Showing posts with label scam. Show all posts
Showing posts with label scam. Show all posts

Tuesday, February 24, 2015

Branding A Necessary Evil: Insurance

Benjamin Franklin once wrote that the only certainties in life are death and taxes.  If he had lived in 2015, he might have added a third inevitable evil:  insurance.

Virtually no responsible, self-sufficient adult in America can function without buying some form of insurance policy at some point in their life.  Whether it is private medical insurance, "umbrella" fire and theft insurance for one's home or apartment, life insurance, vehicle or boat insurance (mandatory if you want to register an automobile or motorcycle), business interruption insurance, professional malpractice insurance, the list of available policies goes on and on...

The ostensible purpose of all insurance is to spread risk.  That is, rather than take the risk that your new house might burn down and lose everything, you fork over a few thousand dollars a year, so that if such a horrendous calamity ensues, at least you can buy a new wardrobe.

It is virtually impossible to imagine an adult successfully prospering in our modern society, fully exposed to all attendant economic risks without insurance.

Driving a car into a tree or hitting a pedestrian can easily bankrupt anyone.  Giving birth to a healthy baby in a public hospital without health insurance could now cost well over $10,000.  That is not to even mention catastrophic illnesses.

Fortunately, ever present are private insurance companies, ready to sell you a blanket policy for a reasonable annual premium.

But how do these "necessary evils" brand themselves to differentiate themselves from one another in the marketplace? By credibly advertising that they will pay all reasonable claims without becoming adversarial?  No, not exactly.

The GEICO gecko has become ubiquitous.  The redheaded, apron-wearing Flo, as portrayed by actress Stephanie Courtney, has become a mainstay of television.  Cavemen, babies, puppy dogs and talking pigs have all become iconic representatives of an industry that isn't otherwise very popular.

Data provider SNL Financial found Geico had spent about $994 million on advertising in 2011. That was fully 22 percent more than next-largest spender State Farm, even though State Farm’s ad spending grew at nearly three times the rate Geico’s did.

The goal is to grab the attention of consumers who would rather not think about insurance. Experts say most people only ponder policies when they have an accident, buy a new car, move, or renew their existing agreement, which usually happens twice a year, at most. 

Today there are about 187 million insured privately owned vehicles on the road. Turnover is relatively low from year to year — 11% of consumers switch their policies while an additional 20% shop but don’t switch, according to J.D. Power. But that still means more than 20 million people are in the market each year.

But the insurance companies' advertising isn't winning many fans among existing customers.

They will wish you good luck trying to collect from the carrier.  

As soon as a claim is filed, some of these same insurance companies that were so cutely advertising their products with ice cream and puppy dogs will hire a team of savvy adjusters and professional litigators to nickel and dime a claimant to death.

But, for now at least, such negative reviews don't seem to be reaching consumers amid the din of talking lizards.

Monday, March 31, 2014

Old Fake Award Scams Never Die...They Just Change Their Names

Congratulations!  After our careful nomination process, many influential people of achievement were reviewed.  In the end, you have been selected as the recipient of a prestigious award recognizing your accomplishments!

All you need to do to claim your prestigious award is send a check or money order for $358, and you will receive a beautiful commemorative crystal trophy for your desk or mantel.  You will also be included in a major press release campaign to announce this momentous event to the whole world.

Of course, no one has ever heard of the organization or the award that you have been selected for, but pay no mind to that silly little detail!  No one cares about the actual award you received anyway, right?

This straightforward business model (or "scam") assumes that some percentage of businesspeople are essentially insecure or gullible enough to put anything on their shelf or mantel that smacks of someone else recognizing their value, and will part with a nominal sum to accept such an award.  And generally, the business model bears enough fruit over time to perpetuate itself.

Consequently, countless "Who's Who" scams have cropped up over the decades, leading Forbes to create the "Hall of Lame" dedicated to publicizing such silly contrivances.

I would like to nominate the United States Institute for Excellence in Commerce ("USIEC") for giving out such a meaningless award, recognizing its worthless contribution to an online world already filled with scams.

The USIEC claims to be a "leading authority on researching, evaluating and recognizing companies across a wide spectrum of industries" that meet its "stringent standards of excellence."

Of course, its website is largely a template and contains little substance when examined.  The USIEC does not list a single human being actually on its "team," and its website includes mostly generic, stock photographs of impressive-looking office buildings and friendly business-people.

The USIEC purports to be a philanthropic enterprise, having offered loans through to fishermen in Nicaragua, farmers in Kenya, grocery stalls in Lebanon and dairy farmers in Uganda.  In reality, allows anyone to donate as little as $25.00 to humanitarian aid.

Further, the USIEC has self-published a couple of research "white papers" that are virtually unreadable gibberish, but called it a "library" for its members.

