Quick Consumer Tips

A savvy consumer is always on the alert for con artists and other shady efforts to separate you from your money. To protect your money and avoid being a victim of fraud, keep these things in mind:

 

1. A deal that sounds too good to be true usually is! Offers that often fall into this category are promises to fix your credit problems, low-interest credit cards, deals that let you skip credit card payments, business/job opportunities, risk-free investments and free travel.
2. Extended warranties or service contracts are rarely worth what you pay for them.
3. Say no to credit insurance offers. Often offered with credit cards, car loans and home mortgages, it is almost always better to purchase regular property, life or disability insurance.
4. There is no universal three-day cooling-off period. Don’t be misled into thinking that you have an automatic three-days for canceling a purchase. Only a few types of contracts give you a right to cancel.
5. Think twice before sharing personal information. Protect your privacy and avoid unauthorized use of your personal information by following the advice in Protect your Privacy.
6. Beware of payday and tax refund loans. Interest rates on these loans are usually excessive. Even a high-interest cash advance on a credit card may be a better option.
7. Not all plastic cards offer the same protections. Your liability for the unauthorized use of a gift card and debit/ATM card may be much higher than the $50 maximum on your credit card.
8. Real estate agents represent the seller – not the buyer. When buying, consider hiring a buyer-broker who represents you.
9. Home and auto repairs are the subject of frequent complaints Second opinions are especially important when you are dealing with a repair service you do not know.
10. Think twice before you rent-to-own. Interest rates on rent-to-own purchases can be very high. If you miss a payment, you could end up with nothing. Consider other options such as buying second-hand at a thrift shop or through ads in your local newspaper.
11. Don't buy under stress. Research suggests senior citizens, people in crisis (e.g., coping with a death or debt), college students, small business owners, minorities, and immigrants are especially at risk of being victimized. Avoid making big-ticket purchases during times of duress.
12. Be cautious of Buy Here, Pay Here lots. If you decide to buy a car from a used car lot, be sure to read all of the papers before you sign. Don't sign contracts that allow the dealership to change the finance rate AFTER you leave the lot.
13. Work-at-Home ads usually don't payoff. Be especially weary of ads that promise huge annual salaries; they often require expensive upfront fees with no guarantee. You risk losing your money and wasting a lot of time and energy.

SERVICE CONTRACTS

Sellers of cars, major appliances and other expensive items may try to sell you a service contract or “extended warranty.” Service contracts can add hundreds to your purchase price and are rarely worth the cost. Some duplicate warranty coverage you get automatically from a manufacturer or dealer. Ask these questions before you agree to one of these contracts:

• Does the dealer, the manufacturer, or an independent company back the service contract?
• How are claims handled? Ask who will do the work and where it will be done.
• What happens to your coverage if the dealer or administrator goes out of business?
• Do you need prior authorization for repair work?
• Are there any situations when coverage can be denied? You may not have protection from common wear and tear. And some manufacturers do not honor contracts if you fail to follow their recommendations for routine maintenance.

 PRODUCT RECALLS
 

Ready to buy a used vehicle or other second-hand product? Check to be sure it hasn’t been recalled for safety reasons. Some recalls ban the sale of an item while others ask consumers to return the item for replacement or repair. Sometimes a seller provides a part that reduces the danger of using the product. Two websites post information on current recalls:

• www.Recalls.gov -- This site lists government-initiated recalls, streamlining access to information from federal agencies.
• www.pueblo.gsa.gov -- A listing of both government- and industry-initiated recalls.

Beware: Charitable Giving

Investigate before you donate. Some con artists use names similar to well-known charities or pretend to be raising money for state or local law enforcement agencies.

• Ask for written information, including how much of the money raised is actually used for charitable purposes.
• Ask your Secretary of State if the charity is registered to solicit in your state.

Check the Better Business Bureau and others for information on charities: www.give.org, www.charitywatch.org, and www.guidestar.org.

Beware: Youth Peddling

Some for-profit companies use young salespersons to sell magazines and other items door-to-door. They trick consumers into believing they are giving money to legitimate charities because consumers tend to support young persons and youth programs. If a young person solicits you, ask for identification verifying the organization’s name, address and purpose. If the representative can’t provide this information, ask them to leave. Report suspicious people to your local police department and/or contact the child labor division of your state labor department listed in the phone book. Even if you are satisfied with the information provided, don’t feel pressured to make a purchase or contribute.

 

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