The U.S. Federal Trade Commission protects consumer rights in the marketplace. We are often unaware of these rights because they are cited in the "fine print" of an advertisement or contract. For people with print disabilities, digesting the main messages of the continuous paper flow may be challenging enough, let alone reading the fine print. I have reviewed most consumer publications by the FTC and selected a handful I think would be of particular benefit to consumers with disabilities. They are compiled in this document as follows: Consumer Quiz Charitable Giving Health Care Claims Repair, Service Contract, and Warranty Shopping by Mail and Phone Telemarketing Fraud Top Ten Consumer Scams of 1995 Jamal Mazrui National Council on Disability Email: 74444.1076@compuserve.com ---------- Facts for Consumers from the Federal Trade Commission _________________________________________________________________ Consumer Quiz Do you know your consumer rights? Here is a short quiz * If your credit card is stolen and the thief charges $1,000 worth of goods, will you have to pay the bill? * If you buy $200 worth of encyclopedias from a salesperson, can you later decide to cancel the sales contract? * Three months ago you were supposed to receive cookware you bought using a credit card and an 800 telephone number. Can you cancel the order? Look inside for the answers to these questions and more Bureau of Consumer Protection Office of Consumer & Business Education (202) 326-3650 The Federal Trade Commission (FTC) receives many letters from consumers asking various questions about their rights under FTC-enforced laws and rules. Here are some of the most frequently-asked questions. See how much you know about your consumer rights. 1. Your new washing machine spills water on the floor. The dealer's mechanics have repaired it several times under the warranty, but it still is not working right. Your warranty runs out, and two weeks later it spills water again. Do you have to pay for the repairs now? No. If you complained about the problem during the warranty period and it was not fixed properly, you are entitled to get it repaired. Your warranty rights do not run out for problems you complained about during the warranty period. 2. The used car you bought less than one month ago developed transmission trouble. You consult your sales contract and discover you purchased the car "as is." What is "as is." "As is" means that the seller makes no promises to fix the item later. If you want warranty protection, make sure the seller puts repair promises in writing. 3. Your credit card is stolen. Before you can report it to the card company, the thief charges $1,000 worth of goods on your card. What is the most you will have to pay? $50. If a credit card is lost or stolen and the card is used before you report it missing, the maximum you owe is $50. After you report the card missing, you are not liable for any purchases made by the unauthorized user. 4. You lost your electronic fund transfer (EFT) card that lets you withdraw money using a teller machine. You report the card lost a week after discovering it was missing. How much money can you lose? $500. If your EFT card is lost or stolen, and you do not notify your bank within two business days after discovering it is missing, you may lose as much as $500. If you notify the bank within two business days, your liability is limited to $50. 5. A debt collection agency keeps calling you at home about a bill you owe. You want to pay the bill but you lost your job two months ago. Can you stop the collector from calling? Yes. If you write the debt collector a letter saying "stop bothering me," the collector must stop calling. However, this does not erase your debt; you still owe the money. 6. There is a mistake on your monthly credit card bill. To correct the error, should you write or call the company? Write a letter and use the special billing error address provided by the company. While a phone call may resolve the problem quickly, sending a letter is the only way to trigger your rights under the Fair Credit Billing Act, a federal law that requires the card issuer to correct billing errors or justify the charges. 7. You just had your eyes examined. What should you do if you want to shop around and buy your glasses somewhere else? Ask the examiner for a copy of your prescription. An FTC rule requires ophthalmologists and optometrists to give patients their eyeglasses prescription after an examination at no extra charge. 8. This morning a salesperson knocked on your door and sold you $200 worth of encyclopedias. Now you decide you do not want the books. Can you cancel the sales contract? Yes. You have three days to cancel most door-to-door transactions of $25 or more. The seller is required to give you a cancellation form at the time of sale. Sign and mail it to the address given for cancellation any time before midnight of the third business day after the day of sale. 9. Last night you visited a health spa and signed a membership contract. Do you have three days to cancel the contract? No. You usually do not get three days to cancel sales made at a merchant's regular place of business. However, a few state and local laws provide extra protection on some contracts like health spas. Check with your local consumer protection agency if you have questions. 10. To help finance your new car, you need to take out a loan. What is the most important question to ask about financing? Ask for the Annual Percentage Rate (APR). The rates charged for loans may vary significantly. The APR is a unit price for credit which takes into account all the finance costs of the loan. Use the APR to compare loans and shop around for the best deal. 11. You sent a mail-order company $30 for a new pair of shoes. Shipment was promised in two weeks. Six weeks later you have not heard from the company, and your shoes have not arrived. Are you entitled to get your money back? Yes. The FTC's Mail or Telephone Order Rule allows you to cancel most orders and get a complete refund if you did not get delivery in the time period promised. 12. You ordered some cookware using a credit card and an 800 telephone number. The ad said the merchandise would be shipped in six weeks. It is three months later and you never received your order. You have not been billed for the merchandise but wish to cancel the order because of the delay, and avoid being billed. Can you use the FTC's Mail or Telephone Order Rule to cancel your order? Yes. Effective March 1, 1994, telephone sales are covered by the rule. 13. You were recently divorced. Now you realize all your credit cards are in your ex-husband's name. How can you establish your own credit rating by using your past credit history? Apply for credit in your own name and list the accounts you shared with your former husband. If the creditor has trouble verifying these references because they were listed only in your husband's name, offer to provide additional information that would confirm your participation in payment of those bills. This might include cancelled checks where your name would show that you either paid the bills or that you shared the account with your former husband. 