About 30 years ago in Australia There was a competition at the local shopping centre. Spend $20 at any shop in the centre, show your receipt and you get a chance to win the displayed car.
The chance involved folding a paper plane, and then trying to get it into the car through the sunroof. Which was only open a small crack.
A friend of the family tried about 5 times over the day and never got close.
They came back quite drunk at the end of the day to have one last go. Threw the plane and instead of going over the top of the car, it accidentally slammed directly into the front windscreen. It then rebounded straight up in the air and then dropped straight down through the sunroof.
Way back in the day, I had a reinsurance company as a client. For those unfamiliar, reinsurance companies insure insurance companies.
For example, they might insure a standard insurance company for automobile accidents, with a $1,000,000 deductible. So the retail insurance company handles payouts up to a million dollars, but when there's a really wild claim, the reinsurance company pays the insurance company for anything over a million.
They end up specializing in rare events that involve large payouts, so they also did things like the hole-in-one insurance you mention above, very common with charity gold tournaments.
They had many stories to tell, including the fellow who played a lot of golf and collected three hole-in-one payouts, and another story about a truck that went off a mountain road, slid down and blocked train tracks, causing a train derailment, with a town below the train that needed to be evacuated.
What makes you think that nobody can get the billion?
Insurance policies require you to pay a certain amount guaranteed, then pay back a much larger amount if something unlikely happens. So Pepsi had to pay $10 million. If the right thing happened during the game then Berkshire Hathaway would have paid a billion, and some lucky consumer would have walked away a newly minted billionaire.
Berkshire's General Re does reinsurance, not re-"reinsurance". Is there a recursive step -- Could General Re face a claim that it needs to leans on the rest of Berkshire to pay?
The article says its insurance companies face a 2 percent chance of being "$12 billion" insolvent, which Berkshire could cover from non-insurance profits. But would that still be true if the claims came in, or would the non-insurance companies also have correlated down years?
I suppose Berkshire Hathaway is big enough that if it came down to it, it could liquidate equity ($500B minus devaluation due to whatever catastrophe) to make good on claims.
No way that Berkshire pays a $500b claim. They would find a way to stick the US taxpayer with the bill as many smaller companies have done before them.
reinsurance is also a nice way to reduce a company's taxes, and to hold money offshore. Many reinsurance companies are owned by another company; but the "re" is incorporated in a low or no tax jurisdiction such as Cayman Islands or Bermuda.
Bizarrely it’s sometimes another division of the same reinsurance company.
I work for an insurer and got talking with one of our pricing guys who told me about a case where one of the big multinationals had one division which was way under it’s predicted claims volume for the year, and another that was over. To rebalance the risk the US division ended up insuring the EU division.
Another story that night was about a reinsurer that through several departments taking on different risks ended up on the hook for a dockyard which caught fire catastrophically. And all the goods in that dockyard. And the boat which started the fire.
That evening led to my drunken catchphrase: “fucking insurance”, said ever more enthusiastically.
They are doing it wrong - socialise that risk. Here in New Zealand when a big insurer has something bad happen (eg an earthquake flattens a big city) you get bailed out by the government. Departing staff still got big payouts in that era too, so it doesn’t seem to impose any stringent criteria on companies too. AMI specifically. Sarcasm aplenty in this comment.
Even reinsurance has limits, and large earthquakes on major metropolitan centres are basically the one thing that will exceed them (floods can be bad too, but the risks are more predictable, and are often excluded from policies in high-risk areas).
The only alternative to the "government backstop" is that insurers will refuse to write policies or will exclude earthquake risk (in which case the government may need to set up it's own scheme, e.g. in CEA insurance in California).
Reinsurance funds typically market themselves as a source of alpha for large institutional investors. The reinsurance company sells bonds that promise a relatively high rate of return, with the caveat that in the event that the fund needs to pay out a large claim, the value of the bond may be nullified.
They used to talk about anti-selection (a/k/a "adverse selection"). For example, if a retail insurer has no reinsurance, it has to incorporate both the probability of claims and the distribution of payout sizes.
But if they have reinsurance, the payouts are 'clipped' at their deductible. This means that they have an incentive to take on clients that are less likely to have any sort of accident, even if when they do have an accident, it has catastrophic consequences.
This means that a reinsurance company cannot rely on the overall statistics for claims, because the insurance companies that buy reinsurance price their products with reinsurance in mind. The people unlikely to run into massive claims will end up in pools where the retail insurance company doesn't buy reinsurance.
So they have to carefully price the reinsurance to account for the fact that the insurance company is packaging their most reinsurance-sensitive pool of customers together.
A few years ago I was in charge of monitoring a hole in one contest for a golf tournament.
Anyone who got a hole in one was to receive $10,000. All I had to do was hang out in the shade and not get killed from golf balls while watching everyone's attempts.
I asked the tournament official where that 10k comes from, and he said from an insurance agency. They paid $200 insurance. No one ended up getting a hole in one that day.
Apparently some golf players even carry hole-in-one insurance against themselves, to cover the unexpected cost of the traditional celebratory round of drinks for everyone in the club afterwards.
If I recall, there was a basketball one where the insurance company didn’t want to pay because the shooter had paid college ball. The team wound up paying to avoid the PR disaster.
YES! This was at a Chicago Bulls game in the late 90's iirc. I watched the game on TV. The shot was from the free-throw line to the basket on the opposite end of the court. The guy shot one handed, wheeling his arm around wide to throw the ball with a great arc.
It took a few seconds to travel through the air, and from the moment he released the ball the crowd was silent - we could all see it was looking on-target. It went through the hoop! It barely nicked the rim on its way down, so after it went through it ricocheted hard to one side, in my memory it was a near 90-degree turn.
The crowd went wild. Everyone was thrilled to finally see someone win that prize. I don't remember how much it was, but I do remember it was a very large cash prize.
And then, like you said, the next day the prize company said they wouldn't pay because there was some stipulation that participants could not have played any pro or college basketball. Public sentiment turned harshly on the team - you see, to take away his prize would be to invalidate the joyful moment we all shared watching that shot. If he didn't win, what the heck did we just see?
I don't know if the insurance company changed their minds or if the team just ate the cost of the prize, but it didn't take long for the Bulls to realize what was the right thing to do, and do it.
It is interesting. It took me a while to find an article that described his "near disqualification" [1]. Am I imagining things, or is it like all the top results, even for an event so long ago, are tilted towards "of course he'll get the money, who said otherwise?" But clearly it was said. Maybe it was a risky play by the prize company to rope in the team & some partners into chipping in to pay for the loss, which might have crippled them [2]. And then a lot of spin after the fact by the team to save face. They were forced to legitimize a shady move by a business partner, who threatened their reputation. Some rough lines to FB/CA?
"It takes time to make up a hit like this . . . but I know this will generate enough business to cover the loss."
For $1m, the Bulls could avoid to pay it, and should, since they violated the terms of their insurance contract, and they are a huge profitable professional business, not a rube.
> Calhoun said he would not be quitting his job as a sales associate at the Reliable Office Superstore in Bloomington
Anyone that thought he could quit his job needs some math lessons and financial education. $1M isn't enough to retire if you're under 30, especially when taxes come out.
^ it would also solidly cover educational expenses and income loss, etc, in the event one wanted to change careers. One could move to the industry of one's choosing with that kind of cushion.
The prize was paid out at $50k/year for 20 years. After taxes, that could cover a modest living in many parts of the country, but I'd agree that is not "quit your job/retire" money, even in the 90's.
The story calls him a "A $5-an-hour office supply store salesman", so at 2,000 hours a year it's $10,000. That makes the gross prize money five times his salary.
There's a furniture salesman here in Houston who makes heavy use of that sort of promotion. His latest if you spend $3,000 on a mattress and the Astros win the "2018 baseball final championship series" you'll be refunded the purchase price.
Not sure why it's worded so formally; must be a legal thing.
Last year, a window company in Cleveland ran a special where if the Indians had a 15-game winning any time after August 1st, anyone who used the company in July would have their money refunded.
The Indians ended up with a 22-game winning streak during that period, resulting in around $2 million in refunds. The insurance for that was $75,000. I remember calculating the probability of winning 15 games in a row any time over a ~55 game period and the insurance company seemed like they were getting a great deal!
Terms like “Super Bowl” and “World Series” are trademarked, so advertisers use phrases like “the Big Game” or “baseball final championship series”, in this case, to avoid a lawsuit.
The NFL has aggressively litigated uses of their trademarks, to the point where you might technically be allowed to do something, but realistically it isn’t worth the trouble.
The Olympics are down right evil when it comes to selecting cities. They will require long standing businesses to change their names of it is related to certain terms.
I'm trying to recall the Mancini Mattress (Bay Area) ad -- something like "If we can't beat the price, the mattress is free!" I'm thinking ... ohhh... I bet they always somehow manage to beat the price!
Many stores will have custom SKU or model IDs, so a mattress that is physically identical and cheaper somewhere else is actually a different product per the paperwork...
Yes, the way they do that is having specific mattresses that are only produced for them. So for example, let's call it Dreamliner XL 2000, this mattress isn't manufactured by anyone else, even if there are Dreamliners sold by other vendors it isn't that model, hence the bold claim. Whee!
That's also exactly why Casper and a half dozen other upstarts have come out with the memory-foam mailed-to-you-in-a-vacuum-tube online mattress sales.
The conclusion of the podcast was "If you spend $800 you're probably safe, below that it's hard to know if it's good or awful. Above $1500 is too much."
Considering Marriott/Hilton/IHG requires their hotels to use a 10 year warrantied mattress that only costs $250-$300 each, I'd say even $800 is too high. Even though that's wholesale price, doubling should be enough to get a single unit price.
People would be better off investing in some HIIT cardio excercise if they're looking for a good night's sleep. And eating less / more nutritious food.
The extra $300 is what you pay for going with a reputable brand, because unlike Marriott, you don't have the time to figure out which off-brand mattresses are crap and which aren't.
In that case, your assertion that "doubling should be sufficient to get single unit price" was wrong, cause you aren't going to get a queen from either of those companies for $500.
Mattress sellers love the value based sales pitch: how much would you pay for 1 hour extra sleep per night? Maybe paying $10/hour for extra sleep for one year is a bargain in some contexts, then you have a payback period of < 1 year, even for a ridiculously overpriced mattress.
Not to mention that I have taken some pretty rockin' naps in hammocks of various sizes, the cheapest of which was $4.99, and packed down into a twist of netting smaller than my fist. But to be fair, the two appropriately-spaced trees required for that one were not included.
The mattress is by no means the only way to get a complete and restful night of sleep, and past a certain materials threshold, you can't get longer or better quality sleep with any amount of upgrades to your mattress. The marginal cost is likely better spent by buying light bulbs that phase out blue light in your evenings, or by taking melatonin supplements, or with a therapy device for sleep apnea, or blackout curtains, or any number of other supposedly sleep-improving products. At a certain cost point, you might as well climb into a spa-grade float tank, or dangle from your back-piercings, or sleep in a bounce castle.
I think that there is probably a bigger difference in sleep quality between a $300 mattress and a $500 mattress than between the $500 mattress and a $3000 mattress. Once the specific concerns that typically interrupt sleep are addressed, the returns diminish fast. There is no way I am losing an hour of sleep every night just because my mattress isn't good enough.
I think that there is probably a bigger difference in sleep quality between a $300 mattress and a $500 mattress than between the $500 mattress and a $3000 mattress.
That seems awfully likely to me, too. I paid around $650 for a full-sized Sealy pillowtop something-or-other, apparently aimed at the hotel market, from an online mattress store some years ago, and it's been fine -- at least as comfortable as the ($800 in the early 1990s) Stearns & Foster it replaced. It's possible the Sealy won't last as long as the S&F did -- at least back then, the latter had a reputation for top-notch build quality -- but I have a lot of trouble envisioning any mattress in that size class being worth over $1000, let alone $3000.
I get a just fine sleep on the ground with nothing more than a 100$ air pad, and I've done better in the sand sometimes.
Not for everyone though, but I bet if I could get them sleeping similarly from a young age, it would be.
1.3billion Chinese sleep on essentially padded wood just fine, for example.
Sex is a big plus for a mattress, though. On a padded wood Chinese "bed" it's just fucking horrible for whoever's on top's knees/elbows/wrists/contact points.
You can get IKEA mattresses for a couple hundred bucks and they’re OK, but having upgraded to a really nice cal king latex foam mattress a few years ago, it’s now hard to sleep anywhere else ( https://www.flobeds.com for those curious — arrived at this after tons of research, easy to move since it comes apart into pieces that fit into contractor trash bags and ships in vacuum sealed bags — no box spring either )
I love my IKEA Hesstun. 2 separate sets of coils (I prefer springs to memory foam), a comparable design from the major brands was about twice the price. IKEA offers a transparent profile view (i.e. the inside of the mattress) for every mattress they sell, and you can lie on every one for hours without a single salesperson bothering you. 365-day exchange policy, longer than any of the stores I visited was offering (IKEA allows exchanges, but not refunds on mattresses). People knock IKEA but I do not believe my mattress is inferior in build quality to an assembly-line mattress from Sealy, Simmons, etc.
