On the one-year anniversary of the MoneyGram’s $18 million settlement with the Federal Trade Commission for its role in allowing gullible Americans to wire money to Canadian scammers, I went out and searched to see if it’s still happening.

It is.

I didn’t have to go far to find a victim. Only a few miles from Watchdog Nation HQ to find another victim of the Granny Scam who sent the money through MoneyGram, even though the company promises that it has cleaned up its act.

But first I must apologize to R. for passing on bad information. When a year ago, I first reported how MoneyGram had to pay $18 million back to customers who wired money to scammers, I attached an advice box to the column. (See last year’s video and Watchdog Nation report on MoneyGram here.)

The box stated, “If you were scammed in a MoneyGram wire transfer, here’s how you can apply for your part of the $18 million settlement.” I recommended calling MoneyGram and the Federal Trade Commission. That’s what MoneyGram and the FTC told me to tell readers at the time.

So R., who lives in Bedford, Texas followed my advice. A month before, he had received a letter telling him he won the Maple Leaf Lottery. His prize, he was advised, was $520,000! It made sense. He had traveled in Canada and entered a few contests. Now all he had to do was deposit the first prize check in his bank, then take that money and wire it to Canada for his taxes and fees so he could get the rest.

He did as told. A few days later, he got a note from his bank that the check was a counterfeit. He lost $4,000. (An embarrassed R. asks that he not be identified.)

My original notes from last year quote an FTC spokesman telling me, “We’ve got $18 million here, and that’s going to mean a bunch of money going back to defrauded consumers.”

Not to R.

“Nope,” he says. “Got nothing.”

After he filed complaints with MoneyGram and the FTC, he never heard back.

He asked for help, and I contacted MoneyGram on his behalf. A company spokeswoman verified that his claim was not included in the settlement because it came after the redress program had ended. Besides, R. had no proof that he faxed his complaint to MoneyGram in the first place. (Remember to get written or taped confirmation!)

An FTC spokesman tells me that the $18 million ran out almost immediately after the settlement was publicly announced.

“At that point, literally, both the FTC and MoneyGram were inundated with complaints from victims,” FTC’s Todd Kossow said.

If the new complaints had been added, “They would have diluted the pool,” he said.

He estimated that “the amount lost by consumers through fraud-induced money transfers using MoneyGram’s system likely was in the hundreds of millions of dollars for the years 2004 through 2008.”

R. wouldn’t have qualified anyway, Kossow explained, because, as MoneyGram stated, his transaction occurred after the qualifying period for settlements ended in 2008.

The government says 34,000 redress checks were mailed to victims — totaling $18 million. The average check was $520. But most victims lost a lot more than that in various scams in which money was wired to MoneyGram outlets in Canada.

The original FTC complaint accused MoneyGram of helping U.S. consumers transfer $84 million to scammers in this country and abroad. The FTC alleged that 10 percent of MoneyGram’s Canadian agents (134 employees) were involved in the scams as partners.

MoneyGram’s executives were warned and did nothing, the agency said. Company whistle-blowers were disciplined or fired. The FTC alleged that company leaders said fixing the problem was too costly.

At the time, MoneyGram announced that it would not fight the complaint to avoid “battling it out through a long and costly trial.”

Recently, MoneyGram spokeswoman Lori O’Briant told me the company has worked hard to beef up its anti-fraud efforts, including increasing fraud specialists on staff, using “a new multimillion dollar Fraud Prevention System that helps stop fraud before money is sent.” She said it also had built closer relationships with law enforcement agencies around the world, updated its money transfer forms to alert consumers of potential danger and improved its hiring practices.

So how’s that working?

Well, in September 2010, a 74-year-old Hurst, Texas woman was swindled out of $6,000 in “the granny scam” when she wired money to Canada thinking it was for her nephew. Hurst police tell me that $3,000 was wired through Western Union, and $3,000 was wired through MoneyGram.

R. says there’s really no policing to detect and punish those involved. “I even spoke to the Royal Canadian Mounted Police, and their attitude was, ‘We’ll be looking out for them. We know it’s happening, but it’s hard to catch them.’”

R. also filed a complaint with the U.S. Postal Inspection Service (his “winning” letter arrived in the mail). But nothing came of that, either. Service spokeswoman Amanda McMurrey says, “Typically, in these situations, there’s not much we can do except forward that on to the government of Canada.”

The best defense, she says, is to understand that a bank will deposit cash for a check into a person’s account in a few days, but if the bank later learns the check is a counterfeit, the account holder is responsible for repaying the money.

Requests for wire transfers are a telltale sign of a scam. Never wire money to anyone without double-checking the circumstances and individuals involved.

# # #

In fairness, Watchdog Nation wants to share MoneyGram’s response to the above in full:

“At MoneyGram, we take consumer fraud very seriously. Our ability to provide safe and reliable payment services for our consumers is critically important to our business.

“Over the last year, MoneyGram has renewed it commitment to preventing fraud. Measures undertaken by the company include:

• Tripled anti-fraud staff
• Intensified operational scrutiny of transactions with a new multi-million dollar Fraud Prevention System that helps stop fraud before money is sent
• Expanded global outreach with law enforcement and regulatory agencies
• Reporting to and communicating with FTC and partnering with other financial services providers, law enforcement agencies and industry councils to promote consumer awareness
• Updated our money transfer send form to better educate customer and raise awareness of scams
• Created new agent facing policy – enhanced requirements for applicants to become a MoneyGram agent, as well as enhanced agent education/training to mitigate fraud

“As a result of our actions, we have prevented more than $30 million dollars in fraud this year alone. In addition, fraudulent transactions sent from the United States to Canada have decreased by 75% since May (Canada has historically been one of the most active fraud corridors).

