Consumer guide for young adults

              Arizona
Attorney General
Terry Goddard
1275 West
Washington Street
Phoenix, Arizona 85007
602.542.5025
400 West Congress
South Building
Suite 315
Tucson, Arizona 85701
520.628.6504
Outside the Phoenix
or Tucson metro area
800.352.8431
www.azag.gov
Consumer
Guide for
Young Adults
Message from the Attorney General
At the age of 18, a person becomes an adult in the eyes of the law. With this privilege comes
great responsibility.
As an adult, you may sign leases, apply for loans and enter into legally binding contracts. As
you enter this new world, you should be armed with as much information as possible. While
my Office works vigorously to prevent people from taking advantage of you, it is ultimately your
responsibility to become an informed consumer.
This Guide provides information on contracts, credit, landlord-tenant agreements, identity theft,
scholarship scams and much more. It is designed to enable you to make smart decisions and
avoid becoming a victim.
The Resource Guide in back provides contact information for government and consumer
organizations that may be helpful to you.
Sincerely,
Terry Goddard
Arizona Attorney General
2
Message from Attorney General Terry Goddard
Top 10 Consumer Tips for Young Adults
• If it sounds too good to be true, it probably is.
•  Check your credit report for errors or to see if someone has stolen your identity once a year for free
at www.annualcreditreport.com.
•  Protect your personal identifying information. Never give out your financial information, driver’s
license number or Social Security number through email.
• At age 18, contracts you sign are binding.
• Always read the fine print and don’t sign anything you don’t understand.
• Don’t be pressured into making quick decisions on purchases or investments.
• Get all claims, warranties and promises in writing.
• Keep your receipts.
• Know your rights as a consumer and where to get help if you have a problem.
•  If you feel you need an attorney, the following organizations provide attorney referrals for people of
varying income levels. Attorneys should explain clearly and upfront all fees as well as when you are
expected to pay.
Arizona State Bar Community Legal Services
602.252.4804 602.258.3434
www.azbar.org www.vlparizona.org
If you have questions or need assistance, contact the Attorney General’s Community Services Program:
Arizona Attorney General’s Office
1275 West Washington Street
Phoenix, Arizona 85007
602.542.2123 (Phoenix)
520.628.6504 (Tucson)
1.800.352.8431 (outside Maricopa County)
communityservices@azag.gov
consumerinfo@azag.gov
The information contained in this Guide is for educational use only and does not substitute for the advice of an attorney
licensed to practice law in Arizona. Additionally, the Attorney General’s Office cannot represent individual consumers. However,
our consumer experts look into every complaint and work with businesses to resolve disputes. Complaints that are not
resolved by businesses voluntarily are reviewed by our Office for further action.
The material in this brochure is not copyrighted. Organizations are encouraged to reprint this booklet or excerpts and do not
need to contact the Attorney General’s Office for permission.
Get updates on
new and common
scams to avoid
becoming a victim
of consumer fraud.
Sign up for Scam
Alert Emails at
www.azag.gov
Introduction
3
4
Know the Basics
Filing a Consumer Complaint . .5
Contracts . .7
Credit . .9
Be an Intelligent Consumer
Student Loans .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 10
Payday Loans . .12
Landlord-Tenant Agreements . .13
Cars . .15
Credit Cards . .19
Cell Phones .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 21
Avoid Frauds and Scams
Identity Theft . .22
Travel Scams .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . . 24
Job and Scholarship Scams . .25
Lottery and Prize Notification Scams .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   . 26
Resource Guide
Helpful Web Sites and Phone Numbers . .27
Table of Contents
1 Know the Basics
Filing a Consumer Complaint
Imagine spending most of your hard-earned money on a product or service you’re anxious to
have and one week later finding out it is defective or even worthless. What would you do?
n Step 1: Contact the Business Immediately
• Complaining sooner is better than later. This increases your chance for a satisfactory settlement.
If you postpone complaining, the company may not be responsible for solving your problem.
• Contact the store where you purchased the product or service by phone and explain your
problem. Make sure relevant information is on hand, including a description of the item, model
and/or serial number, account number, receipt, billing statement or canceled check. Explain
how you want the merchant to respond (exchange, refund, etc.).
• If phone contact is unsuccessful, go to the merchant in person and ask to speak to a manager
or supervisor. Keep records of the individuals you talk to, the date(s) you talk to them and what
is said.
•  If these first two attempts fail, it is time to put your complaint in writing. Complaint letters to the
merchant or the manufacturer are important because a business may ignore a complaint if it’s
not in writing. Sometimes the person who has the authority to solve the problem may not be
aware of your complaint. A letter will bring it to their attention.
What to Include in a Complaint Letter
• Your name, address, email address and home and work phone numbers, including when you
can be reached.
•  The business address, telephone number and names of the people at the business you have
complained to.
• Your account number, if applicable.
•  A brief explanation of the problem and any important details.
• The model, make and serial number of the item.
• A description of what you have done to resolve the problem.
• How you would like the problem resolved.
• Copies of all related documents (keep the originals for future reference).
• If you are complaining about a service, include a description of the service and the name of
the person who performed it.
5
2
Filing a Consumer Complaint (continued)
6
n Step 2: File a Complaint with the Attorney General’s Office
•  If the manufacturer or business does not cooperate and you feel you are a victim of consumer
fraud, you may want to file a complaint with the Attorney General’s Office.
