BBB Warning: Beware of scam escrow businesses

AUSTIN, Texas — What began as an opportunity to sell unwanted property, allegedly became a financial loss for one consumer.

Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin is warning consumers looking to use escrow companies for real estate transactions after receiving a complaint from a consumer who lost thousands of dollars to an escrow business. The complainant, John Ellickson of Gig Harbor, Washington, alleged he used an escrow company’s services in order to complete the sale of his villa located in Mexico. However, the business never closed the transaction and pocketed $6,351 of Ellickson’s cash.

“I have no idea how they found me. I didn’t tell the owner of the resort I was selling my property,” Ellickson said.

A representative of another company emailed Ellickson a contract. He also asked for a copy of Ellickson’s driver’s license and passport to verify he owned the property. The representative then referred Ellickson to an escrow company, whom he was told would handle the closure of the sale.

“They gave me information for an escrow company that would transfer funds once the sale was complete,” Ellickson said. “I had to wire transfer $2,190 which I was told acted as a fee and would be reimbursed.”

The business told Ellickson the sale would be completed by Sept. 11. However, a couple days later the business asked for more money.

“They needed an additional $4,161 to pay for some taxes,” Ellickson said. “I wired the money, but I just assumed it was some real estate tax. All the documents looked real and I never questioned it.”

Since submitting the last payment, Ellickson hasn’t heard from the company since.

When looking to use an escrow company for a real estate sale, BBB advises you:

  • Seek legal aid. Unless you know the laws regarding real estate transaction, it’s a good idea to seek legal counsel. This can ensure all parties are acting in a legal manner and all procedures are being followed. If you feel unsure about any step in the sale, you can consult with a lawyer who can advise you about additional steps to take.
  • Beware of red flags. A business asking for upfront fees and fees related to taxes is a sign the company is not looking to close a transaction. Typically, an escrow company service fee will range from $300-$500, plus any additional third party fees. A business should not seek any fees until after the deal has been closed.
  • Overseas sales can be tricky. Selling a timeshare or property from another country can be difficult. You’re dealing with foreign laws and jurisdiction outside of your state and the United States. Consult with a lawyer to see what your options are.
  • Never give out your personal identification. Be careful if a business requests either a driver license or passport to verify who you are. Providing that information could result in someone stealing your identity.
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Tips For Donation Wisely

The busiest shopping weekend of the year is over, Christmas wish lists are marked off and consumers are wrapping up those sweet bargains and placing them under the tree. The spirit of the holiday season is about giving, and what better way to give than to give back to a local charity?

Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin urges donors to give wisely and support trustworthy charities . Remember to first research charities to ensure your contributions are going to a trustworthy organization.

BBB Wise Giving Alliance evaluates charities based on 20 BBB Standards for Charity Accountability. BBB charity reports help donors make informed giving decisions.

Check out these five tips to help you make the most out of giving this holiday season at bbb.org/givingtuesday.

To find a BBB Accredited Charity near you, go to bbb.org/central-texas and check out these local profiles:

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RadioShack ordered to pay back customers for unused gift cards

RadioShack_Logo_2013Although out of business, the former electronics store RadioShack will have dish out cash to some of its former customers.

The Texas Attorney General’s Office announced today consumers who had an unused balance on RadioShack gift cards will be able to file a claim. Radioshack’s payback is part of a settlement agreement previously approved in the U.S. Bankruptcy court in Wilmington, Delaware and was led by the State of Texas and supported by 23 other states and the District of Columbia.

“This implementation confirms that the voice of the consumer is being heard, and we are pleased RadioShack is honoring its commitment to customers holding millions in unredeemed gift cards,” said Attorney General Paxton.

To qualify for a priority claim, consumers  had to purchase a gift card from RadioShack’s stores, website, or any of the retailer’s authorized seller. However, if the consumer acquired their gift card through a merchandise return or a certain promotional gift cards, it will  not qualify as priority claim.

Instead it will be classified as a general unsecured claim and will at most receive a small percentage of the balance on the card, but no payment is also possible.

The deadline for filing claims is December 2, 2016. Consumers in all fifty states are eligible to file proofs of claim at www.oldradioshackgiftcards.com

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BBB Tip: “Shop Small” on Small Business Saturday

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Small Business Saturday was started by American Express in November of 2010. The purpose is for consumers to support their local businesses during the holiday season. According to the SBS Consumer Insights Survey, shoppers spent an estimated $14.3 billion dollars at small businesses during last year’s event.

