The chance involved folding a paper plane, and then trying to get it into the car through the sunroof. Which was only open a small crack.
A friend of the family tried about 5 times over the day and never got close.
They came back quite drunk at the end of the day to have one last go. Threw the plane and instead of going over the top of the car, it accidentally slammed directly into the front windscreen. It then rebounded straight up in the air and then dropped straight down through the sunroof.
They walked away with the car.
For example, they might insure a standard insurance company for automobile accidents, with a $1,000,000 deductible. So the retail insurance company handles payouts up to a million dollars, but when there's a really wild claim, the reinsurance company pays the insurance company for anything over a million.
They end up specializing in rare events that involve large payouts, so they also did things like the hole-in-one insurance you mention above, very common with charity gold tournaments.
They had many stories to tell, including the fellow who played a lot of golf and collected three hole-in-one payouts, and another story about a truck that went off a mountain road, slid down and blocked train tracks, causing a train derailment, with a town below the train that needed to be evacuated.
Per https://www.reuters.com/article/us-berkshire-buffett-insuran..., they are planning for handling a potential $400 billion catastrophe.
Hurricane Katrina (2005) was up at 160 Billion and Harvey (2017) hit 125 billion. So 400 Billion is just at the upper end of the expected range.
wouldn't actually giving out the $11mi to the consumer, or picking 10 consumers, create more brand awareness than promising $1bi that nobody can get?
Insurance policies require you to pay a certain amount guaranteed, then pay back a much larger amount if something unlikely happens. So Pepsi had to pay $10 million. If the right thing happened during the game then Berkshire Hathaway would have paid a billion, and some lucky consumer would have walked away a newly minted billionaire.
Berkshire's General Re does reinsurance, not re-"reinsurance". Is there a recursive step -- Could General Re face a claim that it needs to leans on the rest of Berkshire to pay?
The article says its insurance companies face a 2 percent chance of being "$12 billion" insolvent, which Berkshire could cover from non-insurance profits. But would that still be true if the claims came in, or would the non-insurance companies also have correlated down years?
I suppose Berkshire Hathaway is big enough that if it came down to it, it could liquidate equity ($500B minus devaluation due to whatever catastrophe) to make good on claims.
I work for an insurer and got talking with one of our pricing guys who told me about a case where one of the big multinationals had one division which was way under it’s predicted claims volume for the year, and another that was over. To rebalance the risk the US division ended up insuring the EU division.
Another story that night was about a reinsurer that through several departments taking on different risks ended up on the hook for a dockyard which caught fire catastrophically. And all the goods in that dockyard. And the boat which started the fire.
That evening led to my drunken catchphrase: “fucking insurance”, said ever more enthusiastically.
The only alternative to the "government backstop" is that insurers will refuse to write policies or will exclude earthquake risk (in which case the government may need to set up it's own scheme, e.g. in CEA insurance in California).
But if they have reinsurance, the payouts are 'clipped' at their deductible. This means that they have an incentive to take on clients that are less likely to have any sort of accident, even if when they do have an accident, it has catastrophic consequences.
This means that a reinsurance company cannot rely on the overall statistics for claims, because the insurance companies that buy reinsurance price their products with reinsurance in mind. The people unlikely to run into massive claims will end up in pools where the retail insurance company doesn't buy reinsurance.
So they have to carefully price the reinsurance to account for the fact that the insurance company is packaging their most reinsurance-sensitive pool of customers together.
You can save yourself a lot of adjectives by saying "dirty".
Anyone who got a hole in one was to receive $10,000. All I had to do was hang out in the shade and not get killed from golf balls while watching everyone's attempts.
I asked the tournament official where that 10k comes from, and he said from an insurance agency. They paid $200 insurance. No one ended up getting a hole in one that day.
It took a few seconds to travel through the air, and from the moment he released the ball the crowd was silent - we could all see it was looking on-target. It went through the hoop! It barely nicked the rim on its way down, so after it went through it ricocheted hard to one side, in my memory it was a near 90-degree turn.
The crowd went wild. Everyone was thrilled to finally see someone win that prize. I don't remember how much it was, but I do remember it was a very large cash prize.
And then, like you said, the next day the prize company said they wouldn't pay because there was some stipulation that participants could not have played any pro or college basketball. Public sentiment turned harshly on the team - you see, to take away his prize would be to invalidate the joyful moment we all shared watching that shot. If he didn't win, what the heck did we just see?
I don't know if the insurance company changed their minds or if the team just ate the cost of the prize, but it didn't take long for the Bulls to realize what was the right thing to do, and do it.
Thanks for bringing back these fun memories.
"It takes time to make up a hit like this . . . but I know this will generate enough business to cover the loss."
Anyone that thought he could quit his job needs some math lessons and financial education. $1M isn't enough to retire if you're under 30, especially when taxes come out.
He could easily have paid for someone to attend Harvard on the prize money (https://www.thecrimson.com/article/1990/3/20/ivy-tuition-rat...).
Not sure why it's worded so formally; must be a legal thing.
The Indians ended up with a 22-game winning streak during that period, resulting in around $2 million in refunds. The insurance for that was $75,000. I remember calculating the probability of winning 15 games in a row any time over a ~55 game period and the insurance company seemed like they were getting a great deal!
