Consumer Blog

Article in the Post-Dispatch today summarizes a new report from state government in Illinois, saying payday lending has been good for consumers.

As we've mentioned numerous times in this blog, AG Nixon believes this industry is in dire need of drastic reform in Missouri. Illinois appears to have similar statistics to ours. In Missouri, the average payday loan has an APR of more than 400%.

AG Nixon announced today a new feature on our Web site that allows you to check whether your number is on the No Call list.

We get this question from consumers a lot - and in the past, we've had them call our office and ask. So this will be more convenient.

FYI, registration is permanent - once you sign up, you never have to again. If you move and keep your number, you stay on the list. The only time you would need to re-register is if you change your number. Recent blog post explains the basic ABCs of No Call - who is exempt, your rights, etc.

Missouri consumer writes:

I would like to know why is gas 25 to 30 cents cheaper in Jefferson city & Columba than at the lake or Eldon it all is supplyed by the same company in Columba.

I'm not sure what reason those stations would give you, but the bottom line is this: gas stations may set their own prices for gas, as long as they stay within 18 cents of the national average. The federal government tracks that average.

As for price gouging, this applies only during times of disaster. That's why you've heard about price gouging lawsuits from AG Nixon after Sept. 11th, Hurricane Katrina and last winter's ice storm in southwest Missouri.

With the huge popularity of gift cards, you might have guessed, there is some fraud out there.

As AG Nixon pointed out in a consumer alert last Christmas season, one of the big no-no's with gift cards is to buy them online from someone reselling them. You have no idea of their value, whether they were stolen, etc.

The safest thing is to buy the card at the retail store or its official Web site, then keep your receipt if you or your gift recipient ever has trouble.

As for fees, you are most likely to encounter them and other restrictions with "use anwhere" cards, like those offered by Mastercard and Visa. Cards usable only at a specific retailer generally have very few fees or restrictions.

The wireless industry has been talking for years about a 411 service to look up wireless phone numbers. Here is a Consumer Reports article on the developments.

Missouri consumer writes:

I had to take a $500 payday loan and could not pay the interest. They have maxed out the loan and I must make bi-weekly payments on $875 dollars. Now they're saying another $250 in interest and $25 in fees. Everyday they are adding daily interest. There is no hope that I can pay daily interest and ever pay off the loan. Are they operating within the law to add daily interest after the check has been presented? I am unable to pay any other creditors due to paying this interest. Now facing debt management program or bankruptcy due to this mess.

Your total bill should not exceed $875, which is the maximum allowed by law including principal, interest and fees. You have two options here:

• File a complaint with our office. We can mediate and try to resolve this for you - we have a pretty good success rate. But if that doesn't work, we can't get involved further because Missouri law gives the state Division of Finance the exclusive legal authority over payday lenders.
• File a complaint with the Division of Finance. 

Have you noticed that people often put lots of acronyms after their names on business cards? Some of them we all know, like CPA, PhD, MD, DDS, Esq. But then there are lots and lots of others. What do they all mean? In many cases, nothing! Article in the KC Star today explains.

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.

Ever been told you are attractive enough to be a model? It's such a great compliment -- if it is coming from a genuine source. Sometimes, however, these words of flattery are used as a type of bait for a money-making scam.

We recently received spam that was most likely a modeling scam. The Riverfront Times reported that many agencies sign-up men, women and children as modeling talent, despite not having modeling jobs. Further, there are fees and costs that are required the "models" to pay these agencies.

According the Federal Trade Commission article, "If You've Got The Look...Look Out!", there are ways to protect yourself and determine if these are legitimate business.

First, you must ask questions: Is this too good to be true?; Is the company licensed or bonded?; Can the company provided names of successful models? Further, be wary of an agency that requires money up-front and for companies that require you to pay any fees in cash or money order. Also, avoid high-pressure sales-pitches. And last, review all documents before signing them.

You may have noticed there are lots and lots of discount vacation offers out there. Sign up for an in-home vacuum cleaner demo and win a free trip to Branson. Car dealerships in recent weeks are offering vacation vouchers in return for looking at cars on particular dates. So what's the catch?

There's not a lot of fine print in most of these cheap travel offers, so it's hard to predict what surprises consumers will find when they take the trip. Here are some we often hear about:

• They may try to sell you some high-priced item like a timeshare or travel club. Thus it's a win for the vacation company to give you a cheap trip, because they make a lot of sales these ways.
• Your hotel may not be what you think. Maybe it's 20 blocks from the beach, or it's a dive, etc.
• Unapproved charges to credit card or withdrawals from bank account. Be careful about giving information out over the phone in advance.
• Difficulty canceling or high fees for doing so.

If you encounter any of these problems, you can file a consumer complaint with us. P. 10 of our publication Know Your Rights has more on travel offers.

