How to

GET RICH QUICK! (. . . and in the meantime, learn to be a wise consumer)

Developed originally for the Colorado Association of Teachers of Family and Consumer Sciences By The BBB Foundation of BBB Denver/Boulder 2008 Edition

Greetings! Who would like to GET RICH QUICK? Any young people you meet in the classroom, perhaps? This booklet was prepared by The BBB Foundation, the community outreach arm of the BBB Denver/Boulder. The BBB Foundation is a 501(c)(3) nonprofit organization dedicated to helping build and maintain a fair, safe and ethical marketplace for all Colorado buyers and sellers through a range of consumer education initiatives. This is a proposed secondary-level curriculum for use by the Colorado Association of Teachers of Family and Consumer Sciences (CATFACS) and any other education professionals who might find it useful. The materials may be reproduced entirely or in part, but we please ask that you fairly and appropriately credit The BBB Education Foundation in all printed or verbal presentations. Please let us know whether the materials were useful, and constructive input you can provide for future editions of this booklet would be most appreciated. Your comments, compliments and complaints should be directed to [email protected] or mailed to The BBB Foundation, 1020 Cherokee Street, Denver, Colorado 80204-4039. If you prefer, my direct dial is 303996-3962. Sincerely,

Susan Liehe

Susan Liehe Vice President of Public Affairs BBB Denver/Boulder

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CONTENTS The following sections of GET RICH QUICK! were developed to allow the teacher to select any or all for classroom use. Each section contains the following elements: Overview text. This is a short article that can be used as the basis for a lecture, or, students may be given this as a reading assignment. One way to use each section would be to have the students read the text prior to class, then be prepared to discuss the questions provided and/or issues that come to mind. Questions. These could be used to spark discussion in class or as a short-answer writing assignment. Assignments. For further examination of each section's material. Projects. If the teacher desires a longer term, in-depth project, here are a few suggestions. Students could be given the opportunity to choose a project from any section and could certainly be encouraged to develop their own ideas as well. Part 1:

Overview The Usual Suspects: Industries of Concern

Part 2:

Classic Scams We Love

Part 3:

Advertising: Does it Educate or Aggravate?

Part 4:

Generations and Gender

Part 5:

Home Sweet Home

Part 6:

Complaints: Two Perspectives

Part 7:

Give Me Some Credit!

Part 8:

Customer Service

Part 9:

A Peek at Consumer Privacy

Part 10:

Using the Web Safely

Part 11:

Choosing a Charity Evaluation

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Part 1 --

Overview

We are a society of consumers in a growing global marketplace. On any given day many of us may fulfill roles as both buyers and sellers of goods and services. Whether you are wealthy or struggling to make ends meet, whether you are looking for your first job or ready for retirement, your behavior as a consumer is key to your success and safety. Buying and selling comes so naturally to us, however, that sometimes the skills of being a wise consumer are taken for granted. From the time there were goods being bartered, even before money was minted, there has been trickery in the marketplace. Things are not always as they seem. People will mislead you and profit from your error. This fact of human nature will likely never change, so your solution, as you enter the world of buyers and sellers, is to be the most savvy, best informed, most thoughtful consumer that you can be. Today's theories of consumer education really date back to the dawn of the 20th century, when advertising began to reform. "Snake oil" tonics had been marketed in the late 19th century as cures for everything from arthritis to broken bones; in truth, most of these concoctions contained liberal amounts of alcohol. But after 1900, American businesses began to see that a truthful and fair marketplace would benefit them more in the long run. Self-regulation among businesses, along with the evolution of mass media such as newspapers, radio, and later television, brought better and more factual advertising. Through education and awareness, and as more laws began to control how products could be manufactured, labeled, and sold, Americans learned to be better consumers. By the 1960s there was a strong public sentiment of protecting consumers' interests against unsafe manufacturing or unethical corporate greed. With the expansion of the Internet in the 1990s, the longtime rules of the marketplace were translated into online business practices, both good and bad. For all our advancements in law and technology, however, a fundamental truth remains: In the marketplace, you must protect your own interests. Do you ask the right questions? Can you trust the person you're doing business with? Are you spending your money wisely? What follows is a very quick overview of consumer issues. The Usual Suspects: Industries of Concern Perhaps the best way to begin a study consumer issues is to review the industries which have garnered to most consumer complaints at the Denver/Boulder Better Business Bureau. The BBB is a non-commercial, nonprofit organization that provides free reliability information on businesses and charities, and also mediates disputes between buyers and sellers. Last year, the following industries had the most complaints, with the previous year's ranking in parentheses: 1.

Telephone Companies (2, 11)

2.

Television - Cable and Satellite (1, 1)

3.

Magazine Subscription Agents (3, 2)

4.

Moving and Storage (7, 8)

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5.

Automobile - Dealers New and Used (4, 3)

6.

Telemarketing (*)

7.

Buying Clubs / Group Purchasing (6, 12)

8.

Automobile - Repair and Service (9, 7)

9.

Cellular, Mobile and Paging Communications (*)

10.

