Friday, December 30, 2011

Last Post of the Year

It's been a good year on the blog. We had more than twelve thousand visits to the blog in 2011 and the Scams of the Week has been a huge success for being a helpful resource for people on the web. Next year, we will most likely post updates on each individual scam as it arises, rather than lump them together. It would be more beneficial to people surfing the web immediately after being contacted by the scam.

The Kansas City BBB has created a Facebook page as another tool to spread the word about scams, tips, and news. If you'd like to get updates via your Facebook stream, like our page.

We will continue to have the posts about charities, scams, news and tips. In addition, we will be making some fun additions. Hopefully occasional comic strips as well as podcasts.

The BBB wishes you a great weekend, and we'll see you next year!

Tuesday, December 27, 2011

How NOT to Handle Complaints

*There will be some unprofessional language in the links provided below.

Ocean Marketing took every single wrong turn possible in handling a complaint from a justly dissatisfied customer. Ocean Marketing has never had a complaint to the BBB, but the way they handled this single issue, not even filed with us, has caused an incredible amount of grief for the company.

A customer dissatisfied with delayed shipping of product, coupled with rude and vague communication from Ocean Marketing, forwarded his email chain with PR Rep Paul Christoforo to internet traffic magnet, Penny Arcade. Penny Arcade published the entire chain. Read the details here. The rep from the company patronizes the customer for his valid complaint, then berates Penny Arcade's founder Mike Krahulik.  On the occasions that people have insulted Penny Arcade, and as soon as Penny Arcade fans heard about it, it fanned internet flame wars with unparalleled intensity.

Apparently Mr. Christoforo wasn't finished torching his reputation, because he begins trashing other industry professionals for refuting his shameless namedropping. Gaming site Kotaku's Editor and Chief also refuted Mr. Christoforo's claims of his support. Another industry powerhouse, IGN, weighed in as well, condemning the actions of Ocean Marketing.  Other sites are also coming forward with their stories of poor customer service from Paul Christoforo. *Special thanks to this guy for compiling most of the links above.

In addition to the general customer service no-noes this Chistoforo guy engaged in, he tragically misunderstands his customer base. The customer in this story, Dave, accurately sums them up:

"You Show a surprising lack of business polish for someone who's quite established, AND a lack of awareness of your customer base: Hardcore gamers. We're demanding, vocal customers but the flip side is we're loyal and eager to spend."

Hardcore gamers are just about the only group that can activate an effective boycott. They're tight knit and back each other up. If one of them is wronged, they all feel wronged. They also know that if something happens to one person, it can happen to another. The customer only asked to be kept informed, which is a mild request, and typical of hardcore gamers. More than most any other customers, they're extremely well-informed about their purchases and know what to expect. What could Paul Christoforo have been thinking?

Needless to say, business owners, use this as a lesson on how NOT to handle a complaint.

Wednesday, December 21, 2011

Automatic Renewals: Benefits and Hazards

Most people are familiar with companies that automatically renew memberships for services. The BBB is intimately familiar with it as we, because it generates a considerable amount of complaints when customers don't want the service anymore and are told that they were enrolled in another year of service. Most people think that companies have these policies only so that companies can keep customers, whether customers want to stay or not. This isn't always true... It's often true, but not always.

One of my favorite examples of automatic renewal is XBox Live. XBox live has high value. Users can stream Netflix and Hulu, watch music videos and play multiplayer games with their friends via the internet among other things. It's pretty much a must have for Xbox 360 owners. I don't want my subscription to run out, that's for sure. Microsoft does almost everything right regarding the automatic renewal. The user is prompted when 'e signs up for Xbox Live, asking about auto-renewal. Within a month of the auto-renewal date, the subscriber is again greeted with a prompt, asking if 'e would like to auto-renew the subscription. It's very nice of Microsoft to ask right before the subscription expires if the person would like to auto-renew, but the prompt doesn't give the user the option to review his payment method. If a subscriber hasn't purchased any Microsoft points any time in the past year (i.e. me), it's difficult to remember which card is on the account. I'm unsure if I really want to auto-renew when I don't know which account will be charged. It would have been better if it had an ask me later option like Adobe updates. It's a minor complaint and it's the only hiccup in the process. The subscriber is also sent an email about the renewal and a receipt via email. This is how auto-renewal should be handled, by keeping the subscriber perpetually updated.

