BANKruptcy. There’s a reason they don’t call it CREDIT UNIONruptcy

Columnist: Hundreds of complaints about banks, none on credit unions

FORT WORTH, Texas (9/3/09)–Dave Lieber, “Watchdog” columnist for the Fort Worth Star-Telegram, told Texas credit unions that he receives hundreds of requests for help with bank problems and none for credit unions.

He recently gave a presentation titled “Why Americans Hate their Banks but Don’t Know Enough to Love their Credit Unions,” at the Fort Worth Chapter of Credit Unions‘ monthly meeting.

Dave Lieber's Watchdog Nation

Dave Lieber's Watchdog Nation

Photo by Mike Lewis

Lieber’s column helps readers who have issues or problems with current situations affecting their communities (LoneStar Leaguer Aug. 28).

He said that while he has had hundreds of requests from readers to address or correct complaints facing the banking industry, he had not received any asking for help in dealing with a credit union.

With many “horror” stories relating to banking customers’ complaints, Lieber had his audience laughing when he said he now understood why it was called “BANKruptcy” and not “CREDITUNIONruptcy.”



ANOTHER PONZI SCHEME: Death is bad enough, but here’s how to steal from the corpse

You’ve heard of Bernie Madoff and Madoff Securities. You’ve heard of R. Allen Stanford and his Stanford Financial Group. But here’s another Ponzi scheme that resulted in a major federal indictment the other day. Tens of thousands of people across the United states were deceived. Hundreds of millions of dollars are missing. And it hasn’t drawn a lot of public attention.

Does National Prearranged Services ring a bell?

Funeral industry scandal

Funeral industry scandal

That’s the company that sold more pre-need funeral contracts than anyone else. NPS officials turned out to be among the earliest examples last year of stereotypical U.S. executives’ greed. It’s the biggest scandal to hit the funeral industry in years.

Tens of thousands of people paid a lot of money to the Missouri-based company that sold funeral contracts through insurance policies written by its two subsidiary Texas insurance companies. You buy these contracts now, with the idea that when you die, that’s one less worry for your survivors: most funerals costs are already paid.

Last year, though, Texas regulators figured out the company was about to fail and placed it into receivership. The FBI launched a criminal investigation.

That’s how I came to know about this. With the help of Jim Bates of the Funeral Consumers Alliance of Texas, I was the first newspaper writer to expose this, which I did in my Fort Worth Star-Telegram column. (Credit, though, to the award-winning Funeral Service Insider newsletter that put the story into print first.) I’ve kept my eye on it ever since and wondered why more people haven’t done so.

But last week, two new developments show the immense reach of this scandal.

On Thursday, a federal lawsuit was filed that seeks to recover $600 million in lost funds from the companies. That same day, a federal grand jury indicted former NPS Chief Financial Officer Randall Sutton for mail fraud, wire fraud and money laundering. (Here’s my story about that in the Aug. 8, 2009 Star-Telegram.)

I called Sutton at home Friday and left a message that I wished to hear his side.

By going after the CFO, however, the feds may be targeting the actual founders of the company, the Cassity family, the politically well-connected funeral industry entrepreneurs that dominated their industry and made millions.

Where the money is today is anybody’s guess, but before this is through, we’ll surely have a greater understanding of what the St. Louis Post-Dispatch calls the “secretive Cassity family trust, RBT Trust II.”

“Some believe the missing funds could be hidden in that account,” reporter Todd C. Frankel writes.

Until now, we didn’t know what ultimately led to the demise of NPS and its two Texas subsidiaries – Lincoln Memorial Life Insurance and Memorial Service Life Insurance. But the federal indictment gives us the first behind-the-scenes look at the many ways you can steal from a corpse.

If you’re keeping track of big-time fraudsters who are ruining this great nation of ours by making suckers out of millions of us, well, please take notes. Watchdog Nation, the only way to stop these scams is to understand how they work. (NOTE: Details below are from the U.S. Attorney’s Office, and, of course, at this point, they are only allegations.)

