The Survive and Thrive Boomer Guide

Cash for Clunkers program trades old pickups for new ones

It’s extremely disappointing to learn that highly touted Cash for Clunkers program mostly exchanged old Ford or Chevrolet pickups for new ones that receive only slightly better gas mileage.

An analysis by The Associated Press, as reported by Yahoo! News, shows:

The single most common swap – which occurred more than 8,200 times – involved Ford F150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford F150s. They were 17 times more likely to buy a new F150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.

The AP's analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 car dealerships in every state also showed:

Owners of thousands more large, old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with only barely improved mileage in the middle teens.

Those deals helped the Ford F150 and Chevy Silverado – along with Ford's Escape midsize SUV – climb into the top 10 most-popular vehicles purchased with the government rebates, reports Yahoo! News’ article “'Clunker’ Data Show Pickup-for-Pickup Trades.” The most common truck-for-truck and truck-for-SUV deals totaled at least $911 million.

It's a violation of the Cash for Clunkers program to give the rebates for new cars and trucks that got the same or worse mileage.

Although the National Highway Traffic Safety Administration is investigating these violations and dealers that submitted invalid trade-ins will have to return the rebate, it’s upsetting that consumers and dealers defrauded taxpayers and the federal government.

Consumers, businesses, and the government need to work together in a spirit of fairness and honesty to come through the Great Recession and restore our economy. Turning in a gas guzzling pickup or SUV for a new gas guzzling pickup or SUV doesn’t cut it in terms of producing a good outcome for all.

Copyright 2009, Rita R. Robison, Consumer Specialist

Flickr photo by JFeister

MoneyGram to pay $18 millions to settle fraud charges

MoneyGram International Inc., the second-largest money transfer service in the United States, will pay $18 million to settle Federal Trade Commission charges that the company allowed its money transfer system to be used by fraudulent telemarketers to bilk U.S. consumers out of tens of millions of dollars.

MoneyGram also will be required to carry out an anti-fraud and agent-monitoring program.

The commission charged that between 2004 and 2008, MoneyGram agents helped fraudulent telemarketers and other con artists who tricked U.S. consumers into wiring more than $84 million within the U.S. and to Canada. These consumers were falsely told they had won a lottery, were hired for a secret shopper program, or were guaranteed loans.

The $84 million in losses is based on consumer complaints to MoneyGram – actual consumer losses likely are much higher, reports the commission.

The commission charged that MoneyGram knew that its system was being used to defraud people but did very little about it, and that in some cases its agents in Canada actually participated in these schemes.

“Money transfer services have a responsibility to make sure their systems don’t become conduits to rip people off,” said David C. Vladeck, director of the commission’s Bureau of Consumer Protection, in an announcement about the settlement. “In this case, MoneyGram not only ducked this responsibility, but also looked the other way while its agents took part in the scams.”

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In many of the scams, the con artists used counterfeit checks to induce consumers to send money back by wire transfer. Most often these scams were lottery or prize schemes in which consumers were told they had won thousands of dollars and just had to pay a fee for “taxes,” “customs,” or “insurance” to a third-party to collect their winnings, reports the commission.

Consumers paid the fee using MoneyGram, but received nothing.

In another scheme, telemarketers told consumers they were guaranteed loans, regardless of their credit score. All they had to do was pay “insurance,” “paperwork,” or “processing” fees to complete the transaction.

Consumers who sent funds using a money transfer service received nothing in return.

In mystery shopping scams, the con artists called U.S. consumers or sent them a piece of direct mail in which they claimed to be hiring consumers to visit stores such as Wal-Mart to evaluate MoneyGram money transfer operations. The con artists sent consumers a cashier’s check, telling them to deposit it in their checking account and then send most of the money back using a money transfer at Wal-Mart.

When the counterfeit checks bounced, consumers realized they had lost the money they transferred. By this time, however, the money transfer agents had already received and paid out the money, often either without checking IDs or by using fake drivers license information.

The agreed-on court order settling the commission’s charges bars MoneyGram from knowingly providing help or support to any sellers or telemarketers that are violating the Telemarketing Sales Rule and requires it to carry out an anti-fraud program.

Under the program, MoneyGram must conduct background checks on prospective agents; educate and train its employees about consumer fraud; institute agent monitoring; and discipline agents who don’t comply with the rules.

The order also requires MoneyGram to provide a clear and conspicuous fraud warning on the front of all its money transfer forms.

