DepositBuilder

Welcome to www.DepositBuilder.Org!

Welcome!

Have you seen http://www.DepositBuilder.Org ?

This is where you can plan to buy a home on "Rent to Own" even with damaged credit or no credit!

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The Rent-to-Own Supercharged Course for Success!
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In this issue you’ll learn:

- 2 Powerful Techniques to Find Rent-to-Own Property in your Area
- 3 Major Benefits of Rent-to-Own/Lease Options
- A TRUE STORY about a couple who bought a house Rent-to-Own, fixed it up. and made a bunch of money in equity within one year.

In the upcoming issues you are going to learn:

* Affordability: Rent-to Own is affordable.  The first step is figuring out what you can afford. We will show you the right way to do this.

* 3 Benefits of Rent-to-Own for the Seller of the Home

* How to find the right area to look for rent-to-own/lease option properties based on your monthly housing payment calculation.

* Determining the purchase price of houses in those areas.

* The critical relationship between rent and purchase price in a lease option

* The major risk of lease options and how to virtually eliminate it.

More Strategies For Finding Rent-to-Own Properties in Your Area

Why the Supply of Rent-to-Own is Endless.

Plus, each issue has a great true story of how different people have used these secrets to land the house of their dreams in no time!

So, here we go!

The first step of being able to move into a Rent-to-Own house is finding a house that you can buy using the Rent-to-Own method.  Not all sellers are interested in this – there are those who only want to sell the property outright, and there are those who want to rent it forever and never sell the place they own. 

However, once you start looking you will be simply amazed at how many houses you will find that you can obtain using the Rent-to-Own method.

Now, this may be simple, and – it is.  Don’t let that fool you – what I am about to expose to you are extremely powerful methods for finding Rent-to-Own homes.

*******************  The first method I will cover – and one of the most effective methods out there – is simply to place a classified ad. ******************************

You can get a classified ad in most local papers for around $20 – not too much if it can really find you a dream house!

We have seen people place classified ads and literally get flooded with inquiries from people who want to sell their homes, and think that Rent-to-Own might work for them.  You just need to make it clear in the ad that you are looking for a Rent-to-Own situation, and highlight some of the ways that Rent-to-Own can help the seller (quicker move-in time, they can get full asking price, etc.).  It’s really a win-win situation!

Once you have a stream of home owners calling you for information, you can then ask them a series of qualifying questions to make sure they are the type of person that you want to buy a home from.

This is the most fun part of knowing about the Rent-to-Own process.  Where else do you get to turn the tables so that you actually get to qualify the sellers instead of the sellers qualifying you?

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SIDEBAR:

- To see the exact advertisements that were used by real people to pull in massive numbers of inquiries from people selling their homes go to http://www.DepositBuilder.Org  

– We’ll also tell you what six questions you need to ask the sellers that contact you in order to sort out the houses and sellers that you want from the ones you don’t.
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Once you start looking for Rent-to-Own possibilities, you’ll see how easy and how exciting finding rent-to-own properties can be.

Why do think it is such a popular concept?

Why is there so much hype about lease options and rent-to-own? 

For one reason only, because they work. They are legitimate, hassle-free ways of acquiring property for a lot less money than it takes to buy a home right off the bat.

*************************** The second method that you can use to find rent-to-own homes is simply to approach those people who are already trying to sell their homes and educate them about the rent-to-own option. *************************

You will be amazed how little people know about rent-to-own, and how many sellers will think that it is a great idea once you give them the details.

Anyone selling a house could be a rent-to-own seller.  Almost anyone renting out a house could be a rent-to-own seller.  You will never know unless you ask!

The most qualified candidates for this are those sellers who are in the market to sell their house quickly for one reason or another. 

• Maybe they got a job offer in another area and need to move right away,
• maybe they got a divorce and need to get rid of the house so that they can move on.

Look for houses for sale, and then speak with the owners. 

• Find out if they have a reason that they are trying to sell the house quickly, and
• then offer them a solution – the Rent-to-Own solution.

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SIDEBAR: These are only two techniques that you  can use to find properties that you will be able to make a Rent-to-Own arrangement for.  To learn four other strategies that the top real estate investors use to find property, as well as a 7th, top secret strategy that will generate more RTO (rent-to-own) leads than you can handle and have you looking at properties in your area in a matter of days, check out http://www.DepositBuilder.Org

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I get so many requests every day to help people find rent-to-own properties in their area, and I tell them all the same thing. Use one of the seven strategies in the http://www.DepositBuilder.Org E-book and see what happens. we'll be here to answer your questions once you give it a try. They work, just give them a try.

So, here you have two of them – test them out, see how they work for you, and start moving on your path to Rent-to-Own success!

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3 Major Benefits of Rent-to-Own
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1. You build equity faster.
If you had a mortgage payment of $1000 a month, less than 1% of that payment each month would go toward the principle balance of your loan. If on the other hand you had a lease option property with a $1000 a month payment and you have a 25% rent credit, you’re building equity at $250 a month not $1.00 a month.

2. You can move into the property a lot sooner with a lot less stress.
You do not have to wait 30, 45, or 60 days for the loan to close. Do you remember how long you waited to move into the last place you rented? It’s not going to take any longer than that to move into the Rent-to-Own property - plus there’s no bank qualifying.

3. You don’t have to spend all your money on a down payment. You can save some of that money for fixing up the house the way you want it.

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SIDEBAR: Want to see a complete list of the benefits of both buying and selling a house Rent-to-Own? 

Hint: The more you know about how the Rent-to-Own process benefits the seller, the more likely you are to be able to talk a seller into making a deal with you. 

See a complete list now – http://www.DepositBuilder.Org
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In the next issue we discuss:
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If you want to start your search for a rent-to-own property within minutes, go to http://www.DepositBuilder.Org   and pick up a chance of a lifetime for only $27.00!

Happy House Hunting to all Soon-To-Be-Home Owners!

The Team at http://www.DepositBuilder.Org

Your Consumer Rights

Mail and Telephone Order Sales.

Door-to-Door Sales

Billing Errors

Unordered Merchandise

Resolving Disputes

Reducing Unwanted Telemarketing Calls

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These days, consumers shop at stores, through catalogs, on the phone, and online. They may buy products from a salesperson who knocks on their door or from a seller who could be thousands of miles away.

 

Some of these transactions may not go as smoothly as they hope. But as a consumer, you have rights in these situations, and businesses selling products have responsibilities they must meet as well.

 

 

 

Mail and telephone Order Sales

The law protects consumers who shop by phone or mail if the merchandise arrives late— or doesn’t arrive at all. By law, a company should ship your order within the time stated in its ads. If no time is promised, the company should ship your order within 30 days of receiving it. If the company can’t ship within the promised time, they must give you an “option notice,” which gives you a choice:

You can agree to the delay or cancel your order and get a prompt refund.

 

There is one exception to the 30-day rule: If a company doesn’t promise a shipping time, and you’re applying for credit to pay for your purchase, the company has 50 days to ship after receiving your order.

 

Door-to-door Sales

Buying a product from someone who comes to your home can be convenient and enjoyable. But there may be times when you change your mind about a purchase you made in your home.

 

The Cooling Off Rule

gives you three days to cancel purchases of $25 or more made at your home, workplace or dormitory, or at a place the seller rents or uses on a temporary short-term basis, like hotel or motel rooms, convention centers, fairgrounds, and restaurants.

 

There are some exceptions to the Cooling Off Rule. 

For example, you cannot cancel sales that: 

• are under $25

• are made entirely by mail or telephone

• are the result of prior negotiations at the seller’s permanent location where the goods are sold regularly

• are needed to meet an emergency

• are made as part of your request for the seller to do repairs or maintenance on your personal property (purchases made beyond the maintenance or repair request are covered)

 

In addition, sales are exempt if they involve: 

• real estate, insurance, or securities

• automobiles, vans, trucks, or other motor vehicles sold at temporary locations, provided the seller has at least one permanent place of business

• arts and crafts sold at fairs or locations, like shopping malls, civic centers, and schools 

The salesperson must tell you about your cancellation rights at the sale, and must give you two copies of a cancellation form (one to keep and one to send back) and a copy of your contract or receipt. 

The contract or receipt should be dated, show the name and address of the seller, and explain your right to cancel. The contract or receipt must be in the same language as the sales presentation. 

Your Consumer rights - Billing errors

Suppose you use your credit or charge card to pay for purchases. If you find a mistake on your billing statement, you can dispute the charge and not pay the amount in question while the charge is in dispute. It can be a charge for the wrong amount, for something you did not accept, or for an item that was not delivered as agreed. You still just pay any part of the bill that isn’t in dispute, including any finance charges on the undisputed amount.

If you decide to dispute a charge:

• write to the creditor at the address on the monthly statement for “billing inquiries.” 

Include your name, address, credit card number, and a description of the error. 

• make sure your letter is timely. It must reach the creditor within 60 days after the first bill with the error was mailed to you. 

The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving the letter. 

You also may dispute charges for unsatisfactory goods or services. 

To take advantage of this protection, you must: 

• have made the purchase in your home state

or within 100 miles of your current billing address, and the charge must be for more than $50 

• make a good faith effort to resolve the dispute with the seller first 

Unordered Merchandise

If you receive merchandise you didn’t order, the law says you can keep it as a gift. No one can force you to pay for the item or return it. If you decide to keep the merchandise, you may want to send the seller a letter to let them know you are keeping the gift, even though you’re not legally obligated to do so. Your letter may discourage the seller from sending you repeated bills, or it may clear up an error. 

Send the letter by certified mail and keep the return receipt and a copy of the letter. These records will help you establish that you didn’t order the merchandise. 

Two types of merchandise may be sent legally without your consent: free samples that are clearly marked and merchandise mailed by charities asking for contributions. In both cases, you may keep the shipments. These companies know you have the right to keep any merchandise they send without paying for it. 

Resolving disputes

If problems come up after you make a purchase, try to resolve your dispute with the seller first. Make sure you act quickly. Some companies may not accept responsibility if you don’t complain in a timely way. 

Send a letter of complaint. It puts your complaint on record and lets the company know you are serious about pursuing the dispute. 

Be sure you keep a copy for your records. If you can’t get satisfaction, consider contacting the following organizations for more information and help: 

• State and local consumer protection offices. 

• Your local Better Business Bureau (BBB). 

• Action line and consumer reporters. Check with your local newspaper, TV, and radio stations for a contact. 

• Postal Inspectors. Call your local U.S. Post Office and ask for the Inspector-in-Charge. 

• Federal Trade Commission.

Letter

 • For telephone orders only, write: Direct Marketing Association (DMA),

1111 19th   Street, NW
Washington, DC 20036 

 

 

(Your address)

(Your City, State, Zip Code)

(Date)

(Name of Contact Person)

(Title)

(Company Name)

(Street Address)

(City, State, Zip Code) 

Dear (Contact Person):

On (date), I purchased (or had repaired) a (name of the product with the serial or model number or service performed). I made this purchase at (location, date, and other important details of the transaction). 

Unfortunately, your product (or service) has not performed well (or the service was inadequate) because (state the problem).

