RIP-OFF ALERT: The Federal Reserve sets the interest rates it controls at 2%. Prime rate for good borrowers is around 5%. Contrast that with the stories of desperate people who take out loans on the web with interest rates as high as 2,000%. Clark doesn't know anyone who gets up in the morning and actually wants to get ripped off with a loan at 2,000%!
The penny-pinching guru recalls the original Rocky movie, where the famed title character worked for the mob beating up people who couldn't pay their loans. But even the mob in that era didn't charge 2,000%. Yet today, with a click of the mouse, you can borrow yourself into oblivion.
According to a report in The Chicago Tribune, one surprising category of borrowers tends to fall prey to these outrageous online loans. That's people who earn about $35-65K/year. These folks will usually look for loans if they're short on money for the bills.
Clark believes online predatory lenders are sociopaths. They know the difference between right and wrong, yet they don't care about the harm they're causing to families. So put this in the back of your mind if you ever reach that point of desperation.
Business Week, meanwhile, reports that business owners are getting loans with interest rates of more than 50%. While that may not sound excessive by comparison, it's extremely high for business owners.
Retail and restaurants are often targeted for these kinds of loans. The modus operandi of the lenders is that they make an advance against future credit card receivables, which are then redirected to be deposited to them, not to the business owner. It's like mortgaging your future.
Remember Doug Flutie's famous 1984 Hail Mary pass? Well, these business loans are kind of like that. But even though that pass connected, it's not the kind of chance you want to take with the future of your business.
RIP-OFF ALERT: You've heard of phishing, right? That's where you get those scam e-mails purporting to be from your bank or other financial institution. Now there's a new phenomenon called "whaling." According to CNET.com, top corporate executives and business owners have been getting e-mails alerting them to a bogus U.S. District Court subpoena. When you click on the link in the e-mail, you're taken to what looks like a real subpoena. But it's not, and it loads a key-logger virus onto your computer. The key-logger captures all your account numbers and passwords, and it even alerts the criminals when you log on to your bank or brokerage account. The criminals then sign in, change your password and steal your money.
Phishing is targeted at the general public. But whaling only targets the big fish in corporate America or small business owners, hence the name. It's been estimated that 2,000 people have fallen prey so far to whaling. If you're among them, here's what you need to do: Run an anti-virus program on your computer to remove the key-logger. Clark has a couple of suggestions for spyware blockers that you might want to check out. Then change all your passwords at your bank or brokerage house.
Are designer accessories and clothing for sale on eBay the real deal? Most of the time they're not. Tiffany's has been fighting eBay for about 5 years over this matter. The jewelry retailer says its reputation gets trashed whenever people buy bogus Tiffany's merchandise from eBay. But so far eBay has been reluctant to take responsibility for the impostor goods being sold through its site. Clark and his executive producer Christa have been fighting about this point forever. She says it's a case of buyer beware, while he thinks eBay has serious responsibility to intervene here because they get a cut of every transaction. In fact, eBay used to advertise on its website saying that they have Tiffany's wares for sale. The case is now in court and a judge will rule on the matter.
Clark uses eBay about 15 or 20 times a year to pick up electronics and cell phone accessories on the cheap. One of his recent purchases was a cell phone charger for $5, which included shipping. He quickly contacted the seller when it turned out the merchandise didn't work for him. When he didn't get a response, he got online and gave the seller a bad rating for not following through on the transaction. Clark knows that he's getting aftermarket goods -- usually made in China -- when he buys on eBay. But potential buyers of designer goods need to know that they may be getting a fake online.
Clark wants to warn you about a new e-mail scam making the rounds. Criminals have been gaining access to e-mail contact lists and sweeping out all the addresses. They then send out a very distressed note in your name to every contact on your list. The e-mail will claim that you're in financial, legal or medical trouble and that you desperately need money right away. The criminals hope that even one or two of your closest friends will respond with an offer of funds. Public e-mail services such as Yahoo! have been hit by this scam, according to The New York Times. Sometimes the criminals will even change your password while they're in your account. At that point, it can be very difficult to reclaim your e-mail address. So if you get a suspicious e-mail from a relative or friend, call them first and find out what's going on before you give them your money. On a related note, there's now a $5 security key that really helps secure your PayPal account. The key generates a random code every 30 seconds that you must use to access your account. Even if a thief has your e-mail address and password, they still won't be able to get in without the code. These kinds of security keys have become so inexpensive yet so invaluable. Clark hopes that brokerage houses and banks will soon be offering these devices to customers.
