Little people rise up and smite insurance company

This is a story about how the little people rose up against an insurance company – and won!

Here’s what happened:

My Star-Telegram editor, Lois Norder, devised an idea to poll our readers. We offered them several Watchdog column tips and asked them which story they wanted Watchdog Nation to pursue. You can see the original poll story in this Dave Lieber column. This turned out to be a remarkable way to test the pulse of our readers. It’s the first time in more than 30 years on newspapers that I was able to get this kind of data.

The winner, by far, was a story tip about a retired couple who couldn’t get anyone to care about how United Healthcare was ignoring their pleas for insurance coverage.united-healthcare1

Well, the people who took part in the poll cared. And when we alerted United Healthcare that our readers were on to them, the matter was quickly settled.

This problem could have been solved three years ago! Really, it’s unforgiveable. The end results, which first appeared in this Dave Lieber Watchdog column on September 13, 2009, are also below:

# # #

Today we look at the wonderful concept of taking ownership of someone’s problem and solving it. Does anyone do that anymore?

Certainly, in the case of Joaquin and Martha Romero of Arlington, nobody did.

Not the human resources department at American Airlines, where Joaquin Romero had retired as a ground crew chief after 30 years.

Not UnitedHealthcare, which improperly rejected his claims for the past three years and kept telling him to contact an insurance company that most likely does not exist.

The only people who took ownership of the Romeros’ problem were Watchdog readers who voted in a poll I held last month to pick their favorite story among 10 suggested topics.

You did what nobody else would do: You cared about their problem and made it priority one.

Too bad nobody cared before now, because their issues could have been resolved three years ago. But that didn’t happen.

When Joaquin Romero retired, he expected that the health insurance offered under his union contract would provide supplemental coverage for expenses not paid by Medicare for him and his wife for the rest of their lives.

But when the couple filed claims with United for the allowed 20 percent unpaid cost, they were always rejected.

“Denial after denial after denial after denial,” Martha Romero says. “It’s unbelievable. It’s the biggest problem I’ve ever had.”

The reason? United kept telling the Romeros that their secondary insurance was handled by another company, Intercare.

The Romeros could never figure out what Intercare was. I couldn’t find Intercare either.

But try telling that to United’s computer system, which kept reporting incorrect information. Nobody bothered to change it.

“I’m at my wits’ end here,” Joaquin Romero told me.

Once we shared the information with American Airlines and United, the insurer found the problem in its system.

The company is now reviewing records and expects to pay the Romeros about three years’ worth of rejected claims. It could total several thousand dollars.

United says the company believes that the phantom insurance company’s listing was based on information provided by one of the Romeros’ doctors. The Romeros say their doctors checked all records and could never find the mistake.

Martha Romero says she refused to quit fighting because she knew she was right. But that’s rare.

Jim Riddlesperger, a political science professor at Texas Christian University, says most consumers don’t fight rejected claims very long. A company can delay making payments, as happened in this case.

“So, obviously, denying claims as a corporate strategy is a way to save money,” Riddlesperger says.

Unanswered questions remain, though, about the various people who could have helped the Romeros but didn’t.

Take the human resources representatives at American.

“When I called, they didn’t want to go into the details,” Joaquin Romero says. “I asked a young lady, ‘Why don’t you get ahold of “?UnitedHealthcare?’ She said, ‘No, you have to do that yourself.’

His reply: “I already did, and they sent me back to you.”

American spokesman Tim Smith said call center representatives saw that United was listed in records and sent the Romeros there for help.

When I pressed Smith for how American retirees should handle similar problems, he suggested writing a letter to the airline “to a different set of people” for help.

He didn’t specify who. (So send it to me at watchdog@star-telegram.com).

And what about Olive H.? That’s how the “appeals coordinator” who rejected the Romeros’ claim signed her letter.

Olive H. wrote: “I reviewed your concern and found that no corrective steps can be taken at this time. I made this decision because the United Healthcare system is showing a plan you have coverage with Intercare.”

So much for that thorough look.

Kim Whitaker, a United spokeswoman, acknowledges that Olive H. “didn’t look further and dig deeper.” Customer service reps will receive additional training to learn to do so, she said.

“Certainly, we apologize. There was definitely a mistake made here.”

Martha Romero is grateful to readers who voted for their problem.

“I can’t thank them enough. Our backs were so up against the wall. I didn’t know who else to go to.”

News researcher Cathy Belcher contributed to this report.

# # #

What to do when a retiree’s secondary insurance claim is rejected

Ask the insurance company to explain the appeals process.

Seek help from the company where you retired.

If the benefit is part of a union-negotiated contract, contact the union for help.

Complain to your state’s Department of Insurance.

Consider suing, allowed under the federal Employee Retirement Income Security Act.

Mortgage loan rules are changing to help consumers

If you are looking at a home mortgage loan, Watchdog Nation wants you to know that next year you will be able to do a more thorough background check on your loan officers than ever before.


Courtesy of riskontrol.org

Courtesy of riskontrol.org


Here’s a little background. Although this focuses on Texas, every state in the nation is going to implement its own rules about how to handle its part of the new system.

