David used the classic Threaten To Cancel method to save big time on his cable bill, $238.92 per year. Better yet, he did it in the face of Comcast trying to raise his bill. Granted, it was by less than a dollar. But why pay more if you don’t have to? Here’s how he did it.

He told the CSR that he was not happy with service anymore and found it overpriced. The rep tried to get him to to a lower bandwith for a lower price. Dave said no, I just want to cancel. Comcast came back with $33/month for 6 months.

“I said that was a good price,” writes David, “but that I still wanted to cancel…unless he gave me that price for 12 months. He agreed, and now I am paying almost half of the full monthly rate, without having to add more services I don’t need (ie home phone and cable TV), or downgrading It seems like Comcast is very willing to keep the customers they already have, so take advantage of that and get yourself a lower rate.”

Ryan wanted to order new Comcast service but balked at their request for a Social Security number. When he asked why they needed it, the Comcast chat rep said “The Patriot Act” required it. That doesn’t sound right to us, or to Ryan. His story and full screenshot of the chat, inside…

Ryan writes:

After completing the order procedure on their website I was directed to a live chat window. After waiting about twenty minuets a Analyst joined the chat. She immediately requested I provide my Social security number in order to open a new account. I refused to provide my SSN and asked for details as to why it was required. Her answer is that the Patriot Act requires them to get my Social Security number.As you can see in the transcript I attached, she referred me to their legal department. I actually asked for the phone number five to ten seconds before she closed the chat. But when I viewed the chat transcript it says the chat was closed before I asked. That is a neat trick.

Can what she told me actually be true? …I don’t believe [the Patriot Act] requires me to provide my SSN just to get Internet service.

I think the Comcast rep somehow thinks that Comcast falls under the “Know Your Customer” clause of the Patriot Act. As far as I understand it, that only applies to financial companies or financial intermediaries, neither of which I believe Comcast qualifies as.

Yesterday, the Seattle Post-Intelligencer reported that the police were looking for two men who were posing as Comcast employees as a ruse to steal social security numbers. The men were driving an unmarked car, wandering around a neighborhood knocking on doors and telling residents they needed to fix some wiring issues. One resident refused, claiming that she didn’t have an appointment. She then saw the employees start knocking on other doors and, finding it unlikely that her entire neighborhood could have “wiring issues,” called the police.

They told a woman they needed to come into her house to fix some wiring, according to a police report. She noted the men drove a black Saturn sedan rather than a marked Comcast vehicle and refused to let them enter, saying she didn’t have an appointment.

The woman told police the men walked down the street knocking on doors.

An 80-year-old homeowner who lives across the street told police he and his son let the men inside. While inside, one of the men had the elderly man say his Social Security number into a cell phone and gave him a false work order, according to the report.

Comcast employees, including contractors, have identification available at all times and usually have a Comcast or contractor vehicle, company spokesman Steve Kipp said.

In some door-to-door sales cases, Comcast employees may ask for the last four digits of a customer’s Social Security number to verify an account, he said. But that information also can be provided over the phone, Kipp said.

Installers never ask for money and should have their Comcast badges prominently displayed, he said.

Today the paper posted a new report that confirms that these mysterious social security number thieves were in fact actual Comcast contractors who were not following proper company procedure.

Kipp said the contractors, working for Roseville, Calif.-based Winmark Authorized Agent Group, should have had their Comcast identification present.

“We’re working with the contracting company to make sure they’re properly trained and an incident like this wouldn’t happen again,” Kipp said.

He said the Social Security and AARP membership information obtained from one man was used to verify a Comcast account and not retained by the contractors.

In July 2007, Vijay and Supriti Soni of Corona del Mar paid $440,000 for a home at 2129 W. Civic Center Drive in Santa Ana.

Five weeks later, they resold the house to Javier Hernandez – the family gardener and handyman – for $660,000. That’s a 50 percent gain in 38 days – at a time when real estate prices in Santa Ana were plunging.

But the lender that financed both mortgages – Washington Mutual Bank – took a bath. In March of this year Hernandez’s loan went into default and in July the bank foreclosed. On the trustee’s deed, the bank listed the home’s value at $377,137 – $220,000 less than the outstanding loan.

Records show that Washington Mutual, America’s largest savings and loan and one of its most precariously perched lending institutions, financed at least 43 mortgages worth $24.5 million on properties bought and sold by members of the Soni family since early 2007.

Of the 22 homes sold in that period, at least six have become problems for Washington Mutual: Four were foreclosed, one received a notice of default and another was listed for sale at a $260,000 loss. Total value of WaMu’s mortgages on the troubled properties: $2.7 million. (Click here to see a graphic that explains how the family made money)

Washington Mutual’s lending practices resembled many other home loan institutions that have run into trouble, such as IndyMac Bank, which failed in July, and Countrywide Financial Corp., which was rescued in a January merger with Bank of America. They all offered complex adjustable-rate and subprime mortgages, approving many of the loans with limited scrutiny. When soaring numbers of borrowers were unable to repay or refinance their loans, the banks collapsed.

