Thursday, 7 July 2011

The Voice - Consumer's Voice

Dear Consumer’s Voice #1

I went to a furniture shop today and what they told me is that some charges like handling fee and insurance are compulsory so I would like to know if they are telling the truth?

I suspect that they’re telling the truth, at least partially. Although I’ve never quite understood what a “handling fee” actually is, they’re perfectly within their rights to charge you it so long as you agree up front. Unfortunately you probably won’t see any reference to this until the very last moment before you sign the contract. You’ll probably also see other charges as well, things like a compulsory delivery charge, even if you pick up the furniture yourself. The reason they sometimes insist on delivering? That way they know for sure where you live so that when they need to repossess your goods they know where to find them.

As for the insurance I think it’s a greyer area. You should ask them what exactly the insurance is for. They’ll probably tell you that it’s to protect you in case the goods are stolen or destroyed. In that case I suggest you politely decline it, saying that you’ll take out your own household content insurance policy if you don’t have one already.

What they’ll probably then confess is that it’s actually a payment protection policy that protects THEM if you fail to pay.

One of the tricks that some furniture stores play (and they play SO many of them) is to hide the cost of the item you’ve bought in these various charges. They can reduce the amount of money you’ll be paying in “finance charges” by pretending that it’s actually something else, like insurance, handling fees and delivery charges. That way they can also reduce the percentage you appear to be paying for the privilege of buying on credit.

I really believe that consumers should avoid buying anything on credit if they can help it. It’s a horribly expensive way to buy things, the “hidden” charges can be enormous and the risks of defaulting are extremely high. The lesson is simple. It will take you half as long to save up for something and buy it for cash than it will take to buy it on credit.

Dear Consumer’s Voice #2

Three weeks ago I bought a vehicle from a garage costing me P36,000. After a while I took the car for service but the mechanic found a lot of things missing from the vehicle. I have spent a lot of money within a week of purchase of the vehicle. I told the manager of the company to fix the vehicle or let me swap with another but he refused and says I have to pay for the vehicle. What can I do to swap or let him fix the car?

I suspect it’s too late to fix this problem. Of course a decent dealer will do his best to fix problems like this but I think you’ve come across a more traditional second-hand car dealer, the type that gives the profession a bad name.

The problem is that the dealer will just say that you bought the car “voetstoots” which is usually taken to mean “as is” or “as it stands”. They mean that you had the chance to check the vehicle before you bought it and that’s it. Of course lawyers might tell you that this can’t be used to cover a major defect in the item purchased. A dealer can’t sell you a vehicle that is utterly useless and claim you bought it voetstoots but in your case the problems seem to be a lot less serious. Some things missing aren’t a major defect, they’re just unbelievably irritating.

I think that it’s best to add this to your list of life experiences. Just make sure you spread the word to everyone you know not to do business with this particular dishonourable dealer.

Scam alert

Yet more scams this week. I received one myself from someone claiming to be from “William Hill” a legitimate UK-based betting company. It claimed, in perhaps the worst English I’ve read in a long time, that:
“your credt card was used for Gambling, deposit 450.USD, that`s not normal for your credit card transactions. Our ip santinel detected that your ip adress is outside from your contry. Our afliates suggested a refund , if u wasn`t the person that used the credit card apply now for a refund.”
It then gave a link to a web site where, it claimed, I could get a refund. The site was actually a very good replica of the UK tax authority site with links for each of the main UK and international banks. Each link went to a craftily constructed replica of their online banking page and asked not only for your username and password but also your complete credit card details.

Yet again it’s critical to know that your bank and no legitimate organization will EVER post you a link like that. Always enter web addresses yourself and then bookmark them for safe-keeping.

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