14. Where can you get information about other consumer matters? Contact Public Reference, Federal Trade Commission, Washington, DC 20580; 202-326-2222. Ask for a free copy of 'Best Sellers,' which lists all the FTC's consumer publications. You also may contact an FTC regional office near you. 3/86 _________________________________________________________________ FTC Headquarters 6th & Pennsylvania Avenue, N.W. Washington, D.C. 20580 (202) 326-2222 TDD (202) 326-2502 FTC Regional Offices 1718 Peachtree Street, N.W., Suite 1000 Atlanta, Georgia 30367 (404) 347-4836 10 Causeway Street, Suite 1184 Boston, Massachusetts 02222-1073 (617) 565-7240 55 East Monroe Street, Suite 1437 Chicago, Illinois 60603 (312) 353-4423 668 Euclid Avenue, Suite 520-A Cleveland, Ohio 44114 (216) 522-4207 100 N. Central Expressway, Suite 500 Dallas, Texas 75201 (214) 767-5501 1405 Curtis Street, Suite 2900 Denver, Colorado 80202-2393 (303) 844-2271 11000 Wilshire Boulevard, Suite 13209 Los Angeles, California 90024 (310) 575-7575 150 William Street, Suite 1300 New York, New York 10038 (212) 264-1207 901 Market Street, Suite 570 San Francisco, California 94103 (415) 744-7920 2806 Federal Bldg., 915 Second Ave Seattle, Washington 98174 (206) 220-6363 ---------- Charitable Giving When you read or hear an emotional appeal from a charity, you may decide to give generously. This may be especially true when help is needed for victims of a natural disaster or some other crisis. While most charitable organizations are legitimate operations, it pays to be careful. It's bad enough when your contribution goes to a well-intentioned charity that inefficiently spends its funds or uses its money primarily on more fundraising appeals. It's far worse when you contribute to a group that unbeknown to you misrepresents its fundraising intentions or solicits charitable funds for phony causes. Unfortunately, it happens. How can you make sure your contribution is well-spent? The staff at the Federal Trade Commission offers the following suggestions. l Carefully check out any organization to whom you plan to make donations. For information about a particular national charity's activities, finances, and fund-raising practices, contact: Philanthropic Advisory Service Council of Better Business Bureaus 4200 Wilson Boulevard Arlington, VA 22203-1804 (703) 276-0100 National Charities Information Bureau 19 Union Square West, Dept. FT New York, NY 10003-3395 (212) 929-6300 l Don't fall for appeals, especially over the telephone, that insist you send money right away. Be wary of charities that harass you to contribute or use strongly emotional appeals that may distort the charity's purpose. Always ask for printed material so you can more carefully evaluate any requests for money. l Don't give your credit card number over the telephone to anyone soliciting your contribution. Telephone scams for all kinds of causes and products are widespread. l Contact your state Attorney General's office, consumer protection agency, or local Better Business Bureau to see if complaints have been filed against a particular charity. Be aware, however, there could still be problems with a charity _ even with no complaints on file. If you believe a particular organization may not be operating for charitable purposes or is making misleading solicitations, please contact us. Write: Correspondence Branch, Federal Trade Commission, Washington, DC 20580. You also may contact the National Fraud Information Center's Consumer Assistance Hotline: 1-800-876-7060 (9 a.m.- 5 p.m. EST, Monday-Friday). ---------- Health Claims: Separating Fact from Fiction Although health care may well be the number one interest in the country today, health fraud has become a major cause for concern. Billions of consumer dollars are wasted on useless remedies and devices. Even worse, consumers with medical problems may waste valuable time before getting proper treatment. That delay may do serious harm and endanger lives. But there are ways to tell which health-related products are legitimate and which are not. This brochure tells you how to spot worthless claims and explains how the fraud business works. It describes some typical areas where fraud flourishes and suggests what you can do to help stop the problem. How You Can Spot Worthless Claims Being well-informed enables you to spot health fraud. Learn to recognize worthless products by the typical phrases often used to promote them. l Does the ad promise "a quick and easy cure"? l Is the product advertised as effective for a wide range of ailments or for an undiagnosed pain? l Does the promoter use key words such as "miraculous," "exclusive," "secret," or "ancient"? l Is the product advertised as available from only one source, requiring payment in advance? l Does the promoter use undocumented case histories that sound too good to be true? In addition, don't rely on promises of a "money-back guarantee." Be aware that many fly-by-night operators will never be there to respond to a refund request. Why Health Fraud Schemes Work Health fraud, or quackery, is a business that sells false hope. It preys on persons who are victims of diseases that have no complete medical cures, such as arthritis, multiple sclerosis, and certain forms of cancer. It also thrives on the wishful thinking of those who want short-cuts to weight loss or improvements to personal appearance. It makes enormous profits because it claims to offer quick cures and easy solutions to better health and personal attractiveness. Health fraud operators have always been quick to exploit trends. While legitimate medical science is continually advancing, unscrupulous promoters are quick to market useless concoctions as medical "breakthroughs." Recently, for example, fraudulent promoters have taken advantage of the fitness movement by selling a variety of useless "weight-loss" products, such as special "weight-reducing" garments. While the health fraud business causes widespread economic harm, the most harmful frauds of all are the ones that turn people away from proper medical diagnosis and treatment of serious illnesses. In addition, some bogus products themselves may be harmful. Where Health Fraud Schemes Occur Consumers can avoid problems and save money by learning some basic facts about health fraud. The following sections discuss five areas where health fraud commonly occurs. This is not an exhaustive list, but it may help you become better informed and spend your health-care dollars more effectively. Arthritis If you or a family member are one of the estimated 37 million Americans who suffer from one of the many forms of arthritis, be aware that this disease invites a flood of fraudulent products. This is because, so far, medical science has found no cure for arthritis. The Arthritis Foundation estimates that $1 billion is spent annually on unproven arthritis remedies. Thousands of dietary and natural "cures" have been sold for arthritis _ mussel extract, vitamin pills, desiccated liver pills, and honey and vinegar mixtures. According to the Food and Drug Administration (FDA), no herb, either by itself or in combination with other ingredients, is a cure for any form of arthritis. In addition, there is no medical evidence to suggest that a lack of vitamins or minerals causes arthritis or that taking vitamin or mineral supplements will give relief. If you have arthritis and are searching for a cure, you should know that arthritis is a serious condition that should be treated by a doctor. Miracle "cures," copper bracelets, and even