“Gotcha Capitalism” -- an interview with Bob Sullivan by Terry Gross on NPR’s “Fresh Air,” 1/7/08
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Intro: Does it seem to you like the bills for your cell phone, your credit card, your internet access, your rental car, your bank, and your hotel are loaded with “fees,” many of which are incomprehensible like the “regulatory cost recovery charge” on the cell phone bill? According to Bob Sullivan, Americans are paying an average of $1,000/year in sneaky fees. He’s written a new book about these hidden fees and how to protect yourself from fees you shouldn’t be paying. The book is called “Gotcha Capitalism.” Sullivan also writes “The Red Tape Chronicles” for MSNBC.com.
Terry Gross: What do you mean by “Gotcha Capitalism”?
Bob Sullivan: Everyday, when people open bills or they turn on a TV set or they get on an airplane or they check into a hotel, they pay a bill and they pay a price. But then there’s also a second price – the “aftercharges,” these tack on charges. It’s almost impossible to know what they are. They come around a dark corner, it’s a surprise: gotcha! The next thing you know is what once was a $70 hotel is now a $100 hotel, what once was a $39 cell phone bill is now a $72 cell phone bill. It’s nearly impossible to determine the real price of things. Companies are making a killing by confusing consumers this way.
TG: That is so true! What I don’t understand is, are those fees legitimate costs? And, if they’re legitimate, why aren’t they included in the thing we sign up for, the price that we sign up for? And if they’re not legitimate, what are they doing there!
BS: They run the full spectrum, I’d say, from being an outright scam, frankly, to being a real price that probably should be an add-on to the price tag itself. But something really magical happened in the whole nature of pricing a few decades ago which really came to fruition thanks to the internet. Somebody’s realized that they could essentially trick us with low teaser prices and then sneak in these after charges after the fact. They could separate out – they could do this in the name of separating out real costs of doing business. The phone company, for example, has tack-0n fees for real estate taxes, for the price of collection federal taxes. Not only do they charge you federal taxes, they charge you extra for collecting them! So instead of charging you one price, which is the standard… Imagine if you went to a deli and you paid $3 for a sandwich and 15¢ for the fact that they had to charge you 30¢ for sales taxes! So they’re breaking out these costs of doing business and isolating them essentially so that they can charge you more in the end.
TG: Let’s look at my cell phone bill. I was charged a “federal universal service charge” of $1.22, a “state gross receipts surcharge” of $2.21, and a “regulatory recovery charge” of $.96. I have no idea what any of that means! Do you?
BS: I do, actually! The last one there, the $.96 charge – that’s the price their charging you to collect the other taxes that you mentioned.
TG: … Oh, great!
BS: It’s literally like the cashier charged you extra for taking your money at the store. When they break that out, essentially they can pump up their bottom line. That money’s going right to the cell phone company even if it kind of sounds like it’s a tax.
TG: And the “federal universal service charge”?
BS: That’s the money that’s going to the schools and libraries of America, supposedly. It’s helping making the telephone and internet service universal to everyone. It’s another very controversial federal program because most schools now have internet access and there are some really expensive programs being funded by that which are not necessarily what you might think. Helping little kids get internet access is a great idea. Helping resort communities in Hawaii get fiber optic access – which some of that money goes to pay for – is probably not what you were thinking when you paid your taxes on your cell phone bill!
TG: And the “state gross receipts surcharge”?
BS: That’s basically a sales tax. With a funky name.
TG: They couldn’t have just said that?!
BS: That would make it easier! I think all these little nits really irritate us day by day. I like to think, every month when I open my cell phone bill, my blood pressure goes up because I feel like I have to get into this defensive posture and scour everything. So that’s the sort of day-to-day problem of gotcha capitalism. But there’s really a larger problem here which is that most people kind of surrender in the face of all of this confusion. A confused consumer is a profitable consumer. It’s much easier to make people pay extra and lose a whole lot of money when they’ve given up keeping track of what their real costs are.
TG: Who has the time to do this? To keep track of all of this? There’s barely enough time to pay the bill, let alone analyze things that are designed to be incomprehensible.
