CONTENTS NJ Car Insurance by jolinmilioncherie


Quick Consumer Tips                      vi   Insurance                           24
How to Use This Handbook                  1      Auto Insurance                   25
PART I – BE A SAVVY CONSUMER              1      Homeowner/Renter Insurance       25
General Buying Tips                       1      Health Insurance                 25
   Before You Buy                         1      Long-Term Care Insurance         26
   Service Contracts and Extended                Disability Insurance             27
       Warranties                         1      Life Insurance                   27
   Product Safety Recalls                 2   Investing                           27
   After You Buy                          2      Financial Brokers and Advisors   28
Shopping From Home                        2   Travel                              29
   Online Auctions and Private Sellers    3      Travel Safety                    30
Telemarketing and Spam                    4      Resolving Air Travel Problems    30
   Telephone Calls                        5   Utilities                           31
   Junk Faxes                             6      Electricity and Natural Gas      31
   Spam                                   6      Telephone Services               31
Protect Your Identity                     6      Water                            33
Protect Your Privacy                      7   Internet Service Providers          33
   Online Privacy                         8   Digital Television                  34
   Financial Privacy                      8   Services and Resources for          35
   Medical Privacy                        9      Consumers with Disabilities      36
Automobiles                               9   PART II – FILING A COMPLAINT        36
   Buying a New Car                       9   Go Back to the Seller
   Buying a Used Car                     10   Report Legal Violations & Safety    36
   Leasing                               11      Hazards                          37
   Renting                               11   Get Help                            38
   Repairs                               12      Dispute Resolution Programs      39
   Recalls and Lemon Laws                12      Small Claims Court               39
   Vehicle Repossessions                 12      Legal Help                       40
Banking                                  13   Sample Complaint Letter
   ATM/Debit Cards                       14   PART III – CONSUMER ASSISTANCE      41
Credit                                   14      DIRECTORY                        41
   Installment Loans                     15   Corporations                        78
   Payday and Tax Refund Loans           15   Automobile Manufacturers
   Home Equity Loans                     15   State & Local Consumer               79
   Credit Cards                          15      Protection Offices                95
   Credit Reports and Scores             16   State Banking Authorities            99
   Resolving Credit Problems             16   State Insurance Regulators          103
Education                                19   State Securities Administrators     107
Employment                               19   State Utilites Commissions          111
Food And Nutrition                       20   Federal Agencies                    128
   Weight Reduction                      20   Better Business Bureaus             134
Health Care                              20   National Consumer Organizations     140
   Choosing a Doctor                     21   Trade and Professional Assoc.       147
   Choosing a Health Care Facility       21   Military Family Centers             148
   Prescription Drugs                    22   Military Exchange Offices           150
   Medicare Drug Coverage                22   INDEX
Housing                                  22
   Buying a Home                         22
   Home Improvements and Repair          23

                              QUICK CONSUMER TIPS

         As a savvy consumer, you should always be on the alert for shady deals and scams.
     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 (p. 17), low-interest credit cards
     (p. 16), deals that let you skip credit card payments (p. 16), business/job opportunities
     (p. 20), risk-free investments (p. 28), and free travel (p. 30).
         2. Extended warranties or service contracts are rarely worth what you pay for
     them. See page 1 for questions you should ask before you say yes to one of these con-
         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 disabil-
     ity insurance. See page 14.
         4. There is no universal three-day cooling-off period. Don’t be misled into think-
     ing that you have an automatic three-days for canceling a purchase. Only a few types of
     contracts give you a right to cancel. See Your Rights: 3-Day Cooling-Off Rule on page 4.
         5. Think twice before sharing personal information. Protect your privacy and
     avoid unauthorized use of your personal information by following the advice on page 7.
         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. See page 15 for more information on these costly credit options.
         7. Not all plastic cards offer the same protections. Your liability for the unauthor-
     ized use of a gift card (see stored-value cards on page 13) and debit/ATM card (p.14) 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. See page 22.
         9. Home improvement (p. 23) and auto repairs (p. 12) 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 news-
         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 wary 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.

                        TIPS FOR USING THIS HANDBOOK
Read this section for general advice on shop-       Look here for contact information for corporate
ping for goods and services as well as an expla-    offices, consumer organizations, trade groups,
nation of your consumer rights and responsibili-    government agencies and other sources of
ties. The Table of Contents on page v and the       assistance.
Index on page 150 will help you quickly locate
specific topics and information.
                                                                   VISIT US ONLINE
PART II – FILING A COMPLAINT                        A searchable version of this Handbook is
Turn to this section for suggestions on resolving   available online at
consumer problems. A sample complaint letter
on page 40 will help you present your case.

                         PART 1: BE A SAVVY CONSUMER
Before you spend another dollar, invest a few       • Get a written copy of guarantees and warran-
minutes reading this section of the Handbook.         ties. Compare their features.
The Federal Citizen Information Center (FCIC)       • Get the seller’s refund, return and cancella-
has brought together information from federal         tion policies.
agencies and various consumer organizations         • Ask whom to contact if you have a question
to help you make smart choices and avoid scams.       or problem.
                                                    • Read and understand any contract or legal
                                                      document you are asked to sign. Make sure
       GENERAL BUYING TIPS                            there are no blank spaces. Insist that any
                                                      extras you are promised orally be put in
BEFORE YOU BUY                                        writing.
To avoid problems and make better decisions,        • Consider paying by credit card. If you have a
use this checklist BEFORE you make a pur-             problem, you may not have to pay the charge
chase.                                                made on your credit card. See page 16.
 • Decide in advance exactly what you want and
                                                    SERVICE CONTRACTS AND EXTENDED
   what you can afford.
 • Don’t buy on impulse or under pressure.          WARRANTIES
   This includes donating to charity. Do your       Sellers of cars, major appliances and other
   research.                                        expensive items may try to sell you a service
 • Ask family, friends and others you trust for     contract or “extended warranty.” Service con-
   advice based on their experience. Gather         tracts can add hundreds to your purchase price
   information about both the seller and the        and are rarely worth the cost. Some duplicate
   item or service you are purchasing.              warranty coverage you get automatically from
 • Review product test results and other informa-   a manufacturer or dealer. Ask these questions
   tion from consumer experts. See Consumer         before you agree to one of these contracts:
   Information Sources on page iv and check the      • Does the dealer, the manufacturer, or an inde-
   Handbook index for more information.                pendent company back the service contract?
 • Get advice and price quotes from several          • How are claims handled? Ask who will do the
   sellers.                                            work and where it will be done.
 • Make sure that the seller has all appropriate     • What happens to your coverage if the dealer
   licenses. Doctors, lawyers, home improve-           or administrator goes out of business?
   ment contractors and many other service           • Do you need prior authorization for repair
   providers must register with a state or local       work?
   licensing agency. See page 79.                    • Are there any situations when coverage can
 • Check out a company’s complaint record with         be denied? You may not have protection from
   your local consumer affairs office (p. 79) and      common wear and tear. And some manufac-
   the Better Business Bureau (p. 128).


     turers do not honor contracts if you fail to
     follow their recommendations for routine                  BEWARE: CHARITABLE GIVING
     maintenance.                                   Investigate before you donate. Some con artists use
                                                    names similar to well-known charities or pretend to be
 PRODUCT SAFETY RECALLS                             raising money for state or local law enforcement agen-
 Ready to buy a used vehicle or other second-       cies.
 hand product? Check to be sure it hasn’t            • Ask for written information, including how much of
 been recalled for safety reasons. Some                the money raised is actually used for charitable pur-
 recalls ban the sale of an item while others          poses.
 ask consumers to return the item for replace-       • Ask your Secretary of State if the charity is registered
 ment or repair. Sometimes a seller provides           to solicit in your state.
 a part that reduces the danger of using the
 product. Two websites post information on          Check the Better Business Bureau (p. 128) and others
 current recalls:                                   for information on charities:, www.char-
     •—This site lists    , and See also Youth
  government-initiated recalls, which are           Peddling on the next page.
  gathered from federal agencies.
     •—This site lists both                 site. This is an indication, but not a guar-
  government and industry-initiated recalls.                   antee, of the seller’s reliability.
                                                               • Another way to check online sellers is to
 AFTER YOU BUY                                                 look for other consumers’ comments. Visit
 What you do after you buy can be as important        where consumers rate
 as what you do before you buy. These steps will               online stores. Some Internet auction sites
 help you avoid as well as deal with any problems              post ratings of sellers based on comments
 that might pop up.                                            by buyers. This information may give you
                                                               some idea of how you’ll be treated, but
    • Save all papers that you get with your pur-              beware of too many glowing stories that
 chase. Keep all contracts, sales receipts, can-               might have been placed by sellers them-
 celed checks, owner’s manuals and warranty                    selves.
                                                            • Be wary of post office boxes and sell-
    • Read and follow product and service                ers in other countries. It may be difficult to
 instructions. The way you use or take care of a         find the seller to resolve a problem later.
 product might affect your warranty rights.
                                                            • Know the total price. Make sure it
                                                         includes all charges—shipping, handling, insur-
         SHOPPING FROM HOME                              ance and taxes. Coupons and other discounts
                                                         should be properly deducted.
 You can order all kinds of things from the com-
                                                            • Make sure you are clear on what you
 fort of your home using the telephone, mail, or a
                                                         are buying. Watch for words like “refurbished,”
 computer. But along with this convenience come
                                                         “reconditioned,” “close-out,” or “discontinued.”
 common complaints of late delivery, shipment of
 wrong or damaged items, and hidden costs. To               • Protect your personal information. Use
 avoid problems and to make it easier to resolve         a secure website to help protect your credit
 them when they do happen, be sure you follow            card from misuse. For more advice concerning
 the advice in the Before You Buy checklist on           privacy on the Internet, see Online Privacy (p. 8).
 page 1. In addition:                                       • Never send your credit card number by
                                                         e-mail because e-mails are not secure. If you are
    • Know your seller. If you don’t, do some
                                                         not comfortable providing your credit card num-
                                                         ber online, ask whether you can call or fax it.
        • Company websites often provide infor-             • Give your credit card, debit card, or
        mation in a section called “About Us.”           bank account number only if you’re using
        Some online sellers participate in pro-          that account to pay—never to prove your
        grams such as BBBOnLine that help                identity.
        resolve problems. Look for a logo or
        endorsement seal on the company web-

                                                                         SHOPPING FROM HOME

   • Keep a record of your purchase. Keep                • Be wary of sellers who insist you use a
track of what you ordered, when, the price, and       specific escrow service-especially if you have
how you paid (check, money order, charge, etc.).      never heard of that particular service before.
Also save any information the seller gives you        Check out the escrow service just like you
such as product description, delivery date, can-      check out sellers of other services. One warn-
cellation policy, privacy policy, warranties, and     ing signal you may not be dealing with a legiti-
order confirmation numbers.                           mate company is a web site that has grammar
   • Keep track of your order. If it’s late, see:     and other simple mistakes.
Your Rights: Shopping from Home on this page.
                                                     YOUR RIGHTS: SHOPPING FROM HOME
For more information about shopping online,          When you order something by mail, phone, fax
visit       or computer, the Federal Trade Commission
ments.htm and                  requires the company to:
ONLINE AUCTIONS AND SELLERS                               • Ship the merchandise within the time
Many private sellers sell items on the Internet       promised, or if no specific delivery time was
through auctions, classified ads, newsgroups,         stated, within 30 days of receiving your order;
and chat rooms. Unfortunately, these types of             • Notify you if the shipment cannot be made
sales are a very common type of Internet fraud.       on time and give you the choice of waiting lon-
Resolving disputes can be difficult when the          ger or getting a refund; and
seller is in a different part of the country. Be          • Cancel your order and return your payment
aware that government agencies may not be able        if the new shipping date cannot be met—unless
to help you since many laws don’t apply to sales      you agree to another delay.
between individuals. Follow this advice as well      If you cancel, your money must be refunded
as the general tips on shopping from home.           within 7 days (or your account must be credited
    • Check how the auction works. Can you           within one billing cycle if you charged the order).
cancel a bid? Don’t assume that the rules used       The company can’t substitute a credit for other
by one auction site apply to another. Some sites     merchandise. If you applied for a charge account
offer step-by-step instructions that will take       with the merchant at the same time that you
you through the bidding process.                     placed your order, the company has an extra 20
    • Find out what protections you have.            days to ship the merchandise to allow time for
Does the site provide free insurance or guaran-      processing your application.
tees for items that are not delivered or what the
seller claimed?                                        This FTC rule only applies to the first shipment
                                                       of magazine subscriptions or other merchandise
    • Follow the strategies used in any auc-
                                                       that you receive repeatedly. Orders for services
tion. Learn the value of the item you are bid-
ding on. Establish your top price and stick to
                                                               BEWARE: YOUTH PEDDLING
                                                    Some for-profit companies use young salespersons
    • Don’t bid on an item you don’t intend
                                                   to sell magazines and other items door-to-door. They
to buy. If you’re the highest bidder, you have
                                                   trick consumers into believing they are giving money
bought it. Auction companies often bar those
                                                     to legitimate charities because consumers tend to
who back out of a deal from future bidding.
                                                  support young persons and youth programs. If a young
    • If the seller can’t accept payment             person solicits you, ask for identification verifying
by credit card, use an escrow service.             the organization’s name, address and purpose. If the
Your money is held by a third-party until         representative can’t provide this information, ask them
you get your purchase and approve release           to leave. Report suspicious people to your local police
of your payment to the seller. There is a        department and/or contact the child labor division of your
small fee, but the peace of mind is worth it.      state labor department listed in the phone book. Even if
Auction company eBay recommends Escrow. you are satisfied with the information provided, don’t feel
com which is backed by Fidelity National            pressured to make a purchase or contribute. See also
Financial Corporation.                                      Charitable Giving on the previous page.


 (for example, photo finishing), sale of seeds         • The sale was the result of prior contact you had
 and growing plants, collect-on-delivery (C.O.D.)        at the seller’s permanent business location.
 orders, and transactions such as books and            • You signed a document waiving your right to
 music clubs are covered by a different FTC rule.        cancel.
 There may also be laws or regulations in your         • Your purchase is not primarily for personal,
 state that apply. Report suspected violations to        family or household use.
 your state or local consumer protection agency        • You were buying real estate, insurance, secu-
 (p. 79) and to the FTC (p. 124).                        rities, or a motor vehicle.
                                                       • You can’t return the item in a condition similar
 YOUR RIGHTS: 3-DAY COOLING OFF RULE                     to how you got it.
 When you buy something at a store and later           • You bought arts or crafts at a fair, shopping
 change your mind, your ability to return the mer-       mall, civic center, or school.
 chandise depends upon store policy. If you buy
 an item in your home you may have three days          Remember that if you paid by credit card and
 to cancel. This Cooling-Off Rule also applies         are having difficulty getting your refund, you
 to purchases of $25 or more at your workplace         may also be able to dispute the charge with your
 and places rented by a seller on a temporary          credit card company under the Fair Credit Billing
 basis, such as hotel or motel rooms, convention       Act. See Resolving Credit Problems on page 16.
 centers, fairgrounds and restaurants. Enforced
 by the Federal Trade Commission (p. 124), the            TELEMARKETING AND SPAM
 Cooling-Off Rule requires sellers to tell you that
 you have three business days after the sale to        Junk mail. Phone calls just when you sit down
 change your mind. At the time of the sale, the        to eat. Spam cluttering your inbox. Pop-up ads
 seller must give you two dated copies of a can-       when you are surfing the net. What can you do
 cellation form (one to keep and one to send) and      about all these ads that waste your time and
 a copy of your contract or a receipt showing the      hassle you? Actually, there is a lot you can do!
 salesperson’s name and address and explaining             • Tell companies you do business with to
 your right to cancel. The contract or receipt must    remove your name from customer lists that they
 be in the same language that’s used in the sales      rent or sell to others. Look for information on
 presentation.                                         how to opt out of marketing lists on sales mate-
                                                       rials, order forms and websites.
 To cancel a purchase, sign and date one of the            • Contact the three free services provided by
 cancellation notices and send it by certified mail    the Direct Marketing Association to remove you
 postmarked before midnight of the third busi-         from most national telemarketing, mail and e-
 ness day following the sale. Saturday is consid-      mail lists (p.143).
 ered a business day, but Sunday and legally-rec-
                                                           • Call the credit reporting agencies’ notifica-
 ognized holidays are not. Keep the other notice
                                                       tion system at 1-888-567-8688. This will reduce
 of cancellation for your records. If you were not
                                                       the number of unsolicited credit and insurance
 provided with this form at the time of the sale,
                                                       offers you get. All three major credit bureaus
 your three-day period doesn’t start until you
                                                       participate in this program.
 receive it from the seller. You can also write your
 own letter to cancel the order.                           • Under U.S. Postal Service Rules it is illegal
                                                       to send mail that looks like it is from a govern-
 Once you have canceled, you must be given a           ment agency when it isn’t. It is also illegal to
 refund within 10 days. The seller must notify you     send mail that looks like a bill when nothing
 of the date for product pick up, and return of any    was ordered—unless it clearly states it is not a
 trade-ins you gave as a down payment. Within 20       bill. Report violations of this rule to the USPS
 days, the seller must either pick up the items, or    (p.127).
 reimburse you for mailing expenses.
                                                       TELEPHONE CALLS
 Be aware that there are situations in which the       The federal government’s Do Not Call Registry
 Cooling-Off Rule does not apply:                      is a free and easy way to reduce telemarketing
 • You made the purchase entirely by mail or           calls to your home. To register, visit

