Archive for the ‘Consumer Forum’ Category

Take automotive recall notices seriously

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT

Posted April 20, 2014, at 10:35 a.m.
The next time you’re in your car, think about oncoming drivers who haven’t had their recalled vehicles repaired.

The odds are good that you’ll meet several. We’ve all heard about the General Motors recall of 2.6 million vehicles for ignition switch problems. Toyota recently recalled about 1.3 million vehicles sold in the U.S. because air bags might not inflate.

Automakers are on a pace that could total a record number of recalls in a decade. However, industry experts estimate that one-third of all recalled vehicles do not get the repairs they should. Of all vehicles on the road, one in seven may be operating with a defect that should have been remedied after a recall.

What should happen after a recall is simple. Owners take their cars to an authorized dealer, who makes needed repairs for free (the dealer is reimbursed by the manufacturer and so is eager to handle recall work). What really happens, in many cases, is that owners don’t get the work done.

If the car is under warranty, owners are more likely to have recall work performed. But some suspect dealers of looking for more things that may or may not need fixing, so they stay away.

Some consumers may figure they can simply “beat the odds” and keep driving, guessing that the chances of a recalled defect causing them a problem are minimal to nonexistent.

The people driving cars needing recall work also may not know that a recall has been issued. That’s likely if they’re the second or third owners of a vehicle.

There’s a huge resale market for used vehicles; if an owner doesn’t act on a recall notice and sells a vehicle, there’s no way for the buyer to know.

Our highly mobile society is another factor. If a car owner moves, a recall notice might not catch up to a new address. New or prospective owners have not been able to trace a single vehicle’s recall history, but that’s about to change.

Last year, the National Highway Traffic Safety Administration announced that it’s requiring manufacturers of cars, light trucks and motorcycles to create searchable databases on company websites. This will allow consumers to search by Vehicle Identification Number to see whether a recall has been issued and whether a particular vehicle has been fixed.

While some companies have already set up sites, data is supposed to be available for all vehicles by mid-August and is to be updated weekly. It will also be available on the National Highway Traffic Safety Administration’s website, www.safercar.gov.

Another problem may be in the appearance of recall notices. Some consumers may have received them in the mail and tossed them, thinking they were junk. The National Highway Traffic Safety Administration requires a red-boxed, all-caps banner stating IMPORTANT SAFETY RECALL INFORMATION, alongside National Highway Traffic Safety Administration and U.S. Department of Transportation logos.

For your safety and everyone else’s, if you receive a recall notice, act on it.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

When a solicitor calls, ask how much of your donation actually goes to charity

CONSUMER FORUM

Posted April 13, 2014, at 10:40 a.m.

 

Consumer rights and charitable solicitations

The caller was straightforward, stating up front that hewas being paid to solicit funds on behalf of the Maine State Federation of Firefighters. 

The cause: to aid the families of fallen firefighters. No argument there. However, as a consumer advocate, I had to ask the question. How much of what you raise goes to the federation?

The response stopped me cold.

“I’ve been instructed to tell people who ask that, [that] at least 15 percent of the money goes to that cause,” the caller said.

“Fifteen percent?” I asked in disbelief.

The caller thanked me for my time and ended the call.

He was being accurate. Companies that solicit Maine consumers by phone must register with the state Department of Business and Professional Regulation. Outreach Calling, the firm making the call to our home, reported last year that during 2012, it returned exactly 15.00009885 percent of funds it raised to Maine State Federation of Firefighters.

Outreach made similar reports to Maine on the 16 other charities for which it raised funds.

“Cancer” was a key word in the names of five of those charities; other beneficiaries included veterans, children and public safety groups. Several of the groups also received around 15 percent of funds raised; in 10 instances, the return to each was almost exactly 10 percent.

Why employ a phone solicitor that gives back only a fraction of what it collects?

“We do it because it’s effective, and it raises money for us,” said William Vickerson, the attorney in Portland representing Maine State Federation of Firefighters.

