White van speakers

White van speakers is a scam sales technique in which a salesman makes a buyer believe he is getting a good price on audio merchandise. Con artists in this type of scam call themselves "speakerguys" or "speakermen".

Process

The typical white van speaker scam involves one or two individuals, who are usually dressed in T-shirts and jeans or business uniforms. They drive an SUV or a commercial vehicle (usually a white commercial van, which is the cheapest to rent) that often displays a company logo. To find suitable targets, the van operators set up their con in moderately trafficked areas—parking lots, gas stations, colleges, large apartment complexes—or even watch heavy traffic for people driving expensive cars and wave them down. The marks are usually affluent young men, college students, or others thought to have large amounts of disposable income.

The operators claim that they work for an audio retailer or audio installer, and that, through some sort of corporate error (warehouse operator mistake, bookkeeping mistakes, computer glitches, etc.) or due to the client changing the order after supplies were purchased, they have extra speakers. For varying reasons they need to dispose of the speakers quickly and are willing to get rid of them at "well below retail" prices. The con artists will repeatedly state the speaker "value" as anywhere between $1800 and $3000, prices often purportedly verified by showing a brochure or a magazine advertisement. They will usually also have an official looking website verifying their claims.

If the mark declines the offer, the speakerguy uses various high-pressure negotiation and sales tactics to change the mark's mind. Among these techniques are producing any other glossy material that details the quality and high retail value of the speakers, and bombarding the potential customer with technical jargon, whether correctly or incorrectly used. If still unable to convince the mark that he is turning down an incredible offer, speakermen will almost always significantly lower the price immediately (the actual cost of the speakers may be less than 3% of the MSRP). Some speakerguys will even suggest that, since the customer got such a great deal, he should pay a little extra as beer money for his supposed benefactor.

Economics

Distributors rent a warehouse and obtain licenses and distribution rights, then import large quantities of poorly made goods. They ship these goods to local warehouses in major cities and hire con men to distribute the shoddy goods.

North American distribution operations are in major cities across the continent.¹ The marketers at each office establish a promotion, benefit, and bonus scale for the speaker sales teams. Bonuses may be paid in cash or speakers.

In Australia the same tactic is used. Receipts are issued, but the contact details are usually fake so that the goods can not be returned. As an added measure, vehicles are leased from lease companies so that they can not be traced to either the distributor or 'sales person' driving.

Online availability

White van speakers and home theater systems are now commonly found online, primarily on Craigslist and eBay, prompting revealing reviews showing these speakers to be outclassed by even inexpensive "home theatre in a box" systems sold by legitimate manufacturers.

One online technique used on Craig's List is for the seller to post ads for the speakers for the "retail price" printed on their boxes, which is often in the thousands of dollars. Then the seller will post another ad with different wording at a "deal" price, a fraction of the original price. Both ads will have links to the phony speaker brand's web site. The higher priced advertisement is meant to fool any prospective buyer into thinking that they have done their due diligence. In addition to the phony prices, other common verbiage includes: "my loss is your gain", "received as a gift", "already have one don't need 2", "moving out of town", and "great buy!" A more recent development in ad postings are self-perpetuating scams—those claiming to be victims of the scam say they are trying to recoup some of their loss.

Techniques used

The brand name of the speakers is often confusingly similar to a well-regarded speaker manufacturer. For example, the reputations of manufacturers such as Klipsch, Paradigm, Dahlquist, and Wharfedale are used to sell low-quality speakers with fake brand names like Kirsch, Paradyme, Dahlton, and Grafdale.

"Matrix Audio Concepts" is another fictional brand that returns additional related websites with an Internet search query for that term. Some sites, such as for Theater Research², also list customer service telephone numbers or support e-mail addresses. These methods of contact are often dead ends.

Another recent technique is to parrot but not mimic, the names of reputable companies. For example, Genesis Media Labs is a white van scam name that trades on the American "Genesis" brand of loudspeakers ³⁴, while DiVinci trades on the name of the Swiss "DaVinci" company.

Those who initially feel they have received a good deal soon change their mind: it is easy to find discussion forum threads where the products fail after a brief period of time, or where buyers find that the Genesis Media Labs or DiVinci warranties are worthless.

Technology and quality of the product

Overall, the quality of the product is inferior. For example, Denmark Audio's home theatre system has been quoted as sounding like a hornet's nest, even with no external signal input. The Denmark Audio system has been tested on a test bench and proven to be of very low quality ⁵.