To file a complaint, please take the following steps:
•  Step 1: Contact the Attorney General’s Office as soon as possible.
• Step 2: Follow the instructions for filling out a complaint form (all complaints must be in writing).
• Step 3: Send us copies (keep your originals) of any documentation to support your complaint,
including contracts, phone records and the names and addresses of persons involved.
 If you would like help filling out your complaint or would like to speak with someone in person
about your problem, go to one of the Attorney General’s Satellite Offices around Arizona.
Locations and hours are posted online at www.azag.gov.
Consumer fraud
is any deception,
false statement,
false pretense,
false promise or
misrepresentation
made by a seller
or advertiser
of merchandise.
Concealment,
suppression or
failure to disclose
a material fact may
also be considered
consumer fraud.
Know the Basics
Contracts
A contract is an agreement between two or more people that sets obligations that each
person promises to carry out. Not all contracts must be in writing, but having them in
writing helps to avoid miscommunication and protects you from dishonest people or
businesses.
Although many contracts are enforceable whether written or oral, some contracts
are required to be in writing to be enforceable.
n Contracts That Must be in Writing
• Contracts that require more than a year to complete;
• Contracts involving the sale of real estate;
• Contracts involving the sale of goods over $500;
• Contracts where there is a promise to be responsible for
another person’s debt.
7
Know the Basics
Signature
Contracts (continued)
8
n What to Consider Before Signing a Contract
• A signed contract implies that you have read, understood and agreed to all of the document’s
contents.
•  Make sure all oral promises are written into the contract.
• Do not sign a contract under pressure.
•  Do not sign a contract with any blank fields. If sections of the contract do not pertain to
your transaction, cross them out. If you make hand written changes, be sure both parties
initial them.
• You have the right to negotiate over specific terms or not sign the contract at all.
• You might want to take the contract to a relative, friend or attorney for help reviewing and
understanding the terms.
• Don’t sign a contract unless all of your questions have been answered and you feel
comfortable with the contract.
n  What if the other party does not fulfill its obligations
imposed by the contract?
• You may have a claim for breach of contract and, if so, you may be able to go to court and ask
for relief. You may also be able to resolve the dispute through mediation or arbitration.
n You may be able to cancel the contract after you have
signed it if:
• You signed the contract as a result of fraud, misrepresentation or misleading business
practices;
•  The goods that you purchased under the contract are defective and the seller does not repair
them;
•  You were not legally competent to sign the contract. Legally competent means that you are
over 18 years old and were not under a guardianship or mentally impaired (by illness or
intoxication) at the time the contract was made.
Know the Basics
Credit
Credit is a way of buying goods and services now and paying for them in the future.
Credit is not free money.
n Credit Reports and Scores
•  Every time you use or apply for credit or make a bill or loan payment, it impacts your credit
history and credit score.
•  Paying your bills on time can improve your credit score.
• Your cumulative history of credit applications and payments make up your credit history.
• Three companies, or “credit reporting agencies,” collect your credit information. Contact
information for all three is listed below.
•  A good credit score can help you qualify for future credit offers—such as an auto loan or
mortgage—at a lower interest rate. A bad credit score can make such offers more difficult or
expensive to obtain.
n Free Annual Credit Report
• Be sure to request a copy of your credit report at least once a year to check for possible errors.
• You have the right to one free credit report per year from each of the three credit reporting
agencies. You can request these at www.annualcreditreport.com.
n The Three National Credit Reporting Agencies
•  Equifax, www.equifax.com, P.O. Box 740241, Atlanta, GA 30374-0241, 800.685.1111
•  Experian, www.experian.com, P.O. Box 2104, Allen, TX 75013, 888.397.3742
• TransUnion, www.transunion.com, P.O. Box 2000, Chester, PA 19022, 800.888.4213
n Credit Report Errors and Disputes
•  If you believe information in your credit report to be inaccurate, you have a right to file a dispute
with the reporting agency and the company that gave them the inaccurate information.
•  For more information on settling a dispute, go to www.ftc.gov.
Freezing Your
Credit Report
A credit freeze blocks
the credit bureaus from
releasing your credit
history - the report on
which your credit score
is based. Because most
lenders will not extend
credit unless they can
review your credit report
and score, placing a
freeze on your credit is an
effective way to prevent
identity thieves from
taking out credit cards or
making large purchases
that require financing
in your name. Since a
credit freeze also blocks
your own access to new
credit, it should be used
only by individuals who
are satisfied with the
credit already extended
to them and are not in
the market for a new
credit card, mortgage
or other financing.
Freezes are free to
identity theft victims.
For all other consumers
they cost $30 ($10
to each of the three
bureaus) to establish
and another $30 to
unfreeze. Each bureau
must be contacted
individually and has
its own procedure for
establishing or lifting
a freeze.
9
Know the Basics
Student Loans
Making a financial investment in your education is a smart decision that will pay great
dividends over the course of your lifetime. However, paying for college and graduate school
is a complex and sometimes confusing process. It is likely the largest financial commitment
you will make until you purchase your first home. Students should talk with their families
about what they are each able and willing to contribute and the scholarship options
available to them in order to select the payment methods that best meet their family’s
individual needs and goals.
n Financial Aid Packages
 Once you apply for financial aid, your school likely will
suggest an aid package made up of multiple funding
sources, including:
• Grants: Financial contributions made by your
school that you do NOT have to repay.
