YOUR RIGHTS AS A CONSUMER
Your Rights
as a Consumer
You are a consumer when you buy goods or service, or
enter into rental mortgage, loan or installment transactions, for personal,
family, or household use. This pamphlet explains some of your rights as
a consumer.
Getting Credit
If
you are 18 years old or older, you cannot be refused credit because of sex,
marital status, mental retardation, age, blindness, learning disability, race,
color, religion, creed, national origin, ancestry, physical disability, source
of income or sexual orientation. If you are denied credit, must
be told why within 30 days.
If the denial was based on a credit bureau report, you
should ask the credit bureau what is in that report. If the information
is wrong, you can ask the credit bureau to investigate and correct its files. You
also can put your own short explanation into the credit bureau's files.
Married women can have credit and credit records in
their own names, separate from their spouses. A creditor cannot require
your spouse to co-sign with you as a condition of your receiving credit.
The Cost of
Credit
Many
lenders and sellers are limited in the interest they may charge. Interest rates
limits vary in different transactions. For instance, the general interest
rate is 12% but more interest can be charged by banks and credit unions. Also
more interest can be charged for credit cards, small loans and car sales. Second
mortgage lenders and brokers are regulated by a special law limiting the "points"
and other closing-related fees they can charge.
In most cases where interest is included, or where you may
pay in five or more installments, the seller or lender must give you enough
information to allow you to shop for credit before you enter into an agreement.
For example, the seller or lender must tell you how much the "finance
charge" (dollar amount of interest and points) will be and what the "annual
percentage rate" will be so that you can compare rates.
When you make a major purchase, it is wise to shop for
credit. Consider borrowing on the cash value of your life insurance, or
get a passbook loan. Then check the personal loan rates at your credit
union or bank. If you cannot get a loan from any of these places,
consider a small loan company or licensed second mortgage lender for credit.
Contracts
A
consumer contract, by law, is supposed to be in plain, understandable language.MAKE
SURE ALL PROMISES MADE TO YOU ARE PUT IN WRITING. DO NOT SIGN ANYTHING WITHOUT
READING IT. TAKE YOUR TIME. IF YOU HAVE ANY QUESTIONS,
ASK.
If you don't want to agree to a certain term ( for instance,
default or attorney's fee clause ), cross it out and put your initials next
to the part crossed out. Never sign a contract with blank spaces. Cross
them out. Always ask for and keep a copy of anything you sign. Also
keep all receipts, warranties, cancelled checks, and other papers.
Sales at Your
Home
You
can cancel a magazine sale, or any other sale of goods or services made at your
home, within three business days. The seller is required to give
you a notice explaining your cancellation rights. If you cancel in
writing within three business days, all your money must be refunded.
Home improvement contracts are included in this law
about sales at your home. In addition, home improvement contractors
must be licensed by the Consumer Protection Department.
Credit Card
Protections
If you dispute the amount of a monthly statement, notify
the creditor in writing of the error, and ask for a correction. Each creditor
is required to tell you in writing what procedures to follow if you question
your monthly statement.
If you bought something with a credit card and have
a dispute with the seller about what you bought, you may have to pay that part
of the bill if you charged more than $50 to buy the item and you bought it in
your home state or within 100 miles of your current address. But
first, you must try to resolve your dispute with the seller.
If your credit card is lost or stolen, you are not liable
for unauthorized use once you have notified the card issuer; even if the issuer
has not been notified your liability cannot exceed $50. A bank which
has issued a credit card cannot take money out of your bank account to pay the
debt, without a court order, or specific authorization. But the bank can
take money out of your account to pay a mortgage or installment loan, if you
are behind in your payments.
Warranties On
Goods
Express warranties are statements about the merchandise
which caused you to buy. If these statements are not true, you may
cancel the sale ( if the misrepresentations are serious ) and get back money,
have the goods repaired or replaced at the seller's cost, or deduct your damages.
Most consumer goods also are sold with implied warranties
concerning the usability of the product. Connecticut law limits the
extent to which a seller can change or remove an implied warranty on a new item.
There is a federal warranty law, which requires the
seller to provide you with certain information about product warranties, and
gives you the right to sue for damages and for your attorney's fees and costs.
Connecticut's "Lemon Laws" protect buyers
and lessees of defective new and used cars. Under this law if the dealer cannot
fix a defect in a new car covered by the warranty after a reasonable number
of attempt during the applicable period of two (2) years or 18,000 miles from
date of delivery to the consumer, whichever happens first, (or if the car is
in the repair shop for a cumulative total of 30 days during the applicable period
for the same defect), you are entitled to a refund or a new car. For
used cars costing $3,000 or more, dealers must provide a warranty that the car
is mechanically operational and sound. Dealers can sell used cars
which are priced under $3,000 or are 7 or more years of age "as is"
only if they include a specific statement to that effect in large print on the
front of the sales contract. Informal arbitration is available to
buyers of a new cars through the Department of Consumer Protection.