A year ago, President George W. Bush signed into law the Secure and Fair Enforcement Mortgage Licensing Act, which creates a Nationwide Mortgage Licensing System and Registry.

The system is designed to make sure loan originators “act in the best interests of the consumer.”

For the first time, consumers will have access to loan originators’ employment history and any discipline or enforcement actions taken against them. Employees with federally licensed lending institutions will not need individual licenses. But others will be licensed by the state. About 5,000 Texans are expected to get licenses next year that didn’t need them before.

The new process includes submitting to a background check, taking a qualifying exam, posting a surety bond, getting annual license renewals and taking eight hours of continuing education each year.

For the past decade, says Chris Schneider, director of enforcement for mortgage loans in Texas, most mortgage brokers and loan officers in Texas were licensed. But loan officers had to be sponsored by a licensed mortgage broker.

Next year, almost all loan officers will be licensed as residential mortgage loan originators. The distinction between mortgage brokers and loan officers will disappear, Schneider says.

The change starts April 1, 2010.

This new layer of licensing is designed to clean up the industry. In Texas, for example, the Texas Department of Savings and Mortgage Lending has five full-time mortgage fraud investigators. The Texas Insurance Department has three members in its fraud unit. Local prosecutors investigate and prosecute, too.

Currently, licensed brokers and loan officers in Texas who engage in illegal practices can be suspended or lose their license. In the past year, Savings and Mortgage Lending handled close to 900 complaints; as a result, 61 people were told to cease and desist and six were suspended, records show.

Among the most common violations: unlicensed activity, false statements in loan documents, failure to produce required documents, and improper disclosure of all fees and other costs.

The attorney general, who can either prosecute violators or refer them to local prosecuting agencies, reports receiving close to 400 complaints in the past two years. Of those, 89 were forwarded to 14 local prosecutors for further action.

Increased licensing sounds like very good news for all consumers.

# # #

To go more in-depth, Watchdog Nation recently shared the story of a shrewd businesswoman who thought she was paying $4,000 for a down payment to a loan officer. Actually, the man says he is a credit counselor. He promises to refund the money but hasn’t. Read that story in this Dave Lieber column.

The above information is based on a longer version of the September 11, 2009 Dave Lieber column in the Fort Worth Star-Telegram.

# # #

Mortgage fraud

Mortgage fraud can involve a broker, real estate agent, appraiser or buyer.

For complaints, contact your state’s attorney general, the Federal Trade Commission, U.S. Housing and Urban Development Department, your county prosecutor and the government agency that regulates the lending institution.

Complain about a mortgage company to the agency in your state that regulates mortgage lenders.

For national bank complaints, contact the federal Office of the Comptroller of the Currency. For help on finding the right agency to file a complaint, check with your state’s banking department, headquartered at the State Capitol.

Meet Bob. Ole stubborn Bob. No food stamps. Lots of pride.


Pholto courtesy of www.telegraph.co.uk

Photo courtesy of www.telegraph.co.uk


Bob doesn’t want any help.

Stubborn old guy.

After I wrote about him in the Aug. 14, 2009 Dave Lieber column in the Fort Worth Star-Telegram, I received calls and e-mails from several dozen people who want to give him food and money.

Bob said no. Unlike everybody else who contacts The Watchdog, Bob of Fort Worth doesn’t want my help. He only wants everyone to understand the horrible state of Texas’ food stamp program.

Bob, who doesn’t want his last name used because he is afraid of getting into a fight with the government, is 78 and lives with his wife on $500 a month from Social Security.

Two years ago, they qualified for food stamps. But the credits on his state-provided electronic debit card – worth about $200 a month – ran out in May.

So what does he do?

“Potatoes are like a dollar for 5 pounds,” he said. “So we eat a lot of potatoes. If they’ve got a sale on something – for instance, if regular lettuce is a dollar and a half a head, and they have a sale for 75 cents, we’ll make salads out of lettuce. We find the bargains on something and we’ll eat that this week.”

Since May, Bob has been trying to get ahold of someone at the state Health and Human Services office on East Lancaster Avenue in Fort Worth to help him re-qualify for the Supplemental Nutrition Assistance Program – a requirement to make sure recipients still need it.

“We sent all our papers, and we kept calling, and they kept putting us off. You couldn’t get anybody down there. Nobody answers the telephone. They had about a dozen people working down there helping people, checking and rechecking them.

“And a woman says, ‘Well, we’re planning on getting a new system so it will be about a week.’ And then you don’t get anything. Then finally, a week or so later, they got a recording on their phone. I guess everybody was not getting anything. The recording said, ‘If you’re really needing help, if you’re really out of food, call 211 and they’ll get you some food.’ “

The Texas 211 help-line folks told him that he could go to a food bank, but Bob, a military veteran, doesn’t want to do that: “I have to be careful what I eat. I had colon cancer and diabetes. I’m a mess.”

Nobody knows how many Bobs there are in Texas. State officials say they believe that one-third of all food stamp applications processed in July were past the 30-day limit allowed by federal law.

That’s 45,000 families like Bob’s that waited more than a month for help, for a phone call back, for a letter, anything. Bob’s wait is three months. How many more are out there waiting?