* Promise your customers that the money they invest will be held in trust for when they die. Get the customers to pay in full when they sign the contract, but don’t tell them there is any risk. And don’t disclose to funeral homes and customers that these funds will be used for other purposes.

* Don’t tell customers that because their funds are used for other purposes, other contracts to new customers must be sold to cover the costs of funerals for the original customers.

* After you convince your customers to pay in full for a life insurance policy to cover funeral costs, go back and erase from their contracts any mention that complete payments were actually made. Alter documents so they show that customers made only partial payments. Then take the difference between the full payments and falsified partial payments from the customer’s insurance policy and use it for other purposes. Leave most of the customer’s payment in the account, but transfer the obligation of future payments to the insurance provider, who will be surprised when that bill comes due years later.

* While you’re altering the forms, make sure you white-out the names of the true beneficiaries and replace them with the name of National Prearranged Services. Once NPS is listed, the company can get more money. Here’s how: Pledge customers’ insurance policies as collateral for loans to NPS without the customers’ knowledge. Then use affiliated insurance companies to extract money from these loans under false pretenses. Use proceeds to pay outstanding premiums due from other customers. You can get another $65 million from your customers that way, the indictment states.

* Because NPS is now a listed beneficiary, NPS can then easily convert customers’ whole life insurance policies to monthly renewable term policies. By taking the difference from the insurance company, the difference from the cash surrender value of the whole life policy and the first monthly premium of the renewable term policy, you can get another $40 million from your unknowing customers, the indictment states.

* Don’t keep your promise to invest the money you receive from roll-over accounts. Instead, purchase large blocks of pre-need funeral contracts from funeral homes you’ve done business with. Promise to invest 80 percent of the underlying customers’ funds for 30 days, and then use the money to purchase life insurance. But don’t bother investing the money as promised. While you’re at it, create false monthly reports for the funeral homes showing their money is held in trust — when that’s not true.

* Promise to invest $1.7 million from a well-known Kansas City funeral home, but place the money in speculative futures contracts – and lose most of it. Then, rather than admit what happened, send monthly statements to the funeral home showing false balances.

* Give false information to regulators and funeral homes when they come by asking questions.

* Make sure your chief financial officer claims that he is licensed by the Missouri Department of Insurance. But get his secretary to study and take the qualifying exam online pretending to be him.

Who gets hurt in the end? Right now, most states have guaranty funds that pick up funeral costs in the event of a systemic failure such as this. But I fear that when those funds run out, funeral homes, already operating on tight budgets, will be forced to pay the losses out of pocket to assuage angry customers, well, actually their survivors.

Dave Lieber is the author of Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, the 2009 winner of the Next Generation Indie Book Award for Social Change. This post appears on

Attention Mattress Giant: If you knew the bed was bad, why did you sell it to me?

The trend that I hate the most, really hate, is that it takes most service personnel two times, at least, to get things right. We used to live in a nation where almost everybody got things right the first time.

Now you hire somebody to do something, most likely, they will have to come back because they didn’t get it right the first time.

Recently, for example, the security alarm guy from ADT visited Watchdog Nation HQ to help protect our top-secret investigative files.

He was back again the next day. He forgot to alarm the back door.

The new brakes that were put on Watchdog Nation’s Batmobile the other day? We had to return and get them replaced after 24 hours. Defective parts.

But the one that stands out in a week of second chances is the Mattress Giant.mattress-giant2

Last week, we bought a new bed. Of course, when they delivered it, they forgot to bring the bed frame.

No problem. I went to the store and picked it up. Yeah, second chances. I half expect the incompetence.

By the second night, however, the box springs were so creaky we couldn’t stand it. Every move on that bed sounded like a stack of plates crashing to the floor. LOUD. CRASH. WAKEUP.

We returned to the store, and the woman at the counter apologized. She told us there might be a $59 exchange fee.

I started reading their statement of principles hanging on the wall to her. Standing behind their service. Quality. Blah blah blah.

She got the fee waived.

Then I asked her how come the box springs made so much noise?

She explained it was part of “a bad batch” that came from the bed factory in Cleburne, Texas.

I asked, “If you knew the batch was bad, why did you sell it to me?”