BS: It’s true. In the book I have lots of examples of companies expressly setting out to confuse consumers and how they do that.
TG: Give us an example.
BS: ATT in the latter part of the last decade actually did market research to figure out how to design an envelope and a notice that consumers would discard! They actually sent out samples to people. They did a study. They found that certain phrases or bolding certain words would convince people that they didn’t have to read the notice that was sent, so they’d throw it in the trash. The act of throwing it in the trash was essentially legal consent to letting ATT remove consumers’ rights to sue them! So it was a very momentous event for the consumer to discard your right to file a lawsuit against ATT.
TG: So in order to retain the right to file a lawsuit, you had to actually read it, sign it, and return it.
BS: You had to read it and object to it – and, of course, understand it! But at the very top of the notice it said, “You do not have to do anything.” Of course, everyone loves to hear that, so they threw the note out.
TG: So that particular contract was voided by a court.
BS: That’s right. There was a paper trail that showed ATT’s intention was exactly that.
TG: But you say that other companies have perfected the idea of design mail that you throw away, not knowing that you’re giving up your right to do something by throwing it away. So how has it been perfected?
BS: It’s been perfected by the fact that no one says this anymore or puts in an email or a letter. But I think we all sort of implicitly know, when we get one of those 16-page notices from our credit card company that’s essentially printed on tissue paper and in type that’s so small that it’s almost impossible to read, that no one ever intended for your to read them. The proof is in the pudding. The number of people who evoke their rights in those situations is infinitesimal.
TG: And evoking your rights in that situation would be what? Objecting to the raise in interest that you’ve just been given by your credit card company?
BS: Sure. And some of these absurd notes that go out are exactly that. A credit card company will send you a note and it will say, “We’re raising our interest rate by 12% unless you object.” Now, everyone were to object to that notice if it were written in a certain way, right? But because very few people take the time to object to that, it seems clear that no one is actually reading it. The whole asterisk culture, I think, is really at play here. I have a story in the book of driving by a highway billboard that says “FREE INTERNET BILLPAY” from a local bank and there’s a big asterisk on it. How many people can take the time to read the asterisk on a sign when you’re going by at 50 miles an hour? Obviously there’s no intent to really communicate anything there. It’s just to try to communicate as little as possible to get away with as much as possible.
TG: What did the asterisk say on the billboard?
BS: Oh, gosh! I had to actually pull over and get on top of my truck to read the very small type on the very bottom of the billboard. About a 10-minute episode, which irritated my passengers, I read the asterisk which said, “See banker for details”!
TG: … Getting back to cell phones. Cell phones often come with contracts, and you have to sign up for a year or longer. What’s your advice on these contracts?
BS: Contracts are really terrible because they prevent you from acting like a consumer would in a free market. Most contracts are now two years. Inevitably six or seven months in, you find you’ve been transferred, or there’s construction near your office and your phone no longer works. Maybe you lose the phone. Or maybe a brand new phone like the I-phone comes out and you want to buy a new phone. Contracts really hamstring you. However, you can avoid them. You can avoid them by getting a prepaid phone. Or you can actually pay for the phone up front – which for most people is a very hard choice. But the shorter the term of the contract, the better. And again, the larger problem with these contracts is when companies have millions of people as guaranteed consumers for a year or two; they have no incentive to improve their service. That’s one reason why how many people you know say, “Well, my phone works at home, but it doesn’t work in the office!” Or, “It doesn’t working along my commute.” Or they have to go outside to make a phone call. In this day and age, that’s pretty ridiculous.
TG: So you recommend getting the shortest contract possible?
BS: Yes. Not just in cell phones. In DSL service. In cable TV. The contracts, especially now when the services change so quickly, long-term contracts really are a bad idea.
TG: Let’s move on to cable and satellite TV fees and contracts to watch out for. Let’s start with the fact that a lot of them have teaser rates. What do you have to look out for there?