I know my mattress has low ratings online -- this is meaningless, all the review sites are just commissioned salespeople for the online brands (Casper, Purple, etc), so of course those sites discourage you from buying from IKEA.
I feel like it's much less effort to just bring your own. If you're into mechanical keyboards I'm willing to bet you have an old one lying around. Especially since the preference for keys is so personal.
Yeah, I wish, though the only nice full-size keyboard I have laying around is a Sidewinder X4, which is out of production and about half as tactile as the Chinese-made MX brown clones in the AnnePro.
The value proposition for me doesn't really exist enough to spend out-of-pocket though. Mostly due to not reaping the benefits from increased efficiency.
I usually brought my own keyboards (you can get one with MX browns or mx brown clones for $35-75 on amazon) to whatever job.. but at this one they saw my keyboard, said "Budget of $100, spec out whatever you want, and we'll order it."
The guy said "$150 for a keyboard and mouse of someone's choice, amortized over a year or two, is a tiny price to pay to keep our people happy."
I ended up with a Das 4C board at work (with browns) and a custom double-shot keycap set (bought out of my own pocket).
That's the type of company I prefer to work for. Given how much they are spending on salary, quibbling over a decent quality keyboard & mouse raises red flags.
Im worried about the health of the company if it can't afford a slightly more expensive keyboard that will last years and make me more productive.
If that is a big ticket item I would wonder if they are in serious trouble or it's just a shitty place to work for. A managers response to a request like that should be "here's the corporate card" or "submit the receipt for reimbursement"
No, it's more related to the manager/boss not understanding the value of a good keyboard. I asked about how to convince the employer of the value. The employer can certainly afford it, but he needs to understand why it's a good investment.
And then I got into hammocking, and nothing seems to beat my first, a Bear Butt I got for 50$. Seems the more expensive they get, they lose out on just being big nice expansive hammocks with silky smooth material. So not a hard rule I guess!
>$3000 on a mattress? WTF? How is that even possible for such a highly commoditized good?
I paid close to $3000 for a sleep number matress with adjustable firmness for each side. Still use it every day fifteen years later and think it was well worth the money.
In India, my family spent Rs. 500 (about $8) for a custom-made mattress, that's filled with high-quality cotton tightly stuffed into it. No foam whatsoever. 30 years later, it's still rocking.
Almost everyone here in India uses custom-made mattresses. Foam-based products are of recent launches and not many people use that. Only younger generations.
Something like that was happening in New England this spring
"Buy anything at Jordan’s Furniture starting today and it will all be FREE, if the Red Sox pitch a No Hitter, home or away, after July 17th during the regular season. That is 64 games! There is an average of 3 ½ No Hitters pitched each year."[0]
Jordans Furniture does those promotions every year. They are different events though every year. The insurance company paid out $30 million in furniture when the Red Sox won the World Series in 2007.
Funny enough, Jordans Furniture is owned by Berkshire Hathaway.
Last year Cleveland was treated to $1.7 million in free windows from Universal Windows Direct when the Cleveland Indians went on a 15 game winning streak.
If you're wondering about premiums, the first article quotes a guy in the business who say the premiums are usually around 30% of the value of the prize. That means the $75,000 premium paid by Universal Windows Direct was a steal. Of course, the odds of a 15 game winning steak in baseball are very small.
>A contest is a type of promotion you can run in which an element of skill is involved. For a promotion to be considered a contest, entries must be skill-based and winners must be chosen based on merit. Meaning they cannot be drawn randomly.
>Examples of contests include:
>"Best Photo" Competition
>Voting Contest
>Sports-Based Contest
>Essay Competition
>"Tell us in less than 20 words..." Competition
>When you run a skill-based contest, winners are not randomly drawn, hence removing one of the three defining features of a lottery. As a result, contests are not impeded by No Purchase Necessary laws.
Thanks. Having created contests for my business, I am familiar with the skills exclusion, but always understood the skill in question was required to be that of the contest participants. This is somewhat implied by your citation:
>...entries must be skill-based and winners must be chosen based on merit.
In the scenario above, it takes skill but not the participants' skill, so it is essentially as out of the control of the participants as which number is drawn by a ball machine.
Now, if the skill in question is that of picking a winning sports team, then were talking about gambling which, of course, has its own set of rules and would be a stretch to apply here in any case.
Overall, it seems this contest would be on shaky legal ground one way or another.
It appears that since there are no "winners and losers" -- either everyone wins or every one loses an equivalent amount, these giveaways are not in scope for sweepstakes/contest laws.
>everyone wins or every one loses an equivalent amount
That's not a factor WRT the law in question.
The law states that if you take money or some financial consideration for a chance (that is not based on your skill) of receiving something of value, then it is effectively an illegal lottery. It doesn't matter whether everyone wins or loses.
This is usually addressed by allowing people to enter without making a purchase (entry form, postcard, etc). But, here, that obviously would be an insane offer, so doesn't really apply.
OT but worth mentioning.. He is one of the finest human beings to ever come out of Houston. A class act. He flew a bunch of vets on a private jet to the World Series just because. He also does a massive amount of charity that doesn’t make the headlines. During Harvey, as you know, he opened his furniture store as a shelter. A real gem of a person. He is also in his store, open to close, every day. (“I-45 North between Tidwell and Parker..”) Startups could learn a lot from the story of how he built that company.
He did the "oil price above 75$ barrel by end of 2015 = all purchases for the year refunded" deal as well.
Which meant as an oil and gas recruiter, not only was I juggling a shitload of candidates whose rent payments depended on us finding them employment (which depended on prices getting above 75$), they also had huge credit card debts that they'd have to keep paying off of the price didn't go up.
Is there a decent write up? Sounds, from what you say, like a lucrative business with someone who has a decent set of ethics. It's always useful to read people's stories like that.
And as others have posted, he's fairly beloved here in Houston due to his charity work. Heck one of the local rappers remixed his commercials Houston style: https://www.youtube.com/watch?v=P74UnjzKJOU
In the rare case you win (there are legitimate win a car contests that are not trying to get your private information) there is a lot of paperwork to fill out. In the best case you would be sober before the paperwork is done.
Technically, that is a different type of competition. That is an event at least partially based on skill rather than a pure-chance lottery. In places like Canada, and I suspect Australia too, such rules draw lines between competitions for prizes and a lottery subject to gambling rules.
I'd bet that a suburban mall couldn't got a gambling license, but a paper airplane throwing competition is something else. It may seem silly but that small requirement does negate many of the evils associated with gambling. You aren't going to see someone dropping thousands on lotto tickets if they have to throw a paper airplane each time.
I seem to remember there was a similar case prosecuted at some point where the advertiser claimed that the car was only for illustrative purposes and even drew an analogy with having a model display some goods, saying you wouldn't expect to be buying the model along with the goods.
I might have just dreamt all that up though because I can't find anything online.
> There is absolutely no doubt that ideogram promises a chance to win the car in exchange for the registration.
While a naive person may make that inference, a rational person may understand that 'ideogram' does not constitute an assertion that the picture depicts the prize to be won.
I sure don't mean to defend such predatory scammers, but I'm pretty sure they are legally safe on that part.
I had a friend last year who got very excited when she "won a car" and I had to talk her down when she said all she had to do was make an inconveniently long drive to a shopping mall to claim it / have her prize "verified."
> While a naive person may make that inference, a rational person may understand that 'ideogram' does not constitute an assertion that the picture depicts the prize to be won.
The law isn't based on a "rational" person, but a "reasonable" one, that is the judgement of an ordinary person with typical life experiences. That's why you're tried by a jury of your peers, not of logicians, lawyers or ethicists.
I don't think it's particularly "naive" to believe that retailers or advertising companies could make enough off of a contest promotion to justify the cost of a car. Most of the cost models of contests are opaque and, in most of North America at least, there is probably a general perception that regulations would be in place for something that so prominently implies that it is a contest for a car. The "trick" here is to set up the appearance of a contest while evading the legal controls for an actual contest. The very trick of disambiguating this in the more-or-less fine print is probably only allowed in things that aren't sweepstakes or contests.
Yes, in hindsight, it may seem that only "naive" people could believe this, and that "rational" people see through it. But this strategy probably represents something like the endpoint of a search strategy that found a successful meme, precisely because it mimics authentic, regulated contests.
In a world full of multi-million-dollar marketing budgets, where cars actually are given away to get attention, it's definitely not obvious at a glance that this isn't one of those sweepstakes.
> a rational person may understand that 'ideogram' does not constitute an assertion
I'm sorry to see you were downvoted for presenting the other side even if you don't support these schemes.
But I have to ask, what constitutes "an assertion" after all? Written text is just one form of fixing and transmitting ideas; alphabets usually originate in actual ideograms with original meanings that were long lost and were reduced to a sound or syllable.
Transmitting an idea with a text-image combo is just as valid for a contract as any other medium as long as the meaning is clear and unambiguous. And there is no debate here that it's exactly the intention of the organizers to transmit the idea "you can win a car" - and in fact that's what most people understand, with a tiny exception of an educated and naturally suspicious minority. The only debate is if it's legal for the organizers to claim an ideogram that literally reads "Enter to win A CAR" does not imply the car is a prize.
I don't know how a judge would rule, but from a political preference - philosophical point of view I would strongly incline to deny them that right; we get a much nicer society with less scammers, without losing anything of substance.
I'm frankly surprised these aren't being blown out of the water by litigation. One might even be able to make the argument that the mall operator, timeshare commission payers, et cetera are complicit.
It's illegal to rent space to businesses you know to be conducting illegal activities. The mall operator can't rent space to a drug dealer or arms dealer, they can't rent a brothel, they can't rent space to human traffickers. Mall operators are not common carriers.
Selling nukes and biological/chemical warfare agents and other things that "arms dealers" provide is not legal in the US. Gun shop owners are not commonly referred to as "arms dealers".
But thanks for shoehorning your political views into an unrelated conversation.
I'm with you, but it does seem like he's referring to "Lord of War" more than "Gun Shop Owner." The guy selling RPGs to known criminals isn't the same as the guy who sells me my AR15s
Read up on accessory laws in the US. Not saying it’s an open and shut case, but there is enough grey area that a DA wanting to make a name for themself for political gain could easily justify trying.
Litigation, not prosecution. This is probably too low a priority for public prosecution, particularly criminal prosecution. But civil litigation? Would appear to be low-hanging fruit, particularly if one can entangle the timeshare promoter’s assets.
There's generally no one doing the work basically. A gym I went to had notoriously bad competitions and advertising. It was never the "last memberships available" and there wasn't actually "10 days left" the counter just changed back on the final day. No one ever got the prizes either, they just never announced a winner, and a new competition started the same day. People still signed up by the hundreds.
Hundereds of formal complaints by people from the gym to the ombudsman and consumer affairs over more than five years amounted to literally nothing. They still do everything they used to.
Even more seriously, they didn't pay their employees superannuation, and it took years to even start the process of sorting that out.
As these car competitions are run by private businesses and not the car manufacturers my guess is they are simply too small of a fish to go after.
Now, just last week that same gym was implicated in a drug trafficking ring. But that's a different department of law enforcement...
for an alternative viewpoint, I'm from the UK and I see these car sweepstake scams all over the place. I think the region you're in has a strong impact on what the police's priorities are, due to different leadership.
> I'm from the UK[..] I think the region you're in has a strong impact on what the police's priorities are, due to different leadership.
Totally agree! The few times I compare ads on television from Netherlands vs England the difference is huge. There's a huge amount of gambling advertisement in England. Advertising regarding something that's addicting is often quickly restricted in The Netherlands. Secondly the loan advertisements. In Netherlands the advertisements have to mention that it costs money (seems super obvious) plus there are restrictions on the interest rate. Seems in England companies can do whatever they want.
If a lot of people get into money problems it'll affect everyone (stealing might go up, or they'll not pay back loans, etc). It is so strange that this is allowed.
> If a lot of people get into money problems it'll affect everyone
This is called "negative externality". Another example is junk food. It does affect everyone when people are unhealthy (health care costs for instance).
> It is so strange that this is allowed.
I think the US have ruled that advertisement is protected by freedom of speech. Actually some people get extremely defensive when talking about restricting advertisement (nanny state argument...).
Advertising is indeed covered by the first amendment. However, various US Supreme Court decisions have also confirmed that the government can make restrictions on misleading commercial speech and that, in general, commercial speech is less protected than speech more broadly.
It’s not just the UK in Europe though. Sweden is worse for gambling advertising than the UK ever has been, at least 2/3rds of evening TV adverts here are for online casinos.
In Sweden I was surprised at the the gambling games aimed at kids at fairs/theme parks. Roulette/wheel of fortune gambling to win big bags of sweets and chocolates. In the UK I think you'd at least have to introduce an element of skill into the game. (Also I've never seen so much candy for sale as in Sweden! It's amazing Swedes have any teeth left.).
