Photo by Hunter Freeman
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Rip-off Alert: Beat the Cheats
By Sid Kirchheimer, July & August 2004
17 simple ways to protect yourself now! Don’t get scammed at the car lot, on the Internet, in the hospital, on vacation, and more…
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Whether it's car salesmen or doctors, identity thieves or home
repairmen, airlines or Internet auctioneers, somewhere along the line
someone's going to try to take you to the cleaners. How do you stop them?
Protect yourself—and your wallet—by heeding the following inside
tips from some of America's top consumer guardians.
Car Trouble
1. Leave your mark
Two years ago, the California Bureau of Automotive Repair ran an undercover
sting. The discovery: nearly half of all body repairs in that car-crazy state
were fraudulent. The bureau's primary weapon was a permanent marker.
"What we did was discreetly mark auto parts before we took cars in for
repairs," says investigator Warren Sam. "After the repair was made,
we asked for our old part. If it didn't have the marking we made, we knew
the work wasn't done."
Although his sting focused on bodywork, Sam recommends you do the same
before taking your car in for maintenance inspections. Inconspicuously mark air
and oil filters, spark plugs, brake pads, alternators, and other visible parts.
When you pick up the the car, ask for the old parts back. If they're
missing your mark when you get them back along with your bill, you're
probably getting a used part from another repair job and your old part is still
in your car.
2. Pass on the test drive
Buying a new car? The reason dealers readily offer you the keys before you talk
turkey: to make a photocopy of your driver's license. When you hit the
road, they hit the phone or the computer. With your name and license number,
they can instantly get your credit history from a commercial service.
"By the time you return from the test drive, they know what you paid
for your last car, what's on your credit cards, and your mortgage
payment," says Duane Overholt, a former car salesman who now counsels
consumers on dealership scams. "That information tells the dealer your
spending habits, and we know that most people typically spend 10 to 15 percent
more than the monthly payments on their last vehicle." Smart move: keep
your driver's license tucked away until after you've negotiated a
price.
3. Don't buy an "etching"
Ironically, one of the biggest consumer rip-offs is an antitheft measure for
your new car. The most popular, says Overholt, is an etch—the car's
vehicle identification number (VIN) is acid-etched into the windshield or side
windows by the dealer to prevent car thieves from altering it. This process
costs the dealer less than $100 but typically costs you at least five times
that much. It's wasted money because alter-proof VINs are displayed
elsewhere on your car—usually on the driver's doorjamb and the engine
block.
Home Repairs
4. Steer clear of drive-by repairmen
The most notorious scamsters in home-repair frauds are those repairmen who
cruise neighborhoods and sell their services at your front door. A tip-off:
Check the repair truck's license plate. If it's from out of state or a
county miles away, you're probably talking to a fly-by-night operator.
The license plate check is especially important to prevent the most common
dupe: an offer to "recoat" your roof or driveway. "A promise to
extend the life of asphalt or wood shingles with a recoating is a $1,000
rip-off that involves nothing but covering shingles with regular paint to make
them look shiny and new," says Tom Kraeutler, a home inspector in New
Jersey who hosts a nationally syndicated radio home-fix-it program, The Money
Pit. And don't fall for door-to-door driveway resealers who offer a bargain
price to use the leftover materials from the "last job." Chances are,
your driveway may be recoated, for several hundred dollars, with used and
useless motor oil.
5. Smoke out bogus chimney improvements
A chimney sweep may tell you that your fireplace is unsafe and needs a new
liner. But unless you have visible problems such as cracks or loose or missing
bricks, he's probably pulling a scam, says Kraeutler. "They'll
come to your house for a $50 cleaning, look down the chimney, and say you need
$3,000 to $4,000 in repair work for the fireplace to work safely." The
work they do is usually unnecessary, and it's your money that goes up in
smoke. Before agreeing to this expensive "repair," hire an
independent home inspector to do an evaluation.
6. Avoid being drained by waterproofing
If your basement floods every time it rains, you may need to have it
waterproofed. But consider this very expensive job only after you've ruled
out cheaper options. Frequently, gutters are simply clogged or soil surrounding
the home has eroded so it slopes toward your home, causing water to flood in.
"Anytime someone tries to panic you, that should raise a red flag,"
says Kraeutler. "What some guys will do is dig up your entire basement and
install gutters in the interior beneath the surface of the floor, which can
cost $25,000 or more, when all that's needed is some minor tweaking outside
at a fraction of the cost." (Damp-proofing paints and sealants can help
with minor problems, and sump pumps can sometimes be installed without ripping
up the entire basement floor.)
