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How to get refunds from bad gurus by John T. Reed 1 Copyright 2001, 2002, 2003 by John T. Reed I frequently get email from readers who paid a bad guru for some product or service and want a refund. Lately, I have received increasing reports of gurus charging unauthorized purchase to credit cards they previously used for authorized purchases. I suspect the guru business has fallen on hard times and the bad gurus are pressuring their commissioned phone salespeople so much that they are now resorting to outright credit-card theft. There is no sure way to get refunds, but I am going to make some suggestions here. I hope that readers will provide additional ideas from their experience. Ask the guru Guru John Beck is the only good guru I know who does TV infomercials. He says that people can probably get a lot more refunds from gurus if they just ask and do it in a way that is appropriate. No ranting and raving. Just get the facts and make a straightforward request. As a general rule, you must do that before you ask anyone else for help. Document everything. Find and read the refund policy Some guru victims have told me that their guru buried the refund policy deep in the box of stuff they received"”and that it had early deadlines that had passed by the time they learned about them. When you receive the products your ordered from a guru, examine the contents of the box to find the refund policy, if any. If there is one, and you want a refund, make sure you comply with it if it' reasonable. Some refund policies are ridiculous, like making you submit offers to buy real estate and such to qualify. Tape record any phone pitches You can buy a cheap, simple device for tape recording phone calls at Radio Shack. That' where I got mine. It' also where Linda Tripp got hers. However, do not follow Linda Tripp' example of taping Monica Lewinsky over the phone without Monica' permission in a state where that is illegal"”like the state where Linda did it: Maryland. I only use the device when I am in litigation because I found that many lawyers say things on the phone, then deny they said them later. I always ask the other person permission before I turn it on. Then I ask them their name, today' date, and again for permission while it is running. When I interviewed Nothing Down author Bob Allen, I also had my wife on the other phone taking notes. I told him she was there. You may not have to do that. Check your local laws and the recording section in the front of your phone book. Since it is now typical for bad gurus to follow up your initial purchase with multiple boiler room calls pressuring you to buy expensive products or services, you will have plenty of opportunities to record them or have a second person take down what they say. One of the ways these guys get away with it so much is they do everything verbally, hardly anything in writing. Then, when confronted, they deny the lies they used to sell you the product or service. By taping them, you eliminate that escape route. Tape record in-person pitches You should also tape record the sales pitch at the free come-on seminar. Fraudulent gurus typically prohibit that. Ignore them. Tape recording copyrighted material is wrong and illegal. But a sales pitch is not copyrighted material. Legitimate businesses would be delighted for anyone to reproduce their advertising. Sit near a public address speaker in the meeting room. Pay by credit card Your credit-card company will often give you a refund whether the guru likes it or not. There is typically a deadline for doing that. Look under the "disputes" section on the back of your monthly credit card bill. It tells you the address where you send your complaint as well as what to include. Mostly, they just want you to tell them which item on your bill you are disputing and why. Of course, if the guru in question is so crooked that he starts making unauthorized use of the card, this is not such a hot idea. This seems to be happening an

amazing amount lately. I surmise it' happening because the telephone boiler room salesmen are on straight commission"”and because no one is closely supervising them integritywise. Typically, the guru in question either knows what' going on or doesn"t want to know. Often, the claim innocence on the grounds that the boiler room is a separate company. But there are a number of restrictions on this. Here are some of the problems from Jane Bryant Quinn' book Making the Most of Your Money: "¢ Disputing credit card purchases only works for consumer goods and services. If you are a business, there is no ability to dispute. Some gurus sell products to consumers, but write the sale up as if you are a business or sell you a product that purportedly sets you up in your own business. This prevents you from disputing any credit card charge you are unhappy about. "¢ Item must cost more than $50. (I was not aware of that. Read the fine print in your credit-card agreement.) "¢ You must have bought it within 100 miles of your home address or within your home state. (I was not aware of that either. More fine print. Many gurus have you travel to another state to buy their products and services. Now we know one of the reasons.) "¢ You must dispute before you pay for the item. After the money is in the bad guy' bank account, the bank cannot get it back. You have to sue. "¢ Your claim must be in writing, not by phone. You probably have not read the fine print in your credit-card agreement. Guess who has? The bad gurus. They are taking advantage of your ignorance of the rules by structuring transactions to strip you of the protections you take for granted so they can take advantage of you. Federal Trade Commission The Federal Trade Commission (https://www.ftc.gov/) is the agency in charge of consumer protection (202-326-3650). You should report the problem to them, but they are busy, underfunded, etc. Click here to file a complaint with the FTC. You can also look at the map at https://www.ftc.gov/ro/romap2.htm to see what FTC region you are in. Click on your state and you will get the mailing address and phone numbers of the regional office for your region. Consumer.gov This is a consumer Web site run by the federal government. https://www.consumer.gov/ National Fraud Information Center The National Fraud Information Center is at https://www.fraud.org/. National White Collar Crime Center 800-221-4424 White Collar Crime 101 800-440-2261 Opt Out Request Line This gets you taken off mailing lists and telephone sales lists. 888-567-8688 Direct Marketing Association This gets you taken off mailing lists and telephone sales lists. 