Consumer Tips

The Printer Paradox

By: James Wilson 

Individuals are well intentioned in wanting to save money, but under certain conditions these objectives actually have the effect of costing more in the long run. This is the classic printer paradox, as described below.

Jeff needs a new printer and wants to get the best value for his dollar. He goes to the local office supply store where he finds Printer A and Printer B. Both printers have the same features and functionality, but Printer A is $30 and Printer B is $50.  Presented with the opportunity to buy essentially the same printer for $20 less, Jeff happily purchases Printer A and heads home.

Over the next six months Jeff has to purchase three ink cartridges to meet the printing needs out of his home office. Each ink cartridge costs $20, bringing Jeff’s six-month total to $90. What Jeff does not realize is that cartridges for Printer B are only $10 each. If Jeff had bought Printer B with three cartridges he would have only spent $80 over the same six-month period.

Consumer protection laws do not tell companies how they must price their products and ancillary services, but they do try to combat information asymmetry—the same type of situation that gives rise to the printer paradox. If Jeff took a little more time, and used the information in the marketplace before buying Printer A, he may have bought Printer B instead. Laws like the Colorado Consumer Protection Act (CCPA) work to prevent misrepresentations in sales and marketing so that the information you use to purchase goods and services helps you make sound decisions.

There are a range of services that help you ascertain the information you need. Typically most consumer agreements have, by law, specific provisions addressing everything from termination rights to collection of payments. Even though products or services may be similar in nature, the specific requirements for each may be different. For example, in Colorado you generally have a minimum three-day period to rescind a new gym membership. A buyer’s club membership, however, has only a minimum one-day cancellation period. Instead of trying to memorize the various requirements for the different products and services you may buy, you should utilize the following resources:

 

Boulder County Community Services (BCCS) – www.bouldercountyhc.org

BCCS has a great team of individuals that specialize in individual counseling and workshops. Topics that they assist with include personal finance, foreclosure information, housing education, and more. Free services like those offered at BCCS should be a top priority when making the large financial decisions in your life. At their counseling appointments and workshops you will learn about properly budgeting the purchase of your home, reducing your debt, and what to look out for before signing up for that next credit card.

 

Department of Regulatory Agencies – www.dora.colorado.gov

DORA is a dedicated agency in Colorado charged with curbing deceptive trade practices and promoting fairness in the marketplace. Whenever you hire a service provider in Colorado who is required to be licensed by the state (e.g. plumber, barber, insurance agent, etc.) you should double check to make sure that their license is current, and review any disciplinary history. Contracting with current licensees with a clean history will better protect you down the road if something goes wrong.

In addition to verifying licensure, the AskDORA feature enables you to ask questions about consumer protection questions you may have. If you need to know more about financial services for example, this is a great place to start.

 

Colorado Attorney General Consumer Protection Section – www.coloradoattorneygeneral.gov

The Consumer Protection Section of the AG’s office helps enforce laws like the CCPA. If you have a complaint regarding a consumer protection issue, this is the office to contact. In addition to being an outlet to field complaints, their website has a long list of resources relating to specific consumer protection issues. In addition to a “Consumer Questions” section—which offers answers to common questions the office receives—the Consumer Resource Guide offers information related to specific topics, including automobiles, scams, credit and lending, health issues, and more. The Consumer Resource guide can be accessed at www.coloradoattorneygeneral.gov/initiatives/consumer_resource_guide.

 

As always, make sure you use consumer protection laws to your advantage by gathering the information you need to continue making informed decisions. If there is something you do not know, but would help you feel confident about your choices, start with the resources listed above.

Beware when looking up advice online

By: Sierra Moller 

In today’s digital age, there are hundreds of thousands of articles on financial advice. A quick Google search of “credit repair” or “debt consolidation” will populate hundreds of millions search results from blogs all over the Internet. In all the noise of available advice on the Internet, how do you know what resources to trust?

In my quest to assemble great consumer tips and tricks on debt consolidation and credit repair, I came across many sites that had content that seemed like good advice, but also seemed like it was trying to guide me towards a particular product or service.