•  Work Study: On-campus employment
opportunities, the earnings from which are
contributed toward your tuition.
• Federal Student Loans: Federal government
loans for education characterized by low interest
rates and flexible repayment plans. Usually, these
are the first types of loans taken out by families
to pay for education. Of the three types of federal
loans, two, Stafford and Perkins loans, are available
for students, and one, the PLUS loan, is available
for parents. Each type of federal loan has different
payment options and benefits, so it is important to
understand what is available in each type of federal
loan.
• Private Student Loans: Loans offered to
students and parents by private financial
institutions. Because these loans often have
higher interest rates and fees, most families use
private loans to make up the difference when other
funding sources do not cover the full cost of tuition
and living expenses. Students should not obtain
private loans until they have exhausted the federal
student loans available for each school year.
10
Be an Intelligent Consumer
Be an Intelligent Consumer
Student Loans (continued)
•  Other common funding sources considered in financial aid packages are a financial contribution
by your parents, contribution of your own money and any outside scholarships you have won
(tips on finding scholarships and avoiding scholarship scams are included in the “Avoiding
Frauds and Scams” section of this Guide).
•  A great deal of information on the financial aid options available to students can be found online.
Sites like www.finaid.org and www.estudentloan.com allow you to look up side-by-side
loan comparisons based on your specific needs.
n   Factors to Consider when Selecting
Private Loans
•  Make sure you understand and can afford your
loan’s interest rate now and in the future. Know
whether it is a fixed or variable rate loan. Many
companies advertise “as low as” rates that few people
actually receive or as part of variable rate loans that can
increase over time.
•  Identify the payment plan that works best for you.
Some types of student loans allow students to defer
paying principal and/or interest until after they graduate,
and some loans don’t start accruing interest until you
graduate. Still others allow you to adjust the length of
time you take to pay off your loans or have penalties
or incentives for prepayment. All of these options have
implications for how much you will pay. You should make
sure you clearly understand what is best for you.
•  Ask about all potential upfront and late payment
fees, as well as any bonuses associated with
on-time payments. It is possible that your loan or the
entire financial institution is sold to another company
while you are in the middle of payments. You should ask
how a potential sale will impact these fees and bonuses.
• Don’t assume that one of your school’s preferred
lenders is the right one for you.
The loan that is best for you is based on your family’s
specific circumstances. You have the right to select any
lender you want, even if the lender is not included on your
school’s preferred lender list. Shop around!
11
Payday Loans
12
Payday loans are short-term loans, usually at a high interest rate, that become due on
the borrower’s next payday. Consumers who find themselves stretched thin financially
sometimes turn to payday loans as a quick source of cash.
More and more, payday lenders are targeting college students, military personnel and
other young consumers who are unfamiliar with their lending options. It is easy for young
people to become trapped in a cycle of debt that is difficult to overcome and can do lasting
damage to their credit.
n Facts About Payday Loans
•  Lenders often charge fees that translate into exorbitant annual percentage rates.
•  For example, a two-week $100 loan that charges a $15 interest fee turns out to be a loan with
an annual percentage rate of 390%. This means that in one year you would pay an additional
$390 over and above the $100 loan.
n Protecting Yourself From the
Consequences of Payday Loans
•  Under the Truth in Lending Act, you are
entitled to know the cost of any type of credit
applied for and to receive the information
in writing, including the Annual Percentage
Rate (APR) and the dollar amount of finance
charges. Read this material carefully before
you enter into the loan.
•  Look to alternative sources for loans that do
not carry such high interest rates or fees,
such as credit unions, community-based
organizations, your employer, family, friends or
a cash advance on your credit card.
•  Make sure that you can realistically pay
the loan back when it becomes due before
agreeing to its terms.
Be an Intelligent Consumer
Landlord-Tenant Agreements
A property lease is a written or oral legal agreement between landlord and tenant that sets
the amount of rent to be paid and the length of time the apartment or property may be
rented. A written lease also states the rights and duties of both parties. As a tenant, it is
important to know your rights and responsibilities as well as those of your landlord.
A free copy of the Residential Landlord-Tenant Act is available on the Arizona Secretary of
State’s Web site at www.azsos.gov.
n Discrimination and Fair Housing
•  Landlords can use a screening process to choose tenants, using criteria such as credit history,
criminal record and references from employers and prior landlords. However, it is illegal to
screen prospective tenants based on race, religion, gender, ethnic background, mental or
physical disability, familial status or age.
•  If you feel you have been the victim of discrimination by your landlord, please contact the
Attorney General’s Office Civil Rights Division at 602.542.5263 (Phoenix), 520.628.6500
(Tucson) or www.azag.gov.
n Security Deposits
•  By law, a landlord may not ask for a deposit greater than one and one-half month’s rent.
•  Take time-stamped photos of the property when you move in to document the condition of the
building. Make a detailed list of any preexisting damage and have it signed by the landlord.
•  Ask your landlord for a signed receipt when you pay your security deposit and each time you
pay your rent.
n Roommates
•  Some leases will require all your roommates’ names on the lease in order for them to live there.
•  Signing an agreement with your roommate may help resolve problems if the roommate doesn’t
pay his or her share of the rent or other costs you agreed to share.