Therefore, to resolve the problem, I would appreciate your (state the specific action you want). Enclosed are copies (copies, NOT originals) of my records (receipts, guarantees, warranties, canceled checks, contracts, model and serial numbers, and any other documents). I look forward to your reply and a resolution to my problem, and will wait (set a time limit) before seeking third-party assistance. Please contact me at the above address or by phone (home or office numbers with area codes).

 

Sincerely,

(Your name)

(Your account number)

SAMPLE COMPLAINT LETTER

 

 

 

 

Reducing Unwanted telemarketing calls

You might receive dozens of calls each week from telemarketers pitching a wide array of products from dream vacations and dating services to low mortgage rates and new siding.

 

But you can stop telemarketing calls you don’t want by registering your home or cell phone numbers on the national do not Call Registry. Telemarketers covered by the National Do Not Call Registry have up to 31 days from the date you register to stop calling you.

 

You can register for the National Do Not Call Registry online or by phone for free. If you have a valid email address, you can register online by visiting www.donotCall.gov . Once you submit your registration, the FTC will send you an email message with a link in it. You need to click on the link in the email within 72 hours to finalize your registration.

 

You may register up to three telephone numbers at one time online.

 

To register by phone, call toll-free 1-888-382-1222 (TTY: 1-866-290-4236) from the phone number you wish to register. You can register only one phone number each time you call the National Do Not Call Registry. Your phone number will remain on the Registry for five years from the date you register (unless you choose to take it off the Registry or your phone number is disconnected).

 

Organizations That May Call

Placing your number on the National Do Not Call Registry will stop most — but not all — telemarketing calls.

You still can get calls from or on behalf of:

• political organizations,
• charities,      and surveys.
• Organizations with whom you have an established business relationship can call you for      up to 18 months after your last purchase, payment, or delivery — even if your number is on the National Do Not Call Registry.
• And companies to which you’ve made an inquiry or submitted an application can      call you for three months.

 

Think before you submit any entries, surveys or questionnaires, sweepstakes, forms, or requests for “free”  products. The company may be trying to establish a business relationship with you, or get your written permission to be called.

If you place your number on the National Do Not Call Registry, you still can give written permission for particular companies to call you. And, even if you have an established business relationship, you can ask a company not to call you. The company must honor your request, regardless of any prior written permission. If you don’t put your number on the national Registry, you still can prohibit individual telemarketers from calling by asking each one to put you on their company’s do not call list.

Filing a Do Not Call Complaint

If your number has been on the national do not Call Registry for at least 31 days and you receive a call from a telemarketer that you believe is covered by the Telemarketing Sales Rule, file a complaint at www.donotCall.gov or by phone at 1-888-382-1222 (for TTY, call 1-866-290-4236). You will be asked for either the name or telephone number of the company that called you, and the date the company called you.

As a consumer, you see or hear hundreds of ads a day on the Internet, on TV, on the radio, in newspapers and magazines, on buses, and sometimes in other places you wouldn’t expect.  Ads making fraudulent claims can — and often do — show up in these places, and it’s up to you to sort through them and determine which ones are scams so you can ignore them.

You’ve probably heard the saying “if it looks too good to be true, it probably is too good to be true,” but there is more to spotting a fraudulent claim.

Be wary when you see ads that:

• use asterisks, footnotes, or lots of fine print.

Any disclaimers about the product must be large enough for you to read. If they’re not, the advertiser may have something to hide.

• include glowing testimonials from consumers or “famous” doctors. Whether they deal with dramatic weight loss, disease cures, or extravagant financial success, they usually are a tip-off to a rip-off.

• do not list an address or location. Ads listing only phone numbers or websites may do so to make it harder for you to track them down if you have a problem with their product or service.

• advertise merchandise way below market value for a limited time only. This technique often is used to advertise electronics, computers, or other high-ticket merchandise that can be ordered only by phone.

• feature merchandise with names that soundor look like nationally recognized brands.

• offer vague descriptions of products.

• promote name-brand merchandise at ridiculously low prices or through unusual ways.

Using Consumer Reports: What Landlords Need to Know

Federal Trade Commission Issues "Facts for Business" Guide on Complying with the Fair Credit Reporting Act

Publication Specifically Aimed at Landlords who are Residential Property Owners

The Federal Trade Commission recently issued a "Facts for Business" guide to help landlords comply with the federal Fair Credit Reporting Act (FCRA). "Using Consumer Reports: What Landlords Need to Know" provides guidance for residential property owners who use reports from credit bureaus and tenant screening services in deciding whether to rent to consumer applicants.

 

Section 615(a) of the FCRA requires landlords, when they take an "adverse action" against a rental applicant based in any way on a "consumer report" from a "consumer reporting agency," to provide an adverse action notice to that consumer. In particular, the law requires landlords to provide tenant applicants with a notice that informs them about the adverse action, identifies the consumer reporting agency that provided the report that contributed to the landlord's action, and specifies consumers' rights under the FCRA.

Complying With The FCRA

The guide helps landlords by providing instruction on the key terms in the FCRA with examples, where appropriate. It states that a "consumer report" from a "consumer reporting agency" includes not only a credit report provided by a credit bureau (such as Trans Union, Experian, or Equifax), but also a report supplied by a tenant screening service of the applicant's rental history procured from prior landlords or housing court records. The guide states that "adverse action" includes not only a landlord's denial of a rental application, but also a landlord's action that imposes a burden not required of all tenants -- such as requiring a co-signer on the lease, requiring a deposit, or increasing the tenant's rent or deposit to a higher amount.

The guide also provides several examples to illustrate that the landlord must provide the notice if the adverse action in any way is based on a consumer report.

For example, it discusses scenarios in which the landlord must provide the adverse action notice if it obtained a consumer report that played a factor in the landlord's action, even though its action is based primarily on an applicant's income or prior reputation as a tenant.

Finally, the guide provides a road map for landlords to help them draft their adverse action notices, including which consumer reporting agency to

• name where there is more than one,
• what information to provide about the      agency or agencies, and
• other information specified in the law      concerning the consumer's rights under the FCRA.

FTC Staff FCRA Compliance Review

The amendment to Section 615(a) that requires adverse action notices by landlords who use consumer reports took effect in September 1997. As part of its ongoing program to enforce the amended FCRA, FTC staff recently completed a review of compliance with Section 615(a) by a number of residential apartment owners in several major cities. The review indicated substantial compliance, but disclosed that some landlords were not totally aware of some of the details of the FCRA or precise compliance methods as outlined in the guide.

"Using Consumer Reports: What Landlords Need to Know" will assist in compliance efforts by this important group of businesses governed by the FCRA.

Your

Opportunity

to Comment

The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards collect comments from small business about federal enforcement actions. Each year, the Ombudsman evaluates enforcement activities and rates each agency's responsiveness to small business. To comment on FTC actions, call 1-888-734-3247.

Copies of the complete "Using Consumer Reports: What Landlords Need to Know" guide are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

MEDIA CONTACT:

Mitchell J. Katz
Office of Public Affairs
202-326-2161

STAFF CONTACTS:

Peggy Twohig or Clarke Brinckerhoff
Bureau of Consumer Protection
202-326-3224

 

Major Purchases and Investments

Buying a Home

Renovating or Repairing Your Home

Buying a Car

Franchises and Other Business Opportunities

A College Education

Paying for Funeral Goods and Services

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Making a major purchase like a home or a car can be a stressful and complex process. But if you learn about your options, you can make a well-informed decision.

 

Buying a home

For many people, being able to buy a house or condo represents the realization of the American dream. Before making what is likely to be the biggest purchase decision of your life, first make sure to understand the different types of mortgage products that are available. Then, you can choose the one that best meets your needs.

 

Shopping around for a home loan or mortgage will help you get the best financing deal. A mortgage — whether it’s a home purchase, a refinancing, or a home equity loan — is a product, just like a car, so the price and terms

are negotiable. Compare all the costs involved in getting a mortgage, including points, fees, and down payments. Shopping, comparing, and negotiating could save you thousands of dollars.

 

Points

Points are fees paid to the lender or broker for the loan and often are linked to the interest rate; usually the more points you pay, the lower the rate. One point equals one percent of the loan amount.

 

• Check your local newspaper or lender for information about current rates and points.

 

• Ask for points to be quoted to you as a dollar amount — rather than just as the number of points — so that you will actually know how much you will have to pay.

 

Fees

A home loan often involves many fees, such as loan origination or underwriting fees, broker fees, and transaction, settlement, and closing costs. Each lender or broker should be able to give you an estimate of its fees. Many of these fees are negotiable. Some fees are paid when you apply for a loan (such as application and appraisal fees), and others are paid at closing. In some cases, you can borrow the money you need to pay these fees, but doing so will increase your loan amount and total costs. “No cost” loans sometimes are available, but they usually involve higher interest rates.

 

Major Purchases and investment terms to Understand

 

Get Information from Several Types of Lenders

 

Home loans are available from several types of lenders — savings banks, commercial banks, mortgage companies, and credit unions. Different types of lenders may quote you different prices, so contact several of them to make sure you’re getting the best price.

 

You can also get a home loan through a mortgage broker. Brokers find a lender for you. A broker’s access to several lenders can mean a wider selection of loan products and terms you can choose from. Brokers generally contact several lenders regarding your application, but they are not obligated to find the best deal for you unless they have contracted with you to act as your agent. Contact more than one broker, just as you contact more than one bank or thrift institution.

 

Get All Important Cost Information in Writing

Know how much of a down payment you can afford, and find out all the costs involved in the loan. Knowing only the amount of the monthly payment or the interest rate is not enough. Ask for information from each lender about the same loan amount, loan term, and type of loan, and get it in writing.

 

When you ask for information about rates, ask each lender:

 

• for a list of its current mortgage interest rates and whether the rates being quoted are the lowest for that day or week.

 

• whether the rate is fixed or adjustable. When interest rates for adjustable-rate loans go up, the monthly payment usually goes up, too.

 

• how the rate and your loan payment will vary if the rate quoted is for an adjustable rate loan, including whether your payment will be reduced when rates go down.

 

• about the loan’s annual percentage rate (APR). The APR takes into account not only the interest rate, but also points, broker fees, and other credit charges that you may be required to pay, expressed as a yearly rate.

 

Once you are satisfied with the terms you have negotiated, get a written lock-in of the terms — this will guarantee you a specific interest rate if you close on the loan within a period of time, usually 60 or 90 days. The lock-in should include the rate that you have agreed to, how long the lock-in lasts, and the number of points you will pay. A fee may be charged for locking in the loan rate but this fee may be refundable at closing. Lock-ins can protect you from rate increases while your loan is being processed; if rates fall, however, you could end up with a less favorable rate. If that happens, try to negotiate a compromise with the lender or broker.

 

Down Payments and Private Mortgage Insurance

Some lenders require 20 percent of the home’s purchase price as a down payment.

 

However, many lenders now offer loans that require less than that — sometimes as little as 5 percent on conventional loans. If you can’t make a 20 percent down payment, lenders usually require you to buy private mortgage insurance (PMI) to protect them in case you don’t make your payments. When government-assisted programs like FHA (Federal Housing Administration), VA (Veterans Administration), or Rural Development Services are available, the down payment requirements may be substantially lower.

 

If PMI is required for your loan, ask what the total cost of the insurance will be, how much your monthly payment will be, including the PMI premium, and how long you will be required to pay PMI.

