Commonwealth Conversations: Consumer Connections

Anatomy of a Facebook Scam

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

You are scrolling through your Facebook status updates, and suddenly you find a couple of friends who have become a fan of what looks like free food at Olive Garden. The title of the fan page, “Official Olive Garden Week, Dine In On Us This Week Only,” sounds pretty tasty.

When you go to the fan page, this is what you see:

You become a fan and start clicking away. You eventually get sent to an off-Facebook website that looks like this:

Your $500 gift card is now $100, but that’s still a pretty good deal. Below the field that requires your e-mail address, you are told, “AmazingFreeRewards.com is not affiliated with Olive Garden® All Olive Garden® trademarks are the property of Olive Garden® and AmazingFreeRewards.com does not, in any way, claim to represent or own any of the Olive Garden® trademarks or rights. Olive Garden® does not own, endorse, or promote AmazingFreeRewards.com or this promotion.”

At this point, hopefully your scam radar is pinging like crazy. If you are still in the hunt, once you type in your e-mail address, you are asked for a bevy of personal information, including your name, address, phone numbers and birthday. This is not something you should be doing.

This scheme looks legitimate. There’s an Olive Garden logo on the Facebook page. There are testimonials in the comments section. “Danny,” for example, wrote, “man still can’t believe this actually worked! Thx.” Of course, clicking on “Danny’s” name doesn’t send you to a person’s page, it stays right on the “giveaway” page.

As of 2:30 on Monday, this Facebook page had 66,140 fans. That’s six times more than the 10,520 fans on the real Olive Garden Facebook page, where free stuff is not given out.

This is the kind of scheme that pops up more and more on the Internet, whether it is free food from a big chain restaurant or a gift card to a big retailer like Wal-Mart. Or, as Mitch Lipka at WalletPop covered last week, IKEA. You might eventually get your gift card, but only after purchasing something, and only after giving a wealth of personal information to an entity you do not know.

Lost in the Flood

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

Once again, we are getting an epic rainstorm here in Massachusetts, and already-waterlogged residents need to be prepared for another round of flooding. While flood insurance is often the last thing on our minds, these past few storms have reminded many homeowners why coverage for water damage is essential. 

Categorizing the damage from flooding is necessary in understanding your coverage. Determining where the water came from can be the defining difference between being insured or left to fend for yourself. A standard homeowner’s policy will usually cover damages from fallen rain, like leaks in the ceiling or walls, as well as basement flooding due to sewer or drain backups.

Most people run into trouble with coverage when damage is caused by rising waters from the ground, the true definition of flooding. Flooded basements due to rising water levels is a case in which you will need special flood insurance that can only be provided by the government through the National Flood Insurance Program. Visit the Division of Insurance’s website for more information about the program.

As the rain continues, the most important step is reading and understanding your policy. If you have questions about your coverage, call your insurance agent before it is too late. For most homeowners, flood insurance will be inexpensive and easy to acquire and if you find yourself with water damage after this next round of rain, you’ll be glad you’re covered.

Many homeowners take a look at this issue only when a storm causes a problem in their home. This recent stretch of wet weather should be a reminder for even those with dry basements this week to check their policies and make sure they have the kind of insurance they feel is necessary for their home.

Top Complaints: Contractors, Cars and Foreclosure

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

Today, the Office of Consumer Affairs and Business Regulation hosted a press conference to discuss the top five scams that confronted consumers in 2009. Along with information from our office, the Better Business Bureau, Attorney General’s Office and Federal Trade Commission shared their top five lists this morning. This was part of our effort to inform and educate the public during National Consumer Protection Week.

Topping our list of consumer issues is Home Improvement Contracting. While our office only took over regulation of contractors last July, we have already received enough complaints to make it our most prevalent consumer issue. The next two categories of complaints on our list were regarding auto insurance and health insurance; complaints usually came in the form of issues with claims and general questions about benefits. In addition, we received enough calls from consumers regarding Lemon Law and foreclosure assistance issues in 2009 to make them number four and five on our list.

