Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 24, 1990 TAG: 9004240039
SECTION: EXTRA PAGE: E-3 EDITION: METRO
SOURCE: Tammy Poole
DATELINE: LENGTH: Medium
True or false:
\ 1. If you notify your financial institution of the loss or theft of your Automatic Teller machine (ATM) card (or code) within two business days, your liability for unauthorized withdrawals is just $50.
\ 2. A home equity credit line allows you to borrow up to 75-80 percent of the current market value of your home.
\ 3. The Equal Credit Opportunity Act makes it illegal for a potential lender to ask your age.
\ 4. If your health club goes bankrupt, you will receive a full refund of prepaid fees.
\ 5. The Federal Trade Commission's mail-order rule, which requires shipment of your order in 30 days (unless the company specifies a different shipping period in advance), applies to orders placed over the phone and mailed to you.
\ 6. Cellular and cordless phones are just as safe from unintentional eavesdropping as conventional phones.
\ 7. If your credit card application is denied, you can learn what's in your credit report for free. Answers:
\ 1. TRUE. But, you could lose as much as $500 if you don't tell the card issuer within two business days after learning of loss or theft. And if you don't report an unauthorized transfer that appears on your statement within 60 days after the statement is mailed to you, you risk unlimited loss on transfers made after that 60-day period. That means you could lose all the money in your account plus your maximum overdraft line of credit.
\ 2. FALSE. Depending on your credit worthiness, and the amount of your outstanding debt, lenders may let you borrow up to 75 to 80 percent of the current market value of your home minus the amount you still owe on the home. Before taking such a loan, you should shop for the credit terms that best meet your borrowing needs, beware of balloon payments, look for safeguards such as high minimum withdrawals, and remember that failure to repay the loan could mean the loss of your home.
\ 3. FALSE. A lender may ask your age, but may not: Refuse to give you credit or decrease your amount of credit just because of age; refuse to calculate your retirement income in rating your credit application; discontinue your credit account to require you to reapply for credit just because you have reached a certain age or have retired; or refuse you credit or discontinue your account if you've been denied credit life insurance or other credit-related insurance is not available to your because of your age.
\ 4. FALSE. Bankruptcies of this nature are governed by state laws, which vary. To minimize your risk, don't pay for membership in a club that's still in the planning stages, and be especially wary of lifetime membership fees. Pay as little as possible in the form of an initiation fee (little or no downpayment); try to arrange a monthly payment schedule, and negotiate for a month-to-month contract with the club. If the club refuses, shop around and sign up elsewhere.
\ 5. FALSE. If you place your order over the phone and receive it via a non-U.S. postal service carrier, you are not protected under the rule. At least one part of the transaction must take place through the U.S. mail in order for the rule to apply. The FTC is currently considering whether to extend the rule to telephone sales. The Fair Credit Billing Act offers dissatisfied telephone customers who use credit cards some protection. You can dispute an error or a charge for merchandise not received, but you must do so within 60 days after the issuer of the credit card mailed the first bill containing the error or item in dispute.
\ 6. FALSE. Both cellular and cordless telephone calls are highly vulnerable to eavesdropping. Such calls, transmitted in part over assigned radio bands or frequencies, may be overheard by anyone who has the right equipment.
\ 7. TRUE. If you are denied credit, you must be informed of that decision in writing and the notice must list the specific reasons why or tell you how to get an explanation. If the denial occurred in the last 30 days and was based on a credit report, you'll be told how to contact the credit bureau that supplied the report. That bureau must tell you what's in your credit report, and cannot charge you for that information.
The quiz is provided by the National Office of Consumer Affairs in Washington, D.C.
by CNB