Mortgages (19, 22)

*We did not categorize complaints into these specific categories in previous years. As you can see, there are some very ordinary activities that people undertake which can be deceptively problematic: Buying a car. Having it repaired. Arranging or altering your telephone or cellular phone service. Subscribing to a magazine. Moving from one place to another. Buying a home. Why are these problem industries? In part, because of advertising. Ads for cars abound on television, on the radio, and in the newspaper. Pricing can be confusing, as can warranties. People sometimes buy cars with their hearts, not their heads. And then there's the whole story of buying a used car, which can be terribly frustrating if you buy on impulse (without the test drives and your mechanic's opinion). Advertisements for mortgages are popular, too, when low interest rates seem almost too good to be true. For most of us, buying a home is the single largest purchase we will make in our lives, and the loan plus interest is a staggering amount. For first-time buyers, the loan application and approval process is daunting and confusing. Sometimes changes in technology dictate which industries will have high complaints. For example, when Internet service providers were cropping up everywhere, advertising unlimited access for about one-third the actual market rate, the BBB saw a dramatic jump in complaints. Some people paid in advance for Internet service--as much as three year's worth, trying to take advantage of the exciting low price--only to find that (1) the service never worked, or (2) they kept getting disconnected when trying to go online, or (3) the business closed its doors and left town. Some industries will be a problem forever, and seemingly always have been. There are certainly reputable moving and storage companies, although this is an industry where bad operators can readily make a profit. Many people don't understand how a move should be priced. (We all underestimate how much stuff we own.) Movers sometimes provide a low bid to win your business, only to hand you a much higher bill when the job is complete. Moves across country can be delayed at the pick-up or drop-off, too, if your order doesn't fill a truck and the driver changes his plans. It can be very easy to subscribe to a magazine, and almost impossible to get the subscription cancelled. Sometimes consumers receive magazines they do not remember ordering, and get a bill too. Or people take advantage of "first issue free" offers, only to find later that a subscription has indeed begun in their name, along with the obligation to pay for it.

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QUESTIONS 1. Has anyone in your family experienced a problem in one of these high-complaint industries? 2. Do you remember having trouble learning how to use a new product on the market? Can you see where confusion about how an item is supposed to work (or why anyone would need such a thing) would cause consumers to make impulsive or unwise purchases? 3. What industries do you think will have the most complaints five years from now? Which ones do you suppose will always make the list, year after year? NOTE: There are no suggested assignments or projects for Part 1.

Part 2 -- Classic Scams We Love OVERVIEW The weather changes. Fashions change. The economy grows and falters. People get older. But one thing never changes: as long as there is a marketplace, there will be someone scheming and planning and hoping to rip off the gullible among us. Everybody knows that older adults are a vulnerable segment of the population, open to fraud and scams. Seniors might be more trusting, or less savvy about technology, or even have a disability that prevents them from seeing or hearing critical information. But here's the surprise: teens and young adults are highly vulnerable to scams as well. Why? Because you haven't yet heard about the classic, timeless cons that most older adults know about. And perhaps because young people are so confident, so technologically savvy, you aren't likely to realize that your own generation will inevitably fall for its own scams and schemes--just as every generation before you has done. You've heard of the expression "The American Dream." This usually means freedom and financial security, owning a home, going to college, being able to travel, perhaps owning your own business and watching it flourish. Americans can be born in poverty and rise up to be millionaires, or President. You can be whatever you want to be! Yes, this is a wonderful message. But sometimes the con artist will use this "dream" to draw you into a scam. Here are a few of the classics you can look forward to seeing, in advertising, posted on telephone poles, on the Internet, in the mail, at a seminar, at the door, and/or over the phone: Get rich quick! Over the decades, this has been the most alluring message of all. It was popular in the 1920s and it is even more popular today, especially online. Invest just $5,000 and you will soon be earning $35,000/month -- in your spare time! These are usually "business opportunities" for you to "get in on the ground floor," and of course they are "for a limited time" and offered "to just a few people." Act now! Isn't it time for you to be a winner? Haven't you ever dreamed of owning your own business, being your own boss? Work at Home! This theme is so popular and so attractive because so many adults (and for that matter, students) could use extra income. In a down economy, the unemployed, the underemployed, at-home moms, seniors, and people with disabilities are all vulnerable to this kind of scam. Schemes appear to include stuffing envelopes, transcribing medical records, or selling

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health supplements, among many others. At the BBB, we have virtually never found a work-athome scheme that has been viable or lucrative. They are a complete waste of your time and money. Usually, the victim sends in money for the kit or packet or training video, and nothing ever arrives. Or, the instructions that do arrive are only about how to set up your own flyers or posters to attract new victims--a set-up that is illegal, by federal law, as what is called a pyramid scheme. Lose Weight Now! Americans are obsessed with being slender, and knowing that, con artists love to peddle the latest and greatest way to lose weight. Many products are simply vitamin supplements or inert ingredients that will do nothing to make you magically thin. Some could even be harmful in larger doses. And the products aren't cheap. It seems there is no shortage of happylooking thin people in the ads, telling you how great a particular weight-loss product will be. The truth is, the only to lose weight is to eat less and move more. The only thing that will get any lighter with most weight-loss scams is your wallet. This product cures arthritis! (Or cancer, or AIDS, or carpal-tunnel syndrome.) "Medical quackery" products abound in advertising and on the web. This is particularly alarming considering the rising costs of legitimate health care--seniors and low-income consumers might well be tempted to purchase some unlicensed, unapproved product if they can no longer afford prescriptions. Remember that if the U.S. Food & Drug Administration (www.fda.gov) says something is not a medical device or an approved medical treatment, you should not spend your dollars ". . . on hope." QUESTIONS 1. Why do you think "The American Dream" is such a popular theme? 2. Are you personally acquainted with a person who has become quite successful financially? How did they achieve this success? 3. Do you know anyone who is unemployed, or chronically ill? Do you think they might give one of these classic scams a second look because they are getting desperate? ASSIGNMENTS 1. Find some examples of printed advertising that uses some of these classic themes. Along with "Get Rich Quick!" and The American Dream, why do you suppose patriotism (i.e., American flags) is a common advertising theme today? Is this appropriate, do you think, or is it just a shallow marketing ploy? 2. Do an Internet search on a phrase such as "weight loss" or "stops pain." Print out from three sites that deal with non-traditional health or medical products. Do you think each site is legitimate? Why or why not? PROJECTS 2-1 BE YOUR OWN BOSS! It shouldn't be difficult for you to find out about a work-at-home scheme in your own neighborhood. Check the bulletin boards at a community center or supermarket, or look at the local newspaper classifieds. Find a business opportunity and, using a ficticious name, see if you can investigate it without having to part with much money. If possible, send the promoter a letter or email explaining that you are "very interested" and would like more information. Notice what pressure is placed on you to part with your money, very likely for nothing in return. Report to your class about what you experienced. Then provide your local post office with the information so that they can investigate the offer as a scam.