The order contains monitoring and discipline provisions that will ensure MoneyGram is properly training, monitoring, and taking actions to address problems related to its agents.

In addition, MoneyGram will pay the commission $18 million, which will be used to provide payments to consumers who lost money.

Consumers interested in finding out about recovering funds should call 202-326-3755.

Copyright 2009, Rita R. Robison, Consumer Specialist

Watch out for these top 2008 scams in the New Year

In a year of financial turmoil, con artists have revamped old scams and thought up new ones to bilk people out of their money. Charity and lottery scams also continued to be popular.

In its listing of the 10 worst scams of 2008, ConsumerAffairs.com left out the Bernard Madoff’s investment Ponzi scheme, which could result in $50 billion dollars in losses. Madoff’s scam was just too large to include in the list, Mark Huffman, who wrote the article, “Top 10 Scams of 2008,” said. It would dwarf all the others on the list and then some.

The ConsumerAffairs.com top 10 scams are:

1. Foreclosure rescue scam.
2. Unauthorized charges.
3. Work at home schemes.
4. Phony government official scam.
5. Financial meltdown scams.
6. Campaign 2008 scams.
7. Fake lottery scam.
8. Charity telemarketing scam.
9. EPPI Card scam. EPPICards are cards issued by the government for administering payments and benefits electronically.
10. Kevin Trudeau’s “Weight-Loss Cures They Don’t Want You to Know About.”

Be sure to avoid these scams in 2009.

Copyright 2008, Rita R. Robison, Consumer Specialist

Baby boomers, seniors need to use caution when buying discount medical cards

With the economy in shambles and layoffs climbing, baby boomers and their parents may be tempted to buy discount medical cards to save money on healthcare costs.

Don't be tempted by the cards unless you research offers carefully to determine how they can meet your specific medical needs.

Discount medical cards save subscribers money by offering discounts, for a monthly fee, on healthcare needs such as physician visits, hospital stays, and prescription medications.

However, the Better Business Bureau points out that the cards aren't healthcare insurance and aren't subject to the same type of regulatory oversight as insurance. In addition, the cards aren't accepted by all physicians or pharmacies.

The bureau has received complaints from consumers who signed up for discount medical card programs and were extremely disappointed with the lack of convenience and actual savings. Consumers say they were:

• Misled by advertisements and duped by sales pitches into thinking they'd save hundreds, or even thousands of dollars, but later found only a limited number of physicians and pharmacies accepted the cards, making their use difficult and inconvenient.

• Scammed by telemarketers who sold them on a program but took their money and ran.

The bureau advises that, before signing up for any discount medical card or card program, consumers should ask the following questions and obtain the answers in writing:

• What is the annual cost of the plan? Don't be swayed by exaggerated savings claims. "Up to 40 percent" doesn't mean a guaranteed 40 percent savings.

• What are the benefits of the discount? What healthcare products and services are covered? Which ones aren't covered?

• Which local healthcare providers and facilities accept the discount card? If the sales person refuses to provide a list of providers, consumers shouldn't do business with them.

• Who do I call if I have a problem with the discount plan? Can I cancel my membership at any time? Is there a cancellation fee, and what is the refund policy?

Consumers should steer clear if they're pressured to "act now," because it's a "one-time offer." They should be extremely wary of telemarketing calls. In order to avoid the threat of identity theft or being scammed, consumers shouldn't do business with salespeople or discount card companies that insist on debit card or bank account information or require that payment be wired to the company.

Before buying a discount medical card or plan, consumers should check out the company on the bureau Web site at www.bbb.org.

Copyright 2008, Rita R. Robison, Consumer Specialist

Got car dents? Watch out for common summer fraud

If a man approaches you in a parking lot and tells you that he has a tool in his trunk that can smooth out the dents in your car cheaply, don't fall for the scam.

He might have a device that he'll use, but he'll ask for money upfront to complete the job. But, you'll never see him again.

It happened to a friend of mine. The tool smoothed the dent a bit, but the con artist never returned my friend's calls about finishing the work.

The cheap fee of $150 was a rip-off.

This is a typical summer scam. Summer's not over yet. Scam artists are still out there, preying on unsuspecting consumers.

Tell anyone who approaches you in a parking lot about repairing dents in your car to take a hike.

Copyright 2008, Rita R. Robison, Consumer Specialist

MoneyGram to pay $1.1 million to help prevent wire transfer fraud

MoneyGram Payment Services has agreed to a multi-state agreement intended to help prevent U.S. residents from becoming victims of wire transfer scams.