He told me that most members of the Maine State Federation of Firefighters are volunteers, and fundraising is not their strong suit. If they sold cookies or calendars, they’d have overhead that would eat into any proceeds raised.

“With us, the gross profit is also the net profit,” Vickerson said when pressed on the 15 percent return.

He said Outreach has been responsive to concerns he has voiced in the past when consumers complained about particular callers or solicitation techniques. He also said most of those complaints were unfounded, based on recordings of the calls which Outreach routinely makes.

You might wonder why you receive such calls, if you’ve been placed on the National Do-Not-Call list. Charitable causes are one of those exempt classes as are political calls, which we’ll all receive soon in growing numbers.

Some consumers when called routinely say, “Put me on YOUR do-not-call list,” and some of them report success (results may vary).

Charity Navigator, a major watchdog group, rates more than 7,000 charities on its website (www.charitynavigator.org), including two dozen involved in fighting breast cancer. Together, the charities raised $1.8 billion; but the percent of its budget that each spends to raise money varies, from a low of 2 percent to a high of 91 percent.

Advocates like to see at least half of all money raised going to the cause to which they were donated; so, we think, do donors.

Charity Navigator, Guidestar and other research groups offer help in choosing which causes to support. GreatNonprofits.org offers people familiar with a charity’s operations a chance to share experiences with others.

Last year, the Tampa Bay Times and California-based Center for Investigative Reporting did extensive research and rated America’s 50 Worst Charities. Outreach Calling made the list, based on returns of 9.8 percent to 15 percent for six charities reviewed in 2010 and 2011.

William Vickerson says, so far, Maine State Federation of Firefighters has not been able to find a fundraiser that can do better in Maine.

Asked if the federation will keep looking, he replied, “We’ll do it. We always do.”

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

 

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How to avoid scams hiding behind unclaimed property lists

CONSUMER FORUM

Posted April 06, 2014, at 12:47 p.m.

After seeing a recent news release from the Maine treasurer’s office, a Northeast CONTACT caseworker told a friend that his name was on the treasurer’s list of unclaimed property owners. All that he had to do was call the treasurer’s office, identify himself and give his Social Security number to verify his identity. The friend was indignant. “I’m not revealing my Social Security number,” the friend said. “Don’t you know what could happen?” The caseworker replied, “You don’t think the state of Maine knows your Social Security number already?” The friend was being cautious, perhaps overly cautious. We urge consumers to claim property, cash or other valuables that are rightfully theirs. And we urge them to do so in an orderly manner, so as not to fall victim to a number of scams that are out there. First, we’ll define unclaimed property as lost or forgotten assets. Funds in idle bank or credit union accounts, uncashed payroll or dividend checks, unredeemed money orders, even gift certificates may be unclaimed property. These and other abandoned assets total over $41 billion waiting to be claimed, because the rightful owners could not be located in a specified span of time. Among the things that do not constitute unclaimed property are real estate (see appropriate municipal officials); abandoned animals (animal welfare laws apply); and abandoned vehicles (Maine’s Bureau of Motor Vehicles can advise on these). Let’s look at the Maine state treasurer’s website at www.maine.gov/unclaimed. There, you can search for unclaimed property you may own or report unclaimed property. A fact sheet puts total unclaimed funds in Maine, from 1979 to 2013, at more than $191 million. During fiscal year 2013, the state paid more than 16,000 claims averaging a bit over $1,000 each. The largest single payout was over $130,000. To claim your abandoned property, complete an online form on the state treasurer’s website at www.maine.gov/treasurer; or print out a blank form, fill it out and mail it to the treasurer’s office (39 State House Station, Augusta, ME 04330). There is no fee to file a claim, and there’s no need to pay anyone else to help you. For assistance, call 624-7470 or toll-free in Maine at 888-283-2808. The federal government does not have a single website to search, so you’ll need to search individual states if you have unclaimed property outside Maine. The feds do have leads to finding property that may have been subject to federal regulation (failed financial institutions, savings bonds no longer earning interest and so on) at www.usa.gov (search for “unclaimed property”). State treasurers across the country maintain a National Association of Unclaimed Property Administrators website at www.unclaimed.org. You can find links to other states where you have lived to search for unclaimed property. You can also report suspicious unclaimed property email messages and websites to the Internet Crime Complaint Center. And, yes, the scammers are out there. Here are some tip-offs of frauds: They may pose as National Association of Unclaimed Property Administrators officials when sending fraudulent emails (which real unclaimed property officers never do). They might try to refer you to someone other than a state official (this work is not outsourced). They could demand a fee (there’s never a charge). And they’ll likely want bank account information (although you might have to supply personal information such as your Social Security number, you’ll never be asked for bank account info).

