Every time Sarah T. of Stow, Ohio sees the expensive set of Royal Prestige cookware in her cupboard, she gets angry.
Angry she fell for a salesman’s claims about the advantages of his pots and pans and the dangers posed by Teflon cookware.
Angry she believed she’d get a free vacation if she listened to his spiel.
And angry she got duped out of thousands of dollars.
“We paid $2300 for cookware we don’t use and haven’t used in three years,” she says. “Everything stuck to the pans. I couldn’t cook with them. The sale was so high pressure. This was such a waste of money and our time.”
Sarah isn’t alone.
More than one hundred consumers -- from Hawaii to New York -- have filed similar complaints with ConsumerAffairs.com about the high pressure and misleading sales tactics used to get them to buy Royal Prestige cookware.
These tactics, they say, cost them thousands of dollars and -- in some cases -- damaged their credit.
Promises, Promises
For the past three months, we’ve investigated complaints about the company and its practices.
And we’ve uncovered a trail of consumers complaining about what they describe as scare tactics, phony promises and deceptive actions used by Royal Prestige salesmen, including:
• Promises of free vacations and other prizes just for listening to a presentation about the cookware.
• Claims that Teflon cookware causes cancer, Alzheimer’s disease and other illnesses;
• Failure to disclose that consumers have three days -- from the time they sign a contract -- to cancel their orders;
• Misleading consumers who financed their purchases about their interest rates;
• Failure to disclose interest rates to consumers who financed their purchases.
Hy Cite
The Hy Cite Corp., of Madison, Wisconsin, owns the Royal Prestige brand name. It also sells china, crystal, knives, and water filtration systems.
The company, however, does not sell directly to consumers. It uses independent distributors, who hold demonstrations in homes, on college campuses, and in motels across the country to sell the products.
Our investigation reveals many of these consumers -- who are often newly engaged couples -- are duped even before they arrive at those meetings.
The Lure
John and Kativa D. of Rochester Hills, Michigan thought it was their lucky day when they received a phone call last year saying they’d won a free cruise and a $1000 gift certificate.
All they had to do to claim their prizes was attend a short presentation.
“We didn’t know what the presentation was about,” Kativa says. “But we thought there was no harm in attending.”
The couple soon found themselves in the middle of a high pressure sales pitch for Royal Prestige cookware—one that convinced them to buy $1800 worth of pots and pans.
“There was a lot of pressure to sign the contract on that spot,” John says. “We thought the ‘free cruise’ and $1000 gift certificate would offset the price.”
But those “free gifts,” they say, turned out to be a ruse.
“The gift certificate is phony because you have to pay like $300 to $400 to get $1000 worth of stuff,” Kativa says. “And we were foolish to think the cruise was free. We’d have to pay to go on that, too. Nothing is free like we thought. We thought that if we spent $2000 we’d get half back. It wasn’t like that at all. We’d have to spend money to get our freebies.”
Jared A. of Roslyn, Pennsylvania says a Royal Prestige salesman also duped him with so-called free prizes -- $500 in gift certificates.
“But the items you could use them for were cheaply made and the shipping fees were astronomical.”
Scare Tactics
Our investigation also uncovered frightening and outrageous medical claims used by Royal Prestige salesmen to sell their products.
“They said the pots and pan you get at Wal-Mart will kill you because of the non-scratch coating,” says Kim R. of Knoxville, Tennessee, who bought $1000 worth of pots and pans. “They said the Teflon pots and pans also cause Alzheimer’s disease. That scared me. My grandmother died of Alzheimer’s two years earlier. I only bought their pots and pans because I was scared.”
That’s the same reason Sarah B. of Madison, Wisconsin bought a $500 Royal Prestige electric skillet.
“I never would have spent that much money unless I was scared out of my wits,” she says. “They said the cookware most of us use has formaldehyde that causes birth defects and other diseases like Alzheimer’s, cancer and Sudden Infant Death Syndrome.
They also said if someone has a bird cage too close to the kitchen, the bird will die because of the fumes from the Teflon.”
We’ve learned these claims are false -- and more evidence of the salespeople's unscrupulous tactics.
