Issue 101, February 2004

Table of Contents

  1. Governor Granholm's State of the State Address
  2. Michigan Reads Update
  3. DEQ Releases 2003 Solid Waste Report
  4. Top Consumer Complaints in Michigan
  5. New Banking Scams Unleashed in Michigan
  6. Top Ten Investment Scams, Schemes and Scandals
  7. Comprehensive Financial Literacy Web Site Launched by OFIS
  8. Jan. 26 Was'State Quarter Day'
  9. Jan. 26 Was Also Statehood Day
  10. School Report Cards Released

(1) Governor Granholm's State of the State Address

Governor Jennifer M. Granholm outlined her 7-point plan to grow Michigan’s economy and create new jobs for Michigan workers in her second State of the State Address before a joint session of the Michigan Legislature on Tuesday evening.

“The state of the state tonight is one of total determination,” said Granholm. “Michigan will become an economic powerhouse state in the 21st century. We will grow our economy by giving businesses the tools they need to succeed and by improving the quality of life for all of our citizens. To be an economic powerhouse, you can’t have one without the other.”

Granholm said that in the coming year, her administration will focus on retaining manufacturers while also attracting new businesses to the state, developing a 21st century workforce, creating cool cities, ensuring quality educational opportunities, making health care more accessible and affordable, and protecting Michigan natural resources.

In addition to growing the economy and improving our quality of life, the Governor also addressed the need to protect our citizens and their hard-earned dollars.

Two key initiatives announced by Governor Granholm tonight to provide affordable health care options to Michigan citizens are the new Michigan Prescription Discount Card, or MI-RX, and the Third Share Partnership for health care benefits. The MI-RX Card will allow as many as 200,000 senior citizens and working people without insurance to cut the cost of their prescription drugs by as much as 20 percent.

The Third Share Partnership, modeled after successful programs in Muskegon and Wayne counties, will help small businesses offer health insurance to workers by dividing the cost of the health care premium between the employee, the employer and the state, with the state’s third share coming in the form of a tax credit to the business.

“There are few things that affect the quality of our life and the quality of our work more than good health,” said Granholm. “Our seniors, our uninsured workers, and our businesses are faced everyday with the impact of skyrocketing health care and prescription drug costs. These new programs will help our citizens take care of their families, and help our businesses remain productive and competitive.”

To help businesses grow, Granholm called on the federal government to pursue international trade policies that level the playing field for Michigan and U.S. businesses. In addition, she announced two initiatives to streamline permitting processes in Michigan.

Granholm also announced three new venture capital funds to attract and grow businesses in Michigan. The Emerging Business Fund, the Venture Michigan Fund, and the Small Business Growth Fund will leverage federal and private dollars to make more than half a billion dollars available for starting a new 21st century business.

“New ideas can create entire new business almost overnight,” said Granholm. “But our best new ideas in Michigan can also die in the research lab or in someone’s garage or migrate elsewhere if entrepreneurs don’t have access to capital. These new funds will help businesses take root in Michigan and grow new jobs.”

The Governor’s address, entitled “Our Determination, Our Destination: A 21st Century Economy,” also included initiatives to aid Michigan’s manufacturing sector, provide interest-free loans to engineering and technology students, curb the use of credit scoring and end predatory lending practices, and stiffen legal penalties for those who prey on our seniors and vulnerable citizens.

“Tonight let us set out together, knowing that the road to educational excellence expands the road to good jobs,” said Granholm as she concluded her remarks. “The road to a healthy people in a healthy land merges with the road to good jobs. And the roads to a stronger business climate widen the highway to high quality jobs. As it was said that all roads lead to Rome, let it be said of us that we have moved with focus and determination on the road our citizens need most – the road to high-quality jobs and a great quality of life.”

Editor’s Note: For a full text of Governor Granholm’s State of the State Address, please go to,1607,7-168-23442_21981-84911--,00.html.

Source: Michigan Newswire, January 27, 2004.

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(2) Michigan Reads Update

Some of you may have heard about the Michigan Reads! project launched by Governor Granholm to encourage parents to read to their preschool kids.

