Here is a guide to help try to avoid being cheated or scammed by a business or company and check out or evaluate a company for free before you decide to pay them money for services.

Over the years a common theme has emerged where people feel they are scammed by a company or taken advantage of and it appears they have not checked them out before giving up their hard earned money for services. Here is my guide on what to do to help you from being a victim.

Checking out a company or business before you pay them a lot of money is smart and prudent. It can help keep you from being ripped off.

The largest issue I see when people are in trouble and looking for help is they tend to run to the first company that claims they can help them and they suspend commonsense or prudent measures and hope the company will perform the services they claim to be able to. It isn’t till later that people find out that the claims made may not have been true and then they are left in a worse spot and struggle trying to get their money back.

How to Check Out a Company or Business

There is no one surefire way to checkout a company so feel free to add additional suggestions in the comments below. Here is what I suggest doing.

1. What is the Company Address? Ask the company to provide the physical street address where they are located if you were to visit them. Many companies hide behind a mail drop or postal center address.While it is true that some start-up companies do legitimately use these mail centers to receive mail, it is also true that may fly-by-night outfits use them as well to shield themselves. They will close the mailbox and move on to the next thing.

   If a company is not substantial enough or can’t provide you with a physical street address then you may want to consider if they are going to be around if a problem occurs.

   If they do give you a physical street address with a suite number, do a Google search for that address and suite number. Many of those turn out to be virtual office spaces. They look like legitimate addresses but a little checking will show you they are just a fancier version of the mail drop mask.

   You might want to suggest you are going to be in the area and you’d like to drop in unannounced at their address. If they try to talk you out of that, that might make you wonder why.

   

   You can use the street address to take a look at it from the street using Google Maps. That can be extremely enlightening.

2. Is the Company Registered? It’s easy to check to see if a company is licensed these days. A simple Google search for ‘[state] corporation search’ will typically get you the link for the state you are searching so you can do a quick search of the the state records to see if they are registered.You will want to check the state in which they say they are located and your state. It is surprising the number of companies that are not licensed to conduct business in their own state. While a company may be operated as a sole-proprietorship and may not be a registered corporation or LLC with the state, that will at least give you a good idea how big they are and if they claim to be a “corporation, nonprofit, or LLC” they should be registered.
3. Is the Company Licensed? If the company is selling you some sort of financial service or debt help, the chances are that their state and your state require some sort of licensing. This is true for both for-profit and nonprofit organizations.If a company is selling you debt help or a loan, they most likely should hold a state license or be exempt from licensing. Ask them for their licensing information to be able to provide a service. If they claim they are not required to be licensed, you can use the free debt relief compliance module to check if that is true.
4. Recognize the Role of the Person is You Are Talking To. Typically the person you are talking to on the phone is either paid a commission or evaluated on one thing, making sales. The intentional or unintentional effort of a representative is to persuade you to use they services and enroll as a client with them. Don’t feel pushed. You need to understand the representative may say a lot of things that don’t wind up being supported in writing. They may engage in puffery or misrepresentation to get you to pay them money for services.If a company is attempting to sell you services and using the telephone, they must comply with the FTC Telemarketing Sales Rule.
5. Ask the Company to Put Their Performance Claims in Writing. If a representative is willing to tell you they have a great success rate for the services they are selling, then they should not hesitate to share that data with you. In fact the Federal Trade Commission has some very clear guidance about how a company should do that.May I base my advertising claims on the experiences of some previous customers?

   Yes, but your sample must be representative of the entire relevant population of your past customers. To accomplish this you must, among other things, use appropriate sampling techniques, proper statistical analysis, and safeguards for reducing bias and random error. You can’t cherry-pick the most successful examples to inflate your results.

   If you advertise or represent that your customers will save a certain amount of money or reduce their debt by a certain percentage – for example, “We can settle your debts for 40% to 60%” – your statements must be truthful, and you must have objective proof to back them up. Your claims must accurately reflect the results you’ve achieved for previous customers. It’s important to consider the message your claims convey. Under the law, the FTC looks at claims from the point of view of reasonable consumers. Therefore, what matters isn’t the literal accuracy of the words you use, but rather your proof to support the “net impression” your message conveys. For example, claiming that your past customers have achieved “up to 60% savings” is likely to convey to new customers that they, too, will get savings of around 60%. If you don’t have solid proof to back that up, the claim is deceptive.

