Its Christmas morning and you’re opening up one of your smaller gift boxes and quickly come upon a gift card which can be used only at a favorite retail establishment. You like the idea of getting a gift card because it allows you to buy what you want and when you want it.

Months goes by and you forget about the card, happening upon it again in June just a few weeks before you take your annual summer vacation. With glee, you begin to think of ways that the money will come in useful, perhaps enough funds to purchase new bathing suits for you and the kids or a hammock and bird feeder for the backyard.

Before you run out and use the gift card you’ll want to make sure of one thing: is the retailer still in business? Unfortunately, a rash of bankruptcies even for popular retailers has meant that some consumers have been left holding the bag (or a worthless gift card) which could end up being the worst gift that you received this Christmas.

According to consumer advocate Clark Howard, when a retailer of restaurant goes into bankruptcy, it is up to the bankruptcy judge to determine what rights you have as a gift card holder. Unfortunately, judges usually wipe out those rights, leaving you with just a small piece of plastic as remembrance of a gift given. Howard hates gift cards and recommends that people give a time-honored gift instead: cash.

If you do receive a gift card this holiday season you can avoid losing the value of that gift by purchasing something immediately. The weeks following Christmas usually have the best sales of the year, stretching the value of the gift card further. However, with so many retailers on shaky ground, you might want to hit the store the day after Christmas because the New Year may not be so promising for that retailer.

Howard says that consumer groups are trying to have the Federal Trade Commission (FTC) issue guidelines on gift cards that would require retailers to escrow gift card money. This move would protect consumers in the event of a business bankruptcy and give gift card givers and receivers some peace of mind.

Tags: bankruptcy, Christmas gifts, Federal Trade Commission, FTC, gift cards, restaurant, retailer

Con artists are always at work, coming up with ways to get people to part with their money. Some scams are small, involving the selling of a product that doesn’t live up to its reputation while others involve the pilfering of entire life savings.

The Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) is an independent arm of the United States federal government tasked with providing consumer protection for U.S. citizens. The FTC monitors allegations of fraudulent, deceptive, and unfair business practices in the marketplace, providing information to consumers to help them spot, stop, and avoid them.

One scam that has received a lot of attention lately are sweepstakes prizes designed to lure people to send money in to claim a prize that they supposedly won. The money is a fee to cover service charges and taxes, but no prize is ever delivered.

Old Scam, New Twist

The latest twist on this particular scam is that the thieves are using names of various government agencies and legitimate phone numbers which mask where they’re calling from. In the May 2008 FTC report outlining the scam, the commission says that the callers will identify themselves as being representatives of “the national consumer protection agency” or the bogus National Sweepstakes Bureau, with even the boldest crooks asserting that they represent the FTC itself!

Internet technology allows scammers to make it look as if they are calling from a government phone or from your own area code, both of which can catch unsuspecting people off guard. People who fall for this ruse will wire money via Western Union which ends up in the hands of a scammer who is usually based overseas.

The FTC offers some tips on how consumer can prevent being victimized including:

• Don’t pay to collect sweepstakes winnings. If you have to pay to collect your winnings, you haven’t won anything. Legitimate sweepstakes don’t require you to pay “insurance,” “taxes” or “shipping and handling charges” to collect your prize.

• Hold on to your money. Scammers pressure people to wire money through commercial money transfer companies like Western Union because wiring money is the same as sending cash. If you discover you’ve been scammed, the money’s gone, and there’s very little chance of recovery. Likewise, resist any push to send a check or money order by overnight delivery or courier. Con artists recommend these services so they can get to your money before you realize you’ve been cheated.

• Look-alikes aren’t the real thing. It’s illegal for any promoter to lie about an affiliation with — or an endorsement by — a government agency or any other well-known organization. Disreputable companies sometimes use a variation of an official or nationally recognized name to try to confuse you and give you confidence in their offers. Insurance companies, including Lloyd’s, do not insure delivery of sweepstakes winnings.

• Phone numbers can deceive. Some con artists use Internet technology to call you. It allows them to disguise their area code: although it may look like they’re calling from Washington, DC or your local area, they could be calling from anywhere in the world.

• Take control of the calls you receive. If you want to reduce the number of telemarketing calls you receive, place your telephone number on the National Do Not Call Registry. To register online, visit www.donotcall.gov. To register by phone, call 1-888-382-1222 (TTY: 1-866-290-4236) from the phone number you wish to register.

• File a complaint with the FTC. If your number has been on the National Do Not Call registry for at least 31 days, and a telemarketer calls, file a complaint with the FTC. To file a complaint online, visit www.donotcall.gov. To file a complaint by phone, call 1-888-382-1222 (TTY: 1-866-290-4236). If you receive a call from someone claiming to be a representative of the government trying to arrange for you to collect supposed sweepstakes winnings, file a complaint at ftc.gov. It’s most helpful to enforcement officials if your complaints include the date and time of the call and the name or phone number of the organization that called you. Although scammers may call using a telephone number that disguises their location, law enforcers may be able to track that number to identify the caller.

To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(Source: Federal Trade Commission)

Resources

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Smart Money Tips

Tags: consumer affairs, consumer information, Federal Trade Commission, FTC, sweepstakes scam

You’ve decided to go ahead with an important consumer purchase, perhaps that new car you always wanted even a vacation home and you receive a nasty piece of information — your credit is awful. “This can’t be!,” you think but according to at least one of the credit reporting services you aren’t even fit to buy a new shirt, let alone a high ticket consumer item.

Some consumers have bad credit because of action they took which caused accurate negative information to be added to their record. But, for many other consumers inaccurate even false information could have found its way into their reports.

How To Fix Your Credit Report

Your credit report won’t fix itself, but with your pro-active work you can take care of each mistake one by one.

To get started you should:

• Retrieve copies of each of the three major credit reports. These are available for free from AnnualCreditReport.Com, a service of the Big Three credit reporting services: Trans Union, Equifax, and Experian. By law, the companies must allow you to access your reports once annually for free.

• Examine the report closely to make sure that your name, social security number, address and other personal information is correct.

• Check your individual accounts as they should each be in good standing. If not, find out the reason why an account isn’t in good standing. If it is due to something you did, then you cannot correct this problem other than making future payments on time. If there is an error with the account, contact the appropriate credit reporting service and explain to them what information you found is incorrect.

Notifying the Credit Reporting Service

If you discover an error, make a copy of the credit report and circle in red what you believe to be wrong information. Then, visit the Federal Trade Commission’s site and copy their sample dispute letter and change it accordingly. You’ll be sending the letter and your credit report to the service.

The credit reporting service must launch an investigation within thirty days, contacting the creditor on your behalf. Please note that the credit reporting service can come to any number of conclusions based on their investigation:

• Information that you dispute which cannot be verified will be deleted from your file.

• Erroneous information must be corrected.

• Incomplete information must be completed.

• Information belonging to another consumer must be removed from your file.

Not all investigations will be ruled in your favor. Perhaps you overlooked an account or after correcting certain information you could still have negative, but accurate details on your report. You do have the right to attach a letter of explanation to your credit file which can help explain your position. Send a copy to the business in question too so that they have your dispute on file.

Wrong information on a credit report isn’t the end of the world, but not responding can be a problem — take control of your credit today and order your credit reports and obtain your credit score (which is an extra charge).

Resources

Check Your Credit

Federal Trade Commission

Financing Tips

Tags: credit report, credit score, Equifax, Experian, FTC, Trans Union