refusal to honor 3 day recission

[dee&david]

We signed a contract without reading the fine print. It says "I understand that the normal 3 day recision right as outlined by the Federal Trade Commission... does not apply." We are in the state of Virginia. Can they legally do this? Do we have any recourse? (The three days is not up yet.)

 

[I AM ALWAYS LIABLE]

We signed a contract without reading the fine print. It says "I understand that the normal 3 day recision right as outlined by the Federal Trade Commission... does not apply." We are in the state of Virginia. Can they legally do this? Do we have any recourse? (The three days is not up yet.)

My response:

It might be important to tell us what kind of a contract this is, and exactly, in what physical location, it was signed - e.g., in your house?

IAAL

 

[dee&david]

The contract is for "storefront builder packets" (fancy name for web sites) and for a merchant account with an internet mall company. We signed it at a hotel in Roanoke at a sales conference. Additionally the gentleman told me I could have 30 days to cancel the merchant account, however again in reading the fine print, it says no one can make binding promises... something to that effect. Now in reading further it says that disputes arising out of this transaction shall be resolved pursuan to the laws of the State of Utah... We did not see the back of this form and were not told there was more "fine print" on the back where these last two issues are addressed.
Happy Thanksgiving.
(Our third day is Friday)

 

[dee&david]

more questions...

I wrote a check which I could possibly stop payment on tomorrow, also, the contract has monthly payments coming out of a checking account. Is there a way to stop that? Then are we liable and will this ruin our credit?

 

[HomeGuru]

Rescind the contract and stop payment on the check and the monthly checking account debit. Check out the FTC site as an example on imall at http://www.ftc.gov.

 

[I AM ALWAYS LIABLE]

My response:

I would imagine that their contract is used both in "home" solicitations, as well as at "business locations". You were at a business location.

Since you agreed to Utah law, the following is the controlling law in your instance.

Utah Home Solicitation Statute:

70C-5-101. Definition -- Home solicitation sale. As used in this chapter, "home solicitation sale" means a consumer credit sale of goods or services in which the seller or a person acting for him engages in a face-to-face solicitation of the sale at a residence or place of employment of the buyer and the buyer's agreement or offer to purchase is there given to the seller or a person acting for him. It does not include a sale made pursuant to preexisting open-end accounts, or a sale made between the parties at a business establishment at a fixed location where goods or services are offered or exhibited for sale.


Since the contract was signed at a "business establishment at a fixed location where goods or services are offered or exhibited for sale" it was proper of them to cross out that portion of the contract.

Therefore, there is no 3-day "cooling off" period for the contract you signed.

Since you signed a contract, cancelling your check will do you no good. They could, at the very least, have a bad mark placed on your credit record and, at worst sue you in Utah for the contract amount, interest at the legal or contract rate, attorney's fees, court costs, and other collection fees.

In summary, you're on the hook.

IAAL

 

[HomeGuru]

Based on what IAAL has posted, you are on the hook.

Based on my knowledge and experience in this area, you have a right to cancel for several reasons:

1) the sales rep verbally represented something to you that was not true or inconsistent with the contract.

2) the sales rep did not explain fully all the terms and conditions including the back of the contract form.

3) there have been problems with various companies selling these types of websites and so called "mall" packages either through network (multi-level) marketing and/or direct sales. The FTC is aware of the history and problems associated with the way that the product is sold and has been investigating numerous complaints. There are various methods of sales and various product types but suffice it to say, others are making sales commissions on the unsuspecting consumers. I have been personally involved in a crack down of some companies using the FTC and the State Attorney General's Office. The bottomline is that even if the contract has stated provisions that were agreed to, various claims could be brought forth to make the contract unenforceable and thus not binding. One of the strongest cases using FTC guidelines is claiming false and deceptive advertising. One of the stongest cases using consumer laws would be to investigate the company, the type of product, how the product is sold and who gets the sales commissions. Is there front end loading whereby the consumer buys a mall, also becomes a sales rep and is expected to sell space/websites to others in that mall in order to generate any money? Is there a pyramid type effect with respect to the commissions paid? Check to see if the people making money on the program are making money by solely selling the malls regardless if the buyers are making money or not.

In my opinion, because of the type of product that was sold to you and the recent history wiith the FTC on this type of product, you have a right to cancel. You may need to file a complaint with the FTC and with your respective Office of the Attorney General. All the consumers that I have advised, who wanted out of the program/purchase, were able to obtain a refund, once we threatened and/or filed a complaint with the State AG and FTC.

 

[dee&david]

Thanks from both of you who replied.
I can't find anything on the FTC site dealing with the malls.
This wasn't set up like a network marketking program, but you have 6 "storefronts" and you can either put your own web site on or sell the space to others, or do joint ventures with them where you get commissions off what they sell on the site.
The company is Galaxy Mall. How can I find out if others have had problems with them in the past.

 

[HomeGuru]

You are not looking hard enough just like not reading the fine print or the back of the contract.
Do a seach on the FTC website using the search word iMall.
I am familiar with Galaxy and this company has a similar marketing plan.
Contact the BBB, Attorney General/Consumer Protection Office and the FTC for a history of complaints.
You can also do a search engine under the company name.
Based on my experience, I would not have bought into the program.