“Not now I’m on the phone. But you knew that” (How to stop phone hackers)

The reply to this oft-repeated phrase is usually “Oh, I’m sorry.  Let me know when you’re off.”  Although now it might very well be “I know.  But, you should hang up.  Your conversation was over five minutes ago. Now you’re just having small talk.”

I thought this was a private line

According to a recent 60 minutes piece on phone hacking, those calls you are having might possibly be a little more revealing than you wish them to be.  The main point of the segment was that, because of a weakness in the most common operating system for cell phones, it is possible for someone to hack into your phone, gain access to its contents and listen to your conversations.  The only thing they need is your phone number.   It’s a strange feeling as you watch these guys hack into the working cell phone of a U.S. Congressman and tape the conversations that he is having with the reporter.

Your emotions go from:

“Wow.  That’s pretty cool.  He’s being taped using his cell phone;” TO
“Hey. That’s a Congressman.  Being able to hack into his phone is NOT cool;” TO
“Yikes.  What if the President uses the same kind of cell phone?;” TO
“Hey, wait a minute.  I use a cell phone!”

This isn’t your Father’s mobile phone

What’s important is that we change our views of what a cell phone is.  At this point almost everyone has a smart phone somewhere on the family payroll.  Rather than being just a phone, a smart phone is really a computer that also has the ability to function as a telephone.  According to a PEW report, ¾ of all Americans use a Smart Phone.  According to a Federal Reserve report on using mobile phones for financial transactions nearly 90% of the Country has a mobile phone.  Seventy-one percent of those people have smart phones.  A Smart phone refers to a phone that has internet capabilities.  (If your phone only lets you take calls, text your friend and play that grainy black & white version of Tetris it’s not a smart phone)

But when we use a smart phone so much we get a little lazy.  Well, perhaps complacently careless is a better way to put it.  We get so used to taking a call; checking our e-mail; looking for new cat-videos on facebook; checking Twitter; re-checking our e-mail; taking another call; responding to a text; taking another call; re-checking Twitter….that we get careless.  It’s easy to forget that we have a computer in our hands and think of our phone as  a walkie-talkie with pictures.

But, there are two types of information on our smart phones that we should be guarding much more closely.  Your smart phone has: 1) A direct path to every person listed in your phone book and to every person you are connected with on social media; and 2) Your up-to-date credit card information.

What’s the big deal if someone has access to my e-mail and social media accounts, anyway?  What do I care if someone else reads my e-mails?  What you have to worry about is not the emails that the hackers can see; it’s the e-mails that they can SEND.  The bad guys don’t really care if your Aunt Sil sends you that e-mail with a story about someone who had a life-changing experience and asks you to send it along to 10 people that you love.  What they care about is having access to your address book.  This will let them finding that ONE person who will think the email that the hackers sent actually came from you and then try to send you money.

The second type of information on your phone that the hackers love? The number, expiration date, and three-digit secret code on the back of your credit card.  Since we don’t want to re-enter our credit card number into the phone every time we buy something, we usually just click “yes” when it asks if we want the phone to save our credit card info.  And some APPs (like the one we use to buy concert tickets) require us to enter our credit card info into the system just to activate our account.  When we agree to let something be stored in the cloud, we don’t ever really stop to think just where the cloud is.  Most of the time, the “cloud” is not somewhere up in the heavens, it’s a giant building somewhere that contains everybody’s secret info and a million little fans to keep it cool.

So they can hear me talk. Big deal

In the 60 minutes piece they showed you how hackers can get into your phone even while you’re performing every day activities – none of which we would classify as highly (or even slightly) risky. (unless you already consider giving out your phone number to be risky).  According to the hackers that were interviewed for the segment, there is a loophole in the operating system that is used by every major cell phone carrier.  That system – the “SS7” operating system – lets your phone roam; lets the providers exchange billing information; and lets hackers reach into your cell phone rather easily.  All they need is your phone number. (That demonstration starts at about the 2:30 mark and appears to work).  Since it’s a bug in the network, there’s nothing we can do to our own phones to stop it.  And, since it’s the mechanism that lets the cellular carriers give each other money, the guess here is that it won’t be fixed anytime soon.

If the hackers in your neighborhood aren’t swift enough to crack the code of the SS7 loophole, you’re still not out of the woods.  There are a few other ways to hack your cell phone that we learned about from the good folks at 60 minutes.  All of these will expose your cellie (and all the private stuff you have contained thereon) to the bad guys.

  • Ghost WiFi created for Hotel – OK, how many of us hop onto the Wifi at the hotel even before our bags are unpacked?  It makes sense.  The more you’re on Wifi, the less you’ll get charged for data downloads.  Now, how many times have you checked with the front desk to make sure that you signed on to the correct Wifi network?  This is a MUST from now on.  The hacker-guy on 60 minutes created a Wifi that looked so much like it was from the Hotel where the reporter was staying she didn’t realize it was fake and signed on.  Remember, they don’t have to be close to you to create a fake Wifi.  They just have to had access to a place that is close by at some point. (across the street; in the hotel lobby with a hotspot of their own; in the alley behind the hotel; in the room above/below you)
  • Downloading a nasty APP – Finding an APP for your phone that tells you where the next winning lottery ticket will be sold would be great! Downloading it would be another story.  Don’t assume that every APP that is available is verified and safe.  Bogus APPs exist and can cause many headaches.  Have an Android? Check here to see how to find bogus APPs.  The APP store that comes with Apple products contains APPs that most likely have been pre-checked by Apple for viruses & malware.  But, even Apple has some soft spots in its armor.
  • Opening e-mail (or an attachment) from someone you don’t know – This one’s the simplest one.  If you don’t know who’s e-mailing you, don’t open the e-mail.  If you ignored an e-mail that was from someone you know by mistake, they’ll call you and say “Hey, I sent you an e-mail with the winners from the 5th at Belmont this Saturday.  Why didn’t you open it!”