We write a lot about Internet scams for good reason. According to the Kansas City Star, U.S. consumers lost more than $7 billion in web scams last year. The article cites a recent Consumer Reports survey that indicates Internet phishing scams are on the rise.

Further, the study reveals that "zombie" spams are the source of many consumer complaints. The zombie spam is delivered and hides deep in personal computers. When the victim opens an attachment that seems to be as innocent as a picture file, the spam software can take control of your computer. The statistics can be overwhelming; for instance, you face a 1 in 4 chance of being a "cyber victim." But that isn't where the story has to end. You can defend yourself from viruses and phishing scams by installing software to block such spyware. Always remember not to open attachments and emails from companies and people you don't know. Most importantly, continue to check sites like this blog to keep up on all the latest scams.

Missouri consumer writes this in response to my recent blog titled "Waist deep in payday loan debt:"

My husband and I are also "waist deep" and keep sinking when it comes to payday loans. I am on disability and a few years ago my husband got hurt at work. we took out loans to pay the mortgage and have food on the table. Now some of these places won't work with us and are threatening that if our check comes back NSF we will either be prosecuted or they will turn us over to a federal check recovery program that will keep debiting our account until it is paid in full. This has cause numerous sleepless nights and worry. We are scared and don't know what to do. Please help.

Again, consumers dealing with this issue can file a consumer complaint with our office. Remember, you can file a complaint even if the business hasn't done anything wrong. We mediate complaints and have good success in payday loan cases. The company often agrees to reduce the balance. So my advice would be to file a complaint, then share your story with everyone you know who is considering this kind of loan.

Readers of this blog have commented on this topic more than any other.

The summer has flown by and it's hard to believe that in the next few weeks students will be headed back to school. In fact, many college students will be moving into their first apartments this weekend. Before you make your next move and sign your lease for a rental unit, you should speak to the landlord about questions and concerns you may have.

We have several helpful publications on our website that can ensure your move goes more smoothly. Often, it's hard to remember the questions that need to be asked until after you've already meet your landlord. The Renter's Checklist provides a number of critical questions for your landlord while you are evaluating the property. You can get more detailed information about renter and tenant rights by checking out the Landlord-Tenant Law brochure. So, if you are moving into an apartment this week, possibly the hottest of the year, we can't guarantee it will be easy. But, at least with these publications, it might be a little less stressful.

AG Nixon has unveiled an updated version of Know Your Rights in Spanish. Conozca sus derechos covers a wide variety of consumer topics, including ID theft, credit, cars, payday loans and scams that specifically target Spanish speakers. We offer two publications in Spanish, the other being Landlord-Tenant law.

These and all of our publications can be ordered for free online or by phone at 1-800-392-8222.

If you have an iPhone, have you gotten your first bill yet? Some consumers say their bills are huge - not just the amount due, but the size - including one who says her bill was 500 pages. Apparently this article has a link to an online video showing this woman going through her bill.

Small business owners take note: AG Nixon has announced a court order to temporarily shut down some operations of a deceptive yellow pages operation.

This time, the scheme plays upon the yellow pages name. Our lawsuit says this company called businesses, said they're with the "yellow pages" and asked if they want to renew their ad. The business owner says "yes," thinking it's the local yellow pages. Turns out it's a completely different company, and the ads run who knows where - some obscure directory, online only, etc. And the business gets a big bill for this ad.

Lesson to businesses: when dealing with the yellow pages company, get out your directory and call the number in your book. Don't trust a caller who says they're with the yellow pages - there are simply too many out there. This is the third time recently we've gotten results against a yellow page operator. In December, we announced one settlement, then another three weeks later. In those cases, the companies were sending "activation checks" to businesses. Those are the $2 checks you receive, cash, and next thing you know you have a contract for something you don't want.

Have you seen those billboards and advertisements offering to buy your house? In this softer real estate market, you'll see more of them offering to rescue people from foreclosure or double house payments.

Some of these outfits are scammers who simply want to take your house without paying. How is that possible?

A quit-claim deed is one way. This is a document they might sneak into your pile of paperwork that essentially transfers ownership of the house to them - but it doesn't transfer the mortgage responsibility to them. So you no longer own the home, but you still have to pay for it. Avoid this scam by talking to a lawyer or your mortgage company before signing any new documents.

The North Carolina AG this week busted an operation for doing just that. And AG Nixon shut down a St. Joseph operation last year for something similar.

The founder of the arts & crafts chain Michaels recently found out he was a victim of ID theft. He learned this when someone wrote a $7 million dollar check on an account they'd created in his name.

This story is unusual because most ID theft, as far as we know, is random. Thieves just grab any Social Security, credit card or bank account numbers they can and go crazy with them. But the feds say in this case, Russian thieves went through the Fortune 400 list of wealthy people, picked one, then went online to hunt down his personal data.

