By Courtney Dentch
Learning to be rude could be the best defense against predatory loans and pushy salespeople, a representative from the state attorney general’s office told the Brinkerhoff Action Association Monday.
Lois Menyweather warned the group of about 50 Jamaica residents to be wary of confusing loan contracts that could trap them into paying more than they should. She also gave tips at the civic organization’s Monday night meeting on how to avoid becoming a victim of identity theft.
Predatory lending includes unfair or deceptive practices in which mortgage lending institutions target low-income, minority and elderly customers, according to the office of the state attorney general.
“You refinance your home thinking that you’re getting a good deal because the interest rate is low,” Menyweather said. “The bottom line is you take the loan out and you’re told that it’s one price and then you get the papers and it’s another price and you can’t make the monthly payments and you have to refinance again.”
Contracts for these predatory loans often include high closing fees – up to 15 percent, which can be tacked onto monthly payments – or clauses that prohibit repaying the loan early, Menyweather said.
“If you get a lump sum of money, God willing, and you want to pay off the loan, they won’t let you,” she said. “They keep you tied into that particular contract.”
To avoid getting caught in a bad loan, the best strategy is to read the contract and have it explained before signing anything, Menyweather said.
“Some are good, but you have to review the paperwork,” she said.
And under New York state law, consumers have three business days to change their mind, she said.
“If by chance, you sign a loan contract, you have 72 business hours to cancel that contract,” Menyweather said. “Follow that up with a certified, registered letter, and keep all your paperwork in a file.”
Menyweather advised the group to keep original documents relating to any consumer transaction, should problems arise.
Also, do not let contractors talk you into home renovations you cannot afford by offering financing rates. Like predatory loans, these agreements often cheat homeowners, Menyweather said.
“Be very leery of the guys who come knock on your door and say, ‘we have some extra concrete. Do you want your sidewalk done?’” she said. “Learn to say no. Be rude because that’s what they understand.”
Menyweather also discussed identity theft at the meeting.
“Stolen identity is fast becoming the largest crime in the nation,” she said. “You never know who’s using your identity.”
Criminals use ever-evolving technology to get credit card, Social Security, bank account and PIN numbers, Menyweather said. Waiters have been arrested for using a pocket-sized scanner to copy credit card information and other people have used information found on ATM receipts, she said.
“These crooks are so intelligent today,” she said. “They will figure out your PIN number.”
Guard important access numbers, especially Social Security numbers, which should never be given out as a form of identification, and get an updated credit report every year, Menyweather said. Also, invest in a paper shredder or tear up all documents before putting them in the garbage, including junk mail, she said.
“The garbage is a world of information and believe me, people are going through the garbage,” Menyweather said.
And remember, a healthy dose of cynicism never hurt anyone, she said.
“I’m not saying that everyone is a crook, but go with that impression,” Menyweather said. “That’s the best way to protect yourself.”
Reach reporter Courtney Dentch by e-mail at TimesLedger@aol.com, or by phone at 229-0300, Ext. 138.
