“I’m sorry did you say you were a scam artist?” (how to spot phone scams)

If a stranger came up to you on the street and said “Hey, do you mind if I go through your purse while you wait for the bus?”  You would probably hit him over the head with it instead.  So why if that same stranger calls you on your cell while you are waiting for that same bus, will you give him the time of day?  Yes you’ll be skeptical. But, if he plays his cards right, you’ll stay on that call just long enough for him to soften you up and let him through that purse of yours so he can see your checkbook.

Used to be the most you had to worry about when leaving the house to spend some money was buying the wrong thing.  Some folks used to say “don’t buy any wooden nickels,” because the threats you faced were when you actually had to leave the house to buy something.  Today, you don’t have to worry only when go out of your house to make a purchase.  The bad guys have many ways to reach right into your house and come get your money, while you’re still sitting on the couch.

Your cell phone and your e-mail account both provide an avenue to reach you at any time of day or night.  And for some reason, if we get contacted through either of these avenues e-mail or cell-phone, we interpret those communications as if they each contain an inherent hint of credibility.

When we get an e-mail asking us for money (or our password or account numbers) it should be met with the same level of skepticism that we have when a stranger asks us for money in the parking lot on the way to our car after the late movie.  Still many of us will keep reading that e-mail in the hope that this might just be the one chance we’ve been waiting for to make some real dough.  This is why people still fall for the Nigerian prince scam.

The tricks of the trade:

Before we describe some of the scams that are still around it probably makes sense to talk about HOW scam artists work and the tricks they use to knock us off of our game.  It’d be easier if we could just ASK if they were scam artists (much like asking if the new guy to the group is a narc)  Unfortunately, we have to figure it out for ourselves.  Remember: the scammer’s only goal is to get you to make a simple transfer of funds.  All they need is your account numbers.  Be they checking; credit card; savings or debit card.  The only thing they seek is those magical numbers.  Magical because they unlock the moola that is hiding behind the door.  Once they have those numbers, the game is over. They each have a map on their desks that contains their business plan:

  • Locate sucker (by phone or e-mail)
  • Gain their trust
  • Suggest a payment
  • Find the money
  • Get the payment
  • Disappear

Instead of thinking:

“Gee they sound so nice and they seem to know so much about me and what I’m thinking.  They just want to help me. They seem like a friend of mine. I should be nice and try to help them to. After all, why would anybody try to steal from me? I’m a nice person and wouldn’t steal from anybody”

You should be thinking:

“I don’t know who this person is. They could be anybody. They SAY that they have some business with me, but how do I know that’s true?  I’ll bet they are crooks, living in some foreign country laughing at apple pie, Chevrolets and me! I’ll never believe them!”

Here’s how they’ll do it

  • The Lure of the BIG SCORE! – This is really at the heart of every con. Make the person think they’re about to hit it big.  Many of us suffer from the lottery mentality – wishing that you hit it big, but thinking you only have to spend minimal effort (like a dollar) to get it.  Scam artists know this and try to tap into that feeling when they try to con you.
  • Using fear – Oddly, this is just more of the BIG SCORE! idea. The con artist is trying to scare you into thinking that you will lose out on that great thing; or that you will be set up to suffer some great unseen harm if you say “no.”  Sure it’s scary to think that your computer could get hacked, your ID stolen or your house burgled.  But that’s not the reason to say Yes to the person who calls out of nowhere to try and save you.
  • Using mirroring – This is when they listen to what you say and pretend to be just like you.
    • If you mention the dog, they are a dog person;
    • If you mention grandkids, their favorite grandmother just passed away;
    • Whatever city you are in, they just Loooove your college or pro team.
      Being able to process some off-hand comment by someone, turn it around and pretend you have the same thing in less than a second is an art form, to be sure.  Just remember: you’re talking to the artist!
  • Pressure you to act NOW – They know that if you don’t say YES while they have you on the phone during the first call, you will probably not fall for their scam. If you hang up – or just say NO – they have no power.  E-mail scams also contain some pressure to act fast.  That comes from whatever fear they are trying to fill you with.
  • Do a lot of fast-talking – scam artists know that the only way to keep you from being careful is to fill everysinglesecond with the sound of their voice. They figure that if you’re listening to them, you won’t hear your own brain screaming “Ahem…RED FLAG!”  Evasive answers, long-winded explanations, phrases that just don’t sound right, ANY feeling in your gut of doubt or a hint that you don’t trust the speaker should register in your brain as if you’re watching a magician who’s really bad at card tricks. (you’ll gladly watch the trick; but ain’t no way you’re gonna give him a tip)
  • Keep you engaged/won’t let you stop the conversation – Every scammer knows that the victim’s only weapon is to end the conversation/hang up/walk away.  Nobody ever got arrested for hanging up on someone.  Almost every scam victim we talk to says some variation on the phrase “Well he sounded so nice.”