Maybe I have to learn more about this doctrine.
person A buys mattress.
sells it to person B for 1 cent
person B (or A, not disclosed in ad) gets mattress for less then 1c
A&B split total cost
That's also exactly why Casper and a half dozen other upstarts have come out with the memory-foam mailed-to-you-in-a-vacuum-tube online mattress sales.
People would be better off investing in some HIIT cardio excercise if they're looking for a good night's sleep. And eating less / more nutritious food.
(And enjoy the rest of your night in the hotel)
It replaced a 10-year-old Tempurpedic that cost around $4K.
The Casper is a better mattress in EVERY WAY so far (had it since 2015).
Mattress sellers love the value based sales pitch: how much would you pay for 1 hour extra sleep per night? Maybe paying $10/hour for extra sleep for one year is a bargain in some contexts, then you have a payback period of < 1 year, even for a ridiculously overpriced mattress.
The mattress is by no means the only way to get a complete and restful night of sleep, and past a certain materials threshold, you can't get longer or better quality sleep with any amount of upgrades to your mattress. The marginal cost is likely better spent by buying light bulbs that phase out blue light in your evenings, or by taking melatonin supplements, or with a therapy device for sleep apnea, or blackout curtains, or any number of other supposedly sleep-improving products. At a certain cost point, you might as well climb into a spa-grade float tank, or dangle from your back-piercings, or sleep in a bounce castle.
I think that there is probably a bigger difference in sleep quality between a $300 mattress and a $500 mattress than between the $500 mattress and a $3000 mattress. Once the specific concerns that typically interrupt sleep are addressed, the returns diminish fast. There is no way I am losing an hour of sleep every night just because my mattress isn't good enough.
That seems awfully likely to me, too. I paid around $650 for a full-sized Sealy pillowtop something-or-other, apparently aimed at the hotel market, from an online mattress store some years ago, and it's been fine -- at least as comfortable as the ($800 in the early 1990s) Stearns & Foster it replaced. It's possible the Sealy won't last as long as the S&F did -- at least back then, the latter had a reputation for top-notch build quality -- but I have a lot of trouble envisioning any mattress in that size class being worth over $1000, let alone $3000.
Not for everyone though, but I bet if I could get them sleeping similarly from a young age, it would be.
1.3billion Chinese sleep on essentially padded wood just fine, for example.
Sex is a big plus for a mattress, though. On a padded wood Chinese "bed" it's just fucking horrible for whoever's on top's knees/elbows/wrists/contact points.
I know my mattress has low ratings online -- this is meaningless, all the review sites are just commissioned salespeople for the online brands (Casper, Purple, etc), so of course those sites discourage you from buying from IKEA.
I spend the majority of my life using these bits so I buy quality.
The value proposition for me doesn't really exist enough to spend out-of-pocket though. Mostly due to not reaping the benefits from increased efficiency.
The guy said "$150 for a keyboard and mouse of someone's choice, amortized over a year or two, is a tiny price to pay to keep our people happy."
I ended up with a Das 4C board at work (with browns) and a custom double-shot keycap set (bought out of my own pocket).
If that is a big ticket item I would wonder if they are in serious trouble or it's just a shitty place to work for. A managers response to a request like that should be "here's the corporate card" or "submit the receipt for reimbursement"
And then I got into hammocking, and nothing seems to beat my first, a Bear Butt I got for 50$. Seems the more expensive they get, they lose out on just being big nice expansive hammocks with silky smooth material. So not a hard rule I guess!
I paid close to $3000 for a sleep number matress with adjustable firmness for each side. Still use it every day fifteen years later and think it was well worth the money.
Almost everyone here in India uses custom-made mattresses. Foam-based products are of recent launches and not many people use that. Only younger generations.
"Buy anything at Jordan’s Furniture starting today and it will all be FREE, if the Red Sox pitch a No Hitter, home or away, after July 17th during the regular season. That is 64 games! There is an average of 3 ½ No Hitters pitched each year."
Funny enough, Jordans Furniture is owned by Berkshire Hathaway.
Last year Cleveland was treated to $1.7 million in free windows from Universal Windows Direct when the Cleveland Indians went on a 15 game winning streak.
If you're wondering about premiums, the first article quotes a guy in the business who say the premiums are usually around 30% of the value of the prize. That means the $75,000 premium paid by Universal Windows Direct was a steal. Of course, the odds of a 15 game winning steak in baseball are very small.
>A contest is a type of promotion you can run in which an element of skill is involved. For a promotion to be considered a contest, entries must be skill-based and winners must be chosen based on merit. Meaning they cannot be drawn randomly.
>Examples of contests include:
>"Best Photo" Competition
>"Tell us in less than 20 words..." Competition
>When you run a skill-based contest, winners are not randomly drawn, hence removing one of the three defining features of a lottery. As a result, contests are not impeded by No Purchase Necessary laws.
>...entries must be skill-based and winners must be chosen based on merit.
In the scenario above, it takes skill but not the participants' skill, so it is essentially as out of the control of the participants as which number is drawn by a ball machine.
Now, if the skill in question is that of picking a winning sports team, then were talking about gambling which, of course, has its own set of rules and would be a stretch to apply here in any case.
Overall, it seems this contest would be on shaky legal ground one way or another.
That's not a factor WRT the law in question.
The law states that if you take money or some financial consideration for a chance (that is not based on your skill) of receiving something of value, then it is effectively an illegal lottery. It doesn't matter whether everyone wins or loses.