Security Interests
When a seller or lender takes a security interest in
your car or furniture, it can repossess the item if you do not pay-and if the
repossession is done peacefully.
Upon repossession of furniture, appliances, or a car
that cost you $2,000 or less, the debt is cancelled. When a car that cost
than $2,000 is repossessed, the bank or seller has to give you certain notices.
If there is a difference between the debt and statutory value of the car, the
reasonable value of the repossessed car has to be proved, and you may have to
pay the difference. It is important to have an attorney represent
you if you are sued after repossession, since you have many rights; the creditor
might have to pay you and your attorney if the creditor has not complied with
applicable laws.
Credit Insurance
Credit insurance insures the seller or lender and pays
them the insurance benefits of a credit life or disability insurance policy
in the event of their death or disability.
Most sellers and lenders tell you in writing that credit
insurance is not required; sometimes they try to make you buy it anyway. Credit
insurance is a significant source of profit for a business. You do
not have to sign up for credit insurance; you should always ask for a comparative
prices on credit insurance, since the seller may try to sell you a more expensive
policy than you need.
Unfair Practices
You may feel you have been cheated or mislead. There
is a general law covering unfair practices which allows you to sue for damages
and get your attorney's fees paid too. Unfair practices can include such
things as misrepresentation, excessive prices, poor quality merchandises or
services, high pressure sales tactics, and unfair refund policies. If
you feel that you have such a claim, you can file a compliant with the Department
of Consumer Protection or see an attorney.
Debit Collection
A creditor or collection agency may not use abusive
or deceptive tactics to get you to pay a bill. A collector may not
call your neighbors, relatives ( other than your spouse ) or employer about
your debts. The collector may not call at an inconvenient time or
place ( at your job ) if you tell him or her that it is inconvenient. the
collector may not contact you at all if you have an attorney, or you tell him
or her in writing not to contact you anymore. If you dispute the
debt you should let the collector know right away in writing.
Wage Attachments
Sometimes a collector will threaten to take your wages. This
cannot be done until you have been sued, and a judgement has entered. The
judgment will order you to make weekly payments. If you make those
payments, your wages cannot be attached.
Part of your wages cannot be attached at all under
Connecticut law; the maximum attachment is 25% of your disposable income. You
can usually reduce an attachment by agreement with the creditors attorney. Be
sure to read the wage attachment form carefully.
You can not be fired by your employer for wage
attachments, unless you have more than seven served in one year.
Bankruptcy
If
your debts can not be managed and you want a fresh start, you may declare bankruptcy.
any people in Connecticut use "straight bankruptcy" which cancels
most debts. You also might want to consider the "wage earner
plan," which lets you pay your debts over a period of time. A
discharge in bankruptcy relieves you of most debt ( but not support debts, or
taxes less than three years old).
Certain assets are exempt, that is, they do not need
to be turned over to the bankruptcy court, and you can keep them for your fresh
start. It is important to have a good legal advice before making a decision
about bankruptcy.
Sometimes credit counseling can help you avoid
bankruptcy. Call your local Info-Line for the information on the
nearest credit counseling service.
Co-Signers
When you co-sign fore someone else, you are fully responsible to pay that debt
if the person you co-sign for doesn't pay it. Many people think that co-signing
is just a favor for a friend, it is not. It is a commitment to pay
the debt in full, so be very careful about co-signing for anyone.
Layaway Plans
When you buy goods on layaway, the seller must give you a
written document describing the goods, the purchase price, and the layaway plan. The
seller cannot later increase the price, substitute different goods, or refuse
to deliver any goods which have been fully paid for, even though their are more
items still on layaway.
If the seller does any of these things, you can cancel
the transaction and get all your money back.
Repairs
When you have goods repaired, such as a car, a watch,
or a TV, you have a right to get a written estimate of the cost of the repair
in advance. You can't be charged more than the estimate, and you can all
the replaced parts back..
A repairer must have a sign posted on the premises telling
you of your rights. In the case of cars, you don't have to pay more than
the repair estimate, unless you agree to do so, and the garage can't refuse
to return your car if you paid the estimated price.
Mail and Telephone
Order Merchandise
If
you get something through the mail that you did not order, you do not have to
pay for it. If you order something through the mail or by telephone,
the seller generally has to fill your order within 30 days or ask you whether
or not you want to cancel the order. To protect yourself, use a credit
card. Then if the merchandise is not delivered or is defective, you can
explain that to the credit card issuer and refuse to pay. Complaints should
be filed with the Federal Trade Commission.
