There are always scammers out there. People looking to make a dishonest buck.
How long has the Nigerian email scam been going on ("You'll get 12 gazillion dollars if you just give me your bank account number where I can send the money from your long-lost cousin.")? The sad thing is, if it wasn't working, it would have stopped a long time ago.
The scams seem to fall into the general categories of (1) Get rich quick (playing on your greed) or (2) Taking advantage of your lack of knowledge.
Here are a couple of examples that were very personal. They involved my mom and my aunt.
My aunt is 72 years old. She is incredibly fit and a very bright (educationally) person. Common sense, well...
A few years back, she got talked into putting a new roof on her home. Top of the line, great materials, 50 year warranty, blah, blah, blah.
AFTER she did this, my brother's and I asked her a few questions.
How did this company contact you? They rang my doorbell.
Did her old roof need replacing? I didn't think so, but the guy at the door said it did.
Even if you needed a new roof, why would a 70 year old woman get a 50 year warranty? Uhm...
So, we got her to agree to not do any major home improvements without running the deal by one of us first.
Yesterday, she sent one of my brothers an email about getting a new hot water heater for her home (my brother owns a home inspection business). She wanted his advice on which of the hot water heaters she should get installed.
The guy was selling tankless hot water heaters. Package One was a super-deluxe model that allowed her to run all of her hot water appliances at once. It had a 12 year warranty. It included 3 annual "check ups" that included an annual draining.
Package Two was not quite so super duper. It still had the 12 year warranty, but only included 2 check ups.
Both packages would require extensive upgrades to her plumbing system, and installation (or moving) of her gas line.
Package One was priced at $4999. Package Two was only $4400.
Now, a quick check of the Home Depot website (she's very web savvy) would have shown her that their top of the line model was under $1500. This beast will allow you to run up to 3 major hot water systems simultaneously.
Since my aunt lives alone, that means she could could be taking a shower, have her other shower running with no one in it, AND run the dishwasher all at the same time. Ah, modern conveniences!
My brother is contacting her to ask the following questions -
How did these maggots contact you?
Is your current hot water heater not working?
Why the need for all the plumbing? They just need to remove the current one, and hook up the new one. A couple of new connections and you're back in business.
Why would your tankless water heater need to be drained? Uhm, what would they be draining? (BTW, they do need to be periodically flushed to wash out scale and lime in the system).
Hopefully, my brother will get to her before she signed any paperwork.
A couple of years back, my mom had some plumbing problems. A dripping faucet on one of the hose bibs, and a small leak under her kitchen sink.
She called a national franchise plumbing company and a guy came out. He looked at the leaks, harumphed and rubbed his chin, and said it looked bad. Hmmm, some telltale signs. He'd need to go under the house to see how bad the damage was.
He went under my mom's home for about 10 minutes. Grim faced, he told her that it was all flooded under the house. Her galvanized pipe was rotted and would need to be replaced. She sure was lucky she called when she did, because the whole system was ready to fall apart and then it would get REAL ugly.
She signed a contract to do the work for $2500. She had to give him a 10% deposit to lock in a time. He'd be out in 2 days, and have the work done the same day.
The next day, I just happened to call her to see how she was doing. She told me the story, and I asked her if she'd given the guy the money. Yep, $250.
I called the company and asked them to give me a breakdown of their estimate. Not surprisingly, I couldn't get a straight answer, so I canceled the appointment.
I had my mom call the father-in-law of my other brother. His FIL was a retired plumber, and gave my mom a reference name to call.
Long story short: There was no flooding under the house. The house was built with black ABS pipes, not galvanized. The new guy did the work, and the total, including time and materials was $190. Yeah, $60 less than the deposit from the other company (which they would not refund).
As with my aunt, my mom will now call one of us before she makes any purchase that has a comma in the amount.
In our precious metals store, we see TONS of jewelry AND coins come in that are fakes or forgeries. Necklaces stamped, "Italy 14k" that end up being made from brass. "Solid sterling" jewelry that fairly jumps at the rare earth magnets we pass over all potential jewelry purchases.
We had a young guy come in to see if the price he had just paid for some Morgan silver dollars was a decent price. The coins were made of steel and had absolutely no value.
Some of the folks that come in have been scammed, some are trying to scam us.
Accept The Challenge
For goodness sake, ask questions. For instance, my aunt should have asked, "Why would I need to have the device drained each year when it is 'tankless'?" or "How much does the heater cost and how much is the installation cost?" She could have then done some research and seen she was being taken.
Set up a checks and balance system. As I noted, my mom and aunt now call one of us before they spend any kind of big money. These cretins are praying on the vulnerability and lack of knowledge of people that were raised during a time when you could trust a company.
Nowadays, it seems like you need to assume you're getting scammed. If the company turns out to be legit, it's a pleasant surprise.
Whenever possible, try to plan your purchases so you have time to compare and contrast your options. This is especially true when making a purchase of something where you have little intimate knowledge. Generally speaking, you're going to pay more when you take the first offer that is made.
Take your time. Investigate. Educate.
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Copyright 2011 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com