An extermination company promised customers who had their houses treated for termites that they had a life-time guarantee for free re-treatment if they paid a small fixed annual fee. The company lost money on the guarantee and so it raised the fee. If the FTC sued the company, it would claim the practice was:

Question

Quizplus · Accepted Answer

The company's practice of offering a lifetime guarantee for a small annual fee and later raising the fee because they were losing money is considered unfair because it implies that the original offer was a fair deal, but then the company changed the terms to ensure it made a profit. It is not deceptive because the company did not deceive the customers, and the Cooling-Off Rule does not apply in this case.

An Extermination Company Promised Customers Who Had Their Houses Treated