As it turns out, for every well-intentioned article available on the Internet, there are dozens of articles geared towards advertising a particular product. This form of marketing is called native advertising, and it’s rampant throughout the Internet today. Native advertising is the concept that corporations pay to have content about their products included in articles that align with the publication in style and tone, making it very difficult for readers to spot. [1]

Financial websites such as Forbes, have been participating in native advertising for several years. For instance, Forbes has a program called BrandVoice, which allows marketers to produce articles for Forbes.com and the magazine, which often resemble the look and tone of regular articles. [2] The articles contain general advice, but often also embed a “plug” for a particular brand or service. To their credit, Forbes maintains a staff of sponsored content specialists to work with the advertisers to ensure the article remains valuable to readers.

Forbes is not alone. In fact, other prominent financial websites use native advertising. For example, Fortune.com and Money.com work with Impact Partnership, a marketing organization, to pair advice on retirement and financial planning with native content from financial advisors across the country.[3]

Native advertising works. In fact, it might work too well. Click-through rates tend to be much higher than typical advertisements and readers are usually more engaged in the content. However, it can be problematic when readers, who are reading the articles for advice, rely on those articles, not realizing it was an advertisement.

This practice has garnered both positive and negative attention. On the one hand, the practice has arguably created a whole new business model for companies such as Forbes by creating new sources of revenue. On the other hand, consumer protection organizations call the practice is deceptive to consumers because readers may not always realize when the content is an ad. [4]

The practice has also raised eyebrows at the Federal Trade Commission. The FTC is currently considering implementing regulatory measures on native ads, including plans to monitor the market to ensure that native advertising is being used in a manner than benefits consumers.[5]

For now, the FTC has not issued formal guidance on requiring disclosure, but there are rumors that it plans to do so. Additionally, industry organizations such the Interactive advertising bureau (IAB) has issued their own warnings to advertisers. They suggest that brands respect consumers and clearly label sponsored content as advertising. [6]

Until the FTC issues more rules and guidance on native ads, here are a few commonly accepted labels to help spot native ads.

  • “Advertisement” or “AD“ (Google, YouTube)
  • “Promoted” or “Promoted by [brand]”
  • “Sponsored” or “Sponsored by [brand]” or “Sponsored Content”
  • “Presented by [brand]” and “Featured Partner”

Lastly, its important to note that the advice provided in sponsored articles is not necessarily wrong or even bad advice. In fact, most of the advice in these articles is legitimate. But it is important that when your searching for advice on the internet, you use sources of information that you trust. Or at the very least, you should know when your reading an article that is intended to be an advertisement or promotion for a product. Be on the lookout for content in articles that promotes one specific product or service over others.

[1] http://www.wordstream.com/blog/ws/2014/07/07/

[2] http://blogs.wsj.com/cmo/2015/01/04/forbes-takes-native-ads-to-new-level-with-att-sponsored-cover/

[3] http://www.prnewswire.com/news-releases/impact-partnership-expands-relationship-with-fortune-to-include-money-fortune-knowledge-group-300022824.html

[4] http://www.bloomberg.com/bw/articles/2014-08-05/ad-industry-execs-weigh-in-on-john-olivers-native-advertising-takedown

[5] https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-revised-endorsement-guides-what-people-are-asking

[6] http://www.iab.net/iablog/2015/01/what-happens-if-the-ftc-provides-native-advertising-guidance-in-2015.html

 

Buddy System For Debt Freedom

By: Sierra Moller 

A while back my friends and I were talking about our debt problems. In today’s world, it seems like everybody has them. But each of us had different kinds of debt problems. One friend had credit card debt, another had an expensive mortgage, another had a car loan, and I had student loans. It is an exciting time in our lives, but these money surprises add up quick.

Buying your first home, moving to a new city, getting an education or buying a car are all GOOD things (in theory) for your financial future, but only if you can manage to stay financially floating. Whether we like it or not, these exciting events require establishing and maintaining good credit.

None of us had a clue how to get on track, so we decided to buddy up to help each other save. After all, its no fun when you feel everyone is out having fun and you’re stuck at home because you can’t afford to enjoy an evening out with friends.

Turns out, research by the National Endowment for Financial Education finds [i] that having a financial buddy is a great tool to help you stay on track.

“A financial buddy can be anyone: a spouse, a trusted friend, a family member or a co-worker, and it doesn’t have to be someone with whom you share all of your financial information,” says Paul Golden, spokesperson for NEFE. “It is similar to having a workout buddy. You want someone to help you stay the course, reach short- and long-term goals and remember that you are not alone. And if you both have similar goals, you can share your respective struggles and triumphs along the way.”[ii]

It makes sense. If you have a few friends that all decide to pay off their debt and hold each other accountable together, suddenly, it becomes a lot easier to find new ways of having fun that are affordable. Free entertainment is typically the best way to get over your debt-paying blues.