Have you heard of Hannah Montana? No doubt you can answer affirmatively if you're a parent with a young child or teen. Montana is a teen actress/musician with her own Disney show. She is also the daughter of country star Billy Ray Cyrus. In addition to her TV career, Montana performs her music live around the country. Her shows are a very hot ticket for those in the "tween" age group. There's been a big brouhaha over ticketing for Montana's recent concert dates. Unfortunately, scalpers were able to use software to fool Ticketmaster into selling them all available tickets online. Parents who wanted to take their children to see Montana perform had to go through scalpers to get tickets. Now a federal judge has issued an injunction making it illegal to use the software. This is just one indication of how the ticket market is in turmoil. Another example comes from the world of sports tickets sales. The New England Patriots recently filed suit against their season ticket holders who used StubHub to sell tickets for games they weren't able to attend. The Patriots instead wanted season ticket holders to use their team's monopoly website to resell tickets. The court ruled that StubHub had to disclose the names of all buyers and sellers, and the team is penalizing sellers by taking away their season passes! How unfair is that?
Job seekers who entered their information in the Monster.com database may be at risk of identity theft following a massive security breach at the company. Identity thieves managed to steal the names, addresses, phone numbers and e-mail addresses of 1.3 million people. So beware if someone claiming to be an employer calls or e-mails asking to screen you as a potential employee. If they're an identity thief targeting you, they may ask you to divulge your social security number, mother's maiden name or place of birth. These are some of the remaining key pieces of info they'd need to steal your identity. If you think you've already been targeted or may be in the future, you're best option is to do a credit freeze. Consumersunion.org offers a comprehensive list of states that have credit freeze laws on the books. If you're already a victim, it's free to do a credit freeze. But you may have to pay some nuisance fees if you just want to do a freeze as a preventative measure. Right now 10 million people have their identity stolen each year. So why is there no national credit freeze law? The problem is that Congress is in cahoots with bank lobbyists who want to repel all freeze laws -- even those on the state level. We'll keep you posted...
If you have kids, you probably know that Facebook is big among teens. This social networking site is becoming one of the main ways that young people communicate with each other online. But the problem is that if you want to use Facebook, you have to list info about yourself on a public page. This makes you a target for identity theft. A recent study found that nearly 50 percent of Facebook users put enough info -- things like birth date, hometown, family information and more -- to aid ID thieves. Kids don't understand the risks inherent in using some of this new social networking technology. It should be up to parents to educate themselves so they can have an intelligent discussion with their kids about the issue. Clark advises parents to sign up for their own accounts and figure out how these things work so they can safeguard their kids.
Have you been receiving phony e-greeting cards in your inbox lately? If you open these, you might get spyware and others kinds of malware on your computer. Clark is really upset about this trend because e-greeting cards should be a pleasant thing. Unfortunately, something so innocent has been corrupted. The latest incarnation in this rip-off scheme works in the following way: Criminals send out bogus e-greeting cards and if you open it, you download a program that steals e-mail addresses from your contacts list. Once the criminals have those e-mail addresses, they send out another fake e-greeting that appears to be coming from you, staring the cycle all over again. The worst part is that when you opened the initial e-greeting, you probably also unknowingly downloaded a key logger program. This program tracks every key you type, including usernames and passwords for your bank, brokerage or mutual fund accounts. Under the law, you are protected if money is stolen from your bank account, but not from your brokerage or mutual fund account. Some brokers have issued their own policies that allow for customer protection. But the bottom line is that you must run anti-virus and anti-spyware software on your computer. Clark likes Spybot - Search and Destroy, a free program that will eliminate key loggers and other spyware on your system. Hopefully the legitimate e-greeting businesses will find a way to regulate their industry so people can again have faith in their products.
Clark read a story recently in the Orlando Sentinel about the many risks of online shopping, especially at holiday time. It’s so easy to get taken these days in online transactions because many of the Web sites out there are phony. Just about anyone can set up a domain name and start peddling goods. So, how can you protect yourself? One way is to visit whois.net, the site that lists the person or company that registered the site and when it was registered. If the site was just registered, you know it is probably not legit. Epinions.com and bizrate.com are other sites that rate companies and their customer service. You can also protect yourself at the payment stage by using checkout.google.com, the rival to PayPal. So, if you don’t know the site by name or reputation, always check it out before you buy.
