One of the most important things I try to do with this column is warn you about rip-offs and scams.
There are so many of them and new ones keeping popping up like weeds.
Here are two you should know about.
Bogus bill collectors target pay day loan customers
These phony debt collectors harass their victims and try to scare them into paying thousands of dollars they don’t owe.
Danielle Vukonich, 31, who works for a well-known restaurant chain in Seattle, recently got one of these calls at work.
“It was really, really scary,” she recalls. “He was really threatening. He said I was getting charged with various crimes and I could be arrested.”
Vukonich says the caller identified himself as an “officer” with the “Federal Investigation Authority” (There is no such agency.) He claimed she owed money on a payday loan from 2007 and he wanted her to settle up for $1,800 right then. He was willing to take a credit card or bank account number, or she could wire transfer the money.
Vukonich knew she’d paid back the loan and didn’t let the caller bully her into paying. But since the scammer called her at work, she had to let her manager know what was going on, in case this guy called again and she wasn’t there.
“It was totally embarrassing,” she tells me.
Now here's the really disturbing part: These debt collector con artists have a lot of personal information about the people they’re calling.
“They know their Social Security number, home address and phone numbers,” says Alison Southwick with the Council of Better Businesses Bureaus. “They even know the names and numbers of friends and family which makes it extremely frightening.”
How could the bad guys get all this information? Some suspect a data breach or an insider who steals the information and sells it to the crooks.
“Cobbling together all that information from external sources can be done, but it’s not as efficient as stealing large bulks of it from someone,” notes John Ulzheimer, president of consumer education at credit.com.
A variety of nasty things can happen if you truly owe money to a company and don’t pay. You can be sued, kicked out of your house or have your wages garnished.
But Ulzheimer points out, “You cannot be arrested or you cannot go to jail for owing a debt.”
If someone threatens that, you can be sure it’s a con artist or shady collection agent.
PROTECT YOURSELF: If you get a call from someone who claims you owe money and your response should be, “I won’t do anything until you send me proof of the debt in writing.”
Do not verify any of your personal information the caller already has and do not provide any more.
You also want to know where the debt originated, so you can contact that company directly to see if the collector is legit. If it’s a crook on the line and you ask these questions, chances are he’ll hang up and you’ll never hear from him again.
Here’s another dubious business practice out there that just makes my blood boil. It’s deceptive and dishonest – and many state attorneys general agree with me
Last Christmas, Peter Tafil of Seattle bought a bunch of Snuggie blankets for presents. So when he got a check for $8.25 last month and the return address on the envelope said Snuggie, he figured it was some sort of rebate.
Luckily he put on his reading glasses and spotted the fine print under the amount. It says “… by cashing or depositing this check you are purchasing a membership in Great Fun.”
This is no rebate check. It’s an offer to join a discount travel and shopping program. By endorsing the check, you agree to a 30-day trial offer. Unless you call and cancel that membership before the trial period ends, you will be charged the annual membership fee of $149.99. It will be billed to your credit card on file with Snuggie.
One more thing: The small print says your membership will automatically renew each year.
“I don’t think it’s right,” Tafil says. “It’s very sneaky. I think something should be done about it.”
The company sending these checks, the Trilegiant Corporation of Norwalk, Conn., doesn’t see a problem with the way it markets Great Fun.
“There’s nothing to suggest it’s a refund check,” says the company’s vice president of communications James Hart. “The word refund does not appear anywhere on the mailing. To be confused, you would have to ignore all the language on the check.”
Hart says the company has an arrangement with Snuggie to use its mailing list. If you accept the “offer” to join Great Fun, he says, Trilegiant gets your credit card number from Snuggie and bills you.
So why use a check to market a membership club?
“It’s like a rebate upfront when you join the program,” Hart says.
I showed Trilegiant’s Snuggie check to Washington State Attorney General Rob McKenna, one of many AGs who has sued the companyin the past for unfair and deceptive marketing practices.
“I hate these checks,” he said. “I believe they are unfair and deceptive. A lot of people will fall for it because they won’t read the fine print.”
In an e-mail statement, Allstar Products Group, the New Jersey company that markets Snuggie blankets, tells me its offer is legal and that credit card datais only released to the credit card processor “upon explicit approval of each individual consumer.”
Allstar’s executive vice president Ronald Steblea writes, “We want to take this opportunity to assure our consumers that the Great Fun program was a test and we are not moving forward with the program in the future.”
If you cashed one of these checks and feel you were tricked into joining Great Fun, file complaints with your state Attorney General or consumer protection office. You should also file a complaint with the Federal Trade Commission. The Better Business Bureau may be able to help you get a refund.
PROTECT YOURSELF: Never sign a check with fine print near the signature line until you’ve had a chance to get a magnifying glass and read it. Don’t assume you received a rebate check and that fine print is just meaningless verbiage. Find out if you are obligating yourself to spend some money if you cash or deposit that check.
© 2013 msnbc.com. Reprints