A sales pitch for stricter laws against door-to-door sales

KANSAS CITY, Mo. - When the warm weather hits, so do they.

A young lady selling magazine subscriptions knocked at Lisa Lund's door last summer. She was friendly, compelling. Her pitch was personal.

"She said they were making money to help put themselves through school, to get a better job and support their family," the Olathe, Kan., woman said.

Lund handed over a $75 check for three years of Seventeen magazine. Weeks later, she had nothing but a growing suspicion that she had been ripped off.

National watchdog groups say Lund and others have opened their doors to a largely unregulated industry where unscrupulous operators can flourish. Though some companies are legitimate, experts say, others can get away with defrauding customers and victimizing young salespeople, too.

Consumer and parent groups are calling for tougher laws.

Brian Frazier sees the sales crews almost every weekend in south Overland Park, Kan.

"They're fun to talk to. They're witty," Frazier said.

But every time they knock, he tells them he was burned once and never again. After buying a subscription and getting nothing, he left nine unanswered messages at Kansas City-based New Direction, the same company that Lund bought from.

So far this year, the local Better Business Bureau has received 19 complaints against New Direction, which lists a Harrison Street address in Kansas City. Frazier and Lund each lodged a complaint, and others came from as far as Utah and Texas.

The Kansas City Star called the company's two listed numbers, answered by women who claimed to have no association with New Direction. And when a reporter checked, nobody lived at its listed address, an apartment.

A national publishers group says it has long discouraged such activity.

However, the Better Business Bureau says it has received more than 11,000 similar complaints this year against 50 magazine sales companies.

"When there are that many stories, they are exactly the same," said Cherie Reese, vice president of the local Better Business Bureau. "A young salesperson came into my home saying they want to make a better life for themselves."

At 9 p.m. in the cold of November last year, a young magazine salesman from Kentucky came to James Hanson's door in Sedalia, Mo.

He asked to use the phone because he had been stranded by his crew and said he worked for a company that was not New Direction.

The 18-year-old told Hanson that he averaged 12 hours a day, six days a week. He was given a $20 stipend per day for food and was staying in a motel across from a Northland truck stop. He had no personal phone or transportation.

The youth seemed satisfied with the job, but Hanson, a lawyer, was concerned enough that he filed a report with the Missouri attorney general.

"You've got a kid who really isn't old enough to understand the darker side of life," he said. "Here they are at the mercy of some people they don't know that well, making all kinds of promises."

In conversation, it became clear that he was not working for college money, as he had told Hanson's neighbors.

Parent Watch, a nonprofit that has helped young people who run into trouble with subscriptions, estimates that 35,000 to 50,000 young people are selling magazines on any given day.

"Its big defect is that it targets youth, and youth are too easily manipulated," said Earlene Williams of Parent Watch. "You're talking about migrant workers here."

It's unclear if the crews have any connection with the publishers. In some cases, bogus subscriptions are sold without the publisher's knowledge. Watchdog groups suspect some publishers are silently complicit with the arrangement.

A spokesman for the Magazine Publishers of America would not answer The Star's questions but issued a statement saying that the group has "long urged" its members to stop doing business with any company that does not comply with the law. He said only a small percent of subscriptions are sold door to door.

For five years, the National Consumers League has listed magazine door-to-door sales among the worst teen jobs.

For Malinda Turvey, it was deadly. Ten years ago, the 18-year-old from Wisconsin turned to a magazine sales company to raise money for cosmetology school.

Two days into her new job, Turvey and six other crew members died in a van that crashed in Wisconsin.

Authorities said the van, carrying 14 salespeople ages 15 to 25, flipped as its driver tried to switch seats with a passenger as a squad car approached. The driver, who did not have a valid license, went to prison for vehicular homicide.

Since then, Turvey's father, Phil Ellenbecker, has been pushing for stricter enforcement against door-to-door magazine crews. This year, Wisconsin passed a tougher law that takes effect next April.

The law requires crews to register with the state's labor department and to post $10,000 bond. Their vans must be checked by the state. Everyone on a crew must clear criminal background checks.

"The bill is so powerful, and it is the only one of its kind in the country, that they don't want to come here," said Ellenbecker, who said he has documented 86 deaths and more than 300 felony cases related to door-to-door magazine sales companies.

"All the fly-by-night itinerant sales companies that used to come here will not come here."

But a Wisconsin state senator who voted against the bill said he saw no evidence that crews were out of control.

"Like everything else, there are good actors and bad actors," Sen. Glenn Grothman said. "I felt like it was a legislator taking advantage of a horrible anomaly to bar a legitimate business."

Grothman especially disagrees with one of the strongest provisions of the bill: that crew members must be company employees, not independent contractors.

"In the real world, there are salesmen who operate on a commission basis," he said. "That's the culture. Nobody's forcing them to do it."

But as contractors, Ellenbecker contends, the salespeople have no rights, no minimum wage, no benefits. And when a worker commits a crime, the company can deny responsibility.

"There's a huge crack in the legal system," he said, "and they're walking right down the corridor, and they're getting away with it."

It is no crime to play on the heartstrings of the consumer, said Capt. Bill Hisle of the Shawnee Police Department.

"I liken that to a vacuum cleaner sales guy saying this is the best vacuum or McDonald's saying they have the best hamburger in the world."

And more often than not, he believes, the crews are selling legitimate subscriptions.

However, his office responds every year to crimes committed by door-to-door salespeople, most often petty theft.

Rarely are they prosecuted.

"We have had multiple, multiple incidents, but many times we are not able to get the information we need before they have left town," said Johnson County District Attorney Steve Howe.

And if the magazines don't come? Enforcement can be just as difficult. Here's why:

- Customers may not even bother to complain if they're out only $50 or $100.

- Crews are long gone by the time customers know they've been defrauded.

- When buyers do complain, it takes time to document a pattern and respond.

As one Utah man found, dealing with state investigators can be equally frustrating.

After complaining about New Direction to the Better Business Bureau and the attorneys general in Utah and Missouri, the only thing Kelly Tipton got was a letter from the Better Business Bureau saying that the company could not be reached and would receive an "unsatisfactory rating."

Three months after the sale, the Missouri attorney general told him the same thing, adding that Tipton could prosecute but would need an attorney.

Legal fees would have exceeded the $370 he lost, so Tipton gave up.

Three years ago in Missouri, at least 60 people complained about Creek House Subscription before the Missouri attorney general's office sued, accusing the company of failing to deliver promised magazines. The owners, from the Joplin area, agreed to pay more than $11,000 to the state and consumers.

Ellenbecker hopes that other states and Congress will follow Wisconsin's lead, but checks in Missouri and Kansas turned up no legislative efforts.

"Unfortunately," said John Breyault of the National Consumers League, "it will take more Malinda Turveys before this issue gets the attention it needs nationally."

AVOIDING FRAUD

- Be careful about letting any salesperson into your home.

- Ask for identification.

- If your city requires itinerant crews to register, ask for proof that has been done.

- Don't fall for sob stories.

- High-pressure tactics often signal fraudulent activity. Don't let yourself be hurried or coerced. The seller can stay at your door only at your courtesy.

- Be wary of sellers who offer cash or discounts for providing the names of friends who might buy their products.

- If you want to buy, get everything in writing, including price, warranty and all conditions. Say you will check it out and get back to the seller.

- Don't make any payment hastily, especially for merchandise or services you haven't received.

(c) 2009, The Kansas City Star.

Distributed by McClatchy-Tribune Information Services.