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Part 3 -- Advertising: Does it Educate or Aggravate? OVERVIEW Why is there advertising? For one reason, paid messages by businesses make it possible for us to enjoy hundreds of media products every day, printed, electronic and web-based. Advertising gives a seller of goods or services a way to talk about his product's features, its price, its convenience, and so on. Consciously or not, we consumers are very accustomed to this trade-off: we watch 47 minutes of our favorite "hour-long" television show, accepting the other 13 minutes of advertising as business as usual. At its best, advertising is an educational tool. It showcases what products and services are available; it helps customers make informed choices. It can also be entertainment in its own right, and highly creative. At the least, advertising can be merely annoying. We are constantly bombarded with messages all day long, from radio jingles to billboards to signs on the side of a passing bus. For most of us, too many messages means that a lot of what we see and hear is just a blur of color and noise. At its worst, advertising can mislead and confuse potential buyers. Sometimes this is accidental, and sometimes it is done intentionally. Your job is to learn to tell the difference. Understanding how to interpret advertising with a more critical eye can start by simply asking yourself: Is this good information--is it useful? Is the advertising humorous, entertaining, demeaning, offensive, and/or confusing? How do you feel about this? Are the facts true? Can the claims be substantiated? Would I make a choice about this business or product based on this advertising? A good skill to develop is to be able to notice when you are being manipulated, persuaded, even fooled. For example, very attractive people with unusually nice hair appear in the ads on television for shampoo. You may think, If I buy that product, I will have hair like that. Could the feeling you

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have be subliminal or unconscious, i.e., you know better but you still are kind of drawn to the wonderful idea that hair that great is within your reach? Television advertising for cars today is often based on an overall "lifestyle" that is portrayed: a beautiful countryside, stunning scenery, the open road beckoning . . . and of course a pictureperfect companion or family to share your vehicle with. (Does this advertising increase your understanding of the product, or does it seek to garner impulse buyers? Given the financial investment that an automobile represents, is this a purchase you can afford to make carelessly?) Pricing is very critical in print advertising, particularly for items such as computers or furniture. Beware of deep discounts ("Up to 75% off!") and curious ways that an item appears to be a better deal than it is ("Buy today, make no payments until 2006!"). Deep discounts may not be based on a price that was never actually offered for a particular item, although it sounds exciting when you think you must really be getting a bargain. In the latter case, the interest you would pay on that amount of money is built right into the price--there is a hidden cost to you for that "free time" while the item is in your possession. QUESTIONS 1. Sophisticated advertising, particularly that targeting young people, may be subtle in how it tries to influence your buying habits. Buy this cool product and you will be cool, too. Can you think of an example of this? What tools does the advertiser use to attract you (music, color, etc.)? 2. Do you think "testimonials" in advertising are effective? Do you think they are honest and legitimate? How can you tell? How do you feel about a celebrity who lends his or her name to a product? 3. Have you ever gone to purchase an item that was advertised, only to be disappointed that the price was higher than you had understood it would be? Did you miss the "fine print?" Was it your mistake . . or was the advertising misleading? 4. How often is the word "free" used in advertising? How often does it involve having to make another purchase? ASSIGNMENTS 1. Find an example of advertising that you feel is intentionally misleading, either with complicated pricing or by not providing essential facts you would need to know. One example of this kind of ad would be one with a LARGE headline and very small print with disclaimers at the bottom. 2. Watch for one of those "lifestyle" ads on television or in a glossy magazine. Write a paragraph describing what that lifestyle is, what it looks like, where it is. Is that lifestyle within your reach? Does it logically relate to the product being advertised? How do you feel about this kind of advertising? PROJECTS 3-1. TAKE THE CHALLENGE! Select a piece of print or electronic advertising from a local business that you think is misleading or potentially dishonest. Write a letter to the business owner and explain why the advertising does not seem helpful to building a fair and safe marketplace. Ask the business owner to respond to your concerns and to consider changing the ad to be more clear or fair. Send a copy of your letter to the editorial page of your local newspaper. 3-2. ASK THE EXPERTS. Arrange to visit a local advertising agency and interview one of the executives. Ask the executive to focus on a recent account and explain how an advertising campaign is developed, including how decisions are made about communicating pricing and

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benefits. Make a presentation to your class, with visuals, about what you learned and whether you believe the resulting advertising is effective and beneficial.

Part 4 -- Generations and Gender OVERVIEW As you become a more informed participant in the marketplace, you will be able to help others be better educated about making wise buying decisions. One day it will be your turn to educate "the younger generation" about classic scams and advertising. As noted in an earlier section, it is an unfortunate fact that older adults are vulnerable to being ripped off. One critical element is their isolation: they are more likely to live alone or may not have friends or relatives locally who can help them make buying decisions. They could be isolated from advancements in technology, such as using the web to quickly and easily compare prices and benefits of products. Because of mobility or transportation limitations, they may not be able to browse at store after store until they find exactly what they want and can afford. Older adults may be more naturally inclined to trust kindly strangers, and they could be unable to imagine the kinds of schemes that have evolved in today's marketplace. Telemarketing--including the harassing and badgering of people who are old and alone--is a very serious problem in the field of consumer protection called elder fraud. One of the ways that a con artist selects who to target for a scam is by looking at peoples' names. Dorothy, Edith, Edna, and Louise are probably older adults, along with George, Harold, and Maurice. Meanwhile, Susan, Wendy, Brenda and Diane were probably born in the 1950s. Of course we could probably safely guess that Tiffany, Brittany, Chad, Shane, and Jerrod are young people. Men might be more safe in the "name game," as some popular names such as Robert, Thomas, James, John and Michael are seen across many generations. In past decades, there were certainly examples of how a male consumer was safer making a certain kind of purchase than a female. Most anything related to automobiles was more difficult for a female, who could be mislead out of ignorance of mechanical matters. Similarly, men were generally less informed about fabric and fashion, and for that matter, food. As our society has evolved, it is less easy to target a person for fraud based on his or her gender. (Or is it?) Not asking questions, not comparing prices, not getting references, not being a wise consumer: these behaviors unfortunately do not discriminate when it comes to age or gender. QUESTIONS

