Friday, 15 March 2013

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

Please help by checking out this "probably too good to be true" website for me Anticipating your usual timely response.

This is 100% certainly, without hesitation, absolutely no doubt, a scam. They call themselves “Money Management International” and make some extraordinary claims.

They include:
"Stock Market Services - 8.5% to 19.0% Daily Interest"
"Liberty Reserve Investment – Receive 19.5% - 28.5% Daily"
"Online Investments - 25% - 45% Fixed Daily Interest"
"Forex Markets - Earn 400% Profit in 24 Hours"
"Kuwait Investment - 1000% Return In 48 Hours"
And so on....

Given the number of people who fell for the recently collapsed Eurextrade Ponzi scheme I think we all need to be a lot more careful when we hear claims like these. They are all lies, scams and frauds. If you want to keep your money please be skeptical and avoid anything that seems to be too good to be true.

Dear Consumer’s Voice #2

Hi, I have a problem with a furniture store. I had an account with them in the 2010 where I took a fridge with no deposit. I do not remember well if I took it by month end February but I was supposed to pay end March but couldn’t as I had some financial problems then. They were so rude to me whenever thy called for installments to an extent that I told them to get it because I can’t afford to pay as I was not working. Thy wanted installment of that month (March) and my mum paid and they told her that will be all.

Ever since then they never communicated with me or anything concerning the matter up until 3 weeks back saying I owe them P4,136. I went to them to ask about the matter because I didn’t understand and thy told me even if they took the fridge I still owe them. I used it 2 months or less. I do not remember well but I only have one receipt when the installment was paid.

I’m afraid you misunderstood how store credit works, like so many people do. I really do think it’s time for furniture stores, in fact all stores that sell things on credit, to go a lot further to explain to us what we’re agreeing to when we sign their agreements. They’re unlikely to do this of course, they don’t want you to understand them. If we all understood them we’d all stop buying on credit immediately. We’d all see how expensive credit can be and we’d all start saving up to buy things for cash. But the stores can’t allow that to happen and the reason is simple. Furniture stores are not, primarily, furniture stores. They’re moneylenders first of all, selling furniture is just a means for lending you money.

In your case the situation is slightly more complicated. I contacted the store and the story is not quite as simple as you presented. They pointed out that you failed to pay the first installment on time and only paid it the following month and then didn’t make any further payments. You only made one payment out of the 24 your agreed to make. The store also mentioned that you were employed when you signed the contract and that the agreement included insurance that covered your installments if you lost your job. Why didn’t you tell them that you had lost your job?

Now some maths. The total cost of the credit agreement was 24 x P470 which is P5,640.

The store also told me that after they repossessed the fridge from you they later sold it for P1,402. If you subtract the single payment of P470 you made and then the resale price of the fridge you’re left with a balance of P3,768. Add on a few hundred for administration and the sum the debt collector wants sounds about right.

Unfortunately I can’t see a way for you to avoid this debt you incurred. I suggest you contact the debt collector and agree a repayment plan that you can afford and stick to.

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