Better Business Bureau: New 'work at Home' laws
Today we start with a review of two new federal laws that hopefully will help consumers avoid those pesky scams we are always talking about.
First, new regulations to address the problems with those "work-at-home" scams. On March 1, new amendments to the Federal Trade Commission's Business Opportunity Rule went into effect. The changes implement new disclosures that work-at-home businesses must provide to consumers to help consumers make informed decisions. There are five key items work-at-home businesses must now disclose using the FTC approved disclosure form: • The name, business address, and telephone number.
• The basis for any earning claims.
• Whether the company has been involved in certain legal actions.
• Whether the company has a cancellation or refund policy.
• A list of people who bought this business opportunity within the previous three years.
In the past 36 months, more than 10,000 complaints have been filed with Better Business Bureau against "work at home" companies.
Second, new regulations governing the operation of "credit repair companies." One of the fallouts from the sluggish economy is an increase in people needing and wanting to fix their bad credit. Con artists know that and are offering too good to be true "opportunities."
There are many credit repair services that are scams. Under new FTC guidelines credit repair companies cannot legally: • Misrepresent the amount of money or percentage of debt amount that a consumer may save by using their service.
• Misrepresent the amount of time necessary to achieve the represented results.
• Misrepresent the amount of money or the percentage of each outstanding debt.
• Lie or advise you to lie about your credit history. And the most significant one
• Charge an up-front fee prior to obtaining a settlement or reducing a consumer's debt.
These new regulations will cause the schemers some headaches, to be sure. I can't wait to see how they will circumnavigate the rules.
Good news: consumer savvy, smart shopping and common sense all had a great year in 2011. Consumers asked BBB for help more than 103 million times, up from 87 million in 2010 and the highest rate in the organization's 100-year history. Conversely, filings of formal complaints against businesses were down; 927,000 in 2011 compared to just over one million in 2010.
Consumers are less likely to need BBB dispute resolution services when they come to us first. BBB maintains business reviews on more than 4 million businesses and grades them based on complaint histories, responsiveness to customers, licensing, legal and government action, and other factors.
In closing, I have a question for you today. Have you secured a free credit report from each of the three credit reporting agencies in the past year?
Now let me ask you, have you obtained these reports on each of your children? That's right; the bad guys love the Social Security numbers of minors from birth to 17 years old. These numbers normally have clean records and are used for setting up fake identities in order to perpetrate various frauds. Remember to use annualcreditreport.com to obtain the reports.
Alan Bligh is the executive director of the Better Business Bureau in Corpus Christi. Contact him by email at firstname.lastname@example.org.