A quality control problem

WaMu’s $310 billion in assets, its diverse loan portfolio, its large base of depositors and conservative risk management were supposed to protect the thrift from collapse. Now it appears to be the next domino in the row.

WaMu said it is investigating the Soni family’s transactions as part of a fraud scheme, and maintained that those loans are not a symptom of larger problems.

“We have extensive controls in place to protect the integrity of our portfolio and loan processes,” WaMu spokeswoman Sara Gaugl said. “We are continually enhancing our efforts to identify and prevent any potential illegal activity.”

But lending analysts said the Soni family’s transactions raise troubling questions about standards at the Seattle-based thrift, which could face a federal takeover if it can not find a new source of credit. The distressed WaMu properties would then belong to the taxpayers.

“This is a quality control problem,” said Paul Leonard of the Center for Responsible Lending’s California office. “It certainly is curious WaMu’s fraud detection system didn’t pick this up. It looks very bad and it is bad. The question is how widespread it is.”

No criminal background checks

Leonard and others said the Sonis’ transactions probably escaped notice because Washington Mutual, like many other lenders:

* Allowed financing of property flips that occur less than 90 days after purchase. The Federal Housing Administration imposed a ban on financing 90-day flips in 2006. The FHA also requires a second appraisal for homes sold at a 100 percent gain less than 180 days after purchase.
* Relied heavily on imperfect fraud detection software. Computers are good at flagging statistical aberrations – such as unrealistic income statements – but can be deceived by knowledgeable and determined insiders.
* Did not check criminal backgrounds. The Sonis had been convicted in 2003 of numerous felonies for a real estate fraud scheme. WaMu checks criminal backgrounds of loan originators, such as outside mortgage brokers, but not borrowers.

Last month, District Attorney investigators raided the family’s homes and business offices. Now, prosecutors are investigating the Sonis and other members of their family for criminal behavior.

“Unfortunately, we are back looking at these characters again,” said Doug Brannan, the deputy Orange County District attorney who prosecuted the Sonis in 2003.

Washington Mutual declined to answer specific questions about the Soni family case.

“This is an active investigation and we are fully cooperating with local law enforcement regarding this matter,” Gaugl said. “We will not tolerate misrepresentation or fraud of any kind, and will aggressively pursue all legal means available to combat these offenses.”

Tightened standards?

Washington Mutual once aimed to be the Starbucks of banking: A shop in every neighborhood; lending that was as simple as buying a double decaf latte.

That was before the mortgage lending industry began to implode.

In mid-2007, WaMu’s then chief executive officer, Kerry Killinger, boasted that his company had tightened lending standards to protect itself from the darkening real estate market.

“It’s been over two years since we first began talking to you about housing prices becoming inflated and of the high risk of a slowdown in housing with price declines in some parts of the country,” Killinger said during his July 2007 quarterly earnings call. “As a result, we started to take actions to minimize our exposure, including tightening our underwriting.”

It seems to have been too little, too late.

This summer, the bank reported a $4.8 billion loss in the first half of 2008 due mostly to souring home loans. On Sept. 11, the company ousted Killinger and said it was setting aside $4.5 billion for losses in the third quarter of this year.

Credit-rating agencies downgraded the bank’s bond rating to junk status. The stock sank to $2 on Sept. 15, from a high of $39.25 a year ago. Last week, the bank put itself up for sale.

48 percent gain in 92 days

The Soni family’s transactions with WaMu, which took place from early 2007 through March of this year, indicate that Washington Mutual continued making risky loans long after its underwriting standards were supposedly tightened, said James Barth, a senior finance fellow at the Milken Institute in Santa Monica.

“Lending institutions had an obligation to do due diligence to make sure the borrower can repay the loan, especially in 2007 and 2008 when they knew there was a mortgage meltdown taking place,” Barth said.

Home prices in Santa Ana peaked in 2006 and have fallen more than 40 percent since.

While those prices were plummeting, members of the Sonis’ family never sold for a loss. A Register analysis of 22 Santa Ana properties flipped by the family in the past two years shows a total gain on sale of $3.7 million.

Average gain: 48 percent.

Average time between purchase and sale: 92 days.

Todd Lackner, a San Diego mortgage fraud investigator who has examined the transaction records, said the common thread of WaMu funding makes the Sonis’ transactions even more disturbing.

“To me, it looks as if WaMu had a failed policy of funding these flip transactions at drastically inflated prices,” said Lackner, who furnished grand jury testimony about the real estate scheme that led to the 2005 bribery conviction of U.S. Rep. Randall “Duke” Cunningham. “I find that disgusting. Any idiot can see these sale prices are excessive.”