One of the hacker guys made a device that allowed him to hack into the reporter’s phone when he just bumped into her.  There’s no way to keep folks from bumping into you and it is probably not a good idea to treat everyone who touches you in public like they are stealing your lunch.  But if you feel anyone touch your phone (or the part of your outfit that contains your phone), disable the Bluetooth right away. (this is explained below)

Is everything hackable? “Yes”

This point of view is from the interviewee from the 60 minutes segment.  Not an encouraging opinion.  But, one that we can’t ignore (unless we unplug totally and revert to smoke signals).  What we should find heartening is what they term as the greatest weakness in phone security – something they call the “human element.” (we don’t know what that is, but we’re darn sure gonna make sure that our phone doesn’t use it)

What to do to protect yourself:

Here are some ways to prevent your phone from getting hacked by taking charge of the so-called human element:

  • If you don’t know who sent the e-mail don’t open it.  By now your reflexes take your fingers to your mailbox to open each new e-mail automatically.  Resolve to go a little slower when looking at your e-mails and stop if you don’t recognize the sender.  If it’s from a business (your credit card or cable company, perhaps) tap on the “sent by” letters and see if the address actually is from that company or if it’s from [email protected] A strange ‘From’ address is a giant red flag.
  • Don’t open that attachment. E-mails from someone you know that have no text but a link and some short phrase like “thought you’d like this” or “Check this out” are almost always bogus.  An old hacker trick is to send these seemingly innocent e-mails from the box they hacked into and then steal the info from the folks on the receiving end who open the link.  (Another RED FLAG is when you get an e-mail that was also sent to 4 or 5 addresses that start with the same letter of the alphabet.)  Get away from:
    • “Gee I got an e-mail.  That’s so neat. Let’s open it!” and move towards
    • “An e-mail? hmmmm.  Maybe it’s from a hacker.”
  • RED FLAG texts (read: ones you should ignore & delete): Any text from a number and not a name. Your phone will auto-populate the “From” field when you get a text from someone in your contact list. If you get a text from someone who is NOT one of your contacts, it’ll just show the number.  That’s a Red Flag! Ignore it. Delete it. (Unless you’re signing up for a trusted service on the web and they say “We’re going to send you a text as part of a tw0-step ID process.  Open that text and tell us the secret code it contains.”)
    • Also, any text that asks for personal information is bad news. Unless your friend said “I’m gonna text you and ask you for this info” delete it.
  • Spam means spam. Your smart-phone’s e-mail system has a “Junk” or “Spam” box.  It didn’t make a mistake.  If it sent the e-mail to the SPAM box, it’s because it was actually SPAM!  You don’t even need to open the Spam box. (Your phone will delete those messages after 30 days or so).  Since many hackers can access your phone if all you do is open the message, leave it alone.
  • Turn off Bluetooth when you’re not using it. This is an easy one to take care of.  Some devices (like the one we talked about above where the hacker touched the phone in the reporter’s pocket) let hackers use your Bluetooth to listen to you and steal your information.  You should get into the habit of turning your Bluetooth off when you don’t need it.  (Your earbuds do NOT need Bluetooth to operate)
    • In an iPhone – go to: Settings > Bluetooth and toggle it to the off position (it is off when the green disappears)
  • Think about anti-virus protection. Your phone is a computer, not just a phone.  If you pretend your smart-phone is really a teeny-tiny laptop, buying virus software makes a lot more sense.  If your PC or laptop has anti-virus protection (Side note: if your laptop or PC does NOT have anti-virus protection, stop reading this and buy some right away!)…If it does, that same company might let you cover your smart phone with the same subscription.  Call them and ask.
  • Disable “Load remote images”.  Your phone automatically downloads images in e-mails that you receive.  Those images contain little spies that will tell the sender some (harmless) information about you.  It will tell them 1) whether you opened the e-mail; 2) what device is you’re using; 3) how long you looked at the e-mail, etc.  The information is  relatively harmless.  But it’s the pathway that the hackers use to get OTHER info from your phone.  Disabling this feature will add a layer of protection.
    • If you do this, it will prevent you from seeing pictures in some e-mails.  Don’t worry, the e-mail WILL show you where the pic should be and how large it is. If you want to see the picture all you have to do is tap where it says “load all images” inside that e-mail. (This way YOU pick which e-mails send information about you back to the sender).
    • An unintended consequence is that some e-mails might look like they were loaded by a drunk person.  Your phone isn’t broken! It just really wants to see those pictures.  Tap “load all images” if the e-mail is impossible to read.
  • Verify the WiFi address and login info when traveling.  Don’t assume the first Wifi that pops up on your phone is the righteous one.  Out of the house or at a Hotel?  Look at the entire list of Wifi addresses that pop up on your phone before you tap “login.”  If you’re at a Hotel or coffee shop, add the phrase “Which Wifi is yours?” when you are talking to the sales clerk.  Believe us, this conversation is much easier than the one where you run down to the front desk at 2:00 a.m. in your skivvies to make sure that you’re not using a bogus Wifi.
  • There are APPs out there that will scan your cell phone for malware and tell you at any point someone else tries to hack into your phone.  We use “lookout” which is free on the iPhone APP store.  Nothing is foolproof.  The idea is that you are making it slightly harder to hack your phone in many different ways.
  • Crypto-phone – There is an alternative (actually there are more than one).  These are phones that boast “complete encryption technology.”  They work by scrambling the signal that the phone is giving out to protect the phone call and data from hackers or eavesdroppers. (Presumably the congressman in the 60 minutes piece did NOT have one of these)  We don’t (because what we say on our cellie is really not that important).  And because they’re $3500 apiece.

Take a few steps to protect your phone and sleep easier.  (And you might want to cool it with any kind of talk you don’t want the neighbors to hear in the meantime)

Posted by: Mark Wiseman (who worked at a law firm where all the associates were sure our phones were tapped.  Maybe they’re STILL listening!)

I don’t have to worry…Do I? (what you should do BEFORE you try to buy a car)

There is much to be concerned about when you buy a car.  The price; the negotiations; which car gets better mileage; will it hold up in a crash; should I get rust-proofing; can I trust ANYone?  Consumer Courage is going to try to look at many of these issues.  Here (in the first part of a series of posts) are the things that you should consider doing, before you even leave your house. 

How much homework should you be doing?  Try this: Think about doing an hour of research for every thousand dollars that you plan to spend.  If you think you’re going to buy a car that’s $10,000, get ready to spend 10 hours doing research to get ready.  (If you borrow ten grand to buy a car and your loan will take between 3 and 5 years to pay back, it makes sense that you put some work into the process before you go signing any contracts)  The guess here is that once you get past $50,000 (50 hours of research) you might not need to spend one hour for each additional thousand.  (If you want to buy a house that will cost $150,000, you might not need to spend 150 hours doing research)  But, at least you understand the game: You are going to commit years of your life to pay for something…you should be willing to spend some time to protect yourself.

