Tuesday, August 31, 2010

FTC Warns Consumers to Exercise Caution When Selling a Timeshare Through a Reseller

FTC New Alert

The Federal Trade Commission, the nation’s consumer protection agency, offered these tips for people who seek to sell their timeshare through real estate brokers and agents that specialize in reselling timeshares:

Even if the salesperson claims the local market is “hot,” or his office is overwhelmed with buyer requests, don’t agree to anything on the phone or online before checking out the reseller. Contact the Better Business Bureau (www.bbb.org), state Attorney General (www.naag.org), and local consumer protection agencies (www.consumeraction.gov) in the state where the reseller is located. Ask if any complaints are on file.

Ask for all information in writing.

Ask if the reseller’s agents are licensed to sell real estate where the timeshare is located. If so, verify it with the state real estate commission. Deal only with licensed real estate brokers and agents, and ask for references from satisfied clients.

Ask how the reseller will advertise and promote the timeshare unit. Will progress reports be issued? How often?

Ask about fees and timing. It’s better if the reseller takes its fee after the timeshare is sold. If a fee must be paid in advance, ask about refunds. Get refund policies and promises in writing.

Don’t count on recouping the purchase price of a timeshare, especially if you’ve owned it for less than five years and the location is not well known.

To get an idea of the value of a timeshare, consider using a timeshare appraisal service. Check with the state where the service is located to make sure the appraiser’s license is current.

Before signing the contract, make sure it specifies the services the reseller will perform, the costs the seller is responsible for and when they must be paid, whether the seller can rent or sell the timeshare at the same time the reseller is trying to sell it, the length or term of the contract to sell the timeshare, and who is responsible for documenting and closing the sale.

Don't sign the contract if the deal isn't what you expected or wanted. Negotiate changes or find another reseller.

Check with the resort to determine restriction, limits, or fees that could affect resale or ownership transfer.

Have available the name, address, and phone number of the resort, the deed and the contract or membership agreement, the financing agreement if money is still owed, information to identify your interest or membership, the exchange company affiliation, the amount and due date of the maintenance fee, and the amount of any real estate taxes that are billed separately.

For more information contact:
American Resort Development Association
1201 15th Street N.W., Suite 400
Washington, D.C. 20005
(202) 371-6700; Fax: (202) 289-8544
www.arda.org

Tuesday, August 24, 2010

New Credit Card Rules Protect Borrowers

From the Federal Reserve

More new rules from the Federal Reserve mean more new credit card protections for you. Here are some key changes you should expect from your credit card company beginning on August 22, 2010:

Reasonable penalty fees

Let's say you are late making your minimum payment.

Today: Your late payment fee may be as high as $39, and you likely pay the same fee whether you are late with a $20 minimum payment or a $100 minimum payment.

Under the new rules: Your credit card company cannot charge you a fee of more than $25 unless:

◦One of your last six payments was late, in which case your fee may be up to $35; or
◦Your credit card company can show that the costs it incurs as a result of late payments justify a higher fee.

In addition, your credit card company cannot charge a late payment fee that is greater than your minimum payment. So, if your minimum payment is $20, your late payment fee can't be more than $20. Similarly, if you exceed your credit limit by $5, you can't be charged an over-the-limit fee of more than $5.

Additional fee protections

No inactivity fees. Your credit card company can't charge you inactivity fees, such as fees for not using your card.

One-fee limit. Your credit card company can't charge you more than one fee for a single event or transaction that violates your cardholder agreement. For example, you cannot be charged more than one fee for a single late payment.

Explanation of rate increase

If your credit card company increases your card's Annual Percentage Rate (APR), it must tell you why.

Re-evaluation of recent rate increases

Today: Your credit card company can increase your card's APR with no obligation to re-evaluate your rate increase.

Under the new rules: If your credit card company increases your APR, it must re-evaluate that rate increase every six months. If appropriate, it must reduce your rate within 45 days after completing the evaluation.

This set of rules is the latest in a series of regulations that implement the Credit Card Accountability, Responsibility, and Disclosure Act (the Credit Card Act). For information on protections under the Federal Reserve's other credit card rules, read What You Need to Know: New Credit Card Rules Effective Feb. 22.

Tuesday, August 17, 2010

FTC Testifies About Ongoing Efforts to Protect Consumers from Deceptive Debt Relief Scams

FTC Office of Public Affairs

The Federal Trade Commission today told the U.S. Senate Committee on Commerce, Science, and Transportation that the FTC has made it a top priority to protect financially distressed American consumers from deceptive debt relief schemes.