Suit says WaMu picked appraisers

The FBI says mortgage fraud reports increased 31 percent nationally in fiscal 2007, totaling 46,717 incidents with an estimated loss of $813 million.

“During declining markets, mortgage fraud perpetrators may take advantage of industry personnel attempting to generate loans to maintain current standards of living,” the FBI’s annual fraud report said.

If, like most contemporary lenders, Washington Mutual continued to rely on fraud detection software to catch problems, it wasn’t hard to slip under the radar, said Ann Fulmer, vice president for Interthinx, an Agoura Hills fraud detection company used by lenders.

Banks don’t check criminal backgrounds of buyers or sellers, because it would be too expensive, Fulmer said. People with experience – in real estate sales, appraisals, finance and escrow – know how to game the system, she said. With a little creativity and an Internet search, they can obtain phony employment, tax and financial documents for loan applicants.

“The problem with technology, it’s very easy to fabricate documents to get them through,” Fulmer said. “It’s not a matter of what controls you put up. If someone is determined and they know how to work inside the system and they’re ethically challenged, there’s no way to stop them.”

In the past two years, Soni family members took out a total 14mortgages with Wells Fargo, Countrywide Home Loans, Downey Savings & Loan, J.P. Morgan Chase Bank and HSBC Mortgage Corp. But Washington Mutual was their preferred lender, with triple that number of loans.

One possible reason is suggested in a lawsuit filed in November by New York Attorney General Andrew Cuomo. The suit claims that Washington Mutual had a history of pressuring appraisers to give properties high valuations so it could make more money.

The suit alleges that eAppraisIT, a subsidiary of Santa Ana-based First American Corp., was strong-armed by WaMu into using pre-approved appraisers who offered higher property values for sales financed by the bank. The suit says eAppraisIT caved because WaMu was its largest customer, paying for 262,000 appraisals between early 2006 and October 2007.

“By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion,” Cuomo said.

First American said Cuomo’s allegations were “largely based on a handful of emails that have been taken out of context or mischaracterized.”

Washington Mutual’s Gaugl said: “After investigating these allegations, we can say with confidence that there has been no systematic effort by WaMu to inflate home appraisals.”

That case is pending in New York State Supreme Court.

ID theft to buy a Mercedes

In August 2003, an Orange County Superior Court jury found Vijay and Supriti Soni guilty of forgery, falsifying real estate documents, identity theft and grand theft. Vijay Soni was sentenced to a year in jail. He also surrendered his real estate license. Supriti Soni was convicted on 19 counts in the case and sentenced to three years in prison.

Brannan, who prosecuted the case, said their scheme “took advantage of their clients’ trust when they exploited the unsuspecting customers’ information for their own financial gain. They left these families with large financial liabilities, goods and property purchased in their name without their knowledge, many hidden costs, and a huge amount of grief to clean up their credit.”

Supriti Soni appealed, but her conviction was upheld.

The appeals court said that, under various names, the Sonis “obtained confidential information from various people – one of whom worked for Vijay and the rest who were clients for properties or mortgages – and then used it to acquire furniture, loan proceeds and commissions, real estate deeds and commissions, a Mercedes Benz automobile and cash for themselves.”

A Superior Court judge later agreed to reduce seven of the 15 felony counts against Vijay Soni to misdemeanors.

Homes and offices raided

On their Web site, Vijay and Supriti Soni posted a message:

“Supriti Soni and Vijay Soni of Orange County have been acquitted of all charges and allegations. Supriti and Vijay Soni have been in Real Estate Business for many years and have been extremely successful. On their way toward success they were put under radar and charged with false allegations. Through the Internet using search engines their reputation as a successful and an honest business people were compromised. However the final judgment reveals that Supriti and Vijay Soni are innocent and acquitted of all charges and allegations.”

Attached was a document showing that eight of Vijay’s felony convictions had been reduced to misdemeanors.

Soni’s attorney, Shirley Macdonald Juarez, told the Register she asked Soni to remove the Web posting, because it implies he has no felonies on his record. In fact, eight felony convictions remain.

On Aug. 7, 2008, investigators from the Orange County District Attorney’s office and state Franchise Tax Board served search warrants on nine locations, including the homes of the Sonis, her mother Sushama Lohia and the family of her sister Suniti Shah plus four family companies – SL Realty, California Escrow, New Age Realty and First Priority Escrow. They carted out 154 cardboard boxes and 40 computers filled with evidence.

Family members declined to comment for this story, citing the advice of attorneys.

“I’m confident that the facts will reveal that Mr. Soni has not engaged in any wrongdoing,” said Vincent LaBarbera, Vijay Soni’s attorney.

Intra-family flipping

In the past two years, the Soni family essentially created their own market in Santa Ana by flipping enough homes in a small area, said Lackner, the appraisal fraud specialist. In at least three cases, homes flipped from one family member to another – sales later used by appraisers to give credibility to high asking prices for other properties in the area.

