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Scenario 4—Consumer Protection
On February 1, a salesperson for Metropolitan Life Insurance met with the Drakes at their
home. The Drakes lived in a 55+ retirement community with a homeowners association
that prohibited door-to-door sales. After facing a persuasive sales pitch about the
importance of providing for the surviving spouse and their kids and grandkids, the Drakes
signed a contract to purchase a life insurance policy for a total of $3000 per year. A
down payment of $100 was required, with the remainder of the cost to be paid in monthly
payments. Two days later, the Drakes had second thoughts about purchasing the
insurance. Mr. Drake contacted the insurance company and stated that they had decided
to cancel the contract. The insurance company said it would be impossible to cancel the
first year and the Drakes would be in breach of contract if they did not make all of the
payments.
· Did Metropolitan Life Insurance violate any consumer laws by not allowing the Drakes to
rescind their contract? Explain.