She replied, “Well, some of the bad ones got mixed in with the rest.”


Have you ever heard of bar codes? Inventory control? Finding the bad ones in the lot AND PULLING THEM OFF THE SHELVES??

I believe Mattress Giant knowingly sold me a bad bed. How else to explain how they knew the batch was bad and still sold it anyway?

I called Graeme Gordon, the vice president of marketing and advertising for Mattress Giant (sted on the company Web site as the PR contact), to discuss this with him. If he calls back, I’ll update this post.

An employee at the International Bedding Corporation in Cleburne, Texas told me she wasn’t aware of any bad box springs, but if there was a bad lot, “We sell it to Mattress Giant, and if they have an issue, they’ll talk to our production manager. If you have a problem, talk to Mattress Giant.”

I’m talking here. Right now.

UPDATE: After this blog post appeared, within seconds, Mattress Giant sent me a message via Twitter. A few minutes later, Graeme Gordon, who didn’t call back yesterday, called today to respond to this post. The vice president for marketing and advertising apologized.

Here are excerpts of his remarks:

“We’re in the middle of a meeting and I wanted to step out to let you know that I know what was going on…

“This comes down to someone at the store level who unfortunately isn’t aware of what is going on.

“The reason we know something wasn’t right was because we saw returns jump from 1 to 5 percent… There was a flaw in the design.

“The manufacturer told us they were completely redesigning the box springs. So there’s no excuse for getting it mixed in…

“I’m not one to give excuses, and honestly, there’s no reason that should have happened….

“If anyone calls and says they’ve got the same problem, I’ll bring them one tomorrow. I’ll give them a pillow, whatever it takes to get the problem solved…

“I’m going to ask you: Can I send you a pillow to make up for this?”

I said, “Thank you for the gesture, but I’m not in this for the free gifts.

Ask a bunch of questions

Watchdog Nation button

Watchdog Nation button

I felt the Midas touch today.

Midas was the king who loved Gold. I was the guy who needed a new catalytic converter.

All started with the annoying little dashboard light: CHECK ENGINE.

Neighborhood repair shop where I’ve been going said, “$1,700 for a new one because they do not make after-market parts.”


Called the dealer. He concurred. No after-market parts available.

Visited another neighborhood garage. $1,200.

Price drop of $500 — just for asking a question.

Visited a third muffler shop. Quoted price: $500.

Another $700 drop for asking another question.

Visited Midas today. And yeah, asked that same question again.


Guess who got a new catalytic converter today for about $1,400 off the original estimate.
Watchdog Nation, baby!

Ask a bunch of questions.

It works.

Finding an honest contractor

Courtesy of

Courtesy of

How hard is it to find a good, inexpensive and honest roofer, plumber, painter or contractor?

If you’ve ever been burned, you know the answer to that.

Monty Snow, a leading citizen of Watchdog Nation, sent us a recent note, which he granted permission to share:

Just a personal note about consumer (self) protection. You know, after my experience with a plumbing company that charged me $250 to dig 1-foot-deep holes, I decided to find a good plumber before I needed one again (lesson 1).

So I started checking websites, looking at customer reviews, and I found a guy who everybody seemed to love. You could tell from their reviews that it wasn’t just about plumbing – they really liked the guy. So I emailed him and asked him straight out how much he charges and how he calculates it. He wrote me back immediately, was very straightforward, no b.s., and he told me exactly what I wanted to know.

I needed him sooner than I thought I would – twice in fact. He came out, used only the best of materals, did a first-class job each time, and the total for both calls was $250 – the big fancy company had charged me to dig the hole.

But I went a step further. I figured if this guy was honest and reliable, he probably used honest and reliable people when he needed something done around the house. So, when my air conditioner acted up, I sent the plumber an email and asked him who he uses. He gave me the guy’s name and number, said he never used anybody else (Networking – lesson 2).

I called the a/c guy and he was out the next day, fixed only what I needed, didn’t try to sell me anything, was extremely pleasant and reasonable. When I need an electrician, I’m gonna call the plumber and the a/c guy.

