Effective March 1, amendments to the Federal Trade Commission’s Business Opportunity Rule go into effect. The changes implement new disclosures that work-at-home businesses must provide to ensure consumers have the appropriate information they need when considering a work-at-home program.

For decades, Better Business Bureau of Southern Arizona has heard from consumers scammed out of money by work-at-home programs. Since January, BBB has given out more than 175 business reports to southern Arizona consumers interested in local work-at-home companies. And in the past 36 months, more than 10,000 complaints have been filed with BBB’s nationwide.

To help consumers make informed decisions about work-at-home programs, there are five key items work-at-home businesses must now disclose using the FTC approved disclosure form:

1. Its identifying information (i.e. the name, business address, and telephone number)

2. If earning claims are made, the basis for that claim

3. Whether the company, its affiliates or key personnel have been involved in certain legal actions

4. Whether the company has a cancellation or refund policy

5. A list of people who bought this business opportunity within the previous three years

While these new regulations will help consumers better understand these work-at-home programs, consumers still need to be vigilant and cautious. Here are common red flags to watch for that could indicate a work-at-home scam:

1. Non-compliance with the FTC’s new regulations. If a company is not willing to provide you all the information now required, walk away and report them to your BBB and the Federal Trade Commission.

2. Big bucks for simple tasks. Watch out if they promise to pay you a lot of money for jobs that don’t seem to require much effort or skill.

3. You are asked to invest money up-front. If someone asks you to make an advance payment – especially if it’s a big investment, or you don’t have much information about the deal – this is a red flag. (more…)

An Ohio company that markets products ranging from portable electric heaters to uncut sheets of U.S. dollar bills is under scrutiny for what the Better Business Bureau of Southern Arizona calls “significant and ongoing concerns” over advertisements which BBB believes have the capacity to mislead consumers.

The company, Arthur Middleton Capital Holdings of Canton, Ohio, is best known for its full-page ads in newspapers and magazines that appear similar to news stories and which run in publications in Arizona, and nationwide.

Arthur Middleton’s owner and chairman is Rodney Napier.

Kim States, BBB President, said BBBs in several markets  have questioned Middleton’s continued use of misleading and, at times, erroneous information in company ads.

“In our judgment, these problems have become so chronic and so flagrant that we felt an obligation to alert the public,” States said. “Time after time, BBB has expressed its concerns about the ads to the company. Time after time, the company has promised to make changes, only to come up with new products and new ads that are just as troubling.”

Most of the BBB’s concerns involve ads for World Reserve Monetary Exchange and Heat Surge – both businesses are part of the Arthur Middleton holding company.

BBB has logged 207 consumer complaints involving World Reserve Monetary Exchange, and 258 involving Heat Surge. Many of the complainants, some of which are from southern Arizona, say the ads are misleading.

World Reserve Monetary Exchange sells coins, paper currency, safes and related items and describes itself as “the largest provider of coin and currency aside from the U.S. Federal Reserve.”  Heat Surge is best known as the seller of Roll-N-Glow (is this the same as the Heat Surge fireplace?) electric fireplaces, with Amish-built mantles. Among recent ads targeted by the BBB are:

• World Reserve Monetary Exchange ads for uncut sheets of $1, $2 and $5 bills. The $1 and $5 bill (more…)

When faced with overwhelming credit card debt, as many of us are in this recessionary era, we’re awash with options on how to deal with the debt: handle it on our own; try debt settlement; obtain a debt consolidation loan; file for bankruptcy; tap home equity, or join a debt management program through a credit counseling agency.

Better Business Bureau of Southern Arizona advises on the advantages and disadvantages. Here we’ll clarify what’s entailed in a debt management program.

What is it?
A debt management plans are also commonly referred to as “debt management programs,” “DMPs,” and “debt repayment programs.”

First a person with unmanageable credit card debt seeks credit counseling at a consumer credit counseling service.  A counselor obtains an itemized list of the client’s monthly expenses and income. If a client has funds remaining in the budget, but can’t keep up with minimum payments, debt management becomes a possibility.