Here are a few fun, money saving ideas to do with friends:

  1. Hang out at the park. Throwing around a frisbee or a football is a great way to spend an afternoon with friends.
  2. Go on a hike. Lucky for my friends and I, we have an unlimited number of nearby trails to explore. Check out Trail Finder to find an good place to hike near you.
  3. Game night. We started this a few years ago and take turns hosting it at each other’s house.
  4. Free tours. Breweries, the Candy Factory, Celestial Seasonings Tea Factory and more. Colorado has many fun free tours to take.
  5. Attend Free Venue Days. These events require more planning, but give you a chance to score free entry to some of the best local museums, zoos and botanic gardens around.
  6. Catch a flick at a dollar theatre. If your town doesn’t have a dollar theatre, you can also rent movies from RedBox.
  7. Get Crafty. There are thousands of cool d0-it-yourself ideas online that are really fun to do with friends such as pumpkin carving, quilting, origami, woodworking and more.

It is also nice to have the emotional support for when things get tough. A financial buddy can be an important asset when you face life’s inevitable misfortunes. During these hard times, a financial buddy can act as both your cheerleader and coach, offering support and encouragement.

When faced with difficult choices, people tend to act- well human. That means we often don’t make the best decisions, which usually leads to further troubles down the road. A good financial buddy can help you remind you of your financial goals, and help you make smart choices.

For example, a good financial buddy could go with you to credit counseling. Credit counseling is a great place to start, and is often free. Using experts will help you get qualified, and personalized financial advice. A credit counselor can help you make a budget, develop a savings strategy, and even compare home or auto loans.

The point is, there is no easy route to financial freedom, and no road-trip is ever fun if you’re doing it alone.

[i][ii] http://www.nefe.org/press-room/news/make-resolutions-stick-with-a-financial-buddy.aspx

Making and Saving Money in the Sharing Economy, Part I

By: Otto Hanson

On a planet with rapid growing population and dwindling natural resources, sharing is one of the best and most economical ways to reduce our impact on the environment.  Whether it’s a power drill, a car, a home, or a buck, sharing with strangers can be difficult, and certain safety, transparency, payment processing and review mechanisms must be developed  in order for people to trust sharing with strangers.  Luckily, companies and non-profits are sprouting up all over the globe with crafty, effective platforms designed to enable people to safely share resources with each other.

This two part blog post is designed to introduce people to a few opportunities to get into the sharing economy.  On each of the mentioned platforms, a smart plan and a little dedication should yield cost savings or generate income, depending on whether you choose to consume or provide on the platform.

Before getting into the platforms, a few words of caution.  The author of these posts is not an attorney, and nothing contained herein should be taken as legal advice.   Some of the services provided on the listed platforms are heavily regulated.  If you choose to become a host on Airbnb.com or a driver on Uber or Lyft, for example, you should consult an attorney to make sure you’re aware of relevant laws, as well as any tax, insurance, and licensing requirements.

The following is a sample list of some opportunities to save or make money in the sharing economy.  The first item is specific to Boulder and Denver, CO, but all the others are available nationally (and many of them internationally).

B-Cycle

What is it?  A non-profit bike-sharing program that lets people borrow red bikes all over Boulder and Denver.  An annual membership lets you borrow bikes from any station and drop them off at any station for free, up to thirty minutes at a time (60 minutes for subsidized pass holders in Denver only).

How do I sign up?   Qualified low-income individuals in Denver County can get the Subsidized Annual Plus Access Pass for $10 by calling Wendy at 303-825-3325.  All others should visit the Denver B-Cycle webpage or the Boulder B-Cycle webpage.  Regrettably, Boulder B-Cycle does not currently have a subsidized program, though as of March, 2015, they expected to have one in place soon.

What do I need to sign up?  To sign up for the subsidized B-cycle pass you’ll need to verify that you receive TANF, Snap benefits, rental assistance, or are of a qualifying income level.  A credit card is typically required to sign up, but the Denver B-cycle program has offered to do their best to work with clients without access to a credit card.

