Guarantees: Legal v Psychological
You want to know about guarantees?
Then you need to know what the legal significance of a guarantee is.
The FTC has brought an action against a telemarketing company who allegedly mislead consumers about the possibility of obtaining jobs with the US Post Office.
There is a recurring theme in business opportunities scams: the use of guarantees. In this particular scheme, the telemarketer allegedly gave the consumers a written guarantee:
[the Defendants] are so confident that consumers will pass the exam by using [their] product. Consumers also receive an application for employment, and a booklet entitled "Postal Exam Prep Guide ... For the Current Postal Battery Exam 460 & 470 (Exam Guide).The Exam Guide also states on its cover, "Guaranteed Results" Get Your Money Back If You Don't Pass the Test!"
What is interesting about this "guarantee" is that it should signal danger or more risk, but evidently consumers are lulled into thinking that the "guarantee' makes this a no-lose proposition. Why does this work?
First, individuals are unaware of the legal concept of a guarantee - a surety who will responsible for the primary obligation. If the "guarantee" is from the telemarketer or a corporation of less or equal reputation, then the guarantee is worse than worthless.
Second, no reputable corporation is going to give out confidential information for free -which is what you would have to believe if guarantee was going to be honoured. Individuals who failed the course would try to obtain the refund and resell the information. So the business model is not going to happen.
Third, without a description of how the guarantee was going to be funded, the "guarantee" is just a series of letters.
