Senior Citizens Handbook - Your Rights as a Consumer

Senior Citizens Handbook - Your Rights as a Consumer

Last updated: March 2009

(Chapter 7 Section 1 of Senior Citizens Handbook)

•  Home Improvement Scams
•  Telemarketing Scams
•  The Do Not Call Registry
•  Open-End Credit Scams and Door to Door Sales
•  Phone Slamming
•  Advice About Credit Cards

This Section explains how to avoid scam artists who are trying to get your money. It also explains your rights to protection from creditor abuse. 

Note: Additional Consumer Information is Available

Prairie State Legal Services publishes a booklet titled When You Owe Money that explains what creditors can do to collect money from you. It explains the common methods and tactics which creditors use to collect debts and will give you important information to deal with these methods. It explains your rights with regard to collection agencies and tells you how to respond to a collector's lawsuit. It explains what a court judgment means and how to protect your money and property when a creditor tries to collect on a court judgment.

Home Improvement Scams

In General

Homeowners need to make home improvements from time to time. Needed repairs may be expensive, like roof repairs, and you may need to finance the cost. If you need to make a home repair, be very careful about who you hire and how you finance the work. This is a prime area for scams, and you want to be sure you protect yourself and your home from any con artist seeking to take advantage of you.

Some contractors target low-income elderly homeowners to get them to sign contracts for unnecessary and overpriced "home improvements". Often, these contractors charge more than the quoted price or perform shoddy or unfinished work on the house. The situation can turn really ugly when the senior refuses to pay, and the contractor or lender threatens foreclosure on the senior's home.

Your Rights Under the Illinois Home Repair and Remodeling Act

The above law requires the contractor to give you a copy of a pamphlet written by the Illinois Attorney General’s Office called Home Repair: Know Your Rights. The contractor will ask you to sign a statement that says he gave you the pamphlet. Do not sign it unless you have gotten the pamphlet. Do not sign any contract until you have read the pamphlet very carefully. It gives you important advice about what to watch for in a home repair contract. Before the contractor can present you with an offer, he has to let you know about any provisions in the contract that require that you submit any disputes to arbitration. You have the right to reject these provisions, which means the contractor must then decide whether to make you an offer without these provisions, or not do business with you at all. 

The contractor must give you a written contract for any work that will cost more than $1,000, and both you and the contractor must sign it. Look this contract over very carefully. Be sure it says what you and the contractor agreed upon, including the work that is to be done, the start and end dates for the work, all the charges, the schedule for payments you must make and any guarantees. Keep a copy of the signed contract in a place where you can easily find it if you need it.

The contractor must carry a minimum level of insurance to insure against damage and improper home repair.

Deceptive Sales Tactics

Scam contractors have a number of ways to "sell" seniors into signing contracts. These methods include: high pressure phone calls, advertisements, flyers and door-to-door sales. Watch out for the following deceptive tactics:

  • Telling you that a repair is urgently needed, when it's not;
  • Advertising a low-priced item, but then telling you that it will cost more because the item has to be "custom-made" to fit your home;
  • Telling you that you will get a discount when, in reality, you are paying market price or more;
  • Using the "bait and switch" technique. "Bait and switch" refers to a practice where the contractor offers low prices for items such as windows and home siding. After you sign the contract, the contractor tells you that the item is out of stock so it has to be replaced with a high priced substitute.
  • Telling lies about the benefits of repair. Example: that the repair will result in energy savings, health benefits and value added to the home; or
  • Telling lies about the financing terms.

Deceptive Financing Schemes

Some contractors use deceptive tactics to hide the true cost of paying for the work. These tactics include:

  • Seeming helpful by arranging for a lender to finance the work on the house, when in reality the contractor and the lender are working together in a way that costs you more money;
  • Using more than one contract for a single repair to try to confuse you;
  • Giving you a contract that doesn't show that the deal is being financed with payments over time, even though the deal is intended to be financed;
  • Adding extra hidden charges above the negotiated price;
  • Providing very expensive (a high rate) financing directly or through a third party lender; or
  • Getting hidden kickbacks from lenders or loan brokers for referrals.

What Senior Homeowners Should Do to Prevent Problems

We offer the following tips to seniors to avoid home improvement scams:

  • Never deal with door-to-door salesmen. You should deal only with local contractors recommended by friends or reliable building supply stores.
  • Always get two or three estimates for the job from different contractors before agreeing to hire one of them.
  • Get references for the contractor and speak to those references. Ask them about satisfaction and any problems that they had.
  • Take a look at the other work performed by the contractor you are thinking of hiring.
  • Make sure that the contract is in writing and describes in detail things like: work specifications, price, financing or credit terms, responsibility for cleaning up and hourly rate for any added work.
  • Make sure that any guarantees or other promises are made in writing. Do not agree to final payment until the project is finished.
  • If the written documents are different than what the contractor promised, do not sign them.
  • Do not let a contractor begin work until you have completed all financial arrangements to pay for the work.
  • As explained later in this section, there is a 3 day right to cancel after the papers have been signed if the sale was door-to-door or if the contractor took a security interest in your home.
  • Never endorse the check from the bank over to the contractor until all the work has been completed to your satisfaction.
  • Do not consolidate other debts with a home improvement loan.
  • If any serious problems arise, get help from a lawyer right away.

Liens and Foreclosures

It is common for the contractor or lender to obtain a mortgage on a senior's home as part of the home improvement sale. Even where that doesn't happen, the law gives the contractor a right to put a lien against the property if he did any work on it and the senior doesn't pay. This kind of lien is often referred to as a "mechanic's lien". If you refuse to pay because of a dispute, the contractor or lender will probably try to force you to pay and may even try to foreclose.