Be sure to check out the newly updated Michigan Reads! web site at,1607,7-160-17447_26038---,00.html. With the current financial climate, much of this project is going to be web based and web delivered. The various Michigan Reads! committees have been working hard to utilize the web to deliver the tools and resources you'll need to host successful Michigan Reads programs at your library:


The Librarian's Toolkit includes background information, marketing resources, program development resources, book lists and quick print/easy activities. See,1607,7-160-17447_26038_27975---,00.html.

The Parents Toolkit includes background information that will help parents and child care givers understand the value of reading to preschool age children, book lists, and a host of quick print, easy activities that can be done at home. See,1607,7-160-17447_26038_28020---,00.html.

Please note that both of these tool kits are being updated and expanded weekly, so be sure to check back often for more information and resources.

You can learn more about Michigan Reads! at several training opportunities in the coming months including:


Author Visits will be coordinated through Lisa Mulvenna, Statewide Events Chair ( Information regarding Rhonda Gowler Greene's presentations and the costs associated with it is available on the web site at,1607,7-160-17447_26038_27975-82534--,00.html.

Currently, author visits are scheduled for January 17th at the Kent District Library (10:00 am) and at the Grand Rapids Public Library (2:00 pm).

Book Availability: Barn Yard Song, by Rhonda Gowler Green is the selected text for Michigan Reads! 2004. It is available from a variety of sources including:


Posters and other promotional items are being developed and will be distributed early next year. Please note that, these and additional marketing materials will also be available on the web site in PDF format so you can print out additional copies from your own computer.

Governor Granholm recently agreed to record some Public Service Announcements for the project. They will be distributed to media outlets in conjunction with Michigan Reads! weeks of April 18-30.


More than a dozen requests are pending with various potential funders from across the state and nation. Sponsors and Partners are listed on the web site at,1607,7-160-17447_26038_27016---,00.html. Special thanks to the Genesee District Library and the Michigan Center for the Book for their generous donations to Michigan Reads!

Information on making a personal contribution to Michigan Reads! is available at,1607,7-160-17447_26038_27016_28094-82545--,00.html.

A template funding request letter is available at,1607,7-160-17447_26038_27975---,00.html. Download this template, insert your library/community information and use it in seeking local support for your Michigan Reads! events.

Source: LuAnn Kern, Project Coordinator, Michigan Reads,,

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(3) DEQ Releases 2003 Solid Waste Report

The Department of Environmental Quality released the 2003 Report of Solid Waste Landfilled in Michigan on February 2, 2004. Data contained in that report shows that in 2003 solid waste imported into Michigan made up one-quarter of all waste disposed of in Michigan landfills. Michigan landfills accepted for disposal 62,615,429 cubic yards of solid waste last year, up from 57,540,922 cubic yards. Waste disposed of by Michigan residents increased by 2 percent, to 47,115,961 cubic yards, while solid waste imported from other states and Canada increased by 4,005,025 cubic yards, about 35 percent, to 15,499,468 cubic yards. The largest source of waste imports into Michigan continues to be from Canada, with total imports of 9,433,028 cubic yards, up 2,825,172 cubic yards, or about 43 percent, from 2002.

“The increase in the out-of-state solid waste disposed of in Michigan highlights the need for the Legislature to close the deal on solid waste legislation pending before them,” said DEQ Director Steven E. Chester. “We cannot continue to allow the importation of large quantities of solid waste into our state that may not meet Michigan’s high health and safety standards.”

Congress has been considering bills to authorize state regulation of solid waste importation for over ten years. The Michigan Legislature is considering a slate of bills that would, among other things, tighten prohibitions against disposal of certain items in Michigan landfills and ensure that waste disposed of in Michigan landfills meets those prohibitions no matter where the waste is generated. Other bills being considered by the Michigan Legislature would add a $3 per ton surcharge to waste disposed of in Michigan and devote the revenue to improving local recycling programs.