MoneyGram will pay $1.1 million to fund a national peer-counseling program to be overseen by the AARP Foundation. The company also agreed to print an attention-grabbing warning on its form used to send money and provide enhanced training to branch agents.

Attorneys general in 44 states and the District of Columbia reached the out-of-court agreement with MoneyGram on July 2, 2008. The case was initiated because 10 states had concerns about the use of MoneyGram’s wire transfer services by scammers. The states reached a similar agreement in 2005 with Western Union.

Con artists prefer wire transfers because they are fast, there are transfer agents in most communities, and funds can be picked up in multiple locations.

Consumers have been tricked by fake employment ads, bogus loan offers, sham foreign lotteries, and schemers who pretend to be interesting in buying or selling something from you. In most cases, the victim is sent a counterfeit check and told to keep a portion of the money and wire the rest. The check ultimately bounces, sometimes weeks after the funds initially appeared in the victim’s account. Victims who have already wired or spent the money are sometimes hit with overdraft fees and seldom recover what they lost.

A survey by seven states found that telemarketing fraud was a factor in more than 29 percent of Western Union transfers in excess of $300 that were sent from the U.S. to Canada in 2002. In addition, fraud-induced transfers represented 58 percent of the total dollars wired during the survey period. The states projected that consumers nationwide lost an estimated $113 million because of these scams.

Under the agreement, MoneyGram will:

• Continue its policy of allowing consumers to cancel pending wire transfers from any outlet – not just the location where they initiated the transfer – or by calling 1-800-MONEYGRAM when there is reasonable belief that the transfer was fraud-induced. A customer who initiates a transfer through MoneyGram’s Web site can cancel the transaction by calling 1-800-922-7146. In addition, the company will refund the consumer for any service fees.

• Ensure that money transfers sent from the United States can only be picked up in the country designated by the sender. The policy may potentially be modified to limit pick-ups in specific states or provinces, if needed.

• Circulate monthly anti-fraud e-mails to MoneyGram outlets. A company software program will also generate messages anytime an agent in the U.S. attempts a transaction that exceeds $500.

• Create new training materials for its agents to more strongly address the issue of fraud-induced transfers and provide enhanced training to personnel who work at locations known to have a high level of fraud-induced transfers.

• Block transfers from specific consumers or to specific recipients when the company receives information from a state that there is reason to believe that fraud will occur, until such time as the consumer is counseled on fraud and requests resumption of the transfer.

• Increase the number of anti-fraud staff and, if possible, improve its computer system to spot suspected fraud-induced transfers before they are completed.

• Provide the states with information about consumer fraud complaints.

• Pay $150,000 in attorneys’ fees and costs, to be shared among the states that negotiated the agreement: Arkansas, Illinois, Massachusetts, New Jersey, North Carolina, Ohio, Texas, Vermont, and Washington.

MoneyGram offers wire transfer services at more than 125,000 locations in the U.S. and an additional 100,000 worldwide. Its agents are independent contractors.

The following states participated in the agreement: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, and Wyoming and the District of Columbia.

Copyright 2008, Rita R. Robison, Consumer Specialist

Sky rocketing fuel costs resulting in surcharges, higher prices, with no way to tell what’s fair

Companies from many industries are adding fuel surcharges to or increasing the costs of what they sell.

Although Americans are cutting costs for food, gas, and vacations, little attention is being paid to many small and indirect ways consumers are paying for gas, according to the Washington Post article, “Consumer Pain Goes Beyond the Pump.” How fuel surcharges are calculated and carried out generally aren’t regulated.

Companies need to disclose to consumers upfront if a company intends to collect an added fee for fuel or energy.

Some examples of surcharges included in the article:

• $10 for mowing a lawn.

• $2 for delivering a pizza.

• $1.70 to ship a package.

• $1.58 to deliver groceries.

• 1 cent to mail a letter.

Carnival and Royal Caribbean cruise lines agreed to refund $61 million to customers who were billed for fuel surcharges after they booked their trips, the article states.

If a fuel surcharge hasn’t been disclosed to you or you think a price has been unfairly increased due to fuel costs, contact the Attorney General’s Office or the state agency in your state that handles consumer complaints. See the Web site of the National Association of Attorneys General for a directory of state offices.

Copyright 2008, Rita R. Robison, Consumer Specialist

Help! It’s tax time

Late last night, after I finished adding up my business expenses, I looked in my 2007 Tax File for my big, thick IRS tax book. It wasn’t there.