BS: The teaser rates on cable television in particular are really abominable. When you get ads that say “$29.99 a month,” there’s often an asterisk. But almost never will they say what the real price is going to be when that teaser period is up. It’s usually six months or a year. There are a lot of folks who kind of live six months at a time and continually get those discounted rates. But you have to keep calling to ask. But the thing that bothers me most is when you’re trying to compare and the real decision is, “Do I get this cable service, this cable service, satellite TV, maybe something else”, I defy anyone to actually sit down and write out, like a rational consumer would, what the real price of this service will be a year from now, to actually compare it. Because the prices are almost impossible to find.
TG: You recommend that you not rent DLS or cable modem equipment. Why not?
BS: You can almost always by equipment like that online at a deeply discounted rate. So you want to disconnect the purchase of the hardware from the purchase of the service. In the end, you can get it cheaper. But here’s a much more sinister reason why you shouldn’t rent equipment from your cable company or your phone company, if you can avoid it. Because when you want to get out of the contract, that’s another barrier to removing yourself. If you have to actually return the cable box, you might not change your service when the time comes to do it. There are endless stories of cable companies “losing” the boxes when they’re returned and charging $200 for them, or some outrageous price. So it’s just another hurdle to making yourself one of those free actors in the economy, something I think is incredibly important now.
TG: What do you have to look out for in terms of internet access fees?
BS: The biggest problem with internet access is that it doesn’t work right now, in a lot of cases. I think it has improved a lot over the past four years. We did a study in the book that shows that, of all the hidden fees that people complain about, internet access actually ranks pretty low. But… it’s really common that people are paying for service that they’re not getting. Those people have no idea what the real speed is that they’re receiving at their house. You might be paying for high bandwidth access but getting not much better than dialup service. There are lots of really great services online where you can test your speed. My favorite is at speakeasy.net. It’s right there on the home page and it takes about 15 seconds and it’ll tell you exactly the speed you’re receiving. You’ll find out if you’re getting what you’re paying for. The biggest scam of internet access is paying for service that you’re not getting.
TG: Gee, I didn’t even realize that was a problem in a lot of places!
BS: Everyone sort of thinks it’s just their fault. And of course if you call for help – and this is a company tactic across all industries – they do everything they can to blame you. It’s your computer. [?] It’s spyware. It can be all those kinds of things. But if you think about plumbing, yeah, there can be a lot of reasons why your toilet isn’t working, but it’s usually the pipe. That’s often the case with internet access as well.
TG: You devote a lot of time in the book to travel and all the fees you run into at hotels and rentacars. I want to ask you a rentacar question. When I’m on the road and I have to rent a car for a day or two, and it’s not long distances I’m traveling, but I absolutely need the car. There’s almost a moment of paralysis at the rentacar desk when I have to decide whether I’m doing to buy the full tank and return it empty [laughter] or am I going to fill it up on the way back. It’s like a losing situation because if I buy the full tank and return it empty, I know I’m not going to really return it empty. I’m going to probably end up returning it half full. But if I don’t buy the full tank and I return it full, I might be in a real hurry for whatever reason and might not have time to fill it up. There might not be a gas station easily located near where the rental agency is, making it impossible to fill it up. I’m resigned to being in a lose/lose situation. What am I doing wrong here? How should I be thinking about this?
BS: You are doing it exactly right! That is one of the classic situations in “gotcha capitalism” where you are a captive consumer with no information needed to make a rational decision. So you do the best you can. And, either way, the company wins. So you’re not doing anything wrong. What’s happening there is that you have a Hobson’s choice, right? If you’d really played this out, what would you have done? You might go onto Google and research gas stations near the rental car agency so you could plot out your plan… [laughter] … which could be foiled. Like let’s say you don’t realize you need to take a bus back to the airport, right? And that 15 minutes you take to fill up the tank makes you lose your flight. And now you’ve got to pay a change fee to the airline! So you really can’t win. My normal advice to people in that situation is to pay for the gas up front because you’re gambling. … And so I think the reality for most people is to show up at things late. You know who you are. Take the fixed expense that you can predict rather than taking the risk on the surprise expense later. That’s a pretty good bet, because for some reason the price of gas doubles when you buy it later from the rental company than earlier. So you’re locking in a fixed cost there. For most people I think that’s a good idea. Of course, the right thing to do is to take the time to fill up the tank right before you get to the airport. But you have to know yourself and pick your poison.
