How may a debt collector contact you?

A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

Vehicle Repossession

When you finance or lease a car, truck or other vehicle, your creditor or lessor holds important rights on the vehicle until you’ve made the last loan payment or fully paid off your leasing obligation. These rights are established by the signed contract and by state law. For example, if your payments are late or you default on your contract in any way, your creditor or lessor may have the right to repossess your car. In many states, creditors or lessors can do this legally without going to court or warning you in advance, as long as they do not breach the peace. In addition, your creditor or lessor may be able to sell your contract to a third party, called an assignee, who may have the same rights and responsibilities as the original creditor or lessor.

However, some state laws limit the ways a creditor or lessor can repossess and sell a vehicle to reduce or eliminate your debt. If any rules are violated, the creditor or lessor may be required to pay you damages.

Fraud: Help for Avoiding Foreclosures?

The fraudster goes through records at the local courthouse listing homes facing foreclosure. He or she then contacts the homeowners and offers assistance to prevent the foreclosure from taking place. Instead, the homeowner is then tricked into signing documents that, in the fine print, transfer the ownership of the property to the fraudster.

Before You Buy...

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 varied road conditions — on hills, highways, and in stop-and-go-traffic;

-ask for the car’s maintenance record from the owner, dealer, or repair shop; and

-hire a mechanic to inspect the car.

Where Do the Consumer Reporting Agencies Get Their Information?

Credit bureaus collect information from parties that have previously extended credit to you, such as a department store that issued you a credit card or a bank that granted you a personal loan.

Who is a debt collector?

A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.

Can you stop a debt collector from contacting you?

You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if you actually owe it. You could still be sued by the debt collector or your original creditor.

Legitimate Cards

Legitimate cards follow standard specifications as to color, tint, quality, and style. Stamped letters and numbers are spaced evenly and sized equally. The signature panel is uniform in size and is almost impossible to scrape off.

Car Ads: Reading Between the Lines

Many new car dealers advertise unusually low interest rates and other special promotions. Ads promising high trade-in allowances and free or low-cost options may help you shop, but finding the best deal requires careful comparisons.

Many factors determine whether a special offer provides genuine savings. The interest rate, for example, is only part of the car dealer’s financing package. Terms like the size of the downpayment also affect the total financing cost.

Loan or Mortgage Fraud

These typically involve unscrupulous "predatory" lenders (typically from the non-bank or home improvement industries) that use false or misleading sales tactics to make high-cost loans to consumers in need of cash, including older homeowners concerned about paying bills. Victims often can't afford the loan, and they may be pressured to refinance a loan repeatedly and pay high fees each time – a scam known as "loan flipping." Borrowers who pledge their house as collateral and can't repay the loan could lose the home in a foreclosure.

Getting Credit When You’re Over 62

Credit is an important money management tool for both young and older consumers. Yet the elderly, particularly older women, may find it difficult to get credit.

If you’re an older consumer who has paid with cash all your life, you may find it difficult to open a credit account. That’s because you have “no credit history” of how you paid on credit. If your income has decreased, you may find it harder to get a loan because you have “insufficient income.” Or, if your spouse dies, you may find creditors trying to close joint accounts. A “joint account” is one for which both spouses applied and signed the credit agreement.

Under the federal Equal Credit Opportunity Act (ECOA), it’s against the law for a creditor to deny you credit or terminate existing credit simply because of your age.

If Your Spouse Dies

Under the ECOA, a creditor cannot automatically close or change the terms of a joint account solely because of the death of your spouse. A creditor may ask you to update your application or reapply. This can happen if the account was originally based on all or part of your spouse’s income and if the creditor has reason to believe your income alone cannot support the credit line.

After you submit a re-application, the creditor will determine whether to continue to extend you credit or change your credit limits. Your creditor must respond in writing within 30 days of receiving your application. During that time, you can continue to use your account with no new restrictions. If you’re application is rejected, you must be given specific reasons, or told of your right to get this information.
These protections also apply when you retire, reach age 62 or older, or change your name or marital status.

Credit Card Blocking: What is it?

When you use a credit or debit card to check into a hotel or rent a car, the clerk usually contacts the company that issued your card to give an estimated total. If the transaction is approved, your available credit (credit card) or the balance in your bank account (debit card) is reduced by this amount. That's a "block." Some companies also call this placing a "hold" on those amounts.

Here's how it works: Suppose you use a credit or debit card when you check into a $100-a-night hotel for five nights. At least $500 would likely be blocked. In addition, hotels and rental car companies often add anticipated charges for "incidentals" like food, beverages, or gasoline to the blocked amount. These incidental amounts can vary widely among merchants.

If you pay your bill with the same card you used when you checked in, the final charge on your credit card, or final amount on your debit card, probably will replace the block in a day or two. However, if you pay your bill with a different card, or with cash or a check, the company that issued the card you used at check-in might hold the block for up to 15 days after you've checked out. That's because they weren't notified of the final payment and didn't know you paid another way.

What happens while my bill is in dispute?

You may withhold payment on the disputed amount (and related charges), during the investigation. You must pay any part of the bill not in question, including finance charges on the undisputed amount.

