A company recently fined by regulators for using deceptive sales tactics is now selling pricey water softeners door-to-door here.
Products made by Water Resources International of Phoenix for the last month have been sold in Coeur d’Alene by a distributor, Northern Hydro Pure.
In other states, the Better Business Bureau has sought substantiation for several of Water Resources’ advertisements, questioned its water-testing process and fielded complaints that its distributors use questionable sales practices.
In its first month in business in Coeur d’Alene, eight of Northern Hydro Pure’s sales people have quit in disgust, claiming they were encouraged to mislead customers.
But the distributor’s owner and two managers said they deceive no one and sell a device they believe in.
Northern Hydro Pure, now working out of a former real estate office on Sherman Avenue, markets $3,000 to $5,000 filtration systems made by Water Resources. Water Resources claims the device improves water taste and gets clothes and dishes cleaner.
“It’s a product that lasts a lifetime,” said Jon DePalma, telemarketing manager for the Coeur d’Alene distributor. “People who use this product are happy with it.”
Sales representatives who resigned after a few weeks did not question the product. They estimated 50 water softeners have been sold since mid-November.
However, the sales representatives said that the distributor still follows high-pressure sales practices that prompted Water Resources to pay $100,000 in August to settle Federal Trade Commission charges.
Ex-saleswoman Carrie Blackstock said the sales methods were not completely honest, but not illegal.
“I call it ‘tricky,”’ she said.
Northern Hydro Pure sales representatives begin their pitch by merely offering to take free water samples, homeowners said. They said they’ve been promised free gifts.
Some homeowners called police or city water officials asking why strangers were seeking water samples.
“We couldn’t figure out who it was,” Police Capt. Carl Bergh said. “Then the company came forward.”
Former sales representatives said the water samples are just a gimmick used to get into a customers home and begin a high-pressure sales pitch.
Under the FTC settlement, Water Resources’ distributors now must tell homeowners they are selling water softeners, not merely testing their water.
New salesman Erv Nave recently visited an 82-year-old Post Falls woman. The appointment was set up by his bosses at Northern Hydro Pure.
“She kept saying ‘they promised me you weren’t going to sell me anything,”’ Nave said. “That’s when I quit.”
Sales manager Bruce Weaver, however, said that sort of thing never happened, and accused Nave of having “selective hearing.”
It’s not the first time sales methods for Water Resources or its distributors were questioned.
In 1988, the Idaho Supreme Court ordered a now-defunct distributor to pay homeowners for misrepresenting a warranty on a Water Resources product, said Idaho Deputy Attorney General Michael McDonagh.
Competitors said that company left customers with equipment that couldn’t be repaired.
Jim Sager, owner of Quality Water Systems on Appleway, said distributors for Water Resources “show up in town every few years, sell and leave.” He also said well-established water softener companies sell similar devices for about $2,000 less.
Water Resources claims legal independence from its distributors. But distributors’ sales reps all follow a scripted pitch provided by Water Resources.
The script itself infuriated sales trainees Darlene Rush, 37, and Andrea Bania, 25, of Coeur d’Alene, who soon quit their sales jobs.
The script required sales people to give a two-hour, in-home presentation, without telling the customers it would take that long. From a potential buyer’s home, sales reps call the office repeatedly - especially if the customer raises an objection about the demonstration - and give Northern Hydro Pure bosses a chance to talk to customers.
During one call, sales reps are told to ask for “Mr. Fry,” a fictitious person.
DePalma and Weaver admit to the tactic, but say Mr. Fry is a harmless code name. They declined to explain why a code name is used.
Both women also said they were ordered not to show customers a cancellation notice that gives buyers three days to back out of a sales agreement.
DePalma and company owner Kelly Williams said that wasn’t true. Williams said sales reps are just told “not to dwell on” the notice.
Seven of eight former representatives interviewed said the customers they visited - in appointments set up by Northern Hydro Pure - were primarily senior citizens. Bania said 19 of 20 sales calls she made were to people 60 or older.
Weaver and DePalma said they are not targeting the elderly.
DePalma insists the company is being victimized by Rush and Bania. Water Resources has 200 offices around the country and thousands of happy customers. He declined to reveal names of satisfied customers, however, citing confidentiality.
“If we left a trail of unhappy customers, we certainly wouldn’t be successful,” he said.