Consumer Issues
Auto Insurance
Types of insurance
"Liability" coverage insures you against claims for the damage which you cause to some other automobile, person or thing. It is essential to the responsible operation of a motor vehicle.
"Collision" is coverage that will pay for the damage that is done to your own vehicle as the result of a collision with something. It is strongly advised that this coverage be kept on new or relatively valuable automobiles. Some lending institutions require collision insurance before they will finance the car.
"Fire, Theft and Comprehensive" are designed to pay for damage done to your car by other hazards.
"Personal Articles" coverage is insurance against the damage suffered when personal articles in the vehicle are lost, stolen or damaged.
Things to remember
Your automobile insurance might not cover an accident which occurs when someone else is driving. Read your policy carefully to make sure you know what is covered.
If you use your car to deliver pizza, you may be using your car for a commercial purpose. If your car is not insured for commercial use (cost is approximately 50% more that regular insurance) then you may not be insured at all. Consult your insurance agent with any questions.
Consumer Tip
It's rare that buying your insurance as part of the purchase deal of the car is a good decision.
You will pay very high premiums, having the cost of insurance included in the finance charged, and be paying for the insurance long after the coverage has expired and you are forced to pay additional premiums. Shop around!
Auto Repairs
Repair Estimates
It is very difficult to prove a car repair case in court so protect yourself ahead of time. Always get a repair estimate in writing before giving the OK to begin work.
Mechanics Lein
There are state laws which allow "mechanics liens" on the vehicle for non-payment of legitimate work. In North Carolina, if there is a dispute, the car owner can post a bond with the court to get his/her car returned pending settlement of the dispute (this prevents the mechanic from keeping the car).
Credit Reports
Obtain a copy of your credit report.
Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
Telephone: (800) 685-1111
Experian (formerly TRW)
Experian National Consumer Assistance Center P.O. Box 2104
Allen, TX 75013
Telephone: (888)-EXPERIAN(397-3742)
Trans Union
P.O. Box 390
Springfield, PA 19064
Telephone: (800) 888-4213
Who uses your credit report?
Lenders, banks, employers, insurers, and others may use your credit report in making important decisions affecting you. If you don't know what's in it, how do you know if they are relying on correct information?
If someone takes adverse actions against you because of what is in your report, you are entitled under federal law to receive a free report from whoever supplied it.
Beware Be careful of companies who claim that they can "fix" a bad credit report. They can do nothing more than you can do, which is write a statement explaining an adverse but otherwise correct entry or requesting an investigation if the entry is in error.
Debt Collection
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act and comparable state statutes provide very effective consumer protection against unscrupulous debt collectors and some creditors under state law. If a Debt Collector contacts you, see Legal Assistance. Keep records of every contact the Debt Collector has with you.
What debt collectors CAN'T do:
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contact 3rd parties in trying to collect debts unless they have a court order authorizing them to or permission from the debtor given directly to the debt collector after default and collection efforts begin.
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contact your Commanding Officer! In North Carolina, creditors are also restricted in their collection efforts and they may not contact your CO without your consent. However, the PX and Commissary may notify COs of bad checks and failure to pay valid debts.
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threaten or harass any person in attempting to collect a debt.
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contact the debtor in attempting to collect a debt
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At unusual times and places
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At their place of employment once they are told the employer does not want such contact at the workplace.
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After the debtor tells them to stop contacting them (further contact is only permitted to let the debtor know what further action will be taken, i.e. lawsuit)
Door-to-Door Sales
What makes a door-to-door sale?
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The sale, lease, or rental of consumer goods or service
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A purchase price of $25 or more.
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The seller or his/her representative personally solicits the sale, including those in response to or following an invitation by the buyer.
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The buyer's agreement or offer to purchase is made at a place other than the place of business of the seller.
3-Day Cool Off Period
The FTC Rule and state law allow a 3-day cooling off period during which the consumer can for any or no reason cancel the transaction. The law also requires that the contract contain notice of this right to the buyer and have a detachable cancellation form. Telephone solicitations are governed by state law.
3-Day Cool Off Period Exception
This 3-day cooling off period does not apply to a credit sale at a store. Unless the contract specifically allows you a "cooling off" period in which to cancel the contact, you are thus bound by the agreement.
Repossessions
Collateral
When you buy items on credit, many times the lender will take a security interest in the property (collateral for the loan). If you fail to pay, then the lender will seek to recover the collateral.
In most cases, the creditor will also seek to recover the deficiency from the sale of the collateral from the consumer. Each state has laws governing the sale of repossessed property. Generally, notice must be given to the consumer before the sale and the sale must be conducted in a commercially reasonable manner.
Repossession at MCAS Cherry Point
At many installations, a creditor may not involuntarily take personal property, rather, the debtor must either consent to the repossession or the creditor must wait until the property leaves the installation.
At MCAS Cherry Point, a creditor must either have a court order authorizing repossession or the debtor's written permission before they can come aboard Cherry Point and repossess property.
Your Options
Before you voluntarily return property that you believe will be repossessed, schedule an appointment with the Legal Assistance Office.
There may be an alternative for you such as selling the item yourself and paying off the loan or working out a better payment plan with the creditor.
