Consumer Protection

Consumers of all ages are vulnerable to the fast pitch and hard sell of the professional salesperson. Fraudulent telemarketers and other con artists have taken millions of dollars from Iowans, especially older Iowans. Misleading sweepstakes through the mail have led some older Iowans to waste thousands of their hard-earned dollars.

Your best protection is to be a well-informed, careful buyer. This includes being knowledgeable about your legal rights, cautious of those “too good to be true” offers, and willing to demand satisfaction. The first step to being a wiser consumer is to protect your private financial information.

Protect Your Privacy

Take Control Of Your Personal Information And Opt Out:

When your personal information is sold or seeps into circulation, it poses two threats: you could become a victim of identity theft, and you will receive more solicitations. Take steps to control your personal information. Be assertive, take control, and keep your personal information private:

“OPT OUT” of sharing your financial or personal information. Federal law now requires banks, credit card companies, brokerage firms and insurance companies to send you a “privacy notice” to prohibit them from selling your data to unaffiliated “third-party” companies. (You can ask to “opt out” at any time.) You also may ask your financial institution not to disclose information to their own affiliated companies. And you can tell other businesses you want to opt out of them sharing your information – from your telephone or cable company to charities, stores, catalog companies, and websites.

Register your home telephone number and your cell phone number on the “Do Not Call” list. Call from the telephone you wish to register at 1-888-382-1222 or register online at www.donotcall.gov. After registration, if you receive a call from telemarketers, you can file a complaint with the Federal Trade Commission by calling the same toll-free number to which you call to register. Be aware that the “Do Not Call” list does not cover calls from charities, non-profit organizations, or political groups. However, you can still ask callers from charities, non-profit organizations, or political groups to remove your phone number from their lists.

Ask the credit reporting agencies not to give your name to solicitors. Credit reporting agencies sell lists to credit card marketers and others. To remove your name, call  1-888-567-8688 (1-888-5-OPT-OUT).

Check your credit report regularly. Consumers are entitled to one free credit report every twelve months from each of the three national credit reporting agencies. Credit reports can be requested at 1-877-322-8228, at www.annualcreditreport.com. You will have to provide your name, address, social security number, and date of birth and may have to answer a question only you would know the answer to, such as the amount of your monthly mortgage payment.

Protect your Social Security Number (SSN). Don’t print it on your checks. Don’t give it out unless it is required (tax forms or employment records). SSNs are the key pieces of information con artists most often use to commit identity theft.

Tell phone solicitors, “Please do not call me again.” When you make this request, the caller is required to enter your name on a “do-not-call” list.

Don’t give out financial or unnecessary personal information on prize offers, sweepstakes entries, warranty cards, or other information cards. This information may be sold many times over, increasing your mail and telephone solicitations. Seriously consider avoiding all prize and sweepstakes offers. Also, be aware that it is not necessary to mail in a warranty card to receive a warranty.

If you are the victim of identity theft, file a report with local police and keep a copy of their report. Contact each of the credit reporting bureaus (Equifax, Experian, and TransUnion) to place a security freeze on each of your credit reports. Order a copy of your free credit reports at AnnualCreditReport.com or call 877-322-8228 to determine if fraudulent accounts were opened. The Federal Trade Commission offers a  personalized recovery plan as well as information about different types of identity theft on its website at IdentityTheft.gov. You can also get more information on identity theft from the Identity Theft Resource Center at www.idtheftcenter.org.

 

Online

The Internet allows us to do many things and has become an integral part of our lives. Unfortunately, dishonest sellers and outright criminals are using it for their own benefit. These general tips should help you protect yourself from many Internet scams:

When possible, look for established businesses or sellers.  An impressive looking website or name doesn’t necessarily mean the seller is reputable, so know who you are dealing with. Make sure you know the seller’s physical address and phone number, should there be a problem.  Check the business or seller out at Better Business Bureau's website at www.bbb.org.