What should I look out for?  Overage charges!  In Boulder each additional 30-minute period after the initial free 30 minutes costs $3.  In Denver the first 60 minutes are free (subsidized pass holders only), but each 30-minute period thereafter is $4.  Most importantly, don’t lose a bike. Replacing it could cost $1200.

Uber and Lyft

What are they? Smart phone-based apps that let people who need rides connect with people who are willing to give rides. In Boulder and Denver these services can be cheaper and faster than traditional taxi services.

What should I look out for? As a provider (driver) on either or both of these platforms, you should be sure first and foremost that your insurance provider will cover you AND your passengers in the event of an accident of any type. The moment you take paying passengers into your car you enter into a world of heightened liability – make sure your insurance policy knows you’re taking paying customers and will protect you in an accident.

As a consumer (passenger) on Uber or Lyft, you should always check to make sure your driver is experienced and has a positive rating on the platform. Inexperienced drivers or drivers with negative reviews should be avoided. Finally, you should look out for surge pricing.

Don’t miss information on more platforms, and general guidance on becoming a provider on any sharing economy platform, on Making and Saving Money in the Sharing Economy, Part II.

Finally, an App for that. My review of Mint.com

By: Sierra Moller

Today, there seems to be an app for everything. And nearly every app is designed to get you to spend money. But are there apps that will truly help me save money?

Mint.com is a simple app that allows you to link all of your accounts to one easy-to-use platform. Its free to signup and only takes a few minutes to link your accounts.

Please note, you must already have online banking set up with your bank in order to use the app. Therefore, if you don’t have online banking already set-up, you will need to go to your bank to set up an online account with your bank. Mint.com works by adding your bank accounts onto their platform to present your financial information in a slick web-interface, complete with graphs and charts.

The app itself is fun, intuitive, and easy to understand. The service is particularly useful for budgeting, creating goals, and looking at all your financial accounts in one place.

As previously mentioned, it requires linking your bank accounts to the app. I loaded up all my debt accounts first so I could capture how much I actually owe all in one place. It recognized my credit card and student loan accounts instantly. However, it didn’t recognize all of my accounts immediately. For instance, it took 24 hours to recognize one of my accounts from a local bank. In fact, depending on your bank, you may not be able to link all of your accounts. That said, mint.com recognized most of my major accounts so when I was finished, I did feel like it accurately reflected my net worth.

After linking my accounts, I was able to look over all my recent transactions and categorize my spending habits. Mint.com initially auto-categorizes your transactions. Most of them are correct, but there were also a lot of transaction that were mislabeled that I had to re-categorize. It was a little inconvenient at first, but once I adjusted a transaction to a different category, mint.com saved it and automatically remembered it for all future transactions. For example, it labeled my parking meter charges as “other” at first, but then remembered to categorize it as “transportation expense” later.

After three weeks of using the app, I quickly realized that I was spending money at restaurants way more each month than I realized. So I tried out mint.com weekly summaries via email. I normally hate emails from apps, but I thought a weekly email would reveal more about what I was buying each week closer to when I purchased it, so I would be more likely to remember.

Truthfully, it was about as useful as most email alerts. I only really checked it when I had the time, and if I was busy, I just deleted the email before reading it. I think if I checked my mint.com account before I bought every meal I would have resisted spending more. But who has the time? I’m usually grabbing lunch because I’m in a hurry and on the go. Therefore the email feature didn’t stop me from making purchases, but it did help me see what I was buying and how much. After a few weeks of using the email feature, I did notice that I started packing my lunch more, and I was more deliberate about the price of my lunch when I was purchasing my lunch on the go.

Another useful feature is the alert function. You can set it up either with your phone or via email for every late fee, bill reminder, rate change, or when you go over budget on a category. I used this function to alert me when I would go over budget on eating out, and I found this function much more useful to control my spending then the weekly email. The reminders for bill due dates was also a nice feature that I highly recommend.

Lastly, mint.com has a credit monitoring function that I found useful. Mint.com allows you to view and monitor your credit score, payment history, errors, and account usage. I was hesitant at first to enter my credit information, but after checking their terms of service, I opted to enter my info.

Remember when using mint.com the company makes money by acting as a lead generator for other financial services. Which means that the company makes money by recommending various financial services, which they get a referral fee for every customer that signs up. Therefore be on the lookout of when the site is directing you to a third party service, as those services usually cost money.

