Better Business Bureau Tips: Scammer Tactics, Business Insurance

Store Your Belongings with Confidence

In 2011, the Better Business Bureau (BBB) received over 1,000 complaints against storage units. Many of the complaints filed were from disgruntled consumers who were never able to access their storage units after paying a deposit, had goods damaged in the storage units, and even consumers that had their belongings taken from the storage unit. While most storage facilities are reputable, the BBB of Minnesota and North Dakota recommends checking out the business carefully before placing your belongings in storage.

“Storage units are very handy for many consumers and businesses,” said Dana Badgerow, President and CEO of the BBB. “However, consumers need to be aware of their contractual obligations and the possibility their possessions could be lost if they fall behind on payments and their storage unit is declared abandoned.”

Be sure to understand these seven major factors before selecting a temporary storage facility:

Cost. Obtain written cost estimates from at least three facilities. Most will insist on inspecting your items before offering an estimate. Costs to consider include the monthly rental fee (usually there’s both a minimum monthly storage charge and a minimum number of months’ storage); storage preparation, padding, packing or transportation fees; and fees for extra options (electricity, pest control, insurance) you may choose. Be clear on when the fees are to be paid and the duration of the contract.

Size. What size storage units are available? Is there a maximum weight limit for unit contents? Can you jam-pack the entire unit from floor to ceiling?

Climate. Consider the general climate and whether your belongings might be subject to mold or water damage. If so, you may want to consider an environmentally-controlled unit.

Insurance. Make sure your items are insured from theft, fire or other damage. The facility may provide basic insurance or you can choose to purchase insurance from an alternate source. Some homeowners’ policies cover self-storage; check with your insurance agent to be sure belongings in storage are covered.

Safety. You will need a heavy-duty, secure lock protecting your storage unit. Ask if the facility has surveillance cameras on the property and if a system is in place to restrict access by strangers. Ask for contact information to reach someone at the facility in case of an emergency, during and after business hours.

Contract. Get everything in writing – the size and location of the unit, extra options that you have selected, termination regulations, insurance coverage and payment terms. Make sure the facility has several different ways to get in touch with you (home phone, cell phone, email, etc.) in case there is ever a problem with your unit or your payment.

Access. What are the hours and are there any charges for accessing your unit? Is there adequate room for parking and is the distance from your car/truck to the rental unit acceptable? Does the facility offer dollies or hand trucks to help you move your belongings in and out? Make sure you can move your possessions with reasonable ease.

Lastly, pay attention to your monthly bill or credit card statement to make sure you are up-to-date on your payments. You don’t want your storage unit to be labeled “abandoned” and your possessions to be put up for auction. Auctioning off the contents of the unit is legal so long as the renter is provided with proper notice. By auctioning the contents of abandoned storage units, facilities are able to recoup lost rent and clear out the unit for a new tenant.

For more tips you can trust, visit www.bbb.org/us/Consumer-Tips/. 

Watch Out: Subversive Scammer Tactics

Investment scams are getting more sophisticated and scammers are quite talented at deceiving people, resulting in more victims. Ever wonder how scammers do what they do? The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation, along with the Better Business Bureau of Minnesota and North Dakota (BBB), provide some interesting theories on the science behind scams. Here are some of the most common tactics:

The "Phantom Riches" Tactic— dangles the prospect of wealth, enticing you with something you want but can't have. "These gas wells are guaranteed to produce $6,800 a month in income."

The "Source Credibility" Tactic— tries to build credibility by claiming to be with a reputable firm or to have a special credential or experience. "Believe me, as a senior vice president of XYZ Firm, I would never sell an investment that doesn't produce."

The "Social Consensus" Tactic— leads you to believe that other savvy investors have already invested. "This is how ___ got his start. I know it's a lot of money, but I'm in, and so is the rest of my family. It's worth every dime!"

The "Reciprocity" Tactic— offers to do a small favor for you in return for a big favor. "I'll give you a break on my commission if you buy now, half off!"

The "Scarcity" Tactic— creates a false sense of urgency by claiming limited supply. "There are only two units left, so I'd sign today if I were you."

Never rush when making any purchasing decision, and don’t be afraid to say no and walk away. For more information on avoiding scams, visithttp://www.bbb.org/us/scam-source/.

The mission of the Better Business Bureau is to be the 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 bbb.org or 651-699-1111, toll-free at 1-800-646-6222. Visit our Centennial website at bbbis100.org.

Ensure Your Business’ Insurance

Smart business owners have the proper insurance to protect their company and its assets. But what happens if your insurance company goes out of business? What does that mean for your business? What are the liabilities? The Better Business Bureau of Minnesota and North Dakota (BBB) offers answers to the following frequently asked questions on what happens to a policy-holder’s coverage if their insurance company closes:

What happens when an insurance company becomes financially troubled, fails and is no longer able to uphold its end of the agreement? That's when the state property and casualty guaranty fund system - a system few know much about - steps in, according to The National Conference of Insurance Guaranty Funds (NCIGF). Put simply, guaranty funds provide an essential safety net for policyholders, one that meets the needs of those least able to deal with losses should their insurance company fail.

Will I still have insurance coverage? Insurance guaranty associations have been established in every state and are designed to protect policy-holders if their insurance company becomes insolvent. An insurance company must be a member of the guaranty association for every state in which it does business. If a company becomes insolvent, the insurance guaranty association ensures continuation of coverage, either by taking on policies directly or by transferring the policies to a financially stable insurer.

What about any claims? The laws vary from state to state. However, most life and health guaranty associations provide coverage at limits of at least $300,000 for life insurance death benefits, $100,000 for life insurance cash surrender values, $100,000 for annuity withdrawal or payment values, and $100,000 for health insurance benefits, according to NCIGF.

Most property/casualty guaranty associations provide coverage on a per-claim basis for personal injury and property damages up to $300,000 and provide full benefit coverage for workers’ compensation benefits.

Where does that money come from to cover claims? If an insurance company goes bankrupt, any amount of coverage that cannot be attained from the company’s liquidation is borne by other insurers in the state according to the amount in premiums those insurers earn from that state.

How can I be sure my insurance company is safe? There’s no way to be absolutely sure that an insurance company is financially secure. To help business owners evaluate their insurer, there are several businesses that rate insurance companies on their fiscal strength and creditworthiness, including Moody's, Standard and Poor's and A.M. Best. Business owners can also confirm with their state insurance department that the company is licensed to do business in the state.

For more BBB advice on insurance or other financial planning issues, visit www.bbb.org.

The mission of the Better Business Bureau is to be the 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 bbb.org or 651-699-1111, toll-free at 1-800-646-6222. Visit our Centennial website at bbbis100.org.