   Here are several important requirements for making sure your savings claims are truthful and not deceptive:

   1. State the savings based on the customer’s debt when he or she signs up for the program. You may not inflate savings figures or percentages by including interest and fees the credit card company adds after a customer signs up for your program.
      

      Example 8: Andy signs up with a debt relief service offered by Company H, owing $10,000 on his credit card. One year later, following negotiations with the credit card company, Company H negotiates a settlement allowing Andy to pay $6,000 to resolve the debt. However, since Andy enrolled, the credit card company has charged him interest and late fees totaling $2,000, so that Andy now owes $12,000. By getting a settlement for $6,000, Company H has saved Andy $4,000 ($10,000 minus $6,000) or 40% of the debt at the time of enrollment. It would be deceptive for Company H to claim to have saved Andy $6,000 ($12,000 minus $6,000) or 50% of his debt.

   2. Include the impact of your fees on the claimed savings. You may not inflate your savings claims by excluding the fees your customers paid you.
      

      Example 9: Betty owes $10,000 on her credit card, and signs up with Company ‘s debt relief service. Company J gets a settlement allowing Betty to pay $5,000 to resolve the debt. However, at the time of settlement, Company J charges Betty a $1,000 fee for its work. It would be deceptive for Company J to claim to have saved Betty $5,000 – or 50% of her debt – because Betty also had to pay $1,000 in fees. Instead, Company J may truthfully state Betty’s savings as $4,000 ($5,000 minus $1,000) or 40% of Betty’s debt.

   3. In calculating the results you’ve achieved over time, you must include customers who dropped out or otherwise failed to complete the program. Don’t base your savings claims only on customers who successfully completed your program.
      

      Example 10: Company K had 10 customers signed up for its service. Each one had $10,000 in unpaid credit card debt for a total of $100,000. Five of the customers completed the program, and each saved $5,000 – for a total savings of $25,000. The remaining five customers dropped out of the program, each one still owing the $10,000 they owed when they signed up with the program. Taken together, Company K has saved its customers $25,000 – or 25% – of the total $100,000 debt they had when they signed up with the program. It would be deceptive for Company K to exclude the drop-outs and claim that it saved its customers 50% of their debt.

   4. Include all debts enrolled by your customers, not only those that have been settled successfully. In calculating your savings claim, you may not exclude accounts you failed to settle, even if the failure was due to customers dropping out of your service.
      

      Example 11: Company L has 10 customers, and each of them enrolls two $1,000 debts in the program – totaling 20 debts or $20,000. Company L is able to settle 10 of the 20 debts, each for $500. However, it was unable to settle the remaining 10 debts before those customers either completed or dropped out of the program. Thus, Company L has saved its 10 customers $5,000 or 25% of their debts in the program. It would be deceptive for Company L to exclude the 10 accounts that weren’t settled and claim a savings rate of 50%.

   While the FTC examples apply specifically to debt settlement companies, the examples can also be used as guidance for other debt help. For example, the success rate of a mortgage modification or credit counseling program.

   Nearly all credit counseling programs will not put their performance numbers or success rates in writing. That should certainly make you wonder why.

   Here is a good example of a credit counseling group that does put their performance measurements in writing and you can use that to evaluate what you should expect from other credit counseling groups.

   For example, if a company is trying to sell you mortgage modification help for thousands of dollars, certainly they should be willing to provide you with documentation to show how successful they have been. And even supply performance data with your specific large lender should be on file. If they are unwilling or unable to provide you with such data, that should make you hesitant.

   Remember, their data must show the performance of all clients enrolled, not just successful clients.

6. Check With the Attorney General Office. You can find the current Attorney Generals’ listed here. The links to their websites will be there as well. You can contact the Attorney General office in your state and their state to inquire if there are any complaints on file. The Attorney General office may also be able to help you determine if the company should be licensed to provide the services they are selling you and check if the company is licensed.
7. Check With the BBB. Don’t even get me started on the BBB. While there have been some valid criticisms of the BBB, they still remain a well recognized repository of complaints and company information. You can search a company here.A BBB rating is not in and of itself the singular clue you should check. I think the companies response to previous complaints is more important. Check to see if previous complaints resolved satisfactorily? Does the company have complaints they’ve never responded to? For me, that’s more disturbing.
   

   Also look for how many recent complaints the company may have and the type of complaints. If they are complaints about the product or service that should be a big red flag for you.