All in all, I find mint.com a great budgeting tool and I recommend it to those looking to get their finances back on track.

 

The Conundrum of Whether to Buy Extended Warranties

By: Andre Kaiser 

Think back to the last time you bought something that came with a warranty. Maybe you bought a TV or computer, or perhaps it was a blender or refrigerator. Do you remember any extended warranty offer that came along with that purchase? Did you find yourself teetering on the fence of choice, not sure if you should pay for the extended warranty or not? If you can’t remember such an experience, chances are you’ll be faced with this decision sooner rather than later. When you are making that decision, hopefully you’ll remember these tips and tricks to know if an extended warranty is right for you.

Why You Might Feel Pressured to Buy

Let’s start off by figuring out why extended warranties are regularly offered on purchases of consumer electronics and appliances. In a study on the topic, Robert S. Smith of the University of Maryland estimated that about 1 in 3 Americans buy extended warranties each year. The total spent on extended warranties each year in the United States is approximately $1.6 billion. While this is a fraction of the total amount spent on consumer goods, companies that sell extended warranties make about 50% of their profits each year from selling extended warranties. No wonder we sometimes fell pressured into buying extended warranties!

How to Take Control

Now, lets figure out if it is worth paying extra for that extended warranty. The following steps will help you make the decision that is right for you.

Step 1: Take a step back, take a deep breath, and take everything you are hearing with a grain of salt. The salesman is more likely than not telling you all the reasons why you “need” this extended warranty. But you are an educated consumer, you have read this blog, and you know there are two sides to every story.

Step 2: Ask yourself, “Do I really need the warranty?” Significant amounts of research suggest that most products don’t actually fail within the warranty or even extended warranty periods. This is what the seller is banking on when they sell you an extended warranty. Do your research, though; the Internet gives consumers easy access to product reviews. Use that resource, but keep in mind that complainers are often more vocal than satisfied buyers. A list of common consumer goods and their average repair rate can be found here. A few more factors to consider include:

  • Price of the Product: After spending so much on a warranty and service fees (discussed below), it might be logical to just buy a new one. One rule of thumb is to be cautions about buying an extended warranty on a product costing less than $200. Another suggestion is the “20% Rule”, that you should not pay more than 20% of the price of the product on an extended warranty.
  • How You Plan to Use It: Will you use the product a infrequently or hundreds of times per day? Is it a portable good or one that will never leave your desk or kitchen? For example, a laptop is probably more at risk to break than a desktop computer.
  • Start a “Fix-It Fund”: Set aside the money you would have spent on all your extended warranties in a separate account. If you can control yourself to only withdraw from this account when you need to pay for a repair, this is a great way to hold on to your money. Chances are you’ll be better off spending less and gaining interest than shelling out the dough for every extended warranty you are offered.

Step 3: Ask to see the extended warranty. Don’t rely on what you are being told—take 5 minutes to see what the extended warranty actually covers. You might be surprised at what you find. Here are some things to look for:

  • Start Date: Many consumer goods already come with a manufacturer warranty, which starts at the time of purchase. If you buy an extended warranty for 2 years but that extended warranty also starts at the time of purchase, you would have an overlap year of double warranties that you don’t need.
  • Parts and Issues: Extended warranties may not cover certain parts or issues you might have. For example, you might only be covered for certain internal parts, and not be covered for an internal battery or accidental/cosmetic damage to a screen. Alternatively an extended warranty could cover more than the manufacturer warranty.
  • Service Fees: Often there is a service/labor fee or deductible that you’ll have to pay to actually get a part fixed or replaced. This could range from $10 to $99 depending on the product. Compare the price of a repair without the warranty with the warranty plus the service fee.

Step 4: Consider your own risk tolerance and creation. If not having a warranty will keep you up at night or make you afraid to ever use the product, do what you need to stay sane. Similarly, if you have bad-luck, clumsy genes, or careless kids, an extended warranty might make more sense.

But Wait, Before You Buy or Walk Away…

It never hurts to negotiate. Always try to see if you can get the price or coverage you want, or negotiate other terms that are important to you. Also, shop around and see what other sellers’ extended warranties cover on similar products—you just might find a better deal. Finally, you might be able to get a free extended warranty from other sources, like your credit card. For more info on this, look for my other blog posts.

