Consumer Blog

Missouri consumer writes:

I had a credit card charge me a late fee on an account the same day it was due. I paid extra to have the payment made on the due date. When I called about this, the customer service agent stated late fees are assessed on 11:59:59 on the due date. Is this legal to assess late fees on the due date?

Your credit cardholder agreement probably outlines this. (Good luck reading it - a Harvard law professor claims that almost none of her students can understand the typical cardholder agreement.) It sounds as if they are posting the late fee at the last second of the due date, which seems logical, since there's no way for you to pay on time by that point.

Still, if you think you've been treated unfairly, you can always file a consumer complaint with our office.

We have warned of the overpayment scam in the past. AG Nixon put out a consumer alert this week saying it's being used against hay farmers in Missouri. Note that this scam also involves the use of wire transfers, and we're warned against those as well.

As always with natural disasters, there may be people and businesses who want to take advantage of the flooding in western Missouri. We often see price gouging and home repair fraud in these situations.

Attorney General Nixon issued a consumer alert on this today. When buying supplies to brace for or recover from the flood, consumers may find the prices of necessary goods have been jacked up simply for extra profits - goods like water, ice, building supplies, etc. And after the flood, consumers hiring home repair con artists may get tangled up with crooks. The above linked consumer alert has tips for avoiding this.

Have you ever made a purchase or reservation using plastic, only to find out the merchant had put a "hold" on some of your funds?

This is called card "blocking," and there are no laws on how much can be blocked, so it's perfectly legal. For example, you might make a rental car reservation with your credit card and find out the rental company put a charge of $500 on your account. Once you pay your bill and settle up, they will credit back the unused portion. It's even more painful if you make the reservation with a debit card, because then $500 in your bank account becomes unavailable. This is common with transactions where you don't know how much you're going to pay when you first present your card. So things like rental cars, hotels and even gasoline.

Another problem is that some companies don't credit back the funds immediately when you pay your bills. They might keep the hold for five business days after you pay. There are no laws regulating this either. So how to handle it? Ask questions and know exactly how much is going to be blocked on your account. And reserve and pay with the same card.

The Federal Trade Commission has some more advice on this.

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.

There is a fear going around that when you stay at a hotel, your key card is an ID theft threat. The idea is that the hotel encodes your personal information (credit card #, address) on the magnetic stripe of your key card. This is an unfounded fear.

The hotel industry says magnetic stripes contain the combination to open your room, and the dates of your stay. That's it. Snopes.com did a piece on this recently.

Missouri consumer writes:

What is the Email of the Federal Trade Commission? I received a very bad email and I want to report them. How do I go about this? In my email software, when I click to designate an Email as Spam, does that get permanently get rid of it?

The federal government wants e-mail scams sent to the Internet Crime Complaint Center. This is a federal agency that monitors consumer complaints about online scams and fraud and looks for patterns to track down the crooks.

As for your question about designating spam, that will depend on your software and the cleverness of the spammer. E-mail programs let you block an entire address or even parts of an address - for example, you could block any address with the word "sex" in it. But if I'm a clever spammer, I'll send mail from lots of different addresses, so I'll have a good chance of getting through -- at least the first time.

Usually we hear about cell phone companies doing whatever it takes to keep customers from canceling.

Sprint, however, is going the other way, canceling the contracts of 1,000 customers who have made repeated complaints. This story even has a copy of one of the Sprint letters - this customer was given 30 days notice.

One of the most frequent complaints we get about cell phone companies is the difficulty of getting out of contracts. Has Sprint just handed unhappy customers a way out?

Forever we have told consumers to check out a company's history of consumer complaints with the Attorney General's Office before making buying or hiring decisions. In the past you had to call our Consumer Protection Hotline (1-800-392-8222). But today AG Nixon announced we have put complaint history on our Web site - the feature is called Know MO, and you'll see the icon on our home page.

There are about 3.5 years worth of complaints in the database - more than 100,000 records.

Missouri consumer writes:

I am having trouble with a moving company. What do you have on file about them?

AG Nixon yesterday rolled out Know MO, our searchable online consumer complaint database. Just enter the name of the company and see what comes up. If there's nothing, try to refine your search using the tips. Never know if you've spelled something wrong, or if the company uses an unusual spelling. Judging from the traffic on our site, this is going to be a useful tool. We had almost 8,000 page views on Know MO yesterday, which is a ton.

In addition to excellent comments on this blog from consumers, we also get spam. Here is a recent one - you might call it a wolf in sheep's clothing:

This is test-spam message, if you want stop spam on your site - just email me: stopspamme@mail.ru and your site will be immediately removed from spam-base.

Most techies (and I'm not one) will tell you that putting your e-mail address on a do-not-spam list is a surefire way to get more spam. As is replying to those messages, asking them to take your address off their list. We believe most spammers get excited by such a reply. "Oh look, I hit a legitimate e-mail address! I'll keep this one and sell it to my friends."

