This was originally published at http://www.wcpo.com/content/news/localshows/dontwasteyourmoney/story/DirectBuy-Great-Savings-or-a-Bum-Deal/6MB5Fz4yOkyB5EaKARhlAw.cspx and is reproduced here without permission under the Fair Use Doctrine of the copyright act. © 2009 The E.W. Scripps Co.
Last Update: 5/27/2008 9:29 am
Reported by: John Matarese
If you're remodeling your home, you may be tempted by ads for DirectBuy. The nationwide buying club promises to let you buy directly from some 700 manufacturers and save big on retail markups.
But are you really saving money....and what if you want to leave at some point?
You may have seen or heard DirectBuy's commercials...where they promise to save you a bundle on home furnishings.
One couple was sold. After seeing the slick brochures and attending an Open House, Robert Lind -- a Sergeant in the Army Reserves -- and his wife Jamie agreed to join the buying club.
As their contract shows, they agreed to pay DirectBuy $379 a month over several years...for a total of over $6000 after interest!
But before they had a chance to buy anything, Robert received a mobilization letter. He's headed for one of the most dangerous corners of the world: Afghanistan.
So Jamie contacted all their creditors, and asked for interest rate reductions and contract suspensions under the Sailors and Soldiers Relief Act.
Robert says "Everyone's been great. Everyone understands there's a loss of income with soldiers that have been mobilized." Everyone, he says, except DirectBuy, which he says did not lower their interest rate...and is now threatening them with late fees if they don't pay.
"They're charging us 17% in January and February. $34 in one month. They're charging us late fees," Jamie says.
Meantime, Consumer Reports Magazine has some other concerns about Direct Buy. Magazine staffers recently visited two franchises to hear the pitch.
Chtris Fichera of Consumer Reports Magazine says "After you sit through an hour and a half pitch, you find out at the end that you have to sign up for a three-year contract, which costs $5000. And if you don't sign up immediately, you can never come back."
Like the Linds, Rob Dotson paid $4000 that first night to join. But he claims everything he checked out at DirectBuy, he found cheaper elsewhere.
Rob Dotson, DirectBuy Member, says "We ended up with cabinets that were three or four thousand less." He says the same was true of all the appliances, lighting and the flooring. He ended up buying it all elsewhere!
While Consumer Reports did find some people who say they've saved with DirectBuy, it warns you cannot compare merchandise prices before you pay the 4 - 5,000 dollar membership fee.
Robert and Jamie Lind don't want a refund....just a break while he risks his life for America.
Jamie says "We don't want any money back...just to cease our contract."
It's important to note that in a few states, including Ohio, DirectBuy gives new members 3 days to cancel their contract if they get cold feet. But even in those states, by day 4, you are legally bound to the contract you signed.
Meantime, we received a statement from the company. DirectBuy calls Consumer Reports story "misleading, inaccurate, and irresponsible"... without a "shred of substantiation".
It says DirectBuy members save over one billion dollars every year....and says 80% of members voluntarily renew.
But good news as to Sergeant Lind. DirectBuy tells me the company will refund his money, release him from his contract, and appreciates his service to his county.
You can read the club's entire response below.
As always don't waste your money. I'm John Matarese.
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