Dear Consumer Ed:
I’m curious. What happens to the Lemon Law cars that are repurchased or replaced?
Consumer Ed says:
They can either be sent to a salvage yard, donated to a vocational technical school, or resold. If the car is resold, there are protections in place for the consumer who purchases it. The manufacturer is required to complete a form explaining why the vehicle was reacquired and describing the defect that the original consumer experienced. This form must be provided to the new purchaser so that he or she is fully aware of the problem. In addition, the manufacturer must provide the new purchaser with a one year or 12,000 mile warranty covering the original defect. That warranty will begin to run the day the new purchaser acquires the vehicle.
Dear Consumer Ed:
I received a call from someone claiming to be from the fraud department of my credit card company. They already had my name, address, and credit card number, so I assumed the call was legitimate. They told me my card had been flagged for an unusual purchase pattern and asked me to give them the 3-digit security code on the back of my card to verify that I was in possession of my card. I went ahead and gave them the code; now I’m questioning whether that caller was actually scamming me. What do you think?
Consumer Ed says:
It’s certainly possible. A check with three of the primary credit card companies reveals that not only are there scams that use this technique, they’re not new. The security codes that appear on credit cards (3 digits on the back near the magnetic strip for Visa and MasterCard, 4 digits on the front of the card near the last 5 digits of the number for American Express) are enhanced security measures adopted to protect not only consumers, but the issuers of the cards; merchants cannot process online or telephone transactions without these codes. The purpose of the scam is to get that 3-4 digit security number, so that the scammer can use the account. You should know that neither Visa nor MasterCard will ever call to ask a customer for their security codes or to verify possession of a credit card, because these companies don’t actually issue their own cards--other financial institutions (banks, credit unions, etc.) do. Since only the issuer of the card would be initiating any security-related calls, if you’re contacted by a caller claiming to be from MasterCard or Visa, rather than the bank or other institution that issued the card to you, you shouldn’t trust that the caller is who s/he claims to be. Companies like American Express that issue their own cards do sometimes “flag” their customers’ accounts for “unusual” activity (e.g., they notice an especially large purchase, or a charge made in a town or country that is not near your home); when this happens, your card may be blocked or suspended until the company can confirm your identity.
However, it’s never a good idea to give out your security codes or any other information that could identify and/or give access to your account over the telephone, unless you have initiated the contact, or have been able to independently verify that the caller is who s/he claims to be. The best way to do this for any credit card is to call the toll-free telephone number on the back of the card, and once you’ve established that you’re actually speaking with a representative of the issuer, verify whether the contact in the earlier call to you was legitimate. If you’ve already given out sensitive information without first taking any of the aforementioned precautions, or if you suspect your account has been compromised (e.g., you start seeing strange entries on your credit report, or purchases you didn’t make are showing up on your credit card statements), there are still things that you can do. First, contact the credit card issuer as soon as possible. The good news is that credit cards are insured and protect you against such scams, as long as you are vigilant in spotting and reporting the unauthorized use of your card. The Fair Credit Billing Act limits your liability for unauthorized charges to $50. (If fraudulent charges were made while the card was still in your possession, there is no liability fee.) You must report the theft of your credit card or card number, however, as soon as possible after you discover the suspect transaction(s). Be sure to have the issuer change your card number, and monitor your statements to make certain no additional fraudulent charges occurred. Remember, it may not always be convenient to take these extra steps, but it’s always better to be safe than sorry when it comes to protecting your sensitive financial information.
Dear Consumer Ed:
My unemployment insurance is about to run out. I keep seeing these on-line job offers where you can make a lot of money working from home. They ask you to pay a fee for training and certification. How can I make sure I am not wasting my time and money?
Consumer Ed says:
You’re wise to be wary of these offers. Many of the work-from-home jobs advertised are scams. First off, do not send money! Legitimate employers won’t ask you to pay them for the promise of a job, and it’s against the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) for employers to charge employees for training. If you are interested in working from home, make sure you research the position very carefully to make sure it’s on the up-and-up:
- Find out specifically what you will be doing – ask about every step.
- How will you be paid? Will you make a salary or will they provide a commission?
- Who will pay you and when will you get paid?
- Be very suspicious of guarantees of wealth, especially when the ads say “no experience required” or “will train”. If it sounds too good to be true, it probably is!
- Get references and ask those people if they have been pleased with the company.
