Stay Savvy About Your Credit Rating

June 2, 2006— -- Author's note: Thanks once again to all the viewers who wrote to me with their consumer questions. I chose to answer those that affect the most people. I hope my answers help you. And please know that your questions always help me. They keep me in touch with the issues that plague consumers today. Remember, the overall advice I give in my book, "The Savvy Consumer": Be the hunter, not the hunted!-- EL

1) Question: I posted a van for sale online. I got four similar e-mails from four different people telling me they would send me a money order or a certified cashier's check and their shipper will pick up the van for shipment overseas. That seems fishy to me.
-- CC

Answer:Way to go, CC! You are ABSOLUTELY right that it is fishy. It is called a check overpayment scam, and it is one of the most rampant scams around right now. Here's what would have happened had you not been so savvy. The "buyer" would have sent you a cashier's check for more than the amount of the van and asked you to send the difference to the "shipper." If you had done it, you would have eventually learned the cashier's check was a fake. To compound the problem, many banks initially clear these fake checks, which gives the consumer the confidence to go ahead and send the money. Later, the bank discovers the check is fraudulent and makes you repay the money -- and by law, you are the one responsible. Bottom line: If anybody sends you a check for more than they owe you and asks you to refund or forward the difference, it is a scam. Period.

2) Question: I have $12,000 in credit card debt. I have talked to several companies that offer this service where you pay so much a month and they take care of everything else. The charge is 12 percent of what I owe. Is this legit or should I talk to someone in Tulsa that is a nonprofit agency? Thank you in advance for your help!
-- JS

Answer: It drives me crazy that there are companies who try to take advantage of the folks who can least afford it. No! You should not pay somebody 12 percent of your debt, when you are struggling to begin with. Yes! There is somebody who wants to help. The answer is the old reliable Consumer Credit Counseling Service. CCCS is a nonprofit group that has been around for decades. (Beware of other companies that claim to be credit counselors but actually take your money and do nothing for you or force you into expensive debt repayment services.)