Author’s plea for secrecy: Try not to tell Mrs. Consumer Courage that we’re recommending that you hang up the phone.  She’s the only person we’ve ever seen who will apologize to the person on the other end that she’s about to hang up. (I’ve actually seen this)

  • Change the subject
    • You’ll say: “I want to think this over”
    • They’ll say: “well you have to act now, because this deal won’t be open for much longer”
    • You’ll say: “Can you send me something in the mail?”;
    • They’ll say: “Well, this is how we keep our costs down. We’re only offering this over the phone.”
    • You’ll say: “I’ve read about this. There was an article in the paper about how your product breaks after an hour and a half”
    • They’ll say: “How about this weather!”
  • Can I get this money back? –  No scam is complete until the bad guys get paid. To do this, you need to give them some account number.  What they really want is money that is untraceable.  Your question to yourself if you’re about to make an online (or over the phone) payment is: If I’ve been duped, can I get any of the money back?  Scammers will tell you all kinds of things designed to make you pay, using a method that will not allow you to get your money back if it all goes south.
    • What kind of payments should you worry about?  
    • RED FLAG payment types = anything that acts as instant cash. Once the funds are sent, they are gone for good.  All of these: checking accounts; debit cards; Money Orders; Green-dot cards (any pre-paid debit card) are instant methods and a scammer’s dream.
    • Not so red flag payment types = Most Credit Cards have fraud protection; Pay by mail usually involves a check (so that’s bad). But anytime you’re paying by mail, you have a lot of time to rethink the whole idea (which is good);
  • But “I’ll never fall for that” – Sure you won’t.  But consider this, Consumer Courage had helped people of all ages, incomes, educational levels, racial groups, temperaments and shoe sizes.  Trust us when we say “Nobody is immune to scam artists.”  Strong one day – weak the next; Sharp one day – airheady the next. That’s all part of the human condition.  Trust us, if they get you on a down day, it won’t be pretty.
  • Can you take me to dinner first? – One of your first rules should be: Don’t pay anybody the first time you speak with them. (of course, if YOU started the call this isn’t so important) This is meant for you to refuse to pay anybody who calls you out of the blue.

How to protect yourself

Let’s take a look at some of the most popular scams that are out there.  (They might not all look exactly as they are described here, so don’t get caught up in any one aspect.)

Grandma I’m in Jail!…

  • Target: seniors, or anybody old enough to have grandkids.
  • What happens: grandma answers the phone at 2:00 a.m. and hears “Grandma?” She says her grandson’s name into the phone and the scammer says “That’s right. We have [insert grandson’s name HERE] under arrest. You need to bail him out or he’ll be in trouble.” Grandma gets her checkbook and pays the bail.
  • STOP the SCAM by saying: “Give me your number, so I can call the police.”

Security Department needs to verify account numbers….

  • Target: anyone with an e-mail account.
  • What happens: scammer (pretending to be your bank or phone provider) sends an e-mail asking for your account (or social security) numbers so they can “verify” your information.  You respond to the e-mail with your password, etc and they hack into your computer or bank account and ruin your day.
  • STOP the SCAM by: (1) deleting (or NOT opening) these e-mails; and (2) realizing that no company will EVER use e-mail to get your personal info.

Collecting money on a fake past-due bill….

  • Target: anyone who has bills.
  • What happens: scammer calls you about a fake “bill that is unpaid and about to go to collections,” and threatens to arrest you (or your relative) who owes money.  Lots of stern language and mentions of jail.
  • STOP the SCAM by saying: (1)“send me a letter that proves I owe you this money”; (2)“you can’t arrest me for not paying my bills”; or (3) “give me your number so I can call the local police and the Attorney General.”

Pay a fee to win the Lottery….

  • Target: anyone who wants to win the lottery.
  • What happens: scammer calls and says that you won some far away lottery or contest, but need to pay a fee to get your money. First you pay a small amount. But, since you didn’t win anything, they keep calling back to get more money in larger and larger amounts.  After a while, you keep paying (first out of home, then out of shame)
  • STOP the SCAM by saying: (1) “It’s illegal to charge a fee to claim a prize”; (2) “I’d like your name and phone number to give to the FBI”; or (3) “Send me a letter that tells me exactly what I won and how much I have to pay.”

Can you cash this check for me? My bank is _________________….

  • Target: Anyone with e-mail and/or a bank account.
  • What happens: Someone wants you to do them a favor.  They’ll tell you a sob story about their bank not cashing their check for them (“I bounced a check, now they make me wait” or “there’s a hold on my account but I don’t have time to fix it”)  They will give you a check made out to them that looks very real. (so real, it will actually fool your bank)  All you have to do is cash it and give them their money.  Many times they offer to let you keep some of the money “for your trouble.”  After putting the check into your account and waiting  for it to clear you send them the amount of the money from the check. A week later, your bank says:

“Oops! Even though we told you it was OK, the check you gave us was a fake (yes they can actually do this after telling you that it’s OK) Unfortunately, now you owe us for the money we paid out to cover the check that YOU wrote.  Oh, you can’t find the scam artist? Too bad. You still owe us”

  • STOP the SCAM by: (1) not doing favors that involve you giving people your own money – unless it’s your Mom; (2) practice saying the phrase “Aw. I’m so sorry. I wish I could help you.”

Imposter Scams

  • Target: (mostly) Seniors
  • What happens: Caller tries to impersonate a person of authority, such as: an IRS agent; a bill collector; some government agency looking for payment; a bill collector threatening a relative with jail for non-payment.  You are worried that you (or a loved one) will end up in the slammer, so you agree to pay.
  • STOP the SCAM by: (1) Staying calm when someone on the phone threatens you; (2) ask for them to send you a letter stating whatever story they are telling you; (3) ask for their name, address and phone number so you can give it to the Police or State Attorney General to make sure it’s OK.

Free iPad, iPhone (or some other gadget you’d like but can’t afford) if you would just “help them out and participate in a survey”

  • Target: (mostly) Seniors
  • What happens: Caller (or letter’s author) invites you to participate in a survey to check out this new product/rate this new service.  As an incentive they are offering some big-ticket item. One hint that this is a scam is that the giveaway is expensive.  The survey is just a ruse to get you on the phone to answer some personal questions so they can steal your Identity.
  • STOP the SCAM by: (1) Not participating in any surveys; and (2) if you must, pull the plug once the questions get personal. Promise yourself to never give out your date of birth, social security number or checking account number to someone on the phone. (Especially if it is to “make sure we can give you the free gift!”).

