Common Consumer Myths

Myths abound when it comes to laws against unfair and deceptive trade practices. Here’s what you should know about the ten most common myths surrounding consumer protection.

MYTH: “I can cancel any purchase within three days.”

FACT: The three-day right to cancel exists only for a limited number of consumer transactions and does not cover vehicle purchases. Mainly, it applies to credit or cash transactions initiated through face-to-face contact (like door-to-door sales) away from the seller’s regular place of business.

MYTH: “That store must give me a refund if I ask for one.”

FACT: Mississippi does not have laws that specifically regulate refund or return policies. Each business may set its own return policy, if the goods were not misrepresented. Businesses may use options such as offering customers’ cash, credit slips, exchanges or no adjustments at all. Damaged merchandise may be handled on a case-by-case basis.

MYTH: “I must be a guaranteed winner of big prizes because I received an awards notification!”

FACT: One of the most common types of fraud involves phony prize offers. It’s not much of a prize if you are asked to make a purchase, provide a donation or send an advance payment of taxes, handling fees or processing charges. Never send money without checking with authorities.

MYTH: “My credit report is private, unless I authorize someone to review it.”

FACT: Potential employers, landlords, insurers and others may look at your credit report, and many actually do.

MYTH: “The lemon law protects me against repeated breakdowns on any big-ticket item I purchase — even a used car not in warranty!”

FACT: Almost all states, including Mississippi, have lemon laws that cover new car purchases, but there is no universal lemon law that applies to all big-ticket items. Before you purchase, investigate the history of a used car or product and have it examined by a mechanic or other professional who knows the product.

MYTH: “It’s safe for me to give my credit card number for identification if I don’t authorize a charge to my account.”

FACT: Credit cards are great for placing catalog orders, making hotel reservations or other purchases from familiar, established businesses. In fact, some credit card companies have “charge back procedures” which can protect you if there’s difficulty receiving the product or service you bought. But, be very careful. Con artists with access to your credit card number and expiration date may make unauthorized charges against your card. Never give out your credit card number to an unfamiliar person or business.

MYTH: “When charities call me to contribute, I know all of my money is being used for the stated charitable purpose.”

FACT: Charitable organizations are not obligated to spend a certain percentage of their income on stated charitable purposes. Charities which hire professional fundraisers have higher overhead costs to meet, and they may spend less on the charitable cause. You should ask if the caller is a paid solicitor or a volunteer for the charity and what percentage of the donation will go to the charity.

MYTH: “I’ll have a better chance of winning one of those publishers’ sweepstakes contest if I purchase magazines.”

FACT: It’s illegal for sweepstakes promotions to require any type of purchase of payment. Entrants who do not purchase magazines must be given the same chance of winning as those who do make purchases.

MYTH: “Others can’t take money directly from my bank accounts without my written authorization.”

FACT: Merely giving someone your checking account number may result in their making withdrawals from your account. People can sometimes issue a “demand draft” to your bank, claiming you authorized the withdrawal, and the bank may pay it, even though it lacks your signature. You might not know such a withdrawal happened until you receive your next statement.

MYTH: “I know that all of the advertisements I see or hear in the media are accurate or they wouldn’t appear in the reputable newspapers and on the major broadcast stations.”

FACT: There is no government requirement that advertisements be submitted to an agency for advance review. By law, advertisers are responsible for making true statements and claims in their ads, and media outlets are not required by the government to verify those ads.