Filed under: Ripoffs and Scams

So I was getting my mail yesterday, and I got one of those offers guaranteeing me two prizes, if all I’d do is saunter into a automobile dealership in my area and show them my “Notice of Intent to Award Prize.”

Now I know that I’m not about to really win a prize, or not in the way that I hope. I know this isn’t a good deal. I know it instinctively, without even giving this piece of paper a second glance, just like we all do. But just for laughs, I thought I’d give this a real look. After all, while I’m sure almost everyone reading this wouldn’t fall for this sort of thing, some people must, and probably either young and not yet jaded adults, or folks who are feeling a little desperate and thinking, “Maybe my ship has finally come in…”

If these forms didn’t occasionally draw someone in, they wouldn’t send them.

My prizes, if I would want to go into see my friendly neighborhood Chevrolet dealer, would be two of:

• a 3 day/2 night resort getaway (retail value: $500)
• a $2,500 instant scratch ticket
• a home theater system (retail value: $500)
• a $1,000 instant scratch ticket
• $10,000 cash

Ooooh. Now that does sound nice, doesn’t it? And since they put in capital letters GUARANTEED WINNER OF AT LEAST TWO (2) PRIZES and even stated, “this is NOT a joke, prank or gimmick,” I really did feel like this worth studying. I mean, honestly, even if there’s a catch, they have to be serious on some level.

So I looked at the fine print.
“Contest is open to legal US citizens who are 21 years of age or older as of 6/25/2008 (the date I received this).” OK, nothing weird there. Paraphrasing now: Employees of the place are ineligible. Contest is ongoing from June 25th to June 29th.

And then, I see it. The fine print that explains the odds of winning. Thank you, Federal Deceptive Mail Prevention and Enforcement Act, which came about in 1999, governing sweepstakes — which this essentially is –through the mail. My odds of winning the $10,000 in cash, or the home theater system, are both one in thirty-seven thousand. Actually, 1 in 37,252.

My odds of winning the $1,000 scratch ticket are the same as the $2,500 scratch ticket — 1 out of 177,100.

But my odds of winning the 3 day/2 night resort getaway are 1 in 1. One-hundred percent.

Even with this wonderful guaranteed prize, were I to go in and claim it, the fine print reveals that my hotel prize doesn’t include “transportation, hotel taxes, service charges, Florida state sales tax or gratuities.” Being that I’m in Ohio, this could be a pricey trip.

So I thought about it and wondered — what would happen if I went in, took the resort prize (and I have no idea the name of this resort or if it’s on the beach or 80 miles from anywhere interesting) and then I actually beat all of the odds and won something? What would happen?

Well, I finally concluded, that the dealership owner probably would grit his teeth and give me my other prize. But he’s probably happy to take that chance. And why not? He likes his odds.

Geoff Williams is a business journalist and the author of C.C. Pyle’s Extraordinary Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale). He hopes that if you know someone who seems susceptible to these types of marketing, that you’ll forward it to them.

Share This

Share This

Filed under: Rants and raves, General Electric (GE), General Motors (GM), Serious Money, Headline news, Stocks to Buy

A recent Barron’s had a cover story featuring General Motors (NYSE: GM) which I’ve been pondering for a while. Somehow the story did not get me all that excited despite the boldness of the headline reading “BUY GM.”

More attuned to the words that followed – “GM is a risky bet” — I wondered why they wouldn’t feature something with possibly equal potential and far less risk. If you read the journal cover to cover, you might have taken note of the fact that there were two articles highlighting General Electric (NYSE: GE).

In the first, Michael Santoli extols the virtues of owning GE compared to a 10 year Treasury note which offers security but no upside potential. He mentions the high yield, low P/E, strong businesses and the fact that current CEO Jeffrey Immelt purchased shares in the open market for $3.5 million.

Later in the same issue, Tom Sullivan writes that GE is a good bet, but he does include a few caveats. In particular, some concern that Immelt might chase higher riskier returns in an effort to boost share price which has been languishing for many years.

GE has less competition for its products primarily focused on water, power and finance. The last is the biggest question mark, creating some fear in the near term to the over all credit market and the unknowns. At the same time it offers a 4.5% yield compared to none a dividend & yield:1.00 (7.70%) for GM, and then there is the seldom discussed fact that GE is a triple-A rated company, which are few and far between these days.

General Motors shut yesterday at $13.19 near its 52 week low of $12.63. Barron’s likes the fact that GM has reduced its labor, health care and pension fund costs under recently negotiated new agreements and that foreign sales are growing at the same time. On the other hand, the cost of plastics (made from oil), steel and aluminum, to name just a few commodities, are going up. Transportation costs are also going up, and new foreign auto makers in India, China and Korea are joining the Japanese competition.