“Additionally, in order to protect and educate our customers we:

• Post warnings on our website on various kinds of scams, as well as warn consumers that MoneyGram should not be used for Internet purchases
• Clearly communicate and warn customers about possible fraudulent transactions on our money transfer forms – including asking if the customer is sending money for the purchase of a car, or rent an apartment, or claim a lottery, etc.
• Provide training for agents to help spot possible fraudulent transactions
• Clearly alert consumers to never send money to people they do not know
• We ask customers who believe they have been a victim of fraud to contact us at 1-(800)-MoneyGram as well as report it to local police. We can then work with police and federal authorities who will further investigate the scam.”

Lori O’Briant
Corporate Communications & Media Relations Manager
MoneyGram International

###

Read the FTC’s Consumer Alert “Money Transfers Can Be Risky Business”

###

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

"Roofer" Shawn Tatum in a CBS11 camera still

UPDATE: On May 12, 2010, Shawn Tatum pleaded guilty to theft charges and was sentenced to 180 days in jail, 10 years’ probation and community service. He also has to repay his former customers $162,000. Here is the original story on this crooked roofer.

# # #

Shawn Tatum taught me more about being a watchdog than any man I know. Recently, a Tarrant County grand jury indicted him on theft charges. He spent a day in jail. How he got there is how I learned my lesson.

Tatum was my roofer, even though, as he once said, “I never held a hammer in my hand.” We met after I asked my insurance agent whether he knew a good roofer. He recommended Tatum.

Looking back, I understand now that in my haste to avoid the complicated process of finding an honest roofer after a Texas hailstorm, I got lazy. Left myself vulnerable. But my search had problems from the start.

The first company I hired to replace my roof after the 2007 hailstorm did a fantastic job. The only problem was that the crew went to a neighbor’s house instead of mine and replaced the wrong roof.

When my confused neighbor knocked on my door that night to explain what had happened, he told me that the erring roofer demanded that he pay him by filing an insurance claim. No way!

I called the roofer. When I suggested that he take the loss on my neighbor’s roof because it was his mistake, he got angry with me for interfering. I asked to get out of our contract. First he said no. Then, after I kept asking, he agreed to sever our ties.

Blessed with a second chance, I took the shortcut to the insurance agent. And not long afterward, Buck Wesson, Tatum’s charming, silver-haired sales director, showed up and mesmerized me with his pitch.

This is the point in the sales process when you should say, “Can we talk by phone in a few days?” and shoo the salesman away. Then you turn on the computer or call the reference desk at the public library and begin asking questions: Does the company show up on the Internet? What does the Better Business Bureau say? Is it a member of any state associations? Are there references from past customers?

Hindsight. I know.

I signed the contract and gave Buck my insurance check. Two months later, after hearing nothing, I called and was told, “Buck don’t work here no more.”

So I talked to Tatum, an Orson Welles look-alike from Arlington who promised to do the job but explained that there were delays.

Turns out he was giving the same speech to a hundred other customers. He was taking their checks — and cashing them at a grocery store in Arlington because he kept his money out of banks — but not doing the work.

Arlington, Texas grocery store Tatum used as his "bank" to cash checks (Google Maps Photo)

After months of delays and excuses, Tatum sent a crew to put on my roof. I later learned that I was one of the lucky ones. Only a few got service. Now every time I look at that roof, I think of the victims who will never see a dime.

In 2007, Tatum Contracting filed for bankruptcy, listing $671,000 in debts. The 86 creditors included homeowners, suppliers and subcontractors who did the work for the man who never held a hammer.

One client, Helen Webb, an elderly Watauga widow, spent two hours with Tatum at her kitchen table. She wanted to hold the $1,700 insurance check in a bank account, but he persuaded her to let him have it. “He said he would do my roof next,” she recalled. Her certified letters to him were returned, marked refused.

The list of creditors — on which my name is mistakenly included — offered a road map for Tarrant County district attorney’s investigators, who sent letters to everyone. “It has come to our attention that you may be a victim of a criminal offense committed by Jerry Shawn Tatum,” they said.

Sixty people responded with stories of how Tatum owed them either a roof or money. From that, 17 cases were strong enough to take to the grand jury, which returned an indictment July 15 alleging theft of more than $100,000.

“The sheer volume” of that many jilted customers shows a pattern of theft, says Assistant District Attorney David Lobingier of the economic-crimes unit.

My attempts to reach Tatum by mail, phone and e-mail last week were unsuccessful. During a 2008 bankruptcy hearing, he testified that he always intended to perform the work and that he had been in business for three or four years.

In a separate case in March, Tatum pleaded guilty in 371st District Court to a hot-check charge involving more than $1,500. He was sentenced to two years’ probation.

Dan Pitts, former president of the North Texas Roofing Contractors Association, says customers shouldn’t give contractors money before a job is started.

“I would say our average roof job is $8,000 to $10,000, and we get no money upfront,” says Pitts, who owns Pitts Roofing in Haltom City.

“It’s hard to get someone back [to your house] when you owe them very little money,” he says. “It’s hard to get them to respond to your phone calls. But if you owe them money, they’re much more apt to return your phone calls.”

For me, the lesson learned two years ago was to stop relying on the advice of others and instead take greater responsibility in my decisions. My insurance agent apologized to his customers. But I don’t blame him. He’s an indirect victim himself.

In a sense, after this, my roles as a newspaper watchdog and vigilant consumer merged into one. Coming close to losing thousands of dollars taught me to take nothing for granted. Everybody needs to be a detective. All the time. On everything.

