Misleading with Up To claims.

"Up to" claims are convenient for companies to show savings without needing to detail every item on sale in their advertisements. It's also a used by dishonest companies to mislead consumers.  For instance, I've seen a book store with a table near the entrance with about fifty sale items on it.  A large sign at the top said "Sale. Up To 75% off."  Upon checking the prices on every item, I found that only one item was 75% off and nearly all the rest were about 10% off. The wording on the sign was technically true, but misleading. The sign didn't accurately represent what reasonable consumers would expect to find.  I asked the store manager to remove the sign and it was taken down.

Businesses could do this with whole stores, and have.  You may have seen ads say things like "Everything on Sale! Up to 50% off!"  A trip to the store is a sobering reality when you find only a few unpopular trinkets on sale for 50% off and everything else at nearly full price.  The store owner may think he's terribly clever for discovering this linguistic loophole. However he's in for sobering reality when he finds out that even though everything in the advertisement is technically true, it's still deceptive and can he can be indicted for false advertising.

The Federal Trade Commission states that "up to" claims should not rely on "outliers" and the Missouri Advertising Rules state that advertisers must clearly indicate which products are on sale. Both agencies agree that even if a statement is literally true, it may nonetheless be deceptive its overall effect is misleading.

The BBB has kept tabs on "Up To" claims since the early 1920s. In our Nov 5, 1923 newsletter, the Kansas City Better Business Bureau  released a statement in accordance with the Associated Retail Advertisers policy on "up to" claims, introducing a policy which we still hold today.

The Bureau recommends that this phrase not be used unless the minimum former price or value included in the lot on sale be given as well as the highest price. Where articles of several different former prices are included in a sale, at least 10% of the total quantity on sale should be off the highest former price mentioned in the advertisement.

If you are a business advertising an upcoming sale, keep these guidelines in mind. If you are a consumer who sees the phrase "up to" claims and no other details, be wary about soliciting that company's business.

Scams of the Week: July 25, 2011

Online EDU, LLC - They make lots of earnings claims about how you can make money from home. They are unsubstantiated and have an F rating with the BBB.  They have a big ring of website testimonials that just lie and lie. Some of them are those fake "news sites" that present the program as a news story. Here a few of the sites.
www.scotts-money-blog.com
www.keywebjobs.com
www.jeffscashblog.com
http://charlesgrants.com
What's kind of funny is that this scam was exposed a couple years ago by the Texas Attorney General

Someone Said Something Bad About You - A Twitter phishing scam is going around that claims someone is trash-talking about you on a blog.  But once you click the link, it loads your computer up with malware, viruses and spyware.

Galaxy Online Jobs - Just another Work-At-Home opportunity database, except it's based out of Thailand. It just houses a list of opportunities that won't make anyone any money.

Two Charities Sued Over Tornado Fund Raising in Missouri

The people of Joplin, MO continue to be in our thoughts as they work to rebuild and recover.  Missouri Attorney General, Chris Koster, is clearly keeping an eye out for the less-than-ethical organizations that would seek to profit from their devastation. 

The Joplin Globe reports that Koster has filed lawsuits against Alivio Foundation, Ind. and Steven Blood.  Among other fraudulent activity, it is alleged that both purported to raise funds for recovery efforts in Joplin, MO through the use of  PayPal donation links on their websites, but that none of the collective $15,000 raised has gone to tornado victims. 

We strongly urge consumers to be careful when making a charitable donation.  Your dollars matter and you want to see them put the best use possible. The BBB offers these tips when considering a donation to disaster relief:

• Be cautious when giving online.
• Rely on expert opinion when it comes to evaluating a charity.
• Be wary of claims that 100 percent of donations will assist disaster victims.
• Find out of the charity as an on-the-ground presence in impacted areas.
• Find out if the charity is providing direct aid or raising money for other groups.
• Gifts of clothing, food, and other in-kind donations are not as helpful as cash.

Do Nonprofits Need More Regulation?

As Americans, we seem to be going through a healthy, nation-wide purge. We don't want to spend money on anything that is not going to make our life better or give us some return on investment.  Including charities.  Because of a tax system that encourages that support for the arts, education, and social services from the private sector, rather than the government, America has the largest 'third-sector' in the world. 

I often say that I have a job because of the 1% of  organizations that have no business calling themselves 'charities'. Nobody likes 'bad' charities.  Anyone whose ever seen an elderly woman throw $10 she doesn't have at the Patriots for Children and Puppies Foundation knows that unscrupulous people take advantage of our national generosity.  Charity scammers make me angry.  If not for my firm belief that we all eventually get what's coming to us, I would not sleep at night.

In our national effort to root out those who waste our money, or worse, defraud us of it, a few States are looking at imposing more reglulation on charities.  Massachusets and Oregon recently turned down proposed legislation that would have prohibited nonprofits from paying their boards (MA) and allow tax deductions only for contributions to charities that allocate at least 30% of their budget to programs (OR).  These provisions have broad support and it is possible that measures such as these will suceed in the future and that other states will seek to more-heavily regulate the charitable sector.

But do American charities need more regulation?  The BBB provides voluntary standards and a way for organizations to show the public they meet them. It is against our Standards for more than one board member to be compensated and organizations must spend at least 65% of revenue on programs if they want to be a BBB Charity Seal Holder.