In this situation, you will need an attorney to look carefully at the Illinois laws regarding liens and foreclosures. You may have a good basis to defend a foreclosure action if the contractor has not properly followed these laws.

Canceling the Contract

You may be better off if you can successfully cancel the contract. This is especially true if the contract is a bad deal, the contractor is slow or never performs, the work is very shoddy or the contractor or lender has obtained a mortgage on the house. However, you are allowed to cancel a contract only in certain situations discussed below. Because these laws are complex, it is wise to consult a lawyer before canceling the contract if you can do so. Act fast because you may only have 3 business days from the date of the sale to cancel.

Door to Door Sales

In a door-to-door sale, a salesperson shows up at your home and talks you into signing a contract. The Federal Trade Commission Cooling Off Rule, and the Illinois Consumer Fraud and Deceptive Business Practices Act are two laws that have been enacted to protect people from door-to-door salespeople. Where that happens, the contractor must give you a written cancellation notice at the time of the sale.

The "cancellation notice" explains your right to cancel the contract within 3 business days after the sale. You can then cancel the contract by giving written notice to the contractor or lender within that 3 day period.

If the notice is not given or not given properly, your time to cancel may continue until 3 days after a proper notice has been given. That would keep your right to cancel open.

Where the Contractor Takes a Security Interest in Your Home

The Truth in Lending Act (TILA) requires that the contractor give you a rescission notice in most transactions where the contractor takes a security interest, such as a mortgage, in your home.

The "rescission notice" must tell you of your right to cancel the contract within 3 business days. If the notice is not given or is not proper, this right remains open beyond the 3 days (up to 3 years).

In addition, TILA requires a very accurate disclosure of credit terms. If the contractor violated TILA, you may be able to void the lien and reduce any amount owed. You might even be entitled to recover money from the contractor or lender as damages.

If the Cost of Your Loan is High Enough to Trigger HOEPA

This refers to the Home Ownership and Equity Protection Act, which covers certain high cost loans. For loans that qualify as high cost, HOEPA requires that the contractor provide additional disclosures to you. HOEPA also prohibits certain abusive practices. If the contractor violates the HOEPA disclosure rules, you may be able to cancel the contract. You also might be able to get money damages, and even greater enhanced damages for some violations.

Where Purchased Items are Defective

In home improvement contracts, you are paying for both the contractor's services (labor) and for certain goods that the contractor is providing, such as windows, cabinetry, siding, etc. If the items you purchased are defective, the Illinois Commercial Code (Article 2) permits you to reject the goods or revoke your acceptance of them under some conditions. That way, you can then return the goods and eliminate your liability for at least part of the contract price.

Where the Contractor Commits Fraud or Misleads You in an Important Way

If you were misled as to the nature of the agreement, the contractor may have committed fraud or violated the Illinois Consumer Fraud and Deceptive Business Practices Act. When that occurs, you might not be liable under the agreement and it may not be enforceable.

Warranties Regarding the Work

You should look closely at the terms of the contract where it specifies the work to be done. Check to see if the contract contains any provisions that promise a certain standard of performance or certain quality of the materials. Check for specifications and for guarantees. If the work or the materials do not measure up to what the contract promises, you may have a claim for breach of warranty.

Even where the contractor does not make any verbal or written promises regarding the quality of the work or the materials, the law presumes certain implied warranties.

Generally, there is an "implied warranty" that the contractor will complete all work according to the standards in the trade, or in a "workmanlike" manner. This means, among other things, that all work must be in compliance with local building codes.

If these standards are not met, you could have grounds to refuse to pay the entire amount or at least to recover your damages for the breach of warranty.

Unfair or Deceptive Practices

The Illinois Consumer Fraud and Deceptive Business Practices Act applies to most consumer transactions. It is aimed at preventing fraud and deception against consumers. It also provides remedies when someone violates the Act. You can use this law to challenge unfair, deceptive or fraudulent practices.

A home improvement contractor may violate this law in any number of ways.

If any contractor fails or refuses to start or complete work under an agreement for home repair, you should send him a written demand to return your down payment and any further payments you made within 10 days. You should send this demand by certified mail. If the contractor does not do this within 10 days after receiving your demand, the contractor violates the Consumer Fraud Act.

A Contractor Might Violate the Consumer Fraud Act if he:
  • lies about the true nature, benefits or cost of a proposed job
  • tricks you into signing a completion certificate or signing over the loan check before the job is completed
  • lies about your cancellation rights
  • does business under any name other than the real names of the persons conducting the business, or the business name given to the State of Illinois under laws regulating home contractors
  • fails to notify you in writing, within 10 days, of any change in its business name or address occurring before the work is done

If any of these things happen, you may have a claim against the creditor for your damages, or a defense if the contractor is suing you.

Third Party Lenders

Usually, you will finance your home improvement contract through a finance company, bank or some other lender. Often, the contractor will arrange for the senior to get the loan. In any event, you will owe your payments to the lender and not to the contractor.

But what if the contractor does shoddy or incomplete work? What if the contractor has overcharged you? Is there anything you can do when the lender sues you for payments you withheld?

In most home improvement loans, there is a notice saying that the holder of the contract (usually the lender) is subject to all the claims and defenses that you can raise against the seller (the contractor). This notice is required by a Federal Trade Commission rule (called the Preservation of Claims and Defenses Rule) where the home improvement contractor is the original lender or refers you to the lender. So, if you can bring a claim against the contractor for breach of warranty or fraud, or any of the other things discussed earlier, you can assert those claims or defenses against the lender as well.

