Case Study 2: Consumer Protection
Brent, a salesperson for Freedom Life Insurance met with Mr. and Mrs. Brown at their home in Florida on October 30th. The Browns lived in a 55+ retirement community that prohibited door-to-door sales. After a credible sales pitch about the benefits of providing income for the surviving spouse and the couple’s grandchildren, the Browns signed a contract to purchase a life insurance policy requiring payments totaling $1,200 per year. A down payment of $200 was required with the remainder of the cost to be paid in monthly payments each year. Two days later, the Browns had second thoughts about purchasing the insurance. Mr. Brown contacted the insurance company and expressed that they wanted to cancel the contract. The insurance company explained that it would be impossible to cancel the first year and the Browns would be in breach of contract if they did not make all of the payments.
- Did Freedom Insurance violate any consumer laws by not allowing the Browns to rescind their contract? Explain.
