February Better Business Bureau Tips for Consumers

Buyer Beware as Shoddy Knock-Offs Infiltrate the Internet

 The market for counterfeit luxury items is wide and deep, covering everything from jewelry and perfume to handbags and sunglasses. Bargain-hunters should check out the Better Business Bureau of Minnesota and North Dakota’s (BBB) advice on avoiding web-based rip-off schemes before looking online for name-brand items at discount prices.

According to a report by the Department of Homeland Security, the total domestic value of merchandise seized during fiscal 2011 was $78.3 million; an amount that would have had a value of $1.11 billion had it been legitimate.

Online classified sites like craigslist or eBay are hot spots for counterfeit luxury item fraud, and both offer “buyer beware” warnings. But vendors are now setting up their own websites to fool frugal shoppers.

The BBB offers the following tips for shopping safely online when looking for deals on designer goods, as well as pointers on how to spot a fake:

Always deal with reputable businesses. The best way to avoid getting ripped off when buying luxury goods is to deal only with reputable businesses. When in doubt, shoppers can contact the manufacturer and verify which vendors are authorized sellers. Consumers should also check out the business with BBB at www.bbb.org/search before making a purchasing decision.

If the price seems too good to be true, it probably is. One of the biggest red flags for knock-off merchandise is an unrealistic price tag. Extremely low prices are tempting but not to be believed. Paying $100 for a $1000 purse usually results in the consumer receiving poorly constructed – and worthless – goods.

Read between the lines. Some websites or online classified ads will go overboard in their description of the item in order to coax the buyer’s trust.  Overuse of “genuine,” “real” or “authentic” is a bad sign. Buyers also need to keep an eye out for sneaky phrases like “inspired by.”

Check the merchandise. Considering that the name is a large part of the motivation for buying a luxury brand, many manufacturers spend considerable time and energy on crafting the physical label. Counterfeiters aren’t usually as meticulous.  Shoppers should look for misspelled words and brand names, poorly sewn logos and labels, etc. Some luxury goods carry an “authenticity label” with a hologram or other security measure.

Know the brand. Different luxury brands, such as purses, have specific hardware consumers can rely on to identify a genuine piece. Zippers, screws, clasps and stitching are usually very specific for the brand and the manufacturer often has details on their website explaining what to look for and how to spot a knock-off. Craftsmanship is king for most luxury brands. If the sunglasses snap in two in the first week, or if the stitching and seams are ragged and don’t match up on a purse, the items are probably counterfeit.

Consumers who have purchased counterfeit luxury goods should contact the BBB and can easily file complaints online atwww.bbb.org/complain. Consumers can also contact the Consumer Product Safety Commission at www.cpsc.gov and file a complaint online there as well.

BBB Advice on Refund Anticipation Loans

 Some tax preparers offer Refund Anticipation Loans (R.A.L.’s) to allow people to receive their tax refunds immediately. However, the Better Business Bureau of Minnesota and North Dakota (BBB) is reminding people that R.A.L.’s are not an actual refund from the IRS, but rather a short-term loan from the company. According to the Consumer Federation of America, the interest rate and administration fees on R.A.L.’s can translate to an annual percentage rate of 149 percent for a 10-day term.

“Refund Anticipation Loans may do more harm than good and in most cases aren’t worth the instant access they provide,” said Dana Badgerow, President and CEO of the BBB. “That’s a tremendous amount of money to spend to borrow your own money for two weeks.”

The R.A.L. is an estimation made by the tax preparer of your refund amount, not a statement from the government. As a result, your refund could actually be less than the amount of your loan. This means you may end up owing the tax preparer more money than you received in your refund. Some people believe they can’t wait the two weeks for their refund because of debts and bills that need to be paid. However, a better option than taking a R.A.L. is to work with debt collectors and let them know your tax refund is on the way. Losing a portion of that money to a short-term loan only puts you further behind.

Low-income taxpayers have a number of options for free tax preparation, including Volunteer Income Tax Assistance (VITA) (1-800-906-9887 or www.irs.gov) and AARP Tax-Aide sites (https://locator.aarp.org/vmis/sites/tax_aide_locator.jsp). Many VITA sites also offer services to help open a bank account or get a low-cost prepaid card, which enables taxpayers to get fast refunds without paying a fee. Free tax preparation may also be available on military bases, and since service members are required to have bank accounts, they are able to benefit from the speed of electronic delivery of their tax refunds

Other options available to consumers are Free File – which offers free tax preparation for people whose income is$57,000 or less – and E-file, both of which allow individuals to file their taxes electronically and have their refunds direct deposited. Visit irs.gov/efile for more information. While this entire process usually takes 10-14 days, people who take advantage of these services will receive 100 percent of their money and not have another loan to pay off.

