CONSUMERconnection
Robocall bans
Also:
■ Investment traps
Ask David
Horowitz
THE FEDERAL TRADE Commission (FTC) is
banning many types of prerecorded telemarketing
solicitations, dubbed “robocalls.” Jon Leibowitz,
chairman of the FTC, declared, “American consumers have made it crystal clear that few things annoy
them more than the billions of commercial telemarketing robocalls they receive every year.”
Until recently, consumers had to specifically
join a do-not-call list to avoid them. But as of
September 1, telemarketers now need written permission from the customer in order to make such calls.
Violators face penalties of up to $16,000 per call.
This still doesn’t ban all such annoying interruptions: Exempt from the new ban are informational calls such as flight cancellations, delivery
notices and calls from debt collectors. Also allowed
are calls from politicians, charities, banks, insurers,
phone companies, surveys and certain healthcare
messages such as prescription notifications.
Live calls are still allowed, unless the recipient’s
phone number is on the National Do Not Call
Registry. People who get an unauthorized call can
file complaints with the commission online at www.
donotcall.gov or by calling toll-free (877) FTC-
HELP (382-4357).
Investment traps
The North American Securities Administrators
Association (NASAA) is warning investors to resist
trying to rebuild their savings through dangerous
investments. Many of these schemes promise high
returns, but they provide little, if any, disclosure of
risks and offer high commissions to aggressive sales
forces. Here are a few types to avoid.
Entertainment investments. Movies, info-mercials, Internet gambling and pornography sites
are among the scams.
Gold bullion and currency. In these scams,
the seller offers to retain “purchased” gold in a secure
vault and promises to sell it for the investor as it gains
in value. In many instances the gold does not exist,
including many forms of foreign exchange (aka
forex) schemes in which the money is simply stolen.
Life settlements. The rising popularity of life
settlements, otherwise known as viaticals, has
prompted a Congressional investigation. While
cashing out of life-insurance policies has provided
some people with necessary funds for medical
expenses and other purposes, this comes at a high
price for investors, particularly senior citizens.
Natural resource investments. These usually
involve energy and precious metals, promising
quick, high returns. Particularly attractive to the
naive are oil and gas schemes, as well as fraudulent
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offerings of investments tied to natural gas, wind
and solar energy, and the development of new
energy-efficient technologies.
Ponzi schemes. In a typical Ponzi scheme,
such as the recent Bernard Madoff scandal, high
returns are paid to initial investors out of the funds
of later investors, who usually lose their investment
to the promoter.
Leveraged exchange-traded funds. These
funds are traded like stock, but use exotic financial
instruments, promising the potential to provide
greater-than-market returns. These are very volatile,
and typically not for most retail investors.
Real estate investment schemes. Homeowners
caught up in the crashing housing market are rushing
to save their homes. They fall victim to these scams,
which require upfront payment, but provide no legitimate loan relief. Scammers
also target homeowners who are considering reverse mortgages, duping
them out of their homes.
Short-term commercial promissory notes. Short-term notes are
those nine months or less in
duration. Often they’re
touted as being “insured”
or “guaranteed,” but the
insurance companies generally are located offshore,
are not licensed to do
business in the United
States and fail to deliver.
Speculative
inventions and new
products. These may
be fine for venture capitalists, who know how
to assess the risks, but
dangerous for those
gambling their retirement money.
For more information about these trading
traps, check out www.
nasaa.org. C
AMY CANTRELL
David Horowitz is a leading consumer advocate
(
www.fightback.com). He is a frequent guest on
radio and television stations. Consult your local
listings for dates and times.
© 2009 FIGHT BACK! INC. ALL RIGHTS RESERVED.
MY MOTHER-IN-LAW has
invested $2,000 in a networking system, and is
planning on investing more.
She thinks it’ll be a good
business venture since she
is aging and could do it
from home. I think it sounds
like a pyramid scheme. I
tried to do an Internet
search to find negative
information, but they must
have flooded the search
engines with only positive
posts about the company.
Dennis
San Marcos, CA
Many businesses offer
Internet investment “oppor-
tunities” similar to what you
describe. The specific com-
pany you mentioned is not a
home business, but a
marketing program
sold on the
Internet. Such
systems can
become scam-
like if they’re
selling “success
in selling” but
there’s no actual
product for sale.
Investigate
this company with
the Federal Trade
Commission before
your mother-in-law
invests any more
money. They’re online
at
www.ftc.gov, or call
toll-free (877) FTC-
HELP (382-4357).
Hint: If you’re look-
ing for negative reviews
about any business, try
inserting the word “com-
plaint” after the company
name in your Internet
search.
Do you have a question for David?
Just log on to
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interest to Costco members will be used in this column with the permission of the
contributor and will be posted on
www.fightback.com.