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

New Maine tax credit replaces ‘Circuit Breaker’ program

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT Posted March 30, 2014, at 5:42 p.m.

A friend approached me recently, saying he was concerned that some seniors may have thrown away paperwork that they could have used to save some money.

At issue is Maine’s new Property Tax Fairness Credit, passed by the Legislature to take the place of the Maine Residents Property Tax and Rent Refund “Circuit Breaker” program. Lawmakers repealed that statute last year and put the PTFC in its place.

Qualifying for the credit are consumers who were Maine residents for any part of tax year 2013 and who lived in a home they owned or rented here for that part of the year. They must have had a Maine adjusted gross income of not more than $40,000 and paid property tax of at least 10 percent of that amount or paid rent on an apartment that was over 40 percent of their Maine adjusted gross income.

The credit of up to $300 (or $400 for those age 70 or older) became available in January and is claimed on the state individual Income Tax Form 1040ME.

To get the credit, eligible people must complete a worksheet that accompanies the form. And that’s where the confusion may have started.

Worksheets were mailed to all Mainers who filed a Circuit Breaker application on or after Aug. 1, 2012, whether they paid state income tax or not. My friend had said some seniors he knew had received the mailing from Maine Revenue Services and discarded it; since they were not liable for any Maine income tax, they reasoned, there was no need to concern themselves with whatever was in the envelope.

That’s not a problem, according to state officials and representatives of seniors groups we’ve spoken with. The forms can be downloaded from Maine Revenue Services’ website (www.maine.gov/revenue/forms) or by calling 1-207-624-7894 to request that a form be mailed. The credit is available for three years for Mainers who do not have to pay any income tax.

Volunteers from AARP will be at various area Agencies on Aging until April 15. Dyan Walsh, director of community services at the Eastern Area Agency on Aging, says the volunteers have received special training on the PTFC.

Walsh says a number of seniors have called since Jan. 1, expecting to sign up for the Circuit Breaker program and not realizing that it had been replaced by the PTFC. Walsh says if seniors cannot travel to the EAAA office, they can call Maine Revenue Services at 207-626-8475 for help. They may also seek assistance by emailing income.tax@maine.gov or by visiting in person at 51 Commerce Drive, Augusta.

Low- and moderate-income earners may qualify for free help in preparing their state and federal income taxes through a program called Ca$h Maine. You can call 211 for details or read about it online at www.211maine.org/cah-maine-2013/.

AARP also offers free tax help at the Bangor Public Library. Until April 10, help will be available Wednesdays and Thursdays from 10 a.m. to 5 p.m. in the small conference room near the reading room.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.  

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Consumer Alert – Office of the Public Advocate‏

Maine Office of the Public Advocate warns current and potential customers of competitive electricity suppliers to look out for fixed price contracts that renew at a variable rate.

In recent months, competitive electricity providers have made a renewed push to convince Maine customers to switch from the standard offer to a competitive supplier.  Often, these suppliers offer a short term (e.g. six month) fixed rate that is lower than the current standard offer, which increased on March 1st.  But customers may see their electricity bill skyrocket once this initial term expires.

