Test Your Knowledge on Consumer Protection &
Take the Attorney General’s Quiz

Here is a brief quiz to test your knowledge on a variety of common consumer protection issues.

1. To protect yourself from identity theft you should:

a. Shred documents that contain personal information before you put them in the trash;

b. Check your credit report yearly to make sure it only contains accurate information;

c. Post your mail in official United States Mail boxes or at the post office;

d. All of the above.

Answer: d. Identity theft was the most often reported consumer complaint in Arizona in 2003. Protect yourself by limiting the amount of personal identifying information that you give out. Shred documents prior to discarding them in the trash and protect your outgoing mail by using secure mail facilities.

More information check out:
ID Theft Brochure

2. True or false: An advertisement must be true if it includes a money back guarantee.

Answer: False. A money back guarantee is only as good as the chances of collecting it. Many consumers believe they won’t lose any money if they order a product because of the money back guarantee. However, many scammers operate out of state and use post office boxes as business addresses or otherwise hide their identity to keep from returning consumers’ money. These scammers move quickly and can be very difficult to track once consumers find out that the product doesn’t work and the company will not honor their guarantee.

3. True or false: All non-profit credit counseling agencies provide quality service and charge reasonable fees.

Answer: False. Almost all credit counseling agencies are non-profit. Some are very reputable and provide valuable services. Others, however, engage in misleading and deceptive practices, charge high fees, pressure consumers to pay fees although they claim fees are “voluntary,” aggressively push consumers into debt management or debt consolidation plans, and don’t provide adequate or effective counseling.

Additional information is available at:
http://www.ftc.gov/opa/2003/10/ftcirs.htm
http://www.consumerfed.org/pdfs/credit_counseling_report.pdf

4. You have recently received a package of merchandise you never ordered along with a bill. Are you obligated to return or pay for merchandise?

Answer: No. If you received merchandise that you did not order, you have a legal right to keep the merchandise as a free gift. For example, you responded to an advertisement offering a free “trial” pair of pantyhose. A month later to your surprise, you receive four pairs of pantyhose with a bill. You have no legal obligation to notify the seller that you do not intend to pay the bill. However, it is a good idea to write a letter to the company stating that you didn’t order the item and, therefore, you have a legal right to keep it for free. This may discourage the seller from sending you bills or dunning notices, or it may help clear up an honest error. Send your letter by certified mail. Keep the return receipt and a copy of the letter for your records. You may need them later.

5. True or false: If a “spring break” vacation is advertised on campus and sold by students, it must have the backing of the college?

Answer: False. Many “spring break” vacation promoters advertise on college campuses and recruit students as salesmen. If you are contemplating one of these trips, beware the promoter that can’t give you exact travel dates or air carrier names as well as those that won’t provide hotel information that you can confirm yourself. Spring break trips can be a great adventure or can leave you stranded at an unfamiliar airport, maybe in a foreign country, waiting for your flight or waiting overnight on a bus for the comfortable, well appointed hotel room you saw in the advertisement.

6. Three months ago you entered into a one year contract with a health spa in your neighborhood. Now you have moved your residence and it is no longer convenient to use the facilities. Are you still obligated to pay on the contract?

a. Yes, a contract creates a binding obligation that you must honor no matter how your circumstances changed.

b. No, when your circumstances change, the contract is no longer effective.

c. It depends on how far you moved and whether the health spa has another facility available for you to use.

d. It depends on whether you notified the health spa that you might move when you entered the contract.

Answer: c. Arizona law requires a health spa contract to provide that it may be canceled upon written notice by personal delivery or registered mail. The notice must state that you have changed your permanent residence to a location more than 25 miles away from the health spa or an affiliated facility offering similar services at no additional charge. The health spa may retain up to 25% of the total contract price to pay for the services used and expenses incurred.

7. True or false: Magazine publishers often offer their lowest prices through telephone solicitations.

Answer: False. Many unscrupulous telemarketers sell magazine subscriptions to consumers without disclosing the full cost to the consumer. The Attorney General’s Office recently obtained a judgment against a telemarketer that offered magazine subscriptions at a cost of $3.36 per week. When the total cost was calculated, consumers were charged $700.00 for a four-year subscription for one magazine.

