Big Spenders Can't Buy Reputation
by Jan Quintrall, President/CEO, BBB jquintrall@spokane.bbb.org
for the Spokesman Review, 10/30/2011
I have been a pro football fan since I was a little girl. I have fond memories of sitting in front of the small black and white television in the basement with my dad watching Bart Starr and the Packers dominate other teams most every Sunday. Dad took the time to explain the game to me and tell me stories about the players and owners, engaging me in the whole mystique of the AFL and NFL. And yes, from my childhood home in the suburbs of Denver I even watched those awful Bronco teams in the hideous uniforms.
Fast forward to now. My husband and I watch football on Sunday and thanks to satellite TV, we can see every game. I must admit I look forward to Monday nights when I can simply watch ONE game rather than the Sunday remote-heavy Red Zone Channel frenzy of all the games at once. But a couple weeks ago, while watching Monday night football I began to wonder about the commercials. As an experiment I watched the Ravens and Jaguars play and wrote down all the names of the advertisers just to see if my gut reaction of questionable companies dumping a ton of money into sporting event ads was correct. What an interesting experience!
Using my list I looked on www.bbb.org for business reviews. The companies’ letter grades ranged from A+ to F. Here is a taste of what I found:
Flex Seal, the gutter spray company, is based in California and has earned itself an F. Just fewer than 100 complaints have been filed in the last year; sales issues as well as billing problems make up the lion’s share of the problems.
Three insurance companies are frequent fliers in football advertising: Progressive Corporation and USAA both carry an A+, while Geico Corporation in Washington DC has earned a C+. The reason for the lower grade for the gecko is failure to respond to or resolve a number of complaints.
Two cell phone companies also spend heavily on television ads. AT&T headquarters earned an A+ and in contrast T-Mobile has a C. AT&T received 19,068 complaints in the last three years, while T-Mobile saw 27,321. They have both responded to all the complaints, but the volume for T-Mobile dropped its grade.
Online Auction newcomer www.Beezid.com is a company based in Quebec, Canada where there is no BBB service at this time. But, it took me a while to figure out from their website where they were located.
Funny, that happened quite a bit. In one case I had to be a detective to figure out who was behind the ad in the first place. Researching www.Jumpman23.com finally brought me to Nike. But I guess the ad itself should have told me it was Nike. Frankly, with a DVR in our house, commercials are usually skipped so I am not as brand-aware as I could be.
Automobile manufacturers like GMC, Lexus, Acura, Hyundai, Toyota, fill most of each break with one or more ads. And the business reviews of local dealers run from A+ to F also. There have been many times in my BBB life where I wonder why someone would pour rivers of money into advertising and promotion, then treat their customers so horribly once they get them in the door.
But the battle of the cable-satellite companies has actually shown up in their ads. Each claims to do a better job of customer service than the other. So I turned to www.bbb.org to see what kind of a grade DirecTV and Comcast Cablevision have earned. DirecTV, based in California, has a D+ while Comcast, headquartered in PA, has a C. The volume of complaints against DirecTV in the last three years is 38,236 while Comcast totaled 3,194. DirecTV is better at resolution, but was the subject of two government actions. For full reports please go to www.bbb.org.
During the course of my experiment there were 53 different ads, assorted ESPN promotions spots and a bunch of movie teasers. Somewhere in there I think there was a football game! The lesson here: Even if a company spends a gazillion dollars on advertising, it does not change the business rating they earn with the BBB. Nor does it make that advertising true. As buyers, we still need to do our research. And, you can always Start With Trust by finding BBB Accredited Businesses on our website.
Other Victims of the Little Loan Shoppe
by Jan Quintrall, President/CEO, BBB
jquintrall@spokane.bbb.orgfor the
Spokesman Review, 10/16/2011
The BBB is the front line in so many ways. For 100 years, in the spirit of self-regulation, we’ve joined with ethical companies to promote an honest marketplace. Peer pressure in industry is more effective and palatable than even one more government regulation. But after 25 years in this business, I know when it is time to call law enforcement. When a company’s actions move from poor practices to outright fraud, we need to get the attention of an agency who can take the legal action a situation requires. Boy, did that happen with the Little Loan Shoppe, one of the first online payday lenders in our area. At the BBB, the red flags rose early and often.
The alleged Ponzi scheme around this business has attracted a lot of media attention. A bankruptcy court is now going after investors to help pay off some of the debt. And many investors were victimized just like the payday loan customers The Little Loan Shoppe served.
Often, scams will exhibit a pattern of activity including:
* Multiple changeable locations, constant mail returns, several mail drop locations, and failure to give a straight answer about where they are headquartered
* Moving from state to state when things begin to get a little sticky
* Not giving consistent, truthful answers about ownership or business status
* Calls from employees concerned about the company’s business practices and reports of bouncing paychecks
* Lots of BBB complaints, usually about the same problem
* Vague or phony locations listed on the company website with a picture of a skyscraper, when that address is really attached to a private, rented mailbox
We saw this template, for the most part, with The Little Loan Shoppe. They bounced from Bountiful UT, to Canada to assorted Spokane locales. But the nature of the complaints was most alarming. Individuals who sought out an Internet-based payday loan gave the company their bank account information. Withdrawals were scheduled and authorized. No problem, if you can overlook the 782.14% interest rate! But our plethora of complaints indicated that once the company had that information, withdrawals—of a higher amount than agreed—occurred repeatedly. Not a good situation for people in such financial straits that they had to seek a payday loan.
At first the company answered BBB complaints, but the underlying cause never went away. Once the U.S. Attorney’s Office got involved, they quit responding at all. Now, because of the pattern and sheer volume of complaints, this company has an unfavorable record with the BBB dating back to 2007! I really wonder what kind of due diligence the investors undertook. Had they simply looked at www.bbb.org, or contacted the Securities and Exchange Commission (SEC), they might have thought twice about that investment. But, a friend would not rip you off, right?
Affinity fraud is an awful thing, because trust has already been built for the scam artist to take advantage of. Pyramid and Ponzi schemes are most successful when a trusted person leads the victims. In this case it was the Jehovah Witness community, but we’ve seen it with all sorts of affiliations and groups. Well-respected business leaders sometimes rope investors into schemes. Unfortunately, investment scams happen across all segments of society.
It took the BBB a number of years to get the attention of law enforcement in this case and I wonder if we could have saved a whole lot of victims if someone had moved faster. That is a constant frustration when it comes to BBB work in the self-regulation mode. Of course, criminals don’t self-regulate.
But the real kicker here was a call we got in August of this year. A job seeker let us know one of our state employment offices was listing a work-at-home job opportunity from the Little Loan Shoppe in Bountiful. So, are they really out of business? And, is anyone screening these job postings?
Remember, the key rule with investment is this: Investigate first. And always Start With Trust by researching a company at www.bbb.org.