Consumer Rights

in and after Foster Care

When can I apply for and receive a credit card account?

A credit card account is a form of a contract and you cannot enter into a legal contract until you reach 18. However, once you reach 18 you may receive one or more applications for a credit card in the mail. You should review these very carefully and have another adult that you trust review them with you. Interest rates on credit cards can vary, and some can be “fixed” (i.e. the interest rate is always the same) or “variable” (i.e. the interest rate changes based on certain changes in the economy). Even credit cards with fixed interest rates often have interest rates that increase significantly if you make a late payment.

How will a company determine whether I am eligible for a credit card account?

The credit card application will ask you to list your income, and the credit card company will get and review a copy of your credit report, if you have one. You will have a credit report if you have ever applied for a credit card, a personal loan or insurance (including car insurance). The credit report will contain information about where you live, how you pay your bills, and whether you have (as an adult) been sued, arrested or filed for bankruptcy. You have the right to request and receive a copy of your credit report. Each of the three nationwide consumer reporting agencies must give you a free copy of your credit report once every twelve months. You can order your free copy of the report by going to www.annualcreditreport.com, calling 1-877-322-8228 or sending in a written request to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You will need to include your name, address, Social Security number and date of birth.

How do I know if a company is a good company or a scam?

Before you do business with a company you know little about, check the company out with the Better Business Bureau in the company’s location.  To find the Better Business Bureau office you need, go to http://lookup.bbb.org.

Also, you can protect yourself from consumer scams by never giving your credit card number, bank account information or Social Security number out over the telephone unless you’re familiar with the company and know why the information is necessary.

I want to buy a car but can’t afford to buy a new car. Is there anything special I should look out for when I’m buying a used car?

There are special rules for sales of used cars by car dealers or companies. Dealers and companies must post a “Buyer’s Guide” on the used cars they sell. The Buyer’s Guide must contain certain information, including the terms and condition of any warranty and whether the car is being sold “As Is.”

What does it mean if a used car is sold “As Is”?

If you buy a car “As Is”, the car comes with no warranties. This means that if something about the car does not work properly, the dealer you bought the car from is NOT responsible for fixing it. In Virginia, if a dealer sells a car “As Is,” the dealer must give you a statement about an “As Is” sale on the front of your buyer’s order. In an “As Is” sale, if you do not get the “As Is” statement on the front of your buyer’s order, and do not get the Buyer’s Guide, you have thirty days to cancel the sale. If you cancel the sale under these conditions, you may return the car and get most of the payments that you made back.

What must a dealer do if the sale is not “As Is”?

If you do not get the “As Is” statement on the front of your buyer’s order, and do not get the Buyer’s Guide, the dealer has given you an “implied warranty.” This is generally an unspoken and unwritten promise that the product (i.e. the car) will do what it is supposed to do (a “warranty of merchantability.”) It may also be something called a “warranty of fitness for a particular purpose.” This occurs when you buy a product based on the seller’s advice that it is suitable for a particular use. You may also get a written warranty, which may be limited (meaning the dealer will cover some of the costs of repairs for a limited number of miles or period of time) or a full warranty (meaning the dealer will repair the car for free.)

What are my rights if I buy a used car from a private person rather than from a dealer?

Private sellers usually don’t have to use the Buyer’s Guide. Most private sales do not come with implied warranties. They are usually “As Is.”

How can I pay for a car?

You can either pay in full when you buy the car or you can finance your purchase of the car over time. If you finance the cost of the car over time, the total cost of the car increases. This is because you are also paying for the cost of credit. This includes interest and other loan costs. If you finance over time, be sure you read, understand and agree with everything on all of the papers, before you sign anything. If you finance the payment of a car instead of paying in one full, up front payment, you should shop around for the best interest rate. Generally, banks and credit unions offer lower interest rates than car dealers.

What is a contract and what does it mean when you sign a contract?

You cannot enter into a legally enforceable contract until you turn 18. A contract is an agreement between two or more persons, or between persons and companies, to do a particular thing. When you sign a contract, it means that you read it, understood it and agreed with it. If you want to change a contract, you must make the change or changes before you sign the contract. You should not rely on the explanation of the seller (or whoever the other party to the contract is) about what the contract means. It always a good idea to have someone you trust look over a contract before you sign it.

What are some contract “dos” and “don’ts”?
  • You should never sign a contract with blank spaces.
  • You should never depend on an oral promise. Always ask for things to be put into writing and signed.
  • You should always get a signed copy of the contract and save it.
  • You should always get a signed and dated receipt for any payment, and save it.
What is “co-signing” a contract?

When someone co-signs a contract, that person is responsible for paying the money owed under the contract if the borrower does not pay. In fact, the creditor can try to collect the money from the co-signer without trying to get the money from the borrower first. Creditors ask a borrower to get a co-signer when the borrower is not a good business risk. For example, if you have not had a job for at least the past 12 months, or if you do not make at least a certain amount of money, the creditor may require you to get someone to co-sign a loan.

Can a contract be cancelled after it is signed?

Once you sign a contract, it is valid and enforceable right away. Usually, there is no right to cancel. Two exceptions to this are: a contract that is signed as the result of a door-to-door sale and a home mortgage not used to buy a house (i.e. a second mortgage.) These contracts must include a statement telling you about your right to cancel within 3 business days and a “notice of cancellation” form which you can use to cancel the contract.

What is payday lending?

A payday loan is a small, short term, high interest rate loan. These loans go by many names:  payday loans, cash advance loans, check advance loans, post dated check loans, or deferred deposit check loans. When you get a payday loan, you write a personal check to the lender for the amount you are borrowing plus a fee. The lender gives you the amount of the check minus the fee and holds your check until your next payday.

Why is payday lending a bad idea?

Payday lending is a very expensive way to borrow money. Although the lender’s fee is no more than $15 for each $100 you borrow, for a two week loan the rate of interest is 391% per year. For a one week loan, the rate of interest is 782% per year. This interest rate is forty to eighty times higher than the interest rates charged by credit cards, banks and other lenders.