Q. Is it true that if someone steals my credit card and charges hundreds of dollars on it, I'm only responsible for $50?
A. Yup. By law, consumers can't be held responsible for more than $50 if they are the victims of credit card fraud and report the theft promptly. So you should contact the card company as soon as you notice that a card has been lost or stolen.
In addition, be careful with "pre-approved" offers you receive in the mail. If you toss them out and a dastardly sort picks one up, he can change the address on it to his own and get a card in your name. This is one way that identities are stolen. It's not a bad idea to buy a paper shredder to destroy credit card offers and documents with confidential information. At office supply stores, you should be able to pick up a modest shredder for around $20 or $30. Identity theft is a massive headache.
If you or someone you care about is mired in credit card debt, learn more in our Get Out of Debt area.
By the way -- it's not too late to fund an IRA for tax year 2001. You have until April 15, 2002 to do so. And you can fund an IRA for 2002 now, too! Get more information in our IRA Center.
This question and answer is adapted from The Motley Fool Money Guide: Answers to Your Questions About Saving, Spending and Investing. For answers to this and 499 other common money questions, check it out -- it's a handy resource.
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Reader Responses to Previous Q&As
On Home Inspectors
I thought your article [on home inspectors] was very misleading and could cause some homebuyers some huge headaches if they followed your advice.
First, what is a traditional agent? I have been a Realtor for 9 1/2 years and I have never heard of a traditional agent. When I first started selling real estate there was an agency agreement called subagency. This was where both agents listing and selling represented the seller. This can still be found in small brokerages with fewer than five agents. However, the majority of real estate companies work with what is called limited agency, where in the office you can have a listing agent that represents the seller and the selling agent represents the buyer. The agent working for the seller is careful to take care of his or her seller but they have to disclose any material facts about the house. The selling agent represents the buyer and tries to get his buyer the very best deal and to make sure everything is known and understood. This also pertains to home inspections.
We have home inspectors in my area that belong to ASHI and I wouldn't use them if they were the only inspection company left in the entire state. They found some plumbing problems that they gave a bid of $6,000 to fix. We called a plumber and his bid was less that $1,000. I don't know a single Realtor in my area that would use this company.... This same company also missed a bad furnace that almost suffocated the buyers after they moved in. I would always take the recommendation of a real estate agent because they work this business everyday and they know who is reputable and who isn't. Just because someone is a member of ASHI doesn't mean he is honest or even good at what he does.
We had another home inspection company come up from a much larger city. They did their inspection and gave a 300-page report. They disclosed all kinds of ticky-tack little things that were easy to fix, but they failed to pick up the fact that the home had had a fire in it. It had been disclosed and they had a copy of the seller's disclosure, but they obviously failed to look up at the black wood in the furnace room or to read the owner's disclosure. I will never use this company again.
Also I would never recommend a home warranty to a buyer. They are nothing but a waste of money. In my 9 1/2 years, I have never heard of anyone getting a claim paid or getting anything covered by the home warranty. I bought my home five years ago and it had a warranty. My swamp cooler leaked and caved in my bathroom ceiling. We had lived here four months. I called the warranty company. That wasn't covered because they only cover central air units. I have friends who bought a home that had a warranty. Their central air unit didn't work, and the company said the central air unit was too old, so it wasn't covered.
I know of numerous stories where people wasted their money on a home warranty and then had to turn around and spend more money to fix a problem because the warranty company didn't stand behind its warranty.
I hope you haven't steered too many buyers the wrong way and cost them money they don't have to waste. Please don't pretend you know all about the home buying business if you are misinformed. I think a qualified Realtor could have written a much more informative and helpful article. -- Amy Greenhalgh
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