Changes to Mortgage Rules Bring Out Scammers
Beginning last month, some homeowners who are “under water” with their mortgages can now refinance under the Home Affordable Refinance Program (HARP). However, the BBB warns consumers that banks and mortgage companies aren’t the only ones gearing up for the rush of applications.
“Whenever there is a new or updated government program that may be a bit confusing, scammers come out of the woodwork to take advantage of that confusion,” said Dana Badgerow, BBB President and CEO. “There are already hundreds of websites claiming to be able to help homeowners through the HARP process, but many of them are fraudulent.”
The BBB warns all homeowners who are thinking of applying for a HARP refinance to:
- Deal directly with your lender first and don’t make payments to anyone other than your lender.
- Don’t pay upfront fees to anyone who promises to provide counseling, take care of the paperwork for you, or stop the foreclosure process.
- Be wary of anyone who tells you not to contact your lender, a lawyer or a credit counselor, or who asks for payment by cashier’s check or wire transfer.
- Never sign over your deed to anyone, or allow yourself to be pressured into signing something you don’t understand.
- Be especially careful of look-alike and sound-alike websites.
- Find out if you qualify by going to www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx or by calling the Homeowner’s HOPE Hotline at 1-888-995-HOPE (4673) to speak to a HUD-approved housing counselor for free (assistance is available in English and Spanish, and in other languages by appointment).
- Report scams to the BBB at www.bbb.org/us/scam-source.
The changes to the HARP program were announced by President Obama in October to allow homeowners to refinance at lower interest rates, even if their home is currently worth less than their mortgage. The new HARP rules apply to homeowners who are current on their payments and whose loans are backed by either FannieMae or FreddieMac. More than one million borrowers are expected to apply for the program, according to the Federal Housing Finance Agency, which oversees the two major mortgage lending programs. If you have credit problems, find a credit counseling agency in your area by calling 800-388-2227 (en Espanola 800-682-9832).
Additional mortgage and credit-related tips are available at www.bbb.org/us/clearpoint-tips.
Don’t Cruise Your Way into a Vacation Scam
Winter and spring are prime months for ocean cruises, but the Better Business Bureau of Minnesota and North Dakota (BBB) advises consumers to read all of the fine print before signing up for a special cruise deal.
The BBB urges consumers to be especially cautious of unsolicited mail with offers of free or discounted cruises. In 2011, the BBB received more than 1,300 complaints against cruise companies. While legitimate cruise companies do offer specials periodically, there are always those sneaky few that end up leaving consumers on the hook for thousands of dollars.
Many times, scammers will send numerous e-mails, postcards, and other mailings trying to get you to call them in order to claim your “free cruise.” Don’t be fooled by professional looking websites. Gather as much information as you can about the business, and ask a lot of questions before signing on the dotted line.
The BBB and CruiseCritic.com recommend the following tips to consumers who are looking to book a cruise getaway:
Don’t be a victim. Oftentimes, vacation scammers will use high-pressure sales tactics and make you feel coerced to buy the limited-time deal on the spot. A reputable business or travel agent will provide any information that you request, and give you time to consider your options before booking a vacation.
Always check the business first. If an offer sounds too good to be true, it usually is. Before giving a business any personal information, check out their BBB Business Review at www.bbb.org/search. Consumers can also contact the Cruise Lines International Association (CLIA) for information on finding a reputable travel agent.
Pay with a credit card. For your best protection against a dishonest cruise provider, always pay for your cruise fare -- both the initial deposit and the final payment—with a major credit card such as MasterCard, Visa or American Express. If problems arise, you may be able to dispute the charges with your credit card company. This same protection may not apply to those using debit or check cards; it's important to confirm policies with your issuing bank before you charge.
Ensure your money is in the right hands. After you've made a payment, review your credit card or bank statement and make sure that any applicable charges originate directly with the cruise line, not with the travel agency. That way, you'll know that the cruise line has definitely received your money. If you must pay by check or money order, it should be made payable to the cruise line -- not to the agency or to an individual.
Get proper confirmation of your booking. Insist on getting the actual cruise line's confirmation numbers, not just a confirmation number from your agency. Not only will you then know that your information and money is in the right hands, but you'll also be able to pre-reserve shore excursions, restaurant reservations and spa appointments (where available) on the cruise line's website.
Don’t be afraid to ask lots of questions. Before signing on the dotted line make sure all of the details have been clearly outlined and the pricing has been thoroughly explained. Double check whether there are hidden cancellation fees, port charges, or insurance processing fees that haven’t been covered.
