Travel Scams

Travel Scams

o Don't be taken by solicitations by postcard, letter or phone
claiming you've won a free trip or can get discounts on hotels and
airfares. These offers usually don't disclose the hidden fees
involved, for example, deposits, surcharges, excessive handling
fees or taxes.

o Some travel scams require you to purchase a product to get a
trip that's "free" or "two-for-one." You'll end up paying for the
"free" trip or more for the product than the trip is worth, and the
two-for-one deal might be more expensive than if you had arranged
a trip yourself by watching for airfare deals.

o Be wary of travel offers which ask you to redeem vouchers or
certificates from out-of-state companies. Their offers are usually
valid only for a limited time and on a space-available basis. The
hotels are often budget rooms and very uncomfortable. The company
charges you for the trip in advance, but will the company still be
in business when you're ready to take the trip? o Check the
reputation of any travel service you use, especially travel clubs
offering discounts on their services in exchange for an annual fee.
Contact your state or local consumer protection agency or the
Better Business Bureau.

o Request copies of a travel club's or agent's brochures and
contracts before purchasing your ticket. Don't rely on oral
promises. Find out about cancellation policies and never sign
contracts that have blank or incomplete spaces.

o Never give out your credit card number to a club or company with
which you're unfamiliar or which requires you to call 900 numbers
for information.

o Don't feel pressured by requests for an immediate decision or a
statement that the offer is only good "if you act now." Don't deal
with companies that request payment in advance or that don't have
escrow accounts where your deposit is held.

o Research cut-rate offers, especially when dealing with travel
consolidators who might not be able to provide your tickets until
close to your departure date.

o You can protect yourself by using a credit card to purchase
travel services. If you don't get what you paid for, contact the
credit card issuer and you might be able to get the charges
reversed. Be aware that you have 60 days to dispute a charge. See
page 20 for further information on billings and disputes.

Rent-To-Own

Although buying in a rent-to-own transaction sounds like a simple
solution when you are short of cash, rent-to-own can be
expensive. The rental charge can be three or four times what it
would cost if you paid cash or financed the purchase at the highest
interest rate typically charged in installment sales. Before
signing a rent-to-own contract, ask yourself the following
questions:

o Is the item something I absolutely have to have right now? o
Can I delay the purchase until I have saved enough money to pay
cash or at least make a down payment on an installment plan? o
Does a retail store offer a layaway plan for the item?

o Have I considered all my credit options, including applying for
retail credit from the merchant or borrowing money from a credit
union, bank or small loan company?

o Would a used item purchased from a garage sale, classified ad or
secondhand store serve the purpose?

If you decide that rent-to-own is the best choice for you, here are
some questions you should ask before you sign on the dotted line.

o What is the total cost of the item? The total cost can be
determined by multiplying the amount of each payment by the number
of payments required to purchase the item. Make sure to add in any
additional charges, for example, finance, handling or balloon
payments at the end of the contract.

o Am I getting a new or used item?

o Can I purchase the item before the end of the rental term? If
so, how is the price calculated?

o Will I get credit for all of my payments if I decide to
purchase the item?

o Is there a charge for repairs during the rental period? Will I
get a replacement while the rented item is not in my
possession?

o What happens if I am late on a payment? Will the item be
repossessed? Will I pay a penalty if I return the item before the
end of the contract period?

Comparison shop among various rent-to-own merchants. Contact your
local or state consumer protection agency to find out if there are
any complaints on record against the business. Check for any
specific state laws. Read the contract carefully and make sure you
understand all the terms and get all promises in writing.

Remember, know what you are paying. Compare the cash price plus
finance charges in an installment plan with the total cost of a
rent-to-own transaction.

Long-term rent-to-own contracts cost so much more than
installment plans that you could rent an item, make a number of
payments, return the item, buy it on an installment plan and still
come out ahead.