Consumer Blog

AG Nixon's consumer column this month covers this topic. It makes the point that there is only one place to go for a free credit report with no strings attached. (Hint: it's not the free credit report you hear advertised all the time). This is something everyone should be doing - it's quick, easy, free and one of the best ways to catch an ID thief.

In a lot of ID theft prevention material, you'll see advice to place a fraud alert on your credit report. While it doesn't hurt, it may not help much either.

A fraud alert tells a lender you may have been a victim of fraud. The idea is that the lender will refuse a new credit application if someone steals your identity and tries to open a loan or credit card. This may happen - but it's completely voluntary. The lender may heed it or ignore it. So with a fraud alert, you may find that you get rejected when trying to open a new account with one lender, but not with another. Again, it's completely voluntary and depends on how badly they want to make the sale. One nice thing is that you only have to file an alert with one credit bureau, and by law it must instruct the other two to put alerts on your file.

As a final thought, a fraud alert is different from a credit freeze.

A lot of consumers believe that if you have a dispute with a company from outside Missouri, you have to file a consumer complaint with the Attorney General of that state.

Not true. If you or the company is in Missouri, you can file a complaint with us.

Some recent examples:

• AG Nixon shut down four out-of-state companies selling consumer cell phone records without consumer permission.
• The AG got a massive fine against TracFone wireless for making telemarketing calls to people on the No Call list.
• We sent cease & desist orders out against two dozen companies that send fraudulent mailings to seniors in Missouri - all the companies are out of state.

As with all our cases, these were driven by consumer complaints. Here's the consumer complaint form. And here's the No Call complaint form.

The Missouri legislature may change state law so that cars that have been totaled only have to show that on their titles for three years. Currently, the law says seven years.

So let's say you're looking at a used car, and it was totaled four years ago. If this bill becomes law, there's no legal obligation to inform you of that damage.

Critics say the law would potentially put wrecked and /or dangerous cars on the road without the buyers' knowledge. There's no question that more information is better than less.

But let me say this: relying on a title search alone when buying a used car is playing with fire. There have been numerous criticisms of carfax.com, one title search company, for promoting itself as much more thorough than it actually is. That's why in our All About Autos publication (see p. 10), we say the most important thing you can do is have the car inspected by an independent mechanic that you trust - not one hired by the seller.

Missouri law also doesn't require flood damage to be listed on a title. Again: have your mechanic check it out.

With April 15 right around the corner, here are some services and programs available from the IRS that may be helpful to low-income consumers:

1. Low Income Taxpayer Clinics (LITCs) - these groups represent low-income taxpayers in disputes with the IRS like audits and collections. They are partially funded by the IRS, but are not federal agencies. Interestingly, there is one in Springfield and Kansas City, but not St. Louis. LITCs can also assist non-English speakers.
2. Free tax preparation - the Volunteer Income Tax Assistance program (VITA) will help low-income consumers fill out their tax forms and wade through the confusing forms, rules, deductions, etc.
3. Earned Income Tax Credit - you may get a credit on your 2006 taxes depending on your income, number of children and some other circumstances. Now, I'm the farthest thing from a CPA, but if I read the chart right it appears you can get up to $1600 in tax credits. And remember, a tax credit is better than a deduction, because it subtracts directly from the amount you owe the IRS.

FYI, you may need VITA before EITC or LITC. IRS SOS? -TF

This is a frequent misunderstanding among consumers in Missouri. The Lemon Law does not cover used cars - it only applies to new cars under warranty.

There's a nice article in USA Today this morning about how to take advantage of state Lemon Laws, but it makes the frequent omission about used cars - the part that most consumers are confused about. Most used cars are sold without a warranty, or "As is." That's why it's critical to research any used car you're considering - do a title search and have it inspected.

A blog post from last week offers more on used car research.

Three articles just in the last week are strong arguments that we should all be taking steps to detect ID theft. No need to fear it - just watch for it.

These are known as data breaches: First, a federal government agency has audited the IRS and found it's doing an inadequate job of protecting taxpayer data.

Second, the Texas AG sues a local Radio Shack store for failing to protect customer data. Allegedly, store workers threw records in the dumpster without destroying them. Note the part about the shredder receipt.

Third, the State of Georgia announced that a disk containing personal information of almost 3 million citizens is missing, lost by a private company that contracts with the state.

ID theft statistics leave a lot to be desired. Most victims don't know how their info gets stolen. But so far the numbers show that data breaches don't lead to a lot of ID theft. For example, in the cases above, all we know is that the info was potentially available to thieves. We don't know a) if any thieves got it and b) if they did, whether they used it to commit a crime.