•  If your roommate moves out, you are still responsible for the rent and bills in your name. If you
signed a contract with your roommate stating what portion of the rent each person would pay,
then you can file a claim in small claims court for any disputed amounts.
n Renter’s Insurance
•  Renter’s insurance is a policy that covers your personal belongings. It is relatively inexpensive
and is a good idea, since most landlords’ insurance policies only cover the building and its
fixtures, not a tenant’s personal belongings. Additionally, most landlords’ insurance will not
cover a tenant whose actions or inactions (as opposed to the landlord’s) cause harm to persons
visiting the property. You must obtain your own liability coverage for this purpose.
13
Be an Intelligent Consumer
Landlord-Tenant Agreements (continued)
14
n If a Problem Arises
•  Document all conversations in writing.
•  Take photos of any damage that occurs as a result of flaws in the property (i.e., a pipe bursting)
as soon as possible.
•  Use certified mail to notify your landlord if you wish to cancel or change your lease agreement.
n Repairs and Upkeep
•  The landlord is generally responsible for keeping your place safe and livable. This includes,
but is not limited to, providing running water and keeping utilities (electrical items, plumbing,
heating, ventilation, etc.) in good working order.
•  You must notify the landlord in writing if repairs are required.
•  You may use the landlord’s failure to repair a reported problem as grounds to cancel the lease.
In some cases, you may make critical repairs and withhold rent to cover the cost.
n Tenant Duties
•  It’s up to you to keep your place clean, as well as to use the plumbing and fixtures properly.
•  Before making remodeling efforts like painting or changing light fixtures, get written permission
from the landlord.
•  Do not do anything illegal while on the premises, including throwing parties where drug use or
underage drinking occur.
n Important Information
•  Generally, landlords cannot raise rents during the term of the lease unless you are on a
“month-by-month” agreement.
•  Landlords have the right to “peaceably” enter your apartment; however, they must give you
24-hour written notice and enter at a reasonable time with a reasonable purpose, unless you
have requested the landlord do a specific task.
•  If you want to leave before your lease expires, you must notify your landlord in advance by
certified mail. Talk about your options with your landlord. The landlord must make an effort to
rent out the apartment to another person, but you may be stuck paying the rent for the rest of
the lease term if the landlord cannot rent out the apartment after you leave.
•  If you feel that terms of your lease are not being met, you can write your landlord a letter
specifying your complaint(s).
•  Your landlord cannot evict you because of complaints you have made; this is called a
“retaliatory eviction” and is unlawful.
Be an Intelligent Consumer
Cars
State law requires that all vehicles have current registration and insurance. Operating a
vehicle without current registration, insurance and a valid driver’s license can result in
tickets, fines and even loss of vehicle.
n Advertisements
•  Be skeptical of “great deals” in car advertisements and read the fine print.
•  Sometimes the advertised deal only applies to a few vehicles or is available only under certain
conditions (i.e., a credit score over 750).
•  Beware of advertised minimum trade-in amounts or “free” gifts with a new car purchase.
Dealers may raise the price of the car to offset a low value trade-in or the cost of the gift.
n Do Your Homework
•   Know what make and models you are interested in and what
they should cost before you visit the dealership. Find out the
dealer’s cost from a reputable online authority. You can look up
this information on Web sites such as www.edmunds.com and
www.kbb.com.
	 		 	 	 •   Know the value of any auto you plan to trade in. If it’s worth less
than what you owe, the dealer may try to add that difference to
your cost.
	 		 	 	 •   Check with the Better Business Bureau on the dealer’s
reputation for honesty and service.
	 		 	 	 •   It is usually cheaper to finance with a bank or credit union than
a dealer; arrange for financing before going car shopping.
n Negotiating the Deal
•  Make buying your new car, selling your old car and financing your new car three separate
transactions.
•  Understand that the Manufacturer’s Suggested Retail Price (MSRP) is the sticker price and not
necessarily a fair price for the car.
•  Even the dealer invoice price may be higher than the dealer’s actual cost.
•  Be prepared to walk away. Going “out the door” is your ultimate weapon.
•  Ask for the dealer’s best price up front and keep asking for it throughout your negotiations.
•  Be sure the price quote includes everything, except for sales tax, registration and title fees.
•  Keep track of the details of the deal. Take a notebook, calculator, pen and tape recorder to
make it easier.
•  Don’t fall for the “What do you want your monthly payment to be?” trap. You may end up
paying more in the long run.
15
Be an Intelligent Consumer
$Cars (continued)
16
•  Take someone with you; two people are less likely to miss something.
•  Do not assume salespeople are your friends. Most are paid on a commission basis, so the more
you spend, the more they make.
•  Remember, everything is negotiable – no matter what the salesperson says.
n Closing the Deal
•  Make sure all promises made by the salesperson or dealership are in writing. Review all
documents and understand all terms before signing.
•  If a contract has terms substantially different from what the salesperson promised, do not sign
the contract unless you accept the new terms.
•  Do not allow anyone to put false information on any forms. The false information could be held
against you.
•  Do not sign any forms that have blank spaces. Draw a line through any blanks on documents
you sign.
•  Never take home a new or used car before financing is approved. This practice is called “spot
delivery” and is designed to lock you into a purchase. If your financing is not approved, you
could lose your down payment.