Medical Treatment
7. Make your hospital itemize—daily
Three of every four hospital bills include overcharges that average
$1,000—money you have to pay for supplies and services never provided.
The reason: bills are calculated from a "block" of medical supplies,
drugs, and services predetermined to be necessary for that procedure or
treatment.
But these services are not always forthcoming. So, to ensure you're not
billed for tests or procedures on that list but never performed, ask for an
itemized list of all services for each day you're in the hospital. The
line-item listing, which hospitals must provide if you ask for it, individually
lists drugs, tests, and services and allows you to track exactly what you are
billed for. "This way you can review what's been done—or not
done—when it's fresh in your mind," says Charles Inlander,
president of the People's Medical Society, a consumer advocacy group.
8. BYOD (Bring your own drugs)
Hospitals are notorious for charging outrageous fees for routine medical items
and the prescription and over-the-counter medications you usually take—up
to four times the price you would pay at the drugstore. Don't want to pay
$5 per pill for a postoperative antibiotic or the cholesterol-lowering statin
you take daily? Before a hospital stay, ask your doctor what drugs you'll
likely need following your procedure, get and fill a prescription for
them—as well as the medications you usually take—and bring them
with you. If your hospital allows you to bring such items, "just sign off
when you're admitted that you will supply and administer those drugs,"
says Inlander.
9. Dial "L" for laboratory
Whether you have an annual cholesterol screening or a test for Lyme disease,
you'll pay twice as much for blood drawn at the doctor's office as you
would if pricked at a lab. At the doctor's, you're charged for a
scheduled office visit, for drawing blood, and for sending it to the lab.
By getting your own lab work done, says Inlander, you may save up to half
the cost. Sometimes your doctor may have to provide a prescription that allows
you to get tested at a lab, and many physicians will call in this permission at
no charge. Added bonus: it's often easier to schedule an appointment at a
lab than with your doctor. Labs are found in the yellow pages under
Laboratories (Medical or Testing). Most will accept insurance, but be sure to
ask if they take yours. They may even provide you with test results directly,
sparing you yet another doctor visit.
Financial Privacy
10. Buy a $2 pen
All it takes to clean out your bank account is a signed check swiped from your
outgoing mail and the chemical acetone commonly found in nail polish remover,
says Frank W. Abagnale Jr., the former check forger and identity thief depicted
by Leonardo DiCaprio in the movie Catch Me If You Can.
It works like this: The crook steals outgoing paid bills from your mailbox
and places a piece of cellophane tape over the front and back of your signature
on the check. Then he or she places the check into a pan of nail polish remover
for about 30 minutes—which lifts anything that's not printer's
ink, except for your tape-protected signature. The check is then blow-dried and
flattened in a book, and the tape is carefully removed. Voilá! A blank
check, signed by you.
Only one type of ink—the kind in gel pens—is counterfeit-proof
to acetone or any other chemical used in "check washing." "I
recommend the uni-ball Gel Impact pen, which sells for about $2 each at any
office supply or chain store," says Abagnale, who now consults law
enforcement and corporations on the art of the steal. "I personally sign
all my checks and important documents with one."
11. Hire your own spy
One of the best ways to stop identity theft is to subscribe to a service that
alerts you when anyone checks your credit rating or attempts to open a credit
account by using your name. But make sure the service is quick about it. Many
take a week or longer to notify you or send quarterly statements of this
activity. "You need to know instantly," says Abagnale.
He recommends the PrivacyGuard Enhanced program, which for a $119-a-year fee
notifies you by e-mail immediately. "In the four years I've used this
program, I've been amazed how often my credit has been checked—by
stores where I shop to companies I do business with." For more information
visit PrivacyGuard's website or
call 877-202-8828.
12. Borrow Ollie North's shredder
Destroying documents before they're thrown away can prevent vital
information such as your Social Security and bank account numbers from falling
into the hands of crooks who sift through your trash…but only if you use
the right type of shredder. "The most common shredder sold—a
straight-cut shredder—only cuts the documents like ribbons; all
that's needed is to push these ribbons together to get your numbers,"
says Abagnale, who adds that crooks will happily take the time to do this kind
of puzzle work. "Spend the few extra dollars and get a 'confetti,'
or cross-cut, shredder. It makes documents impossible to read." Average
price: $120. [See our previously published buyer's
guide to paper shredders on AARP Bulletin Online.]
