Wednesday, August 8, 2012

"Hobo Prince Economic Project" founder fined $1 million by Oregon regulators

Back in April, we issued a cease and desist order against Shelby H. Bell, a man who runs the "Hobo Prince Economic Project."

The Clark County, Wash. man was promising people seven years' worth of weekly $900 payouts in exchange for a $25 signup fee. He maintained that each person’s contract would be financed through a complex series of transactions, including issuance of a $500,000 “reverse” insurance policy purchased with a $25,000 payment from an unnamed bank.

Since he wasn't licensed to transact insurance at all in Washington, Insurance Commissioner Mike Kreidler ordered Bell to stop trying to sign people up for this highly dubious offer. (We subsequently received numerous calls from people across the country who'd signed up for the plan and blamed us for dashing their hopes of a big payout.)

Yesterday, the Oregon Department of Consumer and Business Services fined Bell $1 million, saying that none of Bell's investors have apparently made any money.

"Bell in less than a year attracted more than $187,000 from at least 7,480 people in multiple states and U.S. territories," the department said in a press release, accusing Bell of "offering false hope to thousands of people."

"Bell claimed to be worth billions with backing from the U.S. Treasury through an International Bill of Exchange, which actually has no value," Oregon regulators continued. "Also, investigators determined that Bell used investors’ money to pay for food, movie tickets, a vehicle, and other personal expenses."

Here's a link to Oregon's order.

What's the "Washington Fair Plan?"

Q: My home (or business) insurance has been canceled, and the cancellation notice refers to the Washington Fair Plan. What is that?

A: The Washington Fair Plan was established in 1968 to provide basic property insurance to consumers who could not obtain property insurance in the voluntary, or standard insurance market. Although many years have passed and the home insurance market of today offers many options for home insurance, the Fair Plan still exists and functions under the rules and regulations of our office.

Participation in this program is mandatory for all property insurers in Washington. All companies writing property insurance are members of the Fair Plan. Every insurance agent or broker who is licensed to write property insurance in Washington is required to know about and help consumers if they want the services of the Fair Plan.

The Fair Plan application may only be completed by a licensed insurance agent, and must be signed by the agent and the applicant. Basic fire insurance coverage may be provided for dwelling and commercial risks.

Although you will need to have a licensed insurance agent file an application on your behalf, you may still get coverage information directly from the FAIR Plan.