With Americans continuing to feel the effects of the economic downturn, the FTC has stepped up efforts to stop fraudulent financial schemes that exploit consumers, according to the testimony, which was presented by Alice Saker Hrdy, Assistant Director in the FTC’s Division of Financial Practices. Hrdy described the FTC’s law enforcement actions in this area, a new FTC rule to combat deceptive and abusive telemarketing of debt relief services, and the FTC’s ongoing work to educate consumers about debt relief options and how to avoid scams.

In the past seven years, the FTC has brought 23 lawsuits against credit counseling firms that are sham nonprofits, debt settlement services, and debt negotiators. These cases have helped more than 500,000 consumers who have been harmed, and additional investigations are under way. The FTC works closely with state attorneys general and state banking departments to leverage its resources to protect consumers in this and other areas.

The testimony also described how the FTC recently amended its Telemarketing Sales Rule to further combat deceptive and abusive debt relief practices. The Rule now prohibits for-profit companies that sell debt relief services over the telephone from collecting fees before delivering the services they promise. In addition, the Rule requires telemarketers to make certain disclosures and prohibits them from making false claims.

In addition, the testimony described the FTC’s many educational campaigns to help consumers manage their finances, avoid deceptive and unfair practices, and be aware of emerging scams, including a major initiative regarding mortgage loan modification and foreclosure rescue scams. The FTC has focused outreach efforts on issues affecting people in financial distress, such as federal stimulus money scams.

The Commission vote authorizing the testimony was 5-0. The testimony was presented during a Senate Committee field hearing in Kansas City, Missouri.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

Wednesday, August 4, 2010

Fannie Mae Launches “Know Your Options™”

Press Release from Fannie Mae

Fannie Mae Launches “Know Your Options™” Online Resource to Educate Struggling Homeowners

Initiative Builds on Company's Full Spectrum of Efforts to Help Borrowers

WASHINGTON, DC — Fannie Mae (FNMA/OTC) today announced the launch of KnowYourOptions.com, a new consumer education Web site that outlines the choices available to homeowners who are struggling with their mortgage payments, and provides guidance on how they can contact and work with their mortgage company to find solutions.

The online resource, which offers reliable and easy-to-understand information in both English and Spanish, expands on Fannie Mae's ongoing efforts to help struggling borrowers find alternatives to foreclosure.

“Through foreclosure prevention programs, borrower outreach, underwriting guidelines and servicer engagement, Fannie Mae is taking a comprehensive approach to helping struggling borrowers,” said Jeff Hayward, Senior Vice President, Fannie Mae's National Servicing Organization. “Identifying accurate resources and finding the right answers can be a difficult challenge for borrowers facing hardship and a flurry of disparate, incomplete and sometimes fraudulent information. Know Your Options™ is the company's newest effort to reach distressed homeowners and is designed to bring the best information and guidance together in one place so that struggling borrowers can focus on finding solutions that work for their particular circumstances.”

Key features of KnowYourOptions.com include:

Interactive Options Finder to help homeowners identify options that might be right for their situation;
Calculators to help borrowers understand how many of the options work, including refinance, repayment, forbearance, and modification;
Videos featuring real homeowners discussing how they received help and housing counselors providing advice;
A virtual assistant to walk homeowners through key areas of the site; and
Next steps and helpful forms, including a financial checklist and contact log to help borrowers be prepared when contacting their mortgage company or housing counselor.
For homeowners who are having trouble paying their mortgage, but want to stay in their homes, KnowYourOptions.com provides information on refinancing, repayment plans, forbearance, modifications and Deed-for-Lease™.

For homeowners who recognize that they can no longer afford their mortgages, but want to avoid having a foreclosure on their credit history, the site provides information on alternatives including short sales and deeds-in-lieu.

“There are different answers for different situations and this site can be an important tool in the toolbox for borrowers trying to do the right thing,” Hayward continued. “This initiative draws on the insights and feedback garnered through Fannie Mae's work with thousands of lender partners and housing counselors across the country, and will help connect borrowers with the servicing and counseling professionals they need to reach resolution. Our hope is that this site can be a trusted source of free information for borrowers and industry participants alike.”

The company plans to implement a comprehensive marketing outreach campaign to raise awareness about the site, and also intends to use the site as a vehicle to roll out new options for borrowers that are currently being developed.

To view a video demonstration of the site, please visit: http://www.knowyouroptions.com/presentation.