Internet Security
13. Don't "phish" with strangers
You've heard of spam, or unsolicited e-mail; phishing is spam specifically
designed to steal vital information such as your password and credit card and
bank account numbers. "You'll get e-mail saying your bank, Internet
service, or another account needs to be updated or verified," says John
Hambrick, an FBI supervisory special agent who works with the Internet Crime
Complaint Center (IC3). When you click on the link provided, you'll be
taken to a highly authentic-looking website. The best ones have the same
corporate logo and even the URL address of the corporation being
impersonated.
How can you tell that it's not legitimate? Because no bank would ever
ask you those questions online. "Your bank does not need to verify your
ATM pin or Social Security number," says Hambrick. "Neither do AOL
and other companies."
14. Get wise to online auction scams
There are great deals—and great steals—on eBay and other online
auctions. Here's how to tell the difference: "Anytime you get an offer
from the seller that is outside the normal auction process, it's a
scam," says Hambrick. "For instance, you'll get an e-mail saying,
'You aren't the winning bidder, but I have one more of those items to
sell.' What they are doing is trying to circumvent the auction system and
get you to send them a cashier's check. Trust me, they will not send
anything to you in return."
Also, avoid would-be sellers that:
- don't accept standard third-party payers such as PayPal and instead ask
you to use their own escrow system
- ask for payment by Western Union
- ask for bank account numbers, Social Security number, or other information
not required
- ship from, or are registered in, Andorra, a small country in the Pyrenees
well-known to be a home base for phony eBay vendors
- ship items from an address or area other than the seller's
address.
Travel Swindles
15. Burn the midnight oil
You see those enticing offers for low-fare flights in the newspaper, but when
you call you're told they've been sold out. It's not an outright
rip-off, but it sure feels like one. So, how do you land those cheapo
seats?
Be a night owl, advises Peter Greenberg, chief correspondent for the Travel Channel and author of Hotel
Secrets (Villard, 2004). "Starting from one minute after midnight to about
1 a.m. on Wednesday, all airline computer systems are flooded with low-fare
reservations that were booked but never paid for." This one-hour window of
bargain prices varies, depending on the time zone where you live and where the
airline you're flying is based. For example, if you live in Philadelphia
and you're booking with American Airlines, which is based in Fort Worth,
you'd want to start calling at 1:01 A.M. If you live on the West Coast and
want to call East Coast-based U.S. Airways, you'd call starting at 9:01
P.M.
16. Split the markup
Don't be fooled that you're getting the best hotel bargain by booking
online. Websites such as Orbitz, Expedia, Travelocity, and hotels.com buy rooms from hotels at a discount
price but then charge you a markup of 24 to 48 percent, says Greenberg.
"Instead, if you see a hotel room advertised online for $100 a night, call
the hotel directly and offer $85. At the typical markup, you have to figure the
hotel is offering it to the discounter at about $65. The hotel still stands to
make a $20 profit by booking it from you rather than through the website."
Tip: negotiate directly with the on-duty manager or sales director rather than
a lower-level reservations operator or desk clerk.
17. Check out those charges
Avoid checkout shock by being aware of some common hotel flimflams. For
example, there's "double dipping," which happens when you're
presented with a room service charge on what resembles a credit card receipt.
In addition to the cost of an overpriced meal, the hotel will add on a service
charge (usually about 2.5 percent), state tax—and a gratuity anywhere
from 15 to 20 percent. But instead of totaling the amount, the hotel prints a
"subtotal," leaving space below for you to write in a tip.
"Before you know it, you're eating a $35 hamburger," says
Greenberg. Bottom line: read the room service menu carefully for any mention of
automatic gratuity charges.
Another nasty surprise may be waiting should you have a fax or
overnight-courier package delivered to your hotel room, warns Greenberg.
"The desk will ring you and ask if you'd like the item brought up, and
most likely you will tip the person who makes the delivery. It isn't until
you check out that you discover the hotel has tacked on a surcharge of $3 to $5
for every fax or package you received." In both cases, Greenberg suggests
complaining to the manager on duty. "Nine times out of 10 the hotel will
remove the charge at your request."
Sid Kirchheimer wrote "Smart Pills" for the January-February 2004 issue of AARP The Magazine.
For black-and-white reprints of this article, call 800-635-7181, ext.
8158.
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