Better Business Bureau is pleased to support Small Business Saturday for the fourth year, and urges consumers to support small businesses in their community.

BBB offers the following tips when you “shop small” on Small Business Saturday:

Get involved. Many communities are hosting special events, and being involved in SBS shows that you support the businesses that make your community unique. Find out what local events are happening in your area on the Small Business Saturday website or check with our local chamber or merchants’ association.

Do your research. Check out businesses ahead of time and find out what past customers have to say at bbb.org. Find out what stores and businesses in your area are participating in Small Business Saturday by going to shopsmall.org.

Sign-up for email alerts. Many stores have Small Business Saturday specials just for people who have signed up to receive their emails.

Check social media. Many smallbusinesses will advertise their SBS sales via social media, so be sure to check your favorite small businesses on Twitter, Facebook, or Instagram. Use #ShopSmall to search for information or to share plans with your friends.

Invite your friends and family. Turn this shopping event into a family/friend extravaganza! Visit your favorite local stores, try some new ones, get a head start on the holidays and enjoy time with loved ones.

Ask for gift receipts and save warranty information. A gift receipt can be tucked into a gift item or card so that the recipient can return or exchange a gift if it’s not just right. Be sure to pass along any information about returns, exchanges, repairs, and warranties to the person who will use the item.

 

 

 

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Texas Attorney General shuts down veteran charity organization

The Texas Attorney General has announced its shutting down a veteran’s charity organization that used little of the money it raised to help veterans in need.

According to the AG’s office, Veterans Support Organization and four of its officers raised more than $2.5 million in Texas from 2010 to 2012. However, 70% of the funds were sent to Florida, where VSO was headquartered, and Rhode Island where it was incorporated. The organization had told donors their money would benefit veterans in need.

“Donors have one thing in mind when they donate to charities: helping people in need,” said Attorney General Ken Paxton.

The AG’s investigation also found that VSO’s  “work program” for veterans was structured panhandling, whereby anyone, veteran or non-veteran, could sign on to solicit funds for VSO. Plus, their “housing program” that was designed to get homeless veterans off the streets was just a room rental to VSO’s workers who had to pay rent to VSO or be evicted.

“It is particularly outrageous that VSO cheated veterans in need of help and those good citizens who wanted to help them. Bad actors like these not only take advantage of people’s good intentions, they damage the good reputations of other charities that are operating in good faith,” said Attorney General Paxton.

Under the final judgment and permanent injunction, VSO has to withdraw their registrations and filings in Texas. The company’s officers are permanently banned from engaging in the following activities in Texas:

  • Owning, operating, or managing charities, or any other entity that engages in charitable solicitations;
  • Serving as a fundraiser, spokesperson, or consultant for any charitable entity;
  • Assuming any position of financial authority in any veteran related charitable entity.

In addition, the settlement requires the business to clearly on their website they do not accept solicitations from Texas residents.

The court ordered VSO to pay $275,000 to distribute to support needy veterans in the local area, provide housing assistance for homeless veterans, and support volunteer services at local VA hospitals.

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Secret Sister Gift Exchange: It’s illegal

secret-sister-gift-exchange-postWith Christmas only a month away, many people are getting into the holiday spirit – including those on social media.

Many online users are posting about a Secret Sister Gift Exchange. The idea is to mail a gift worth $10 dollars to a stranger at the top of the Secret Sister Gift list. You then remove the name from the top of the list, move the second name to the first on the list, and finally include your name and details to the second slot.

Lastly, you send all this information to at least six of your friends.

In return, you’ll receive tons of presents from other participants. Sounds simple, right?

Well what you don’t know is the whole scheme is illegal.

The U.S. Postal Service considers it illegal gambling. That applies whether you get the request via postal mail, email, or social media site. Plus, some social media sites don’t allow their uses to participate in those types of schemes.

Additionally, the U.S. Postal Service it would be impossible for anyone to receive the high amount of gifts that are promised.

So if you’re thinking of participating in the gift exchange, you may want to think again.

