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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
Buying a Home 22
Home Improvements and Repair 23
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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.
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TIPS FOR USING THIS HANDBOOK
PART I – BE A SAVVY CONSUMER PART III – CONSUMER ASSISTANCE DIRECTORY
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 www.ConsumerAction.gov
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).
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GENERAL TIPS • SHOPPING FROM HOME
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.give.org, www.char-
• www.Recalls.gov—This site lists itywatch.org, and www.guidestar.org. See also Youth
government-initiated recalls, which are Peddling on the next page.
gathered from federal agencies.
• www.pueblo.gsa.gov—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 www.bizrate.com 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-
Courtesy of www.njcarinsurance.net 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-
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 www.ftc.gov/bcp/conline/pubs/online/pay- or computer, the Federal Trade Commission
ments.htm and www.safeshopping.org. 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.
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SHOPPING FROM HOME • TELEMARKETING
(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.
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
Courtesy of www.njcarinsurance.net TELEMARKETING
www.donotcall.gov 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
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 www.ftc.gov.
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
• Non-commercial calls;
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TELEMARKETING • PROTECT YOUR IDENTITY
• 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 “firstname.lastname@example.org.” 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
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 (email@example.com) 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 www.fcc.gov/cgb/ email.” Forward spam to firstname.lastname@example.org.
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
isp.com.” Instead use one with numbers or • Open a bank account in your name and write
other digits such as Jane4oe6@isp.com 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 www.spammotel.com. 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
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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 sumer.gov/idtheft. 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 www.idtheftcenter.org.
• 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
• Check your credit report once a year. Check it
more frequently if you suspect someone has
PROTECT YOUR PRIVACY Courtesy of www.njcarinsurance.net
• 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-
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 www.ftc.gov.
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
Courtesy of www.njcarinsurance.net
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
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 www.hhs.gov/ocr 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.
(www.healthprivacy.org) or My Health Privacy
(nclnet.org/healthprivacy/index.htm) 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.
where-can-I-buy-a-car-online.com 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.
(www.consumerreports.org) and Motor Trend
• Consider fuel economy. A vehicle that gets (www.motortrend.com).
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-
(www.epa.gov/emissweb) 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 www.fueleconomy.gov 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
www.fueleconomy.gov/feg/savemoney.shtml. 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 www.autopedia.com/html/Rebate.html.
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
AUTOMOBILES Courtesy of www.njcarinsurance.net
insurance in order to get a loan. See Service • The National Highway Traffic Safety
Contracts and Extended Warranties on page 1 Administration (www.nhtsa.dot.gov) 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 (www.autosafety.org) provides information on
protection office (p. 79). safety defects, recalls, and lemons, as well as
• Find out in advance what paperwork you
will need to register a vehicle. Contact your • Visit www.safetyforum.com for a free online
state’s motor vehicle department. search of its database of lemons registered by
• Check prices of similar models using the
NADA Official Used Car Guide (www.nadagu- • Make sure any mileage disclosures match
ides.com) 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 (www.kbb.com). 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 www.carfax.com and www. in writing and read it carefully.
autocheck.com 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 (www.nhtsa.dot.gov). 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
• The Insurance Institute for Highway Safety (www.hwysafety.org). 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 www.nhtsa.dot.gov 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.
Courtesy of www.njcarinsurance.net AUTOMOBILES
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 www.federalreserve.gov/
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 www.edmunds.com, • Ask if the rental company checks the driv-
Intellichoice.com, and www.Leasesource.com 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
• 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
• 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
AUTOMOBILES Courtesy of www.njcarinsurance.net
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-
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 www.safety
LEMON LAWS forum.com.
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 autosafety.org). 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 (www.nhtsa.dot.gov) 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;
www.nhtsa.dot.gov 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
Courtesy of www.njcarinsurance.net BANKING
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
www.bankrate.com. 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?
BANKING • CREDIT Courtesy of www.njcarinsurance.net
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 bankrate.com. For a listing of credit cards visit
credit card, the money for the purchase is trans- www.cardlocator.com.
