The newspaper ad caught Lesa Wunderlich`s eye last October.
”Top salary, excellent benefits with telephone company,” it said. That seemed like a sweet dream to Wunderlich, 36, an office worker who was jobless and recovering from two medical operations.
But the ad was not placed by an employment agency. A firm was selling a $49 directory of telephone jobs. The directory proved to be of little use to Wunderlich, but its publisher held on to her money for months despite a promise to return her fee if she could not find a job.
After much complaining, she appears to have won her battle. But in the depth of an unrelenting recession, consumer advocates and state officials say there are far too many losers and far too many people taking advantage of their hard luck.
Lesa Wunderlich only had to wait for her money.
Others have lost money to firms promising local or overseas jobs that do not exist; they have paid upfront for loans or credit cards that never materialized; or they used needed cash for at-home work schemes that fell flat.
”We are seeing that white-collar crime pays, and it pays damn well,”
said Stuart Rado, a veteran consumer advocate in Miami. Victims usually are unemployed, less educated and often desperate because they have just lost a house or business, Rado and other experts said.
The biggest scams in the Chicago area and the U.S. have been advance-fee loan operations, according to the Better Business Bureau. By last fall, the bureau counted 5,000 complaints about such scams locally and 300,000 nationally, far exceeding any other complaint category.
At congressional hearings in December, U.S. Sen. Joseph Lieberman (D-Conn.) estimated that consumers and businesses were losing $1 million monthly to ”loan broker con-artists.” He since has called for federal legislation similar to a law Florida passed in July banning advance fees for loan brokers.
The firms lure consumers by promising easily approved loans or credit cards for those who have bad credit. Their fees range from $100 to $100,000 and they use 900-number telephone operations, allowing them to tack on added charges by the minute.
To avoid local officials, they operate like ”hit-and-run artists,”
stringing customers along and moving on as complaints pile up, said Diane Ward of the Council of Better Business Bureaus in Arlington, Va.
Because federal and most state laws are unclear about advance fees for loans, according to Lieberman and the council, these firms have stymied law enforcement efforts.
Indeed, some firms chased from Florida set up in Georgia, North Carolina, Minnesota, Texas and New York, consumer-protection officials said.
Like the advance-fee loan operations, a number of firms promising high pay for work done at home have been spurred by the recession.
The problem with their promises, said Ward, is that ”often there is no market for the product” or the companies reject the homemade items because of workmanship. ”So you wind up with the inventory,” she said.
Long before the recession, consumer groups battled scam employment guides. The flood of unemployment has only boosted demand from unsuspecting consumers for these guides.
The trouble, consumer groups say, is telling honest operations from the rest.
Often the high-priced information sold by firms can be obtained for nothing at libraries or in the local newspaper`s want ads, Ward said. In some cases, firms take applicants` money and never send them information.
Worse yet, they raise false hopes by directing workers toward jobs that do not exist, said Steve Bernas of Chicago`s Better Business Bureau. Many promise jobs in exotic settings such as the Middle East and Caribbean, he said.
But there are no jobs, especially not in the pay brackets cited by the firms, he said.
Dismayed by a number of firms touting jobs in Australia, for example, the Australian government contacted the Council of Better Business Bureaus recently, asking it to ”dispel the myth” of plentiful jobs, Ward said.
”They said their unemployment rate was the highest in years,” he said.
The firms survive by shifting locations or using long-distance phone numbers to elude local officials.
That was the case until recently in Colorado, where the state`s attorney general put out of business 14 so-called telemarketing firms involved in advance-fee loans, employment guides and credit-card scams. The state cited consumer-protection and public-nuisance laws.
Some of the firms had moved to Colorado from Arizona and Nevada, and Colorado Assistant Atty. Gen. Jack Wesoky suspects that those booted out of his state will move on. ”It seems like it`s just one more stop for them,” he said.
The firm that Lesa Wunderlich tangled with was based in Boulder, Colo.
After seeing its ad last fall in the Chicago Tribune, she called a local telephone number for Telephone Employment Information Center, which, according to the Better Business Bureau in Denver, was one of several trade names for Sceptor Inc.
Sceptor also operated until recently under names such as Airline Employment Information Center, Postal Information Center and Career Images, said Ron Hamblin of Denver`s Better Business Bureau.
In the last three years, Hamblin said, his office received numerous complaints, alleging problems in receiving refunds from the company. In a number of cases, however, the firm agreed to make some form of refund, he said.
Much to Wunderlich`s surprise, the firm billed her twice on her credit card for its services last fall, when she asked for the employment guide.
Bob Hinde, director of administrative services in suburban Des Plaines, handles consumer complaints and helped Wunderlich. The firm eventually agreed to return her money.
Ron Hoosen, listed as president of Sceptor, according to the Denver Better Business Bureau, said in a telephone interview that the money was sent to Wunderlich last week from an escrow account left behind by the firm.
He also said he only operates a telephone answering service in Boulder and contended that he has never had links to the employment centers.
”They are out of business,” he added, before hanging up.