TG: Right. So cost effectively, if you could actually fill it up before you get to the airport, that’s the way to go!
BS: Yes. That’s the cheapest thing to do. Again, this is like the question, “how many minutes do you get in your cell phone plan?” If you’re the kind of person who’s going to check online every other day, god blessya, then get a cheap plan. But if you’re not, I think it’s smarter to pay a little extra and get a bulk plan so you never have one of those surprise $10,000 phone bills.
TG: And the other things to watch out for when you’re renting a car?
BS: Ohmigosh! You know, car rentals at some airports the taxes and surcharges can be 50% above the normal price. So it’s really important for you to get the out-the-door price when you’re comparison-shopping. There are a lot of other things to worry about when you’re renting a car. The condition of the car when you pick it up. I know this sounds paranoid, but I often take a digital camera with me and take a few pictures of the car before I leave the lot so there’s no dispute when I return, especially if I see a scratch or anything on the car, so they don’t try to sock me for the cost of fixing the car. The most important thing of all is using the internet before you leave to compare the actual price you’re going to pay before you leave. The last thing you might check for – though this is really hard to do and in some cases you can’t get the information – is what the hourly late fee is so that you can plan ahead. So if it’s harder to leave grandma’s house than you expect and you’re three or four hours late, some car rental companies that might charge you $40 or $50 for that, others just $8 or $9. So it’s good to know that before you go into it.
TG: What about buying the rentacar’s insurance vs. using your own?
BS: Here’s another fear! This is like the paper or plastic question, right? I’d just like to point out in this conversation that we could go on like this forever! As a consumer affairs reporter, people are always asking me The Answer to these questions. The questions are formed for us so that they’re impossible. I can give some suggestions, but the truth is, you lose either way. … You don’t take the insurance. Call your credit card company and make sure you understand the coverage that your credit card company gives you. That’s a phone call that’s really worth making. Most credit card companies are actually very responsive and will answer a call like that. It’s almost never a good idea to take that insurance from the rental car company.
TG: Why not?
BS: Because it’s over-priced. And you are already covered. You’re often already covered by your own personal auto insurance for most things. And your credit card will provide you with gap insurance. I can only say that’s true perhaps 90% of the time. So before you go out on a trip, just call and make sure that’s the case.
TG: In keeping with our travel theme, you say once you get to your hotel don’t touch the minibar. Don’t touch the telephone. Why not?
BS: Don’t touch the minibar because not only are your charged now $3 or $4 for a bottle of water or a bag of chips, but at some hotels – like the Wynn Las Vegas Hotel – they’ve figured out a way to charge you even for just looking at what’s in the minibar. If you take out pretzels or a candy bar from one the minibars there and you have it in your hand for more than 60 seconds to look at it or look at the calories, when you put it back it they’re going to charge you for it. So don’t even open the minibar! As far as the telephone, some hotels now charge you even to call the room next door! Hotel telephone revenue has gone down dramatically over the last ten years because people have cell phones now so no one needs to make those $9-a-minute calls from their hotel rooms. So hotels are continually figuring out ways to generate more revenue. So just a call to the neighbor next door can cost you a dollar or two. Don’t use the telephone; don’t use the minibar.
TG: Here’s something really irritating. (As if everything we’ve been talking about hasn’t already been irritating enough!)
BS: … This whole conversation is like fingernails scratching…
TG: Bank fees are really driving me crazy. You basically have to buy your own money at the ATM machines now. And as you point out in your book, there’s not only the constantly escalating fee that the ATM machine’s bank is charging you.
BS: Your home bank is charging you a fee on top of that that the machine isn’t even going to tell you about. If you’re not a Bank of America customer and you go to Bank of America, it’ll probably cost you $5 to get $20. Which is crazy. What’s perhaps even more crazy to me is that when you ask for the money the machine won’t really tell you that it’s going to cost you $5. It’ll tell you half the fee – it’ll give you the Bank of America fee, which is $3. But for some reason it cannot figure out how much US Bank is going to charge you for that money as well, even though US Bank is charging a fixed fee and has for a couple of years. It can do all these wonderful things like check your pin number and check your balance, and all that sort of stuff. But it can’t yet figure out what the true price is!