Extended Warranties for Less

By: Andre Kaiser 

Choosing whether or not to buy an extended warranty on your new appliance or electronic device can sometimes be a tough choice. It is nice to have the safety blanket that an extended warranty seems to offer, but the cost is often a deterrent. But what if you could get an extended warranty without paying for it? If you like the words “free” and “cheap” as much as I do, then keep reading.

Credit Cards Provide Free Extended Warranties

If you are like 72% of Americans, chances are you have a credit card. Is your card a Visa, MasterCard, Discover, or American Express? If so, you’re in luck! All four of these credit card companies offer free extended warranty coverage in some form or another for a variety of consumer goods purchased with their card. After you’re done doing your happy dance or fist pump, don’t go running off just yet, there are some things you need to know about how this process works.

First, make sure your card actually does provide an extended warranty. All American Express, Discover, and MasterCard cardholders have extended warranty benefits. However, only Visa Signature cardholders get the Visa extended warranty perks. Additionally, World Card MasterCard holders have better benefits than holders of Standard, Gold, and Platinum Cards. Before calling your credit card company, make sure you can show with a statement or some document that you actually purchased the product with their card. For example, if you have a Discover and a Visa and you bought your computer with the Visa, you won’t be able to get Discover to extend the warranty of the computer if it breaks.

Second, don’t putz around. All four companies require you to contact them by phone within a certain period of time in order to file a claim. MasterCard and American Express both require you to contact them within 30 days of the defect arising. Discover and Visa allow 45 and 60 days, respectively, for you to contact them.

Third, save your receipts and the original manufacturer’s warranty. To make a claim with your credit card company you will be required to provide both of these documents. You will probably also need to have an estimate from the manufacturer on how much the repair will cost. In most situations this will require contacting the manufacturer, not the store you bought it from.

Fourth, recognize that not all cards offer the same benefits. CardHub.com has rated the four cards on each of their policies and benefits related to extended warranties as follows from best to worst: American Express, Discover, MasterCard, and Visa. CreditCards.com also has a good chart that compares all the exclusions and other terms by card.

Finally, don’t go rouge—follow the process your card company gives you. Credit card companies aren’t going to just toss out cash willy-nilly. Be sure to submit all the documents they require within the time requirements. But if you do follow the process and qualify for coverage, you’ll either get a check or a credit to your account to cover repair costs. Alternatively you might be required to front the cost of the repair, and then your credit card company should reimburse you. Also, depending on the product, you might be asked to mail it in to your credit card company and have to go without it for a few weeks while it is repaired, a slight inconvenience for getting a free repair.

Contact the Store and Manufacturer

Even if you didn’t buy an extended warranty, it never hurts to ask customer service what they can do for you. I’ve heard plenty of stories about Costco taking back broken TVs and computers after the warranty expired and giving the customer a new one. I once took my old mouse into the Apple store asking if they had a way to clean the scroll ball because it wasn’t working, and they just gave me the newer mouse model for free. This doesn’t always work, but I say it’s always worth asking because both stores and manufacturers want to keep their customers happy. You might just catch a break.

Add a Rider to Your Homeowners Insurance

Many homeowner insurance policies allow you to add a rider to cover certain items like a computer, camera, or other equipment. A typical rider of this sort might add about $10 to your policy and cover an item up to $1,000. Just like any extended warranty, some insurance policies are going to be more generous than others. So, be sure to check the fine print for what your policy specifically covers. For example, some policies only cover a computer while others cover a computer and its peripherals such as an attached printer, speakers, and even things like the data or software on your computer.

Online Reviewers Sued for Defamation? How to Protect Yourself

By: Braden Johnson 

The carpet cleaner you hired was late, rude, and left the carpets dirtier than before he arrived. So you find his company’s Facebook page and write a few lines saying what a poor job he did for you. A few months later, you get a letter in the mail. You are being sued by the carpet cleaner for defamation! Is this possible? In today’s social-media driven world, it is.

Technology has given consumers unparalleled opportunities to gather and share information about businesses. With just a few clicks, consumers can share their opinions with millions of people. Businesses are also aware of the power of social media; in fact, many businesses actively seek good reviews and take action to silence bad ones. Suing a consumer for defamation can serve as a powerful way to silence a bad review.

A carpet and rug cleaning business recently sued seven people for defamation after they posted negative reviews about the businesses on a popular consumer review website. According to the owner, the negative reviews brought a 30 percent drop in sales, and he was forced to lay off dozens of people. A lawyer in California, a plastic surgeon in Chicago, and a contractor in Virginia have all filed similar suits.