GE shut yesterday at $27.59, also near its 52 week low of $27.20. There is no question that with GM’s greater risk might come greater reward, however, there are too many “ifs” for me. All the “if this” and “if that” in the articles I read does not make me comfortable. I view that as an equation where prognosticators are trying to come up with an answer having one known and multiple unknown factors that will affect the outcome.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of GE.

Share This

Share This

Filed under: Ripoffs and Scams

Maybe huge bad banks aren’t so bad after all. Recently it was discovered that a teller at JPMorgan Chase devised a scheme to fleece 86-year-old Jessie McDonald out of over $300,000 of her savings. The teller, Melindathee Hill, met McDonald while working for the bank, and offered to help her pay her bills. Hill allegedly also helped herself to some of the money, and used it for jewelry, school tuition, and home insurance. The theft was discovered by the bank in August 2007, and they fired the teller, who hasn’t yet been charged criminally (although she is still under investigation).

McDonald is under the care of the Cook County guardian’s office, and they asked the bank to reimburse her for what was stolen. It took some time, but the bank is now agreeing to give McDonald over $300,000 to reimburse her for her losses.

I am applauding the bank for doing this, especially since it may not have been their responsibility to do so. Although Hill met McDonald through the course of her employment with Chase, it seems as though this theft happened outside of her job. If that’s the case, I don’t really know if Chase is responsible for the theft. But I do think it is commendable that they took the high road and are giving this woman her money back. During a time when all we seem to hear are complaints about banks, isn’t nice to hear a good story about one?

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Share This

Share This

Filed under: Entrepreneurship, Extracurriculars, Ripoffs and Scams, Health

As I might have pointed out once or twice, I am a former smoker. As such, I would have to argue that I’m a little more sensitive to cigarettes than most. Whereas the average non-smoker merely has to deal with a little unwanted smoke, I have to deal with unwanted smoke while attempting to quell the demon inside that is telling me to steal the cigarette, suck it down, and go on a nicotine bender. In spite of this, however, I try to be a nice non-smoker. I don’t fake cough, I try to avoid getting into preachy discussions about the dangers of the evil weed, and I generally do my best to live and let live. With this in mind, I can’t help but feel that anti-smoking laws in Canada may have jumped the shark…

The first thing is the anti-smoking warnings. Since 2000, the Canadian government has mandated that cigarette packages must sport huge warnings that take up roughly 50% of the available display space. These warnings, which have to appear in both French and English, feature highly specific information about the means by which cigarettes harm health. Best of all, they come with flashy and disturbing pictures.

Canada’s latest tool in its war against nicotine delivery devices is a law requiring that stores can’t openly display cigarettes. By the end of this year, all Canadian cigarette retailers must either keep their cancer sticks in drawers or hide them behind gray wall hangings that cost approximately $1,000 US. The idea is that, if children cannot see cigarettes, then they’ll not be inclined to start smoking. On the other hand, talking as someone who started smoking in his early 20’s, I’d have to state that there’s a slight flaw in the plan.Another flaw is the apparent hypocrisy of Canada’s anti-smoking stance. As several retailers have noted, Canada grants alcohol and pornographic magazines to be displayed within view of kids. Anti-smoking activists have countered that, unlike pornography, cigarettes kill 50% of their regular users.

Ultimately, this is a good point. After all, the primary danger of pornography is chafing, which pales beside cancer. That having been stated, it seems like Canada’s costly gray shields are, effectively, a fine that’s being levied against smoking retailers. Perhaps Canada should consider whether its quest for health is getting in the way of its democratic ideals.

Then again, who am I to talk? My country just taxes the damn things into oblivion!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. If he was still smoking like he did in the late 1990’s, it would cost him about $25 a day.

Read | Permalink | Email this | Linking Blogs | Comments

Share This

Share This

Filed under: Bargains, Budgets, Ripoffs and Scams, Shopping, Simplification

Even though New York is definitely not the book wonderland that it once was, it still has quite a few places for the hard-core bibliophile to curl up, search the stacks, and find a great book at a great price.

However, as a cheapskate and recovering bookaholic, I tend to check out books from the library first, choosing only to purchase the ones that I really, really need. By following this method, I’ve managed to cut down my yearly book purchases to only a few dozen volumes; by my standards, this is just a small fix, a tiny something to get me through.

This, by the way, is the bibliomaniac version of methadone treatment.
At any rate, I currently have a list of five or six books that I really, really need. A couple of weeks ago, I took a trip to a few of my favorite bookstores to check out their prices on used duplicates, only to find that the stores were charging pretty high prices. Later, I searched my favorite internet used book sites, ABEbooks and Half.com, where I found the books at steep discounts. I added up the books on ABE, hit the “total” button and watched as the price almost doubled. I’d forgotten about postage.