Swedish kids are in general only allowed sweets on Saturdays which helps. That actually leads on to a pretty dark story too long to write in this margin, but Wikipedia has a good summary: https://en.wikipedia.org/wiki/Vipeholm_experiments
I haven't checked the T&Cs, but it has all the same traits - set up in an outlet village, car being presented with "you could win" banners, aggressive salespeople pestering passers-by to sign up with their personal details. The aggressive sales tactics especially are a bad omen in my eyes.
It is incredibly frustrating that police don’t seem to actively enforce the majority of the laws. My local police seem anemic. There sure are a lot of them, though. Patrol cars are always visible. And, (right-wing) politicians seem to always want to be hiring more and upgrading their gear. For instance, recently they asked for a $30M shooting range. But, if the local newspapers are a good record, it seems that all they seem to do is give out speeding tickets, enforce drug laws, and and bust minorities and immigrants (for whatever). I’m not being facetious.
Anyone in the US have tips on how to get involved to help oversee and direct them? I’m pretty naive and don’t have much time, but I do have motivation, at least. I have tried calling them in the past to get a better understanding of what they do, but it was difficult to find the right person to talk to. I’ve considered doing independent research and reporting (via FOIA), but I also fear repercussions.
>It is incredibly frustrating that police don’t seem to actively enforce the majority of the laws
It's not just the police. It's the DA and judges too. Also, weirdly enough, the defense attorneys and public have a very large burden of fault here.
A court clerk I know realized while filing records that our county had been in violation of state law for over 7 years in handling one type of case. Hundreds, if not thousands of cases have been prosecuted in that time. Yet, there was exactly 0 formal complaints about the counties violation of the statutes.
The clerk in question had to point that out to an attorney quietly, who then finally made a complaint on a case they were handling. After that the country dropped a few hundred pending cases on its books. But why did it take 7 years? Why hasn't anyone went "wow, the county violated people's rights for years, should someone be prosecuted"
Nope, just more revenue collection for all involved.
It depends on the structure of the municipality. You may have a civilian oversight board which has some level of control, and this could be an elected or appointed position. The other option being to become mayor, city manager, or whatever chief executive your area has with oversight over the police force.
Because after decades of capitalists whining about the large and bloated state and trying to cut down from every possible angle, there is probably noone left to do these jobs.
California has tens of thousands of local businesses, and yet only one official office to police them?
Lets say I get ripped off by a restaurant, store, or local company (and I find out later after looking at my CC bill), what recourse do I have? Call the police? What are they going to do? Do they even handle financial fraud? File with the attorney general of California? Is his office really going to look into my issue? Do we just assume all companies are law-abiding? This doesn't make sense to me.
(I know you can call your CC company and dispute the charge, but that doesn't punish the company doing it, except maybe not crediting them that one charge, that is not a deterrent to overcharge your customers, there should be some form of punishment by a government authority)
I'm fairly sure there's federal laws that forbid that. Of course, it's not a crime if you don't get caught. Plus there's a small sub-story in the article about someone that did win a Tesla, but couldn't afford the taxes they had to pay to actually get it.
You can win a car but you have to be able to pay taxes and insurance for it, too.
In my experience, it's quite common to have raffles and similar events rigged.
I've heard of lots of companies that have booths at conferences where they scan your badge for a """chance""" to win some prize. Then they look up each person's credentials, and if someone is high up in a company that they wish to establish communications with, they give that person a prize to get their foot in the door.
This is just a modern version of the fishbowl of business cards. You put out the bowl and say drop in your card to win “x”. Then when it’s time to do the drawing you look through the cards to see who’s the most advantageous person to establish contact with.
The whole point of badge scans/fishbowls is to collect leads. That said, especially at larger companies, legal departments are likely to be unhappy if they learn that trade show contests are being rigged.
Sorry but seeing comments like this about topics I know about, make me question what other falsehoods and inaccuracies I am reading on HN.
The story about the Tesla took place at Four Winds Casino New Buffalo, which is in Michigan, not Las Vegas. Legally speaking, it is a sovereign nation so I would not put much trust in "local authorities" to protect consumers. Further, although Nevada does have a gaming commission, there are still plenty of "scams" and questionable promotional tactics used by companies both inside and outside of the casinos. Time-share sales, for example, are big business in Las Vegas.
The fine print where there actually is a car awarded generally says something like taxes are the responsibility of the winner. In the ones I've seen if you cannot pay the taxes you will be awarded the cash value instead. (I suspect there is a state law in place)
The real contests are generally run by a third party firm that has no interest in the winners. They are payed to pick someone at random and deliver the prize and paperwork.
Some of these promotion companies pay a lot of money just to have their cars as part of promotions (and the sweepstakes companies can get into big trouble if their systems are not setup to give away x cars. Most of them are time seeded so someone is guaranteed to win one a week).
If your already investing that much money, can't the company also cover the taxes, or do most states have laws forbidding that? It seems like bad publicity if your "winners" have to pay several thousand in sales tax to get their "prize car."
You're paying income tax, not sales tax, because winnings are income. (Think about professional gamblers...)
Income taxes are progressive, of course, and then there are a mess of deductions. But they could still make an estimate by just assuming the person is in the $37K to $92K bracket. So that's 25% [1].
> It seems like bad publicity if your "winners" have to pay several thousand in sales tax to get their "prize car."
I think they make the judgement that offering a prize that is 3/4ths as expensive would be less good publicity vs. the largely unknown bad publicity that is mostly oriented towards the government anyway.
[1] ... and yeah, there's 25% on that, and 25% on that, etc.; for tax rates < 1 it's convergent, if the tax_paid = rate * (original_value + tax_paid), just solve for tax_paid.
> You're paying income tax, not sales tax, because winnings are income. (Think about professional gamblers...)
Think about them why? Gambling income is in a completely different category from a prize you won for free. There's no reason they have to be taxed the same.
> Gambling income is in a completely different category from a prize you won for free.
The only difference is that as a professional, you're filing your taxes as a business. It's still "income"[1], it's just the entity filing is a business rather than a specific person.
Regardless, a prize you win is not taxed as a sale.
> There's no reason they have to be taxed the same.
To the extent they're treated inconsistently, people will use the discrepancy to game the system. Politicians do that deliberately, of course, since it's an opportunity for graft.
For legit contests, there is usually a small cash prize in addition that covers the cost of sales/gift tax. This was the case back in the 90s through at least Oprah's car giveaway in the early 2000s. Maybe they dont do it anymore?
That example was in Vegas were in casinos they do have legit give aways of cars. I use the term legit a bit loosely, you really can win, but the odds are highly unlikely.
On the flipside, I worked on promotions game systems in the brand promotions space with instant win and giveaways after the user played a game. If they won we had to contact them to verify and get info to send them the prize.
When someone won the prize we had to get the social security number of the person that won for gift tracking as many were over 15k, their contact info and location to send the prize, you'd be surprised at how many people pass that up or think it is a scam and/or never get back. We had to pick the next person if they passed it up or didn't get back and sometimes it would go through dozens of people before they would accept it. Lots of game systems, trips and even motorcycles were passed up.
I myself would have probably done the same thing, hard to believe you won and if you do win it is hard to not think it is a scam due to systems like mentioned in the article.
As an individual authenticating callers is difficult.
I recently had someone claiming to be from the ATO (Australian Taxation Office) call and ask me to identify myself. Not surprising, my tax filing is overdue. I advised them as a security policy I do not give out PII to unauthenticated callers, asked for a reference number and a return phone number. The number I was given is not listed on the ATO website so I did not return the call. Found some forum posts claiming the number is for return callers who have a reference number. Still, if I can’t find the number listed on offical media I don’t call back.
I’m trying to think of a way the average person could authenticate a caller. I’m not security or technology expert so my knowledge in this area is limited.
I've had my bank call me at work because I forgot to pay my credit card off the day after it was due. No callerid info, just a number. The woman on the phone didn't say who she was, who she was calling from, she just immediately asked me if this was blahblah. My work has been the subject of a bunch of scammers calling about financial services lately so I wasn't too keen on saying who I was. I kept asking her who she was calling from and she just kept asking me who I was. Finally she said she was from my bank. I told her I'd call her back. Called up my bank and had to wait through several people for someone to tell me what was up. Not only does there need to be some etiquette when cold calling someone (like using callerid and stating upfront who you are and who you are calling from!) but callerid need an update so you can't spoof it so we can trust it again.
Funny cause on email this is a solved problem (from a technical standpoint not a social one); encryption and digital signatures are easy. And it would be so useful to those industries too.
This is the advice given by banks and anti-fraud agencies. NB in some countries landlines can remain on a call for several minutes after the call receiver has hung up. A phisher will play a dial tone etc to make it seem realistic. The advice is to either wait 10 minutes (longer?) or preferably call back on another line if you receive a suspicious call.
> NB in some countries landlines can remain on a call for several minutes after the call receiver has hung up.
Source for this? I find it highly suspect from a technical perspective (1-3 seconds, maybe, but not several minutes) and nothing I can find online even remotely seems legitimate / real.
'tis true - the caller has call release control on the PSTN i.e. the call doesn't end until the caller puts down the phone. There's special handling for e.g. 911 calls so that call release control is given to the callee i.e. the PSAP.
This doesn't work for e.g. SIP because the SIP client is not a dumb slave to the network. If I click end call, even if the network doesn't 'want' to end the call, my phone thinks the call has ended.
This used to be true but I really doubt it’s the case anymore.
Most of the “PSTN” nowadays has a bunch of SIP or other digital stuff in the middle, so this breaks down. Not to mention, this was never possible for mobiles to begin with.
It really is the case. VOIP in the middle isn't a problem. MGCs can translate between the callee's phone being on-hook to a SIP re-INVITE with inactive media. In fact, I've worked on projects in the last few years to do just this.
Telcos move slowly.
You're right about mobile networks though - that's a different kettle of fish.
Just wondering, why is that? It seems like a lot of effort instead of just sending a BYE when the phone is hanged up. I don’t see any legitimate reason for this “feature” to exist - if anything it makes scams & eavesdropping by a malicious remote caller easier.
Per one of the articles I found on it, British Telecom apparently set the delay to 3min. The rational (if article is to be trusted) is that customers wanted the ability to hang up one phone and pick up another phone in the same home without disconnecting the call.
My argument was that even if you did have an “actual” copper line it would eventually be terminated at a device that speaks analog phone line on one end and spits out SIP on the other end.
This specific hanging-up behaviour was an artifact of older analog switches and I didn’t think they would emulate it in the software-based SIP switches but according to the comment above it’s still the case.
I definitely knew this was the case back when analog COs were the norm, but didn't realize this was still true. Seems it is very dependent on PSTN provider (I know SWBell didn't do this for normal lines when I worked there) as some do, some don't.
I’ve personally experienced this, probably 30 years ago, in Canada.
I’d call a friend, we’d finish talking, then I’d hang up and as a joke he’d leave his phone off the hook. I couldn’t make another phone call until he hung up or some timeout of unknown length passed.
When I was younger in the US the situation was similar, but I thought it was up to the originator of the call to disconnect. Been too long to be certain of my recollection.
I never determined the timeout, and I haven't had a land line in at least 15 years to experiment with.
You could be right, I can’t remember if the times that happened were when I originated the call or my friend did. I know it didn’t work all the time, and I think it stopped working at some point too.
This was back in the days when you could tell roughly where someone lived by their phone number - 43x—xxxx was south Edmonton (but not Mill Woods or Riverbend), 2xx-xxxx was Calgary, area codes didn’t matter because the whole province was 403, etc. The phone system is a lot different now - you can port a landline to a cell phone (and vice-versa). The original phone number where that happened has been ported to the cable company and now goes through coax (the equipment that handles it is basically a cable modem with a phone jack).
Actually, I’m coming around to your point of view. I think it was the recipient who controlled the “transaction”.
The world was so very different. Waiting for that 0 to finally work its way around the dial, good grief. Especially since as a kid I was perpetually afraid any phone number that included a 0 might lead me to somehow get connected to a phone operator, so I wanted to dial the following number as quickly as possible.
One of the things that radio hosts here joke about is how kids with a zero in their phone number had fewer friends. “Oh, I don’t want to call Bobby, he’s got two zeroes in his phone number, it takes so long to dial”. Between that and risking talking to An Adult and getting In Trouble, I wonder how true that is.
I just had the exact opposite experience! I was discussing scams with my regular painter. He said he got one recently, and showed it to me on his phone. It was an SMS that said, "Dear <FORENAME>, we have been trying to contact you without success. Please ring BlergCo on 99999 about your outstanding ATO debt". I thought, easy enough to check. I went to the ATO website; clicked the link about what we do if you don't pay; clicked the link about which collection agencies they use; checked for green padlocks throughout; and voila - BlergCo, 99999! Since the number on the SMS exactly matched the number on the verified ATO website, I couldn't see how the scam would work. So I told my painter I'd changed my mind, it was probably legitimate, and he should ask his tax agent to follow it up. Which he did. Then paid the overdue provisional tax that he'd completely forgotten about! It made me think, legitimate SMSs (like that one) should probably have extra words to tell the recipient how they can check that it's legitimate. For example, "NOTE: to verify our company name and contact number, please go to the ATO website at xxx.yyy.zzz (and remember to check the green padlock!)", or somesuch.
