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Media and Crisis Management

Food Fraud Culprits Ought to Get Slammed by the Law

Posted on: July 28th, 2012

Crisis Management: Food Fraud Culprits Ought to Get Slammed by the LawCrisis Response

There ought to be a law!

The finger found by a customer in a bowl of Wendy’s chili in San Jose, CA, in 2006 was a setup. Complainant Anna Ayala dropped her lawsuit against the franchise owner after police and health officials grilled her, her family and searched her home. They arrested her and charged her with extortion. Press reports said Ayala had a history of suing companies.

Comedians joked about the case but Wendy’s was not laughing. Sales declined in Northern California. The company shortened operating hours and laid off employees. There was little comfort to the hamburger chain even though it reacted well by instituting polygraphs, private investigators, a hotline, and a $100,000 reward. While Wendy’s chief executive said there was no credible evidence his restaurant was at fault he conceded the finger allegation hurt his national brand.

Sadly, this is old news. As a crisis manager who works occasionally with food companies, I can tell you that people frequently try to extort them with bogus claims of finding objects in foods or products making them sick. They warn that if the company doesn’t satisfy they will complain to the press. Most cases rarely see daylight for one of two reasons. The companies spend many hours tracking evidence to back down their accusers, or, out of expedience, make restitution just to pull these leeches off their necks. Sometimes they call in consultants like me to draft standby plans in case the crazies actually do call a reporter.

Here is an example of what they face. A food products client, who I will keep anonymous for obvious reasons, told me that a man complained about a problem with her product. Through sheer luck her company discovered that the same individual had filed wildly different complaints at three other businesses at the same time. She said he was attempting to extort money from all of them and was eventually caught by the insurance company. When I asked why so many people try this stunt, my client said her colleagues theorize it is economy-related. When there is a downturn, more people are tempted because they need the money.

And since these extortionists regularly threaten to go to the news media, how often do they actually do it? The client said rarely. That’s because the mere threat of the media is the only leverage they have. Once they actually talk to the press then they have no more clout with the business they are attacking.

To be sure, food companies err. I was involved in an insect infestation case with a well-known business. The client fixed the problem and got public credit for taking action. Actual errors are the exception. My food products client told me that more than 9 out of every ten complaints against her company are spurious. She believes companies rarely make mistakes because the Tylenol poisoning scare more than 20 years ago made everyone especially careful about their production and packaging methods. With phony allegations the norm companies lose coming and going. Truth-finding consumes expensive internal investigation time, and, if the gripe hits the press as with Wendy’s, repairing reputation damage costs much more.

Another thing: counterfeit claims undercut people with legitimate concerns.

While allegedly tried to con Wendy’s and faces felony charges, others continue in lower profile ways to falsely accuse food companies, and that is why I think there ought to be a new law. It is hard enough to manage a successful business without such threats hovering like killer bees. Legislators ought to pass a bogus food claim statute with such severe penalties that these scumbags will think twice before they make false accusations that hurt innocent businesses. You can’t yell “fire” in a crowded theater. You shouldn’t be able to yell “food contamination” when it’s a lie.

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