You’re Fired! Here’s a Few Million Bucks

July 29, 2008

Thousands of employees at troubled companies like Fannie Mae, Freddie Mac, Countrywide, Sprint and IndyMac have found themselves out of jobs and health insurance through no fault of their own.  The CEO’s who helped lead the companies into trouble are, however, doing just fine. Read more

Mortgage Bail-Out Bill Falls Short

July 25, 2008

The mortgage bail-out bill just passed by Congress falls far short, when it comes to holding those responsible for this mess accountable.  Attorney Terry Smiljanich of the Consumer Warning Network recently appeared on the Tampa FOX affiliate’s “Your Turn” talk show to discuss the mortgage bail-out. 

Read more

What’s That Doing On My Credit Card Bill?

July 24, 2008

By Terry Smiljanich and Jim Ross

rewards programsEver bought anything online and been offered various “rewards programs,” “free trials,” or “extra 10% discounts”? 

Ignored them or turned them down? Better check your monthly credit card statement. 

Among the various purchases on your card you may find a monthly charge of as little as $9.95 for these innocuous sounding programs from companies you’ve never heard of. How the heck did they get your credit card number and permission to charge you?

They’re called “negative-option” plans, in which consumers are automatically charged for services or products until they take affirmative action to cancel them. Pop-up ads and check boxes authorize a “free” trial in buying, shopping, and travel clubs, privacy services and health programs. The authorization may come from an errant click or through an automatic sign up that flashes by unnoticed by internet shoppers. 

By clicking “yes” or failing to clear a checkbox, you have just authorized the company you are dealing with to give your credit card number to a third party vendor. It’s there in the fine print that nobody reads. Typically, after 30 days of the “free” program, your card will begin receiving monthly charges until you cancel. 

One web-savvy shopper told us of a purchase she made through VistaPrint, an online graphic design and printing company. When she accidentally clicked a “$10 savings” window, she found herself signed up for “Passport to Fun,” costing $14.95 a month, and something called “Shopping Essentials,” both automatically charged to her card. After repeated telephone calls over two months, she finally got these services cancelled. She’s still waiting for her refunds.  

Thousands of consumers have complained. The company’s response? You clicked “yes” didn’t you? They’ll cancel the service, but you are typically out past payments unwittingly made by you.

It’s all perfectly legal, but more and more state prosecutors are finding that they are being used in deceptive and fraudulent ways. As Iowa’s Attorney General charged, “many consumers don’t know they are members, are not aware that they are being charged yearly or monthly membership fees, and make no use whatsoever of the so-called membership benefits.”  

Memberworks was one of the largest “negative-option” vendors. After settling with prosecutors in five states, it changed its name to “Vertrue, Inc.” 

Companies that have tie-in agreements with Vertrue companies include VistaPrint, Victoria’s Secret, and Vertrue boasts on its web pages that it has more than 18 million “members” with over “20 different membership discount programs to choose from.” Business is good, with over $800 million in revenues last year.

San Diego sues Bank of America to halt foreclosures

July 24, 2008

Thu Jul 24, 2008
By Marty Graham

SAN DIEGO (Reuters) – San Diego’s city attorney said on Wednesday he filed a lawsuit against Bank of America Corp and its Countrywide unit to prevent the mortgage lenders from foreclosing on homes in the city, which he aims to make a “foreclosure sanctuary.”

Read more

Motorcycle Fatalities At 9-Year High, And The Cause Might Surprise You

July 23, 2008

Higher gas prices are leading to higher motorcycle sales.  In 1997 there were 356,000 motorcycles sold.  In 2006 there were 1.1 million motorcycles sold.  In the same time frame motorcycle fatalities rose nationally from 2,110 to 4,810.

Nationally passenger car fatalities are at a 15-year low, but motorcycle fatalities are at a 9-year high.  The Governors Highway Safety Association (GHSA) recently released a comprehensive report on motorcycle safety, and while wearing a helmet is always important, the main cause for the sudden increase in motorcycle fatalities appears to be a lack of proper training for new riders.

AAA found that improper driving skills were a factor in 51% of the crash fatalities involving motorcycles and that one in four motorcyclist involved in a fatal crash nationally did NOT have a valid license.   Only 16 states mandate motorcycle training.  If you are interested in your state GHSA has published a survey of State Safety Programs.

Bruce Gullifer of Hendersonville, North Carolina, has been riding motorcycles for more than 35 years. He just returned from a 40 day round trip from North Carolina to Alaska, and he says you can always spot the novice riders.  They buy bikes that are too large, don’t pay attention to what they are doing, and are not dressed properly.  Bruce has attended six advanced motorcycle training classes.

AAA Carolina recommends that motorcyclists:

1) Take a state approved education course for training on how to ride a motorcycle safely BEFORE getting on the highway.

2) Wear a helmet at all times, and be sure to replace  broken down and worn helmets (14% of motorcycle riders use helmets that do not comply with Federal Motor Vehicle Safety Standards).  State laws vary on wearing a helmet.  If you are driving across the nation be sure you are legal.