                                                                                    TELEMARKETING or call 1-888-382-1222 from          SALES CALLS
the phone you want to register. Your number            The Federal Trade Commission has a rule that
will stay in the registry for five years unless you    tells telemarketers what they can and cannot do
take it off the registry. After five years, you will   when making a sales call. Callers must:
be able to renew your registration. If you get
                                                        • Provide the seller’s name;
restricted telemarketing calls after your num-
                                                        • Disclose that the call is a sales call;
ber has been in the national registry for three
                                                        • Tell you exactly what they’re trying to sell;
months, you can file a complaint using the same
                                                        • Disclose the total cost and other terms of
web page and toll-free number.
                                                          sale before you make any payment for the
                                                          goods or services; and
Placing your number on this national registry
                                                        • Tell you if they don’t allow refunds, exchanges
will stop most telemarketing calls, but not all of
                                                          or cancellations.
them. Calls from political organizations, chari-
ties, and telephone surveyors are still permit-
                                                       If a prize is involved, the caller must give you
ted. So are some calls concerning insurance.
                                                       the odds of winning a prize, inform you that no
Organizations with which you already have a
                                                       purchase is necessary, and tell you how to get
relationship can call you for up to 18 months
                                                       instructions for entering without buying any-
after your last purchase, payment, or delivery.
Companies to which you have made an inquiry
or submitted an application can call you for up
                                                       It’s illegal for telemarketers to:
to three months. You can stop these calls by
asking the company to put your number on its            • Misrepresent what they’re offering;
own do not call list.                                   • Call before 8 a.m. or after 9 p.m.; and
                                                        • Threaten, intimidate or harass you, or call
You can also tell each telemarketer who calls              again if you ask them not to.
to put you on its own do not call list. Note the       This FTC rule applies even when you receive
name of the person you spoke with, the orga-           a call from a telemarketer in another state or
nization, and the date of the call. The Federal        country. It also applies if you make a call to a
Communications Commission requires                     company in another state or country in response
telemarketers (except tax-exempt non-profit            to a mail solicitation.
organizations) to maintain a record of your
request not to receive future telephone calls.         The rule generally does not apply when you call
The record must be maintained for ten years.           to order from a catalog or in response to an ad on
If you get another call from the same person or        television or radio, or in a magazine or newspaper.
organization, report the date and source to the        It also does not apply to solicitations you receive
FCC (p. 123).                                          by fax or e-mail. Beware that certain types of busi-
                                                       nesses—including nonprofit organizations, invest-
Consider screening any calls that are still slip-      ment brokers and advisors, banks, and financial
ping through by using an answering machine.            institutions—are exempt from the rule.
You can listen to the caller and decide whether
you want to pick up. Your local telephone com-         File complaints concerning this rule with the
pany may also offer services that only allow           Federal Trade Commission (p. 124). To file elec-
calls from certain numbers or allow you to see         tronically, choose the “File a Complaint Online”
the name and number of the person calling you          link at
(Caller ID).
                                                       PRE-RECORDED MESSAGES
Some states have their own Do Not Call lists           The Federal Communications Commission regu-
for residents. Contact your state consumer pro-        lates calls using artificial or prerecorded voice
tection office (p. 79) to find out if your state has   messages. They may not be made to residen-
such a list and how you can be added.                  tial telephone numbers except in the following
                                                        • Emergency calls needed to ensure your health
                                                          and safety;
                                                        • Non-commercial calls;


  • Calls which don’t include any unsolicited            • Don’t post your e-mail address on a public
    advertisements;                                   web page. Spammers use software that har-
  • Calls by, or on behalf of, tax-exempt nonprofit   vests text addresses. Substitute “janedoe at isp.
    organizations;                                    com” for the “” Or display
  • Calls you have given prior consent for; or        your address as a graphic image, not text.
  • Calls from entities with which you have an           • Don’t enter your address on a web site
    established business relationship.                before you check its privacy policy.
 The beginning of the message must identify              • Uncheck any check boxes. These often grant
 who is calling. During or after the message, the     the site or its partners permission to contact
 caller’s telephone number or address must be         you.
 given. The phone number cannot be that of the
 auto dialer or prerecorded message player that          • Don’t click on an e-mail’s “unsubscribe”
 placed the call. It also cannot be a 900 number or   link unless you trust the sender. This action tells
 any other number with charges that exceed local      the sender you’re there.
 or long distance charges.                               • Never forward chain letters, petitions, or
                                                      virus warnings. All could be a spammer’s trick to
 The called party’s telephone line must be released   collect addresses.
 within 5 seconds of the time that the calling sys-      • Disable your e-mail “preview pane.” This
 tem receives notification the party has hung up.     stops spam from reporting to its sender that
 Your local telephone company can tell you if there   you’ve received it.
 is a delay before you can get a dial tone again         • Choose an Internet Service Provider (ISP)
 in your area. Submit suspected violations to the     that filters e-mail. If you get lots of spam, your
 Federal Communication Commission (p. 123). File      ISP may not be filtering effectively.
 a complaint via e-mail ( or at
                                                         • Use spam-blocking software. Web browser
                                                      software often includes free filtering options.
 JUNK FAXES                                           You can also purchase special software that will
                                                      accomplish this task.
 Unsolicited advertisements faxed to you with-
 out your prior written permission are prohibited        • Report spam. Notify your ISP so it is aware
 by the Federal Communications Commission.            what kind of spam is slipping through its fil-
 If you have received such a fax, file a complaint    ters. The Federal Trade Commission (FTC) also
 with the FCC (p.123). The agency has an online       wants to know about “unsolicited commercial
 Consumer Complaint Form at          email.” Forward spam to

                                                           PROTECT YOUR IDENTITY
 E-mail spam is not just unwanted—it can be           How can someone steal your identity? They use
 offensive. Pornographic spam causes many             your name, Social Security number, credit card
 consumer complaints. Decrease the number             number, or other personal information to commit
 of spam e-mails you receive by making it dif-        fraud or theft. They might:
 ficult for spammers to get and use your e-mail        • Run up charges on your credit card accounts;
 address.                                              • Open new credit accounts or cellular phone
    • Don’t use an obvious-mail-like “JaneDoe@           service using your name; or” Instead use one with numbers or             • Open a bank account in your name and write
 other digits such as                   bad checks on it.
    • Use one e-mail address for close friends
 and family and another for everyone else.            Problems that result, such as unpaid bills,
 Free addresses are available from Yahoo! and         are reported on your credit report. See Credit
 Hotmail. You can also get a disposable forward-      Reports and Scores on page 16.
 ing address from If an            You can reduce the chance a con artist can go on
 address attracts too much spam, get rid of it        a spending spree with your money or steal your
 and establish a new one.                             identify by taking these precautions:
                                                       • Give your Social Security number only when
                                                         absolutely necessary. Ask to use other types

                                 PROTECT YOUR IDENTITY • PROTECT YOUR PRIVACY

    of identifiers when possible. If your state              gotten access to your account information.
    uses your SSN as your driver’s license num-              (See Credit Reports on page 16.)
    ber, ask to substitute another number.               Despite these precautions, problems can still
•   Sign credit/debit cards when they arrive. No         happen. If a card is missing or you suspect
    one can forge your signature and use them.           another problem, notify the company immediate-
•   Carry only the cards you need. Extra cards           ly. See Lost and Stolen Credit Cards (p. 17) and
    increase your risk and your hassle if your wal-      ATM/Debit cards (p.14)
    let is stolen.
•   Keep your PIN numbers secret. Never write            If you become an ID theft victim, file a report
    a PIN on a credit/debit card or on a slip of         with your local police. Keep a copy of the police
    paper kept with your card.                           report, which will make it easier to prove your
•   Avoid obvious passwords. Avoid easy-to-find          case to creditors and retailers. Contact the cred-
    names and numbers like your birthday and             it-reporting bureaus and ask them to flag your
    phone number.                                        account with a fraud alert, which asks merchants
•   Store personal information in a safe place.          not to grant new credit without your approval.
    Lock up your driver’s license and other cards
    at home and at work.                                 To simplify the lengthy credit-repair process, the
•   Don’t give card numbers to strangers.                FTC now offers an ID Theft Affidavit you can
    Confirm whether a person represents a com-           use to report the crime to most of the parties
    pany by calling the phone number on your             involved. Request a copy of the form by calling
    account statement or in the telephone book.          toll-free 1-877-ID-THEFT or visiting www.con-
•   Watch out for “shoulder surfers.” Use your  All three credit bureaus and
    free hand to shield the keypad when using            many major creditors have agreed to accept the
    pay phones and ATMs.                                 affidavit. You can also use this web site to file
•   Beware of blank spaces. Draw a line through          complaint with the FTC.
    blank spaces on credit slips. Never sign a
    blank slip.                                          When dealing with ID theft, you can also get
•   Keep your receipts. Ask for carbons and              advice from the Identify Theft Resource Center
    incorrect charge slips as well.                      at
•   Destroy documents with account informa-
    tion. Stop thieves from finding information in            PROTECT YOUR PRIVACY
    the trash by tearing up or shredding receipts,
    credit offers, account statements, expired           Approval of a credit application, transferring
    cards, etc.                                          money from one account to another, getting your
•   Protect your mail. Ask your local U.S. Postal        driver’s license renewed, getting a prescription
    Service to put your mail on hold when you are        from your doctor to your pharmacy—think about
    traveling and can’t pick it up.                      how easy and fast you can do these things today.
•   Make life difficult for hackers. Install firewalls   A down side of this convenience is that infor-
    and virus-detection software on your home            mation collected on you may be inaccurate or
    computers. If you have a high-speed Internet         misused. You could be treated unfairly, or even
    connection, unplug the computer’s cable or           become a victim of crime. You can help prevent
    phone line when you aren’t using it.                 this misuse with these tips:
•   Keep a record of your cards and accounts.               • Look for privacy statements on web sites,
    List numbers, expiration dates and contact           sales materials, and forms you fill out. If a web-
    information in case there is a problem.              site claims to follow a set of established volun-
•   Pay attention to your billing cycles. A miss-        tary standards, read the standards. Don’t assume
    ing bill could mean a thief has taken over your      they provide the level of privacy you want.
    account.                                                • Ask what information will be collected
•   Promptly compare receipts with account               and how it may be used. Only do business with
    statements. Watch for unauthorized transac-          those with privacy practices that meet your
    tions.                                               approval.
•   Check your credit report once a year. Check it
    more frequently if you suspect someone has


      • Never give anyone your passwords or PIN        it cannot be easily intercepted. Signals include
  numbers. Con artists may try to trick you into       a screen notice that says you are on a secure
  giving this information.                             site, a closed lock or unbroken key in the bottom
      • Do not give personal information to those      corner of your screen, or the first letters of the
  you don’t know. A credit card number, savings        Internet address you are viewing changes from
  or checking account number, or Social Security       “http” to “https.”
  number in the wrong hands can be used to steal
  from you or to steal from others in your name.       A relatively new threat to your privacy is spy-
  See Identity Theft on page 6.                        ware-sneaky software that rides its way onto
      • Don’t give retailers information that isn’t    computers during the download of screensavers,
  required. You don’t have to give numbers other       games, music and other applications. Spyware
  than the one you are using for payment. Some         sends information about what you’re doing on
  states bar merchants from asking consumers           the Internet to a third-party usually to target you
  to provide additional information on checks or       with pop-up ads. You will need to install anti-
  credit card slips. At the supermarket, find out      spyware to stop this new threat to your privacy.
  whether a clerk can give you the discount with-
                                                       FINANCIAL PRIVACY
  out using the store’s discount card.
                                                       The Federal Deposit Insurance Corporation
      • Be selective in what you put on warranty
                                                       (p. 123) and other federal regulators require
  registration forms. The company only needs the
                                                       banks, insurance companies, brokerage firms
  purchase date, model/serial numbers, and how
                                                       and certain businesses who share financial
  you can be contacted if there is a product recall.
                                                       information to tell you their privacy policies.
  Questions not related to your purchase such as
                                                       They must give you this information when you
  your income and hobbies can be ignored.
                                                       open an account, and at least once every year
      • Talk about privacy with others in your home.   after. They must include:
  Everyone—even children—should understand
                                                        • the kinds of information being collected;
  what information you feel is not appropriate to
                                                        • how the confidentiality and security of this
  share on the phone, while using a computer,
                                                          information will be protected; and
  and in other situations.
                                                        • what types of businesses may be provided
 Check with your state or local consumer agency           this information.
 (p. 79) to find out whether there are any state
 laws that help protect your privacy. Some com-        If a business is going to share the information
 panies and industry groups have also adopted          with anyone outside its corporate family, it must
 voluntary policies that address privacy concerns.     also give you the chance to “opt-out” or say no
                                                       to information sharing. Even if you don’t opt out,
 ONLINE PRIVACY                                        your actual account numbers may not be shared
 Protecting your privacy on the Internet must be       with third parties for marketing purposes.
 tackled from several angles. Start by following
 the general advice on pro-                            Your credit information has additional privacy
 tecting your privacy just                                               protections under the Fair
 discussed. Next, make sure                                              Credit Reporting Act. Only
                                   PROTECTING CHILDREN ONLINE
 you are using a web site                                                people with a legitimate busi-
                                    The Children’s Online Privacy
 with a sponsor who is pro-                                              ness need can get a copy of
                                 Protection Act requires commercial
 tecting you.                                                            your report. An employer can
                                websites to obtain parental consent
                                                                         only get your report with your
     • Look for a privacy pol-   before collecting, using, or disclos-
                                                                         written consent. For more
  icy statement or seal that     ing personal information from chil-
                                                                         information on your rights
  indicates the site abides     dren under 13. For more information,
                                                                         under this federal law and to
  by privacy standards. Take    contact the FTC (see p. 124) or click
                                                                         find out how you can get a
  time to read how your pri-       on Kids Privacy at
                                                                         copy of your credit reports, see
  vacy is protected.                                                     page 16.
     • Look for signals that
  you are using a secure web page. A secure site
  encrypts or scrambles personal information so

                                                 PROTECT YOUR PRIVACY • AUTOMOBILES

MEDICAL PRIVACY                                           • Take a test drive. Drive at different speeds
People also give personal information to their        and check for smooth right and left turns. On a
doctors, which is shared with insurance compa-        straight stretch, make sure the vehicle doesn’t
nies, pharmacies, researchers, and employers.         pull to one side.
                                                          • Handle trade-ins and financing separately
The Medical Information Bureau is a data bank         from your purchase to get the best deal on
used by insurance companies that collects and         each. Get a written price quote before you talk
shares information. You can request a copy of         about a trade-in or dealer financing.
your file to be sure the information is accurate.         • Shop in advance for the best finance deal