# # #

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

Texans are losing major protections from their government. This is going to effect the health, pocketbook and well-being of every Texan.

Here’s her story below. I reprint it in case you missed it.

State agencies expect to investigate fewer consumer complaints of wrongdoing by insurance companies, veterinarians and utility companies, as a result of budget cuts proposed to comply with an order from Gov. Rick Perry and other legislative leaders.

Fewer elevator systems, funeral homes, beauty shops and tow truck companies would be scrutinized to make sure they’re providing safe, quality services if the cuts go through as expected.

And consumers would likely lose out on millions of dollars that they would have otherwise pocketed. The Texas Department of Insurance alone estimates that policyholders would sacrifice up to $3 million that would otherwise have been recovered from resolving hundreds of complaints.

Regulatory agencies weren’t spared from the required 5 percent budget cuts intended to help make up for an anticipated shortfall of at least $10 billion in the state budget, even though the agencies typically take in more than enough money from fees and penalties to cover their budgets. The agencies keep a portion, then send most of the money they collect to the state’s general fund to be distributed for other uses.

“It’s a hard economy,” Public Utility Counsel Sheri Givens said. “We’re stretched, but it’s something the Legislature asked for and we’ve complied.”

A question of efficiency

Now the debate is whether the agencies, as they emerge leaner, can also be meaner.

Some say the cuts are appropriate and will lead to better efficiencies in government operations.

“Families are doing the same thing, tightening their belt,” said Peggy Venable, state director of Americans for Prosperty, a political advocacy group whose national headquarters are in Washington, D.C. “We realize that government is too big.”

The group’s Texas chapter and the Lone Star Foundation have partnered to review state expenditures, Venable said. The groups are expected to propose a budget to the Legislature, she said.

The proposal would reflect methods of saving money so that spending is capped.

“Bottom line, some of those regulators and the certification processes [they use], we believe, is totally unnecessary,” she said. “And the self-regulation that takes place doesn’t really result in what we think we need.”

But others say the 5 percent budget reductions will hinder key agencies from fulfilling their role of keeping Texans out of harm’s way.

“Every day, you get on an elevator; you get your hair cut; you get your nails done,” said Alex Winslow, executive director of Texas Watch, a consumer advocacy group in Austin. “If these agencies are having to curtail the number of inspections they do, they’re going to be less likely to be able to find problems.

“Their task is to make sure Texans are safe, and if don’t have resources to do their job, it raises very serious concerns. In some cases, we’re approaching a danger zone.”

Regulatory agencies are income-generators for the state. The Legislature determines how much money the agencies can spend at the beginning of the two-year budget cycle. Agencies then may set their fees to cover operating expenses as well as the amount that the state wants returned for the general fund.

For example, the Texas State Board of Veterinary Medical Examiners collects more than $2.2 million in licensing fees. The Legislature gave it an operating budget of about $1 million for fiscal 2010. The board gives the general revenue fund about $1.6 million.

“As a general proposition, you don’t get to quote, ‘keep,’ anything,” said Dewey Helmcamp, executive director of the board. “That’s the way of the flow.”

Effects on the agencies

Some proposed cuts have been described as “dramatic” and “severe.”

The Texas Medical Board, for example, reported that the 5 percent cut will leave it without enough resources to monitor alcohol- and drug-impaired physicians and other medical professionals.

It also says that its backlog of quality-of-care cases will grow by several hundred if money for expert physician consultants is reduced. The agency already has a backlog of 500 cases. That means hundreds of complaints of bad medicine won’t be addressed, because the physician consultants cannot review cases and give guidance on whether a quality-of-care standard was violated.

“Virtually all of the TMB’s key enforcement performance measures will be negatively impacted if reviews by expert panelists have to be put on hold,” the medical board said in its report filed with the Legislative Budget Board. Without such reviews, standard of care cases, which make up 70 to 75 percent of investigations, cannot be resolved. So none of those cases would be dismissed or would result in a disciplinary action.

Givens said she didn’t want to sacrifice any of her 18 employees at the Office of Public Utility Counsel, which represents the interests of residential and small business customers in utility matters, such as rate increases. But she was asked to cut more than $87,000 from a $1.7 million budget. She is pulling it out of the amount the agency spends on professional fees and services to retain outside experts to review litigation.

The Texas Board of Nursing didn’t want to ax any single program, Executive Director Katherine Thomas said, so it made across-the-board reductions.

“It’s been very difficult, but we’ve been through budget cuts like this before,” Thomas said. “If we have to do it, we have to do it.”

It won’t be able to resolve complaints as quickly because it would have to lay off some investigative staff. Complaints would take 212 days to resolve, rather than 188 days.

And the cuts would slow down random audits and criminal background checks of thousands of state-licensed nurses, the agency says. The nursing board had expected to complete the random checks in a decade but, with the cuts, the effort will take more time.

“Nobody likes it, but we’re all in the same boat,” Helmcamp said. “I know the public probably doesn’t believe it, but we’re operating very close to the minimum we need to get by.”

The bulk of the cuts will come from dollars he would have spent to pay staff to travel to investigate cases of abuse. More of the investigative legwork will be conducted instead by phone, mail and fax, he said.

“There are some cases where we do like to send investigators out,” he said. “We’ll still be able to do that to some extent, just not as much as I would prefer.”

The Texas Department of Licensing and Regulation, which has 380 employees, isn’t filling a number of vacant positions, spokeswoman Susan Stanford said.

Those positions include inspectors of elevators, tow truck companies, auto storage facilities, beauty shops and other businesses. Inspectors make sure shops adhere to sanitation standards, use proper equipment and employ only workers with proper licensing.