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1. Do you consider yourself a "typical" young male or young female when in comes to handling money and making buying decisions? Is this a good thing? 2. Have you ever wanted to take a person of another generation or the opposite gender with you when negotiating or choosing something? Why? 3. Are you aware of an older relative or family friend who has been the victim of elder fraud? ASSIGNMENTS 1. Write a few paragraphs on what you think the expression "The Good Old Days" means with regard to buying and selling. How do you think advertising has changed? Can we trust people with just a handshake today? What consumer behaviors have left our society altogether, for better or worse? NOTE: There are no suggested projects for Part 4. Part 5 -- Home Sweet Home OVERVIEW Ask any Better Business Bureau in the U.S. or Canada about home improvement and consumer complaints, and the answer will be the same: the industry has always been a problem, and always will be. At some point in your adult life (remember, you are pursuing "The American Dream" and that means you will want to own a home someday) you will need to engage the services of a home builder, a remodeling or construction firm, a general contractor, a handyman, a plumber, a roofer, a person to install or clean your carpet, a painter, an electrician, a pest control person, or a landscaper. When you choose a provider of home-related services, you are literally and figuratively "opening your door" to this person and his or her colleagues, so choose carefully. Your home may be your most valuable financial asset, so you need to be cautious when your hire someone to work on it. Many home improvement companies are locally owned small businesses. Some are suppliers affiliated with well-known national manufacturers of products such as windows or building materials. Either way, you must take your time and do your homework in choosing the provider who is right for you and your budget. Your best bet is a "reality check" from those in the know: friends, neighbors, or co-workers who have had similar work done. But don't just take their word for it. Get written estimates from several firms. Ask for, and check on, references. Ask for explanations for price variations. Don't automatically choose the lowest bidder. And always check with your local Better Business Bureau for a reliability report on the company you are considering. Suppose you wanted your kitchen and bath totally remodeled. You know that this work will dramatically disrupt your daily life, so you want the work done quickly but done very well. Here are the kinds of questions you would want to ask of a potential home improvement provider: How long have you been in business? Look for a well-established company. Beware of contractors doing business under several different names. Are you licensed and registered? While most states license electrical and plumbing contractors, not all have statutes affecting general contractors, remodelers, or specialty contractors. Rules vary

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by area. Check with your municipal building office. Ask to see a contractor's license, and make sure it is current. How many projects like mine have you completed in the last year? Ask for a list. When checking with former customers, ask the following: Can I visit your home to see the completed job? Were you satisfied? Was it completed on time? Did the contractor keep you informed along the way? Were there unexpected costs? Did the workers show up on time? Did they clean up afterward? Would you recommend the contractor, or use them again yourself? Because problems so often occur with home improvement providers, here is a checklist of "tip-offs to potential rip-offs." A less than reputable contractor: Solicits door-to-door; Offers you discounts for finding other customers; Just "happens to have materials left over" from a previous job; Only accepts cash payments; Offers exceptionally long guarantees; Asks you to get the required building permits; Does not list a business number in the local telephone directory; Tells you your job with be a "demonstration;" Pressures you for an immediate decision; and/or Asks you to pay in full up front. QUESTIONS 1. Has your family experienced home improvement problems? 2. What barriers do you think might exist that would prevent a consumer from asking all the right questions and researching a company thoroughly? 3. What do you think are the dangers of letting a service provider into your home? ASSIGNMENTS 1. Review some of the advertising in your local yellow pages. What are the key competitive issues that home improvement companies emphasize? Price? Service? Speed? Write up your findings on at least two industries. NOTE: There are no suggested projects for Part 5.

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Part 6 -- Complaints: Two Perspectives OVERVIEW "Conflict," as the old saying goes, "is inevitable." There will be disagreements about buying and selling for as long as there is a marketplace. Nearly everyone has a problem with a transaction at some time in their lives. With some courtesy and conflict resolution skills, along with patience, these problems do not have to end up as expensive lawsuits. Another old saying: "No matter how flat the pancake, there is always two sides." Indeed, most every dispute can be argued passionately by either side. And at the Better Business Bureau, we believe that both sides must have a chance to be heard. Contrary to popular belief, customers are not always right; some are ignorant or careless. Business owners are not all money-grabbing tricksters; a great majority truly want to do the right thing. When a consumer files a complaint, we ask that the basic facts be provided in writing without a lot of emotion or colorful language. Regrettably, it can be difficult for people who are upset to express themselves effectively. Consumers sometimes feel that they are been taken advantage of by some large, "nameless, faceless" corporation or some slick-talking salesman. They feel confused and mislead by advertising with too many disclaimers and too much fine print. They feel that they are treated rudely. They feel that as the little guy, they can't win. Businesses are just out to make a buck. Things are terribly overpriced. There's no one we can trust anymore. Their list of woes goes on and on. Business owners have their side, too. They might feel that they have to educate customers about every aspect of a product or service, only to have the customer shop elsewhere for a slightly lower price. Customers can be rude and demanding, too, with expectations way beyond the reasonable or logical. Customers don't read the instruction manuals and don't take care of their property. For a business, advertising and labor costs are terribly expensive. Some customers don't shop carefully and then abuse the privilege of returning merchandise or demanding a refund. The list of concerns for a business owner or manager is just as long as the consumers' list. After a complaint is filed, we send it directly to the other party. (Most of our complaints are lodged by a consumer against a business, but this is not always the case; some complaints are businessto-business between suppliers and vendors.) We ask the company to respond to the customer's concerns and the facts of each specific case. Often the specialists at the BBB can bring both sides to a resolution. Some cases are referred to a formal mediation or arbitration session. A few go unresolved entirely. QUESTIONS 1. Do you think some disputes between buyers and sellers could be avoided through better interpersonal communication? Can you think of an example with say, the car repair industry? 2. How difficult is it for us to see something from another person's perspective?