Consider the findings of a recent study published by Environmental Science & Technology:
“Cookware coated with Teflon underwent rigorous scientific testing designed to see if any perfluorooctanoic acid (PFOA) could be detected under exaggerated or extreme cooking conditions, and none was found," wrote Dr. Jay Murray, a toxicologist who did consultation work for the DuPont-sponsored study. DuPont owns the Teflon brand name. “Cookware coated with Teflon, along with other consumer articles that were tested, is safe and poses no health risks from PFOA."
Other Misleading Claims
Consumers say Royal Prestige salesmen also duped them by claiming their cookware:
• Saves lives;
• Is safer and healthier than other cookware because you didn’t use oil;
• Helps you lose weight;
• Is endorsed by the Mayo Clinic and the National Institute of Health;
• Is the only cookware you should use “if you care about your family;”
• And wouldn’t burn food or cause it to stick.
“The company's demonstration is nothing but propaganda,” says April H., who is in the military and now stationed in Japan. She bought approximately $2000 worth of cookware and knives. “All the food I tried to cook would stick and burn. Even with oil it didn’t cook right. The set I bought from Wal-Mart work a lot better and was a lot cheaper.”
Adriana R of Los Angeles, California says she wasted $2000 on Royal Prestige cookware.
“I don’t use the cookware because all the food got stuck on it. It’s not meant for frying or steam cooking. When I complained to the company they told me I wasn’t using the cookware right. Now I’m stuck with this bill that I have to pay on for another three to five years.”
Many consumers -- like Adriana and April -- financed their cookware through a division of Hy Cite.
We’ve learned the company charged outrageous interest fees -- in some cases as much as 25 percent. But consumers say their Royal Prestige salesmen didn’t disclose that rate -- or misled them about the amount.
Interest Rate Deception
When Paula R of Florissant, Missouri, financed $1400 worth of Royal Prestige cookware she didn’t know she’d have to pay a whopping 24 percent interest.
“The salesman just told me I was approved for credit and my monthly payments would be $60,” says Paula, who used money from her wedding to pay off the bill. “We didn’t know our interest rate until our first bill arrived. The salesman never disclosed that rate to us.”
Jamie G. of Roswell, Georgia says a Royal Prestige salesman promised her a special “student only” financing plan -- one that included a low interest rate.
“The salesman said I’d only have to pay $20 a months until I graduated,” says Jamie, who financed $1450 worth of pots and pans. “And he offered me a special student interest rate, which he said would be like one percent.”
The salesman even put a hand-written note on Jamie’s contract that says: “12 monthly minimum student payment of $20 at 1% interest/mth.”
When Jamie received her first statement from Hy Cite Finance, though, she discovered her payments were $28.00 a month -- at a staggering 21 percent interest.
“My mom paid it off because of the tons of interest I had to pay,” Jamie says, adding some of her classmates signed up for the same, phony deal. “I definitely feel like I got ripped off.”
Consumers say Royal Prestige salesmen also failed to disclose another key provision of the agreement: they only have three days -- from the date of the sale -- to cancel.
Most consumers, though, don’t receive their cookware -- and thus don't have a chance to try it out -- until two to four weeks later.
Cancellation Woes
Evelyn H. of Laurel, Maryland received her cookware and water filter two weeks after she attended a Royal Prestige demonstration.
That’s when she examined the products and decided she didn’t want to keep the pots and pans.
“When I called the salesperson’s supervisor and said I wanted to return them, he told me I couldn’t,” Evelyn recalls. “He said my contract stated I had three days to cancel.”
But Evelyn couldn’t read her contract.
It’s written in Spanish.
“They didn’t offer me a contract in English,” says Evelyn, who speaks Spanish, but can’t read it well. “And the salespeople never told me my rights if I didn’t want the product or the timeframe I had to return it. They never said I had three days to cancel the contract.”
Andrea C. of Plano, Texas tried to cancel her $1200 Royal Prestige order immediately after she left the demonstration.
“I called that night, but no one was there,” she says, adding her salesman didn’t disclose the cancellation policy and doesn’t recall seeing it in her contact. “I called the Dallas office the next day or two—I know it was within three days—and I was told I couldn’t cancel.