 

Mortgage Discrimination

Fair lending is required by law. The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against credit applicants in any aspect of a credit transaction on the basis of race, color, religion, national origin, sex, marital status, age, whether all or part of the applicant’s income comes from a public assistance program, or whether the applicant has in good faith exercised a right under the Consumer Credit Protection Act.

 

The Fair Housing Act prohibits discrimination in residential real estate transactions on the basis of race, color, religion, sex, handicap, familial status, or national origin.

 

Under these laws, you cannot be refused a loan based on these characteristics, nor be charged more for a loan or offered less favorable terms based on such characteristics.

 

If you think you’ve been discriminated against:

 

• complain to the lender. Sometimes you can persuade the lender to reconsider your application.

 

• check with your state Attorney General’s office to see if the creditor violated state laws.

 

• contact a local private fair housing group and report the violations to the appropriate government agency. If your mortgage application is denied, the lender must give you the name and address of the agency to contact.

 

For ECOA violations involving mortgage and consumer finance companies, file a complaint with the FTC at www.ftc.gov/ complaint or 1-877-FTC-HELP.

 

Lender do’s and don’ts

Lenders must:

 

• consider reliable public assistance income the same as other income.

 

• consider reliable income from part-time employment, Social Security, pensions, and annuities.

 

• consider reliable alimony, child support, or separate maintenance payments, if you choose to tell them about it. A lender may ask you for proof that you receive this income consistently.

 

• accept someone other than your spouse if a co-signer is needed. If you own the property with your spouse, he or she may be asked to sign documents allowing you to mortgage the property.

 

Lenders cannot:

 

• discourage you from applying for a mortgage or reject your application because of your race, national origin, religion, sex, marital status, or age, or because you receive public assistance income.

 

• consider your race, national origin, or sex, although you will be asked to disclose this information voluntarily to help federal agencies enforce anti-discrimination laws. A creditor may consider your immigration status and whether you have the right to remain in the country long enough to repay the debt.

 

• impose different terms or conditions, such as a higher interest rate or larger down payment, on a loan based on your race, sex, or other prohibited factors.

 

• consider the racial composition of the neighborhood where you want to live.

This also applies when the property is being appraised.

 

• ask about your plans for having a family. But they can ask questions about expenses related to your dependents.

 

• refuse to purchase a loan or set different terms or conditions for the loan purchase based on discriminatory factors.

 

• require a co-signer if you meet their standards.

 

Credit Problems? Still Shop, Compare, and Negotiate

Don’t assume that minor credit problems or difficulties stemming from unique circumstances like illness or temporary loss of income will limit your loan choices to high-cost lenders. If your credit report contains negative

information that is accurate, but there are good reasons to trust that you will repay a loan, explain your situation to the lender or broker.

 

If you cannot explain your credit problems, you will probably have to pay more than borrowers who have good credit histories.

 

But don’t assume that the only way to get credit is to pay a high price.

 

Ask how your credit history affects the price of your loan and what you can do to get a better price.

 

Take the time to shop around and negotiate the best deal that you can.

 

Credit problems or not, it’s always a good idea to review your credit report for accuracy and completeness before you apply for a loan.

 

For details about different types of home mortgages, visit www.ftc.gov  and read Looking for the Best Mortgage.

Looking for the Best Mortgage? Shop, Compare, Negotiate. [PDF version]

Use these three steps to save money on a mortgage or home loan. Includes a mortgage shopping worksheet.

 

• If you know someone who is looking for a home, give them a copy of Looking for the

Best Mortgage.

 

• Partner with the local housing authority to do a briefing session on the ins and outs of

home mortgages and give out copies of Looking for the Best Mortgage.

 

• Partner with a local law school to do a briefing session on what’s legal — and what’s

not — in the mortgage lending area.

 

 

 

After you purchase a home, you’ll have to pay to keep it cool or warm.

 

And home heating and cooling bills can add up to hundreds of dollars every month.

 

For tips on how to save money on heating and cooling your home, visit www.ftc.gov/energysavings .

 

Recognize and avoid Home Repair Scams

 

Renovating or Repairing Your home

Once you own a home, you might consider a renovation or simply repairing some items that need attention. If you are not going to do the work yourself, finding a competent and reliable contractor can be the first step to a successful and satisfying home improvement project.

 

Your home may be your most valuable financial asset and that’s why it’s important to be cautious when you hire someone to work on it. Home improvement and repair and maintenance contractors often advertise in newspapers, the Yellow Pages, and on the radio and TV. But don’t consider an ad an indication of the quality of a contractor’s work.

 

Your best bet is a reality check from friends, neighbors, or co-workers who have had improvement work done.

 

• Get written      estimates from several firms.
• Ask for      explanations for price variations.
• Don’t      automatically choose the lowest bidder.

 

Before you hire a contractor, interview them and ask some questions.

 

• How long have you been in business?

• Are you licensed and registered with the state?

• How many projects like mine have you completed in the last year?

• Will my project require a permit?

 

Ask for a list of references and talk with former clients directly.  They can help you decide if a particular contractor is right for you.

 

Ask if:

• you can visit their home to see the completed job

• they were satisfied with the project and if it was completed on time

• there were unexpected costs and if so, what they were

• they would recommend the contractor or use the contractor again

 

Not all contractors operate within the law.

 

Here are some tip-offs to potential rip-offs.

 

Be wary of a contractor who:

 

• solicits door-to-door

• just happens to have materials left over from a previous job

• only accepts cash payments

• asks you to get the required building permits

• does not list a business number in the local telephone directory

• tells you your job will be a “demonstration”

• pressures you for an immediate decision

• offers exceptionally long guarantees

• asks you to pay for the entire job up front

• suggests that you borrow money from a lender the contractor knows

 

For more information about renovating or repairing your home and scams to watch out for, visit www.ftc.gov  and look for Home Sweet Home Improvement.

 

Place a copy of Home Sweet Home Improvement in public meeting areas like the lobby of a community center, public computer rooms at your local library, your church’s hall, and anyplace else where people go for information.

 

If you have a problem with your home improvement project, try to resolve it with the contractor.

 

Follow up any phone conversations with a letter.

 

• Send      it by certified mail and request a return receipt as proof that the      company received your letter.
• Keep      a copy for your files.
• If      you can’t resolve the situation, contact one of the following      organizations for more information and help:
• •      your state and local consumer protection offices
• •      your local Better Business Bureau
• •      your state or local Builders Association and/or Remodelers Council

 

 

 

Buying a car

For most consumers, a car is a very big purchase. Before you shop for a new car, make sure you know how to make a smart deal. Think about what car model and options you want and how much you’re willing to spend. Do some

research. You’ll be less likely to feel pressured into making a hasty or expensive decision and more likely to get a better deal. Shop around and plan to negotiate on price. Dealers may be willing to bargain on their profit margin, often between 10 and 20 percent. Usually, this is the difference between the manufacturer’s suggested retail price (MSRP) and the invoice price.

 

Buying a Used Car

If you need transportation and have a limited budget, buying a used car from an individual or a dealer might be a good option. But buying a car from a private individual is different than buying from a dealer because private sales

generally aren’t covered by federal law, or by “implied warranties” of state law. A private sale probably will be “as is” — you’ll have to pay for anything that goes wrong after the sale.

 

The Used Car Rule requires dealers to post a Buyers Guide in every used car they offer for sale. The Buyers Guide gives a great deal of information, including:

 

• whether the vehicle is being sold “as is” or with a warranty

• what percentage of the repair costs a dealer will pay under the warranty

• the fact that spoken promises are difficult to enforce

• the major mechanical and electrical systems on the car, including some of the major problems you should look out for

 

The Buyers Guide also tells you to:

• get all promises in writing

• keep the Buyers Guide for reference after the sale

• ask to have the car inspected by an independent mechanic before the purchase

 

Whether you buy a used car from a dealer or an individual,

• examine      the car using an inspection checklist.
• You      can find checklists in magazines and books and on Internet sites that deal      with used cars.

 

Test drive the car under different road conditions — on hills, highways, and in stop-and-go-traffic; ask for the car’s maintenance records from the owner, dealer, or repair shop; and hire a mechanic to inspect the car.

 

Auto negotiations have a vocabulary of their own.

 

Here are some terms you may hear when you’re talking price.

• Invoice Price is the manufacturer’s initial charge to the dealer. This usually is higher than the dealer’s final cost because of rebates, allowances, discounts, and incentive awards. Generally, the invoice price should include freight (also known as destination and delivery).

 

If you’re buying a car based on the invoice price (for example, “at invoice,” “$100 below invoice,” “two percent above invoice”) and freight is included, make sure freight isn’t added to the sales contract.

 

• The Monroney sticker shows the base price, the manufacturer’s installed options with the manufacturer’s suggested retail price (MSRP), the manufacturer’s transportation charge, and the fuel economy (mileage). Federal law requires that this label be placed on the car window; only the buyer can remove it.

• Dealer Sticker Price, usually on a supplemental sticker, is the Monroney  sticker price plus the suggested retail

price of dealer-installed options, such as additional dealer markup (ADM) or additional dealer profit (ADP), and dealer preparation.

• Base Price is the cost of the car without options, but with standard equipment and factory warranty. This price is printed on the Monroney sticker.

 

Learning the terms

 

Financing Your Car

If you decide to borrow money to buy your car, be aware that the financing offered by the dealer, even if the dealer contacts lenders on your behalf, may not be the best deal you can get. Contact other lenders directly.

 

Compare the financing they offer you with the financing the dealer offers you. Because offers vary, shop around for the best deal, comparing the annual percentage rate (APR) and the length of the loan. When negotiating to finance a car, don’t focus only on the monthly payment.

 

The total amount you will pay depends on the price of the car you negotiate, the APR, and the length of the loan.

 

Considering a Service Contract

A service contract that you may buy with a new car provides for the repair of certain parts or problems. This type of contract is offered by manufacturers, dealers, or independent companies and may or may not provide coverage beyond the manufacturer’s warranty. A warranty is included in the price of the car while a service contract costs extra.

 

Before deciding to purchase a service contract, read it carefully to get the answers to these questions.

 

• What’s the difference between the coverage under the warranty and the coverage under the service contract?

• What repairs are covered?

• Is routine maintenance covered?

• Who pays for the labor and parts?

• Who performs the repairs? Can repairs be made elsewhere?

• How long does the service contract last?

• What are the cancellation and refund policies?

 

For more information about buying a new or used car, visit www.ftc.gov .

 

Organize a car buyer’s information fair and give out free helpful publications about buying a new car, reading car ads, alternative fuel vehicles, used car auctions, vehicle financing, improving gas mileage in your vehicle, and leasing or renting a car. Print them at www.ftc.gov .

 

Drive down the cost of Owning a Vehicle

The way you fuel, drive, and maintain your car — whether new or used — impacts the cost of operating it.