I was one of the very first developers with an app published on Google Play store, and as a "thank you" for having one of the first apps with 10k+ downloads(which wasn't difficult when number of apps on the store was measured in hundreds), Google wanted to send me the Nexus One phone - which was great, except that the email I got from them looked like scam, it was basically "hey you won a phone, click on this link and fill out this google spreadsheet with your details!" - no official google logo, it was just plain text email and the spreadsheet looked dodgy as hell. So I ignored it, until I read about the giveaway on a reputable site few days later - and yeah, I filled out the sheet and the phone arrived few weeks later. But it was very very easy to ignore it.
Make the winner fill out the tax forms and send them directly to the IRS. The IRS informs the promotion they've received the tax forms, and verifies names, addresses, amount match. The promotion releases the prize to the winner.
Nope, you need to put the payee info on the forms that you submit as well as the recipient.
If you are paying someone more than $600, you need to cut a 1099 form, which tells the category, such as interst, rent, misc, etc. (1099-Int, 1099-Misc, etc.).
On the 1099, you must put the Tax Id of the recipient, which for a person is their SSN, and for another entity is typically their EIN.
You submit your copy of the 1099, and they submit theirs. They need to match or the IRS see a red flag.
So, no, you can't simply say "here's the form, you submit it".
Source: I'm not a Tax Attny, but I live with one, and have co-owned several businesses that needed to cut and/or receive W-2s, 1099,s etc.
As mentioned by others, sweepstakes sponsors are required to report prizes awarded to US residents to the IRS if the value is $600 or more. For tax purposes some also choose report prizes of lower values especially if they are giving away lots of them that equal substantial value businesses expense out.
I thought it was only the 15k prizes above gift tax but it was actually any prize for tax tracking. Lots of people balked when the SSN question came up and understandably so. In a few cases the prizes were motorcycles and ATVs and I felt bad for the people that passed them up.
The promotions systems were brand focused and most of them really did want to give away the prizes but sometimes it was tasking due to the fear of a scam.
The entries were mainly for brand focused games and brand focused gear/prizes mostly marketing focused. The system also only asked for email and the opt-in for the company/brand loot running it was un-selected. Though the brand companies did want to collect emails of people interested in the brand, they had to opt-in for that. We mainly needed emails for contacting if the user won. After winning, names/SSN/location would be asked for but lots of people weren't having it.
It would be easier but it is law and the IRS wouldn't like that. Part of this process of getting the info allows it to be a gift if the sponsor does include paying the taxes, they still need the info to do that.
Basically any transfer of value is tracked and the company that gives it away needs proof to write off the amount and/or declare it a gift.
The SSN and affidavit are the scary part where people think it is a scam.
Anytime you win prizes this happens even if you are on a gameshow. [1]
As mentioned, this is only asked of winners to collect their prize, after the draw.
If they won they must be contacted to verify and get info to send them the prize.
Since it is a transfer of value, the SSN has to be known for the 1099 form that is required by the IRS after $600 in value being transferred. It is also required if the sponsor gives it as a gift, pays the tax portion and for the sponsor to expense it out on the business' taxes.
Same thing happens on gameshows or any giveaway.
It is probably easier to trust after you were on a physical gameshow though, if you just won a prize online it seemed scammy to many eventhough we took all precautions to make it legit including no opt-in when they entered the email or phone. Only their email/phone was required to enter after they won the minigame or played the ticket. Everything else was asked later if they won the prize.
It is harder than you'd think to give away the actual prize to people that won it due to all the scams out there taking the fun out of things.
The solution I came up with is to have the winner come into a store location to claim their prize. They can see their brand new motorcycle, be told that to drive this away we need to report the gift to the IRS so they can collect their cut.
Good solution if local, most of the winners were all over the US.
Lots of people just didn't believe it and thought it to be a scam or maybe denied it due to the taxes, or maybe they were trying to stay on the down low due to collections or something who knows. For whatever reason, they didn't want the prize or didn't believe it.
Since it wasn't a cash prize in most cases, people would have to pay some taxes on it so maybe they didn't think it was worth it. Cash prizes are always easier as the person can just pay the taxes out of the prize, a product like a motorcycle or something fairly big, they would have to sell to pay taxes maybe.
I wonder if it would be worth starting a business brokering access to bricks and mortar for your industry. I'm sure you could find some national chains that have retail traffic that could take delivery of a prize and collect the relevant details.
Then it becomes a problem where you need assurance that the customer is going to actually show up at the store and claim his prize before you go to the trouble of shipping it out. Not a big deal.
The solution is probably a two-part form where the winner can fill in their SSN and seal it in an envelope, then the contest operator would take that envelope and enclose it with the operator's part of the form, and mail it.
That way the contest operator need not ever see the winner's SSN.
The amusing thing is the apparent widespread assumption that contest operators are shady as f.
What the...the problem is the contest winner not trusting the operator with their information. How does giving the operator an envelope containing their SIN solve this problem?!
Only if you win a prize larger than a certain amount (I think it's somewhere around $600) the promoter of the sweepstakes must issue an IRS 1099-MISC form as such prizes are taxable income.
I wonder how many were social security, retirees, or welfare recipients? I think those people will lose their benefits if they declare earnings. And perhaps they just don't think about it before they enter?
I remember a few years back walking on the beach with my dad and some similar time share scam people asked us if we wanted to enter a competition. We were handed two scratch cards with various prizes; cash, a holiday or the grand prize of a car.
Obviously all the scratch cards were winners for the holiday.
My dad scratched his card and said "Oh great, I won the car!"
The scam guys eyes opened wide and he had a confused look on his face and asked my dad to show him the scratch card. Obviously it was actually for a holiday, but it was great seeing the confusion in the guys face since he knew there was no car.
> The scam guys eyes opened wide and he had a confused look on his face and asked my dad to show him the scratch card. Obviously it was actually for a holiday, but it was great seeing the confusion in the guys face since he knew there was no car.
As a lark, it would've been super funny to create a realistic winning "ticket" for the car and substitute that in place to see the reaction.
Obviously it would require some prep work... but for kicks it would appeal to some. ;)
Roping the unsuspecting into an incredibly expensive time-share using hard-sell boiler-room tactics without ever being up-front about the true costs.
I sat through one of these once, curious about how it was going to go, and with the intent going in of not ever buying anything anyway. They present the timeshare as if it costs only pennies a day, and never admit to the true cost unless pressed very hard (and even then they never quote a final figure). What they are really selling is a loan package for the purchase of the timeshare (where the timeshare company is themselves loan originator) with an attached interest rate of something like 12 or 13% APR (bank mortgages at the time I sat through the one I sat through were running about 3.5-4% APR). The timeshare, if you can squeeze a dollar figure out of them comes out to be about $40,000 for which they finance it for you at their 12-13% APR (so a gold mine for them, but bad for you).
I ended up getting the double-team effort (two trying to convince me to jump in) to try to sell me on the value of the scam before I had finally had enough and cut off the sales pitch. Meanwhile, all around me (they did the pitch in a large room with small tables where everyone was in view of everyone else) I was watching the gullible filling out their "loan applications" and setting themselves up for $500/month for the next ten to twenty years before they could pay off the 'loan'.
The cost, plus the interest, was setup such that one would be hard put to actually be able to go on enough vacations at the timeshare to actually make the timeshare profitable for the new owner. If one went on the number of vacations that are typical, one was setting oneself up for each vacation ultimately costing $25K+ (for what should have cost only about $2-3K). This, of course, was the intent of the group running the timeshare, hide the true cost enough that the gullible don't realize they are paying $25K for what should have cost them $3K, and pocket the difference as pure profit.
I went to one to satisfy the same sort of morbid fascination as well. I really have to hand it to the sales people, it was one of the most incredible sales pitches I've ever seen.
They shuttled us to one of their premier properties where they took us to a sales room and served us breakfast. After a few moments they had everybody gather around a large presentation screen and a salesman who spent the next hour not just going over all the "benefits" of buying a timeshare, but tying that to a scripted and intensely acted "deeply personal", tear jerking story that ranged through decades of his life. The delivery was world class small stage acting -- it was that impressive. After that they paired us all off with a secondary sales guy who took us to a model room and start on the normal high pressure sales tactics.
Our only escape was that we simply lied about our income and looked to be too poor to ever afford anything they had on offer and told them we were only interested in vacationing to places they didn't have a presence. It was quite an intense experience. We left, got our free tickets to a show and were shuttled back to where it all started about 3 hours earlier.
It was absolutely bizarre and I kind of can't believe the entire operation is legal.
I did one of these also, and I absolutely don't regret it. I think I learned more about (ruthless) sales tactics in two hours than I ever have from books or classes.
It was a timeshare tied to a big-name hotel chain, and as far as I could tell they were selling some hotel rooms as timeshare units to finance construction and maintenance. So the deal wasn't good, but it was substantially less of a scam than the stereotype because they had a non-scam business to protect. That, or the guy was so sharp that he really did persuade me quite effectively, and I was only saved by having a a prior of "this is the worst deal imaginable". (Well, that and the Odysseus bit - I decided in advance to refuse no matter how good the offer looked.)
The funniest part of the slightly-less-bad scam was that it enabled them to spend a while talking about how it's "not your parent's timeshare" and "not like those shady offers from the 80s". Which was true I guess, you got nice rooms in many places instead of one rundown house - they were just charging rates that were steep even before the multi-thousand-dollar "maintenance fees" kicked it.
Oh well, the free travel and event tickets were actually a great dollars-per-hour value - as long as you said no.
It's always intriguing to see these things, and how some prey on basic math skills.
My girlfriend's mother dragged us to see a presentation associated with one of the "Flipping" TV shows.
They, of course, wanted to invite you into their program. It was "hugely successful". How successful?
"We've funded $100MM of house purchases for our members! We have nearly 8,000 members across the country!"
Well, $100MM in support sounds awesome for most things. Then you think about it more. And let's be generous to them, say the average house they buy costs $100K. That's 1,000 homes they've funded.
But hang on, they have 8,000 members. And they boast that some of those members have flipped 20+ homes each! That means, wait, less than 1 in 10 of the people who "joined their ($4,995) program" ever flipped a house through them...
That's not the kind of math they like you breaking down at those seminars for the other members during the meal break...
Maybe a little hyperbolic, but I noticed a couple of people talking with the staff, and I got a dirty look or two from them, and then, apparently (since I'd left), they "wanted to address concerns", and that those people were only suffering "insufficient motivation".
I don't know, selling 8,000 people $5,000 weekend seminars seems a better way to make $40M than trying to flip $100M of houses...
I went to a similar presentation in Hawaii for educational purposes and was able to convince my wife and daughter to come along.
It was less impressive than we hoped it would be, but we had a good time by replying leading questions with undesired answers. (“How much do you pay per night for a hotel?” “$150 for our excellent Airbnb!”)
I almost felt bad (but not really) for the sales woman who was obviously wasting her time.
When her boss joined in to take it to the next level, I simply asked him: “we’re going to France this summer, 6 months from now, in the Nice area. Show me which offers I could book today through your timeshare plan.” There was nothing reasonable. He gave up soon after that and we received our $300 tour tickets for free.
All in all not a bad deal, but we won’t do it again.
This was a big scam on the Gold Coast in Australia in the 80s and 90s, and my parents milked it.
First thing you need to know is that any major contract in Australia had a "72 hour cooling off period" in which you could cancel it with no redress or regress.
Want a cheap holiday? Bring your kids to the Gold Coast, look up the best time share resort, Friday morning,sit through the spiel, sign on the line that is dotted.
Through the weekend you have access to all the resort amenities, kayaks, jet skis, pools, etc. All comped.
Monday morning, when you were about to head to the airport? Drop off a letter at the front desk with the contract, canceling it.
Ethical? Probably no less so than they were, so hard to find sympathy.
My parents did the mini-version, just taking advantage for the day.
We went to several in southern England. We kids could play in the pool or whatever, while our parents sat through a presentation for a couple of hours. Then we spent the rest of the day together, before heading home.
Though more recently, "The EU has ruled that any new timeshares or long-term holiday products with contracts of more than a year must be sold with a 14-day cooling-off period and written information – in the buyer's first language – detailing their right to cancel within this period must be provided.", so your scheme would work especially well now.
I’m unfamiliar with Australian contract law, but damn that would be risky in the US (assuming you could even find a jurisdiction with a 72 hour cooling off period).
I went to one of the Wyndham presentations a couple years back, partially for the free (albeit shitty) breakfast, free tickets to a local attraction (actually somewhat valuable) and to observe the sales pitch. I came away similarly impressed.
They used a lot of tactics like personal vacation stories, highly suspect financial calculations and so forth. But the one I was most impressed by was getting people in the habit of saying "yes!" a lot. They'd ask a bunch of really dumb stuff like "Do you like to go on vacation?!", "Do you like to have FUN?!", "Do you like to SAVE MONEY?!" etc to get people all hyped up. Then they'd ask them if they want a timeshare, and people are primed to say yes. There's some actual psychological studies on that effect. It worked really well.