Write to MIB, Inc., PO Box 105, Essex Station,        at your credit union, bank or finance company.
Boston, MA 02112, or call 617-436-3660. There is a    Look at the total finance charges and the
fee to obtain a copy of your file.                    Annual Percentage Rate (APR), not just the
                                                      monthly payment.
For the latest information on how the fed-                • Read and understand every document you
eral government protects your personal health         are asked to sign.
information, visit from U.S.
Department of Health and Human Services, the              • Don’t take possession of the car until all
website of the Health Privacy Project                 paperwork is final.
( or My Health Privacy
( created by
                                                      BUYING A NEW CAR
the National Consumers League.                            • Check out different vehicles. Several
                                                      Internet sites can help you compare features
              AUTOMOBILES                             and prices on new motor vehicles. Visit www.
                                             for links to
Whether you are buying or leasing a vehicle,          these sites. A scorecard reports on the features
these tips will help you get the best deal and        of each site including whether quotes are free,
avoid problems.                                       the availability of financing, and site security.
                                                      Two magazines that offer information in print
    • Decide what kind of vehicle best suits your
                                                      and online concerning vehicle performance,
needs and budget. For tips on finding a safe
                                                      service and safety are: Consumer Reports
vehicle, see Choose a Safe Vehicle on page 10.
                                                      ( and Motor Trend
    • Consider fuel economy. A vehicle that gets      (
more miles per gallon is good for your wallet as
                                                          • Research the dealer’s price for the car and
well as for the environment. These government
                                                      options. It’s easier to get the best price when
web pages will help you comparison shop.
                                                      you know what the dealer paid for a vehicle.
    • Use the Green Vehicle Guide                     The dealer invoice price is available at a num-
( to find the vehicles           ber of websites and in printed pricing guides.
that are most fuel-efficient and have the clean-      Consumer Reports offers the wholesale price.
est-running engines.                                  Lower than the invoice price, this figure factors
    • Go to to compare            in dealer incentives from a manufacturer and
the miles-per-gallon ratings of different vehicle     is a more accurate estimate of what a dealer is
models manufactured since the mid-1980s.              paying for a vehicle.
    • For annual fuel estimates, go to                    • Find out if the manufacturer is offering              rebates that will lower the cost. Two websites
    • Check out the seller. For car dealers, check    that offer this information are www.carsdirect.
with your state or local consumer protection          com and
agency (p. 79) and Better Business Bureau (p. 128).       • Get price quotes from several dealers. Find
If you are buying from an individual, check the       out if the amounts quoted are the prices before
title to make sure you’re dealing with the vehicle    or after rebates are deducted.
owner. Also browse the classifieds for other              • Avoid high-profit, low-value extras such
auto ads with the same phone number-a sign            as credit insurance, extended warranties, auto
of an unlicensed broker who sells used cars by        club memberships, rust proofing and upholstery
posing as the owner.                                  finishes. You do not have to purchase credit


 insurance in order to get a loan. See Service             • The National Highway Traffic Safety
 Contracts and Extended Warranties on page 1           Administration ( lists VINs
 and Credit Insurance on page 14.                      of its crash-test vehicles and will let you search
                                                       an online database of manufacturer service bul-
 BUYING A USED CAR                                     letins.
    • Learn what rights you have when buying a             • The Center for Auto Safety
 used car. Contact your state or local consumer        ( provides information on
 protection office (p. 79).                            safety defects, recalls, and lemons, as well as
                                                       service bulletins.
    • Find out in advance what paperwork you
 will need to register a vehicle. Contact your             • Visit for a free online
 state’s motor vehicle department.                     search of its database of lemons registered by
                                                       previous owners.
    • Check prices of similar models using the
 NADA Official Used Car Guide (www.nadagu-                 • Make sure any mileage disclosures match published by the National Automobile        the odometer reading on the car.
 Dealer Association (p. 78) or the Kelly Blue              • Check the warranty. If a manufacturer’s
 Book ( These guides are usually          warranty is still in effect, contact the manufac-
 available at local libraries as well.                 turer to make sure you can use the coverage.
    • Research the vehicle’s history. Ask the          The Federal Trade Commission requires deal-
 seller for details concerning past owners, use,       ers to post a Buyers Guide on all used cars and
 and maintenance. Next, find out whether the           trucks for sale. This Guide specifies whether
 car has been damaged in a flood, involved in a        the vehicle is being sold “as is” or with a war-
 crash, been labeled a lemon or had its odom-          ranty, and what percentage of repair costs a
 eter rolled back. The vehicle identification num-     dealer will pay under the warranty. Keep in
 ber (VIN) will help you do this.                      mind that private sellers generally have less
                                                       responsibility than dealers for defects or other
    • Your state motor vehicle department can          problems. Private sellers generally don’t have
 research the car’s title history. Inspect the title   to post information.
 for “salvage,” “rebuilt,” or similar notations.
                                                           • Ask about the dealer’s return policy. Get it
    • The websites and www.             in writing and read it carefully. sell information on the history
 of vehicles gathered from state motor vehicle             • Have the car inspected by your mechanic.
 departments and other sources. These reports          Agree in advance with the seller that you’ll pay
 are helpful but incomplete-they do not guaran-        for the examination if the car passes inspection,
 tee that a vehicle is accident-free.                  and the seller will pay if significant problems
                                                       are discovered. A qualified mechanic should

                                      CHOOSE A SAFE VEHICLE
  Crash tests can help you determine how well a vehicle will protect you in a crash.
      • The National Highway Traffic Safety Administration ( Each year,
   NHTSA crashes vehicles head-on into a wall and bashes them broadside to test their ability to
   protect their occupants. NHTSA focuses on evaluating vehicle restraints such as air bags and
   safety belts.
      • The Insurance Institute for Highway Safety ( A different test by the
   IIHS uses offset-frontal car crashes to assess the protection provided by a vehicle’s structure.
      • Consumers Union. Consumer Reports’ annual auto issue rates vehicles in terms of overall
   safety. Its safety score combines crash test results with a vehicle’s accident avoidance factors-
   emergency handling, braking, acceleration, and even driver comfort.
  To find out whether a manufacturer has recalled a car for safety defects, click on the “Recalls”
  link at or call NHTSA at 1-800-424-9393. If a vehicle has been recalled, ask
  the dealer for proof that the defect has been repaired.
  Used vehicles should also have a current safety inspection sticker if your state requires one.


check the vehicle’s frame,
tire wear, air bags and        CREDIT AND SUBLEASE BROKERS               The Federal Reserve Board
undercarriage as well as        Con artists often prey on people who     of Governors offers a con-
the engine.                      have bad credit and who cannot get      sumer guide to auto leasing
    • Examine dealer docu-       car loans. “Credit brokers” promise     at
ments carefully. Make            to get a loan for you in exchange for   pubs/leasing/.
sure you are buying, not         a high fee. In many cases, the “bro-
leasing, the vehicle. A bal-      ker” takes the fee and disappears.
loon payment and “base           “Sublease brokers” charge a fee to      Federal law does not cover

mileage” disclosures are       arrange for you to “sublease” or “take    short-term car and truck
warning signs you may          over” someone else’s car lease or loan.   rentals, but some state
have a lease.                  Such deals usually violate the original   laws do. Contact your
                                loan or lease agreement. Your car can    state or local consumer
LEASING                        be repossessed even if you’ve made all    protection office (p. 79)
                               of your payments. You also might have     for information or to file a
When you lease, you pay
                                       trouble insuring your car.        complaint.
to drive someone else’s
vehicle. Monthly payments                                                     • Ask in advance if there
for a lease may be lower                                                  are any charges besides
than loan payments, but at the end of the lease     the stated rental fee. There may be an airport
you have no ownership or equity in the car.         surcharge or drop-off fees, insurance fees, fuel
                                                    charges, mileage fees, taxes, additional-driver
   • Shop for a lease as if you’re buying a car.
                                                    fees, underage-driver fees, and equipment
To help you comparison shop, the Consumer
                                                    rental fees (for items such as ski racks and car
Leasing Act requires leasing companies to
give you information on monthly payments and
other charges. Check out,              • Ask if the rental company checks the driv-, and          ing records of potential customers. A company
for online information on leases including cur-     may check for violations when you arrive at the
rent lease deals.                                   counter. You may be rejected even if you have a
                                                    confirmed reservation.
   • Negotiate all the lease terms including the
price of the vehicle. Lowering the base price          • Check in advance to be sure you aren’t
will help reduce your monthly payments.             duplicating insurance coverage. If you’re travel-
                                                    ing on business, your employer may have insur-
   • Ask for details on wear and tear standards.
                                                    ance that covers damage to the vehicle if you
Dings that you may regard as normal wear and
                                                    are in an accident. You may also have coverage
tear may be billed as significant damage at the
                                                    through your personal auto insurance, a motor
end of your lease.
                                                    club membership, or the credit card you use to
   • Find out how many miles you can drive in a     pay for rentals.
year. Most leases allow 12,000 to 15,000 miles a
                                                       • Carefully inspect the vehicle and its tires
year. Expect a charge of 10 to 25 cents for each
                                                    before renting.
additional mile.
                                                       • Check refueling policies and charges.
   • Check the manufacturer’s warranty. It
should cover the entire lease term and the             • Ask if there is a refundable charge being
number of miles you are likely to drive.            made to your credit card. When you pick up your
                                                    car, the company may make a charge or place a
   • Ask the dealer what happens if you give up
                                                    hold of hundreds of dollars on your credit card.
the car before the end of your lease. There may
                                                    Most companies do not process this amount
be extra fees for doing so.
                                                    unless you fail to return the car as specified in
   • Ask what happens if the car is involved in     your rental contract. If it is processed and the
an accident.                                        amount takes you near or over your credit card
   • Get all the terms in writing. Everything       limit, you may have trouble using your card for
should be listed on the lease to avoid being        other purchases.
charged for “missing” equipment at the end of
the lease.


 REPAIRS                                                defect exists, the maker must fix it at no cost to
 Whenever you take a vehicle to the shop:               you-even if your warranty has expired. The com-
                                                        pany may also be asked to conduct a product
  • Choose a reliable repair shop. Family, friends
    or an independent consumer rating organiza-
    tion may be able to help you. You should also
                                                        If you have a vehicle with a unique problem that
    check out the shop’s record with your state
                                                        just never seems to get fixed—you may have a
    or local consumer protection office (p.79) or
                                                        lemon. Some states have laws concerning lem-
    Better Business Bureau (p. 128).
                                                        ons. They may require a refund or replacement if
  • Describe the symptoms. Don’t try to diagnose
                                                        a problem is not fixed within a reasonable num-
    the problem.
                                                        ber of tries or you haven’t been able to use your
  • Make it clear that work cannot begin until you
                                                        vehicle for a certain number of days. Contact
    have a written estimate and you give your
                                                        your state or local consumer protection office
    okay. Never sign a blank repair order. If the
                                                        (p. 79) to learn whether you have such protec-
    problem can’t be diagnosed on the spot, insist
                                                        tions and the steps you must take get your prob-
    that the shop contact you for authorization
                                                        lem solved. If you believe your car is a lemon:
    once the trouble has been found.
  • Ask the shop to keep the old parts for you.          • Give the dealer a list of the problems every
  • Follow the warranty instructions if a repair is         time you bring it in for repairs.
    covered under warranty.                              • Get and keep copies of the repair orders list-
  • Get all repair warranties in writing.                   ing the problems, the work done, and the
  • Keep copies of all paperwork.                           dates that the car was in the shop.
 Some states, cities and counties have special laws      • Contact the manufacturer, as well as the deal-
 that deal with auto repairs. For information on the        er, to report the problem. Your owner’s manual
 laws in your state, contact your state or local con-       will list an address for the manufacturer or
 sumer protection office (p. 79).                           you can find it on page 75.
                                                         • Help other consumers avoid purchasing
 SECRET WARRANTIES, RECALLS AND                             your lemon by registering it at
 LEMON LAWS                                       
 Sometimes a manufacturer makes a design                Another source of information concerning these
 or production mistake on a motor vehicle. If           topics is the Center for Auto Safety (www.
 dealers report a number of complaints about a CAS gathers information and
 certain part or vehicle, the manufacturer may          complaints concerning safety defects, recalls,
 allow dealers to repair the problem at no cost to      service bulletins and state lemon laws. You can
 you even if the warranty has expired. A service        reach CAS by phone at 202-328-7700.
 bulletin notifies the dealer of the problem and
 how to resolve it. Because these free repairs          VEHICLE REPOSSESSIONS
 are not publicized, they are called “secret war-       When you borrow money to buy a car or truck,
 ranties.” The National Highway Traffic Safety          the lender can take your vehicle back if you miss
 Administration ( maintains a         a payment or in some other way violate the con-
 database of service bulletins filed by manufac-        tract. You should also be aware, the lender:
 turers.                                                 • can repossess with cause without advance
 If you have a problem with a vehicle that is a          • can insist you pay off the entire loan balance
 safety hazard, check whether the manufacturer             in order to get the repossessed vehicle back;
 has recalled your vehicle. Click on Recalls at          • can sell the vehicle at auction; or call NHTSA at 1-800-               • might be able to sue you for the difference
 424-9393. Hazards that aren’t listed should be            between the vehicle’s auction price and what
 reported to your dealer, the manufacturer of the          you owe; but
 vehicle (p.84), and NHTSA. Use the agency’s             • cannot break into your home or physically
 toll-free Auto Safety Hotline at 1-888-327-4236 or        threaten someone while taking the vehicle.
 visit its web page for details on other reporting
 options: the Internet, fax and mail. There is no       If you know you’re going to be late with a pay-
 set number of reports needed before NHTSA              ment, talk to the lender to try to work things out.
 will look into a problem. If a safety-related          If you and the lender reach an agreement, be


sure you get the agreement in writing. Contact           • Amount of check. Is there a minimum or
your state or local consumer protection office        maximum amount for any one check?
(p. 79) to find out whether your state gives you         • Account and check fees. Is there a
any additional rights.                                monthly fee for the account or a charge for each
                                                      check you write? Some accounts only charge a
                 BANKING                              fee if you write more than a certain number of
                                                      checks per month.
SAVINGS AND CHECKING                                     • Holds on checks. Is there a “hold” or wait-
When it comes to finding a safe place to put          ing period before you can get the money you
your money, there are a lot of options. Savings       deposit in your account? There may be a longer
accounts, checking accounts, certificate of           hold period on out-of-state checks while the
deposits and money market accounts are popular        check clears.
choices. Each has different rules and benefits           • Overdrafts. If you write a check for more
that fit different needs. When choosing the one       money than you have in your account, what hap-
that is right for you, consider:                      pens? You may be able to link your checking
                                                      account to a savings account to protect yourself.
   • Minimum deposit requirements. Some
                                                      But there may also be high fees for “bounced”
accounts can only be set up with a minimum
                                                      checks (from you or written to you).
dollar amount. If your account goes below the
minimum, no interest is paid or you are charged      The new Check Clearing for the 21st Century Act
extra fees.                                          (often referred to as Check 21) allows banks to
                                                     clear checks electronically instead of exchang-
   • Limits on withdrawals. Can you take
                                                     ing actual paper checks. Banks no longer have to
money out whenever you want? Are there any
                                                     return original checks with your monthly state-
penalties for doing so?
                                                     ments or even when there is a problem with a
   • Interest. How much (if anything) is paid        particular check. Check 21 creates “substitute
and when—daily, monthly, quarterly, yearly?          checks” which you can use as legal representa-
To compare rates offered locally to those from       tions of the originals. Ordinary check images,
financial institutions around the nation, visit      which some banks have provided for years, are                                    NOT substitute checks.
   • Deposit Insurance. Look for a sign that
says your money is protected by the Federal          It takes banks at least a day or two to process
Deposit Insurance Corporation (FDIC). Credit         paper checks. Electronic processing can happen
union accounts have similar protection from the      almost immediately. This means you will have
National Credit Union Association (NCUA).            less “float” time between when you write a check
   • Convenience. How easy is it to put money        and when the money is actually taken out of your
in and take it out? Are there tellers or ATM         account. This could increase the chance that one
machines close to where you work and live?           of your checks will bounce due to insufficient
Or would you receive most of your service via        funds. Quicker clearing also means less time to
the telephone or Internet? Can you make direct       stop payment on a check.
deposits and other electronic transfers?
                                                        It has always been a good idea to get canceled
If you are considering a                                                       checks with your monthly
checking account or another                                                    statement. Now you will
type of account with check-       BEWARE: STORED-VALUE CARDS                   want substitute checks
writing privileges, add these        Stored-value cards—sometimes              each month. Having your
items to your list of things      referred to as pre-paid or gift cards—       employer deposit your
to think about:                  are a lot like the dollar bills you carry in  paycheck directly into your
                                 your wallet. Money is stored electroni-       account can help you cope
   • Number of checks. Is
                                 cally on the card itself. If a card is lost   with the change in “float”
there a maximum number
                                   or stolen, the money is gone. Stored-       time.
of checks you can write per
                                  value cards do not have the same fed-
month? If you write more,
                                   eral protections that credit and debit
what is the charge?
                                                 cards have.


 ATM/DEBIT CARDS                                        When you use a debit card, federal law also does
 With a debit card and personal identification          not give you the right to stop payment. You must
 number (PIN), you can use an Automated Teller          resolve the problem with the seller.
 Machine (ATM), to withdraw cash, make depos-
 its, or transfer funds between accounts. Some                              CREDIT
 ATMs charge a fee if you are not a member of
 the ATM network or are making a transaction at         Like everything else you buy, credit has a price
 a remote location.                                     tag and it pays to comparison shop. With the
                                                        Internet, you can now compare local credit offers
 Retail purchases can also be made with a debit         with those from financial institutions around the
 card. You enter your PIN or sign for the purchase.     nation. For up-to-date interest rate reports on
 Some banks that issue debit cards are charging         mortgages, auto loans, credit cards, home equity
 customers a fee for debit card purchases made          loans, and other banking products visit www.
 with a PIN. Although a debit card looks like a For a listing of credit cards visit
 credit card, the money for the purchase is trans-
 ferred immediately from your bank account to
 the store’s account. The purchase will be shown           The Equal Credit Opportunity Act protects you
 on your bank account statement.                           when dealing with anyone who regularly offers
                                                           credit, including banks, finance companies,
 Immediately call the card issuer when you sus-            stores, credit card companies and credit unions.
 pect a debit card may be lost or stolen. Many             When you apply for credit, a creditor may not:
 companies have toll-free numbers and a 24-hour             • Ask about or consider your sex, race, national
 service to deal with such emergencies. While                 origin or religion;
 federal law limits your liability for a lost or sto-       • Ask about your marital status or your spouse,
 len credit card to $50, your liability for unauthor-         unless you are applying for a joint account
 ized use of your ATM or debit card can be much               or relying on your spouse’s income, or you
 greater—depending on how quickly you report                  live in a community property state (Arizona,
 the loss.                                                    California, Idaho, Louisiana, Nevada, New
                                                              Mexico, Texas and Washington);
     • Report a debit card missing before it is
                                                            • Ask about your plans to have or raise children;
  used and you are not
                                                                                  • Refuse to consider public
  responsible for any unau-
                                                                                  assistance income or regu-
  thorized withdrawals.                 BEWARE: CREDIT INSURANCE
                                                                                  larly received alimony or
     • Your liability is limited     When you take out a loan for a big pur-      child support; or
  to $50 if you report the loss        chase, a salesperson may try to sell       • Refuse to consider
  within two business days            you credit insurance. Your credit card      income because of your
  after you realize your debit        company may also encourage you to           sex or marital status or
  card is missing, and to            purchase credit insurance. The cover-        because it is from part-
  $500 if you report the loss        age may be promoted as a way for you         time work or retirement
  between 2 and 60 days.              to protect yourself if your property is     benefits.
     • If you do not report an         damaged or lost. Other credit insur-
  unauthorized use of a debit       ance offers promises to make loan pay- You have the right to:
  or ATM card within 60 days          ments if you are laid off, become dis-
                                                                                  • Have credit in your birth
  after your bank statement          abled or die. It is almost always better
                                                                                  name, your first name and
  with the unauthorized use         to buy regular property, life or disability
                                                                                  your spouse’s last name, or
  is mailed to you, you could        insurance instead of credit insurance.
                                                                                  your first name and a com-
  lose all the money in your                                                      bined last name;
  bank account as well as the                               • Have a co-signer other than your spouse if one
  unused portion of your line of credit established           is necessary;
  for overdrafts.                                           • Keep your own accounts after you change your
 Check the policies of your card issuer. Some                 name or marital status or retire, unless the
 offer more generous limits on a voluntary basis.             creditor has evidence you are unable or unwill-
                                                              ing to pay;


 • Know why a credit application is rejected—the        other types of loans, they reduce the equity you
   creditor must give you the specific reasons or       have built up in your house. If you are unable to
   tell you of your right to find out the reasons if    make payments, you could lose your home.
   you ask within 60 days;
 • Have accounts shared with your spouse                Home equity loans can either be a revolving
   reported in both your names; and                     line of credit or a one-time, closed-end loan.
 • Know how much it will cost to borrow money.          Revolving credit lets you choose when and how
For additional information on credit, see Home          often to borrow against the equity in your home.
Financing (p. 22) and Buying a Car (p. 9). Other        In a closed-end loan, you receive a lump sum
sources of information include the HUD Housing          for a particular purpose, such as remodeling or
Counseling Clearinghouse at 1-888-466-3487, the         tuition. Apply for a home equity loan through a
FTC (p. 124), the National Consumer Law Center          bank or credit union first. These loans are likely
(p. 138) and the “Money” link at www.pueblo.gsa.        to cost less than those offered by finance com-
gov.                                                    panies.