One example: Lohia bought the bank-owned house at 827 S. Flower for $249,500 on Jan. 4. She sold it 20 days later for $575,000 to her daughter, Suniti Shah, who financed the purchase with a $488,750 Washington Mutual mortgage.

That was a 121 percent increase in less than three weeks.

“Selling to each other, that’s something an appraiser should definitely discover,” said Mike Sanders, a Laguna Beach real estate appraiser and expert witness in property value litigation cases. “If the appraiser finds all the same people’s names on transactions, then that’s something suspicious.”

No money down

Vijay Soni provided another clue to his success at selling homes in a falling market: They made the down payments for the buyers.

In an interview in June with the India Journal,Soni said his “liquidation company” bought foreclosed properties in Santa Ana, Riverside and Corona and sold them by offering “10 percent down free money to any qualified buyer. With this big burden out of the way, they only have to worry about coming up with their monthly mortgage.”

That would be the equivalent of 100 percent financing, experts said.

If loan documents do not fully disclose who made the down payment, it would misrepresent the purchaser’s stake in the property and potentially is a form of criminal fraud or theft, said Fulmer of Interthinx.

“Unfortunately, the bank doesn’t know it’s 100 percent financing,” she added.

Documents show that all of the family’s sales through Washington Mutual indicated that the buyer paid a down payment of 10 to 20 percent.

“Up against a wall”

But Elijio Servin Rojas told The Register that he never made a down payment on the home he bought in November for $640,000 from Sushama Lohia. Records show he paid at least $64,200 before closing.

Servin Rojas said he was renting when Lohia persuaded him to buy last year. He said he has fallen behind on payments on the $575,800 mortgage from Washington Mutual. He received a notice of default in July.

“I’m up against a wall,” Servin Rojas, a tile worker who has been working only part time, said in Spanish. “They’re just going to take away our house.”

The Sonis were positioned to escape detection if in fact no money changed hands – because Lohia, a licensed real estate broker, also served as escrow agent on the transactions.

One alleged instance is detailed in a lawsuit filed in Orange County Superior Court in May after the Sonis unsuccessfully bid on a $13 million Newport Coast mansion.

The check bounced

Documents in the suit, filed by the home’s seller Dr. William Dobkin, allege the Sonis deposited $450,000 as earnest money with California Escrow, an arm of Lohia’s SL Realty. But when Dobkin asked for the money as the first step of the sale, California Escrow failed to produce the cash, the suit says. Vijay Soni then wrote a personal check for $460,000 to cover the debt. The check bounced.

“We’ve determined, and they’ve admitted, that the funds are no longer there – if they ever were,” Dobkin’s attorney, Jeffrey Simon, said of the California Escrow account.

Soni’s attorney, Allan Leguay, said the case is not about fraud, but whether Dobkin can demonstrate he suffered a financial loss. The lawsuit has been sent to arbitration.

Witness in identity theft case

In August, an investigator from Washington Mutual told Angel Enrique Torres that his name was on a bank account and real estate in Texas.

“I don’t know where that came from,” Torres told the Register.

Torres’ name is also on three Santa Ana properties purchased from the Sonis and their relatives, all financed with Washington Mutual mortgages. One of the homes was foreclosed in July. He said he has fallen behind on the payments of a second home.

County records show Torres refinanced his home at 339 S. Garnsey with a $496,000 mortgage from Washington Mutual in June 2007. Torres told a reporter he was unaware of the refinancing deal.

Torres is part of another family whose members both worked for the Sonis and bought properties from them and their relatives, using Washington Mutual financing. His sister, Sara Torres, bought 1609 W. Raymar from Supriti Soni for $640,000. That’s $111,000 more than Soni paid for the property five days earlier.

Sara Torres was a key witness in the identity theft case against the Sonis. In 2000, she filed a complaint with the City of Orange Police alleging the Sonis put her name on a deed without her consent and applied online for a $10,000 loan in her name.

But when Supriti Soni appealed her conviction, Sara Torres wrote to the judge that her police complaint resulted from a misunderstanding.

“Gentle, harmless and giving”

In court documents, Torres described herself as the cousin of Patricia Cruz Hernandez, whose husband was the Sonis’ gardener, Javier Hernandez.

Hernandez purchased two Santa Ana homes from the Sonis in 2007: 2129 w. Civic Center Dr. and 517 S. Garnsey St. Both are now in foreclosure.

Before the Sonis’ sentencing in 2003, Javier Hernandez wrote a letter to the judge in Spanish urging mercy.

“I don’t have words to express what good people they are,” his letter said.

Sushama Lohia also wrote to the judge about her daughter and son-in-law. “They have become prey of misunderstanding and jealousy of heartless people. If you watch them closely, you will find them gentle, harmless and giving.”

Sept. 24 (Bloomberg) — The FBI is investigating Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc. and American International Group Inc. in its probe of the collapse of the subprime-mortgage market, according to a senior law-enforcement official.