Customers need to pay close attention to what happens when their contract, and the initial rate, expires.  In many cases, if customers do nothing, they will be automatically renewed at a variable rate that can be much higher than the fixed rate they originally signed up for.  Variable rates typically change on a monthly basis, and variable rates for competitive suppliers in Maine have been as high as 23 cents per kWh, or more than three times the current standard offer price. Eric Bryant, Senior Counsel at the Office of the Public Advocate, says, “We generally discourage customers from signing up for variable rates, because there’s no cap on how high those rates can rise.”

Competitive electricity providers are required to notify customers of any such renewal and rate change at least 30 days before their contract ends, but not all customers see these notices, or understand the consequences of moving to a variable rate.  Says Bryant, “Often the first time customers realize that they’ve been moved to a variable rate is when they receive a higher than normal electricity bill.” He recommends that customers weigh this risk against the potential savings before switching to a competitive supplier: “A supply price of 1 cent less than the standard offer price will save the average residential customer between $5 and $6 per month. The higher prices associated with a variable price can easily wipe out a year’s worth—or more—of those electricity savings in a single month.”

The Office of the Public Advocate is currently reviewing what changes to existing electricity regulations are needed to protect consumers, and expects that the Maine Public Utilities Commission will open a proceeding to revise those rules.  Tim Schneider, Maine’s Public

Advocate says “Customers in other New England and Mid-Atlantic states have experienced the same issues with variable rate contracts with competitive providers, and we’ve been working closely with our counterparts in those states to trade ideas and compare notes about how to ensure that consumers and regulators have all the information, tools and protections they need.” The Office of the Public Advocate maintains a web page devoted to supply options, with tips and advice, a listing of some of the competitive supplier’s offers, and a brief description of consumer protections.  It can be found at http://www.maine.gov/meopa/utilities/electric/supply.html.

Consumer Forum March 17th – What you need to know about electricity pricing

Fraudulent huckster’s reward: 10 easy payments of one year each

 

CONSUMER FORUM

 

By Russ Van Arsdale, executive director Northeast CONTACT

 

Posted March 23, 2014, at 12:24 p.m.

 

One of the most familiar faces on American infomercials was recently sentenced to 10 years in prison. Following prior dealings with the legal system, Kevin Trudeau continued to lash out at corporate and government figures he accused of being corrupt.

That changed at last Monday’s sentencing for contempt. According to the Chicago Tribune, Trudeau’s defiant attitude gave way to a more contrite demeanor, a change the convicted fraudster attributed to his first night behind bars.

Kevin Trudeau first came to Northeast CONTACT’s attention through a product called Coral Calcium Supreme. In some of his infomercials Trudeau claimed taking it would cure cancer. Those claims violated an earlier court order banning false health claims by Trudeau, and he was hit with more sanctions as a result.

Trudeau made his name in a series of late-night TV ads, touting sure-fire diets and products that supposedly delivered a number of health benefits. The ads were long on promises and, according to most consumers, short on delivery.

Investigators say Trudeau amassed a fortune through sales of his products and books. His undoing revolved mostly around claims he made in his infomercials about his book, “The Weight Loss Cure ‘They’ Don’t Want You to Know About.”

The best-selling author had boasted that his diet plan was easy. But people who suffered through the 500-calorie-a-day regimen said it was anything but easy. Investigators with the Federal Trade Commission agreed and told Trudeau to stop making those claims. He refused, saying he was the target of zealous regulators and prosecutors.

Last August, the FTC hit Trudeau with a $37.6 million fine; the money was supposed to go to the hundreds of thousands of people who had bought his book based on his inflated infomercial claims.

Trudeau dug in, refusing to pay a nickel. His continued refusals resulted in a contempt case, which Trudeau lost.

At his sentencing last week, Judge Ronald Guzman pointed to a career built on fraud and called Trudeau “deceitful to the core.”

