Payday Loan Scam

February 25, 2011 00:38 by Consumer Ed

Dear Consumer Ed:

I got a call from a man claiming to be with the State Investigation Department of California. He said he was calling to inform me of a lawsuit against me regarding a $500 payday loan that I supposedly took out and failed to repay. He said he would bring the paper work to my job and that my employer had the right under the law to know what I had done. I told him truthfully that I have never taken out a payday loan in my life. He said I could defend myself in court and that I would have to go to California to do so. The caller said if I wanted to avoid the lawsuit, I had to pay him the $500 immediately. I do not want to pay money I don’t owe, but I want the calls to stop and I’m worried that someone will actually show up at my office. What should I do?

Consumer Ed says:

The first thing to do is to find out whether the caller is with a legitimate law enforcement organization.  If you have access to the Internet, you can search “State Investigation Department of California.”  When we did that search, we discovered that no such organization exists. Instead, we found a list of links where consumers like you reported similar calls from the same people that turned out to be fraudulent. Based on this information, it appears as though the call you received is probably a scam. If not, you will be served with a copy of a written lawsuit and you can determine how you should proceed after you receive it.

It is understandable that you would worry about your employer being contacted.  If the call is a scam, as it appears to be, it is unlikely that anyone will contact your employer. However, just in case, you may want to let your employer know about the call and that they may be contacted by someone claiming to be with a law enforcement agency and saying that you owe money.

You were very wise not to give anyone money over the phone. As a general rule, you should never give payment information over the phone unless you have confirmed that the caller is really who he claims to be. To do that, you should look up the company and phone number in the yellow pages or call the number listed on your monthly bill or statement.

To get the caller to stop phoning you, ask him to send you proof of the payday loan in writing. If you are being threatened or harassed, get the caller’s name, company, address and phone number and file a complaint with the Governor’s Office of Consumer Protection by calling 404-651-8600 or 1-800-869-1123 or by visiting consumer.ga.gov.

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Credit Repair Company Made False Promises

January 14, 2011 20:17 by Consumer Ed

Dear Consumer Ed:

I saw a sign on a telephone pole that promised to erase my bad credit.  I contacted the company and paid them $100.00. The only thing they are doing is writing letters for me to the credit reporting agencies.None of my debt has been erased or reduced, and my credit score has not improved. Can I get my money back?

Consumer Ed says:

Under the Federal Credit Repair Organizations Act, before a credit repair company is allowed to accept any money from you, it has to do several things:

  1. Explain your rights and tell you what you can accomplish for yourself for free;
  2. Provide you with a written contract that spells out your rights and obligations, including your right to cancel in the first three days without any obligation;
  3. Complete the services it has promised to perform.


Because this company did not comply with these requirements, you are entitled to your money back.

Before you think about hiring another credit repair company, keep in mind that no one can legally remove accurate and timely information from your credit report. It can only be removed by the passage of time. Companies that promise to “erase” your “bad credit” are probably perpetrating a scam.

Watch out for these “red flags” when choosing a credit repair company:

  • Promising to remove negative but accurate information from your credit report;
  • Encouraging you to establish a new credit identity by applying for an Employer Identification Number to use instead of your Social Security Number.
  • Telling you to stop making payments to your creditors;
  • Suggesting that you dispute all the information in your credit report, even if it is accurate.
  • Telling you to ignore the IRS, collection letters or other legal documents.
  • Encouraging you to make false statements on a loan or credit application.


You should also be aware that only certain regulated professionals or entities are allowed to make credit repair promises in the state of Georgia. These include banks, savings and loan associations, attorneys, real estate brokers and certain nonprofit organizations. If the company in question does not fit that description, it is not an authorized credit repair service organization and is therefore in violation of Georgia state law.

You can report credit repair violators to the Federal Trade Commission and to the Governor’s Office of Consumer Protection by calling 404-651-8600 or 1-800-869-1123 (toll-free in Georgia, outside of the metro Atlanta calling area).

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Door-to-door magazine sales

November 4, 2010 08:38 by Consumer Ed

Dear Consumer Ed:

A teenage girl came to my door selling magazine subscriptions. She said she lived in the neighborhood and was trying to raise money for college tuition. I wrote the magazine company a check for $83 for three subscriptions. Eight weeks later, I still have not received any magazines, although my check was cashed. When I called the company, I got a recording saying, “This number is not available for incoming calls.” How can I report this company and get my money back?

Consumer Ed says:

Magazine subscription scams involving scenarios exactly like yours are very common, and have been used for years.  Usually, the salesperson claims to be a student selling magazine subscriptions, using the appeal that your sale will help send her team to a sports competition (or some other good cause), or help her get a college scholarship or other such rewards. While these solicitations can be legitimate, often they are scams simply designed to take your money.

It’s unfortunate, because there are real students out there selling door-to-door for legitimate school causes, but unless you actually know the person pitching the magazines, you should always be cautious of someone selling anything door-to-door. A door-to-door salesperson who is not selling on behalf of a school or charitable organization is usually required by the local municipality to have a permit, so ask to see the sales permit. You should always ask to see the seller’s ID, and if he claims to attend a particular college, he should be able to produce a photo ID issued by that institution; if he cannot, or if he cannot give a neighborhood address that you can easily identify as genuine, don’t place an order. 

You should also be aware that the FTC's Cooling-Off Rule protects consumers who buy from a door-to-door salesperson if the purchase is more than $25.  The Rule gives you three days to cancel your order and receive a full refund.  The seller must tell you that you have a right to cancel, and give you a summary of your cancellation rights and two copies of the cancellation form.  Always ask to see the required cancellation notice before you agree to buy.  If the salesperson doesn't have it, don't place an order – the company is breaking the law, and should be reported to the proper authorities immediately. 

If the salesperson failed to give you the cancellation form or if the company failed to send the magazines or issue you a refund, you can report the incident to your local police department.  You should also report it to the Governor’s Office of Consumer Protection by calling 404-651-8600 or 1-800-869-1123 or by going to www.consumer.ga.gov.

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