Although these stories may scare consumers, the companies who bring these lawsuits face many difficulties. First, social-media sites like Facebook, Yelp, and Twitter are protected from many types of lawsuit by federal law. The Communications Decency Act of 1996 protects online service providers from being sued for the actions of their users. So the companies cannot sue the consumer review websites that display the bad reviews, only the person who posted the review. But this invites the second problem: because reviewers are not generally required to post under their real name, companies often don’t know whom to sue. To find the identity of the reviewer, the company must get a court order which requires the website to identify the person. Most consumer review websites fight these requests forcefully.

Even if a company can obtain the identity of the reviewer, defamation lawsuits are difficult to win. The reviewer can escape liability by proving that the review was true, or based on personal opinion. So a review stating that the carpet cleaner was late is not defamation if it is true. And a review claiming that the carpet cleaner is the worst you’ve ever used is not defamation if it is your personal opinion. This shows why defamation suits against consumers typically fail.

There are several ways to protect yourself from a defamation lawsuit without losing your right to voice your opinion. First, only write reviews for companies and products you have actually used. Reviews based on anything less than personal knowledge are far more vulnerable to a defamation claim. Second, don’t exaggerate. Focus on the facts, not just getting revenge on a company. Third, if your complaint is very serious, consider submitting it through another entity. You can reach out to your state attorney general’s office, the Consumer Financial Protection Bureau, or your local office of the Better Business Bureau.  These organizations can insulate consumers from defamation lawsuits if they are used effectively.

Government agencies and the BBB typically investigate and substantiate claims before they publish them. Therefore, it is almost impossible for a reviewer who submits a complaint through these entities to be sued for defamation. Additionally, these entities sometimes offer mediation or arbitration services to help reach an amicable resolution for the consumer. Companies face pressure to respond to a complaint from the BBB, because the company’s BBB rating is at risk if they don’t resolve the problem. Government agencies have even more power. They can make legally binding requests for information, and can bring a lawsuit on behalf of any consumer who was wronged.

As long as consumers use good judgment, and follow the tips outlined above, it is unlikely that they will ever be sued for defamation. But the danger of these suits serves as a great reminder to consumers: be fair and composed in your company reviews, or else they may come back to haunt you.

How Much Are You Paying in Credit Card Fees?

By: James Wilson

In the last few decades, remarkable expansion in the use of consumer credit has allowed individuals from every income bracket the opportunity to purchase goods and services that one would otherwise not have access to. Not only do individuals and families use credit cards for emergency purposes, but often these plastic cards are swiped to purchase groceries, movie tickets, ski lift passes, and many more items. One of the largest card issuers in the United States reported that for the latest fiscal year, they had $4.1 Billion in card net income, with $131 Billion in credit card loans as of December 31, 2014—and this is just ONE of many card issuers in the United States. There are substantial benefits to having access to credit, but it is important for you to understand what you are paying for that access.

The most common fee that individuals think of is the “interest” rate they pay on their card. What most people do not understand is how that interest is actually calculated. For example, do you know if your balance is compounded daily or monthly? Do you know whether interest is calculated on the average daily balance or adjusted balance? Fortunately, a detailed understanding of complicated formulas is not necessary for you to understand what you really need to know. Thanks to legislation like the Credit CARD Act of 2009 and others, a lot of important information is at your fingertips.

Credit card issuers are required to disclose a summary of important figures at the top of all promotional material. The box, where these figures are located, is often referred to as the Schumer Box. Inside this box you will find key numbers including the following:

  • Annual Percentage Rate: This is the yearly rate of interest on your credit card. Keep in mind that if you carry a balance from month to month, the effective rate of interest you actually pay is usually a couple of points higher.
  • Other APRs: A card issuer may have different percentage rates for different types of transactions, such as balance transfers, cash advances, and more. These other APRs will often be different than the standard APR for your card. Most importantly, if you are late on payments, a “Late Payment APR” may be significantly higher than the APR you normally pay.
  • Finance Charges: Some cards may have minimum fees you must pay every period for service fees and related charges. It is not hard to find cards that have very low, or no, finance charges.
  • Annual Fee: Depending on the issuer or benefits associated with your card, you may be responsible to pay an annual fee.
  • Late Payment Fee: If you are late on a payment, you may be required to pay an additional charge between $15-$50, or more, for being late. This also may trigger the Late Payment APR percentage described above.