"In the wake of this report, it is now more imperative than ever that the Legislature deliver to my desk the package of bills to curb the flow of out-of-state and foreign trash in Michigan," Governor Granholm said. "I think we can all agree that Michigan's quality of life is eroded a little bit more with every truckload of trash that is brought in to our state. It is time for the Legislature to move on the trash legislation."

To receive a copy of the report, contact the DEQ, Waste and Hazardous Materials Division, Storage Tank and Solid Waste Section, P.O. Box 30241, Lansing Michigan 48909 7741, at 517 335 4035; or download the report from the DEQ Web site at:

Source: Michigan Newswire, February 2, 2004.

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(4) Top Consumer Complaints

Michigan consumers made more complaints about banking and credit concerns - including identity theft - than any other area, leading the state's Top 10 list of consumer complaints in 2003, Attorney General Mike Cox announced on January 26, 2004.

"My office will not allow Michigan consumers to be hoodwinked or scammed," Cox said, making the announcement at the start of National Consumer Protection Week. "When someone's identity is stolen or a vendor does not give a customer the benefit of the bargain, then our economy suffers, and we are all hurt financially."

Cox noted that for the second year in a row, banking and credit concerns, including identity theft, topped the list of complaints. The Attorney General recently launched a campaign, funded with $300,000 of federal money, to seek and prosecute occurrences of identity theft whose victims are vulnerable adults.

"Michigan citizens continue to be threatened by identity thieves looking to profit and pilfer off the unsuspecting consumer," Cox said. "Consumers must stay on their guard to prevent everyday credit and banking transactions from becoming virtual heists."

The list comprises the ten problems Michigan consumers complained about most as compiled from more than 19,004 written consumer complaints and inquiries, as well as 95,000 telephone calls from individuals and businesses.

During 2003, the Top Ten Consumer Complaints were:

  1. Banking and Credit Concerns
    Includes billing disputes, unauthorized credit cards, finance charges, and identity theft.

  2. Retail Complaints
    Includes scanner errors/failure to price items, unresolved refund requests, and quality of merchandise

  3. Internet Complaints
    Includes identity theft, spam, failure to deliver goods, and quality of merchandise.

  4. Telecommunication/Cable/Satellite TV
    Includes misrepresentation of rights/obligations, billing disputes, identity theft, and failure to rescind.

  5. Motor Vehicle Complaints
    Includes lemon law complaints, deceptive advertising, and quality issues.

  6. Mail Order Complaints
    Includes failure to refund, unsolicited merchandise, do not call complaints, and failure to deliver merchandise.

  7. Contractor Complaints
    Includes quality of work performed, failure to deliver services, failure to refund, and warranty issues.

  8. Warranties/Contractual Issues
    Includes warranty-fail to perform, fax law, and business vs. business complaints

  9. Personal Services
    Includes services-fail to deliver, failure to refund, and misrepresentation of rights/obligations

  10. Energy
    Includes price grossly in excess of competitors, utility rate complaints, billing disputes, and unresolved refund requests, and contract misrepresentations.

As in past years, the Attorney General takes this opportunity to help educate Michigan consumers during National Consumer Protection Week, February 1 to February 7. The Attorney General's Consumer Protection Division had a banner year in 2003, returning a record-high $326.6 million to the state budget, in addition to a record-high $1.66 million directly to consumers from debits and refunds.

Cox said the new consumer protection campaign in 2004 - dubbed "It's MI Identity" - has already begun, with contacts made at several adult care facilities where interviews with residents and free credit checks will help them explore whether they're being victimized by identity theft.

The campaign will also supply consumers with information about how to protect themselves as well as train local law enforcement agencies in investigative techniques to help report and thwart identity thieves.

Consumers interested in receiving electronic mail notification of Attorney General Consumer Alerts can sign up on the Attorney General's home page ( under "Desktop Direct." You may also sign up to receive notice of press releases and formal opinions. Examples of consumer alerts issued in the past several months include:

  • Fraudulent E-mail--Thieves Intend to Steal Your Personal Information;
  • Identity Theft Information for Michigan Consumers;
  • Nigerian and Counterfeit Cashier's Check Scams.

