Deceptive businesses exist all around the world and we hear stories of fraud and scamming. The extremity of such deceitful practices is unknown until it hits close to home.

Among the common fraud schemes such as Nigerian money transfers and pyramid scams, there is the popular magazine scam – the one my friend became a victim of.

What Happened the Friend
Johnny, a close friend, was a subscriber to ESPN Magazine when he got a call from a representative of “World Wide Readers Service”. The caller went straight into offering a number of other magazines in addition to Johnny’s current subscription of ESPN Magazine for a discount price of $50 per month. Assuming it was a legit offer (since they knew of his current subscription with ESPN), Johnny gave out his billing information.

For the following four months, Johnny saw a charge on his monthly credit card statement for $49.99 without receiving a single magazine in the mail. Upon realizing that he had just became a victim of a telemarketing magazine scam, Johnny canceled his credit card to prevent the company from charging him again.

Seeing that they weren’t getting their monthly dose of scammed money from Johnny, they gave him a call to obtain new credit card information – along with the threat to report him to a collection agency if he failed to do so. The next obvious step was to request a cancellation to stop these ludicrous charges. Their response: Sure. Just pay the cancellation fee of $1,100.

Apparently, they claimed that Johnny had a 3-day cancellation period in order to avoid the cancellation fee. But really, who can get five different magazines to an address within three days of ordering? And, I should mention that all their contact numbers are supposedly out-of-service.

What they used to hold him accountable is a voice recording of the initial phone call in which he entered a verbal contract with them. Any affirmative response could be added into an audio editing that actually makes him sound like he agreed to their terms.

The cancellation fee is quite a steep amount but it is holding Johnny’s good credit as hostage. The company had strategically put an amount which was large enough that someone would rather pay it than hire a lawyer.

What Did Johnny Do?
Well, Johnny decided to pay the cancellation fee of $1,100. He used a voice recorder for all calls between him and the scammers. He also requested a written letter of cancellation. The entire ordeal was a reason for constant worries and many sleepless nights – he just wanted to get it over with.

Was there a better approach that Johnny could have used in handling his situation?

Surely, he probably could have pursued legal advice and action. It would have been a taxing endeavor (both mentally and financially) even without yielding to the scammers’ demand.

But, he’d rather have this problem out of his life as soon as possible. Despite being out $1,300, Johnny learned a valuable lesson and is glad that it is all over now. There is very little he can do now other than sharing his story in an effort to prevent others from becoming a victim.

How to Avoid Becoming a Victim
Avoiding these magazine scams is easily done by becoming a savvy shopper. Most people would think “this is too good to be true”. Aggressive sales tactics play a big part in the success of these bogus companies.

• Confirm the affiliation of the caller. Note the details of a telephone offer from the company. Call the official company number and inquire on the offer details.
• Never provide any personal or financial information to anyone over the phone (except trusted sources). Once you provide personal and financial information, it implies that you agreed to something. This will jeopardize your privacy and credit – and it looks bad for you if you decide to take legal action.
• Perform a quick Google search with the “name of the company” and the word “scam”. Google will provide you the best and fastest way of determining the legitimacy of a company. Any signs of shady business practices means you should hang up right now.
• Do not say anything indicating your agreement to a verbal contract. Make a note to not say “yes” or “I agree” to a telemarketer. Altering a voice recording is quite simple.
• Request paperwork and info/terms. Having everything in a written document is a way to obtain proof of agreed terms and details. If you want to cancel anything, request a letter of cancellation. You’ll have proof ready when they decide to dispute your cancellation.

Johnny hopes that sharing this story and experience would help others avoid becoming victims of similar companies in the future. And, I hope that everyone who stumbles upon this article through a search for “World Wide Readers Service” will realize that they are a scam before falling prey to them.

(Photo credit: jepoirrer)

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Peer-to-peer loans have become the next biggest thing in investing. The stock market may be producing disappointing results but the new social trend in lending is proving to be a nice alternative – and a great way to diversify one’s investment portfolio.

Lending Club, the most popular peer-to-peer lending network today, is one such company where average Joe’s like you and I can lend to people and collect interest. So, we are the ones making a profit – not the corporations we call banks.

You get to review a large number of loan requests. Information that is available for you to review includes a job profile, home ownership, credit history, and delinquency history.

You Are Not a Savior
Now, it is commendable to want to invest in a loan for someone who is struggling to pay their basic living expenses but needs a loan to pay medical bills. Regretfully, I have to say that it is terrible loan to invest in. Your only goal when it comes to peer-to-peer lending is to gain a profit – a goal that aligns with that of banks.

Though the increased sense of pride is a desirable perk for helping someone out, you won’t be feeling so honorable when the borrower begins defaulting on a loan that you funded. A loan gone bad will leave you feeling cheated with a frown on your face as you watch your money disappear. Don’t ever deviate from your role as an investor. You are not a savior.