The agency didn’t want to cut the budget of its licensing division, Stanford said. “It’s important for the citizens of our state to get their own licenses and not hinder the opening of a new business.”

Texas Department of Insurance spokesman Ben Gonzalez declined to comment about its proposed cuts.

“It would not be appropriate for us to comment,” Gonzalez wrote in an e-mail. “State leadership requested reduction plans.”

He referred any questions to the report the agency filed with the Legislative Budget Board.

It stated that cuts would restrict the agency’s ability to resolve about 1,600 consumer complaints, reducing the amount returned to consumers by $3 million.

The report also said that income benefits for injured employees would be delayed and that injured employees’ access to medical care would be hindered.

All agency heads are watching to see what happens. The order to propose ways to cut the budgets by 5 percent came from Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus. The legislative leaders have not yet approved the 5 percent reduction plan.

“We have not been instructed to execute that plan,” Gonzalez wrote. “Beyond that, we cannot speculate.”

The big federal push to cover the uninsured is still a couple years away, but con-artists are getting an early start.

By John Labus

April 9, 2010  — They’re preying on the uninformed, getting people to buy health insurance policies that don’t exist. “The days of the Fuller Brush man and the encyclopedia salesman, those are over.”

Consumer advocate Dave Lieber with WatchdogNation.com says even if you have coverage, they’ll try to sell a fake supplemental policy. “The elderly are the easiest; they love it when an older person comes to the door. But they’ll take a 30-year housewife and sell her Obama Care too.”

Health and Human Services Assistant Secretary of Aging Kathy Greenlee says federal authorities are taking special care to warn the elderly about this latest scheme.

“First of all, the federal government is not going door-to-door to sell insurance. There’s no part of health reform that includes door-to-door salesmen… Be very careful with (your) Medicare number, and don’t give it out to people that you don’t have a prior relationship with.”

But Lieber adds that it’s not just the elderly who can fall into this trap. “They’re targeting everybody. And the most well-informed person is still susceptible to the scam that comes to their front door, because the scammers know how to talk to people in a way that just makes you feel at ease.”

Both agree that if an offer seems too good to be true, it probably is.

-30-

Kudos to Kristina Logan, not only for not falling for some nitwit’s scam attempt, but also sharing what she learned with the rest of us. On behalf of Watchdog Nation, thank you to Kristina, a 7th grade language arts teacher at T.A.Howard Middle School in Arlington, TX, Mansfield Independent School District.

Kristina heard me talk about Watchdog Nation at a teachers’ conference; she heard me encourage everyone to check things out carefully. Teach, I’m glad you were listening.

This motto for Dave Lieber's Watchdog Nation is explained in his award-winning book and talks. But you can imagine...

She tells me:

“I wanted to thank you for encouraging us all to put up our guard when something seems too good to be true,” she says. “My husband and I are shopping for a car. On AutoTrader we found a great deal! $8,000 for a 2006 Acura MDX. Can you believe that?

“Well, I took your advice and checked into it. Turns out this guy, AKA Christopher Miller, was trying to pull a fast one. When I ‘googled’ his name and where he said that he was from, I see that this joker got the name  and city (Glasgow, Scotland) from a headline. Even more shocking … Christopher Miller is doing jail time of 18 years because he stabbed a soon-to-be-father.

“Long story short, I bet this clown didn’t think that I could actually do anything about it. (Perhaps sending back a couple of jolly emails as a retort will be enough, just to show I’m not falling for his scam.)

“Do you have any other suggestions that I could do to warn others?”

And my answer, of course, is here (with permission to identify her.)

# # #

From: Christopher Miller [mailto:cmiller7.6@hotmail.com]

Sent: Mon 2/15/2010 6:20 PM

To: Logan

Subject: 2006 Acura MDX‏

Hello,

Thank you for your interest about my car. Sorry for the delayed response, but I’m in Glasgow (Scotland) right now and I have been very busy. The total price of the 2006 Acura MDX‏ is $8,000.00USD . THIS IS MY LAST PRICE. I’ll not negotiate the price. The car is registered and located in United States. I want to keep the car for me, but I cannot register it here, as it is made for the USA market, according to US standards. So, I decided to sell it.

A few words about the car:

- 2006 Acura MDX‏

- Warranty: Existing

- Vehicle title: Clear

- Mileage: 102,800

- Body type: SUV

- Transmission: Automatic

- Engine: 3.5L V6 PFI SOHC

- Fuel type: Gasoline

- Exterior color: Silver

- Interior color: Black

- Drive train: All Wheel Drive

- VIN#: 2HNYD18636H546991

- You can see more photos right here: <a href=”http://pict.com/expo/3987579/446af7c46e”>http://pict.com/expo/3987579/446af7c46e</a>

The car is like new, in perfect conditions, accident free, no scratches, no special marks, no need for additional repairs what so ever. A genuine road runner ready to be yours, but only if you shall understand and you won’t make me loose time as it has already happened to me.

If you have any question please don’t hesitate to reply.

Thank you again for your interest.

Christopher Miller

Phone: 817-914 —- (redacted by DL in case it’s someone’s real number)

Sender IP: 76.185.147.220

# # #

Subject: RE: 2006 Acura MDX?

Date: Mon, 15 Feb 2010 19:29:03 -0600

From: Logan

To: cmiller7.6@hotmail.com

Thanks for the reply. I am very interested in seeing the car. I am in South Arlington. What would be the best time to meet someone? Evenings are best for me. Is the car in Grapevine?