•  When financing through a dealer, always negotiate the car price first. Once the price is settled,
then negotiate the monthly payment amount. Otherwise, you may end up with a reasonable
monthly payment, but with a longer term and/or a higher interest rate (i.e., your car will cost
more).
•  Never buy life or disability insurance from a dealer without comparison shopping with an
insurance agent.
• A lways ask the dealer if the interest rate being offered on dealer financing is the lowest rate they
can offer and whether it includes a profit for the dealer.
•  There is no three-day right to cancel the purchase of new or used cars in Arizona.
n Service Contracts
•  Dealers often try to sell you service contracts, sometimes called extended warranties, in the
final stages of buying a car.
•  Service contracts provide for the repair of certain parts or problems. These contracts are offered
by manufacturers, dealers or independent insurance companies. Extended warranties are often
the most highly marked-up item in a car purchase.
•  Service contracts may be a good idea, if you intend to keep your car longer than the warranty
period, if the car you’re buying does not have a very good reliability record or if you just want
additional peace of mind.
Be an Intelligent Consumer
Cars (continued)
•  Be careful when service contracts are not offered by the manufacturer. You need to know that
the company is financially able to stand behind its promises.
•  Be sure you understand the full cost of the contract, not just your additional monthly payment.
Then decide if it is worth buying.
n Tips on Purchasing Used Cars
•  Obtain a vehicle history report on a used car before you
purchase. The report gives you information on the used
vehicle’s title, registration, odometer, major damage and
recall history. Several online services are available and
dealers usually provide this service for free.
•  Have a trusted mechanic inspect the used vehicle before
you buy. This may cost around $100 or more but could
save you money in the long run. Almost all used cars in
Arizona are sold “as is.” That means that no matter what a
salesperson may tell you, the dealer doesn’t have to fix the
car if it breaks, unless:
• Your contract specifically includes this promise; or
• The problem falls within Arizona’s Used Car Lemon Law
(see below).
n Arizona’s Lemon Law
•  New Car: The Arizona Lemon Law (A.R.S. § 44-1261 et
seq.) has a number of specific protections. Consumers
should consult the law or an attorney if their new car does
not operate in a reasonable manner. Here are the basics:
•  The period covered by the Lemon Law is the same as the
term of the manufacturer’s warranty or two years or 24,000
miles, whichever is earlier. The covered period begins on the
date the consumer receives the vehicle.
•  During the covered period, if the manufacturer fails to repair the defect(s) after four attempts,
or if the car is out of service by reason of repair for a cumulative total of 30 or more calendar
days, the manufacturer must accept return of the car or replace it with a new car (contact your
dealer).
• Used Car: A used car is covered by the Arizona Used Car Lemon Law (A.R.S. § 44-1267) if a
major component breaks within 15 days or 500 miles after the car was purchased, whichever
comes first. If it breaks, you’ll still be responsible for a small amount of the repair cost. The
recovery for the consumer is limited to the purchase amount paid for the car.
17
Be an Intelligent Consumer
Car Repairs
At some point, your car will need
repairs. Knowing how your car
operates and familiarizing yourself
with the owner’s manual will help you
spot problems. It is best to find a
trusted mechanic and auto repair shop
before your car needs repairs. This will
help you avoid making a last-minute or
unnecessarily expensive decision.
n How to Protect Yourself
•  Ask for car repair
recommendations from people
you trust. Check with the Better
Business Bureau to see if there
are any complaints against the
repair shop.
•  If your car is under warranty,
make sure that the repair shop
is authorized to provide service
for your car’s make and model.
Work by an unauthorized repair
shop could void the warranty.
•  The repair shop may recommend additional repairs. If you are uncertain whether the work
needs to be done, get a second opinion.
•  Get written quotes from several shops before a major repair is done.
•  Get a written, signed estimate first. The estimate should identify the problem to be repaired,
the parts needed and the anticipated labor charge.
•  There is no such thing as a “standard warranty” on repairs. Make sure you understand what
is covered under your warranty and get it in writing.
Cars (continued)
18
Be an Intelligent Consumer
%Credit Cards
Credit cards should be used for convenience, safety and to provide income flexibility to
help manage short-term money problems. Using your credit card responsibly—including
paying off the balance on time every month—helps build a good credit history.
n Interest Rates
•  If you use your credit card properly, you will pay off the total you charged each month. If you do
not pay off the balance owed, you will have to pay interest.
•  The Annual Percentage Rate (APR) or “interest rate” is the amount you pay for borrowing money
on an annual basis. In other words, it’s the cost of maintaining a balance and not paying off your
credit card in full every month.
•  When the interest rate is applied to your balance, you can see how much it costs every month
to carry your balance. This figure is known as the finance charge. Most cards have a variable
interest rate that changes depending on the economy.
•  It is your responsibility to make sure you know the interest rate on your credit card and when
and if that rate can change.
•  A low rate advertised on a credit card is often only an “introductory rate.” It may be designed to
increase dramatically after the first few months or if you make even one late payment.
n Minimum Payments
•  When paying only the minimum payment on your monthly credit card bill, it can take months or
years to pay off the balance.
•  If you charge $1,000 at 18.5% interest and pay only the minimum payment each month, it will
take 11 years and cost you $987 in interest to pay back the $1,000!
n Fees and Grace Periods
•  The “grace period” is the time between when you buy something and when your credit card
company starts charging you interest on your balance. Not all credit cards have a grace period.