8. Search GetOutOfDebt.org. If the company is going to sell you debt relief assistance and people have had a problem with them in the past, they may have already appeared on the GetOutOfDebt.org website in either an article, reader question or a consumer complaint. The search box for the site should be somewhere up near the top right.
9. Is a Lawyer Selling You Financial Help Services? If you are being asked to pay a large amount of money for financial help services like mortgage modification or debt help by a lawyer, it is only prudent to find another attorney licensed in your state and pay for a second opinion, first.A second opinion will allow you to get a better idea if the claims being made to you are realistic and reasonable. There should be no problem in any attorney being comfortable with their claims when reviewed by another attorney licensed in their state. Think about it like this, do doctors complain when you as for a second opinion about a medical condition? No.

   You can also check to see if the attorney is licensed to provide legal service by going to the website for the Bar association in the state.

10. You MUST Read and Understand the Contract Before You Sign It. Long legal agreements are boring to read. That’s a fact. The average person easily gets lost in all the tiny print and legalese. That’s normal. But you need to understand that the contract you are signing is what you are agreeing to, not what the representative told you on the phone.I’ve seen plenty of contracts that say No Refund even though the representative told them there was. I’ve also seen plenty of contracts that make you agree that there are no guarantees or ask you to waive some of your rights away. And then there are the contracts that even say that everything you were told on the phone is not valid.

    If you are being asked to agree to pages and pages of text, you must understand the agreement is written to protect the person selling you the services, not you. You absolutely must understand what you are agreeing to before you sign the document. If you don’t understand, ask for clarification in writing or take the contract to a lawyer licensed in your state and ask for a second opinion. Consumer advocacy lawyers can be located through NACA.net.

11. Print Out The Company Web Pages. If you feel you are going to use the services of a particular company and you have relied on statements on their website or their website as a whole, print out those pages and keep them in a safe place. They will come in handy if you have a problem with them in the future. Also, save every email the company sends you and print all documents they send you and keep all that information is a safe place you can get to it if a problem arises.
12. Do a Web Search. Before you do anything, do a search of the web for consumer complaints. You can search by company name and also search for their phone number.Individual consumer complaints may not be real, valid or accurate but it won’t take long for you to recognize a pattern of complaints. It’s the overall pattern that creates a red flag for me.

    For example, not every customer is going to be happy. That’s a fact. But it’s how the company handles those customers that’s more important for me. I even wrote a guide on companies can handle upset customers and it’s a good guide on what you should look for and expect from a good company. Read How to Handle a Consumer Complaint Like a Pro And Come Out Smelling Like a Rose.

    What I have observed is online consumer complaints that are then followed by glowing comments. People that are unhappy, complain and shout. People that are happy may post some comments on review sites but they don’t typically run around responding to every unhappy complaint. That’s the mark of someone trying to neutralize complaints, not respond to them.

    In my opinion, ideally what you want is a company that will work hard to resolve any issue that might arise, not get upset over it and attack.

    Use the complaints you may find online and the responses as an example of the integrity and professionalism of the company.

That should be an excellent start for you to check out a company or business before hiring them. If you follow my advice above you will have done more than 98% of people do before hiring a company.

The information you learn will help you to make a well informed decision if the company is right for you.

@GetOutOfDebtGuy

Author: This article was contributed by GetOutOfDebt.org, a site that provides free help for people looking for advice on how to get out of debt or getting out of debt.
Source: How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off

Scott,

I have a question about rolling credit card debt into a home mortgage.

If I have a current mortgage balance of around $66,150 at 8.25% fixed rate, monthly payments, with 21 years left on a 30 year mortgage, How much do I save if get a 15 year mortgage at 4.85% fixed rate, biweekly payments, with $10,190 of credit card debt added which is currently at 9.99%?

I have been a subscriber for some time now, and our local credit union recommended we do this instead of doing just the home mortgage and then a separate loan for the credit cards. They also told us that by paying biweekly we would knock a few years off the 15 year mortgage.

I read your newsletters all the time and have found it helpful in helping us to get our finances in order before I retire in 8 years. We are almost debt free of credit cards and we look forward to being able to live without being enslaved to the credit companies. If you use this in your newsletter use my first name and last initial.

Thanks Scott you are an asset and inspiration to millions of people in these terrible economic times.

Shawn M.

This is an involved math problem–which I love. It’s important that we do an apples-to-apples comparison. That means we have to keep your payments constant. Here we go…

STEP 1: Figure out the numbers AFTER you refinance at 4.85%.