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ASSIGNMENTS 1. Taking the role of a well-informed consumer, write a mock letter of complaint to the BBB about a local business. Stick to the facts of what happened and describe what you would consider a fair resolution. 2. Taking the role of a consumer who isn't thinking clearly, write a mock letter of complaint to the BBB about a local business. Add plenty of emotion and eliminate some of the key facts. End with an outlandish demand for a full refund and punitive damages. 3. Taking the role of a reasonable business owner, respond in writing to either letter of complaint and make whatever explanation you think is appropriate. If you don't think you were in the wrong or were not treated fairly, tell the BBB that you are not able to offer a resolution. If there is some fault that is yours, offer to make it right. 4. Taking the role of an uncaring or unethical business owner, write a letter of response to a consumer that is obviously a form letter, making no apology and accepting no responsibility for what the consumer experienced. You might add some "boilerplate" language about a company's commitment to servings its customers, but the letter will actually contain no evidence of this commitment in action. PROJECTS 6-1 HE SAID, SHE SAID. A team of three students can develop a mock arbitration. One student assumes the role of a consumer, one student is the business representative, and one serves as arbitrator. The students should create a case that involves a transaction of at least $500. The case should have some compelling arguments on both sides, i.e., not ridiculously biased in favor of one side. Good ideas for mock disputes could involve a car purchase, car repair, home improvement, or a moving company. The session can be acted out for the class and should last at least 15 minutes. The arbitrator controls the session in a setting not unlike a courtroom. (This is not "Judge Judy"-proceedings are to be polite and formal.) Allow each side five minutes to present its case. There is no interruption allowed when a party is speaking. Each side may present documents, receipts, contracts, or even photographs to support its case. When the sides have each had an opportunity to speak, the arbitrator can ask questions. The consumer and business representative address the arbitrator, not each other. When the arbitrator feels that all facts and details have been presented, the session is concluded. Then the arbitrator would explain his or her decision. In real life, a BBB arbitrator has several days to write up a written decision; in this exercise, the arbitrator would tell the class how the case was resolved and what award the arbitrator ruled for one side to provide to the other. The arbitrator would need to justify his or her decision based on the facts from the session. An arbitration is, by definition, a "win-lose" decision. As an exercise, the members of the class could also write up their own decision based on what they heard. Or, the class could make a written evaluation of the process: who was well-prepared, who seemed to be making the most compelling argument, and how well the arbitrator managed the process.

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Part 7 -- Give Me Some Credit! OVERVIEW For better or worse, we Americans rely heavily on the use of credit to support the lifestyle we desire. Rarely do people today pay cash for a major purchase such as a car, appliances, or furniture as earlier generations did. And of course having a mortgage for a home is considered normal and appropriate. Without opening a debate about how we relate to money and possessions, it is important that young adults understand the uses and abuses of consumer credit. Too often we have learned the hard way--but making expensive mistakes. Doing the math. For people who can demonstrate they have income and will generally pay bills on time, there is money available for you to borrow and spend. Many adults are constantly offered new credit cards, new accounts, lower interest rates. For a price. That price is interest, and many commercial accounts have an interest rate as high as 24%. The cost of convenience. Just as a 24-hour convenience store charges more for a gallon of milk than a regular supermarket does--because you can pop in at all hours, no waiting, and be on your way--there is a cost attached to being able to select something at a department store and take it home without actually paying for it on the spot. The cost of this convenience is credit, or interest, for the amount you owe. For the privilege of taking home a $100 jacket and wearing it right away, you will pay perhaps 20% interest on that price, beginning the following month. Even if you pay your bill promptly, you will be paying $120 for a $100 jacket. Watching the calendar. It is important to know how a credit account you have is billed. Your monthly payment will be due on a certain date, and then there is generally a "grace period" of a few days after that date. Make sure you understand these dates and observe them. Beyond a certain day of the month, you are charged a late fee or penalty if you haven't made your payment. Since you are already paying interest on the amount you owe, being hit with a late fee is particularly unfortunate because that fee is added to your balance owed, and you are going to be charged interest on the late fee as well. Getting started. Young consumers are now offered credit cards before they have income to support them. It is probably best to start with a bank debit card, i.e., a card that looks like a regular credit card but is only good for whatever amount you have in a checking account. Using this card, you are only spending the money you already have--you are not drawing on credit. When your account is empty, merchants won't accept the card. This prevents you from learning how easy (and dangerous) it is to live on credit. When you have learned how to use a bank debit card, you could then add a regular credit card to your life. But start with a very low limit, such as $250 or $500. Do not spend more than you can pay off within 30 days. As soon as you start building a balance on a card that you cannot pay off quickly, you have entered the downward spiral of using credit foolishly. It can take years to pay off a credit card balance that seemed to only take a few weeks to acquire. It gets ugly. Suppose you go on a shopping spree and spend $5,000 at a store. Your monthly minimum payment due, with interest, might be $120. Now let's say that you have enough income to be able to make a $110 payment. Unfortunately, you will be hit over and over with late fees and penalties for missing your minimum payment. Your balance due will actually grow, not decrease, over time--even though you are making regular payments. To dig out from this mess, you must be able to start making not only the $120 payment, which is the minimum you can get by with without penalties, but perhaps $200 or more.