“At that point I felt like I was stuck paying for it. And I still am. Four years later I’m still paying for this cookware.”
It’s a good thing.
We’ve learned Hy Cite aggressively pursues consumers who dispute their bills or fall behind on their payments.
Damaged Credit
Consider what happened to Nadine and Christopher S. of New York, New York.
Their Royal Prestige salesman promised them a free set of dishes if they bought a pot.
“We thought we were buying one pot for $500, which was a stretch,” Nadine says. “But when the bill came, the total was $1800.”
Nadine couldn’t believe Hy Cite’s explanation for the charges.
“They said it was for the dishes and the pot. I told them ‘no,’ the dishes are free.”
When she asked if she could return the merchandise -- which was still packed in the boxes -- the company refused.
“They said I should have sent a letter stating we wanted to cancel in three days. We didn’t see that policy in our contract. Our salesman led us to believe we could cancel at any time.”
The couple’s dispute continued to escalate.
Hy Cite’s collection agency put a lien on Christopher’s checking account.
“He went to the bank to pay the rent and the bank said there’s a lien on your account and $500 has been withdrawn,” Nadine says. “We had no idea how that happened.”
Nadine says she tried to work out a payment plan.
“After they took out the $500 we said we need this to stop. It’s ruining our lives. We have two kids and another on the way. We offered to pay another $200-$300 and return the merchandise. They refused.
“We’re out $500 and our credit is ruined,” she says. “We just feel really had.”
So does Jennifer F. of Winston-Salem, North Carolina.
Her dispute started over a few broken dishes.
“I put their casual china my dish drain and they broke. I’ve had three do this. They’ve just shattered,” says Jennifer, who financed $1700 worth of china and cookware. “During the demonstration, the salesman told me his pots and pans and china won’t break, but if they did, he said the company would fix or replace them.”
The company, however, didn’t honor that promise.
So the 20-year-old took a stand.
“I told them I’m not going to pay until you replace my dishes. I made the first payment and that’s it. Why would I pay for something that doesn’t work?”
A lawyer who claimed to represent Royal Prestige started hounded Jennifer at work. “I was getting five to six calls a day from him. I was getting in trouble at work; my job was in jeopardy.”
Jennifer says she finally reached an agreement with the lawyer. “I told him I would put some money in my bank account, gave him my account number, and said don’t withdraw the fund until a certain date.”
But the lawyer immediately withdrew the money. “That put me $1500 in the hole. And I know he (the lawyer) got his money because I have overdraft protection. I had to repay the $1500 back to my bank.”
Jennifer’s problems didn’t stop there.
Just last month, she learned the company put a negative mark on her credit report.
“I went to buy a car and this showed up as an unpaid debt on my credit report,” she says. “I was turned down on a car loan because of this. My credit is ruined thanks to Royal Prestige.”
Company’s Response
Erik Johnson is president of the Hy Cite Corporation.
In a recent interview with ConsumerAffairs.com, he defended his company, its products, and its record with consumers.
He claims Hy Cite has thousands of satisfied customers and we’re hearing from a small minority of unhappy ones.
“We do everything we can to satisfy customers' complaints -- except give money back,” Johnson says. “We have a great product that they decided to buy. The products work. We’ll be happy to show them how to make them work. But it’s unrealistic to give their money back.”
What about consumers who say they were duped into buying the products?
Johnson says that should never happen.
He claims the company carefully trains distributors how to sell the products. “We provide literature for distributors to use, and training that shows them the proper way to demonstrate the products,” he says, adding the distributors train their salespeople. “We tape many demonstrations and don’t hear these types of claims. Are we at every presentation? No. But when we’ve investigated claims that our distributors are making these kinds of statements, we normally find that is not what’s been said.”
The company’s catalog describes Royal Prestige pots and pans as “Health System cookware”
But Johnson claims his company does not tolerate distributors who make health claims about Royal Prestige -- or any other brand -- of cookware.
