Local Lawsuit

Local Lawsuit

Introduction

JK Harris & Company, a tax representation firm, was established in the year 1997. The company started its operations in South Carolina but later expanded to different geographic areas. Within a short period of three years from the inception of the firm, the company had established eight regional offices and was operational through its 450 sales offices (Cao Qing, 2011). The company has three major functions. These are making inside sales, centralizing appointments through the call center and performing other functions. The paper discusses the lawsuit that the selected company was involved in from the legal, business and ethical point of view.

Actions that led to the lawsuit

The company has been involved in many legal lawsuits in the past. These lawsuits were filed by the U.S. Attorneys General on account of complaints he received from general public regarding the misleading business practices of the company. In this case, it is imperative to state that there were 18 states' Attorneys Generals who filed the case against the company. The primary concern from the consumers' end was that the company had vowed to resolve the matters related to tax debts. They charged their customers fee against it, but never managed to deliver on the promise. In addition, the company was accused of deceptive marketing (Breeding, 2011). The advertising campaign depicted a picture which was completely different from the on ground realities. The company claimed that the people working in the regional office were tax experts when really they were only sales agents. The lawsuit against the company was settled whereby the company was asked to pay an amount equal to $6 million in settlement of class action.

A similar lawsuit was filed against the company later in the year 2008whereby the company was accused of following deceptive business practices. Deception is a crime and companies involved in any form of deception that may shadow the decision making process of the consumers should remain vigilant of their legal vulnerability (Hansen, 2009).

Risk management

The case presents a scenario of gross negligence and lack of appropriate risk management measures on the part of the selected company. It is conventional wisdom that whenever a business entity raises the consumer expectations too high, they also have the obligation to meet them. There are two important implications incase the company fails to meet its obligations arising as a result of claims made in advertising (FTC, 2010). To begin with, if the company fails to make its promise it loses out on potential customers as instead of taking advantage of the hype created, the company ends up loosing out on its customers as a result of customer disgust or consumer dissatisfaction. Secondly, the company may be involved in lawsuits such as the one's stated above as failing to meet the desired expectations and misleading advertising and business practices are crimes as per the US law.

Had the company employed effective risk management practices, it would have prevented the events that led to the lawsuit. The company was supposed ...