Reports of scams and swindles usually jump during a crummy economy. Last year in St. Louis seemed to be no exception.
Let's review.
Area companies selling extended auto-service contracts continued to rack up consumer complaints, and the March 1 bankruptcy of Wentzville-based US Fidelis shed light on just how much money these outfits can make.
US Fidelis collapsed in late 2009 amid allegations of widespread consumer fraud, and the company continued to make news after its owners were sued last year for stripping more than $101 million from it at the expense of creditors and hundreds of thousands of customers.
Last year also brought the first signs that prosecutors are looking at the service-contract industry, much of which is based in our area.
The independent management team that has run US Fidelis since it filed for bankruptcy revealed it was turning corporate records over to federal prosecutors; and Stephen Wigginton, U.S. attorney for Illinois' southern district, on Dec. 13 filed the first-ever felony charges relating to the sale of the so-called "extended warranties."
(The defendants — two principals at a Florida service-contract firm — pleaded guilty to charges relating to mail fraud and are scheduled to be sentenced in March.)
Yet, the area's biggest consumer-related criminal case didn't involve service contracts.
A 50-count indictment made public in November accuses the top bosses at Clayton-based National Prearranged Services of embezzling money that was supposed to be used to pay funeral expenses for about 150,000 consumers. The men allegedly diverted as much as $600 million and spent it on investments and their own compensation.
Last year, this column tried to cover a lot of ground. Not every rip-off — or alleged one — involved multimillion dollar operations like US Fidelis and National Prearranged. Here are some other highlights from 2010:
• Worst continuing-education program: I wrote about the St. Louis-based American Sports and Fitness Association, which certifies personal trainers, nutritionists and the like. To get the association's certification, aspiring trainers must take an online test. It's pretty tough — at least the first time. After that, the association's website tells you which questions you got wrong and either gives the right answer or offers obvious hints. Ace the same test on your second try and you can buy your certification. Lesson for consumers: Your personal trainer might not be as qualified as his framed certification suggests.
• Why you don't buy from door-to-door peddlers: In February, I wrote about vacuum salesman Harvey Caylor. Customers accused him of tricking them into paying as much as $1,700 for "new" vacuums that were used and sometimes broken. Caylor prefers Kirby-brand vacuums, but the Kirby Co. wants nothing to do with him. It has warned law-enforcement officials here that Caylor is "defrauding Missourians" and targets the elderly. The Better Business Bureau says Caylor's company — Miracle Dry — is a scam. Caylor told me complaining consumers simply regret buying expensive vacuums.
• Biggest whoopsie of the year: The Carpenters District Council of Greater St. Louis and Vicinity mailed pension updates to more than 24,000 beneficiaries. The problem was Social Security numbers of the recipients were printed on the outside of the envelopes. I wrote about the accidental disclosure after union members complained that identity thieves might exploit the data dump.
• Most unnecessary home maintenance: There's no reason to clean your house's ventilation ducts unless they are visibly contaminated or clogged. The suggestion from the U.S. Environmental Protection Agency didn't prevent several consumers from hiring a Chicago-area duct cleaning company that started working our area. I wrote about consumers who said the company — Schaumburg-based Air Duct Cleaning Pros — advertises inexpensive cleaning specials, then intimidates homeowners into spending more.
• Best unsung hero: Nick Kirkou, owner of Crestwood-based Ontime Express courier service. I wrote about how he intervened on behalf of a 90-year-old woman to whom he was hired to deliver sales contracts. She thought she had to sign the documents to start getting paid for a new work-from-home job. Kirkou discovered the Arizona company that hired him was fast-talking the lady in order to get authorization to bill $15,000 to her credit card for the purchase of e-mail marketing leads. He made sure she didn't sign anything, and he reported the scam to the police.