If the notice is not included in the contract and is not required, you have to examine the relationship between the contractor and the lender. The closer the relationship, the more likely that the lender is liable for the contractor’s deceptive practices.

ADVOCACY TIP
Here are some questions you can ask yourself to determine the closeness of the relationship between the contractor and the lender :

  • Is there an ongoing relationship?
  • Does this lender frequently finance this contractor's work?
  • Does one of them have documents that contain the other one's name?
  • Did the lender know of previous problems with this contractor's work?
  • Does one of them give kickbacks to the other?
  • Does one party own the other?

Telemarketing Scams

Telemarketing has become a major American industry. More than ever, sellers of goods or services are reaching into people’s homes through their telephones. Unfortunately, many telemarketing practices are unfair and deceptive. Every scheme is different, but all fraudulent telemarketers promise you a "deal" they cannot possibly deliver. Older Americans are particularly vulnerable to these practices. Telephone fraud against seniors is now widespread and getting worse.

Challenging these practices may be difficult. Telemarketers easily move across state lines and often will not be around long enough for you to bring a legal challenge against them. Still, it is helpful to know the information that follows so you can minimize your losses and avoid future scams.

Reasons Why Older People Become Victims of Telemarketing Fraud

Often it's hard to know whether a sales call is legitimate. Telephone con artists are skilled at sounding believable, even when they're really telling lies. Here are some reasons why seniors become victims:

  • Telephone con artists may reach you when you're feeling lonely. They may call day after day, until you think a friend, not a stranger, is trying to sell you something.
  • You may find it hard to get them off the phone, even if you're not interested in their product. You don't want to be rude.
  • They promise you free gifts, prizes or vacations--or the "investment of a lifetime"-- but only if you act "right away". It may sound like a good deal.

Telephone con artists are only after your money. If you hear from such a person, just say "no thank you" and hang up.

Common Telephone Scams

Some of the more common scams targeted at vulnerable seniors include the following:

  • Sweepstakes and Prize offers. They tempt you with false offers of cash or other prizes, but you have to attend a sales presentation, or buy something, or give out a credit card number. The prizes generally are worthless or overpriced.
  • 900 Numbers. They coax you into making a pay call to a number with a 900 prefix to get information on various subjects, from how to save money on groceries to how to get free credit cards.
  • "Recovery room" scams. They falsely promise to get you a refund because you were ripped off by an earlier scam. But you must pay a fee, so you wind up being ripped off twice.
  • Travel scams. They will say that you've "won" a vacation, but it is never free, and its usually costly. It will likely mean additional charges for hotel, reservations, airfare, upgrades, taxes and fees.
  • Vitamins and other health products. Their sales pitch includes a prize offer to entice you to pay hundreds of dollars for products that are worth very little.
  • Investments. They promise "get rich quick" schemes, that have high returns with little or no risk, but which really are worthless. You can lose a lot of money. Examples: gemstones, rare coins, oil and gas leases, precious metals and art.
  • Charities. Con artists often label phony charities with names that sound like reputable organizations. They will not send you written information or wait for you to check them out.
  • Credit-Card Schemes. They offer credit cards even if you have a poor credit history. You pay a fee, but usually get no card, or you get only a credit-card application or brochures or flyers that discuss credit cards. You may get a card that requires you to pay $200 or $300 to a company located outside the U.S. but limits your charges to that amount.
  • Advance-fee loan schemes. You pay a fee for a guaranteed loan only to have your name referred to an operation, affiliated with the telemarketer, whose sole function is to notify you that your loan application has been rejected.
  • Credit repair schemes. If you have a poor credit history, they may promise to "repair" your credit. But they are lying when they say they can remove liens, bankruptcies, judgments, foreclosures and other items from your credit report. If there are errors on your credit report, the credit reporting agencies, by law, must correct them. You can deal directly with the reporting agencies, or get help from the Federal Trade Commission.
  • Lottery Schemes. One scheme takes your money to "invest" in foreign lottery tickets, which are illegal. Examples: the "Australian Lottery" or "El Gordo". Another scheme is where telemarketers hold themselves out as "experts" in "investing" in lottery chances and who solicit you for ever larger amounts of money. In reality, they invest little or none of your money in the lottery tickets and keep the money for themselves.
  • Magazine-Promotion Schemes. They say you have won a highly valuable prize or "gift", but you have to buy multiple magazine subscriptions to receive it. After you pay (usually more than the magazines are worth), you find out the gift is worth little, and that many of the most popular magazines are not available.

The Telemarketing Sales Rule

The Telemarketing and Consumer Fraud and Abuse Prevention Act is a federal law designed to protect you from fraudulent telemarketers. The Federal Trade Commission (FTC) enforces the Act through its Telemarketing Sales Rule, which prohibits certain telemarketing practices. State law enforcement officers can prosecute fraudulent telemarketers who operate across state lines. If a telemarketer violates the Rule, you can ask the Illinois Attorney General to file suit against them to stop illegal practices, or to obtain damages or restitution on your behalf. You can also bring your own lawsuit.

ADVOCACY TIP
Keep the following information about your rights under the Telemarketing Sales Rule near your telephone. It can help you determine if you are talking with a scam artist or a legitimate telemarketer.

