Avoiding Consumer Contract Woes

As contracts go, it’s pretty specific: People who sign up with a Los Angeles pest control company for “a minimum” of a year are billed and serviced every two months, with “additional services” necessary to “control pest activity” included. After that year, service continues until canceled in writing 30 days ahead. “Customer satisfaction” is guaranteed.

But the pests weren’t party to the agreement, and when bugs continued to appear, some customers canceled their contracts and stopped paying. In return, the company kept billing, threatening late penalties, “collection” and “legal action.”

“Can they keep harassing you?” asks one customer, overlooking the fact that one man’s harassment is another’s righteous pursuit. Of course they can, but consumers have any number of possible responses, from paying the bill to filing a lawsuit.

The obvious problem with consumer contracts involving installment service--pest control, security, dating services, weight-loss clinics, educational seminars, even magazine subscriptions--is that one buys future performance. Satisfactions or dissatisfactions don’t surface until next month, the month after or later--well after any applicable “cooling off” period that gave the consumers several days to rescind an agreement.

Some companies ease the situation with money-back guarantees--magazines, for example, which often refund the “unused” portion of subscription fees. Some offer trial periods of service free or for nominal fees.

Consumer contracts in general present some problems. For starters, says Richard Elbrecht, supervising attorney of legal services in the state Department of Consumer Affairs, “most don’t cover anything of importance to the consumer but a host of things important to the seller.”

Specific restrictions must be noted. When a contract, such as the one above from Day & Nite Pest Control, has such specific instruction for cancellation after the first year, this probably doesn’t mean it can be canceled any time.

General promises should be questioned. In California’s pest control industry, “satisfaction guaranteed” usually means “if pests come back between service (visits), we’ll come back out,” says John Munro, director of education for the trade group Pest Control Operators of California. But when and how often? customers might ask, their patience sorely tried by “the limited number of times the company could come,” says Los Angeles dentist Kathleen Stambaugh. Sometimes, furthermore, they “didn’t come, or came two hours late,” says public relations executive Frank Widder.

“Customer satisfaction guaranteed” may actually be more generous than most companies intend, if they don’t limit what they’ll do if someone is not satisfied or what constitutes “satisfaction.” Will they just come out again? Or cheerfully refund money? Is satisfaction objectively defined by an absence of pests? If not otherwise qualified, “satisfaction guaranteed means subjective, not objective satisfaction,” says Herschel Elkins, California’s assistant attorney general in charge of consumer protection.

Given a form contract, consumers had better add their own concerns and expectations, trying to “come to a real understanding with the other party,” says Elbrecht, “about what they’re getting and what comes along with it.” Day & Nite’s president, Kevin O’Connor, for example, says he sometimes negotiates “open contracts” with people who “might be moving” or who are “not sure if (they’re) going to stick with you.”

Even when they’re not expressed, consumers may have rights under such contracts. Under state warranty laws, most consumer goods are sold with an implied warranty of “merchantability” guaranteeing that they’ll do what they’re supposed to do; i.e., toasters should toast. Conceivably, pest control should “control” pests; most such laws deal with goods, not services, but one can, says Elbrecht, “apply them by analogy, and courts have done it.”

Many people, unfortunately, do their roughest negotiating--if that’s the right word--when the arrangement falls apart. Companies start by threatening, over and again, to turn the account over to a collection agency. They also threaten dire effects on the customer’s credit rating if either they or their collection agency report to a credit reporting agency, and some threaten to sue.

These are significant threats. Indeed, consumers fighting small bills suddenly find themselves weighing the possibility that something will end up on a credit report or in court, and their involvement will become very time consuming, if not a full-time job.

They have similar weapons, of course, starting with the threat to contact some pertinent government office. The state Structural Pest Control Board, for one, sends such complaints to companies involved, giving them 10 days to respond, usually with a promise to treat the place again.

But with five investigators statewide, that’s it: “If someone’s willing to come out again,” says Los Angeles social worker Susanna Des Jardien, who has had trouble with both pests and pest control companies, “the fact that he’s coming out to treat them with snake oil is not of interest to them.”

Consumers can fight adverse credit reports (if not very effectively) by inserting a letter of denial in their credit file. They, too, can threaten to sue; in fact, “everybody threatens suit now,” says Kevin O’Connor, “even over $40.” Given such amounts, small claims court (typically, for disputes involving less than $2,000) may satisfy either party, since it can not only require compensation for those injured but performance or cancellation of a contract.

Still, the most efficient resolution of contract disputes is to argue it all out before signing. No one can think of everything, but they should try.