Be watchful of consumer dangers that abound. By learning about them, you’ll prevent yourself from getting burned or ripped off.
Always borrow money from a pessimist; he doesn’t expect to be paid back. ~Author Unknown
These are only a few of the dangers awaiting the unsuspecting and trusting consumer:
1. Beware The Mechanic’s Lien
Many years ago, when we built out first house, I made the mistake of paying the contractor upfront for the installation of windows. They put in all except one, a big one downstairs. After a dozen fruitless phone calls, I received a bill for ALL the windows from the local hardware store. My smooth talking contractor had “forgotten” to pay for them, while the address given on the estimate turned out to be bogus.
A Mechanic’s Lien has nothing to do with repairing your car. But this particular legal term affects thousands of innocent homeowners who enter into an agreement with a contractor.
How does this work? Well, you hire a service provider to install wooden doors, walls, and floors to change your house into a luxury residence. You pay for the work and start to enjoy your “new” home, when out of nowhere, you receive a notice in the mail that your beloved home will be auctioned off to pay the company that supplied the wood.
You just received a Mechanic’s Lien because your contractor failed to pay the bill for the wood and you are responsible as the ultimate client. The owner (that’s YOU) of the improved property is the ultimate guarantor of the debt, in the eyes of the law. To make things more complicated, the lien makes it impossible to clear your home’s title.
Tip: make sure your contractor proves to you that they paid the original supplier before you give the final payment.
2. Phony Credit Counseling Organizations
Are you in debt? Then you may have toyed with the idea of dealing with credit counselors to help you with your situation. But be careful — the Federal Trade Commission warns of Credit Counseling Organizations (CCO) that defraud their customers by asking them for “voluntary” contributions or by charging high fees, thus increasing existing debt problems. Reputable non-profit CCO’s employ certified and trained credit counselors to help you resolve your debt by negotiating payments with your creditors; they work with you to produce a debt management plan for a more reasonable fee. If you have doubts about whom you are dealing with, check with your local Better Business Bureau.
3. E-Mails Rip Offs
“Dell Electronics of London has selected your name out of 20,000 clients to receive a fabulous prize of $500,000. Please let us know how you wish to receive your money: via cheque (U.K.), bank deposit or cash.”
Sounds fishy, right? Well this is an email I actually received two weeks ago. I immediately forwarded the message to Dell’s consumer website to ask them to be on the lookout for people using their name to commit fraud. They replied the next day thanking me for the warning.
Every year, thousands of people fall victim to these phony offers which have only one goal: to get your personal information in order to rip you off.
4. Car Repairs Fraud And How To Avoid Getting Burned
How well do you trust your mechanic? You take your car for repairs and faithfully pay the bill, thinking that the shop actually fixed the problem with new parts. Wrong!
AARP’s magazine (August 2008) warns of major fraud regarding the use of car parts that are committed against unsuspecting citizens, especially elderly people. The California Bureau of Automotive Repair ran a sting by marking the “defective” parts in a very discreet way. They then took the car to a shop and when repairs were completed, requested the return of the original parts. In 50% of the shops, the returned parts had no markings, indicating that they had replaced them with used or more inferior parts. Of course, the customers paid for new ones.
Tip: When you take your car for any kind of repairs, try to do the same by marking the parts and asking for their return. You’ll soon find out if the shop is honest or not.