BBB: Be Careful with Authorizations Holds

Don’t Let an “Authorization Hold” Hold You Hostage  

Credit is a convenience; it allows you to charge a meal on your credit card, pay for an appliance with an installment plan, or take out a loan to buy a house. However, when dining out at a fancy restaurant or spending the night away in a hotel, the Better Business Bureau of Minnesota and North Dakota (BBB) says it’s important to take notice of what the banking industry calls an “authorization hold.” 

Here’s how it works: Let’s say your restaurant bill comes to $100 and you give the server your credit card. When they run it through, they put an authorization hold on your account for $120, assuming you’re going to add a nice tip to the bill. But you leave the tip in cash on the table instead. Still, your bank or credit card company “holds” that $120 for a couple of days until the actual amount of your charge is processed…and that means you don’t have access to that $20. If you’re close to your credit limit, it could mean a purchase is declined. If you used a debit card, it could mean a bounced check and overdrafts fees.

Now imagine it’s a hotel stay. You’ve checked in and given a credit card at the front desk. They put an authorization hold on your card for what they think your total bill will be (room, taxes, and incidental charges). If you are staying for several nights, this could amount to a lot of money that you no longer have access to; and when you’re traveling, that can be a huge problem.

Credit card processors discourage vendors from doing these kinds of holds, but they are perfectly legitimate as long as the vendor notifies customers of the practice. BBB advises consumers to keep tabs on their credit and bank accounts online, especially when traveling, and read the fine print on hotel agreements. When dining, pay for your check and tip together with either credit or cash, but not both. And whenever possible, keep a “cushion” of available funds on credit cards by paying off the balance regularly. 
 

Romance is in the Air – But Watch out for…Catfish? 

February is a month for romance, but anytime is an opportune time for scammers to take advantage of those looking for love online. The Better Business Bureau of Minnesota and North Dakota is advising people to proceed with caution before letting their hearts – and their money – get taken.

Perhaps you’ve seen the documentary “Catfish,” or the MTV reality show of the same name. In this usage, a “catfish” is someone who creates a fictional identity - pretending to be someone they’re not - using Facebook or other social media outlets to pursue deceptive online romances.

Relationship scams can happen to anyone. You meet a great person online, everything seems to be going great but you aren't able to meet in person for some reason (distance, military deployment, work travel, etc.). Suddenly your online love interest has an emergency and asks you to wire money. If you dip into your own pockets, he or she may continue to find more reasons to ask for money from you - or they may simply vanish. 

The BBB and Western Union have partnered to offer consumers tips on how to avoid scams of this nature: 

Be on your guard. Don’t even consider sending money to people you have yet to meet in person. And be careful about loaning money to people you have met. You could find yourself opening a door that’s difficult to close. If you’re using an online dating service, be especially wary of anyone who asks you to leave the dating website to continue your conversation through email or instant messaging, as this allows fraudsters to carry out their scheme without the dating site having a record of your encounter. 

Be cautious if someone claims to be local but is currently out of the country. These individuals could be fraudsters operating from overseas, making it more difficult for authorities to track them down. It’s always better to be safe than sorry. 

Keep your feet on the ground. Sometimes fraudsters will claim to be head over heels from the word go. Other times they lead their victims on for awhile. Either way, no matter how much an online relationship feels like the real thing, you should be suspicious if someone starts asking for information like credit card, bank or government ID numbers, or asks you to or wire funds.

BBB Tips on Carpet Cleaning 

When contacting a carpet cleaning company, it’s always important to ask questions about the price of the service and specifically what is included in the price for that service. Many of the complaints the Better Business Bureau of Minnesota and North Dakota (BBB) receives against carpet cleaners involve situations where a company advertises they will clean two rooms for a given price and then the final bill is much higher than the advertised price. 

To avoid potential headaches and disputes, the BBB advises the following steps customers should take when hiring a carpet cleaner.