 

You can lower the cost of driving if you:

 

• combine errands and avoid unnecessary idling

• use overdrive gears and cruise control

• stay within the posted speed limits

• carpool

• use the recommended octane level for your car

• steer clear of “gas saving” gadgets or any gizmo that promises to improve your gas mileage

• keep your tires properly inflated and aligned and your engine tuned according to your owner’s manual

• change your oil and use the grade of motor oil as recommended in the owner’s manual

• check and replace air filters regularly

• remove extra weight from your trunk

 

 

 

Franchises and Other Business Opportunities

 

For many entrepreneurs, franchises are a popular way to start a business. A franchise typically enables you, the investor or “franchisee,” to operate a business. By paying a franchise fee, which may be thousands of dollars, you are given a format or system developed by the company (franchisor), the right to use the franchisor’s name for a period of time, and assistance. For example, the franchisor may help you find a location for your outlet; provide initial training and an operating manual; and advise you on management, marketing, or personnel. Some franchisors offer continuing support like monthly newsletters, a toll-free telephone number for technical assistance, and periodic workshops or seminars.

 

While buying a franchise may reduce your investment risk by enabling you to associate with an established company, it can be costly.

 

You also may be required to give up significant control over your business, while taking on contractual obligations with the franchisor.

 

Franchise and Business

Opportunity

Rule

If you’re a prospective business owner and you are considering buying a franchise or investing in another business opportunity, investigate it carefully. The law requires franchise and business opportunity sellers to give you specific information to help you make an informed decision.

 

A franchise or business opportunity seller must give you a detailed disclosure document at least 10 business days before you pay any money or legally commit yourself to a purchase.

 

You can use these disclosures to compare a particular business with others you may be considering or simply for information.

 

The disclosure document includes:

• the names, addresses, and telephone numbers of at least 10 previous purchasers who live closest to you

• a fully audited financial statement of the seller

• the background and experience of the business’s key executives

• the cost of starting and maintaining the business

• the responsibilities you and the seller will have to each other once you’ve invested

 

Recognizing Business

Opportunity

Scams

Fraudulent business opportunity promoters often use the classifieds and the Internet to promote all kinds of offers, from pay phone and vending machine routes to work-at-home businesses like medical billing and envelope stuffing. Too often, these ads make promises — about earnings, locations, merchandise, or marketability — that sound great, but aren’t true. The result: you can get ripped off and lose money instead of making it.

 

Before investing in any business opportunity:

• look at the ad carefully. If it claims buyers can earn a certain income, it also must give the number and percentage of previous purchasers who achieved the earnings.

• get earnings claims in writing. If the business opportunity costs $500 or more, the promoter must back up the earnings claim in a written document. If it’s a work-a-home or other business opportunity that involves an investment of under $500, ask the promoter to put the earnings information in writing.

• interview each previous purchaser in person, preferably where their business operates.

• contact the Attorney General’s office, state or county consumer protection agency, and Better Business Bureau where the business opportunity promoter is based and where you live to find out whether there is record of unresolved complaints.

 

• take your time. Promoters of fraudulent business opportunities often use high-pressure tactics to get your money fast. 

 

For more information on business opportunities and the Franchise and Business Opportunity Rule, visit www.ftc.gov/bizopps .

 

Microsites

• Business Opportunities

Facts for Consumers

• A Consumer      Guide to Buying a Franchise [PDF]

How to: evaluate whether owning a franchise is right for you; understand your obligations as a franchise owner; shop for franchise opportunities; and ask the right questions before you invest. 8.5"x11", 24 pages.

• Could Biz      Opp Offers Be Out for Your Coffers? [PDF] [en      español]

Explains the importance of getting pre-investment information in writing, and researching other aspects of the business' performance by interviewing other people who have bought into the program. 8.5"x11", 4 pages.

• Franchise      and Business Opportunities [PDF] [en      español]

Explains the Federal Trade Commission's Franchise and Business

Opportunity

Rule. 8.5"x11", 4 pages.

• Medical      Billing Opportunities: Worth a Second Opinion [PDF] [en      español]

Medical billing opportunity promoters often misrepresent earnings potential and don't provde key, pre-investment information required by law. 8.5"x11", 4 pages.

• Net Based      Business Opportunities: Are Some Flop-portunities? [PDF]

Cautions consumers about web-based business opportunities that promise more than they can possibly deliver, and what you can do to protect yourself. 8.5"x11", 4 pages.

Consumer Alerts

• Answering      the Knock of a Business 'Opp' [PDF] [en      español]
• Buying a      Janitorial Services Franchise: Making a Clean Sweep [PDF]
• Lotions      and Potions: The Bottom Line About Multilevel Marketing Plans [PDF]
• The Bottom      Line About Multilevel Marketing Plans [PDF]

 

A college education

For many people, a college education can be the key to a successful career. But a college or university education can be expensive. Some schools provide financial help or “scholarships.”

 

Many students take out loans, apply for financial aid or scholarships, or use a combination to help pay for their schooling. Unfortunately, in their efforts to pay the bills, many students are falling prey to scholarship and financial aid scams. Some cheats guarantee or promise scholarships, grants, or fantastic financial aid packages that turn out to be scams. Many use high pressure sales pitches at seminars where you’re required to pay immediately or risk losing out on the “opportunity.”

 

If you’re looking for financial aid or a scholarship:

 

• take your time. Don’t rush into paying at any seminar.

• investigate the organization you’re considering paying for help. Talk to a guidance counselor or financial aid advisor before spending your money. You may be able to get the same help for free.

• be wary of “success stories” or testimonials of extraordinary success. The seminar operation may have paid people to give glowing stories. Instead, ask for a list of at least three local families who used the services in the last year, and talk to them in person.

• be cautious about purchasing from seminar representatives who don’t want to answer questions or who give answers you really don’t understand. Legitimate business people are always willing to give you information about their service.

• ask how much money is charged for the service, what services will be performed, and about the company’s refund policy. But keep in mind that you may never recoup the money you give to a scammer, despite the refund policies they tell you about.

• remember that legitimate companies never guarantee or promise scholarships or grants before you apply.

 

Watch Out for these Signs of a Diploma Mill

 

• “No Studies, No Exams — Get a Degree for Your Experience.” Diploma mills grant degrees for “work or life experience” alone.

 

Accredited colleges may give a few credits for specific life experiences, but not an entire degree.

 

• “No Attendance.” Legitimate colleges or universities, including online schools, require substantial course work.

 

• “Flat Fee.” Many diploma mills charge on a per-degree basis. Legitimate colleges charge by the credit, course, or semester, not a flat fee for an entire degree.

 

• “No Waiting.” Operations that guarantee a degree in a few days, weeks, or even months cannot be legitimate. If an ad promises that you can earn a degree very quickly, forget about it.

 

• “Click Here to Order Now!” Some scams use aggressive sales tactics. Accredited colleges don’t use spam or high-pressure telemarketing to market themselves. Some diploma mills advertise in newspapers, magazines, and on the web.

 

Bogus Diplomas

Some people may be tempted to pay a flat fee for a degree awarded on life experience without having to take any courses. Businesses that offer this type of degree are called “diploma mills.” If you use a so-called “degree” from a diploma mill to apply for a job or promotion, you risk not getting hired, getting fired, and in some cases, being prosecuted.

 

Most employers and educational institutions consider it lying if you claim academic credentials that you didn’t earn through actual course work.

 

To learn more about how to avoid a scholarship scam, visit www.ftc.gov/scholarshipscam .

 

Give copies of the FTC’s brochure, bookmark, or poster about scholarship scams to guidance or career counselors at your area high schools, to PTA presidents, or to organizers of local college fairs.

 

 

 

Paying for Funeral Goods and Services

When a loved one dies, grieving family members and friends often are confronted with dozens of decisions about the funeral — all of which must be made quickly, and many of which are costly. Funerals rank among the most expensive purchases many consumers will ever make. A traditional funeral, including a casket and vault, costs about $6,000, although “extras” like flowers, obituary notices, acknowledgment cards, or limousines can add thousands of dollars to the bottom line. Many funerals run well over $10,000. Yet even if you’re the kind of person who might haggle with a dozen dealers to get the best price on a new car, you might feel uncomfortable comparing prices or negotiating over the details and cost of a funeral. Compounding this discomfort is the fact that some people “overspend” on a funeral or burial because they think of it as a reflection of their feelings for the deceased.

 

The trend toward making funeral arrangements before they’re needed suggests that many consumers want to compare prices and services so that when the time comes, the funeral reflects a well-informed purchase decision, as well as a meaningful one. Many say they see funeral planning as an extension of estate planning.

 

The Funeral Rule

Most funeral providers are professionals who strive to serve their clients’ needs. But some aren’t — and don’t. They may take advantage of their clients through high prices, overcharges, double charges, or unnecessary services. A federal law makes it easier for you to choose only those goods and services you want or need and to pay only for those you select, whether you are making arrangements for yourself or for a loved one.

 

The law requires funeral directors to give you itemized prices in person and, if you ask, over the phone. It also requires funeral directors to give you a written price list to keep that shows the goods and services the funeral home offers. If you want to buy a casket or outer burial container, the funeral provider must show you descriptions of the available selections and the prices before showing you the caskets.

 

Many funeral providers offer various “packages” of commonly selected goods and services that make up a funeral. But when you arrange for a funeral, you have the right to buy goods and services separately. You do not have to accept a package that may include items you do not want.

 

According to the Funeral Rule:

• you have the right to choose the funeral goods and services you want (with some exceptions). The funeral provider must state this right in writing on the general price list.

 

• if state or local law requires you to buy a particular item, the funeral provider must disclose it on the price list, with a reference to the specific law.

• the funeral provider may not refuse, or charge a fee, to handle a casket you bought somewhere else.

• a funeral provider who offers cremations must make alternative containers available.

For more information about purchasing funeral goods and services, visit www.ftc.gov/ funerals and read Funerals: A Consumer Guide.

 

If you own a funeral home and want more information about your responsibilities under the law, read Complying with the Funeral Rule at www.ftc.gov/funerals .

 

 

 

Microsites about Funerals

• Funerals: Consumer Right      Under the Funeral Rule

Explains your rights; lists considerations when choosing a funeral provider; offers questions to ask when making arrangements, comparing products and services, and costs. Discusses pre-need planning. Resources for more information.

Facts for Consumers

• Funerals:      A Consumer Guide [PDF] [en      español]

Explains your rights; lists considerations when choosing a provider; offers questions to ask when making arrangements, comparing products and services, and costs. Discusses pre-need planning. Resources for more information. 6"x9", 36 pages, color.

• Living      Trust Offers: How to Make Sure They're Trust-worthy [PDF]

Warns consumers about unscrupulous businesses that exaggerate the benefits or the appropriateness of living trusts. Provides a glossary of terms, tips for estate planning, and resources for more information. 8.5"x11", 4 pages.

• Paying      Final Respects: Your Rights When Buying Funeral Goods and Services [PDF]      [en      español]

An abbreviated version of "Funerals: A Consumer Guide." Explains the Funeral Rule in brief. 8.5"x11", 6 pages.

Articles

• Paying Final Respects: Your Rights When Buying      Funeral Goods and Services      [PDF]     

 

 

 

Managing Your Finances

Credit

Establishing Credit

Understanding Your Credit Report

Credit Scoring

Using Credit Cards Responsibly

Debt Collection

Avoiding Credit Scams

___________________________________________________________________________________

 

Credit and Credit Rating

The decisions you make now about how you manage your finances and handle money and credit can affect your ability to borrow money in the future, as well as the cost of borrowing that money. They also can affect your ability to rent or buy a place to live, get auto or life insurance, or even get a job. The more you know about credit, the better prepared you will be to manage your finances and establish a solid financial foundation.