- See if the Better Business Bureau has received complaints about the company, but be aware that a lack of complaints doesn’t guarantee that a company is legitimate. You may also want to do an Internet search for the company name with the word complaints.
While some work-at-home jobs are legitimate, you’re probably better off networking with business acquaintances and friends and exploring traditional job listings in newspapers and reputable online employment sites.
Dear Consumer Ed:
I paid a roofer to repair some damage to my roof. Now, several months later, I’m being contacted by one of his workers who is threatening to place a lien against my home because the roofer never paid him. Can he do this?
Consumer Ed says:
Unfortunately, he probably can. Under Georgia law, people who contribute labor or materials to improve a new or existing home are allowed to file a claim of lien against the homeowner if they do not get paid, even if the homeowner actually paid the contractor.Lien claims like these are limited in their effect:they do not show up on your personal credit report and expire by law within 12 months unless the subcontractor actually files a lawsuit to collect the money.
If a lien has been filed against your property, there are many potential defenses available to you. You can demand a cancellation if the lien itself is defective. For instance, the person filing the lien may have signed a lien waiver, incorrectly identified the property, or even filed the lien in the wrong county. It may be helpful to have an attorney check the lien for defects. Alternatively, if you’re not planning on a move, you can simply wait twelve months until the lien expires and take your chances that the lien filer will not want to incur the expense of a lawsuit.
If you will be moving, you may want to bond off the lien claim. This discharges your home from the lien and instead puts the claim against the bond. This clears the title quickly and easily, without waiving the dispute. The person still has twelve months from the time the claim became due to sue for recovery.
You can also file a Notice of Contest, which gives the lien filer sixty days to file a lawsuit; if he fails to do so, the lien expires.
You may have additional defenses based on the work performed or the amount claimed in the lien. However, this requires showing that payments were properly disbursed to all persons providing labor, materials and services. Only your contractor may have this information.
Please see the Home Improvement section of our website for more information. If you are concerned about a claim of lien filed against you, you should also consult with an attorney.
Dear Consumer Ed:
My Grandmother dropped her car off for repairs at an automobile repair shop. She was hospitalized for two months following an accident and when she went to pick up the car she learned they sold it! Can they do that?
Consumer Ed says:
It depends. Under Georgia law, a car is considered “abandoned” if it was left at a repair shop and not picked up within 30 days after the repairs are completed. The repair shop has the right to sell an abandoned vehicle to collect money that the owner owes for repairs and storage. However, the car cannot be sold before the shop makes legally required efforts to notify the owner that the car is considered abandoned and might be sold unless it is picked up within a specified time frame.
Even if a shop sends the required notice, it cannot sell the car immediately. Instead, it has to follow other steps required by law, including sending a demand to the owner for the storage fees and cost of notification. The owner has 10 days to respond to the demand and the right to a hearing before the car is sold.
If the shop followed all of the steps it was supposed to follow, then it probably had the legal right to sell the car. If not, your grandmother may have remedies available to her, and should consult with an attorney to see what those remedies may be.
Dear Consumer Ed:
I was approached after church by a friend to join a network marketing program. I’m told I can make a lot of money if I work hard at it. My only concern is that I have to pay $75.00 up front to join. Is this legitimate?
Consumer Ed says:
You should take a close look before paying any money. Network marketing, also known as multi-level marketing, is a marketing strategy where a company will recruit individuals to act as promoters for the company and its products. The promoters are responsible not only for selling the company’s products themselves, but also for recruiting new individuals who will also act as promoters for the company. The goal of network marketing is to create a large marketing and sales force, where individual promoters are paid commissions based on their own sales and the sales of those they recruited into the network. Mary Kay Cosmetics and Amway are popular examples of companies that use network marketing.
Obviously, each system is different, but companies that use network marketing are often the subject of much controversy. Before joining a network marketing program, you should gather as much information as possible about the company and its compensation structure. First, find out where in the organization you would start, and request a breakdown of the average commission and bonus payout to individuals at each level of the organization. If the company will not provide this crucial information, it may be a signal that they are concealing high loss rates. Second, find out generally how much time and money you would have to spend, in addition to the introductory fee, in order to sell enough products and recruit enough new promoters to turn a profit. Again, companies should provide information on this subject, and if they are unwilling to do so, it should be another red flag.