As the price of gas has risen, so has the cost of moving items from point A to point B. While most carriers, such as DHL, UPS, and FedEx haven’t officially raised their rates, they add a flexible surcharge to the price of a shipment. This surcharge, which covers the cost of gas, has gone up precipitously over the past few months. For example, in late 2007, UPS was charging a 4.75% surcharge. They’re currently tacking on an 8.5% surcharge. According to a recent PayPal survey, 43% of consumers who change their minds at checkout do so because of the high cost of shipping.

What can you do about this? Well, the first option you’ve is the good old US Postal Service. Even though it raised itsrates about a month ago, the USPS still generally represents the ideal bargain in small-package shipping, particularly if you don’t mind waiting in line!

Another option is to order multiple items from the same seller. Admittedly, this isn’t as helpful on sites like ABEbooks and Half.com, where the sellers tend to have a small, diverse collection of items. However, on eBay, Amazon, and other sites, many sellers are willing to package items together to reduce shipping costs, or even drop shipping costs if your buy is sufficiently expensive. Another option that Amazon offers is “Amazon Prime,” which grants a user to get unlimited shipping for an annual fee. If you regularly use Amazon, this can end up being a great bargain.

Finally, one last option is actually getting off your butt and going to a store. After I compared the shipping-adjusted prices of my books, only one of them was still cheaper on the internet. All the others were less high-priced at the real-life bookstore!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He’s kicked cigarettes, Mickey D’s, and his pizza addiction. Books, however, he’ll take to the grave.

Share This

Share This

Filed under: Extracurriculars, Ripoffs and Scams, Technology, Health, Fraud

The next time you see a good deal on Craigslist, you might want to give this a little thought…

According to New York City police, a gang in Brooklyn has been offering discounted iPhones on Craigslist to lure mugging victims. In at least one instance, the four suspects put up a posting in which they offered ten iPhones for the attractive price of $2000. They then negotiated with the potential buyers to meet in deserted areas in Brooklyn, where they proceeded to rob the hapless bargain hunters. On April 10, one would-be buyer scared them off by honking his car’s horn, but on June 4, the men managed to steal $2000, a cellphone, and a handheld navigation device from one would-be buyer. Not long afterward, a police officer, posing as a customer, arranged a meeting, at which several officers converged upon the robbers. Since the arrest, the four men have been tied to four robberies and are being investigated in connection with eight more.

The first key element in this scam was the fact that, while the iPhones were selling for a discounted rate, their price was still somewhat reasonable. Moreover, the fact that Craigslist, like eBay, is largely unpoliced, makes it very easy for robbers to take advantage of the unwary. The next time you meet with someone you found on Craigslist, you might want to follow a few precautions.

• First off, don’t concur to any situation that’ll have you carrying big sums of money. If the sale involves a lot of cash, both you and your fellow Craigslister will be better off if you use traveler’s checks, counter checks, or money orders.
• Second, be sure to travel with a friend when meeting for a sale, as many would-be robbers will be discouraged when they discover that you’re not alone.
• Third, when you concur to meet with someone you’ve never met, be sure that the meeting place is somewhere that you know, or at least in a public area where there are a lot of witnesses. A legitimate buyer or seller should be perfectly happy to meet in a well-traveled area.
• Finally, use your common sense: if a deal sounds too good to be true, it probably is!

  Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He doesn’t like iPhones, anyway!

More scams to watch for:

The ATM scam that could cost you dearly

Save $300 this year on bank fees

Share This

Share This

Filed under: Ripoffs and Scams

A cold glass of milk on a hot summer day, free at the Wisconsin Say Fair. How fitting, especially since Wisconsin is widely known as America’s Dairyland. Too bad that free milk, sponsored by Senator Herb Kohl of Wisconsin, is going to be purchased from Kemps, a dairy based in Minnesota.

Hello? Have we no pride in this fine state? You might be thinking, “well it’s free so who are you to complain?” FREE SCHMEE!!! I don’t even drink milk but I think this is an outrage. I’m sorry… at the Wisconsin Say Fair if we’re giving away anyone’s milk, it should be Wisconsin’s milk. At an event celebrating a region and its history, it only makes sense to support local businesses.