“We do not train them to make health claims. We make them sign a paper that says they won’t make those claims. We also do not train them to say other cookware causes diseases. We tell them ‘don’t say that.’ ”
He adds: “We do not support anyone making claims about cookware causing Alzheimer’s disease. We don’t want people who make those claims in our company. And if anyone hears a distributor saying that, we want them to report it to us.”
The 1,500 Royal Prestige distributors nationwide are also trained not to use high pressure sales tactics, Johnson says.
“We don’t endorse it, we discourage it, and I can tell you it won’t be tolerated. But I’ve never seen it. People who buy our products come to a demonstration and see how our products are used. They choose to buy them. At the end of the demonstration, they can walk out.”
Johnson claims Hy Cite terminates any distributor who makes false or misleading statements to consumers.
In the past three years, he says, the company terminated 50 distributors who used unscrupulous or deceptive means to sell the products.
“I just got back from California,” he said during our interview in September. “I warned a distributor there about down payments not being refunded. He was terminated today.”
What about luring consumers to demonstrations with phony prize offers?
Johnson isn’t convinced that happens.
“I’ve seen the scripts they use -- and been at the call centers -- and I can tell you the scripts and the salespeople accurately describe what’s being offered,” he says, adding the distributors -- not Hy Cite -- arrange and handle all the free gift offers. “They say you’ve won free accommodations, but you have to pay your airfare.”
Johnson also denies his company fails to disclose its interest rates to consumers.
“We always disclose those rates,” he says, adding those charges are anywhere from 12-24 percent interest. “We use the federal truth and lending language and it’s listed on the back of the contract.”
Johnson says his company will honor any “handwritten” financing agreement made by a distributor -- like the one on Jamie G’s contract. “But I’d have to look at it to be sure it’s in our system and is on the original sales agreement.”
He also says Hy Cite’s cancellation policy is clearly spelled out on consumers’ contract.
“I find it impossible that consumers say this wasn’t disclosed. It’s listed on their contract, and they have to sign that they’ve read it. We also train our distributors to verbally tell consumers they have three days to cancel.
“Do consumers hear that? At that point in the demonstration, they’re usually so excited about the product. We all remember what we want to remember.”
And what about the company’s refund policy?
“If customers cancel in three days, we give them a refund, void their contracts, and return their down-payments,” Johnson says. “But we can’t give money back after that. The money went to the distributor, who paid us for the product.”
Consumers who later decide they don’t like the cookware and want to return it, he says, have a case of buyer’s remorse.
“It’s not our issue if they have some other financial need. I can’t take my car to a dealership and say I want my money back.”
Johnson says he can’t understand why anyone would want to return the pots or pans.
“Our cookware works and works well,” he says, adding the company gives consumers a 50-year warranty and will exchange a product or replace one that’s broken.
“It’s a better quality than what you’ll get at Wal-Mart. Our quality is at the level of Williams-Sonoma or higher.”
Johnson also claims his company’s cookware doesn’t cause food to burn or stick to the pan.
Consumers who say that happens, he says, are misusing the product.
“Call it operator error. But I’d be happy to send someone to their house and show them how to properly use it.”
Johnson claims his company strives to make customers happy -- especially those who fall behind on their payments.
“We try to work with our consumers and ask if we can help them by reducing their payments.”
If those efforts fail, he says, the accounts are sold to an outside collection agency. Johnson says he can’t comment on the tactics that agency uses.
Johnson claims his company resolved all the complaints it received from ConsumersAffairs.com in 2001 -- and has an excellent track record with consumers. (See related story)
“We sell to 100,000 new customers a year and less then one percent are not satisfied,” Johnson insisted.
What’s his message to consumers who are still dissatisfied with his company and its products?
“You made a wonderful purchase of a great product. We stand behind that product. And we will help you learn how to use it.”
Christopher D. of Valley Stream, New York says that doesn’t change his opinion of the company.
He considers Royal Prestige a sham operation that fleeced him out of $700 for lousy cookware.
“The company bribes you to get you its presentations and then offers you a product that's ‘too good to be true.’ It doesn’t do what it claims. I wouldn't recommend these products to anyone. I wouldn't even recommend them to people that I didn’t like. “
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