If you are buying something, make sure the item and price are clearly stated. The seller should provide a full description of the item, the item's condition if it is not new, the price, and any other fees (such as shipping, handling and return charges).

Be wary of unsolicited emails and pop-up advertisements. Never provide your bank account number, credit or debit card numbers, or other personal information in response to an unsolicited emailed or pop-up advertisement. While emailed advertisements and pop-up ads may be legitimate, it's also possible that they are "spoofed," meaning they look legitimate but are not. To be safe, go to a search engine, type in the seller's name, and go directly to the seller's website.

When ordering online, use credit cards whenever possible. Credit cards generally offer more consumer protections than debit cards or prepaid money cards. For example, you can dispute a credit card charge if it is fraudulent or if the seller did not live up to the terms of the transaction. Debit card and prepaid money card transactions are much closer to cash transactions.

Never wire money electronically to people you don't know, as you have virtually no protections if something is wrong. Criminals who seek payment through wire transfers, reloadable prepaid cards, or gift cards often do so from other countries, which may be beyond the reach of law enforcement.

Make sure you create strong passwords for all online accounts (including financial accounts) and change your password if you have any reason to believe it may be compromised.

Use anti-virus software and a firewall and make sure you install updates.

Legitimate tech support companies will not make unsolicited calls to charge you for computer security or software fixes. If you receive an unsolicited call from someone claiming to be a technical support employee or a pop-up on your screen, hang up the phone or click out of that window.

Report Internet scams to the Internet Crime Complaint Center at www.ic3.gov.

Telemarketing

Telemarketing scams are friendly, high-pressured sales pitches and transactions conducted by phone that misrepresent a product or service. The telemarketing scams usually originate out of “boiler rooms,” where a number of phones in one room are used to conduct phone solicitations throughout the country.

The calls are made by skilled salespeople, often with years of experience selling dubious products or services over the phone. The products and services may sound legitimate, but often are not. Claims that you have won some sort of valuable prize are the primary hooks for most scams, and should be considered to be a part of a clever effort to cheat you out of your hard-earned money.

Here are some ways to protect you against telemarketing scams:

 

Sweepstakes

Iowans receive millions of sweepstakes notices every year. But sweepstakes bring big problems much more often than they bring big prizes-problems. By law, sweepstakes cannot require you to make a purchase or a donation. They often would have you believe that your chances of winning will increase if you buy a product (such as magazines or household goods). It is not so.

Follow these tips to avoid being misled by sweepstakes offers:

Remember: BUYING DOES NOT INCREASE YOUR CHANCES OF WINNING!

Contract and Credit Buying

If you have ever bought a car, hired a workman to do repair work for you or purchased a pair of shoes using a credit card, you have entered into a contract.

Sometimes credit is extended for the purchase of an item or service and the payment is delayed or spread out over a period of time. What this means is that the store, dealer, or company extends you a loan in the amount needed to purchase the item or service. You agree to pay the money back with interest. Interest is the finance charge, and it is added to the total cost of the item.

The majority of credit buying today is by credit card. Purchasing with credit cards can lead to problems. Eventually the bill will fall due and payment will be required. Also, credit card providers may differ a great deal on the interest rates they charge, and may require other costs such as annual fees. It is wise to shop for the best deal in choosing a credit card.

Basic Contract Do’s and Don’ts:

Shopping for Credit Cards

When you are considering applying for a credit card, ask what the regular interest rate will be. Very low advertised rates usually are only “teaser” rates, and a much higher interest rate kicks in after a few months.

Door-To-Door Sales

Although there are legitimate businesses that rely on door-to-door sales to sell their product, it is a regrettable fact that many door-to-door sales operations use deceptive, high-pressure sales techniques. The victims of these improper practices are all too often older Iowans.

Follow these tips to avoid being victimized:

• Remember, you do not have to let a stranger into your home. Contact the police if you are uncomfortable with the situation.
• Take all the time you need before making a purchase, using that time to compare values, review the agreement, and seek advice.
• DO NOT be pressured by statements that you must buy today!