 

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Mother & son scam team fined $2.1 million for tricking Spanish-speakers with fake medical discount cards

A mother and son scam team is settling with the Federal Trade Commission after they allegedly tricked Spanish-speakers into buying fake medical discount cards.

According to the FTC, Constanza Gomez Vargas, Walter S. Vargas and their company United Solutions Group Inc  told consumers they were buying a qualified health insurance plan under the Affordable Care Act. The duo specifically targeted people who needed health insurance or were paying high premiums for coverage because they were unemployed or had pre-existing medical conditions.

“We’re putting this operation out of business,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.

The FTC complaint said consumers were told the purchased insurance would pay for doctor and emergency room visits. However, they only received the fake discount cards.

This left consumers without insurance, despite paying an enrollment fee and monthly payments ranging from $99 to several hundred dollars.

The Vargas will have to pay a fine of $2.1 million to the FTC, which will be suspended once the government agency receives payment of $17,616 and the transfer of two Mercedes Benz cars.

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Find or report a scam near you with BBB Scam Tracker

In February 2015, Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin unveiled Scam Tracker, an interactive tool consumers throughout the U.S. and Canada can use to find and report scams and fraud. BBB’s Scam Tracker website enables BBB to collect and track that information in a meaningful way.

With BBB Scam Tracker, consumers can find scams in an area near them, by state and city. Scam reports can also be sorted to reveal trends by date or the type of scam. So far this year, more than 300 scams have been reported in Texas. Types of scams reported include debt collection calls, grants with fees, advanced fee loans, sweepstakes and IRS calls.

BBB launched Scam Tracker as another way to promote a more ethical marketplace and help shed light on schemes and fraud. Scam Tracker is unique because it compiles comprehensive data on illegal and individual scams.

Unlike complaints, scam reports are not addressed individually, but serve as a means to warn others and get the word out to the public about scams. In the future, scam reports will be shared with the National Cyber Forensics and Training Alliance for analysis and collaboration with law enforcement to help stop the most flagrant scammers through prosecution and other legal means.

BBB offers these tips to avoid scams:

  • Always check out a business with BBB first.Go to org to see a company’s BBB Business Review.
  • Get everything in writing and always read the fine print.Contracts are meant to protect businesses and consumers by outlining the terms of the agreement. While it’s natural to want to skim through parts of the long-written terms and conditions, it is important to fully understand their rights and what you are agreeing to. Whenever signing a contract, BBB recommends reading the fine print carefully—even if it means taking it home and sleeping on it.
  • Protect your identity—and your pocketbook.Fighting identity theft means staying vigilant online and offline. Always shred sensitive documents that include personal financial information such as bank, credit card and Social Security numbers. Monitor your financial accounts closely to quickly detect suspicious activity. Shop online through secure sites by looking for the “s” in “https”. Always confirm that the business is trustworthy before entering your credit or debit card number.
  • Never wire money to someone you don’t know.Scammers know it’s extremely difficult to track money sent via MoneyGram or Western Union. What is more troubling for victims is the fact that it’s nearly impossible to get your money back once it has been sent via wire transfer. Even if you have been given a check to cover the amount you’re wiring, never send money to someone you don’t personally know. The check could be fraudulent, leaving you liable for the money.

The release of Scam Tracker to every BBB across the U.S., including Canada, is expected to be completed by November 2015. If BBB Scam Tracker is not yet available on your local BBB’s website, you can still research and report scams in your area here.

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FTC: Free phone scam targeting veterans

A scam that tricks consumers into believing they can get a free phone is targeting veterans.

According to the Federal Trade Commission, scammers are setting up booths outside Veterans Affairs facilities offering free phones and cell service to veterans.

ID-100303666Scammers assure veterans the phone and service is free because of a government program.

Months after you have signed up for the free item, a notice will ask for personal information in order to see if you meet income requirements for the programs. After submitting the information, veterans find that are not qualified for the program.

However, here is the truth.

The notice is a ploy in order to obtain personal information.

But there is a government program, Lifeline, that offers free or discounted phone service. The program is supported by the Universal Service Fund, which all telephone companies and other telecommunications providers pay into. The requirements are income based and have nothing to do with if you have served in the military.

If you’ve experienced something similar to this, be sure to use BBB’s scam tracker.