# # #

Hello,

As I told you in my first e-mail, I am in Scotland, UK with my work. Before leaving US I had prearranged the deal with eBay VPP ( Vehicle Purchase Protection ) so my presence in US isn’t necessary. The car is in their warehouse ready for delivery.You have 10 days to test and inspect the car. So if you want to make this deal I need the following details from you:

*Full name and address

*Shipping address

*Phone #

After I will have all this details I will forward them to eBay VPP and I will proceed the order. eBay VPP will contact you with all the details that you need to complete this deal and also to see that i am covered by them and that I am legit seller.

Waiting your email with the requested details.

Regards!

Christopher Miller

# # #

Watchdog says: Check it out on the Internet before buying. She learned that a man named Christopher Miller was involved in something awful (see it here) and that gave her pause about the whole overseas operation. he probably wasn’t the same Christopher Miller, but it was enough to serve as her wake-up call.

Remember that U.S. laws and regulations don’t apply overseas. When you’re dealing with scammers in Canada or across the ocean, remember they are among the best in the world. It’s almost impossible to get your money back.

# # #

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

That’s not necessarily the case with some teeth whitening products purchased on the Internet. If you want white teeth and search for a phrase like “tooth whitening,” you’ll probably get pop-ups for trial offers.

Advertisements lure buyers with an offer of spending just a buck or two for a quick test, but some customers tell me they get charged a lot more.

As first reported in the Jan. 24, 2010 Dave Lieber column in the Fort Worth Star-Telegram, Carol Rea of Grand Prairie says she bought a $1.99 trial of Smile Bright in October and another trial product for 99 cents. Unaware that she had to cancel within 10 days or she would be charged more, she was billed $700 before she repeatedly tried to cancel — unsuccessfully.

Courtesy of Flickr

Worse, the money was extracted from a government-issued debit card that provides her unemployment benefits. She says that she can’t get a full refund and that with the loss of $700, she may not be able to afford her health insurance payments.

Smile Bright’s customer service agents “have very little sympathy,” she says.

Because the cards don’t come with monthly statements, Rea didn’t realize for several weeks that the money had been gradually taken from the card.

“I noticed that starting in November, I wasn’t keeping track of my unemployment account as closely as I had been. I somehow always had less than I thought I should have,” she said.

The Watchdog tried to help Rea and Jeff Johnson, a Fort Worth teacher who paid $2.95 for an “amazing trial offer” — as the ad called it — for Premium White Pro. After the product arrived, he tried to cancel but was later dunned for $87.

Despite several hours of efforts, I couldn’t find executives from either company to speak with. And I believe that’s by design.

Johnson told me he believed that Premium White Pro is based in Colorado. When I called customer service for the product, an agent said the company is based in Des Moines, Iowa. When I couldn’t find it there, I called again and was told by another agent to write to the United Kingdom.

With Smile Bright, Rea was billed by five companies. When she contacted her bank to protest the charges, she says, “the bank claims department told me this was very common and had the contact phone numbers for all five accounts readily available.”

I called all the companies — Health Cleanse, World Fit, Teeth White, Body Pure and Smile Bright.

Most led back to a similar call center operated by First Support Solutions. The agents answer by saying “customer care.” But then they ask which toll-free number you used so they can tell which product you are calling about.

When I called Body Pure, a woman said: “This is a call center. I am a supervisor. We don’t have the corporate number. You can write a letter.”

When I called World Fit, I was told, “If you’re not the buyer yourself, basically, there’s no one you can speak with in regards to this.”

But finally, I found a helpful agent for Smile Bright. He told me his call center is in Provo, Utah.

The product consists of two mouthpieces and a gel or liquid that goes inside. The mouthpieces are worn a half-hour or an hour each day.

“Just like the stuff you get at the dentist, if you’ve ever done that,” he said.

“When a customer signs up, he is given 10 days as a trial period to use Smile Bright,” he said. “Once that 10 days is up, there is a home delivery plan, a subscription every month. In most cases, the charge is $92.37 per month.

“Before the 10-day trial ends, if you call and cancel, there won’t be any charges at all.”

Canceling after 10 days is more complicated. The contract terms, he said, are on the Web site, and a summary is posted near where credit card numbers are entered.

Rea has had trouble trying to return the products she received in the mail.

“Out of nine, 10 little boxes I have accumulated, they are allowing return of only three of them,” she says.

This isn’t uncommon. Here’s the BBB of Utah’s report on this company.

Many teeth-whitening Web sites aggressively push trial offers.

Try to close one advertising box and another pops up that says: “WAIT. Don’t leave yet!!!! Are you sure you don’t want to take advantage of this amazing Celebrity White Teeth Trial for only 99 cents? This is your last chance to help yourself have a beautiful illuminating smile.”

But it isn’t really the last chance.

When you close that box, another pops up: “Act now to receive your Trial for ONLY 99 CENTS. Why not give it a shot, and put yourself in a position to have more confidence?”

The Better Business Bureau warned last year about the deceptive trial offers and pointed out that ads for many of the whitening products show up on news sites. Star-Telegram.com runs some of the ads.

Premium White Pro’s rating is buried in the BBB’s database under the company 1021018 Alberta Ltd. There are 1,797 complaints listed against the business in the last three years, with 375 cited as unresolved.

The BBB report lists 52 Web sites connected to the company, including teethwhiten.com, celebswhiteteeth.com and dazzlewhite.com.

Smile Bright’s BBB report lists 430 complaints, with 253 listed as “failure to respond” and 70 more as unresolved.

In an Internet search, I found hundreds of postings by frustrated customers who believed that they were buying a trial period and ended up getting billed much more.

Doing a little research on the Internet before buying goes a long way in saving time, aggravation, money and embarrassment.