Current Mortgage Balance: $66,150
Credit Card Balance: $10,190
—————————————
Total Principal: $76,340

Refinance APR (Annual Percentage Rate): 4.85%

Loan Period: 15 years

Using the DebtSmart Loan Calculator…
Monthly Payment: $597.75

Biweekly Payment Amount: $597.75/2 = $298.88

Using the DebtSmart Loan Calculator…
Loan Repayment Time with Biweekly Payment: 13.35 years (347.20 biweekly periods)

Total time paying $647.57 per month is 13.35 years or 160.2 months.

STEP 2: Find the total time to repay original loans based on the amount you’re willing to pay for the refinance in Step 1.

Total willing to pay is $298.88 every two weeks.

Monthly: ($298.88 x 26)/12 = $647.57 (same monthly amount as the refinance in Step 1)

Using the DebtSmart Loan Calculator…
The monthly payment that will repay the $66,150 mortgage balance at 8.25% APR, in 21 years: $553.20

From the $647.57 you will use $553.20 for your mortgage and the difference, $94.37, for the $10,190 of credit card debt which is currently at 9.99%.

Using the DebtSmart Loan Calculator…
Time to repay $10,190 at 9.99% with $94.37 per month: 276.48 months which is 23 years. Therefore the mortgage will be paid off first.

Using the DebtSmart Loan Calculator…
The balance remaining on the credit card after 21 years is: $2,082.19

Since the mortgage is paid off, you can use the entire $647.57 to repay the credit card debt balance.

Using the DebtSmart Loan Calculator…
Time to repay $2,082.19 at 9.99% using $647.57 per month: 3.36 months

Total time paying $647.57 is 21 years, 3.36 months or 255.36 months.

CONCLUSION:
The comparison is based on the fact that an apples-to-apples comparison dictates that you pay the same amount per month to both cases and then figure out which case is best and how much is saved.

When you refinance at 4.85% you pay $647.57 for 160.2 months.

With the 8.25% mortgage and 9.99% credit card rate you would have to pay $647.57 for 255.36 months.

Therefore, the amount saved is the difference in payoff time multiplied by the monthly payment:

$647.57 x (255.36-160.2) = $61,622.76 (TOTAL SAVINGS)

That is the amount you could save, instead of spend, by doing the refinance at 4.85%.

You may be interested in reading more on what I think about biweekly mortgages in my article, Biweekly mortgage may be rip-off.

Shawn M.

Author: This article was contributed by DebtSmart.com.
Source:

Before the holidays are over, many consumers will charge an extra $600, $800, even $1,000 to their credit cards. Most shoppers don’t plan for this—it just happens. Department stores tempt them with offers of retail store credit cards, two-for-ones, and big discounts …

But by the time January rolls around, they have giant credit-card-debt hangovers that leave them wondering how they can preserve their finances when they have migraine-headache-sized debt looming over them.

Though they are supposed to be joy-filled, the holidays represent a giant danger to your credit score and your pocketbook. Come the New Year, you will have to battle with your credit card bills as well as increasing interest rates. Remember that when your credit card debt increases, your credit score decreases, which translates to growing interest rates.

But this year can be your breakthrough year. Here are a few of my 10 Holiday Shopping Rules.

1. First and foremost, plan in advance.

This means that before you head to the department stores:

• Make a budget.
• Prioritize your gift list.
• Assign a dollar value to each person on your list.

2. Then, play with cash, and leave your credit cards at home using the “envelope system.”

“I’ll just put it on my credit card, and I’ll pay it off when the bill comes.”

How many times have you said this? The problem is that life tends to get in the way by the time the bills come.

Even to the most disciplined shopper, credit cards are a little like Monopoly money, but if you use cash only, you will limit your spending to the cash in hand.

Before heading to the stores, review your budget and create envelopes with the names of each person you are going to purchase a present for (Son, Mom, Dad, etc.). Within each envelope, place the appropriate amount of money you have budgeted for this person— no more and no less. Each of these envelopes represents the wallet you have for each person on your list.

Though you might want to bring a small amount of cash for parking and lunch, leave all credit cards at home, including your debit cards. When you purchase a present, use the money from the appropriate “wallet.”

This method will create a psychological barrier to impulse shopping. If you are tempted to splurge on a gift, you will be dissuaded when you consider whose wallet you will withdraw money from in order to cover the impulse shopping.

3. Buy your most important presents first.

If you have budgeted appropriately, you will not run out of money, but let’s face it: Money does not go as far as it used to.