More commonly, friends and relatives steal IDs, or thieves use lost or stolen purses and wallets.

Still, all this is a reminder that there's only so much prevention you can do. A lot of this is out of your control, so you need to be detecting. AG Nixon's publication on ID theft has the basic steps for prevention and detection.

The two most recent news releases on our Web site involve businesses as the victims in consumer cases.

The first involves a company that leased credit card processing machines to small businesses, then charged them exorbitant fees for what should have been an inexpensive machine.

In the second case, farmers teamed up with a company to buy and help market their crops, but the farmers said the company never paid them. So AG Nixon filed suit, and the marketing company will have to pay up.

There are numerous examples of this: businesses buy those "employees must wash hands" posters, when they are available for free from various government offices; businesses cash $2 checks sent to them, only to find out that by doing so, they have signed up for some online yellow pages listing; and farmers buy cattle that turn out to be virtually worthless.

So small businesses owners need to be doubly careful about fraud - against themselves personally and against their businesses. Either way, consumer complaints can be filed with our office.

For those of you in or near St. Louis, AG Nixon and several other law enforcement and consumer advocate types are hosting a "Shred Day."

You are invited to bring your sensitive documents to be shredded - things like bank and credit card statements, anything with your Social Security #, etc. If you don't have a shredder, this is a great opportunity. Or if you do have a shredder, but you have so much junk you don't want to run it through page by page (like yours truly), this is for you. 8 a.m. to noon at the Galleria at 40 and Brentwood. Look for the big truck and banner.

Note: This is not bulk trash day. We had people last year bring in old slippers, spirals full of class notes from college, and you wouldn't believe what else. They were politely turned away.

Have you heard of this one? It's apparently making the rounds, after having been around a while, including at least once in Kansas City. In the most common scenario, guys are selling speakers and audio equipment out of the back of their van. They lure people passing by at gas stations and other busy places, claiming to have great deals on merchandise.

Guess what? It's stolen, fake, defective, etc. The lesson here should be obvious: you buy stuff from guys in a van, you take your chances. Also, we like to give out four essential consumer rules. Most fraud victims violate at least one of these. And sure enough, that's true in the van scam too.

Which rule are these victims breaking?

1. Never give out personal info to anyone who contacts you.
2. Don't pay full price for a product or service you haven't received yet.
3. Deal with companies you know or that are recommend by someone you trust.
4. Don't make financial decisions under pressure.

The Shred Day we promoted last week was a raging success in St. Louis this past Saturday. 13,000 pounds of paper was shredded - that's 6.5 tons between 8 a.m. and noon! Apparently the weather was horrendous - freezing cold, raining the entire time, except when it snowed and sleeted. All the staff working the event looked like "drowned rats" according to the organizer, VP Tracy Hardgrove at the Better Business Bureau. But it didn't stop the consumers from coming out. They made it easy for consumers - just drive up in your car, and the staff takes your boxes. So mid-Missourians take note: we are holding a Shred Day on Sept. 8 in Columbia. Stay tuned.

A Missouri radio station this morning was promoting a Web site that, for $41, will opt you out of junk mail. This morning show host obviously didn't read our blog post from late March, in which we pointed out that you can do that and opt out of pre-approved credit card offers for free. So is it a scam?

I don't know of anything illegal about it. It's like hiring a maid - you can do that, or you can clean your own house for free. This organization claims to send half the fee to non-profit outfits that help the environment.

AG Nixon last week shut down a self-proclaimed psychic who solicits seniors and other consumers by mail. According to our lawsuit, Debra Grubbs of Las Vegas offered a "spiritual reading" and other services for $21.95.

We found out about her through Senior Sting 2006, a crackdown where we recruited 300 seniors from across the state to keep their junk mail for the month of May. They sent 8,000 pieces of mail to us. We found all the usual suspects in there - bogus lotteries, Nigerian letters, magazine offers, charity solicitations, etc. But even we were surprised by the number of "supernatural" offers, let's call them. Psychics, numerologists, fortune tellers, etc.

Easier said than done. Observe the comments from this frustrated Missourian:

We were recently victims of I.D. theft. One of the ways they were able to use our credit card data on line was by obtaining our home mailing address. It is readily available from those "people search" data bases. Now, I know what you are going to say. I've removed our information from the data bases, only to have them show up again at a later date.

I must admit, I have never seen my credit card information online in a people search site. If someone has, let me know. Otherwise, this is a familiar story. You never know where your personal information is going to show up, and most of these outfits will tell you they're not violating any laws - because they simply post info that's already available to the public.

The Privacy Rights Clearinghouse, a consumer resource, has a good primer on how to opt out of these various lists.