I’ve read an article about car salesmen, am I ready?

There are many articles about car salesmen. 

Fair & Square lawyer’s note: For the salesmen who want things to be ‘Fair & Balanced’ here are some articles about how to avoid bad lawyers that we didn’t have to look (ahem) very hard to find   

One of the best articles is a piece that was done by a journalist who sold cars for 90 days.  It’s a great read (sort of lengthy, but worth it).  If nothing else, it shows how the car-buyer who hasn’t spent time to figure out what’s going on is nothing more than a sitting duck.  Don’t panic!  There are a few things that you can do to help yourself, before you venture out to the dealership.  (Remember: You are about to interact with somebody who has years of experience dealing with consumers who need cars and figuring out how to use their lack of knowledge to make a commission.  Their wish is that you don’t know what you’re doing) 

Here are three things to take care of before you leave the house to make sure you don’t make somebody else’s dreams come true:    

    • Research the Car
    • Research yourself
    • Get a loan

Research the car

Don’t make the mistake of showing up at a dealership because you have to have THAT car.  You better have more than one car that you will be happy with, in case that sweet deal turns out to be very sour.  One of the most powerful weapons that you’ll have to protect yourself once you start negotiating will be your ability to walk away from the deal.  Car salesmen wait all day for customers who want a particular car so bad that they lose the ability to watch out for themselves. How do you find your three favorite cars?  Do yourself a favor and buy the Consumer Report’s Annual Car Buying Guide.  They don’t take advertising dollars from the car industry, so they have no incentive to shade the truth when it comes to talking about whether a car is a lemon or not.  One of the best things about the Annual Car Buying Guide is that it contains a five-year lookback for nearly every used car on the market.  You will be able to see which cars last longer and which cars will spend more time at the garage than on the road toting you around. 

Editor’s pop-quiz:  Do you really need to subscribe to Consumer Reports and see their Car Buying Guide? Here’s a test: was the percentage of people who own a 2010 Toyota Corolla and reported that the exhaust system needed to be repaired more or less than 5%?….Consumer Courage is not buying a Corolla. But, if we were, this would probably be an important factoid to know, yes?

Don’t stop there, plenty of places on the web will lend you advice about Car-buying. (For example: here is General Advice; a TV report showing advice from a former salesman; and a quickie piece with a bunch of tips for the reader)     

Research Yourself & Get a Loan

Most people will have to take out a loan to pay for their next car.  One of the biggest mistakes that people make is relying on the dealership to arrange financing for them.  It seems like a good idea, right?  THEY have the cars; THEY have that guy who has nice hair and his own separate office in the back of the dealership; THEY have all of the paperwork – why not let them be the ones to arrange the loan? Here’s why this is a bad idea.  Car dealerships make more money on the financing aspect of the deal, than they do from the actual sale of the car.  They can let you ‘win’ the negotiation on the price of the car, just to soften you up for the finance guy.  Why? Because they can use the financing package to rail you with extra fees and higher-than-necessary interest rates.

The Center for Responsible Lending published a report recently  that shows that the interest rates on auto-loans for People of Color and Latinos were nearly 2% higher than White borrowers with similar credit ratings (even though they tried to negotiate MORE often than the white borrowers did).  In addition, non-white borrowers were TWICE AS LIKELY to pay for unnecessary add-ons during the sale process.  The differences in the loans in that report were no coincidence.  In other words: the dealer has the ability to zing you with a higher interest rate and unnecessary fees, as long as you don’t know the difference.

“How can they play with the interest rate?” You ask “If I have good credit, isn’t it illegal to charge me a higher interest rate?”  In fact, it’s perfectly legal.  The banks will pay the dealer a kickback, if the dealer can talk you into believing that the ‘best rate possible’ is higher than the actual rate that you qualify for.  (Example:  Let’s say your credit is good enough to qualify you for a 5% loan.  If the dealer can get you to borrow the money at 8%, they get a bonus on the difference – the 3%) “Would the car dealer mislead me, just to make money?” you ask.  (Do you really want me to answer that question?)

How do I guarantee that I’ll actually get the best rate?

To protect yourself and to get the lowest interest rate you deserve, you have to understand your credit report and your score. This is very simple, but it takes a little bit of time.  About 90 days before you want to apply for a loan, you should visit annualcreditreport.com and order a copy of your credit report. (This is the FREE government website)  Once you do that, take the credit report to a Bank or Credit Union and tell them that you want a car loan and want to work on your credit score.  (If they aren’t willing to work with you, thank them and ask for the name of a bank or credit union that would like your business)  You don’t actually have to have a car picked out to apply for a car loan.  Once you qualify, the bank should agree to hold the interest rate and terms steady for a period of time (60 days, for instance) until you find a car.

Banks and Credit Unions want to help people repair their credit because a) they like happy customers and b) they are more likely to get repaid on time, when customers take their loans seriously.   Do you have an old bill with a low balance that you forgot about?  Is there a charge on your credit report that is NOT yours?  What is your credit score?  What is the exact best interest rate that you qualify for?  These are questions that you should be able to answer on your own.  If you take the time to work on (and understand) your credit report, it will be impossible for the dealership to take advantage of you. (and you’ll pay a lot less for your car!)

Do these three things and you’ll be ready to visit the dealer and start haggling.  “How do I haggle?” That’s a subject for another day.  (Next time, Consumer Courage will talk about why you should ignore the “MSRP” and the phrase you should tattoo on your forehead, before you go inside the dealership)

Posted by: Mark Wiseman (who keeps his cars until the doors fall off)

I keep clicking. But, how do I know I’ve won? (How to watch out, while you’re shopping online)

Thanksgiving is upon us.  Half of the Country can only think about how they will spend this Thursday eating and watching football, while the other half will be planning to wake up before the Roosters do on Friday so they can get in line to get a huge discount on a fancy new electric dog polisher (or some other such thing)  Although in the past few years, ‘Black Friday’ has oozed backwards to start on Thursday.