The sometimes destructive results of scams hit home today when speakers who were directly affected by some of our top complaints spoke at the press conference. Raymond DiCiaccio (photo right, with a check from the Guaranty Fund), a consumer from Attleboro, spoke about his experience when he hired a contractor who left fully paid without finishing the job. After going through the Office of Consumer Affairs, Mr. DiCiaccio received $10,000 from our Guaranty Fund, helping him recover some of the money he would have lost.

Another consumer, Patricia Gordon, also spoke today about her experience with our fourth most prevalent issue, Lemon Law complaints. Ms. Gordon, after months of back-and-forth with her auto dealer, won in arbitration through our office and was eligible to receive a refund on her newly purchased used car that clearly turned out to be a “lemon.”

While our partner’s top complaints extended to issues with identity theft, new-automobile dealers, and time share resellers, there was certainly one common theme: if it sounds too good to be true, it probably is. Our goal this morning was to educate consumers in Massachusetts and with the help of our partners who shared tips and the consumers that told their stories, I hope that throughout the state, consumers will be more aware of the issues they face daily and the vast amount of resources at their disposal.

Business Owners, Insurance Agents Intrigued by Reform Plans

Posted by:
Commissioner Joseph G. Murphy, Division of Insurance

Along with getting a sense of the size of increases small businesses are seeing in health insurance, one of the main goals of this week’s hearings around the state is to gauge response to Governor Patrick’s recnt reform plans for small-market health insurance.

Throughout this week of hearings, we have heard business owners and insurance agents (many of whom are small-business owners themselves) express support for many of the Governor’s ideas – particularly limited provider networks, eliminating “jumpers and dumpers,” and aggressive review of proposed rates. 

These proposed reforms would provide more affordable options for small businesses which are experiencing big increases.  These increases are stifling small businesses and forcing them to make tough decisions. For example, today, Debbie Zabroski said her insurance was jumping from $522 to $750 per month. Self-employed, Debbie was considering making some home improvements this year, but after sitting down and reviewing her budget, realized she would need to spend the money on health insurance instead.

Many small business owners have talked about creating group purchasing cooperatives, which the Governor asked us to investigate. Christine Sullivan, Director of the Enterprise Center at Salem State College and former Secretary of the Office of Consumer Affairs and Business Regulation, spoke passionately in favor of cooperatives today. We continue to investigate cooperatives, the pros and cons, and the hazards of potentially segregating the market between healthy and non-healthy members. We expect to have a report on this issue later this month.

The Governor’s filed legislation includes the creation of selective network products, which would narrow provider choices but also provide lower-cost options in the small market. The legislation also includes creating limited open enrollment periods, which would discourage “jumpers and dumpers” – people who enter higher-priced plans only when planning on using expensive services, and then jump out when they are done. From what we’ve heard in the last four days, all of these ideas have captured the public’s attention and many small-business owners feel they can be part of a successful reform of health insurance in Massachusetts.

In Pittsfield, Just Enough Isn't Enough

Posted by:
Commissioner Joseph G. Murphy, Division of Insurance

Yesterday, we traveled to Pittsfield for a rather spirited conversation about increases in health insurance costs, and one thing we discovered was a disgruntlement at high prices for minimal coverage.

A number of people at yesterday's hearing said they are paying high prices for "catastrophic" coverage, and they wish they could afford more.

In most cases, co-pays and deductibles are sky high for single payers. As Cynthia Crispen Mangiardy said, "I have no health care security whatsoever."

Cynthia, the other participants in today's hearing, and residents across the state are all feeling the same way. Forced to decide on coverage levels, they are purchasing lower levels than they'd like, because they can't afford more. These are not the kinds of decisions we want people to have to make.