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Your credit report. There are three major credit reporting bureaus, which are commercial entities who compile financial data on virtually every adult in the U.S. They compile information about every account you have and whether you are making regular payments. If you are 30, 60 or 90 days late on a payment, this will be reflected on your credit report. One single negative mark such as this lasts seven years on your record. And enough negative marks will make it very difficult for you to ever get the credit you need for something important--like buying a home. QUESTIONS 1. Do you remember hearing a grandparent talk about "only buy with cash?" Do you know any adult today who doesn't use credit? ASSIGNMENTS 1. Find out the regular interest rate of a new credit account at a local store that is popular with people your age. Is it higher than you realized? 2. Ask your parents how much they pay each month in interest on credit accounts. What could your family do with that money if it wasn't going to bills? Was the convenience of "take it home today, pay for it later" worth it? NOTE: There are no suggested projects for Part 7.

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Part 8 -- Customer Service OVERVIEW "Great customer service" means different things to different people. At a fancy hotel, maybe it's the little things like a mint on your pillow and your bed turned back. At a car dealership, it could mean your car has been washed after it was serviced, or the mechanic used a paper lining in the seat so that his greasy coveralls didn't touch your upholstery. At a restaurant, it may simply mean that you are greeted with a polite smile and seated promptly. One thing we can all agree on about customer service is that we all know how we feel ". . . when it doesn't happen." If a business makes a specific promise about something, and then fails to meet that promise, we notice. We also notice when things just don't go well: we're kept waiting too long, we can't get a call back, or an employee is not adequately trained to answer our questions. Experts in small business development have claimed for years that putting a high priority on exemplary service can be that one critical factor that determines whether a small business will survive or fail. Virtually everyone in business today claims to provide "good customer service" . . . but not every business actually delivers on its promise. Some companies have formal vision or mission statements about their service philosophy, and invest significant resources to train their employees on exactly what the corporate standards are for excellence and quality. On the other hand, some companies hire workers and simply put them "on the front line," assuming that all employees will be polite and behave appropriately. In a free enterprise system, it is generally true that we consumers "vote" with our dollars, sending our business to companies where we like the way we're treated. In a marketplace where there is a choice available between one company or another, it is usually the company with a better customer service record who "wins." Many consumer complaints to the BBB involve situations where a person did not feel that he or she was properly treated in the marketplace. Among other factors-- including where a business is located, the price of its product or service, and its quality and value--customer service is a key determinant in whether a customer will patronize the business in the future. QUESTIONS 1. Have you ever said to yourself, "I'm never visiting that business (or web site) again! The service is terrible!" What made you feel that way? Did you ever return as a customer? 2. Can you think of a business in your community that has built its reputation on above-average service? Similarly, can you think of a specific business (or kind of business) for which service is not a particularly important factor, i.e., people will generally do business with this entity regardless of how they are greeted or treated? 3. Have you been employed in a setting where service mattered? What kind of training did you get on delivering the service your employer expected you to provide? 4. Do you think there should be a relationship between the price you pay for something and the level of service you can expect to receive? Can you think of an example? 5. As a consumer, would you be willing to sacrifice receiving good service if the price of the product was low enough? Would you always be willing to make this trade-off?

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6. For a small business owner, what barriers exist that would make it difficult to deliver exceptional customer service? 7. Have you experienced differences in customer service in the private sector (stores, restaurants, medical offices, commercial web sites) versus the public sector (post office, driver's license office)? Why do you think these differences exist?

ASSIGNMENTS 1. Review one issue of a Sunday newspaper, including the inserts and classifieds, noting how the message of customer service is a theme in advertising. What industries emphasize their service in order to win your business? 2. Visit a commercial web site and find its customer service policy. Print out the information on guarantees, changes in pricing, delivery times, refunds, repairs, or exchanges. Do you think the information was difficult to find? Is it adequate? PROJECTS 8-1. GO UNDERCOVER. Develop a one-page survey form that other students could use to "mystery shop" local businesses. Ask at least 10 of your classmates or friends to create a reason to visit a restaurant or retail establishment. Your survey might include: (1) Name and address of the business, date and time of visit. (2) Were you greeted upon entering the business? (3) How would you rate the comfort level of the business: Lighting? Sound of other patrons? Music or other ambient noise? Uncomfortably hot or cold? etc. (4) How would you rate the service performance of the employees? Did you have to wait? (5) Ask questions about the products or services being offered. How knowledgeable were the employees? (6) What suggestions would you make to the business owner or manager about improving visitors' experience? Compile your survey results and present a summary to your class. Or, send a letter to each business owner explaining your survey and offer your comments, compliments or criticism. 8-2. WHAT MAKES EXCELLENT SERVICE? Visit a local bookstore or library and find the titles in the business section about customer service. Read one of these books and prepare a brief presentation for your class about the author's message. Use visuals to support your presentation.