5 Warning Signs of a Scam

July 21, 2008

courtesy appraisalnewsonlineIf you’re ready to sign up for a service, product or opportunity, beware of the following signs that what you’re looking at may really be a scam to get your money:

1. “Act now!” Why the rush? If it’s a good deal today, it’ll be a good deal tomorrow, after you’ve had a chance to check up on the company and its claims. 

2. “You won’t believe this!” The oldest scam warning in the world is: “if it’s too good to be true, it isn’t true.”

3. “Free” Nothing, I repeat nothing, is free. That “free” credit monitoring or “free” ringtone comes with a subscription to be billed later. 

4. “No risk!” Sorry, there’s no such thing as a sure bet. If it’s guaranteed to make money, the seller would be out making money with it instead of hawking it to you.

5. “Fill out this form” Uh-oh, why am I providing personal information to this stranger? Bank account numbers, social security number, etc.? I don’t think so.

Cell Phone Scams Target Unsuspecting Teenagers

July 18, 2008

Better check your cell phone bill.  Especially if you have teenagers. 

Cell phone companies are billing customers for ringtones, wallpaper, horoscopes and a variety of other services advertised as “free.”  

The target?  Unsuspecting teenagers.

Here’s how the scam works:

Glitzy web ads offer cash prizes or free ringtones to customers who provide their cell phone telephone number.  There is absolutely no charge and a chance to win even more cash. At least that’s what it says in the regular size type that’s easy to read.

The tiny print outlining the “terms of service” tells a different story. The prize “service” is charged to your cellular phone and billed monthly with the cell phone carrier collecting a cut.

Not surprisingly, it’s tough to figure out what you’ve been charged for by looking at the bill.  The charges often appear under headlines such as Direct Bill Charges, 3rd Party Downloadable Content, Premium SMS Messages, Premium Text Messages, M-Qube and M-blox.

AT&T – formerly Cingular – already has agreed to pay back consumers under a settlement with Florida Attorney General Bill McCollum. Check here to find out if you’re entitled to a refund.

The practice isn’t limited to AT&T.  Verizon, Sprint, Alltel, Nextel and T-Mobile all are under investigation by McCollum’s CyberFraud Task Force, a special team the Attorney General put together to investigate internet scams. The investigation isn’t limited to cell phone carriers. His office already has busted two online marketing companies.

Want to protect yourself? 

Call customer service and tell them to block all third party charges. The block keeps any company from billing your cell phone without your specific approval in advance.

FSU Students Get Raw Deal

July 17, 2008

FSU Credit Card Bank of AmericaStudents at Florida State University are subsidizing the school’s big time athletic program through an exclusive credit card that charges up to 3 percentage points more than the competition. 

Fundraisers and school officials agreed to the higher interest rates in a deal designed to funnel at least $10.7 million dollars to the Seminole Boosters, a group that raises money for FSU athletics. The Boosters collect part of every transaction. Read the Consumer Warning Network story uncovering the practice.

Six of 10 credit card offers from other banks afford students a better deal. See the chart below.

10 Most Stolen Vehicles For 2007

July 17, 2008

1995 Honda CivicYou might be surprised which cars were the most stolen by thieves last year. The National Insurance Crime Bureau just came out with its list for 2007 and only 2 vehicles on the list were late models. The reason older models are targeted is simple. The value in stolen vehicles is replacement parts.

The list of most stolen vehicles for 2007:

1. 1995 Honda Civic

2. 1991 Honda Accord

3. 1989 Toyota Camry

4. 1997 Ford F-150 pickup

5. 1994 Chevrolet C/K 1500 pickup

6. 1994 Acura Integra

7. 2004 Dodge Ram pickup

8. 1994 Nissian Sentra

9. 1988 Toyota pickup

10. 2007 Toyota Corolla

Consumer Reports has some helpful tips on how to avoid a theft, but I suspect that if you are reading this post you probably already incorporate these tips into your everyday life.

John Newcomer

8 Things You Need To Know About FDIC And Your Accounts

July 15, 2008

With the recent failure of IndyMac Bank people are asking: how safe are my deposits and what exactly is insured. FDIC has a wonderful web site, but the 8 things you need to know are:

  1. Deposits for an individual are insured up to $100,000.
  2. Joint deposits for 2 individuals are insured up to $200,000.
  3. Retirement Accounts such as an IRA are insured up to $250,000.
  4. Business Accounts are insured up to $100,000.
  5. Having multiple accounts at branches of the same bank does NOT increase your insurance.
  6. Having different deposit accounts at the same bank does not increase your coverage. All of your individual accounts are added together.
  7. If you have a loan that is secured with a c.d. or other deposit account, the FDIC may be able to satisfy the loan first. What’s left of your deposit account will be insured up to above stated limits. This is the “doctrine of offset” and is not a rule.
  8. Brokerage accounts are NOT insured by the FDIC. However certain accounts held at a brokerage firm may be insured, such as cash accounts. You need to check with your broker.

FDIC Your Insured Deposits

This chart by FDIC explains by example common questions concerning joint accounts:

If you still have questions, FDIC has an interactive site that will calculate for you the insurance coverage of your accounts.

We are in troubling economic times. It is important to know how to protect your wealth.


John Newcomer

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