    Source: Michigan Newswire, January 26, 2004.

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    (5) New Banking Scams Unleashed in Michigan

    Office of Financial and Insurance Services (OFIS) Commissioner Linda A. Watters is warning consumers about two new banking scams.

    The first scam involves a fraudulent e-mail claiming it was sent by the Federal Deposit Insurance Corporation (FDIC). At approximately 12:00 p.m. (EST) on January 23, 2004, the FDIC Consumer Call Centers in Kansas City, Missouri, and Washington, D.C., began receiving a large number of complaints from consumers who received an e-mail that has the appearance of being sent from the FDIC. The e-mail informs the recipient that Department of Homeland Security Director Tom Ridge has advised the FDIC to suspend all deposit insurance on the recipient's bank account due to suspected violations of the USA PATRIOT Act. The e-mail further indicates that deposit insurance will be suspended until personal identity, including bank account information, can be verified.

    “This e-mail is a fraudulent attempt to obtain personal information from consumers and facilitate identity theft,” said Watters. “Financial institutions and consumers should NOT access the link provided within the body of the email and should NOT under any circumstances provide any personal information through this media.”

    The FDIC and the FBI are attempting to identify the source of the e-mails and disrupt the transmission. Until this is achieved, consumers are asked to report any similar attempts to obtain this information to the FDIC by sending information to

    The second scam involves a caller asking for personal and financial account information. The caller claims to represent the "National Bank Association" and says he or she is in need of the consumer’s bank account information so that the consumer can be removed from a national registry.

    “It’s a safe policy: if you did not initiate the call, do not provide any personal or financial account information. If you receive a call, the company contacting you will have your information on file,” Watters added.

    Source: Michigan Newswire, January 30, 2004.

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    (6) Top Ten Investment Scams, Schemes and Scandals

    The Office of Financial and Insurance Services (OFIS) Commissioner Linda A. Watters forecast that investors will be challenged with increasingly complex and confusing investment frauds on January 14th and identified the Top 10 schemes investors are likely to see in 2004. New to this year’s list are mutual fund practices, senior investment fraud, and variable annuities.

    “Investors face a complex maze of scams, schemes and scandals,” said Watters. “Our fight against fraud never stops because each year con artists discover new ways to fleece the public. Sadly, many of the age-old scams still work to cheat victims of their hard-earned savings as well. It pays to remember that if an investment opportunity sounds too good to be true, it usually is.”

    Information about the role OFIS plays in protecting investors in Michigan is available on the OFIS web site at: -- click in the “Financial Direction” icon -- or by calling toll-free at 877-999-6442.

    Investors lose billions of dollars annually to investment fraud, Watters said. She cautioned that investors must remain vigilant in the fight against investment fraud, especially in the current environment of significant budget cuts at the state and federal levels. “All securities regulators, whether local, state, or federal, share the common goal of protecting investors,” added Watters. “I urge legislators to help us continue to do our jobs by ensuring that regulators have sufficient resources to protect our citizens.”

    Watters, a member of NASAA, also announced a new interactive Fraud Center on the NASAA web site ( The center features details of the Top 10 scams, schemes and scandals; tips on how to detect con artists and avoid becoming a victim; an Investor “Bill of Rights;” instructions on how to file an investment-related complaint; and contact information for each state securities regulator. “Education and awareness are an investor’s best defense against fraud,” Watters said.

    The following ranking of scams, schemes and scandals for 2004 is based on a survey of state securities regulators conducted by the North American Securities Administrators Association. The list is based on the order of prevalence and seriousness as identified by state securities regulators: 1) Ponzi Schemes, 2) Senior Investment Fraud, 3) Promissory Notes, 4) Unscrupulous Broker/Dealer Representatives, 5) Affinity Fraud, 6) Insurance Agent Securities Fraud, 7) Prime Bank/High-Yield Investment Schemes, 8) Internet Fraud, 9) Mutual Fund Business Practices, 10) Variable Annuities.