Dear AT&T, With Love from The Watchdog

Dear AT&T:

I have a question for you: Why do so many people complain to me about your customer service? Repeatedly, they tell me about customer service reps who drop the ball. Lately, I’m hearing a lot of grumbling about your U-verse television service.

See, I have this job that allows me to monitor in an unscientific way which companies are on top of their game. When I keep hearing from readers about one particular company, I know things aren’t right.

Lately, I’m hearing about you.

When you rolled out your U-verse television service in Dallas-Fort Worth 16 months ago, were you prepared to handle your customers and all their ensuing troubles?

Your spokeswoman told me about the “phenomenal customer growth” that brought you 100,000 new U-verse customers in the region. She didn’t agree that there are major problems and said you diligently train your staff of 300,000 to provide great service to everyone.

You do have a call center dedicated to U-verse troubleshooting, and your promised two-hour installation window for a technician visit is commendable – when it works.

“Overall,” spokeswoman Sarah Andreani told me, “we really have gotten a positive response from U-verse customers.”

Granted, J.D. Power and Associates named you the best TV provider in customer satisfaction for our region. So good for you. But the folks who contacted The Watchdog apparently didn’t vote.

I’m talking about customers like Shaun and Kim Hamblin, who ordered U-verse but waited three times for installers who never showed. And when one finally arrived, he accidentally cut their DSL line and they lost Internet service for days.

There’s Cheryl Vieau, fighting a $225 disconnect fee without much success for weeks. “I have been on the phone, mostly on hold, for hours,” she said.

Thomas Parker, fretting for a year about U-verse, said he is giving up: “I have no more patience for this. I haven’t complained in over a month because what’s the point?”

James Burke said six technicians visited his home, but none could fix his poor TV service. “No one seems to care about my problem,” he said.

Seth Viertel has tried for months – “I am at my wits’ end” – to get payments restored to his checking account that were originally credited to the wrong customer account. “AT&T’s customer service is anything but,” he said.

Rebates and rewards? Another sticky wicket. Charles Dempsey couldn’t get his promised $50 gift card from you for signing up for your long-distance plan.

Donald Martin is waiting for his referral reward, too. Someone on your end punched in a wrong number. “It seems there are so many little things that can disqualify one for a reward, and AT&T doesn’t even let you know if they are not going to honor them,” he said.

Complaints about your land-line and cellular service are rarer, but hey, you’re the phone company. That’s what you did for a century before you suddenly spread your wings into TV and computers.

Before you celebrate, though, I’d better mention Morgan Bilbo. He’s still ticked at you because he continues to receive bills for calls he says he didn’t make. “I am very upset and losing sleep over it,” he said.

AT&T, maybe I’m being too rough, but maybe not. Listen to Joyce Polson, who began her letter to me about her U-verse/Internet package this way: “The worst day of my life was the day my husband switched us to this messed up service.”

All these customers contacted me because they couldn’t get anywhere with you. I passed them on to Andreani, your spokeswoman, and she took over from there.

But AT&T, I really don’t want to be your middleman.

As Andreani said, one unhappy customer is one too many.

“We are continuing to improve, but you know what, we have a lot of work to do,” she said.


An indictment for him, and a turning point for me

"Roofer" Shawn Tatum/Courtesy of CBS11

“Roofer” Shawn Tatum in a CBS11 camera still

UPDATE: On May 12, 2010, Shawn Tatum pleaded guilty to theft charges and was sentenced to 180 days in jail, 10 years’ probation and community service. He also has to repay his former customers $162,000. Here is the original story on this crooked roofer.

# # #

Shawn Tatum taught me more about being a watchdog than any man I know. Recently, a Tarrant County grand jury indicted him on theft charges. He spent a day in jail. How he got there is how I learned my lesson.

Tatum was my roofer, even though, as he once said, “I never held a hammer in my hand.” We met after I asked my insurance agent whether he knew a good roofer. He recommended Tatum.

Looking back, I understand now that in my haste to avoid the complicated process of finding an honest roofer after a Texas hailstorm, I got lazy. Left myself vulnerable. But my search had problems from the start.