A spokeswoman for state health services, Stephanie Goodman, says the state doesn’t really know.

The computer system used to process food stamp applications is so outdated that they aren’t counted until they are actually entered into the system.

Applications “sitting on someone’s desk that we have not gotten to” are uncounted, she says.

For sure, there are tens of thousands more.

The problem is so bad that two groups filed a federal lawsuit in Austin last week demanding that the state comply with the 30-daylimit.

The lawsuit is designed to force the state to create a quick plan, says Randall Chapman, executive director of Texas Legal Services Center, which co-filed the suit on behalf of two Irving residents tired of waiting.

“Believe it or not, the two people named in that lawsuit were approved in less than 24 hours,” Chapman said. “It was just magic. Their approval letters were hand-delivered to their homes.”

Chapman offered his organization’s help to Bob. Goodman, the state official, would have checked into Bob’s case, too, had I asked her. Bob could have been fast-tracked and had food stamps hand-delivered to his door, too. But he told me not to do that. He was adamant.

Chapman said: “Some elderly people feel intimidated, or they don’t want their neighbors knowing they need help. That’s a real shame.”

The state is trying to come up with solutions, shortcuts, hiring proposals, abbreviated training procedures, anything to get food to Texans. Next month, the state will begin hiring 656 workers to process applications.

For now, however, the bureaucrats simply cannot get it done.

“We’re processing more cases than ever,” Goodman said. “We’ve got more people on the rolls. We’re just not simply keeping up with the increase in . Our staff has been working weekends and long hours, simply keeping up with the increase in demand…. It’s still not enough. We’re not keeping up.”

In Tarrant County, 150,000 people now receive food stamps, compared with 130,000 last year. There would be more if the system worked properly.

As a test, I called the phone number of the East Lancaster Avenue office where Bob keeps striking out. When you push zero for operator, you get this message: “Hi, you’ve reached the general delivery mailbox for the East Lancaster office. However, this mailbox is not set up to have return calls. Please do not leave a message. Press zero for operator so your call will be reverted to our operator. Have a nice day.”

I hit zero, and got the same message again. Did it again and again and again.

Meanwhile, Texans are eating potatoes and lettuce and waiting for phone calls and letters that never seem to come.

HAPPY ENDING: A week after this story appeared, I received the following e-mail from Bob:

Subject: Thank you for your help … Bob

Dear Dave,

You will be glad to know that I have worked it out to handle my immediate problems …  I want to thank you for your earnest concern for my situation  .  It made  me feel good …

I would appreciate if you could contact all the fine folks that offered their help to me …    I thank them one and all for being so  thoughtful  and offering their mitzvoth’ (act of human kindness) ..

BOB

I wrote back with more news:

Bob,

Thanks for our note. The story we worked on together touched a lot of people.

And you’ll be interested to know that a woman I know who has cancer, no food stamps and no food and no transportation is today, right now, receiving phone calls from the people that offered to help you. I alerted them about her, so they are taking all their good will and giving it to someone else who is in desperate need right now.

So inadvertently, you helped someone else, too.

Dave


Getting help


For food stamp problems, call the ombudsman’s office at the Texas Health and Human Services Commission at 877-787-8999.

Does your family have a secret password to prevent scams?

Before attending Eloise Owens’ wedding in Southlake on the Fourth of July, I studied a Web site that listed her wedding details. At the ceremony, I read the program, which listed all the relatives and some of their hometowns. I felt like I knew the family.

Apparently, a crook felt the same way.scam-alert

Ten days later, Owens’ 85-year-old mother in California received a phone call from Owens’ son, Tyler.

Or she thought it was Tyler. Didn’t sound like him, but he said he had a cold.

As I first reported in the Aug. 9, 2009 Fort Worth Star-Telegram, Eloise Owens, who lives in Flower Mound, says the male caller told her mother that he had traveled to British Columbia, gotten into a fight, broken his arm and was in jail.

He needed $3,000 to get out. Could she wire it to him – but not tell his mother? He said he was embarrassed.

The man said just enough to make it sound true. He told her it was cold in Canada after he had been in warm weather. (The real Tyler lives in Denton.) And he asked her whether she was going to his wedding. (The real Tyler is getting married in October.)

The woman agreed to help. She wired the money from a Western Union store. But when she returned home, a man claiming to be Tyler’s lawyer called her. He said Tyler didn’t get the money because he was in jail. He asked her to go to a different Western Union store and wire another $3,000 to a different name and address. The man promised to send her a check to reimburse the first wire transfer.

She did as she was asked.

The next day, when no one called, she realized it was a scam. She never heard from either caller again.

It’s called the grandparents scam, and it’s easier than ever because of all the personal information widely available.

“She’s still devastated,” said Eloise Owens’ sister, Mary Harris. “It’s really shaken her up. She’s gone through the stages of sadness and anger. I think she’s humiliated because she always told her lady friends when they play bridge together that she would never fall for this. They’re smart women. They have their faculties. And here she is – she fell for it.”

The family filed a report with police in California, but a detective told the family that police usually go after only culprits who steal a million dollars or more, Harris said.

Eloise Owens says she feels partly responsible. She believes that details used in the scam could have come from her wedding program or her wedding Web site.