You should also consider where you will go to recruit new promoters for the company. If you hope to recruit among your fellow church members, consider that you will already be competing with the person who recruited you and anyone else he or she may have recruited at church. Similarly, you might run into similar competition at your child’s school, your local community center, or even among your friends and neighbors. Furthermore, the smaller your community, the more difficult it will be to keep coming up with new, untapped sources. In fact, even if you are initially successful in finding new recruits, consider that each person you recruit today will be competing with you for new recruits tomorrow. The basic point is that recruiting new promoters into the organization will only get more and more difficult as your community becomes “saturated” with other promoters. This is why the Federal Trade Commission has repeatedly warned against network marketing systems that provide greater incentives for recruitment than for selling products. These recruitment-focused programs comprise a majority of all network marketing systems, and in most cases, you will only begin to see returns on your initial investment after a long, aggressive recruiting campaign. As recruitment becomes more and more difficult, the company typically does not have enough revenue to pay commissions to its many members. If that happens, those who have not had enough time to recruit enough new promoters will typically lose their investment.
Dear Consumer Ed:
I ran up some debt a few years ago when I was out of work and couldn’t pay my bills. This has hurt my credit rating, and I’m having a hard time getting approved for a loan as a result. Is there anything I can do to improve my credit score?
Consumer Ed says:
Other than bankruptcy, few actions can have a larger impact on your credit score than non-payment or late payment of bills. Most negative activity will affect your credit score for up to seven years, and bankruptcy will impact it for 10 years. Low credit scores mean lenders will consider you a “high-risk” borrower, which can translate into higher interest rates, lower credit limits or being turned down for credit altogether.
One of the best ways to improve your credit score is to establish new accounts and build a history of on-time payments. In addition, keep debt to a minimum by paying credit card balances in full each month, or at least paying more than the minimum.
If no one will give you a credit card because of your poor credit history, you can apply for a secured credit card. This is where you give a lender a cash deposit and they issue you a card with a credit limit in that amount. If you don’t pay the bill, they just keep your deposit. The fees and interest rates on a secured credit card are usually high, but it is a great way to rebuild your credit if you don’t have other options. As your credit score improves, you should be able to obtain regular credit cards with more favorable interest rates and fees.
Finally, pull copies of your credit reports so you can correct any errors that might be contributing to your low credit score.
Dear Consumer Ed:
I have a mortgage and a checking account with the same bank. The mortgage payments are up- to-date and have never been late. If I decide to change my checking account to another financial institution, can the bank rescind my mortgage loan?
Consumer Ed says:
That depends on the terms of your mortgage agreement. Some loans require the borrower to maintain an account (with a minimum balance) at the lending institution as a condition of the loan. If you have agreed to maintain an account at the bank, and you close it, you could be in default of your obligations under the loan agreement. I would encourage you to contact your Lender to discuss the specifics of your loan requirements. If you are required to maintain a checking account with the financial institution, ask your bank to show you the specific provision in your mortgage contract. Verify whether failure to maintain a checking account alone is sufficient cause for the bank to cancel your mortgage. Discuss whether, given your excellent payment history, the bank would consider amending your mortgage contract to say that you are not required to maintain a checking account with their institution. If your bank will not remove this provision, find out the minimum amount you can keep in the checking account, and withdraw the rest to another bank. Then, as long as you maintain the minimum checking balance with your current bank, you can safely build up your savings elsewhere.
Dear Consumer Ed:
My landlord is having financial problems, and I am worried that the house I am renting may go into foreclosure. As a tenant, what are my rights? Will I be forced to leave immediately?
Consumer Ed says:
No, you will not have to leave immediately if the house is foreclosed on. Under the “Protecting Tenants at Foreclosure Act of 2009”, which was signed into law on May 20, 2009, tenants have the right to stay in a foreclosed property through the end of their lease, unless the new owner is planning to make the foreclosed property his primary residence. In that case, the owner may terminate your lease, but you must be given 90 days’ notice to vacate the premises. If you don’t have a written lease, if your lease is month-to-month, or if there are fewer than 90 days left on your lease, you are also entitled to 90 days’ notice.
Dear Consumer Ed:
I lost my wallet last week. I have cancelled all of my credit cards and got a new driver’s license, but I am still worried about the possibility of someone stealing my identity. Someone suggested that I should file a fraud alert or do a credit freeze. What exactly are they, and which one should I use?