So how do you fight them?

We’re not sure there’s one specific thing to do differently to avoid getting scammed.

  1. Sign up for the Federal Do-Not-Call list.  This will stop a lot (but not all) of the unwanted calls to your house.  You can submit your home and your cell numbers for the list. It’s free.
  2. Be more skeptical than you already are, for starters.  If you are dealing with somebody and you can’t see them, try imagining that they are in Kiev and not some Mom-n-Pop store down the street.
  3. If they have some personal information about you, don’t be blown away and automatically assume that you have reason to trust them.  Realize that if the person calling you has the internet, they can get loads of info about you without trying very hard at all.
    1. Information about you does not equal trust.
    2. Information about you equals internet capabilities and opposable thumbs.
  4. Trip out your home phone and Don’t answer if you don’t know who it is
    • Get voice mail you can hear while the message is being left.  There’s no sin in screening your calls. People who want to scam you will hang up, your daughter will leave a message.
    • Get caller ID.  While it’s true that scammers can fake the caller ID, they are less likely to program the phone to show your Nephew’s number.  They are way more likely to have the number show as “out of area” or “toll free call” or “000-000-0000”  It it’s any of these don’t answer!
  5. You have a dial tone…use it! If you do answer and someone is trying to sell you anything or you feel uneasy for any reason, hang up!  This is not a crime.  Nor can you get into any trouble at all with anyone for hanging up. It’s your phone and your nickel. Don’t be shy!
  6. Don’t pay over the phone, until they send you something in the mail first.  Whoever it is, demand written confirmation of whatever they’re selling, peddling or demanding.  If they can’t afford a stamp, they’re out to trick you!
  7. Do not give out any personal information.  No matter who it is, or what the situation is: if they called you first, they don’t get your info.

Posted by Mark Wiseman (who once had his father hang up on him because he didn’t answer fast enough. Dear old Dad gets an “A” for being a courageous consumer, but a “D-” for making us feel like he really wanted to talk to us)

Just when you thought it was safe to answer the phone…(Staying away from Impostor scams)

This week, we peek in on the ‘imposter’ scam. This scam has many versions. They all center around two major points of focus. First, the scammer convinces the victim that he is a trusted person of authority that works for a legitimate enterprise. Second, the scammer convinces the victim to give up his money (either by giving access to an account, or by making a payment). Everyone is susceptible to this scam – seniors are most at-risk. If you were on the street and some fool came up to you and asked for your account numbers or to get a debit card for $1,000.00 and give it to him, you might smack him. You would surely walk the other way. So, the question begs: why are people so willing to give this stuff up after spending less than 3 minutes on the phone with someone they’ve never met?

Scams and schemes – they’re all just con games

Scams, fraud and confidence schemes all need one thing to work effectively – the cooperation of the victim. Some need more cooperation; some need less. A pick-pocket doesn’t need your cooperation – they just need for you to stop paying attention to your wallet for a second or two. Many scams rely on you to make your cash available…willingly. Most follow the same basic formula.  The trick is to get you to make a payment without realizing that what you are really doing is tossing your money out the window.

Breaking down barriers

We all have internal barriers that make us skeptical when dealing with our money. The feeling you have in your stomach when someone comes to your door selling electric dog polishers is what keeps you from paying the “low-low price of 10 monthly payments of $395.99 each.” Something – your mind tells you – is just not right. So, why do these barriers disappear when we’re on the phone or looking at our e-mails?

It has something to do with the fact that the professionals on the other end of the line have spent their entire careers figuring out how to deal with (and trick) trusting people like us. And it has something to do with fear. That “Oh no!” that they create in your mind acts as a salve for the knot in your stomach and forces you to abandon your skepticism. “Why don’t I trust this guy?” is a lot less compelling than “Oh my G-d. I could lose money!” Especially when the guy you’re skeptical about is talking so nicely and trying so hard to make you feel like you are the center of the world.

Don’t they love me?

No….. they don’t. People selling you things (a new product, a repair service, a warranty) are dealing with you so they can make money – NOT because they looooove you. They want to make money and you are going to make that possible. It’s why people who work for tips smile and laugh when you say something that they don’t agree with. Since breaking down your skepticism barrier is job numero uno for a scam artist, they realize that one way to get your cash is to make you think that they are just trying to help you.

What they say: “We found a virus on your computer and want to help you get rid of it. We’ll save you a lot of trouble, because these viruses can cause real damage. This could cost you thousands if you don’t fix it.”

What you hear: “I’m not here to make money. I just want to help YOU. I will make YOU’RE life better, cheaper and more enjoyable because I love you and want to spread my love by selling this thing right here”

Imposter scam (in the flesh)

The version of the imposter scam that has captured our fancy today has been around for awhile and it works like this:

1. Grandpa buys a new computer.

2. Bogus techie call (Hook…)

After he’s had it for about a week, he gets a call from someone identifying himself as “Jim from Microsoft.” According to Jim, “there are some bad files on Gramps’ computer that would have been taken care of before he left the store…but weren’t.” But don’t worry, Gramps, help is on the way in the form of Jim who will make sure that your computer is in good running shape and free from danger!

3. Believable story, Fear created (…Line…)

To start, Jim just needs to check the computer to make sure that there aren’t any “bad files” left running around in the background and “I just need you to grant me access to your computer” so I can perform the necessary search. “So glad we caught your unit! These virues are really nasty and can lead to thousands of dollars in bills, corrupt files and maybe even a new computer.” We just need to get access to your computer so we can check it out. 

