California comsumer protection laws

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There are several worthwhile Consumer protection laws taking effective Jan. 1st, 2009, in California. We are thankful for these new laws and hope more will follow that will benefit consumers, especially in the credit card arena.

* Banks and other companies no longer can offer gifts to college students in return for completing credit card applications.
For those of us with college students we were rather stunned to find out that our children were provided applications and a promise of at least a $500 credit limit from credit card companies once they first attended college. Even when they did not have income! A very successful hook that credit card companies use with college students is to give them a college hat, or shirt, or night in a hotel, etc. if they will fill out a credit card application. Then the student receives a credit card in the mail with a small limit. Many college students then use the card and go to their limit, not considering how they will repay the balance. Many do not talk with their parents about it either. So parents, advise your college age children in advance not to participate. If you want your children to have a credit card, put them on one of your credit card accounts. Then you can monitor use and where the purchases are made. It is great to see that the gift from credit card companies is ending. However, those companies will still be on the campuses offering applications to every student. Think of it this way; if the credit card companies were not making a very large profit (interest) they would not be on college campuses.

* Consumers will have new rights in placing freezes on credit reports, including requirements that companies comply within three days.
This is consumers’ opportunity to get companies to comply in freezing your credit report until timely action is taken to investigate, dispute and solve incorrect reporting. In the past, there was uncertain time restriction for the company in question to act. Now they must comply within three days.

* Sweepstakes promoters cannot falsely claim someone has been singled out for participation, ask for money to receive a prize and send out "last chance" warnings that are untrue.
One of the saddest situations I uncovered was a retired gentleman with diabetes, a fourth grade education, living on social security and was inundated with sweepstakes promotions. I was at his home and he asked me to take his mail to the post office. As I looked at the mail, I saw an envelope going to a sweepstake promoter. I asked him about it. He told me “I have to buy something – magazine subscriptions or knick knacks, etc. so that I can keep having a chance to win the sweepstakes”. We talked about how long he had been doing this and he said for years. When I asked him how long he had been sending in money for sweepstakes he said, for years. To set the scenario, here is a man who can barely read and can only write his name (because he practiced it so many times). I asked to see the information he received from the sweepstakes company I then asked him what the bold print said. He told me that it said that he had to buy something so he ‘will’ be the sweepstakes winner. I read the words to him that said he ‘may’ have the opportunity to have his name drawn as the winner. I then read the fine print that said no purchase was necessary to enter the sweepstakes.
Remember now, he cannot hardly read and has been buying at least twelve magazine subscriptions per year. He could not read the magazines. I then asked him how much he has spent through the years on sweepstakes. He did not know but figured thousands of dollars. This man could barely exist on social security. That is all he had for income. He would go without groceries so he could buy something from the sweepstake companies and he hit the jackpot.
As our conversation concluded, he would not believe me that he could enter the sweepstakes and win without buying something. He kept saying that he had made it to the next level and he had to buy to win. It was his ‘last chance’. He believed his odds were greatly improved because of the information sent to him from the sweepstakes companies. He even told me what he would do with the money once he won.
I did not take the envelope to the post office for him, but I know he did later. He kept playing sweepstakes until he died. Of course, he never won a sweepstakes and died impoverished. I am rejoicing that sweepstakes promotions must now ethical.