Withstanding Category 4 scams
The strong winds from the hurricanes have definitely blown devastation through the Carolinas and Florida, but they’ve also blown in charity scammers, too. These new scams claim to seek relief for the victims but we as givers need to do some research to make sure we’re helping the victims and not just giving our money away to scammers.
We’ve seen reports in recent weeks that a whole slew of new websites related to Hurricanes Florence and Michael have popped up on the internet. These sites look official; accept donations on behalf of victims but many never say who is running the site or how the money will be used.
So here are a few tips to make sure your donations go where you intend for them to go. Check out the charity with the Better Business Bureau’s (BBB) Wise Giving Alliance at www.give.org, Charity Navigator at www.charitynaviator.org, Charity Watch at www.charitywatch.org/home or GuideStar at www.guidestar.org/Home.aspx
Charities that need to be registered in Idaho can be found by contacting the National Association of State Charity Officials: www.nasconet.org.
If they should be registered but aren’t, consider donating to another charity.
Don’t assume that just because a charity posts messages on social media they are legitimate. Do your research to make sure. If you know that the charity is legitimate and are ready to donate, don’t forget to designate the disaster you’re giving to so you can make sure your funds go to the disaster relief for which it is intended. It is, after all, your money so you should get to decide where your money goes.
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DO DUE DILIGENCE: A consumer called and told me that the IRS was going to “take his home.” It turns out that his ex-wife owns a business that she continued to operate for several years after their divorce. During the divorce proceeding, they agreed that his name would be removed from the business and that he would have no further responsibilities or obligations to the business.
The problem is that he didn’t check to make sure that the proper legal documents were prepared and executed. The communication he received from the IRS indicated that his ex-wife had not paid FICA taxes (Federal Insurance Contributions Act) to the IRS on behalf of her (and his) employees for several years. The IRS was now holding him AND his ex-wife responsible for a bunch of penalties and interest — not to mention the actual taxes, which weren’t paid.
Had he done his due diligence, this probably wouldn’t have happened.
“Due diligence is an investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material. It refers to the care a reasonable person should take before entering into an agreement or a financial transaction with another party.”
Lesson: Do Your Due!
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DEBT IS A VAMPIRE: Everyone knows that being in debt can suck the happiness out of your life. Debt will destroy your attitude, your relationships, and your personality. The kind of debt I’m talking about is “stupid debt.”
Stupid debt sneaks up on us when “easy credit” slips around the corner and enters our lives. Student loan debt, mortgage debt, second mortgage debt, new car debt, credit card debt are a few we’re all familiar with. Also, “Let’s go out to eat” debt, vacation debt, “it’ll only add another $30 to our monthly credit card payment debt” are patterns we can all fall into.
The answer is to live “below your means.” What a concept! There was a time when those who loaned money were limited by usury laws. Not anymore. Banks can pretty much charge what the traffic will bear. Interest rates as high or higher than 30 percent APR (Annual Percentage Rate) are common. This means if you owe $100, and don’t make any payments, at the end of one year you’ll owe $130 — without making any further purchases.
Unfortunately, an entire dark industry has evolved to “help” consumers “eliminate” their debt or magically improve their credit rating so they can borrow more money and go further into debt. Here’s a big hint — most of the companies offering this service want their money up front, without any promise of solving your debt or credit problem.
A common tactic among these companies is to have you sign a complicated, one-sided legal agreement requiring you to send the company ALL your monthly income. The company then “negotiates” with your creditors and attempts to reach agreements with those you owe money to. These agreements are designed to stretch out the term of your payback and reduce the APR (interest) you pay the company. (By the way, the company “helping” you usually takes a hefty monthly fee from your monthly payment, before passing the remainder on to the people you owe money to.) A very important side note — by “negotiating” with your creditors (by not making the required payments as originally agreed) — the company you owe money to reports your slow pay or no pay to the credit reporting agencies and ruins your credit.
BOTTOM LINE: Don’t spend what you don’t have! There are no easy outs once the Debt Vampires get hold of you. The imaginary monsters of Halloween are pussycats compared to what these real life ghouls will do to you, every day and every night while you lie awake worrying about making your next payments.
There are a number of legitimate self-help guided programs designed to help consumers with debt. Many are associated with local churches or county governments. One program that I personally recommend is the Dave Ramsey Program. You can find details at: https://www.daveramsey.com/
There, you can buy a very good book “Total Money Makeover” for about $16 — it’s all you really need to get back on track, financially, if you follow his advice.
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REMEMBER: “We’re On Your Side”
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We have many more tips and interesting cases that we’re working on. Call us at (208) 699-2455. You can follow us at www.billbrooks.us. We are available to speak about consumerism to schools and civic groups. Bill Brooks is a consumer advocate who lives in Coeur d’Alene. Terri Dickerson is a writer and consumer advocate living in Coeur d’Alene. Bobbi Brooks is the proofreader.