Your Rights Under the Telemarketing Sales Rule:
  • It is illegal for a telemarketer (TM) to call you back if you have asked not to be called or if you have placed your name and number on the Do Not Call Registry (unless an exception applies—see next section). If they do, report them to the Illinois Attorney General;
  • Calling times are restricted to the hours between 8 a.m. and 9 p.m.;
  • It's illegal for TM's to misrepresent facts about their goods or services, earnings potential, profitability, risk of an investment or the nature of a prize;
  • TM's must tell you:

1. It's a sales call and who's doing the selling before they make their pitch

2. The total cost of the products or services they're offering

3. Any restrictions on getting or using their products or services

4. That a sale is final or non-refundable, before you pay

5. The odds of winning a prize, that no purchase or payment is necessary to win and any conditions of receiving the prize

  • It's illegal for a TM to withdraw money from your checking account without your verifiable permission.
  • You do not have to pay for credit repair, recovery room or advance-fee loan/credit services until these services have been delivered.
  • TM's cannot use threats, intimidation, or use profane language, or call you repeatedly or continuously with the intent to annoy, abuse or harass.
  • It is illegal for a TM to block your Caller ID on your telephone from displaying the TM’s phone number.

The Telephone Merchandise Rule

The FTC has another rule called the Mail or Telephone Merchandise Rule. If you order merchandise by telephone or mail, it must be delivered within 30 days unless the merchant reasonably provides for a longer delivery time at the time of the solicitation. If the seller cannot ship the merchandise within the applicable time, you have the right to cancel the deal and receive a full refund.

Illinois Telephone Solicitations Act

Some of what is illegal under the FTC Rules also violates the Illinois Telephone Solicitations Act, which makes it illegal for any telephone solicitor to:

  • Call during the hours between 9 p.m. and 8 a.m.;
  • Fail to immediately state his/her name, the name of the business, and the purpose of the call;
  • Call you after you have asked to be taken off the business' contact list, and to fail to remove your name from the contact list;
  • Continue with a solicitation without asking at the start of the call whether you consent to the solicitation;
  • Block your Caller ID from displaying the solicitor’s telephone number; and
  • Withdraw money from your checking or savings account without your express written consent.

ADVOCACY TIP
If you are harmed due to any of the last four violations, you can sue the business for triple the amount of your damages, plus costs and attorneys fees. You also can ask the Illinois Attorney General to sue the business under the Consumer Fraud Act.

Pay-Per-Call (900 Numbers)

Illinois has a Pay-Per-Call Services Consumer Protection Act, which regulates certain telephone providers of information services.
Examples: The Act regulates 900 and 976 numbers.

A "pay-per-call" means a call you make to a sponsor of an information program, which charges you a fee through your telephone bill.

In any advertising for these programs, the sponsor must:

  • Accurately and clearly describe the content of the message, and the terms, conditions and price of the service; and
  • State that callers under age 12 must get parental or adult guardian permission before calling.

You cannot be billed for any such call unless the sponsor gives you a certain message during a 12 second "delayed timing period". The message must accurately tell you:

  • a description of the service;
  • a summation of its cost; and
  • that you will not be charged for the call if you hang up the phone during the message, and that when the message is over, you still have 3 seconds to hang up to avoid being charged.

If you are harmed by a violation of this Act, you can ask the telephone company to give you the sponsor's name, address and telephone number. You can sue the sponsor for triple the amount of your damages, plus costs and attorney's fees. You also can ask the Illinois Attorney General to sue the sponsor under the Consumer Fraud Act.

ADVOCACY TIP
The federal
Telephone Disclosure and Dispute Resolution Act of 1992 also regulates 900 numbers. Under this law, your long distance or local phone service cannot be disconnected because of unpaid charges for any pay-per-call service. The law also requires telephone companies to offer you an option which blocks your access from your telephone to pay-per-call services.

If You Used a Credit Card

If you used a credit card to buy goods or services from a telemarketer, federal law allows you to refuse to pay for goods not delivered or delivered not as represented.

Under the Fair Credit Billing Act, you can make a claim about the telemarketer's deceptive or fraudulent conduct with the bank or company that issued your credit card. If your complaint is timely, the bank will not pay the amount in dispute until the claim is resolved. If the bank has already paid it, you can tell the bank it was a "billing error", which means the bank then has to investigate and reverse the charge if its warranted. In any case, the law gives you up to 60 days after the bill's statement date to dispute the charge.

Help From a Fraud Hotline

If you are the victim of a fraudulent telemarketer, you can call the National Fraud Information Center at 1-800-876-7060, between 9:30 a.m. and 5:30 p.m. (EST). If the operators there believe that the telemarketing call was fraudulent, they can file a complaint for you with the FBI, the FTC, and/or the local police. They also keep a database to help identify perpetrators of telemarketing fraud.

What To Do To Protect Yourself

It is very difficult to get your money back if you've been cheated over the phone. Before you buy anything by telephone, remember:

  • Be wary of "great deals" and low-priced offers. Few legitimate businesses can afford to give away products and services of real value or substantially undercut other companies' prices.
  • Do not buy from an unfamiliar company. Legitimate businesses understand that you want more information about their company and are happy to comply.
  • Get all information in writing before you agree to buy. Make sure any written information reflects what you were told over the phone and the agreed terms. If you get brochures about costly investments, ask someone whose financial advice you trust to review them.
  • Always check out unfamiliar companies with your local consumer protection agency, Better Business Bureau, state Attorney General, the National Fraud Information Center or other watchdog groups.
  • Always take your time making a decision. Do not be pressured into buying. Legitimate businesses do not expect you to make snap decisions. Do not send money by messenger or overnight mail.
  • It is never rude to wait and think about an offer. Be sure to talk over big investments with a trusted friend, family member or financial advisor.
  • Ask detailed questions. Find out exactly what the price covers and what it does not. Ask about additional charges. Get the names of the hotel, airports, airlines and restaurants included in any travel package. Consider contacting these businesses directly to verify arrangements. Ask about cancellation policies and refunds. If the salesperson cannot give you detailed answers, hang up.
  • Never respond to an offer you do not understand thoroughly.
  • Do not buy part of a travel package — the air fare or hotel stay — separately from the rest. If the deal is not what you expected, it may be difficult to get your money back for the part of the package you purchased.
  • Never send money or give out your credit card or bank account number to unfamiliar companies. One easy way for a scam operator to close a deal is to get your credit card number and charge your account. Sometimes, fraudulent telemarketers say they need the number for verification purposes only. Do not believe them.
  • If you pay with cash or a check rather than a credit card, you lose your right to dispute fraudulent charges under the Fair Credit Billing Act.
  • Be aware that any personal or financial information you provide may be sold to other companies.
  • If in doubt, say "no". Trust your instincts. It is less risky to turn down the offer and hang up the phone.