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BBB Investigation: Customers frustrated over used appliance store’s defective items

Happy customers turned into unhappy consumers for a used appliance store in Austin. Customers are alleging the items they bought from Affordable Appliances Plus never worked and were never fixed.

Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin has received 57 complaints against Affordable Appliances Plus in the last three years. Complainants allege they purchased used appliances with the impression that they were in sound mechanical condition. Consumers claim that once the appliance is placed in their home, it fails to operate shortly after their purchase; sometimes within the first 30 days. Customers claim that Affordable Appliance Plus repairs or replaces appliances under their 30-day warranty policy. However, some pay out of pocket for repairs, as they are outside the business’s 30-day warranty policy. Complainants general seek a refund or a replacement appliance of equal value.

The business has responded to complaints by generally saying their appliance is under a 13-month warranty with free replacement or repair during the first 30 days. After the initial 30 days, the customer is responsible for the price of repair parts during months two through 13. Affordable Appliance Plus is enforcing its no refund policy.

After sending a letter regarding the company’s pattern of complaints, BBB reached out to Affordable Appliances Plus. The owner said he would look into addressing the matter. However, the business has yet to follow up with BBB.

Additionally, BBB contacted the business in order to address several advertising claims on their website. BBB requested the business clarify if products described as refurbished are restored to original working conditions and meet all factory specifications. BBB also requested Affordable Appliances Plus modify its website to include where warranty details can be viewed prior to a sale. The business did not respond to BBB’s requests.

Matthew Vitemb bought a washing machine from the company. He said when it was delivered it didn’t work and it was not the one he picked out. A technician with the company went to Vitemb’s home and fixed the appliance. After running two loads of laundry, the machine stopped working. The company replaced Vitemb’s washer two more times. He said that is when he decided to ask for a refund.

“I went to the store and told them I understood their no refund policy,” Vitemb said. “They sent three machines and none of them fulfilled any of the basic functions. It is not reasonable.”

Affordable Appliances Plus refused to issue a refund. Vitemb alleges he received a call from the owner and his wife that shocked him.

“He got very aggressive and she pretty much berated me. He told me I can’t just get a refund and that he ran a good business. I eventually got a fourth washer that worked, but the process was unreal. It was a typical type of bad business horror story,” Vitemb said.

Anita McGill found Affordable Appliances Plus through the Internet. She ordered a washer and dryer over the phone. When she received them, neither worked. The delivery man told her the appliances were rained on after they had been left outside. She called the business to have the machine serviced.

“The technician came out the same day but brought the wrong part,” said McGill. “He did get the dryer fixed, but not the washer. He came back later but still had the wrong part.”

McGill said the technician came back three times to fix the washer, but it never worked. She then waited a month to schedule a follow up appointment because she says the business told her they do not do weekend service calls.

“I called the North location and I believe the wife of the boss answered. She told me I needed a receipt number. No one asked me that before and I told her I didn’t have it because I was at work. She said couldn’t do anything without it and was just very rude to me,” McGill said.

McGill was finally able to schedule an appointment with a technician in May after originally purchasing her items in late January. But there was one detail she didn’t expect to hear while on a call with the repairman.

“He called me and asked me if I knew how much it would cost. I told him that no one discussed pricing,” she said. “I called and they said because the 30 day warranty had expired, I had to pay for parts. I told them since I bought the machine it hasn’t worked properly.”

The business never waived the fee and McGill said the washer is now leaking.

“I thought it was going to be a positive experience. It should have never taken this long,” she said.

If you are looking to purchase from a used appliance store, BBB advises you:

  • Review a company’s warranty and refund policy. The details of a warranty or refund may impact your decision to buy a product. Be sure to know details of a warranty, what it covers and its duration before you make your purchase. You may want to ask situational questions to get a better understanding of how much is being covered. Get all warranty details in writing.
  • Ask if the machine has been tested. If you are buying a used appliance, be sure to know if the machine works properly. Ask the business what condition the appliance was in when it was given to them. You don’t want an item that has the potential to break after being used the first few times. Also ask if the item is either like new or refurbished.
  • Don’t impulse buy. Check out other stores and compare prices. Do your research before deciding to purchase.
  • Check with BBB. Check the company’s BBB Business Review for valuable information like its BBB rating, customer reviews and complaint history.
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