The idea is to make a person’s smile brighter, but many customers say smiling is the last thing that happens when they get ensnared.

What to watch for Before buying, read the fine print and check the company on BBB.org. Learn the cancellation policies.

Complain to the BBB if you believe that you lost money.

Learn about the teeth-whitening industry at www.cctwonline.org, an industry-sponsored site.

Source: BBB

__________________________________________________________________________________

Here is a list of all the “sister” companies for PremiumProWhite, according to the Edmonton BBB:

Courtesy of Flickr

www.dazzlewhitemax.com

www.teethwhiten.com

www.dazzlesmilesupreme.com

www.dazzlesmilepure.com

www.dazzlesmilenow.com

www.celebswhiteteeth.com

www.ultracleanseplus.com

www.acaiforcemax.com

www.guidetosuccessonline.com

www.securityhelpkit.com

www.secureinformationresource.com

www.successgrants.com

www.dazzlewhiteteeth.net

www.quickprofitkit.com

www.justthinkmedia.com

www.dazzlewhitepro.com

www.ToothWhiteningResult.com

www.DazzleWhite.com

dazzlewhite-teethwhitening.blogspot.com

dazzle-white.org

www.dazzlewhitenow.com

www.dazzlewhitemax.com

www.cathysteeth.com

www.janicesteeth.com

www.clearliftultra.com

www.acaislimedge.com

www.acaislimexclusive.com

www.mycreditreportsdirect.com

www.acaiforcext.com

www.onlinecashsuccesskit.com

www.changingsizes.net

Exfatkid.com

www.acaiforceext.com

www.acaislimplus.com

www.edirectsoftware.com

www.maxprofitsecrets.com

www.acaiberry-warning.org

hollywoodteethwhitener.com

www.premiumacaislim.com

mysixpackmethod.com

www.purerezver.com

www.cindysteethwhiteningstory.com

pillsexposed.org

stevegotripped.com

cleanseuniversal.com

dietpomegranatepro.com

cellulitesolve.com

www.johncenaworkout.com

www.premiumwhitepro.com

All he had to do was cash the check and send someone connected with the company part of the money as a Western Union money transfer. The rest was for him to use for mystery shopping to evaluate businesses, he was told. Afterward, he’d file reports about his experiences. Simple enough.

On Nov. 9, he went to his bank, Bank of America, but employees there told him they couldn’t cash the check. Since it appeared to be a Wells Fargo check, he was told to go there.

At a Wells Fargo branch in DeSoto, he was told to have a seat. Fifteen minutes later, a DeSoto police officer walked up to him and said, “Sir, can you stand and put your hands behind your back, please?”

“What?” the man asked.

As first reported in the Dave Lieber column in the Dec. 20, 2009 Watchdog column in the Fort Worth Star-Telegram, the man was arrested on suspicion of forgery of a financial instrument. On Nov. 30, he was indicted by a Dallas grand jury.

This is the first time I’ve seen a case where the apparent victim of a scam is arrested. But there are two important facts that must be disclosed.

Alfred Hitchcock made a 1956 movie about a man falsely accused of a crime.

First, the arrested man is Randolph Shaheed, 59, who in the late 1960s was one of Fort Worth’s most notorious gangster killers. He served 15 years in prison and is now on parole for life. (Watch a Mickey Grant documentary about him here.)

Second, he is one of the most honored ex-offenders in Texas. Two days before his arrest, the Dallas office of the state Parole Division held its annual Success Celebration, at which Shaheed was honored for helping ex-offenders succeed after they are freed.

When I asked the Texas Department of Criminal Justice to describe the award he received, the agency released a 171-word statement that describes his good deeds, calls him the ideal client and says he is “trying to promote positive change.”

How much Shaheed’s criminal record contributed to his current predicament is hard to say. He has a court date Tuesday, and the charges could be sorted out then. When I asked about his case, the DeSoto police and the Dallas County district attorney’s office mentioned his criminal background.

Shaheed said that when the mystery shopper offer arrived, he was in a confused state because his 20-year-old daughter, from whom he was estranged, had died suddenly Nov. 5.

At the time, he said he wasn’t aware that the mystery shopper ploy is a common scam. Targets of the scam are told to cash a check and send a portion of it to the purported mystery shopping company. The Federal Trade Commission says on its Web site: “The truth is that it is unnecessary to pay money to anyone to get into the mystery shopper business. ?.?.?.? Consumers who try to get a refund from promoters of mystery shopping jobs usually are out of luck. Either the business doesn’t return the phone calls, or if it does, it’s to try another pitch.”

Shaheed showed me e-mails from a Fred Mcguire of New York. (Read them here.) Shaheed said he believed that the e-mails were authentic — but they fit the classic scam. The best clue that something was wrong came in the task that Mcguire assigned him: Shaheed was supposed to visit his neighborhood Western Union office and describe all the mechanics of wire transfers from that office, including the name of money agents on duty.

When police confronted him at the bank, Shaheed said “he was a mystery shopper on the Internet,” according to a police report.

He spent four days in jail before his wife posted bail.

He is being represented by a public defender who didn’t return my calls.

Once released, Shaheed called Fred Mcguire in New York to tell him what happened.

“There’s something funny about the number,” he told me. “It just rang as if it were a phone booth or something.”

Shaheed has tried to explain that he was the intended victim of a scam.

“Doesn’t anyone want to listen to me?” he asked. “I’ve presented all the proof. I thought it was a check, brother. You know what I mean? I thought I was getting a part-time job.”