This means interest may start accumulating at the time of purchase, as with cash advances.
•  Some credit card companies charge an annual fee. A card with no annual fee may be
accompanied by a high interest rate.
•  When using a credit card to get a cash advance, the credit card company may charge you a fee
or apply a higher interest rate to the amount of cash loaned.
n Tips for Avoiding Excessive Credit Card Debt
•  Remember the differences between wants and needs.
•  Pay close attention to your spending habits.
•  Don’t spend more than you can pay off at the end of the month.
•  Commit to paying off your card every month.
• Keep in mind that late payments, or exceeding your credit limit, can result in fees and interest
rate increases.
19
Be an Intelligent Consumer
Credit Cards (continued)
20
n What to Do if Your Credit, ATM or Debit Card is Lost or Stolen
•  Call your card issuer as soon as possible and report the loss or theft. Follow this with a letter
that includes your account number, date you noticed the card was missing and when you first
reported it missing.
•  You are not liable for any unauthorized charges on your card made after you report it missing.
•  For unauthorized charges made before you report the card missing, you may owe up to $50.
•  If you do not report the loss of your card within two business days, you may be responsible for
up to $500 of unauthorized charges.
•  If you fail to report it within 60 days, you could have unlimited loss from unauthorized charges.
n Top 10 Credit Card Tips
1  Be aware of promotional or introductory rates. Many cards start out with low rates but
eventually move up to higher rates. Make sure you know when the higher rate begins.
2  Be aware of companies offering free gifts in return for filling out a credit card offer.
3  Always read the fine print.
4  Hold on to your receipts and other documents specifying the conditions of your purchases.
This will help you resolve any disputes if they arise.
5  Never lend your card to anyone.
6  Never give your card number over the phone or Internet unless you initiated the
communication and you are dealing with a reputable company.
7  Reputable companies will never send you an email asking for your card information.
8  Sign your credit card with a pen as soon as you receive it.
9  If you used your credit card and you are not satisfied with the goods or services, you can also
dispute this with your credit card company. Check the terms of your credit card company on
how to dispute the charges and follow the procedures provided to you.
10 	 Always carefully review your bills to make sure there are no unauthorized charges.
Be an Intelligent Consumer
?Cell Phones
It is important that you understand what services come with your cell phone plan, what they
cost, if they use airtime (talking) minutes or if they are additional options you must pay more for.
21
For help resolving
a cell phone-related
dispute,
see the Federal
Communications
Commission (FCC)
Web site at
www.fcc.gov
or the Arizona
Corporation
Commission
Web site at
www.azcc.gov.
n Ask Yourself
•  What will I use the cell phone for? •  Who am I going to be calling?
•  Where will I be using it? •  When will I be using it?
•  What options and extra features do I •  How long will I talk?
 actually need?
n Common Pitfalls for Cell Phone Users
•  Roaming: You are billed expensive charges for using your cell phone outside the area where your
carrier’s network reaches. Find a plan that covers the area where you will be making your calls.
•  Exceeding minutes: Most plans give you a certain number of minutes each month and
exceeding these minutes will be costly.
•  “Peak” and “off-peak” minutes: Most plans give you a certain amount of “peak” minutes
(daytime) and “off-peak” minutes (nights and weekends). Plans typically come with more “off-peak”
minutes than “peak” minutes.
• T ext messaging: There are usually several plan options for text messaging. You can usually
either pay for each message individually or pay a flat monthly rate for a set number of messages.
•  Long-distance: Even though there may be no additional charges for long-distance calls on your
plan, they still use airtime minutes.
•  If you terminate your contract early, you will probably
be charged a large fee.
• E xamine Internet access and media package offers
carefully. Internet access time and fees can quickly
add up. Always ask about all pricing options, as the
unlimited use price may save you money. Most media
packages charge upfront only for the bandwidth.
Most downloading programs cost extra. Texting, photo
sharing and video sharing can also cost extra.
•  Make sure you clearly understand the
coverage offered and fees associated with
insurance purchased for your phone.
•  If you lose your phone or if you think it has
been stolen, notify your cell phone company
immediately and ask them to turn your phone
off. For more information about cell phones,
consumer rights and safety concerns, go to
www.wirelessconsumers.org.
Be an Intelligent Consumer
Identity Theft
22
Identity theft is when someone fraudulently uses your personal identifying information
to obtain credit, take out a loan, open accounts, get identification or do numerous other
things that involve pretending to be you.
Identity theft is a very serious crime that can cause severe damage to your financial well-being
if not taken care of promptly. People can spend months and thousands of dollars
repairing the damage to their credit history and name by an identity thief. Even scarier,
some cases of identity theft are connected to more serious crimes that may lead law
enforcement to suspect you of a crime you did not commit.
If you have believe that you are a victim of identity theft, contact the Arizona Attorney
General’s Identity Theft Help Line at 602.542.2145 or identitytheft@azag.gov.
n What is Personal Identifying Information?
•  Name • Address ��� Date of birth
•  Passwords • PIN numbers • Account numbers
•  Telephone numbers • E-mail address • Screen name
•  Social Security number • Driver’s license number
n How Do They Get Your Personal Information?
•  Impersonating a legitimate business and soliciting the
information by phone or email. This is known
as “phishing.”