Those companies are among 26 being reviewed by the Federal Bureau of Investigation for possible accounting misstatements, said the official, who asked to remain unidentified. The investigations are preliminary, the official said late yesterday.

The FBI has come under pressure to hold companies responsible as the loan crisis rocked Wall Street and led to the biggest housing slump since the Depression. Financial companies worldwide have reported more than $500 billion in losses and writedowns stemming from the subprime collapse.

Housing lenders Freddie Mac and Fannie Mae, as well as insurer AIG, were all taken over by the government earlier this month. Lehman filed for bankruptcy. The crisis has led the Bush administration to ask Congress to approve a $700 billion bailout for the financial industry.

James Lockhart, the director of the Federal Housing Finance Agency, tossed out both Fannie Mae’s and Freddie Mac’s boards and top management, including former Fannie Chief Daniel Mudd and Richard Syron at Freddie, as part of the restructuring.

Freddie Mac spokesman Doug Duvall declined to comment on the FBI investigation. Fannie Mae spokesman Brian Faith wasn’t immediately available for comment. AIG spokesman Nick Ashooh declined to comment as did Mark Lane, a spokesman for Lehman.

SEC Involved

The investigations of Fannie Mae and Freddie Mac were recently opened, said the official. The agency had already been looking into allegations concerning Lehman and AIG.

The Securities and Exchange Commission is also investigating the companies for civil violations.

People familiar with the matter have said earlier that other companies under FBI investigation include IndyMac Bancorp Inc. and Countrywide Financial Corp., which has since been bought by Bank of America Corp.

FBI Director Robert Mueller, testifying in Congress last week, pledged to “pursue these cases as far up the corporate chain as necessary to ensure those responsible receive the justice they deserve.”

Record Fine

Fannie and Freddie, as well as AIG, already restated their books earlier this decade and corrected billions of dollars in accounting errors.

Fannie Mae paid a record $400 million fine to the SEC and its regulator in 2006 to settle charges that executives fraudulently used “cookie jar” reserves and other accounting gimmicks to hide $10.3 billion in losses from 2002 through 2004 and maximize bonuses.

Freddie paid $125 million in fines in 2003 and restated earnings from 2000 through 2002 after it replaced long-time auditor Arthur Andersen and discovered errors related to derivatives. Regulators accused the company of manipulating its accounting to push some $5 billion in earnings to future quarters.

Freddie ousted Chief Executive Leland Brendsel in June 2003 and Fannie’s Franklin Raines left in December 2004. The Federal Housing Finance Agency, which regulates the government-sponsored mortgage companies, seized control of both companies earlier this month after outside examiners found more accounting problems and said their capital cushion was low.

Police have charged Elizabeth Miller, the manager of the Bed, Bath & Beyond in Lexington, Kentucky, who refused to let a couple use the store’s phone to call 911 to report a three-year-old locked in a van, and refused to make an announcement over the store’s PA system. The charge is “failure to report dependency, neglect and abuse, a Class B misdemeanor that carries a maximum sentence of 90 days and a maximum fine of $250.”

The county attorney quoted in the Kentucky Leader-Herald article points out that common decency should always trump any store policy, misinterpreted or not. In fact, it’s the law!

First Assistant Fayette County Attorney Brian Mattone told the Herald-Leader Thursday that under the duty-to-report statute, everyone has the duty to report dependency, neglect and abuse of a child if they have knowledge of it. Mattone said prosecutors thought that Miller, through witnesses, had knowledge of possible abuse or neglect. Moreover, there is language in the statute that says “nothing should relieve their obligation to report,” Mattone said.

The article also quotes another shopper who says she received a similar response from a different Bed, Bath & Beyond last summer when she saw a dog locked inside a car. Here’s hoping that the company’s “we’re ashamed this happened” response is authentic, and that their employees learn that it’s okay to offer help sometimes.

As the largest consumer and small business bank, BofA (NYSE: BAC) can have a major positive or negative impact on the environment. Since March, 2007, the bank has taken on a $20 billion initiative to “encourage environmentally friendly business activity” over the next decade. Applauded by some and criticized by others, just how green is this bank?

Crystalline Tower Office Building in Manhattan
BofA’s new 2.1 million square foot tower is being heralded as the world’s greenest skyscraper. The building features a passive solar design, the use of recycled and renewable materials, and work stations with individual climate controls. Natural elements include the use of rain water and a green roof reduces energy use for heating and cooling.

“First of all, it is the right thing to do for the planet,” said Senior Vice President, John Saclarides, when asked about the greening of the BofA tower. “No. 2 is the corporate responsibility. Bank of America is one of the leading corporations in the world, including profitability. We feel it is our responsibility to set an example for others to follow and show it can be done. This also causes the advancement of technologies used in green engineering.”