Security Deposits
Do a complete "walk through" of the premises at the beginning of the lease and provide a list of damages, even the small ones, to the landlord. Be sure to keep a copy for yourself.
Leaving the premises before the end of the lease may mean you are responsible for the remaining monthly payments, as well as deductions from the security deposit for damages. NEVER leave the premises before the expiration of the lease; thinking that the security deposit should be used towards the last month's rent. When leaving the premises, clean it thoroughly and keep any receipts for professional cleaning services.
Know whether the state has a "military clause" statute and, if not, ensure that the provisions are in the lease. Military clauses allow the service member to terminate the lease under certain circumstances because of military orders. Simply moving from your local rental unit to government quarters will not trigger the protections of a Military Clause. You must negotiate for an early termination in this circumstance.
Selling Your Car
Things to remember...
Some service members think that they can sell their auto with a simple promissory note. There should also be a sales contract and consent from any lien holder (i.e. the bank).
Assumption of Payments
NEVER let someone simply "assume" your payments. You should ensure that you are released from liability with your lender and that they are fully aware of the location of the collateral. Usually this means that the buyer must get financing.
Sailors' & Soldiers' Civil Relief Act
What does the SSCRA do?
The Soldiers' and Sailors' Civil Relief Act provides a mechanism for service members to request delays in civil court proceedings when they cannot appear and defend themselves because of military commitments.
The SSCRA also provides a loan interest cap of 6% for loans incurred by a service member BEFORE he or she came on active duty, when service now interferes with their ability to pay the loan.
There are other SSCRA protections that should be explained by an attorney that may offer you protection.
How can Legal Assistance help?
If a service member has been served with court papers to appear at a hearing, he or she should go to Legal Assistance as soon as possible with a copy of the papers.
A Legal Assistance Attorney will prepare a letter, for the Commander's signature, to the court requesting a delay in proceedings.
Failure to Appear
Failure of a service member to appear and defend an action because of military exigency is a basis for the Commander to decide that an Involuntary Allotment should NOT be initiated by DFAS against a service member to satisfy a resultant court judgment.
Commanders should seek the advice of the Legal Assistance Office in these cases.
Student Loans
What about deferment?
In the past, those entering the military could request that their federally insured student loans be deferred because of military service. This was automatic. Not so with new loans. There must be a showing of economic hardship for a deferment to be granted.
NEVER assume your student loan was automatically deferred, even if you submitted an application.
Be sure the lender has sent you a written deferment and keep a copy with your important papers.
What if your school closed?
If a school closed before "you got what you paid for," the Department of Education is implementing rules to govern loan forgiveness. Check with the Legal Assistance Office for guidance.
Taxes
Need to know information...
Because service members move from state to state throughout their careers, it would seem they would be subject to each state's taxation of their military income and personal property as well as their own home state's. This is not the case. The Soldiers' and Sailors' Civil Relief Act provides protection from "double taxation" by setting up some legal rules.
What's the difference between domicile and home of record?
The service member neither acquires nor loses domicile solely by residing in a given state pursuant to military orders. Domicile can only be changed if the service member intentionally takes the steps necessary to change domicile.
Military Income: Military income is deemed to be earned in the active duty member's state of domicile and therefore, is taxable only by that state regardless of where the service member resides because of military orders.
Personal Property: A service member's solely-owned personal property is deemed to be located in the state of domicile and only that state can tax it - regardless of where it is actually located.
The Legal Assistance Office has Domicile Affidavit Forms to claim exemption from personal property taxes.
Levy & Excise Tax
A host state may levy use or excise tax. In determining whether a charge assessed by the duty state is a personal property tax or a license, fee, or excise tax, look behind the label attached to the charge.
If the charge looks like an annually recurring revenue raising tax based on the value of the property, it probably is a personal property tax regardless of the label attached by the state.
Motor Vehicles
With respect to motor vehicles solely owned by the service member, nonresident service members are immune from "licenses, fees, or excises" imposed by the duty state with respect to motor vehicle, but only if the service member has met the license, fee, and excise requirements of the state of domicile.
Non-Military Income: Non-military income earned by the service member can be taxed both by the state of domicile and the state where the income is actually earned. The service member will probably have to file two different tax returns, getting credit for the taxes paid for non-military income.
Non-Military Spouse's Income: Non-military income earned by the service member can be taxed both by the state of domicile and the state where the income is actually earned. The service member will probably have to file two different tax returns, getting credit for the taxes paid for non-military income.
NOTE: Taxation of real property is not affected by the Soldiers' and Sailors' Civil Relief Act, because real property is taxed where it sits.
Used Cars
What does "As Is" mean?
The Federal Trade Commission requires used car dealers to post in the window of the cars they sell a sticker that either says "With Warranty" or "As Is." On the sticker should be an explanation of what these terms mean.
Buyer Beware
Be very cautious when buying an "As Is" car without having an independent inspection by a reputable mechanic. Once you have the mechanic's opinion of what needs fixing on the car, you are in a better bargaining position with the seller to have these things fixed as a condition of the sale.
Extended Warranties
Extended Warranties offered by the car dealer for an additional charge are many times not worth the paper they are written on. Before agreeing to any contract, bring it to the Legal Assistance Office for advice.