Before you sign up for a new card, you should consider these numbers, what you plan to use the card for, and how these numbers might change in the future. You should always consider the difference between an introductory APR, and the ongoing APR. Just because you have an introductory APR of 0% for six months, does not actually mean the card will be cheaper in the long run.

For an extremely simplified example, let’s say you sign up for a card with an introductory APR of 0% for six months, and 23.99% after that (not unheard of). If you sign up for the card and carry a $1,000 balance month to month, you will pay approximately $268 in interest over the first 18 months. Alternatively, if you carry the same $1,000 balance on a card with a fixed APR of 10.99% (also not unheard of), you will save nearly $100 in interest expense over the same period. Factor in that most households have several thousand dollars in credit card debt, and the saving quickly grows.

The CARD Act went one step further to require card issuer to provide the number of months and total cost to you it would take to pay off the balance making only minimum payments. You should be able to locate this information on your statement or online account associated with your credit card. To save you added time, most issuers with online accounts also allow you to input the number of months you want to pay the balance off by and then provide you with how much you have to pay a month to achieve that goal.

Ultimately, it is up to you to understand how much more in interest and fees you may end up paying to effectively budget the total cost of that next vacation. Review your credit card agreement and go online and discover the features your card issuer provides. Signing up for the right credit card and budgeting effectively may make that vacation a little more affordable.

Phishing Attempts: How to Protect Yourself

By: Glenn Sellers 

One of the more common scams targeting consumers today is a phishing scam. Despite their notoriety however, many people are unfamiliar with what they are. Phishing is an attempt to gain your personal or sensitive information via deception on a virtual interface. This article will let you know how to spot them and how to stay safe from an attack.

To spot a phishing attempt, it is first important to recognize the variety of forms they can take. The following is a list of the various forms of phishing:

  • A classic phishing attempt is just a plain and untailored attempt to get information. The “Nigerian Prince” scam is one of these. They are relatively crude and their success rate has been decreasing in recent years as consumers wise up. They often take the form of an e-mail.
  • Spear phishing is an individualized attempt to gain access to your information. An e-mail or web page is tailored to your specifics, such as your bank account, address, or other information in order to seem more believable.
  • Clone phishing is when a specific web page or e-mail is duplicated to appear like the real thing. Often, link manipulation will be used and a “mirror page” will be set up in order to deceive the consumer.
  • A mal-ware based phishing attempt refers to scams where malicious software is snuck into a user’s PC or Mac and information is relayed via the software. There needs to be some sort of introduction to get the mal-ware into your computer, which can take many forms.
  • Key-loggers track keyboard input. Whenever you go to a web page to enter account information, a password, or other sensitive information, the keystrokes will be tracked and relayed to hackers. These are often done on public computers or through mal-ware.
  • Man in the middle phishing attempts involve a compromised data access point, ranging from cell towers to Wifi routers. All data that passes through the compromised point is filtered and analyzed for useful sensitive information.

Now that you have an idea about the types of phishing attempts, here is some helpful information regarding how to spot and protect yourself against them:

  • Use “https sites” or other forms of encryption. There are abundant resources out there to help get you started with this.
  • Be wary of any suspicious links, especially in your email. This is the primary way that malware gets onto your computer. Anytime you open a link or download something, make sure you know and trust the site it’s coming from. If an unknown source tries to upload an .exe, .zip, or other atypical file to your computer, delete it before opening.
  • Think twice before providing any confidential information, including passwords, SSN, and anything else that may be useful for hackers to access your sensitive information. This can range from checking account information to all the way to seemingly innocuous information like your mother’s maiden name or your elementary school.
  • Use a spam filter in your e-mail. You may filter out useful e-mails periodically, but you can always view your spam folder and mark these as “not spam.” The majority of filtered e-mail will be junk mail or phishing attempts anyway.
  • Always check the URL of a site. A common way for hackers to initiate a clone phishing attempt is with a “mirror page” that looks identical to a legitimate web page, with the only difference being the URL is off.
  • If in doubt, contact the institution in question via phone before filling out a form
  • Avoid public computers and unsecured WiFi entirely when accessing important accounts like online banking or an e-mail account containing sensitive information.