Think Like a Bank
Banks are greedy and their money means everything to them. No wonder they are able to make billions of dollars a year. When you have invested in a peer-to-peer loan, you act as the bank. It is your money at risk. Assuming the same attitude that banks use would help replicate their results.

• Define a lending criteria.
  There are hundreds of peer-to-peer loans that are waiting to be funded as there are also thousands of mortgage applications waiting to be reviewed. So, you must weed out loan candidates that do not fit your taste. Banks will immediately turn down anyone with bankruptcies. What are some details of a loan or a borrower that you’d immediately reject?
• Seek a strong ability to repay.
  The moneymaker of loans is interest. Loans are a long-term commitment and the longer a loan, the more interest you collect. Therefore, you need to find someone who is stable and consistent with making payments. A person who has low job security or tight cash flow after expenses is an unattractive borrower because of their unreliable ability to repay the loan. Many lenders on Lending Club inquire on a borrower’s job position, length of employment, and monthly expenses. A steady job with good positive net income after expenses is ideal.
• Shun all emotion.
  The intimate relationship between lender and borrower creates an increased tendency to sympathize for others. Such glimpses of human emotion are absent with the procedures that banks take when lending. It’s not just you who feels sorry for the single mother raising three children with a low-income job who needs a loan for medical treatment – everyone feels sorry too. But, you are putting your money at risk. If you lent to this struggling mom, you may well be giving money – not lending.
• Ask questions and analyze the information.
  Peer-to-peer loans are more personal that the loans handed out by banks. That’s a reason to get to know more about the borrower. A good amount of information would better assist you with deciding whether or not you should lend to loan candidates. Discovering a discrepancy in their information may help you dodge a bullet. Things like a divorce, kids going to college, or the lack of health insurance could be hints of impending increases of financial burden which could jeopardize their loan repayments.

Is thinking like a bank a foolproof way to invest in peer-to-peer loans? While it is obvious that defaults do occur (just look at how bad mortgages took down our economy), such a strategy is an imperative approach when it comes to investing – not just peer-to-peer loans.

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An item at a garage sale catches your eye and you were able to take it home for a bargain price. You didn’t notice it but your process of haggling had the foundation for price negotiating.

In a business class I took, we had an exercise that simulated a negotiation where groups represented either a buyer or a seller. The sale of a used truck was up for negotiation and we were to learn the basics of negotiating a price.

Each group had to fill out a worksheet with their initial offer, target price, resistance point, and best alternative to a negotiated agreement.

• initial offer: This is the starting price each party intends to lead off with at the beginning of the negotiation.
• target price: This is the amount that the buyer hopes to pay and the amount that the seller hopes to get, realistically.
• resistance point: This represents the highest price the buyer is willing to pay and the lowest price the seller is willing to accept.
• best alternative to a negotiated agreement (BATNA): This is the backup option that each party has as a last resort – should they not agree upon a price.

The Scenario

Buyers: The buyers needs a truck to run a business. They saw an ad by the sellers for their truck and hopes to negotiate for a price that is better than the truck in a nearby town for $5,000, which is immediately available.

Sellers: The sellers have a truck that they have to get rid of. They have put an ad up for the truck so that they don’t have to settle for the $500 that the scrap metal shop will pay for it.

The only information known to both parties is that the truck has faded paint, worn tires and engine sounds. Neither party knows the other party’s BATNA but the parties may disclose it if they choose to do so.

The whole exercise was quite fun and educational. For many people, situations requiring negotiations is rare because they tend to avoid the confrontation. Even this simulation breathed fire into the students as each side were quite aggressive to get the best deal for themselves.

The fundamental terms above prepares the negotiator with a goal so that he/she does not succumb to an unfair agreement. The real-life application of this exercise will prove to be practical and beneficial should they stick to the basics of price negotiating – know what you want and get it.

Some points seen while negotiating:

• Look aggressive. Negotiating is a process that is constantly a tug-of-war and the side that appears dominant will use it as an advantage. An assertive attitude is essential to avoid being cheated in a deal. During the exercise, students were jumping off their seats and their volume was up there.
• Deceive within reason. In this case, lying during a price negotiation was a useful tactic. Some of the buyers revealed their BATNA but lied about the price of the truck so that the sellers would sell their truck at a price lower than that. On the other hand, sellers lied about how they had another potential buyer.
• Be creative. Because of the possible defects that came with the truck, sellers “offered” warranties or repairs without a price tag on them. Although it was not specified in the assignment, the professor welcomed any creative ideas during the negotiations.

You can simulate this exercise with your family and friends. All that is needed are a mediator, buyer(s), and seller(s). It is great practice for the real world and it will be a fun learning experience.

