$10 Price Tags On $5 Shirts

FAMILIAR SCENARIOS

In the following scenarios, the names have been changed to protect the duped:

Scenario 1: H.T. (for "Honest Trusting") Jones was the new second in command at YXW, Inc., and the boss was on vacation. He got a call from someone who identified himself as the supplier for YXW's office supplies. He sounded sincere and informed Jones that the toner cartridges for Jones's old office copier had been discontinued, but that the caller had saved a couple of cartridges if Jones wanted to put in an order. In addition, there would be a slight price break if the toner was ordered right now. Jones took a look at the supplies and figured that the extra cartridges would be a good idea. It seemed like a pretty cut-and-dried deal. Not!

Fortunately, H.T. mentioned the transaction to one of the oldtimers in the office, who said he had never heard of that particular office supplier. Jones's stomach turned over. He started doing some research. He tried to call back the number he had been given by the business. No such number! He tried to look up the business in the phone book. No such business! He called the YXW regional headquarters to get their supplier list. It was then that he found out that the price -- even with the reduction for immediate ordering -- was about three times the usual cost for that kind of cartridge, and it had not been discontinued. How did the caller know the model of H.T.'s office copier? How did he know the cartridge supply was low?

How did he know that the regular boss was out of the office and that H.T. was in charge? A word to the wise: A lot of unsecured messages can -- and do -- get intercepted on the Internet.

Even so, how the caller knew all of these things doesn't matter. What does matter is the lesson to be learned: Unless you know the caller and the business he or she is representing, have that person send you the information in writing so you can check it out.

Scenario 2: Betty loved to help. She didn't have a lot of money, but she was willing to help the charities when she could. The caller identified himself as a solicitor for a police guild organization sponsoring a circus. Would Betty like to buy a family ticket for $30? The proceeds from the sale of tickets would go to support the police organization. Even if she couldn't go, could they rely on her to buy the tickets and send them back so some underprivileged children could see the clowns?

Betty hated to turn down any police organization. In addition to letting down those poor children, her refusal might make her a marked woman and she might be thrown in jail the first time a taillight on her car burned out! What to do?

Well, Betty did the right thing. She asked what percentage of the money actually went to the police guild. She got a toll-free number to call and a hasty good-bye. It turned out that the police might have actually gotten about five dollars out of the $30. The rest would have gone to line the pockets of the calling party. Betty sent a $10 donation to the police guild and used the other $20 to line the pockets of her IRA.

Scenario 3: The other day I got a fax from a group claiming to be part of an organization trying to get computers into every home for purposes of education. If I called the number listed in the next four days, I could order a computer "with 2001 technology" for just $597, less than half of the suggested retail price of almost $1,300! So far, so good.

I looked at the specifications of the $1,300 computer. A red flag went up in my mind immediately when the speed of the computer chip was not mentioned. However, the computer was listed as a Pentium III, with "2001 technology" to make it the best-performing computer money could buy; the chip could be up to 1 GHz. Then I noticed that even though 128MB of RAM now has a cost of less than $20 retail, these "special" computers only had 64MB of RAM, the hard drive was small by today's standards, and the version of operating system was not listed.

Suddenly, this special opportunity was beginning to smell like old fish. To find out how bad it was, I called the number listed on the fax. The person who answered informed me that the computer in question had a 700MHz chip and ran on a Windows 98 operating system.

I picked up a current, well-known computer catalog. The first ad I turned to offered a well-known brand's 866MHz computer with twice as much RAM, a hard drive almost twice as large, a sound card that was a generation newer, and a more modern version of the Windows operating system. That computer was almost 24% faster and had nearly twice the capacity -- and the price was only $500, compared with the other computer's $597. A much better computer cost almost $100 less!

Today, that old cartoon might read, "Put the $1,300 price tag on the $300 computers and we'll mark them down to $597 when we send out the fax."

CAVEAT . . . WELL, YOU KNOW

Scam artists are taking advantage, especially when they invoke the power of words like "under privileged children" or "helping with the education of our country" or protective organizations like firemen and police. These have nearly become the rule rather than the exception.

When it comes to the surfing the Internet -- well, anyone who has been there and done that has been bombarded by banner ads and pop-up ads. Many, but not all, of these ads are for scams. Some seem to have a life of their own; every time you think you have one closed, another one pops up in its place. A good rule of thumb is that the harder it is to get rid of an ad, the more careful you should be in approaching those vendors. My point? There are a lot of ads from a lot of less than honorable and less than legitimate promoters.

A quick aside: If you are overwhelmed by pop-up ads and you can't close them fast enough, just hold down the ALT key (on a PC anyway) and repeatedly hit the F4 key. That or just shut down your browser. These are often the two quickest ways to get rid of the pop-ups. And while you're at it, try to remember what you clicked on that got the pop-ups started and avoid that site in the future.

It is a technologically sophisticated age we live in and the bad guys have gotten very, very sophisticated. Worse, these people seem to multiply like cockroaches. Beware of unsolicited phone calls and faxes. Often, they are from disreputable types looking for the three people out of 100 who will fall for anything. Don't be one of the three! Keep your wallet in your pocket until you've had a chance to do some research.

If this seems like a departure from my usual refrain of saving for retirement, it really isn't. Any money saved by reading this article should be viewed as "found money" and promptly deposited into your retirement IRA, and that's what I have championed since the beginning.

Bruce Faber may be reached at BFaber@Traders.com.