Consumer Blog

Many of the topics we discuss on this blog are covered by publications offered by AG Nixon. Here is a list of all of them. From this page, you can read the full content of each publication, or order them using the online order form.

The Attorney General of Minnesota is going after Sprint Nextel for extending contracts without customers realizing it.

AG Nixon has warned about making changes to your calling plan in the middle of your contract - such as more minutes, a fancier phone, etc. Most cell phone contracts allow for an extension when you make this kind of upgrade. And the phone company often doesn't tell you. Instead, months later when you think your contract is up, they say, "remember that upgrade you made several months ago? That added a year to your contract."

The Minnesota A.G. says Sprint Nextel has deceived customers by doing this, and wants it stopped. Most wireless complaints received here and across the country have to do with long-term contracts. The Minnesota announcement is the second piece of news about government action on this issue recently. We blogged a couple of weeks back about federal legislation that would limit contract termination fees. FYI, there are ways out of your long-term contract without paying the big fees - check out this blog post.

The internet can be a great tool for searching for the perfect car. Collectors may look to the web to help them find rare parts, or even their dream car. For others, the web might provide opportunities to find a car at a better value than one off the lot. But there are risks in purchasing a car sight unseen, and without a test-drive.

A recent and informative article in the Kansas City Star states that the National Fraud Information Center's Internet Fraud Watch receives countless complaints form people who have been scammed while trying to purchase an automobile online. These complaints include unreported body and flood damage to the car. Also, people reported purchasing cars that were over-priced, that don't have titles, and even cars that don't exist. So, what can you do to protect yourself?

The KC Star suggests you follow several steps: First, if you can, check the vehicle out for yourself, take it to get inspected and test-drive it. If not, you can hire a company such as Carchex, to inspect the car thoroughly.

Second, find out if the car is priced appropriately. Check the fair market value on a website like Kelly Blue Book. Also compare the car's cost and history with similar cars on direct-buy sites, like Autobytel.com.

Third, get the vehicle identification number (VIN) and verify its history through Carfax — at a cost of $24.99.

Fourth, read the fine print. If you are using an online auction service, check into its history and reputation and try to review the seller's record.

You can also utilize our "Check list for car buyers," as there are some additional tips and helpful questions you can ask the seller.

Are you a student who just started or is about to start college? Or, perhaps you are a parent preparing to send your child to college.

If so, consider this: Over the last decade, tuition costs have increased 79 percent. While government-guaranteed student loans have been capped at 6.8 percent -- on average, that guarantees less than half of the cost of a four-year tuition -- or only up to $23,000.

According to the Kansas City Star, many students and their families have had to turn to private lenders to supplement their pre-existing loans. Unfortunately, students with no cosigner, or students whose parents cosigned, but had a poor credit history, face up to 20 percent in interest rates on their private loans. Consequently, graduates find themselves forking over a large portion of their take-home salary to pay off their loans, which are tied to the current interest rate. With record borrowing, comes record debts, and many predict this trend will get worse, as tuition costs will continue to rise.

After conducting a crackdown on scammers who make their money with fake check schemes, the United States Postal Service created a new website to prevent future consumers from being swindled out of thousands. Fakechecks.org has tests, quizzes and a FAQs section to help educate the public specifically about fake check scams.

Fake checks -- also known as "overpayment scams"-- are a growing trend that we have blogged about here. Over the last eight months, the USPS' efforts to stop these scammers have resulted in recoveries of over $2 billion and 77 arrests around the globe. Scam artists will undoubtedly keep trying to get money from unsuspecting victims. But hopefully, with the information on our website, and with more websites like fakechecks.org, consumers can learn and inform others of these schemes and we can prevent scammers from stealing more money.

The trifecta is complete: Experian has announced it will allow the nationwide credit freeze, so that makes all three national credit bureaus.

We blogged in the last two weeks about TransUnion's bombshell announcement, then Equifax followed suit.

Once the credit bureaus announce details, we'll post instructions for exactly how to do this. We'll also alert the media - we encourage every consumer to freeze their credit report to prevent identity theft.