(Photo credit: CarbonNYC)

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Soon, the tenants in one of the apartments in our house will be leaving and I’ll be given the responsibility of helping my parents find new tenants again. After seeing how my father often goes about getting new tenants, I told him that there is a better way of doing it. His typical process is just:

1. Post an advertisement in the Chinese newspaper.
2. Shows the apartment and explains the rules of the house.
3. Accept the first person who agrees with the rules and puts down a deposit.

As many homeowners of rental properties would agree, this is a very poor method of searching for tenants. The most important thing of renting out property is to protect oneself, legally. That’s why the hunt for new tenants should mimic the procedures of hiring a new employee for a business.

1. Application Process

Just like filling in a job application, potential tenants should be given a rental application to fill out. It is not considered inappropriate to ask for a resume, references, W-9 or 1099 forms, and references. Here, we are not reviewing the person’s education and ability to perform certain task but instead, we are reviewing the person’s credibility and ability to pay the rent.

2. Interview

The interview is the key step in hiring an employee and it is also the key step when taking in a new tenant. My parents often like to meet the potential tenants just to get to know their personality and character. Someone can put anything down on a piece of paper so the interview will finalize their decision.

3. Hired!

Before officially starting work, an employee would have to sign plenty of documents to make everything official. I have proposed to my parents that I write up some things on paper, such as terms of the lease and rules of the house, and have the tenants sign it. They normally do not do this because of their limited ability to communicate in English. I’ve even thought of making a mini handbook so that tenants know things such as how to contact us, recycling information, and the rules.

Taking Charge

A detailed process, once again, serves the purpose of protect oneself. Just in the case that there would be any problems with the tenant, we can say that we told you so. Because of the close resemblance that this process has with owning a business, I’ve asked to take over this entire ordeal and have my parents conduct the interview (along with making the final decision).

Photo credit: cincyproject

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School is about to start and it seems like the time to start selling some stuff help ease the costs of back to school supplies. Let’s take a look at some of my ventures and expected incomes, if everything sells.

As you may know from an earlier post of how I make money through my hobby, I have quite a stash of popular sneakers that can bring in a good amount of cash. From the photo, you can see shoes that I’ve put up for sale on popular sneaker forums. I’ll put them on eBay if they don’t sell there. And yes, people will even buy shoes that have been worn because it’s all about the style.

Expected income: around $900

Next comes the textbooks. Since everyone is hunting down the best bargains for textbooks, it seems to be a great time to sell them also. I’ve made a huge list of the books and relevant information. It took a while to estimate the prices I should charge. I went straight ahead and made a flyer for the books. Once I get back to school, I’ll print a bunch and stick’em to all the walls.

Other places where I listed were Amazon.com, Facebook’s Marketplace, and various other textbooks sites. Never sell back to bookstores because they will rip you off.

Expected income: at least $200

Wow. Putting up so many things for sale is quite tiresome and time-consuming but this will allow me to put more into my savings or Roth IRA.

Textbook photo by Open Up My Head

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Anyone running a business seeks to run it with as much efficiency as possible, while still being able to maximize profits and to satisfy customers. My college course classes for the Business Management minor has taught me many ways to streamline a business and to make it more profitable.

In my situation, the one thing I can do to make a drastic change in the way I spend money to make money. Reducing expenses is a common business practice but it is very efficient way of making a larger profit.
HOW I’M DOING IT

The PSP mod kits that I sell consist of a battery and a memory stick. The cost of the battery is already very cheap ($25) and I cannot find a better alternative. As for the memory stick, I’ve been purchasing 512mb memory sticks for $7.99 each. After some thorough research, I’ve found that 256mb memory sticks could be used and they were available in a store for only $4.99 each.

Next, I’ve given a detailed look at the listing fees on Amazon.com. Apparently, I’ve been selling in the wrong category, which charges 15% commission while the mroe appropriate category charges only 8% commission. That is almost HALF and that’s a BIG difference!
Finally, I’ll be reducing the cost of shipping. Firstly, I’m using USPS Priority Mail with delivery confirmation. The shipping boxes, I order online so they’re free. I typically make the effort to trek to the post office and pay for postage there. After looking around USPS.com, online postage is cheaper and tracking is free.

So now, I’ll be paying for and printing postage labels at home. It saves money and I can just drop off the packages without waiting on line, thus also saving me time.

THE RESULTS

The total cost of goods, including taxes and shipping fees, was originally $40.55 for a profit of $13.15 per unit. A reduction in expenses would yield a cost of goods of $36.60 for a profit of $17.10. Decreasing expenses by about 10% will increase profits by 30%. A few dollars and cents may not seem like much but as multiple units are sold, there is a big difference in profits.