Pass this one along to all the seniors you know...

Consumers around the country are getting a call from crooks claiming to be Publishers Clearing House. This is a lot like the foreign lottery scams we see - the crook calls and says you have won a large prize, then asks for payment up front to cover taxes and fees. This tactic to get your personal info is called phishing, and many lottery scams use it.

As always, never give out your personal information (like Credit Card or bank #) to anyone who contacts you, whether it's by phone, e-mail or other. Only give it out when you initiate the contact.

The Better Business Bureau says the company targets low-income consumers to help finance computer purchases. Says customers complain about paying up front and not getting their products and not getting refunds. If you are having similar problems, you can file a complaint with AG Nixon.

AG Nixon is warning that consumers around the country are receiving checks in the mail from strangers, they're asked to cash them and wire some of the money elsewhere. Typical overpayment scam, right?

Except this time, it involves checks that appear to come from the State of Missouri.

As always, be very suspicious of any stranger who approaches you with a business proposition. Real business deals don't happen that way. And wiring money is a big red flag. Con artists love getting money via wire transfers because most such companies allow you to pick up your money anywhere in the world where they have a store.

If your home lender was Ameriquest, you may want to go through your pile of junk mail. After a reaching a $325 million settlement, the lender will pay more than 3 million people, including 7,325 Missourians, who should have received a claim form. AG Nixon advises that eligible borrowers should carefully review the form and return it promptly. The deadline is September 10, 2007. If you have not received a form, or have questions, Ameriquest has more information on its site.

Missouri consumer writes:

My cell phone bill has a city license tax, but I live in North County St. Louis, not in a city. I have not gotten anywhere by calling the wiresless company or city hall. Why am I being charged this?

We get lots of these complaints and are usually successful resolving them for consumers, so feel free to file a complaint.

In these cases, we ask consumers to get written proof from the county Assessor's office that their address is outside the city limits. Once we submit that document to the wireless company, they usually agree to the consumer's request.

Not often that we have two issues in one day for rural cell phone users...

Many Missourians who live in rural areas are charged high mobile roaming rates. This may change soon, due to a possible regulation change by the Federal Communications Commission (FCC). When you travel, you may be going out of your coverage area. If that happens, your phone will pick up a signal from the closest antenna, which may belong to a company that could charge your provider high fees for your usage. Under current FCC rules, your company could be charged roaming rates up to $1 a minute and those fees could be passed onto you! Until the new recommended rules take effect, always check your cell phone to see if you are roaming before you make a lengthy call.

And of course, you should always pull over if you are making a call from your car.

Have you ever called a company to cancel a service and the service representative won't take no for an answer?

That's exactly what many AOL customers came up against when trying to cancel their contracts. AG Nixon said that over 150 Missourians may be eligible for refunds from the $45,000 settlement. In addition to the pay-out, AOL will make changes to its refund policies.

If you have a similar consumer complaint, you should report it to the AG's Office.

So imagine this scenario: You're out to dinner with your significant other, and it's a special night. You order a bottle of wine, you both choose steaks, get excellent service, and you leave your waiter a big tip. Perfect night, right? Except, you choose to pay with your debit card, and you didn't have enough in your account. And instead of being told your card was denied, your bank covered the transaction and charged you an overdraft penalty.

Ok...so maybe facing a $30 overdraft fee isn't the scariest circumstance, but according to the St. Louis Post Dispatch, U.S. banking customers paid more than 17.5 billion in overdraft fees last year.

Furthermore, AG Nixon warns that if you shop online, you should avoid using ATM cards. If you need to dispute a charge, you are only protected under federal law if you use a credit card. That protection doesn't apply to any other form of payment - check, money order, wire transfer, debit card, Paypal, etc.

We have written extensively here about the overpayment scam, which hit home in Columbia this week. A man there got the usual: check from a stranger that looked authentic, he was asked to cash it, keep some if it and send the rest elsewhere. But he was smart and did exactly what you should do - he called the originating bank and found it was counterfeit.

AG Nixon has warned of the overpayment scam twice in recent weeks. First, a scam targeting Missouri hay farmers, and earlier this week a scam involving bogus checks that appear to be from the State of Missouri.

Missouri consumer writes:

In regards to offers for "Pre-Approved" credits cards, can they deny you? From my understanding, if an offer is stated as "Pre-Approved", that means they must accept your application and provide you with the card as offered. Could you please provide me with more detailed information pertaining to this, such as the actual laws involved.

Pre-approved credit card offers are conditional. That means at first glance you appear to meet their criteria, but you still have to fill out the application to confirm your credit and other details. These companies under the law have the right to deny you a card, even if at first they said you are pre-approved. (The federal laws on this are in 15 U.S.C. § 1681.)