At Wells Fargo, the teller suspected that the check Shaheed presented was fraudulent, bank spokeswoman Helen Bow said. “She immediately notified the Police Department,” Bow said. She declined to answer other questions, referring The Watchdog to police investigators.

DeSoto police Capt. Ron Smith is skeptical of Shaheed’s story. “Don’t believe everything you hear,” Smith said. Although he acknowledged he had not reviewed the case file, Smith said he would be surprised if Shaheed was the victim of a scam.

In 1969, Shaheed, then known as Randolph Brown, killed a grocery store clerk in a bungled robbery attempt. Later that night, he attempted another robbery. All told, he shot at seven people, killing one and wounding two.

He was already infamous. Two years earlier, he had walked onto a Fort Worth bus holding a knife. When the driver kicked him and a friend off, he punched the driver, who started shooting. His friend was killed. He turned himself in on television at KXAS/Channel 5.

He was convicted of murder for the 1969 slaying and sent to prison, and he was paroled in 1984. After his release, he made a deal with the FBI to go undercover to break up a drug ring. Afterward, he was temporarily placed in the witness protection program. He testified against 17 defendants, the Star-Telegram has reported. All were convicted.

Then he became a minister and worked on many anti-gang programs for kids — his new life’s work. For that he was honored by the Parole Division. Excerpts from its statement released to me last week:

“With the last three years, Randolph Brown has become an advocate for other offenders. In 2005, Brown started a program now called ‘Ex-Offender’s of America Alumni Association,’ or XOAAA, where prison ministry goes beyond prayer.

“Through his program, Brown uses his voice, gifts, talents and ministry to bring forth healing for ex-offenders and those affiliated with them. The program promotes employment searches, how to get a job, finance management, spiritual counseling and more.

“The XOAAA program does not benefit just offenders but crime victims and family members as well.”

Brown also organized the Coming Up Program in Fort Worth, the statement says.

After praising his work on a radio program and cable TV, the Parole Division concluded, “Offender is more than just an ideal client. He is an advocate for ex-offenders trying to promote positive change within our community.”

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. His book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, won two national book awards in 2009 for social change. Twitter @DaveLieber

Please let me introduce you to Inspector Luigi. (This next video is an intro, but you can skip to the actual audio files below.)

He is with the U.S. Customs Service — or so this fraud says. He called my pal, George Kahak, who probably holds the world title as victim of the most scams.

I first wrote about George in my Dave Lieber Watchdog column in The Fort Worth Star-Telegram. The story is so fascinating that I reprinted it in my book — Dave Lieber’s Watchdog Nation.

I’d love for you to read the short chapter on George in this memorable excerpt.

So the other day George called me. He was about to get bit again. He won a half million dollars in a lottery. But the organizers wanted to explain to him how to claim his prize. It involved him sending money to them.

As always, I warned him off. But this time, when Inspector Luigi called George, I was there.

I asked George if I could take the phone. Then I told Inspector Luigi that George is hard of hearing. Meanwhile, I taped it for you.

Please listen to the slick, deep voice of this con artist. He’s a beaut. Each segment is just a few minutes.

In Act I, he explains the scam to me in detail.

In Act II, he continues his ridiculous explanation.

In Act III, well, here’s the real drama. He tells me where to wire the money. Then, The Watchdog confronts him. (This sound file ends when the good inspector hangs up on me.)

In Act IV, I call back a few days later and Luigi pretends he is some other guy who answers the phone. When he tries to connect me — surprise — I get disconnected.

And in the finale, Act V, he tries to pretend, once again, that he is someone else. But it’s obviously his voice.

NOTE: As of this writing, Luigi is still using the phone number he gives on the audio (1-305-224-1783), so feel free to call him and say hello before the line goes dead.

WHY DOES THIS MATTER?

Bastards like Luigi do this every day. There are thousands of them. They prey on your grandmother, your parents, your friends and neighbors. They are so convincing that they get enough victims to make this worthwhile. Luigi is a classic case.

Watchdog Nation can’t stop the Inspector Luigis of the world from operating, but you can expose them and make it clear to all exactly how they operate.

Please share this blog post with those whom you care about.

You can read my original Star-Telegram story about this here.

# # #

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. His book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, won two national book awards in 2009 for social change. Please use these icons below to share this warning message on Facebook, Twitter and your other favorite social sites.

“Suddenly we have a common goal in our lives. Get rid of credit cards.”

Not longer after, I got scolded by an economist I know. The well-respected financial analyst e-mailed me:

“Now I fear that you’re going after the credit card industry with too much vigor. Be careful, my friend. They’re financial tools, and for people who pay their balance they’re convenient, a source of an interest free loan and cash back. They’re smart. So why would people get rid of them?? I think you narrow your appeal as a watchdog if you pander to a particular demographic.”

Of course, I thought about what this expert said. Then decided to share with you where I am coming from when I scratched those simple 14 words.

I found a recent report by The Pew Charitable Trusts that is the most devastating study of what is going on in U.S. credit companies now, i.e. the big-boy banks. I knew it was bad, but had no idea …

“One hundred percent of credit cards from the largest 12 banks used practices deemed `unfair or deceptive’ under Federal Reserve guidelines. None of these banks issued cards would meet the requirements of the Credit CARD Act of 2009.”

That simple sentence by the Pew project team couldn’t be written any clearer. But let me try anyway in my own WatchdogNation.com brand of plain talk:

The largest dirty dozen banks are breaking the law that is about to go into effect in a few months. Grab all the cookies before they put a lock on the jar. Only here, the cookies are American families getting raked by their own banks.

The banks aren’t even trying to comply. 100 percent! Not a mensch in the bunch. And this is the same group that buys Congress with PAC donations and vows, “We can regulate ourselves.”