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Part 9 -- A Peek at Consumer Privacy OVERVIEW Many adults today are concerned about maintaining privacy. The very word suggests many sensitive issues, from your Social Security number being used improperly by commercial entities as your customer I.D., someone tracking your moves from site to site on the Internet without your knowledge, or even whether we are inundated by telemarketing calls during dinner or dozens of "spam" emails tempting us to buy things we don't need. Particularly in regard to identity theft and financial fraud, understanding privacy is an important part of our lives as consumers. The Federal Trade Commission has rated identity theft the #1 consumer problem in the U.S. for three years in a row. And the problem continues to grow. Simply defined, identity theft occurs when someone uses your name and your credit reputation to make a purchase. They get the goods . . . you get the bill. A person masquerading as you can rent an apartment, take a vacation, commit a crime, or even get a job using your Social Security number or other personal information. How does someone get your information? By stealing your wallet. By taking incoming mail out of your mailbox. By breaking in to your home. Piece by piece, not unlike the assembly of a jigsaw puzzle, an identity thief can assemble a picture of who you are and what bank and credit accounts you have. The single most critical piece of data about you is your Social Security number. With it, a person can contact the three major credit reporting bureaus and pull your credit report. The thief could easily give the credit reporting bureau your new address (which is, of course, not accurate) and you would never know the report had been mailed. This detailed document is like your "financial DNA." All your account numbers, along with balance owed and credit available, is revealed. Myths continue to persist about about identity theft. It's not some outlandish "Hollywood" crime that only happens to the rich and famous; in fact, working people who use credit moderately are excellent candidates for this fraud. It's not wholly a creation of the Internet, either, so even those people who do not use a computer at all are still at risk. Identity theft is as old as pickpockets and as low-tech as "dumpster diving." Having too many credit cards and credit accounts makes us particularly vulnerable. How many cards do you have, how many do you carry each day, and how many accounts can you truly keep an eye on? If a bill did not arrive in your mailbox on a certain day of the month, would you miss it? It's also extremely important that you carefully review every bill you receive, making sure the purchases listed are indeed yours. Special care must be taken to destroy paperwork that a thief would enjoy having. Paper shredders should be used on all of those annoying unsolicited credit card offers, for example, so that no one can open a new account in your name. Receipts that indicate your credit card number should also be shredded when you are done with them, along with bank statements, invoices, or anything with your signature on it. In a sense, when you are a victim of identity theft, you are victimized twice: once when your credit is used without your knowledge, and again when you have to make all the phone calls and write all the letters to clean everything up. And cleaning up after this crime can take months, even years.

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QUESTIONS 1. If you shop at a supermarket and use a "customer card" with your purchases, your identity is being linked to the various products you selected. Does this feel like a benign or serious privacy invasion? Can you think of a way where this data could result in more telemarketing, junk mail, or email spam for you? 2. Does the incoming mail at your home arrive in a secured place? Can you imagine the value to an identity thief when even just a few pieces of your incoming or outgoing mail are stolen? ASSIGNMENTS 1. On the Internet, use www.google.com or a similar search engine to see what information exists about you in cyberspace. (Since there is not typically a lot of information about young people, you may want to search for one of your parents instead.) Were you surprised by what you found? 2. Offer to do a "wallet audit" of an older relative. How many credit cards does the person carry? Were you able to find the person's Social Security number on a driver's license or insurance card? Ask him or her how long it has been since a credit report was checked for inaccuracies or fraud. Do you think this person would be vulnerable to identity theft? Write up the results of your "audit," including suggestions for the person to be safer in the future. PROJECTS 9-1. WHO KNOWS WHAT? Current steps to maintain national security and fight the war against domestic terrorism may override an individual's right to exercise certain personal liberties. A hidden video camera may now be recording who visits a particular restaurant, rents a car, or passes through a transit station. The government may benefit from gathering more data on individual citizens, including your income and spending habits. Visit web sites such as the Privacy Rights Clearinghouse (www.privacyrights.org) or the Electronic Privacy Information Center (www.epic.org) and learn more about privacy concerns, from identity theft to biometric technology to data profiling. Make a presentation, supported by visuals, to your class about at least three of the most provocative issues related to privacy. 9-2. IDENTITY THEFT CASE STUDY. Ask your local police department, bank, district attorney, or Better Business Bureau if you could interview a recent identity theft victim. How did the theft begin? In what ways was the victim vulnerable? What has happened since the crime was discovered to straighten things out? Write a paper or make a presentation with your findings.

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Part 10 -- Using the Web Safely OVERVIEW Is the Internet an amazing, positive, revolutionary tool that has improved the fields of education, science, government, the cultural arts, entertainment, and commerce? Or it is a questionable, dangerous, obscene, fraud-filled pit of waste? It is both. To avoid using the web altogether would be to miss out on many wonderful resources that can enhance our lives. To use it carelessly, however, opens the doors to some very unwise consumer decisions. It is important to learn how to evaluate the worthiness of a web site, to protect one's financial data, and to avoid the classic scams and bogus opportunities which have all found a home online. Here is some things to consider when deciding whether a web site is worthy of your business . . . or a return visit. Who owns the site? Does this person or company give a name, a physical address, an area code and telephone? What services or products does this company actually provide? Is this a salesoriented site masquerading as an information site? How can you contact this entity? What if you wanted to make a purchase, but you do not want to use a credit card. Can you call this company, or fax them, or mail a check to a physical address? If no such information is available . . why? Is the site beautifully designed? Does this matter to you? Was it hard or slow to open? Does video, animation and sound actually make the site more enjoyable, or just harder to use? Do these fancy features make the site any more legitimate? Is the site navigable and easy to use? Do you find yourself clicking back and forth to find what you need? Is the progression of pages logical? Do all the links work? Is the site secure for the transmission of sensitive data? Look for the familiar icon of the "padlock" and make sure it appears closed, not open. Will this site be sneaking off with information about you? How much information is requested from you, and at what price do you provide it? A site with great information may offer you a tradeoff between getting that great information but having to "register" with your email address to access it. Make these trade-offs with your eyes open. Be careful about how often you sign up, list your age and buying preferences, and so on. Are all the details easy to find? Make sure you know your choices about shipping, postage, handling, refunds and exchanges. Too often these details are missing until it is too late to ask. Did the site automatically link you to another page that you did not intend to visit? We call this "pagejacking." Could you find your way back? Can you always use your BACK key or click off of a page? Again, why would you want to use a site that tried to trick you into staying until you made a purchase? Are there annoying pop-ups impeding your ability to use the site? Is there so much advertising, you can't even find the content?