 

When you get credit, you are borrowing money from a lender, and you have to pay back that money — usually with interest. You can get credit in many different ways: through a credit card, a personal loan, an educational loan, an automobile loan, or a home mortgage.

 

It’s important to maintain a good credit record because it can affect how much you pay to borrow money. If you have a good record, it means that you are a good candidate for a loan — based on your history of paying bills, your job history, and your salary — and it will be easier for you to get loans at lower interest rates. That usually translates into lower monthly payments.

 

If you have a poor credit history, however, it can be a big problem. A poor credit history usually results from making payments late or borrowing too much money, and it can mean two things:

 

1) that you might have trouble getting a car loan, a credit card, a place to live and, sometimes, a job or

 

2) that you will pay a lot to get the loans you need.

 

Establishing Credit

Suppose you never financed a car, a computer, or some other major purchase.

 

How do you begin to establish credit?

 

• Consider applying for a secured credit card.

 

It requires you to open and maintain a bank account or other account at a financial institution as security for your line of credit. Your credit line will be a percentage of your deposit, typically from 50 to 100 percent.

 

Application and processing fees are common for secured credit cards. In addition, secured credit cards usually carry higher interest rates than traditional non-secured cards.

 

• You might apply for a credit card issued by a local store; local businesses often are more willing than national chains to extend credit to someone with no credit history. Once you establish a pattern of paying these bills on time, major creditors might be more willing to extend credit to you.

 

• Consider asking someone with an established credit history — perhaps a relative — to co-sign the account if you don’t qualify for credit on your own. The co-signer promises to pay your debts if you don’t. You’ll want to repay any debt promptly so you can build a credit history and apply for credit in the future on your own.

 

 

 

If your application for credit is turned down, the creditor must tell you why. It may be that you haven’t been at your current address or job long enough. Or your income may not be high enough. Different credit card companies have different standards.

 

But if several companies turn you down, it may indicate that you are not ready for the responsibilities that come with getting credit.

 

Understanding Your Credit Report

Your credit report contains information about where you live, how you pay your bills, and whether you’ve been sued, been arrested, or filed for bankruptcy.

 

Consumer reporting companies collect this information, create a credit report, and then sell it to businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years.

 

You have the right to receive a free copy of your credit report every year. The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, if you ask for it, once every 12 months.

 

You will have to answer some questions to prove that you are who you say you are and to make sure you get the right credit report.

 

Free credit Reports

To order your free credit report, visit www.annualcreditreport.com , call 1-877-322-8228, or complete the

Annual Credit Report Request Form available at www.ftc.gov/freereports

 

and mail it to:

Annual Credit Report Request Service,

P.O. Box 105281

,

Atlanta

,

GA

30348-5281

.

 

After you receive your credit report, read it carefully. If you find mistakes in your report, you should try to correct that information immediately.

 

• First, tell the consumer reporting company, in writing, what information you think is inaccurate.

Include copies (NOT originals) of documents with your letter to prove your point.

 

In addition to providing your complete name and address, your letter should clearly identify each item you dispute in your report. Include a statement of the facts, an explanation of why you dispute the information, and your request that it be removed or corrected. You may want to enclose a copy of your report with a circle around the items in question.

 

• Next, tell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute.

 

And if you are correct — that is, if the information in the report is found to be inaccurate — the information provider is not allowed to report it again.

 

For more information about correcting mistakes in your credit report, visit www.ftc.gov/credit and look for How to Dispute Credit Report Errors.

 

http://www.ftc.gov/bcp/conline/edcams/credit/ycr_free_reports.htm Article on Free Credit Reports

http://www.ftc.gov/opa/2006/03/jointprprivacy.shtm Privacy

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre41.shtm Before You File for Bankruptcy

http://www.ftc.gov/bcp/conline/edcams/freereports/index.html Free Credit Reports

http://www.ftc.gov/bcp/conline/pubs/credit/fdc.shtm Fair Debt Collection

http://www.ftc.gov/bcp/conline/pubs/credit/fdc.shtm Military and Identity Theft

http://www.ftc.gov/bcp/conline/pubs/credit/debt.shtm Debt Management “Must Do List”

http://pdfdownload.bofd.net/pdf2html.php?url=http://www.ftc.gov/bcp/conline/pubs/credit/fcrasummary.pdf Fair Credit Reporting Act

http://pdfdownload.tsone.info/pdf2html.php?url=http://www.ftc.gov/bcp/conline/pubs/credit/idtsummary.pdf Remedying the Effects of Identity Theft

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm Disputing Credit Report Errors and Problems

 

 

What if you find accounts that aren’t yours, that you didn’t authorize, or that you didn’t even know existed?

 

Refer to the Identity Theft section on page 31 of this guide.

 

Credit Scoring

Creditors use credit scoring systems to determine if you’re a good risk for a credit card, an auto loan, or a mortgage. Information about you and your credit experiences, such as your bill-paying history, the number and

type of accounts you have, late payments, collection actions, outstanding debt, and how long you’ve had your accounts, is collected from your credit application and your credit report.

 

Using a statistical program, creditors compare this information to the credit performance of consumers with similar

profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt.

 

A total number of points — a credit score — helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments on time.

 

How to Improve Your Credit Score

Credit scoring models are very complicated and often vary among creditors and for different types of credit. If one factor changes, your score may change — but improvement generally depends on how it relates to other factors considered by the model. Only the creditor can explain what might improve your score under the particular model used to evaluate your credit application. Nevertheless, scoring models generally evaluate the following types of information in your credit report:

 

• whether you paid your bills on time

• your outstanding debt

• how long you have been paying bills

• whether you applied for new credit recently

• the number and types of credit accounts you have

 

Using Credit Cards Responsibly

A credit card makes it easy to buy things now and pay for them later. If you’re not careful, you can lose track of how much you’ve spent by the time the bill arrives. And if you don’t pay your entire bill, you’ll probably have to pay finance charges on the unpaid balance.

 

If you continue to charge while you have an outstanding balance, your debt will grow.

 

Before long, your minimum payment will cover only the interest. Not only could it take years to catch up, but you will have paid much more for the items than they originally cost. If you start having trouble repaying your debt, you could harm your credit record.

 

Debt Collection

If you’ve already established your credit history but are having trouble making your monthly payments — or if you’re being contacted by debt collectors — you might feel overwhelmed.

 

But there are things you can do to manage your debt.

 

1. develop a budget: Make a list of how much money you bring in and how much money you spend on a monthly basis. Start by listing your income from all sources.

 

Then, list your “fixed” expenses — those that are the same each month — like mortgage payments or rent, car payments, and insurance premiums. Next, list the expenses that change — like entertainment, recreation, and clothing. Writing down all your expenses, even those that seem insignificant, can help you track your spending patterns, identify necessary expenses, and figure out priorities. The goal is to make sure you can make ends meet on the basics like housing, food, health care, insurance, and education.

 

2. Contact Your Creditors: Contact your creditors immediately if you’re having trouble making your payments. Tell them why it’s difficult for you, and try to work out a modified payment plan that reduces your payments to a level you can manage. Don’t wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you.

 

3. dealing with debt Collectors: The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must stop contacting you if you ask them to in writing. For more information, visit www.ftc.gov/credit and see Fair Debt Collection.

 

4. Credit Counseling: If you’re not disciplined enough to create a workable budget and stick to it, if you can’t work out a repayment plan with your creditors, or if you can’t keep track of mounting bills, consider contacting a credit counseling organization.

 

Reputable credit counseling organizations can advise you on

• managing      your money and debts,
• help      you develop a budget, and
• offer      free educational materials and workshops.
• They      should send you free information about the services they provide without      requiring you to provide any details about your situation.
• If a firm doesn’t do that, consider      it a warning sign and go elsewhere for help.

 

For more information, visit www.ftc.gov/credit  and see Fiscal Fitness: Choosing a Credit Counselor.

 

5. Consolidate Your debt: You may be able to lower your debt payments by consolidating your debt through a second mortgage or a home equity line of credit.

• But      remember that these loans require you to use your home as collateral. If      you can’t make the payments — or if your payments are late — you could      lose your home.
• For      more information, visit www.ftc.gov/credit       and see Knee Deep in Debt.

 

Avoiding Credit Scams

If you are having trouble managing your debt or setting up your first account, you might be tempted by offers that guarantee to provide you with a loan, wipe out negative information on your credit report, or consolidate your debts. Before you do business with any company, check it out with your local consumer protection agency or the Better Business Bureau where the company is located.

 

Some common credit scams involve offers for debt relief, guarantees that you’ll get credit if you pay a fee first, or offers to remove accurate negative information from your credit report.

 

Offers for Debt Relief

If you are trying to get solvent, be on the alert for advertisements that offer quick fixes like these:

 

• “Consolidate your bills into one monthly payment without borrowing”

 

• “STOP credit harassment, foreclosures, repossessions, tax levies and garnishments”

 

• “Keep your property”

 

• “Wipe out your debts! Consolidate your bills! How? By using the protection and assistance provided by federal law. For once, let the law work for you!”

 

These services usually involve filing for bankruptcy relief, which can hurt your credit and cost you attorneys’ fees. If you’re having trouble paying your bills:

 

• talk with your creditors

 

• contact a credit counseling service

 

• consider a second mortgage or home equity line of credit, but remember the risk: if you can’t make the payments, you could lose your home

 

Advance-Fee Loan Scams

Some scam artists target consumers with bad credit or no credit. In exchange for a fee you pay in advance, they “guarantee” that you will get the credit you want as a credit card or a personal loan. The fee you pay in advance may be as high as several hundred dollars.

 

The FTC has shut down many of these companies because they didn’t deliver on their promise. Resist the temptation to follow up on an advance-fee loan guarantee; it may be illegal. A legitimate lender never guarantees in advance that you’ll get a loan.

 

Advance-Fee Loans

Ads for advance-fee loans often appear in the classified ad section of local and national newspapers and magazines. You also may get them in the mail, hear them on the radio, or see them on television.

 

Keep these tips in mind when you see or hear ads that promise easy credit, regardless of your credit history:

 

• Don’t pay for the promise of a loan.

It’s illegal for companies doing business by phone in the

U.S.

to promise you a loan and ask you to pay for it before they deliver.

 

• Ignore any ad — or hang up on any caller — that guarantees a loan in exchange for a fee in advance.

 

• Legitimate lenders do not “guarantee” that you will get a loan or a credit card before you apply, especially if you have bad credit, a bankruptcy on your credit report, or no credit history.

 

• Never give out your credit card account number, bank account information, or Social Security number over the telephone unless you are familiar with the company and know why they need your information.

 

• Don’t make a payment for a loan directly to an individual; no legitimate lender would ask you to do so.

 

• Don’t use a wire transfer service or send money orders for a loan. You have little recourse if there’s a problem with a wire transaction. Legitimate lenders don’t pressure you to wire funds.

 

• If you are not absolutely sure who you are dealing with, get the company’s number from the phone book or directory assistance, and call to make sure you’re dealing with the company you think you are. Some scam artists have pretended to be the Better Business Bureau or another legitimate organization, and some even pay people to pretend to be references.

 

Credit Repair Scams

You see the ads in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services.

 

They all make the same claims:

 

• “Credit problems? No problem!”