Note of Compassion:  Do retailers really have to make people work on Thanksgiving Day?  It’s rough enough that Ohio’s minimum wage  is only $7.85 per hour.  

But, I digress.  This week’s post is not about Black Friday.  It’s about one of the most unproductive work days on our calendar

Cyber Monday 

Many people will log on to a website next Monday and order something from a place that they didn’t even know existed.  Where will this company be located?….What is their return policy?…..Have they ripped other people off?….Who cares!  You’re getting 99% off; PLUS instant credit; PLUS a coupon…Zowee!

What to do to make sure you’re gonna get a good deal

The only way to really make sure that no digital trouble will befall you, because you are shopping online is (of course) to go to the Mall.  Failing that, here are some helpful tips to consider whilst you are double-clicking your way to retail-bliss:

    • Lock it up  You should always look at the address bar for the website you are on.  Most websites start with the initials “HTTP.”  You should not order anything from (or pay for anything through) a site that does not have the letter S after the HTTP.  The ‘S’ means that the site is secure.  You should also look at the end of the address bar (or at the bottom of the page in some browsers, when you draw your curser over the address, itself) and see if there is a little padlock icon.  If neither of these things are there, get out!
    • Stay at home and plugged in WiFi is awesome isn’t it?  Almost always, that’s a yes.  But, if you are using a credit card or trying to be secure on any website, skip the Wireless and use a PC.  One thing that WiFi cannot do, is prevent other folks who are on the same network from swiping your personal info.
    • Use a Credit Card  This one’s easy.  Credit Cards have dispute procedures, where you can get them to stop your card from making payments to a scammer website. (some may even provide a refund, if you run into trouble)  Debit Cards, Gift Cards, Gift Certificates and (nearly all) checking accounts do not.  Always pay your bill with a credit card.
    • BEWARE PayPal  Consumer Courage has already written about PayPal and how Consumer UNfriendly their dispute resolution procedures are.   Also, any site that steers you toward a payment scheme that is anything other than a Credit Card should raise red flags;
    • Keep receipts  That you should get a receipt for every purchase goes without saying.  But, don’t assume that your credit card statement will have much of anything that you can use, if there is a problem.  Even if they say they will e-mail a receipt, copy the confirmation page and put it into a WORD doc, until you actually get that e-mail.  Then, make sure that you bought what you wanted to buy and that they charged you exacty what the site said they would.  If the receipt varies from your understanding IN ANY FASHION, start calling people right away.
    • Stay away from pop-ups and add-ons  These are those little (many times FREE) items that many websites try to fool you into ordering, when you check out.  Nearly all of these offers look like they are sponsored by the seller.  Most are not.  In 99% of the cases, it would be cheaper – and a lot less aggravating – just to throw half of what they want to charge you into the trash and be done with it.  Clicking ‘Agree’ or saying YES is the easiest thing in the world.  Calling them to cancel?  Not so easy.
      •  Don’t even think about
        • Getting 50% of your next purchase if you sign up for a survey;
        • Get 20% off now, if you sign up for instant credit;
        • Trying our product replacement program for 90 days and ‘Cancel at any time!’
        • Get a free weight loss book/pill/magic wand;
      • Many times, this is a totally different company who has paid your seller just to introduce the two of you, right after your purchase.  (or worse, it’s a scammer that has hacked their way onto the site, without the seller’s permission) Where are they located?…How do you call them?….How do you get them to stop charging your credit card bill every month?….Don’t find out the hard way!  Just ignore the pop-up window.
    • How did you get there?  It’s never a good idea to go directly to a Retailer’s website from the link in an e-mail.  That’s because scam artists all hire ornery-brainy teenagers who can create an e-mail with a web-link that only LOOKS like it’s from your favorite retailer. 
      • Wanna get that great deal that you saw in an e-mail?  Have at it.  Just make sure you get out of your e-mail program and find their main site through Google or some other search engine.  This will weed out a lot of bad guys.
    • Who are these people, anyway?  If you haven’t seen them before, do some research before you give them your Credit Card number: 
      • Find their home page and look for their street address, phone number, ‘Contact Us’ information, etc.   Then call and see if you can reach a human being.  An endless phone loop (or disconnected number) may just be an indication of what it will be like to deal with them, if there is a problem.
      • Type their company name into any search engine and add the words “….Ripoff”  or  “….Scam.” You might be surprised.
    • BEWARE of the info grab  Usually, when you make a purchase online, they want your Credit Card info; billing address and e-mail.  If they ask for Anything else, you should start to worry.
    • Close your browser and log back on  Just like you leave the store when you’re shopping, get used to leaving the net, after you make each purchase.  If you keep your browser open and continue surfing the web, it’s possible that another of those teenagers has created a program to follow your digital footprints back to the site where you just made your purchase and steal your credit card numbers.  And finally;
    • Shut down and Restart your computer  When you are completely done with your session, shut down and restart your computer.   This’ll stop any chance of some cyber-crook from sneaking into your computer files, while you are bragging about the new 178 inch Plasma TV you bought for $19.95.

This year, know what you can do to be careful when you sit down at the computer to buy your presents after Thanksgiving and you can enjoy your cranberry pudding with a clear mind.

Posted by: Mark Wiseman (who hopes never to be in so much trouble that he has to eat cranberry pudding)

“I will gladly pay you Tuesday……” How much that locksmith is really going to cost you…

ABC has a new show called the ‘Lookout.’  The hook is that they are the ‘Lookout’ for you and your consumer rights.  They set up elaborate stings to catch TV repairmen who charge for work that they didn’t do; help you decide if the thread count on the set of sheets you bought is really THAT high (I guess bogus thread counts is becoming a problem….?) and locksmiths who appear to be nothing more than ripoff artists.  It is equal parts: ’20/20′ ; ‘To catch a predator’ and ‘candid camera.’  In the locksmith segment, they had an actress call a locksmith for help, pretending that she is stuck in her backyard without her keys.  (The camera crew and a locksmith ‘expert’ are on-site and commenting to the audience as it all unfolds).  They needed about 30 people to put the zing on the one poor guy who showed up to get her in the house.   (He charged her 10 times what they told her on the phone and trashed the door getting it open, so everyone went home happy)

That the ‘Locksmith Scam’ is alive and well is not news.  In fact, there have been so many exposes about bad Locksmiths in the last few years, I would imagine that the phrase “Hey, let’s re-run the bit on Locksmiths!” is uttered in the newsroom, whenever there is a slow news day. (Here are ‘Locksmith Scam’ reports from 2006,  20072008,   2009,   20102011  2012  AND  2013 ) They are all examples of how (if you are locked out of your house – or your car – and have to call a locksmith) you are at their mercy, in terms of price and efficiency.

