What’s a rumor cost?
Millions of dollars in the case of Gerber Products Co., which is battling a rerun of an untrue rumor saying it’s paying $500 to children under 12 to settle a lawsuit.
“In the last month, it has really been running rampant,” said Terri Wahl, a spokeswoman for Fremont, Mich.-based Gerber.
The baby-food company said it has received more than 18,000 calls on its toll-free telephone lines in the last three weeks seeking information about the bogus settlement.
Gerber employees have been giving callers the same refrain: There is no class-action settlement, let alone a $500 savings bond waiting for their child.
It’s a rerun of a rumor that swept the nation last spring. In that one, Gerber supposedly was paying as much as $1,400, and 35,000 calls poured into the company’s offices.
“Hoaxes like this are becoming more and more prevalent,” said Sidney Doolittle, a Chicago consultant who has helped companies battle rumors.
“Brands have a lot of equity. Companies have to protect that. It’s capital and it’s worth a lot,” said the partner in McMillan/Doolittle.
The cost to battle a rumor can be substantial.
Procter & Gamble, for example, was forced to abandon its 100-year-old trademark because of a persistent rumor that the Cincinnati-based consumer-products giant was engaged in Satan worship.
Last winter, buyers of infant formula were led to believe that North Chicago-based Abbott Laboratories, Bristol-Meyers Squibb Co. of New York and its Mead Johnson Nutritional Group unit had agreed to pay up to $1,400 per claimant to settle a price-fixing suit. It involved a bogus form that supposedly had to be submitted by a deadline.
It was to be sent to a post office box in Minneapolis, where claims were being received for a real infant-formula price fixing settlement that would have paid only $40.
Curiously, that same post office box is where parents seeking the savings bond from Gerber were to send copies of the birth certificate and Social Security numbers of the children.
“Somehow our name got connected with that settlement,” said Gerber’s Wahl, noting that postal inspectors have closed the postal box and are returning any mail sent there to the senders.
Despite Gerber’s efforts at battling the rumor with a message on its Web site and four other Web sites, people still are racing to collect copies of a non-existent claims form in time to beat the bogus Oct. 1 deadline for submitting claims, the Gerber spokeswoman said.
As quickly as Gerber identifies a person passing along the information, and gets the person to stop, another starts.
“The notices are being posted in hospitals. Teachers are sending them home with students. And one corporation even put the notice in with their paychecks,” Wahl said.
So professional are the notices that Paula Anton of Chicago didn’t give it a second thought before telling relatives, co-workers and employees in a physical therapy office about the money they could claim so easily.
“I thought it was real when it came in on the fax machine,” Anton said of the notice faxed from Chicago-based Brook Electrical Distribution Co.
An embarrassed Jacob Rosenstein, president of Brook, said he told Gerber the fax should never have been transmitted.
“It should tell you one thing: If something is too good to be true, it probably isn’t” true, he said.