self-prescribed over-the-counter pain-relieving products cannot take the place of appropriate medical advice and treatment. The Arthritis Foundation advises that arthritis symptoms should be monitored by a doctor because the problem can worsen if not properly treated. For a free brochure about unproven remedies, call the Arthritis Foundation, toll-free, 1-800-283-7800 (9:00 a.m. - 7:00 p.m., Eastern Time, Monday - Friday), or write: Arthritis Foundation, P.O. Box 19000, Atlanta, Georgia 30326. Cancer Because the diagnosis of cancer can bring feelings of fear and hopelessness, many people who have been diagnosed as having a form of cancer may be tempted to turn to unproven remedies or clinics that promise a cure. As an aid in evaluating cancer-cure claims, keep in mind that there is no one device or remedy capable of diagnosing or treating all types of cancer. Cancer is a name given to the wide range of diseases requiring different forms of treatment determined by a doctor. Medical science has been able to help many cancer patients, but use of a bogus remedy can delay proper diagnosis and treatment by your doctor. For more information about the seven early warning signs of cancer, contact the American Cancer Society office listed in your Yellow Pages. To order free publications on cancer research and treatment, call the National Cancer Institute's Cancer Information Service: 1-800-422-6237. Weight Loss If you, or others you know, are attempting to lose weight, consider these basic facts: l If you want to lose weight you must lower your calorie intake or increase your calorie use by exercise. Claims that you can eat all you want and lose weight effortlessly are not true. There are no products that will let you lose weight effortlessly. Be skeptical about any such claims. For example, the Federal Trade Commission (FTC) obtained a consent order against a promoter that claimed its $300 device, custom fitted to the purchaser's ear, stimulated acupuncture points and controlled hunger. The consent order settled FTC charges that the advertising was deceptive. Every diet that works requires reducing your calorie intake or increasing your calorie use through exercise. The FTC has specifically held that it is deceptive to advertise otherwise. l If you want to lose weight and tone up as well, you must exercise. If you want to look fit, particularly as you grow older, you must exercise. Any product that promises to trim you down and tone you up effortlessly is a fraud. Fat Deposits "Cellulite" is a name advertisers sometimes use for the fat that some people accumulate around their thighs, buttocks, and stomachs. Before you buy products advertised to dissolve "cellulite," here are some important things to keep in mind: l No amount of rubbing, wrapping, massaging, or scrubbing will get rid of fat deposits. The best way to reduce fat deposits is by dieting to lose weight and exercising to improve muscle tone. l No special vitamin or mineral supplement can dissolve fat deposits. Again, the best way to lose weight _ including fat on thighs, buttocks, and stomach _ is to follow a sensible diet and exercise program. For more information about nutrition, diet, health, and exercise, write to the American Heart Association, Suite 200, 2233 Wisconsin Avenue, N.W., Washington, D.C. 20007. Baldness If you are bald or your hair is thinning, you may be a target for health fraud. You should know that: l No over-the-counter cream, lotion, or device can prevent baldness, induce new hair to grow, or cause hair to become thicker. Over-the-counter (non-prescription), do-it-yourself "remedies" are ineffective because most baldness is hereditary. Ninety percent of all baldness is due to the inherited trait known as "male pattern baldness." Also, no over-the-counter cream, lotion, or device can treat other types of baldness, including those caused by ringworm, systemic disease, glandular defects, or local infection. For a proper diagnosis of the cause of baldness and to discuss possible treatment, see your physician. l Artificial hair implants are dangerous and will not stimulate natural hair growth. The implanting of polyester or modacrylic fibers into the scalp can cause serious infections, bleeding, and loss of natural hair. According to a complaint brought by the FTC against one company, such implants are generally recognized by doctors as unsafe and ineffective treatment for baldness, thinning hair, the loss of hair, or for the replacement of lost hair. Synthetic implanted hairs fall out or break off shortly after being inserted. Such treatment has a high probability of discomfort and pain and a high risk of infection, skin disease, and scarring. For additional information about baldness, write to the American Academy of Dermatology, P.O. Box 3116, Evanston, Illinois 60204-3116. What Federal Agencies Do To Stop Health Fraud And What You Can Do To Help Although the government requires that over-the-counter drugs satisfy established standards of safety and effectiveness before being marketed, many unscrupulous companies advertise and sell products without meeting these requirements. There are, however, laws that prohibit health fraud in the marketplace and those laws can be enforced against sellers and advertisers of bogus products. At the federal level, three agencies have principal responsibility for monitoring the sale and advertising of fraudulent health products. By being aware of the health fraud problem and by reporting suspicious products to the appropriate agency, you can help get dangerous or worthless products off the market. The Food and Drug Administration The FDA has jurisdiction over the content and labeling of foods, drugs, medical devices, and cosmetic products. The FDA can take law enforcement action to seize and prohibit the sale of products that are falsely labeled. If you have questions or wish to report a fraudulent company, contact an FDA field office (listed in your phone book under Department of Health and Human Services), or write to: FDA Headquarters, 5600 Fishers Lane, Rockville, Maryland 20857. The Federal Trade Commission The FTC has jurisdiction over the advertising and marketing of foods, non-prescription drugs, cosmetics, medical devices, and health care services. Under the FTC Act, unfair or deceptive acts or practices, in or affecting commerce, are illegal. The FTC has the authority to prohibit such acts or practices. It can seek federal court injunctions to halt fraudulent claims quickly and to obtain redress for injured consumers. If you have questions about claims made in advertising or in other promotions for health or cosmetic products or services, write to: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580. United States Postal Service The USPS has jurisdiction over fraudulent health care products that are advertised or sold through the mail. To complain about fraudulent mail order products, write to: Chief Postal Inspector, United States Postal Service, Washington, D.C. 20260-2112. Where To Get More Information In general, ask questions and seek information from a wide variety of sources. In addition to the FDA, FTC, and USPS contacts, you may want to use these other resources. l When you have a question about the value of a product, ask your pharmacist or doctor. l Contact officials in your state Attorney General's office or your local consumer