They also had our credit card info already because we were staying in another Wyndham property, and kept saying that we'd have to sign some form or else they'd charge our card for the tickets. Of course they made it difficult to get that form. You can get it after we tour one of the model units. You can get it after we look at another one. You can have it after we watch this video. Sure, you can have it now, but first let's look at this financial worksheet. Always being super nice to make it hard to be assertive with them. I finally had to basically curse at the sweet young lady to get the form out of them, but they managed to tack on 45 minutes of high pressure sales time over and above the minimum we had to spend.
It's all quite impressive in a "dark patterns" sort of way.
There was a bunch of crap to sign. I suspect there was some agreement, otherwise people would just not show up to the presentation at all. But TBH I didn't read it all or seriously consider doing a chargeback.
> I was watching the gullible filling out their "loan applications" and setting themselves up for $500/month for the next ten to twenty years before they could pay off the 'loan'.
I presume that quite a few of these are actually timeshare employees playing the role of "conspicuously convinced punter"
That is quite possible. I presumed the 'open plan sales room' was exactly to play on 'follow the herd' mentality. These guys were slick enough that they very well may have filled half or more of the room with plants to further fuel 'herd' mentality.
Interesting - the presentation I saw was careful to pitch each family separately and not even walk them past one another. I assume it was partly for the feeling of exclusivity, and partly to avoid letting any awkward questions like "don't those fees turn this into a total ripoff?" pollute multiple buyers.
I wonder which approach works best? (Though I guess if there are enough plants, you could get both effects going at once.)
The real scam is the ongoing, monthly, maintenance fees on your 'timeshare'. Worldmark wanted $100 per month, per week of ownership, in a presentation I saw in Vegas. Which means that 52 weeks x $100 x 12 months = $62,400 per year in 'maintenance' on each unit. So even if you paid cash, they still get $62K per year in addition. This was Worldmark Vegas, buying a 'week' in a townhouse complex of $150,000 units.
I get the sense that the days of "take out a huge loan to be locked into vacationing at a crummy house in Boca" are over, probably because the reputation got too bad. Now it's reasonable prices, flexible travel dates, luxury properties around the world - all yours, for the low price of bank-breaking fees for life.
The maintenance fee is $100 a month for each week of timeshare you own. So if you want to use the time share 4 weeks a year you pay $400 a month. After selling all 52 weeks the company is collecting $62,400 a year.
If the unit has been chopped up such that all 52 weeks of the share have been sold, then a combination of people will be paying $100 per week of ownership, every month. Your share of the monthly maintenance is allocated by the number of weeks you "own".
You aren't just paying maintenance for the week that belongs to you. Original calculation of $62400 is correct. Part of the scam is obfuscating from you the true costs of the deal.
If the 52 week-owners knew each other, and could all afford the costs of the share in the first place, they could conceivably form their own LLC, cut out the timeshare company middleman, pay $10k each up front for week-length shares in a $520000 property, and cut their maintenance fee in half, to $50 per share per month (assuming 5% upkeep/utilities/taxes per year). They could even rent out any unused weeks on AirBnB to cut the maintenance charges, or even pay out distributions.
The timeshare people are making bank on the fact that getting up to 52 people to spontaneously come together in a common cause is extremely unlikely. You need a prime mover organizing the whole thing, who is ideally positioned to profit from information asymmetry.
I'm not up to speed on the mathematics, but a matchmaking algorithm that keeps preference data secret until all participants in a trade web commit to a deal that satisfies at least one of those preferences could drive a lot of middlemen and scam-like businesses out of the market.
For instance, you might find an algorithmic pickle agent in the network, and tell it that you could eat one big jar of crisp dill cucumber pickles every two weeks if it costs less than 8 money units, delivered to your door, or one per week if it costs less than 3 money units, committing some number of money units greater than 8 to back a promise to buy at those prices. A small-time pickle-making farmer might tell the agent that they can ship at most 500 jars a week, as long as they get at least 2 money units per jar, or as many as 800 if they can get 4 per jar (cost of hiring a dedicated packer, perhaps). The pickle agent consults with a commodity shipping agent, calculates a billion different ways to move pickles from suppliers to consumers, and then starts moving money and pickles around. Everyone who promised to buy at a certain price is guaranteed to get the goods at that or a lower price, and everyone who promised to sell at a certain price is guaranteed to ship the goods at that or a higher price. The shippers get their fee for moving a package from point A to point B. The agents take their cut to pay for their computation, and for insurance against failed shipments or bad pickles. The system would also need to include distributor/importer/resellers, because some trades just aren't possible unless you pack a whole pallet of pickles, or a whole truckload/shipping container, and break that out for individual orders closer to the consumers.
That's all technically possible with smart contracts, as far as I know, but it would require a huge amount of programming effort to even get the basics correct. And Wal-Mart already has their supply chain, inventory, and distribution software in place.
I'm not sure if this is a complete "scam." I think it mostly works out as similar to the costs of typical hotels.
- I would assume the timeshare companies often have more supply of rooms than they have paying "owners." For example certain destinations are only desirable during part of the year when the weather is favorable. So they may not be making this full amount in the math above.
- They have regular expenses beyond the room maintenance itself: overall building maintenance, resort amenities, staffing, utilities, cable/tv, etc.
- For comparison: a simple $150 hotel room for example would be $150 x 365 = $54,750. Similar to the timeshare, this one may not be 100% booked, though I don't know what booking/ownership rates are for timeshares vs. hotel rooms. In any case many timeshare units may have one or multiple bedrooms, a kitchen, a living area, etc. whereas the $150 hotel room is probably just a sleeping area. So you are likely getting "more space" with the timeshare.
Admittedly, many timeshares are scams, I won't deny that. But the evidence you provided for this one is not completely indicative of that. It still may not be a "good deal" based on how you prefer to travel, and if it's not certainly don't partake in it.
To me spending $100 x 12 = $1200 per year for your housing on vacation is not completely unreasonable compared to $150 x 7 = $1050, considering the extra amenities and opportunity to save money by cooking in the unit. It doesn't make the timeshare a "steal of a deal" (like some of the presentations make it out to be) but rather more of a "prepaid vacation" which may make sense in some situations. It seems like a "legitimate business" in this case to me, assuming the up-front costs to buy in are not too crazy. Country Clubs have been using a similar structure of "buying in" + recurring fees since before the timeshare industry even existed, and presumably these country clubs are legitimate businesses as well. There are good and bad players in the timeshare industry, like is the case in so many other industries as well.
My parents are Worldmark owners, so I've done some analysis on that one in particular. There is a decent amount of flexibility (destination) and the units have seemed pretty well-equipped. In the math I've done it seems to work out to not necessarily make your vacation "cheaper" but it doesn't make it "more expensive" either. They like it because they get more space and a kitchen to cook some of their own meals, and they use it as encouragement to take vacations to destinations they otherwise would not have thought about (and have very much enjoyed).
The timeshare company in the article though is clearly a major scam though! I trust that most people on HN can take a look at the math to weigh what may be a good deal for their personal situation.
I'm assuming that the figures parent laid out as an example don't include the cost of the timeshare itself. So you're mortgaging the cost of the time share at a high interest rate, then it's $1200/yr./week on top of that for "maintenance".
My wife and I had a lot of trouble having children, and went to Mexico for IVF. Although we were staying in Cancun, we basically had no money. We had planned on just lounging on the beach for a week, but several different groups were offering free little day trips to different destinations if you set through a timeshare presentation.
We ended up doing that three times, and even knowing what I was getting into ahead of time I found their "hard sell" tactics both persuasive and exhausting. I didn't get roped into anything, but I can definitely see how it happens.
> Roping the unsuspecting into an incredibly expensive time-share using hard-sell boiler-room tactics without ever being up-front about the true costs.
The hack is to attend, tell them you go once a year, sometimes twice, to some ethnic ancestral home town, and you'll buy on the spot if they have a timeshare there. Pick out some two-stop-light town in some out of the way country, that doesn't even have AirBnB rooms, and you can see the sales people visibly deflate as they vainly look for a listing in Borat-istan. Put on a show of being all sad, and explain that you can't imagine paying for their fantastic deal for only 15% of your annual travel budget, but to put you down in the wait list as the first to buy when they expand to your home town.
You are in-and-out in the allotted time, with the freebies, usually three hours max. I actually like inspecting the actual buildings to try to spot whether or not they took shortcuts, as how these scams work fascinates me, and some of these places have genuinely good ideas I scrapbook for my homebuilding notes, so I don't mind the lead up to the real sales pitch where I deflate them, but I'm sure you can modify the hack so you open with your counter-pitch and are in and out in minutes. I've seen people report they tell the salespeople up front they only came for the freebies, they're never buying, and if both sides agree to discreetly walk early so the sales manager doesn't notice, they'll rate the sales effort A++++ (there are always surveys afterwards), and are out in minutes.
I'm curious with groups like 419 Eaters why there aren't more organized scambaiters for timeshare scams. The freebies are legit, and if you're planning to be in a particular area anyways, three hours for a 1-2 day stay, especially if you like seeing how others solve various housing-related challenges, is a good trade.
A couple of years ago my wife and I rented a condo in Hawaii, and ended up going to one of those one morning. Coincidentally, it turned out to be at the same complex we were renting from and the example unit we toured was identical to our own. We walked out when I did the math and found that the time share would have actually cost more than just renting the place.
I always thought it would be kinda fun to get a group of people together (maybe a Meetup) who would attend timeshare pitches for fun. The goal would be to pack the room with people who had no intention of buying in.
Time is money, and I suspect the best way to cost them money is to waste their time.
Right, in order for you not to be wasting your time, you'd have to get some value from attending. I think you could argue for any of the following: (a) educational, (b) entertainment, (c) charity work, or (d) none of the above. Depends on the person...
He gave a talk covering the same subject matter too, which is faster to grok if that's your kind of thing.
After reading/watching this stuff, these kind of scams become incredibly transparent. And it's fairly ugh to see fellow humans subsequently get sucked in by them.
Thanks. I'll check it out. I'm quite immune to the tactics myself due to watching my father fall for way too many of them growing up. As a result of seeing that at an early age I've become quite immune to the tactics. But I could easily see how the less immune could readily be drawn in to something they likely could not afford.
I went to one of these many years ago just after finishing my degree. I explained to the guy laying on the sales pitch that I understood how interest rates worked and I had a masters degree in Computer Science. He said "you aren't the kind of person we're interested in, you can leave."
Thanks for the free Vegas trip! I actually won some money that trip, so technically I walked away from the scam with a profit!
you got off easy. My wife and I made it abundantly clear that we we're falling for it (Software engineer and data analyst). They still spent another 2 hours making us feel as horrible as possible.
In exchange for sitting through a timeshare presentation, a friend and I received a free trip to Orlando, FL. Instead of going to Disneyland we went to the Kennedy Space Center and the Air Force Missile Museum.
Lesson: Don't just settle for free tickets for a show, find out if they have any other incentives.
Yeah. I thought we could just go there to listen to it. they didn't say anything about a timeshare, they just said go there to listen to them talk about some apartments. I sounded pretty harmless.
Things started off politely enough. Then about 30 minutes in they get really mean, really fast. this was wyndham by the way - if you check online, looks like they have nothing but 1 star reviews, from those that did sign up.
It starts with manipulation, then insults on your intelligence, then move onto insults on your personality, followed by countless bullying tactics. Then, once that doesn't work, they call over some ruthless thug boss lady, to really intimidate and bully you. These guys are world class jerks. i don't know how they sleep at night.
Once they realize that they can't get you, they'll just keep beating you up, just for kicks.
Hint if you ever attend one: turn to your partner after the introduction and say "I don't know honey, we would have to sell the RV". They know that people with a RV rarely buy so they are much more willing to stop wasting their time.
The other option is go on vacation, send your parents to the presentation, and you take the freebies. This worked for a friend of mine- his parents old/disabled enough that they couldn't enjoy scuba diving and the like anyway, they were mentally competent enough to not sign anything, and they enjoyed the presentation better than the other tourist traps in the area.
I'm not sure how anyone can enjoy the presentation. Our presentation quickly devolved into insinuation, badgering, bullying, intimidation and finally: outright insults.
It doesn't make economic sense, but once they find out your not going to buy it, they spend the rest of the time making you'r experience as horrible and stressful as possible. Perhaps to dissuade others from doing what you just mentioned.
I'm all for capitalism, but I feel like this should be illegal.
Yes, I know, "the consumers shouldn't be so dumb". But there is always the group of a society that will bite. The seller may make a good buck, but these tactics have many downstream effects that just get compounded for the people buying this garbage.
There should be some kind of protection for the consumers in this case.
I know it would be hard to define the line, but in this specific case, it's clear that it shouldn't be allowed.
The biggest problem here is information asymmetry. The market for these time share schemes is very inefficient because the sales people have more information on both the value and cost than the customers. This is why people commenting here who have out of band information about this were unpersuaded despite finding the pitch emotionally compelling / exhausting. Regulations to require earlier and less subtle cost disclosure would help. But this is right in the zone where it's difficult to take political action: most people don't care very much about this so you can't win an election or build a career on fighting this, and the sales companies care a lot, so they'll organize a dedicated opposition to you if you try.