Green Banking Centers
Of the $20 billion for green initiative, $1.4 billion is earmarked for achieving LEED (U.S. Green Building Council’s Leadership in Energy and Environmental Design) certification for all new office space and bank centers. Located in Adelanto, California, BofA recently opened one of the most eco-friendly banks in the nation.

The roof is lined with 64 photovoltaic solar panels that generate 60% of the bank’s electricity. Insulation is made from recycled blue jeans and counters are made of pressed wheat.

Saving Trees
BofA decreased paper used for internal operations by 32% from 2000 to 2005, as the customer base grew by 24%. This initiative saved over a billion sheets of paper. Their internal recycling program processes 30,000 tons of paper annually, saving roughly 200,000 trees every year.

Hybrid Vehicle Reimbursement
185,000 U.S. employees are eligible for a reimbursement of $3,000 for the purchase of a hybrid vehicle. As of May, 2008, nearly 2,000 workers had taken advantage of this offer.

“This benefit began as a pilot in 2006 in L.A., Boston and Charlotte and was so well received internally that last year we expanded it to all associates company-wide,” says Senior Vice President of Media Relations Colleen Haggerty.

Credit Card Reduces Carbon Footprint
Partnering with Brighter Planet, BofA offers a Visa card that helps fund renewable energy projects. By spending $1000, one ton of carbon emissions are offset, which is the equivalent of taking a car off the road for 2,000 miles.

Funding Coal Creates Scrutiny
BofA has been boycotted by the Rainforest Action Network for being the top funder of mountain top removal mining and a lead financial backer of new coal-fired power plants. Mountain top removal mining is a highly invasive practice that has destroyed 1,200 miles of streams, flooded communities, and disrupted sources of drinking water.

The Carbon Principles however established guidelines for banks to consider the risk factors of loans to power companies and were adopted by BofA. The Principles take into consideration that the U.S. may eventually cap carbon emissions and that there may be a cost for them, thus factoring in future liabilities that may be incurred. Although the Principles certainly help protect banks and can be in their best financial interests, it also has environmental benefits.

Do the BofA’s green initiatives have enough teeth to green the bank or is it mostly just a green washing effort? Do you consider such things before choosing a bank?

City boy: ‘We were aggressive with our sales pitch and didn’t give risk warnings if we could avoid it’. Photograph: Grant Smith/Rex Features

Pacific Continental Securities was possibly the UK’s most notorious firm of stockbrokers. Its team of young salesmen used high-pressure tactics to lure clients into buying shares that for most investors were almost a guaranteed route to financial ruin.

After a wave of complaints, the Financial Services Authority finally banned the firm from taking on new business last year. Pacific Continental went bust shortly afterwards.

But as hapless investors lost their savings, the brokers raked it in.

Today a former broker at Pacific Continental reveals how he was encouraged to make false and misleading claims to sell shares – and warns that many of his former bosses and colleagues have now moved to other City firms. Innocent individuals, he claims, are still being plagued by the same high-pressure sales tactics used to sell ultra-risky stocks.

Let’s call our whistle-blower John Hunter, although that’s not his real name. He has asked us to change it because he has now made a fresh start in life outside of stockbroking. He hopes his story will warn investors to stand well clear of what he describes as “just-about-legal boiler rooms”.
John’s story

“I am not proud of my career at Pacific Continental. I caused innocent and trusting people to lose money.

But, and I know some will be sceptical about this, I feel conned myself.

When I left a temporary job in 2005, I wanted to work in the City. I knew I was not an automatic prospect.

I had left school at 17, skipped university and my only work experience was in a shop. But I was determined to succeed.

I sent off 60 letters to City firms and recruitment agencies. All ignored me, except Pacific Continental and one other. I opted for PacCon because the other company was so over-the-top, promising that I’d soon be driving a Ferrari. That was ridiculous.

Before I started at PacCon, I had to pass FSA papers in regulation and securities. They were easy to answer. At PacCon’s Cannon Street offices, I was surrounded by young people – almost all male. Many were effectively barrow boys. We all thought we had made it as City stockbrokers.

There was no formal training. The way it worked was that four or five juniors would report to a desk head. I later learned my desk head had previously worked for a Barcelona boiler room. I was paid £18,000 a year plus commission. But desk heads earned a lot more. My job was to phone “leads”. We got some from a “marketing company”. If anyone asked, we would refer to some form they had filled in or some sort of market research they had helped with.

Under FSA rules, we were told to ask “know your customer” questions. These were designed, in theory, to weed out those for whom the small company stocks we sold were unsuitable.

We often asked questions in such a way the customers would give the answer we needed. We would encourage people to exaggerate their earnings and portfolio.

Few wanted to be thought of as “scared” of small company shares.

My desk head gave me a script which, he said, was “what you need to say under FSA regulations”.