    • You’re not from around here are you? Despite the names that pop up in Google, or even your local Yellow Pages, in a great many cases, the ‘Local’ Locksmith is really a call center 500 miles away that contacts somebody who lives in your city and happens to have his own set of tools. You know you’re in trouble when the guy who shows up doesn’t have a uniform; a decal on his vehicle or a receipt that resembles the company that you called.  What else won’t he have? He won’t have an accurate price list, no insurance for damages that he might make to your property; or accountability;
    • They told you HOW MUCH over the phone? That you will pay more than what you were told by the dispatcher on the phone is automatic. How much more is the question.  The problem is that you are desperate and they know it. They are the only thing that stands between you and the other side of your door.  Many people pay whatever the cost ends up being for two reasons: they are just happy to be inside and they are a little intimidated about refusing to pay the guy that just showed them how easy it is to break into their house.  So, they pay and plan to call the company to make a stink. But, after you pay, how simple will it be to actually reach the locksmith company to complain about the price?……….
    • Now who do you work for again? The folks who run this scam are REALLY good at being hidden.  They use multiple aliases and a spider web of corporate identities and addresses that would make your head spin.  (at one point, during the show, the host drove to three separate empty fields in New Jersey that were listed as business addresses)  All of this is designed to keep you from figuring out who is in charge and where they are.  Your original call goes to a call-center in Tempe…the local address is an empty field on the outside of town….and after you call, you could get callbacks from 3 or 4 different locksmiths in your area who claim to be on their way to help you.  In Consumer terms, this means that if you have a problem that you want to solve after the Locksmith has left your house, you’re outta luck; Which brings us to the real question –

How do you avoid this? 

First, let me say that not every person you call, when you’re locked out is a scam artist.  Indeed, I would bet that every city has a Mom & Pop key and lock place that employs salt-of-the-earth folks who would be happy to let you into your house for a reasonable price.  The problem is finding those people at midnight, when you haven’t ever tried to locate them before.  And (as is the case with every scam) separating the good guys from the ones who are trying to fleece you is a lot harder, when you are desperate.

    • Check with the Better Business Bureau (or the FTC). Most of the articles tell you to check the BBB.  That’s great advice.  If the name of the company that you called is listed with the BBB as having an ‘F’ rating, you know they’re somebody you should stay away from. But, if they are NOT listed, don’t take this to mean that they are OK.  If it’s an alias, the BBB won’t necessarily have a bad report on them.  Meaning to say: a good report or no report doesn’t necessarily mean that you are out of the woods. (The FTC also has a helpful Consumer Info Sheet on Finding A Locksmith)
    • Call someone you DO know. If you find yourself locked out of anywhere, the first person that you call should not be a locksmith, it should be someone you know.  Yes, it’s embarrassing…yes, you’re imposing on someone. But, it is also a tad unsafe. Find someone to come hang with you, before you call a complete stranger and tell them “I’m in the dark, locked out and all alone.  Here’s the address!”  It will also be much easier to haggle over a price and stop them from drilling holes in your door that you don’t need if you have a friend with you. And, if you find the need to say “I’m not going to pay $500, since they told me $50 over the phone,” you won’t be alone.  
    • Keep an extra key in a SAFE place.  Here’s an item that everyone should have on their door.  It’s called a ‘Key Safe.’ It usually costs less than Fifty bucks and you screw it to your door.  Once you do that, you’ll never be locked out of your house again. (They do make hide-away keys, that  look like rocks you place in the garden.  But, it doesn’t seem like a safe plan for you to stroll into your garden, pick something up and magically use that to open your front door, while the whole world can watch exactly where you kept it).

Your car’s a different story

It’s a good idea to make an extra car (and a house) key and store them with a friend, on the off-chance that you can reach them, if you’re locked out.  In case you can’t reach that friend at 1:00 in the morning, there’s always Triple A.  (their memberships all come with ‘Lockout’ benefits)  They’ll send a locksmith to help you get into your car if you are a member.

(Editor’s disclaimer: Just to be clear, Consumer Courage is not pushing anyone to join AAA.  If you don’t want to, you can always consider joining, only after you realize that you are locked out of your car. The base membership is only $50 .  If you join and the garage that they send helps you out, you will have spent much less than if you are a victim of the Locksmith Scam)  

If they can’t get you in – a slim jim doesn’t work on every car – AAA will reimburse you up to $50 for a Locksmith that you hire (if you have a regular membership) and $100 (if you have the PLUS membership). 

Hopefully, reading this post is the closest any of us come to getting locked out.   But, one never knows………

Posted by: Mark Wiseman (who once got locked out of his car…on Memorial Day…..at the Beach!   Oy)

Mythbusters: Payday Lending Version

Last year I analyzed four myths about payday lending that the Pew Charitable Trust’s “Payday Lending in America” project was able to disprove, in the first iteration of their study on borrowers. Their newest report “How Borrowers Choose and Repay Payday Loans: Payday Lending in America” goes into more depth, revealing a love-hate relationship between borrowers and high-cost, short term loans. The report tells a conflicting story of dependence, need, stress, relief, and any other emotion associated with finances that you could think of. Borrowing from the Mythbusters theme again, here’s the skinny on Pew’s new report.

(Editor’s Note: David wrote a blog post, when the first PEW report on PayDay loans came out last year.  For those who are interested in seeing how he dissects the fundamental myths behind PayDay loans, you can go here to check it out.  It’s worth the click)

Myth 1: Payday loans are mostly paid back.

Truth: There is some ‘truthiness’ going on here. Pew’s recent study finds that borrowers renew their loans or take out back-to-back loans in order to prevent defaulting. Only 14 percent of payday borrowers can repay their loans from a monthly budget. At some point, most borrowers inevitably default, require a cash infusion from family or friends, or use a tax refund (1 in 6) to pay off their loan debts.