“On the program, I listed mom’s name and her city. My dad is not living, so he was not listed. That tells someone that she probably lives alone. Also, I mentioned in the wedding party my daughter-in-law-to-be. That gives the reference to the upcoming wedding of my son.”

But nobody will ever know how the thieves learned anything about the family. Sometimes con artists use obituaries or information gleaned from other public announcements to pick their targets. Sometimes they just randomly call, hoping to get the elderly.

“That was strange and alarming that someone has that information about me who theoretically shouldn’t know anything about me,” Tyler Owens said.

He was touched by his grandmother’s devotion: “She was up all night worrying about me. That was very heartwarming that she would do that.”

Harris says she is furious at Western Union for not questioning her mother more closely on two separate money transfers. After the incident, she said she argued with a customer service representative about the lack of fraud detection. “My mom got hurt in two different offices,” Harris said.

Western Union spokeswoman Kristin Kelly says employees are trained to look for fraud. The customer order form lists warnings about various situations but doesn’t mention the grandparents scam.

Kelly says the cardinal rule is never send money to someone you don’t know. But that doesn’t work here.

“This one’s tricky,” she said. “Obviously, they think they know the person they are sending the money to.

“If an agent asks the grandparent, ‘Do you know this person?,’ they’ll answer, ‘Yes, it’s my grandson.’

Fraud prevention tips: When someone calls and says, “Do you know who this is?,” don’t start tossing out family names. If the caller says, “It’s your grandson,” ask, “Which one?” Make the caller say the name.

And create a secret family password to verify identities in any emergency situation. A suggestion: watchdog.


Tips


On printed materials and Web sites such as social networking sites, name people using only first names.

Omit names of cities where relatives reside.

Don’t mention travel plans.

Be careful what information you place on the Internet about your family. Con artists can learn about relatives on popular social networking sites such as Facebook, Twitter and MySpace.

Source: Eloise Owens

My identity disappears … again

Like many of you, The Watchdog recently shopped for lower credit card rates. But I ran into an unexpected problem.

I got rejected for a new credit card.

Not because of my credit score. Instead, I was rejected because I hadn’t bought anything on credit since 2003.

Only that’s not true.missing-identity

As I first reported in the Aug. 7 Fort Worth Star-Telegram,  a credit card company told me to take a hike because I had “insufficient credit history.” The company learned this from Equifax, one of the three major credit bureaus.

When I protested that I have a mortgage, have made regular car payments and pay regularly on other credit accounts, the company told me to take it up with Equifax.

So I ordered my credit report from Equifax and braced myself. As a victim of identity theft in December, I’m not surprised by anything.

Sure enough, the Equifax report showed that I had stopped engaging in any financial activity whatsoever after 2003. Ridiculous.

Mine is what a credit report must look like for someone who dies, goes to prison, or swears off credit forever and now lives under a bridge somewhere.

Whatever the problem, until it was fixed, I couldn’t open a new credit line with any borrower who relies on Equifax for information. (The two other major credit bureaus, TransUnion and Experian, did have accurate information about me.)

I’m not alone.

Consumer groups say credit reports are rife with inaccuracies, and these mistakes are hard to correct.

“When consumers have a problem with credit reporting agencies, good luck getting it fixed,” said Ira Reingold of the National Association of Consumer Advocates.

The reason, according to a report by the National Consumer Law Center: “Workers [for credit bureaus] don’t examine documents, contact consumers by phone or e-mail, or exercise any form of human discretion in resolving disputes.”

The law requires credit bureaus to provide the maximum level of accuracy for consumers, but that doesn’t always happen, Reingold says. Consumers sometimes have to sue the bureaus to clean up their reports.

What is the accuracy rate? Nobody knows. The leader of the trade association for credit bureaus, the Consumer Data Industry Association, told Congress two years ago that the industry has about a 2 percent error rate.

The National Consumer Law Center says the inaccuracy rate could be as high as 25 percent.

Bad information hurts people. Credit reports are widely used to check a consumer’s eligibility for credit, employment, insurance and rental housing. Errors in a consumer’s report can result in a denial of those benefits or higher costs, the Federal Trade Commission says.

A new FTC rule, announced last month, will require companies that provide information to credit bureaus to investigate complaints about incorrect information. The rule goes into effect in July 2010. Until then, credit bureaus are supposed to investigate.

A pilot study conducted by the federal government showed that most consumers who found errors were able to get them fixed, says Rebecca Kuehn, assistant director for the FTC’s Division of Privacy and Identity Protection.

The FTC is going to sponsor another study and, ultimately, make recommendations to Congress about how to ensure greater accuracy, she told me.

Rather than contact Equifax myself, I decided to test the identity theft protection service I had hired after my ID theft problem last year. Debix.com promises to restore your credit in the event of any problems. The Austin-based company charges $9.95 a month and has 400,000 customers.

“We’ve never seen anything like this before,” Debix Vice President Julie Ferguson said of my case. Paul Rendsland, a licensed private investigator with Debix, was assigned to my case. He collected my paperwork and sent it to Equifax. But the problem wasn’t resolved immediately, so Debix stepped it up.

