February 29, 2008
Atlanta, GA - The Governor’s Office of Consumer Affairs has joined a group of federal, state, and local government agencies and national consumer advocacy organizations to launch the 10th annual National Consumer Protection Week (NCPW), March 2-8, 2008. NCPW highlights consumer education efforts in the fight against fraud in communities across the nation. NCPW 2008's organizers encourage people from coast to coast to fortify their financial know-how. Financially savvy consumers are likely to make smarter decisions about managing their money, using credit wisely, and building a solid financial foundation.
According to the Federal Trade Commission, consumers conduct some type of financial transaction requiring an educated decision every day: shopping for a mortgage or auto loan; understanding and reconciling credit card statements and telephone bills; choosing savings and retirement plans; comparing health insurance policies; understanding their credit report and how it affects their ability to get credit and on what terms; or simply deciding how to pay for a purchase.
The Governor’s Office of Consumer Affairs (OCA) offers the following advice to Georgians on being better informed consumers and avoiding fraud:
Used Car Purchases – A lot of consumers shopping for used cars end up with vehicles that don’t perform as promised or whose contracts contain fees or terms that the buyer was not aware of. Remember to follow these tips when shopping for a used car:
- View advertising with a cautious eye and do not make assumptions. Look for fine print, asterisks, limitations or conditions to the offer. Remember: “If it sounds too good to be true, it probably is.”
- Run a vehicle history report to find out accident and repair history, the number of previous owners, recalls, whether the vehicle was salvaged or in a flood, and to verify the accuracy of the odometer reading.
- Have the automobile inspected by a qualified mechanic that you trust.
- Be sure before you sign your contract. There is no “cooling off” period when it comes to car purchases. What’s more, all vehicles are sold AS IS unless otherwise specified in writing. So unless you have a specific written promise or purchase a service contract, the seller may not be liable for any problems the vehicle has.
Tax Refund Anticipation Loans – Cash-strapped consumers may be attracted to the appeal of Refund Anticipation Loans (RALs) offered by tax preparers, which promise to get cash in the hands of tax payers sooner than waiting for a refund from Uncle Sam. The problem is that RALs come with very high annual interest rates, ranging from about 35% to over 500% and often don’t get consumers their money any faster than filing a standard claim. Consumers should avoid these high-interest loans and consider taking advantage of free e-filing through the IRS and its registered partners.
Debt Collectors – If youare being hassled by debt collectors you do have rights and recourse. While you cannot erase debt you actually owe, if you write a letter to a debt collector requesting that they stop contacting you, they must refrain from doing so except to acknowledge that there will be no further contact or to notify you that they intend to take some specific action. If you do not owe the debt in question, you should advise the collector of that in writing and pull a copy of your credit reports to make sure that an identity thief has not opened up an account in your name. If a debt collector continues to contact you after you have requested that he stop, you can file a complaint with the Federal Trade Commission by calling 1-877-FTC-HELP or visiting www.ftc.gov.
Credit Repair & Debt Management Companies – Companies that promise to erase bad credit, remove bankruptcies and bad loans from your credit report, and legally create a new credit identity cannot live up to their promises. Consumers who fall prey to these false testimonies may lose hundreds or thousands of dollars without any improvement to their credit. Remember: no one can legally remove correct information from your credit report, even if it negatively reflects on you. If you need professional help managing or getting out of debt, there are legitimate companies who can assist you. Georgia consumers should know their rights by being aware of the laws that regulate the activities of these companies:
- A debt adjuster may not charge you a fee of more than 7.5 percent of the amount you pay monthly for distribution to your creditors.
- All funds received from you, minus authorized fees, must be disbursed to creditors within 30 days of receiving them.
- A separate trust account must be maintained for your funds, and it must be audited annually.
- Copies of these audits and proof of insurance coverage must be filed annually with the Governor’s Office of Consumer Affairs.
- Phishing - Beware of unsolicited emails that ask you for personal information such as your social security number, bank information, PIN numbers, etc., as the sender is likely an identity thief. Companies you do business with should already have this information on file. However, if you think the request may be legitimate, don’t respond to the email or web page links in question; instead, contact them directly via the number on your account statement, credit card, or by requesting the number from directory assistance.
- Internet Auctions – Many consumers get conned when they buy or sell goods via Internet auctions. Fraudsters may accept your payment but fail to ship the item. Or they may misrepresent the quality or value of the item. To help prevent these types of fraud, consumers should only use reputable auction sites and always read the feedback on the seller beforehand to see if the reviews are positive (and numerous). Avoid paying by wire transfer; instead use an online payment service, such as PayPal, or your credit card, which may offer additional protections. If you are selling merchandise online, be suspicious if someone offers to pay more than the sales price. This is usually a scam, in which the buyer sends you a check for more than the agreed-upon price and then asks you to mail or wire him funds to cover the overage. The buyer’s check turns out to be counterfeit, and the victim is out the value of the product shipped, as well as the money he sent the buyer.
Sweepstakes/Lotteries – Phony lotteries and sweepstakes, many of them foreign, promise the participant that he or she has already won a prize and just needs to send in a check to pay for taxes, handling fees, etc. Sometimes the mail piece includes the sweepstakes winnings in the form of a check, which, of course, turns out to be fraudulent. It is illegal to charge someone for a prize. So, it’s simple: if you are asked to send in money in order to collect winnings or a prize, it’s a scam.
Home Repairs – Many Georgians are hiring contractors to do home repair/home improvement work, only to find that the work is done poorly or that the costs exceed the agreed-upon price. To avoid being taken advantage of by a disreputable contractor:
- Obtain written bids from at least three different contractors.
- Make sure you get a written contract that includes the scope of work to be done, the starting and completion dates, the cost of the total project and all warranties.
- Ask for references and check them out.
For more information, contact Bill Cloud, Governor’s Office of Consumer Affairs, at 404-656-3790.