Monday, August 29, 2011

Scams of the Week: Aug 29, 2011

Premier Properties, LTD. - I'm not sure what else to say about these Timeshare companies anymore.  I have seen one (likely) legitimate Timeshare Resale business after sifting through thousands. I have never had a call on a real one. This one claims to be in Kansas City.  Of course, it's not actually here. They change their name every couple weeks and also claim to be in Florida, Branson, Indianapolis, Delaware, Washington D.C. and many other places.  They seem to be related to Diamond International Escrow, High End Vacation Properties, Holiday Solutions International, San Diego Resale Group, Boston Resale Group, and many many others.  Avoid, avoid, avoid.

Cloverleaf - A company that calls from an Ashland, KY cell phone asking for Medicare information.  They claim to sell diabetes meters and bill Medicare. They claim to be called Cloverleaf, but when pressed for information say that they are part of a company that has never heard of them.  It's pretty recent. 1-800 notes has had several posts about the company.  They call from 606-316-2601

DVJ Trading Company - The company is soliciting potential employees via job sites like career builder.  They violate one of my pet peeves by not listing a suite number in the office building they claim to lease from. This all but guarantees they are not in the building.  The job they are hiring for is a work-at-home administrative assistant.  It is a lengthy scam process. They interview employees over the phone, verify their identity by asking for a copy of the applicant's driver's license.The job description states the following: "communicate with our US based customers to facilitate the process, receive other funds collected at closing and disburse all proceeds to appropriate parties."  This is where they steal your money. In the midst of receiving and disbursing funds, the victim finds out that the money coming into their account is fake, but the money going out is all too real.  This scam will probably just steal your money, but, at worst, it might be money-laundering.

1 out of every 4 Kids in Kansas City Might Not Eat Tonight.

In partnership with Feeding America, the nation's largest domestic hunger-relief organization, Harvesters, a BBB Accredited Charity, has released a study examining food insecurity in every county in our country.

Food insecure children lack dependable access to enough food to be healthy.

In the Kansas City metro, 1 out of every 4 children does not have enough food.  Without enough food, children can't adequately grow phyisically, mentally, and socially - and that threatens everyone's future.

Think Johnson County is a big exception?  Think again.  Nearly 1 in 5 kids in the wealthiest county in our region might not have something to eat tonight.

Look to Harvesters for ideas on what you can do to help hungry kids in Kansas City.

Thursday, August 25, 2011

Payday Loansharks

An Aug 14, 2011 Kansas City Star published an editorial about "Scandalous payday loan rates."  The article comments on the Missouri legislature's failure to cap lending rates. This failure encouraged petitioners to seek the passage of an interest cap law for short-term loans via statewide ballot, thus circumventing the legislature. The law would cap interest at thirty-six percent. The article mentions Missouri's abysmal track record in its recent attempts to reform lending laws and highlights that the average interest rate on payday loans last year was 444.61%. Missouri law has an irrelevant ceiling of 1950%. The article states:
"The legislature has refused for several years to take on substantive reform of the loose laws that make Missouri's payday lending industry the most plentiful and permissive in the nation. Frustrated by the legislature's inaction and an effort this year to pass a sham reform bill, a coalition of faith-based and civic groups has united to attempt to place an initiative petition on the 2012 statewide ballot."

Many have labeled payday lending legal loansharking.  Loansharking is something with which Kansas City and the Better Business Bureau have had much experience.  Missouri has had extremely soft short-term lending laws since the Constitution was rewritten and adopted in 1946. On January 7, 1947, the Kansas City Star published an article of startling similarity to their recent editorial. Its title, "The People Write the Laws," states the following:

"After almost two years the last session (of the Missouri Legislature) left unfinished business. Among other things it left the State without a reasonable law covering interest rates.  Money lenders are back with tricks and subterfuge to remind the state of the old loan shark days when a poor man's loan was a sale into perpetual bondage. The last session tried to set up an interest schedule but the governor vetoed the bill."

Under BBB manager George Husser, two attorneys, J.B. Birkhead and George Gisler, did more to fight loan sharks than probably anyone in Missouri. Birkhead was even appointed to a national committee on the subject in the sixties.  His expertise is still referenced today in the United Kingdom, Australia and even Wikipedia. These two men fought payday loan companies (Salary Buyers) and Loan Sharks when many loan sharks were controlled by the Mafia under the thumb of Nick Civella.

In 1939, the Kansas City Better Business Bureau and bar associations worked on a law that would give Missouri stricter usury laws.  This included the group called "Salary Buyers," which were nothing more than high interest lenders that claimed they were not lending money, but were, in fact, buying an employee's wages in advance--a payday loan.  The law passed, but was shortly nullified by the ratification of a new Missouri Constitution that prevented anyone from capping interest rates.

