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Show The Salt Lake Tribune BUSINESS Sunday, September19, 1999 E9 Credit Card ‘Protection’ Scams Bilk Consumers THE ASSOCIATEDPRI WASHINGTON Chris Weddle, a college student with just one credit card, had received numerous calls from telemarketers offering plans that would supposedlyprotect him from being held liable forchar;‘ges he did not make. He resisted time and again, saying he did not need additional much they HUMBERTO CRUZ earn nportool ssage Miate wail Now May Be Time to Buy Life Insurance safeguards beyond those guaranteed byfederal law. “Some of them would just keep pushing,” said Weddle of Santa Maria,Calif. ‘There were a couple oftimes whereI just had to hang upon them.” But one companydidn’t take Watch for terminsurance yates to skyrocket or guarantees of level premiums to disappear “no” for an answer — and ironi- ments fortermlife insurance bill for a plan to protect against unauthorized charges. Federal regulators say credit alter Dec.31, as insurance companiesincrease reserve require- cally, charged Weddle an unau- thorized $240 on his credit card card protection scams have beoperations who target people unawareof the rights theyalready without having to pay for them Federal law caps the maximum. amount credit card companies can be held liable for charges they did was announcing cases against several such companies today, whoare accused of bilking con- opt to waivethis fee as well Visa, for example, has a “zero liability licy for customers who report fraudulent charges come big business for fraudulent have. The Federal Trade Commission sumers out of $25 million by exploiting concerns about cardtheft. loss or Y2K-related problems. not authorize at $50. Lendersoften “These companies took advantage of students, seniors and others scaredinto thinking they were vulnerable,” said Jodie Bernstein, director of the FTC’s bureau of abie for charges they did not con- sent to on theirbills. In another twist on the scam, telemarketers called credit cardholders to warn them that the millennium bug Be wary of those pro: moting protection plans who ay you are liablefor more than $50 of unautho- rized charges on your credit card account MSay you needcredit within two business days ofdis ard loss protection be cause computer hackers covering them. Customers might realize their credit card is missing right awayor might not discove the fraudulent charges unti! they notice themon their monthlybill. According to regulator telemarketers sometimes trick consumers by reciting parts of theircredit card numberandask: ing for the rest of the digits, sands of dollars to your account WM Say that the Y2K In someinstances, the telemar- Attorneys general in Illinois Ohio, Arizona, Florida, West Virginia and Wisconsinplanned similar actions. Credit card holdersalreadyare entitled to certain protections sumersthey couldbe heldfullyli Signs to Watch Out For: could expose their card to fraud that the offered protection plan would avoid. keters posed presentat majorcredit ‘d compani would scare dholder: thinking that they consumerprotection. Telemarketers also told con criminals were stealing numbers over the Internet, FTCsaid. ¢ the claiming they need to verify the security of the card. With the full number in hand, the companies could bill directly to the credit card, with charges ranging from $200 to $400. Some consumers, like Weddle, had not consented to any services but werebilled for them anyway. can access your credit card i number and charge thou computer bug will m: keit easy for thieves to place unauthorized charges or n your credit card account arecalling from rity department to activate the protection features on your newcard requires insure rs to, raise the reserves they set aside to cover claims, ‘ven if not all states approve the regulation, others will require companies that dobusiness in theirstate to increase their reserve requirements for any policies theysell anywhere as of Jan, 1, 2000. In effect, the vction by thosesta says the regulation protects con sumers by making sureins ance companies can make on the claimsfor death benetits ‘Clearly, consumers deserve premiumsthat are not excesaid George ReiderJr. Connecticut insurance commissioner ident ofthe NAIC. “Hi ilso deserve ins remain solvent and be able to fulfill their contractual obliga1 believethat the corect balance hasbeen struck, andstand behind theneed for his regulation,” Critics, on the otherhand, aimthe regulation is the result of lobbying by insurance ompaniestocreatean excuse raise rate his is something that is cING THE Zj9, protecting insurance compa: jies. It is not protecting con: sumers,” said Byron Udell, president of AccuQuote insurance price-quote service. Whoever is right, the bottom 8 & line for consumers is the same. Nowis the best time, and per- nayis thelast time, to get a great Jeal on termlife insurance fore the new regulation goes nto effect Even consumers who bought ance r itch pale ies nd lower their premiums now vecause of the“competitive 4 V4. ULTIMATE CD (9 6.15" vice slashing going on” before i ulation takeseffect, said avid Plhillips,president of InsuranceQuote Services, other price-quoteservice m Term life insuranceis pure insurance, withno savingsfea: ‘ash value, and typically 's the highest benefit for the premiumdollar. This benefit is for a particu: lar period oftime, or “term.” After that, if you still want insurance, you must apply and APY qualify for a new policy. Becnuse y 1 would be older, 1id expect your Introductory rate until 10/27/99 mium to be hi The cost of termlife insur ince has come down so much, however, that many newpoli IT Cies are costingless, evenif you bought a newpolicy each of the past five years and even thoughTam yearolde each time, the price is lower buy,” said Udell ALLOWS YOU TO ADD MONEY AT ANY TIME. OPPORTUNITIES TO WITHDRAW WITHOUTPENALTY. IT PAYS HIGH MARKET RATES. By far the most popular type of term life insurance is “level: premium” term, which typi cally provides coverage for 5, 10, 20 or 30 years at the sameguar anteed rate or premiumeach year At first that rate is higher than what you would pay just for a year's coverage. But by buying a longer-term policy witha guaranteed rate you protect yourself against rising premiums as youget older. You also avoid the risk of failing to qualify for insurance later on. And if you find a better de elsewhere, you can simply walk away and switch to another pol icy. Coverage stops on theold course, but you don't have to keep paying the premi policy, of ums and there is no cash value to lose Even with iner edd compe tition, industry watchers agree the upshot of Regulation xX will be to driverates up. How muchfs subject to Themild-mannered CD has changed. Typically, CD rates are debate Udell and Phillipssay rates on the least expensive 30-year ies may double or even eo Hlaher while the best r arbitrarily determined a 20-year, $500,000 policy for a 0 year-old will go up morethan 50 percent to $650 or $700. Turge you to re insurance coverai what you need. And better yet do it by Dee, a1 Humberto Cruz lives in Coral Springs, Fla. Write himc/o Tri bune Media Services, 43 M ran Ave. Suite 1400, Chice go, IL 60611. 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