A fraud alert and a credit freeze are both ways of preventing an identity thief from opening up a new credit account in your name. Fraud alerts are generally used in situations like yours – loss of a wallet or a credit card – or when someone has noticed suspicious activity on their credit card bills or credit report. A fraud alert is free and will remain on your credit report for 90 days. With an initial fraud alert in place, potential creditors are supposed to take steps to verify that any request for new credit in your name was authorized by you. However, those steps may not always alert them that you are not, in fact, the applicant, and new credit may be extended despite the fact that you filed the initial alert.
If you have actually been a victim of identity theft, you can go one step further and file an extended fraud alert. Extended fraud alerts, (which are also free of charge), stay on your credit report for seven years. If you have filed an extended fraud alert, a potential creditor must actually talk with you or meet with you before extending new credit.
To place an initial or extended fraud alert on your credit report, contact ONE of the three credit reporting agencies listed below. That credit bureau is required by law to contact the other two bureaus, which will in turn place the alert on their versions of your credit report.
Equifax: 1-800-525-6285; www.equifax.com
Experian: 1-888- 397-3742; www.experian.com
TransUnion: 1-800-680-7289; www.transunion.com
A credit freeze is considered more fool-proof than a fraud alert. When you freeze your credit, potential creditors will not even be able to see your credit report unless you grant them access by temporarily lifting the freeze. For Georgians, there is a $3 charge per credit bureau to freeze or unfreeze your credit. However, if you have been the victim of identity theft or are 65 years or older there is no charge for freezing your credit. You must contact all three of the credit-reporting agencies listed above to effectively freeze access to your credit.
If you discover that you are a victim of identity theft, there are five things that you should do immediately:
- Place a fraud alert on your credit reports;
- Get copies of your credit report from each of the three credit reporting agencies, and review them carefully;
- Close any accounts that were opened fraudulently or that have been tampered with;
- File a report with your local police or the police in the community where the identity theft occurred; and
- File an identity theft report with each of the three credit reporting agencies.
Dear Consumer Ed:
My parents own a time share. They rarely go there, and I have no interest in buying it from them. But the monthly maintenance fees are killing them. They want to get out, but they don’t know how. They got a letter from a company that says they will take the timeshare off their hands if they pay $2000 and sign over the deed. Do you think they should accept this offer?
Consumer Ed says:
Use extreme caution when confronted with offers such as these. Some time share “resellers” are actually scammers who accept large payments from time share owners, but never file the deed or pay any maintenance fees. The time share owner may not discover he has been scammed until he is sued for past due maintenance fees.
Your parents should consider the following alternatives:
- Ask the resort’s developer, resort manager or owner’s association if they have a newsletter, website or bulletin board where owners can advertise their timeshare for resale.
- Avoid paying money to a reseller upfront. If possible, find a reseller that takes its fee after the timeshare is sold. If you must pay a fee in advance, ask about refunds. Get refund policies and promises in writing.
- Ask if the reseller’s agents are licensed to sell real estate where your timeshare is located. If so, verify it with the Real Estate Commission. Deal only with licensed real estate brokers and agents, and ask for references from satisfied clients.
- Read the contract thoroughly and make sure you understand everything before you sign.
- Contact the Better Business Bureau to check the company’s reputation. Ask if any complaints are on file.
- If you sell your deed, let the resort know who now owns your timeshare and who to bill for the maintenance fees and taxes.
- Check public records to verify that the deed has been filed in the new owner’s name.
Dear Consumer Ed:
I received a call from a company that said it could guarantee me a government grant within 3 months. They asked for an up-front fee of $2500 for writing the grant applications. I paid the money and now I am worried that I might have been scammed. What do you think?
Consumer Ed says:
This is most likely a scam, since no one can “guarantee” that an applicant will receive a grant. Government grants are usually aimed at the needy, educational institutions, or specialists who can provide assistance to the government. A list of information about government grants and how to apply can be found at www.grants.gov, a service of the U.S. Department of Health and Human Services.
Whenever paying anyone for information or services relating to grant assistance, always research the company. You can check out a company’s reputation through the Better Business Bureau at www.bbb.org. In addition, ask the company in question for a copy of its business license, a list of its grant writers, a list of past successful grant applications, the names of the agencies that awarded grants, and a list of references. Keep in mind that legitimate grant-writing companies almost never telemarket, send unsolicited fax advertisements, or advertise by bulk mail to the general public.
Never give out personal information to people you don’t know, especially unsolicited telemarketers. And never pay money to get money.
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