Trudeau had served nearly two years in federal prison in the 1990s after being convicted on two fraud charges. Last Monday, prosecutors said his record of fraud goes back to the mid-1980s.

Throughout his career, Kevin Trudeau struck a chord, both with conspiracy theorists and with searchers for miracle cures and other easy answers to life’s complex problems. If 10 years seems like too much for Trudeau to deal with, we offer him a suggestion.

Think of it as 10 easy payments of one year each.

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ALSO IN THE NEWS: Scammers are making hay out of the mysterious disappearance of Malaysian Airlines flight MH370. Phony stories are appearing on Facebook, Twitter and other sites, mostly claiming the plane has turned up, survivors found and so on.

Instructions to “click here” should be ignored; the insensitive crooks are just trying to get you to answer questions that will get your money to them, or to infect your computer with malware.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

 

 

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What you need to know about electricity pricing

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT
Posted March 16, 2014, at 9:13 a.m.

We received questions from a couple of consumers recently regarding electricity prices. Now that companies other than generating utilities can sell electricity, they’re competing for customers.

And while competition is often a good thing, it can create confusion. Here are a few tips from the Maine Public Advocate — the office that represents consumers in utility-related matters — to consider when mulling over competing offers.

Consumers who take no action will continue to pay what’s called the Standard Offer price. This rate is set by competitive auction and changes each year on March 1. Changes in the Standard Offer price are generally announced about three months before the effective date. The Standard Offer price is posted on the website of the Public Utilities Commission,

Other rates are offered by competitive electricity providers, or CEPs. The basic rate — what you pay per kilowatt hour — may be lower than the Standard Offer price. But that may not be the whole story.

A CEP price may be fixed or variable. If it is fixed, find out the term so you’ll know whether it lasts beyond the next Standard Offer price change next March 1.

If it’s variable, be aware that what appears to be a savings today may turn into higher prices in a few months. One of our consumers found that a “bundled” rate, while representing a saving initially, reflected nearly a doubling of the basic rate a few months into the contract.

There’s a five-day “buyer’s remorse” period mandated on all these contracts. Should you change your mind after that period, you may be hit with an early termination fee. Find out before signing up what the terms of the contract are and how large a fee is involved if you terminate early.

The public advocate lists the basics of each CEP’s offer on its website . While that’s a good reference, you should know that a CEP’s rates can change at any time. If you’re shopping around, call the provider to make sure you’re aware of the current terms.

You have a number of consumer rights in dealing with CEPs, in addition to the five-day void provision mentioned above. A CEP must:

— Offer at least 30 days of service.

— Have a customer’s authorization for service (no “slamming”).

— Give at least 30 days’ notice before terminating service.

— Not use unfair or deceptive business practices.

— Not release a customer’s information, unless allowed by law or with a customer’s consent.

If a CEP drops a customer and the customer doesn’t make another choice, the customer goes back on the Standard Offer service. If a consumer feels the CEP has used “slamming” practices to obtain customers, the consumer may file a complaint with the PUC.

Finally, we heartily concur with the public advocate’s advice that consumers know and understand all terms and conditions before signing up for any plan. You can call the PUC’s Customer Assistance line toll-free, 800-452-4699 weekdays from 8:30 a.m. to 4:30 p.m. with questions about CEPs.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

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WABI-TV appearance

Using common sense when you buy will keep your home from plunging ‘under water’

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT
Posted March 09, 2014, at 8:50 a.m.

DowneastGuide-to...yourMainehomeWe’ve all heard the ads urging us to buy, since “interest rates are near historically low levels.” With spring approaching (at least on the calendar) and those low rates expected to hold for a while, many renters are thinking about buying a home.

Many may think twice, wondering if all those horror stories about houses going “under water,” or costing more than they’re worth, might come back to bite them. Those with second thoughts might want to spend some time with a new publication from the Maine Bureau of Consumer Credit Protection.