This is usually addressed by allowing people to enter without making a purchase (entry form, postcard, etc). But, here, that obviously would be an insane offer, so doesn't really apply.
Which meant as an oil and gas recruiter, not only was I juggling a shitload of candidates whose rent payments depended on us finding them employment (which depended on prices getting above 75$), they also had huge credit card debts that they'd have to keep paying off of the price didn't go up.
And as others have posted, he's fairly beloved here in Houston due to his charity work. Heck one of the local rappers remixed his commercials Houston style: https://www.youtube.com/watch?v=P74UnjzKJOU
> They walked away with the car.
Hopefully they did walk.
"this place has got everything!"
Thanks for linking to that -- I've always gotten a kick out that scene.
I'd bet that a suburban mall couldn't got a gambling license, but a paper airplane throwing competition is something else. It may seem silly but that small requirement does negate many of the evils associated with gambling. You aren't going to see someone dropping thousands on lotto tickets if they have to throw a paper airplane each time.
1) Being Australia, the laws required it to be actually a competition and not a "chance for a chance for a chance".
2) Being 30 years ago, there is a less of a chance that people were simply trying to rip you off.
- "The exact nature and approximate value of the prizes must be disclosed clearly and conspicuously when they are offered."
- "The law prohibits the company from misrepresenting the odds of receiving any item offered."
- Prohibited: "Failing to award and distribute all prizes of the value and type represented."
Online complaint form here.
There is absolutely no doubt that ideogram promises a chance to win the car in exchange for the registration.
I might have just dreamt all that up though because I can't find anything online.
Interestingly, the family that started Toyota is named "Toyoda" (with a d, or rather a だ).
I just have to enter the car? Hold my beer!
While a naive person may make that inference, a rational person may understand that 'ideogram' does not constitute an assertion that the picture depicts the prize to be won.
I sure don't mean to defend such predatory scammers, but I'm pretty sure they are legally safe on that part.
I had a friend last year who got very excited when she "won a car" and I had to talk her down when she said all she had to do was make an inconveniently long drive to a shopping mall to claim it / have her prize "verified."
The law isn't based on a "rational" person, but a "reasonable" one, that is the judgement of an ordinary person with typical life experiences. That's why you're tried by a jury of your peers, not of logicians, lawyers or ethicists.
Yes, in hindsight, it may seem that only "naive" people could believe this, and that "rational" people see through it. But this strategy probably represents something like the endpoint of a search strategy that found a successful meme, precisely because it mimics authentic, regulated contests.
I'm sorry to see you were downvoted for presenting the other side even if you don't support these schemes.
But I have to ask, what constitutes "an assertion" after all? Written text is just one form of fixing and transmitting ideas; alphabets usually originate in actual ideograms with original meanings that were long lost and were reduced to a sound or syllable.
Transmitting an idea with a text-image combo is just as valid for a contract as any other medium as long as the meaning is clear and unambiguous. And there is no debate here that it's exactly the intention of the organizers to transmit the idea "you can win a car" - and in fact that's what most people understand, with a tiny exception of an educated and naturally suspicious minority. The only debate is if it's legal for the organizers to claim an ideogram that literally reads "Enter to win A CAR" does not imply the car is a prize.
I don't know how a judge would rule, but from a political preference - philosophical point of view I would strongly incline to deny them that right; we get a much nicer society with less scammers, without losing anything of substance.
But thanks for shoehorning your political views into an unrelated conversation.
Of a warhead I don't know, but North Korea is rumored to have bought critical nuclear expertise from Iran.
Litigation, not prosecution. This is probably too low a priority for public prosecution, particularly criminal prosecution. But civil litigation? Would appear to be low-hanging fruit, particularly if one can entangle the timeshare promoter’s assets.
Hundereds of formal complaints by people from the gym to the ombudsman and consumer affairs over more than five years amounted to literally nothing. They still do everything they used to.
Even more seriously, they didn't pay their employees superannuation, and it took years to even start the process of sorting that out.
As these car competitions are run by private businesses and not the car manufacturers my guess is they are simply too small of a fish to go after.
Now, just last week that same gym was implicated in a drug trafficking ring. But that's a different department of law enforcement...
Totally agree! The few times I compare ads on television from Netherlands vs England the difference is huge. There's a huge amount of gambling advertisement in England. Advertising regarding something that's addicting is often quickly restricted in The Netherlands. Secondly the loan advertisements. In Netherlands the advertisements have to mention that it costs money (seems super obvious) plus there are restrictions on the interest rate. Seems in England companies can do whatever they want.
If a lot of people get into money problems it'll affect everyone (stealing might go up, or they'll not pay back loans, etc). It is so strange that this is allowed.
This is called "negative externality". Another example is junk food. It does affect everyone when people are unhealthy (health care costs for instance).
> It is so strange that this is allowed.
I think the US have ruled that advertisement is protected by freedom of speech. Actually some people get extremely defensive when talking about restricting advertisement (nanny state argument...).
Are you sure it's the same scam? A car sweepstake is a real thing outside of the particular scam mentioned.
But the car manufacturers logo was all over it, which makes me think it's legit.. but it is always there.. which is suspect.
Anyone in the US have tips on how to get involved to help oversee and direct them? I’m pretty naive and don’t have much time, but I do have motivation, at least. I have tried calling them in the past to get a better understanding of what they do, but it was difficult to find the right person to talk to. I’ve considered doing independent research and reporting (via FOIA), but I also fear repercussions.