Other Things You Can Do

Before you buy from an unfamiliar organization, check it out with some of these groups. Your local phone directory has phone numbers and addresses.

  • State Attorney General
     
  • Better Business Bureau
     
  • Call for Action 
        5272 River Road, Suite 300
        Bethesda, MD  20816-1405 
        (301) 657-8260
        
  • BBB Wise Giving Alliance
        4200 Wilson Blve., Ste. 800
        Arlington, VA  22203 
        703-276-0100

For More Information

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provice information to help consumers spot, stop and avoid them. To file a complaint or get free information on any of 150 consumer topics, call (888) 382-1222 (toll free) or use the online complaint form at www.ftc.gov. The FTC enters Internet, telemarketing and other fraud related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.

 

How To Stop Unwanted Calls: The Do Not Call Registry

Registering with the Registry

The National Do Not Call Registry puts you in charge of the telemarketing calls you get at home. The Federal government created the national registry to make it easier and more efficient for you to stop getting telemarketing calls you do not want. You can register your home and/or mobile phone number online at the National Do Not Call Registry, or call toll-free, 1- 888-382-1222 (TTY 1-866-290-4236), from the number you wish to register. Registration is free and is effective for 5 years. Placing your number(s) on the registry will stop most, but not all, telemarketing calls.

If you do not want to put your number on the National Do Not Call Registry, you can still prohibit individual telemarketers from calling by asking them to put you on their own do not call list.

You can check the above website to verify that your number is on the registry or you can call the registry's toll-free number (1-888-382-1222) and follow the prompts to verify that your number is on the registry.

ADVOCACY TIP
The FTC does not allow any business to register consumers for the National Do Not Call Registry. Be wary if you see any web-sites or get any phone calls from anyone claiming that they can or will register your name or phone number on the National Do Not Call Registry, especially those that charge a fee. They likely are a scam.

You can register up to 3 phone numbers, including home phone numbers and cell phones. There is no deadline to register a number.

FCC regulations prohibit telemarketers from using automated dialers to call cell phone numbers. Automated dialers are standard in the industry, so most telemarketers do not call consumers on their cell phones without their consent.

If you later change your mind, you can take your number off the registry by calling toll-free 1-888-382-1222 from the telephone number you want to delete. Telemarketers would then be allowed to add your number back to their call lists.

Registration Blocks Most Calls

The Federal Trade Commission (FTC), the nation’s consumer protection agency, manages the Registry. Telemarketers will be required to purchase the registry from the FTC.

The FTC and the State of Illinois are enforcing the National Do Not Call Registry. Once you have a number on the registry for 31 days, most telemarketers are prohibited from calling it. If they do, you can file a Complaint.

Illinois law has adopted the FTC’s Do Not Call Registry as its own (called the Illinois Restricted Call Registry, administered by the Illinois Commerce Commission). This gives consumers the benefit of being included in both state and national registries with the convenience of free one-step enrollment at the National Do Not Call Registry.

The registry does not block calls from the following sources:

  • Political organizations;
  • Charities;
  • Telephone surveys;
  • Companies with which you have an existing business relationship;
  • Companies to whom you have provided express agreement in writing to receive their calls.

However, if a third-party telemarketer is calling on behalf of a specific charity, you can ask not to receive any more calls from, or on behalf of, that specific charity.

Once you purchase something from a company, that company may call you for up to 18 months after your last purchase or delivery from it, or your last payment to it, unless you ask the company not to call again. In that case, the company must honor your request not to call.

Likewise, if you make an inquiry to the company, or submit an application to it, the company can call you for 3 months after the inquiry or application. If you make a specific request to that company not to call you, then the company may not call you, even if you have an established business.

If there are some telemarketing calls you do not mind receiving, you can give a company written permission to call you. If you do, they may do so even if you have placed your number on the National Do Not Call Registry.

Filing a Do Not Call Complaint

If your number has been on the Registry for at least 31 days and you receive a call from a telemarketer that you believe is covered by the Registry, you can file a complaint with the National Do Not Call Registry, or by calling the registry’s toll-free number at 1-888-382- 1222 (for TTY, call 1-866-290-4236). To file a complaint, you must know either the name or telephone number of the company that called you, and the date the company called you.

While the FTC does not resolve individual consumer problems, your complaint will help the FTC, the Illinois Commerce Commission or the Illinois Attorney General to investigate the company and could lead to law enforcement action. Telemarketers who disregard the rules of the Registry may be subject to fines and penalties of up to $11,000 per call.