So here's my consumer advice:

1. A pre-approved offer is not likely to be the best deal out there. You're better off to shop around yourself. This is a ferociously competitive industry, so you can find cards with low interest rates, no annual fees, cash back, points, etc.

2. Opt out of these offers at www.optoutprescreen.com. This is more than a nuisance - it's an ID theft risk. The more paper flying around with your name on it, the more vulnerable you are. You will have to enter your Social Security number, and that's OK since you initiated the contact.

Missouri consumer writes:

I have 5 payday loans that I received by going on the internet. Now I am unable to pay them back the way they would like me to. I have contacted them and asked if we could set up a payment plan of some sort. The answer is always no. What are my legal rights? They call my work numerous times.

You are dealing with two separate issues:

• Debt collection: Understand that you do have rights under federal law.
• Outstanding payday loan: you can file a consumer complaint with us about this.

We take lots of complaints, and we're able to resolve many of them. The lenders usually agree to a reduced payment and call it even.

More on the subject of payday loans (which has received more comments from readers than any other on this blog, BTW): Bad news for these lenders in Oregon - the law changed this year to limit the annual interest rate to 36% APR. Since the law was signed by the governor, dozens of payday lenders have gone out of business.

Interesting, 36% is the same maximimum interest rate AG Nixon has called for in Missouri. Currently, the average payday loan in Missouri carries as APR of more than 400%.

Nearly 240 million people in this country rely on their cell phones. And according to the Kansas City Star, cell-phone companies earned the top spot on a 2006 Better Business Bureau ranking of consumer complaints.

Common complaints include billing errors, poor call quality, dropped calls, penalties for breaking contracts, malfunctioning phones and roaming charges.

So, what can you do to get the best possible service? Most cell phone providers have a "try-out" period at the beginning of your contract, so use it! Make the most of this opportunity to test your reception quality, your battery life, customer support and other functions of your phone.

Check out our Consumer Corner for more helpful tips before your next cell-phone purchase.

Do you ever get telemarketing calls from groups that claim to represent police officers, firefighters, sheriffs, highway patrol troopers? Be careful, and don't assume they're legitimate.

AG Nixon announced yesterday a lawsuit against a telemarketer calling itself "Police Protective Fund," claiming to raise money for the families of police officers killed in the line of duty. According to our investigation: PPF raised nearly $6 million in 2006, and donated only $37,000 of that to officers' families. Consumers who complained tell us they used guilt, intimidation, harassment, etc, to get money from them.

Here are our best tips on how to handle charity solicitations.

A group of consumers is suing Cingular/AT&T over a rebate program. Instead of getting cash or a check when they mail in their rebate, the get a Visa Reward card with a lot of restrictions. The consumers say if they had known that, it might have changed their buying decision.

Doesn't everyone love cute, fluffy and innocent puppies? It appears there is a new scheme to make money off of dog lovers. One Missouri consumer writes:

I have received an e-mail that is supposedly from a woman who is in Africa asking me to adopt her puppy. This seems to be a scam and I wanted to warn others about this email.

This is a scam and recipients of the e-mail are asked to send hundreds of dollars for "shipping fees." Scammers are successful by tugging at the heart strings of unsuspecting victims.

If you receive a similar e-mail, use common sense. Do not give any personal information, such as your social security and credit card numbers.

Further, if you wish to take action, file a complaint.

Fascinating hourlong special on ID theft on Dateline recently. You'll see how fast stolen info gets used. These guys get hold of a credit card number and max it out within minutes. All the more reason, as we always say with ID theft, to check your bank statements, credit card statements and credit report on a regular basis. You'll see the box in the right column with the list of six video segments. Each time they take a commercial break, the video will end and you'll have to go back to the list of videos and click the next segment.

Most consumers don't realize that their credit score is factored into their insurance rates.

The Federal Trade Commission just did a big study on that, and their report basically endorses the practice. The insurance industry says, and the FTC apparently agrees, the lower your credit score, the more likely you are to file claims. Thus you pay higher premiums. Since some minorities and low-income American have lower credit scores, they often end up paying higher rates for things like car insurance. Thus, some consumer groups say this practice discriminates on the basis of race.

The FTC is taking some heat for the conclusions of this study.

The Secretary of State's Securities Division, which regulates securities dealers and enforces Missouri's consumer laws in that area, releases a list of the top threats to investors each year. In addition to the material on the SOS Web site, you can also check out our Investment Scams publication or page 24 of our Know Your Rights publication.

We have talked about phishing on this blog, where a crook sends you an e-mail that looks like it's from a legitimate organization. They hope to trick you into giving out personal information like Social Security #, bank account or credit card numbers.

McAfee, the anti-virus software company, has a very challenging phishing quiz online. Take it and see if you can spot the bogus Web sites.

No matter who your local or cell phone provider is, they probably offer directory assistance, and they probably charge for each call. There are two free services out there you may not know about.