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;
Courtesy of www.njcarinsurance.net CREDIT
• 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-
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
CREDIT Courtesy of www.njcarinsurance.net
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 www.experian.com
TransUnion: 1-800-916-8800 or www.transunion.com 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
www.annualcreditreport.com 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 www.myfico.com 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
Courtesy of www.njcarinsurance.net CREDIT
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 www.nfcc.org.
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 www.consumercredit.com or call 800-769-3571
CREDIT Courtesy of www.njcarinsurance.net
• InCharge Institute of America. Visit www. • Big upfront fees. A reputable credit coun-
incharge.org 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
moneymanagement.org or call 1-866-899-9347. requiring you to provide any details about your
• Myvesta. Visit www.myvesta.org 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:
Courtesy of www.njcarinsurance.net EDUCATION
agency or creditor intends to do so and it is are selected, plus how and when aid will be
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
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. studentaid.ed.gov 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 www.finaid.org. 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
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- ings.org 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 www.ope.ed.gov/security.
• 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 www.acenet.edu.
Courtesy of www.njcarinsurance.net
EMPLOYMENT • FOOD AND NUTRITION • HEALTHCARE
• 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 www.usajobs.opm.gov. 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 www.FirstGov.gov.
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
www.health.gov/dietaryguidelines. 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
• Nutrition.gov (www.nutrition.gov); group support? How often?
• MedlinePlus (Click on F for Food or N for
Complaints concerning fraudulent weight loss
Nutrition at www.nlm.nih.gov/medlineplus);
claims should be directed to the Federal Trade
• The Nutrition Source (www.hsph.harvard.edu/
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
nlm.nih.gov/medlineplus/weightlossand 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
Courtesy of www.njcarinsurance.net HEALTHCARE
sites run by government agencies and by recog- tion including QuestionableDoctors.org, www.
nized organizations such as the Mayo Clinic or Docinfo.org, and www.checkbook.org,
the American Medical Association (AMA). This Visit www.healthfinder.gov 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
• HealthierUS.gov, HealthFinder.gov and Internet to help you compare health care facili-
MedlinePlus (www.nlm.nih.gov/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 www.usnews.com,
grams, and organizations. www.checkbook.org, and www.healthgrades.com.
• Intelihealth (www.intelihealth.com).
Information and practical advice on staying The Joint Commission on Accreditation of
healthy from the Harvard Medical School. Healthcare Organizations accredits hospitals
• Mayo Clinic (www.mayoclinic.com). 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 www.jcaho.org, 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 (www.mlanet.org). You can post a complaint on its website or call
Websites suggested by librarians. 1-800-994-6610.
• Mental Help Net (www.mentalhelp.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.
CHOOSING A DOCTOR
• 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 www.medicare.gov/nhcompare/home.asp.
your state. A state or local occupational and • Eldercare Locator (www.eldercare.gov)—
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
ama-assn.org) and American Board of Medical a county and city or ZIP code where the assis-
Specialties (www.abms.org). 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 (www.aahsa.org) 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. (www.alfa.org) represents both for-profit and
cdc.gov. 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 (www.ccaconline.org) gives its seal
Websites that can help are www.docboard. of approval to qualifying facilities.
org and www.healthcarechoices.org. There are
also pay-for-use sites with similar informa-
HEALTHCARE • HOUSING Courtesy of www.njcarinsurance.net
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
• 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 www.medicare.gov 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 www.nabp.net 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 www.hud.gov. 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 www.fda.gov/oc/ 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 www.pueblo.gsa.gov.
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-
data.fda.gov/scripts/cder/drugsatfda. 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.
Courtesy of www.njcarinsurance.net HOUSING
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 www.fanniemae.com 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, www.stopmortgagefraud.com.
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-
HOUSING • INSURANCE Courtesy of www.njcarinsurance.net
• 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: www.pueblo.gsa.gov and www.insure.com.
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 insweb.com 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.
• 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 (www.ambest.com), Standard &
recent job; Poor’s (www.standardandpoors.com), Moody’s
• tells you the job will be a “demonstration;” Investors Services (www.moodys.com), and
• offers you discounts for finding other Weiss Ratings, Inc. (www.weissratings.com) 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 naic.org), 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 www.jdpower.com/
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).