It's not just the police. It's the DA and judges too. Also, weirdly enough, the defense attorneys and public have a very large burden of fault here.
A court clerk I know realized while filing records that our county had been in violation of state law for over 7 years in handling one type of case. Hundreds, if not thousands of cases have been prosecuted in that time. Yet, there was exactly 0 formal complaints about the counties violation of the statutes.
The clerk in question had to point that out to an attorney quietly, who then finally made a complaint on a case they were handling. After that the country dropped a few hundred pending cases on its books. But why did it take 7 years? Why hasn't anyone went "wow, the county violated people's rights for years, should someone be prosecuted"
Nope, just more revenue collection for all involved.
Is anyone seriously complaining? This is the first I've heard about this scam in years.
This is the market sorting itself out.
Lets say I get ripped off by a restaurant, store, or local company (and I find out later after looking at my CC bill), what recourse do I have? Call the police? What are they going to do? Do they even handle financial fraud? File with the attorney general of California? Is his office really going to look into my issue? Do we just assume all companies are law-abiding? This doesn't make sense to me.
(I know you can call your CC company and dispute the charge, but that doesn't punish the company doing it, except maybe not crediting them that one charge, that is not a deterrent to overcharge your customers, there should be some form of punishment by a government authority)
They can't mock-award it to someone of their own?
You can win a car but you have to be able to pay taxes and insurance for it, too.
I've heard of lots of companies that have booths at conferences where they scan your badge for a """chance""" to win some prize. Then they look up each person's credentials, and if someone is high up in a company that they wish to establish communications with, they give that person a prize to get their foot in the door.
The story about the Tesla took place at Four Winds Casino New Buffalo, which is in Michigan, not Las Vegas. Legally speaking, it is a sovereign nation so I would not put much trust in "local authorities" to protect consumers. Further, although Nevada does have a gaming commission, there are still plenty of "scams" and questionable promotional tactics used by companies both inside and outside of the casinos. Time-share sales, for example, are big business in Las Vegas.
The real contests are generally run by a third party firm that has no interest in the winners. They are payed to pick someone at random and deliver the prize and paperwork.
If your already investing that much money, can't the company also cover the taxes, or do most states have laws forbidding that? It seems like bad publicity if your "winners" have to pay several thousand in sales tax to get their "prize car."
Income taxes are progressive, of course, and then there are a mess of deductions. But they could still make an estimate by just assuming the person is in the $37K to $92K bracket. So that's 25% .
> It seems like bad publicity if your "winners" have to pay several thousand in sales tax to get their "prize car."
I think they make the judgement that offering a prize that is 3/4ths as expensive would be less good publicity vs. the largely unknown bad publicity that is mostly oriented towards the government anyway.
 ... and yeah, there's 25% on that, and 25% on that, etc.; for tax rates < 1 it's convergent, if the tax_paid = rate * (original_value + tax_paid), just solve for tax_paid.
Think about them why? Gambling income is in a completely different category from a prize you won for free. There's no reason they have to be taxed the same.
The only difference is that as a professional, you're filing your taxes as a business. It's still "income", it's just the entity filing is a business rather than a specific person.
Regardless, a prize you win is not taxed as a sale.
> There's no reason they have to be taxed the same.
To the extent they're treated inconsistently, people will use the discrepancy to game the system. Politicians do that deliberately, of course, since it's an opportunity for graft.
In gambling, you're putting money into the system, possibly applying skill, and getting money back out.
With free prizes, you're just being given things with nothing in return.
That's a big difference. And not one that you can effectively game. It's very clear whether you're inputting money or not.
It never covered income tax though; thats on you.
When someone won the prize we had to get the social security number of the person that won for gift tracking as many were over 15k, their contact info and location to send the prize, you'd be surprised at how many people pass that up or think it is a scam and/or never get back. We had to pick the next person if they passed it up or didn't get back and sometimes it would go through dozens of people before they would accept it. Lots of game systems, trips and even motorcycles were passed up.
I myself would have probably done the same thing, hard to believe you won and if you do win it is hard to not think it is a scam due to systems like mentioned in the article.
I recently had someone claiming to be from the ATO (Australian Taxation Office) call and ask me to identify myself. Not surprising, my tax filing is overdue. I advised them as a security policy I do not give out PII to unauthenticated callers, asked for a reference number and a return phone number. The number I was given is not listed on the ATO website so I did not return the call. Found some forum posts claiming the number is for return callers who have a reference number. Still, if I can’t find the number listed on offical media I don’t call back.
I’m trying to think of a way the average person could authenticate a caller. I’m not security or technology expert so my knowledge in this area is limited.
Source for this? I find it highly suspect from a technical perspective (1-3 seconds, maybe, but not several minutes) and nothing I can find online even remotely seems legitimate / real.
'tis true - the caller has call release control on the PSTN i.e. the call doesn't end until the caller puts down the phone. There's special handling for e.g. 911 calls so that call release control is given to the callee i.e. the PSAP.
This doesn't work for e.g. SIP because the SIP client is not a dumb slave to the network. If I click end call, even if the network doesn't 'want' to end the call, my phone thinks the call has ended.
Most of the “PSTN” nowadays has a bunch of SIP or other digital stuff in the middle, so this breaks down. Not to mention, this was never possible for mobiles to begin with.
Telcos move slowly.
You're right about mobile networks though - that's a different kettle of fish.