The National Consumer Law Center reports this is the last tax season any banks will be offering R.A. L.’s. However, It’s possible that some smaller payday lenders, which until recently haven’t had much federal oversight, may continue to offer some version of the loans.

Navigating the Funeral Process

 At an average cost of $7,000, funerals are one of the more expensive purchases consumers ever make. During such an emotionally-charged time, it can be easy to spend more than might be necessary. The Better Business Bureau of Minnesota and North Dakota (BBB) offers the following advice for navigating the funeral process.

Most funeral providers offer a variety of package plans that include products and services that are most commonly sold. However, it’s important to remember that no package is obligatory and it’s important to take the time, even though the time to make these decisions may be short, to find the individual products and services that best serve the needs of you and your loved ones. The “Funeral Rule,” enforced by the Federal Trade Commission, requires funeral directors to give you itemized prices in person and, if asked, over the phone. 

As outlined by the Funeral Rule:

• You have the right to choose the funeral goods and services that you want (with some exceptions).
• The funeral provider must state this “Rule” in writing on the general price list.
• If state or local law requires you to buy any particular item, the funeral provider must disclose it on the price list, with a reference to the specific law.
• The funeral provider may not refuse, or charge a fee, to handle a casket that you bought elsewhere.
• A funeral provider who offers cremations must make alternative containers available.

One way to reduce stress during a time of grief is pre-planning. The National Funeral Directors Association offers a “Bill of Rights for Funeral Preplanning” (www.nfda.org/planning-a-funeral/preplanning.html) that its members follow. You do not have to prepay for a funeral in order to preplan one, although there may be financial benefits to doing so.

The BBB has Business Reviews on more than 1,350 funeral homes and mortuary service providers across North America, available for free at www.bbb.org/search. For more consumer tips you can trust, visit www.bbb.org/us/bbb-news.

Protecting Data – Does Your Business Know What to Do?

In times of escalating privacy and data breaches, customers expect every business — large or small — to take the necessary precautions to protect their sensitive personal information. The Better Business Bureau of Minnesota and North Dakota (BBB) advises business owners to proactively address customer anxiety and take steps to both prevent and prepare for a security breach. The BBB has endorsed the Online Trust Alliance’s (OTA) Data Protection and Breach Readiness Guide, recently updated for 2012

Last year, more than 125 million people were affected by data loss incidents.  Increased awareness of these high visibility incidents, as well as aggressive data collection and sharing practices, have eroded consumers’ trust and online confidence, according to OTA.

“The Internet has become the land of opportunity for scams and, unfortunately, we see thousands of them every year,” says Dana Badgerow, President and CEO of the BBB.  “Consumers need assurances that they can trust the companies they do business with to secure their data, and the Data Protection and Breach Readiness Guide is a great tool to help businesses protect themselves and their customers.”

In the wake of a security breach, it’s important to take action quickly. Small and large businesses alike need to be able to readily determine the nature and scope of the data incident, and take all appropriate steps to contain and stop the attack.

The 2012 Data Protection and Breach Readiness Guide reflects input from a wide range of stakeholders, including interviews with companies that have experienced breach and data loss incidents, and industry and breach analysis experts. The BBB encourages all businesses to use its suggestions to help build a safer Internet for all.

For more data security advice you can trust, visit www.bbb.org/data-security, and for a complete OTA guide, visithttps://otalliance.org/breach.html. For more consumer tips you can trust, visit www.bbb.org/us/bbb-news.

The mission of the Better Business Bureau is to be the leader in building marketplace trust by promoting, through self-regulation, the highest standards of business ethics and conduct, and to instill confidence in responsible businesses through programs of education and action that inform, assist and protect the general public. Our hours of operation are 8 a.m. to 5 p.m. Monday through Friday. Contact the BBB at www.bbb.org or 651-699-1111, toll-free at 1-800-646-6222. Visit our Centennial website at bbbis100.org.

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