Home-repair fraud continues to be a common problem in Missouri, especially since consumers are rushing to make a few repairs before winter rolls around. After expensive down payments, some are left with unsatisfactory or incomplete work. Many times these repair "companies" are individuals who will take your money and never be seen again or will refuse to return to complete the work.

Knowing the following tips can help ensure you will not become the next victim of home-repair fraud:

• Always know the company -- You should always check the credentials of the company to make sure it is legitimate. You can search the Attorney General's Know MO website or the Better Business Bureau to see if any complaints have been filed against a particular company. You may also want to ask the contractor for references
• Obtain estimates -- Before agreeing to any work that needs to be completed, you should always request a written estimate from the company. To further protect yourself, you may want to seek a second opinion. Also, bear in mind that an estimate is not the same as the final price. As the job goes on, unexpected costs may come up. Be sure to have the contractor get your approval for any additional work or supplies that are needed.
• Written agreements -- Always make sure that all work is agreed upon in writing. These contracts should specify who is to supply the building materials, obtain building permits and pay for any sub-contractors.
• Down payments -- Some contractors will ask that you make a down payment before they begin work or buy building supplies. Be careful here! To protect yourself, you really shouldn't pay more than a third of the estimate as a down payment. Also, tell the contractors that you will reimburse them for any supplies they purchase. If the contractor is pushy and continues to demand a large down payment, it may be time to look for a different contractor.
• Lien Wavers -- When all the work is completed, be sure to ask the contractor for a lien waver upon payment. This way, the contractor acknowledges payment and they cannot retaliate with liens on your property. You should also obtain lien wavers from any sub-contractors involved in the job.

Should you become a victim of home-repair fraud, the Attorney General is here to help. You can file a complaint. Also, find more information by reviewing our Know Your Rights publication.

You may be a driver with a perfect record, but did you know that insurance companies are looking at more than your driving history to determine your premium?

As mentioned in a Consumer Reports further states that insurers believe that there is a connection between credit scores and damage claims. So, too, believes the Federal Trade Commission. But why?

The St. Louis Post-Dispatch explains that insurers predict that if people are cautious with their credit they will be cautious behind the wheel. But often times, people who have reasonably good credit can unknowingly affect their insurance in a variety of ways, such as simply opening three accounts in the one year or making multiple loan inquiries. Taking any of those actions can result in an increase in premiums.

This week, the Financial Services Subcommittee on Oversight and Investigations has started looking into possible discrimination allegations related to credit scoring. For more information on this issue, please see the articles referenced above.

Recently our office has received identity theft complaints from victims with a story we haven't heard before. Their name and address was used in correlation with a work at home scam.

In these scams, the "company" -- typically overseas -- needs an agent here in the US to receive payments from clients who then wire the money back out of the country. This is very similar to an overpayment scam. In this case, the return address on the packaging mailed was that of our new Missouri victim. In other words it appears as though he or she actually mailed the package and is apart of the scam.

In the end, there will be two victims, the one that cashes the check and the one whose information was used in correlation with mailing the check. So what can you do if you have been alerted your name and address was used in this manner?

First contact your local police department to file a report. They may not be able to investigate due to jurisdictional issues, but at least you have taken the time to document the incident.

Second, you can contact the US Postal Inspector -- if the package came through regular mail -- or the fraud department of the private company, such as UPS or FedEx.

Next file a complaint with our office. The more information we have about these cases, the better our chances of finding a common link.

For many students, college life makes for a frugal existence. Without having extra cash on hand, it's easy for students to turn to credit cards. And credit cards can lead to debt, or even more debt, if they have student loans that will need to be paid off upon graduation. It is estimated that students are saddled with an average of $2,000-$4,000 in credit card debt.

The Kansas City Star reports that one consumer group, U.S. PIRG, wants to take steps to lessen credit card temptations. The U.S. PIRG suggests banning credit card companies from distributing give-aways on campus grounds. Further, it wants to limit lenders' access to students' names. For more information about the U.S. PIRGs project, visit its site.

