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.

The information on this page is from the 2008 Consumers Action Handbook. Links will take you to www.usa.gov for further information on the topic. You can download or order a free copy of the Consumer Action Handbook on their web site.

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

2. Extended warranties and service contracts are rarely worth what you pay for them. Know the questions you should ask before you say yes to one of these contracts.

3. Say no to credit insurance offers.
Beware of these offers that are often offered with credit cards, car loans and home mortgages, it is almost always better to purchase regular property, life or disability insurance.

4. 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.

5. Think twice before sharing personal information. Protect your privacy and avoid unauthorized use of your personal information.

6. Beware of payday and tax refund loans.
By law these types of loans should not be offered to military, but even a high-interest cash advance on a credit card could be a better option.

7. Not all plastic cards offer the same protections. Your liability for the unauthorized use of a gift card and debit/ATM card 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 an agent or lawyer who represents you.

9. Home improvement and auto repairs are the subject of frequent complaints. When it comes to spending on your home improvement or auto repairs, 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 newspaper.

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 pay off. Again, refer back to #1, if it "sounds too good to be true, it usually is!" Be especially wary of ads that promise huge annual salaries; they often require expensive up-front fees with no guarantee. You risk losing your money and wasting a lot of time and energy.

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