    1. PONZI SCHEMES. Named for swindler Charles Ponzi, who in the early 1900s took investors for $10 million by promising 40 percent returns, these schemes are a perennial favorite among con artists. The premise is simple: promise high returns to investors and use money from previous investors to pay new investors. Inevitably, the schemes collapse and the only people who consistently make money are the promoters who set the Ponzi in motion. Con artists typically attribute government intervention as the reason why new investors didn’t get their promised returns.

    2. SENIOR CITIZEN INVESTMENT FRAUD. Volatile stock markets, low interest rates, rising health care costs, and increasing life expectancy, combined to create a perfect storm for investment fraud against senior citizen investors. State securities regulators said older investors are being targeted with increasingly complex investment scams involving unregistered securities, promissory notes, charitable gift annuities, viatical settlements, and Ponzi schemes all promising inflated returns. To learn more, visit NASAA’s Senior Investor Resource Center at

    3. PROMISSORY NOTES. A long-time member of the Top 10 list, these short-term debt instruments often are sold by independent insurance agents and issued by little known or non-existent companies promising high returns – upwards of 15 percent monthly – with little or no risk. When interest rates are low, investors often are lured by the higher, fixed returns that promissory notes offer. These notes, however, can become vehicles for fraud when the issuer of the note has no intention or capability of ever delivering the returns promised by the sales person.

    4. UNSCRUPULOUS BROKERS. Despite the stock market’s rebound in 2003, state securities regulators say they are still receiving a high level of complaints from investors of brokers cutting corners or resorting to outright fraud to fatten their wallets. “I give credit to the increasing numbers of investors who are giving their brokerage statements a closer look and asking the right questions about unexplained fees, unauthorized trades or other irregularities,” Watters said.

    5. AFFINITY FRAUD. Con artists know that it’s only human nature to trust people who are like yourself. That’s why scammers often use their victim’s religious or ethnic identity to gain their trust and then steal their life savings. No group seems to be immune from fraud.

    6. INSURANCE AGENTS AND OTHER UNLICENSED SECURITIES SELLERS. While most independent insurance agents are honest professionals, too many are lured by high commissions into selling fraudulent or high-risk investments, such as promissory notes, ATM and payphone investment contracts and viatical settlements. “Scam artists continue to entice independent insurance agents into selling investments they may know little about,”Watters said. The person running the scam instructs the independent sales force – usually insurance agents but sometimes investment advisers and accountants – to promise high returns with little or no risk.

    7. PRIME BANK SCHEMES. Another perennial favorite of con artists who promise investors triple-digit returns through access to the investment portfolios of the world’s elite banks. The negative publicity attached to these schemes has caused promoters in recent cases to avoid explicitly referring to prime banks. Now it is common to avoid the term altogether and underplay the role of banks by referring to these schemes as “risk free guaranteed high yield instruments” or something equally deceptive.

    8. INTERNET FRAUD.With the Internet becoming a common part of daily life for increasing numbers of people, it should be no surprise that con artists have made cyberspace a prime hunting ground for victims. Internet fraud has become a booming business. The most recent figures show cyberfraudsters took in $122 million in 2002, according to the Federal Trade Commission. “The Internet has turned from an information superhighway to a road of ruin for victims of cyber fraud,” Watters said. “Many of the online scams regulators see today are merely new versions of schemes that have been fleecing offline investors for years.” Watters also warned investors to ignore e-mail offers from individuals representing themselves as Nigerian or West African government or business officials in need of help to deposit large sums of money in overseas bank accounts. “Don’t be dot.conned. If you get an e-mail pitching a deal that can’t be beat, hit delete,”she cautioned.

