Hy Cite Corporation Provides for Consumer Refunds and Must Avoid Future Misrepresentations
(SAN FRANCISCO) – Attorney General Bill Lockyer and the district attorneys of San Francisco, Alameda and Los Angeles today announced the settlement of a consumer protection lawsuit against Hy Cite Corporation, whose Royal Prestige cookware and water filtration products were being sold by distributors in California using allegedly deceptive advertising and unfair business practices.
In the settlement, the Wisconsin-based company agreed to offer full refunds to the more than 400 consumers named in the judgment and pay $250,000 in civil penalties and costs. The judgment issued by the San Francisco Superior Court also prohibits Hy Cite, its employees and agents from engaging in misleading sales representations about the health benefits of the company's cookware and water filtration products. In reaching the settlement, the company did not admit to any wrongdoing.
Under the judgment, the company and its agents are required to make substantial changes in their sales contracts to remove deceptive or confusing terms. The company and agents also must state clearly the consumer's right to cancel a purchase within three days and have in place procedures to fulfil the customer's cancellation request.
The settlement comes in a joint complaint filed in February 1999. In the case, Attorney General Lockyer and District Attorneys Terence Hallinan of San Francisco, Thomas Orloff of Alameda and Gil Garcetti of Los Angeles sought to have Hy Cite Corporation halt deceptive business practices, provide full restitution for victims and pay civil penalties.
The consumer complaint alleged that the company and local distributors had been targeting the Hispanic community using high-pressure door-to-door sales tactics to get customers to buy expensive pots and pans and water filtration devices. Salespeople in lengthy in-home presentations promoted Royal Prestige products as a "health system"that could prevent anything from cancer to high blood pressure to high cholesterol without a scientific basis. To sell water filtration devices, Royal Prestige salespeople allegedly told consumers that their water supply was contaminated with lead, acid rain or other environmental hazards and used a phony chemical test to support baseless claims.
The complaint also alleged that consumers failed to be notified appropriately about their right to cancel the home solicitation contract within three days of the purchase, and were presented with confusing sales agreements that failed to clearly and conspicuously disclose that a high interest rate of 21% would be charged.