Predators who wish to shovel money from your pocket to theirs are everywhere. Some are using outright illegal scams, such as the letter informing you of the $10M you have inherited from a long lost relative in Nigeria. Others use means that are not technically illegal but are very shady.
The following are two such shady deals that are happening to me as I write this article. I am holding the letters they each sent me. One is attacking my online business and is hoping I’m too busy to notice their ploy. The other is after my wife’s inheritance.
The Annual Report Scam
Every LLC in Oregon files an annual report, accompanied by a $100 annual fee to the State. This report is basic information about the business to verify they have the current owner and address, to make sure the business is still in operation, and to collect a small tax. This report is due on the anniversary of the LLC’s initial filing. Each year I receive this form in the first part of December, and it is due near the end of January.
The normal process is for the state to send the form 50 days ahead of the due date, I make any changes and return it with the $100 fee. It is a very simple process. Until the scammer steps in.
There is a shady company in Michigan, who uses initials for their name and has nothing to do with the Oregon State Government, who steps in to get a cut of the action.
In September, the Michigan company sent me a very official looking document that resembles the one the state sends me in December. It is all filled in. The bold print says, “Please Respond By: October 13th For Timely Fulfillment.”
They hope I’m so busy that I look at the information filled in the boxes, which is the same as last year’s information, make any corrections, sign it and send them the listed total fee. One more item checked off my list.
The first year I received this letter, I was about to send it in but paused because I knew the fee for the annual report should be $100, but this form was asking for $195. I also noticed the check was not to be made out to the Secretary of State. That made me stop and look closer. When I carefully read all the fine print, I discovered the following:
*This company is a third-party private entity.
*They will assist me in filing the annual report for a fee.
*They are not a government agency.
*They do not have a contract with Oregon to provide this service.
*They are charging me $95 to send in the form and pay my $100 for me.
*I make the check out to them and mail it to an address near our Oregon state capitol building. (I checked into the address, and it is a mailbox in the UPS Store. The form gets sent to an address near the State Capitol but then gets forwarded to the shady company in Michigan.)
*All orders will be fulfilled from their corporate office in Michigan.
*Processing fees are 100% fully guaranteed.
*This is not an invoice, and I am not required to use this service.
*I can file this directly with the State myself for the statutory $100 fee.
*The respond by date is about two months before the state will send me this form.
So, their ploy is to fill out my annual form using the information off my last year’s form, send the state my completed form with the $100 fee and pocket their $95 fee for their efforts. On my end it takes the same effort to send them their form with a $195 check in October as it does to send the form to the state with a $100 check when I receive it in December. But since these jokers send me the form long before the state will, they get a chance to get $95 out of me without providing me any real service.
Since, in small print, they disclose they are filing my report and paying the fee for me, and they are not the state government, they are not technically doing anything illegal. They are simply providing a service I do not need for a $95 fee.
The state of Oregon puts out a bulletin warning of this company by name and suggesting you do not use this shady service which is a scam they can’t prevent.
They came very close to taking my money the first year they sent me this form. If I would have fallen for their ploy and paid them that first year, I might have continued to pay them in subsequent years. Watch out for scammers attacking your business.
Advance on inheritance hustle
The second shady hustle to come across my desk recently was an advance on my wife’s inheritance. Her uncle passed away, following the death of his wife, and they didn’t have any children. So he named all of his nieces and nephews as heirs. This process went to probate with her brother as the executor of the estate.
Shortly after the probate was filed in court, the hungry wolves started mailing each of the heirs an offer for them to get an advance on their inheritance. Some of the heirs contacted us a bit confused as to what these letters meant. Several of the letters included a check for a substantial amount stating, “this money could be yours in as little as 24 hours.”
For some of the heirs these letters were their first indication that they were heirs to their uncle’s estate. After reading the letters, I see how people can get excited about taking this deal. As the letters stated, probate can take a long time, and you may need money now.