TG: Why is this happening. Look, a lot of banks are open fewer hours and with fewer tellers because they know we’re getting our money and depositing our money through these ATM machines. They’re saving money on personnel. Yet every year they’re charging us more money to use the ATM machines. Why is that happening?
BS: It’s happening because they can! They’re in the business of making as much money as they can. At the moment, if there is federal regulation of these banks, I don’t know where it is. As a result, they’re just simply escalating… they’re playing with dials on revenue charts. The more they can make, the better. The promise of ATM machines was that we would have access to our money all the time. We wouldn’t have to go in the bank and stand on lines. For the most part, people like the convenience of ATM’s. But we’re saving the banks a tremendous amount of money by not going in and talking to a person. For that “privilege,” they’re charging a lot.
TG: Banks also have a lot of hidden fees that you write about.
BS: Yes. The bank fees are probably the worst of all. Banks are making about a third of their revenues right now from fees. In fact, some banks make more money from fees than they do from interest. Which should be shocking. Banks are in the business of giving out loans and charging interest. That’s an important function for the economy. Charging fees from customers and depositors is not an important function of the economy. That’s just a drag on the economy. And yet the biggest offender of all -- things like overdraft fees – are incredibly frustrating for consumers. Banks have figured out now that our checking accounts are not simple checking accounts anymore, we use them essentially as cash-flow accounts. So you’re constantly not only writing checks, withdrawing cash, using debit cards to buy things, electronic transactions online, automatic billpay. While everyone says, well, it’s your fault if you dip below a zero-dollar balance or your minimum, it’s really, really hard to keep track of what’s in your account at any given time since this money is moving in and out all the time. Each time you make a mistake, it’s $35 or $40. Banks are making a killing by confusing people about how much is in their account. As of now, there’s no stopping them.
TG: Here’s a fee that’s really baffling to me. It happened to me once. I don’t know how often they do this. In some places, if you pay a bill by phone, you’ll be charged a fee for that.
BS: Yeah, isn’t that crazy! If the credit card company tells you you have only another 24 hours to pay your bill and they say, “Call up and pay us,” they’ll charge us $5 or $10 to make that payment over the phone. For no reason at all. Obviously you could make it in any other way for free. But it’s just because – well, it’s for two reasons. One is really rather sinister. Who is it that’s paying their bill by phone at the last minute? These are the folks that can least afford to do it. These are the folks that are under the most pressure. So when you’re on the phone and the bank says, “If you don’t pay this bill right now, all sorts of terrible things are going to happen to you,” people are intimidated into not only paying their bill that way but getting this last extra dishonorable charge. Again, there’s no one stopping them. So why wouldn’t they!
TG: Why are all these hidden fees being hidden now? It seems like particularly in the last ten years or so that we’ve been seeing many more of these hidden fees than we used to. Is that an exaggeration?
BS: No. It’s absolutely the case. It’s part of why I wrote the book. I’m a technology reporter, not a personal finance reporter. The reason hidden fees have become this raging industry that they have is because of technology. That’s how I happened on the story – just writing about people’s cell phone bills and TV and internet access and why these things irritate people. Bait-and-switch has always existed in any economy. What we have now is, instead of somebody trying to steal thousands of dollars from a few people at once, companies stealing a dollar or two from thousands of people all the time. That adds up very quickly. They’ve perfected the amount they can ding us for. One little bit at a time is usually about $10 a month. Most people won’t complain about eight or nine extra dollars here or there. They’ve figured out what that pain point is. They’ve also refined their data bases, figured out exactly how they can expense things, and parse [sic] things out, as we discussed, with cell phone bills. So it’s really a computer, a big, giant, smart supercomputers that all these companies have, that are constantly honing ways to get more and more pennies and nickels from us. In the face of that information war, consumer really doesn’t stand a chance.
TG: Why isn’t there more regulation protecting consumers?