Where to Get More Information

If you have questions or complaints regarding the Do Not Call Registry, please contact the FTC by email at dncconsumerinquiry2@ftc.gov, or by mail at:
National Do Not Call Registry
Attn: DNC Program Manager
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, DC 20580

Open-End Credit Scams and Door to Door Sales

Most reputable businesses do not sell door-to-door. Seniors have long had a problem with door-to-door sales. (See the section above about home improvement scams.) Seniors also should be wary of salesmen at their door hawking new products and new ways to finance them. Such salesmen may try to sell you over-priced items.

Examples: satellite dishes or water conditioners.

Door to door salesmen not only overprice these items, but often lure you into buying them with a special "credit card" account, which usually will wind up costing you more money. Door-to-door salesmen prey on seniors' insecurities.

Example: They may show you phony reports that tell you that your drinking water is unsafe, and then try to sell you a water conditioner. Or, they may try to sell you pre-need funeral and burial services.

Beware of Open-End Credit Cards

Door to door salespeople selling a big-ticket item are likely to offer to arrange financing for it. It usually is not the best credit deal available. But many financing arrangements used today have a new twist. Instead of giving you a contract that calls for repayment of a fixed amount over a specific period of time, the seller will try to sign you up for a limited use "open-end credit" credit card. This card is usually issued by some affiliate organization. As shown below, this type of arrangement is going to cost you more money.

How Open-End Credit Scams Work

When credit terms are fixed at the outset (closed end credit), you are going to know your bottom line costs.

Example: If you buy a car for $5,000 at 12% for 48 months at $131.67/month, you will know that you will be paying a total cost of $6,320.16, of which $1320.16 is the cost of financing (interest).

The Truth in Lending Act (TILA) requires that consumers be given all of this information at or before the time they sign the loan. For the above example, look at the box appearing below to see what the most critical part of the TILA disclosure statement would look like.

On the other hand, a typical credit card is a prime example of "open-end credit". When you first get the card, you may have no charge on it at all. The amount of debt changes as you add charges to it and as you make your monthly payments on it. It is impossible for you to know at the beginning exactly how much debt you are financing (the "amount financed"), how much interest you will owe (the "finance charge"), and how much your monthly payments will have to be.

Example of Truth in Lending Disclosure Statement for a "closed-end" transaction:

ANNUAL PERCENTAGE RATE FINANCE CHARGE AMOUNT FINANCED TOTAL OF PAYMENTS
The cost of your credit at a yearly rate The dollar amount the credit will cost you The amount of credit provided to you or on your behalf The amount you will have paid after you have made all payments as scheduled
12% $1,320.16 $5,000.00 $6,320.16

With open-end credit, none of this information is known when you open the account, so the creditor cannot disclose any bottom line "total of payments". Indeed, in open-end credit, sellers are not required to disclose the amount financed, the finance charge or the total of payments.

Some door-to-door salesmen will try to finance the merchandise or services they are selling through "open-end" credit by giving you a special "credit card". They do this to avoid giving you the kind of disclosure statement shown earlier. Obviously, without such a statement, you will not be able to see the bottom line cost of the transaction before you commit yourself. The more expensive your purchase, the more incentive there is for sellers to try to deceive you in this way.

You are at a disadvantage, not only because you don't know the bottom line, but for other reasons, too. Usually, the minimum monthly payments are set at an amount which will take much longer for you to pay off than a comparable closed-end loan. Longer terms mean higher cost in finance charges.

Example: A senior bought a satellite dish with a special "credit card" for around $4000. He got statements telling him to pay $77 a month, but the interest rate on the credit card was 18%. At that payment level, it took him 111 months to pay off the satellite dish and spent over $8500. The senior had no way of knowing he was committing that much of his income for over 9 years (until he was 89 years old) to pay it off.

Usually, such purchases are available from other sellers, at less cost. Moreover, there is usually no good reason to finance the purchase with a credit card. Usually, the card cannot be used for any purpose except to buy more things from sellers linked to the deal.

Examples:
Programming for the satellite dish, or chemicals for the water conditioner.

Legal Remedies for Open-End Credit Scams

If the sales pitch seems fraudulent or even just includes misrepresentations, you may be able to challenge it under the Illinois Consumer Fraud and Deceptive Business Practices Act.

Examples:

  • A company selling water conditioners falsely tells you that they are affiliated with a government or a utility.
  • The seller misrepresents the need for the product, its costs or exaggerates its merits.

Door-to-door transactions are subject to a 3 day cooling off period. This means you can cancel the deal if you do so in writing within the 3 days. You may still be able to cancel after that if the seller does not give the proper disclosures concerning the right to cancel the deal within 3 days, or if the seller installs the goods before the end of the 3 day period. You may also be able to claim damages against the seller. See the earlier discussion of Door-to-door Sales under "Home Improvement Scams".

In addition, you may have a remedy if the deal was made as an "open-end" credit transaction merely as a way to get around making the "closed-end" type of disclosures. This could violate the Truth in Lending Act and the Illinois Retail Installment Sales Act.

Phone Slamming

What is Phone Slamming? 

You have the right to choose any long distance carrier you want. You also have the right to choose your calling plan and the service features offered by your long-distance phone company. The practice known as "slamming" takes those choices away from you.

"Slamming" occurs when a phone company switches your long distance phone carrier or services without your knowledge and without your consent.

Your Rights If You are Slammed

Slamming is illegal. The federal government has tough laws to prevent slammers from making money at your expense. If you are slammed, you have the right to switch back to your preferred phone company. By federal law, you are not required to pay the slammer for any calls you made within the first 30 days after you were slammed. After the first 30 days, you are only required to pay for charges your regular phone company would have charged.

How Does Slamming Happen?

Although slamming can occur "by mistake", it is often the result of phone companies having "tricked" you into signing up for different services. They can trick you in a variety of ways.