“We have a good relationship with all three credit bureaus,” Ferguson said. “So we called one of the executives at Equifax and asked them to call you.”

Dinah Watson of Equifax’s consumer affairs office called me and said she fixed the problem. When I asked her what happened, she explained that I had used my full middle name on some credit applications and only my middle initial on others. Equifax, she said, split my credit history into multiple files and didn’t provide all of them to the credit card company. She made it sound like it was my fault.

That sounded peculiar. What about my Social Security number? And my address? My date of birth?

“That’s not a good explanation,” Atlanta lawyer Steven H. Koval said when I told him about it. Koval sued Equifax on behalf of a client who spent two years unsuccessfully trying to correct her credit report.

Jennifer Costello, an Equifax spokeswoman, later told me that customers should contact the credit bureau and work to resolve problems. Equifax is sending me a credit report and my credit score as a consolation.

When that report arrives, I’m going to hunt for more errors.

Action plan

Order a free credit report each year from annualcreditreport.com.

When errors are found, request an investigation by the credit bureau in writing – not by phone or online. Send along documentation by certified mail, return receipt requested.

Notify the company that furnished the incorrect information as well.

If unsuccessful, consider hiring a lawyer who specializes in credit report errors. Go to www.naca.net to find them.

Learn your rights by reading the Fair Credit Reporting Act.

Playing The Gong Show with Government

Today we’re going to play the Watchdog version of The Gong Show.

As we first shared with readers in the August 2, 2009 Fort Worth Star-Telegram, we’re going to see what Texans think of the fine being proposed by the Public Utility Commission against Amigo Energy of Houston. Last summer, Amigo failed thousands of Texas families by not sending bills to some customers and billing others incorrectly at substantially higher rates than they expected.

The proposed fine: $15,000.


Chuck Barris and friend

Chuck Barris and friend


“Merely a slap on the hand,” said former Amigo customer Pam Kinkema of Fort Worth.

But before we bring out the gong, let’s share some data:

As I reported last month in the Fort Worth Star-Telegram recently, the PUC received 1,035 complaints against Amigo in the past year. Of those, 452 were found to violate state rules. Many stemmed from when Amigo took over variable-rate customers from defunct National Power.

We shared the backstage antics of Amigo during their 2008 breakdown in this earlier stunning report which first appeared in the Fort Worth Star-Telegram.

Why such a meager fine? The PUC declined to comment, as the case is pending. But in its settlement agreement, PUC legal staffers wrote that Amigo “instituted corrective action,” acted in “good faith” to follow the rules and “worked aggressively” to solve billing problems.

The PUC has proposed fining another company that had similar failures — Direct Energy of Houston — $200,000.

Time for our game. Here’s what former Amigo customers say about the fine. If they don’t like it, you’ll see the gong.

Kinkema: “The PUC doesn’t take this situation seriously. To allow a company to mistreat and misrepresent services for citizens is a crime. I personally think the problem is with the PUC.”

GONG!

Clifton Hobbs of Saginaw: “The fine is a joke, just like the PUC. I bet employees at Amigo are laughing out loud at the fine. Can we fine the PUC? Where are our representatives?

“The message sent is that it is OK to treat people needing power any way you want. Don’t take their phone calls and keep overcharging them as much as possible, while threatening to ruin their credit. Guess what I was being charged? 28 cents per kilowatt hour.”

GONG!

Janice Strickland of Burleson: “I got a bill from Amigo for 25 cents per kwh. My old rate was 11 cents. Of course, I could not get through by phone to Amigo, and when I did, I got hung up on.

“I think the fine prevents other companies from doing the same thing. The PUC is on the consumer’s side, and they are there to help.

No gong

electric-meterAnthony Carrolla of Arlington: “The fine is over the line in terms of generosity — especially since Amigo knowingly engaged in deceptive pricing practices, sent out collection notices within just a few days of delayed billing and, at least in my case, would not acknowledge that I was being billed incorrectly and threatened with disconnection.

“Essentially, Amigo ‘played’ everybody in this matter and received only a slight slap on the wrist for their malfeasance.”

GONG!

Gary Hines of Fort Worth: “A ridiculously low fine. How does a fine paid to the PUC really help the people that were overcharged, misbilled and so on? It is just typical. The consumer gets screwed and the government collects more ‘taxes.’

“The PUC acted in a liaison capacity for me and communicated directly with Amigo to resolve my final bill in a very fair manner.”

GONG!

Byron McClintock of Fort Worth: “The message this fine sends to Texans is that the state of Texas and our ‘representatives’ do not and will not stand up for their voting public.  . . .  If the state is going to levy fines against businesses, make it hurt their pocketbook as that business would do to the consumer.”

GONG!

Deanne Graham of Grand Prairie: “The commission needs to come out strong with these fines, not a little slap on the wrist. Honestly, $15,000 to them is like a penny to me. Last summer, they ripped me off good. I paid a thousand dollars for about 45 days of power use. It should have been less than half of that. I and other customers will pay that fine. They never will even feel it.”

GONG!

Pat Carew of Colleyville: “I am happy the PUC has taken action, but the fine is a mere pittance of what it should be. If you multiplied the number of customers hurt by $300 to $500 each, the fine would be staggering.”