Birkhead and Gisler were appalled by the astronomical interest rates that people were forced to pay.  What were those extraordinary interest rates that salary buyers demanded?  How much did the local loan sharks charge? According to the KC BBB's 1938 year-end review, it was around 240%.  For years, during the BBB's campaign against loan sharks, this number was consistently exemplified as the most reprehensible interest rate imaginable.  It was 1710% less than Missouri's current interest cap and almost 200% less than the average modern payday loan.



Payday lending businesses hate the comparisons to loan sharks because they don't threaten physical violence to get payment.  In all honesty, neither did loan sharks back in their heyday.  They threatened to tell the borrower's employer about the situation, jeopardize his job security and ruin his reputation. That is the very reason the FTC will not let collection agencies contact a debtor's employer when asked not to.  Now, instead, payday lending companies threaten a person's credit.  Payday lenders tell borrowers that if they don't pay up, they will never be able to get a house,  a car, rent or lease anything, borrow anything. In the future, they would be denied legitimate loans for things they need. Essentially, they also threaten to ruin the borrower's reputation.

In July 2009, the St. Louis Better Business Bureau published a study detailing the weaknesses of Missouri Payday lending laws compared to other states and what detrimental effects it has on Missouri citizens. According to the study, Missouri citizens have borrowed the second highest amount of money ($317M) from payday lenders behind only California ($365M).

The debate over payday lending rages in Missouri and is likely to intensify as the petition accumulates more signatures, but the arguments really don't matter. Bottom line, virtually unrestricted payday lending does excessive harm. Whether or not payday loans are restricted, delegitimized or legally vindicated, it's a bad idea to get a payday loan. They almost guarantee financial hardship and have little-to-no benefit for the borrower--even short term.

Monday, August 22, 2011

Scams of the Week: August 22, 2011

Get 1497 Daily - This website makes the claim that you can get $1497 per day by adhering to their gig.  What's really frustrating about this site, is that people must give their email addresses to view a video that doesn't tell them anything about the program, just that it makes people over a thousand dollars a day. Nonsense.

5Linx Affiliates- It is definitely a pyramid scheme, they don't try to hide that, but some pyramid schemes are legal if there is a product involved, like Mary Kay. 5Linx also answers its complaints sent from the BBB and has a B+ rating, so the company itself doesn't violate our standards.  The problems with this company are from the people that sell their products and try to convince the rest of us that it's a legitimate offer.

Scams use a tactic of "asking" whether a program is a scam or not.  They have lengthy blogs dedicated to this one question and they always end with a recommendation of the program.  This is often illegal.  It's formulaic and easily recognizable once you are aware of the tactic. By putting the word "scam" in an article and having a title with a question like "Is 5Linx a Scam or Legitimate Opportunity" the article will show up higher in search results when people search "5Linx Scam." The same applies when people search "5Linx Review."  There are THOUSANDS of search results for both "5Linx Scam" and "5Linx Review." They all follow the same tired formula, they all have the same story, and EVERY ONE ends with an emphatic endorsement of the program. If we were to believe these "Advertorials," we would need to concede that no one has lost money on this program. There have been ZERO unsuccessful entrepreneurs and absolutely no dissatisfied customers, even though most of these same "reviews" state that most people will fail at the program. It doesn't make sense.

Do not trust reviews that try to appear unbiased until you know and trust the source.

You May Already Be A Winner! - Or not.  Someone has been calling the area telling people that they have won $1.5Million, but to claim the winnings, they must give 1.5% for taxes to the guy giving you the money. Scary part: they ask to show up to your house. Yikes. They are currently calling from (716) 200-4945.


"Card Services" - It just won't die. It used to be an automated call from "Heather at Card Services" until she and her cohorts were arrested and shut down. Now they're back and claiming that they are "Visa Card Services" and calling from 1-800-938-7529. They say that they can lower the interest rates on your credit cards. If you can't lower your credit card interest rate, then they can't either. Your credit card company is under no obligation to deal with anyone concerning your interest rate. If they say "no" to you, they can say "no" so some third party. Don't take the bait.

Thursday, August 18, 2011

Donating in a Double-Dip Recession

During rough economic times, your favorite charities need you the most. It's no secret, however, that when our incomes go south, charitable contributions are often the first items to scratch from our budgets. 

As the prospect of a double-dip recession grows, there's no doubt that charities, already suffering from the first round economic woes, are going to get hit again.

The Chronicle of Philanthropy has a great post about how our current economic insanity may affect charities.  Just as investors will survive market fluctuations by staying in the game and focusing on the long-term, charities will weather this storm by consistently plugging along with fundraising efforts. 

