Small Businesses Should Make Sure To Provide Accurate Costs and Response Times in their Advertisements

Last week, the Colorado Attorney General fined a locksmith $100,000 for misleading customers.  The locksmith advertised a $55 service charge for a car lockout, but actually added additional charges.  In addition, the locksmith said it had a 20-minute response time, but took much longer in many cases.  Small businesses should reviews their advertising carefully to make sure it is accurate and not misleading.

Important Tip Have your small business advertisements reviewed by someone independent to make sure it means what you say

In an additional citation, the locksmith was using multiple trade names (d/b/a names).  The Attorney General is requiring the locksmith to note that all the trade names are part of the same business so consumers are not deceived when they call for multiple quotes – but get the same company on the telephone each time.

The press release from the Attorney General is below:

Attorney General Obtains Settlement Barring Englewood Locksmith Firm From Misleading Consumers

Colorado Attorney General John Suthers announced today his office has reached a settlement with an Englewood locksmith company after an investigation revealed it had routinely misrepresented the costs of its services to consumers.
Under the settlement, Basad, Inc., and its owners Peleg Forman, Batia Forman and Michael Biton, will pay $100,000. The money will be used to reimburse consumers who complained of paying Basad, Inc., charges that were not disclosed to consumers when they called and requested locksmith services.

“Consumers deserve a reasonable estimate of any services they request from a locksmith or other company,” Suthers said. “This settlement should send a message that companies that routinely mislead Colorado consumers should understand we do not tolerate deceptive business practices.”

The Attorney General filed a lawsuit in January 2009 alleging that Basad, while disclosing their “$55 service charge” for a car lockout, failed to alert consumers of additional charges that often exceeded the service charge. Consumers complained of receiving an initial estimate of $55 but were charged $110 or more after the locksmith opened their cars. Consumers also complained that Basad failed to honor their advertisement of a “20-minute response time,” leaving consumers waiting for several hours in some instances.

Under the settlement, Basad will be required to disclose to consumers during the initial sales call that there will be additional charges, such as labor or lockout fees, in addition to its service call fee. Basad also will be prohibited from representing in advertisements any specific response time. The settlement also requires Basad to record all phone calls between consumers and the dispatchers in its Englewood office for a full year. The recordings will allow the Office of the Attorney General to ensure it is complying with the settlement.

During the investigation, the Office of the Attorney General learned that Basad Inc., advertises its locksmith services using numerous doing business as “dba(s),” including A 24 7 Locksmith and Ocean Locksmith. Full-page yellow page advertisements for separately named companies all ring to the same Englewood office. Under the settlement, Basad must disclose that these dba(s) are the same company so as to not mislead consumers into thinking that they are telephoning competing businesses for quotes.

Additional Information
Important Tip: 
Have your small business advertisements reviewed by someone independent to make sure it means what you say
Marketing copy: 
making sure your advertising is legal