Courtesy of www.njcarinsurance.net INSURANCE
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- fema.gov.
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 www.insurancefraud.org.
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.
INSURANCE Courtesy of www.njcarinsurance.net
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 www.insurekidsnow.gov 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 (www.ncqa.org). 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 www.medicare.gov and of care. Other plans pay only for your actual
www.medicarenews watch.com. expenses.
Courtesy of www.njcarinsurance.net INVESTING
• 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- accuquote.com 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 www.iii.org and www.hiaa.org. 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
INVESTING Courtesy of www.njcarinsurance.net
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 www.sec.gov/investor/brokers.htm
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 • www.Bankrate.com 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 (www.standardandpoors.com) • www.Validea.com offers data on Wall Street
• Moody’s Investors Services (www.moodys.com) analysts and their recent stock picks.
• Weiss Ratings (www.weissratings.com) • 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 www.cftc.gov.
• 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
www.sec.gov/edgar.shtml. fantastic profits with little risk. No investment is
risk-free and a high rate of return means greater
FINANCIAL BROKERS AND ADVISORS
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;
Courtesy of www.njcarinsurance.net TRAVEL
• 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. InsureMyTrip.com 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
to find their complaint BEWARE: CONTESTS AND SWEEPSTAKES SITES
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 • Recreation.gov. 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 ...” • www.reserveusa.com. 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.
• www.FirstGov.gov/Citizen/Topics/ 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 Courtesy of www.njcarinsurance.net
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 www.dot.gov 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 www.tsa.gov 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
www.state.gov/travel 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 www.cdc.gov/travel 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.
Courtesy of www.njcarinsurance.net UTILITIES
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 (www.trac.org) 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 www.fcc.gov/cib. 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 (www.nclnet.org/phonebill/index.html) 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, LowerMyBills.com, ABTolls.com and
agreement before the service period is up? PhoneBillCentral.org. Another website,
• Who do I contact if I have a problem? Do 10-10Phonerates.com, 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 www.eere.energy.gov/consumer 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-
UTILITIES Courtesy of www.njcarinsurance.net
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
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
• 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
Courtesy of www.njcarinsurance.net UTILITIES
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.
PRE-PAID CALLING CARDS
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 www.PhoneShark.com 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
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 www.epa.gov/safewater.
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.
Courtesy of TELEVISION
INTERNET SERVICE PROVIDERS • DIGITALwww.njcarinsurance.net
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
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.
• 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.
Courtesy of www.njcarinsurance.net
SERVICES AND RESOURCES FOR CONSUMERS WITH DISABILITIES
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- www.gsa.gov/frs or write:
eral government. The toll-free number is 1-800-877-8339. Federal Citizen Information Center
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: www.rfbd.org
Toll free: 1-800-424-8567
e-mail: email@example.com This national nonprofit, volunteer-driven orga-
Website: www.loc.gov/nls 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.
Courtesy of www.njcarinsurance.net
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.
Courtesy of www.njcarinsurance.net 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 www.ftc.gov. Complaints about as supermarket scales, gasoline pumps, taxi
e-commerce across international borders can meters and rental car odometers.
be filed at www.econsumer.gov. • 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
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),
GET HELP Courtesy of www.njcarinsurance.net
CALL FOR ACTION
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: www.callforaction.org 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
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-
Courtesy of www.njcarinsurance.net GET HELP
SMALL CLAIMS COURT www.nolo.com 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, nacaanet.org).
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,
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: firstname.lastname@example.org
money from) each paycheck to pay you. Web: www.nlada.org
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: www.lsc.gov
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 www.abalawinfo.org program is available.
(American Bar Association), www.uslaw.com,
www.thelaw.com, www.freeadvice.com, and
SAMPLE COMPLAINT LETTERCourtesy of www.njcarinsurance.net
Your City, State, Zip Code
Name of Contact Person, if available
Title, if available
Consumer Complaint Division (If you have no specific contact.)
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-
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
KEEP COPIES OF ALL OF YOUR LETTERS, FAXES, E-MAILS, AND RELATED DOCUMENTS.