AG Nixon issued a consumer alert today warning college students and families of the financial temptations that await them on campus. This is a time when young adults can get themselves in deep trouble if they're not careful - credit card, payday loan debt, bouncing checks, ID theft and the rest.

When considering investing in a vacation property, you should weigh the pros and cons of both timeshares and a popular new option called fractional ownership. What many people think of as a timeshare is actually fractional ownership.

The two differ in that with timeshares, you pay to stay in the home you share with other people and do not have any ownership of the property. With fractional ownership you actually own a percentage-along with a number of other people-of a home or condominium, including the cost of the home, taxes and maintenance.

According to a recent Bankrate.com article, an increasing number of Americans are choosing fractional ownership over timeshares because of the perceived advantages of owning a percentage of a vacation home. For instance with fractional ownership, you have more control of where you'd like to vacation. When you choose a timeshare, you may not have the choice of your perfect destination. Another benefit to fractional ownership is the possibility of earning equity with the appreciation of the property. Whether you are thinking about fractional owner in a Tuscan villa for a quarter of the year, or in a timeshare in Branson for a week, both options come with risks.

You may have read previous blog entries pertaining to fraud that occurs in the timeshare industry. Complaints of scams received by our office include timeshare companies that try to sell properties that don't exist. Or, they might lead you to believe that the property is in a more desirable location than it is; for instance, the company may promote the location is "seaside" or "oceanfront" when it is really miles from the beach.

There are disadvantages and risks to fractional ownership too. As with any ownership, you are in charge of maintenance, insurance, etc. With an unstable housing market, you may not be able to sell your part of the property. Finally, there are currently very few lenders who are willing to finance a fractional ownership. Bottom line: When considering either timesharing or fractional ownership, you should have a "buyer beware" mentality. And look at this as a luxury expense, rather than an investment. It is wise to investigate as much as possible and have an attorney review any contracts before you make a decision.

You have probably heard about the recent massive toy recall. But just because those toys are off the shelves, it doesn't mean that they are out of circulation.

A study published in "Injury Prevention" magazine found that many items that have been recalled over the years find their way onto eBay. Further, most parents who have bought these toys have no idea that they were recalled. Take the time to see if your child's toys have been recalled on our product recall clearinghouse page.

There doesn't seem to be a day that goes by that we don't hear about another massive consumer goods recall. In fact, there have been so many recent recalls, that it is impossible to be aware of all of them.

To keep you informed, AG Nixon has just launched a comprehensive product recall clearinghouse that includes recalled information for all consumer products, such as toys, meat, medicine, boats, cars and environmental products. The site can be a one-stop-shop for recalls in lots of different categories. The recall pages are maintained with the most up-to-date information from multiple federal agencies, like the Food and Drug Administration and the Consumer Product Safety Commission. You can use this site to be a safe and smart consumer.

And remember, if you have questions or complaints about the sale of goods or services you can fill out a complaint form with the Missouri Attorney General's Office online at ago.mo.gov or you can call the Consumer Protection Hotline at 1-800-392-8222.

A Missouri Consumer asked this question regarding my recent blog, Recalled toys sold on eBay

What do we do if we find out that we purchased a recalled item on eBay?

This is a good question and one that all consumers should be thinking about, regardless of whether they purchased items from eBay, a store or even a garage sale. You should know that it is not illegal to sell most recalled items on eBay, or elsewhere.

Of course, there are exceptions with certain recalled products, like cars that have high lead paint levels. The sales of such cars are among items that are banned by the Federal government.

That said, eBay does have a policy against the sale of recalled goods. When shopping on eBay, obtain as much product information as possible, like the manufacturer, before purchasing any item. Then check our product recall clearinghouse, to make sure it is not listed as a recalled item.

If you find that you have already purchased a recalled item, contact the seller (whether it's from a store, eBay or even an auction house) and notify them that you've purchased a recalled item. This action will hopefully prevent the sale of that type of product to other consumers. Then get the contact information for the manufacturer of the recalled good from our recall list. Almost all of the notices on our list offer both the maker's website and phone numbers. It is important to contact the company as soon as possible. Often, you may receive a refund; other times, you may be sent a new product that has been updated to fix the defect. Further, if the product you purchased does happen to fall under the illegal recalled goods category, then you should contact the Product Safety Commission as well as take the necessary steps listed above. If you need assistance with this aspect, you can contact the MO AG's office by going online at ago.mo.gov, or you can call the Consumer Protection Hotline at 1-800-392-8222.

Sorry, that headline was just too easy.

The help-wanted ad Web site has announced that hackers accessed the personal information of 1.3 million of its users. Interesting, Monster says the stolen data did not include what we refer to as "sensitive information" - that being Social Security, bank or credit card numbers. Instead, it was contact info - name, address, phone number, etc.

It's certainly an invasion of privacy that would make you feel uneasy, but it's hard for a thief to commit ID theft with just that information.