This specific hanging-up behaviour was an artifact of older analog switches and I didn’t think they would emulate it in the software-based SIP switches but according to the comment above it’s still the case.
I’d call a friend, we’d finish talking, then I’d hang up and as a joke he’d leave his phone off the hook. I couldn’t make another phone call until he hung up or some timeout of unknown length passed.
I never determined the timeout, and I haven't had a land line in at least 15 years to experiment with.
This was back in the days when you could tell roughly where someone lived by their phone number - 43x—xxxx was south Edmonton (but not Mill Woods or Riverbend), 2xx-xxxx was Calgary, area codes didn’t matter because the whole province was 403, etc. The phone system is a lot different now - you can port a landline to a cell phone (and vice-versa). The original phone number where that happened has been ported to the cable company and now goes through coax (the equipment that handles it is basically a cable modem with a phone jack).
The world was so very different. Waiting for that 0 to finally work its way around the dial, good grief. Especially since as a kid I was perpetually afraid any phone number that included a 0 might lead me to somehow get connected to a phone operator, so I wanted to dial the following number as quickly as possible.
IMHO the solution would be a calling system where spoofing is difficult/not allowed.
Make the winner fill out the tax forms and send them directly to the IRS. The IRS informs the promotion they've received the tax forms, and verifies names, addresses, amount match. The promotion releases the prize to the winner.
If you are paying someone more than $600, you need to cut a 1099 form, which tells the category, such as interst, rent, misc, etc. (1099-Int, 1099-Misc, etc.).
On the 1099, you must put the Tax Id of the recipient, which for a person is their SSN, and for another entity is typically their EIN.
You submit your copy of the 1099, and they submit theirs. They need to match or the IRS see a red flag.
So, no, you can't simply say "here's the form, you submit it".
Source: I'm not a Tax Attny, but I live with one, and have co-owned several businesses that needed to cut and/or receive W-2s, 1099,s etc.
I thought it was only the 15k prizes above gift tax but it was actually any prize for tax tracking. Lots of people balked when the SSN question came up and understandably so. In a few cases the prizes were motorcycles and ATVs and I felt bad for the people that passed them up.
The promotions systems were brand focused and most of them really did want to give away the prizes but sometimes it was tasking due to the fear of a scam.
The entries were mainly for brand focused games and brand focused gear/prizes mostly marketing focused. The system also only asked for email and the opt-in for the company/brand loot running it was un-selected. Though the brand companies did want to collect emails of people interested in the brand, they had to opt-in for that. We mainly needed emails for contacting if the user won. After winning, names/SSN/location would be asked for but lots of people weren't having it.
Basically any transfer of value is tracked and the company that gives it away needs proof to write off the amount and/or declare it a gift.
The SSN and affidavit are the scary part where people think it is a scam.
Anytime you win prizes this happens even if you are on a gameshow. 
If they won they must be contacted to verify and get info to send them the prize.
Since it is a transfer of value, the SSN has to be known for the 1099 form that is required by the IRS after $600 in value being transferred. It is also required if the sponsor gives it as a gift, pays the tax portion and for the sponsor to expense it out on the business' taxes.
Same thing happens on gameshows or any giveaway.
It is probably easier to trust after you were on a physical gameshow though, if you just won a prize online it seemed scammy to many eventhough we took all precautions to make it legit including no opt-in when they entered the email or phone. Only their email/phone was required to enter after they won the minigame or played the ticket. Everything else was asked later if they won the prize.
It is harder than you'd think to give away the actual prize to people that won it due to all the scams out there taking the fun out of things.
I think most people will give up the digits then.
Lots of people just didn't believe it and thought it to be a scam or maybe denied it due to the taxes, or maybe they were trying to stay on the down low due to collections or something who knows. For whatever reason, they didn't want the prize or didn't believe it.
Since it wasn't a cash prize in most cases, people would have to pay some taxes on it so maybe they didn't think it was worth it. Cash prizes are always easier as the person can just pay the taxes out of the prize, a product like a motorcycle or something fairly big, they would have to sell to pay taxes maybe.
Then it becomes a problem where you need assurance that the customer is going to actually show up at the store and claim his prize before you go to the trouble of shipping it out. Not a big deal.
That way the contest operator need not ever see the winner's SSN.
The amusing thing is the apparent widespread assumption that contest operators are shady as f.
Obviously all the scratch cards were winners for the holiday.
My dad scratched his card and said "Oh great, I won the car!"
The scam guys eyes opened wide and he had a confused look on his face and asked my dad to show him the scratch card. Obviously it was actually for a holiday, but it was great seeing the confusion in the guys face since he knew there was no car.
As a lark, it would've been super funny to create a realistic winning "ticket" for the car and substitute that in place to see the reaction.
Obviously it would require some prep work... but for kicks it would appeal to some. ;)
I sat through one of these once, curious about how it was going to go, and with the intent going in of not ever buying anything anyway. They present the timeshare as if it costs only pennies a day, and never admit to the true cost unless pressed very hard (and even then they never quote a final figure). What they are really selling is a loan package for the purchase of the timeshare (where the timeshare company is themselves loan originator) with an attached interest rate of something like 12 or 13% APR (bank mortgages at the time I sat through the one I sat through were running about 3.5-4% APR). The timeshare, if you can squeeze a dollar figure out of them comes out to be about $40,000 for which they finance it for you at their 12-13% APR (so a gold mine for them, but bad for you).