Also, check out our Student Consumer Guide for tips on preventing debt and other related issues that young adults face as they prepare for college.

Three promising developments for consumers in the cell phone world:

1. A class-action lawsuit is suing T-Mobile over high termination fees, and several California courts have ruled that the lawsuit can proceed. T-Mobile had argued it should be thrown out. Granted, any benefit from this lawsuit might only help these plaintiffs or Californians in general... but it could start a movement nationwide. These termination fees are a big source of consumer complaints to our office. This recent blog comment was typical of other consumers:

I signed my family up for the family plan,(3 lines), and then discovered that the service in our area was not good at all. US Cellular is charging me $150.00 early termination fee PER phone!!!

This is such a volatile issue for consumers that the federal government may weigh in on it. We blogged about that a couple of weeks ago.

2. Verizon has announced a major shift in policy: you can now make changes to your contract in mid-term without extending it. Most wireless contracts feature a little-known clause that triggers a lengthy contract extension any time a change is made to your service - more minutes, etc. Will be interesting to see if other celltelcos follow suit.

3. AT&T has settled with the California Attorney General over their handling of stolen cell phones. They have agreed to be a bit more consumer friendly when it comes to charging customers for calls after their phone has been stolen. The CA AG is calling on the other big phoners to step up and make the same agreement. Stay tuned - we will hear more of this kind of thing. Frustrated consumers and the threat of government regulation can lead to all kinds of concessions from the industry. We have seen that very recently with credit bureaus.

Have you ever been contacted by a company or individual that claims you may have some missing or unclaimed property that you may not even know about? Did this company or person than offer to locate those missing assets for a fee?

If this situation sounds familiar to you, don't worry. While this service is not illegal, it certainly is not necessary, either. Consumers can search for missing or unclaimed property themselves for free!

The Missouri Treasurer's office maintains an online database as a "lost-and-found" directory where consumers can search for any property that may have been left from some long-lost relative. The Treasurer's staff keeps these assets until the rightful owner or heir is identified.

Chances are, companies are offering to locate your missing property because they found your name on the Treasurer's website and saw that you have unclaimed assets. So don't pay someone to find your property when you can do it yourself for free.

If so, the Federal Communications Commission wants to remind you that in February 2009, your set won't work unless you have the right equipment to receive a digital signal. I admit I'm not sure - mine at home is about 5 years old.

Recently we have been contacted with numerous complaints from consumers stating they have received unsolicited credit cards in the mail. The letter informs the recipient that they simply need to call to to activate the card. But upon further inspection, consumers realize that if they are not interested in keeping the card, they must also call to cancel the account.

Generally in these situations, consumers have an old inactive account with the company sending the card. But how would you know that this truly your card and not an attempt at identify theft? These recent complaints serve as good reminders, as consumers need to check their credit report on a routine basis.

As we've mentioned before, you are entitled to one free credit report per year, per credit bureau -- and you can order your report online. By carefully reviewing your credit report, you would be able to determine if the card represents:

• A forgotten account that may need to be closed
• A new account that may have been fraudulently opened

If you believe the account was opened fraudulently, you can file an identity theft complaint and we will work to rectify the situation. Either way, it's a good idea to determine why you received the card -- so don't just throw it away.

Do you get much junk mail? Pre-approved credit card offers? Most consumers don't know you can opt out of a lot of that stuff.

Observe:

For junk mail, go to the Direct Marketing Association site or write: DMA Mail Preference Service PO Box 643 Carmel, NY 10512 For pre-approved offers of credit and insurance, you can opt out online or by callng 1-888-5OPTOUT (567-8688)

If this is any indication, we ran an anti-mail fraud project last year called Senior Sting 2006. During the month of May, 300 senior citizens from across Missouri kept all their junk mail. It amounted to 8,000 pieces.

The Federal Trade Commission made this announcement to Congress this week. The original plan was that you'd have to re-register your listing every five years. But now, if you're registered on the national list, you're all set. As we mentioned a couple of weeks ago, registration on the Missouri No Call list is also permanent. You would only need to mess with it again if you change your phone number. If you move but keep your number, you're still covered.

