When times are tough, rest assured there are always scam artists around to try to make things worse. The Federal Trade Commission recently announced that it is launching a major sweep to target fraudsters and scammers who proliferate in economic downturns. Scammers thrive on people’s very human vulnerabilities: fear, stress, anxiety, greed, vanity, honesty, and compassion. Where once scammers would use mail, phone, or even local solicitation, today easy to e-mail and websites allows scammers another avenue, one that can deploy pitches widely and quickly. Common schemes in this economy include get-rich-quick schemes, debt-reduction scams, job recruitment scams and work-at-home scams. Authorities warn people to beware of any jobs that require fees: “Pitches for bogus work-at-home opportunities involving medical billing, rebate processing, “mystery shopper” positions that promise to pay you for buying products anonymously for companies, and money-order processing jobs also are on the rise, say Better Business Bureau and consumer-protection officials.”
Then National Consumers League has recently released its semi-annual ranking of the top telemarketing and Internet scams:
Top Scams, Jan. – June 2009
1. Fake Check Scams
2. Internet: Gen Merchandise
3. Prizes/Sweepstakes/Free Gifts
5. Nigerian Money Offers (not prizes)
6. Business Opportunities/Franchises/Distributorship
7. Advance Fee Loans, Credit Arrangers
8. Friendship & Sweetheart Swindles
9. Internet: Auctions
10. Lotteries/Lottery Ticket Buying Clubs
- If it sounds too good to be true, it most likely is
- Be super cautious in giving out personal information to anyone, particularly online
- Learn how to protect against phishing and other online scams designed to get your personal information or your money
- Don’t send money to anyone you don’t know
- Avail yourself of consumer protection tools and resources – we’ve compiled some below
Consumer Fraud Resources
FBI Scam Alerts
Federal Trade Commission Bureau of Consumer Protection
Federal Citizen Information Center – Consumer Action Website
Better Business Bureau
State Attorneys General – site links and telephone numbers
State, County, and City Government Consumer Protection Offices
Identity Theft Resource Center
National Consumer Law Center
by Alan Long of Eldredge & Lumpkin
The difficult economy is not just visible in the headlines but a reality that most of us face daily. Over the last several months we have seen many customers lose their jobs, retirees watch their income from stocks and pensions disappear and contractors lose jobs. These have had a very decided trickle down effect and, as a result, many of our clients are having difficulty keeping current on their premium payments.
Insurance assumes an unwanted connotation in times like these. It is an intangible that can prompt the reaction, why put my dwindling assets towards something that may not ever be used? Unfortunately, driving a car requires insurance, carrying a mortgage requires insurance and success in bidding for jobs requires insurance. So there is a need to find a palatable way to manage these payments. This is where your insurance agent will help.
A policy review with your agency’s customer service representative (CSR) will help determine if you have the most cost-appropriate coverage to fit your individual needs. The key is finding ways to make it work for you.
When you speak with your CSR before a cancellation occurs, you can actually save money and grief. Here’s why:
- Each time you receive an insurance cancellation notice (even if you get your payment in before it is actually canceled) the company charges a late fee. These range from $20-$35.
- If your policy is canceled because of non-payment – even for the first time – most companies will require a replacement policy to be paid in full up front.
- If your policy is canceled and has to be rewritten, you will lose all grandfathered benefits; these may include preferred credits, loyalty credits and pre-insurance exemption status.
- Losing a policy can be costly to the Cape Cod homeowner. We have seen companies decline to renew homeowner policies that have received too many cancellation notices.
- Even though Massachusetts does not allow credit ratings to be used as a factor in setting insurance rates, the number of issued cancellations can affect the rate you receive.
- Cancellations will affect your credit rating and have a ripple effect on your general credit standing.
Find easier ways to pay your bills. Getting organized can take away some of the stress and avoid late fees. Here are some suggestions:
- Keep a list of your policies and their effective dates. Renewed policies require at least a down payment by the effective date.
- Get a list of your installment dates. Most companies charge a fee from $4-$8 per installment. If you pay in 10 installments, you could be paying an extra $80 per year in installment payments for your insurance.
- Pay the bill at a time of year when payment is easier to manage.
- Pay bills online. Using the mail could result in late payments.Companies will consider your premium paid on the date they receive it at their place of business; afterward it is considered “late”.
Be sure to communicate with your agent and company. That’s the best way to save money and time on your insurance premium payments.
One side effect of the worsening economy? Experts predict that there will be more and more uninsured motorists on the road. A recent study (PDF) from the Insurance Research Council (IRC) says that within the next year, we can expect that approximately one in six drivers across the country may be driving uninsured. The report found a strong correlation between the percent of uninsured motorists and the unemployment rate: “An increase in the unemployment rate of one percentage point is associated with an increase in the uninsured motorist rate of more than three-quarters of a percentage point. Based on current unemployment rate projections, the percentage of uninsured motorists is expected to rise from 13.8 in 2007 to 16.1 in 2010.”
Depending on which state you live in, the problem may be more or less severe. The five states with the highest uninsured driver rates in 2007 were:
- 29% – Mexico
- 28% – Mississippi
- 26% – Alabama
- 24% – Oklahoma
- 23% – Florida
The five states with the lowest uninsured driver rates in 2007 were:
- 1% – Massachusetts
- 4% – Maine
- 5% – North Dakota
- 5% – New York
- 6% – Vermont
Page 3 of this report from the IRC includes a chart depicting the percentage of uninsured drivers in your state. (PDF)
Paying the price
Driving uninsured can be costly. It’s against the law to drive without liability insurance in all states but Wisconsin and New Hampshire, which both require drivers to have what is in effect self-insurance, or proof they can pay a minimum level of damages. Penalties for driving uninsured may include fines, license or registration suspension, impounded vehicles, and the potential for imprisonment. For example, here in Massachusetts, penalties for driving without insurance can include a fine of between $500.00 $5000, up to 1 year in jail, or both. Your license can also be suspended. FindLaw offers links to state laws for driving without insurance or with insufficient insurance.
Check your own coverage
In good economies and bad, the cost of an accident with an uninsured driver can be steep. IRC estimates the average payment on claims in crashes with an uninsured driver is about $11,000. Your chances for recovery will depend on your own coverage and/or the financial assets of the uninsured – which may be poor, given that is the most likely reason for not having insurance in the first place. It’s a good idea to evaluate your coverage level with your independent agent to ensure that you have adequate coverage. If you don’t already have it, you may want inquire about uninsured and under insured motorist coverage. These types of coverage would pay for injures or damages if you are in an accident with an uninsured or under insured motorist or if you are the victim of a hit-and-run accident.