27 February 2009

If it sounds too good to be true, it
probably isn't.”
  - anonymous

A friend recently forwarded an email to me, figuring I'd be excited about the opportunity it presented--a work-from-home job that would pay me big bucks for simple data entry.

I hear terrible stories all the time about how cons and scams are perpetrated against unsuspecting and trusting people--and when it comes to computers, people are even MORE vulnerable, because the con artists can make what they do look so "official." These "work at home," "easy money," and "data entry for dollars" people are real bottom feeders, taking money from desperate, unemployed, and unskilled workers.

However, you don't have to be desperate, unemployed, or unskilled to fall prey to a scammer.

My sister's husband fell for a beautiful scam several years ago--he took out a $20,000 home equity loan to invest in a "business opportunity" that was going to make him fabulously rich. 

The plan was that he was supposed to get half a dozen microwave popcorn vending machines that he would then place in airports, bus terminals, waiting rooms, or other places where people are bored and in transit. He would also receive a huge shipment of pre-packaged microwave popcorn. All he'd have to do is rent the space, keep the machines full of popcorn, and then restock and collect money every week. The franchiser would take care of all the maintenance of the machines. My brother-in-law would have an exclusive territory, and full support from the franchiser for insurances and the like. They were going to "help" him, and at the end of his 3-year contract (with the prices locked in for the whole term), he'd have the option of buying the machines outright and striking it rich on his own.

Sounds good, right?

Wrong. After he paid the money, the "dance" began. He called daily, but it took more than another two months to ever reach his buddy who had sold him the franchise. Turned out, the machines weren't quite ready for delivery, anyway; there was a small problem with the microwave that caused the popcorn to catch fire. In the machine.

Next, my sister reported that a tractor-trailer truck arrived one morning, backed into her driveway, and the delivery guy asked where she'd like "the pallets." Turned out, even though the machines weren't ready, the popcorn was. She had to find room for 5,000 pounds of pre-packaged microwave popcorn. This displaces an area roughly the size of a 10x10x12 bedroom in a house. It took all day to move popcorn from the pallets on her driveway into a storage room in the downstairs of her house.

Two months later, my sister was distressed. No machines, no delivery schedule, a big run-around, and two tons of popcorn in the basement. Worse, field mice, chipmunks, and squirrels were finding their way in, and now she had a rodent problem. And no place to move the popcorn.

She went to Sears and bought a large storage shed (15x15x10) for about $2,000, and had it installed at the back of her yard (building permit=$250, installation=$150, and it took another full day). She also called her lawyer, and put wheels into motion to recover her $20,000. The lawyer's fee was $175/hour. The final call was to an exterminator, who inspected and then fixed the problem--for $300.

Shortly after this, my brother-in-law received a letter from the State Attorney General's office, naming him (and others) in a complaint against the franchise. As a listed "franchisee," he was included in the complaint. Seems that one of the defective machines was actually in the wild, and when some unsuspecting customer who reached into the slot to pick up her popcorn, she got a second-degree burn, instead of a treat.

The next call came from the lawyer, who told her that because she and my brother-in-law had accepted delivery of the popcorn, it was unfortunately considered an acceptance of the contract, and that he could not sue them for non-delivery or recovery of payment. He pointed out that the terms of acceptance were in the fine print on the back of the contract. 

She paid him $500 for having read the fine print.

She told my brother-in-law that she'd eat the loss, but the popcorn had to go. Because of its packaging characteristics, it couldn't even be used in a standard microwave oven. That's when they found out they couldn't just put it in the trash or a landfill themselves. They had to pay a special trash removal service to come and get it, and take it all away. They spent $600 for that.

The bottom line? $20,000 for the loan, $500 for the lawyer, $2,400 for the shed, $300 for the exterminator, $600 for the trash removal, and God only knows how many days of her time, dealing with untold aggravation. The cash outlay for this venture was at least $23,800. She also said she'd been so stressed while it was going on, she'd had to see a shrink. I don't include that, though, because the doc and the meds were covered by her health insurance.

And you wonder why I'm such a skeptic?

Excuse me. I'm short of cash. I have to go see if there are any envelopes that need stuffing.


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