INSTALLMENT LOANS                                       CREDIT CARDS
Before you sign an agreement for a loan to buy a        Chances are you’ve gotten your share of “pre-
house, a car or other large purchase, make sure         approved” credit card offers in the mail. Examine
you fully understand all the lender’s terms and         the fine print carefully before you accept any
conditions:                                             offer for a credit or charge card.
 • The dollar amount you are borrowing.                     • The Annual Percentage Rate (APR).
 • The payment amounts and when they are due.           If the interest rate is variable, how is it deter-
 • The total finance charge—the total of all the        mined and when can it change?
   interest and fees you must pay to get the loan.
                                                            • The periodic rate. This is the interest rate
 • The Annual Percentage Rate (APR)—the rate
                                                        used to figure the finance charge on your bal-
   of interest you will pay over the full term of the
                                                        ance each billing period.
 • Penalties for late payments.                             • The annual fee. While some cards have no
 • What the lender will do if you can’t pay back        annual fee, others expect you to pay an amount
   the loan.                                            each year for being a cardholder.
 • Penalties if you pay the loan back early.                • The grace period. This is the number of
Fortunately, the Truth in Lending Act requires          days you have to pay your bill before finance
lenders to give you this information so you can         charges start. Without this period, you may have
compare different offers.                               to pay interest from the date you use your card
                                                        or when the purchase is posted to your account.
PAYDAY AND TAX REFUND LOANS                                 • The finance charges. Most lenders cal-
With a typical payday loan, you might write a           culate finance charges using an average daily
personal check for $115 to borrow $100 for two          account balance—this is the average of what
weeks—until payday. The annual percentage rate          you owed each day in the billing cycle. Look
(APR) in this example is 390 percent! Payday            for offers that use an adjusted balance, which
loans are illegal in some states.                       subtracts your payment from your beginning
                                                        balance. The finance charges you will pay are
Another high cost way to borrow money is a tax          usually lower. Stay away from offers that use the
refund loan. This type of credit lets you get an        previous balance in calculating what you owe;
advance on a tax refund. APRs as high as 774%           this method has the highest finance charge.
have been reported. If you are short of cash,           Also don’t forget to check if there is a minimum
avoid both of these loans by asking for more time       finance charge.
to pay a bill or seeking a traditional loan. Even a         • Other fees. Ask about special fees when
cash advance on your credit card may cost less.         you get a cash advance, make a late payment,
HOME EQUITY LOANS                                       or go over your credit limit. Some companies
                                                        charge a monthly fee regardless of whether you
Consider carefully before taking out a home equi-
                                                        use your card.
ty loan. Although this type of loan might let you
take tax deductions that you could not take with


 The Fair Credit and Charge Card Disclosure                  number of the CRA that provided the report.
 Act requires credit and charge card issuers to              Under the Fair Credit Reporting Act (FCRA),
 include this information on                                                    you have the right to request
 credit applications.                                                           a free report within 60 days if
                                      BEWARE: OFFERS TO SKIP A                  a company denies you credit
 CREDIT REPORTS AND                           CREDIT PAYMENT                    based on the report. See page
 SCORES                              If your credit company invites you         18 for how to remove or dispute
 A credit report contains           to skip a monthly payment without           incorrect information.
 information on where                a penalty, it is probably not doing
 you work and live, how                                                         RESOLVING CREDIT
                                         you a favor. You may still owe
 you pay your bills, and               finance charges on your unpaid           PROBLEMS
 whether you've been sued,            balance. And interest will proba-
                                                                                CREDIT BILLING DISPUTES
 arrested, or filed for bank-       bly be adding up on any purchases
 ruptcy. Consumer Reporting           you make after the due date you           If you find an error on a credit
 Agencies (CRAs) gather                              skipped.                   card or charge account bill,
 this information and sell                                                      you have the right to dispute
 it to creditors, employers,                                                    the problem under the Fair
 insurers, and others. The most common type                  Credit Billing Act. The law defines billing errors
 of CRA is the credit bureau. The three major                as: incorrect credits for payments, charges that
 national credit bureaus are:                                you didn’t make, and charges for goods or ser-
                                                             vices that you did not receive or that were not as
 Equifax: 1-800-685-1111 or www.equifax.xom                  promised.
 Experian: 1-888-397-3742 or
 TransUnion: 1-800-916-8800 or            Write to the creditor within 60 days of the post-
                                                             mark of the first bill with the disputed charge.
 As of September 1, 2005, all consumers are eligible         If more than 60 days have passed but you just
 to receive a free annual credit report from each of         recently found the problem, you may still be able
 the three major CRAs.                                       to dispute the charge.
 To order your report, you must go through                       • Send a letter to the address provided on or call 1-877-322-                the bill. Do not send the letter with your pay-
 8228. The information in your credit report is               ment.
 used to calculate your FICO credit score—a
 number generally between 300 and 850 that rates                 • Be specific. In your letter, give your name
 how risky a borrower you are. The higher your                and account number, the date and amount of the
 score, the less risk you pose to creditors. Your             charge disputed, and a complete explanation of
 FICO score is available from                  why you are disputing the charge
 for a fee. Free credit reports                                                          • Send your letter by
 do not contain your credit                                                          certified mail, with a return
 score.                                     BEWARE: TEASER RATES                     receipt requested, if you
                                                                                     want to make sure it is
 Negative information con-             Some cards are advertised with very
 cerning your use of credit can       low introductory interest rates called
 be kept in your credit report          teasers. The rate is good for a short        If you follow these require-
 for seven years. A bankruptcy           period of time. If you know you can         ments, the creditor or card
 can be kept for ten years.             pay what you owe while the low rate          issuer must acknowledge
 Information about a lawsuit or         is in effect, it could be a good deal.       your letter in writing within
 an unpaid judgment against              But if the teaser time runs out and         30 days of receiving it and
 you can be reported for seven           you still owe money, you could end          conduct an investigation
 years or until the statute of            up paying a higher rate than you           within 90 days.
 limitations runs out, which-         might have without the special intro-
 ever is longer.                      ductory rate. Just one late payment          While the bill is being
                                       could also cancel the teaser rate.          investigated, you do not
 Anyone who denies you cred-                                                       have to pay the amount
 it, housing, insurance, or a job                                                  in dispute. The creditor
 as a result of a credit report                                                    cannot try to collect this
 must give you the name, address, and telephone


disputed amount, nor can the creditor report the         until they have completed promised services.
amount as late or close or restrict your account.        They must also give you:
    • If there was an error, the creditor must            • a copy of the “Consumer Credit File Rights
credit your account and remove any related                   Under State and Federal Law” before you
finance charges or late fees. For any amount                 sign a contract;
still owed, you have the right to an explanation          • a written contract that spells out your rights
and copies of documents proving you owe the                  and obligations; and
money.                                                    • three days to cancel without paying any fees.
    • If the bill is correct, you must be told in          Some credit repair companies promise to
writing what you owe and why. You will owe the             help you establish a whole new credit identity.
amount disputed plus any finance charges.                  You can be charged with fraud if you use the
                                                           mail or telephone to apply for credit with false
What if you don’t agree with the creditor’s deci-
                                                           information. It is also a federal crime to make
sion? You can file an appeal with the Office of
                                                           false statements on a loan or credit applica-

the Comptroller of the Currency by calling
                                                                                    tion, to give a false
1-800-613-6743 or going to
                                                                                    Social Security number,
                                        LOST AND STOLEN CREDIT CARDS                or to obtain an Employer
                                          Immediately call the card issuer          Identification Number
NEGATIVE CREDIT                        when you suspect a credit or charge          from the Internal Revenue
INFORMATION IN YOUR CREDIT               card has been lost or stolen. Many         Service under false pre-
REPORT                                   companies have toll-free numbers           tences.
If there is inaccurate or incom-      and 24-hour service to deal with such
plete information in your credit                   emergencies.                     If you have lost money
report:                                                                             to a credit repair scam,
                                        By federal law, once you report the         contact your state or local
 • Contact both the credit                                                          consumer affairs office
    reporting agency and the           loss or theft of a your card, you have
                                         no further responsibility for unau-        (p. 79) or the National
    company that provided the                                                       Fraud Information Center
    information to the CRA.             thorized charges. In any event, your
                                       maximum liability under federal law          (p. 138).
 • Tell the CRA in writ-
    ing what information you                      is $50 per card.                  OUT OF CONTROL DEBT
    believe is inaccurate.                                                          Counseling services are
Under The Fair Credit                                                               available to help people
Reporting Act, the information provider is                 having trouble budgeting money and paying
required to investigate and report the results to          bills. Credit unions, cooperative extension offic-
the CRA. If the information is found to be incor-          es, military family service centers and religious
rect, it must notify all nationwide CRAs to cor-           organizations are among those that may offer
rect your file. If the investigation does not solve        free or low-cost credit counseling.
your dispute, ask that your statement concerning
the dispute be included in your file. A notice of          Local, nonprofit agencies that provide educa-
your dispute must be included anytime the CRA              tional programs on money management and help
reports the negative item. For more informa-               in developing debt payment plans operate under
tion on credit reports and the CRAs, see Credit            the name Consumer Credit Counseling Service
Reports on page 16.                                        (CCCS). They are members of the National
                                                           Foundation for Consumer Credit (NFCC). To
If the information is accurate, only time, hard            locate the agency closest to you, call 1-800-388-
work, and a personal debt repayment plan will              2227 or visit
improve your credit report. Credit repair compa-
nies advertise that they can erase bad credit for          Several national nonprofit organizations also
a hefty fee. Don’t believe it.                             provide information and assist people with debt
                                                           problems via the phone and Internet.
Under the Credit Repair Organizations Act,                  • American Consumer Credit Counseling. Visit
credit repair companies can’t require you to pay     or call 800-769-3571


 • InCharge Institute of America. Visit www.               • Big upfront fees. A reputable credit coun- or call 1-800-565-8953.                seling agency will send free information about
 • Money Management International. Visit www.          itself and the services it provides without or call 1-866-899-9347.         requiring you to provide any details about your
 • Myvesta. Visit or call 1-800-       situation.
   680-DEBT.                                               • Unrealistic promises. Some companies
 Typically, a counseling service will negotiate        falsely claim they can solve problems for pen-
 lower payments with your creditors, then make         nies on the dollar or remove negative informa-
 the payments using money you send to them             tion from your credit record.
 each month. The cost of setting up this debt-        Check with your local consumer protection
 management plan is paid by the creditor not you.     agency (p. 79) and the Better Business Bureau
 Ask these questions to find the best counselor       (p. 128) to see if any complaints have been filed
 for you:                                             about the company.
      • What services do you offer? Look for an       DEBT COLLECTION
  organization that offers budget counseling and      The Fair Debt Collection Practices Act applies
  money management classes as well as a debt-         to those who collect debts owed to creditors
  management plan.                                    for personal, family and household debts-these
      • Do you offer free information? Avoid orga-    include car loans, mortgages, charge accounts
  nizations that charge for information or make       and money owed for medical bills. A debt collec-
  you provide a lot of details about your problem     tor is someone hired to collect money you owe.
      • What are your fees? Are there set-up and/     Within five days after a debt collector first con-
  or monthly fees? A typical set-up fee is $10.       tacts you, the collector must send you a notice
  If you’re paying a lot more, you may be the one     that tells you the name of the creditor, how much
  who’s getting set up.                               you owe, and what action to take if you believe
      • How will the debt management plan work?       you don’t owe the money.
  What debts can be included in the plan and will
  you get regular reports on your accounts?           If you owe the money or part of it, contact the
                                                      creditor to arrange for payment.
      • Can you get my creditors to lower or elimi-
  nate my interest and fees? If the answer is yes,
                                                      If you believe you don’t owe the money, contact
  contact your creditors to verify this.
                                                      the creditor in writing and send a copy to the col-
      • What if I can’t afford to pay you? If an      lection agency with a letter telling them not to
  organization won’t help you because you can’t       contact you. A debt collector may not:
  afford to pay, go somewhere else for help.
                                                       • Contact you at unreasonable times, for exam-
      • Will you help me avoid future problems?           ple, before 8 a.m. or after 9 p.m., unless you
  Getting a plan for avoiding future debt is as           agree;
  important as solving the immediate debt prob-        • Contact you at work if you tell the debt collec-
  lem.                                                    tor your employer disapproves;
      • Will we have a contract? All verbal prom-      • Contact you after you write a letter telling
  ises should be in writing before you pay any            them to stop—except to notify you if the col-
  money.                                                  lector or creditor plans to take a specific
      • Are your counselors accredited or cer-            action;
  tified? Legitimate credit counseling firms           • Contact your friends, relatives, employer or
  are affiliated with the National Foundation             others—except to find out where you live and
  for Credit Counseling or the Association of             work;
  Independent Consumer Credit Counseling               • Harass you through threats to harm you, pro-
  Agencies.                                               fane language or repeated telephone calls;
                                                       • Make any false statement, or claim that you
 Unfortunately, honest credit counselors have a
                                                          will be arrested; or
 lot of rivals who are more interested in taking
                                                       • Threaten to have money deducted from your
 your money than helping you. They can do more
                                                          paycheck or to sue you—unless the collection
 harm than good. Red flags are:


  agency or creditor intends to do so and it is     are selected, plus how and when aid will be
  legal.                                            received.
To file a complaint, contact your state or local        • What are the school’s refund policies?
consumer protection agency (p. 79) and the          If you enroll but change your mind or are not
Federal Trade Commission (p. 124).                  able to finish a class, can you get some of your
                                                    money back?
                                                    Most of this information is covered in a school’s
                EDUCATION                           catalog, brochures or web site. If you know oth-
Choosing a college or other education program       ers who have recently attended a school you’re
is one of the most important decisions you will     considering, ask about their experiences and
make in your lifetime. School is a big investment   opinions. Talk to a high school counselor and
of time, money, and effort, whether it’s a four-    local employers. To find out if any complaints
year university, a two-year program or a trade      have been filed about a school, contact the
or professional school. Carefully evaluate your     Better Business Bureau (p. 128) or higher edu-
options.                                            cation agency in the state where the school is
   • Does the school offer the courses and type
of program you want?                                The U.S. Department of Education (p. 113) has
   • Does the school offer services you need        a wealth of information on choosing, applying
and activities you’re interested in?                and paying for education after high school. This
   • What are the school’s graduation and trans-    information along with applications for federal
fer-out rates? A school is required to disclose     financial assistance is posted online at
this information to prospective students.  or you can call 1-800-433-3243.
   • What percentage of recent graduates are
working in their chosen field of study?             Another source of information on financial
                                                    assistance from both private and government
   • What is the school’s loan default rate? In
                                                    sources is This site also offers
other words, what percentage of students who
                                                    calculators that can help you figure out how
took out federal student loans later failed to
                                                    much school will cost, how much you need to
repay their loans on time? You might not be able
                                                    save, and how much aid you will need.
to get federal aid for a school that has a high
default rate.
                                                    Many state governments have created programs
   • What kind of crimes happen on campus and       to make it easier for families to save for the edu-
what programs are in place to protect your safe-    cation of their children. Visit www.collegesav-
ty? The school must provide you with a summa- for links to information on the various
ry of its annual security report. The Department    state programs.
of Education posts crime statistics for many
schools at
   • What financial aid is available at the
school? Ask for specifics such as the types of      If you’re looking for a job, you may come across
aid available, how you apply, how recipients        ads that promise wonderful opportunities. While
                                                    some companies honestly want to help you, oth-
                                                    ers are more interested in taking your money. Be
            GENERAL EDUCATION                       wary of:
         DEVELOPMENT (GED TESTS)                     • Promises to get you a job and a guaranteed
       States and other jurisdictions issue             income;
       high school equivalency credentials           • Upfront fees, even when you are guaranteed a
      to adult candidates who earn passing              refund if you are dissatisfied;
       scores on GED tests. For more infor-          • Employment agencies whose ads read like job
      mation, visit the American Council for            ads; and
      Education (ACE) at


