Check before you invest. It’s the simplest advice we can offer consumers looking to earn more than the microscopic percentages a savings account returns these days.
A 91-year-old Maine resident (we’ll call him Walter) had a run-in in 2008 while attempting to help his son start an Internet business. Had he checked with Maine’s Office of Securities, he might have taken a different course.
Something called Wise Financial Marketing Solutions, an authorized agent of something called iBridge Equity, advertised itself as helping people start home-based Web businesses. The firm assisted with advertising home loans and mortgages and helped the buyer set up a website.
Walter called Wise in February 2008 and was told the program would cost $19.95. He agreed and gave the operator his credit card number. Later his statement showed a charge for that amount to “WFMS,” and another for $495, an amount the caller had not authorized.
Walter called and informed Wise he had changed his mind and didn’t want the program. He was told it couldn’t be canceled but that another, better program was available which would generate $1,500 a month. Although Walter never agreed to accept, he found an additional charge of $5,200 on his next statement.
They went back and forth for several months before Wise returned about $3,000. Last month, Maine’s Office of Securities issued a cease-and-desist order telling Wise not to make its pitch to any other Maine residents. The company can request a hearing within 30 days of receiving the order; as of this writing, no such request had been made.
The order notes that Wise was “administratively dissolved” in March of last year. Whether the principals are doing business under another name is not known.
Besides its bait-and-switch tactic after the initial complaint, what did the company do wrong according to Maine law?:
ä Did not register as a business opportunity in Maine.
ä Did not provide a disclosure statement to our buyer.
ä Did not respond to the Office of Securities’ certified letter requesting a list of Maine residents who had purchased the company’s business opportunities.
ä Did not respond to an order to cease and desist until it complied with Maine law about such sales.
Judith Shaw, Maine’s securities administrator, said publicizing the cease-and-desist order probably won’t help Walter recover any additional money, since Wise is out of business. Shaw said the action should alert other consumers not to buy financial programs or services without thorough research.
“Contact our office first,” Shaw said, whenever people are thinking of buying such programs. The Office of Securities can determine quickly whether the sellers are registered in Maine; if not, buyers might be well-advised to look elsewhere.
The office is sponsoring a gathering Oct. 26 in Presque Isle called the “Campaign for Wise and Safe Investing.” The conference is designed to help seniors invest wisely and avoid scams. For information on the conference or other outreach activities of the Office of Securities, call Alyson Cummings toll-free at 877-624-8551. The office’s Web address is www.maine.gov/pfr/securities.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, P.O. Box 486, Brewer 04412, or go to http://necontact.wordpress.com.