> The biggest problem here is information asymmetry.
This gets to the heart of a question I've always had about unfettered markets, and never seen answered.
It's widely acknowledged that markets don't just satisfy demand, they also transfer information. If you know something other people don't, you can make money, but in doing so you'll gradually disperse your unique knowledge until it's no longer valuable. (Either directly, by selling it, or indirectly, as people see that you're consistently willing to make transactions other people wouldn't.) At best, this is a payout for the productive activity of spreading knowledge (the argument for arbitrage). At worst, it's a short-term scam that's self-negating.
This is all true. Timeshares spread information because people noticed "if this is such a great deal, why do you have to pay people to listen to the pitch?" And so timeshares got a horrible reputation with most people. When I talk to hard libertarians, anarcho-capitalists, and so on, this is their argument - it took some time, but the marked worked even with asymmetric information.
But... new information can be created, at least in economic terms. Timeshare pitches now have segments on why this timeshare isn't a scam like the old ones. There are new names for things that basically amount to timeshares. The focus of the scam has moved from high interest to high fees.
And so the scammers constantly 'make' new information that disadvantages everyone who lacks it, and get money spreading that information to the populace. Is the pure-markets system supposed to not have this problem, maybe by correcting too fast to reward the scam? Or is it just accepted that there will be some large and stable amount of scamming at all times?
Markets are just a tool. Entirely unregulated markets exhibit some undesirable properties. Society, through government, has every right to aim to diminish the ill effects of these undesired properties. But it also behooves society to be careful in how it regulates, in order to avoid diminishing the usefulness of this tool. It's a balance. This is not as sexy or simple in principle as either extreme, but it's the right answer.
This is one of those cases where regulation makes sense. I think regulations aimed at improving information symmetry are some of the best. They are fairly low impact; maybe they stomp on an arbitrage opportunity, but they don't limit the solution space nearly as much as regulations that simply proscribe what you can and can't do, for instance.
Basically: the "hard libertarians and anarcho-capitalists" are just wrong. But if they were to rebut with a take down of state controlled economies, I would definitely agree with them about that. The trick is to strike a good balance.
One of the main reasons I can't buy the "The consumers shouldn't be so dumb" argument is that there's usually a concentrated push back every time the idea of teaching basic financial literacy in high school comes up. I could understand it if people were taught basic personal finance, but most people are not taught these things.
You could start by making it illegal to offer prizes to attend real estate sales seminars — decapitating their primary hook. Next, you could require interest rates to be in gigantic letters, and a whole host of other info to be required. You could also make it illegal for real estate developers to also be loan providers.
Force them to, up front, present a very clear, very basic, and in very legible print the exact terms, and exactly how much this will cost per month, per year, and how much interest will have been paid over that time. Including the addition of all fees.
I have vague memories of Father dragging us along to timeshare presentations each holiday or so, purely so we could get a family ticket to the local water park or whatever.
I don't think I've thought about his for years, so thanks. I think. I didn't recall how cheap Pa was.. :)
These are all through Bali. The scam is that you appear to win something, but really it is just to get you into a high pressure sales environment. So you go back to their office (where everyone is amazed that you won!) and then realise the prize is a tour of some holiday destination they want you to invest in etc.
They do give you stuff for free. I got two free tickets to Disney. I just had to convince them that I was interested in buying a timeshare for 90 minutes. Once I got past that mark, they were obligated to give me the tickets - a fact that I promptly reminded them about. Two aggressive sales people and one super pissed off sales manager later, and I was off to Disney. I would never do it again - it was sheer agony.
My dad signed up for one of those sweepstakes back in the '90s. They called and said he won a "prize" but he had to come into view a "presentation". Went to the "presentation" where they tried to hustle him to signup for a timeshare. He resisted and they gave him the "prize", which was a knockoff boombox.
That boombox is still alive, my mom uses it in the garage when she's doing gardening. I'm pretty sure the company that gave it to us is long gone. Life finds a way?
For those of a certain age (I guess).... Its a radio player with speakers. Usually battery powered. Usually with a cassette tape or two (for copying). They ended up getting pretty big in the 80s (large in size) with detachable speakers.
We had the small yellow waterproof, sony sport model.[1]
I think one even had a record player.
At some point loud portable stereos migrated into cars.
Now we just transmit audio to portable battery powered bluetooth speakers
Car stereos became an aftermarket industry with upgrade-able and louder components at the same time that boomboxes appeared on the American market; they were parallel industries, driven by the advent of cheap transistor-based amplifiers in the mid-70s.
Amusingly, the website this article is hosted in pops up a modal asking you to sign up to a mailing list with a low contrast dismiss button and saying "you can always unsubscribe". People in glass houses.
Also there’s about 17 typos and grammar issues in this tiny article making me question if the “investigative journalism” portion of this article is just made up.
Seems suspicious that they are willing to spend days chasing down a story but not 5 minutes proofreading...
>The information from these forms is collected en masse, entered into a large database, and delivered directly to the telemarketing company running the promotion (in this case, Great Destinations).
Another shady “competition” is the “complete this form and get a laptop”. Except it’s not just this form, it’s this form, and this form, and this form, and this form... until the user gives up.
Each of those forms goes to a sales call list. And when you give up, you’ve already completed half a dozen forms - and you’ve given all that data for free.
If somebody does ever complete all of the forms, they get told the laptop is now out of stock - but here’s a free £50 voucher for Amazon.
I know some people who automated those but basically fed them fake generated data, and managed to make quite a bit before they got banned. Probably not legal, but AFAIK the responses to those surveys aren't legally binding either, and the more "poisoned the well", the less profiling and tracking they can do, so I don't have any moral problems with that.
A couple of years ago I had some time to kill in Vegas since i don't gamble. I was approached by this timeshare dude who offered me free tickets to the Shark Reef and a $100 gift card for a fancy restaurant. I attended the meeting (free breakfast!), politely declined all offers from a range of salesmen with ever hardening sales tactics and walked out with my vouchers two hours later.
Similar experience here. They really do try several tricks to get you to bite. The one trick that they tried was that once we were in the restaurant the lady claimed that it was a mistake and that we were not supposed to be there. The free meal was only for members but she would overlook it and continue with the presentation just for us. Pretty laughable.
Some of these presentations can be a good "deal" if you can resist the sales pressure, the sales staff takes your declination in good humor, and they actually give something of real value as a lure. If not, well the best case scenario is you've wasted an afternoon being yelled at and walked away with a useless "prize".
My mom participated in one of these drawings at a mall in Germany. A few weeks later we received a call: we got randomly selected for the final 10-20 candidates (can’t remember the exact number) from which 5 will win a car and should come to the main event.
At the main event, believe or not, 5 people out of the 10-30 finalists actually won a car! My mom included! Of course they said it’s not the car that was at the mall because that was only for demo, but she received a brand new never used model roughly a month later after filling out the papers and still drives it today :)
I used to know someone who worked for one of the companies behind those "We'll Fix Your Credit Score, Call Us" and "We'll Buy Your House, Call Us" signs on the side of street intersections (among other things), and I asked her to explain to me how those signs could possibly make any money.
The way she explained it was (mostly her words), way less than 1% of people are dumb enough to dial the number, but of the people who do call, 100% of them are people who are dumb enough to call.
In other words, if the signs appeared more credible, they would be much less effective, because they'd end up wasting a lot of time screening the calls of people who are unlikely to accept the terms they offer.
She also said that scaling up (and going up market) would increase their likelihood of litigation.
It seems to me like that's what's happening with these timeshare seminars. The car isn't just there to mislead people about the potential upside of the contest, the car is really there to screen the marketing process for gullible people attracted to large financed purchases.
I sometimes wonder if this isn't a fairly common practice in numerous industries. For instance some time back I was watching a show on US cable television. Vikings on the History Channel, in particular. Aside from the completely obnoxious icons and labeling everywhere, about 5 minutes into the show advertisement pops up literally in the middle of the screen consuming about 25% of the screen space. And that was enough for me to immediately move onto other things, as that's worth less than the $0 price of admission. Incidentally the web version is amazing, has more content, is better quality, has no ads, and something I would generally highly recommend - underrated series.
While cable TV, and cable news in particular, has been rightfully demonized, it makes me wonder if they're really just happy to target themselves down to a demographic that is willing to tolerate this nonsense. And perhaps this demographic might also respond more favorably to advertising, influencing, and other corporate ends.
The same thing has also happened in the movie industry as well. If you think the vast majority of modern movies suck, it would not necessarily just be because of nostalgia or other effects. The modern movie viewer demographic has changed radically and thus movies are being made for these people. Even more interesting is that movie ticket sales are down hard, but they're somehow convincing the new demographic to pay even more which actually means that gross receipts have been stable and even increasing at times.
--
Of course there's also a chicken and egg question. In the movie industry for instance, did movies change because the demographic changed, or did the demographic change because movies changed?
I wonder how much we undervalue audience segmentation when analyzing social network profitability. Twitter and reddit’s perpetual issues making money could be that they index too highly for cynical people who trust no one, while Facebook does gangbusters indexing highly for people desperate to make a connection.
It's the same logic that drives absurd spam mails. They want the kind of people that consider a nigerian prince that needs your help to share his wealth with you as a legitimate opportunity.
This is similar to the reason that household brands have such terrible packaging design. It's a form of price differentiation - if you can afford the more expensive version you'll avoid the ugly one just because it doesn't look nice.
I've always been amused by Sainsbury's tactics - as well as the bland and unattractive packaging for their value brands, they also add a little passive-aggressive slogan that slightly throws some shade on their own product (and perhaps by association, you). For example, value wipes have "Not quite as thick, but cleans up quick". Value peas have something like "A little smaller, but just as tasty!"
Emphasising "less" and "small". I guess the slogan they really want is "You are too poor to afford the good stuff".
(Of course the joke is all the products are indistinguishable out of the packet as no doubt they come from the same production lines and they aren't likely to tool up to make deliberately inferior versions if that would cost extra).
>Of course the joke is all the products are indistinguishable out of the packet as no doubt they come from the same production lines and they aren't likely to tool up to make deliberately inferior versions if that would cost extra
That's absolutely not the case. It's definitely economical to make slightly inferior versions for the value brand. If you read the ingredients, you can see where they've cut costs. For example, the ordinary own-brand chocolate digestives are 27% chocolate, while the Basics brand digestives are 24% chocolate.
Basics pasta is made from an inferior grade of wheat, Basics peanut butter is bulked out with 8% vegetable oil, Basics tin foil is very slightly thinner. It seems like a trivial difference, but it equates to millions of pounds a year across the entire product range. The major supermarkets and their manufacturing partners are incredibly good at finding marginal cost savings.
Supermarkets really want you to buy their own-brand products, because the margins are far better than on branded goods. I believe that the slogans used by Sainsburys are playing on quite a subtle psychological effect - by signposting how they saved money, they reduce the sense that the product is suspiciously cheap.
Low-cost airlines like Ryanair have deliberately cultivated an image of conspicuous thrift. We intuitively interpret the second-tier airports with crappy facilities, the tatty seat upholstery and the ugly websites as signals of trustworthiness, because we can see where the corners have been cut to save money. In some sense, we want to get shafted on baggage fees or sold a scratchcard by a surly flight attendant, because it allays our fears that they have scrimped on engine maintenance or hired a load of ex-Aeroflot pilots.
Well I would be for penalizing such businesses. Isn't this just bait and switch? Such businesses should have their licenses revoked, as they damage relations for everyone else who wants to use prize incentives. These cheaty businesses also call into question the common person's ability to negotiate with fine print -- it's just too much.
In the USA, this is just how it’s done. I’m not exaggerating; this is business as usual. Penalizing this would be a catastrophe for Americans. I think the sheer volume of the tricks, lies, gimmicks and gotchas cause each one bleed into the next to the point of immersion. The shimmer of the spectacle and hope become one and the same. Because every day is just another swindle at the Big Bazaar Of Life.
A decade ago I would have thought your comment was over the top. Then I moved to Germany. And was surprised to find an utter lack of spammy phone calls, no crowd of ubiquitous scammers vying for my attention, no surprise mystery medical bills, nothing. I was with my German girlfriend in a department store once, she tore a little slip off the stockings she was buying, put her name and email on it, and dropped it into a jug by the cash register. I gave her a "were you born yesterday" look and asked if she hadn't yet learned that these things are all scams. She had absolutely no idea what I was talking about. A month later we won an all expenses paid trip to a resort in Turkey, it was on the tacky side but also the height of luxury and relaxation. All the stocking brand wanted from us in return was a few happy selfies to post on their Twitter account.
If more Americans knew that it doesn't have to be this way, maybe things could change.
I have more or less the same story moving to Austria. I get spammy calls but they are actually legit surveys (quality of life, political leanings, newspaper preferences, etc) and only because I gave up my phone number at a party many years ago and haven't bothered to have it removed. I get once of these survey calls about every 3-6 months and if I'm not in the mood I just tell them I don't have time and they never call back. On occasion they ask if they could call back at a later date.