It’s called The Downeaster Common Sense Guide to Finding, Buying and Keeping Your Maine Home. The 32-page guide was written by the bureau’s principal examiner, David Leach, and senior consumer credit examiner, Edward Myslik.

It starts in exactly the right place: asking if you should buy a home or continue to rent. Once you’ve determined that your best bet is to buy, the real work begins.

The best piece of advice in the guide is not to buy more home than you can afford. You figure affordability through a debt-to-income ratio. The “front-end ratio” is figured by dividing the monthly mortgage payment (principal, interest, taxes and insurance) by the borrower’s total monthly income. The ratio should not be more than 28 percent.

What’s termed the “back-end ratio” is a measure of income against the mortgage cost plus the cost of all other loans.

The guide cautions against allowing this ratio to go higher than 43 percent.

New federal lending rules are aimed at ensuring that borrowers will be able to make payments on schedule; those rules make it unlikely that a loan will be approved if the back-end ratio exceeds 43 percent.

Once you’ve ordered an up-to-date credit report ( www.AnnualCreditReport.com, 877-322-8228) you’ll have an idea what your credit score will be. The score is not part of the report; it’s a number generated by Fair Issue Corporation, also known as FICO.

The scores provided to each of the three credit reporting bureaus may be different, and lenders will use the lowest number when offering an annual percentage rate, also known as APR, on a loan.

When shopping for a mortgage, you need to decide between conventional loans and Federal Housing Authority, also known as FHA, backed loans. Under the latter type, the FHA provides a guarantee to investors should a borrower default. The guide advises that, while FHA loans are priced about the same as conventional loans, the mortgage insurance costs more (meaning higher APRs).

The guide has lots of nuts-and-bolts info on shopping for mortgages. Note rate vs. APR, mortgage points, disclosure, home inspections and other concerns are all covered. The authors also caution against falling for three advance payments that guarantee a low APR. Advance fee loans are always scams and are illegal in the U.S. and Canada.

Read the guide online at www.Credit.Maine.gov and go to “Consumer Guides.”

Maine residents can also request a free printed copy by calling 800-332-8529. For a real estate professional’s take on home mortgages, visit www.realtor.com/home-finance/mortgages/how-to-get-best-interest-rate.aspx?source=web.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

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Be wary of promises that you can get rich by working at home

CONSUMER FORUM

By  Russ Van Arsdale, executive director Northeast CONTACT
Posted March 02, 2014, at 9:50 a.m.

If an ad promises that you can earn “thousands in your spare time,” please know that the promise is likely worth less than the paper it’s printed on.

The following quote from the Maine Attorney General’s Consumer Law Guide speaks volumes: “While, of course, not all companies advertising work-at-home plans are dishonest, enough have been the source of problems to warrant special caution on your part.”

Many work-at-home offers hold out what so many unemployed or underemployed people desperately need: hope. That hope can turn to despair when they put money they can’t afford into a scheme that serves only to line its creators’ pockets.

The good news is that complaints nationwide continue to decline. The Consumer Sentinel Network — http://www.ftc.gov/enforcement/consumer-sentinel-network — compiles consumer complaints to the Federal Trade Commission, or FTC. The total of work-at-home and similar fraud complaints dropped from more than 39,000 in 2011 to just under 33,000 last year.

The bad news is that work-at-home schemes continue to hit their victims hard. Losses can run into the thousands, even tens of thousands of dollars.

Last Wednesday, a federal court issued a temporary restraining order against perpetrators of what one FTC official termed “a massive scam.” The order froze the assets of defendants operating under a number of names, including Essent Media, LLC, Net Training, LLC, YES International, Coaching Department and Apply Knowledge.

In its complaint, the FTC contends that a three-pronged campaign was waged. Initially hucksters sold fairly inexpensive programs, generally less than $100, through which buyers could “earn hundreds of dollars a day from home.”

Phase two offered — at greater cost —“professional coaching” to “ensure success.” Instead, that coaching generally promoted more spending, on things such as business formation, website design, accounting and tax-filing services, few of which the FTC says proved helpful.