In exchange, for $358, you can receive a framed certificate and trophy from the USIEC to show the world that you are a proud contributor to its noble cause.

In reality, the USIEC was outed numerous times by other bloggers who noted that it used to call itself the "Small Business Institute for Excellence in Commerce," and others who decry it as a "meaningless award scam."

And if you think that the USIEC couldn't possibly have duped anyone by its approach, it is worth noting that its website receives heavy traffic.  Further, here is a list of just a few press releases announcing those who evidently "accepted" the award, presumably by paying the USIEC for the trophy and to publicize the honor:

In reality, being offered an award by the USIEC is not a legitimate recognition of one's diligence and enterprise, as one PR blogger put it, it's "a sign of gullibility."

Saturday, May 4, 2013

IP Law Firm Targets Trademark Agency "Scammer"

It has become commonplace for small business owners to receive unsolicited notices in the postal mail that very closely resemble official, federal U.S. Government trademark renewal forms.

Without scrutinizing the official-looking legal document carefully, the business owner may send it back with a check usually for a nominal sum such as $400, to cover the cost of his trademark renewal.

Only later does he discover that the form was not official correspondence at all, but rather a mass mail solicitation designed to confuse and deceive him into sending a check to a private company.

One New York intellectual property law firm has taken the initiative to target one such alleged mass mail trademark renewal "scammer."

White Plains, New York-based Intellectual Property law firm Leason Ellis LLP recently filed a federal lawsuit on its own behalf against Patent & Trademark Agency LLC and Armens Organesjans, an individual who is reportedly the mastermind behind the alleged mass mail "scam."

Leason Ellis alleges that the Defendants, who claim to operate the "nation's premier trademark registration and renewal service," are actually nothing more than a private company that targets unwary businesses and individuals by sending mass mailings that are designed to mimic U.S. government trademark renewal forms.

To support its allegations, Leason Ellis notes that the official United States Patent and Trademark Office recently included an example of such a mass solicitation sent by the Defendants as an example of one scam to avoid.

Leason Ellis claims to have been damaged by virtue of having its clients duped by the allegedly false advertising sent by the Defendants.  The Complaint alleged a variety of torts, including tortious interference with business relationships.

Tuesday, August 14, 2012

Internet Scammers Target Sophisticated Law Firms

A creative and sophisticated Internet scam has targeted sophisticated law firms.

Indeed, the Gioconda Law Group PLLC was targeted by this type of scam artist, but (thankfully) we were able to recognize it very quickly.

It works like this:  A potential foreign client that appears to be legitimate will send an unsolicited e-mail inquiry seeking legal assistance in collecting a relatively modest commercial debt that it claims is owed to them.

For example, a Taiwanese company that supplies parts and equipment to electronics vendors will contact a New York law firm, claiming that it sold $1.2M worth of goods to a New York-based electronics business.

The company will provide a variety of written documentation to the law firm that appears totally legitimate, including signed contracts, supply agreements, purchase orders and invoices.

The company will gladly sign a formal lawyer's engagement letter and agree to pay the lawyer for his time and effort in seeking to collect on the debt.

The company will eventually send an e-mail to the lawyer saying, "Great news!  The debtor has agreed to pay for the goods and send you the settlement check for processing.  Please deduct your fee and send us the remainder by international wire transfer."

If the lawyer doesn't catch on by then, he may indeed deposit the settlement check, and wire the funds to the company.

However, the check he deposits is counterfeit, and the law firm is left holding the bag for the missing funds that it wired to the foreign company from its trust account.

Sound implausible?  

Some of the biggest law firms in the country have been suckered into writing trust account checks or wiring money to bank accounts based on funds they thought had cleared their trust accounts, only to later learn that the check deposited with the law firm was a forgery.  The result is that the law firm ends up on the hook for hundreds of thousands of dollars, while the recipient of the money has disappeared.

Minnesota law firm Milavetz, Gallop & Milavetz (MGM) fell victim to such a fraud three years ago.  Founding partner Robert Milavetz says that when MGM got an email from a 40-year old Korean woman seeking to collect a $400,000 judgment owed her for an accident, the firm thought nothing of it: "We do this kind of thing every day," he says. "We help people get settlements. That's what lawyers do."

In one recent case, a pair of foreign nationals are facing criminal charges for allegedly having duped 70 U.S. lawyers and law firms out of $29M and of having tried to make off with another $100M from 300 more.

Lawyers must implement and consistently utilize a high level of due diligence when taking on new clients, especially ones that are self-introduced through online channels.

Ask for tax returns or other official documentation demonstrating that the client has been a solvent business for at least the previous two or three years.  Ask for professional references or other credentials, and don't let your zeal to take on a new matter cloud your judgment.

The moral of the story is, if the deal sounds too good to be true, it probably is.