I’m sure Kemps will tell us that lots of their milk is in fact sourced from Wisconsin farmers, so there is no need to worry. I don’t buy into that thinking. I think that at the Say Fair, of all places, the milk should come from a Wisconsin dairy. After all, much of the State Fair is focused on agriculture, and it has been since the beginning. It is a place where farmers from all over the say come to compete with their animals and crops. If we can’t, on this one occasion, make a concerted effort to purchase from and promote locally owned and operated businesses, that’s a sad statement about our priorities.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Read | Read | Permalink | Email this | Linking Blogs | Comments

Share This

Share This

Filed under: Extracurriculars, Ripoffs and Scams, Simplification, Fraud

58-year old Tatsuko Horikawa, of Fukuoka, Japan, recently discovered the secret to living really, really affordably. Rather than pay for rent, food, clothing, and other necessities, she has been secretly bunking in a closet for several months. Until recently, the man she’s been rooming with has had no idea that he wasn’t the only person in his home, but the mysterious disappearance of food from his kitchen convinced him to install security cameras.

When he first saw the images of Horikawa, the man thought that a burglar had broken into his home. However, when he called the police, the officers discovered that his doors and windows were still locked and intact. Further investigation revealed Horikawa, who had installed a mattress and several water bottles in a compartment in the man’s closet. Police speculate that she has been living there, off and on, for up to a year. They also think that she may have been “closet surfing” in homes throughout the neighborhood.

While this story is a tiny creepy, it’s also a little inspiring. If things get to be too much, it’s nice to know that there might be a place for you in your neighbor’s closet. Just be sure to clear out the dust bunnies first!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He’s never lived in a closet, although he has been known to hide under a bed or two.

Share This

Share This

Filed under: Extracurriculars, Ripoffs and Scams, Career, Wealth

He’d to have seen it coming…

Rep. Anthony Weiner (D-NY) is a handsome, 43-year old Congressman who just happens to be a bachelor. Consequently, when he authored a bill that would open up 1000 visa slots to international models, it was almost inevitable that the jokes would start flying. As Jennifer Fermino of the New York Post noted, it looked like Weiner was seeking to broaden his dating pool. Of course, Congressman Weiner’s unfortunate name hasn’t helped matters.

According to Weiner, the problem is that a 1991 immigration guideline lumps models in with physicians, scientists and other geniuses. Apparently, there aren’t enough visas for all of these “highly specialized” workers, and the fashion industry feels that the current visa allocation process unjustly favors geniuses above models. Weiner argues that the current restrictions against European models make it difficult for photographers to do fashion shoots in the United States, encouraging them to move their productions to Europe. This, in turn, means that fashion jobs are migrating overseas.

Foreign models currently dominate the fashion industry; Giselle Bundchen, the current top model in the world, earned $33 million in 2007. This is nearly seven times the take of America’s top model, Carolyn Murphy. However, Bundchen and her ilk qualify for O-1 visas, which are designated for people of “extreme capability,” such as Nobel Prize winners.

This issue is a tiny difficult. On the one hand, it’s totally ridiculous, and the fact that it’s found its way to the floor of the United Says Home of Representatives is a stunning criticism of America’s undue fascination with the lifestyles of the rich and shameless. That having been said, I personally like to buy American, and it seems odd to me that a country of over 300 million people can’t produce enough self-obsessed anorexics to appease the fashion industry. Damn it, the teeny-boppers of tomorrow need role models!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He wishes that thrift stores employed models.

Read | Permalink | Email this | Linking Blogs | Comments

Share This

Share This

Filed under: Ripoffs and Scams, Fraud

The short answer to the question is no. The chance of LifeLock helping you repair your credit after an identity theft is next to none. But of course, the company doesn’t want you to think that, or you’d probably never pay for their “service.”

One of the reasons LifeLock fans have given for their support of the company and its services is that they’ll help you repair your credit. That’s simply not the case, unless your identity theft meets one tiny little exception. LifeLock will only help you if you can prove that your identity theft was caused by a “defect” in their service.

Now that’s not immediately clear in the marketing materials used by LifeLock. In fact, they say prominently on their website: “If your Identity is stolen while you’re a member of LifeLock, we’re going to do whatever it takes to recover your good name.” The page then goes on to state that there’s not much fine print to this guarantee, but that you should read it.

That’s the important sentence. And there isn’t much fine print because the company doesn’t need any. Their fine print can be boiled down to one easy concept: They won’t help you unless you can prove there was a defect in their service. Good luck with that. As long as they told the credit reporting agency to put a worthless “fraud alert” on your credit report as they say they’ll, it seems they’re in the clear. Identity thefts are caused by stolen credit card numbers, theft of mail containing personal information, misuse of your information by people in a position to access it. None of those have anything to do with LifeLock, so they’re not covered.

I suspect that most people who pay over $100 a year for the LifeLock service really believe that the company will help them recover from identity theft. But the company puts it in black and white: They most certainly won’t help you unless you can prove their service was somehow defective.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Bookkeeping, and is the author of Essentials of Corporate Fraud.

Share This

Share This