GONG!

Margaret Bruce of Arlington: “My affiliation with Amigo Energy was the worst provider/customer service experience I ever had…. I couldn’t get out of the contract fast enough. In view of what I went through with them, I consider the PUC fine a little slap on the hand. The PUC should have acted much sooner to protect me and imposed a big fine to send a message to energy companies. Energy companies that mistreat their customers need to be shut down, required to refund money to their current and former customers and receive a hefty fine.”

GONG!

And finally, here’s what Amigo says.

CEO Jesson Bradshaw: “The commission appropriately recognizes that we understand what happened and we’ve taken corrective action for that. And that weighs heavily into how that whole process came down.”

GONG!

GONG!

Dave Lieber gives wonderful tips about how to fight electricity companies and other utilities in his new book, 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.

The government protects you; the government hurts you

The deal was too good to be true, and fortunately for Charles Crocker, he realized that.

The brokerage unit of Stanford Group Co. in Dallas wanted to sell him certificates of deposit with a very high rate of return. But the money would have gone to Antiqua. Crocker wanted to keep his money at home. He did agree, however, to put his money in the financial empire of R. Allen Stanford, investing it in various accounts that were considered less risky.

R. Allen Stanford

R. Allen Stanford

He was right. The accounts were not risky, and Crocker is lucky. Unlike tens of thousands of Stanford customers who invested in the CDs, he didn’t lose his money. But that didn’t help much for seven weeks in 2009 when all of his accounts were frozen along with 50,000 other Stanford customers. A federal judge ordered the accounts blocked so the U.S. Securities and Exchange Commission and others could investigate.

As detailed here in the Sunday, July 19, 2009 Watchdog column in the Fort Worth Star-Telegram by Dave Lieber, the government actually ended up hurting Crocker and others more than Stanford ever did.

Nobody would answer his questions about when he could get his money. Even after his $400,000 in life savings was restored, along with access to his Social Security payments, nobody will talk to him about how he can get reimbursed for the nearly $1,000 in penalty fees for checks that bounced when the Stanford accounts were frozen without Crocker’s knowledge.

He also doesn’t know if his credit will be restored.

How horrible to be hurt by your own government, those who have sworn to protect you. Imagine going nearly two months without access to your money because of an investigation. Crocker showed Watchdog Nation a thick binder of letters to government officials of all stripes. Nobody but nobody would help him.

His congresswoman, U.S. Rep. Kay Granger, R-Fort Worth, for example, referred him to the court-appointed receiver, who refused to answer e-mails, phone calls or letters.

The only thing worse is losing all your money, which happened to so many.

Here’s an amazing report that details the perfidy and corruption of the Stanford empire, including how the top regulator in Antiqua was bribed to falsify documents and stave off the SEC.

Now that ace TV pitchman Billy Mays is gone, all eyes should turn to The SCOOTER Store guy

Now that TV huckster Billy Mays is gone, who can replace him as top pitchman on middle-of-the-night TV?

Watchdog Nation nominates Doug Harrison.

He’s the guy on The SCOOTER Store’s incessant TV commercials who makes that big promise about the free chair or scooter if you don’t qualify under Medicare.


Billy Mays

Billy Mays


Doug Harrison is founder and president of The SCOOTER Store and star of his own commercials. He promises that if you don’t  qualify for a scooter or power chair with government assistance – his exact words – “we’ll give you a new power scooter free.”

The SCOOTER Store’s marketing campaign is an example of advertising that takes you to the edge of the line but doesn’t cross over. Or does it?


Doug Harrison (Photo/thescooterstore.com)

Doug Harrison


That same Doug Harrison a couple of years ago agreed to make a $500,000 personal “contribution” to the federal government  to settle a huge civil lawsuit against The SCOOTER Store for violating the False Claims Act. The company paid another $4  million in fines and gave up Medicare claims worth about $13 million.

Harrison, the U.S. Justice Department stated in 2007, “also agreed to forego dividends from his shares in the company for the next year in exchange for a release of his personal liability.”

As a recent Watchdog column by Dave Lieber in the July 18, 2009 Fort Worth Star-Telegram reminded here, federal prosecutors accused The SCOOTER Store of engaging “in a multi-media advertising campaign to entice beneficiaries to obtain power scooters paid for by Medicare, Medicaid, and other insurers. Instead of the ‘zippy’ power scooters that were advertised, The SCOOTER Store sold the beneficiaries expensive power wheelchairs that they did not want, need and/or could not use.”

The government also accused The SCOOTER Store of selling used equipment as new and charging Medicare millions for unnecessary accessories.

As part of this, the company agreed to a 5-year corporate integrity program, monitored by the federal government.

When you examine the 2009 TV ad starring Harrison and the company’s latest marketing materials, the delicate use of  language stands out.

The promise of a free chair is still there, but it’s loaded with conditions:

“You may even get your power chair or scooter ABSOLUTELY FREE.”

“Your new power chair or scooter could cost you little to nothing.”

“If we pre-qualify you… we guarantee you will receive it FREE.”

And the ultimate qualifier: “This guarantee has some restrictions, is not available in all locations, and is subject to change.”