agency to get more information or to report problems. These offices will be listed in your telephone directory. l Write or call the Better Business Bureau for information or to report a problem. Check your telephone directory for the office nearest you, or write to: Council of Better Business Bureaus, 4200 Wilson Boulevard, Arlington, Virginia 22203. l Check your local library for books on health care and particular health issues, including fraud and quackery. ---------- When selecting a service contract or a service repair center for a consumer electronic product Consumers Should Know about service contracts * what they are * who sells them * what to ask about repair service * what are the kinds * how to find them * what to ask servicers Published as a public service by the Electronic Industries Association/Consumer Electronics Group ion cooperation with the Federal Trade Commission, the Consumer Information Center, General Services Administration and the Consumer Electronics Roundtable. No endorsement of any particular product, company or service is implied by their mention in this publication. Single copy -- complimentary with a No. 10 self-addressed envelope with 29 postage. Mail to: Electronic Industries Association SCS, P.O. Box 19100 Washington, D.C. 20036 Electronic Industries Association Consumer Electronics Group Table of Contents Answers to Questions About Service Contracts what are service contracts what are their pros and cons who sells service contracts what to ask before buying Answers to Questions About Repair Service how to find the right kind for a product under warranty for a product under service contract how to prove warranty coverage what to ask repair servicers how to check repairs Answers to Questions About Service Contracts SERVICE CONTRACT Q. What is a service contract? A. A service contract is a kind of repair insurance, sometimes called an "extended warranty," sometimes called a "service agreement," that you buy separately from the product. Q. How does a service contract differ from a warranty? A. Essentially, a warranty is not bought separately; it comes with the product you purchase. Q. Are there different kinds of service contracts? A. Yes, there can be many different kinds of service contracts. For example, a service contract may require you to pay a certain amount for repair service. Or it may require you to pay labor, pans, or transportation charges. Q. Are you saying that a service contract may not pay for repair service when I need it? A. It may not pay for everything. For example: * It may pay for labor only or parts only * It may not pay for every part * It may limit the number of repairs * It may require you to pay a certain amount for each service call * It may not pay for in-home service Q. What are some pros and cons of service contracts? A. Service contracts may help you pay for expensive repairs and routine maintenance. On the other hand, be sure the service you receive is given by technicians who are trained to service your product brand and who will use appropriate replacement parts. Q. How can I make sure the service contract I buy with a new product does not duplicate the warranty or overlap it? A. Read the warranty to find out how long the warranty lasts and what it covers. For example, if the TV you select has a lengthy picture tube warranty, you might want to buy a service contract that does not cover the picture tube, or you might do without a service contract. Q. My VCR needs maintenance service to keep the heads clean. Can a service contract help pay the cost? A. Yes, some service contracts do cover routine maintenance. Q. When should I think about buying a service contract? A. Discuss this with the retailer when you buy the product. Your new electronic product warranty may cover most repair costs sometimes for 90 days, sometimes for a year or more. Q. So how can I decide about whether to buy a service contract? A. Read the warranty; read the service contract; and compare. Weigh the cost of the service contract against maintenance and repair bills you may face later. Q. Who sells service contracts? A. The retailer who offers you a service contract may be selling it for the dealer, the manufacturer, or a separate service company. Ask the salesperson for time to study the contract. Also ask if the retailer sells more than one kind of service contract. If so, compare them. Q. How can I find out if the manufacturer of my product brand offers a service contract? A. To find out about the availability of a manufacturer's service contract, contact a retailer who sells the product or contact the manufacturer. Some manufacturers have "800" numbers. Look for one in the product intrusion booklet or dial 1-800-555-1212 for information. Sometimes a manufacturer's service contract (also called an extended warranty or service agreement) is not for sale when you buy the new product. It may be offered to you by mail or by telephone just before the new product warranty expires. Q. How can I find out about the reputation of a service contract company? A. Ask the Better Business Bureau or your local consumer protection office if they have had any complaints against the service company. Q. What happens if my service contract company goes out of business? A. Unfortunately, there is little you can do if this happens. The best way to protect yourself is to make sure before purchase that the company is reputable and has insurance so you can get a refund. Q. I have a bad service contract. What can I do? A. You cannot change the terms or conditions of a service contract you already have purchased. Always read a contract before you sign it. Q. What if the salesperson has no written contract for me to look at? A. If you cannot first read the contract, do not buy it! Make sure all the blank lines are completed. Q. Can a service contract be renewed? A. Some service contracts cannot be renewed and say so. Because your product is more likely to need service as it gets older, renewability is important. Ask about the cost of renewal for it can often be higher. Q. What should I ask before buying a service contract? A. Before buying a contract, ask yourself or the dealer these questions. * Who is offering the contract -- the dealer (retailer), the manufacturer, or an independent third party? * Where will the product be serviced? In my home? In a repair shop? In a manufacturer's service center? * Does the contract begin when my product warranty ends so I do not pay twice for the same coverage? * What is the length of the service contract coverage? * What exactly will I get in repairs and maintenance for the money I'll pay? * Is the contract valid if I move? * Is the service contract transferable if I sell the product? * How much time do I have to decide if I want to buy the service contract? Answers to Questions About Repair Service Q. What should I do if I'm having problems with my electronic product? A. First, you should take a look at the operating instructions, especially the section that refers to "Trouble." Second, you should take a look at your warranty or your service contract to check their terms. Q. Are there different kinds of service repair shops? A. Yes, there are three kinds: manufacturers', authorized, and independent. * Product manufacturers own and operate service repair centers. * Authorized service shops are privately owned and