 4. Access given (….and Sinker)

“All you have to do is go click on the link that I’m e-mailing you and then a few YES boxes and we’re set! The cost? Just a few dollars. $199.99 to be exact. But, that’s just a set-up fee. If you let us do this today and keep the program for 10 days, we will refund the money and it won’t cost you anything.”

5. Account numbers handed over. Money spent

“To pay, we’ll need your checking account number and the access code just to debit your account for the $199.99 charge. But, don’t worry, after 10 days, we’ll credit your account for this amount and it won’t cost you anything.” Thereupon Gramps offers up the checking account numbers AND the all-important access code that lets his bank know that it is in fact him (and not some scammer) making the transaction electronically.

Keep in mind, if you enter the account numbers and the access code checks out, your bank could care less where the transaction is coming from. If you live in Akron and the transaction to pay for this $199 software is emanating from Mars, your bank can’t really tell. The only thing they care about is that the access code fits with the right account. If it does…..bingo! The money gets transferred

5. Coming back for more – the mother lode

Thirty days later is when the fun begins. Gramps gets a call from someone else at Microsoft. They are “here to refund his money, so let’s get started. Can I have the account numbers again just to verify, and the access code? Yes, yes, thank you. And here we go…..” [silence and a pause]

“Oh fiddlesticks! I can’t believe I did this. I just deposited an extra $2,000.00 into your account. Aw man. My boss is gonna kill me. I’m in my probation period. They’ll fire me for sure.”

Gramps says “Why don’t you just refund the money back to you and do the transaction for the right amount?”

“I would. But all refunds have to go through my boss and I’m in trouble as it is.” After a few moments of worrying, the new Microsoft guy comes up with a great idea. “I know it’s a little trouble for you. But, if you get a Green dot card or a Money-gram and take the $2,000 that I put in by mistake, you can send it back to me and I’ll put it in our account. That way I won’t be in trouble.” After Grandpa shows the healthy amount of worry “Gee,” he hesitates “that sounds like an awful lot of trouble.”

The rep assures him “Check your statements, you’ll see that $2,000.00 WAS put into the account today. (you can’t be too careful, right?) Once you see that I did put money into your account, you’ll be able to pay us back)” Gramps checks his account and, in fact, there WAS a $2,000 deposit that very same day. Seeing that new-Microsoft-guy is telling the truth, Grandpa goes to the store and puts $2,000 on a Green Dot card to send back to them.

Two things here: First of all, there WAS a $2,000 deposit into Gramps’ account. After the first call (when he gave the scam artists his checking account number and access code) they were able to use that code to take money from his OTHER account – a Pension account – and put it into the checking account just before they called him back to issue him the bogus refund. When he went to verify that there was a deposit he saw one; albeit with his own money.

Which brings us to the second point – they need Grandpa to give the money to them. Even though they have his account number and access code, they don’t want to steal they money. If they do, they’ll break a whole lotta Federal laws AND it would make it much easier for the Feds to trace the money back to live people. If they get paid by a Green Dot card, instead, it will be impossible to trace it to them. More importantly, when Grandpa goes to the cops (or when his kids take him to the cops) he’s probably going to get a shrug and hear something like “Gee, we really don’t know where this money went. It’s going to be impossible to find the bad guys.”

How to avoid the impostors

Hang up! All of the power scam artists possess comes from the fact that you are talking to them (or e-mailing them) and grows every second you do so. Feel queezy? Seems like something’s wrong? Feel like you’re no getting straight answers? Hang up the phone; delete the e-mail; throw away the letter. It’s not a crime to STOP talking to someone.

Wanna cut down on this nonsense a ton? Stop answering the phone altogether. Let the machine get it. If it’s your daughter, she’ll call back (or leave a message).

Let’s slow down: Scam artists all talk a lot – and fast. If they’re filling the air, instead of letting you think for yourself, your less likely to say no.  Usually, the sales pitch is followed immediately with other nonsense that is meant to distract you from your impulse to say No.  If you MUST continue to talk to them do it at your own pace.  Practice saying “OK, now could you repeat the part about the cost,” and “Could you slow down, please?” 

Press them on the details: How did you get my number again? What’s the name of the store that gave you the information? And who did you say you were working for? What’s your address? What’s your phone number? (Give me your extension so I can call you back.) I have a bad part? What’s the brand name? I could be risking losing a lot of money? Tell me where it has happened that someone lost money because of this and how do I verify that you’re telling me the truth?

Google it: Once you’ve asked your questions:

    • Use your friend Mr. Google. Type in the story they gave you and add the word “scam” or “ripoff.”
    • Look up their company name on your local Better Business Bureau’s website.
    • Look up the part name, serial number and any other information you can get out of them about exactly what they are trying to sell you. If it doesn’t exist or get any hits, that’s a pretty good sign they are trying to rip you off.
    • Don’t have a computer? Call a friend, call the BBB, call the Attorney General, call the local library.  The point is – if you don’t do some research about the person who has called you and is asking for money, you’re not trying. 

No You canNOT look into my medicine cabinet: There are laws that prevent people other than you from passing out your personal private information. Your account numbers, your date of birth, your social security numbers, your bank access code; these are all pieces of personal information that are protected by Federal Law. Perhaps you should think twice (or three times) before giving these out over the phone. You wouldn’t let a stranger look through your drawers or rifle through your wallet. Don’t make the same mistake with your computer or personal information.