  • Promotions of “previously undisclosed” gov-      If you need to lose weight, talk with your doc-
    ernment jobs. All federal jobs are announced     tor about the options that are best for you. Most
    to the public at            health experts agree that the best and safest
                                                     way to lose weight is to modestly cut calories,
 Get a copy of the employment agency contract
                                                     eat a balanced diet, and exercise. People usu-
 and review it carefully before you pay any money.
                                                     ally do best when they reduce their usual calorie
 Check with your local consumer protection
                                                     intake or increase the calories they use by 500–
 agency (p. 79) and the Better Business Bureau
                                                     1,000 per day. This allows you to eat enough for
 (p. 128) to see if any complaints have been filed
                                                     good nutrition yet lose about one to two pounds
 about a company.
                                                     a week. Steer clear of harmful tactics such as
                                                     smoking, fasting, purging, or abusing laxatives.
 For links to information on employment, click on
 “Education and Jobs” at
                                                     To make sure you safely lose pounds not just
                                                     dollars, ask these questions:
 The Federal Trade Commission (p. 124) sues
 businesses that fraudulently advertise employ-           • How does the product or service work?
 ment openings and guarantee job placement.           Does the program emphasize diet, exercise or a
 Contact the FTC if you have a complaint.             combination of both.
                                                          • How much will it cost? Ask for an item-
        FOOD AND NUTRITION                            ized list that includes membership fees and
                                                      fees for weekly visits. Ask if there are extra
 The following suggestions will help you save         fees for diagnostic tests, food, dietary supple-
 money when shopping for food.                        ments, or other products in the program.
  • Use a grocery list. You will be less likely to        • How well does it work? Ask to see the
    pick up extra items.                              studies that back up success claims. Look for
  • Shop at the lower-priced food stores.             how many people completed the program, how
    Convenience stores often charge the highest       much weight they lost, and how long they kept
    prices.                                           the weight off.
  • Compare price-per-ounce or other unit prices.         • What are the risks? Get details about
  • Stock up on non-perishable items with low         possible side effects. Check with your doctor
    per-unit costs.                                   before you take prescriptions, over-the-coun-
 To help you make healthy food choices, the fed-      ter weight loss drugs, or dietary supplements.
 eral government posts dietary guidelines at          Diets that require drastic food restriction Federal regu-      should be under the supervision of a physician.
 lations also require many foods to identify fat          • How many calories will you eat each
 content, fiber and nutrients on their labels.        day? For diets under 1500 calories, be sure to
                                                      check with your doctor to make sure you meet
 For more information, check out these sources of     all your nutrient needs.
 information on food shopping, safety, and nutri-         • What are the staff qualifications? Ask
 tion.                                                about their training and experience.
  • U.S. Department of Agriculture (p. 111);              • What type of attention will you
  • The Food and Drug Administration (p. 115);        receive? Will you get individual counseling or
  • (;                group support? How often?
  • MedlinePlus (Click on F for Food or N for
                                                     Complaints concerning fraudulent weight loss
    Nutrition at;
                                                     claims should be directed to the Federal Trade
  • The Nutrition Source (
                                                     Commission (p. 124).

 WEIGHT REDUCTION                                                  HEALTHCARE
 The federal government has brought together
 information on weight loss and dieting at www.      Thousands of websites are now available to help               you make health care decisions. Be wary of sites
 dieting.html.                                       sponsored by companies that are trying to sell
                                                     you a particular treatment. It is better to visit


sites run by government agencies and by recog-       tion including, www.
nized organizations such as the Mayo Clinic or, and,
the American Medical Association (AMA). This        Visit for more advice on
information should complement, not replace,         identifying providers.
what you receive from a doctor. Here are some
sites that are generally recognized as reliable     CHOOSING A HEALTH CARE FACILITY
information sources.                                Report cards are starting to appear on the
 •, and            Internet to help you compare health care facili-
    MedlinePlus (      ties. Three private websites that rate hospitals
    Three federal government gateways to infor-     based on information collected from Medicare
    mation on health issues, health care pro-       records and other sources are,
    grams, and organizations.             , and
 • Intelihealth (
    Information and practical advice on staying     The Joint Commission on Accreditation of
    healthy from the Harvard Medical School.        Healthcare Organizations accredits hospitals
 • Mayo Clinic ( An alpha-      as well as nursing homes and other health care
    betical index of diseases and Healthy Living    organizations. Specially trained investigators
    Centers (for example, Women’s Health, Diet      assess whether these organizations meet set
    and Health). Consult the Health Decisions       standards. At, you can check on a
    Guide for information on medical tests and      local facility, including how it compares with oth-
    treatments.                                     ers. JCAHO also accepts consumer complaints.
 • Medical Library Association (    You can post a complaint on its website or call
    Websites suggested by librarians.               1-800-994-6610.
 • Mental Help Net ( Links
    to a broad range of mental health topics.       If you are looking for a nursing home or other
 For information on medical privacy, see page 9.    assisted living facility, these additional organiza-
                                                    tions can help.
                                                       • Nursing Home Compare—operated by the
When searching for a doctor, dentist or other
                                                    U.S. Department of Health and Human Services—
health care professional:
                                                    will help you compare the facilities in many states.
   • Find out whether they are licensed in          Go to
your state. A state or local occupational and          • Eldercare Locator (—
professional licensing board will be able to give   another service of the U.S. Department of
you this information (p. 79).                       Health and Human Services—provides infor-
   • Research whether they are board-certi-         mation and referral services for those seeking
fied in the appropriate specialty. You can find     local and state support resources for the elderly.
this information on the sites of the AMA (www.      Call toll free: 1-800-677-1116. Be prepared with and American Board of Medical         a county and city or ZIP code where the assis-
Specialties (                         tance is sought.
   • Ask how often they have done the pro-             • The American Association of Homes and
cedure you need and their success rate. You         Services for the Aging ( is a
may be able to find some of this information on     trade group that represents many nonprofit
the Internet. For example, the Center for Disease   facilities. Phone: 202-783-2242.
Control reports the success rates and number of        • The Assisted Living Federation of America
procedures performed by fertility clinics at www.   ( represents both for-profit and Some states collect and post data on       non-profit assisted-living facilities. Phone: 703-
the success of heart-bypass surgery.                691-8100.
   • Check whether there have been any                 • The Continuing Care Accreditation
complaints or disciplinary actions taken.           Commission ( gives its seal
Websites that can help are www.docboard.            of approval to qualifying facilities.
org and There are
also pay-for-use sites with similar informa-


 PRESCRIPTION DRUGS                                   All drug plans approved by Medicare may use
 Pharmacies may charge widely different prices        this seal on their materials:
 for the same medicine so it is a good idea to
 comparison shop
      • Ask your physician and pharmacist if a
                                                      Like other insurance, if you decide not to enroll
  generic drug may be appropriate. Generics usu-
                                                      in a drug plan when you are first eligible, you
  ally cost less than brand name drugs.
                                                      may pay a penalty if you choose to join later. If
      • Consider using a mail-order or on-line        you have limited income and resources, you may
  pharmacy, especially if you will be taking a drug   get extra help to cover prescription drugs for
  for a long time. The prices charged are often       little or no cost.
 An increasing number of consumers are replac-        For more information, look at the “Medicare &
 ing a trip to the pharmacy with a trip on the        You 2006” handbook, visit on
 Internet. While there are online pharmacies that     the web, or call 1-800-MEDICARE. TTY users
 provide legitimate prescription services, there      should call 1-877-486-2048.
 are also some questionable sites that make buy-
 ing medicines online risky. Do business only
 with a licensed U.S. pharmacy. Check with the
 National Association of Boards of Pharmacy           The U.S. Department of Housing and Urban
 to determine if the site is licensed and in good     Development (HUD) funds housing counseling
 standing. Visit or call 847-698-6227.   agencies throughout the country. These organi-
                                                      zations can give you advice on buying a home,
 An online pharmacy should offer you access           renting, defaults, foreclosures, credit issues
 to a registered pharmacist who can answer any        and reverse mortgages. To contact the agency
 questions you might have about drug interac-         nearest you, call 1-800-569-4287 or visit the HUD
 tions, side effects, etc. Be wary of sites that:     website at Homeowners with
  • Sell drugs without a prescription;                problems that could result in default of their
  • Sell drugs not approved by the FDA;               mortgage or foreclosure on their property are
  • Advertise quick cures; or                         encouraged to contact a HUD-approved housing
  • Tell stories of “amazing results.”                counseling agency immediately.
 If you suspect a site is not a licensed pharmacy,
 report it and any complaints to the U.S. Food        In your housing search if you believe you are
 and Drug Administration at           being discriminated against on the basis of your
 buyonline/buyonlineform.htm (p.113)                  race, color, nationality, religion, sex, familial sta-
                                                      tus, or disability, contact HUD’s Office of Fair
 Want to know the side effects of a particular        Housing at 1-800-669-9777.
 medication? Curious whether a drug has
 been approved by the U.S. Food and Drug              Links to other information on housing are avail-
 Administration? Another FDA web page brings          able at
 together information on approved prescription        BUYING A HOME
 drugs, some over-the-counter drugs, and discon-
 tinued drugs. Visit Drugs@FDA at www.access-         Buying a home is one of the most complex finan-                cial decisions you’ll ever make.
                                                       • Consider hiring a buyer-broker who works
 MEDICARE PRESCRIPTION DRUG COVERAGE                     for you not the seller. Real estate agents
 Starting January 1, 2006, Medicare will offer           represent the seller not the buyer.
 prescription drug coverage to help you get            • Get prices on other homes. Knowing the
 the prescription drugs you need. Everyone               price of other homes in a neighborhood will
 with Medicare can join a drug plan as early             help you avoid paying too much.
 as November 15, 2005 to get this coverage. If         • Have the property inspected. Use a
 you aren’t sure if a drug plan is approved by           licensed home inspector to carefully inspect
 Medicare, call 1-800-MEDICARE (1-800-633-4227).         the property before agreeing to buy it.


When shopping for a home mortgage:                     tion on all closing costs and escrow account
                                                       practices. Any business relationships between
    • Research current interest rates. Check           the lender and closing service providers or
 the real estate section of your local newspaper,      other parties to the transaction must also be
 use the Internet, or call at least six lenders for    disclosed. Many of the fees are negotiable. More
 information.                                          information is available from the Federal Trade
    • Check the rates for 30-year, 20-year             Commission (p. 124), the Federal Reserve Board
 and 15-year mortgages. You may be able to             (p. 124), and the Department of Housing and
 save thousands of dollars in interest charges         Urban Development (p. 117).
 by getting the shortest-term mortgage you can
 afford.                                                 For more information on home buying and
    • Ask for details on the same loan                   mortgages, visit Fannie Mae’s website at
 amount, loan term, and type of loan from       or call 202-752-7000. The
 multiple lenders so that you can compare                Mortgage Bankers Association also offers their
 the information. Be sure to get the Annual              website,
 Percentage Rate (APR), which takes into
 account not only the interest rate but also             HOME IMPROVEMENT AND REPAIRS
 points, broker fees, and other credit charges           Home improvements and repairs can cost thou-
 expressed as a yearly rate.                             sands of dollars and are the subject of frequent
    • Ask whether the rate is fixed or adjust-           complaints. When selecting a contractor:
 able. The interest rate on adjustable rate                   • Get recommendations and references.
 mortgage loans (ARMs) can vary a great deal              Talk to friends, family and others who have used
 over the lifetime of the mortgage. An increase           the contractor for similar work.
 of several percentage points might raise pay-                • Get at least three written estimates.
 ments by hundreds of dollars per month.                  Insist the contractors come to your home to
    • If a loan has an adjustable rate, ask               evaluate what needs to be done. Be sure the
 when and how the rate and loan payment could             estimates are based on the same work so that
 change.                                                  you can make meaningful comparisons.
    • Find out how much down payment is                       • Check contractor complaint records.
 required. Some lenders require 20 percent of             Your state or local
 the home’s purchase price as a down payment.             consumer protection agency (p. 79) or Better
 But many lenders now offer loans that require            Business Bureau (p. 128) can provide this infor-
 less. In these cases,                                                             mation.
 you may be required to                 MORTGAGE REFINANCING                           • Make sure the
 purchase private mort-                                                            contractor meets
 gage insurance (PMI)           Consider refinancing your mortgage if you
 to protect the lender if      can get a rate that is at least one percentage licensing and registra-
                               point lower than your existing mortgage rate        tion requirements. Your
 you fall behind on pay-                                                           state or local consumer
 ments.                        and if you plan to keep the new mortgage for
                                several years. When comparing mortgages,           protection agency
    • If PMI is required,         don’t forget to include the extra fees you       (p. 79) can help you find
 ask what the total               must pay for the new mortgage. You may           out what the necessary
 cost of the insurance           be able to get some fees waived if you are        requirements are.
 will be. How much will        able to refinance with your current mortgage            • Get the names of
 the monthly mortgage                               holder.                        suppliers and ask if the
 payment be when the                                                               contractor makes timely
 PMI premium is added                                                              payments.
 and how long you will be required to carry
                                                              • Contact your local building inspection
                                                          department to check for permit and inspection
    • Ask if you can pay off the loan early               requirements. Be wary if the contractor asks you
 and if there is a penalty for doing so.                  to get the permit—it could mean the firm is not
The Real Estate Settlement Procedures Act                 licensed.
(RESPA) requires lenders to give you informa-


     • Be sure your contractor is insured. They
 should have personal liability, property damage                    INSURANCE
 and worker’s compensation insurance for work-
 ers and subcontractors. Also check with your        General sources of insurance information
 insurance company to find out if you are cov-       include the American Council of Life Insurers
 ered for any injury or damage that might occur.     (p. 141), the Insurance Information Institute
                                                     (p. 144), the National Association of Insurance
     • Insist on a written contract that states      Commissioners (p. 145), and your state insurance
 exactly what work will be done, the quality of      department (p. 99). You can also visit these web-
 materials that will be used, warranties, timeta-    sites: and
 bles, the names of any subcontractors, the total    When buying insurance:
 price of the job, and the schedule of payments.
     • Try to limit your down payment. Some              • Find out whether your state insurance
 states have laws limiting the amount of down        department offers any information concern-
 payment required.                                   ing insurance companies and rates. This is a
                                                     good way to get a feeling for the range of prices
     • Understand your payment options.              and the lowest-cost providers in your area. See
 Compare the cost of getting your own loan ver-      p.112.
 sus contractor financing.
                                                         • Check several sources for the best deal.
     • Don’t make a final payment or sign a          Try getting quotes from a website such as www.
 final release until you are satisfied with the but be aware that many online quote
 work and know that subcontractors and sup-          services provide prices for just a few com-
 pliers have been paid. Some state laws allow        panies. An independent insurance agent that
 unpaid subcontractors and suppliers to put a        works with several insurers in your local area
 lien on your home for bills the contractor failed   may be able to get you a better deal.
 to pay.
                                                         • Make sure the insurance company is
     • Pay by credit card when you can. You          licensed and covered by the state’s guaranty
 may have the right to withhold payment to the       fund. The fund pays claims in case the company
 credit card company until problems are cor-         defaults. Your state insurance department (p. 112)
 rected (p. 18).                                     can provide this information.
 Be especially cautious if the contractor:               • Check the financial stability and sound-
 • comes door-to-door or seeks you out;              ness of the insurance company. Ratings
 • just happens to have material left over from a    from A.M. Best (, Standard &
    recent job;                                      Poor’s (, Moody’s
 • tells you the job will be a “demonstration;”      Investors Services (, and
 • offers you discounts for finding other            Weiss Ratings, Inc. ( are
    customers;                                       available online and at most public libraries.
 • quotes a price that’s out of line with other          • Research the complaint record of
    estimates;                                       the company. Contact your state insurance
 • pressures you for an immediate decision;          department or visit the website of the National
 • offers an unusually long guarantee;               Association of Insurance Commissioners (www.
 • can only be reached by leaving messages with, which has a database of complaints
    an answering service;                            filed with state regulators.
 • drives an unmarked van;
 • has out-of state license plates; or                   • Find out what others think about the
 • asks you to pay for the entire job up front.      company’s customer service. Consumers
                                                     rate homeowner insurance companies from J.D.
 With most home improvements, federal law            Powers and Associates at
 gives you three business days to cancel without     homes/insuranceratings.
 penalty. Of course you would be liable for any          • Once you pay your first insurance pre-
 benefit already received. State laws may also       mium, make sure you receive a written
 provide some protection. See Your Rights: 3-Day     policy. This tells you the agent forwarded your
 Cooling-Off Rule (p. 4). And remember—if you        premium to the insurance company. If you don’t
 finance home improvements with a home equity        receive a policy within 60 days, contact your
 loan and don’t make your payments, you could        agent and the insurance company.
 lose your home. See Home Equity Loans (p. 21).