Re: winning things - I won 500 Euro from Visa for entering a contest, where the only requirements were to fill out the online form with my name, age and email address, followed by using my Visa card 3 times in one month any of the following 3 months. I should note that Visa the company here doesn't actually function as a credit card like in the U.S., rather it's directly connected to your bank account, where at the end of the month any balance due is automatically deducted. If your account drops below zero, you just pay some interest at the end of the month. From my basic research (looking at my bank statements for the past 2 years), it's extremely low. In fact looking at my last "25% KEST" charges, I was in minus for 3 months last year, and the charge was 0,02 euro cents. I honestly have no idea how that works, but I assume we have some good consumer protections in place.
>Visa the company here doesn't actually function as a credit card like in the U.S., rather it's directly connected to your bank account
People get these concepts confused a lot.
Visa is a payment processor - that is, a company that facilitates electronic payments.
Different "payment types" (credit, debit, gift card) can use the Visa network.
Visa, the company, does not issue any credit cards or debit cards directly themselves, they only make agreements with other financial institutions who issue cards that use the Visa network to process payments.
So your debit card is issued by your bank and uses the Visa network to transfer funds.
Visa debit cards are also extremely common here in the US as well.
MasterCard is like Visa in it's just a payment processor, it doesn't issue cards itself. American Express and Discover, however, are both payment processors and issuing banks, they issue credit and debit cards themselves. It gets more complicated because other financial institutions issue credit cards that use the American Express payment network.
So because of all this I've had a debt card that switched from Visa to a MasterCard when the bank's agreement with Visa expired and they got a better deal with MasterCard. I also had a credit card that switched from using the American Express network to the Visa network.
I thought a debit card was just for withdrawing cash? We have bank cards (Bankomat Karte) for withdrawing cash - in fact, when you pay and want to use the card, many people just say "karte" (literally: card) to mean a bank (debit?) card and not a credit card.
Our Visa cards can also withdraw using a pin, but I don't know anyone who does (anecdotally speaking - but I do pay attention to shoppers ahead of me in line, seems like a rare occurrence). I personally use it to (very rarely) purchase products for which I don't have enough cash on hand, and because banks generally set the withdraw limit to 400€/day. On top of that, most places (IMO) still don't accept credit cards or will charge 3-5% fee (such as the official Apple dealer McShark). Visa transactions are also hindered in comparison, there tends to be less information available about the purchase and seller names are truncated to ~20 characters. Also the booking is often delayed (online) until the statement is sent per e/mail, unlike bank transactions which appear online within 24 hours.
What you initially described isn’t a “debit card” despite GPs post, but a debit card isn’t what you think either. A debit card can be used like an ATM card (what you call a Bankomat, and isn’t charged a cash advance fee like using a pin with a normal credit card), but it also can be used pinless like a credit card, just the money is immediately held in your bank account. That’s the difference with what you described originally, the immediate rather than end of month part. The closest thing really we have in the US generally used to what you describe is a “charge card”, which some versions of American Express are. You are required to settle up in full at the end of the month usually, though, and carrying a balance isn’t allowed (again, not always, but usually).
> I thought a debit card was just for withdrawing cash?
In many countries you can use the debit card to withdraw cash and make online and EFTPOS transactions. EFTPOS machines can process debit and credit cards. With debit cards the money is deducted from your account immediately or in your case at the end of the month. (but then it should be called credit not debit)
Good Lord, you're right. This sort of marketing could work, if Americans were more vigilant about punishing bad actors.
If someone in Germany tried an American-style scam, the sheer tangibility of the vision I have of angry Germans not effing stopping until the perps are put in jail is palpable.
Sadly, this seems to be a national attitude and those just don't seem to be transmissable.
Now I'm wondering whether Germany is the exception or the rule. I darn sure wouldn't want to trust anyone, say, in Russia. Not sure about Latin America though. Argentina might seem safe, but Mexico? Africa, mostly probably not.
This is certainly true. In fact, I would go so far as to say we (those born or raised in the US) are conditioned from a young age to become dependent on our consumer economy in order to lock us into a system where we have to accept this sort of behavior or go to extremes to reject it becoming an outcast or "wierdo".
This leads to the development of an ineffective coping mechanism where one learns to identify scams they have seen in the past and find a defense for it. This is like leaving a firewall wide open and only closing a specific port after an attack has occurred on that port. More precisely this is a reactive approach to defense.
A comprehensive approach to systematically develop effective safeguards in the US probably won't happen, ever. The people who want these safeguards are too busy with their day-to-day lives to dedicate any considerable amount of time to achieving it, meanwhile the people don't want anything to change have the time, money and influence to fight any attempt at reform. Meanwhile value is being extracted from the consumer which leads to a never-ending cycle.
This is getting a little scary with the shift to rent-seeking behavior. This is true from even the more established, trustworthy businesses (think Microsoft). A monthly subscription is not so bad, but when this becomes the normal way to buy things from the big names it legitimatizes the practice so a scammer can get their hands into your pocket forever.
When I was a kid -- I'm in Australia -- we'd regularly get computer line-printed Readers Digest Sweepstakes out of the blue -- we lived in a farm in a rural area and this was the 1960s.
The sweepstakes often made claims that "we have invested $1.34 in your name..." It was many years before I realised that they really meant "we have spent $1.34 buying your name and address..."
A few years ago my wife got a call about a free cruise but the catch was sitting through the timeshare sales pitch. We had no intention of buying in, especially since we couldn't afford it at the time, but we wanted the free cruise (well my wife did, I didn't want to go). Well we sat through the horrible sales pitch and then they put us in a room to get the cruise. We sat in the room for maybe 25 minutes before we gave up. Nobody came in to help us in that time. The reason we left wasn't because of the wait, I was determined to get that free cruise despite not wanting to be there. The reason was the restrictions behind the cruise. There were tons of blackout dates and you couldn't pick the exact date of travel. You picked 3 dates and they would let you know which one. I also believe there was a very short window of when they would notify you that you had the tickets to the cruise. I was starting my career at the time so I didn't have the flexibility of just taking a week off at the last minute.
My friend won a "dive trip" after entering a contest at a dive show.
just sit through a timeshare pitch.
I went with him, because my dad spent some times in car sales and I'm good at not buying things. Plus as his dive certified friend I could go too.
We went to a rented conference room in a hotel for the pitch. It was agony.. High pressure sales (If they have to pressure you to buy, you probably don't want it)
He got the trip voucher, but it ended up being worthless. It was cheaper to book another trip normally because of added fees and such on the free trip. He never took his "free" trip.
We had a similar experience 10 years ago. I got a call about free vacations or another prize, catch was sitting through 1h timeshare sales pitch. It was an horrible experience, everything was fake, there were actors in the back screaming "We are so HAPPY TO BUY THIS", etc. I don't remember the number for the timeshare but what I remember is that it was impossible for me to buy that, there wasn't anything I could do even if I wanted, but they insisted , insisted and insisted. We wanted to go away from that horrible place and we didn't care about the prize at that point but we felt like "politely" kidnapped. Is an horrible experience I never had in my entire live. Finally they gave me the prize, it was 7 days in a place I didn't care and it had a lot of blackout dates as well, tax not includes, and a lot of items "not included". Note: this was in Argentina, probably in the first world there are more strict rules.
Quite a long time ago, I went to a big ski show and being younger and more foolish than I am today I filled out a bunch of contest entries. I was positively bombarded with "you've won a free vacation" sorts of calls and mails for the next year or two. All I had to do was listen to some timeshare pitch.
I never actually did but I'm sure it would have been similar. I've met a few people who at least convinced themselves they liked their timeshares but the idea never appealed to me.
Back in the 90s there was a hilarious trend of winning the car in the mall by being the person to be in the car the longest. This was when SUVs were becoming a really big thing.
People were sleeping in the car with 5 other strangers to see who could outlast the others, with only short bathroom breaks allowed.
I'm not really sure what the advertisers/dealers won in that exchange.
Probably a bit of free publicity in a local newspaper, people coming by to watch for a while (while a salesperson approaches them), etc. It's good fun, too.
I saw that very car at that very mall, and the screens were all surrounded by people eagerly entering their info. Don't people get enough spam calls and emails to realize why?
They just blame it on their phone company and the like. I know a few people that knowingly hand out info at conventions yet will blame everything but. Might have to do with the marketing companies waiting long enough and people quickly forgetting about them entering their info. So when the spam calls hit they just think of whatever company they know for sure has it.
Side note: it’s almost impossible to book anything in Orlando without getting spamming with timeshare calls months later. I’m amazed it’s even legal.
This is why the GDPR and similar things are good; you can sign up, but they have to delete your data if you ask them for it. It makes schemes like this a lot less er, 'final', so to speak.
However, this only works if GDPR ends up being enforced, which doesn’t look too great so far considering how many sites violate the regulation with non-compliant forced consent screens.
No. Otherwise, the marketers wouldn't waste their time.
People don't think past their nose.
Similarly to the concept of demanding adequate gov't representation, digital security has been made to seem impossible by large media conglomerates who benefit from all the tracking of advertising networks, etc.
It's never just 'one spam email'. You end up on a list, the list will end up being sold many times over, also to other list creators and in the end you will get 100's if not 1000's of messages, probably you will still be receiving messages long after you're dead.
Reminds me a bit of a process I've been wrestling with to redeem a "rebate" (gift card to a chosen retailer from a list) on an online textbook, negotiated between the professor and the textbook company after the semester start. The stakes are a little lower ($15 rather than a car) but the hoops they make you jump through, and the personal information they want, for what is ostensibly your money definitely make it feel just as scammy.
When I was in middle school, I remember doing a raffle at our local mall for an iPod Mini. My Mom told me to ruffle up the paper before dropping it in because the raffle drawer would feel the rough edges and select that one.
We got a call a few weeks later that I won the iPod mini. I still remember my mom driving me to the mall and them handing me the new iPod Mini. That was my peek. I've never won a raffle since.
In India, at the entrance of almost every mall, you will find a few people handing you cards to fill-up your name, phone number and email, with the promise of lucky draw gifts.
It's a way to harvest personal information for mobile phone and email spamming.
Yet, so many fall for it. Even modern urban types.
Once, there was a telemarketer calling me and trying to persuade me to buy a home alarm system. All he wanted is to get my credit card #. I asked him to repeat himself 2-3 times for almost all of his sentences (not all, because that would make him hang up). After about 20 mins, he knew my game and said that I was wasting his time and I was not a good citizen of the U.S. I was sad because somebody said that but the whole conversation was fun :-)
Have to smile, reading this. It reminds me of the time I received a very scammy call telling me I'd won a week's holiday in Florida (US accented person; I am not in the US). Now in my world view, if first prize is a week in Florida, second prize would be two weeks in Florida. Losers get to spend the rest of eternity at Maralago (sp?). But all that's a horse of a different colour...
I asked the caller to hold a moment...
Went out into my veggie garden and spent almost an hour doing some digging and weeding and generally having a grand ol' time in the sunshine. It raised quite a laugh when I returned around sunset and the caller was still holding, waiting for me to return. Quite unbelievable! Led me to wonder how these people are incentivised.
I put the phone down without waiting to find out anything more about their scam/offer/whatever.
I know a lot of telemarketers can not hang up a phone themselves or require a manager to do it for them. Not hanging up is a great method if you want to annoy them
This is one of the investments no normal person with a healthy common sense would even consider to invest in. So if you see "timeshare" and are not dropping the flyer into the trash can, that already says that you are open to getting screwed over. It's like the "African prince died, gives you $10 mio if you give us your credit card details".
That said, there is nearly no game or investment that doesn't at least have some people trying to cheat others.
So in practice, I know this is true, but in principle, splitting a vacation property 52 ways so that everyone gets one week a year actually seems pretty reasonable. Why is it that these things are always scams?
They are NOT always scams, they just have bad reputation because of possibility of abuse.
There are plenty of good management companies that run thousands of timeshare units. My family pays for 3 and all are in perfect shape, own private beach access, gives access to nice cars (that are changed to new every 2 years) and have very strict rules on participants. No, you cannot just crash place with your friends and call the day; the penalties are harsh and good timeshare management will match you with people interested in similar lifestyle. They are much much cheaper than price of tickets / setting up vacation trip and the thought alone that maximum 52 people (versus 365 in hotel room) per year slept in that bed and took a dump in that toilet is a very comfortable one :)
I have good news and bad news. The bad news is, your uncle in Nigeria died. Want to know the good news before or after you give me your credit card details?
I know a couple people who have timeshares in some prime vacation spots (island, ski/hiking areas in the mountains) and they are quite practical when you don't/can't buy/rent a property permanently, instead sharing it with 10+ other people, divvying up the weeks lottery-style and enjoying a few weekends a year. It's also a motivation to plan for taking weekends off to just relax, since you only get 1-2 windows of opportunity once or twice per year.
You can rent people's timeshares usually for the maintenance fee. If you really want to own a timeshare, buy it on the secondary market for a fraction of the cost.