For a long time, Weight Watchers received numerous complaints about its automatic renewal system. In an effort to curb these complaints while keeping their automatic renewal system, their site changed multiple times to make the auto-renew feature more obvious. I watched as they moved their disclaimer about the automatic renewal all over the page. At one point it was boldfaced and in red print above their sign-up section. Now, it is in bold black print, next to all capital letters that say "PLEASE NOTE," followed by an explanation of the renewal. It is also boldfaced in the subscriber agreement. The Weight Watchers online membership apparently allows users access to etools that help trend eating habits and plan diets. They rarely get complaints over their auto-renewal nowadays. However, the benefit of automatic renewal for a set of tools is not immediately apparent.  For automatic-renewal to be valuable to the customer, it has to prevent the termination of a service. When a customer has to log in and use the site, auto-renewal is, I suppose, a handy bonus if one does not want to do monthly accounting, but it doesn't really prevent the termination of a service. If the service expires, the next time a person needs to use those tools, he or she can renew at that time with no loss of needed service.

Netflix, Hulu, Gamefly and many others have automatic renewal services because their services are themselves automated. Netflix and Gamefly have queues that discontinue if payment isn't made. Hulu will throw all Hulu+ videos out of a subscriber's queue (or prevent the subscriber from watching them. Same thing.). Trash service is also a valuable to have auto-renewed.

Complaints and consumer backlash start when they don't feel the service warrants automatic renewal. It gets worse if the company doesn't do a good job of updating the customers on the status of their renewals. Customers will feel slighted or cheated. If you are a business contemplating auto-renew services, take these things into account. It's very difficult to win back a customer who feels wronged, and even harder when you cannot justify the use of a service that cost them money. Customers need to be aware of what they agree to before signing up. So many people who filed complaints against Weight Watchers had click "I agree" right near where it explicitly mentioned the automatic renewal. Be aware of these types of things.

Friday, December 16, 2011

Scams of the Week: December 17, 2011

It's kind of a slow week for scams in the KC Area, which is good. Be aware that there is is still phishing scam out there that is using the BBB's name to trick businesses into clicking a link via email. Call us to verify complaints.

US Grant & Finance Department - They spoofed some numbers from Washington D.C. to make themselves appear official (202-621-0402 and 202-621-0357). They claim that their victims have been awarded a $7000 grant for being a good citizen and ask for $100-250 in processing fees to be wired to them. Grants don't work like this. If these people call, or anyone with a similar story, hang up the phone.

Loyalty Rewards Co. - Only a few people have said anything about them. People mostly complain about getting unsolicited phone calls, but in one case, the company claimed to have obtained the person's phone number from their online activities. But the person didn't even own a computer. They're calling from 314-627-2824 and asking for credit card information.

Wednesday, December 14, 2011

Charity Wednesdays - Women Drive Charity Donations

I found this note from The Chronicle of Philanthropy on the who, what, and why of charitable giving not very suprising.  A study conducted by Indiana University's Center on Philanthropy*  and paid for by the Bank of America Merrill Lynch Foundation found that women were the driving force or equal partner in 75% of giving choices by wealthy American couples. 

This seems really obvious to me.  The charitable sector is about emotions.  We are motivated to give  and serve because we feel bad for animals in need, homeless people on the street, and artists who need jobs.  Women are emotional. Of course we drive giving decisions!

*I'm a proud alumna of Indiana University.  Click the video below to see how IU put the smack down on Kentucky last weekend.  Go Hoosiers!

Friday, December 9, 2011

Phishing Scam: BBB interview on KCTV5

People are being targeted by a phishing scam that is using the BBB name. You can watch the video here.