AUTO INSURANCE                                          Don’t wait till you have a loss to find out if you
Getting several quotes on insurance for a motor         have the right type and amount of insurance.
vehicle may save you hundreds of dollars a year.              • Make certain you purchase enough
Other ways to reduce your insurance premium are:           coverage to replace what is insured.
     • Raise your deductibles on collision and             “Replacement” coverage gives you the money to
 comprehensive coverages. If you have an old               rebuild your home and replace its contents. An
 car, it may make sense to drop these coverages            “Actual Cash Value” policy is cheaper but pays
 altogether.                                               only what your property is worth at the time of
                                                           loss-your cost minus depreciation for age and
     • Take advantage of
 discounts. Some com-
 panies offer discounts to              BEWARE: INSURANCE FRAUD                     • Ask about special
 motorists who drive less                                                       coverage you might
 than a certain amount of               • Be wary of people selling insur-      need. You may have to pay
 miles per year, are a student      ance door-to-door and over the tele-        extra for computers, cam-
 with good grades, have             phone.                                      eras, jewelry, art, antiques,
 taken a safe-driving course            • Be suspicious if, after an acci-      musical instruments,
 or are over 50 years old. You      dent, a stranger contacts you to offer      stamp collections, etc.
 might also be able to get          “quick cash” or recommends a partic-            • Remember that
 discounts if you insure more       ular attorney or health care provider.      flood and earthquake
 than one vehicle, insure           Report the incident to your police          damage are not covered
 your vehicle and your home         department.                                 by a standard homeowners
 with the same company,                 • Don’t give your insurance iden-       policy. The cost of a sepa-
 have had no moving vehicle         tification numbers to companies you         rate earthquake policy will
 violations or accidents in         don’t know.                                 depend on the likelihood of
 three years, have anti-theft                                                   earthquakes in your area.
                                        • Carry a disposable camera in your
 devices or have safety fea-                                                    Homeowners who live in
                                    glove compartment. If you are in an
 tures such as air bags.                                                        areas prone to flooding
                                    accident, take pictures of the dam-
                                                                                should take advantage
                                    age and the people involved. Ask for
HOMEOWNER/RENTER’S                  names, telephone numbers and driv-
                                                                                of the National Flood
INSURANCE                                                                       Insurance Program.
                                    er’s license information for all those
You may be able to save                                                          Call 1-888-CALLFLOOD
                                    involved. Contact information for any
hundreds of dollars a year                                                      or visit www.floodalert.
                                    witnesses is also a good idea.
on homeowners insur-                                                  
                                   If you suspect fraud, call the National
ance by shopping around                                                             • If you are a renter,
                                   Insurance Crime Bureau’s hotline at
for insurance. You can also                                                     DO NOT assume your
                                   1-800-835-6422. For more information,
save money with these tips.                                                     landlord carries insur-
                                   check out
                                                                                ance on your personal
     • Consider a higher                                                        belongings. Purchase a
 deductible. Increasing                                                         special policy for renters.
 your deductible by just a few hundred dollars
 can make a big difference your premium.                  HEALTH INSURANCE
     • Ask your insurance agent about dis-                Most consumers have health care coverage
 counts. You may be able get a lower premium              from an employer. Others have medical
 if your home has safety features such as dead-           care paid through a government program
 bolt locks, smoke detectors, an alarm system,            such as Medicare, Medicaid, or the Veterans
 storm shutters or fire retardant roofing mate-           Administration (VA). For information on
 rial. Persons over 55 years of age or long-term          Medicaid, look in your phone book under
 customers may also be offered discounts.                 Medicaid, Social Services, Medical Assistance,
     • Insure your house NOT the land under               Human Services, or Community Service.
 it. After a disaster, the land is still there. If you    Information about Medicare is available by call-
 don’t subtract the value of the land when decid-         ing 1-800-MEDICARE. Information concerning
 ing how much homeowner’s insurance to buy,               VA medical care is available from your nearest
 you will pay more than you should.                       VA facility.


 If you have lost your group coverage from an           When choosing among different health care
 employer as the result of unemployment, a              plans, you’ll need to read the fine print and ask
 death, divorce, or loss of “dependent child” sta-      lots of questions.
 tus, you may be able to continue your coverage          • Do I have the right to go to any doctor, hospi-
 temporarily under the Consolidated Omnibus                tal, clinic or pharmacy I choose?
 Budget Reconciliation Act (COBRA). You, not             • Are specialists such as eye doctors and den-
 the employer, pay for this coverage. When one of          tists covered?
 these events occur, you must be given at least 60       • Does the plan cover special conditions or
 days to decide whether you wish to purchase the           treatments such as pregnancy, psychiatric
 coverage.                                                 care and physical therapy?
                                                         • Does the plan cover home care or nursing
 Some states offer an insurance pool to residents          home care?
 who are unable to obtain coverage because of a          • Will the plan cover all medications my physi-
 health condition. To find out if a pool is available      cian may prescribe?
 in your state, check with your state department         • What are the deductibles? Are there any co-
 of insurance (p. 99).                                     payments?
                                                         • What is the most I will have to pay out of my
 Most states also offer free or low-cost coverage          own pocket to cover expenses?
 for children who do not have health insurance.          • Are there any limits on expenses covered in a
 Visit or call 1-877-KIDS-           year? In my lifetime?
 NOW for more information.                               • If there is a dispute about a bill or service,
 HMOS AND PPOS                                             how is it handled? In some plans, you may be
                                                           required to have a third-party decide how to
 When purchasing health insurance, your choices
                                                           settle the problem.
 will typically fall into one of three categories:
     • Traditional fee-for-service health insurance     LONG-TERM CARE INSURANCE
  plans are usually the most expensive choice.          Medical advances have resulted in an increased
  But they offer you the most flexibility when          need for nursing home care and assisted liv-
  choosing health care providers.                       ing. Most health insurance plans and Medicare
     • Health maintenance organizations (HMOs)          severely limit or exclude long-term care. Here
  offer lower co-payments and cover the costs           are some questions to ask when considering a
  of more preventative care BUT your choice of          separate long-term care insurance policy.
  health care providers is limited.                        • What qualifies you for benefits? Some
     • Preferred provider organization (PPOs)           insurers say you must be unable to perform a
  offer lower co-payments like HMOs. Their              specific number of the following activities of
  advantage over HMOs is that they give you             daily living: eating, walking, getting from bed
  more flexibility when selecting a provider.           to a chair, dressing, bathing, using a toilet and
  A PPO gives you a list of providers you can           remaining continent.
  choose from.                                             • What type of care is covered? Does the
 WARNING: If you go outside the HMO or PPO              policy cover nursing home care? What about
 network of providers, you may have to pay a por-       coverage for assisted living facilities that pro-
 tion or all of the costs.                              vide less client care than a nursing home? If
                                                        you want to stay in your home, will it pay for
 The National Committee for Quality Assurance           care provided by visiting nurses and therapists?
 (NCQA) evaluates and accredits HMOs. You can           What about help with food preparation and
 find out whether one is accredited in your state       housecleaning?
 by calling 1-888-275-7585. You can also get this          • What will the benefit amount be? Most
 information as well as report cards on HMOs by         plans are written to provide a specific dollar
 visiting its website (                   benefit per day. The benefit for home care is
                                                        usually about half the nursing-home benefit.
 Medicare beneficiaries can compare                     But some policies pay the same for both forms
 HMO programs at and                   of care. Other plans pay only for your actual
 www.medicarenews                            expenses.


   • What is the benefit period? It is possible      effect for a specific period of time-a year or until
to get a policy with lifetime benefits but this      you reach a certain age are common. Visit www.
can be very expensive. Other options for cover- for online comparisons of term
age are from one to six years. The average nurs-     life insurance.
ing home stay is about two and one-half years.
   • Is the benefit adjusted for inflation? If       Whole life, universal life, and other cash
you buy a policy prior to age 60, you face the       value policies combine a long-term savings
risk that a fixed daily benefit will not be enough   and investment product with life insurance.
by the time you need it.                             Canceling these policies after only a few years
                                                     can more than double your life insurance costs.
   • Is there a waiting period before benefits
begin? A 20 to 100 day period is not unusual.
Disability can be more disastrous financially        Investors today have a wide range of choices:
than death. If you are disabled, you lose your       stocks, bonds, mutual funds, Treasury securities
earning power. You still have living expenses        (including savings bonds), options, commodi-
and, often, huge expenses for medical care.          ties, commodity futures, real estate investment
When purchasing disability insurance, ask:           trusts (REITs), variable annuities and many
                                                     more. You must investigate before you invest-and
      • How is disability defined? Some poli-        remember that every investment involves some
 cies consider you disabled if you are unable to     degree of risk. These securities are not insured
 perform the duties of any job. Better plans pay     by the federal government if they fail-even if you
 benefits if you are unable to do the usual duties   purchase them through a bank or credit union
 of your own occupation.                             that offers federally-insured savings accounts.
      • When do benefits begin? Most plans           Make sure you have answers to all of these
 have a waiting period after an illness before       questions before you invest.
 payments begin.                                         • How quickly-can you get your money
      • How long do benefits last? After the         back? Stocks, bonds, and shares in mutual
 waiting period, payments are usually available      funds can usually be sold at any time, but there
 till you reach age 65, though shorter or longer     is no guarantee you will get back all that you
 terms are also available.                           paid for them. Other investments such as lim-
      • What dollar amount is promised? Can          ited partnerships, often restrict your ability to
 benefits be reduced by Social Security dis-         cash out your holdings.
 ability and workers’ compensation payments?             • What can you expect to earn on your
 Are the benefits adjusted for inflation? Will the   money? While bonds generally promise a fixed
 policy provider continue making contributions       return, earnings on most other securities go up
 to your pension plan so you have retirement         and down with market changes. Also keep in
 benefits when the disability coverage ends?         mind that just because an investment has done
For more information on disability insurance,        well in the past there is no guarantee it will do
visit and                  well in the future.
                                                         • What type of earnings can you expect?
LIFE INSURANCE                                       Will you get income in the form of interest,
Your need for life insurance will change with        dividends or rent? Some investments, such
changes in your life. For example, the arrival of    as stocks and real estate, have the potential
children usually triggers a sharp increase in the    for earnings and growth in value. What is the
amount you need. As children grow older and          potential for earnings over time?
leave the nest, you will probably need less pro-
                                                         • How much risk is involved? With any
                                                     investment, there is always the risk that you
                                                     won’t get your money back or the earnings
Term life insurance policies are the least costly.
                                                     promised. There is usually a trade-off between
They pay death benefits only-they have no cash
                                                     risk and reward-the higher the potential return,
value if you decide to stop making payments. As
                                                     the greater the risk. The federal government
the word “ term” suggests, these policies are in


  insures bank savings accounts (see FDIC on                • Have they had any run-ins with regulators
  p. 123) and backs up U.S. Treasury securities         or received serious complaints from investors?
  (including savings bonds). Other investment           Call your local state securities regulator (p.103).
  options are not protected.                            You can also check out the database of disci-
      • Are your investments diversified? Some          plinary actions maintained by the Securities
  investments perform better than others in             Exchange Commission and the National
  certain situations. For example, when interest        Association of Securities Dealers. The data-
  rates go up, bond prices tend to go down. One         base is online at
  industry may struggle while another prospers.         or call NASD at 1-800-289-9999.
  Putting your money in a variety of investment             • How are they paid? Is it an hourly rate, a
  options can help to reduce your risk.                 flat fee, or a commission that depends on the
      • Are there any tax advantages to a par-          investments you make? Do they get a bonus
  ticular investment? U.S. Savings Bonds are            from their firm for selling you a particular prod-
  exempt from state and local taxes. Municipal          uct?
  bonds are exempt from federal income tax and,             • What are the fees for setting up and servic-
  sometimes, state income tax as well. For spe-         ing your account?
  cial goals, such as paying for college and retire-   If you are seeking more information or have
  ment, tax-deferred investments are available         an investment problem that you are unable to
  that let you postpone or even eliminate payment      resolve directly, you can contact the SEC (p. 126)
  of income taxes.                                     or the NASD (p. 145). Additional organizations
 The following companies rate the financial con-       that may also be helpful are:
 dition of corporations and municipalities issuing          • offers a semi-annual
 bonds. Their ratings are available online and at       rating of the top online brokerage firms that
 many public libraries.                                 trade stocks and mutual funds.
  • Standard & Poor’s (            • offers data on Wall Street
  • Moody’s Investors Services (         analysts and their recent stock picks.
  • Weiss Ratings (                    • The Commodity Futures Trading
 For ratings of mutual funds, consult magazines         Commission (p. 111) provides consumer alerts
 such as Kiplinger’s Personal Finance, Money,           and advisories in the “Consumer Protection”
 Consumer Reports, Smart Money, and Worth.              section at
                                                            • Both the North American Securities
 For stocks, get a prospectus from the company          Administrators Association (p. 146) and the
 that describes the investment and provides a           National Futures Association (p. 145) can offer
 history of performance over a period of years.         helpful information.
 The Securities and Exchange Commission
 requires public companies to disclose financial       BEWARE: INVESTMENT FRAUD
 and other information to help you make sound          Deceptive pitches for investments often mis-
 decisions. You can find the text of these files at    represent or leave out facts in order to promote                              fantastic profits with little risk. No investment is
                                                       risk-free and a high rate of return means greater
                                                       risk. Before investing, get written information
 When selecting a broker or investment advisor,        such as a prospectus or annual report. Beware if
 research the person’s education and profession-       a salesperson:
 al history as well as the firm they work for. Ask:
                                                        • Encourages you to borrow money or cash in
    • Have they worked with others who have cir-          retirement funds to invest;
 cumstances similar to yours?                           • Pressures you to invest immediately;
    • Are they licensed in your state? Your state       • Promises quick profits;
 securities regulator (p. 103) lists individuals and    • Says that the disclosure documents required
 firms that are registered in your state. Ask if          by federal law are just a formality;
 the regulatory office has any other background         • Tells you to write false information on your
 information.                                             account form;


• Sends material with typos or misspellings or           the beach. Then ask the hotel. See Contests
  not printed on letterhead;                             and Sweepstakes below.
• Does not send your money promptly;                        • Ask about cancellation policies. You
• Offers to share inside information; or                 may want to look into trip insurance for added
• Uses words like “guarantee,” “high return,”            protection. offers pricing
  “limited offer,” or “as safe as a CD.”                 and policy information on plans from different
                                                         companies and describes the different forms of
                   TRAVEL                                policies available.
                                                            • Insist on written confirmations. Ask for
Whether reserving a hotel room, buying plane             written proof of reservations and dates.
tickets or making other travel arrangements,
                                                            • Pay by credit card. It’s not unusual to
these tips will help you get a deal that delivers
                                                         make a deposit or even pay in full for travel ser-
what you are promised.
                                                         vices before the trip. A credit card gives you the
     • Plan as far ahead as you can. Special
                                                         right to dispute charges for services that were
 deals on hotel rooms and airline seats often
                                                         misrepresented or never delivered. If a travel
 sell out very quickly.
                                                         agent or service providers tells you that you
     • Be flexible in your travel plans. Hotels          can’t leave for at least two months, be very cau-
 often offer better rates on days when they              tious-the deadline for disputing a credit card
 expect fewer people to be staying with them.            charge is 60 days and most scam artists know
 After you get a fare quote from an airline, ask         this. (See Resolving Credit Problems on p. 16).
 if you could save money by leaving a day ear-
 lier or later, by taking a different flight on the
                                                          In some states, travel sellers have to be regis-
 same day, or using a different airport. Changing
                                                          tered and insured. Advance payments for travel
 planes during your trip is sometimes cheaper
                                                          must be placed in an escrow account until the
 than a nonstop flight.
                                                          services are provided. Prizes or “free” gifts may
     • Check out the seller. Ask tour opera-              also be regulated. Contact your state or local
 tors and travel agents whether they belong to            consumer protection agency (p. 79) to find out
 a professional association, then check to see            about your rights and how to file complaints. The
 if they are a member in good standing. Contact           American Society of Travel Agents (p. 142) will
 your state or local consumer protection agency           also help resolve disputes with member agents.
 (p. 79) and the Better
 Business Bureau (p. 128)                                                       FEDERAL RECREATION
 history.                     Don’t pay if you are asked to give money to       Thinking about a vacation
     • Comparison             claim a prize or get something else free. If      in the 50 states or U.S. ter-
 shop. Determine the          you have really won a sweepstakes, you pay        ritories? Check out these
 complete cost of the         taxes directly to the government, not through websites for ideas.
 trip in dollars, includ-     the company. Beware of invitations that           • Links
 ing all service charges, include phrases like:                                 to information on reser-
 taxes, processing fees, “You have been specially selected...”                  vations, scenic byways,
 etc.                          “You have won...”                                national recreation trails,
     • Beware of               “A new car! A trip to Hawaii! $2,500 in cash!” state tourism sites, and
 unusually cheap               “Yours, absolutely free! Take a look at our...”  much more.
 prices and freebies.          “Your special claim number lets you ...”         • A
 It could be a scam and        “All you pay is postage, handling, taxes ...”    one-stop reservation ser-
 you could end up pay-                                                          vice for cabins, campsites
 ing more than that of a                                                        and outdoor activities on
 regular package tour.                                       lands managed by the U.S. government.
                                                           • Travel_
     • Make sure you understand the terms of
                                                             Tourism/State_Tourism.shtml. A directory of
 the deal. If you are told that you’ve won a free
                                                             travel and tourism sites for U.S. states and
 vacation, ask if you have to buy something else
 in order to get it. If the destination is a beach
 resort, ask the seller how far the hotel is from