Fortunately, you have the right to cancel a door-to-door contract within three business days if the purchase is $25.00 or over. The law requires the seller to give you two written copies of your NOTICE OF CANCELLATION form, with copies of the sales contract or sales receipt. If you decide to cancel the door-to-door sale, you must do so by sending the written Notice of Cancellation, referred to above, to the company or business before midnight of the third business day after the date of the sale. You should probably send this notice by certified mail with a return receipt requested so you have proof of timely mailing.

 

Home Repairs and Improvements

Some of the suggestions listed above also apply to home repairs and improvements. These items can be costly, and sometimes dishonest people will use repair schemes to defraud an older person. Be aware of the following in considering offers from people to perform home repairs and improvements:

Check out the contractor before you sign a contract or pay any money. Ask if the contractor is registered with the Labor Services Division of Workforce Development (call (515) 242-5871 or check online at https://www.iowadivisionoflabor.gov/contractor-registration). Check local references. Ask the Attorney General’s Consumer Protection Division if it has complaints at (515) 281-5926 or (888) 777-4590. You can also contact the Better Business Bureau for potential complaint information about a contractor. You may contact the Iowa Department of Public Health to ask if a plumber or HVAC technician is licensed or has been disciplined. The Iowa Department of Public Safety, Iowa Electrical Licensing and Inspection website allows you to search electricians to see if they are licensed.

Get it in writing! Before any work begins, agree on a written contract detailing work to be done, responsibility for permits, costs, and any other promises. Request a copy of the contractor’s liability insurance certificate. Put start and completion dates in writing, as well as consequences if the contractor fails to follow them. (Example: the contract could be nullified if the contractor doesn’t start on time.)

Try to avoid paying money in advance to a contractor you don’t know! Any deposit is subject to loss. If you have to make a partial advance payment for materials, make your check out to a supplier and the contractor. Insist on a “mechanic’s lien waiver” in case the contractor fails to pay others for materials or labor.

Be wary of home improvement sellers who offer to arrange credit for you. It is best to arrange your own financing with a local lender that you know and can trust, since many home improvement sellers arrange credit with high-cost lenders. The interest rates may be very high, and high up-front fees and charges may be added. (Some contractors are even bringing in brokers now, and the brokers’ fees can add several thousand dollars to the cost!) If you do let the seller try to find financing for you, do not let them do any work before you see the terms of the financing they are trying to arrange. Do not be afraid to say “NO” to both an expensive loan and the home improvement contractor who tried to get you into it.

Remember, in most cases, you have three business days to cancel a contract signed at your home. (Contracts often contain a “liquidated damages” clause, and you may be liable for a percentage of the contract amount if you cancel after three business days.)

As a guiding principle, if someone approaches you about home repairs or improvements, as opposed to your initiating contact with them, be on your guard and do not agree to anything until you have had time to do some checking and get some advice.

 

Home Equity Lending: Debt Consolidation & Refinancing

A “home equity” loan is a loan secured by the equity you have in the house you already own or are buying.

You may get letters, telemarketing calls, or visits from loan brokers or representatives of creditors who want you to take out a home equity loan – to refinance your existing mortgage or consolidate your other debts into a home secured loan. Don’t let anyone talk you into taking out a loan you weren’t looking for.

If you do apply for a home equity loan, you should receive a Good Faith Estimate of settlement costs within 3 days of applying for the loan. If the costs are more than 3 to 5 percent of the amount you are asking to borrow, take the Good Faith Estimate to a trusted advisor, financial counselor, or lawyer to ask about it. You can stop the loan right there, or you can try to negotiate lower fees.

You have three days after signing to cancel a home equity loan on the house in which you live. Take those three days after you sign the papers to look them over carefully. If you don’t think you can afford it, if it’s not what you were told it would be, or if you are just having second thoughts, don’t be afraid to use your right to cancel. But remember–that unqualified right to cancel only lasts for three days.