Consider investing in travel insurance. Travel insurance can provide protection in the event of an accident, an illness, lost luggage, or a canceled or interrupted trip, among other things. Follow the same steps outlined here when buying travel insurance.
For more consumer tips you can trust, visit www.bbb.org/us/bbb-news.
New Year’s Resolution: Lose Weight not Money
Losing weight is one of the most common New Year’s resolutions after the excesses of the holiday season. While it’s exciting to gear up towards a worthy goal like this, it’s also important to treat this decision like any other major purchase. Be sure to visit www.bbb.org/search to check out the complaint history of health clubs in your area. The BBB also recommends asking potential gyms and yourself the following 10 questions before signing up for a membership:
Five questions to ask the gym:
What are the terms of any introductory offers? Gyms often use special introductory offers to lure in new members. Just make sure you understand the terms and what the price will be once the introductory period is over.
Will my membership renew automatically? Many times people who join a gym fail to realize that their contract will renew automatically and that they have to take specific steps to cancel their contract.
How can I get out of my contract? Getting out of a gym contract isn’t always as easy as getting into one, so make sure you understand what steps you will need to take to cancel your membership. Some contracts may not allow you to cancel before the term ends without an early termination fee.
What happens if I move? Gyms have different policies when it comes to how a move will affect your membership. It might depend on how far away you’re moving and if they have other locations in the area you’re moving to.
What happens if you go out of business? Ask the gym to explain what will happen to your money if they suddenly go out of business – or if they’re purchased by another company.
Five questions you should ask yourself:
What are my fitness goals? Determining your fitness goals in advance will help you select a facility that is most appropriate for you. If you have a serious health condition, consult with a medical professional when setting your fitness goals.
Is this location convenient? If the gym is across town, you’ll be less likely to work out. Choose a fitness club that is convenient to work or home so the location is not a deterrent to getting exercise.
Can I really afford this every month? Monthly gym fees add up and, after any introductory periods are over, the price could jump higher than your budget can handle. Be sure to do the math before you join and make sure you can afford a gym membership.
Am I feeling pressured to join? Do not give in to high-pressure sales tactics to join right away. A reputable gym will give you enough time to read the contract thoroughly, tour the facilities, and make an informed decision.
Did I get everything in writing? Read the contract carefully and make sure that all verbal promises made by the salesperson are in writing. The terms of the contract are defined by the document you sign, so don’t just take a salesperson’s word for it – get everything in writing!
Small Business Resolution: Disaster Plan for Your Business and Employees
Reacting to a natural disaster or emergency not only means ensuring the immediate safety of employees, but also making plans as far as how the business will continue to function in the aftermath. Whether it’s a natural or manmade disaster, you need to be prepared for the unexpected with a comprehensive business continuation plan. The BBB advises business owners to develop a plan of action should their business be faced with a disaster.
According to the Insurance Institute for Home and Business Safety, one in four small businesses forced to close because of a disaster never reopens. Businesses that have a continuity plan in place – and use it during and after disaster strikes – typically experience less damage, loss and downtime than businesses without a plan.
The BBB offers the following advice to help keep your business operating to meet your customers’ needs in the wake of a disaster:
Don’t be caught off guard. Consider the different types of disasters—fire, flood, tornado, etc.—that can occur and how your business would respond differently to being displaced for a week, a month, or longer.
Know your surroundings. Determine alternate locations for your business to operate if you are displaced from your current building. This could mean enabling employees to work from home or finding an alternate location for your office or store.
Communicate. Devise an emergency communications plan that outlines how your business will communicate with employees, customers, vendors and other key external contacts in the days following a disaster. Contact vendors and suppliers to confirm their emergency response plan procedures. Be prepared to use alternate vendors for essential supplies and equipment. Have your back-up equipment kept in good working condition.
Have an up-to-date inventory of your assets. Review your insurance policies to ensure that you have adequate coverage for items you cannot afford to lose. A standard policy may not cover business interruption losses.
Store your documents safely and efficiently. Keep duplicates of personnel, payroll, payables and receivables and other essential records at an off-site location. Regularly make back-up copies of important computer files.
Establish a succession of management for the company. Determine who will manage the company if key leaders are unavailable.
For more business tips you can trust, visit www.bbb.org/us/bbb-news.
The mission of the Better Business Bureau is to be the leader in building marketplace trust by promoting, through self-regulation, the highest standards of business ethics and conduct, and to instill confidence in responsible businesses through programs of education and action that inform, assist and protect the general public. Our hours of operation are 8 a.m. to 5 p.m. Monday through Friday. Contact the BBB at www.bbb.org or 651-699-1111, toll-free at 1-800-646-6222.