Examples:

  • Some phone companies send out contest entry forms, checks or surveys which authorize the switch in fine print.
  • Other companies train their telemarketers to make confusing offers that get you to say "yes".

In January 2008, the Federal Communications Commission (FCC) released new rules intended to require carriers to help the consumer understand that a carrier change is being authorized. Under these new rules, it should be harder for a carrier to make the consumer think that changes are limited to something else, such as an upgrade to existing service.

What To Do If You Are Slammed

Remember that slamming is illegal when you've been tricked into switching long distance phone companies. If that happens, here's what to do:

  • Call your local phone company (not the long-distance carrier) and ask to be reconnected to your long-distance phone carrier of your choice. Explain that you did not order service from the new long distance company. You should explain that any charge appearing on your phone bill for switching companies should be taken off the bill.
  • Call your preferred long distance company and report the slam. Ask to be reconnected for free.
  • Call the long distance company that slammed you. Tell them that: (1) all of their charges within 30 days of slamming should be removed; and (2) any calls made after the first 30 days should be re- calculated according to your preferred company's billing rate. If you have already paid the slammer's bill, the slammer must forward your payments to your preferred long-distance provider. That provider should give you a refund or credit for any amount you paid to the slammer in excess of the  they would have charged you.
  • Call the following toll free numbers to verify your phone providers: 1-700-555-4141 for long distance services; and 1+ your area code + 700-4141 for local toll services.
  • If the company that slammed you refuses to drop the illegal charges (or refuses to forward your refund if you already paid), you can file a complaint. You should file the complaint with the Federal Communications Commission (FCC):

1. By calling them, toll-free, at 1-888-225-5322;

2. By sending written complaints t FCC, Common Carrier Bureau Enforcement Division, Washington, D.C. 20554; or

3. By filing a complaint with the United States Federal Trade Commission

Even if the company that slammed you properly drops all charges, you can still tell the FCC about the slam. Be sure to keep notes of your telephone calls with all the phone companies. Write down the names of the employees you talked to and the dates you spoke to them.

How to Prevent Being Slammed

There are a number of things you can do to make sure that you do not ever get slammed. To protect yourself, you can do the following:

  • Ask your local phone company to "freeze" your existing long-distance carrier. A freeze informs the local phone company that you do not want to switch providers unless they receive written or verbal authorization from you.
  • If you get a call from a telemarketer offering to switch phone companies, tell them that you are not interested in switching. It is never a good idea to change service based on information you get over the phone. If you are interested in the telemarketer's offer, ask them to send you the information by mail.
  • If you receive a letter or postcard "verifying" a switch in service, immediately let the sender know that you did not authorize the change. Next, call your local phone company to confirm that your long-distance provider is the one you choose.

Further Rights Under Illinois Law

Under Illinois law, it is illegal for any long distance company to change your phone carrier without first getting your authorization. It also is illegal for them to change your phone services if it results in an additional monthly charge unless the company either:

  • Sends you a letter about the change; or
  • Gets verification of your consent to the change.

If the company sends you a letter about the change, the letter must be sent by first class mail, postage prepaid, no later than 10 days after the company is on notice that the change in carrier has occurred, and no later than 10 days after a change in your services has occurred. The letter must be a separate document sent for the sole purpose of describing the changes or additions in your carrier or services, the details of which must be described in clear and plain language. The letter also must give you a toll free number to call if you want to cancel the change or make additional changes.

If the company seeks verification of your consent to the change, they must use an independent third-party agent to do the verification. The agent must contact you and get your acknowledgment to the following disclosures:

  • Your name, address and phone numbers of all phone lines that will be affected by the change;
  • The name of the phone company that is replacing your preferred provider or that is adding a new service to your account, and the name of the phone company being replaced;
  • The fact that you may be charged a fee for the change.

The agent seeking your verification of these things must obtain this verification no later than 3 days after the company making the change is on notice that a change in carrier has occurred, and no later than 3 days after a change in your services has occurred.

Complaints to the Illinois Commerce Commission for Violation of Illinois Law

You can file a complaint with the Illinois Commerce Commission (ICC) if:

  • Your carrier has been changed without your permission; or
  • You have been given additional services that you did not order.

Once you file the complaint, you can decide whether or not to submit the complaint to the ICC's established mediation process. If the complaint is not submitted to mediation or if no agreement is reaching during the mediation process, the ICC will hold a hearing.

If the ICC finds that a phone company has violated the Illinois law, the ICC can order any of the remedies allowed under the federal law discussed above.

In addition, the ICC can issue a "cease and desist" order. For companies that repeatedly violate the law or which intentionally violate a cease and desist order, the ICC can revoke the violating company's operating certificate which would effectively put them out of business.

Advice About Credit Cards

While easy access to credit generally can be a good thing, many seniors have fallen deep into debt because they have not been able to resist the overwhelming marketing of credit which has pervaded our society in recent years. The widespread practice by financial institutions of offering credit cards by mail is a large part of the problem. Like others, older Americans are enticed by multiple offers to get new cards, by low minimum payment provisions, teaser rates, no annual fee and high credit limits. These offers, however, never discuss the down side of a new card or its potential risks.