I ended up getting the double-team effort (two trying to convince me to jump in) to try to sell me on the value of the scam before I had finally had enough and cut off the sales pitch. Meanwhile, all around me (they did the pitch in a large room with small tables where everyone was in view of everyone else) I was watching the gullible filling out their "loan applications" and setting themselves up for $500/month for the next ten to twenty years before they could pay off the 'loan'.
The cost, plus the interest, was setup such that one would be hard put to actually be able to go on enough vacations at the timeshare to actually make the timeshare profitable for the new owner. If one went on the number of vacations that are typical, one was setting oneself up for each vacation ultimately costing $25K+ (for what should have cost only about $2-3K). This, of course, was the intent of the group running the timeshare, hide the true cost enough that the gullible don't realize they are paying $25K for what should have cost them $3K, and pocket the difference as pure profit.
They shuttled us to one of their premier properties where they took us to a sales room and served us breakfast. After a few moments they had everybody gather around a large presentation screen and a salesman who spent the next hour not just going over all the "benefits" of buying a timeshare, but tying that to a scripted and intensely acted "deeply personal", tear jerking story that ranged through decades of his life. The delivery was world class small stage acting -- it was that impressive. After that they paired us all off with a secondary sales guy who took us to a model room and start on the normal high pressure sales tactics.
Our only escape was that we simply lied about our income and looked to be too poor to ever afford anything they had on offer and told them we were only interested in vacationing to places they didn't have a presence. It was quite an intense experience. We left, got our free tickets to a show and were shuttled back to where it all started about 3 hours earlier.
It was absolutely bizarre and I kind of can't believe the entire operation is legal.
It was a timeshare tied to a big-name hotel chain, and as far as I could tell they were selling some hotel rooms as timeshare units to finance construction and maintenance. So the deal wasn't good, but it was substantially less of a scam than the stereotype because they had a non-scam business to protect. That, or the guy was so sharp that he really did persuade me quite effectively, and I was only saved by having a a prior of "this is the worst deal imaginable". (Well, that and the Odysseus bit - I decided in advance to refuse no matter how good the offer looked.)
The funniest part of the slightly-less-bad scam was that it enabled them to spend a while talking about how it's "not your parent's timeshare" and "not like those shady offers from the 80s". Which was true I guess, you got nice rooms in many places instead of one rundown house - they were just charging rates that were steep even before the multi-thousand-dollar "maintenance fees" kicked it.
Oh well, the free travel and event tickets were actually a great dollars-per-hour value - as long as you said no.
My girlfriend's mother dragged us to see a presentation associated with one of the "Flipping" TV shows.
They, of course, wanted to invite you into their program. It was "hugely successful". How successful?
"We've funded $100MM of house purchases for our members! We have nearly 8,000 members across the country!"
Well, $100MM in support sounds awesome for most things. Then you think about it more. And let's be generous to them, say the average house they buy costs $100K. That's 1,000 homes they've funded.
But hang on, they have 8,000 members. And they boast that some of those members have flipped 20+ homes each! That means, wait, less than 1 in 10 of the people who "joined their ($4,995) program" ever flipped a house through them...
That's not the kind of math they like you breaking down at those seminars for the other members during the meal break...
I don't know, selling 8,000 people $5,000 weekend seminars seems a better way to make $40M than trying to flip $100M of houses...
It was less impressive than we hoped it would be, but we had a good time by replying leading questions with undesired answers. (“How much do you pay per night for a hotel?” “$150 for our excellent Airbnb!”)
I almost felt bad (but not really) for the sales woman who was obviously wasting her time.
When her boss joined in to take it to the next level, I simply asked him: “we’re going to France this summer, 6 months from now, in the Nice area. Show me which offers I could book today through your timeshare plan.” There was nothing reasonable. He gave up soon after that and we received our $300 tour tickets for free.
All in all not a bad deal, but we won’t do it again.
First thing you need to know is that any major contract in Australia had a "72 hour cooling off period" in which you could cancel it with no redress or regress.
Want a cheap holiday? Bring your kids to the Gold Coast, look up the best time share resort, Friday morning,sit through the spiel, sign on the line that is dotted.
Through the weekend you have access to all the resort amenities, kayaks, jet skis, pools, etc. All comped.
Monday morning, when you were about to head to the airport? Drop off a letter at the front desk with the contract, canceling it.
Ethical? Probably no less so than they were, so hard to find sympathy.
We went to several in southern England. We kids could play in the pool or whatever, while our parents sat through a presentation for a couple of hours. Then we spent the rest of the day together, before heading home.
Though more recently, "The EU has ruled that any new timeshares or long-term holiday products with contracts of more than a year must be sold with a 14-day cooling-off period and written information – in the buyer's first language – detailing their right to cancel within this period must be provided.", so your scheme would work especially well now.
They used a lot of tactics like personal vacation stories, highly suspect financial calculations and so forth. But the one I was most impressed by was getting people in the habit of saying "yes!" a lot. They'd ask a bunch of really dumb stuff like "Do you like to go on vacation?!", "Do you like to have FUN?!", "Do you like to SAVE MONEY?!" etc to get people all hyped up. Then they'd ask them if they want a timeshare, and people are primed to say yes. There's some actual psychological studies on that effect. It worked really well.