Myth 2: Payday lending is an alternative for overdraft fees from checking accounts.

Truth: More than ¼ quarter of borrowers stated that payday loans caused their overdraft fees. The loan and overdraft fees are not mutually exclusive.

Myth 3: Borrowers think the terms are fair.

Truth: Again, there is some degree of truthiness about this. It is less about fairness but more so about ease of access, desperation, and perceptions. Some 55 percent of borrowers reported that loans take advantage of borrowers. What’s more, perhaps the most revealing finding is that 37 percent would borrow on any terms.

When people get desperate, it’s no surprise that they’ll do desperate things. The overall challenge with payday lending is that families lack income and assets to support themselves. As one borrower remarked, this relationship between borrower and loans is sweet and sour. Sweet when there is some immediate relief; but sour after the loan is made. Payday loans turn out to be a real problem for most customers, but the root here isn’t these terrible products. The root of the problem is the inability to earn income, set aside assets and build financially secure households. Fighting off the worst terms of the worst products is just a delaying measure until we can fix the structures and systems that aren’t serving the American people very well.

 Posted by: David Rothstein

 

2012, A Year in Review and what to watch for in 2013:

The Ohio Attorney General’s Annual Report for the Consumer Protection Section has been released, which leads us to question; Has 2012 been a good year for Consumer Protection in Ohio? Let’s take a look at the good and bad, and see what comes out on top! 

GOOD FOR CONSUMERS:

1) Ohio Supreme Court, in a 7-0 decision, sided with consumers to hold banks to minimum standards of due process, basically declaring that, in a foreclosure case, the banks must actually be able to prove that the promissory note had been assigned to them before they filed the foreclosure lawsuit.    

2) Neighborhood Housing Services of Greater Cleveland expanded its mission to include the “NHS Consumer Law Center”  – a welcome relief that somebody still cares about consumer protection in Ohio.

3) The Debt Settlement Bill did NOT get passed by the Ohio legislature.  Ohio already has a ‘Debt-Adjuster’s Act’  that protects consumers from outrageous fees and gives the Attorney General watch-dog powers over Debt-Adjusters. (‘Debt Adjusters’ are companies that help people who have too many bills that they can’t pay negotiate with their creditors).  This bill was an attempt to let certain companies operate outside of that act – which would have been very bad for consumers.  Good riddance to bad rubbish – Let’s hope it does not get resuscitated in the next legislative session.

4) The FTC (Federal Trade Commission) has a separate Bureau of Consumer Protection that has the mission of protecting consumers from fraud, deception and unfair business practices on a nationwide basis.   Since the beginning of the Obama administration, they have been more active than anyone at Consumer Courage can remember.  Click here for a (not entirely complete) list of a few of the major actions by the FTC’s Bureau of Consumer Protection, during 2012.    Having a Federal watchdog actually do its job, is certainly good for consumers.  Keep up the good work!

(Editor’s note: The increased efforts by the local regional FTC office to provide assistance to the advocate community and consumers of the region has been more obvious than ever before – especially with the pending arrival of National Consumer Protection Week starting March 4, 2013 – and is a welcome change from administrations past)

5) The Cleveland Plain Dealer still features a full time consumer reporter, Sheryl Harris,  who helps consumers resolve problems, highlights important developments in consumer protection legislation, litigation and industry self-regulation, and represents a much needed loud voice for consumer advocacy in Ohio.  I was particularly pleased to see some of her articles picked up by other newspapers in Ohio, and am proud of the PD for recognizing that consumer issues affect every member of our communities!

6) Social media and the internet are supporting some great blogs (including this one) to improve consumer education, which is often the only weapon we have to battle consumer fraud.  There are even a few “apps” designed to help consumers buy a new car,   finance a car, deal intelligently with car mechanics or fix it yourself,  and to find peer reviews and price comparisons.   

7) There are some great consumer protection lawyers in Ohio who continue to fight battles for their individual clients on a daily basis.  Most times, these advocates have to put their client’s victories ahead of their need for publicity, by agreeing to settlements that are confidential.  (Unfortunately, this means that we don’t usually hear about the results).  Anyone who spends a lifetime pursuing their dream of social justice knows that we are making an impact and changing the world when we help one person at a time.  I am confident more battles will be fought and victories won by the courageous few who embrace the “private attorney general” concept and use litigation to effectively fight fraud. 

BAD FOR CONSUMERS:

1) Ohio’s Consumer Protection statute – The Consumer Sales Practices Act (CSPA) – was amended (some say diluted), as of July 3, 2012, to add a “cure offer” provision that takes away the consumer’s right to get enhanced damages and money for his own attorney fees under certain circumstances. What happened:  Because of this law the CSPA is now described by the NCLC as ‘one of the weakest consumer protection statutes in the Country.’  From now on, if consumers don’t accept the settlement offer made by the supplier right after they file their lawsuits, they might have to pay the fees the that the corporation’s lawyer charges to defend the suit.

• If the ‘cure’ offer is too low?; or
• If the offer to pay the consumer’s attorney fees (the new law contains a range) is too low?; or
• If the consumer suffers damages for inconvenience, embarrassment or anything that doesn’t involve lost cash?; or
• If the consumers want their lawsuits to stop the business from ripping somebody else off? …………………………..too bad! 

(Editor’s note: Curiously enough, the point at which the business has to offer the consumer a ‘cure’ is AFTER the consumer files his lawsuit, not before.  By lining it up this way, the legislature guarantees that the consumer will be inconvenienced as much as possible. If the ‘cure offer’ was to be made, BEFORE the lawsuit was filed, the consumer could skip the need to find an attorney and spend their valuable time preparing for a lawsuit, in the first place.)

So far, anecdotal evidence tells us that not too many corporate attorneys are using this new law (maybe because it makes no sense to settle the Ohio-based Consumer claims, when multiple claims based on other statutes and common law will remain pending).  But, the law has only been in effect for 6 months, so it may be too early to tell. 
What’s the Lesson:  If the legislature really wants to reform the law that is designed to protect consumers, it needs to listen and learn from consumer advocates who understand that litigation can and should be used to combat fraud in our state.