Things to Think About Before Taking A New Card:

  • Avoid accepting too many offers. There is hardly ever a good reason to carry more than one or two credit cards. You should choose only one or two cards which are best for you. Having too much credit can lead to bad decisions and debts that you might not be able to manage;
  • Interest rate is important, but not the only consideration. You should always know the interest rate and try to keep it as low as possible. A temporary low rate may encourage you to spend more than you can afford. You also need to watch for other credit terms that may add to the cost, so a card which appears cheaper may be actually more expensive. Annual fees, late charges, membership fees and the method by which balances accrue can add to the cost of credit;
  • Beware of temporary "teaser" rates. These rates last only for a limited time, such as six months or less. After that, the rate automatically goes up, substantially. If you build up a large balance which will require you to pay beyond the introductory period, the much higher permanent rate is more important than the temporary rate. Often, teaser rates apply only to transfers of balances from other cards, but not to new purchases;
  • If your rate is variable, understand the basis on which it may change. Some cards do not have a fixed rate. Variable rates can be very confusing. You may need help reading the credit contract to understand how and when your rate may change;
  • Be careful about juggling cards to take advantage of teaser rates and balance transfer options. Some people constantly transfer their balances from one card to another to take advantage of new teaser rate offers. While this can keep your interest rate lower for a longer period of time, it takes a great deal of time and effort to juggle cards in this way. If you do not constantly monitor your temporary rates, or do not continue to receive teaser rate offers, you will soon be looking at carrying balances at high rates again;
  • Watch out for late charges and penalty rates. If you miss making a payment on time, your credit contract may require that you pay high late charges. Even if you miss just one payment, your interest rate may go up, and you could forfeit your low rate;
  • Learn your credit card's billing method. If interest will apply from the date of purchase without a grace period, a low rate may actually be higher than it looks. You need to understand how the grace period works and remember that many lenders do not mail bills until late in the grace period. Your payment may be due quite soon after you receive the bill in order to avoid additional interest charges; and
  • Most credit cards are unsecured and require no collateral. Avoid credit cards where the creditor is taking some form of collateral for the debt owed, such as a bank account or your home.
    Examples:

1. Credit cards that involve balances secured by a bank deposit. This type of card allows you a credit limit up to the amount you have on deposit at a particular bank. If you can't make the payments, you lose the money in the account.

2. Credit cards issued in connection with a home equity line of credit. The potential consequence of nonpayment is loss of your home by foreclosure. These cards are frequently offered by home improvement contractors.

  • If you do take a credit card and discover terms you do not like: Cancel!

For additional information, see Using Credit.

Avoiding Credit Card Problems

Once you choose a card, there are a number of things you can do to avoid credit problems. These include the following:

  • Avoid running up big balances, because you will pay the most interest. Do not fall into the trap of thinking that you can afford more credit just because you keep getting more credit card offers in the mail. Lenders use marketing profiles which show that you are likely to carry a big credit card balance and pay a great deal of interest. Don't run up the balance in reliance on a "teaser" rate.
  • Do not use credit cards to finance an unaffordable lifestyle.
  • If you get into financial trouble, do not make it worse by using credit cards to make ends meet.
  • Don't get hooked on minimum payments. If you pay only the minimum, you will not be paying down the debt, or doing so very slowly. This not only increases the amount of interest you will pay, but if you make new purchases every month, your debt will grow, not shrink.
  • If you can afford to do so, make your credit card payments on time. This can avoid late payment charges and penalty rates. You should know that most lenders will waive a late payment charge or default rate of interest one time only. It is worth calling to ask for a waiver if you make a late payment accidentally, or with a good excuse.
  • Avoid the special services, programs, and goods which credit card lenders offer to bill to their cards. These products are often overpriced, and add to your cost of credit, because interest is being charged.
    Examples: credit card fraud protection plans, credit record protection, travel clubs and life insurance.
  • Watch out for unsolicited increases by a credit card lender to your credit card limit. Do not assume this means that you can afford more credit.

If You Get Behind On Your Payments

If you get into financial trouble, pay your higher priority debts before you pay on the credit cards. Most credit card debt is unsecured, meaning that you did not put up any collateral on that debt. On the other hand, priority debts such as your house and your car are usually secured. Don't let yourself be pressured into keeping up with credit card payments at the risk of losing your home or your car.

You should not move credit card debt up in priority because the creditor is threatening to sue you. Do not let them convince you to use money set aside in your budget for more pressing debts to make credit card payments.

If you can afford to pay something less than the full amount of credit card debts, contact each credit card lender and try to make a payment arrangement which fits your budget. The lender might also agree to waive fees, lower interest rates, or otherwise change the terms to make your payments more affordable.

Credit Card Disputes

If someone steals, borrows, or otherwise uses your credit card without permission, you should immediately make a report to your credit card company. Under the law, your obligation for unauthorized use of a credit card is limited to $50. This means that if your card is stolen, the lender can charge you no more than $50 no matter how much the thief has charged to your card. (Note: This limit may not apply to a "debit" card).

Another type of billing dispute is where you dispute how much you owe. You can find information about how to raise a dispute on the back of each bill, including the mailing address to use. You must raise a dispute in writing within 60 days of the first bill with the improper charge. You must include the following information:

  • Your name and account number
  • The dollar amount in dispute
  • A statement of the reason for the dispute.

Examples of reasons for dispute:

  • I did not authorize this charge;
  • I did not receive the goods I ordered.

If you have problems with the quality of the goods or services you purchase, your right to dispute the charges is limited. The credit card lender must own the business from which the purchase was made or must advertise the goods or services purchased. In addition, the purchase must have been for more than $50 and must have been in your home state or within 100 miles of your mailing address. In order to dispute a charge for goods or services based on quality, you must first have made a good faith effort to resolve the issue directly with the merchant.

Once you raise any dispute, the credit card company is required to investigate and report back to you in writing. Until the dispute is resolved, you do not need to pay the disputed portion of the bill.

Where to Go for More Information

Statutes and Regulations

Federal Laws
Illinois Laws

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