We were aggressive with our sales pitch and didn’t give risk warnings if we could avoid it. I was encouraged to browbeat customers into a sale – in fact, it worked that anything was fine if it resulted in the punter buying. I was new to this and thought PacCon methods were normal. With commission, I earned £2,000 a month.

One stock I sold shares in was New Millennium Resources. It was listed on AIM and involved in mining in Angola. We were told to tell clients about the press releases this company put out, detailing its new diamond finds. It was a good story to sell – and I got rid of about £40,000 in this one – including £5,000 to an elderly lady.

Whenever any of us made a big sale, we’d shout, clap and cheer – even laugh if the customer had caved in for a big amount without a fight. Then we’d be praised in the office and taken out by the desk head – champagne and, for some, strip joints. And we’d move up a place on the sales board which recorded our success.

The real money was made by desk heads. They could earn up to £750,000 a year by “re-dealing” – selling more to the clients you had softened up. This might be another stock which was promised to replace the losses clients made in the original shares we pitched. They were the real power – the ostensible heads the FSA talked to used to just sit in their offices playing solitaire.

Calls were apparently recorded but there was no oversight and no one ever listened to them. If you were really outrageous, you’d get a verbal warning but it was seen as a joke.

In spring 2006, New Millennium was delisted from AIM and the shares I sold for up to 10p became effectively worthless – they were never sellable at a profit. I then started asking questions which did not make me popular – they told me to shut up and sell.

So how did we get the price up so high? It was through “stock supporters” – someone with an interest in the shares who would put out press releases and buy a few thousand shares. By spending perhaps £300, they would double the share price – if one person bought and no one sold, the value soared. Clients were never encouraged to sell; after all, we wanted to flog shares we’d bought from the promoters at a big discount to our asking price.

When the penny dropped after six months, I realised what we told clients was, charitably, very optimistic. More honestly, it was totally imaginary. I felt like total crap. I knew I had stolen from clients just like a mugger, but I was grabbing more than a mobile. I felt like a coward – I had never met my victims. I’m not specially moral but I was really shocked this was all legal.

Other than FSA approval and a City base, the firm was just like a boiler room. It was outrageous, but what is even more outrageous is how some ex-colleagues have set up lookalike firms. They know they are in the wrong – one even has a bodyguard in case angry punters pay to have him eliminated. All I can now say is sorry.”

· Pacific Continental Securities (UK) went bust in June 2007. Insolvency practitioners Smith & Williamson sold the assets to Brooklands. PacCon was wound up in March 2008.

Investors who show mis-selling can now lodge claims with the Financial Services Compensation Scheme (go to fscs.org.uk). Claims could total £250m.

How bad does Circuit City want your money? So much so that the retailer is willing to “instal” backward compatibility on your Xbox 360. Reader Brad snapped a photo of this sign at Circuit City in Newport Beach, California, which reads:

Want to play your original xbox games on your new Xbox 360?Backward compatibility on the Xbox 360 is done through software*

Let Circuit City install it for you
For just $28.99

What are the benefits to playing original Xbox games on my Xbox 360 console?

• Every game* will be playable in high definition.
• Every original Xbox game* will be upscaled to 720p and 1080i, and will take advantage of Xbox 360′s anti-aliasing capabilities, delivering a picture that is clear and crisper than anything available on Xbox.

*Refer to the original Xbox games list to ensure compatibility on the Xbox 360.

Not sure where to start with this scam to fleece unsuspecting customers, but “Fuck you Circuit City” will do for now. This unscrupulous retailer is trying to convince customers, who sadly do not know better, that this is a service they need—much like extended warranties and aftercare. Backward compatibility isn’t even something that Circuit City can really install! I guess they can, but it updates over Xbox Live. And if you don’t have an internet connection, Microsoft will happily send you the backward compatibility software, which users can easily install themselves.

Circuit City is using asterisks to cover their false promises, luring customers and failing to point out a distinct point: Xbox games playing on an Xbox 360 look the same on an analog TV. An HD TV is necessary to give Xbox games that next-gen look. And customers smart enough to know this and refer to Microsoft’s BC list are definitely smart enough not to fall for Circuit City’s scam. Open season on the other shoppers, though. Brian Ashcraft

Greg Miller, the son of Bette Miller, the woman who is in a dispute with Bank of America over a $5,000 bond bought in 1984 from Rainier National Bank, has written in to tell his side of the story. Here’s his letter.

Greg writes:
Having read all about this on your web site, I can see there is some confusion, so I thought I would set the record straight for your readers. I am Greg Miller, Bette’s son. I have been chasing this for over two years. Here is the real story, only part of which was seen on KOMO 4 News.

In about April of 2005 my mother had a silent heart attack. She was on the floor of our family home of 40 years for about two days and was rushed to the hospital. Her ability to care for herself in the family home safely became an issue. She tried to return home and was unable to remain there successfully. Such being the case moving to an assisted living facility became the priority. My sister and I had to help her by doing the leg work of consolidating her financial position, cleaning the house, selling property, and handling liquidation of any investments to help her finance her future. My father died about 12 years ago. Since at that time she was able to continue in the home without difficulty on her social security and the remainder of my father’s pension, there was no need for her to concern herself with their investments or what bonds, stocks, etc. remained in their safe deposit box.