2) CSPA was amended (effective 9/28/12),  to remove certain Home Construction Repairs from the list of Consumer Transactions that were protected.  Now, there is a separate section of the Ohio Revised Code that will let contractors: get away with requiring more money up front; have a reduced risk of liability; and gain the ability to set their own standards.  Mark Twain once said ‘Those that respect the law and love sausage should watch neither being made.’  This new law looks more like sausage than any in a long time. 
Since there are still consumer protections for home-improvement contracts that cost LESS than $25,000, contractors actually have an incentive to make your repairs cost more.  Strangely, there is an exception for contracts of any price, where the contract is a so-called ‘Cost-plus’ contract.  Since home-repair contracts are almost never ‘cost-plus contracts’ (cost-plus contracts are most common in large defense contracts, such as when the government needs fighter-planes, battleships and tanks), it’s hard to understand why this provision is in the law in the first place.  But, if your home-improvement contract is a ‘cost plus contract’ you’d better watch out!  
Here are some troubling questions that are left open even after this bill became law:

• Will builders now have an incentive to add costs to the contracts to make the total over the $25,000 threshold?
• Will builders now try to make ANY home-improvement contract a ‘cost-plus’ contract to trigger the exemption and remove any consumer protections?
• Will the provision in the new law that allows contractors to adopt their own building standards make it harder for a consumer to show that the work was shoddy?

Lesson:  Now you need to get a lawyer to help you negotiate a contract for any home improvement, or you will discover that the builder can take most of the money up front and basically build whatever he wants.  Unfortunately, this law might just have taken away your rights as a consumer.

3) The ‘Puppy Mill bill’  was passed.  But, it contained unbelievably low standards for dog breeders.  Even worse – at the last second ALL consumer protection provisions in the bill were cut out.  (go to section 956.20  in this version that did NOT get passed, to see the Consumer protections that were removed by the House)
What happened: nearly every version of this bill included language that protected the consumers who purchased the animals, in case the animal contracted problems that were associated with being bred in a puppy mill. (Outrageous vet bills in the first year; buying an animal that looked to be OK, but was not, etc.)  The version that was adopted by the legislature and presented to the Governor, however, deleted any of the consumer-protection language, with no explanation why.
Lesson:  The legislature cares more about dogs than the people who own them.  Don’t take our word for it, though.  There are even some animal rescue operations that have a problem with the new law. 

(Editor’s Note: this sleight-of-hand is not uncommon with legislation when both houses and the Governor are from the same party.  When every version contains consumer protections, the advocates stop lobbying to keep consumer protections inside the bill.  Then, when the bill goes to the legislative committee for touch-ups, they remove all consumer protection language, and consumers are left out in the cold)

4) HB 322 passed (effective 9/4/12) to allow all banking institutions based in Ohio to increase the interest rates on revolving credit accounts to the highest rate allowed by any other state.  All we can say is: WOW! 
What happened: The limit on credit card interest rates for banks that have their headquarters in Ohio, which used to be 25% (which, itself is impossible to repay) was abolished.  Now, Ohio banks can charge an interest rate that is as high as the interest rate that is allowable in ANY State, which can be off-the-charts high. (such as this credit card that comes with a 79% interest rate!

Lesson: Consumers are even more on their own than ever before.  You’d better be careful what kind of interest rate your credit card has (either the initial interest rate or the nasty default interest rate)  And, making the minimum payment – ON TIME – to keep the default rate from kicking in is now more important than ever before.

5) The Ohio Dept of Commerce, and other watch-dog agencies continues to allow short term lenders to make payday loans, by taking advantage of a loophole in the laws that govern the short-term lending industry.  That they haven’t stepped in is even more shocking, when you consider that almost 64% of Ohio’s voters agreed to outlaw high interest rate PayDay loans in 2006; and at least two Courts have recently determined that PayDay loans are still illegal in Ohio.  Instead of being able to charge only 28% on a loan, these lenders continue to charge 400% interest.

6) In a recent development that is somewhat shocking (especially since the FTC has been very consumer-friendly, during the Obama administration. See: ‘Good for Consumers,’ above) the FTC proposed changes to the Used Car Rule  that do not keep pace with technology or the latest issues in car buying.  Those changes have been labeled as ‘…worse than the old one, blatantly false…misleading’ by a consortium of Consumer Groups.  

(Editor’s note: the FTC recently extended the public comment period for the new rule to March 13, 2013.  While such an extension doesn’t always signal an about face, it is entirely possible that the FTC is rethinking its position on this new rule, given the pushback that they have received from the Advocate Community.  Consumer Courage is holding out hope that more informed, consumer-friendly heads will prevail)

Any changes to the FTC’s used-car rule are very important to Ohio, because we don’t have any rules that regulate used car sales.  (or any law, for that matter, that is directed to the latest crazy lending scheme: car title loans). 

Other key actions to watch in 2013:

1) The Ohio Supreme Court will be deciding Sonya Anderson v. Barclays Capital Real Estate, Inc dba HomeQ Servicing, Case No. 2011-0908, (click here for a brief background on the case)  to determine if Mortgage Servicing is covered by the Consumer Sales Practices Act. Oral Arguments are set for 2/28/13 so watch for a decision in March or April.

2) Motions are pending in the Ohio Supreme Court asking them to review two key Court of Appeals opinions; one on time barred debt and Ohio’s borrowing statute, Jarvis v. First Resolution Mgt. Corp., Case No. 2013-0118,  and the other finding that payday lenders can’t use loopholes to charge exorbitant rates in Ohio Neighborhood Finance v. Rodney Scott, Case No. 13-0103.   It is interesting to note that the former Director of the Ohio Dept. of Commerce has already filed a memorandum in support of the industry, so don’t expect the State to stand up for consumers on that one!   Watch this blog for updates!
(Editor’s Note: Although the brief in support of the PayDay lending industry was filed by the former Director of the Ohio Department of Commerce, and not the current one, the skeptic in us thinks that having the former Director file a brief on behalf of an industry that charges shameful interest rates would be a great way to help that industry, without actually doing it yourself.  It is interesting to note that the current DoC administration has remained silent in this case.  We’re just sayin’….)

3) We need to watch how the lower courts are going to apply the victory in Schwartzwald. Take a look at recent court decisions in U.S. Bank, N.A. v. McGinn, 2013-Ohio-8,  where the court suggests a way around the new ruling!