•  I mpersonating your landlord or employer to get your
credit reports or personnel records.
•  Stealing your wallet or purse.
•  Stealing your mail.
•  Stealing credit or debit card numbers as the card
is being processed.
•  Going through your trash.
•  Diverting your mail by using a change of address form.
Avoid Frauds and Scams
Avoid Frauds and Scams
Identity Theft (continued)
n What Do They Do with Your Personal Information?
•  Drain your bank account with electronic transfers, counterfeit checks or your debit card.
•  Open a bank account in your name and write bad checks.
•  Open a credit card account that never gets paid off, affecting your credit report.
•  Use your name if they get arrested so it goes on your record.
•  Use your name for purchases involved in illegal activities, such as products for
methamphetamine production or an Internet domain for a child pornography site.
•  Use your name to file for bankruptcy or avoid debts.
•  Obtain a driver’s license with your personal information.
•  Buy a car and use your information and credit history to get a loan.
•  Obtain services in your name, such as phone or Internet.
n What to Do if You Are a Victim of Identity Theft
•  Step 1: File a police report with local law enforcement as soon as possible.
•  Step 2: Close any accounts that have been tampered with or opened fraudulently. The longer
an identity thief has access to your accounts, the more money you could lose.
•  Step 3: Place a “fraud alert” on your credit reports through the three major credit bureaus and
carefully review your credit reports.
•  Step 4: Identify any errors, inquiries you did not know about, accounts you did not open, debts
you did not know about or anything else that seems wrong or out of place on your credit report
and work to resolve them as soon as possible.
•  Step 5: File a complaint with the Federal Trade Commission (FTC) at www.ftc.gov.
•  You may use an identity theft affidavit when disputing new unauthorized accounts. This can be
obtained at the Attorney General’s Web site at www.azag.gov.
n Tips to Protect Your Identity
•  Carefully review your bank and credit card statements monthly.
•  Order a free copy of your credit report at least annually and check it carefully.
•  Shred everything with personal identifying information before discarding.
•  Do not give your personal information in response to emails pretending to be from bank, credit
card company or Internet service provider. Legitimate financial institutions or government
agencies will never send you an email asking for this information.
•  Never give personal identifying information over the phone unless you initiated the call and
know the business.
23
Travel Scams
24
There are a growing number of last minute, all-inclusive and low cost travel specials
available to consumers. Unfortunately, many of these are scams that do not deliver what
they promise. Consider the following tips when making your vacation plans.
n Tips for Booking Online
•  Be leery of making reservations with unknown people or businesses that require advance
payment or deposits without a written contract.
•  Legitimate businesses will always provide a written contract guaranteeing your reservation.
•  Beware of travel reservation Web sites that are unfamiliar to you. Scam Web sites have been
cropping up that offer reduced fares on travel and hotel accommodations only to steal your
credit card information.
•  Research a site before making a purchase and stick to trusted travel sites when booking online.
	 	 n Tips for Booking by Phone
	 	 	 •  Don’t make any transactions that can be completed only by phone. Legitimate
reservation companies will offer the option to book by phone or via the Internet.
	 	 	 •  Ask questions about their address, a written contract and refund policy.
	 	 	 •  Do an Internet search of the address to see if a map shows the location.
	 	 	 	 n Avoid Offers That Are Too Good to Be True
	 	 	 	 	 • D ramatically reduced fares are often not legitimate and may
require additional payments that the buyer is unaware of
when making the reservation.
	 	 	 	 	 •  Be cautious of nearly-free, all-inclusive vacation packages.
Often the amenities and perks are not as they appear. There
are additional hidden charges or buyers are forced to sit
through lengthy, high pressure time-share presentations.
	 	 	 	 	 •  Always read the fine print before purchasing.
	 	 	 	 	 •  Purchase travel with a credit card rather than a debit card.
Credit cards offer more options for recourse should the
travel company attempt to defraud or mislead you.
Avoid Frauds and Scams
Job Search and Scholarship Scams
In their efforts to pay the bills for college, many students and their families are falling prey
to scholarship scams.
25
n The FTC cautions students to look for telltale lines:
• “You can’t get this information anywhere else.”
• “I just need your credit card or bank account number to hold this scholarship.”
• “The scholarship will cost some money.”
• “You’ve been selected by a ‘national foundation’ to receive a scholarship.”
• “You’re a finalist” in a contest you never entered.
n Tips When Searching For a Job
or Scholarship
•  Be aware of companies that
require application fees or other
up-front costs, even if they are
small.
•  Don’t believe any companies or
services that guarantee you will
be awarded a scholarship or a job.
•  Don’t fall for any scholarship-matching
service that says
you can’t find this information
anywhere else. You can find
scholarship information through
your school counselor, college
admissions office or at the library.
You can also search online at sites
such as www.fastweb.com or
www.scholarships.com.
Avoid Frauds and Scams
Lottery and Prize Notification Scams
26
Phony lottery or sweepstakes prize notifications are among the most successful scams in
history. Often consumers receive a call, email or mailing claiming that they have won a
lottery or prize. They are asked to send personal information or money to cover “fees” in
order to claim their prize. The scammer then runs off with the money or gains access to the
consumer’s bank account and can transfer money out of that account illegally.
n Red Flags
• Beware of requests to wire or mail money to cover administrative fees, taxes or legal fees
involved in processing “your winnings.” A legitimate lottery would deduct such expenses
from your winnings.