BS: I don’t really know why there isn’t more regulation protecting us. But I do know this: whether you’re talking about bridges that are collapsing or levies that are collapsing or America’s infrastructure in general, there isn’t a lot of disagreement that there are all sorts of chinks in our armor here. I looked back at the history of the Federal Trade Commission while I was working on this book which is the federal agency ordained with protecting us, along with the Consumer Products Safety Commission and some other federal agencies. But the FTC would be the one most people know about. In 1979 the FTC had 1700 full time employees. Last year the FTC had about 1,000 full time employees. So it’s nearly half the size. During the intervening couple of decades the FTC added to the list of its things to do the internet, the “do not call” list, spam, identify theft. And, by the way, the population is about 75,000,000 larger. So the FTC has a far bigger job than it had in the late 1970’s and early 1980’s. And it’s doing so with half the staff. There just aren’t nearly enough people whose job it is to make sure companies are being fair with us. The end result, which I think is the biggest problem of all for consumers, is that when you get a $500 cell phone bill, and it’s because your cell phone company changed your plan and didn’t inform you – didn’t even send you anything in writing which is legal and happens every day in this country – who do you turn to for help? How do you get justice? The truth is, right now there isn’t any place to turn for justice. That’s because we haven’t invested in the infrastructure, our bridges, for our cities, our transportation and what I’d called the infrastructure for our market economy – which is keeping a fair market. We aren’t investing in that, and this is the result.
TG: A lot of people would say, “The market will straighten this out.” Because the market “straightens things out.” But you’re very skeptical of that.
BS: I am. I think, first of all, I can just point at the way things are for all the evidence I need that the market isn’t straightening this out! But what people don’t understand about a free market is not that it’s a free-for-all market. There are rules. Think about when your family pulls out a board game and what happens if you start playing without reading the rules. Pretty quickly somebody is throwing eggnog at somebody else! Because if there are no rules, eventually things descend into chaos. And that’s really what we have here. The fundamental rule that’s missing right now is what things cost. When you go to a cell phone store or a grocery store, why don’t the price tags mean anything? Why can you wind up being hurt much more than you think? What’s happened is that we’ve basically thrown out all the rules and as a result we don’t have a functioning market economy anymore. We have a broken economy. We need a market fix for that. And that involves setting rules.
TG: You point out in your book that now that a lot of these companies charge these hidden fees, other companies have to charge them too to be competitive.
BS: This is a very important point to me. I don’t want to sound like all companies are bad and all consumers are good. We have the whole spectrum on that. Obviously some consumers try to cheat companies and vice versa. But here’s what’s important: I think there are lots of companies out there that would dearly love more regulations. They’d really like to know that when they set a price that all their competitors won’t be able to cheat either. I have a story in the book about a hotel company that experimented with upfront pricing and tried to put on the internet the prices consumers would pay when they left the morning after staying in the hotel. What happened at that hotel? They were losing customers like crazy to their competitors who were lying about what the real price was. So they just couldn’t afford to be honest. I think that’s tragic. In our economy we’re losing our way if companies really can’t afford to be fair to people. There are lots of companies who, if given the opportunity, would really enjoy competing in a marketplace where everything was above board.
TG: … You’re also an expert in internet fraud. I want to share with you some really good news! I’ve been really lucky in the past few days! Within just a few days I have been honored by the internet! For example, the International Awareness Promotion Department of the BMW Auto Company informed me that my email address had been randomly selected as a star prizewinner. That’s worth €500,000! All I need to do is contact the claim officer with my name, address, country, age, sex, occupation, phone number, and fax! Plus: I’m so lucky that Barrister Williams Moore law firm contacted me that the great philanthropist, the late David Rollins, made a random selection of individuals drawn from 250 countries whom he expects to continue in line with his selfless services to mankind. And I was chosen as one of those people! All I need to do is give them my name, address, nationality, age, occupation, phone, fax, country of residence! What’s going on here?
BS: You didn’t win the Spanish lottery? El Gordo?
TG: No! My god, I’m offended!