The Dirty Dozen has so much dirt under their fingernails that the original 14 words that upset the economist were far too kind.

Time to name names, pal.

Want to know The Dirty Dozen 12 Biggest Banks? Courtesy of WatchdogNation.com via the wonderful folks at Pew:

Is your credit card company among the Dirty Dozen?

American Express

Bank of America

Barclays

Capital One

Chase

Citi

Discover

HSBC

Target

U.S. Bank

USAA

Wells Fargo

# # #

Final note: My Nordstrom Visa bill came recently with a new 29.99 percent rate. I called and complained. They said it was a mistake and quickly moved me back to 12.99 percent. A recent Frontline show on PBS used Nordstrom Visa as an example of bad practices. Only 9 months ago, the Nordstrom Visa card was rated as one of the best cards to get on lowcards.com. That’s how quickly things have slipped, even among the better ones. Point is: CALL AND COMPLAIN.

# # #

The full report was written by the Pew Health Group, Shelley Hearne, Managing Director. Contributors were Nick Bourne, Eleni Constantine, Ardie Hollifield, Alexander Martone. You can learn more about their work at Pew’s Safe Credit Cards Project. You can read their full report here.

# # #

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. His book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, won two national book awards in 2009 for social change.

After that, the check can be cashed unless you ask that the stop-payment order be extended.

Every state has its own law, but most are the same. [To find your state's law go to a search engine and type in, for example, "stop payment checks law in Connecticut."]

Listen to this sad tale.

Courtesy of Flickr

Pat and Gayla Lavery had no idea of the law in their home state of Texas, and they got burned twice: once by the apparent scammer who took their $1,350 check for a vending machine he never delivered, and again, they believe, by Washington Mutual, which cashed the check six months and six days after the stop-payment order was placed. Chase Bank, which acquired WaMu last fall, won’t help the Watauga, Texas couple recover their money.

As Dave Lieber first reported in the Nov. 13 Watchdog column in the Fort Worth Star-Telegram, the Laverys said they thought that when they paid $32 to their bank, Chase, for the stop payment in August 2008, the vending machine salesman would never see the money.

Turns out that Texas law is clear: A stop payment is good for six months, and extensions must be requested by the customer and granted by the bank.

It started when Pat Lavery saw an advertisement for a vending machine on Craigslist. Lavery visited Sam Beck, the owner of Discount Vending in Dallas. Beck, Gayla Lavery says, wanted $1,350 and promised that once the check cleared, he would deliver the machine.

But when Beck made a special point of asking which bank the check was written on, Gayla Lavery got suspicious.

“I had a bad feeling about this guy from the start,” she said, “but my husband said, ‘We’ll give him the check and then go home and look him up on the Internet and we can always stop payment on the check.’?”

That night, the couple found that the Better Business Bureau had given Beck’s company an F rating, mostly for not responding to complaints.

“There were complaints about him everywhere,” she said. “I was afraid he was going to be at my bank when it opened so I went online that night and put a stop payment on the check. The bank charged me $32, but I figured it was better than losing $1,350.”

They called Beck, told him what they had done and promised to pay cash upon delivery. He said he would deliver the machine, but they never saw him again.

Six months and six days later, Beck walked into a Washington Mutual branch and cashed the check. Part of the payout came from their checking account, and when that hit zero, the rest came from overdraft protection.

The check is endorsed by Sam Beck. (The Watchdog could not reach Beck.)

The couple visited Chase. “They pulled out this big book of policies and showed me all the disclaimers to cover themselves for this,” Gayla Lavery said. “There was no disclaimer when I did the stop payment online but apparently being ethical doesn’t matter to large companies like Chase.”

She says she sent a certified letter to one of Chase’s top executives in Texas but got no response.

The Watchdog contacted Chase. Spokesman Greg Hassell shared the bank’s policy:

“For personal accounts, a stop payment is good for 180 days. Customers can place an additional stop payment order at any time” for another 180 days for an additional fee.

All Texas banks are supposed to follow the same policy. Texas law states: “A stop-payment order is effective for six months … [and may be] renewed for additional six-month periods.”

The Chase spokesman says customers are notified in person and online of the law and bank policy. He forwarded me the language used online to inform customers, but I couldn’t find any wording that warned consumers about the 180-day rule. I did find it in another area of Chase’s Web site under “Account Rules and Regulations.”

According to the Texas Department of Banking, banks don’t have to cash a check presented more than six months after it’s written — but they’re not prohibited, either.

“While the bank is not obligated to pay the check, no law states that Chase couldn’t accept the stale-dated check and pay it as written after the stop payment expired,” department spokesman Phil Lena said.

So the ultimate decision rests with the bank, and it could go either way.

The best way to solve the problem is to close the checking account. Then no more extensions need to be granted, said Shannon Phillips Jr., deputy general counsel of the Independent Bankers Association of Texas.

Before cashing a check after six months, some banks may flag an account with a hold and check with the customer. But others don’t, he said.

Phillips suggests the Laverys consider a lawsuit against Chase. “Chase is the 800-pound gorilla in this thing. If they want to take them to small-claims court, they are the consumers. Juries are usually a little more sympathetic to a consumer. This is the kind of thing that small-claims courts were established for.”

It’s a long shot because state law is clear.

Another alternative: search for a bank that is understanding and flexible with its customers.

Watchdog Nation tips

Check online for background information on the seller before making a purchase.

Don’t pay for items until they are delivered. Never pay cash.

Be wary of advertisements. Verify everything.

To read your state law on stop payments, search online for your state’s banking and banking laws.