Before ordering a multi-year subscription over the telephone, make sure that you have the full name, address and telephone number of the company from which you are ordering. Calculate the total cost that you are paying for the subscription. If you change your mind after ordering the subscription, you have the right to cancel your order within three days after receiving the merchandise. To do so, you must mail or deliver a signed and dated cancellation notice to the address provided by the seller. Send the notice by registered mail so you have proof of your mailing date. When you send the cancellation notice, contact your bank or credit card company to stop any unauthorized payments from your account or to dispute any charges or debits to your account.

8. Which of the following costs may be assessed at the end of an automobile lease contract:

a. Excessive mileage;

b. Wear and Tear;

c. Early termination;

d. All of the above.

Answer: d. When you lease, you pay to drive someone else’s vehicle. Although leasing can involve lower monthly payments than a car purchase, at lease end, you will have no ownership or equity in the car. When leasing a vehicle, negotiate all the lease terms, including the price of the vehicle. Ask whether extra charges will be assessed for excessive mileage, wear and tear, disposition and early termination and find out the amount of these charges. Get this information in writing. Make sure the manufacturer’s warranty covers the entire lease term and the number of miles you are likely to drive. Consider “gap insurance” to cover the difference between what you owe on the lease and what the car is worth if it is stolen or totaled in an accident. Before you sign the deal, take a copy of the contract home and review it carefully away from any dealer pressure. Be alert for any charges that were not disclosed at the dealership, like conveyance, disposition, and preparation fees.

9. True or false: Working at home provides an easy way to make thousands of dollars from your own home.

Answer: False. Although many advertisements want you to believe you can make lots of money performing simple tasks from your own home, you should be very cautious before signing up for such a program. Many work-at-home opportunities are actually “schemes” that don’t disclose the true costs you will pay in terms of money and your time. Some classic work-at-home schemes to beware of include medical billing, envelope stuffing, and assembly or craft work.

Additional information is available at:
http://www.ftc.gov/bcp/conline/pubs/invest/homewrk.htm

10. True or false: An easy way to reduce monthly credit card payments is to obtain another low-interest rate credit card.

Answer: False. Many consumers frequently receive offers for "pre approved" credit card in the mail or by phone. Often, consumers are guaranteed to reduce their monthly credit card payment by obtaining a “low-interest rate” card. Consumers should compare terms and fees before agreeing to obtain a new card. Many of the low rates offered by these solicitations are introductory rates that remain low only for a limited period of time.

It is wise to compare terms and fees before you agree to open a credit or charge card account. If you are solicited by telephone, insist on receiving written information regarding the application and acceptance process as well as all fees associated with the card being offered. Do not give out any credit/debit card information or information involving your checking account to the caller. You also may want to ask for the annual percentage rate, the periodic rate that is applied to your outstanding balance and, if you are considering a variable rate card, how the rate is determined. Finally, ask about any fees or charges associated with the new cards, including the annual membership fee, transaction fee and other charges.

11. You are solicited by a door-to-door salesman who showed you a glossy brochure offering you home exercise equipment with the purchase price payable in twelve “easy” monthly installments. You agreed to buy the equipment, but the next day you’re not sure this was such a smart purchase. Can you cancel the purchase agreement?

Answer: Yes. The sale of merchandise in a home, other than the seller’s, in which all or part of the purchase price is payable in installments, is considered a home solicitation sale under Arizona law, and the buyer may cancel the agreement anytime before midnight of the third business day after the sale. If a purchase was made on a Friday at 3:00 p.m., the buyer would have until Wednesday at midnight to cancel. If a purchase was made on a Monday at 3:00 p.m., the buyer would have until Thursday at midnight to cancel. To cancel, the buyer must give written notice to the seller, by regular or registered mail, in person, or by telegram. The buyer must also make any goods already delivered available to the seller, in substantially as good condition as delivered. The buyer can either make them available at his or her residence or send them back according to the seller’s directions, and at the seller’s expense and risk.

