Every year Americans lose between $40 and $60 million in telemarketing scams, according to the Better Business Bureau. Last spring, an elderly North Kingstown resident sent a $28,000 cashier’s check to a Canadian company that told her she had won $98,000 in the lottery, and to claim her prize money she needed to pay the tariff.
As recently as last week, a West Warwick man was charged for running an Internet scam out of his basement apartment offering Rhode Island residents close to $2,000 a week to stuff envelopes if they would pay an initial $20 to $30 to join the program.
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“We consider the Internet the new version of the Wild West,” said A. Michael Marino, president of the Better Business Bureau of Rhode Island. “Historically, we knew where people were and how we could find them. Now, everything is changing and people need to be more aware. The Internet has eliminated all boundaries.”
Marino said that every day, stories of scams and people losing money are heard at the Better Business Bureau of Rhode Island office in Cranston. It makes the agency’s number one priority, education.
“For years the Better Business Bureau has been synonymous with complaints,” he said. “But in reality that is not the largest area of activity for us. We are trying to educate people that if it sounds too good to be true, it probably is. We believe this education helps create a better business community for Rhode Island.”
Opened in 1922, the Better Business Bureau of Rhode Island is part of a national organization based in Washington D.C. Each center is accredited every three years by the national organization.
Like other bureaus, the Better Business Bureau of Rhode Island is funded by the local business community. Its $500,000 annual budget is raised through the dues of its 1,250 members.
Though Marino said the bureau would like to have more members, he believes membership requirements and a misunderstanding of the Better Business Bureau’s role have kept many businesses from joining.
“Nationally 10 percent of businesses are involved with the Better Business Bureau,” he said. “Would we like more members, definitely. We think it’s simply a matter of businesses not understanding the purpose and function of the Better Business Bureau, because they often associate us with complaints.”
To become a member, a company must be in business for at least a year, and Marino said the company should have a “history of properly addressing the issues” of consumers. In addition, Marino said the Better Business Bureau would seek out businesses that have received praise for their work and recommendations from consumers.
He said companies could also lose their membership because of bad business practices. In fact, between four and six companies are lost a year.
According to Marino, much of the bureau’s funding is used to provide services for the community, including both consumers and business owners.
“We act as the voluntary conscience of business,” he said. “We work with business so that their needs are being met and we work with consumers to make sure they don’t feel they have lost.”
One of the bureau’s newest functions is providing consumers with a 24-hour outlet for researching companies through an automated telephone service and a web-site database.
The bureau keeps a list of all companies, both members and non-members and the complaints filed about those companies. The website also contains alerts on the latest scams reported to the bureau.
In the last month alone, Marino said more than 5,000 calls were placed to the phone system after operating hours, and 50 percent of Internet activity came after 5 p.m.
“We tell people it’s easier to check before, and to always know if there have been previous problems,” he said. “The 24-hour service is easier for people because they can check after work, when it’s convenient for them.”
Still, if people don’t check before they deal with a company, and have a problem, Marino said they do have the right to file a complaint. A notice is then sent to the company either by phone or by mail.
“Dealing with complaints, you are often dealing with human nature,” he said. “There is often a gap between the two sides. You have to consider both sides of the story.”
Marino said a when a complaint arises, many companies will do their best to resolve the issue, but there are a few who are difficult.
“In a small state like Rhode Island where much of your business depends on your reputation, and companies are legitimately trying to serve their customers well, you will find that most are very anxious to look into the problem,” he said. “A large percentage of problems are solved right off the bat because word does get around and no company wants to develop a reputation.”
But, he said a small number of complaints are not settled either because the companies don’t respond to the complaint, or because no fault could be found. Marino said if a company doesn’t respond, the complaint is sent to the Attorney General’s office for further investigation.
Marino said it’s important for consumers to remember that not all complaints are valid. For example, he said during the holidays the bureau gets a number of complaints from consumers who bought a shirt at one store and then found it for a lower price at another store. But when they try to return the shirt to the first store, they can’t.
“We have to explain that’s part of a free enterprise economy, (that) stores are allowed to determine their own prices,” he said. “We need to remind people that part of their job as a consumer is to shop around and, eventually, the economy itself will right the situation by forcing the more expensive shop to either lower its prices or go out of business.”
What can people do to protect themselves? Marino said the best thing to do, is to be aware. The Better Business Bureau puts out a yearly publication telling consumers what their options are, how to file a complaint, and what the current state laws are. Currently in Rhode Island, Marino said there are three prime targets, the elderly, stay-at- home mothers with a low income, and residents who may not speak English as a first language.
“It’s very frustrating because often victims are the people that can least afford it,” he said.
In an effort to combat the problem, the Better Business Bureau has released three consumer guides: a general consumer resource guide, a resource guide for the elderly and most recently a resource guide in Spanish.
“Consumers need to know what their rights are,” he said. “And for many these mean understanding how to protect yourself.”
Marino said all consumers should be cautious with phone solicitations, giving personal information out on the Internet or over the phone, and should read all aspects of a contract before signing it.
“Consumers must keep in mind that though most people are honest and deal fairly in the marketplace, there are some who don’t.”