When shopping, buy the gifts at the top of the priority list first and, if you go over budget, find substitutes for those people on the bottom of your list. (Your sister would probably love a framed picture as much as a $75 sweater.)

If you buy your most important gifts first, you will be less tempted to charge things to your credit card. But if you save your most important gifts for last, you might find yourself turning to credit cards when all your cash has been spent on less-important gifts.

Finally, never get the credit-card discount.

4. Finally, never get the credit-card discount.

That 10 percent discount you get for signing up for a store credit card might seem like a great deal, but think again. It’s a giant scam because it pales in comparison to the damage this will do to your credit score.

Think about it: If you sign up for a retail store account, you are:

• Inviting an inquiry into your credit score. The retail store will run your credit report, which will hurt your score. Inquiries account for 10 percent of your score.
• Increasing the number of credit cards you have. Credit-scoring bureaus respond more favorably to people with three to five major credit cards (American Express, Discover, MasterCard and Visa).
• Incurring interest, unless you pay the account in full. This interest will compound so that the 10 percent savings ends up costing you 20, 30, 50, even 100 percent more than you had intended to spend!

Three defendants have been sentenced to federal prison on charges of bank fraud and aggravated identity theft; one man committing fraud from prison.

According to United States Attorney Sally Quillian Yates, the charges and other information presented in court: In late January 2011, Samantha Johnson stole the wallet of a 93-year-old woman while she was shopping at a retail establishment in Conyers, Georgia. There Johnson found the victim’s debit card for checking accounts at Georgia United Credit Union along with the personal identification number (PIN) for her debit card and account numbers and personal information that she would need to obtain information over the telephone about her accounts from the credit union.

Johnson shared the victim’s debit card number, PIN, account numbers and personal information with Danyez Hines and Carlos Garcia. At the time Garcia was incarcerated at Valdosta State Prison, having been convicted of identity theft and fraud in which he targeted elderly victims.

Sounds like a real “go-to” person, eh? Nothing like looking for help in committing a crime than with a person who had previously failed at getting away with this crime before. Criminals are so smart ::rolls eyes::.

Unfortunately, incarceration did not stand in the way of Garcia participating in additional crimes. Johnson and Hines were able to communicate with Garcia through a cell phone that had been smuggled to him in the prison.

Which makes me wonder, how in the world would one keep a cell phone charged in jail?!

Using the victim’s account numbers, debit card, PIN, and personal information, the defendants attempted through various means to obtain the more than $120,000 in funds that were in the victim’s accounts at the Georgia United Credit Union. Garcia, using the cell phone smuggled to him in the prison, used the debit card number and PIN to wire transfer money from the victim’s account to his prisoner account at Valdosta State Prison.

Hines and Johnson ordered new checks for the account and directed that they be sent to Hines’ grandmother’s address. Once the checks arrived, Hines forged the victim’s signature on checks and cashed them or gave them to others to cash for him. Using the personal information obtained from the victim’s wallet, the defendants called the credit union, posed as the victim and transferred funds between accounts.

When the victim and her family discovered the fraud, they reported it to the credit union. The credit union froze the victim’s accounts and deactivated the victim’s debit card before a substantial loss occurred.

I’m sure the wiring to a personal PRISON account and the mailing of checks to a personal address didn’t give the police too much of a chase in this case.

Garcia, the already once failed criminal, fails yet again and was sentenced to 6 years, 9 months in prison to be followed by 5 years of supervised release and ordered to pay restitution of $3,104.09.

Hines was sentenced to 2 years, 10 months in prison to be followed by 5 years of supervised release and $1,719.75 in restitution.

Johnson was sentenced to 5 years, 10 months in prison followed by 5 years supervised release and $3,104.09 due in restitution.

“Identity theft has the potential to decimate its victims bank accounts and credit history. These defendants targeted a 93-year-old woman and attempted to defraud her of her life savings. Thankfully, the victim and her family discovered the crime before the defendants were able to empty her bank accounts,” said United States Attorney Sally Quillian Yates. “They exhibited a remarkable callousness toward the impact that their criminal conduct would have on their elderly victim” – Source.

Folks, DO NOT KEEP YOUR PIN NUMBERS AND PERSONAL INFORMATION IN YOUR WALLET. That’s right, I went all CAPS on y’all.

Author: This article was contributed by GetOutOfDebt.org, a site that provides free help for people looking for debt consolidation and advice on getting out of debt.