Car Repair Problems

At one time or another, all of us have had to take our cars in for repairs. Most repair shops are honest; however, sometimes there are problems.

The most important step is to find the right repair shop and technician:

 

Donations to Charities

People enjoy contributing to charitable organizations and there are certainly many charities worthy of support. However, some unscrupulous people may take advantage of your good will and misuse money that was intended for people in need.

Remember these points when you are asked for a donation:

Remember that if you are on a fixed income you should make charitable contributions only when your budget permits, and only in an amount you can truly afford. No reputable charity would ever expect you to deny yourself necessities in order to make a donation.

 

Health Fraud

Every year millions of dollars are spent by older Americans on “nutritional supplements,” “medicines” and devices that are pure quackery and have no real health benefit. Fraudulent remedies to reverse the aging process or cure chronic or severe illness are often sold at great expense to consumers who may be so desperate in searching for relief that they are willing to try anything, even a product which may cause further health problems.

There are too many forms of health fraud to describe here, but some general advice can help you avoid problems.

Seek the advice of established health care professionals in deciding on your course of treatment.

Beware of extravagant promises, or guarantees of dramatic health benefits, such as advertisements promoting “scientific breakthroughs” and “miracle cures.” If it’s too good to be true, it probably is.

Talk to trusted friends and relatives before spending money on some new or unusual medicine or treatment.

 

Consumer Remedies

When something goes wrong with a product or service you purchased, or you believe you may have been defrauded, you can do more than just sit back and steam. There are several ways to resolve your situation and possibly prevent the same thing from happening to someone else in the future.

 

Deal with the Seller First

In most cases, it may help to give the seller a chance to “make it right.” Call or write and ask to speak to the owner or manager. Give a calm, direct description of your complaint and what the company can do to make it right with you.

 

Complaints

A thoughtfully prepared complaint, made either in person or in writing, can be an extremely effective way of getting a consumer problem solved, especially when the complaint is made to the proper authority. Complaints are most effective when accompanied by receipts and other documentation that help explain your situation. If you are contacting the store or business by mail, you may want to send your complaint letter by certified or registered mail, and always keep a copy for your records. NEVER SEND ORIGINALS of any receipt, contract, or document. If taking your complaint directly to the business does not produce the satisfaction that you are seeking, you can call the Better Business Bureau and/or contact the Consumer Protection Division of the Attorney General’s Office.

 

Small Claims Court

Iowa consumers who have not received satisfactory responses to their inquiries and complaints about defective products or poor service may wish to seek relief through Small Claims Court when their disputes are $6,500.00 or less.

The Small Claims Court is useful to the consumer because:

If the dispute involves more money than the dollar limit referred to above, the District Court is used to resolve it. At this point, you should seek the assistance of an attorney.

 

Unfair Debt Collection Practices

Because of unexpected circumstances, many people find themselves in a position where they owe money on a loan or purchase and cannot pay it back. There may be very good reasons for the inability to pay, such as loss of income or medical emergency. This section is intended to make you aware of your rights if someone attempts to collect a debt from you. Knowing your rights, and what debt collectors can and cannot do, is very important in reducing the stress which being in debt may cause. In this section, the person collecting the debt will be called the “creditor” or “debt collector.”

 

The Consequences of Failure to Pay a Debt

There are no “debtor prisons” and it must be emphasized that people cannot go to jail or be arrested just because they are unable to pay their debts. A debt collector who threatens you with jail is breaking the law.

When you fail to make your payment to a creditor, you will usually receive a bill. If you continually fail to pay, you may receive more bills stating you owe the money. If allowed by contract (such as a credit card), interest may be added to the amount you owe. The business then might attempt to call you or write to you to resolve the matter. If this does not work, the business may get more aggressive in contacting you about the debt, and may hire either a collection agency or an attorney for purposes of collecting the money.