Still, it's a reminder that even the biggest Web operators are vulnerable, and your personal info is not safe. So I repeat my mantra: you must be watching for signs of ID theft. Check your bank and credit card statements at least monthly, and check your free credit report three times a year.

A growing trend in contracts between consumers and businesses is mandatory arbitration. That's a clause in your contract that says if you have a gripe, you can't sue. Instead, you go to arbitration.

Consumer advocates don't like these, saying the company often chooses the arbitrator, which means the deck is stacked against the consumer. Companies of course like these because it's a way to cut down on lawsuits.

A federal appeals court in San Francisco has thrown out AT&T's clause, saying it violates California law. That means a class-action lawsuit brought by several customers can proceed. Not sure if this will set precedent around the country, since the court only cited the CA law.

Watch out for these clauses - you'll find them in contracts for everything from phone companies to homebuilders. Not much you can do about them except take your business elsewhere. But that's tough to do since so many companies use them.

KC Star article today talks about the increase in these foreclosure rescue schemes. We blogged a couple of weeks ago on these outfits that offer to buy your house, then pull a fast one on you.

Again, the advice is to talk to your lender before you do anything like this. #1, they want to work with you, rather than lose your loan. #2, if you decide to use a mortgage rescue business, your lender will help you determine if you're about to get scammed.

I recently posted a blog entitled, "Questions to ask before you rent," that focused on the tenant/landlord relationship. But with college starting up, students are still moving into apartments, duplexes and condos. Many choose their best friends as roommates, which can make for great experiences but can also make the relationship with roommates even more complicated. Whether or not someone chooses to room with their best buddy or a total stranger, there are some precautions to take that will ensure the protection of each person's best interests.

First, consult our renter's checklist, the landlord/tenant law brochure, as well as our student consumer guide, all of which will provide tips and questions that renters can ask their future landlords. Then, after all the roommates have settled on an apartment, they should sit down and hammer out some of the specific details. They could draft a roommate agreement that addresses issues that could come up over time. For instance, this agreement could establish rules and boundaries for smoking, stay-over guests, division of rent, cable, utilities, and other expenses and cleaning responsibilities.

The worst possible scenario for a roommate is when he or she comes home to find another roommate has moved out without notice. With a signed agreement, there will be certain measures that will protect the deserted roommate(s). This may be an awkward conversation to have with a good friend or even a new person, but it is better to get these questions out in the open at the beginning. Many people have had roommate horror stories; taking these small steps might start the school year off right.

There are many professions in Missouri that require licensing and are regulated by a state professional board. For instance, what if you walk into a salon and ask for light-red highlights, but you leave with orange hair and it's so excessively damaged that you have hair loss? Or, what if you go to a nail salon and it is not sanitary? Is that cosmetologist or salon accountable to anyone?

If this does happen, you should go to the Missouri Division of Professional Registration website and do a licensee search to check to see if this person is licensed. This is critical! If the person has misrepresented himself or herself as being a licensed professional--but isn't--then you should immediately contact the Division. You can find numbers for all of the boards at the website. Further, you can click on the link of the regulated profession and fill out a downloadable complaint form. These bad cosmetology experiences are just scenarios I used for dramatic effect. There are many occupations that are regulated and licensed in this state. Consequently, they are held responsible by an administrative authority. But surprisingly there are some jobs that don't require a license, such as loan officers. So, if you have a consumer-related concern about a non-licensed field, what can you do? Again, check and make sure that the line of work is, indeed, not regulated by a state board, at the MO Division of Professional Registration website. If it is not listed, then contact your local Better Business Bureau Office or file a consumer complaint form online at the MO AG's website.

Kansas City is considering new ordinances that would limit the number of payday loan stores in the area. This is a result of concerns from consumer advocates who say payday lending is legalized loan sharking, predatory and that it hurts low-income borrowers - those who can least afford to pay the sky-high fees.

This topic, BTW, has drawn more comments than any other on this blog.

A payday lender in KC has a column in the KC Star this week, in case you're interested in hearing their side of the story. They argue that payday loans are helpful to consumers. AG Nixon has been one of the industry's most vocal critics in Missouri, calling for drastic reforms.

AG Nixon today announced the latest recall, this one from Toys R Us. Again, made in China. And again, lead paint is the issue.

It's the Imaginarium Wooden Coloring Case - a coloring set feature pencils, chalk and paints.

We have written about this scam in our consumer encyclopedia. Now, federal authorities are sounding the alarm again.

The ruse is this: you get a call from someone who claims to be from the county courthouse and says you didn't show up for jury duty. You'll soon be under arrest. So you get scared enough, plead for them to believe that you're innocent... and answer all their questions. Like, "what's your Social Security number?" It's an attempt at ID theft. Ignore it and tell all your friends.