Watchdog with Paul Muschick

Can you hear me now? FCC's effectiveness at investigating consumer wireless complaints challenged

As part of an ongoing Senate probe of wireless phone service, the federal Government Accountability Office (GAO) examined how the Federal Communications Commission (FCC) handles consumer complaints against phone companies.

It questioned whether the agency has been doing enough to resolve complaints, or whether that even is the agency's goal.

The criticism follows a previous GAO report from 2008 that questioned why the FCC closed so many consumer complaints without taking any action.

Thursday's Watchdog column has more details.

Watchdog out

The Watchdog will be out of the office for the next two weeks. Keep the calls and e-mails coming and I'll return them when I return the last week of July.

Are you getting the most favorable terms on your credit card?

Every credit card has not only different interest rates, but different terms. With so many companies issuing so many cards, it's tough to tell whether you're getting the best deal. Bankrate.com recently published its 2009 comparison. See how your card ranks.

Fake check scams

With the economy souring, people are trying to unload items by selling them on Internet sites like Craigslist. Be careful about taking checks for your goods, the BBB warns. Here is the latest installment from its consumer awareness series. You can find more warnings on fake check scams at http://www.fakechecks.org/.

Not So Easy Money

By Edward Johnson

The ongoing economic trouble in the marketplace has many consumers living on the edge. If you have thought about a part-time job or selling off unneeded household items in order to raise some cash, you are not alone. However, it is an increasingly complex and dangerous world out there so remember: a false sense of security is all a scam artist wants to provide you. In exchange, you unknowingly give them your money. The current scourge of bogus payments for goods and/or services is a perfect example.

It is estimated that consumers have lost billions of dollars as a result of fake check scams. Scams involving fake checks come in many different forms and can be very hard to identify as the printing technology used by scammers improves. The Better Business Bureau (BBB) warns against three common check scams and offers advice on their common red fags.

According to a recent survey by the Consumer Federation of America, nearly one-third of adults have been approached by a scammer trying to pass off fake checks and at least 1.3 million people have become victim of the scam with an average loss of $3,000 to $4,000.

It can be practically impossible to tell a fake check from a real one using only the naked eye because fake checks can be printed in full color and even include watermarks. Many check scams plaguing consumers in the United States are the work of scammers operating outside of the country and originate in Canada, Jamaica, Eastern Europe and Africa which makes it extremely difficult for law enforcement to track them down and bring them to justice.

Scams involving fake checks typically require the victim to deposit a check into their bank account then wire money back to the scammers. While the check may initially be deposited into the victim’s bank account —leading to a false sense of security— the fake check will ultimately be discovered within a couple weeks and the bank will take the funds back out of the victim’s account. The victim of the scam is out whatever money they sent to the scammers and will be responsible for paying the bank back if their account is overdrawn.

The following are three common scams that rely on fake checks and can cost victims tens of thousands of dollars:

Lottery and Government Grant Scams

Victims receive a letter claiming they’ve won a lottery or qualify for a financial assistance grant. Included with the letter is a check for at least a partial amount of the total money they have coming to them. The victim is told that, in order to receive the rest of the money, they are to deposit the check and wire back as much as several thousand dollars. The victim is often told this is to cover taxes or administrative fees.

Mystery Shopping Scam

The victim believes that they are going to be employed and that the job offer is just that. The victim thinks they will earn a few hundred dollars by working for a company that provides mystery —or secret— shopping evaluations for businesses. After being “hired” the victim receives a letter in the mail along with evaluation forms, a check and detailed instructions. The victim is to deposit the check into their bank account, and then use the money to purchase items from specified stores and evaluate the customer service. The rest of the money is theirs to keep for the work they did. Included in the list of stores to evaluate is Western Union or MoneyGram and the victim is told to wire as much as a couple thousand dollars back to their “employer” and rate their experience with the money wiring service.

Overpayment Scam

The victim is selling an item through a newspaper classified or an online site such as Craigslist. A buyer shows interest and asks to pay for the item by check. When the check arrives the amount is higher than the price of the item. The victim is told that it was a mistake and is sometimes asked to wire the extra back or that the extra cost is for the victim to wire payment to a shipping company that the scammer has chosen —of course the supposed shipping company is actually the scammers.

Edward Johnson is president & CEO of the Better Business Bureau serving the Eastern and Northeastern Pennsylvania region.

Hey baby, what's your number?

From now on, your number one question when interviewing contractors for a home improvement job should be: what's your state registration number?

As of Wednesday, it became illegal for most contractors to work in Pennsylvania without being registered with the state attorney general's office. Keep in mind the registration isn't a license, and doesn't endorse the contractor's skills. Rather, it's a way for authorities to keep tabs on who is doing home improvement work in case problems arise, and a starting place for consumers looking for a contractor.

You can access the registry here. I'll have more information in Sunday's Watchdog column. One obvious shortcoming of the registry is you can only search for a contractor by the company name, not the owner's name. So make sure you get the name of the company, not just the person behind it.