Don’t call us child, we’ll call you: Other than being a great song from my childhood, this should be your mantra. There is a HUGE difference between someone who called you out of the blue and someone that YOU called yourself. Don’t confuse the two.

What they say: “We were alerted to call you because you filled something out/bought a product/were picked out for a prize.”

What you should hear: “We picked your number off of a list and are trying to trick you into giving us money because scamming nice folks like you is a LOT easier than getting real job.”

Just remember this phrase: If you didn’t start the call, don’t tell them anything at all! 

 Send me a letter (not an e-mail) one of those paper things: Scammers hate mailing letters. They’ll do it. But if they refuse, this should be your first warning that whoever your’re talking to is lying. “Oh, we keep our costs down by not mailing letters. This way we can pass our savings on to you.” Bullcrap. Letters cost 50 cents. Are they saving THAT much money by not mailing you one?  Your answer should be “if you don’t send me a letter, you don’t exist.”

Green dot/money-gram/money-order/western-union all spell T-R-O-U-B-L-E: If you buy anything on the net or over the phone you should use a credit card NOT a Green dot card, Money Gram, Money order or anything else that is instant cash. Instant also means “non-traceable” and “up in smoke.” Most credit card companies have fraud units and will withhold payment to a vender if you call to say that you’ve been ripped off. “We can’t take credit cards, because we need the money right away” or “…because we’re not equipped to take credit card payments.” Both are fibs. Credit cards give them money right away and there are loads of online payment processing services for folks who want to take payment via credit card.  If they say they can’t do this, they’re not really trying.  

Can you help a brother out? This one is as old as dirt. Just a small favor is really the toe-in-the-door to getting your cash into their account. “I’m going to be in trouble with my boss.” Means “Please do this thing you would NEVER do, because you pity me.” As red flags to, this one’s a doozy.

Posted by Mark Wiseman: (who, when he was 10, had to wait hours to hear that Sugarloaf song on the radio. Now he can Youtube it every 10 minutes.  G-d bless the internet)

 

Paint my kitchen, but don’t paint me a fool (what to do before you pay that handyman)

Consumer Courage has a friend who wanted to have her kitchen painted and had settled on a handyman to do the job.  After a quick look-see at the inside of the home, he pronounced the job do-able and provided an estimate of just over $400.00.  Our friend, let’s call her ‘Kate Middleton’ (not her real name) thought herself fortunate.  Although she had to buy the paint, herself, she was going to have her kitchen painted for around five hundred dollars.  It seemed like an incredibly sweet deal.  As we will see, the sweetness didn’t last too long.

After the handyman picked a start date, she bought the paint, got her walls ready and removed the excess items from her counters.   When the date arrived, Kate took time off of work to show him into the house and get him started.   While he was unfolding his drop-cloths and eyeballing the work area, he told her that it would cost a little more, because he ‘didn’t see the molding around the cabinets.’  Since there was so much molding, he told her, it would actually be $800.00 for the whole job.  Before we learn what happened next, let’s try to put ourselves in Kate’s shoes.  She had waited months to get her kitchen painted.  She hired somebody to do the job because she either doesn’t have the time or the know-how to do it – or both.  Ever since the original estimate, she had looked forward to having the kitchen done, trying hard to see the new color every time she walked into the room.  She bought the paint and got the room ready for action.  In her mind, the job was done.  Sure, it had yet to be painted, but she had done everything she needed to do. 

Consumer Courage thinks that the handyman knew what was going through Kate’s mind and was using that against her.  It’s way too easy to say ‘Yes’ to a price-change with the guy in your kitchen on the day the job is going to start. (If the Handyman called her a week beforehand and said that the price would be doubled, she would probably have hung up the phone)  But, since he was in her house and she was missing work time, she began to consider agreeing, just to get it over with.   Now, her sweet deal is turning into a bitter pill.  What the heck happened?

Let’s start with what the painter is supposed to do

The consumer laws that were created by the Federal Government are found either in a particular statute (somewhere in the United States Code) or in rules that were created by one of the Federal Regulatory agencies.  In Ohio, the system works much the same way.  The Ohio Legislature enacts most of the laws that affect Ohio’s consumers.     But, many times the legislature creates a consumer statute and then gives the Attorney General the authority to create rules to make what does (or does not) violate a consumer’s rights more clear.  The so-called OAG Substantive Rules cover many subjects and are meant to add to the laws passed by the State Legislators.  There is one such rule that governs the house painter from our story, the ‘Repair or Services’ rule  

This rule has many benefits.  If someone is performing a repair or service for you (whether it’s at their shop, or at your house) they HAVE TO:

    • Tell you that you have the right to ask for an estimate;
    • Give you the estimate in writing, if you ask;
    • Give you the estimate, BEFORE they start the work;
    • Get your permission IN WRITING, to perform any work that will jack up the price of the job by more than 10% of the original estimate;
    • Give you an itemized list of what they did, when they are done;
    • Give you the part that they replaced;
    • Give you a copy of ANYTHING that you sign or initial, when you sign it;
    • Tell you if anyone other than them or their employee will be doing the work.

They are not allowed to:

    • Lie, by telling you that if you don’t fix something, it will put you in danger, when it’s not true;
    • Lie, by telling you that something is broken, when it’s not;
    • Understate the price of a job in ‘material’ fashion;

The easy part

The easy part here is to figure out what the repairman did wrong.  He ‘Materially understated or misstated the estimated cost of the repair or service,’ (which is subsection (D)(11) of Rule 109:4-3-05  ) The rule, itself, doesn’t define what it means to ‘materially understate’ what a repair or service might cost, when you estimate a job.  But, it’s a good bet that when a repairman announces that he has to double the price of a job ($400 to $800, as it happened here) because of a condition that he most certainly saw when he came to look at the job (molding on the cabinets for a kitchen paint job), Consumer Courage thinks he has ‘materially understated’ the cost of the job.

