Thursday, May 27, 2010

All the Cool Donors Are Researching Charities Online

These days, most people with a smart phone or a computer - that is, to say, most people - use the Internet to aid their decision making. I recently bought hand-held video game players for my kids as a way of making our summer travels more enjoyable for everyone. Before making my purchase, I used an online forum of my friends to ask about personal experiences with various brands. I then used a different website to read product reviews from tech gurus. Another website helped me find coupon codes so that I could get the game players, games, and accessories all at a discount. Lastly, I purchased everything I needed online. I loved having all of that information right in front of me.

Did you know that you can do the same when 'shopping' for organizations to support? A 2007 survey published in The Chronicle of Philanthropy showed that 40% of donors research charities online. I have a hunch that in the 3 years since, that number has increased. It's not as if we are using the Internet any less in 2010. And that is a very good thing because it makes it easy for people to find and fund organizations they feel passionate about.

For people in Kansas City, there are a number of excellent online sources of information about local and national charities. The Better Business Bureau's Wise Giving Alliance has detailed reports on 100s of nationally-soliciting organizations. Our local BBB also has a growing list of reports on local organizations doing great work here in Kansas City. Lastly, the Greater Kansas City Community Foundation has a fantastic database of information on all of the charities it supports.

With all these resources at your fingertips, there is no excuse for not being an educated donor. So find a charity that suits your passion and let your fingertips do the walking.

Wednesday, May 26, 2010

Call Us First

Most of you are probably aware that the BBB has extensive experience with scams. We know the inner workings of most of them off the tops of our heads.  Within minutes, if not seconds, of speaking with a caller, we can determine if he or she was contacted by scammers.  When new scams pop up that we have not heard of, we are able to figure out their intentions quickly.  Better Business Bureaus have helped stop countless scams because the BBB has been doing it for more than 90 years.

In today's Kansas City Star, I read about an elderly man who may have lost $360,000 to scam artists in Florida.  He believed that he was paying taxes on a $5 milllion in sweepstakes winnings.  A local aging advocate, Jauqui Moore of Mid-America Regional Council, said that elderly people are particularly susceptible to these types of scams because they could very well be "the last of the group."  In other words, all of their trusted friends and acquaintances have passed away, leaving them with no one to give helpful advice.  Many elderly people left finances up to their spouses who have passed away.

I would suggest any elderly person in such a position to trust us, the Better Business Bureau, as a friend--as someone who can give advice on offers that are too good to be true.  We help people avoid many of the scammers that are currently stealing from Americans and Canadians.

If you have questions about scams or how to avoid them, you can call the Better Business Bureau of Kansas City at (816) 421-7800.

Friday, May 21, 2010

Senate Passes Consumer Financial Protection Act

We previously posted a blog on this bill.  The sweeping bill has its pros and cons.  The Senate voted pretty much how we expected (along party lines).   This legislation will have great influence on how financial businesses operate as well as how the Executive power is distributed among agencies. It's a pretty big deal.

Thursday, May 20, 2010

Positive Thinking

It's rare that you will find anyone that says positive thinking is a bad thing.  However, we see positive thinking being used as a tool to manipulate people to buy into scams.  All the work-at-home money-making schemes have a common theme.  They use the very words that our parents used to tell us, "Believe in yourself, and anything is possible." Schemers make it even more alluring by giving the impression, "Not only is it possible, it's likely that you will become rich using this program!"  Instead of using this idea to spread goodwill and confidence, scam literature uses "positive thinking" to trick people into believing that they will "get rich quick."  We always urge people to check the validity of these programs (99.99999% of which are scams), but they often check into it after having already purchased it.

I ran across an interesting video about how people can be manipulated by messages that promote positive thinking.


Thursday, May 13, 2010

The Original Ponzi Scheme

Most people have heard the term "Ponzi Scheme," but many do not know what it is or why it has such an odd name. It was named after Charles Ponzi, who operated the most successful incarnation of the scam until Bernie Madoff took that dishonor last year. It is a scam that requires a constant influx of investors to pay off the original investors.  There is no product and the facade only lasts until the number of investors decreases.  As soon as less money comes in that the month before, the illusion crumbles along with all the investors' finances.  Usually, the originator of the scheme will vanish before the victims know what's happening.

Charles Ponzi

The BBB has combated such schemes for nearly a century. After the BBB diversified its expertise to areas other than advertising, we turned to investigating and raising awareness about such schemes.  In perusing through our archives, I found the following articles written about Ponzi in 1926, after his first prison term and before his second:

PONZI FOUND GUILTY AFTER JURY TRIAL
Financial Wizard Receives Choice of Two years in State Prison or $1500 Fine

April 5, 1926 

Charles Ponzi, who was indicted February 8, 1926, at Jacksonville, Fla., charged with violating the "declaration of trust" laws of Florida, was found guilty by a jury in a criminal court in Jacksonville, April 2, 1926.  The verdict carries a sentence of two years in the state prison or a fine of $1500.

Ponzi was indicted three days after the announcement of the combined drive against real estate "sharks" by the National Better Business Bureau and the Florida State Chamber of Commerce.  At that time he was circularizing investors offering Units of Indebtedness in the Charpon Land Syndicate for $10 each.  The syndicate offered to its investors a return of 200 percent profit on their investment in a period of approximately sixty days.  Many of the offers were received in this territory and numerous inquiries were received by this Bureau regarding the concern.