•  Beware of requests for bank account information so your prize can be deposited directly
into your account.
• Beware if, after declining the offer, you continue to get calls offering to lower the fees
required to claim your prize in an attempt to get money from you.
• If you receive a check as part of a prize notification or from anyone you do not know,
assume it is counterfeit. Have your bank help you determine the authenticity of the check
before depositing it or drawing on the funds.
n Tips to Protect Yourself
• Never send money to “claim your prize.”
• Be suspicious of “junk mail” solicitations. Hang up on
persistent callers.
• If calls become threatening, hang up and call law
enforcement.
• Never give personal financial information, such
as your bank account number, to a person
or business you do not know.
• Sign up on the Attorney General’s Web
site (www.azag.gov) to receive Scam
Alerts to protect yourself from the latest schemes.
Avoid Frauds and Scams
Helpful Web Sites and Phone Numbers
Web+ Phone
Arizona Attorney General’s Office
Consumer Information and Complaints
1275 West Washington
Phoenix, AZ 85007
602.542.5763 (Phoenix)
520.628.6504 (Tucson)
1.800.352.8431 (In-State Toll Free)
www.azag.gov
Arizona Corporation Commission
1300 West Washington
Phoenix, AZ 85007
602.542.3026 (Phoenix)
520.628.6550 (Tucson
1.800.345.5819 (In-State Toll Free)
www.azcc.gov
Arizona Department of Economic Security
Family Assistance Administration
1789 W. Jefferson Street (location)
Phoenix, AZ 85007
P.O. Box 40458 (mailing address)
Phoenix, AZ 85067
602.843.3934
www.azdes.gov
Arizona Secretary of State
1700 W. Washington Street, 7th Floor
Phoenix, AZ 85007
602.542.4285 (Phoenix)
520.628.6583 (Tucson)
1.800.458.5842 (In-State Toll Free)
www.azsos.gov
Arizona State Bar Association
602.252.4804
www.azbar.org
The Better Business Bureau of
Central/Northern Arizona
4428 North 12th Street
Phoenix, AZ 85014
602.264.1721 (Phoenix)
1.877.291.6222 (Toll Free)
www.arizonabbb.org
The Better Business Bureau of
Southern Arizona
434 South Williams Blvd., Suite 102
Tucson, AZ 85711
520.888.5353 (Tucson)
1.800.696.2827 (Outside Metro Tucson)
www.tucsonbbb.org
Community Legal Services
602.258.3434
www.vlparizona.org
Consumer Reports
www.consumerreports.org
Federal Communications Commission (FCC)
445 12th Street, SW
Washington, DC 20554
1.888.225.5322 (Toll Free)
1.888.835.5322 (TTY)
www.fcc.gov
Federal Trade Commission (FTC)
Consumer Response Center
CRC-240
Washington, DC 205080
202.326.2222
www.ftc.gov
Credit Reporting Agencies
Equifax
www.equifax.com
P.O. Box 740241
Atlanta, GA 30374-0241
800.685.1111
Experian
www.experian.com
P.O. Box 2104
Allen, TX 75013
888.397.3742
TransUnion
www.transunion.com
P.O. Box 2000
Chester, PA 19022
800.888.4213
For a free annual copy of your credit report,
contact www.annualcreditreport.com.
Get updates on
new and common
scams and avoid
becoming a victim
of consumer fraud.
Sign up for Scam
Alert Emails at
www.azag.gov.
Resource Guide
27
Phoenix
Mesa
Tucson
Payson
Prescott
Flagstaff
San Luis
Tempe/ASU
Sun City
South Tucson
Green Valley
Lake
Havasu
City
Sierra Vista
Nogales
Sedona
Somerton
Yuma
Kingman
Oro Valley
Safford
Tubac
Wickenburg
Winslow
Apache Junction
Florence
The Attorney General’s Community
Services Program includes Satellite
Offices throughout the State and the
Fraud Fighter Van. Satellite Offices
make it easier for residents to get
information on consumer fraud and civil
and victims’ rights issues in their
own neighborhoods. Fraud Fighter
Volunteers are available to make
educational presentations to community
groups and distribute materials at local events.
A complete list of Satellite Office locations and schedule of events are posted on
the Community Services page of the Attorney General’s Web site at www.azag.gov.
The Fraud Fighter Van is the newest tool to bring services and information to senior
centers, libraries and neighborhoods. The Fraud Fighter Van is filled with information
about identity theft, scam alerts, Internet safety and much more.
For more information, contact:
Community Services Program
Arizona Attorney General’s Office
1275 West Washington Street
Phoenix, Arizona 85007
602.542.2123 or 1.800.352.8431
communityservices@azag.gov
Subscribe to the Attorney General’s
consumer alerts and messages on
current issues at www.azag.gov.
Publications available from the
Arizona Attorney General’s Office include:
• Top 10 Consumer Scams
• Civil Rights:
• Employment Discrimination
• Discrimination in Places of
Public Accommodation
• Housing Discrimination
• Voting Discrimination
• Consumers’ Guide
to Buying a Car
• Identity Theft
• Internet Safety
• Life Care Planning
• Predatory Lending
Crime and Fraud Prevention Initiatives
28
www.azag.gov