To get you interested in their proposition, they really tug at your heart strings with the following:
*Probate is long and frustrating.
*Your loved one wouldn’t want you to wait for the money.
*We can authorize up to $500,000 in as little as 24 hours.
*You can fix your car or get a new one right now.
*We can help get your kid braces or pay doctor bills.
*If you are having a tough time paying rent, we can help.
*Need money to fix the deceased’s house before selling it?
*Do you need a much-deserved family vacation? (Especially for those who were long term caregivers to the deceased and are at the end of their rope.)
*Having trouble making the mortgage payments while waiting for probate?
*This is not a loan so you will not have anything to pay back or any payments to make. The money comes directly from the estate and not from your pocket. (The estate is already in our pocket now so yes it does come out of our pocket.)
*No credit, no job, no collateral, no problem. This is not a loan.
So, what are they really offering? They will buy your rights to the inheritance at a discounted price. They will not specify what the price is and will bury their fee in the estate numbers.
For example, you may actually be inheriting $200,000, but at the time of their letter you have no idea how much your portion of the inheritance will be. These guys are very good at figuring out what your cut will be at the end of probate, so they know more than you. You are estimating your share will be more than $100,000.
They might offer to give you $75,000 right now if you sign over your future inheritance with an inheritance assignment contract. You are basically selling them your place as an heir to the estate. And if you can convince any other heirs to do this also, you get an extra $500 for each heir that signs up.
By considering their offer using the numbers you imagined, you would get $75,000 now vs maybe $100,000+ in two years, which sounds reasonable to you. So, you make the deal and get $75,000 cash, thinking they will collect their $100,000 in two years, which includes their $25,000 (25%) fee, for a cash advance on an unknown amount of inheritance. Afterall, isn’t this a better deal than a credit card cash advance?
In reality you sold a $200,000 inheritance for $75,000. In exchange for giving you $75,000 today, they will get $200,000 in two years, the initial $75,000 plus a $125,000 (62.5%) fee. In this example, their fee greatly exceeded what they gave you. You lost more than half of your inheritance!
Sometimes we can get so caught up in the immediate cash gratification that we don’t realize the actual cost of obtaining that money. This is why credit card companies can get away with charging 28% interest. Money now means a lot more to us than money in the future.
This is not a new scam. Thousands of years ago there was a story in Genesis of how Esau came home famished. His brother, Jacob, had just made lunch. Esau traded his inheritance (birthright) for a bowl of soup because he was “dying” of hunger. He later regretted taking something he wanted immediately without counting the actual cost.
Do not sell off your inheritance to these companies. The handsome profit they are making belongs to you. Your loved ones would like you to have all they left you after a lifetime of saving. Your loved ones do not want their life savings going to these hucksters.
These mailings go to the heirs of every estate going through probate in the country. That is a lot of time, effort, and money on their part. They only do this because they stand to make a substantial profit off your misfortune and many people must take them up on their offer.
Anytime someone contacts you with an offer to help with something, especially if they shouldn’t routinely know about it, your defenses should go up. You also see this with national ad campaigns using celebrity spokespeople informing you that now is the time to buy gold (If now is the time to buy, why are they selling and spending a fortune to advertise it?). Don’t let your extended warranty run out. (They are making money on those who will buy one from them). We can get you out of your timeshare contract. (Beware of any attorney saying they can get you out of a contract you signed. And if getting out of your timeshare entices you, first read, A Guide to Loving Your Timeshare and learn how to get the most value from a timeshare you already own, like I do. Once you learn how to get great value out of it, you won’t want to sell and fall victim to the wolves.)
Keep your eyes open and your defenses up. There are many people trying to reach into your pocket undeservingly.
Thank you for bringing this to everyone’s attention. How did they find out who the inheritors were of the Uncle’s estate? Seems like there is too much available info out there, and where is privacy any more. This is very helpful, thanks for sharing!
When the estate goes into probate it is public info and they go after it.