Latest ‘hot tips’ for consumers

Monday, November 05, 2007

To help consumers make informed decisions, the Better Business Bureau has released the following list of companies that employ questionable business practices. To protect yourself and avoid becoming a victim of fraud, follow these tips provided by Consumer Action.

• Cramming
• ID Theft & Account Fraud
• Mail-order and Online Pharmacies
• Prizes and Lotteries
• Work-at-home Scams
• Deb Management Programs
• Mystery Shopping

Cramming

A company called E-mail Discount Network, which claims to offer an e-mail account service, is being investigated by the Florida Attorney General’s office for cramming. Cramming occurs when a company bills for services without the consumer’s prior authorization, hoping the consumer won’t notice the extra charges, and pay the entire bill.

According to the BBB, an Indiana consumer complained that a pay-day lender sold his name to this company, who then put a monthly $12.95 charge on his phone bill.

Tip: Examine your phone bill carefully and challenge any unauthorized charges with the company. For more information about phone fraud and how to complain, read: You Can Help Fight Phone Fraud.

ID Theft & Account Fraud

A special alert was issued on Consumer Benefit Group, an Arizona company which is calling seniors and telling them that their personal information has been found on marketing lists. According to the release, consumers allege the company uses high pressure to sell a membership program (around $300) that will prevent their personal information from being distributed. Complaints involve unauthorized charges, customer service issues and difficulty in obtaining refunds.

Tip: Add your phone number to the National Do Not Call List and never give out your personal information. If you receive a call from a company you don’t know, simply hang up. If you already have a relationship with the company, hang up and contact them using the phone number that is listed on your statement.

For more information, read: ID Theft & Account Fraud: Prevention and Clean Up.

Mail-order and Online Pharmacies

The BBB says consumers continue to complain about Express Scripts, a St. Louis-based company that fills mail-order prescriptions. According to the BBB, complaints range from late delivery, improper billing and lost orders to incorrect prescriptions.

Tip: Before ordering from any company, check out its reliability report on the BBB’s website. If you are buying medicines online, the U.S. Food and Drug Administration recommends that you buy only from licensed pharmacies located in the United States. The National Association of Boards of Pharmacy Website has more information about licensing and its program to certify online pharmacies.

For more tips, check out Buying Medicines and Medical Products Online.

Prizes and Lotteries

Gold Rush International is calling consumers and telling them they have won $2.5 million if they send a $400 up-front fee via Western Union to Jamaica. The BBB from Northern Indiana reported that one consumer’s caller ID showed the call was coming from Indianapolis, but the call-back number given by the company included the area code for Jamaica.

The BBB of Northern Indiana is currently investigating this scam. If you are a victim or have received a similar call, please contact the BBB in Indianapolis at (317) 488-2221, extension 104.

Tip: Don't fall for the Big Prize scam! Legitimate lottery and sweepstakes administrators never charge fees to deliver your prize And it’s highly unlikely that you would win a lottery or contest that you did not enter. If you send money by wire to a scam artist, you will never get it back. Read: Fraud: Recognize It. Report It. Stop It.

Work-at-home Scams

Weight Loss Pros advertise in local newspapers, claiming, “1000 envelopes = $5,000. Receive $5.00 for every envelope stuffed with our sales material. Guaranteed!” According to the release, so far 390 complaints have been filed against this Florida company. Most of them involve misleading advertising and delivery issues. Consumers are required to send a $40 up-front fee for materials, but the materials aren’t received. This work-at-home company has the BBB’s lowest rating.

Tip: Learn the signs of work-at-home schemes, questions you should ask and how to complain if you become a victim by reading Work-at-Home Schemes.

Deb Management Programs

American Debt Arbitration of Clearwater, FL, offers debt relief for consumers experiencing financial difficulties. Some of the allegations against this company include making misleading and false statements, failing to disclose policies and operating in various states without a license.

Tip: If you are having trouble budgeting your money, talk to a credit counselor. Look for a non-profit organization that is a member of the National Foundation for Credit Counseling.

Mystery Shopping

Shipping 4 U offers a business opportunity for consumers to do secret shopping for major companies. These companies include GAP, Western Union, UPS, Best Buy, Old Navy, Wal-Mart, and McDonalds. The problem? “It’s all a lie,” the BBB says. According to the release, an Indiana consumer contacted the BBB after she received a $3,160 check to get started. The check was counterfeit, and this business opportunity is a scam.

Tip: The Federal Trade Commission suggests that consumers be skeptical about mystery shopping promoters who:

• Advertise for mystery shoppers in a newspaper’s “help wanted” section or by email. While it may appear as if these companies are hiring mystery shoppers, it’s much more likely that they’re pitching unnecessary — and possibly bogus — mystery shopping “services.”
• Sell “certification.” Companies that use mystery shoppers generally do not require certification.
• Guarantee a job as a mystery shopper.
• Charge a fee for access to mystery shopping opportunities.
• Sell directories of companies that provide mystery shoppers.

For more on Mystery Shopping, read: The Secrets of Mystery Shopping Revealed.