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Guest Post by: W. Liang

I am writing to all of you concerning a possible “scam” running by a corporation by the name of Bally Total Fitness. If you don’t know what that is, this corporation runs a nationwide chain of fitness centers and gyms. On August of 2007, this corporation filed for bankruptcy protection, yet many members and consumers seem to be unaware of this. Bally Total Fitness sees that while their corporation is going down the hole, they will make almost anyone and everyone a target for their unlawful business practices. They will do everything in their power to lure you with their empty promises so you can sign three-year contracts that are almost impossible to get out of. There are three ways:

My Story: I walked into a Bally Total Fitness facility nearby my home with a friend. A sales person immediately sat us down, gave us a clipboard and told us to sign some release forms before they told us about their plans. We figured it was pretty much harmless because we thought we were in control. Another note: Bally’s do not offer any pamphlets or flyers on membership plans and prices. We were led into an office and a friendly salesperson, who I shall not name, began to ask us about our commitments. We told them we were looking for a month-to-month plan for two months and that was it. He told us that for a month-to-month, we were only limited to workout on three specific days of the week. It would be $60 a month. We thought it was too expensive and got up to go. He stopped us and gave us another suggestion: $38 dollars a month for each person if we put a down payment of $57. We still though it was too expensive for our budget and told him we would go home and think about it. Desperate for us to stay, he said he would cut us a special deal: $5 down payment and $38 each person for each month. We thought it was too good to be true, but had us convinced when he said he was the manager and had the power to do cut deals like that. As long as we go 17 times for within 60 days, we can cancel without any fees. He told us to give an ID card and credit card and gave us an eight page contract. Note that he never told us it was a contract nor did he say it was for 36 months.

Two months went by; we abided to the rules, went 17 times and went for a cancellation. When I got there, I was denied because the number of times I attended magically turned to 12. The salesperson who signed me up gave me another alternative. If I was going back to college, send in a proof of residence and address and give a fee of $50 along with a notice of cancellation MAILED to their headquarters in California. I was denied again because I was told I must be at least 25 miles away from any facility. My salesperson knew very well where my university was being a college student himself. Also, I found out he was in fact not the manager of the club. The manager of the club was actually a woman. Right then and there, I knew that there was something really fishy with this company. So it’s been 5 months and I am still locked in this contract and haven’t found a way out.

I did some research online and was shocked and appalled by the number of websites, forums and personal stories about how this major corporation has screwed them over. It has been the subject of federal investigations across America, involving the New York State Attorney General and the Better Business Bureau. Former Attorney State General Eliot Spitzer had some agreements of reform for the company. However, Bally’s just isn’t living to their end of the agreement. So, I decided to share some of the stories I found on forums on the internet:

– 17-year old girl walked into her local Bally Total Fitness and informs staff she is a minor. Staff member assures her that he will take care of everything and ends up taking all her information and changes her birthday on the contract so she can be born one year earlier.
- U.S. Military person was denied of cancellation even after sending in papers for proof of his deployment to Iraq. Years later, was harassed by Bally’s Collection Agency. Credit report ruined. Bally claimed they have never received such letter at their headquarters.
- 20-year old college student was promised a student plan, but finds out his membership was never cancelled because supposedly, his card was found active in another state far away from him. Harassed by collection agency; credit report ruined.
- Half of the stories on the internet involving cancellation denial were that Bally claims they never received any documents or cancellation notices. However, the ones who fax them or mail them notices along with the threat to sue were not denied of cancellation.
- Many victims of this “scam” were involved because of fraud, forged signatures on contracts and pressure.

Many people who fall victim to this corporation is more or less our age. Now, I understand some of you might be members and are completely satisfied with the services; and some of you might be a current/former employee who enjoys working for Bally’s. I’m not saying every salesperson out there is deceptive. However, I do feel that one must take a closer look at what is happening with this company and why are there so many consumers out there who are completely dissatisfied with this corporation. If it is nothing but a few complaints, then maybe it is the consumers who are to blame, but if there are thousands upon thousands of complaints out there, it does not take a genius to figure out that this corporation is hiding something.

I left the title of this article or whatever it a question because I want you to decide for yourself whether or not Bally Total Fitness is actually scamming people. For me, I cannot find myself supporting such a crooked company that makes their money by lying and stealing. So please, tell a friend; and tell a friend to tell another friend and let this be one step closer to the shut-down of this bully of a corporation… or at least some reforms to their policy. Let’s be truthful now, I am sure most of you have considered joining a gym at one point or another in your life. So now, I am sharing my story with you all in hopes of preventing more unsuspecting consumers f
rom being scammed.

FOR MANY MORE INTERESTING STORIES AND INFORMATION, YOU MAY GO TO ANY SEARCH ENGINE AND TYPE IN SEARCH: “BALLY TOTAL FITNESS SCAM”

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