Our advice to donors is to stay vested with the charities you support.  If you absolutely need to, find creative ways to support them.  At this year's silent auction for my son's school, I'm teaming up with a friend to offer decluttering and organizational services.  Someone else can give the school $50 and I can donate my time.  There are countless ways to stay involved with the organizations and causes that are dear to you. 

Thursday, August 11, 2011

Farm Aid

This Saturday, Livestrong Sporting Park in KCK will host Farm Aid - an annual concert founded by Willie Nelson and John Mellencamp in 1985. 

Originally founded to support farmers in the 1980's caught in a crisis brought on by a nasty combination of low commodity prices and high debt, today it works to support local, sustainable agriculture - what it calls "the good food movement."  It supports farmers through grants to family farm nonprofit organizations.

Locally, Juniper Gardens Training Farm in Kansas City Kansas and the Missouri Rural Crisis Center in Colombia, Missouri have received grant funding from Farm Aid.

The BBB's review of Farm Aid is mixed. While it meets all Standards related to the ethical use of donor funds and fundraising practices, it has room to improve in the areas of governance, effectiveness assessments, and in its informational materials.   Regardless, we hope everyone enjoys a good show. 

Tuesday, August 9, 2011

Scams of the Week: August 9, 2011

Publisher's Clearinghouse Scams - This is old news to some. Lots and lots of scams claim to be Publisher's Clearinghouse.  If you receive something in the mail that says you've won more than $10,000 from PCH, it's a scam. If you've won over $10,000, Publisher's Clearinghouse will show up at your door and present you a check, just like on TV.  If you won less than $10,000, they will ask you to sign an affidavit and then mail you a check, with no special conditions.  Scams always tack on a catch. You either have to deposit a check and send money back to the company or they ask for money up front.

There are several different versions of the scam.  Some begin with a phone call from a scammer claiming to be a representative of Publisher's Clearinghouse. Some will be in email format, others still will be mailed to potential victims.  If any of them require anything more than accepting whatever money they are handing you, it's a scam.

Wednesday, August 3, 2011

Charity Wednesday - Thrift Store Love

I have blogged before about my thrift store obsession.  I love them.  Where else can a person save money, reduce their global footprint, and help someone in need all at the same time.   Plus, they feed my creative streak as I search for interesting items for my home. 

So imagine my delight upon reading this article in Philanthropy Today about a woman taking a road trip to visit thrift stores all around the country.  This is the kind of trip I can only dream of.  Right up there with backpacking Europe.  Something I'm sure my husband will expect me to plan the week after our youngest child moves out (in 18 years . . . ).   Goodwill Industries is sponsoring her trip, to draw attention to its stores and the people they help.   Goodwill rocks.

Thrift stores rely on a steady stream of generous donations.  As with donations of cash, the BBB recommends that donors be careful about where they donate household goods.  Here are a few tips:

  • Not all thrift stores benefit charities equally. Ask your favorite store how much your donations and purchases benefit the charity it supports.
  • When gathering items to donate, make sure that the items are needed (check with the thrift store) and in good condition. Remember that torn, soiled clothing is never in style and that as hard as it can be to toss that three-wheeled monster truck into a landfill, no child wants to play with a broken toy. Disposing of unwanted and unusable gifts is costly to charities.
  • Make sure you obtain a donation receipt if you would like to record your donation at tax time. Information on how to claim a deduction for charitable purposes can be found here on the IRS website.
In the coming weeks, I'll be writing a few posts about the organizations that call homes advertising they will be collecting donations in your area.  I'll also discuss those Planet Aid boxes we see everywhere that take donations.  For now, I recommend donating to a charity thrift store you know well.  When I get those calls about pickups, I keep in mind that my favorite thrift store - a place I know puts ALL of its revenue toward charitable programs - charges $50 to pick up stuff at my house because of costs incurred with driving a truck to a private residence.  All thrift stores have those costs. They just might pay for them in different ways.

Tuesday, August 2, 2011

Scams of the Week: August 2, 2011

OnlineBusinessScams.com - This company charges up to $2000 to send consumers a packet of information about filing a complaint with your local Better Business Bureaus and Attorneys General.  You can file a complaint for free with the Better Business Bureau. It does not cost anything.  I will give you all the information that you need and I won't even charge you a penny. Use this link to find your local Consumer Protection Agency and file a complaint with them: http://www.consumeraction.gov/state.shtml. Here is a link to every BBB and how you can file a complaint with us is on every BBB's page: http://www.bbb.org/us/list-all-bbb-locations/.

BBB Sweepstakes - We do not have a sweepstakes, so if you receive a call from the BBB about your winnings, just know it's a scam. Always. If you did not enter a contest. All of these calls for the past five or so years originated from Jamaica.  Remember, an 876 area code is not toll free. It's Jamaican.