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Consumer Protection: Advice from The Bucks County Consumer Advocates

February 2009

Q.  I am in the middle of an argument with my wife.  We, like most folks, would like to get our tax refund as soon as possible.  We have several bills that the refund would pay and take some pressure off of us.  She wants to use a nationally known tax preparer and as she puts it get an “instant refund”.  I reminded her that the instant refund is a loan for our own money.  It does not make sense to pay for my own money.  She thinks the charge is fair but I told her to read the fine print.  Anyway, I think people should be wary of this practice.  A.P., Furlong

A.  Many tax preparers, whether independent or part of a national firm, offer many services for a fee.  Instant refunds or rebates are really a straightforward loan and because they are a loan the consumer is entitled to full disclosure about any fees and the interest rate that will be charged.  What many consumers do not understand is that if there are additional fees wrapped into the loan the Annual Percentage Rate increases dramatically.  These loans are usually referred to as a Refund Anticipation Loans (RAL).  While we understand that it is very attractive especially in these tough financial times to want to get your money immediately, it is really not a financially prudent thing to do.  The loan is based on your refund. If there is a problem with the refund there will be a problem with your loan.  The rates for these loans vary from 36% to predatory levels.  According to the Internal Revenue Service (IRS), taxpayers who file electronically or by mail are given the option to have their refund directly deposited into their bank account.  It is quicker than waiting for the processing and mailing of a physical check and there is no fee or interest charged. It is, after all, your money.  Since most of these loans are bank loans secured by the taxpayer’s expected refund, the loans last about 7-20 days until the actual IRS refund repays the loan.  That alone is a good indication of just how needless most RAL’s really are. 

The IRS has issued several warnings for this tax season.  One alert is for a phone scam which states that it is the IRS calling and advising that the taxpayer is entitled to a rebate and that all they need to do is provide bank account information.  The IRS does not call taxpayers on the phone.  Any phone call should be viewed as a scam.  They also want to warn consumers that bogus emails continue to be a problem.  The emails have many variations.  Some are directed at a specific refund, others are bogus email audits or notices that tax laws have changed and that they require further information.  With all these scams the important thing to remember is that the IRS will not email any taxpayer.  If a consumer answers any of these emails they will be directed to a specific site that will ask for financial and personal information.  The bottom line is to check with the IRS before providing any information. 

Q.  I have been living in my apartment for ten years now.  It has been a good arrangement up till about a year ago.  I have asked my landlord so many times to fix things in my apartment that I have lost count.  I’m thinking about not paying him the rent for March until he fixes the problems.  What do you think about withholding rent?  K.R., Langhorne

A. Withholding rent may be appropriate for you only if your repairs would cost more than one month of your rent or your problems are so serious that you home is uninhabitable.  But be careful, because it is not often the wisest choice because many of the courts do not look favorably on it.  In addition while you are withholding rent you should be looking for another place to live.  Examples of what would not be appropriate problems for withholding rent are torn carpeting, leaky faucets, toilets that won’t stop running, cracked walls, or a normal amount of bugs.  Examples of what might be appropriate are no hot water, no heat in the winter, dangerous conditions in the structure of you home, a seriously malfunctioning sewage system, or an extreme rodent or other type of infestation.  The safest way to withhold rent to try to get the landlord to improve conditions is to put the rent money into a separate bank account from your other funds.  This way, if your landlord tries to evict you or sue you for the money, you can prove to the court that you were not using the money for any other purpose.  The first step in this process would be to write to your landlord via certified mail, tell him about your problems and ask him to fix it.  It must be done in writing even if you’ve already told him before about the problems.  Be detailed about the problems; explain how seriously it affects your family’s home, life, health, safety, cleanliness, etc.  Always keep copies of all of your letters.  Make sure you give your landlord a reasonable amount of time to do the repairs.  If he doesn’t fix the problem, you should write to him again via certified mail.  Tell him that because he has not fixed your problem, your home is uninhabitable, and therefore you intend to withhold your rent.  Tell him that you will begin paying rent again after he fulfills his obligations as a landlord.  Consumers interested in receiving a free copy of the Landlord/Tenant Act may call Bucks County Consumer Protection at 1-800-942-2669.                

Q. I think I made a huge mistake.  I received an email from Wal-Mart that said I was chosen to take part in a survey.  I do shop online and in person at Wal-Mart so I figured it was legitimate.  After I filled out the survey they were going to deposit $150 into my bank account.  They requested my financial information so that they could deposit the money directly into my account.  I did that and now my husband thinks I was scammed.  Is this a scam and if so what should I do?  A.P., Hilltown

A.  I have seen a copy of this email.  It does look good but it is not from Wal-Mart.  Call your bank and close your account.  This is a typical online phishing scam.  I will say that the email is one of the best I have seen.  That being said there are a couple of red flags in this email.  One is that most companies do not pay $150 to take a single page survey.  The second issue is that no legitimate request from any company will ask for your personal or financial information.  Consumers need to be on guard all the time, especially with the economic difficulty that is currently taking place throughout the country. When an offer like this is sent we always suggest contacting the real company and verifying if they did in fact send out the information.  Wal-Mart officials have stated that they do not participate in this type of promotion and have no affiliation with the group putting on the survey.  Consumers who get this email and others like it should contact the Federal Trade Commission at 877-382-4357 or online at www.ftc.gov.  Our office encourages consumers to call and check out any offer they receive that sounds to good to be true.

Q.  I lost my job about nine months ago and have been actively searching for employment without success.  I don’t have a car and was looking close to home.  My friend told me about a sign that she saw about working out of my home.  I thought that this sounded perfect, but wanted to check it out with you.  It sounds like I can make a lot of money without having to leave the comfort of my home.  What can you tell me?  F.I., Dublin          

A.  This type of ad can be found everywhere.  The ads are attached to street lights, to telephone poles, in the newspaper and over the internet.  While you may find these ads appealing, proceed with caution.  Not all work-at-home opportunities deliver on their promises.  Many of these ads omit the fact that you may have to work many hours without pay, or they don’t disclose all the costs you will have to pay.  Countless work-at-home schemes require you to spend your own money to place newspaper ads, make photocopies, or buy supplies like envelopes, paper, and stamps.  For the most part a lot of these work-at-home opportunities are nothing more then a scam.  There have been many consumers deceived by these ads and have lost thousands of dollars.  If you are considering work-at-home employment make sure you get some questions answered first.  Get the information in writing.  Legitimate work-at-home program sponsors should tell you in writing what is involved in the program they are selling.  Ask questions about what you will be doing, and make sure they explain every step of the job.  Find out if you will be paid a salary or   on commission, and who will be paying you.  Ask when you would receive the first paycheck.  Also, you want to know what the total cost of the work-at-home program will be, including supplies, equipment and membership fees.  The answer to these questions may help you determine whether a work-at-home program is appropriate for your circumstances, and whether it is legitimate.  You will also want to check out the company with Bucks County Consumer Protection to see if there have been any complaints against the company.

Department of Consumer Protection /
Weights and Measures
Michael D. Bannon
Director
50 North Main Street
Doylestown, PA 18901
Phone: 215-348-7442
Fax: 215-348-4570
Canny Consumer Hotline 1-800-942-2669