A debt management plan is a personalized, structured repayment program wherein you pay back 100% of your debt over time, a maximum of 60 months. You pay down the principal much faster than you could on you own and make one monthly payment to the credit counseling agency which electronically distributes the money to your creditors.

A good credit counselor will review the status of your creditors—tracking the name of the credit grantor, the account number and current interest rate.  Then the counselor will look up how much each creditor would charge in interest were you to join the program (policies between creditors vary greatly). A counselor can tell you how you could save in interest over the long term and your shortened payoff time.

What are the benefits?

• Lower interest rates, late and over-limit fees.
  By joining a debt management program, you show you wish to back your debt. In exchange, most creditors make concessions to the original agreement to help their customers repay their debt and avoid a potential bankruptcy.

Reduced interest rates and waived late and/or over-limit fees are the main appeal.

• Decrease the payoff time.
  As a result of paying reduced interest and fees, more of your monthly payment is directed to pay off your principal, allowing you to shorten the duration of your payoffs.
• Eliminate calls from collectors.
  Clients who are well behind on their bills are often hounded by collections agencies. Such calls will continue for about the first 90 days of the program (while the credit grantors process credit counselor proposals). During this period, you may tell collectors that you’ve joined a DMP and refer them to your agency’s Customer Service Department. Once the 90-day period has past, creditors will stop contacting you.
• Improve stress.
  Once you regain control with a manageable action plan, your stress is greatly reduced. The uncertainty of how you are going to handle a large financial problem causes undue worry and tension. A reputable credit counseling service will encourage free follow-up visits with your counselor.  Should you have questions about your budget or credit, or your circumstances change, having access to a financial specialist reduces anxiety.
• Make just one monthly payment.
  As a convenience, credit counselors consolidate your payments into one monthly installment that’s divided and sent electronically to each creditor. Usually set up as an automatic withdrawal from a bank account, this payment method reduces the likelihood of incurring late fees.
• Pass on bankruptcy.
  A DMP works well for those who are ethically opposed to bankruptcy. Others cannot file due to policies of their employers who prohibit it.  Some choose another route to minimize the negative impact on their credit reports.
• Emerge debt free.
  The goal is to help you become free of debt. For those who have been unable to control credit card debt on their own, the DMP is a great tool, along with a budget, financial education, determination and hard work, to help you payoff debt and secure a healthy financial future.

Potential downsides?

• Use of credit.
  To allow you to concentrate on paying off debt rather than incurring more, you must close your accounts and stop using credit. As a result, visit any credit counseling service and you’ll see jars of cut up credit cards. Creditors actually monitor your credit reports to see if you make payments outside of the DMP to other creditors and may drop you from the program altogether if they catch you doing so. A few exceptions are allowed, such as if you have a corporate card for business and the bill is paid by your employer.
• Impact on credit.
  Your creditors determine how your account will be reported to the credit reporting agencies.  Any payment options, which alter your original agreements with each creditor will affect your credit somewhat–some methods more than others.  Generally, filing for bankruptcy is the worst move (credit wise) and will leave negative remarks on your credit report for 10 years.

After creditors accept the terms and receive three consecutive payments, some creditors “reage” your accounts (bring them current) that will improve your credit. If you haven’t been able to make payments, have a long history of late payments, or carry high debt loads, joining a plan, paying on time and working down your balances can actually improve your credit.

To determine how a DMP would affect your credit, call each of your creditors and ask.

• Must have some income to qualify.
  When counselors work with you to develop a budget, you must have some surplus income to pay your credit cards through a DMP. If your situation is extremely dire, another option may work better for you.

Shopping for a Credit Counseling Agency
Start by researching nonprofit credit counseling organizations. Search the Better Business Bureau and check the agency’s “reliability report.”  For added protection, also consider doing business with BBB Accredited Businesses.

Lastly, find out if it is a member of the National Foundation for Credit Counseling. NFCC members adhere to strict standards of professionalism and accreditation and draw upon only certified credit counselors.