 

• “We can erase your bad credit. 100% guaranteed.”

 

• “Create a new credit identity — legally.”

 

• “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

 

Don’t believe these statements. They’re just not true. No one can remove accurate negative information from your credit report.

 

Only time, a conscientious effort, and a plan for repaying your debt will improve your credit report.

 

For more information on these and other important credit issues, visit www.ftc.gov/credit .

 

• Conduct a series of workshops and dedicate one session to each of these topics:

 

• establishing      credit,
• understanding      your credit report,
• credit      scoring,
• using      credit cards responsibly,
• debt      collection, and
• avoiding      credit scams.

 

• Tell your friends, family, and colleagues about their right to get a free credit report. If they want to learn more, give them a copy of Your Access to Free Credit Reports. You can print it from www.ftc.gov/credit or order free copies by calling 1-877-FTC-HELP or visiting www.ftc.gov/bulkorder .

 

If you are considering responding to an offer to “repair” your credit, think again. Don’t do business with any company that:

 

• wants you to pay for credit repair before they provide any services.

 

• does not tell you your legal rights and what you can do for yourself — for free.

 

• recommends that you not contact a consumer reporting company directly.

 

• suggests that you try to invent a “new” credit identity by applying for an Employer Identification Number, and that you use it instead of your Social Security number.

 

This is common and illegal.

 

• advises you to dispute all information in your credit report or take any action that seems illegal, such as creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution.

 

For more information about repairing credit on your own, visit www.ftc.gov/credit  and look for Credit Repair: Self Help May Be Best.

Consumer Alerts

 

 

CREDIT – FTC REPORTS ON HOW CREDIT WORKS AND YOUR RIGHTS

Want a Free Annual Credit Report? The Only Official Website is annualcreditreport.com
[PDF version]
To alert consumers that there is only one website providing free annual credit reports under Federal law: annualcreditreport.com, and to warn consumers about “imposter” sites.

Bogus July 1 Email Exposed: The Real Deal on Your Credit File Privacy
[PDF version]
An anonymous email containing false and misleading information about the use of your personal information has shown up in email in-boxes across the country for the last several years, leaving many consumers concerned and confused. Here's the real deal from the Federal Trade Commission.

Fake Credit Reports: Cashing in on Your Personal Information
[PDF version]
Learn how to protect yourself from a high-tech scam known as “phishing.” Some Web sites or unsolicited emails offering credit reports may be using bogus sites as a way to capture your personal information and sell it to others who may use it to commit fraud, including identity theft.

Negative Credit Can Squeeze a Job Search
[PDF version]

Shopping for a Mortgage? Your Application May Trigger Competing Offers
[PDF version]
Explains how consumers applying for a mortgage may receive competing offers based on prescreening from information in their credit report. Explains how to opt out of prescreening, if you choose. 8.5"x 11", 2 pages.


Facts for Consumers

Building a Better Credit Report
[PDF version]
Learn how to legally improve your credit report, how to deal with debt, how to spot credit-related scams, and more.

Choosing and Using Credit Cards
[PDF version]
Explains credit card terms, how your balance is computed, and how to shop for the best deal. Outlines cardholder protections.

Credit and Divorce
[PDF version]
Encourages recently divorced consumers, and those contemplating divorce, to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits – and pitfalls – of each.

Credit Repair: Self-Help May Be Best
[PDF version]
Explains how you can improve your credit worthiness and lists legitimate resources for low or no-cost help.

Credit Scoring
[PDF version]
Explains the system creditors use to help determine whether to grant you credit.

The Federal Trade Commission Presents Focus on Finances: Preparing For Your Future
[PDF version]
A newspaper supplement to help educate young people about credit, identity theft, and buying a car.

File Segregation: New ID Is a Bad IDea
[PDF version]

Getting Credit: What You Need to Know About Your Credit
[PDF version]
Provides tips on shopping for credit cards, using cards carefully, and keeping your credit record clean. Also explains credit reports and credit scores, how to protect your identity, improve your credit record, and what to do if you are a victim of identity theft.
A good source of information for people learning about credit. Includes a dedicated Web page for more information -- www.ftc.gov/gettingcredit.

Getting Credit When You’re Over 62
[PDF version]
Under the federal Equal Credit Opportunity Act, it’s against the law for a creditor to deny you credit or terminate existing credit simply because of your age. Explains your rights and offers tips for applying for and maintaining credit.

How to Dispute Credit Report Errors
[PDF version]
Explains how to dispute and correct inaccurate information in your credit report. Includes a sample dispute letter.

New ID? Bad IDea: File Segregation Exposed
[PDF version]
You're promised a chance to hide unfavorable credit information by establishing a new credit identity. The problem: "File segregation" is illegal. If you use it, you could face fines or even a prison sentence.

Prescreened Offers of Credit and Insurance
[PDF version]
Many companies that solicit new credit card accounts and insurance policies use prescreening to identify potential customers for the products they offer.

Summary of Your Rights Under the Fair Credit Reporting Act
[PDF version]

Remedying the Effects of Identity Theft
[PDF version]

Your Access to Free Credit Reports (also in Spanish)
[PDF version]
Educates consumers about their right to a free copy of their credit reports. The brochure outlines the nine-month roll-out period beginning with the Western states on December 1, 2004; explains the ordering process by Web, toll-free telephone number, and postal address; and includes a copy of the standard credit report request form. The brochure also discusses other consumer rights under the federal Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act (FACT Act).

 

 

Information Security

 

Identity Theft

Practicing Online Safety

Phishing Emails

Spyware

Email Viruses and

Worms

Internet Auctions

-----------------------------------------------------------------------------------------------------------------

 

 

Information security 

Defend -Defend against ID theft as soon as you suspect it.

• Place a “Fraud Alert” on your credit reports, and review the reports carefully.

• Close any accounts that have been tampered with or established fraudulently.

• File a report with law enforcement officials to help you with creditors who may want proof of the crime.

• Report the theft to the FTC at www.ftc.gov/idtheft  or 1-877-Id-THEFT.

Your report helps law enforcement officials across the country in their investigations.

 

--------------

 

how Id theft can happen

Skilled identity thieves use a variety of methods to steal your personal information, including:

 

1. dumpster diving. They rummage through trash looking for bills or other paper with your personal information on it.

 

2. Skimming. They steal credit or debit card numbers by using a special storage device when processing your card.

 

3. Phishing. They pretend to be financial institutions or companies and email spam or send pop-up messages to get you to reveal your personal information.

 

4. Changing Your Address. They divert your billing statements to another location by completing a “change of address” form.

 

5. “old-Fashioned” Stealing. They steal wallets and purses; mail, including bank and credit card statements; preapproved credit offers; and new checks or tax information. They steal personnel records from their employers, or bribe employees who have access.

 

-----

 

To learn more about how to Deter, Detect and Defend against identity theft, visit www.ftc.gov/idtheft.

 

For tips on how to talk to others in your community about identity theft, get the FTC’s ID Theft Consumer Education Kit at www.ftc.gov/idtheft . This kit includes tips on getting the word out at work, in your community, and through the media. It has materials to use when you speak to others about identity theft.

 

Practicing Online Safety

Access to information and entertainment, credit and financial services, products from every corner of the world — even to your work — is greater than earlier generations could ever have imagined. Thanks to the Internet, you can order books, clothes, or appliances online; reserve a hotel room across the ocean; download music and games; check your bank balance 24 hours a day; or access your workplace from thousands of miles away.

 

The flipside is that the Internet — and the anonymity it affords — also can give online scammers, hackers, and identity thieves access to your computer, personal information, finances, and more.

 

If you are aware of and know how to protect yourself against certain online scams, like phishing emails, spyware, and viruses and worms, you can reduce your chances of falling victim to them or having them damage your computer.

 

Phishing Emails

Phishing is a scam where Internet fraudsters send spam or pop-up messages to lure personal and financial information from unsuspecting victims.

 

To avoid a phishing scam, don’t reply to email or pop-up messages that ask for personal or financial information, and don’t click on links in the message. Don’t cut and paste a link from the message into your

web browser — phishers can make links look like they go one place, but that actually send you to a different site.

 

Some scammers send an email that appears to be from a legitimate business and ask you to call a phone number to update your account or access a “refund.” Because they use Voice Over

Internet Protocol technology, the area code you call does not reflect where the scammers really are. If you need to reach an organization you do business with, call the number on your financial statements or on the back of your credit card, or type in the web address yourself.

 

Forward spam that is “phishing” for information to spam@uce.gov and to the company, bank, or organization impersonated in the phishing email. Most organizations have information on their websites about where to report these kinds of problems.

 

Spyware

Many free downloads — whether from people you know or businesses you don’t — come with potentially undesirable side effects.

 

Spyware is software installed without your knowledge or consent that adversely affects your ability to use your computer, sometimes by monitoring or controlling how you use it.

 

To avoid spyware, resist the urge to install any software unless you know exactly what it is. Your anti-virus software may include anti-spyware capability that you can activate.

 

If it doesn’t, install separate anti-spyware software, and use it regularly to scan for and delete any spyware programs that may sneak onto your computer.

 

Email Viruses and

Worms

Most viruses sent over email or instant messenger won’t damage your computer without your participation. For example, you would have to open an email or attachment that includes a virus or follow a link to a site that is programmed to infect your computer.

 

So hackers often lie to get you to open the email attachment or click on a link. Some virus-laden emails look like they come from a friend or colleague;

 

some have an appealing file name, like.....

 

“Fwd: FUNNY” or “Per your request!”; others promise to clean a virus off your computer if you open it or follow the link — but instead infect your computer with a virus.

 

Don’t open an email or attachment — even if it appears to be from a friend or coworker — unless you are expecting it or know what it contains. You can help others trust your attachments by including a text message explaining what you’re attaching.

 

Internet Auctions

Internet auction sites are a great resource for buyers and sellers. They give buyers a “virtual” flea market with new and used merchandise from around the world, and they give sellers a global storefront from which to market their goods. But the online auction business can be risky business.

 

Here’s how to use these sites wisely:

 

• Evaluate how soon you need to receive the item you’re bidding on, and whether you can tolerate it being delivered late, or not at all. Many complaints about Internet auctions fraud involve late shipments, no shipments, or shipments of products that aren’t the same quality as advertised.

 

• Carefully consider your method of payment.

Learn what recourse you have if something goes wrong. Don’t send cash, and don’t use a money wiring service.

 

• Know who you’re dealing with. Avoid doing business with sellers you can’t identify, especially those who try to lure you off the auction site with promises of a better deal. Confirm the seller’s telephone number in case you have questions or problems.

 

Teach Your Kids

 

Online Safety

As a parent, you can teach your kids how to be safe online. Use the Internet with them and talk to them about their online habits, like the use of social networking sites. Tell them why it’s important to keep their name, Social Security number, address, and phone number to themselves.

 

For more tips, visit www.onGuardonline.gov/socialnetworking.html .

 

To learn more about how to be on guard when you’re online and other issues like wireless network security, social networking sites, scams sent through spam, online shopping, peer-to-peer (P2P) file sharing, Internet-based telephone service (VoIP), and cross-border scams, visit www.onGuardonline.gov .

 

• Gather your friends, family, or colleagues and test your online knowledge by playing the interactive games and quizzes at www.onGuardonline.gov/quiz.