This morning, I dashed down to the local IRS office to see if they had any copies. Fortunately I found guidebooks and forms.

One of the taxpayers waiting for assistance told me that the IRS doesn’t send out those instruction books any more. Could that be possible?

If you’re working on your taxes at the last minute like me, here are some tips for selecting and working with a tax preparer:

• How to select an income tax return preparer.

• How to drive your tax preparer crazy.

• How to avoid tax-preparer fraud.

• Mystery shoppers find deceit, incompetence among tax preparers.

Identity thieves prowl online, at stores, in mailboxes, trash

Identity theft costs Americans more than $5 billion a year.

It was shocking to watch an MSNBC Dateline program on identity theft. Once thieves get your information, they start making purchases in a matter of minutes. And the report showed how identity thieves operate all over the world, with their prime target being Americans.

What can you do to prevent identity theft? Here are 10 tips:

1. Watch what you put in the trash and recycling bins. Shred or tear up any items that contain your Social Security number or date of birth. Also destroy charge-card receipts, copies of credit applications, insurance forms, checks and bank statements, expired charge cards you’re throwing away, and credit offers that come in the mail. Call 1-888-5-OPTOUT to stop receiving pre-screened credit offers.
2. Don’t leave outgoing mail in your home mailbox if it has any personal or financial information about you. Use a secure mailbox instead. Remove mail promptly from your mailbox.
3. Every year, order a copy of your credit report from each of the three major credit-reporting agencies. Check the accuracy of the reports and make sure only activities that you’ve authorized are included. You have the right to get a free copy of your credit report, once every 12 months, from the three companies -- Equifax, Experian, and TransUnion. For access to your free credit report, visit www.annualcreditreport.com.
4. Pay attention to billing cycles. If the bills you’re expecting don’t arrive on schedule, it may be because an identity thief has taken over your account and changed your billing address to cover his or her tracks.
5. Be careful about giving out personal information on the phone, through the mail, or over the Internet. Be on the lookout for scams. Some people pose as Internal Revenue Service agents or other government workers.
6. Be especially careful about giving out your Social Security number. This is the main thing people need to steal your identity.
7. Arrange for your checks to be sent directly to the bank or credit union so that they can’t be stolen from your mailbox.
8. Be careful with credit card receipts in stores and restaurants. If the account number is on the receipt, don’t leave it behind.
9. Be aware that some scam artists target older boomers and people 50-plus.
10. If you have in-home help or if other persons have access to your home, lock your personal information in a secure file cabinet.

See the following Federal Trade Commission booklets for information on ways to help you guard against and recover from identity theft.

• "Take Charge: Fighting Back Against Identity Theft"

• "Site Seeing on the Internet"

• "How Not to Get Hooked by a 'Phishing' Scam"

If you've been a victim of identity theft, call the FTC's identity theft hot line at 1-877-438-4338.

Watch out for scamsters set on stealing your money

Con artists bilk Americans out of billions of dollars every year.

One of their ripest targets? Older baby boomers.

Scamsters prey on the financial fears of mature adults, gain their trust, and then steal their savings.

Regulators report scams are on the increase as more baby boomers move into retirement.

The 79 million baby boomers have more than $8.5 trillion in investable assets, according to an article in USA Today.

Here are some classic pitch lines and scenarios by consumeraffairs.com.

• Anything sold from a car trunk or van in a parking lot.
• Earn big money stuffing envelopes.
• Free golf clubs.
• Correspondence from your bank’s “fraud department.”
• You’ve just won $2.5 million on the Australian Sweepstakes.
• Free money! Act now!
• Find out anything about anybody.
• "This is U.S. Customs. You need to pay the duty on your Publishers Clearinghouse winnings.”
• “Bad credit? No problem. For a small fee, we’ll find you a lender.”
• Call 809-xxx-xxxx now for important information about a valuable prize.
• Get a non-secured credit card with a $2,500 limit.
• “We’re checking your husband’s credit card.”

Resources to help boomers avoid fraud:

• An AARP Web page lists scam prevention resources.

• The Federal Trade Commission’s OnGuardOnline.gov covers scams, shopping, viruses, spam, and spyware.

• The National Consumers League’s Internet Fraud Watch offers articles on how to avoid fraud.

• The North American Securities Administrators Association’s Fraud Center provides resources to help investors protect their savings.

Tomorrow's post will be on identity theft.