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Fraud, scams all around

What savvy consumers should look for

What savvy consumers should look for

March 02, 2007|by LYNN F. LITTLE

Every day there is news about scams and frauds targeting consumers. Become an informed consumer, so you are better able to see through deceptions and be on alert for shady deals and scams.

The Federal Citizen Information Center suggests you keep the following consumer tips in mind to help protect your money and to avoid being a victim of fraud:

· A deal that sounds too good to be true usually is. Offers that often fall into this category are low-interest credit cards, deals that let you skip credit-card payments, business/job opportunities, risk-free investments free travel and promises to fix your credit problems.

· Extended warranties or service contracts are rarely worth what you pay for them.

· Say no to credit insurance offers that come with credit cards, car loans and home mortgages. It is almost always better to purchase regular property, life or disability insurance.

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· There is no universal three-day cooling-off period. Don't be misled into thinking that you have an automatic three days to cancel a purchase. Only a few types of contracts give you a right to cancel.

· Think twice before sharing personal information.

· 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 could be a better option.

· Not all plastic cards offer the same protections. Your liability for the unauthorized use of a gift card and debit/ATM card might be much higher than the $50 maximum on your credit card.

· Real estate agents represent the seller. When buying, consider hiring an agent or lawyer who represents you.

Home improvement and auto repairs are the subject of frequent complaints. Second opinions are especially important when you are dealing with a repair service you do not know.

· 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 secondhand purchases at a thrift shop or buying through ads in your local newspaper.

· 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.

· Be cautious of buy here, pay here contracts. 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.

· Work-at-home ads usually don't pay off. 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.

· It can be a challenge for consumers to get the best deal and to make smart consumer decisions. Visit the Federal Citizen Information Center at www.consumeraction.gov for help and information. At this Web site you can order the 2007 Consumer Action handbook and many other publications loaded with helpful hints to save you time, money and hassles.

Lynn Little is a family and consumer sciences educator with University of Maryland Cooperative Extension in Washington County.

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