operated independent of the manufacturer. They are authorized by the manufacturers to service their products, usually employ technicians trained by the authorizing manufacturers, and normally use the manufacturers' test equipment and replacement pans. * Independent service shops are privately owned and operate independently of product manufacturers. They may service electronic products, but may not be authorized by the manufacturer. Q. How do I find a service center when my product is still under warranty? A. If the manufacturer requires you to use only an authorized service center during the warranty period, choose one from the list that was packed with your product, or contact the manufacturer to find the closest authorized center or shop. Q. What if I decide to use an independent service shop for warranty repairs? A. If you use a dealer who is not authorized by the manufacturer, you may have to pay for service and you may void your warranty. Q. I forgot to mail in my owner's registration card. Can I still get service under my warranty? A. Yes, if the warranty is still valid. A sales receipt or a cancelled check (always save them with your warranty) can be used to prove the date you bought the product. You are not required to return the registration card, but you should do so if you want to receive any safety notices that the manufacturer may send to product owners. Q. How can I find a service center when my product is under a service contract? A. If your service contract requires you to use an authorized service center, check your contract for the names and addresses of those listed. If none are named, you can call the service contract company, the dealer, or the manufacturer to get suggestions, or check listings in the telephone book. Be careful, however, if you rely on telephone book listings. The manufacturer's logo or trademark used with a service center's name does not always mean the center is currently authorized. For verification, you can call the manufacturer. This may keep you from using a service center that has lost its authorization and possibly from voiding your contract. Q. Does a service center that is not on a manufacturer's authorized service center list mean it has lost its authorization? A. No. An independent service center may not have applied for a manufacturer's authorization. Q. What should I ask servicers? A. If your service contract allows you to choose a repair service, ask: * Are your technicians trained to service my product brand? * Do you charge for a diagnosis, an estimate, and house calls? * Is the labor charge by the hour or a flat rate? * Will you call to give me the total cost before you do the repair? * Is there a warranty on the repairs? What does it cover? For how long? Q. What should I get from servicers? A. Here's a checklist: * A written estimate * A claim check that shows the date your product goes into the shop for repair; gives the service center's name, address, and phone number; describes your product by brand, model, and serial number * Signature of the technician or counter clerk along with a written description of what repair will be done in language you can understand (You may have a service contract that will allow reimbursement) * "No charge" written on the receipt if the product is under warranty Q. What should I do to check repair work? A. Here are two suggestions: * Always try the serviced product before you leave the service center or before the technician leaves your home. * Be sure your receipt itemizes the work that was done (in language you can understand and in handwriting you can read) and be sure it spells out any warranty or service contract terms, if applicable. The Electronic Industries Association and the Federal Trade Commission recommend that you take the time to understand and use your product warranty or service contract protection. Before signing a service contract, consider its terms, so that you can weigh the costs against possible future maintenance and repair bills. When a product needs repair, carefully select a service center using the information given in this brochure. ---------- How to Write a Wrong * The FTC Mail of Telephone Order Rule covers goods ordered by mail, telephone, computer, and fax machine. * The FTC Cooling-Off Rule gives you three days to cancel purchases of $25 or more that are made in your home or at a location that is not the permanent place of business or local address of the seller. * If you receive and item in the mail you did not order, federal law states you can consider the item as a gift. * If you have a problem with a company, try to resolve it with the company before contracting a third party. Make sure you act quickly. Some companies may not accept responsibility if you fail to complain within a certain period of time. * Send the company a letter of complaint. A letter puts your complaint on record and lets the company know you are serious about the dispute. Bureau of Consumer Protection Office of Consumer & Business Education (202) 326-3650 Produced in cooperation with the American Association of Retired Persons Most businesses want you as a satisfied, repeat customer. However, there may be instances when you are not satisfied and you need to know how to remedy the situation. This brochure explains your rights regarding mail and telephone order shopping, unordered merchandise, and door-to-door sales. It also explains how to write an effective complaint letter and lists some resources for additional consumer assistance. Mail and Telephone Order Sales Ordering merchandise by mail, telephone, computer, or fax machine can be convenient ways to save time and energy. But if your merchandise arrives late or not at all, you need to know your rights. The Federal Trade Commission (FTC) Mail or Telephone Order Rule states that a company should ship your order within the time stated in its ads. If no time is promised, the company should ship your order within 30 days. If the company is unable to ship within 30 days or the promised time, the company must send you an "option notice." This notice gives you the choice of agreeing to the delay or canceling your order and receiving a prompt refund. There is one exception to the 30-day requirement. If a company does not promise a shipping time, and you are applying for credit to pay for your purchase, the company has 50 days after receiving your order to ship. Fair Credit Billing Act (FCBA) You also have protections, under the FCBA, against billing errors and the receipt of unsatisfactory goods and services if you use your credit card to pay for purchases made by mail or telephone. Billing Errors If you find a billing error on your monthly credit or charge card statement, you may dispute the charge and withhold payment on the disputed amount during the dispute period. The error might be a charge for the wrong amount, or for something you did not order. If you decide to dispute the charge, follow the steps below. Of course, you still must pay for any part of the bill that is not disputed, including finance charges on the undisputed amount. To be protected by the FCBA, you must: * Write to the creditor at the special mailing address indicated on the monthly statement for "billing inquiries." Include your name, address, and credit card number, and describe the billing error. * Send your letter soon. It must reach the