The privacy battle is never ending: Attorney General Nixon last year shut down four operations that were selling customer cell phone calling records without permission.

A Missouri consumer writes:

Several years ago I had made an offer to settle a debt for less than the amount the bank claimed I owed. The bank accepted the terms of my offer. Recently I received a phone call from a debt collection company claiming that I owed the balance the bank had previously agreed to write off. What recourse to I have, under state and/or federal law?

Hopefully you got this agreement with the bank in writing. If so, send copies to the debt collector. Remember that this debt may also appear on your credit reports, so check there too. If it does, initiate a dispute and send a copy of the agreement to the credit bureaus. When you check your credit report, you'll see dispute instructions. If you don't have it in writing, your job will likely be harder. Debt collectors are not teddy bears. But it's worth at least trying.

If plans A and B fail, you can file a complaint with our office. We have great success getting debt collectors off the backs of people who are incorrectly targeted.

The Federal Trade Commission offers a summary of your rights under the Fair Debt Collection Practices Act.

The Federal Trade Commission has announced a settlement with a sweepstakes promoter who will pay over a million dollars in fines.

The lure is not that creative - consumers were told they had won a prize and need to send in money first.

Here is the first consumer rule of sweepstakes: never pay to play. It is illegal for sweepstakes companies to require payment, improve odds for those who pay or even to suggest your odds will improve if you pay. In fact, these contests have to clearly indicate that no purchase is necessary. That's what makes it a sweepstakes. Payment in advance makes it gambling, which is tightly regulated and illegal in most cases. Some exceptions: riverboats, Missouri Lottery and church / charity raffles. (Yes, that means your neighbor's Texas Hold 'Em games are probably illegal.)

AG Nixon has had success going after sweepstakes companies, getting major settlements with American Family and Publishers Clearing House.

The Federal Trade Commission is hosting a workshop yesterday and today on ways to improve authentication in business transactions.

And that is the heart of ID theft, because the biggest cause of this crime (besides the thieves) is inadequate authentication by lenders, creditors, merchants, etc.

For example: If I steal your Social Security # and birth date, I can easily find a lender or credit card company that will open a new account for me in your name. Even if you have a fraud alert on your credit file, it won't necessarily stop the thief.

Example #2: If I steal your credit card number, I can easily find a merchant who will let me charge on it.

Example #3: If I steal your checking account and banking routing #, I can easily withdraw money from your account. So lenders and merchants could do more.

But there is no easy solution to completely solve the problem. How, for example, do you verify people's IDs online and by phone? Obviously photo IDs and fancier things like fingerprints or retinal scans aren't currently available.

So if your information can be used that easily by a thief, what can you do? Missouri doesn't have a credit freeze law. So your best defense is to protect your personal info the best you can, and catch ID theft early by checking your credit reports.

More trouble for a driveway repairman, this time in St. Louis. We have written about these before. Make sure to inform everyone you know to run, not walk, from anyone offering door-to-door driveway repairs.

Yesterday we wrote about driveways. Today, lottery scams.

They continue to find victims. This week the Illinois Attorney General warned of a scam using the letterhead of the Illinois Lottery.

Generally, the scam goes like this: you get an email or letter saying you've won a lottery (often a foreign lottery). You probably have never entered it. You are asked to pay processing fees or taxes up front, then you'll supposedly get your winnings.

Tell everyone you know that this is a scam, every time, no question about it. See a sample of one of these prize notification letters in our Consumer Encyclopedia under foreign lotteries.

The Federal Trade Commission announced settlements with two companies for playing games with consumer rebates. The FTC says InPhonic, a wireless phone company, sold packages to customers that included rebates, then never sent the customers the documents needed to get the rebates. And the FTC says Soyo, an electronics retailer, sent 95% of its rebate checks much later than promised.

Notice that the FTC's announcement came during a "Rebate Debate" workshop it hosted. The event was a discussion about how to keep the rebate industry operating properly. This brings us to a lecture on rebates. These two companies are not the only ones that play games with them. The entire rebate industry is profitable when consumers fail to redeem their rebates. So they don't often make it easy.

According to one recent survey, 60% of rebates are never redeemed. This article offers an excellent look at the industry. When you buy products with a rebate, be prepared: save your receipts, make copies of everything, and do exactly what the instructions say - that means send documents in correctly on time, then check your calendar and start making noise if you don't get your reimbursement by the date promised.

If your talks with the company don't go anywhere, you can file a complaint with AG Nixon. Our biggest such legal case was against a company called Consumers Trust, which promised 100% rebates on high-dollar items, then failed to deliver. The company agreed to refund almost $2 million to consumers, paid, then went bankrupt.