 TRAVEL SAFETY                                          OVERBOOKED FLIGHTS
 Several federal agencies offer advice and infor-       Selling more tickets than there are seats is not
 mation on the Internet that can help insure you        illegal. Most airlines overbook their flights to
 have a safe trip.                                      compensate for “no-shows.” If there are more
                                                        passengers than seats just before a plane is
     • The U.S. Department of Transportation (p. 121)
                                                        scheduled to depart, you can be “bumped”—left
 at offers airline, highway and rail
                                                        behind against your will. The U.S. Department of
 safety information. For example, you can look
                                                        Transportation requires airlines to ask people to
 up crash-safety reports on cars or find out how
                                                        give up their seats voluntarily, in exchange for
 weather is affecting air travel and road conditions.
                                                        compensation. Airlines decide what to offer vol-
     • The Transportation Security Administration       unteers—money, a free trip, food, or lodging.
 (p. 121) at has advice on safe travel
 by air, land and sea. For example, they post tips      Federal rules protect you if you are “bumped”
 on dealing with airline security checks, travel-       on most flights within the U.S. and outbound
 ing with kids, and warnings on prohibited items.       international flights. The airline must give you a
 Click on Travelers and Consumers.                      statement describing your rights. If the airline
     • The U.S. Department of State (p. 119) at         is not able to get you to your final destination tells what to do before,          within one hour of your original arrival time,
 during, and when you return from a trip over-          you may be entitled to an on-the-spot payment
 seas. You can also get warnings on locations to        as compensation. The amount depends on the
 avoid and what to do in an overseas emergency.         price of the ticket and the length of the delay. To
     • The Centers for Disease Control and              receive this payment, you must have a confirmed
 Prevention (p. 115) at offers       reservation. You must also meet the airline’s
 health-related travel information. You can             deadlines for ticketing and check-in. An airline
 research vaccination requirements, find infor-         may offer you a free ticket on a future flight in
 mation on how to avoid illnesses caused by             place of a check, but you have the right to insist
 food and water, and review inspection scores on        on a check.
 specific cruise ships.                                 DELAYED OR DAMAGED BAGS
 RESOLVING AIR TRAVEL PROBLEMS                          If your bags aren’t on the conveyor belt when you
                                                        arrive, file a report with the airline before you
 No matter how well you plan, you might encoun-
                                                        leave the airport.
 ter these common travel hassles.
                                                         • Insist that they fill out a form and give you a
 DELAYED AND CANCELLED FLIGHTS                              copy-even if they say the bag will be on the
 Airline delays caused by bad weather, traffic              next flight.
 control problems, and mechanical repairs are            • Get the name of the person who filled out the
 hard to predict. If your flight is canceled, most          form and a phone number for follow up.
 airlines will rebook you on their first available       • Confirm that the airline will deliver the bag to
 flight to your destination, at no additional charge.       you without charge when it is found.
 If you are able to find a flight on another airline,   Some airlines will give you money to purchase
 ask the first airline to endorse your ticket to the    a few necessities. If they don’t provide you with
 new carrier. This could save you a fare increase       cash, ask what types of articles would be reim-
 but there is no rule requiring them to do this.        bursable, and keep all receipts.

 Each airline has its own policies about what           If a suitcase arrives damaged-the airline will
 it will do for delayed passengers-there are no         usually pay for repairs. If an item can’t be fixed,
 federal requirements. If your flight is delayed or     they will negotiate to pay you its depreciated
 canceled, ask the airline if it will pay for meals     value. The same is true for belongings packed
 or a phone call. Contrary to what many people          inside. Of course, airlines may refuse to pay for
 believe, airlines are not required to do so.           damage if it was caused by your failure to pack
                                                        something properly rather than the airline’s handling.


LOST BAGS                                               TELEPHONE SERVICES
If your bag is declared officially lost, you will       Many consumers are now able to choose both
have to submit a second, more detailed form             local and long-distance phone service providers.
within a time period set by the airline. The infor-     These companies offer many optional services
mation on the form is used to estimate the value        such as voicemail, call waiting, caller ID, paging,
of your lost belongings. Airlines consider the          and wireless services.
depreciated value of your possessions, not what
you originally paid or the replacement cost. The        Think about how you use the telephone, then
maximum an airline pays on lost bags and their          you can compare services and prices. You might
contents is $1250 per passenger. On internation-        choose a package deal from one company or
al trips, the limit is $9.07 per pound.                 services from several companies.
                                                         • Whom do you call most often?
If the airline’s offer doesn’t fully cover your loss,    • What time of day or day of the week do you
check your homeowner’s or renter’s insurance               call?
to see if it covers losses away from home. Some          • Do you want to get messages and if so, do
credit card companies and travel agencies also             you need voicemail or will an answering
offer optional or even automatic supplemental              machine do?
baggage coverage.                                        • Do you need call waiting and/or caller ID?
                                                         • How important is it for you to have your

On those trips when you know you are carrying              telephone with you when you are away from
more than the liability limits, you may want to            home?
ask about purchasing “excess valuation” from
the airline when you check in. Of course, there is      Find out how each company prices its services.
no guarantee the airline will sell you this protec-     Are there minimum use, time-of-day or distance
tion. The airline may refuse especially if the item     requirements; flat monthly fees; or special
is valuable or breakable.                               plans? For example, wireless service may be
                                                        cheaper than regular local service if you don’t
                                                        make many calls.
                                                        Make sure you’re comparing prices on
In many states, consumers can choose their
                                                        similar plans and features. The nonprofit
telephone and energy service provider. Contact
                                                        Telecommunications Research and Action
your state utility commission (p. 107) to find out
                                                        Center ( offers information about
whether you have a choice. Some commissions
                                                        long distance rates and wireless service.
will provide you a list of service providers and
advice on making a choice. Most state utility
                                                        The FCC (p. 123) offers consumer information
commissions will also take any complaints you
                                                        about choosing a long-distance carrier, under-
have concerning utility sales and service.
                                                        standing new phone fees and taxes, and more at
ELECTRICITY AND NATURAL GAS                    The National Consumers
If you have a choice of suppliers, ask:                 League also maintains a web page
 • How much will it cost? How long can I                ( to help
    depend on this rate? Are there any other fees       you understand phone charges and recognize fraud.
    I will be charged?
 • Are there any other terms or conditions?             Compare plans and rates at SaveOnPhone.
    For example, is there a fee if I cancel my          com,, and
    agreement before the service period is up? Another website,
 • Who do I contact if I have a problem? Do   , focuses on rates from 10-
    you have a local customer service office?           10 dial-around long-distance services.

Want to save money on your energy bills? The            SLAMMING AND CRAMMING
U.S. Department of Energy offers an Energy              “Slamming” is the switching of your long dis-
Saver guide at             tance or local telephone service without your
info.                                                   permission—it is illegal. You may not know you
                                                        have been “slammed” until you find a differ-


 ent company name on your bill, or your phone          CELL PHONES
 charges are higher than normal. If you’ve been        Cell phones can be very convenient, but before
 slammed:                                              you sign a contract for wireless phone service,
  • Ask your local phone company to switch you         you will want to ask a number of questions.
    back to your original company at no charge;
                                                           • Where can you make and receive calls?
  • Tell the original company you’re switching
                                                       Most providers now promote their plans as
    back, and ask to be enrolled in your previous
                                                       local, regional or national. A local plan offers
    calling plan; and
                                                       a low-cost option if most of your calls are near
  • Contact the company that slammed you—its
                                                       home. Regional plans generally offer a much
    name and number will be on your bill—and tell
                                                       larger geographic area—sometimes several
    them you are exercising your right to refuse to
                                                       states. If you call outside the area covered by
    pay charges.
                                                       these plans, you will pay long-distance and
 If you’re unable to resolve your complaint, con-      roaming charges in addition to the airtime used.
 tact the FCC (p. 123).                                National plans are the most expensive but they
                                                       let you use your phone anywhere in the country
 “Cramming” occurs when companies add charg-           for a single per-minute price. Roaming and long-
 es to your telephone bill for optional services       distance charges are replaced by a single, pre-
 you never agreed to, such as voicemail or “club       dictable flat rate.
 memberships.” You may not notice these monthly            • How frequently will you use the phone?
 charges because they are relatively small—$5          If you just want a phone for emergencies, an
 to $30 dollars—and look like your regular phone       economy plan with a few minutes a month may
 charges.                                              be all that you need. On the other hand, if you
                                                       are going to be a heavy user, a plan with several
 Take these steps to avoid slammers and                free hours and the lowest air time is a wiser
 crammers:                                             choice.
      • Consider putting a “block” on changes              • Is a family plan option available?
  to your phone service. Ask your telephone            Instead of individual cell phone plans for each
  service provider if they offer a blocking service,   member of the family, you can share one cellular
  which usually requires the company to notify         service plan among several phones. Everyone
  you before making any changes to your service.       shares the same pool of monthly minutes. The
      • Read the fine print on contest entry           cost of the additional numbers per month is
  forms and coupons. You could be agreeing to          usually less than if you purchased individual
  switch your phone service or buy optional ser-       accounts.
  vices.                                                   • Is the technology digital or analog?
      • Watch out for impostors. Companies may         Digital service is more clear and more secure
  falsely claim to be your regular phone company       than analog but coverage can be spotty. Analog
  and offer some type of discount plan or change       networks have greater coverage, especially in
  in billing. They may also say they are taking a      rural areas. If you want digital service, make
  survey or pretend to be a government agency.         sure your cellular company has a “roaming”
      • Beware of “negative option notices.”           agreement that lets your phone work on an ana-
  You can be switched or signed up for optional        log system when you are outside digital range.
  services unless you say no.                          But beware roaming can be expensive, and it
                                                       requires a “dual mode” phone.
      • Examine your telephone bill carefully
  every month-especially the pages that show               • Is there a trial period during which you
  the details.                                         can test the service? Many people experience
                                                       dead spots where a cell phone doesn’t work. A
 Your phone service cannot be shut off for refusal
                                                       trial period lets you test your service in places
 to pay for unauthorized services. For help, con-
                                                       where you will be using it-for example, in your
 tact your local or state consumer protection
                                                       office, in all the rooms of your house, in your car,
 agency (p. 79), state public utilities commission
                                                       and in other places where you travel.
 (p. 107), or the FCC (p. 123).
                                                           • Are there any fees or limits on changing
                                                       your plan? Some providers charge a fee if you


 want to downsize or upgrade your plan. Others        culated on some other basis. Any minimum or
 limit how often you can make changes.                additional charges that you might have to pay
     • What happens if you want to cancel             must also be identified.
 your service? Most providers have a penalty.
 This is a concern if you have to move out of the     If a call involves sweepstakes, prizes, or awards,
 area covered by your plan.                           the ad must give you the odds of winning AND
If you want cell phone service only for emergen-      how you can enter without calling the 900 num-
cies or aren’t sure how much you will actually        ber. Pay-per-call services cannot advertise
use a cell phone once you get it, you may want to     directly to children under age 12 unless they are
consider a prepaid cell phone before you commit       legitimate educational services.
to a long-term wireless contract. With a prepaid
cell phone, there is no contract to sign and no       You can deduct the charges you are disput-
monthly bill to worry about. You will know exactly    ing from your phone bill. Pay the rest by the
how much you spend. The down side of prepaid          due date. You should hear back from the com-
plans is that you pay more per minute and if you      pany within 40 days and the problem should be
don’t use the phone for an extended period of         resolved within 90 days. If the charges appear on
time, you may lose the money in your account.         your credit card statement, see Resolving Credit
                                                      Problems on page 16.

Many stores sell pre-paid calling cards. They are     You may have other rights according to state
sold online, too. Before buying one, know the:        law. Check with your state or local consumer
                                                      protection agency (p. 79) or state utility commis-
 • per-minute rate;
                                                      sion (p. 107).
 • connection fee;
 • maintenance fee; and
                                                      To prevent 900 number calls from being made
 • expiration date.
                                                      from your phone number, request “blocking”
For help finding the best deals on pre-paid           from your local phone company. Some but not all
phone cards, try as well           companies charge for this service.
as the websites listed previously.
900 NUMBERS                                           The majority of consumers rely on local utili-
                                                      ties to provide a safe and ample supply of water.
You can get all sorts of information and enter-
                                                      Your local water agency is responsible for send-
tainment services by calling 900 numbers. These
                                                      ing you an annual Consumer Confidence Report
pay-per-call numbers are also used for surveys,
                                                      that should list the source of your water, what
contests and charitable fundraising. The “infor-
                                                      contaminants may be in the water, and informa-
mation provider” you’re calling sets a price for
                                                      tion on the safety levels of contaminants and
the service, and bills you through your local tele-
                                                      their effects on health. For more information
phone company.
                                                      call the Environmental Protection Agency’s Safe
                                                      Drinking Water Hotline at 1-800-426-4791 or visit
Unfortunately, con artists have added 900 num-
bers to their toolbox. Some use promises of gifts     EPA’s website at
and prizes to try to get you to call. Others make
phony offers to help you find a job or get out
                                                        INTERNET SERVICE PROVIDERS
of debt. Some even claim to be about a family         With thousands of Internet Service Providers
emergency. Be wary of contests, sweepstakes,          (ISPs) offering to connect you and your comput-
offers and messages that require you to call a        er to the Internet, choosing the ISP that is right
900 number. Also keep an eye on your monthly          for you can be overwhelming. Some ISPs are
phone bill for any unfamiliar charges.                very large and well-known—like AOL, MSN, and
                                                      Earthlink—while others are literally one-person
Both the FCC (p. 123) and the FTC (p. 124) have       operations. Some companies strictly limit their
rules concerning pay-per-call numbers. These          service to providing Internet access. Others, like
rules say that advertisements for pay-per-call        your telephone and cable company, may offer
services must tell you the cost of the call. This     Internet access as part of a much larger package
may be a flat rate, a per-minute charge, or cal-      of services.


     If you have limited Internet expertise, you may         • Special Features. What services are pro-
     want to start with one of the well-known ISPs.       vided in terms of spam blocking, virus protec-
     They usually offer user-friendly startup soft-       tion, instant messaging and chat rooms?
     ware. This software often includes features             • Terms of Service. Is there a limit to the
     such as a browser, instant messaging, parental       number of hours per month you can use the ser-
     controls, and pop-up blockers. There may also        vice?
     be 24-7 access to technical support people,
                                                             • Cost. What is the monthly fee for the
     who can help you deal with any difficulties. Of
                                                          service? Are there any additional equipment
     course, all of this convenience results in higher
                                                          or setup fees? What is the fee for extra email
     monthly user fees. Once you are comfortable
     with how the Internet works, you may discover
     you don’t need all the ‘extras’ and switch to a                DIGITAL TELEVISION
     lower-cost ISP.
                                                          Digital Television (DTV) is an entirely new tech-
     Whatever your present level of expertise, you
                                                          nology that will ultimately replace today’s analog
     will want to consider these factors when select-
                                                          television system. DTV comes in three levels of
     ing a provider.
                                                          picture quality:
          • Speed. For a dial-up modem, does the ISP       • Standard Definition TV (SDTV)
      provide a 56k connection-the maximum speed           • Enhanced Definition Television (EDTV)
      ordinary phone lines can handle? For a faster        • High Definition TV (HDTV)
      connection, you will have to consider moving up
      to “broadband Internet access,” which lets you      Today most people have analog televisions.
      access the Internet via high-speed technologies     Analog TVs will need additional equipment to
      such as a digital subscriber line (DSL), a cable    receive over-the-air television when the DTV
      modem, or satellite.                                transition ends. TV stations are currently transi-
                                                          tioning from analog broadcasting to digital. The
          • Availability. For dial-up service, is there
                                                          current target for ending analog broadcasting
      a local phone number for access? If you travel,
                                                          is December 31, 2006, but this date will likely be
      will there be local numbers or a toll-free num-
                                                          extended, perhaps for another two years. When
      ber that you can call?
                                                          analog broadcasting ends, consumers with
          • Modem Ratio. Since not all users are          analog sets will need to obtain a separate con-
      online at the same time, it is not necessary for                                         .
                                                          verter box to watch over-the-air TV Analog sets
      an ISP to have a modem for every user. But          equipped with a converter box will display the
      they should have a user to modem ratio of 10 to     digital broadcasts, but not in full digital quality.
      1 or better. The lower the number of users per
      modem, the better your chance of being able to      You will need DTV equipment to receive DTV
      connect at peak hours.
                                                          signals. No matter how you receive your TV
          • Email. How many email accounts come           signal (cable, satellite or over-the-air) you will
      with the service? What will be the storage limit    need DTV equipment to watch DTV program-
      on your mailbox? How many days does the ISP         ming.
      keep your mail before deleting it?
          • Website Space. Do you want to create a        DTV equipment can be purchased as all-in-
      personal website? If the answer is yes, find out    one or as individual components. A “compo-
      whether your provider offers web space and          nent” solution includes a DTV monitor (TV
      software to create your page.                       screen) that must be paired with a cable or
          • Software. Is there any software required      satellite set-top box or stand alone DTV
      to activate the service? How do you get it? How     tuner. These monitors are sometimes labeled
      large is the software? Can you use whatever         “HD Ready.” Digital Cable Ready (or Plug-
      browser or email program you’d like?                and-Play) televisions are also available and
          • Support. What kinds of support are avail-     can be used to receive digital cable TV with-
      able—phone, email, chat, etc.? What are the         out a separate set-top box. Digital Cable
      hours of support? Are there any additional          Ready TVs plug directly into the cable jack. A
      charges for support?                                CableCARD can be plugged into these sets to
                                                          unscramble certain cable programming.

