Better Business Bureau Tips for October

BBB Advises Debit Card Users to be on the Lookout for New Fees

The Better Business Bureau of Minnesota and North Dakota (BBB) is alerting consumers that they may be seeing new fees on their bank statements for using their debit cards.

Recent changes in banking laws capped the “swipe fee” that banks can charge retailers for debit transactions. The average fee was 44 cents per transaction, but the new law caps that fee at 21 cents. Banks estimate they will lose hundreds of millions of dollars a year in debit card transaction fees and are looking to recoup that money by modifying various checking account fees.

Some of the nation’s largest financial institutions already have announced a flat $3-$5 monthly fee for debit card use, although some may go to a per-transaction fee, particularly for infrequent users.

The BBB is advising consumers and business owners to be on the alert for notices from their financial institutions about changes in the terms of their accounts. “If you don’t understand a notice you receive or see a new fee on your account statement that you weren’t expecting, contact your financial institution and ask for an explanation,” said Dana Badgerow, president and CEO of the BBB.

Account holders may want to ask their bank if there are programs to waive the fee for accounts with a minimum balance. It also pays to shop around; some financial institutions may continue offering no-fee debit cards.

For more consumer information you can trust, visit www.bbb.org/us/bbb-news. 

Paying as you go: BBB Advice on the Layaway Process

The current economy has left many shoppers on a budget and searching for more affordable methods of paying for big-ticket items and holiday gifts. This holiday season, many families will be turning to alternate forms of payment to make ends meet. With many stores offering layaway services, the Better Business Bureau of Minnesota and North Dakota (BBB) is offering advice on how to use this payment plan in lieu of credit cards.

Once considered a dated, old-fashioned method of payment, layaway services are back in vogue, with many businesses now dusting off their layaway plans for today’s beleaguered consumers. Buying items on layaway is different from putting them on a credit card because the buyer isn’t charged interest on the purchase and can’t take the item home until it is paid off. When purchasing items on layaway, the buyer must typically make a down payment of 10 to 20 percent and pay any service or plan fees for the store to hold the item for them. The customer then typically has 30 to 90 days to make periodic payments to pay off the balance. Once it is paid off, the customer can take the items home.

“Layaway services can be a great alternative to using a credit card,” said Dana Badgerow, president and CEO of the BBB. “However, it’s extremely important that customers take note of the fine print and understand all the terms.”

As a complement to in-store layaway, some stores provide online layaway services for purchasing items through the retailer’s website. Additionally, third-party businesses have sprung up for the purpose of setting up layaway plans online between customers and retailers that don’t already have a layaway program. Customers make periodic payments to the third-party layaway service provider. Once the item is fully paid for, the third-party business buys the item from the retailer and ships it to the customer.

When buying items on layaway, the BBB advises consumers to get everything in writing and offers the following checklist of questions to ask:

• How much time do I have to pay off the item?

• When are the payments due?

• How much do I have to put down?

• Are there any storage or service plan fees?

• What happens if I miss a payment? Are there penalties? Does the item return to inventory?

• Can I get a refund or store credit if I no longer want the item after making a few payments?

• What happens if the item goes on sale after I’ve put it on layaway?

• Does the retailer or third-party layaway service have a good BBB rating?

For more advice on how to be a savvy consumer this holiday season, visit www.bbb.org/us/bbb-news.

Asphalt Scams Roll Through Unsuspecting Neighborhoods

It’s that time of year when you might get an unexpected knock on your door — especially if you have an older or a gravel driveway. The Better Business Bureau of Minnesota and North Dakota (BBB) warns consumers that asphalt scam artists are out and about trying to rustle up business before the weather turns colder. These operators often go door-to-door claiming they have extra asphalt from a nearby project and they’re willing to do asphalt work at a discounted price.

However, the quality of work is often sub-par and the final cost can sometimes be double – or more than double - the quoted price. Many times if there are problems with work performed, customers have only a phone number for the company and no other way to contact them if calls are not returned. The BBB also notes that many times in these cases contracts are not provided prior to the work being performed; all agreements are verbal.

