Last week, we release a press regarding a company called Warrantech and the confusion many consumers had regarding the extended warranties and service contracts the company offered.  While researching this company, I too had to dig deeper to find out the differnce between the 2 so I wanted to take this opportunity to share that knowledge with the rest of the viewing community.

First of all, retailers love these things because they increase their profit margins quite a bit.  If the profit margin on an expensive electronic item is only a few percentage points, adding on a service contract or extended warranty can up that number in a big way.  Consumers purchase about $1.6 billion in these things every year so the demand to protect valuable items has definitely not diminished even with the economy in the state it is in.

Salespeople will often use the terms "service contract" and "exteneded warranty" interchangeably, but the distinction lies in the fact that an extended warranty will protect against manufacturing defects for a longer time period while a service contract will provide a degree of upkeep depending on what is written on the contract.  Here's an example:  If your computer freezes up, an extended warranty will offer you protection while a service contract might help you out if you accidentally spill coffee all over your keyboard.

As with any decision to purchase a valuable item, the extended warranty or service contract should not be rushed into.  Read the fine print and know what coverage you're getting before you sign off.  You can always shop around as well because there are third party companies outside the one the retailer recommends and using bbb.org can put you in touch with one who you can trust.

 
As the rest of this unseasonably hot summer rolls on with little rain, one other issue besides plants dying that homeowners need to be wary of is damage to the foundation of their homes.  The soil underneath a home's foundation acts like a sponge meaning as it absorbs water, it expands and as it loses water, it contracts.  This expansion and contraction can cause your house to shift and eventually damage your foundation.  Fixing it isn't cheap either.  Insurance adjusters say the average foundation repair runs between $3,000 and $7,000 and most homeowners insurance policies don't mention coverage for drought-related foundation problems.

So what can you do about it?  A relatively cheap way to keep the soil under the foundation of a home from excessively expanding and contracting is to run a series of soaker hoses along the side of your home to keep moisture in the soil.  The best method to doing this is to bury the hose 3 inches deep and about 18 inches away from the edge of your foundation.  The distance is helpful because it allows the water evenly soak the soil instead of pool up next to the edge of the house.

Another thing to consider is not planting new trees or large shrubs too close to your house.  These items take in a lot of water and can rob the soil underneath your foundation of much needed moisture.  Even though the process of watering around your foundation can cause your water bill to go up, it will be much less costly than having to hire someone to repair it.

Credit card scams are nothing new to BBB, but a new one I've received information on is working on 2 levels and definitely warrants giving some attention to.  Here's how it works...someone will call you on the phone impersonating your credit card holder (VISA, Mastercard, etc) saying they're from the Security and Fraud Department.  These people already have your credit card number through some form of identity theft, but they can't use it yet and will sound officially because they will be giving you all the information.  They will often give you a badge number and tell you that your card has been flagged for an unusual purchase pattern and that they're calling to verify.

The purchase in question will be referred to as an Anti-Telemarketing Device for $497.99 and of course you will say that you didn't buy it.  The scammer will then say they will issue a credit to your account for that charge and begin a fraud investigation and will give you a 6 digit "Control Number".  The scammer will then read back to you, your own address and have you verify it so they can send you a statement showing your account credited.  The final kicker now begins...the scammer will say they need to verify that your card hasn't been stolen and will ask you to verify the 3 digit security number on the back of the card.  If you read those numbers to them, they will say "thank you" and ask if they can do anything else for you and hang up.  Now you've been had.  The scammers have a verified address and your credit card's security code (remember they already have your card number) and can now make purchase after purchase.

VISA Security has identified this as a scam and says they will never ask for anything on the card as they already know the information given that they issued the card to you in the first place.  If you feel you've been scammed, contact the police and your credit card issuer to try and get the charge disputed.  If nothing else, most credit card companies have a way to look at your statement online so if if there really is a phony charge on your account, you can see it for yourself.        

Tough times bring desperate consumers sometimes and there is a particular kind of loan scam that consumers need to watch out for...the advance fee loan scam.  Basically a business will promise consumers that their loan will be approved without knowing if they qualify and then run off with the processing fee for a loan which never materializes.  Many of these advanced-fee loans are promoted in classified sections of the newspaper and in magazines and they feature toll free numbers to call.  Of course they're also found on the Internet and boast very impressive testimonials.