     34                                                                                                    34

 Relay Services                                                        Other Services
 Telecommunications relay services link telephone conversations
 between individuals who use standard voice telephones and those       Consumers who are deaf or
 who use text telephones (TTYs). Calls can be made from either         hard of hearing, or who have a
 type of telephone to the other type through the relay service.        speech impairment, and use a
                                                                       TTY may receive operator and
 Local Relay Services                                                  directory assistance for calls by
 States provide relay services for local and long-distance calls.      calling toll-free 1-800-855-1155.
 Please consult your local telephone directory for information on
 the use, fees (if any), services, and dialing instructions for that   Check the introductory pages of
 area.                                                                 your local telephone directory
                                                                       for additional TTY services.
 Federal Relay Service
 The FRS, a program of the U.S. General Services                       For a copy of the U.S. Government
 Administration (GSA), provides access to TTY users who wish           TTY Directory, please visit
 to conduct official business nationwide with and within the fed- or write:
 eral government. The toll-free number is 1-800-877-8339.              Federal Citizen Information Center
                                                                       Department TTY
 For more information on relay communications or to obtain a           Pueblo, CO 81009.
 brochure on using the FRS, please call toll free 1-800-877-0996.

National Library Service for the Blind and            Recording for the Blind & Dyslexic (RFB&D)
Physically Handicapped (NLS)                          20 Roszel Road
Library of Congress                                   Princeton, NJ 08540
Washington, DC 20542                                  Toll free: 1-800-221-4792
202-707-5100, Fax: 202-707-0712                       Website:
Toll free: 1-800-424-8567
e-mail:                                   This national nonprofit, volunteer-driven orga-
Website:                              nization provides recorded and computerized
                                                      textbooks to people who cannot read standard
NLS offers the free loan of recorded and              print effectively because of a visual impair-
braille books/magazines, music scores in              ment, learning disability or other physical
braille and large print, and specially designed       disability. RFB&D operates 33 recording stu-
playback equipment to residents of the United         dios and offices across the country. An 80,000
States who are unable to read or use standard         volume library contains a broad selection
print materials because of visual or physi-           of titles, from literature and history to math
cal impairment. Service is also extended to           and the sciences, at all academic levels-from
eligible American citizens residing abroad.           kindergarten through postgraduate and pro-
While NLS administers the program, direct             fessional. RFB&D offers individual and insti-
service is provided through cooperating               tutional memberships, scholarship programs
libraries in the various states, the District of      and a custom recording service. The cost of an
Columbia, Puerto Rico, Guam and the Virgin            individual membership is $25 per year, plus a
Islands. Contact NLS for application forms            one time $50 registration fee. Fees for insti-
and addresses of cooperating libraries.               tutional membership range from $300 to $800
                                                      annually depending on the level of member-
                                                      ship and the number of books chosen. RFB&D
                                                      also offers for nonprofit sale computer and
                                                      professional books on disk, and specially-
                                                      adapted tape players and accessories.

35                                                                                                     35
                                               PART 2
Even the most savvy consumer has a problem                  • Be brief and to the point. Note all important
with a good or service at one time or another. It       facts about your purchase, including what you
is your right to complain if you have a genuine         bought, serial or model numbers, the name and
consumer problem-it is also your responsibil-           location of the seller, and when you made the
ity. A problem can’t be fixed if no one knows it        purchase.
exists.                                                     • State exactly what you want done about the
                                                        problem and how long you are willing to wait for
         CONTACT THE SELLER                             a response. Be reasonable.
The first step in resolving a consumer problem is           • Don’t write an angry, sarcastic or threaten-
contacting the seller. You can solve most con-          ing letter. The person reading your letter prob-
sumer problems by talking to a salesperson or           ably was not responsible for your problem, but
customer service representative. Do this as             may be very helpful in resolving it.
soon as possible because some retailers have                • Include copies of all documents regarding
time limits on returns and refunds. If this doesn’t     your problem. Keep the originals.
work, ask for a supervisor or manager.                      • Provide your name, address and phone
                                                        numbers. If an account is involved, be sure to
When this fails, try going higher up—to the             include the account number.
national headquarters of the seller or the manu-       Keep a record of your efforts to contact the sell-
facturer of the item. Many companies have a            er; include the name of the person with whom
special customer relations or consumer affairs         you spoke and what was done, if anything.
division whose primary function is solving con-
sumer problems. Many companies provide a
toll-free number or address for this office on the     REPORT FRUAD & SAFETY HAZARDS
product label, warranty or other papers given
                                                       If you suspect a law has been violated, contact
to you at the time of purchase. If this is not the
                                                       your local or state consumer protection agency
                                                       (p. 79). This agency may take action or refer you
 • See page 41 in this Handbook for contact infor-     to another state organization that has the
    mation for several hundred corporations.           authority to take action where you live. A local
 • Visit the company’s web site. Look for a            law enforcement officer may also be able to pro-
    “Contact Us” link.                                 vide advice and assistance.
 • Dial the directory of toll-free numbers at 1-800-
    555-1212 to see if the company has a toll-free     Violations of federal laws should be reported to
    number listed.                                     the federal agency responsible for enforcement.
 • Ask your local librarian to assist you. Most        While federal agencies are rarely able to act on
    public libraries have reference books with         behalf of individual consumers, complaints are
    contact information.                               used to document patterns of abuse that may
As you do your search, keep in mind the name           allow the agency to take action against a company.
of the manufacturer or parent company is often
different from the brand name. The Thomas              Throughout Part I of this Handbook, you will find
Register of American Manufacturers—a book              references to federal agencies you can contact
available at many public libraries—lists the man-      for more information—this is usually the same
ufacturers of thousands of products.                   agency to contact with your complaint. You can
                                                       also find the appropriate federal agency by using
With each person, calmly and accurately                the online directory posted at www.pueblo.gsa.
explain the problem and what action you would          gov/complaintresources.htm.
like taken. A written letter is a good strategy
because you will have a record of your commu-          People who have no intention of delivering what
nication with the company. The sample letter           is sold, who misrepresent items, send counter-
on page 40 will help you prepare a written com-        feit goods or otherwise try to trick you out of
plaint.                                                your money are committing fraud. If you suspect
                                                       fraud, there are some additional steps to take.

                                                                  REPORT FRAUD • GET HELP

    • Contact the Federal Trade Commission.           and utilities (p. 107) are regulated at the state
Write to the FTC Consumer Response Center,            level. State Weights and Measures Offices are
Washington, DC 20580 or call toll-free 1-877-         concerned with accurate measures and counts
FTC-HELP (1-877-382-4357). You can also file          of packaged goods. They also check the accu-
electronically, choose the “File a Complaint          racy of weighing and measuring devices such
Online” link at Complaints about         as supermarket scales, gasoline pumps, taxi
e-commerce across international borders can           meters and rental car odometers.
be filed at                           • State and local licensing agencies.
    • Notify the National Fraud Information           Doctors, lawyers, home improvement contrac-
Center (p. 138) operated by the National              tors, auto repair shops, debt collectors, and
Consumers League, a nonprofit consumer orga-          childcare providers are required to register or
nization. Call 1-800-876-7060 or visit www.fraud.     be licensed. The board or agency that oversees
org.                                                  this process may handle complaints and have
    • Scams that used the mail or interstate          the authority to take disciplinary action. Your
delivery service should also be reported to the       state or local consumer protection office (p. 79)
U.S. Postal Inspection Service (p. 127). It is        can help you identify the appropriate agency.
illegal to use the mail to misrepresent or steal         • Better Business Bureaus (p. 128). This
money.                                                network of nonprofit organizations supported
                                                      by local businesses tries to resolve buyer
Reporting fraud promptly improves your chances        complaints against sellers. Records are kept
of recovering what you have lost, and helps law       on unresolved complaints as a source of infor-
enforcement authorities stop scams before oth-        mation for the seller’s future customers. The
ers are victimized.                                   umbrella organization for the BBBs assists
                                                      with complaints concerning the truthfulness of
If you suspect you have a product that poses a        national advertising and helps settle disputes

                                                                                                          GET HELP
safety hazard, report the problem to the appro-       with automobile manufacturers through the
priate federal agency:                                BBB AUTO LINE program (p. 75).
                                                         • Trade associations. Companies selling
• Automobiles—National Highway Traffic                similar products or services often belong to an
  Safety Administration (p. 121)                      industry association that will help resolve prob-
• Drugs, medical devices—Food and Drug                lems between their members and consumers (p.
  Administration (p. 115)                             140).
• Food—U.S. Department of Agriculture (p. 112),
                                                         • National consumer organizations.
  Food and Drug Administration (p. 115)
                                                      Some of these organizations assist consumers
• Seafood—Food and Drug Administration (p.
                                                      with complaints. Others may be unable to help
  115), U.S. Department of Commerce (p. 112)
                                                      individuals but are interested in hearing about
• Toys, baby and play equipment, household
                                                      problems that may influence their education
  products—U.S. Consumer Product Safety
                                                      and advocacy efforts (p.134).
  Commission (p. 111)
                                                         • Media programs. Local newspapers, radio
                 GET HELP                             stations, and television stations often have
                                                      Action Lines or Hotline services that try to
Don’t give up if you are not satisfied with the       resolve consumer complaints they receive. To
seller’s response to your complaint. Once you         find these services, check with your local news-
have given the seller a reasonable amount of          papers or broadcast stations. See the box on
time to respond, consider filing a complaint with     the next page for members of Call for Action.
one or more of these outside organizations.
   • State or local consumer protection
offices (p. 79). These government agencies
mediate complaints, conduct investigations, and
prosecute offenders of consumer laws.
   • State regulatory agencies that have juris-
diction over the business. For example, bank-
ing (p. 95), securities (p. 103), insurance (p.99),


 Call for Action, Inc.              Call for Action, Inc. is a nonprofit network of consumer hotlines
 5272 River Road, Suite 300         that educate and assist consumers with consumer problems.
 Bethesda, MD 20816                 Listed below are hotlines in major markets staffed with trained
 Phone: 301-657-8260                volunteers who offer advice and mediate complaints at no cost
 Fax: 301-657-2914                  to consumers. Consumers in locations not listed should call the
 Web:         Network Hotline at 301-657-7490.

  WTAJ-TV                    WXYZ-TV & WJR            WABC Radio               KTVI-TV
  Altoona, PA                Radio                    New York, NY             St. Louis, MO
  814-944-9336               Detroit, MI              212-268-5626             636-282-2222
                             248-827-3362                                      1-800-782-2222 (IL only)

  WBZ Radio                  WINK-TV                  WPVI-TV                  WFTS-TV
  Boston, MA                 Fort Myers, FL           Philadephia, PA          Tampa, FL
  617-787-7070               239-334-4357             866-978-4232             866-428-6397

  WIVB-TV                    WFMY-TV                  KPNX-TV & KNAZ-TV WTOL-TV
  Buffalo, NY                Greensboro, NC           & The Arizona Republic Toledo, OH
  716-879-4900               336-680-1000             Phoenix, AZ            419-255-2255
                                                      1-866-260-1212 (AZ
  WJW-TV                     KSHB-TV                  WTAE-TV                  KJRH-TV
  Cleveland, OH              Kansas City, MO          Pittsburgh, PA           Tulsa, OK
  216-578-0700               816-932-4377             412-244-4698             918-748-1488

     KKTV-TV                 WTMJ-TV                  WPRI-TV                  WTOP AM&FM
     Colorado Springs, CO    Milwaukee, WI            Providence, RI           Washington, DC
     719-457-8211            414-967-5495             401-228-1850             301-652-4357

DISPUTE RESOLUTION PROGRAMS                          ferent approach-the third party decides how to
Some companies and industries offer programs         settle the problem. Request a copy of the rules
to address disagreements between buyers and          of any program before making a decision to
sellers. The auto industry has several of these      participate. You will want to know beforehand if
programs (p. 75). The National Association of        the decision is binding? Some programs do not
Security Dealers offers a program designed to        require both parties to accept the decision. Also
resolve investment-related disputes (p. 145).        ask: Does participation in the program place any
Some small claims courts also offer a dispute        restrictions on your ability to take other legal
resolution program as an alternative to a trial.     action?

Mediation, arbitration, and conciliation are three   The American Bar Association (p. 141) publishes
common types of dispute resolution. During           a directory of state and local dispute resolution
mediation, both sides involved in the dispute        programs.
meet with a neutral third party and create their
own agreement jointly. Arbitration uses a dif-

                                                                                                 GET HELP

SMALL CLAIMS COURT                             may help you with answers to
Small claims courts resolve disputes over small         general legal questions. For information on
amounts of money. While the maximum amount              state-specific legal questions, try the website of
that can be claimed differs from state to state,        the National Association of Consumer Agency
court procedures are gen-                                                  Administrators (www.
erally simple, inexpensive,                                      
quick and informal. Court           BEWARE: RECOVERY SERVICES
fees are minimal, and you          A scam artist has taken your money.         If you cannot afford a lawyer,
often get your filing fee         Don’t be scammed again by a “recov- you may qualify for free legal
back if you win your case.       ery service” offering to get your money help from a Legal Aid or
Typically, you will not need       back for you. The service is just try-      Legal Services Corporation
a lawyer-some states do           ing to take your last dime. There is no (LSC) office. These offices
not permit them. If you live        charge for filing a complaint with a       generally offer legal assis-
in a state that allows law-                government agency.                  tance about such things as
yers and the party you are                                                     landlord-tenant relations,
suing brings one, don’t be                                                     credit, utilities, family mat-
intimidated. Most judges make allowances for              ters (e.g., divorce and adoption), foreclosure,
consumers who appear without lawyers. Even                home equity fraud, social security, welfare,
though the court is informal, the judge’s decision        unemployment, and workers’ compensation. If
must be followed.                                         the Legal Aid office in your area does not handle
                                                          your type of case, it may refer you to other local,
If you file a case and win, the losing party should       state or national organizations that can provide
give you what the court says you are owed with-           help.
out further action on your part. But some losers
refuse to follow the court’s decision. When this        To find the Legal Aid office nearest to you,

                                                                                                                GET HELP
happens, you can go back to court and ask for           check a local telephone directory or contact:
the order to be enforced. Depending on local            National Legal Aid and Defender Association
laws, law enforcement officials might sell a            1625 K Street, NW, 8th Floor
person’s property or take money from a bank             Washington, DC 20006
account or business cash register. If the person        Phone: 202-452-0620
who owes the money receives a salary, the court         Fax: 202-872-1031
might order an employer to garnish (deduct              e-mail:
money from) each paycheck to pay you.                   Web:

Check your local telephone book under the               To find the LSC office nearest you, check a local
municipal, county or state government headings          telephone directory or contact:
for small claims court offices. Ask the clerk how       LSC Public Affairs
to use the small claims court. Before taking your       3333 K Street, NW, 3rd Floor
own case to court, ask the court if it has infor-       Washington, DC 20007
mation that will help you prepare your presen-          Phone: 202-295-1500
tation to the judge and observe a small claims          Fax: 202-337-6797
court session.                                          Web:

LEGAL HELP AND INFORMATION                              Free assistance may be also be available from a
If you need an attorney to advise or represent          law school program where students, supervised
you, ask friends and family for recommenda-             by attorneys, handle a variety of legal matters.
tions. You can also contact the Lawyer Referral         Some of these programs are open to all. Others
Service of your state, county, or city bar associa-     limit their service to specific groups, such as
tion listed in your local phone directory.              senior citizens or low-income persons. Contact
                                                        a law school in your area to find out if such a
Websites such as                     program is available.
(American Bar Association),,,, and


                                                                              Your Address
                                                                 Your City, State, Zip Code

                   Name of Contact Person, if available
                   Title, if available
                   Company Name
                   Consumer Complaint Division (If you have no specific contact.)
                   Street Address
                   City, State, Zip Code

                   Dear (Contact Person):

                   Re: (account number, if applicable)

    • describe    On (date), I (bought, leased, rented, or had repaired) a (name of the
    purchase        product, with serial or model number or service performed) at (loca-
                     tion, date and other important details of the transaction).
• name of product,
   serial number      Unfortunately, your product (or service) has not performed well (or
                      the service was inadequate) because (state the problem). I am
• include date and disappointed because (explain the problem: for example, the            • state problem
      place of      product does not work properly, the service was not performed
     purchase      correctly, I was billed the wrong amount, something was not dis-        • give history
                  closed clearly or was misrepresented, etc.).

                   To resolve the problem, I would appreciate your (state the specific
                   action you want—money back, charge card credit, repair, exchange,
                   etc.) Enclosed are copies (do not send originals) of my records
                   (include receipts, guarantees, warranties, canceled checks, contracts,
                     model and serial numbers, and any other documents).
  • ask for spe-
   cific action
                     I look forward to your reply and a resolution to my problem,
• enclose copies     and will wait until (set a time limit) before seeking help from     • allow time for
  of documents      a consumer protection agency or the Better Business Bureau.                 action
                   Please contact me at the above address or by phone at (home
                   and/or office numbers with area code).                              • state how you can
                                                                                              be reached

                   Your name




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