12. True or false: You have a three-day right to cancel any purchase.

Answer: False. You only have a three-day right to cancel in very specific and limited situations. For example, there is no right to cancel a vehicle purchase. Also, the way you must cancel a particular purchase varies. You must usually send the cancellation notice by certified mail and have it postmarked or delivered by the deadline. How the amount of time you have to cancel is calculated also varies. The deadline may be three calendar days or 72 hours and may begin when you sign, rather than when you take delivery of the item. Listed below are some laws that provide a limited right to cancel:

    1. When your home is pledged as security for a home equity loan, second mortgage or line of credit (three days - Truth in Lending Act, 15 U.S.C.A. § 1635)
    2. Door-to-door sales if you pay over time (midnight of third business day after signing - A.R.S. § 44-5002). See question No.11, above.
    3. Certain sales made in your home (midnight of third business day after sale - FTC Cooling-Off Rule, 16 CFR Part 429)
    4. Telephone solicitation sales (three business days from delivery - A.R.S. § 44-1276(C) and (D))
    5. Credit repair contracts (midnight of third day [doesn’t say “business” day] after signing - A.R.S. § 44-1706(A)(1))
    6. Health clubs and spas (midnight of the third “operating” day - A.R.S. § 44-1793(D))
    7. Dance lessons (fifteen days - A.R.S. § 44-1744)
    8. Discount buying clubs (three business days - A.R.S. § 44-1797.11)
    9. Dating clubs (three business days - A.R.S. § 44-7153)
    10. Real estate timeshares (midnight of seventh calendar day after signing - A.R.S. § 32-2197.03(A))

13. You’ve been thinking about having your driveway resurfaced, and now someone has come to your door telling you that he is a contractor who happens to be in your neighborhood and has some material left over from a previous job. He offers to resurface your driveway at a very low price, but he’s got to do the job today, while he’s in the neighborhood.

True or false: This is your lucky day, and you should seize the opportunity to get a real home repair bargain.

Answer: False. This situation could be a classic home repair scam in which the contractor does shoddy or incomplete work with substandard materials. Before hiring a contractor to work on your home you should get several quotes, and ask for and check references. Check with the Registrar of Contractors to see if the contractor is licensed and if there are any complaints against him. 602.542.1525 in Phoenix and 520.628.6345 in Tucson. Never make such an important decision under time pressure. Think it over and talk it over with a friend or family member.

14. True or false: Items purchased through an internet auction site are automatically guaranteed against nondelivery, inauthenticity, or misdescription of goods.

Answer: False. While some internet auction sites provide free insurance or guarantees for items that are not delivered, inauthentic, or not what the seller claimed, the policies used by one Internet auction site may not apply to another. The following tips can protect your on-line auction purchases: verify the seller’s identity and, if possible, check the seller’s feed-back rating; know the item’s relative value and all terms and conditions of the sale, including the seller’s return policies and who pays for shipping; when bidding, don’t give out personal identifying information such as your social security number, driver’s license number, or bank account number; if possible, pay by credit card; and finally, save all your transaction information.

15. A “live check” is:

a. a refund of money from a seller to a consumer;

b. a rebate on a purchase from a seller to a consumer;

c. a post-dated check drawn on a business or personal banking account; or

d. a marketing sales tool that may obligate the recipient cashing the check to purchase future products and/or services.

Answer: d. Some businesses offer their products or services by sending consumers a check for a small amount of money, such as $2.50. The endorsement section on the back provides that upon signing and cashing the check, the consumer has agreed to the purchase terms for goods or services. “Live checks,” which appear to be legitimate checks drawn on business accounts, will not only put cash in your pocket, but they may also obligate you to purchase future products and/or services unless you make an affirmative and timely rejection of a sales offer. Cashing the check and then remaining silent is treated as a binding contract. To protect yourself before cashing any checks, pay careful attention to the business entity issuing the check and look for fine print. The material terms of an offer may appear in fine print as a footnote at the bottom of the face of the check, or the terms may be described on the back of the check.