You may…

You could…

If…

Notice how these words, added as qualifiers after the Justice Department’s action, are not capitalized.

What is capitalized?

FREE… and… ABSOLUTELY FREE.

Over the line?

Do electricity regulators really regulate?

Watchdog Nation had a theory: Some electricity companies, despite Photo courtesy of centralillinoisproud.comhorrendous customer service, are getting away with it. But is the theory true?

Based on the hundreds of letters we receive each year at the Fort Worth Star-Telegram from people complaining about their electricity bills, we wondered what happened to the thousands of complaints about electricity companies that go to the Public Utility Commission of Texas each year.

Do the companies get penalized?

As The Watchdog columnist for the Fort Worth Star-Telegram, I conducted a study. Using the open-records law, we requested the total complaints from customers of three companies that had severe difficulties in the past two years – Amigo Energy, TXU Energy and Direct Energy. We studied the number of complaints, the number that were investigated and what action was taken against any offenders.

The findings are described in detail in Sunday’s Fort Worth Star-Telegram (7/12/09) here. And you can have the reprint of our Guide to Shopping for Electric Rates – requested already by thousands of people.

In summary, the best way to counter an electric company (or any company for that matter) that harms you is to complain, complain and complain. By forcing up complaint numbers, the trend lines show a problem, thereby making the regulators more likely to take strong action.

By the way, colleague Jack Z. Smith tells a much-needed story about how the elderly, especially, can shop for lower rates here.

I am the victim of identity theft (again)

On the final day of 2008, I got a phone call, but it wasn’t someone with good wishes for the new year. The call was from a woman at a collection agency. She was stern and to the point: She asked me to repay $279 for a bounced check I had written at a Wal-Mart in Pearland.

Only I have never been to Pearland, and I don’t write checks at Wal-Mart.

My first thought: scam.

I asked for her company name, and she told me. When I asked for her name and her employee ID number, she refused, saying, “You’ll get a letter.” She hung up.

I did an Internet search for the company name — TRS Recovery — and the words Wal-Mart and bounced check.

A slew of comments came up.

One person reported a similar situation: bounced check in a Wal-Mart he never visited, and he doesn’t write checks.

His bank representative, he wrote, looked up TRS on the Internet and discovered that the company “is a fraud!” He complained that letters from the company “looked very real” and worried about people who have been “scammed by this company.” He added that he intended to file a police report against the company and also a complaint with the Federal Trade Commission.

After reading that and similar comments on another Web site, I thought that was all there was to it, and I could return to prepping for our New Year’s Eve celebration.

But a voice in my head asked, “What would The Watchdog do next?”

An unexpected twist

Next I checked the company’s Better Business Bureau report online.

What I found was unexpected and further proof that a lot of people write a lot of nonsense in blog postings. A scam? Hardly.

Turns out TRS Recovery is an affiliate of TeleCheck, which operates an electronic check verification system for retailers.

The BBB report shows 677 complaints against the company. Half are for billing and collection issues. But another statistic is one not found in a scam company. Of those 677 complaints, the number resolved is also 677. A company that cleans up its messes.

The free report listed company officials with phone numbers. I picked the top name on the list and called her – Denise Hossler, director of compliance.

New Year’s Eve. I figured I’d never get anyone. But Hossler picked up her phone.

She offered to help, and no, I didn’t tell her I’m The Watchdog. I wanted to see how she treated customers. I got lucky. This is someone who cares. When I complimented her on the perfect BBB record, she said that was her personal goal for the year.

Hossler looked up my file, and we figured out what happened.

Someone had bought $279 worth of merchandise at a Wal-Mart in Pearland last month using a fake check with my name and address. The check purported to be from a Harlingen credit union.

I was the victim of identity theft.

Happy New Year.

A victim again.

What did Yogi Berra supposedly say? Deja vu all over again.

Thirteen years ago, I tried to pay at a Wal-Mart in North Richland Hills, and the store declined my check. Turns out someone had written a check at a Montgomery Ward store in my name. Later, I learned another check was written at a toy store.

Took two days to clean things up. For two weeks, I wasn’t permitted to write checks. A state trooper told me that my driver’s license number was probably “pulled out of the air” by a con man.

Very few people become the victim of ID theft twice, says Linda Foley of the Identity Theft Resource Center. “You’ve been hit twice.”

Better that than lightning.

According to one study, Americans have a 1 in 37 chance of becoming an ID theft victim.

In Texas, a new legislative study shows that although half of all Texas ID theft victims lose no money, they spend between four and 130 hours fixing problems related to the theft. For those who do lose money, losses average $500.

Texas has laws to protect people in my situation. A debt collection company can’t hold me responsible for a debt I didn’t incur. Lenders can’t penalize me if I apply for loans or credit.

But what concerns me is the ease with which someone can pull this off. Fake checks — called synthesized checks — can be printed on a home computer.

I wondered about Wal-Mart’s procedures for verifying checks. Wal-Mart spokeswoman Ashley Hardie told me that check writers at Wal-Mart stores are randomly checked for additional information such as a driver’s license or a phone number when a cashier is prompted to ask for more information by the TeleCheck system. But this means that not all customers’ checks are verified.