When we conclude these hearings, we will produce a report with recommendations for Governor Patrick and continue to work on his reforms in this area. Hopefully, we can get insurance premiums to the point where people like Cynthia can buy the coverage they want without facing serious financial questions about it.

Drumbeat for Insurance Reform Continues in Boston

Posted by:
Commissioner Joseph G. Murphy, Division of Insurance

When insurance benefits broker Steve Walsh meets with business clients to discuss changes in their health insurance premiums, he knows the decision goes beyond how much a company should pay for health coverage.

At today’s hearing on small-business health insurance costs in Boston, Walsh testified about one of his clients, a country club trying to cover a 36 percent increase in costs. The owner feels he is barely getting by financially, and was considering raising membership rates in order to cover the increase in health premiums. However, the owner knows many of his members are in a difficult spot in terms of their renewals, and an unexpected increase may cause them to drop their membership. So he decided to not raise membership rates, and hope for the best.

This is the kind of story we hear consistently, about businesses being faced with difficult decisions on their future because of increasing health insurance premiums. Also at today’s hearing, we heard from Jude Silber (in photo left, with Jon Hurst of the Retailers Association of Massachusetts), who runs two businesses in Harvard Square, Motto and MDF. She said, “I can’t do it anymore,” as she discussed trying to keep up with health insurance increases for her seven employees.

We also heard today from a number of trade organizations and other stakeholders in our state’s health insurance market, including one carrier. While we heard some different viewpoints on how to go about fixing health insurance, everyone acknowledges that changes have to be made.

Last month, Governor Patrick unveiled his plan to support small businesses and create jobs. Part of that plan includes reforming health insurance. The Governor has acknowledged that small businesses and families need relief from these big increases now, and we are hearing from all sides of the issue in these sessions that change is certainly needed.

‘They Can Literally Make Me Bankrupt’

Posted by:
Commissioner Joseph G. Murphy, Division of Insurance

At our first hearing today on health care costs for small businesses, we heard from a number of business owners who talked about how increases affect themselves and their employees.

Richard Egan (photo top left), who owns a physical therapy business, said premiums for families have more than doubled for him in two years. "They can literally make me bankrupt," Egan said.

Debra Converse, the head of the Hyannis Area Chamber of Commerce, said her 650 small business members have seen increases of 10 to 39 percent.

Many business owners (like Robert Saquet of Eggers Furniture in Middleboro, photo bottom left) said the rate of insurance increase have eliminated employee raises. Gregory Stone, owner of the Lighthouse Inn in West Dennis, said he still pays 80 percent of his employees' insurance, but has been unable to give them raises for five years.

These are the kinds of issues we have heard on occasion from small business owners, and today's hearing shows that Governor Patrick is right when he says reform is needed now.

We look forward to receiving more testimony this week. If you are unable to attend, please send written comments to smallgrouprate@state.ma.us.

Weighing in on Small Business Insurance Costs

Posted by:
Commissioner Joseph G. Murphy, Division of Insurance

Today, the Division of Insurance begins a schedule of six hearings on small business health insurance costs with a session in Hyannis. As part of Governor Patrick’s reform of small-market health insurance, these hearings will give us the opportunity to hear directly from small business owners how they have been impacted by increases in insurance costs.

We have heard informally from many business owners and organizations about increases in health insurance. In our current climate, an increase of 10 or 12 percent is considered “good,” especially compared to the 20, 30, 40, even 50 percent increases some companies have been facing.

Small business is the engine that drives our state’s economy, and as we continue our economic recovery, small business needs to be given the best possible environment to thrive and grow. Ending these skyrocketing insurance increases is one part of the Governor’s plan to support small businesses and create jobs in Massachusetts.

As we travel throughout the state this week and next Monday, we want to hear from as many small business owners as possible. You can see the entire schedule here. We will update this blog as often as possible, telling the stories of businesses facing these large increases, and we will be sending small updates on our Twitter feed @Mass_Consumer.

We’re looking forward to a good week of hearings, and we look forward to your input.