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Craftmatic Settles Florida Charges

Agrees to reform sales practices, pay restitution to consumers

August 23, 2007

Craftmatic • Craftmatic Denies Wrongdoing, Defends Sales Tactics • Senator Prods FTC to Investigate Craftmatic Complaints • Craftmatic Settles Florida Charges • Craftmatic Settles WV Fraud Charges • Ohio Settles With Craftmatic Beds --- • Consumer Complaints

A national company marketing electrically adjustable beds has agreed to alter its sales practices in Florida.

Craftmatic Organization, Inc., a multi-million dollar business with operations and distributors throughout the United States, the United Kingdom and the Republic of Ireland, must also pay $100,000 in consumer restitution to consumers who were pressured into buying beds they did not want or who were otherwise deceived by the company’s sales tactics.

The company earlier settled similar charges filed by Ohio and West Virginia authorities, and consumers from around the country have filed complaints with ConsumerAffairs.com.

"We called the company in response to a promotion for a chance to win a free bed. Next thing we knew we had a man in our house selling us a bed we could not afford, sight unseen," said Josie of Pueblo, Colorado. "We feel we were pressured into signing the contract and when we tried to cancel we were told we couldn't, it was too late, I was no longer dealing with the Craftmatic Company, but a finance Company."

Bobby of Texas said he was contacted by a salesman as he tried to recover from an extended illness.

"Sales pitch about all the health benefits I would receive from owning their bed. I was desperate at the time for any type of help to improve my health and after approximately 6 hrs I agreed to purchase the bed through a loan," he said.

"The bed is broken, will not work, and I have not been able to contact anyone to receive assistance even though I was told it had a lifetime warranty."

The Florida attorney general’s Economic Crimes Division has been investigating the company since 2004, examining allegations that the company’s salespeople frequently employ high-pressure sales tactics to compel senior citizens to purchase the costly adjustable beds.

Craftmatic has also repeatedly claimed that the beds will resolve consumers’ medical problems, although these claims have not been fully substantiated by authorities.

Throughout the course of the investigation, the attorney general’s office received more than 60 complaints, many from elderly consumers who felt they had been pressured into buying beds they did not want and could not afford.

Attorneys with the Economic Crimes Division were able to facilitate consumer restitution or other remedies, often providing consumers with a full refund and removal of the unnecessary equipment.

One consumer, an elderly Naples woman claimed that she had not only been persuaded to buy the expensive bed, but that the salespeople took her old bed out of her house to make room for the newer model. After relaying the woman's complaint to the company, the state was able to win a refund and the company provided for the purchase of a new bed.

“Salespeople should never be permitted to harass elderly Floridians, especially when consumers are made to feel as though the only way to evict the salespersons from their homes would be to purchase these beds,” said Attorney General Bill McCollum.

“This settlement will not only provide for much-needed business reform, but will also provide financial support to a program that exists to protect seniors from these types of characteristically unfair practices,” he added.

Under the agreement, the company:

Will make substantial reforms of business practices used in Florida;

Will no longer be permitted to represent to consumers that the Craftmatic beds provide any specific therapeutic benefit;

Must refrain from engaging in high-pressure sales tactics;

Must apply limitations to their prolonged sales pitches and demonstrations conducted in consumers’ bedrooms; and

Must also be responsible for removing any Craftmatic beds from the home of any previous complainants who wish to have the beds removed from their homes and provide for the acquisition of a new bed if the consumer’s previous bed was removed to make way for the Craftmatic bed.

In addition to the consumer restitution and the changes to the company’s marketing practices, Craftmatic will pay $20,000 to the state’s Seniors vs. Crime Program.

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