The creditor may not take any legal or other action to collect the disputed amount and related charges (including finance charges) during the investigation. While your account cannot be closed or restricted, the disputed amount may be applied against your credit limit.

Loss of Multiple Cards

While shopping, you can easily be targeted by pickpockets. If your purse or wallet is stolen, you may lose all your credit cards at one time.

Separate your cards. Only carry those cards with you that you plan to use. Also, check your cards from time to time and put aside those cards you don't use very often.

Buying A Used Car: Cash or Credit?

Once you’ve settled on a particular car, you have two payment options: paying in full or financing over time. Financing increases the total cost of the car because you’re also paying for the cost of credit, including interest and other loan costs. You also must consider how much money you can put down, the monthly payment, the loan term, and the Annual Percentage Rate (APR). Rates usually are higher and loan periods shorter on used cars than on new ones. Dealers and lenders offer a variety of loan terms. Shop around and help your teenager negotiate the best possible deal. Be cautious about financing offers for first-time buyers. They can require a big down payment and a high APR. To get a lower rate, you may decide to cosign the loan for your teen. If money is tight, you might consider paying cash for a less expensive car than you first had in mind.

Rule of 78

This method uses tables based on a mathematical formula to determine how much interest you have paid at any point during a loan. It requires that you pay more interest at the beginning of a loan when you have the use of more of the money and that you pay less interest as the debt is reduced. Since all of your payments are the same in amount, the amount of your payment that is going toward the principal increases while the amount going toward interest decreases. State law may mandate the use of the Rule of 78.

Generally, the longer the term of a loan and the higher the interest rate, the less favorable the Rule of 78 is to borrowers who wish to pay off early.

Who Decides whether or not to Grant You a Loan?

The lenders themselves make the decision about whether or not to grant you credit. The credit-reporting companies only supply the information about your credit history.

Strange Requests for Your PIN Numbers

This form of fraud involves thieves who find creative ways to steal your credit or debit cards when you don't know about it. For example, sometimes people crawl behind rows in movie theaters and steal pocketbooks while you are watching a movie. When you return home they call you, identify themselves as bank security agents, and ask for your PIN numbers. If you hesitate, they simply ask you to phone their supervisor and give you an accomplice's phone number to call. By doing so, they are able to get your PIN numbers and use the stolen debit cards to withdraw cash and make purchases.

Again, never reveal your PIN number to anyone. Also, never keep your PIN number in your purse or wallet. Don't write your PIN on your card either. Always try to memorize it.

Altered Cards

Altered cards are made from actual cards. The original stamped data is melted down or pressed out. Then, the card is re-stamped with legitimate account numbers, names, and expiration dates, which have been illegally obtained. On altered cards, the letters do not line up well and are usually irregular in size. Some credit card companies help merchants identify altered cards by making an authenticator machine available to merchants. The machine authenticates or verifies certain information that is encoded on the back stripe on the back of the card.

Changed Circumstances

The terms of your credit cannot be changed simply because your life circumstances do. For example, the length, interest, or other features of loans cannot be changed; you cannot be forced to reapply for a loan; and you cannot be terminated because you change your name or marital status, reach a certain age, or retire.

Counterfeit Cards

Counterfeiters make most counterfeit cards by silkscreening or painting the card logo and issuing institution's name onto a blank piece of card plastic. Because they are silkscreened, the cards don't look exactly like the real thing. Real credit cards are printed. Also, the signature panel on silkscreened cards may be glued or painted on and can be easily lifted or chipped. This panel may also appear uneven in size or placement.

Unsigned Credit Cards

Stealing and using credit cards that have not been signed is another potential fraud. In other words, credit card thieves could steal your unsigned credit cards and then sign your name on the card in their handwriting. By doing so, they take your name as an alias and they will never have a problem writing and verifying their own signature.

Protect your credit cards. When you receive a new or replacement card, sign the back of it as soon as it is activated. Always be sure to store it in a safe place. Cut up expired cards before disposing of them.

Fraudulent Telemarketers

Watch out for fraudulent telemarketers! They may start with a postcard promising cash and prizes if you call an "800" or "900" number. If you do it, a friendly voice will ask for your credit card number to "verify" your identity, then come the high-pressure tactics to get you to buy merchandise with your credit card. Later, you may be billed several times, or you may never receive the merchandise at all.

If you do receive the merchandise, it may not be what you expected or you may feel that the price you paid was highly inflated. By that time, it is often difficult and time consuming to return the item and receive credit.

To protect yourself, ask for written information on products or services offered before you order them.

Fair Credit Billing Act

The Fair Credit Billing Act provides for the prompt correction of errors on open-end credit accounts (department store credit accounts, for example) and protects consumers' credit ratings while they are settling disputes.

Under this law, if a consumer is disputing a charge, creditors cannot report the consumer's account as delinquent. This applies to open-end credit instruments, such as credit cards, revolving charge accounts, and overdraft checking. Consumers who question an item are responsible for notifying the creditor in writing within 60 days of receiving the bill. The creditor must acknowledge the notice within 30 days and may not do anything to damage the consumer's credit rating while the item is in dispute.