• Be sure to check out businesses with the Better Business Bureau at 1-800-646-6222or bbb.org.
• Ask about potential changes that could affect the final cost of the service upfront.
• If you have a new stain, you can call your carpet cleaning company for advice before you try do-it-yourself methods or over the counter products. Feel free to ask any questions you may have about the carpet cleaning process. 
• Review your carpet warranty before you have professional cleaning work performed.  Be advised that certain types of cleaning products and equipment may void your warranty.
• Carpets will look better and last longer if you have them cleaned regularly.  Carpet manufacturers recommend annual cleaning. A reputable cleaning company will provide excellent results.
• Remember that price does matter.  While no one wants to be overcharged, extremely low prices should also set off warning signals. Companies advertising very low prices may be practicing ‘bait and switch’ advertising.  Once the workers arrive in your home, they quickly push a more expensive treatment for the cleaning or refuse to conduct the cleaning at the price advertised. Ask exactly what is included in the price and be sure to get it in writing before the crew begins any work. 
• Ask your technician ahead of time what they do or do not move or if there are any extra charges for this service.
• Try to be at home the first time you work with a new carpet cleaning company.  Be sure to identify trouble spots before they arrive and point those out to your technician.
• If a business offers a service or satisfaction guarantee, be sure to ask them to explain how they define “guarantee”.
• If a spot reappears after cleaning or there is any other problem with the cleaning, you should call within two weeks and a reputable company will address the problem.
• Ask the cleaning company if they sub-contract any work.   If they do, ask for the name of the company conducting the work in your home so you have an opportunity to research that company before you agree to the service.
• Ask family, friends and neighbors for personal recommendations.

BBB Small Business Advice: Your Company’s Identity at Risk

Everyone is aware of the threat of personal identity theft, but identity thieves are now also preying on businesses. This scam has evolved from targeting individuals, and now the most sophisticated identity thieves are pursuing even bigger potential payoffs by targeting businesses. The Better Business Bureau of Minnesota and North Dakota (BBB) is offering advice on how to avoid the different forms of business ID theft, as well as guidance for small business owners if their company’s identity has been compromised.

“We’ve seen this scam in our area in recent months,” said Dana Badgerow, president and CEO of the BBB of Minnesota and North Dakota. “Small businesses are often targets because they may not be as well-equipped to protect sensitive information as larger companies that can afford to hire dedicated staff to ensure oversight and security.” 

ID theft aimed at stealing directly from a business isn’t the only type of commercial identity theft. Another form of business identity theft happens when a scammer poses as the company in order to scam unsuspecting consumers. The following are other examples of business identity theft schemes identified by the BBB.

Defrauding the Business
Crafty ID thieves can do a lot of damage with a company’s Employer Identification Number, including gaining access to bank and credit card accounts or opening up new lines of credit under the business’s name. Business identity theft can also be perpetrated by scammers - and sometimes even employees - who purchase items in the company’s name either for personal use or to resell.

Phishing emails
Phishing emails are a common example of business ID theft, and are usually designed to defraud consumers. Phishing emails are spam disguised as messages from a business or government agency, and are used to coerce sensitive financial information from the recipient or to install malware and viruses onto recipients’ computers.

Name Hijacking
Criminals will also often hijack a company’s name and reputation to commit consumer fraud, such as advance fee loan or lottery scams. Scammers use and leverage the company’s identity and good reputation to create a trustworthy façade behind which they operate their scam. In the BBB’s experience, business owners are usually alerted to the identity theft by angry consumers who were ripped off by the scammers or by a series of unusual calls from consumers inquiring about the validity of checks the company supposedly issued.

Here are some steps the BBB recommends small business owners take to mitigate harm if their business identity has been stolen or hijacked. 

• Report it to the Authorities
  Business owners need to immediately contact their local police department if they believe the company’s identity has been compromised. In some cases where bank or credit accounts have been compromised, law enforcement investigators may want the accounts to remain open in order to track down the thieves. If scammers are using the company’s name on phishing emails or with phony websites, business owners can also contact the FBI’s Internet Crime Complaint Center at www.ic3.gov.
• Alert Bank and Credit Card Companies
  If scammers are accessing the business’s credit or bank accounts, forging company checks or opening up new lines of credit, it’s important for a small business owner to notify financial institutions involved in order to limit any further unauthorized transactions. Before closing any accounts, the business owners will want to receive the go-ahead from law enforcement so as not to jeopardize ongoing investigations.
• Let the Public Know
  If the company’s identity has been stolen and is being used to defraud customers, warning the public is a top priority to prevent additional people from becoming victims. An easy first step is to prominently post a warning on the company’s website briefly explaining the threat. Depending on the scope of the scam, business owners might also want to consider alerting media or making direct contact with customers via phone or an email blast. Businesses can also contact their BBB to seek assistance in getting information out to consumers quickly via their BBB Business Review.

For additional small business advice on preventing ID theft, visit http://www.bbb.org/data-security/spotting-identity-theft/overview/. 

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. We are open 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.