The indictments against Ponzi were based on alleged violation of the state statutes regulating trusts.  He is charged with operating without filing a proper declaration of trust, selling without a permit and failure to pay the license fee required.

Ponzi is described by Bugs Baer, newspaper columnist, as the "superman who winds up in the "soup." In an effort to get out of the "soup" Ponzi's attorney has appealed the case.

CHARLES PONZI CONVICTED
Judge Peeler Sentences Him to One Year in Penitentiary.

May 12, 1926 

Charles Ponzi, one time resident of a Montreal prison for forgery, Atlanta Penitentiary for violation of immigration laws, and still later serving on a five-year sentence for his guilty plea of using the United States mails to defraud, once more has the platial prison gates beckoning him.

Ponzi came to Florida, organized the Charpon Land Syndicate, and started to market "units of indebtedness" to investors.  Associated with him was Calcedonia Alviti.  the Boston Better Business Commission, when Alviti appeared there, collected evidence which was presented to the state authorities.  Alviti was stopped by his conviction which carried a six months' prison sentence.

The National Better Business Bureau and the St. Petersburg Bureau, with the State Chamber of Commerce, the Florida Association of REal Estate Boards and the Florida Real Estate Commission, investigated Ponzi's activities in Florida.

Evidence presented to State's Attorney Charles M. Durrance led to his indictment on four counts.  Indicted with him were his wife, Rosa Maria Ponzi, and Emma and Calcedonia Alviti.

Assistant County Solicitor M. M. Scarborough represented the state during his trial.  A jury found Ponzi guilty and a motion for a new trial was filed.  Judge Peeler denied this sentenced Ponzi to one year in the penitentiary.  Ponzi has appealed the case.

Postmaster General New on April 28, 1926, issued a fraud order against Charles Ponzi and the Charpon Land Syndicate, charging the obtaining of money through the mails by fraud.  Solicitor Donnelly declared he found the scheme inherently fraudulent and impossible of execution.  Postoffice Inspector Morgan Griswold assisted in this case.

The prompt action of officials probably prevented a recurrence of his Boston fiasco.

Tuesday, May 11, 2010

Yoshida Motor Sports Fraud Skids to a Halt

UPDATE: Oberg pleaded guilty to the charge of wire fraud and was sentenced to 100 months in prison. The money laundering charge was dropped. His appeal in 2013 was dismissed. Yoshida Motor Sports, as of 1/20/2017, no longer holds a BBB rating. Complaints filed against the company at the time of Oberg's indictment have since fallen off the business profile. The government action against Oberg fell off Yoshida Motor Sports' BBB business profile after the BBB's three-year reporting period.

Original blog post published May 11, 2010:

Travis D. Oberg of Yoshida Motor Sports has been pretty vocal to the Better Business Bureau. More than once he has called and tried to have complaints removed from his files.  The complaints were all the same: a company ordered wholesale products from Yoshida, paid for the product and never received anything.  Oberg maintained that he was a victim of the complainants who were trying to extort money from him, an honest business man.  He frequently called them names and regarded them with scorn.  Here are a couple examples:
"They continue to claim they want product. I have turned these issues over to our lawyer to discuss either re negotiating the contract or the terms of refund scince they are in breach. I ask that tis comlaint be set aside as I have agreements to the terms of payment and the breach this is a wholesale contract matter between to companies and this is not a consumer matter"
 "I belive mr. ***** is using the BBB to extort from [our] business as he is in the wholesale surplus business and is is knowlegable to what a take all deal is. we feel that mr. ****** is using the BBB to extort our business as he understands the value of the BBB rating.. we have thousands of customers and most understand wholesale to wholesale transactions. we ask that this be dissmissed as this complaint is a contract issue business to business between to wholesale company this is not a consumer issue and has been submitted in bad faith.   respectfully submitted"
I started investigating Yoshida Motorsports after receiving a call on April 1, 2010 from a consumer that had been taken advantage of by the company.  As it turned out, I needed to do very little investigating.  Within twenty-four hours, I found out that the FBI was already knee deep in the case and building evidence.  It was evident that charges would soon be brought.

On May 6, a warrant was issued for Travis Oberg's arrest, though he has yet to be apprehended.  The U.S. Department of Justice has charged Oberg with wire fraud and money laundering.  Today, we updated Yoshida Motor Sports' BBB reliability report to reflect the current government action taken against him.  Yoshida now has an F rating with the BBB.

After speaking with Oberg several times in the past month, I almost expect him to inform us that he's been wronged by the Department of Justice, who are obviously trying to extort money out of him and we need to remove reference of the criminal charges from his reliability report.

Thursday, May 6, 2010

The Advertisers Protective Bureau, Inc

The Kansas City BBB has been around since 1916, but we haven't always used that name.  Before 1923, there was no such thing as the "Better Business Bureau."  All of the Bureaus were known as Advertising Clubs or Vigilance Committees.  In Kansas City, we were known as The Advertisers Protective Bureau, Inc. of the Kansas City Advertising Club.  It was quite long-winded. I'm glad we changed it.

I've been recently digging through the BBB archives.  I looked though some of our earliest published documents, expecting to find nothing before 1923 when we officially became the Better Business Bureau. To my delight, I found our annual report from 1920 tucked into a book.  For our Kansas City Historians, I thought I might publish this little cookie on the blog.  So, without further ado...

1920 Page 1

1920 Page 2

1920 Page 3

1920 Page 4

Our advertising code is still very similar and the claims were similar to what they are now.  Interesting stuff.