The No. 1 complaint received by the Internet Fraud Center these days is online auction fraud. More specifically, it’s eBay. Two-thirds of all complaints involving Internet crime are somehow connected to eBay. People are getting ripped off as buyers and sellers, as eBay sits back and banks the cash. Clark thinks eBay has some responsibility as the transactor. Christa disagrees. Both of them Clark would like to see eBay start a bonding program to help ensure the products and the transactions. But for now they don’t. So be careful!
Clark wants you to know about a scam going on right now on Craigslist.org, the free online classified service. He got a letter from a man who had listed an item on the site for sale who got duped. The man got tons of responses to his listing, but the people want to pay with cashier’s checks that they claimed had already been cut for more than what he was asking. They asked simply that he send them back the difference once he got the cashier’s check. This is a complete scam. The man told the people to send the checks and then he sent them to Clark. They look 100 percent authentic and claimed to have come from several different banks in Houston and Northeast. The checks even have the watermark seal on them and came in the amounts ranging from $2,000 to $8,000. The scamsters sent the man about a half a dozen checks in total, and they’re all fakes. If you get an offer like this, DO NOT RESPOND. The banking industry has failed miserably when it comes to verifying these checks. So, when you cash one, you will be in a world of financial hurt.
Have you heard of the NFIC – the National Fraud Information Center? It’s become a great source for information about the latest scams around the world. Repeatedly, someone drafting your checking account has become one of the favorites for thieves. Sweepstakes are another top complaint. The average loss in a fraudulent lottery is $5,000, which is huge. The No. 2 scam is phony scholarship help. The third most popular scam is magazine sales and callers who are “renewing” subscriptions. No. 4 is credit card offers and No. 5 is fake check scams with the average loss being about $4,000. Advance fee loan scams are also huge, as are work-at-home schemes and lottery pools. We’ve all experienced some type of phishing scam, and finally are the phony vacation offers. Clark has talked about each of these at some point in the show, but you still need to be on the lookout.
eBay is under assault again for more counterfeit activity on its Web site. Three out of four “Tiffany” items being sold on eBay are counterfeit. As a result, Tiffany is suffering and is suing eBay. Tiffany is losing twice in the matter and could win this case. eBay, on the other hand, could lose something much more important – the trust of the American public. Clark thinks there are so many bad things going on with eBay that people will eventually stop using them. We’ll keep you posted.
Have you heard of crime ware? It’s the term law enforcement has come up with for programs that spy on you and steal your passwords for all kinds of accounts. According to the LA Times, this kind of crime is exploding. It works like this: you open an e-mail or Web site and type in your login and password. These programs capture the key strokes and send them to the crooks. They’re also known as key logging programs. And people have been able to steal tens of thousands of dollars. It’s a new version of "phishing" because you don’t even know it’s happened. The folks at ING Direct have come up with a way to prevent this exact type of crime. Instead of having you punch or type in your code, the site displays a keypad on the screen that people touch with their fingers. Most of other banks aren’t concerned at all. But banks are responsible if a customer’s information if compromised. Bank of America is being sued for allowing criminals to hack into people’s computers and get these numbers. If you’re doing online banking and your bank is not installing better technology, it’s time to move on to a new company.
Clark talked recently about the new Medicare prescription drug program that is launching next year and the fact that it’s so confusing. Well, crooks are taking advantage of that confusion and are trying to dupe seniors who are about to sign up for the program. Tons of information about these programs is showing up in mailboxes, so crooks have decided to start soliciting people over the phone for phony programs. Scams have popped up in Illinois, West Virginia and Missouri, according to the Kansas City Star. There are a lot of programs available and differing fees on top of that. So, crooks are joining in the game and are asking for seniors’ social security numbers, addresses. No one from Medicare should ask you for this information, so if you or your parents are getting calls BEWARE! The FBI is involved and is concerned about both fraud and ID theft. There are only 16 insurers in the program and the book you will get is called “Medicare and You.” The propaganda period has started and the sign-up begins Nov. 15. Seniors have to sign up for a program to be included next year. So, do your homework and go to medicare.gov for more information. Another scam out there is going around online. It’s a Yahoo Photos scam that claims to need your Yahoo login and password. Basically, you get a message telling you there are pictures from Yahoo.com that are available to see. When you click on the link, the site asks you for your information before you can see it. Don’t fall for it!