They're as expensive as a car, but sold (a) remotely (so the customer has no opportunity to inspect before buying) and (b) within a vacation mindset (which makes people less diligent about diligence). TL; DR Used car salesmen with fewer checks on their behaviour.
I once worked as a freelance graphic designer for a company that wanted to give away a car as the first prize in a raffle. All promo material needed to have huge amounts of fineprint, including that the winner - in order to get the car - would have to sign a contract, forcing him to leave the company's logo stickers on the car for two years, or pay a penalty of about 20% of the car's value.
> In simple terms: when you enter one of these contests, you’re allowing telemarketers to not only use your data to make robocalls in perpetuity, but sell it and share it with any “subsidiaries” it chooses.
They don't check if it is you who's entering the information. What could go wrong?
The TV giveaways are also a con. You know the deal, you watch the whole show because the competition details will be given at the end. Then the questions are multiple choice and rather easy. For example, where is the final stage of the Tour de France? Option a) Peterborough, option b) Potters Bar, option c) Paris.
In this semi-fictional example if you get the answer right then you could get to win a bicycle shaped object that looks like one of the bicycles ridden by one of the top teams.
You might not be telemarketed to death in this instance but the text you send will be to one of those premium rate numbers, to cost you £3 or so.
This money then goes to pay for the show, if you get 10000 people to text in then that is real money, enough to pay for the interns and rent the camera gear.
But it was not always like this. There was a time when the answers were difficult. There was also a time when nobody knew what a search engine was because they had not been invented yet. There was also a time when knowledge might only exist in people's heads rather than only online. Questions for TV shows could be difficult and the only way to enter might have been on a postcard where you might also have to enter a 'tie breaker', e.g. 'bicycles are best because...' (complete in less than ten words).
The tie breaker might not be there to just pick a winner from those that got the question right, the show might honestly be looking for a slogan and crowdsourcing it was a good way to pick more brains than just the production crew.
Furthermore, the result or answer was something of interest to the viewers. You could learn something. General knowledge was a thing back then, not denigrated to 'trivia' or something you could get by using your favourite search engine. General knowledge had value beyond the pub quiz.
In these former times, before 'Who wants to be a millionaire', it would have been an insult to the audience to ask a noddy multiple choice question for a competition.
Answering would not have been totally beyond the realms of possibility, you might have to go to the local library, dig out Encyclopaedia Britannica and get the answer from there. Or, if you knew your subject, then it might be something you knew. So winning also meant that you did get 'respect' from your peers and 'the world at large' for being clever enough to know the answer. Winning might have been more valuable than the prize itself just for the kudos. It wasn't as if some computer just selected your name at random in some lottery of other mugs willing to gamble.
The funny thing though is how these things go full circle. The TV shows that made the competition into something patronising and lame no longer get viewers, or even interns. That intern can make more success for themselves being a Youtube influencer and doing it all themselves. Rather than make the tea and do the errands for the big fat producer they can do their own script, presentation, camera-work and sound. they can also do their own competitions. And, in their competitions they can give away some respectable loot and get some genuine feedback from their fans. They can also avoid having to fleece their fans of an SMS premium rate call, a like/subscribe/thumbs-up and comment will be needed though. Even the question can be non-Google-able, fans might know from watching the show what breed of dog their co-presenter owns, so that could be a good quiz question. There need not be any bait-and-switch and the car given away really can be an actual car that actually gets given away.
All to make it a game of skill and not run an illegal lottery.
I assume Ofcom or IBA before them put no effort into enforcing so the programmes just felt free to turn it into a lottery with a question only the dog will get wrong.
In the olden days of answers on a postcard to... yes, some of those were actually difficult questions. That was in the days that Brit TV still tried hard to avoid becoming commercial trash and even the commercial channels were quite restricted: Caps on game show prizes, no naming of prize manufacturers - even when you can clearly see it's a Ford, cash values were capped even lower than prize values.
Who Wants to be a Millionaire wouldn't have been allowed a few years previously. Now every show seems to have their own illegal lottery and we have product placement. :)
> the text you send will be to one of those premium rate numbers
One of the curious laws in Northern Ireland requires postal entry to be an option for all submission competitions hosted here.
So QRadio station advertises its 'win free money' competition, entry by a text message costing £1.50, but also has to state that postal entry is possible. I really should write a letter.
NI law also prohibits requiring purchase of an item as a condition for entering competitions.
Not sure whether what you're describing is different; I understand UK law is that you have to have free* entry as an option otherwise it's gambling, and the company has different regulations plus a bunch more tax to pay. Most companies therefore include a free option so they can avoid being classed as gambling. Many actually have it online since that's cheaper to run than reading post! Of course, the URL is not easy to find...
*or at least, something where the competetion runner doesn't make money from the entrant, so postal is fine even though you have to pay postage
>I understand UK law is that you have to have free* entry as an option otherwise it's gambling
The 2005 Gambling Act allowed a much wider range of promotional prize competitions and draws. If the question is a genuine test of skill, you don't need a free entry option (except in NI). If you do include a free entry option then you don't need to bother with the trivial multiple-choice quiz, but the free entry route needs to be publicised with equal prominence to the paid entry route.
If anyone wants to listen to an example of a somewhat difficult quiz programme they could try Brain of Britain - a long running radio show on BBC Radio 4.
Likewise. I'm usually at least decent at general knowledge quizzes and was more than 20 questions into the episode I picked before I knew an answer 100%.
The episodes available in the US at the GP's link are all Semi-Finals and Finals. Could any regular listeners comment as to whether they tweak the difficulty for the tournament or if it's always such a relentlessly high bar?
I worked in one of these call centers just after high-school. Not even a molecule of ethics existed in the entire company. My job involved getting yelled at by people who were sick of getting calls from dozens of different companies, and occasionally talking with someone gullible enough to come in for a sales meeting, who would then yell at everyone involved once they discovered they had been duped.
I can't remember exactly, but I think I eventually got fired because I started to deviate from the script. Sometimes being honest with people, and sometimes trolling angry people. It was a horrible job.
The really disappointing part here is that many, many more things are like this. E.g. raises and promotions. Nowadays a lot of companies can't afford these any more. But still on paper they offer these opportunities and even really give promotions to 1-2 people of multiple dozens or hundreds, so that you feel shitty about not getting one. Or dating websites that give unattractive people hope that they can find a (-n attractive) partner if they fill out 2 hours worth of forms and let the inputs run through an algorithm.
This sort of thing and the sorts of things Facebook and other companies do really gives CRM and marketing a poor name. My team and I work in technical CRM and we do what we can to give our customers actual relevant advertisements. We also willingly collect only relevant data, don’t store it indefinitely, and never purchase data. The social team gets cranky with us but we have a core set of values that we don’t compromise even when upper management gets pushy.
Is this article a very clever Facebook submarine marketing ad? It ends with a false statement about Facebook providing instructions to delete data. I live in USA and can't find any way to delete my browsing history that Facebook collected via the Like button.
My grandfather won a Cadillac, it was the 60's in San Francisco, and Regal gas stations ran a contest, grand prize a shiny new Cadillac. The details are lost, but as far as my dad knows it was a plain enter-to-win raffle, and his dad won! Comin up slammin Cadillac doors, but they "weren't really a Cadillac family" so they sold it.
It really bothers me that people completely lack any sort of moral fortitude they think overtly lying and deceiving people is "ok". The fact is, everyone from the dealership to the call center employee knows whats going on and is a willing participant in this scam.
pff, there was some movie long ago, some technician was installing a few 1-armed-bandits in some pub, and asked the owner - should they give 1 win per 100, or 1 per 1000 ? And the owner answered: What? 1 per 1000? We're not a charity here, there must be zero wins!
Having worked in casinos and actually owning a real, unrestricted gambling machine (for laughs, tbh): that's bullshit. Gambling works because there is always, always some machine that is paying out money. This one machine is sufficient to get all other patrons to throw more and more money at them.
Sometimes all hell breaks loose and multiple or all machines pay out. The joke is that most gamblers won't cash out and go home - they will "reinvest" their entire win in hope to win more... and the really desperate ones throw even more "fresh" money at them.
I interviewed about engineer who used to work for a South American casino company, and he explained that on Saturday nights the machines are configured to pay out 110%, then the next morning... Much less.
You mentioned owning an 'unrestricted' gambling machine - I've always wondered, do such machines have a setting to actually be fair (or I guess, totally random?) Or is it always a matter of payout percentages?
"Unrestricted" in that most second-hand gambling machines are switched to a "demo mode" which delivers unrealistic winning chances.
The situation with the modes is more complex in Germany:
- "real", licensed casinos can carry the big ass slot machines. These have very high limits, both in wins and losses, and can be centrally controlled by the casino.
- bars, "machine casinos" and other unlicensed venues carry the machines of the kind which I have. On these you can lose (aka pay in) no more than 80€/h, and win (aka pay out) no more than 500€/h. Which means: if you win e.g. 1000€, you'll have to hang around for 2 hours to withdraw your win. Machines based on the new rules (TR5) actually have even lower limits (80/400 loss/win). These are mandated to only collect a certain amount of money - only 33€/hour used should go as profits to the operator, the rest of the money paid in must be distributed to the gamblers over time ("long term").
The article mentions about GDPR, but I thought GDPR was mostly for online businesses? How would GDPR affect an offline telemarketing company like this one where almost all of your info are collected and processed to the fullest possible unethical extent?
GDPR affects any organisation (not just businesses) that collects and processes the personal data of people who reside in the EU. So yes, the same rules would apply here, assuming the business deals with EU residents.
In the 90s my brother almost won a car. It was legit because he was part of the 10 finalists and the news media was there. They all drew keys out of a bag and tried to start the car until one of them started it. The key he drew didn't work.
> In the course of an hour on a Wednesday afternoon, 22 hopefuls fill out the digital form.
Lets take this hour to be an average hour. Over 12 hours in a day that the mall is presumably open, that's 22*12 = 264 leads.
> the mall isn’t behind these giveaways; they merely rent out the advertising space (for around $1.5k per day).
This would imply that these leads need to be worth at least $1500/264 = $5.68 per lead. Does this look like too much to anyone else? I would have guessed that independently of what they're selling, the conversion rate has to be attrocious, as people signed-up not because of their interest for the thing being sold but because they wanted a free car.
Maybe the reason why this works is that people who are stupid enough to give out their names on a mall promotion, are probably also easy to push shit on.
EDIT: I forgot to add at least two other costs: they need to lease the car, and they need to pay employees to keep an eye on everything. So that figure is more of a lower bound.
Don't forget to consider the revenue side of the equation. I imagine these promotions wouldn't exist if they didn't make money, for at least a few, business entities in the chain.
If they have:
0.3% conversion;
$25,000 average price;
20% margins
Which aren't unrealistic numbers for timeshares. They break even at $15 cost per lead when ignoring call center costs and other overhead. It's pretty easy to find people to work at an outbound call center for a campaign like this for $9-$12 an hour. (that's without looking offshore) There's also the possibility for additional revenue on customer financing and data resale.
When I was a very very broke college student, I worked on cold calling campaigns trying to set appointments to sell security systems. Now I do analytics for a a business that is happy with doing outbound dials on $20 CPL for largely semi-qualified leads. It ain't the most fulfilling work. But it does pay well and the owners have never, and will never take outside investment.
Ah, I misunderstood. You mentioned a $6 CPL as seeming like 'too much' and in my experience it wouldn't be. I've seen targeted data request campaigns hit that with generic survey data gathered from completely unrelated businesses/industries.(Partially qualified warm transfers usually costing at least 4-5 times that) Especially when factoring in the ease of, and revenue gained from financing deals. After accounting for, what has to be, one of the lowest costs for re-possession out of any industry; I wouldn't be surprised if they made more money from loans that defaulted/sold to collections than anything else.
It's not a lot of leads but they're self-selecting for guillibility. Anyone who thinks they can actually win that car is probably more likely, as you guessed, to buy whatever crap someone is going to try and sell them.
Also that's just an hour on Wednesday afternoon. I'm sure the weekends get many more leads.
They're not leasing the car, I'm sure. It's provided for free by the Acura dealer as advertising. The article refers to it as a "loaner" from Acura of Fremont.
It's also not inconceivable that the dealer chips in some money for the floor space as well, though I find that less likely because it probably just over-complicates things from a logistics perspective, particularly over such a small amount of money.
It also reminds me of loyalty programs at department stores. I get so tired of the disgusted look on the face of the cashier when they ask me if I want to sign up for some clothing store loyalty card today to save 40% or something. They can’t believe that the 40% discount on $50 isn’t enticing to yoke myself to their stream of ads and even more intense data sharing than whatever they are already getting from plain transactions.
The chance involved folding a paper plane, and then trying to get it into the car through the sunroof. Which was only open a small crack.
A friend of the family tried about 5 times over the day and never got close.
They came back quite drunk at the end of the day to have one last go. Threw the plane and instead of going over the top of the car, it accidentally slammed directly into the front windscreen. It then rebounded straight up in the air and then dropped straight down through the sunroof.
They walked away with the car.