smart spending

How to be your own consumer protection agency

Robert Laura, partner at Synergos Financial Group in Howell, Mich., recommends that investors:

  • Expect each investment to have a specific purpose in their portfolio and know what the benefit of each is.
  • Understand what they own. Investors should not invest in something that cannot be easily monitored or explained. If you can't explain what you're invested in, you shouldn't be in it.

"Most people have no idea why they have things in their portfolio, they just walked into an office and people bought those investments for them," he says.

"If someone did a review of who owns variable annuities, the people who own them can't explain them and the people who can explain don't own them," Laura says.

Debt collection

Debt collectors will sometimes say whatever it takes to get paid. That's when knowing your rights under the law can come in handy.

Scott Crawford, CEO of DebtGoal.com, recommends that debtors talk to the collectors and determine if in fact the debt is valid.

"Debt collectors are required to send you that validation within in 30 days of your request," he says.

Crawford recommends that consumers:

  • Send a certified letter with return receipt to request validation initially.
  • After requesting validation in writing, you can request that they only contact you via mail, or not at all.
  • Crawford also recommends that debtors try to negotiate their payoff amount.

"Try starting at 40 percent of what you owe and go from there," he says.

Consumers can also request that collectors report the debt as paid in full to the credit bureaus, no matter how much they settle for.

Payday lenders

Payday lending has a bad reputation, but it's an economic necessity for some people at some times. Though there can be less costly alternatives, payday lenders are never hurting for business from hard-up customers.

According to Crawford, there are two things to look for with a payday lender:

  • Their posted rate. All lenders must post their annualized rate and associated fees.
  • Borrowers should find a lender who won't allow balances to revolve endlessly.

"What you want is someone who will force you to get off of it. I think it is fairly common for companies to have policies of extending credit only so many times," Crawford says.

When it comes to payday loans, finding the lowest cost solution can still be expensive. If you find yourself turning to them for quick cash, it's time for a serious savings intervention.

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