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Four Damaging Consumer Myths That Just Won’t Die

woman looking at documentsWe ran into an interesting article the other day about scientific things that most of us were taught as children that simply aren’t correct. For example, there’s that diagram we’ve all seen of an atom with little protons and neutrons circling the nucleus that just isn’t at all what an atom looks like. Unfortunately, there are also consumer “facts” we’ve learned over the years that are really myths – and that just won’t die. These myths have become so imbedded in our consciousness that most of us are not even aware that they’re false and could be costing us big money. Here are five of those consumer myths that just won’t die.

Myth #1: There are three days where you can take back a car

Of the numerous myths out there regarding automobiles this is one of the largest and is one that many people continue to believe. The fact is that the minute you sign a contract to buy a car or truck, you own it and you have no legal right to give it back within three days. The truth is that you can’t legally return a vehicle in any of our 50 states. However, you can return it if the dealer is willing to write on your contract that you can return it within a specified time period. Other than this, make sure you’re happy with your purchase as that vehicle is now yours. Period.

Another fact you probably don’t know is that your dealer can require you to bring back a vehicle. The reason for this is that dealers often allow buyers to take the car before their credit was approved. But the dealer still owns the car legally until it has been paid by either the institution that is providing the loan or you. So, be aware that you could take that bright, shiny, new car home only to be told the next day that you must return it.

Myth #2: You can just return a car

There was a moment in time when General Motors had a program on its cars and trucks where they could be returned within 60 days. The purpose of this was to boost sales and consumer confidence. The way this worked is that you could buy a GM vehicle and drive it for a maximum of 60 days. If, after that period of time, you weren’t happy with your purchase, you could just return the vehicle. However, if you purchased a vehicle under this program, it was a good idea to read the contract very carefully. This is because the deal had several stipulations. For example the car or truck must have fewer than 4000 miles when you brought it back; there could be no more than $300 in damage; there was an additional $500 fee added to the list price to participate in the program; and you lost any cash-back incentives. If you wrecked the vehicle, the deal could be voided. Your family could not return the vehicle if you died. And if you returned the car or truck after 30 days, you had to still pay the sales tax.

Myth #3: The vehicle’s a lemon

All states have what are called lemon laws but they do vary from state to state. The purpose of a lemon law is to help protect consumers if a vehicle is defective and can’t be repaired or if the dealer will not honor the manufacturer’s warranty. Its purpose is to cover a replacement of the vehicle or a refund. And while you might think that your state’s lemon law covers only a car or truck, this is not true, either. In fact, the law covers nearly every possible vehicle including motorcycles, vans, boats, recreation vehicles and ATVs. For that matter, most state’s lemon laws even cover used cars and trucks. In addition, a dealer warranty or manufacturer’s warranty will sometimes fall under the lemon law.

Myth #4: A store must offer you a refundwoman taking out money from wallet

Do you believe that every store is required to gibe you a refund a purchase? This is definitely a myth. The Federal Trade Commission doesn’t require a store to offer you any refund. The good news is that most retailers will let you return an item as a way to keep their customers happy. However, there is an exception to this called the “cooling-off” rule. It states that if you purchase something in your home or in a location that is not a retailer’s primary place of business and costs more than $25, you have three days to return it.

Merchants, manufacturers and retailers all tend to have different return policies and even a different policy on different kinds of merchandise. As an example of this, a return policy on electronics may not necessarily apply to clothing. Fortunately, if you are unable to return an item that’s defective there are federal laws that could help. What you would need to do is write the Federal Trade Commission and make a complaint. You may also get help from your local Better Business Bureau. Do keep in mind that retailers often have exceptions, explicit policies on returns and definite time limits.

Return policies can be confusing. It’s also sometimes tough to know your consumer rights. When you’re shopping a new store it’s best to spend a few minutes getting information regarding its policies. Before you pay for a purchase, make sure you read the fine print on any contract or financial statement and don’t be afraid to get legal advice if necessary. Before you make that purchase be sure you understand what the store’s policies cover. Some states do require retailers to post their return policies but not all do.

Will you soon get your credit score free?

If you have a Discover card you may have recently been pleasantly surprised to see that your statements now include your credit score. This may soon be true for all credit cards, as the Consumer Financial Protection Bureau has asked the major credit card providers to give their consumers free scores to help them improve their credit.

Lenders are now required to provide your credit score only if they deny you credit, give you interest rates that are less favorable than what you had applied for or when they increase their rates. This is despite the fact that your credit history and credit score determine nearly every aspect of your life – from getting a job to the interest rates you pay on your car insurance and mortgages. As it stands now if you want to learn your financial standing, you must buy your credit score online through a company like FICO or get some version of your score online free.

The problem

The problem is that these free scores are not the same ones that lenders use to decide about extending you credit. Also, since it’s been found that 20% of all consumers have mistakes on their credit reports it’s possible that a lot of these people are being denied credit because of these inaccuracies and this is impacting their credit scores. As CFPB director Richard Cordray recently pointed out, many consumers don’t learn how important their credit standing is until it’s too late – after their identity has been stolen or they have been denied credit. However, this may change and you may soon be seeing your credit score on all of your credit card statements. This way you will know exactly how you stand before you apply for that new loan, credit card or mortgage.

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