The registry is required under the Pennsylvania Home Improvement Consumer Protection Act, passed last year. The law provides other safeguards for consumers that I'll explain in Sunday's column.

When registering, contractors must provide Social Security numbers, home addresses and other information authorities could use to track down those who create trouble. A big complaint from consumers is they can't find the contractor who took their down payment and vanished.

Contractors also must declare any work-related civil judgments, criminal convictions, bankruptcies and sanctions from other states. That information will be posted online for consumers to see. Consumers also can access the information by phone at 1-888-520-6680. Another shortcoming of the registry is there's nothing to stop a contractor from lying about their past, but authorities are confident those people will be caught. Their registration then could be revoked in court, and they could be charged with providing false information.

Authorities hope the registry will discourage scammers who have been posing as contractors, and then doing shoddy work or no work at all, from staying in business. They expect the many legitimate contractors out there, and disgruntled customers of shameful contractors, to keep an eye on the registry to make sure the information that's there is true.

So when interviewing contractors, get their registration number and confirm it. If they're not registered, the date should be off.

But you can't stop your research there. Your home is your most-valuable asset, and you should do more to check out the person you're trusting to work there. Here are other ways you can check out a contractor:

Pennsylvania Attorney General’s Office “Take the ‘con’ out of a home improvement contract”

Maryland Home Improvement Commission

New Jersey Division of Consumer Affairs, home improvement contracting

New York state Consumer Protection Board “Tool Kit to Home Improvement”

National Association of State Contractors Licensing Agencies

Better Business Bureau to look up home improvement contractors

Pennsylvania courts database to check for criminal cases against contractors

Lehigh Valley Builders Association to check if they're a member. Membership is a good sign.

It's also a good idea to look for civil lawsuits and judgments at your county courthouse.

Trash-Monster customers to be paid from bankruptcy

If you were a customer of Trash-Monster a few years ago, and you were left holding the bag - your smelly trash bags - I've got good news for you.

A bankruptcy judge has approved a repayment plan to creditors. It includes money for Trash-Monster customers who were stuck in 2007 when the Williams Township trash hauler closed abruptly without refunding money, and without even telling customers it wouldn't be collecting anymore.

That raised quite a stink in some neighborhoods, where trash sat uncollected while homeowners tried to figure out what was going on. Here's what The Morning Call wrote (Download Sept. 2007 article) at the time.

The company was sued (Download Trash-Monster-BCP-Complaint) by the state attorney general's office, which sought to recoup the money customers had paid Trash-Monster in prepaid contracts. But the lawsuit was put on hold when one of the owners, Charles Minarcik III, filed for bankruptcy.

His bankruptcy plan (Download Trash-Monster payment plan) was approved last month. The money will be repaid gradually, so don't expect it immediately. But as long as Minarcik sticks to the payment plan, authorities believe all Trash-Monster customers eventually will get what they're owed.

See Thursday's Watchdog column for more.

Before you hire a trash hauler, do your homework. You can check to see if a company has state approval to dump large trucks at landfills - a good sign, because otherwise where's your trash going to go - with the state Department of Environmental Protection. Make sure your company has a valid Act 90 certification, which can be found in the "authorization status" links about halfway down the page.

Tips for avoiding fake check scams

The Consumer Federation of America recently kicked off a campaign to help consumers avoid falling for fake check scams. Here is information from their May 27 news release, which includes tips.

CFA Task Force Aims to “Tear Up” Fake Check Scams

Survey Shows Over a Million Consumers are Being Swindled

Washington DC– Today, the Consumer Federation of America is launching a national campaign to combat fake check scams. Millions of consumers are lured into accepting genuine-looking checks and money orders and wiring money to crooks in return. According to the results of a CFA survey, nearly one third of adults have been approached with fake check scams and at least 1.3 million have become actual victims. With an average loss of $3,000 to $4,000 per consumer, billions of dollars have been pocketed by fake check scammers. “In today’s economy, as consumers struggle to make ends meet, vulnerability is at an all-time high. Phony claims of sudden riches or ways to make money have never been more attractive,” said Susan Grant, CFA’s Director of Consumer Protection. CFA created a Fake Check Task Force to help raise awareness about these scams and protect consumers.

The telephone survey of 2,000 adults conducted for CFA by Opinion Research Corporation December 4-8, 2008 revealed that the most common fake check scams are those involving sweepstakes/lotteries (66 percent), grants (36 percent) and work-at-home opportunities (35 percent). In the sweepstakes and grant scenarios, the consumer receives a check or money order with instructions to wire a portion of the money to pay taxes or administrative fees. In the phony job offers, consumers are asked to process payments for a foreign business or make purchases as a mystery shopper and wire the remaining money to their employer minus their “pay.” Another popular variation of the scam is the “overpayment,” where the scammer offers to buy something the consumer has advertised for sale, sends a check or money order for more than the asking price, and tells the consumer to wire the extra to someone who will arrange for shipping.