The hard part

The tough thing here isn’t figuring out that the repairman is playing a game with the cost of the job – it’s feeling comfortable enough to tell him not to start in the first place.  Like our friend Kate, who spent weeks preparing and wants only that her kitchen has a new coat of paint, it’s not so easy to stand up to the guy inside your house – ready to start working.  You can almost hear the conversation going on in the Kate’s head:

“I figured that $400 was pretty low…….He does come recommended, so I know he does good work…. At least I’ll be done…..I’ve got to get back to work……If I start looking for someone else now, it’ll take a few weeks to start and I’ll probably pay around $800, anyway…..OK, yes, go ahead and start”

But, it’s not that simple.   This little hiccup in the cost of the job raises a few other questions in Kate’s mind (or should…):

    • Did he really ‘miss the molding’ like he said, or is he sand-bagging?

Skeptic’s Note: Consumer Courage isn’t a professional painter.  But, even I know that the molding is going to get painted, too.  

    • How do you know that this is the last time he will try to increase the price?
    • How can you trust him to do a good job, if you couldn’t even trust him to honor the estimate that he gave you to get the job in the first place? 
    • If you had a hard time telling him not to start, how easy do you think it’s gonna be to tell him to stop, once he has spent a few days there and has done actual work? 
    • What could I have done differently to prevent this from happening? 

Get at least TWO estimates 

This is one of the most offered (and most ignored) pieces of advice there is.  Any time you hire somebody to perform a service for you, try as hard as you can to get at least two estimates.  That’s one of the quickest ways to see if the price you get is reasonable or too high or too low. (Remember: a low-ball offer can be as much of a red flag as an offer that’s too high) Sometimes, the repairman that you feel more comfortable with will agree to honor the price that a competitor gives you.  If not, he might be willing to tell you why the low offer is too low

“Isn’t it time-consuming to get two estimates?” Yes it is.  You know what else is time-consuming?  Making the handyman leave your house when he is only halfway through with the job, because he keeps jacking up the price.  And then trying to find a SECOND repairman to come in and finish the job that the other guy started! 

Get something in writing from them – YOUR work is just beginning

We have already seen that you can demand a written estimate from them, before you let them start the work.  But, YOUR work is just starting, when you get the estimate.   One of the most important aspects of any home-repair job is how you use the time between when they give you the estimate and when you actually hire them to do the work.  In any case, it is important to make sure that they give you SOMETHING that contains a company name, address, phone number and (hopefully) something about how they are ‘bonded’ or ‘insured’, so you can figure out if they are legit and whether they have messed with anybody else, before they got to your house.  When they leave, you can use whatever they gave you to START your research on the company. 

Too many people think that getting an estimate is the only bit of work that they need to do, before they agree to start paying. 

    • What does Google have to say about them?   (Try typing in the company name and the word ‘Scam’ or ‘Ripoff’ or ‘lawsuit’);
    • What about the Ohio Secretary of State?  (Are they registered with the Secretary of State as an actual corporation?);  
    • What about the  Better Business Bureau? (they have a search function to let you check out a business or charity); 
    • The Ohio Attorney General has a search function that lets you check out other consumer complaints about a particular company; 

All of these are very important sources of information for you.  When you start your research (or if the whole thing goes bad) it’ll be much easier to research (or complain about) a business if you are able to look up Van Delay Industries Latex sales’ instead of ‘I think his first name was Art’

 Don’t fall in love…..

….with the job or the repairman that is.  (If you fall in love with a regular person, by all means, go be in love….who am I to judge?)  But, don’t become infatuated with the guy who comes to give you an estimate or with the idea of ‘just getting done’ with the job.  That can cause you to lose your objectivity.  You are hiring somebody for a business transaction, not to be your friend.  Sometimes, the repairmen who are uber-friendly are that way so you’ll miss an obvious red flag about the situation.  They want you to think “Hey, I could be friends with this guy.  He’s going to paint my house.  I’m having a friend paint my house.” Instead of “Hey, this guy is trying to charge me double.  I should be thinking about whether I should even let him start working.  Maybe this little ‘change’ in the price of the job is just the tip of the iceberg.”

Buyer’s/Homeowners’ remorse

What do you do, if you agree to get some work done on your house and THEN read Consumer Courage and decide that it’s probably not a good idea?   Don’t worry.  There are a few laws on the books that give Consumers the right to cancel contracts signed while they were at home, on the phone or at a so-called ‘temporary’ site, when the seller doesn’t have a principal place of business in your city (hotel rooms, seminars, etc.)…..but, that’s the subject for another post. In the meantime, do the research, get a couple of estimates and be ready to say NO. 

Posted by: Mark Wiseman, who once painted his entire kitchen, and the molding, BRIGHT ORANGE! (take my advice, don’t try that at home)

“I’m not a Doctor, but I play one on TV.” Why going TO the Doctor is not such a bad idea….

Residents of Northeast Ohio have been receiving an interesting flyer in the mail. It informs them of the revival of a very old service – Doctors making house calls. “Your Doctor…..on Demand!” it promises. But, unlike nearly every other piece of mail that you will receive touting medical services, there is no sponsoring hospital or insurance company. Hmmm.