To avoid asphalt scams, be sure you know who you’re dealing with. Research the company first at www.bbb.org. Also, watch for these common signs of an asphalt scam in your neighborhood:

• The claim the company has leftover asphalt from another job. Be aware of paving companies that approach your home, stating that they are “in the area” and have extra asphalt or concrete to repair your driveway for a minimal cost. Professional asphalt contractors know, with great accuracy, how much paving material is needed to complete a project. Rarely will they have leftover material.
• High pressure sales. Never hire someone on the spot. Trustworthy contractors provide a written estimate that will be valid for days or weeks. Ask for local references and verify that the contractor is in compliance, current and up-to-date with all local licensing, bonding and insuring requirements. If you feel that you are being subjected to high-pressure sales tactics, the BBB advises you to end the conversation and tell the company you’re not interested.
• No contract offered. Insist on a written contract specifying in detail the work to be performed and the agreed total price, not just price per square foot.
• Cash-only sales. Most reputable contractors take checks or credit cards and don’t require cash-only terms and will not demand payment in advance.
• Deals that seem too good to be true. If the quoted price seems very low, chances are the quality of work will also be quite low. Many times the company will quote a low price for their work and upon completion overcharge the customer.
• Unmarked trucks. Often the trucks they travel in are unmarked or they have an out-of-town address and phone number. A little research will reveal that they have no permanent address and the phone number is often an answering machine or answering service.

A professionally designed and properly constructed asphalt pavement will last for many years, and reputable contractors will stand behind their work. They will also know whether or not a permit could be required before work begins. Consumers are often safer dealing with a contractor who has roots in the community. Contact the BBB for a free Business Review on any company you are considering doing business with by visiting bbb.org.

BBB Advises Business Owners to Secure Their Online Banking

October is National Cyber Security Awareness Month and the Better Business Bureau of Minnesota and North Dakota (BBB) is advising business owners to protect their identity when using online banking.

Online banking is a great tool to help small businesses quickly and conveniently track financial information, as well as pay their bills and employees. However, data thieves are now targeting small business owners — and their employees — to get access to their online banking credentials and accounts so that they can make unauthorized money transfers. A small business can guard against increased liability on its financial transactions by using secure procedures to protect the credentials they use to access their bank accounts.

“In this day and age when practically everything is done on the Internet, it’s extremely important to take any and all necessary precautions,” said Dana Badgerow, president and CEO of the BBB. “Not only is your business’ financial data at risk when you don’t follow secure online banking procedures, your employees’ records could be compromised, too.”

The BBB recommends the following guidelines to help you protect the computers you use to access your bank accounts and your online access credentials.

Initiate a "dual control" payment process with your bank and employees. Ensure that all payments are initiated from your bank accounts only after the authorization of two employees. One employee will authorize the creation of the payment file and a second employee will be responsible for authorizing the release of the file. This process should be in place regardless of the type of payment being initiated-including checks, wire transfers, fund transfers, payroll files, ACH payments, etc.

Designate dedicated workstations. Restrict the use of certain workstations and laptops to be utilized solely for online banking and payments, if possible. For example, a workstation or laptop used for online banking should not be used for web browsing or social networking.

Use robust authentication methods and reliable vendors. Make sure your financial service providers allow for "multi-factor authentication." This means that you need more than just a username and password to access your account.

Update virus protection and security software. Ensure that all anti-spyware, anti-malware, and security software and mechanisms are robust and up-to-date for all computer workstations and laptops used for online banking and payments. Implement a process to periodically confirm they remain up-to-date. Security patches are often available via automatic updates.

Reconcile accounts daily. Monitor and reconcile accounts daily against authorized credits and withdrawals. If you see any kind of unexpected activity on your account, notify your financial institution immediately.

For more tips on data security, visit www.bbb.org/data-security.

The mission of the Better Business Bureau is to be a leader in building marketplace trust by promoting, through self-regulation, the highest standards of business ethics and conduct, and to instill confidence in responsible businesses through programs of education and action that inform, assist and protect the general public. Our hours of operation are 8 a.m. to 5 p.m. Monday through Friday. Contact the BBB at www.bbb.org or 651-699-1111, toll-free at 1-800-646-6222.