Posted by Elisabeth Leamy, Thu Jun 01 2006, 08:37PM

Author's note: Thanks once again to all the viewers who write to me with their consumer questions

Author's note: Thanks once again to all the viewers who write to me with their consumer questions. I chose to answer those that affect the most people. I hope my answers are helpful to you. And please know that your QUESTIONS are always helpful to ME. They keep me in touch with the issues that are plaguing consumers today. Remember, the overall advice I give in my book, The Savvy Consumer: "Be the hunter, not the hunted!"
~EL


1)
Q:
I posted a van for sale online. I got 4 similar emails from 4 different people telling me they would send me a money order or a certified cashier's check and their shipper will pick up the van for shipment overseas. That seems fishy to me.
~CC, Goose Creek, SC
A:
Way to go, CC! You are ABSOLUTELY right that it is fishy. It is called a "check overpayment scam" and it is one of the most rampant scams around right now. Here's what would have happened had you not been so savvy. The "buyer" would have sent you a cashier's check for more than the amount of the van and asked you to send the difference to the "shipper." If you had done it, you would have eventually learned the cashier's check was a fake. To compound the problem, many banks initially clear these fake checks, which gives the consumer the confidence to go ahead and send the money. Later, the bank discovers the check is fraudulent and makes you re-pay the money ľand by law, you ARE the one responsible. Bottom line: if ANYBODY sends you a check for more than they owe you and asks you to refund or forward the difference, it is a scam. Period.

2)
Q:
I have 12,000.00 in credit card debt. I have talked to several companies that offer this service where you pay so much a month and they take care of everything else. The charge is 12% of what I owe. Is this legit or should I talk to someone in Tulsa that is a non-profit agency? Thank you in advance for your help!
~JS, Tulsa, OK

I have baddddddd credit. I can't buy a house or a car or anything. No one wants to help. I have two children, 17 and 10, no other income. I am a single mom. I would appreciate it if I can get help cleaning my credit, and be able to purchase a house.
Please point to the right direction.
~SB, Houston, TX

A:
It drives me crazy that there are companies who try to take advantage of the folks who can least afford it! NO! You should not pay somebody 12% of your debt, when you are struggling to begin with. YES! There is somebody who wants to help. The answer is the old reliable Consumer Credit Counseling Service. CCCS is a non-profit group that has been around for decades. (Beware of other companies that claim to be credit counselors but actually take your money and do nothing for you or force you into expensive debt repayment services.) For a MODEST fee, CCCS will negotiate more favorable repayment terms with your creditors. You send a monthly check to CCCS and CCCS uses it to pay your bills. CCCS also offers important financial education classes to teach you better budgeting, how to clean up your credit and how to purchase a home. You can reach CCCS toll free at (800) 388-2227. Operators there will connect you with the CCCS closest to you.

3)
Q:
We have just recieved a letter that states that it has been approved by ABC 20/20 and Oprah. The letter states that it has been tested by you guys and that is it legal. Before I spend the $165.00 to get my $800,000.00 from this chain letter, I thought I'd ask to see what you thought.
~S & T, Benton, KY

A:
Does this sound like something a savvy consumer should do? Does this sound like something THE Savvy Consumer (that's me!) would recommend? No way. Chain letters are the most basic form of pyramid schemes. Plus they are illegal. Not only will you lose your $165, theoretically you could be prosecuted for participating! Be aware that some chain letters disguise their true nature by passing on prayers or recipes along with money. They're STILL pyramids and still illegal. Several recent scams have tried to use the good name of ABC News to prove their legitimacy. Whenever you're in doubt about something like this, just type a few key words that describe the offer into an internet search engine. I bet the results that come up will be liberally sprinkled with the word "scam."

4)
Q:
If you are a co-signer to help a person get a credit card, and after several years you never know that the person is deliquent in paying the responsibility, are you not protected as a consumer? All the while I myself was really taking care of my credit history. What are my rights with regards to this matter ruining my credit history?
~LU, Baytown, TX

A:
Co-signing is serious business. When you co-sign, you are promising the credit card company that you will pay the bill if your friend does not. Co-signing is a generous gift, and it should only be given to truly trustworthy friends and family members. If you part ways for some reason, you should remove yourself from the account by writing a letter to the card company and sending it certified. The company has no obligation to inform you, the co-signer, that it is reporting the account to the credit bureaus. So as a safeguard, you should order a credit report from the big 3 credit bureaus at least once a year. You can do so by visiting: www.equifax.com. www.experian.com and www.transunion.com or going to the central website set up by all 3: www.annualcreditreport.com. The central phone number is 877-322-8228.

5)
Q:
I have a FICO [credit] score of 685. Recently I went to a local bank branch to apply for a new credit card. I was declined. I do not know why. I had similar incidents in the past. Please let me know how to address these kinds of issues.
~MR, Herndon,VA

A:
You, too, need to order your credit report regularly. Take advantage of the new federal law that gives you one free credit report per year. Alternate ordering from the big 3 credit bureaus, because each will have slightly different information on file about you. In addition, anytime you are turned down for credit, the bank must give you an explanation as to why and the credit bureau the bank used must provide you a free credit report. If you find inaccuracies on your credit report that are dragging your score down, dispute them. The credit bureaus are required to research your claim and make corrections.

6)
Q:
I have recently been receiving calls from a bill collector about a credit card that I assume has been written off because it has been so long. I didn't see it on my credit report when I last pulled it in 2004. Can they come back at someone after it's been written off?
~CW, Viera, FL

A:
After 7 years, unpaid bills fall off your credit report. At that point they cannot be put back on. Plus, the statute of limitations runs out after 7 years, so no creditor or debt collector can sue you in court to collect. HOWEVER, debt collectors CAN still try to collect from you. These old debts are called "zombie" debts and many debt collectors buy them for pennies on the dollar and try to succeed where other collectors have failed. Because the debts are so old and their chances of getting the money are so slim, some collectors use awfully heavy-handed tactics. Here's one of my favorite tips of all time: ALL you have to do is ask the collector for the name and address of his/her company. Then write a letter (send it certified!) asking that they not contact you anymore. By law, they must obey.

7)
Q:
After a couple of major auto problems, which occurred under warranty, and numerous attempts to repair the problems, I was finally told the dealer had made enough attempts and now my car is out of warranty. Two years of trying to fix my vehicle have been in vain. Apparently, companies are putting profits ahead of customer satisfaction.
~JD

A:
Fortunately, you're having trouble with a car and not a toaster. You may be covered by your state's lemon law. Lemon laws cover cars purchased brand new. In some cases you can make a claim if the previous owner bought the car a short time ago and then quickly sold it to you. Each state sets a time and mileage limit. For example, you may be required to make a lemon law claim within 15 months or 15,000 miles of buying the vehicle. Each state also defines what counts as a lemon. For example, in one state if the dealer can't correct critical brake or steering problems in one try, the car's considered a lemon. In another, a car is defined as a lemon if the dealer has tried and failed three times to repair a repeat flaw. In a third state, the lemon law covers new cars that have been in the shop for a cumulative total of more than 30 days. A quick internet search of your state and "lemon law" will give you the answers you seek.