There was a time, of course, when a Doctor would actually come to your house if you were sick. If you’ve ever watched an old Western, you’ve sat through the obligatory scene where the Doctor rides up to the house in a buggy, grabs the little black bag (that has about enough room in it for a sandwich) and runs into the house. Invariably, despite having no diagnostic equipment, no medical tools and no drugs of any kind, the Doctor usually says “Oh, he’ll be alright. Just make sure he gets some rest.” What concerns Consumer Courage is that these ‘house calls’ are about as effective as those visits from the old westerns. Spiffy-looking, but not so heavy on the ‘medical’ part of things.

To be sure, house calls are making somewhat of a comeback. There are Hospital systems using house calls in an attempt to keep re-admissions down for the senior population. But, there are a few things about this particular advertisement that is troubling. If you – or your loved ones – are considering calling these people (or anyone else who is advertising House Call services), there are some things that you should think about.

Are they even Doctors?

Only half of the people listed on the card claim to be physicians. The rest are either listed as Nurse-practitioners (NPs) or Physicians’ Assistants (PAs). Don’t misunderstand. Consumer Courage has no problem with talking to, taking advice from or seeing an NP or a PA. However, if you do, there is usually a Doctor in THE NEXT ROOM! And, when the NP or PA is done with you, you stay in the room and wait for the Doctor to come in and go over what just happened. (you know, just in case you need a Doctor) But, we have the sneaking suspicion that the Doctors names on the card are only there, so that you’ll call.  (if it was called ‘Nurse Practitioner House Calls,’ you wouldn’t dream of calling) To compound matters, some of the people who call will assume that whoever comes to the house IS a Doctor, whether it’s true or not.

Who are they affiliated with?

There are no affiliations listed on the flyer. If you need to go to a hospital, or follow-up with a specialist, these folks are probably NOT going to be able to set you up with an appointment (or get you admitted) any quicker than you could, on your own. The guess here is that these people (who all appear to work in the State of Michigan) aren’t affiliated with anyone in Northeast Ohio (not even REVCO). And, if they want to refer you for further treatment, the most they’ll do is say, “You know, you should really see a Doctor.” (which is kind of ironic, because that’s who you called).

Where are they licensed?

States have licensing requirements for professional services for a reason. If your lawyer messes up (I’m not saying that lawyers ever make mistakes…..just go with me on this) If your lawyer ever messes up, there are numbers you can call (and people who will investigate), so that you can make sure the misbehaving attorney toes the line. The same goes for Doctors. The State Medical Board of Ohio watch-dogs Doctors to make sure that they don’t cause harm, act in a safe and sanitary manner and are available to answer for themselves, if there are problems. But, it’s possible that with a House call service, you could be getting medical treatment from someone who doesn’t have the proper license. Before you let anyone in your house (In fact, make this: Before you even give them your address!) demand that they tell you all of their licensing info.

Ask them:

    • Are you licensed to practice medicine in Ohio? If the answer is anything but “Yes, here’s my license number and full name,”…..hang up!
    • Does the person, who is coming to my house have a license?  
      • What is their name?
      • Exactly what are they licensed to do?
    • Were any of these licenses ever suspended or revoked?…..ANYWHERE?

To be sure, it’s a good idea to research and ask questions of the people who are giving you medical care, before you get treatment for anything. But, when someone is coming to your house, you should be waaaay more skeptical about their credentials and experience. The research is a lot easier (and a tad more reliable) when the Doctor has an office and works for (or closely with) a local hospital. In addition, whether they are covered by Malpractice insurance is less of a worry for the Doctor who is working through a local facility.

What are they going to do?

The flyer I saw listed way too many services for one person to cover, effectively, and a whole host of things that you can do without paying for someone who has medical training. The list of ‘specialty areas’ covered everything from X-rays to ‘Arthritis Joint Injections’ to ‘Oxygen tests.’ It’s not clear exactly how many visits you might need if you have more than one ailment or if one person is going to perform all of the services. (And, if a house call is necessary for you to get help with ‘wound care’ or ‘Diabetic Care,’ perhaps you should be seen at a proper medical facility, anyway.)

For all you know, the people offering the House Calls are just trying to get another patient’s name and info, so they can make money over-billing for insurance. In 2012, that’s exactly what happened. A Doctor (from Michigan, as it happens) was indicted, because his service that specialized in ‘House Calls’ was really just a front so he could defraud Medicare.  He stole $40 Million by billing for services that he didn’t provide or were ‘medically unnecessary’ and for sending people who were not really Doctors to perform those services.

If you are considering a House Call, be careful, you might just be getting somebody who is only qualified to tell you to try and see if getting good night’s sleep will fix what ails ya.

Posted by: Mark Wiseman (who is happy that lawyers don’t have to make house calls)

“Put down that Loan Application….and slowly walk away” (Pension Advances – the latest way to steal)

When Consumer Courage was in our teens (and when our hearts were stronger) we used to got to scary movies.  And, there was always a scene when the heroes were being chased by the slasher/villain.  They would come across a functional, primed, easy-to-use, easy-to-carry weapon and then drop it, as if it were a rabid ferret.  Then, they would say “let’s split up!” And we would scream “NOOOOO!……,” as they would each trudge off into a separate (non-lighted) direction.  You can guess what happens next….When Consumer Courage reads about this week’s subject (a shameful product called “Pension Advances”), it elicits the same response: “NOOOOOOOO!” 

What are Pension Advances? 

A ‘Pension Advance,’ is when a company gives you money, because you agree to give them access to the monthly checks from your retirement account, until you have paid them back.  The access that you give them will be forever – because they will require you to sign a contract that says that you cannot revoke, change or alter the amount money that they get.  By the time you are finished paying them, they will get much more money from you than you ever dreamed. 