 

• Host a training session using the tutorials and videos at www.onGuardonline.gov/tutorials.

 

• Know exactly what you’re bidding on. Read and print a copy of the seller’s description of the product closely, especially the fine print. Save copies of all emails you send and receive from the auction site or seller, too.

 

Seven Tips for Online Safety

You can reduce the chance of an Internet mishap by following these tips.

 

1. Protect your personal information. It’s valuable. To minimize your risk of identity theft, don’t share your personal information unless you know how it will be used and protected. Don’t reply to — or click on — links in any email asking for your personal information.

 

2. Know who you’re dealing with. When shopping online, look for a seller’s physical address and a telephone number. Call to see if the number works. Before you download free software or programs, read the fine print — some downloads come with spyware.

 

3. use anti-virus and anti-spyware software, as well as a firewall, and update them all regularly. Look for anti-virus software that removes or quarantines viruses, and for anti-spyware that can undo changes spyware makes to your system. Make sure your firewall is on and set up properly. If your firewall was shipped in the “off” mode, turn it on.

 

4. be sure to set up your operating system and web browser software properly. Select security settings high enough to reduce your risk of being hacked. Make sure to regularly update your system with the latest patches.

 

5. Protect your passwords. Keep your passwords in a secure place, and don’t share them on the Internet, over email, or on the phone. When it comes to passwords, longer is better.

 

6. back up important files. If you have important files stored on your computer, copy them onto a removable disc, and store it in a safe place.

 

7. Learn who to contact if something goes wrong online.

 

Visit www.onGuardonline.gov  to learn how to respond if problems occur when you’re online.

Home Sweet Home Improvement

 

Whether you're planning an addition for a growing family or simply getting new storm windows, finding a competent and reliable contractor is the first step to a successful and satisfying home improvement project.

Your home may be your most valuable financial asset. That's why it's important to be cautious when you hire someone to work on it. Home improvement and repair and maintenance contractors often advertise in newspapers, the Yellow Pages, and on the radio and TV. However, don't consider an ad an indication of the quality of a contractor's work. Your best bet is a reality check from those in the know: friends, neighbors, or co-workers who have had improvement work done. Get written estimates from several firms. Ask for explanations for price variations. Don't automatically choose the lowest bidder.

Home Improvement Professionals

Depending on the size and complexity of your project, you may choose to work with a number of different professionals:

" General Contractors manage all aspects of your project, including hiring and supervising subcontractors, getting building permits, and scheduling inspections. They also work with architects and designers.

" Speciality Contractors install particular products, such as cabinets and bathroom fixtures.

" Architects design homes, additions, and major renovations. If your project includes structural changes, you may want to hire an architect who specializes in home remodeling.

" Designers have expertise in specific areas of the home, such as kitchens and baths.

" Design/Build Contractors provide one-stop service. They see your project through from start to finish. Some firms have architects on staff; others use certified designers.

Don't Get Nailed

Not all contractors operate within the law. Here are some tip-offs to potential rip-offs. A less than reputable contractor:

" solicits door-to-door;

" offers you discounts for finding other customers;

" just happens to have materials left over from a previous job;

" only accepts cash payments;

" asks you to get the required building permits;

" does not list a business number in the local telephone directory;

" tells you your job will be a "demonstration;"

" pressures you for an immediate decision;

" offers exceptionally long guarantees;

" asks you to pay for the entire job up-front;

" suggests that you borrow money from a lender the contractor knows. If you're not careful, you could lose your home through a home improvement loan scam.

Hiring a Contractor

Interview each contractor you're considering. Here are some questions to ask.

" How long have you been in business? Look for a well-established company and check it out with consumer protection officials. They can tell you if there are unresolved consumer complaints on file. One caveat: No record of complaints against a particular contractor doesn't necessarily mean no previous consumer problems. It may be that problems exist, but have not yet been reported, or that the contractor is doing business under several different names.

" Are you licensed and registered with the state? While most states license electrical and plumbing contractors, only 36 states have some type of licensing and registration statutes affecting contractors, remodelers, and/or specialty contractors. The licensing can range from simple registration to a detailed qualification process. Also, the licensing requirements in one locality may be different from the requirements in the rest of the state. Check with your local building department or consumer protection agency to find out about licensing requirements in your area. If your state has licensing laws, ask to see the contractor's license. Make sure it's current.

" How many projects like mine have you completed in the last year? Ask for a list. This will help you determine how familiar the contractor is with your type of project.

" Will my project require a permit? Most states and localities require permits for building projects, even for simple jobs like decks. A competent contractor will get all the necessary permits before starting work on your project. Be suspicious if the contractor asks you to get the permit(s). It could mean that the contractor is not licensed or registered, as required by your state or locality.

" May I have a list of references? The contractor should be able to give you the names, addresses, and phone numbers of at least three clients who have projects similar to yours. Ask each how long ago the project was completed and if you can see it. Also, tell the contractor that you'd like to visit jobs in progress.

" Will you be using subcontractors on this project? If yes, ask to meet them, and make sure they have current insurance coverage and licenses, if required. Also ask them if they were paid on time by this contractor. A "mechanic's lien" could be placed on your home if your contractor fails to pay the subcontractors and suppliers on your project. That means the subcontractors and suppliers could go to court to force you to sell your home to satisfy their unpaid bills from your project. Protect yourself by asking the contractor, and every subcontractor and supplier, for a lien release or lien waiver.

" What types of insurance do you carry? Contractors should have personal liability, worker's compensation, and property damage coverage. Ask for copies of insurance certificates, and make sure they're current. Avoid doing business with contractors who don't carry the appropriate insurance. Otherwise, you'll be held liable for any injuries and damages that occur during the project.

Checking References

Talk with some of the remodeler's former customers. They can help you decide if a particular contractor is right for you. You may want to ask:

" Can I visit your home to see the completed job?

" Were you satisfied with the project? Was it completed on time?

" Did the contractor keep you informed about the status of the project, and any problems along the way?

" Were there unexpected costs? If so, what were they?

" Did workers show up on time? Did they clean up after finishing the job?

" Would you recommend the contractor?

" Would you use the contractor again?

Understanding Your Payment Options

You have several payment options for most home improvement and maintenance and repair projects. For example, you can get your own loan or ask the contractor to arrange financing for larger projects. For smaller projects, you may want to pay by check or credit card. Avoid paying cash. Whatever option you choose, be sure you have a reasonable payment schedule and a fair interest rate. Here are some additional tips:

" Try to limit your down payment. Some state laws limit the amount of money a contractor can request as a down payment. Contact your state or local consumer agency to find out what the law is in your area.

" Try to make payments during the project contingent upon completion of a defined amount of work. This way, if the work is not proceeding according to schedule, the payments also are delayed.

" Don't make the final payment or sign an affidavit of final release until you are satisfied with the work and know that the subcontractors and suppliers have been paid. Lien laws in your state may allow subcontractors and/or suppliers to file a mechanic's lien against your home to satisfy their unpaid bills. Contact your local consumer agency for an explanation of lien laws where you live.

" Some state or local laws limit the amount by which the final bill can exceed the estimate, unless you have approved the increase. Check with your local consumer agency.

" If you have a problem with merchandise or services that you charged to a credit card, and you have made a good faith effort to work out the problem with the seller, you have the right to withhold from the card issuer payment for the merchandise or services. You can withhold payment up to the amount of credit outstanding for the purchase, plus any finance or related charges.

The "Home Improvement" Loan Scam

 

A contractor calls or knocks on your door and offers to install a new roof or remodel your kitchen at a price that sounds reasonable. You tell him you're interested, but can't afford it. He tells you it's no problem - he can arrange financing through a lender he knows. You agree to the project, and the contractor begins work. At some point after the contractor begins, you are asked to sign a lot of papers. The papers may be blank or the lender may rush you to sign before you have time to read what you've been given to sign. You sign the papers. Later, you realize that the papers you signed are a home equity loan. The interest rate, points and fees seem very high. To make matters worse, the work on your home isn't done right or hasn't been completed, and the contractor, who may have been paid by the lender, has little interest in completing the work to your satisfaction.

You can protect yourself from inappropriate lending practices. Here's how.

Don't:

" Agree to a home equity loan if you don't have enough money to make the monthly payments.

" Sign any document you haven't read or any document that has blank spaces to be filled in after you sign.

" Let anyone pressure you into signing any document.

" Deed your property to anyone. First consult an attorney, a knowledgeable family member, or someone else you trust.

" Agree to financing through your contractor without shopping around and comparing loan terms.

Getting a Written Contract

Contract requirements vary by state. Even if your state does not require a written agreement, ask for one. A contract spells out the who, what, where, when and cost of your project. The agreement should be clear, concise and complete. Before you sign a contract, make sure it contains:

" The contractor's name, address, phone, and license number, if required.

" The payment schedule for the contractor, subcontractors and suppliers.

" An estimated start and completion date.

" The contractor's obligation to obtain all necessary permits.

" How change orders will be handled. A change order - common on most remodeling jobs - is a written authorization to the contractor to make a change or addition to the work described in the original contract. It could affect the project's cost and schedule. Remodelers often require payment for change orders before work begins.

" A detailed list of all materials including color, model, size, brand name, and product.

" Warranties covering materials and workmanship. The names and addresses of the parties honoring the warranties - contractor, distributor or manufacturer - must be identified. The length of the warranty period and any limitations also should be spelled out.

" What the contractor will and will not do. For example, is site clean-up and trash hauling included in the price? Ask for a "broom clause." It makes the contractor responsible for all clean-up work, including spills and stains.

" Oral promises also should be added to the written contract.

" A written statement of your right to cancel the contract within three business days if you signed it in your home or at a location other than the seller's permanent place of business. During the sales transaction, the salesperson (contractor) must give you two copies of a cancellation form (one to keep and one to send back to the company) and a copy of your contract or receipt. The contract or receipt must be dated, show the name and address of the seller, and explain your right to cancel.

Keeping Records

Keep all paperwork related to your project in one place. This includes copies of the contract, change orders and correspondence with your home improvement professionals. Keep a log or journal of all phone calls, conversations and activities. You also might want to take photographs as the job progresses. These records are especially important if you have problems with your project - during or after construction.

Completing the Job: A Checklist

Before you sign off and make the final payment, use this checklist to make sure the job is complete. Check that:

" All work meets the standards spelled out in the contract.

" You have written warranties for materials and workmanship.

" You have proof that all subcontractors and suppliers have been paid.

" The job site has been cleaned up and cleared of excess materials, tools and equipment.

" You have inspected and approved the completed work.

Where to Complain

If you have a problem with your home improvement project, first try to resolve it with the contractor. Many disputes can be resolved at this level. Follow any phone conversations with a letter you send by certified mail. Request a return receipt. That's your proof that the company received your letter. Keep a copy for your files.

If you can't get satisfaction, consider contacting the following organizations for further information and help:

" State and local consumer protection offices.

" Your state or local Builders Association and/or Remodelors Council.

" Your local Better Business Bureau.

" Action line and consumer reporters. Check with your local newspaper, TV, and radio stations for contacts.

" Local dispute resolution programs.