I think that the problem with over-regulating charities is that in a sector stiving to meet the ever-changing demands of  the people it serves, there has to be some wiggle room. Sure a charity might not meet BBB Standards if it takes a rebuilding year and puts the bulk of its fundraised dollars into management training, but that certianly shouldn't be illegal.  Because it might be a smashing success and in future years allow the organization to actually put a dent in fulfilling it's mission.  Less-than-ethical organizations don't put much money toward programs, but that doesn't mean that there aren't reasons for good charities to occassionally do the same.

Haven't we had enough of a few bad apples making things more difficult for the rest of us?  HIPPA? Airport Security? No Child Left Behind, anyone? Regulation makes it difficult to find creative solutions to problems.  And the type of problems our nonprofit sector is charged with solving - homelessness, animal welfare, environmental preservation, literacy -  demand increasingly creative solutions in an atmosphere of dwindling funds. 

So let's arm ourselves with voluntary standards and not regulate the fun out of fundraising. Or governing. Or problem solving.  We can do it!

Scams of the Week: July 18, 2011

Queen Rita Linus 419 Scam - It's a Nigerian scam with a huge twist. It's not from Nigeria; it's from Zimbabwe. I guess they still manage to scam people, because they still try an awful lot. The email claims to be from an 18 year old deaf girl that got your email from the African Chamber of Commerce. She wants you to send lots and lots of money to secure her and her family's escape from the clutches of the evil despotic ruler, Mugabe!  Once free, she will generously give you $2.5 million.

Midwest Circulation - A door-to-door magazine sales company that never sends anything.  From the 100+ complaints we've received at the Kansas City BBB, no one gets magazines after paying for them.  The salespeople lie about being from a local college and often make up entire local family history.  They are located in Cameron, MO but take weekend trips to cities such as Des Moines and Wichita.

Upfront Fee Jobs - If a job asks for money, go elsewhere--always! There is no reason at all for any job to ask you for money. I put this up here because the BBB of Northern Indiana warns about a woman who was just scammed out of $2,200.

Charity Wednesday - American Children's Charities

We have received 81 calls in the past two weeks from donors wanting more information about American Children's Society.  I thought it prudent to use this blog to explain to the public what we know about this charity.

American Children's Society (ACS) is an organization that works in eight states (AL, FL,KS, MO, NJ, NY, PA, and TX).  It's primary program is the Auto Donation Program, which it claims on its website to have run for the past 10 years. According to its 2009 IRS Form 990, it's program expenses consist mostly of the transport, repair, and storage of donated vehicles. Also according to the 2009 IRS Form 990, it pays a third-party business to solicit, process, and sell donated vehicles.   A much smaller program provides assitance to families of ill and deceased children.

The National BBB Charity Review Program, known as the Wise Giving Alliance, has sent ACS repeated requests for information, but the organization has chosen not to respond. Charities have the right not to disclose their information to us, but we feel that failure to disclose information demonstrates a lack of commitment to transparency.

American Children's Society suggests that donors check out their 990 tax forms on Guidestar.org.  I encourage all donors to carefully read any organization's most recent IRS Form 990 before making a major donation to a charity that chooses not to otherwise disclose its information. 

For more advice on donating an automobile or other vehicle, check out the BBB's Tips on Giving.

Charity Wednesday - Christmas in July

As of the date of this post, there are 171 days until Christmas.  While I'm still trying to figure out what I'm doing Friday, let alone what my plans will be 171 days from now, the folks at the Johnson County Christmas Bureau are gearing up to help over 3200 families in need this holiday season. 

And they have the most fun volunteer opportunity on the planet.  The Christmas Bureau is partnering with the Kansas City Royals and needs 60 volunteers to sell raffle tickets during two upcoming Royals games.  Volunteers receive a free Royals ticket, free parking, and a $10 food voucher - in addition to the satisfaction of helping an organization that helps others.

For information on how you can volunteer or help the Johnson County Christmas Bureau in other ways, visit their website.

Scams of the Week: July 5, 2011

Google+ Fake Invites -   You may have heard, Google released their social networking site that is a lot like Facebook with tweaks here and there. Lots of people are inviting their friends to join and phishers are swooping in with their own invites. They ask for your personal information, so be sure you trust who sent you the invite.

BannersBroker.com - They said it's NOT a scam, so we should definitely believe that. Some of their outlandish claims are that you can turn $20 into $10,000 and that you can double your money in four weeks. The website it privately registered and the phone number leads to a call center near Vegas. Sound dubious.

Email Hack Phishing -  In a variant of the grandmother scam, con artists are hacking your friends email accounts and claiming that they're in trouble.  They will ask you to wire them money.  Here's the text of the email:

"I'm writing this with tears in my eyes, I cam down here to the United Kingdom for a short vacation unfortunately i was mugged at the park of the hotel where i stayed,all cash,credit card and cell were stolen off me but luckily for me i still have passports with me.

I've been to the embassy and the Police here but they're not helping issues at all and my flight leaves in less than 3hrs from now but am having problems settling the hotel bills and the hotel manager won't let me leave until i settle the bills,I'm freaked out the moment."

iTunes $25 Gift Card - Another Facebook phishing scam that gets people to click on it and give their information to it.  Like most other offers on Facebook, just avoid it.