and broken. Who's responsible? Make sure you get in writing!
As far as faulty merchandise - you need to make sure that the
manufacturer backs their product's quality in writing. Also demand
in writing, proof that they carry product liability insurance.
Don't sign a contract without it. It's a small investment that
can save your business from disaster.
BEWARE: Always write down detailed notes during
every negotiation, regarding any and all agreed upon terms. Before
you finish the negotiation, make sure to read the terms back to
the "other side" and ask them if they have any questions.
If they have any challenges with the terms, you can settle them
on the spot. Then, when the contract arrives or is drawn up, take
the time to make sure all of the agreed upon terms are in the
document and check for any non-authorized additions or omissions.
If you find that a con artist has added fallacious information
or omitted terms or conditions, bring the mistake to their attention
and ask them to clarify their reasoning. As they're answering,
check their physiology, tone of voice, and body language for signs
of nervousness. If they seem nervous or uncomfortable, it was
probably deliberate instead of an honest mistake. At this point,
call their bluff and renegotiate a better deal or walk away!
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