Columns

Hooray For Earning An Honest Living
Jim Olsztynski

It's disheartening how many hustlers are masquerading as legitimate businesses.

Never mind Enron, WorldCom and all the other major league business scandals from several years ago. Big shots are going to jail, accounting reforms have been enacted, and there's reason to believe big corporations are behaving better, if only because of more intense scrutiny.

What largely escapes the media's attention, however, is a disturbing array of smaller scale hustles masquerading as legitimate businesses. They come in below the radar because they are for the most part legal enterprises involving esoteric services, or the illusion thereof. Some entail relatively trivial sums of money but victimize many people. Collectively, they attest to the fact that too many people are earning livings as modern day snake oil peddlers.

And I bet most of them complain that plumbers charge too much.

I'm not talking about outright criminality. Robbers and con artists at least are defined as criminals, and law enforcement provides some degree of protection against them. The activities referred to here all fall within the letter of the law, but are sordid nonetheless. Examples abound.

Class-action lawsuits. This is one of our country's main growth industries. Lawyers prowl for minor misdeeds by businesses, real or imagined, then file lawsuits on behalf of thousands of supposedly injured plaintiffs, most of whom don't even know they have a grievance. When settlements or judgments get rendered, the anonymous plaintiffs end up with a few extra pennies in their pockets while the lawyers rake in millions.

Artificial patent lawsuits. Loopholes in our patent system make it possible to obtain patents based on simplistic explanations of how certain things work. The case I'm most familiar with involved a schematic of e-commerce transactions. Theoretically, anyone who sells anything over the Internet could be charged with infringing on such a patent, but the perpetrators would never dare sue Amazon, eBay or anyone else with deep enough pockets to call their bluff and fight the silly case in court.

Instead, the perpetrators target small businesses of a certain size that their research shows have enough money to afford a settlement ranging to tens of thousands of dollars, but not enough to outlast them in drawn-out court proceedings. It's a thoroughly legal form of extortion. While not widespread, this gambit has succeeded in picking the pockets of some small e-commerce entrepreneurs.

Invention marketing. Invention marketing firms sucker garage shop tinkerers into believing their Rube Goldberg contraptions have vast money-making potential. The inventors end up paying thousands of dollars in fees for half-baked market research and insipid press releases sent to people like me.

Rarely if ever does a client make a cent off the inventions submitted to these companies, and just in case one does stumble into a licensing agreement, the invention companies make sure there are documents signed that entitle them to a large chunk of the royalties. I've written about these businesses in the past and asked them to direct me to inventions they have sponsored that ended up being successfully marketed. I've yet to hear of one.

Deceptive Yellow Pages directories. These are based on dubious themes such as a state services directory listing firms that have facilities in a given state. You could almost conjure up a small sliver of value to that, except when you see the deceptive solicitations for paid listings.

They are purposely designed to look like invoices, with disclaimers shaded in such as way as to escape notice. The amounts usually are under $100, which is not enough to ring alarm bells in a harried accounts payable clerk cutting checks for dozens of routine bills. The directories are low-budget publications with suspect distribution.

Phony phone charges. Telephone companies are obligated by law to bill customers for various third-party services supposedly ordered by telephone users. Modern phone bills are long and complicated, and many people don't take the time to review all the line items, so it's easy for shady businesses to slip in charges unnoticed.

Thus, many people end up paying $9.95 a month for a psychic hot line service or some such. It happened to me a few years ago, until I sent a letter to the company demanding a full refund of every cent I spent with them. I copied the consumer fraud office of my state's attorney, which did the trick in obtaining all of my money back.

I've run out of space before I've run out of legalized scams to report. All there's room left to say is how good it is to be associated with an industry of hard-working, industrious people who earn their keep and make valuable contributions to our society.

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Jim Olsztynski is the former editorial director of Plumbing & Mechanical.