Another line that appears is the shock people have when they try to hook up the home theatre system to high definition television sets and find out it cannot be done — the claim of HD compatibility made for the white van system is just another element of the scam.

Options for those scammed

Law enforcement officials are often reluctant to get involved in these transactions, despite their questionable legitimacy. Employers with proper business licensing often hire independent contractors to sell the speakers on the street from white vans.

In Pennsylvania, the act of selling white van speakers is punishable by up to five years in prison and a fine of up to $10,000.⁶

Dissatisfied buyers are usually unsuccessful in obtaining a refund, particularly since locating these workers and their warehouses is seldom easy. This is because white van salesmen list their operational hours to be between 9 and 5, when in fact they are only at the warehouse for one hour in the morning, usually between 8 and 9. Moreover, returns are only allowed within three business days. Therefore, although the legality of this business model is questionable with regard to trademark infringement, unfair competition, false advertising, and possibly income tax and sales tax evasion, buyers generally have little ability to take direct legal action. However, if you deliver the notice of cancellation within three business days and you take the speakers to them early in the morning, you may be able to return them.

However, there are some things the conned or the simply disappointed can do. A disgruntled buyer may file a complaint with the state Attorney General, alleging that the seller intentionally misled him to believe he was purchasing high quality goods from a reputable manufacturer. They may also report the seller to the Internal Revenue Service or their state's Department of Revenue.

The local police should also be contacted. Law enforcement could issue citations, as rarely do the speaker guys obtain the proper permits and license to sell "out of a vehicle". However, this is not always the case. The reason why speaker men work for companies is because these companies shield them from potential lawsuits often by providing tax identification codes, licenses to sell out of vans and other guidance on how to avoid law enforcement and civil suits. Many of the sales take place in the parking lots of Best Buy, Home Depot, Wawa Stores, or Circuit City with video surveillance equipment installed, making video evidence of the act likely, and where ATMs are handy for their customers.

In Australia, Consumer Affairs or the Office of Fair Trading should be contacted in the state the sale occurred in. If the seller arrived from another state, the ACCC's Scam Watch should be contacted⁷. In addition, the local council should be contacted if the seller does not have a street trading permit. State Police should also be contacted so that Police can build a pattern and profile on the offenders.

Organizations known to be connected to the distribution side of the white van scam

Product safety concerns

Consumers have reported receiving products which have been faulty for some time now⁹. This is a result of sub-standard quality and manufacturing processes. However, during June 2008 another, more serious warning emerged. Denmark Audio systems inter alia had been found to have an impedance curve dropping below two ohms¹⁰. The result of this fault will damage amplifiers connected to the load when it drops, however it could also lead to overheating and short circuits¹⁰. Therefore these systems could potentially cause a fire if left unattended.

Brands reported to be sold out of white vans

References

^ Scam Shield - Distributor Locations
^ Theatre Research website
^ Genesis Loudspeakers by Genesis Advanced Technologies
^ Genesis Model 5.2 review at Stereophile Magazine
^ Warning - white van scammers out in Melbourne
^ Walsh, Lawrence: "Purchase of bootleg speakers is not worth the treble", Pittsburgh Post-Gazette, August 27, 2003.
^ [1] Scam Watch - Report a Scam
^ ^a ^b Minister for Consumer Affairs - Government of South Australia
^ ^a ^b ScamShield Listing Australia
^ ^a ^b Kitsap Sun
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j VR-Zone Forum: "White Van" speaker brand listing
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m Kuro5hin story
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ^m ⁿ ^o ^p ^q ^r ScamShield Listing Canada
^ ^a ^b ^c ^d ^e ^f ^g ^h ⁱ ^j ^k ^l ScamShield Listing Colorado
^ Bss M-250's - 440 Forums
^ ^a ^b ProSoundWeb Live Audio Board: The White Van Scam
^ Singapore Hardwarezone Forum: Scam at around Sim Lim Area - Warning
^ [2] [3] - Forum Review and Definitive Sound Technology Website
^ Santa Barbara BBB News: Dogg Digital Audio
^ ^a ^b ScamShield Listing Tennessee
^ Ripoff Report: Fleetwood Audio
^ ScamShield Listing California
^ ScamShield Listing Texas
^ Ripoff Report: PTS Protecsound
^ Remote Central: Theater Logic Home Cinema L6
^ Audio Asylum: Any one heard of VOKL AUDIO?

External links

A great deal of information and warnings on the topic of "white van speakers" can be found using search engines. Some of the more informative links include:

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