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Woman pays thousands to join buying club, but can't get merchandise she wants

Posted Friday, Apr. 08, 2011  comments  Print Reprints

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lieber Dear Watchdog:

I can be intelligent at times, but when I joined DirectBuy I was grasping at straws to get my mobile home repaired. It was falling down around me. The floor had large holes. I saw the TV commercials and flew from my home in Midland to the Fort Worth location. DirectBuy promised it could help and rushed me into signing and leaving their showroom. I paid $5,000, but since then, I have not been able to purchase anything that I want from them. Their prices were higher than what I found at Lowe's Home Improvement and Best Buy, so I bought everything I needed there. Is there anything I can do to get my money back from DirectBuy? You have been a lifesaver to others.

Karen Oliver, Midland.

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Dear Karen:

DirectBuy describes itself as "the leading home improvement and furnishings club that offers merchandise at manufacturer-direct prices without traditional retail markup."

The company engages in selling sessions that Consumer Reports termed "intense." If you don't buy a membership that ranges from $3,000 to $7,000 on the spot, you are not allowed to come back for several years. There's no time to research what you are getting into.

In this faltering economy, the company appears to be struggling. Stores have recently closed in Roanoke, Va.; Pleasanton, Calif.; Columbus, Ohio; and Buffalo, NY.

Bloomberg News reports that bonds for the company plunged 23 percent in value after the company told investors last month that new memberships had declined and the chief financial officer at the Indiana headquarters quit.

The company also faces two major lawsuits, in Connecticut and Indiana, from consumers challenging the company's selling practices. West Virginia's attorney general filed a lawsuit this year claiming that DirectBuy uses "high-pressure sales practices" and "deceptions and falsehoods" to gain new customers.

The state cited DirectBuy's "now or never tactic" and called this "false, misleading and unconscionable."

DirectBuy denies this.

Last week, I visited the Fort Worth franchise on East Loop 820 to speak to the owners, Larry and Mary Albritton, but I was told they were in a meeting. That day, Mary Albritton wrote back and referred me to Mike Georgeff, the corporate spokesman "who can better answer those questions."

Before I could contact Georgeff, he got in touch with me: "We would be more than happy to answer any questions you have and help you provide your readers with accurate information on our business."

So I took advantage of his offer and sent him eight written questions.

He didn't answer most of them.

For example, when I asked him about the accuracy of the news report about the company's struggle to gain new members and the CFO's resignation, he didn't address that. Instead, he wrote that he was disturbed that "irresponsible media outlets brushed off their duty of fair and balanced reporting and chose instead to run inaccurate reports based on misinformation and hearsay." But he didn't offer any corrections.

When I wrote him back to ask for more answers, he did not respond to the questions. He did state that a new store has opened in Columbus, Ohio, and another one is planned for Green Bay, Wis. He also wrote that DirectBuy has been in business for more than 40 years and that the Fort Worth location has been around for 20 years. There are 140 stores across the nation.

"We currently have 10,000 members in the [North Texas] area, and that number is growing by the day," he wrote.

He added, "We're very proud of what we do and the successes we're experiencing in helping members gain access to a better life. That being said, we understand that like any business, we are open to criticism."

One question he declined to answer concerned the status of a complaint by former DirectBuy customer Antoinette Greco of Bedford, whom I first wrote about in September.

Greco planned to renovate her kitchen. So she attended a sales session at the Fort Worth store and paid $3,000 to join. When she returned to the showroom to start buying items, she saw that she couldn't get the ones she wanted.

She asked a lawyer to write a letter demanding a refund. Then DirectBuy took her request to an arbitrator. Greco declined to tell me the result, citing a confidentiality agreement. But I called around and learned from another source that she was refunded her membership fee.

So Karen Oliver, that's the recommended solution for you. Write a demand letter asking for a full refund. If you don't get it, take your case to arbitration.

The Watchdog column appears Fridays and Sundays.

Dave Lieber, 817-390-7043

Twitter @DaveLieber

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