Tuesday, December 6, 2011

Charity Wednesdays - Holiday Bell Ringers

I'd like to take an informal poll:  Do you give to those holiday bell ringers that stand outside of stores looking for donations?

While there are a few organizations that do that type of fundraising, Salvation Army, a BBB accredited charity, is the most well-known.   While I have little doubt that donations to them are doing good things for the people they serve, I have mixed feelings about this type of fundraising.

The Good:
* A wonderfully visible sign of the need to support charities during the holiday season.  What's more iconic than a red kettle and a bell ringer this time of year?

* It's a really easy way to donate.  It can't get much easier than dumping the spare change that didn't make it back in you wallet before leaving the store. Of course, as fewer people carry cash, this does get less convenient.  But in some areas, not Kansas City, Salvation Army bell ringers are now using a mobile ap to collect credit or debit card donations.  If it catches on, I'm sure we'll see it here in a season or two.

* It's a great way to teach kids about charity.  A lesson in generosity can't get more hands-on than by putting some change in a bucket.

* For many, it's a great volunteer job.  Many churches and other organizations work with the Salvation Army to sign up volunteer bell ringers.  Some bell ringers are employed, and in this economy, a job is a job is a job and that's o.k, too.

The Bad:
*It is difficult to know how much control their is over collections. I'm sure it drives accountants nuts. It is hard to tell for absolute certain that the $5 you put in that kettle will make it's way to the local Salvation Army.  But, honestly, it's not very common.  It may happen in a few well-publicized cases but it is very rare.

*It's a high-pressure sale.  At least, it can be, if you're the type of person that is easily swung into a guilt trip.  This guilt trip could be made considerably worse if your 6-year-old asks why other people are putting change in the red bucket but you're not.

*It really shouldn't be part of a serious giving plan. At our house we map out how much we can afford to give to charity, what we want that money to do, and which organizations are the best fit for it.  On a tight middle-class budget that means that $5 here, $3 there - amounts that add up - are not part of our plan.  But the $0.53 I got in change after buying my sister-in-law a Justin Bieber CD?  O.k., the red kettle can have that.  But it's the 'extra' in my budget, not what I've set aside for organizations with which I have established relationships.

Thursday, December 1, 2011

What Does that Asterisk Mean?

A common trend consumers may notice is just how many asterisks are on advertisements.  Some advertisements have so many asterisks that the company begins using additional symbols like crosses, degree symbols, or double crosses.  Asterisks usually lead to additional information about a deal being offered. However, the frequency in which asterisks are misused or used for purposes that have the potential to mislead is concerning.

Last year, the Kansas City Better Business Bureau had to contact multiple car dealerships with advertisements that had asterisks the led nowhere. There was no additional information. The asterisk implied that there were exceptions to a listed price, but the consumer had no way of knowing what those exceptions were.

Some asterisks lead to lengthy disclaimers that virtually nullify everything that the advertisement has just said.  Asterisks should never be used to contradict what was said immediately before. Companies can face legal action over this. Short disclaimers can do the same thing.  Businesses are not allowed to advertise something that is untrue in most situations unless conspicuously disclosed near the advertised items, not hidden away in small print at the bottom of (or back) of the ad.

I've seen companies link their asterisks to disclaimers or terms of use that are dozens of pages long. The advertisement gives no indication of where to look for the additional information that is undoubtedly buried somewhere within the 10,000 word disclaimer. That too, is unacceptable.

Even though some companies make asterisks difficult to follow, they should be much easier to comprehend.  Just follow the BBB Code of Advertising:

An asterisk may be used to impart additional information about a word or term which is not in itself inherently deceptive. The asterisk or other reference symbol should not be used as a means of contradicting or substantially changing the meaning of any advertising statement. Information referenced by asterisks should be clearly and prominently disclosed.

If you see an advertisement that might violate the above statement, contact your Better Business Bureau. It's possible that the business is accidentally or intentionally misleading consumers. It will need to be rectified.