creditor within 60 days after the first bill containing the error was mailed to you. The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving the letter. Unsatisfactory Goods or Services You also may dispute a charge if you bought a product by mail or telephone and found it unsatisfactory. As with a billing error, you may withhold payment on the disputed amount during the dispute period but you must pay for any part of the bill that is not disputed, including finance charges on the undisputed amount. In order to take advantage of this protection regarding the quality of goods, you must: * Have bought the item in your home state or within 100 miles of your current billing address. The amount charged must be more than $50. * Make a good faith effort first to resolve the dispute with the seller. You are not required to use any special procedure. There are certain exceptions to this protection. The dollar and distance limitations don't apply if the seller is also the card issuer or if a special business relationship exists between the seller and card issuer. Unordered Merchandise If you receive an item you did not order, federal law states you can consider the item as a gift. You cannot be forced to pay for the item or return it. If you decide to keep the merchandise, you may want to send the seller a letter stating your intention, even though you have no legal obligation to do so. Your letter may discourage the seller from sending you repeated bills, or it may clear up an error. You may want to send the letter by certified mail and keep the return receipt and a copy of the letter. These records will help you establish later, if necessary, that you did not order the merchandise. There are two types of merchandise that may be sent legally without your consent: free samples that are clearly marked as such; and merchandise mailed by charities asking for contributions. In either case, you may keep the shipments. Door-to-Door Sales Shopping at home can be convenient and enjoyable. But there may be times when you change your mind about a door-to-door sales purchase. The FTC Cooling-Off Rule gives you three days to cancel purchases that are made in your home or at a location that is not the permanent place of business or local address of the seller. However, the Cooling-Off Rule does not cover sales that: * are under $25. * are made entirely by mail or telephone. * are the result of prior negotiations made by you at the seller's permanent location. * are needed to meet an emergency and you write and sign an explanation waiving your right to cancel. * are made as part of your request for the seller to perform repairs or maintenance on your personal property (although, any purchase made beyond the maintenance or repair request is covered). * involve real estate, insurance, or securities. * are of automobiles sold at temporary locations, provided the seller has at least one permanent place of business. * involve arts and crafts sold at fairs or other locations, such as shopping malls, civic centers, and schools. Under the Rule, the salesperson must orally inform you of your cancellation rights at the time of sale. You also must be given two copies of a cancellation form and a copy of your contract or receipt. The contract or receipt should be dated, show the name and address of the seller, and explain your right to cancel. The contract or receipt must be in the same language used in the sales presentation. SIGNING THE CONTRACT Before you sign a contract, get as much information as possible in writing. Make sure the contract matches the claims made by the seller. Be sure all blank spaces in your contract are filled in. Also, get a copy of the contract or other document you sign; keep it in a safe place for future reference. HOW TO CANCEL A DOOR-TO-DOOR SALE To cancel a sale, sign and date one copy of the cancellation form. Make sure the envelope is post-marked before midnight of the third business day after the contract date. (Saturday is considered a business day but Sunday and most federal holidays are not.) Because proof of the mailing date and receipt are important, consider sending the cancellation form by certified mail. Keep the other copy of the cancellation form for your records. You can write your own cancellation letter if you are not given cancellation forms. But let the FTC know that you did not receive cancellation forms from the seller. WHAT THE SELLER MUST DO IF YOU CANCEL If you cancel, the seller must, within 10 days: * cancel and return any papers you signed. * refund all your money and tell you whether any product left with you will be picked up. * return any trade-in. Within 20 days, the seller must either pick up the items, or, if you agreed to send back the items, reimburse you for mailing expenses. If you do not make the items available to the seller or if you agreed to return the items but fail to do so, you remain obligated under the contract. If You Have a Complaint Try to resolve your dispute with the seller first. Make sure you act quickly. Some companies may not accept responsibility if you fail to complain within a certain period of time. Send a letter of complaint. A letter is important because it puts your complaint on record and lets the company know your are serious about pursuing the dispute. Be sure you keep a copy for your records. If you cannot get satisfaction acting alone, consider contacting the following organizations for further information and assistance. * State and local consumer protection offices. * Your local Better Business Bureau (BBB). * Action line and consumer reporters. Check with your local newspaper, TV, and radio stations for a contact. * Postal Inspectors. Call your local post office and ask for the Inspector-in-Charge. * The Federal Trade Commission. Write: Correspondence Branch, Federal Trade Commission, Washington, DC 20580. Although the FTC does not intervene in individual disputes, the information you provide may provide a pattern of possible law violations requiring action by the FTC. * Mail/telephone orders only. The Direct Marketing Association (DMA). Write: DMA, 1101 17th Street, NW, Suite 705, Washington, DC 20036. * Door-to-Door sales only. The Direct Selling Association (DSA) can assist you with your complaint if the door-to-door seller is a member. Write: DSA, 1776 K Street, NW, Washington, DC 20006. Dispute Resolution Options You also may want to consider dispute resolution programs. They are an increasingly popular way to settle disagreements. They can be quicker, less expensive, more private, and less stressful than going to court. Many businesses, private organizations, and public agencies offer these programs. Two resolution techniques are mediation and arbitration. Through mediation, you and the other party try to resolve the dispute with the help of a neutral third party -- a mediator. In the course of informal meetings, the mediator tries to help resolve your differences. The mediator does not make a decision; it is up to you and the other party to reach an agreement. The mediator is there to help you find a solution. In arbitration, you present your case before an arbitrator, who makes a decision about the case. Arbitration is less formal than court, though you and the other party may appear at hearings, present evidence, or call and question each other's witnesses. The decision may be binding