Jacob Bernstein of Women’s Wear Daily profiles personal finance guru Suze Orman and examines some of her conflictss of interest.
Bernstein writes, “Fair Isaacs’ credit model, known as a FICO score, is the most widely used in the United States and the arrangement between them and Orman has been a source of controversy in the financial press, since Orman promotes the importance of a good FICO score in her books at the same time she is earning money from the very company that sends that score to potential lenders.
“Another source of controversy is Orman’s relationship with TD Ameritrade, with whom she has a business partnership. To convince viewers of her show to begin saving, Orman has suggested going to Saveyourself.com (a Web site she set up) and opening an account with that firm. If you deposit $50 a month in each of the first 12 months, the bank will match you — up to $100. ‘It’s a savings rate of 15 percent,’ Orman has said repeatedly. The trouble is, after the first $600, the interest rate drops to an ordinary one, making the offer more of a marketing ploy for the bank than anything else.
“Recently, Orman has also come under fire for not anticipating the meltdown of the financial system and for being a sometime cheerleader of investing in real estate. For her part, Orman says, ‘I still believe that real estate purchased at the right time, when it made sense, is one of the best investments you will ever make. You cannot live on a stock certificate.'”
Read more here.