Clark has talked a lot about how safe paying bills electronically really is, but people are often still skeptical. He went to a computer expert to ask just how safe it really is to add some certainty to his claim. One thing you can do is check for the “master lock” symbol at the bottom of the screen while you’re on the site. That lock means the server is scrambling of the data through encryption. It also means that you’re with the right site and the information on it is true. The address should read “https” instead of “http,” which means the server is secure. Some criminals have figured out a way to mimic the “https” address, but when you see that site lock you are A-OKAY.
Clark has held steady to his opinion that the popular auction site eBay needs to take some responsibility for the fraud and crime happening on its site. The site has created trust among its followers and users over the years. But crooked buyers and sellers have infected the site for the last two years, and eBay has simply washed its hands of the issue. Clark thinks that eBay must get a handle on the fraud in order to maintain its success. It’s apparently already taking a toll, now that news reports show that eBay’s stock has been dropping like a rock. Bloomberg reports that traffic on the site has also dropped, so people are getting more leery of using the site. Christa, Clark’s executive producer, has felt differently since eBay’s inception. She thinks it’s an open marketplace, much like a classified ad, and eBay should not have to assume any responsibility. We want to know what you think. Tell us in our weekly poll. If Clark could decide what happens with eBay, he would offer two kinds of sellers. The first would be bonded sellers, who have been checked out and have a bond. The other group would be unbonded sellers, and it would be buyer beware. It seems that eBay can’t decide whether it wants to protect people or not, and that’s unacceptable to Clark.
Clark feels strongly that eBay, the online auction site, needs to take more action to combat the fraud on its site. He thinks that because eBay is the “auction house,” the company has a duty to prevent fraud. But eBay says it is not involved in the transaction so it has no duty. Christa, Clark’s executive producer, feels the same way eBay does. She thinks it’s impossible for eBay to police everyone and everything on its site. Well, now the courts want to weigh in on the matter because of an investigation sparked by the jewelry company Tiffany. Tiffany was worried about fakes floating around on eBay, so the company conducted its own investigation. Turns out that, during the investigation, eBay posted 186 pieces of Tiffany jewelry and three quarters of it was phony. Tiffany tried contacting eBay for five months until the company finally pulled the fake merchandise. There were a total of 19,000 fake Tiffany items on eBay, according to the LA Times. Clark believes eBay is doing a pathetic job preventing fraud and counterfeiters from taking over its site. There is no way for consumers to know when they’re buying a legitimate product. So, until the courts come up with a decision and eBay steps up to the plate, you have to be your own advocate for protection. It’s buyer beware and you need to check out people you’re selling to and buying from. In the meantime, the company should consider a bonded seller policy, so that all sellers must go through a screening process. There needs to be more buyer protection on the site if it’s going to maintain consumers’ faith in the company.
Clark often reports on ripoffs going on in the consumer world. Today, he has a Top 10 list of scams, schemes and scandals, provided by the state regulators who watch over financial analysts and brokers. Drum roll please…. The No. 10 scam is variable annuities. If you don’t know what these are and you don’t have any, good. If you do, you don’t want to put any more money into these plans. They have massive commissions and are absolutely horrible for your wallet. No. 9 are scandalous mutual fund companies. No. 8 is Internet fraud. No. 7 are “high yield investment” scams. Some that Clark has received calls on involve exotic overseas investments that are a complete scam. Insurance agents who sell people bogus investments come in at No. 6. Most insurance agents are honest, but a number of them have been involved in very scandalous affairs. No. 5 are church ripoffs. Just because someone seems religious does not mean that person is on the up and up. At No. 4, phony brokers. Just because someone says something is going to be a great investment doesn’t mean it will. Promissory notes – or fake CDs – are No. 3. These are promises that someone will pay you later if you give them money. But there is no guarantee, and it’s not safe. No. 2 is any kind of scam against seniors. If you’re not involved in your parents’ finances, be nosy! And, the No. 1 scam in the U.S. involving your wallet are Ponzi schemes. These are schemes where criminals recruit people to pay back other people who have invested, and then you have to recruit someone once you’re in. Eventually, these collapse because there are no more people willing to “invest.” There a lots of people who will sell you sizzle, but that’s all it is.