Consumer Protection
Laws
There are more than 50 state and federal laws protecting
you as a consumer. Only a few of them have been mentioned here. If
you have a problem with a consumer transaction, there may well be a law that
can help you.
In addition, there are agencies which enforce consumer
laws, such as the Connecticut Banking Department, Consumer Protection Department,
and Insurance Department. You can register your complaint with the Better
Business Bureau, or consumer action programs, as well as state licensing agencies.
You should not hesitate to talk to an attorney about
your consumer problem. Many of the laws which protect consumers also provide
that the consumers attorney's fees must be paid by the creditor. An attorney
can tell whether it will cost you anything to stand up for your rights as a
consumer.
CREDIT REPORTS: 10
years of Financial Information
By Barry L. Thompson of Thompson and Vollono, LLC
update
added 11/24/99
Your credit report or "credit history" covers the last 10 years of your financial life. Credit reports often only take on importance to you when you are seeking to borrow a large sum of money such as a mortgage loan to purchase a home or an automobile loan. If you applied for and received a department store credit card back in 1991, even if you never used it, it will still appear on your credit report. It will continue to appear on the reports for 10 years. Most stores, banks, lenders, and credit card companies automatically report to the major credit bureaus on a monthly basis. This is so despite the fact that you did not use the account during that time period. Potential lenders desire to see your credit use and spending patterns for a substantial time period to help them determine your "creditworthiness".
Frequently during the loan application and approval process a potential borrower is advised that there is a debt or "blemish" on his or her credit report and the lender wants it paid or otherwise removed from the credit history before they will approve a new loan. Credit bureaus only report negative information about your credit for a period of 7 years. Late payments occurring prior to 1992 will not be revealed to someone examining your credit history. Even extremely derogatory reports such as foreclosures, bankruptcies, or judgment liens will be eliminated once they become more than 7 year old. Therefore if you filed for bankruptcy protection in 1991 that fact will not appear on your credit history in 1999.
One exception to the "7 year rule" is the United States Internal Revenue Service. The IRS will often report its tax lien again to the credit bureaus to create a fictional new "new activity" on the account to resurrect the negative report for another 7 years. Some credit bureaus will use a similar device to recreate an old debt but they usually do not employ the practice unless there is a substantial amount of money owed.
If there is a dispute between you and a creditor claimed that you owe a debt it is the creditor's burden to prove the existence of the debt. It is not up to you to prove that the debt does not exist. If the creditor cannot prove a debt exists by means of an unpaid invoice or similar proof the credit bureau is obliged to remove the item.
Often a debt is "sold" to another party who then attempts to collect it. This can be the source of some confusion to a debtor because the name that shows up on the credit report may be unfamiliar to the debtor. For example, Home Depot may sell its debt to HFC resulting in a debt owed to HFC showing on your credit report when you had no direct dealings with HFC. You still have to deal with HFC if the underlying debt is valid and proven.
Mechanic's Lien
Almost everybody has heard of a mechanics lien but most people cannot tell you what it is. Despite its name, it is not a lien placed by an auto mechanic (those do exist and aren't called mechanics liens but that is a story for another day).
A mechanics lien is a lien placed on real estate by a person or company that supplies improvements to the real estate but is not paid. For instance, if a plumber repairs a leaking pipe and then is not paid, he can file a lien against the property but must do so within 90 days of the last day he worked on the property.
Interestingly, this can be done without a court order. Property can be liened simply on the strength of a statement signed under oath attesting to the debt. Of course, a party who has a lien wrongfully placed on their property can apply to a Court for a release of the lien.
Mechanics liens come up frequently in the context of new construction since so many people and companies have supplied materials and labor that went into the construction of the house. Many people who have bought new houses and paid for them in full have been surprised to have liens placed against the property after the closing due to the builder not paying all of the subcontractors . This may occur since the lien may be placed against the property even if the owner is different from the person who requests the work to be done.
Many attorneys recommend that buyers of new homes purchase title insurance to protect against the risk of a mechanics lien. Title insurance will defend a claim made by a lienor and will pay any loss incurred as a result of the lien. Attorneys also require that the builder supply a mechanics lien waiver which is a document signed by all parties who may have a right to lien in which they give up their lien rights.
This pamphlet, prepared by the Connecticut Bar Association, is based upon Connecticut law in effect at the time of its publication and is intended for general information purposes only. It is issued as a public service and is not a substitute for obtaining legal advice from a Connecticut Attorney.
Buying
and Selling a Home / Your Family Lawyer /
If you are in an Auto Accident / Why
you Should Have a Will /
Your Rights When Arrested /
Barry L. Thompson, resume / Michael
V. Vollono, resume
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