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QUESTIONS 1. Do you think some of us might give an offer a second look on a web site when we would normally know better if the same offer came in a piece of junk mail or in a telemarketing call? In other words, does the fact that the Internet is an exciting new medium that we "all want to be part of" affect our good judgement? 2. What problems have you had, beyond hardware or dial-up issues, using the web for research or entertainment? Is it getting better, or worse? 3. Have you shopped online? How did the transaction go for you? ASSIGNMENTS 1. Print out the privacy policies, if they exist at all, on three commercial web sites. Evaluate the differences between the three. Do some merchants pretend to be concerned about your privacy when in fact they indicate that they will be " . . sharing your customer preferences with other related merchants . .?" 2. Using a search engine and a phrase such as "work at home," find at least three web sites that are missing the critical who-what-where data. Why do you think these sites hide behind the anonymity of the web? PROJECTS 10-1. BE THE WEB MASTER. Do a thorough review of a commercial web site you are interested in, using the checklist in this section and other criteria. Write up your findings and include suggestions of how you would design the site differently, add better information, and so on. Would you add more video or audio? Remember that a site that will be successful in the long term needs to encourage users and build consumer confidence, not just amuse its creator.

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Part 11 --

Choosing a Charity

OVERVIEW “Is someone tugging at your heartstrings . . . to get at your pursestrings?” This is a question that the BBB poses in dozens of public presentations each year in the Denver metro area. Charity fund-raising and its potential for fraud is perennially a popular topic, but especially late in the calendar year when all of us are inundated with appeals to support and give and donate. The audiences at these presentations may be seniors, Rotary or Kiwanis or Optimist club members, students, teachers, business owners, or volunteers. Despite their differences in age and background, these consumers often smile knowingly at the “heartstrings/pursestrings” question because they relate to it at once. Whether their personal interests lie in animal protection, literacy, cancer screening or saving the rainforest, these audience have likely seen the brochure, heard the telemarketing pitch, or scanned the newsletter or web site that relates to that “favorite cause.” Who among us hasn’t been so moved by a charity fund-raising appeal that we send off a check that very day? --But who hasn’t, at some other time, also wondered about the honesty of some particularly aggressive fund-raising or the integrity of the shadowy organization behind the pitch? Money lost to charity fund-raising fraud is difficult to track and almost impossible to recover. Many victims of these schemes don’t even realize they have been victimized. For this reason, we place increasing emphasis on awareness, education, and prevention. Americans don’t have to be taught to care; we are a generous people. We respond when people are affected by disease, natural and man-made disasters, and war. Indeed, in the months following the terrorist attacks on New York City and Washington, it has been estimated that nearly 9 out of 10 adult Americans made a donation to a nonprofit organization, including churches.1 In Colorado, citizens have responded strongly to the challenges of the Columbine shootings and wildfires raging in our state. We want to help, we want to prevent future tragedies . . . we want to make the world better. But between this well-intentioned impulse and reality, however, there exists a gap. This is a gap of understanding about which programs deserve our support and which do not; there is a sense of fatigue and information overload, particularly in November and December, and consumers often voice a frustration and helplessness to the BBB that they simply don’t know who to believe. There is a smooth way that some fraudulent appeals strike just the right chord with veterans, cancer survivors, or nature lovers, cleverly making the donors feel particularly good about themselves even though they are inadvertently lining the pockets of a scam artist. AARP estimated in 19972 that between one and four percent of all dollars that Americans give to charities is given in error, that is, given to an entity that is not at all the nonprofit service organization it pretends to be. Another way to view this challenge: consider that every dollar raised by a scheme masquerading as a charity is a dollar that our wonderful, hard-working, legitimate nonprofit organizations will never see. Charity fund-raising fraud is a particularly ugly variety of fraud. The BBB knows it cannot eradicate this scourge from our communities overnight, but awareness of the problem is a good first step. Here are the questions you deserve an answer to before you give a single dollar:

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 1 2

Who is the nonprofit organization behind this campaign/appeal? Is there a local office or presence of this organization that I can visit? Can I get your program information in writing to review at my leisure? How much of your fund-raising is conducted by paid fund-raisers? How are these fund-raisers compensated? Will my gift be used immediately, and if so, how? Can I see your annual report and IRS Form 990? What is your web site address? Can I speak with another donor who has been involved in your program? Will you be selling my name to other organizations? How much of every dollar donated goes directly to your program?

BBB Wise Giving Alliance, Donor Expectations Survey, Fall 2001. AARP Senior Consumer Alert, “Are Your Donations Hitting Their Target?” - Fall 1997.

QUESTIONS 1. Have you been approached by someone for a donation who did not have any information in writing? 2. Do you think anyone in your family has ever mistakenly given money to a less-than-reputable organization or a con artist? 3. Can you think of a recent natural disaster or tragedy that has sparked fund-raising activity in your community? Do you think this activity was legitimate? ASSIGNMENTS 1. Visit the web site www.bbb.org and locate the information on charities provided by the BBB Wise Giving Alliance, a national philanthropic watchdog and research organization. Print out the criteria which the BBB uses to evaluate a nonprofit's operations. PROJECTS 11-1. CHARITY CHECKLIST. Choose a local charity in your community and ask to interview a lead volunteer or staff member. Ask them about their fund-raising practices and public disclosure. Write up your findings and present the organization's mission and program to your class, with visuals.

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Evaluation 1. Which sections were most useful? What would you like to see changed about the subject matter covered?

2. Which sections, if any, would you eliminate from future editions of this booklet?

3. What is missing from this overview of consumer issues that you would like to see included?

Please send your comments to Susan Liehe, c/o BBB Denver/Boulder, 1020 Cherokee Street, Denver, CO 80204-4039. Direct dial 303-996-3962. Email [email protected]. FAX 303-798-8321. Additional copies of this booklet are available; you may also make copies provided that appropriate credit is given to The BBB Foundation as its author. Thank you!

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