Solar Sales Pitch May Have Overheated
Question: I hope that you can look into something that bothers and annoys me very much. In mid-December, I received a flyer in the mail inviting me to hear a presentation by Life Time Solar Inc. of Newport Beach and notifying me that I had definitely won one of three prizes: (1) $2,000 in cash, (2) a 26-inch color console television set or (3) a six-piece designer luggage set, value $249, and my name would be “matched with our list to determine which prize” I had won.
I called and made an appointment. It was for Dec. 15 in Pomona, at a Lucky shopping center. The meeting was in a vacant store with bare walls, concrete floors, no towels, toilet paper or soap in the bathrooms and no heat.
The “seminar” was supposed to be 1 1/2 hours, but was actually three hours, and they work on you individually so that everyone (about 20 of us) was there four or more hours. It was very intense, and everyone who bought this $11,950 solar-energy package was promised a bonus of a color TV set. The sales pitch centered on the company’s projections that my annual gas bill (you have to bring your latest gas bill to the seminar) would go from an average of $330 last year to $672 in 1985 (a 100% jump) to $1,344 (another 100% jump) in ’86 and then to $2,688 (another 100% increase) in 1987--and then level off.
The fast-talking salesmen said a 40% federal tax credit and a state credit of 10%, plus an “SRP” rebate of $2,400, would cut the total price down to $3,575. This “SRP” thing (I don’t know what it stands for) is a $200-a-month bonus from the company for two years for forwarding to it my monthly gas bill so that, apparently, they can use these figures to prove how much money is saved by using this solar package. Over the five-year period, from ’85 through ‘89, they said my total gas bills would be $10,080 and that the solar package would save me 75% of that, or $7,560.
I didn’t believe any of this for a minute and walked out about three hours into the pitch, although I hung around outside for about another hour before any of the others came out. Before I left, I’m afraid that I saw several of them signing papers, which suggests that they fell for this nonsense.
What particularly grates me, though, is that there were absolutely no gifts anywhere in this store (I explored it), and when I mentioned the prizes, I was told that I had won the luggage set (where was the list against which my name was supposed to be checked?), but that they were out of prizes and the luggage would be delivered to my home on Dec. 18.
Naturally, it never was, and it’s two months later.
No one, in fact, got any of the prizes. Incidentally, I asked to look over their financing contract, but the salesman grabbed it out of my hand and wouldn’t let me review it or have it. He just wanted me to sign it immediately after the sales pitch. Is all of this legal?
--J.C.
Answer: Like motherhood, energy conservation is one of those subjects about which no one likes to say mean things. And, if some sort of solar-energy package can materially save energy at an economically viable cost, then hooray for it!
All of which, however, doesn’t mean that the people with whom you have had contact, Life Time Solar Inc. of Newport Beach, couldn’t be in violation of the law, in the opinion of Herschel Elkins of the California Attorney General’s office.
“While there’s certainly nothing illegal,” Elkins says, “about inviting people to a high-priced, high-pressure sales presentation, there is if the presentation is based on misrepresentations.”
We took those soaring gas-rate projections given to you to the Southern California Gas Co. You were told that your $330-a-year gas bill would double this year to $672 and then double again in 1986 to $1,344 and double once more in 1987 to $2,688 and then remain at that level through ’89. In other words, in just three years your $330-a-year gas bill would jump 815%--to $2,688.
Fascinating Figures
Southern California Gas spokesman Rich Puz finds these figures fascinating because his company, every year, has to make similar, long-range, projections for the edification of the Public Utilities Commission. In the gas company’s latest projection (this past July), its economists put their heads together and estimated that between now and the turn of the century, AD 2000, the cost per million BTUs (British Thermal Units) of gas would increase from $4.03 currently to $5.51. Percentage-wise, that’s a 16-year increase of about 25% or, about 2% a year.
Compounded over the next three years, then, that works out to an increase of about 3.3%--not 815%.
Those “projected savings” were also found interesting by Elkins. The salesman who filled out your work sheet for you projected a five-year gas bill of $10,080 but, with the touted solar-energy package, “gas savings at 75% = $7,560.”
“The projections,” Elkins feels, “are outrageous, as are the tax-savings claims and the energy savings. Energy savings are primarily on hot water and nothing else, so basing a 75% savings on the entire gas bill is absurd.”
But not to Kent Pearce, Life Time Solar’s president. “We stand by our projections of a 250% increase in gas rates over the next five years because of the Mideast situations and other factors that may come up,” Pearce said. “We tell our people, up front, that these are projections-- we don’t really know; no one knows--and that they could cut these projections in half and it would still be valid. And that the investment possibilities are more important than the gas savings, anyway. Anyway, half of this person’s figures are incorrect,” he said.
On checking back with you, however, on just whose figures were used on the “cost-effectiveness” work sheet, which Pearce finds “incorrect,” you have assured us that the figures are not in your handwriting, but in the handwriting of the salesman ushering you through the presentation.
Concerning the $249-value “six-piece designer luggage set” that you never received, Pearce admits that “there was a short period in December when we ran out of luggage, and our supplier fell down on the job. All she would have had to do would be call our corporate headquarters, and we would have sent them to her home by United Parcel.”
When it was pointed out to Pearce that you had done this, not once, but several times, he was at a loss to understand how you fell through a crack of such dimensions.
“The main thing is,” Pearce added, “that we stand by our projections on both the rates and the savings, and we’ve had hundreds of satisfied customers.” He also apologizes for the harshness of the “temporary meeting room we had to use in December. We’ve got our own, comfortable, carpeted, 1,200-square-foot quarters now, so we won’t have any repetition of that. “
Unconvincing Figures
The Attorney General’s office, represented here by Elkins, remains unconvinced that the figures--alternately disputed, and then supported, by Pearce--represent a true picture of either the course of future energy costs or the savings that can be effected through his company’s energy package.
“We certainly don’t want to discourage any approach to energy conservation,” Elkins adds, “but we are definitely interested in this approach, and if this person--or anyone else finding himself in a similar presentation--will contact me, we’ll certainly look into it and be in contact with them.”
Such correspondence should be addressed to: Herschel Elkins, Office of the Attorney General, 3580 Wilshire Blvd., Los Angeles 90010.
Q: Here we go again: another postal rate increase! Now, it’s “D” stamps until proper 22-cent stamps can be printed up.
And I’ve got a whole drawerful of odd, leftover “A,” “B” and “C” stamps. How is anyone suppose to remember what these older stamps are worth? I’m sure not going to throw them away just because I’ve got a bad memory.--J.C.
A: Don’t even entertain the thought! Out of fashion or not, those old alphabetic stamps will retain their value long after the glue on them has dried and peeled off:
Here’s what they’re worth:
“A” (issued in 1978): 15 cents.
“B” (issued in March, 1981): 18 cents.
“C” (issued in November, 1981): 20 cents.
“D” (the latest, in effect Feb. 17, 1985): 22 cents.
Don G. Campbell cannot answer mail personally but will respond in this column to consumer questions of general interest. Write to Consumer VIEWS, You section, The Times, Times Mirror Square, Los Angeles 90053.