And, because the entire transaction is not a loan (‘This is NOT a loan’ is a phrase you will see many times on the documents that you sign), they aren’t required to be upfront with you about:

    • The interest rate you will be charged; 
    • The costs you will be charged;
    • The fees that will be paying; or
    • The fact that even your death won’t stop them from getting your pension money

As we will see, these products are set up as such a way that makes changing them virtually impossible.  In the words of Stuart Rossman, the Director of litigation for the National Consumer Law Center,  they are “Diabolically ingenious.”   

How much damage can Pension Advances do?

Look at the story of Dr. Louis Kroot, a Navy physician who got stung by one of theseHe needed money, to be sure (Medical bills to care for his daughter and a tax bill from the State –  because he used his retirement to help pay some of those bills).  In exchange for a payment of $91,566.37, he will wind up paying $242,753.99 over 95 months.  (That interest rate is more than 30% and it happens to be illegal in a great many states) 

Dr. Kroot’s story highlights a misunderstanding that most consumers suffer from, when it comes to borrowing money.  Just because someone is willing to give you money, doesn’t mean that you can afford to pay them back, or that it is a good idea.  When someone lends you money (or gives you a Pension Advance) they aren’t doing it because the just “love you” and want to help you out.  They are lending you money, because the amount of fees and interest you pay are going to make them rich.  And, if you are getting money from an industry where there are no governmental regulations, you have to be even MORE careful. 

Why is a Pension “ADVANCE” not a loan?

This is by design.  They go to great pains to make sure that the money you get is not considered a loan. This way, none of the Consumer laws that usually apply to consumer transactions can help you. 

    • The Truth-in-Lending Act (TILA); 
    • Ohio Small Loan Act (SLA); 
    • Ohio Mortgage Lender Act (OMLA);
    • Ohio Short-term Lender Act (STLA)………….

None of these laws (and their fancy-schmancy disclosures and consumer protections) will do you any good.   In fact, no Federal Statute covers the transaction that you are about to enter.  As a result, the Pension Advance industry is entirely unregulated.  This means that the person trying to get you to enter into a Pension Advance deal knows that no matter what they say – no matter what lie they tell you to get you to sign – without a law to protect your rights, you simply don’t have any.  Pension Advances are a salesman’s dream: the cost to the customer (and therefore, the commission) are high; and the customer simply canNOT get out of the deal, once it goes through.  

If it’s not a ‘loan’ how does it work?

Here’s what they make you do, before they give you money (this information was graciously donated by Stuart Rossman, from the NCLC)

    • First, you will set up a new checking account to make the monthly payments to the Pension Advance company.  To achieve this, you will give your pension administrator authorization to funnel that payment amount from your monthly check, directly to the new account (before you ever see it);
      • That new account will have three names on it: you and two representatives from the Pension Advance company.  You will agree IN WRITING that nothing will happen on that account unless two of those three people give permission.  (If you want to change or stop the payouts, once you get the money, do you think you are going to be able to get one of the Pension Advance company reps to sign along with you?…………me neither)
    • Second, you will give them a Power-of-Attorney that will give them access to any other accounts where your pension benefits go (like your regular checking or savings accounts), just in case there’s a problem.
    • Third, they will buy  – and you will pay for – a forced-place insurance policy, naming them as the beneficiary (in case you happen to pass away) before they have all of their money.

Can’t I just fill out a form and stop the payments, myself?

Well……not exactly.  As part of the transaction, you will agree IN WRITING that if you take any steps to stop the payments (like calling your Pension and telling them to stop the payments) they will add an additional two years to the payment cycle.  If the loan is for 8 years – a common length of time for these –  and you try to stop the payments, you will have agreed IN WRITING that it should become a 10-year loan.  (If Dr. Kroot, our Naval Officer, had tried that, he would’ve had to pay an additional $58,976.88, just for trying to get out of the contract!)

In case you’re wondering, the law in Ohio is that if you can read a contract and sign your name to it, you are bound by the terms – no matter how ridiculously one-sided that contract is. 

How do you protect yourself from Pension Advances

The obvious method is in the words of Lou Tisler (the Executive Director of Neighborhood Housing Services of Greater Cleveland ,NHSGC, the parent company of Consumer Courage), “Don’t get one.”

Remember a few things:

    • The less questions that they ask and the less time you have to wait for the money – the more likely it is that the money that you are trying to get is WAY too expensive.  If it only takes them a few days to give you the money, or – Ye Gods – a few hours, it is because they are about to steal from you.  (because the interest rate is so high; because you won’t be able to stop it, or both)
    • Always ask for a day or two to think it over.
      • Their enemy is an informed-patient consumer, so they try to pressure you into signing “TODAY!”   But, you can use this against them. Tell them: “Since your approval process is so quick, I certainly have time to think it over!”
    • Call someone you know and see if they will be the voice of reason
      • There is no decision that is too-important to make without getting advice from one of your friends.  Ask for help.  High-pressure salesmen want you to decide right away and without help. 
    • Remember:  fewer Government regulations means a BIGGER incentive to mislead you about the truth and a BIGGER likelihood that the transaction is going to be loaded with provisions that you are going to regret.
      • Before you take part in any transaction, call around and see just how many Consumer Protections you have.  If you don’t have any – that’s a problem.
    • The longer you are going to take to pay a debt – the more it makes sense to take your time, do research and listen to someone other than the person who is going to make money off of you.

And if someone calls you about taking out a Pension Advance, remember our foolish teenage horror-movie hero and scream, “NOOOOOOOOOOOO…………..

Posted by: Mark Wiseman (who is eons away from even thinking about a pension)