The FTC says the defendants violated the FTC Act by misrepresenting earning potential and the nature of their services. It also alleges they violated the FTC’s Telemarketing Sales Rule by misrepresenting their investment strategies.

Other scammers are out there making similar pitches. Here are some of the come-ons you should avoid:

— Envelope stuffing. Machines do this faster and cheaper than people.
— Craft work or assembly. Once you’ve paid the money, your work is never “up to standards.”
— Medical billing. Doctors either do the billing themselves or use established firms, rather than someone working at home.
— Rebate processing. The badly written materials you get fall short of the big promises, and there are no rebates to process.

Always be wary of “opportunities” that involve a fee right away or handing over your credit card information. Any such offer demands healthy doses of both research and skepticism.

As part of National Consumer Protection Week, the FTC is hosting a Twitter chat about work-at-home schemes and other frauds at 2 p.m. Tuesday. Follow @FTC #NCPW2014. Learn more at www.ftc.gov and search “FTC Twitter chats.”

The state of Wisconsin has published a nifty guide detailing work-at-home scams. See it online athttp://datcp.wi.gov/uploads/Consumer/pdf/WorkAtHome189.pdf.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

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Do you need water line insurance?

CONSUMER FORUM

By Russ Van Arsdale, Executive Director Northeast CONTACT
Posted Feb. 23, 2014, at 8:57 a.m.
Not long ago, a Bangor resident wrote to ask us about a letter she had received that asked if she was interested in buying water line insurance.

It’s not a question we get every day, so we tried to educate ourselves before responding. It turns out that at least three companies offer coverage of the lines that run from the water main under city streets to the connection in your home. Repair of those pipes is not generally covered by water utilities or by most homeowners’ policies.

As with all types of insurance, not all coverage is created equal. That is likely one reason that many water utilities have not been quick to endorse one company over another. In the case of the Bangor Water District, there’s no endorsement at all.

District General Manager Kathy Moriarty told me that she was aware of letters sent by American Water Resources offering water line insurance. Those letters went to homeowners, not to the district. She said the bottom line decision by most homeowners rests, at least in part, on the age of their homes.

Moriarty said the water lines in most newer homes are made of copper. The lines usually are deep enough so as not to be moved by frost. And, barring breakage by construction equipment or an earthquake, copper lines should provide good service for many years.

If the pipes are galvanized steel, that may be another matter. Galvanized metals tend to have shorter lifespans than copper, and homeowners with such pipes connecting to the mains might want to think about insurance or replacement. As the letters soliciting coverage state, repairs can run into the thousands of dollars. And few of us would welcome a disruption in water service for whatever period repairs would require.

Customers of the Bangor Water District can usually find out what kind of pipe was used to make the connection to their homes by inquiring at the district’s office (the phone number is 947-4516). Moriarty says her office maintains good records on those connections.

“We can give the homeowners those details,” she said.

The Portland Water District says on its website it’s also aware of the recent mailings but “(w)e have no information on their products.” The Portland Water District says it teamed up about eight years ago with HomeServe, an independent company that offers similar insurance. HomeServe’s website says the company has partnerships with other utilities across the country.

Michelle Clements, a spokesperson for the Portland Water District, says district officials like the fact that they can offer insurance as an option to homeowners who want it. She said her district reviews HomeServe’s written materials before they go to consumers; she said the company has been receptive to suggestions the district has made about clarifying terms and explaining coverage.

“We are just offering it,” Clements said of the insurance. “We don’t encourage our customers one way or another.”

A number of customers, though, have opted to buy the coverage, she said.

Homeowners with concerns should talk with people at their local water utility to determine the age and composition of their connecting lines. If you decide to buy water line insurance, find out first EXACTLY what is covered (lines, connections, meters) and what isn’t. Also, find out if you have any say in selecting a contractor should a problem arise.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

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