Recently, the Kansas City Star reported that spammers are targeting more than just your email. The same e-spam messages that fill up your inbox can be sent to your mobile phone via text messaging. Many cell-phone plans charge for text messages that you send, as well as receive, meaning that consumers could be charged per pesky message about puppy scams, timeshares, and foreign lottery scams.

While many consumers are just now receiving this type of spam, it isn't a new issue. For years, MO AG Nixon has backed legislation that would protect mobile phones under the umbrella of the No Call List. Efforts to pass these bills have failed in MO, but AG Nixon will renew his efforts on this issue in the coming legislative session.

In the time being, some cell-phone companies have vowed to correct the matter by filtering as many of these messages as possible before they reach their customers' phone.

Page 18-19 of AG Nixon's publication Know Your Rights gives our 4 critical consumer rules. If consumers followed these rules, most disputes, scams, etc, would be avoided.

1. Never give out your personal information to anyone who contacts you. Only give it when you initiate the contact. ID thieves and scammers who send phishing e-mail and phone calls hope you will violate this rule. Unless you contact them, you simply can't be sure who they are, no matter how important or convincing they sound. And they will sound convincing.

2. Don't pay full price for a product or service you haven't yet received. Home repair fraudsters who come door to door hope you'll violate this rule. Only pay when the work has been done or product received according to the terms of your agreement. If a service provider insists on a down payment, agree to no more than 25%.

3. Do business with companies that you know or have been recommended to you by someone you trust. Again, doing business with a door-to-door home repair stranger violates this rule. You can also contact our Consumer Protection Hotline (800-392-8222) or Web site or your local Better Business Bureau to ask what companies have received consumer complaints. You can check KnowMO, our online database of consumer complaints.

4. Never make financial decisions under pressure. Any high-pressure sales situation is suspicious. Make decisions on spending money or giving to charity only when you've done your homework and you're comfortable with it. If you say no to a high-pressure salesman or telemarketer, you are not going to hurt his feelings. Well, you might - but he'll quickly get over it and move on to the next prospect.

Missouri consumer writes:

I have company appearing on my credit report for late rent on an apartment my daughter had in Ill in 2005. I did co-sign for the lease. The report has no contact information listed. What is the time-bar for this type of debt?

Under federal credit laws, negative items may stay on your credit report for up to seven years. The exception is bankruptcy, which can stay for up to 10 years. The Federal Trade Commission offers this summary of your rights under the federal Fair Credit Reporting Act. Note: there are credit repair scams out there. Be suspicious of anyone who promises they can remove accurate negative information from your credit file. The best way to improve your credit is to begin now with good behavior, like paying your bills by the due date. In time, your credit will reflect your good work.

Missouri consumer writes:

I received an e-mail from a grantsready.com telling me about government grants available for various things. It asks you to pay them $19.99 to get a list of grants...is this a scam? It also says that they can show you how to apply for them. Also, is there actually somewhere you can find out about government grants for small business, home improvement for energy, or education?

Don't know anything about this company. If you want to pay someone $19.99 for a list of grants, you're free to do that, and they may give you helpful information. The scam is when they say "You have won - send us $19.99." Don't fall for any claim you've won a grant you never applied for. And don't fall for any claim that says they can guarantee you a government grant. Yes, there is a legitimate source of info: grants.gov.

I want to cover two categories here: keeping your heating bills down, and getting help paying your bills if needed.

Reducing heating bills: the big picture here is to keep the cold air out. Make sure your attic insulation is sufficient and make sure there's no air coming through the cracks and joints in your house. That means doors (you need good rubber weatherstripping), windows, electrical outlets, etc. Also, take advantage of sunlight - keep the blinds and curtains open during the day. The Public Service Commission, which regulates utility companies, has more good suggestions.

Financial assistance: Missouri's Cold Weather Rule guarantees you certain rights against utility disconnection during the cold months. Again, the PSC explains that at the above link. Also, financial help may be available from a number of different sources. Check first with your local Community Action Agency.