Cookware Firm Charged With Sales Trickery
The state attorney general has accused a Wisconsin cookware company of using high-pressure sales techniques and scare tactics to prey on working-class Latinos in California.
In a lawsuit that seeks $1 million in penalties, along with restitution for victims, state government attorneys allege that Royal Prestige salespeople traveled door to door claiming that their pots, pans and water filter systems would prevent cancer, high blood pressure and high cholesterol.
How could a buyer resist? Thousands could not, paying as much as $2,400 for a set of the pans, prosecutors say.
“They create the impression that the only way you can use the healthier . . . fatless cooking method they describe is by using their pans,” Deputy Atty. Gen. Laura Kaplan said.
The company that produces the Royal Prestige line, Hy Cite Corp., contends that none of the alleged sales techniques are advocated in its brochures or the training programs it provides for distributors or direct salespeople.
“Our position is that the product sells itself and that we do not have to oversell it,” said Erik Johnson, a spokesman for the company, which began doing business in 1959 and entered the California market two decades ago.
But Kaplan said that, because of uncanny similarities in complaints from throughout California, the company’s position “doesn’t seem very believable.”
Since the lawsuit was announced last month, angry consumers from the Los Angeles area have weighed in, bolstering previous assumptions that the alleged practices extend far beyond the San Francisco Bay Area, where complaints first emerged several years ago.
Kaplan said dozens of calls have come in from Orange, Los Angeles and Ventura counties, from individuals, consumer advocates and legal aid attorneys in communities ranging from Pacoima to El Monte, Santa Ana to Oxnard.
The company last year reported sales of about $90 million across the United States and in Canada and Mexico.
It faced a similar suit in 1995, when Arizona’s attorney general alleged that salespeople told buyers the cookware would help them lose weight, look better and live longer. The lawsuit was settled for $37,000 and reimbursement to fewer than 100 customers.
California prosecutors hope for a more open-ended arrangement, based in part on the millions of dollars in sales the company reportedly makes here annually.
The attorney general’s spokeswoman, Sandra Michioku, said the agency decided to take the case because it felt the company was victimizing Latinos. The litmus test the agency uses for consumer protection lawsuits is whether the cases affect a significant number of Californians, as this one does.
“The hope here is to bring the action to a halt but also to educate the public,” Michioku said.
Piecing together complaints from throughout the state, prosecutors believe that all the company’s salespeople used similar tactics: They worked their way into homes, sometimes intimating that they were health officials, then interrogated the customer about the pans they were using and the illnesses in their house.
“They pose as people doing some kind of health survey, then ask to look at the pots and pans and disparage the kind of pots and pans they have,” said June Cravett, an assistant district attorney in San Francisco, whose office joined the state in filing the case.
The salespeople then “very heavy-handedly say, ‘If you care about your kids, if you care about your family, if you don’t want them to get sick and die with cancer, with heart disease . . . you need these very expensive pans,’ ” she said.
In some cases, prosecutors said, the salespeople even test the water for contaminants--using a swimming pool testing solution that turns water yellow when chlorine, which is a safe chemical common to many water systems, is present--to scare people into buying the filter system.
“It’s a yucky-looking color,” Kaplan said. “Then they say, ‘This is what you’re drinking.’ ”
Johnson, the Hy Cite spokesman, said the company does provide a chlorine testing kit, but only because some people don’t like the taste of chlorine and “like to remove that from their water.”
Hy Cite also has been charged with unfair business practices because financing arrangements tack on 21% interest, but some consumers said they were led to believe it was a no-interest installment plan.
On the back of forms people fill out the interest rate is displayed, prosecutors said, but it is unobtrusive and easy to miss. Johnson said that because of varying disclosure requirements in different states where it does business, the company must use small print.
“We don’t intend to hide it,” he said.
Yet many of the complaints that reached California authorities had little to do with the foundations of the lawsuit--the sales tactics or the financing. Instead, consumers complained that the cookware did not work properly and was particularly hard to clean.
“We’ve had a lot of complaints about food sticking,” Kaplan said.