and legally enforceable in court. Consider contacting the following organizations to find out what dispute resolution options are available in your area: local and state consumer protection offices; small claims courts; BBBs; and bar associations. ---------- STRAIGHT TALK ABOUT TELEMARKETING * Telemarketers may call only between 8 a.m. and 9 p.m. They must tell you that they're selling something -- and who's doing the selling -- before they make their pitch. * You can stop unwanted calls from telemarketers by telling them not to call back. If they do, they're breaking the law. Report them to your state Attorney General. * Before you pay for any products or services, you must be told the total cost and restrictions on getting or using them. _________________________________________________________________ You know the routine. You sit down to dinner and the phone rings. You answer it. There's a pleasant voice trying to sell you something. If you're tempted by the offer, you'd better get the facts before a potential fraud gets you. While most phone sales pitches are made on behalf of legitimate organizations offering bona fide products and services, many sales calls are frauds. Consumers lose more than $40 billion a year to telemarketing fraud. That's why the Federal Trade Commission (FTC) encourages you to be skeptical when you hear a phone solicitation and to be aware of a new law -- the Telemarketing Sales Rule -- that can help you protect yourself from abusive and deceptive telemarketers. After you read this brochure, you'll know: * how fraudulent telemarketing operations work; * how you can use the new Telemarketing Sales Rule to recognize a fraud and stop unwanted calls; * how to protect yourself; and * what to do if you've been scammed or want to file a complaint. How Telemarketing Scams Work The heart of a fraudulent telemarketing operation is usually a "boiler room," a rented space with desks, telephones, and experienced sales people who talk to hundreds of people across the country every day. Telephone fraud knows no race, ethnic, gender, age, education or income barriers. Anyone with a phone can be victimized by telemarketing scam artists. Fraudulent telemarketers and sellers may reach you in several ways, but the telephone always plays an important role. Cold Calls. You may get a call from a stranger who got your number from a telephone directory, mailing list, or "sucker list." The latter refers to lists of consumers who have lost money through fraudulent prize promotions or merchandise sales. These lists contain names, addresses, phone numbers, and other information, such as how much money was spent by people who have responded to telemarketing solicitations. "Sucker lists" are bought and sold by unscrupulous promoters. They are invaluable to scam artists who know that consumers who have been deceived once are vulnerable to additional scams. Direct Mail. You may get a letter or postcard saying you've won a prize or a contest. This often is a front for a scam. Instructions tell you to respond to the promoter with certain information. If you do, you'll be called by a salesperson who may use persuasive sales pitches, scare tactics, and exaggerated claims to deceive you and take your money. Broadcast and Print Advertisements. In some cases, you may make the telephone call in response to a television, newspaper or magazine advertisement, or a direct mail solicitation. The fact that you make the call doesn't mean the business is legitimate or that you should be less cautious about buying or investing on the phone. The Telemarketing Sales Rule The FTC's Telemarketing Sales Rule requires certain disclosures and prohibits misrepresentations. It gives you the power to stop unwanted telemarketing calls and gives state law enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines. The Rule covers most types of telemarketing calls to consumers, including calls to pitch goods, services, "sweepstakes," and prize promotion and investment opportunities. It also applies to calls consumers make in response to postcards or other materials received in the mail. Keep this information near your telephone. It can help you determine if you're talking with a legitimate telemarketer or a scam artist. * It's illegal for a telemarketer to call you if you've asked not to be called. If they call back, hang up and report them to your state Attorney General. * Calling times are restricted to the hours between 8 a.m. and 9 p.m. * Telemarketers must tell you it's a sales call and who's doing the selling before they make their pitch. If it's a prize promotion, they must tell you that no purchase or payment is necessary to enter or win. If you're asked to pay for a prize, hang up. Free is free. * It's illegal for telemarketers to misrepresent any information, including facts about their goods or services, earnings potential, profitability, risk or liquidity of an investment, or the nature of a prize in a prize-promotion scheme. * Telemarketers must tell you the total cost of the products or services offered and any restrictions on getting or using them, or that a sale is final or non-refundable, before you pay. In a prize promotion, they must tell you the odds of winning, that no purchase or payment is necessary to win, and any restrictions or conditions of receiving the prize. * It's illegal for a telemarketer to withdraw money from your checking account without your express, verifiable authorization. * Telemarketers cannot lie to get you to pay, no matter what method of payment you use. * You do not have to pay for credit repair, recovery room, or advance-fee loan/credit services until these services have been delivered. (Credit repair companies claim that, for a fee, they can change or erase accurate negative information from your credit report. Only time can erase such information. Recovery room operators contact people who have lost money to a previous telemarketing scam and promise that, for a fee or donation to a specified charity, they will recover your lost money, or the product or prize never received from a telemarketer. Advance-fee loans are offered by companies who claim they can guarantee you a loan for a fee paid in advance. The fee may range from $100 to several hundred dollars.) * If you have the slightest doubt about a telephone offer, wait until you can get information in writing and check it out! EXCEPTIONS TO THE RULE While most types of telemarketing calls are covered by the Rule, there are several exceptions. The Rule does not cover the following situations: * Calls placed by consumers in response to general media advertising (except calls responding to ads for investment opportunities, credit repair services, recovery room services, or advance-fee loans). * Calls placed by consumers in response to direct mail advertising that discloses all the material information required by the Rule (except calls responding to ads for investment opportunities, prize promotions, credit repair services, recovery room services, or advance-fee loans). * Catalog sales. * Calls that are initiated by the consumer that are not made in response to any solicitation. * Sales that are not completed, and payment or authorization for payment is not required, until there is a face-to-face sales presentation. * Calls from one business to another unless nondurable office or cleaning supplies