How to be your own consumer protection agency

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America has no shortage of regulators in place, yet consumers are bamboozled every day. Ever wonder how you could be your own consumer protection agency?

Consumers themselves are the final lines of defense against bad investment products and shifty professionals, and that means employing some critical thinking and common sense to protect your finances.

Here are some tips for evaluating these common financial areas:

Credit cards

If you’re shopping for a credit card, the options can seem endless.

In order to guarantee that you end up with a deal instead of a dud, Bill Hardekopf, CEO of, recommends that consumers:

  • Determine what kind of credit card user you are. Do you pay off your cards every month or do you carry a balance?
  • Look at the meat of the offer in the terms and conditions.
  • Select three or four cards, look at the terms and conditions, rates, fees and rewards, and compare the cards.


Houses are the biggest investments most consumers will ever make; consequently home loans can be expensive and complicated. Shopping around for a mortgage lender or broker you can trust is the most vital step in finding the right loan for you.

Tara-Nicholle Nelson, consumer ambassador and educator for, recommends that homebuyers get a referral from their Realtor.

To find a competent lender or broker, Louis Spagnuolo, vice president of mortgage banking with WCS Lending in Boca Raton, Fla., recommends that consumers:

  • Ask how long they have been in the business. Experience is very important because there have been so many changes.
  • Make sure they are licensed in the state where you are looking to buy a home.

When it comes to shopping for a mortgage, Nelson advises consumers to get a good faith estimate from each lender.

“And read it!” she says. “You have to compare origination charges, not just interest rates and payments.”


Despite layers of regulation, consumers get swindled every day when it comes to their investments. There are a couple of reasons for that:

  • Products are complicated with even more complex fee structures. Use this Bankrate calculator to see how fees can eat into investments.
  • The people selling the overly complicated products: Often there is a conflict of interest between commissioned sales representatives and investors.

“What I’ve also found is that (consumers) are just not aware of all the fees. While the expense ratio might be 150 basis points, there could be an equal amount of other fees, including trading,” says Robert Fuest, chief operating officer and head of investment research at Landor & Fuest Capital Managers in New York.

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, 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.