They also had our credit card info already because we were staying in another Wyndham property, and kept saying that we'd have to sign some form or else they'd charge our card for the tickets. Of course they made it difficult to get that form. You can get it after we tour one of the model units. You can get it after we look at another one. You can have it after we watch this video. Sure, you can have it now, but first let's look at this financial worksheet. Always being super nice to make it hard to be assertive with them. I finally had to basically curse at the sweet young lady to get the form out of them, but they managed to tack on 45 minutes of high pressure sales time over and above the minimum we had to spend.
It's all quite impressive in a "dark patterns" sort of way.
I presume that quite a few of these are actually timeshare employees playing the role of "conspicuously convinced punter"
I wonder which approach works best? (Though I guess if there are enough plants, you could get both effects going at once.)
The movie "Queen of Versailles" was fascinating. Timeshare mogul builds USA largest house https://www.imdb.com/title/tt2125666/videoplayer/vi191341081...
52 people each buy a week share.
Each person gets charged $100 / month.
So 52 people each pay $1200 / year, which is the $62,400. Which I'm guessing is a bit more than the cost of maintenance
You aren't just paying maintenance for the week that belongs to you. Original calculation of $62400 is correct. Part of the scam is obfuscating from you the true costs of the deal.
If the 52 week-owners knew each other, and could all afford the costs of the share in the first place, they could conceivably form their own LLC, cut out the timeshare company middleman, pay $10k each up front for week-length shares in a $520000 property, and cut their maintenance fee in half, to $50 per share per month (assuming 5% upkeep/utilities/taxes per year). They could even rent out any unused weeks on AirBnB to cut the maintenance charges, or even pay out distributions.
The timeshare people are making bank on the fact that getting up to 52 people to spontaneously come together in a common cause is extremely unlikely. You need a prime mover organizing the whole thing, who is ideally positioned to profit from information asymmetry.
I guess there would still be a discoverability problem, not to mention the very significant risk of putting your money into a scam.
For instance, you might find an algorithmic pickle agent in the network, and tell it that you could eat one big jar of crisp dill cucumber pickles every two weeks if it costs less than 8 money units, delivered to your door, or one per week if it costs less than 3 money units, committing some number of money units greater than 8 to back a promise to buy at those prices. A small-time pickle-making farmer might tell the agent that they can ship at most 500 jars a week, as long as they get at least 2 money units per jar, or as many as 800 if they can get 4 per jar (cost of hiring a dedicated packer, perhaps). The pickle agent consults with a commodity shipping agent, calculates a billion different ways to move pickles from suppliers to consumers, and then starts moving money and pickles around. Everyone who promised to buy at a certain price is guaranteed to get the goods at that or a lower price, and everyone who promised to sell at a certain price is guaranteed to ship the goods at that or a higher price. The shippers get their fee for moving a package from point A to point B. The agents take their cut to pay for their computation, and for insurance against failed shipments or bad pickles. The system would also need to include distributor/importer/resellers, because some trades just aren't possible unless you pack a whole pallet of pickles, or a whole truckload/shipping container, and break that out for individual orders closer to the consumers.
That's all technically possible with smart contracts, as far as I know, but it would require a huge amount of programming effort to even get the basics correct. And Wal-Mart already has their supply chain, inventory, and distribution software in place.
- I would assume the timeshare companies often have more supply of rooms than they have paying "owners." For example certain destinations are only desirable during part of the year when the weather is favorable. So they may not be making this full amount in the math above.
- They have regular expenses beyond the room maintenance itself: overall building maintenance, resort amenities, staffing, utilities, cable/tv, etc.
- For comparison: a simple $150 hotel room for example would be $150 x 365 = $54,750. Similar to the timeshare, this one may not be 100% booked, though I don't know what booking/ownership rates are for timeshares vs. hotel rooms. In any case many timeshare units may have one or multiple bedrooms, a kitchen, a living area, etc. whereas the $150 hotel room is probably just a sleeping area. So you are likely getting "more space" with the timeshare.
Admittedly, many timeshares are scams, I won't deny that. But the evidence you provided for this one is not completely indicative of that. It still may not be a "good deal" based on how you prefer to travel, and if it's not certainly don't partake in it.
To me spending $100 x 12 = $1200 per year for your housing on vacation is not completely unreasonable compared to $150 x 7 = $1050, considering the extra amenities and opportunity to save money by cooking in the unit. It doesn't make the timeshare a "steal of a deal" (like some of the presentations make it out to be) but rather more of a "prepaid vacation" which may make sense in some situations. It seems like a "legitimate business" in this case to me, assuming the up-front costs to buy in are not too crazy. Country Clubs have been using a similar structure of "buying in" + recurring fees since before the timeshare industry even existed, and presumably these country clubs are legitimate businesses as well. There are good and bad players in the timeshare industry, like is the case in so many other industries as well.
My parents are Worldmark owners, so I've done some analysis on that one in particular. There is a decent amount of flexibility (destination) and the units have seemed pretty well-equipped. In the math I've done it seems to work out to not necessarily make your vacation "cheaper" but it doesn't make it "more expensive" either. They like it because they get more space and a kitchen to cook some of their own meals, and they use it as encouragement to take vacations to destinations they otherwise would not have thought about (and have very much enjoyed).
The timeshare company in the article though is clearly a major scam though! I trust that most people on HN can take a look at the math to weigh what may be a good deal for their personal situation.