BS: You’re probably the only one. These are all just a very simple Nigerian scam that everyone’s familiar with. But one thing you need to understand about scam artists is that they don’t sit still like a lot of American companies. These guys are very innovative and they are constantly honing their pitch. The minute they figure out that something works, they send it out to the whole world. Every story gets more and more elaborate. They keep [?] stories on. The point I like to make when I’m talking to people about internet scams is that everyone knows that when you get an email that you have a long lost relative in Kenya, that’s a scam. Everyone laughs and says, “Isn’t this silly! I would never fall for that!” I’m here to tell you, people fall for it all the time. I’ve talked to dozens and dozens of victims who have sent ten, twenty, thirty thousand dollars overseas for things like this. Probably not as simple as the scams that you were just describing. But when they’re just a little bit more complicated, people fall for them.
TG: But these scams – they want to give me money!
BS: Well, let me give you an example of something that’s just a little bit more refined that what you described. I have a friend who’s a new owner of a bed and breakfast on the New Jersey shore, a beautiful place. She recently got an email from someone in Africa, a dignitary, who said he was going to work – a six-month stint – at UNICEF in New York City and needed a place to stay. Along came a check from UNICEF, drawn on what looked like a UNICEF bank account. Now, if you deposit that check, the money would have gone into her account because the bank would have cleared the check. And banks can actually un-clear checks, if you will, discover that they’re fraudulent, weeks later. So they can literally put the money into your account and then take the money back out because they don’t actually do the fraud checking immediately. They give you the money. If you’re a business owner and you get a check like that, that’s a pretty good story. It’s a check that looks like it’s from a big organization; the money actually goes into your account. So what the scam is, of course, is that eventually the guy will call and say, “I can’t actually make it. Could you refund the money?” Or, “Can you refund half the money because I can only make it for half the time?” So you send the money back overseas. I think it’s really important that we talk about internet scams that, while a lot of them are funny and sound really unbelievable, the truth is that, with just a little bit more tweaking, they’re very believable. Anybody can fall for them.
TG: Yes, and the ones that I read, they’re not asking for my credit card number or my social security number. Those are two of the indicators that someone is trying to steal your identity or somehow falsely get access to your bank account or your credit card. They’re not asking for that!
BS: No. They’ve figured out now enough people like me have written stories that warn people if someone asks for your credit card number, don’t give it to them. So they just take it, one step removed. That’s what’s sometimes called creating a “suckers list” in the business. They send out 10 million of those notes and maybe 95 people write back because they say, “You know what? It’s probably not real, but what the heck! What’s the risk! They didn’t ask for anything personal.” The exchange might then go on for a number of weeks before they actually pop the question. By then, they’ve probably worked on your defenses a bit. There are amazing scams involving online dating sites that are parallel to what you’re describing. People have whole relationships – I’ve seen people drag this on for six months. A guy overseas who romances a woman, sends her flowers and candy – of course purchased with stolen credit cards. And then finally asks her for a little bit of money to travel to see her. So, again, that’s just the same scam – the same core scam – but just drawn out a little bit more elaborately.
TG: I have a feeling that, since I got about four of these within four days of each other, that they’re all from the same list. These are all the same person or all the same groups that were trying to make me these “offers” who got my name off the same list at the same time.
BS: That’s very likely. So the fundamental question is how people find your email address. There are lots of ways they do that. The most common way is by scraping the internet. They send out these “spiders” that find every email imaginable on any web page anywhere. I have a feeling that you’re a fairly prominent public figure and there’s probably an email address for you somewhere. If this were a private email address, then you might start to ask yourself, “If I’ve only shared this with some friends and maybe a couple of companies, are those companies sharing the information?” I’m here to give you the sad news that companies share a lot of information that they take about us, even when their privacy policies say they won’t and their PR people say they don’t. Companies frequently sell our information. When they do, we can’t keep track of where it ends up anymore. So it might go from a legitimate company to maybe a not-so-legitimate company and then end up in the hands of a scammer.
TG: Bob Sullivan, it’s been great to talk with you. Thanks for all your explanations, analysis and advice!
BS: Thank you for the opportunity! I really care a lot about this subject. People should be treated fairly and we’re not doing that right now.