Mike Prusinski, a spokesman for LifeLock, which provides loss protection for consumers, said big retailers that don’t demand more rigorous check verification are a major contributor to identity theft.

“If Wal-Mart and all the other places, instead of doing it randomly, did it all the time,” ID thieves would face tougher obstacles, he said.

Foley, of the ID Theft Resource Center, says, “Thieves know which companies don’t check things carefully and which ones do. They’re not stupid. This is their profession.”

Next, I’ll show you how I’m digging out of this hole.

PART TWO: WHEN IDENTITY THEFT HAPPENS, KNOW HOW TO FIGHT BACK

A few hours before the end of 2008, I found out that I was the victim of identity theft. I got a call from a collection agency seeking payment for a $279 check in my name payable to a Wal-Mart store in Pearland.

Only I didn’t write the check and I’ve never been to Pearland. This is the second time this has happened to me in 13 years.

I didn’t let it ruin my fun. I wasn’t angry or upset. I didn’t panic. I figured that whatever happens, I can deal with it. Then I tried to make as many calls as I could to learn what happened and do what I was supposed to do before the clock struck midnight.

It doesn’t take long to lay the groundwork to protect yourself when something like this happens. I kept a diary of my experience, and I’ll share it so you’ll know what to do if this happens to you.

1. I check out the collection agency – TRS Recovery – on the Internet. I discover that others have received similar calls. Several write that the TRS/Wal-Mart/bounced check story is a scam and that the company is taking money from innocent victims. But that turns out not to be true.

2. At the Better Business Bureau Web site, I learn that TRS is an affiliate of TeleCheck, a large check-processing company. The company has a perfect BBB record. 667 complaints. All of them resolved.

3. The BBB report lists phone numbers for company officials. I call the first one on the list — the director of compliance. Even though it is New Year’s Eve day, Denise Hossler answers her phone. She walks me through the facts, and I learn that this is a case of identity theft.

4. At her urging, I call workers at TRS’ fraud unit to register a dispute. I get a reference number. They tell me to get a Federal Trade Commission ID theft affidavit form from www.ftc.gov, fill it out and fax it to them to wipe the slate clean.

5. After downloading the affidavit from the FTC Web site, I complete it and take it to a notary. Notary public Stephanie Silva hears what has happened and says of ID thieves, “If they spent as much time doing honest work, they’d be millionaires.”

6. I call the FTC ID theft hot line (1-877-438-4338) to register for a national list of victims. I get another reference number.

7. The credit union where the check supposedly originated tells me the account with my name doesn’t exist. Someone used the credit union’s name but printed the check on his or her own. The credit union e-mails me a letter stating that.

8. The FTC affidavit is faxed to the debt collectors, along with the required proof of address (my Fort Worth water bill). But I receive no verification that it arrives. So I call back and ask for the mailing address so I can send it certified, return-receipt requested. They say that’s not necessary. I do it anyway.

9. When I call the Wal-Mart store to report the theft, I’m placed on hold. Eventually, I hang up. Later, Wal-Mart’s media relations department puts me in touch with a Wal-Mart risk-assessment employee, who takes a formal report. (A Wal-Mart spokeswoman says that ID theft victims should report incidents to the store involved.)

10. I call the Brazoria County Sheriff’s Department, which covers that Wal-Mart, to file a complaint, but I’m told to contact my hometown police department. Fort Worth police take my complaint and give me a police report number, which I’m told is the most important reference number of all. I’ll file an open-records request with the city to get a copy of the actual report.

11. I call LifeLock (phone: 1-877-Lifelock), a company that provides me with limited ID theft protection for $10 a month. A representative tells me that if I lose any money, LifeLock will cover it and that if I ever have a problem clearing my credit report, the company will work on that, too.

12. At the Identity Theft Resource Center’s Web site (www.idtheftcenter.org), I read informative articles about ID theft. Then I call the center’s Victim Assistance Center (1-858-693-7935) and talk to an adviser. She reminds me that this is not going to ruin my life, hurt my credit score or take money out of my pocket.

Most people, she says, “are very upset. They don’t know what to do. They’ve never had this situation happen to them. They ask, “How dare anyone do this to me?”

13. I call Linda Foley, a leader at the ID Theft Center, to ask more questions. She recommends that I call the three major credit bureaus and put a fraud alert on my credit to prevent anyone from opening a line in my name. Anyone can get an alert for 90 days before renewing, but as an ID theft victim, I can get it for seven years. She also suggests that I ask the bureaus for a security freeze so no one can access my credit report without my permission. (TransUnion, 800-680-7289; Equifax, 800-525-6285; Experian, 888-397-3742).

Foley predicts that as credit tightens, thieves will turn to check fraud. Unlike a credit card account, which can be closed, a check writer can keep writing fake checks. Every time a fake check pops up somewhere with my name, I’ll have to answer it by sending that FTC affidavit to the merchant as my explanation.

When does this end for the thousands like me who endure this? Probably when stores put in check-processing systems that can show cashiers a photo of the rightful holder of a checking account, Foley says.

No photo match? Then no purchase.

Meanwhile, I’ll keep you posted.