Reading the fine print, you can find that some of these illegit companies come from outside of the US making it hard for law enforcement to track them down.  In fact, Canadian law enforcement officials say that it's unlikely a legitimate business in Canada would approve a US citizen who has less than perfect credit in the United States.  Legitmate offers also do not require an up-front payment although they may have an application fee but it will be paid after the loan is approved.  If you want to check out one of these advance fee loan companies, just visit www.bbb.org to make sure you don't get taken advantage of. 

 Yesterday, the Office of the Attorney General released a statement warning consumers to beware of a sweepstakes scam impersonating of all entities, the Federal Trade Commission.  You can view what the sweepstakes letter looks like here.  The "winner" is told that they need to pay an insurance policy on their winnings to the tune of $4,500 and that it is refundable once their actual second place check of $450,000 arrives.  The letter further tries to put the consumer's mind at ease by telling them that someone from the FTC will be their case manager and assist them in gathering their winnings.

The only problem is that the FTC doesn't collect money from consumers and it isn't involved in any sweepstakes of any kind.  We tell consumers all the time on our public telephone lines that they never have to pay money to be in a true sweepstakes contest.  It is actually against the law for a company to charge a consumer to be entered into a sweepstakes so that's the biggest red flag to look for with these things.  If you've been contacted with this scam, the Attorney General is recommending you call their office at (800) 252-8011 and of course file a complaint at bbb.org as well.

We've all seen the "distressed loved one" scams where someone calls an elderly person and tells them they are their grandchild in order to extort money from them.  Now there seems to be a new scam targeting the elderly that I want to put out there.  A few bad apple companies are calling elderly consumers and telling them they are an "Inspector" or "Investigator" who found their personal information on various mailing lists.  The person goes on to tell the elderly person that they are at a high risk of identity theft and that their company can help.

Using high-pressure sales tactics, the scammer convinces the elderly person to buy into a program that will eliminate their personal information from being distributed.  The company these people are working for will then charge the elderly person's credit card every month without authorization and when pressured for a refund, will not give it.  The "membership" to these types of companies can run from $250-$450 per month so it doesn't take long for these charges to really add up, especially given that so many elderly are on fixed incomes.

If you hear from a company like this, please call your BBB IMMEDIATELY so we can take the necessary steps to tracking down these scam artists.  While it is noble and very admirable that the elderly are more trusting of other people than most, scammers unfortunately find them easy targets and BBB is here to help.

 Twitter is one of the top social media Web sites with hundreds of thousands of people creating profiles for others to "follow" their day-to-day activities.  With that fame now comes ways to exploit it.  Cyber-scammers, or really criminals, are becomming more prevalent directing users to malicious Web sites or scams that steal the identity of the user.

Because anyone can sign up for Twitter and do so anonymously, it is hard to track these people down, but they have hacked personal information from users to send messages to their followers.  The biggest example came last week when someone stole Britney Spears' Twitter name and password and posted a tweet to all her followers that she had died.

The safest thing to do with Twitter, just like all the other social media Web sites, is to not reveal every last detail about yourself to the general public.  No one needs to know your address, phone number or other contact information.  Also, don't click on links that are suspicious.  There are too many landmines floating around the Internet that could mess up your computer.  Twitter is fun, but you can't lose your common sense just because of 140 characters.

 The theme of the office the past couple of working days has been debt collectors.  We've received quite a few phone calls from people who are being harassed so I figured I would enlighten everyone on a few things you can do to protect yourself and a few things that debt collectors are NOT allowed to do.

First of all, the Fair Debt Collection Practices Act is your main guide for referencing what a debt collector can and cannot do.  As far as contacting you goes, the debt collector can contact you in person, by mail, telephone, telegram or fax.  They cannot contact you before 8am or after 9pm unless you agree and cannot call you at work if you have told them not to.  If you have an attorney, the debt collector is supposed to contact them, but if you don't, they can contact members of your family to find out where you live, your phone number and where you work.

If you wish for the debt collector to stop contacting you, the best way is to write them a letter telling them to stop.  Once they receieve the letter, they cannot contact you except to say there will be no further contact or to notify you of further action.  Writing a letter will not make your debt go away so be careful to get that taken care of to avoid being sued.