Tis the Season....To Advoid the Scammers!!READ

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7 honking, screaming, flashing rip-off red flags

http://moneycentral.msn.com/article...asp?special=msn


TV and print executives, asked to help keep a lid on deceptive advertising, say con artists are too slick. You decide.
By Liz Pulliam Weston

Pity the poor media moguls.

The chairman of the Federal Trade Commission last week tried to enlist cable channels, newspapers and magazines in the agency’s fight against deceptive advertising. Check out your options.
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Specifically FTC Chairman Timothy Muris wants “reputable publications” and broadcasters to stop running “obviously fraudulent” diet and health ads.

The publishers and broadcasters protested that they couldn’t possibly be expected to vet every ad that comes their way. Indeed, how are they to know there might be something fishy about a product that’s purported to melt 20 pounds off in a weekend without exercise or dieting, or a potion that promises to cure cancer, diabetes and dandruff all at once?

If it’s that hard to spot misleading diet and health ads, imagine how complicated it must be for the magnates to pinpoint deceptive financial advertising.

So I decided to help. Here’s my list of screaming red flags for media moguls and the financially challenged. I’m sure as soon as the moguls review this list, they will cleanse our airwaves, newspapers and magazines of all such scams:

“Profit by donating your car to charity!”
These ads imply that big tax write-offs await those who donate their junkers and hint that you can somehow be better off financially by giving a car away than you could be by selling it. That’s never the case, unless you’re willing to commit tax fraud by assigning some outrageously inflated value to your cast-off vehicle. And surely, these ads wouldn’t be encouraging that!

It’s also just an oversight, I’m sure, that car donation ads don’t mention the tax break isn’t available to most people. You have to be able to itemize your deductions to take a charitable write-off, and most taxpayers don’t have enough deductions to itemize.

The ads also gloss over how little money actually winds up in charitable hands -- usually less than 30% of the car’s value, and sometimes as little as $100. The rest goes to the for-profit companies and junkyards that process the cars -- and that pay for the advertising.

“Incorporate yourself now!”
Reduce your taxes, protect your assets, get new credit, hide money from your soon-to-be ex-spouse! And that's just the highlights of what I learned during two hours at one of these seminars.

Like most of you, I once thought only legitimate businesses could incorporate, and that not every business should because of the costs and legal considerations involved. But the promoters assured me I could get Uncle Sam to subsidize my personal expenses simply by running them through a corporation. Not only that, but I could hide assets from creditors and deceive credit-card companies I’d stiffed into giving me new accounts.

Unfortunately, I was too cheap to shell out the $2,000 for the how-to-do-it videos that revealed all the promoters’ secrets, so I’ll never know how to hypnotize IRS auditors into believing that my scam is somehow a real corporation.

“Get rich in your spare time!”
Media moguls know it’s entirely possible to “earn $200,000 a year working part-time!” Of course, you have to be a member of some corporate board to pull it off.

Or maybe I just don’t realize that promoters of various business franchise opportunities -- vending machines, pay phones, medical billing schemes or good old-fashioned work-at-home programs --are humanitarians motivated only by the goodness of their own hearts.

Instead of selfishly keeping these great opportunities to themselves, and making all the money, they want to ensure as many people as possible will benefit. That’s why they advertise -- and collect hefty upfront fees before sending you any of the details.

“Erase bad credit!”
No sooner does the FTC stamp out a flock of credit-repair clinics than a new batch scurries in to take their places. If a nuclear holocaust ever does take place, these folks will crawl out from the rocks right behind the cockroaches.

Anyone who knows anything about credit knows you can’t erase true, negative items from your credit report or invent a new credit history -- without committing fraud. There’s also nothing a credit-repair clinic can do for you that you can’t do for yourself.

But maybe, in the interests of the First Amendment, we need to provide people with the opportunity to pay $4,000 upfront to a fly-by-night outfit so they can discover that for themselves.

“Protect your credit by settling your debts!”
For every action there is an equal and opposite reaction, and nowhere is that more true than in the world of credit. Pay less than you owe, and your credit rating gets trashed.

Yet many debt-settlement companies insist they can suspend this rule of physics, just for you. These outfits promise that your creditors will be so happy to get paid -- even if it’s just pennies on the dollar -- that they won’t take their revenge on your credit report.

The people being told this usually have plenty of firsthand experience dealing with creditors, and seeing just how patient and kind-hearted they can be -- not. Yet they still fall for this scam.

“Guaranteed 16% returns!”
The actual investments change from season to season. For a while it was high-interest mortgages. Then it was viaticals -- investments in life-insurance policies taken out on people who were supposedly dying. “Prime bank notes” were popular for awhile there, too, despite the fact that such investments don’t exist.

Here’s a tip for the moguls: Check out the interest rate being paid on a one-year Treasury bill. That’s what a real guaranteed return looks like. Anything higher and the investor is taking some kind of risk. So you can be pretty sure that any advertiser promising double-digit “guaranteed” or “safe” returns on an investment in this market is operating a scam.

“Join us at the Airport Hotel!”
I have no idea why promoters of dubious schemes so love to push their ideas at airport hotel conference rooms. Fast getaway, maybe?

It would be terribly unfair to label every airport conference seminar a scam, of course.

Just as it would be awfully wrong to paint all media moguls as being disingenuous when it comes to spotting scams and refusing advertising dollars from con artists.

So I won’t. No matter how tempting that might be.

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money.