In April of 1984 my mother and father purchased a Rainier Bank Bond for $5000.00. They saw on the face of the bond that it automatically reinvested every two years and saw no reason to cash it. On the face of the bond it clearly stated that you had to present the bond to cash it in. Great! No worries. It remained in the safe deposit box collecting interest. In the mean time Rainier Bank was sold to Seattle Pacific Bank. Seattle Pacific was the acquired by SeaFirst Bank that was then bought by Bank of America. Fast forward to April of 2005, my mother asked me to handle cashing that bond for her. I carried it to the Bank of American branch in Monroe, Washington, where, after a couple of weeks of research, they indicated they would not cash it. I was most frustrated and I wrote a complaint to the BOA CEO in North Carolina. He referred it to one of his functionaries who indicated after further research they would not be paying the bond unless we could come up with Form 1099′s proving our claim. When I asked what 1099 forms were, it was indicated that they were IRS forms. I asked who was responsible for producing these forms and they said, “The bank.” Now the bank had told me they had no record of this bond as they didn’t keep records older than 7 years. It is conceivable that somewhere in the shuffle between all these banks and records the information on this bond was inadvertently lost. The question remains, why would a bank ask for records they know could not exist because they would have had to produce them on a bond for which they have no record, pretty circular logic. I sent the functionaries several more entreaties without BOA stepping up to take care of their contractual responsibilities. I contacted a friend who is an elder law attorney and was referred to our current attorney along with the advice that BOA was trying to either wait for my mother to die or the statute of limitations to run out.

Our attorney checked with unclaimed property in Washington State to determine if the bond had been treated as an unclaimed account and escheated to the State. No record of any escheatment was found to exist. An investigation launched by our attorney inquiring to the Federal Comptroller of the Currency resulted in the governmental equivalent of a shrug; they were unable to make certain verification either way. They said the bank had allowed folks to cash the bond without actually having the bond previously. It is weird when a bank has a contract and they see fit to, by choice, violate that contract with others as a way of getting out of honoring it at all with those that comply with the contract. Then BOA told us that the bond/contract was not sufficient and couldn’t we produce other proof.

This was the rough equivalent of me buying a car, disposing of the contract copies provided me and then acting as though I had no reason to pay for the car because I had no record of it. The bank would produce their copies of the contract to prove their point. Then I would tell them the copies of the contract were not sufficient. We all know that scenario would last-not long at all.

The conclusion our attorney offered appeared correct. It appeared they were stonewalling us. I found it ironic in the extreme that BOA’s tag line on advertising was “The bank with a higher standard.” Their higher standard involved ignoring contractual obligations and attempting to rip off an 80 year old widow in assisted living with no conscience, doing their best to get away with whatever they thought they were able to get away with because they are a big bank and do not care about anyone or anything but their bottom line and are willing to do anything to enhance that bottom line.

I, my mother, and our attorney continue to tenaciously pursue this both on substance and principle. If my mother can be ripped off then none of us is safe. We all entrust our funds to banks for our future, both short and long term. I began to wonder if I should not start stuffing my mattress because at least I could guarantee the mattress could be made to give it back to me with just a little wrestling with it.

By the way, the value of the bond is currently in the neighborhood of about $30,000.00. We also want BOA to pay our legal fees as we never would have had to obtain an attorney had they stepped up and handled their responsibilities appropriately. Not one thin dime of my mother’s investment should have to be used to pay for an attorney or the hassle this has been for the previous years to her and the entire family. It was BOA’s attitude of unwillingness to work with us that put us in this position and, since it was their actions that caused this they also need to shoulder the fiscal responsibilities that their actions forced on us.

On a more personal note, I find this whole scenario disgusting, frightening, and depressing. Banks tell us to invest our money with them. They tell us it is safe, trustworthy, and backed by the FDIC. My parents saved for their retirement and now, when my mother needs the money, the Bank denies they owe her a dime. They hold her accountable for their poor record keeping and use that as an excuse to take her money. This behavior is reprehensible and causes a lack of faith in banks in general and Bank of America in particular. They are behaving with callous disregard to my mother, their moral and legal obligations, their business ethics, and the public trust. This is my mother, who birthed me, raised me, loved me, and protected me. Now it is my turn and I will not let her down nor see anyone else do so.

Herb Weisbaum was kind enough to work on telling our story and insuring others knew about it. If this issue is of concern to your readers, please have them communicate their displeasure with BOA to:

Kenneth D. Lewis
Chairman, CEO, and President
Bank of America Corporation
Bank of America Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255

Hope this helps clarify the situation to your readers.

Thanks!

Greg Miller