The first company I hired to replace my roof after the 2007 hailstorm did a fantastic job. The only problem was that the crew went to a neighbor’s house instead of mine and replaced the wrong roof.

When my confused neighbor knocked on my door that night to explain what had happened, he told me that the erring roofer demanded that he pay him by filing an insurance claim. No way!

I called the roofer. When I suggested that he take the loss on my neighbor’s roof because it was his mistake, he got angry with me for interfering. I asked to get out of our contract. First he said no. Then, after I kept asking, he agreed to sever our ties.

Blessed with a second chance, I took the shortcut to the insurance agent. And not long afterward, Tatum’s charming, silver-haired sales director showed up and mesmerized me with his pitch.

This is the point in the sales process when you should say, “Can we talk by phone in a few days?” and shoo the salesman away. Then you turn on the computer or call the reference desk at the public library and begin asking questions: Does the company show up on the Internet? What does the Better Business Bureau say? Is it a member of any state associations? Are there references from past customers?

Hindsight. I know.

I signed the contract and gave the salesman my insurance check. Two months later, after hearing nothing, I called and was told, “He don’t work here no more.”

So I talked to Tatum, an Orson Welles look-alike from Arlington who promised to do the job but explained that there were delays.

Turns out he was giving the same speech to a hundred other customers. He was taking their checks — and cashing them at a grocery store in Arlington because he kept his money out of banks — but not doing the work.



Grocery store in Arlington, Tatum used as his "bank" to cash checks/Courtesy Google Maps

Arlington, Texas grocery store Tatum used as his “bank” to cash checks (Google Maps Photo)



After months of delays and excuses, Tatum sent a crew to put on my roof. I later learned that I was one of the lucky ones. Only a few got service. Now every time I look at that roof, I think of the victims who will never see a dime.

In 2007, Tatum Contracting filed for bankruptcy, listing $671,000 in debts. The 86 creditors included homeowners, suppliers and subcontractors who did the work for the man who never held a hammer.

One client, Helen Webb, an elderly Watauga widow, spent two hours with Tatum at her kitchen table. She wanted to hold the $1,700 insurance check in a bank account, but he persuaded her to let him have it. “He said he would do my roof next,” she recalled. Her certified letters to him were returned, marked refused.

The list of creditors — on which my name is mistakenly included — offered a road map for Tarrant County district attorney’s investigators, who sent letters to everyone. “It has come to our attention that you may be a victim of a criminal offense committed by Jerry Shawn Tatum,” they said.

Sixty people responded with stories of how Tatum owed them either a roof or money. From that, 17 cases were strong enough to take to the grand jury, which returned an indictment July 15 alleging theft of more than $100,000.

“The sheer volume” of that many jilted customers shows a pattern of theft, says Assistant District Attorney David Lobingier of the economic-crimes unit.

My attempts to reach Tatum by mail, phone and e-mail last week were unsuccessful. During a 2008 bankruptcy hearing, he testified that he always intended to perform the work and that he had been in business for three or four years.

In a separate case in March, Tatum pleaded guilty in 371st District Court to a hot-check charge involving more than $1,500. He was sentenced to two years’ probation.

Dan Pitts, former president of the North Texas Roofing Contractors Association, says customers shouldn’t give contractors money before a job is started.

“I would say our average roof job is $8,000 to $10,000, and we get no money upfront,” says Pitts, who owns Pitts Roofing in Haltom City.

“It’s hard to get someone back [to your house] when you owe them very little money,” he says. “It’s hard to get them to respond to your phone calls. But if you owe them money, they’re much more apt to return your phone calls.”

For me, the lesson learned two years ago was to stop relying on the advice of others and instead take greater responsibility in my decisions. My insurance agent apologized to his customers. But I don’t blame him. He’s an indirect victim himself.

In a sense, after this, my roles as a newspaper watchdog and vigilant consumer merged into one. Coming close to losing thousands of dollars taught me to take nothing for granted. Everybody needs to be a detective. All the time. On everything.

# # #

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

Dave Lieber's Watchdog Nation book won two national awards for social change.