DISCLOSURE:
GOOD BUSINESS, AND GOOD FOR BUSINESS
What Is Disclosure?
Consumers who make purchases in their homes from sales representatives need
information about what they buy and about the companies from which they make
purchases. They should have as much information as possible about the experience
of the company. They should be informed about product components and workmanship.
They should be able to count on quality service during and after the purchase.
And they should get verbal promises in writing.
Right now, in-home consumers do not have all of this information. With
Disclosure, they would.
Disclosure refers to the disclosure of information to consumers by companies
that sell products and services in the home. The concept was created by Jim
Weigold, who owns We Care, a home remodeling company that serves customers
in the Philadelphia area and has been in the business for more than 30 years.
He has witnessed firsthand how vulnerable consumers are to unscrupulous
contractors, those who get into business without adequate experience or financial
resources, who promise anything to close a sale, who charge the maximum and
deliver the minimum, and who disappear after the bill is paid.
Jim decided that something had to be done. He realized that by giving consumers
more information they would be in a better position to differentiate among
companies and decide whether or not to make a purchase. So he created the
Open Disclosure Organization for companies that voluntarily document in writing
information about themselves and their products and services. Consumers can
then use this information to compare providers of replacement windows, roofing,
painting, carpeting, or any goods and services sold through in-home visits.
They know how long the business has been in existence, its assets, its insurance
limits, and whether workers are employees or subcontractors. Most important,
they can see what percentage of a business' work comes from repeat or referred
clients - a clear indication of customer satisfaction. And everything is
verified with the owner's signature and photo ID.
Open Disclosure Organization members also support content labeling on
manufactured products, similar to the legally required labels found on
mattresses, pillows, etc. With content labeling, consumers can easily see
what gauge of steel is in their new door and if its handles are plated or
solid brass. They know whether windows contain all new materials, the type
of glass, and what kinds of seals are used. Without labeling, they can't
be sure.
With the right information, consumers can make comparisons that go far beyond
cost estimates. They will understand how experienced a firm is, who will
perform the services or install the goods, and how satisfied others have
been with a company's work. And, if a firm does not disclose, that tells
consumers something as well.
Disclosure benefits those on both sides of the sale. It serves as a valuable
screening device for consumers and gives them a more informed basis for comparing
estimates. Disclosure reassures people that they are doing business with
a company that has nothing to hide, that puts its promises in writing and
guarantees them with the owner's signature. For companies, disclosure provides
credibility with consumers and separates their firm from competitors who
don't disclose.
Why Is Disclosure Needed?
Let's take the home improvement industry as an example. In Philadelphia,
individuals can enter the industry with nothing more than a business card
- no prior experience, no financial resources, and no guarantee that they
will be around for any length of time. Consumers won't know how long a contractor
has been in business unless they ask, and even then, nothing is in writing.
At present, consumers have three business days to rescind a signed sales
agreement, a regulation instituted by the Federal Trade Commission to give
them time to verify businesses' claims. Disclosure firms, however, believe
that this regulation doesn't go far enough. Three days is too little time
for some consumers, particularly those who are elderly or physically disabled,
to verify claims without the information provided by disclosure.
Without disclosure, consumers are vulnerable to the practices of incompetent
companies, unethical salespeople, misrepresented products, and slipshod service.
With disclosure, consumers have detailed, written information about their
specific job and about the company doing that job. The owner's signature
serves as a guarantee that the statements are correct; if they are not, the
owner is liable for fraud.
Open Disclosure Organization member companies want disclosure to become a
requirement of all companies making in-home sales. Until that happens, they
voluntarily provide details on their experience, finances, employees, and
sources of business to prospective customers in writing, verified by their
owners' signatures and photo ID. By doing so, they protect consumers and
themselves from incompetent companies, and raise the performance standard
among businesses doing in-home sales.
Benefits to Consumers
- Provides reliable, readily available information on companies
- Establishes as instant screening devices disclosure firms vs. non-disclosure firms
- Permits more detailed comparison of contractors and bids
- Eliminates sales intimidation, inflated claims, and the use of misrepresented products
- Enhances understanding of company and products and services through disclosure information and product labeling
- Improves service
- Written information strengthens protection from fraud
Benefits To Member Businesses
- Establishes credibility with potential customers
- Differentiates member from non-disclosure competitors
- Increases customer confidence; reducing cancellations
- Increases referrals and repeat business, due to improved customer confidence
- Provides opportunity to obtain leads through participation in cosponsored Open Disclosure Organization marketing
Benefits To Industries Utilizing In-Home Sales
- Establishes an ethical benchmark
- Enhances reputation by making disclosure a priority
- Builds consumer confidence
- Gathers support for disclosure and product labeling
- Disclosure will increase the number of potential customers willing to allow sales representatives into their homes
- Product labeling will do for manufacturers of products that are installed in the home what disclosure does for sales