Friday, April 30, 2010

Nothing New: Pesky Debt Settlement Companies Making Trouble

If you pay attention to the news or the BBB, you will have already heard about these "debt settlement" companies.  They tell consumers that for a fee, the money a debtor owes can be drastically reduced.  Debt settlement firms often ask the debtor to sign over power of attorney to them, not to pay on their debts until the creditors are desperate to settle, and often, require consumers to pay up front fees.  Any one of these things can cause financial problems for a consumer.  Put them all together and the debtor is sure to be bankrupt or in financial ruin, owing more debt and now with worse credit.

The Better Business Bureau has received an ever-increasing amount of complaints on debt settlement companies.  Since the start of the recession, the BBB has received more than 3,500 complaints from individuals, including many who paid hundreds of dollars in upfront fees to debt settlement companies but only fell deeper into debt.

The debt settlement industry has come under harsh scrutiny in Missouri.  Attorney General Chris Koster testified before congress about Missouri's Zero Tolerance policy on financial fraud.  His expertise and the testimony of several others on the subject prompted Senator Charles Schumer to introduce the Debt Settlement Consumer Protection Act on Wednesday, April 28, 2010.  In his press release, Schumer states, "There has been an exponential growth in the number of debt settlement companies offering “quick and easy” solutions to consumer credit problems."


Some of the things in the bill that will benefit the consumer are as follows:
      -Prohibits a debt settlement company from requesting or receiving any debt settlement fee from a consumer until the company has provided the consumer with documentation that has a debt has, in fact, been settled. 
      -The legislation mandates that debt settlement fees are reasonable and commensurate to the actual services provided, and that they cannot exceed specified amounts.  The legislation also provides consumers with the right to cancel a debt settlement contract and receive a full refund of unearned fees, as well as the money accumulated and held for settlement.

Though there is a lot more to the law, these two will affect the industry more than anything.  They will knock the less scrupulous companies out of consideration.  Companies wishing to make a quick buck at the expense of others will not take the chance of issuing a full refund if they can't deliver on their promises.

Anyone looking for financial advice, the BBB encourages consumers to contact non-profit organizations such as Consumer Credit Counseling. 

Thursday, April 22, 2010

BBB First Quarter Top Ten Complaints

Here are our top ten complaint categories for the first quarter.

Cell Phone Companies                                      1847
Tax Return Services                                             207
Collection Agencies                                             138
Telephone Communications Companies                108
Loan Services                                                        89
Gas Companies                                                     73
Auto Dealers - New Cars                                      57
Auto Dealers - Used Cars                                      51
Television - Cable, CATV & Satellite             47
Auto Repair Services                                              43
Banks                                                                     42



With Sprint/Nextel and H&R Block, both heavyweights in their industries with customers numbering in the tens of millions, headquartered in the Kansas City area, the top two come as little surprise.  Both decreased considerably from last year's complaints.

Collection agencies saw a sharp increase, more than two-and-a-half times last year's amount.  To be fair, more than 30 of those complaints were against Regent Asset Management, a collection agency with obscure credentials and shady tactics.

Auto Dealerships consistently appear on the top ten complaints and this year was no different.  The other types of business rotate in and out.  Below, you can compare to last year's complaints by category.

Last Year's Numbers:

Cell Phone Companies                                     2047
Tax Return Services                                           289
Mortgage and Escrow                                        125
Consumer Finance & Loan Companies         80
Telephone Communications Companies               67
Collection Agencies                                             54
Auto Dealers - Used Cars                                   48
Auto Dealers - New Cars                                    48
Magazines - Subscription Agents                          43
Insurance - Auto/Home/Property                          42

Tuesday, April 13, 2010

New Phishing Scam Uses BBB as Lure

BBB Warns Businesses About New Phishing Attack
Beware of fake complaint reports coming from seatac@bbb.org

Better Business Bureau is warning businesses to beware of a new malicious e-mail that pretends to be from BBB about a complaint filed against the company. The e-mail first came to BBB’s attention on April 12, 2010.

Several businesses across the US – including law firms, advertising agencies and architecture firms – have reported receiving a suspicious e-mail from the address seatac@bbb.org with the subject line “BBB Complaint Case #” followed by a nine-digit number. We have already had one source confirm that the scam is targeting Kansas City businesses.  Both BBB Accredited and non-Accredited businesses have been targeted.

The body of the e-mail claims that the company did not respond to a complaint filed by a Jason Harlow (however other names may be used) and includes a link to a page at www.ca-bbb.org where the business can supposedly review the complaint.

Because the message is fraudulent, BBB advises any business that receives this e-mail to take the following steps:
  • Do not click on any links or reply to the message,
  • Forward the message to phishing@council.bbb.org,
  • Completely delete the message from your inbox, and
  • Run a full virus scan on your computer if you did click on any links.

If you receive an e-mail from Better Business Bureau about a complaint filed against your business and need assistance in determining whether or not it is legitimate, contact the Kansas City Better Business Bureau.

For more advice on how to protect your business from malicious online attacks and data breaches visit www.bbb.org/data-security/

Monday, April 12, 2010

Shred Day Success

NBC, The Better Business Bureau, Shred-It, Commerce Bank and TLC for Children and Families sponsored our yearly Shred Day.

The event was a complete success.  On Saturday, April 10, in the participating locations (Commerce Banks across the greater KC area), we helped shred 126,210 lbs (63 tons) of sensitive documents in four hours.

At times, we had lines of cars around the block, waiting their turn to shred.

While the service was free, TLC for Children and Families took donations to help abused children and spouses.  They received $9,400 in donations from the shredders.  This is a yearly event, so if you missed it, be sure to check in with us next year!

Tuesday, April 6, 2010

BBB Mardi Gras Casino Night Recap



The BBB continued its annual Mardi Gras tradition with Casino Night.





We had the most popular casino games including Craps,




Black Jack
 


and of course a Texas Hold 'Em Tournament.



The participants' appetites weren't neglected.  We all left full or we did something wrong.



The Texas Hold 'Em Winners: (Left to right) 2nd Place Brandon Hale ($200), 1st Place Salim Saad ($300) , 3rd Place Mike Sturdivant  ($100)



Our wonderful dealers from Jacks & Aces who made the night possible.


Also, thanks to all of our sponsors!