Prohibited Collection Practices

Under the laws of Iowa and the United States, persons who attempt to collect debts are restricted in their methods of collection. These restrictions prohibit conduct that is threatening, harassing or dishonest. If the debt collector’s conduct in attempting to collect the debt violates these prohibitions, you may be able to sue the debt collector for the money damages and recover your attorney’s fees from the debt collector.

Examples of Prohibited Practices

If you request proof of debt, the collector must provide proof to you.

 

What to do if a Debt Collector Uses Unfair Collection Practices

If you believe that a debt collector is using improper methods to collect the debt, you may wish to get legal help right away, or you may wish to write a letter to the collector telling them to stop their improper activity. Make a copy of the letter for your records and mail it by certified mail, return receipt requested. By doing this, you can prove that your letter was received. If the conduct of the debt collector continues, make notes of these occurrences and contact an attorney.

Repossession

A secured debt is one that arises when an individual borrows money or buys on credit and allows the creditor to have an interest in some of their property. That property becomes the “collateral.” The best examples of this are when a person purchases an automobile, furniture, or appliances on credit. In exchange for your right to make payments, the seller has the right to take back (“repossess”) the property if you miss any payment subject to your right to cure. When a creditor attempts to repossess property, you may want to consult an attorney. Creditors do not have the right to enter your home without your permission when attempting to repossess collateral.

Your right to cure is when you receive a “cure notice” telling you your payment is late and giving you 20 days to pay all overdue amounts and any late charges. If you purchase a consumer item on credit for personal use (such as a car or appliance), or take out a consumer loan, then creditors cannot repossess the collateral, or “accelerate” your loan (make all your installment payments become due at once) until they have sent you a “cure notice.” If you pay within this time you may continue to make installment payments as if you were never late. However, you are only entitled to one “cure notice” each 365 days, and if you are late a second time the creditor could repossess the collateral without additional notice.

 

What Happens If You Are Sued

If the amount of the debt is $6,500.00 or less, the lawsuit will take place in Small Claims Court. If the amount of the debt is more than that, the lawsuit will take place in the District Court, and you should be sure to get legal help.

When you are notified that you have been sued, it is important that you respond appropriately. If it is in Small Claims Court, you will need to file an appearance and answer on Iowa's Electronic Document Management System (EDMS) within 20 days of service of the Original Notice upon you. If you do not do this, the court will automatically enter the judgment against you. The Iowa Judicial Branch website has instructions for defendants responding to Small Claims Actions that can be found online at the court's website: http://www.iowacourts.gov/for-the-public/court-forms. The "Instructions for Defendants Responding to a Small Claims Action" can be found in the Small Claims folder on this Court Forms webpage for the public under, "Court Forms." 

Even if you do not dispute that you owe the money, you may still want a hearing so you can ask the judge to set up payments that you can afford. You can represent yourself in Small Claims Court, although if you dispute the debt it would be a good idea to talk to a lawyer. If you cannot afford an attorney, you may wish to contact Iowa Legal Aid or another legal services organization to see if you are eligible for free legal help.

What Happens If You Lose In Court

If a court determines that you owe the debt, a judgment will be entered against you. If you do not pay the judgment and you have any money in a bank account and the creditor discovers where it is, the creditor can seize it. If you are employed, the creditor can take a portion of your wages. The amount taken depends upon the amount of the money you are expected to earn that year. The more money you earn, the more money can be taken. Remember, your wages cannot be taken (“garnished”) until a judgment has been entered against you. Talk to a lawyer for further details.

The law protects certain property and funds from being taken in this manner. This type of property is referred to as “exempt.” The following are examples of exempt property that cannot be taken from you.

Other Resources

Iowa Legal Aid has useful information dealing with unfair debt collection and Small Claims Court. You can contact them at 1-800-532-1503 or visit www.iowalegalaid.org.