    9. MUTUAL FUND BUSINESS PRACTICES. Although mutual funds play a tremendous role in the wealth and savings of our nation, ongoing scandals throughout the industry clearly demonstrate that some in the mutual fund industry are putting their own interests ahead of America’s 95 million mutual fund shareholders. State securities regulators, the SEC, NASD, and mutual-fund firms themselves have launched a series of inquiries into mutual fund trading practices. To date, more than a dozen mutual funds are under investigation and several mutual funds and mutual fund employees have either pleaded guilty, been charged or settled with state regulators. “These investigations demonstrate a fundamental unfairness and a betrayal of trust that hurts Main Street investors while creating special opportunities for certain privileged mutual fund shareholders and insiders,” Watters said. “We will continue to actively pursue inquiries into mutual fund improprieties and are committed to aggressively addressing mutual fund complaints raised by investors in our jurisdiction,” she added.

    10. VARIABLE ANNUITIES. Sales of variable annuities have increased dramatically over the past decade. As sales have risen, so too have complaints from investors. Regulators are concerned that investors aren’t being told about high surrender charges and the steep sales commissions agents often earn when they move investors into variable annuities. Some investors also are misled with claims of guaranteed returns when variable annuity returns actually are vulnerable to the volatility of the stock market. The benefits of variable annuities – tax-deferral, death benefits among others – come with strings attached and additional costs. High commissions often are the driving force for sales of variable annuities. Often pitched to seniors through investment seminars, regulators say these products are unsuitable for many retirees. “Variable annuities make sense only for consumers willing to invest for 10 years or longer, but they are not suitable for many retirees who cannot afford to lock up their money for a long time,” Watters said.

    Source: Michigan Newswire, January 14, 2004.

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    (7) Comprehensive Financial Literacy Web Site

    The Office of Financial and Insurance Services (OFIS) within the Michigan Department of Labor and Economic Growth has launched a comprehensive web site featuring a variety of financial literacy materials.

    The new “Financial Direction” web site can be accessed directly from the OFIS home page at,1607,7-154-10555_12902_28358---,00.html. A listing of the materials on the web site can also be obtained by calling OFIS toll-free at: 877-999-6442.

    “To make sound financial decisions consumers need access to reliable information,” said OFIS Commissioner Linda A. Watters. “This consolidated site offers links to a wide range of resources along with tools designed to provide students with the fundamentals of financial literacy – before they make critical financial decisions.”

    In addition to great resources like the OFIS produced “Mortgage Shopper’s Resource Kit” the “Financial Direction” web site links consumers directly to comprehensive financial education resources including The Federal Reserve Bank of Dallas, Smart Money (Federal Deposit Insurance Corporation) and the Federal Trade Commission.

    More specific information is organized by topic and offers information ranging from predatory lending to links to professional trade organizations.

    Source: Michigan Newswire, January 6, 2004.

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    (8) Jan. 26 Was 'State Quarter Day'

    To mark the unveiling of the new Michigan quarter, Governor Jennifer Granholm proclaimed Jan. 26, 2004, as State Quarter Day. The full text of the proclamation is available at

    The official release of the new Michigan quarter into circulation took place at a ceremony at the State Capitol. All children who attend the quarter release ceremony received at no charge, a new Michigan quarter. Michigan’s is the 26th quarter to be released as part of the U.S. Mint’s “50 State Quarters” program.

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    (9) Jan. 26 Was Also Statehood Day

    When Michigan entered the Union on January 26, 1837, it was the fastest-growing territory in the country. While not growing nearly as fast today , Governor Granholm did commemmorate the anniversary by announcing festivities at the State Historical Museum.

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    (10) School Report Cards Released

    Most of the state's schools received passing grades on the first-ever Education Yes! School Report Cards, released on Friday, January 30th. But almost 900 schools statewide failed to make "adequate yearly progress", according to a federal measure that comes with controversial consequences. Another 1145 schools received the report cards without grades because the state did not have sufficient data.

    The grades reflect scores on the Michigan Educational Assessment Program standardized tests, school attendance rates, graduation rates and whether the schools are improving enough to meet the demands of the No Child Left Behind Act.

    The federal law's goal is that schools do better each year, until 100 percent of students read and do math at grade level. The law requires this by 2013-2014.

    Schools not making adequate sanctions, such as allowing the students to transfer to neighboring schools.

    For more information, see the State Department of Education web site at or

    Source: Lansing State Journal, January 31, 2004.

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