The hustle and bustle of the holidays can leave us vulnerable to the Scrooges of the world, unethical individuals, or business owners wanting to separate us from our cash. Some tips from the Federal Trade Commission, consumer watchdog groups, and state agencies could keep you from getting burned or at least scorched.
Phony charities that have clever names to make them seem legitimate fill our mailboxes with appeals this time of year, notes the American Association of Retired Persons. But they often take all the money you send and nothing goes to charity. Check out any unknown appeal with the Better Business Bureau before making a donation.
If you get a message on your answering machine or pager asking you to call a number beginning with area code 809--don't! You could be charged $2,425 a minute.
The 809 area code is in the Bahamas and can be used as a pay-per-call number, similar to 900 numbers in the United States. Because 809 is not in the United States, it is not covered by U.S. regulations of 900 numbers, which require that you be warned of charges to pay-per-call numbers.
If you call the 800 numbers or visit the Web sites on the "Work From Home" signs tacked up on poles or stuck in the ground near intersections, it will cost you $39 or more just to get the information to make a decision whether to do the work. Until you pay they won't even tell you what kind of business it is.
No lottery winners here
There's the phone call from the "Canadian Lottery," telling the recipient that he or she is a winner but must send money to cover taxes and tariffs before the "winnings" are sent. According to the Better Business Bureau, no legitimate lottery or sweepstakes notifies its winners by phone. And a legitimate lottery never asks for money from its winners.
Keep passwords and PINs secret
Another fraudulent scheme uses fictitious bank correspondence and Internal Revenue Service forms to mislead taxpayers into disclosing personal and banking data. The information is then used to steal the person's identity and bank-account balances.
Don't answer any requests for account numbers, passwords, Social Security numbers, and personal identification numbers (PIN) needed for access to the accounts; instead, contact the bank to see if the request is legitimate.
Careful on Internet auctions
As Internet auctions have grown in popularity, so have problems, although there are a lot of satisfied customers, too. The big complaint is with merchandise that isn't delivered, either as promised or at all.
How can you steer clear of problems? Deal only with merchants who have solid recommendations from other customers. Ask all questions by e-mail before bidding. And use an escrow service to make sure you get the right goods before the seller gets your cash.
Internet insurance guidelines
With many Kentuckians shopping for low-cost insurance on the Internet, the State Department of Insurance has come up with some guidelines.
Be cautious about giving out any financial or personal information, such as credit-card numbers, medical history, address, and Social Security number, the agency warns. Be certain the site is secure and know what the company plans to do with the information you provide.
Also, be sure you are dealing with a company licensed to do business in Kentucky. Ask the company how it handles support if you have a claim. See if a local agent is assigned to you or if you will have to call an 800 number for assistance. Call the number and see how responsive the customer-service representatives are, and keep a copy of any records, e-mails, or forms that you fill out online.
Become a smart consumer
Many scams can be prevented by practicing smart consumer behavior, according to the FTC.
Don't give out your credit-card number or commit money over the telephone unless you initiated the call. Get all details in writing before making payment. And if it sounds too good to be true, it probably is.
"Today, you have to be a much smarter consumer than 20 years ago," says Frank Abagnale, author of The Art of the Steal: How to Protect Yourself and Your Business From Fraud and a reformed thief himself. "You have to be careful where you go on the Internet, who you give information to, who you believe."
People over age 50 are often targeted: older people make up just 12 percent of America's population but account for 30 percent of the scam victims, according to the FTC.
Current Kentucky scams
In Kentucky, there has been a surge in investment frauds, including promissory notes, callable certificates of deposit, and viatical settlements (the buying of death-benefit policies).
Dozens of Kentuckians have also been contacted by mail by unscrupulous Nigerian businessmen, offering to transfer large sums of U.S. dollars to the addressee's bank, to be shared at a future date. If the letter-receiver expresses an interest, he or she is asked to pay a good-faith fee--the sole object of the scam.
Each year, Nigerian flimflammers defraud Americans of an estimated $100 million.
CONTACT THESE AGENCIES FOR HELP
There's help available if you have questions whether or not a solicitation or proposition is legal:
Better Business Bureau of Central and Eastern Kentucky
Better Business Bureau of Louisville, Western Kentucky, and Southern Indiana
Federal Trade Commission
Securities and Exchange Commission