We ended up doing that three times, and even knowing what I was getting into ahead of time I found their "hard sell" tactics both persuasive and exhausting. I didn't get roped into anything, but I can definitely see how it happens.
The hack is to attend, tell them you go once a year, sometimes twice, to some ethnic ancestral home town, and you'll buy on the spot if they have a timeshare there. Pick out some two-stop-light town in some out of the way country, that doesn't even have AirBnB rooms, and you can see the sales people visibly deflate as they vainly look for a listing in Borat-istan. Put on a show of being all sad, and explain that you can't imagine paying for their fantastic deal for only 15% of your annual travel budget, but to put you down in the wait list as the first to buy when they expand to your home town.
You are in-and-out in the allotted time, with the freebies, usually three hours max. I actually like inspecting the actual buildings to try to spot whether or not they took shortcuts, as how these scams work fascinates me, and some of these places have genuinely good ideas I scrapbook for my homebuilding notes, so I don't mind the lead up to the real sales pitch where I deflate them, but I'm sure you can modify the hack so you open with your counter-pitch and are in and out in minutes. I've seen people report they tell the salespeople up front they only came for the freebies, they're never buying, and if both sides agree to discreetly walk early so the sales manager doesn't notice, they'll rate the sales effort A++++ (there are always surveys afterwards), and are out in minutes.
I'm curious with groups like 419 Eaters why there aren't more organized scambaiters for timeshare scams. The freebies are legit, and if you're planning to be in a particular area anyways, three hours for a 1-2 day stay, especially if you like seeing how others solve various housing-related challenges, is a good trade.
Time is money, and I suspect the best way to cost them money is to waste their time.
He gave a talk covering the same subject matter too, which is faster to grok if that's your kind of thing.
After reading/watching this stuff, these kind of scams become incredibly transparent. And it's fairly ugh to see fellow humans subsequently get sucked in by them.
"The way you spot a mark is to look for the person who thinks they can't be taken. They're the greenest grass to a con man."
I'm sure it's in the video somewhere :-)
Thanks for the free Vegas trip! I actually won some money that trip, so technically I walked away from the scam with a profit!
Lesson: Don't just settle for free tickets for a show, find out if they have any other incentives.
Things started off politely enough. Then about 30 minutes in they get really mean, really fast. this was wyndham by the way - if you check online, looks like they have nothing but 1 star reviews, from those that did sign up.
It starts with manipulation, then insults on your intelligence, then move onto insults on your personality, followed by countless bullying tactics. Then, once that doesn't work, they call over some ruthless thug boss lady, to really intimidate and bully you. These guys are world class jerks. i don't know how they sleep at night.
Once they realize that they can't get you, they'll just keep beating you up, just for kicks.
Boy, that's got to be a stressful job.
The other option is go on vacation, send your parents to the presentation, and you take the freebies. This worked for a friend of mine- his parents old/disabled enough that they couldn't enjoy scuba diving and the like anyway, they were mentally competent enough to not sign anything, and they enjoyed the presentation better than the other tourist traps in the area.
It doesn't make economic sense, but once they find out your not going to buy it, they spend the rest of the time making you'r experience as horrible and stressful as possible. Perhaps to dissuade others from doing what you just mentioned.
Yes, I know, "the consumers shouldn't be so dumb". But there is always the group of a society that will bite. The seller may make a good buck, but these tactics have many downstream effects that just get compounded for the people buying this garbage.
There should be some kind of protection for the consumers in this case.
I know it would be hard to define the line, but in this specific case, it's clear that it shouldn't be allowed.
This gets to the heart of a question I've always had about unfettered markets, and never seen answered.
It's widely acknowledged that markets don't just satisfy demand, they also transfer information. If you know something other people don't, you can make money, but in doing so you'll gradually disperse your unique knowledge until it's no longer valuable. (Either directly, by selling it, or indirectly, as people see that you're consistently willing to make transactions other people wouldn't.) At best, this is a payout for the productive activity of spreading knowledge (the argument for arbitrage). At worst, it's a short-term scam that's self-negating.
This is all true. Timeshares spread information because people noticed "if this is such a great deal, why do you have to pay people to listen to the pitch?" And so timeshares got a horrible reputation with most people. When I talk to hard libertarians, anarcho-capitalists, and so on, this is their argument - it took some time, but the marked worked even with asymmetric information.
But... new information can be created, at least in economic terms. Timeshare pitches now have segments on why this timeshare isn't a scam like the old ones. There are new names for things that basically amount to timeshares. The focus of the scam has moved from high interest to high fees.
And so the scammers constantly 'make' new information that disadvantages everyone who lacks it, and get money spreading that information to the populace. Is the pure-markets system supposed to not have this problem, maybe by correcting too fast to reward the scam? Or is it just accepted that there will be some large and stable amount of scamming at all times?
This is one of those cases where regulation makes sense. I think regulations aimed at improving information symmetry are some of the best. They are fairly low impact; maybe they stomp on an arbitrage opportunity, but they don't limit the solution space nearly as much as regulations that simply proscribe what you can and can't do, for instance.
Basically: the "hard libertarians and anarcho-capitalists" are just wrong. But if they were to rebut with a take down of state controlled economies, I would definitely agree with them about that. The trick is to strike a good balance.
A more general increase in the power of contract and what the need to include to make them valid.
Something similar to the nutrition label.
I don't think I've thought about his for years, so thanks. I think. I didn't recall how cheap Pa was.. :)