For More Information

o Federal Trade Commission: www.ftc.gov

o National Association of Home Builders Remodelors™ Council: www.nahb.com

To order a free copy of How to Find a Professional Remodeler, send a self-addressed stamped envelope to:

 

NAHB Remodelors Council

Dept. FT

1201 15th Street, NW

Washington

,

DC

20005

o National Association of Consumer Agency Administrators: www.nacaanet.org

 

1010 Vermont Avenue, NW

Suite 514

Washington, DC 20005

E-mail: nacaa@erols.com 

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

 

Bankruptcy - Learn the basics

 

This section provides information about bankruptcy but is not the same as legal advice (the application of law to an individual's specific circumstances). We recommend you consult a lawyer if you want assistance with bankruptcy and whether it is appropriate to your particular situation. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, people who plan to file for bankruptcy protection, with limited exceptions, must get credit counseling from a government-approved organization within six months before they file. They also must complete a debtor education course from an approved provider to have their debts discharged. If you are looking for more information on bankruptcy options, go to: www.usdoj.gov/ust/eo/bapcpa/ccde/index.htm If you are thinking of Bankruptcy consider these facts: What is Bankruptcy? Bankruptcy is a proceeding in a federal court in which an insolvent debtor's assets are liquidated and the debtor is relieved of further liability. Chapter 7 deals with liquidation, while Chapter 13 deals with reorganization. If you have questions concerning bankruptcy, you should seek the advice of a licensed bankruptcy attorney. Also, see www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html Types of Bankruptcy Chapter 7 bankruptcy is when the court appoints a Trustee who may liquidate or sell some things that you own to pay your creditors. Most of your debt will be canceled, but you may choose to pay some creditors, usually to keep a car or home in which the creditor has a lien. Chapter 13 bankruptcy is when your debt is reorganized into a single monthly payment. The payment will continue for 36 to 60 months. In no case may a plan provide for payments over a period longer than five years. You do not have to repay all of your debt. You pay only as much as you can afford, but the minimum payment may be affected by property you want to keep. When you complete the payments, debt not paid is discharged. Does Bankruptcy eEliminate Debt? Filing bankruptcy does not necessarily eliminate all debts, and often simply restructures existing debts - this leaves you responsible for all future payments. Filing bankruptcy also stays with you for up to 10 years and you may have difficulty getting any type of loan. Bankruptcy is public record and will be reflected on your credit report but not permanently. Is Bankruptcy the Best Solution? Anyone who is considering bankruptcy needs to fully understand the process and the laws surrounding bankruptcy. Questions about bankruptcy should be addressed by a licensed bankruptcy attorney. Alternatives to Bankruptcy There are alternatives to bankruptcy and you can avoid bankruptcy with outside help. It is important to get early advice about bankruptcy if you are hoping to use the bankruptcy process to save your home or your car. To locate an approved pre-bankruptcy agency and also a post debtor education agency, you visit the U.S. Trustees Program at  at www.usdoj.gov/ust. By law, the U.S. Trustee Program does not operate in Alabama and North Carolina; in these states, court officials called Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations and pre-discharge debtor education course providers. Click here for more information on the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Looking for a Bankruptcy Attorney Are you looking for bankruptcy information or to locate an attorney in your area? There are a number of methods to find legal counsel, including your local bar association. NACBA is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. For more information go to: www.nacba.org or to select a bankruptcy attorney by location go to: Attorney Finder ecomm.nacba.org

Credit Report Links - FTC

Consumer Alerts

Want a Free Annual Credit Report? The Only Official Website is annualcreditreport.com
[PDF version]
To alert consumers that there is only one website providing free annual credit reports under Federal law: annualcreditreport.com, and to warn consumers about “imposter” sites.

Bogus July 1 Email Exposed: The Real Deal
on Your Credit File Privacy
[PDF version]
An anonymous email containing false and misleading information about the use of your personal information has shown up in email in-boxes across the country for the last several years, leaving many consumers concerned and confused. Here's the real deal from the Federal Trade Commission.

Fake Credit Reports: Cashing in on Your Personal Information
[PDF version]
Learn how to protect yourself from a high-tech scam known as “phishing.” Some Web sites or unsolicited emails offering credit reports may be using bogus sites as a way to capture your personal information and sell it to others who may use it to commit fraud, including identity theft.

Negative Credit Can Squeeze a Job Search
[PDF version]

Shopping for a Mortgage? Your Application May Trigger Competing Offers
[PDF version]
Explains how consumers applying for a mortgage may receive competing offers based on prescreening from information in their credit report. Explains how to opt out of prescreening, if you choose. 8.5"x 11", 2 pages.


Facts for Consumers

Building a Better Credit Report
[PDF version]
Learn how to legally improve your credit report, how to deal with debt, how to spot credit-related scams, and more.

Choosing and Using Credit Cards
[PDF version]
Explains credit card terms, how your balance is computed, and how to shop for the best deal. Outlines cardholder protections.

Credit and Divorce
[PDF version]
Encourages recently divorced consumers, and those contemplating divorce, to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits – and pitfalls – of each.

Credit Repair: Self-Help May Be Best
[PDF version]
Explains how you can improve your credit worthiness and lists legitimate resources for low or no-cost help.

Credit Scoring
[PDF version]
Explains the system creditors use to help determine whether to grant you credit.

The Federal Trade Commission Presents Focus on Finances: Preparing For Your Future
[PDF version]
A newspaper supplement to help educate young people about credit, identity theft, and buying a car.

File Segregation: New ID Is a Bad IDea
[PDF version]

Getting Credit: What You Need to Know About Your Credit
[PDF version]
Provides tips on shopping for credit cards, using cards carefully, and keeping your credit record clean. Also explains credit reports and credit scores, how to protect your identity, improve your credit record, and what to do if you are a victim of identity theft.
A good source of information for people learning about credit. Includes a dedicated Web page for more information -- www.ftc.gov/gettingcredit.

Getting Credit When You’re Over 62
[PDF version]
Under the federal Equal Credit Opportunity Act, it’s against the law for a creditor to deny you credit or terminate existing credit simply because of your age. Explains your rights and offers tips for applying for and maintaining credit.

How to Dispute Credit Report Errors
[PDF version]
Explains how to dispute and correct inaccurate information in your credit report. Includes a sample dispute letter.

New ID? Bad IDea: File Segregation Exposed
[PDF version]
You're promised a chance to hide unfavorable credit information by establishing a new credit identity. The problem: "File segregation" is illegal. If you use it, you could face fines or even a prison sentence.

Prescreened Offers of Credit and Insurance
[PDF version]
Many companies that solicit new credit card accounts and insurance policies use prescreening to identify potential customers for the products they offer.

Summary of Your Rights Under the Fair Credit Reporting Act
[PDF version]

Remedying the Effects of Identity Theft
[PDF version]

Your Access to Free Credit Reports (also in Spanish)
[PDF version]
Educates consumers about their right to a free copy of their credit reports. The brochure outlines the nine-month roll-out period beginning with the Western states on December 1, 2004; explains the ordering process by Web, toll-free telephone number, and postal address; and includes a copy of the standard credit report request form. The brochure also discusses other consumer rights under the federal Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act (FACT Act).

Credit Rating and Establishing Credit - FTC

Credit Rating

The decisions you make now about how you
manage your finances and handle money and
credit can affect your ability to borrow money
in the future, as well as the cost of borrowing
that money.

They also can affect your ability
to rent or buy a place to live, get auto or life
insurance, or even get a job. The more you
know about credit, the better prepared you
will be to manage your finances and establish
a solid financial foundation.

When you get credit, you are borrowing
money from a lender, and you have to pay
back that money — usually with interest. You
can get credit in many different ways: through
a credit card, a personal loan, an educational
loan, an automobile loan, or a home mortgage.

It’s important to maintain a good credit
record because it can affect how much you
pay to borrow money. If you have a good record,
it means that you are a good candidate
for a loan — based on your history of paying
bills, your job history, and your salary — and
it will be easier for you to get loans at lower
interest rates. That usually translates into
lower monthly payments.

If you have a poor credit history, however, it
can be a big problem.

A poor credit history
usually results from making payments late or
borrowing too much money, and it can mean
two things:

1) that you might have trouble
getting a

• car loan, a credit card,
• a place to live and, sometimes,
• a job or

2) that you will pay a lot to get the loans you need.

Establishing Credit

Suppose you never financed a car, a computer,
or some other major purchase. How do
you begin to establish credit?

• Consider applying for a secured credit card.
It requires you to open and maintain a bank
account or other account at a financial
institution as security for your line of
credit. Your credit line will be a percentage
of your deposit, typically from 50 to 100
percent. Application and processing fees
are common for secured credit cards. In
addition, secured credit cards usually carry
higher interest rates than traditional nonsecured
cards.

• You might apply for a credit card issued
by a local store; local businesses often are
more willing than national chains to extend
credit to someone with no credit history.
Once you establish a pattern of paying
these bills on time, major creditors might
be more willing to extend credit to you.

• Consider asking someone with an
established credit history — perhaps a
relative — to co-sign the account if you don’t
qualify for credit on your own. The co-signer
promises to pay your debts if you don’t.
You’ll want to repay any debt promptly so
you can build a credit history and apply for
credit in the future on your own.

• If your application for credit is turned down,the creditor must tell you why.
It may be that you haven’t been at your current address or
job long enough. Or your income may not be
high enough. Different credit card companies
have different standards. But if several
companies turn you down, it may indicate
that you are not ready for the responsibilities
that come with getting credit.

Table of Contents - FTC

Table of ConTenTs
Managing Your Finances............................................................................. 1
Credit ...................................................................................................... 1
Establishing Credit ......................................................................... 1
Understanding Your Credit Report ............................................... 2
Credit Scoring ................................................................................. 3
Using Credit Cards Responsibly ................................................... 3
Debt Collection ............................................................................... 3
Avoiding Credit Scams ................................................................... 4
Major Purchases and Investments............................................................. 7
Buying a Home ...................................................................................... 7
Renovating or Repairing Your Home ................................................ 11
Buying a Car ......................................................................................... 13
Franchises and Other Business Opportunities ............................... 15
A College Education ............................................................................ 16
Paying for Funeral Goods and Services............................................ 18
Your Consumer Rights .............................................................................. 19
Mail and Telephone Order Sales....................................................... 19
Door-to-Door Sales .............................................................................. 19
Billing Errors ........................................................................................ 20
Unordered Merchandise .................................................................... 20
Resolving Disputes ............................................................................. 21
Reducing Unwanted Telemarketing Calls ......................................... 22
Avoiding Scams and Rip-Offs .................................................................... 23
Current Scams..................................................................................... 23
Work-at-Home Scams ................................................................... 23
International Driver’s License Scams ........................................ 26
Green Card/Visa Lottery Scams .................................................. 26
Vacation Package Scams ............................................................. 27
Misleading Health and Weight Loss Claims ..................................... 29
Medical Clinics ............................................................................. 30
Weight Loss Claims...................................................................... 30
Information Security ................................................................................. 31
Identity Theft ....................................................................................... 31
Practicing Online Safety..................................................................... 32
Phishing Emails ............................................................................ 33
Spyware......................................................................................... 33
Email Viruses and Worms ............................................................ 33
Internet Auctions ......................................................................... 33
More Resources from the Federal Trade Commission (FTC) ............... 35
How to Order Publications ................................................................ 35
Filing a Consumer Complaint ............................................................ 35