Posted by: Nadine Ballard

Meet the Bloggers (focus on Nadine Ballard)

We have the pleasure of having a blogger roll that includes people who are among the most informed Consumer minds in Ohio.  (Their full bios are on our ‘About the Bloggers’ page).  But, here’s a little taste.  We will have the pleasure of reading posts from: David Rothstein, from Policy Matters Ohio, which is a think tank in Cleveland that studies Policy and Statewide issues; Rachel Robinson, who used to work for The Equal Justice Foundation in Columbus and now represents Consumers; Amy Wells, who also represents Consumers and is the Ohio state chair for the National Association of Consumer Advocates; Lou Tisler, the Executive Director of Neighborhood Housing Services of Greater Cleveland (the ‘parent company’ of the NHS Consumer Law Center), who you met in the previous post; and Nadine Ballard, who has been aspiring to be a Consumer Lawyer (as you’ll read below) ever since her days as an undegrad at Michigan State University.  (I could gush about Nadine and how she has the respect and admiration of every Consumer Attorney in the state, because of her knowledge and understanding of Consumer Law.  But, I don’t want to embarass her….)  Instead, I’ll let her tell you a little about herself. 

Hello, I am Nadine Ballard. I am currently a full time professor in the Paralegal program at Sinclair Community College, where I have taught an undergraduate course in Consumer Law for nearly 10 years. Prior to joining the full time faculty at Sinclair I served as the Chief of the Consumer Protection Section of the Ohio Attorney General’s Office. I have been licensed to practice law  in Ohio for 32 years, and have spent most of my career with a special concentration in Consumer Law. In fact, my interest in Consumer law started in my undergraduate studies at Michigan State University where I obtained a B.S. degree in Public Affairs Management with a field of concentration in “Consumerism”.
After I graduated from MSU, I went to law school with the express intent of practicing consumer law. I graduated from the University of Dayton with a J.D. in 1980, and immediately became an Ohio Assistant Attorney General. I was involved with the investigation and resolution of consumer disputes through complaint handling, litigation, legislation, and rulemaking.

In 1985, I returned to Dayton to work as a staff attorney in the UAW-GM Legal Services Plan where I primarily handled consumer litigation. I left that office in 1992 when I was appointed to the Common Pleas Court as a General Division Magistrate. I served the Court for 15 years, presiding over many trials and writing decisions which involved a wide variety of civil issues, including consumer law. In February, 2007 I left the Court and returned to the Attorney General’s office to be the Chief of the Consumer Protection Section. Throughout my entire career, I have taught consumer law at Continuing Legal Education programs for bar associations, Legal Aid, legal service organizations, the Judicial College, and the Ohio Association of Magistrates. I am also a co-author of a practice manual for lawyers called “Ohio Consumer Law”.

I am a single mother of a 24 year old daughter, who recently graduated from The Ohio State University, majoring in actuarial science, and is now working in Cleveland as an actuary.  I have seen throughout my career that college students are one of the most vulnerable groups in Ohio because Ohio does not do a good job of teaching financial management in high school, and there are so many frauds targeted against college age students including credit card solicitations, cell phone contracts, scholarship scams, summer job scams, and horrible debt collection problems after they max out those easy-to-get credit cards (and are deep in debt with student loans). I currently subscribe to the RSS feed for dozens of legal and organizational blogs which focus on consumer issues, and consider myself very current on the hot topics in the field of consumer advocacy. I am looking forward to highlighting which articles are a must read for all of us interested in actively being our own best consumer advocate; to applaud the good work of others; to give everyone a heads up on new pending legislation or new case law and to strongly advocate for the best interests of all consumers!

 

Welcome from the Executive Director of NHS

Hello and thanks for reading!  This is Lou Tisler, the Executive Director of Neighborhood Housing Services of Greater Cleveland.   I am writing to introduce you to a new venture for NHS of Greater Cleveland.  We have started the NHS Consumer Law Center.

For over 37 years, NHS of Greater Cleveland has been helping the residents of Cleveland achieve, preserve and sustain the American Dream of Homeownership.  Our classes and resources are designed to teach people how to qualify for a home loan; how to do the repairs needed to their homes; how to refinance the loan that they are in; how to get help if they are in trouble with their payments; how to be financially responsible and so many other things.  But, while we were reaching our clients on the issues that they needed to purchase and stay in their homes, we realized that there were so many other decisions that they were being faced with, including a deluge of foreclosure scams, that could have impact on their ability to remain financially healthy.  We wanted to be able to reach people on many of the other issues that they face every day as consumers, as well, allowing them to make informed decisions and avoid scams so as to have means for purchasing, fixing and keeping their homes. That is why we have decided to start the NHS Consumer Law Center.

People are under constant attack from the marketplace that we live in.  Sadly, there are many ways that the money that you earn can be put at-risk.  We want you, and everyone else, to know how careful you need to be, how to protect yourself, and what alternatives to choose, when you make those (seemingly) routine buying decisions. 

• How should you treat solicitors who call during dinner?
• What should you do if you get a strange bill on your credit card statement?
• Should you bother trying to clean up your credit report if you want to borrow money?
• What should you know about a company that wants to lend you money, while having you sign your next paycheck over to them ‘just in case’?
• Should you sign up for a credit card every time somebody offers you a free T-shirt to do so?….

There are so many questions that Consumers answer on their own, without knowing the consequences of making a wrong move.

The companies and scam artists that have a business model that is designed to take advantage of unsuspecting Consumers (and there are many!) rely on the fact that many consumers don’t fully understand all of the aspects of their purchasing transactions and make quick, uninformed decisions.  As long as this type of decision-making process exists, con-artists and scammers will make tons of money.  The antidote is a system to teach consumers exactly what things like ‘Variable Interest Rates’ and ‘Disputing Credit Errors’ and ‘Fair Debt Collections Practices Act’ mean.  That is the mission of the NHS Consumer Law Center.

It is our goal that the NHS Consumer Law Center will provide to the citizens of Northeast Ohio (and beyond) the information that they need to make the intelligent, informed and financially beneficial decisions that will make them stronger consumers and help them build long-term wealth.  We intend for this website to help us in our mission. 

Part of that website, is our Consumer Issues Blog.  We have what we consider to be an ‘all-star’ list of bloggers.  Welcome.  Thanks for reading; and please………come back for more discussions that will benefit you, the consumer!