are being offered. * Sales of pay-per-call services and sales of franchises. These are covered by other FTC rules. Defensive Moves In addition to knowing about the Telemarketing Sales Rule, it's a good idea to keep the following tips in mind whenever you hear a phone solicitation: * Resist high pressure sales tactics. Legitimate businesses respect the fact that you're not interested. * Take your time. Ask for written information about the product, service, investment opportunity, or charity that's the subject of the call. * Before you respond to a phone solicitation, talk to a friend, family member, or financial advisor. Your financial investments may have consequences for people you care about. * Check out testimonials to make sure they're genuine -- not statements that have been bought or paid for. * Don't send money -- cash, check, or money order -- by courier, overnight delivery, or wire to anyone who insists on immediate payment. * Keep information about your bank accounts and credit cards to yourself _ unless you know who you're dealing with. * Before you pay, check out the company with your state or local consumer protection office. To Report a Scam Fight telephone fraud. Report telephone scam artists to your state Attorney General. The Telemarketing Sales Rule gives these local law enforcement officers the power to prosecute fraudulent telemarketers who operate across state lines. You also may call the National Fraud Information Center (NFIC) at 1-800-876-7060, 9 a.m. - 5:30 p.m. EST, Monday - Friday. NFIC is a private, non-profit organization that operates a consumer hotline to provide services and assistance in filing complaints. NFIC also forwards appropriate complaints to the Federal Trade Commission for entry on its telemarketing fraud database. In addition, you may want to file a complaint with the FTC by writing to: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580. Although the FTC generally does not intervene in individual disputes, the information you provide may help indicate a pattern of possible law violations requiring action by the Commission. ---------- TOP 10 CONSUMER SCAMS OF 95 Most people think that they can tell when someone is lying to them. But it's hard to resist a caller telling you with great excitement that you've just won $25,000. Nonetheless, it's worth remembering that "con man" is short for confidence man -- a professional liar. And sweepstakes promotions were one of the most common schemes employed by con artists in 1995 to part consumers from their money illegally, according to the staff of the Federal Trade Commission. The FTC also reminds consumers that its tough new rule to combat telemarketing fraud goes into effect on Dec. 31. The Telemarketing Sales Rule requires callers to make up-front disclosures, prohibits misrepresentations, and authorizes every one of the state Attorneys General to sue scam operators in federal district court to obtain a nationwide injunction. (See related FTC news release, issued today.) Of course, most telemarketing is legitimate, but here are the FTC staff's TOP 10 SCAMS OF 1995: 1. SWEEPSTAKES: You've Won $25,000! Or a boat, or a car, or something else "valuable." So goes the pitch. But if you're asked to pay before you get your prize, it's a scam. Often these outfits claim the money is for shipping, taxes, or something like that. But legitimate companies rarely require any payment or purchase up front. 2. TRAVEL SCAMS: Two Weeks in Hawaii for $350! Maybe it's a "certificate" for a bargain vacation. Claims of inexpensive travel are easy to believe, because real bargains are available if you shop carefully. Check out all travel offers with a reputable travel agency. And if they want your money right away -- before you can think the offer through and check it out -- odds are it's a scam. 3. GEMSTONES: Invest in Gemstones With Low Risk and Great Return! Usually, you must rely on the seller and phony "grading certificates" or "appraisals" for information about what these "investments" are worth. Often, however, they're not worth the money you've paid and they have little resale value. 4. RECOVERY ROOMS: Been Ripped Off? We'll Get Your Money Back! These "recovery rooms" get the names of people who have been defrauded in other scams and then call, claiming to be federal attorneys or agents who can get your lost money back -- for a fee. When the federal government sues scam artists, there is never a charge to consumers to return any money recovered. 5. BUSINESS OPPORTUNITIES: Earn Big Money with Vending Machines! or by operating some other type of business that the promoter claims will produce big returns. These outfits promise all the support you need, and they may tell you to call others who have done well with their program. Too often the assistance is nonexistent and the references are "shills" who actually work for the company. Once consumers invest their money, they may learn that there is no market for the business. If the business is a franchise, special disclosure rules apply. These disclosures give some useful background on the company, including substantiation for any earnings claims the marketers make. 6. CHARITABLE SOLICITATIONS: Donate to a Good Cause! You may think you are donating to a good cause -- but often, the calls are from crooks. In many cases, these scam artists claim to be collecting on behalf of the police or the highway patrol officers. Give money to charitable causes, if you want -- but take all necessary steps to make sure the charity is legitimate. 7. ADVANCE FEE LOANS: We Can Get You a Loan! even if you have bad credit. These scams involve promises that, for an advance fee, you will get the loan you need. But then the paperwork stall begins and the loan never comes. Someone who knows nothing about you, but promises to get you a loan and demands money up front, is probably running a scam. 8. TONER ROOMS: We're Your Office Supplies Company and We Have a Great Deal! Prices are going up soon, so place your order now. These scam artists ship low-quality goods at high prices and try to bully companies into paying for them. Typical come-ons involve sales of copier toner, copy paper, cleaning supplies, and light bulbs. If your company receives unordered goods, don't pay. But do complain. 9. WORK AT HOME PLANS: Earn Thousands of Dollars a Month Working at Home! Claims that you can earn a significant income working at home rarely can be supported. Very often, there is a "catch." Check these claims out carefully before sending any money. If it were possible to make the amounts claimed, the scammers would be doing the work themselves instead of engaging in fraud. 10. CREDIT REPAIR: Remove Damaging Information from your Credit Report! These scam artists claim they can get truthful information removed from your credit report -- for a fee. Not true. Accurate information can be reported for seven to 10 years. If your report has errors, you can get it corrected at no cost to you. In addition, nonprofit organizations can help you rebuild your credit at no cost. The FTC has published free consumer brochures on each of these scams. They describe in a little more detail how the scams work, and offer tips for recognizing and avoiding them. Copies of the brochures are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202-326-2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710