MERCHANDISING FRAUDS Contracts Signed But Not Read.—Fraudulent furniture deal ers will of ten advertise certain articles, sell them to customers, give duplicates of signed contracts for instalment purchases and deliver entirely different articles. Irate victims are suavely asked to read the signed contracts, which describe not the articles seen, but those delivered. The same scheme obtains in selling other goods.
A mail-order concern circularizes with a "discount cheque," which is neither a cheque nor a discount. The cheque, plus the price, is a liberal amount for the article. With books the "give away" plan varies little in method. "Repre sentative" persons receive a notice that each will get a set of books free because the company wants one citizen in each com munity whose opinion counts to accept a free set, in order to act as a local reference. The petition, which is "confidential," says that there is only a "shipping memo" to sign. In a few days a carbon of the "memo" returns and the citizen finds that he is pledged to make a monthly payment for "supplementary material," usually amounting to $75 or $1 oo, regularly charged for the set.
formerly sold silk hose and underwear by mail. The victim paid $1 for a coupon as part payment on hosiery "worth $io," and he agreed to remit to the company the coupon and $3. This arrangement entitled him to a receipt and three coupons and the title of "receipt holder." The title gave him the privilege of selling the three coupons at $1 each, keeping the money. The first "receipt holder" paid $1. If, and when, each of three subsequent buyers sent $3 to the com pany the first "receipt holder" got his hosiery without further payment. This scheme was stopped by the post office.
a "graft" usually worked in office buildings. A pretty girl sells suit club memberships at $2 a week. In the weekly drawing, a lucky number wins a $5o suit. Those who never draw a lucky number are told that they will get a suit upon paying $5o. Police investigations in one city showed that $3o,000 paid into one club group yielded but five suits. Those who had paid $50 and went to get their suits found only cheap materials and a make believe tailor's shop.
Dishonest importers find profit and yet escape consequences. Import duties do not have to be paid until goods are removed from warehouses, if sufficiently large bonds are put up with surety companies and the goods are stored in bonded warehouses. In 1926-27 a wily merchant im ported an assortment of costly European goods which he stored in a bonded warehouse. Then he secretly removed it, burned the warehouse, and having his goods concealed and duty free, col lected the amount of the insurance.