“The check or money order is phony, and so is the person’s story,” explained Grant.

“Unfortunately, the consumer usually doesn’t learn that until after sending the money.” Federal law requires financial institutions to give consumers access to the money from checks or money orders they deposit quickly, usually within 1-5 business days, but just because funds are available doesn’t mean the check or money order is good. It may take weeks for the counterfeit to be discovered. When it is, the consumer is on the hook to repay the bank, credit union, or check cashing service.

Compounding the problem is consumer misunderstanding. Fifty-nine percent of the respondents in CFA’s survey incorrectly believe that when you deposit a check or money order, your bank confirms that it is good before allowing you to withdraw the money. The number goes up to 70 percent among young adults age 18-24, and 71 percent of people with incomes under $25,000 and who did not complete high school. More than 40 percent of those surveyed do not know that they are liable if the checks or money orders they deposit or cash are counterfeit. Fifty-two percent age 18-24 and half of Hispanics incorrectly said the person who gave you the check must pay the bank back.

Another factor is the fact that the scammers are hard to pursue. They often operate from Canada and other foreign countries, making it more difficult for U.S.law enforcement agencies to bring legal action against them, and they cover their tracks by picking up the money in cash and using phony identification.

Created in May 2008, CFA’s Fake Check Task Force brings nonprofit consumer organizations, law enforcement and consumer protection agencies, financial service companies, and other businesses and trade associations together to fight these scams through greater education and awareness. The campaign has several elements, including new information in English and Spanish about grant and mystery shopping scams on the National Consumers League’s www.fakechecks.org Web site and an ecard on the site that consumers can send to warn others about fake check scams. At www.consumerfed.org/fakecheckscams there are several new CFA resources for consumer education including a fact sheet and ready-to-use news articles in English and Spanish, and links to other materials.

Consumer Tips to “Tear Up” Fake Check Scams

· Never agree to pay to claim a prize. No legitimate sweepstakes or lottery would ever send you a check or money order and ask you to send payment in return. If you really won, you would pay taxes directly to the government.

· Never agree to pay for grants from the government or foundations. They don’t offer money to people unexpectedly or charge to get it. Most grants go to organizations, not individuals, and require a lengthy and extensive application process. See new tips on grant scams at www.fakechecks.org/prevention- faqs04.html.

· Never agree to cash checks and send the money somewhere as part of a job working from home. That is not how legitimate employers operate. See new tips on mystery shopping scams at www.fakechecks.org/prevention-faqs05.html.

· Never agree to wire money to anyone you have not met in person and known for a long time.

· If it seems suspicious, get advice. Consult your state or local consumer protection agency, the Federal Trade Commission, the Postal Inspection Service, or another trusted source.

· Remember that there is no legitimate reason why anyone who wants to give you a check or money order for something would ever ask you to send money anywhere in return. Go to www.fakechecks.org to learn more about how to protect yourself from fake check scams.

More lip service on VA claims backlog

Congress took another stab at trying to understand the claims backlog at the Department of Veterans Affairs during a hearing last week. It doesn't seem like it got very far, based on the testimony. Veterans' advocates complained again, and VA bureaucrats muddied the waters with statistics.

Here's a summary from the Washington Post.

Notary facing sanctions

The Pennsylvania Department of State has put a Lehigh Township notary, Mary Bishop, on notice that she could lose her job because of several allegations (Download Bishop complaint) against her.

Bishop has been a notary since 1990, and her commission expires next year. The department started investigating her last year after a complaint from a Bucks County man who claimed he had problems with PennDOT vehicle paperwork he submitted through Bishop's office. Bishop was cited by state police in that case for failing to send completed paperwork to PennDOT within 20 days.

Bishop was found guilty of that citation, and pleaded guilty to four other citations also related to her work in 2006.

The Watchdog also has received a complaint against Bishop. Read about it in Sunday's Watchdog column.

Before doing business with a public notary, you can confirm their license and check their disciplinary record with the Department of State. You also can file a complaint against a notary.

Rodale under investigation by Florida attorney general's office

Thursday's Watchdog column will detail an investigation into the marketing tactics of publisher Rodale Inc. of Emmaus.

The Florida attorney general's office started investigating last year after two consumers filed complaints. One person alleged he had trouble cancelling a magazine subscription (Download magazine complaint). The other said she was billed for a book and magazine subscription (Download book and magazine complaint) she didn't order.

The company says it stands by its business practices, and is cooperating with authorities.

Authorities subpoenaed Rodale last February (Download Feb. 2008 subpoena) and May (Download May 2008 subpoena), seeking information about complaints the company had received from Florida consumers, as well as information on marketing materials. Rodale provided the information.

As of Wednesday morning, Rodale had a D+ rating with the Better Business Bureau, in part because the BBB said the company hadn't responded to a few complaints. After the Watchdog asked about it, Rodale provided the BBB with proof it had responded to all complaints, and its rating was adjusted late Wednesday to a B+.