202-955-5030 American Association of Retired Persons Nothing-down gurus often tell their followers to target seniors because they have lots of equity in their homes. The unspoken reason is that seniors are often easier to take advantage of. Because senior citizens are often the targets of scammers, this association has developed programs to help seniors avoid becoming victims and possibly recoup losses. Contact the Attorney General for your state Got to a search engine like Google and type in the name of your state and the phrase attorney general. That will most likely give you the attorney general' Web site where you will find instructions on how to file a complaint. For example, the NC attorney general consumer complaint Web page is https://www.jus.state.nc.us/cpframe.htm. Contact the Attorney General for the bad guru' state Got to a search engine like Google and type in the name of the bad guru' state and the phrase attorney general. That will most likely give you his or her attorney general' Web site where you will find instructions on how to file a complaint. Small claims court I mistakenly thought that you generally could not sue a guy from another state in your local small claims court. I thought if it is convenient to sue him in his home area or in an area where he has property, that can work quite well. However, on 4/30/02, I heard from a reader who sued Carleton Sheets for $2,500 in small claims court. Sheets is in Florida. The customer in question was in California. "How can you get jurisdiction over him for a California Small Claims Court?" I asked. He said he searched for Sheets on the Internet and found that the parent company had a person designated to receive service of summonses in California. California corporations and certain others doing business in California are required to designate a local person for that purpose. So he served his summons on that company in California and subsequently received a settlement offer of $2,000 from Sheets" representatives. If you want to sue a guru in small claims court, do not assume you have to be in the same state. Do a diligent search for him or his company in your state. If he owns property or rents space or anything else there, you can probably sue him in small claims court and collect if you win. Check: "¢ phone books "¢ Google search engine "¢ your state' corporate registrations "¢ fictitious business name registrations in counties near you "¢ Internet address finders "¢ County assessor' records "¢ County recorder' offices The late Marc Goodfriend once made a speech for a guru who then failed to pay him. He had a cute young woman approach him after another seminar saying excitedly, "Are you So-and-so?" When he beamed "Yes," she handed him a summons. Goodfriend got his money. Mark Haroldsen once reprinted something I had written and paid me less than I told him I wanted when he had called to ask permission. I billed him for the difference. He ignored me. So I made sure I told everyone I could about it. Eventually, I guess he got tired to hearing about it and paid me. Under certain circumstances, you can "till tap" a bad guru. That is, you get a court order and go to one of his paid seminars. The sheriff confiscates the money he is collecting at his seminar and gives you the amount on the order. Sounds like fun. I was contemplating it regarding Haroldsen when he paid. Use of small claims court against you There are a bunch of complaints on the Internet about a leasing company. Many claim the company somehow managed to get a judgment against them in Massachusetts, then used that judgment to confiscate their bank account, car, child' bank account, and so forth. Some claimed they never got notice of the trial in Massachusetts, which they lost by not showing up. This made no sense to me. The U.S. Constitution requires due process, which, among other things, means that a person or company who is suing you must tell you about the suit. When I investigated the Massachusetts example, I was told it works something like this. Consumers, including single moms and retired people, are pitched some sort of home business idea, like your own Web site. As part of the pitch, they are told they have to lease software that costs thousands of dollars and sign up for credit-card-processing services. I have a Web site, as you can see. To have a Web site you need only pay modest amounts for Web access (e.g., $23.90 a month to AOL) and Web hosting (maybe $25 a year). Most Internet Service Providers throw in free Web hosting as part of giving you email and Web browsing service. A machine to process credit cards costs about $200 to $400 and your local bank will provide the processing service for a small percentage and perhaps a transaction cost. For example, Costco provides Merchant Credit Card Processing through Nova Information Systems for 2.01% + 28¢ per transaction. The only software I use is a Web page writing program that cost less than $100. Nowadays, I get the impression that various common word processing and page layout programs include Web page creation as one of their features. In other words, if you have Internet access from your home, you probably already have a Web site that you are not using. And you probably have all the software you need in your normal programs. The leasing company does not lease software or card processing services, but they provide financing for the lease. Roughly speaking, they only loan you the money in the form of a lease. Businesses sometimes set up shell companies to take the legal heat, but the company that is supposedly only financing is actually getting all the profits. I wrote in my newsletter about some banks that claimed to be mere lenders in slum properties, but investigation revealed that the "owners" of the buildings were maintenance men and such who were put in the position of "owner" by the lenders. These folks were owners on paper only. Their compensation bore more resemblance to a salary than profit. They had invested nothing in the property. And virtually all the profits were going to the "lenders" in the form of "interest" that went up and down according to whether the property had a good month. Real interest payments do not fluctuate according to the performance of the assets. They are set as a percentage of the amount owed. Courts do not like efforts to mislead them and apply legal doctrines like "substance over form" and the "step transaction" doctrine (interim steps get ignored and the court just looks at where everyone started and ended) to treat the arrangement as what it really is, rather than what it claims to be. From time to time, fancy schmancy Wall Street firms and big banks are exposed as being involved in sleazy scams like predatory lending. They always do it through some shell company you never heard of. When they get caught, they protest, "We just provided the financing." When finance or leasing companies play this game, the shell companies frequently go out of business. Typically, they accumulate a high number of Better Business Bureau complaints and lawsuits, then simply go out of business, often reopening across the street with a new name, but with the same owners, managers, employees, and business practices. And guess who their financing or leasing company is? The same company. Reputable financing or leasing companies would not keep doing business with a product or service company that was generating an inordinate number of legitimate complaints. Nor would they do business with a company that was founded and run by guys who just ran a similar business into the ground.

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