Wouldn't it be nice if all of those once-in-a-lifetime opportunities that arrived by direct mail really fulfilled their promises? The Federal Reserve recently offered a friendly reminder that many are just too good to be true.
In this specific case, the Fed has gotten complaints about a direct solicitation campaign that claims a "Community Reinvestment Act program" entitles homeowners to cash grants or equity disbursements. Cash grants for being a homeowner? Sign me up!
In reality, the solicitations require that consumers apply for a mortgage loan secured by the consumer's home. There's no free cash after all.
Here's the rub. The Community Reinvestment Act is a real federal law. An unsuspecting consumer who does a little research on the Internet might be fooled into thinking this offer is legitimate since the law actually exists. It might not even sound so far-fetched that one of the law's programs may give consumers cash grants or equity disbursements.
Ironically, the purpose of the act was to urge depository institutions to better serve the credit needs of low- and moderate-income neighborhoods, consistent with safe and sound banking standards. No one's entitled to any grants or loans, however.
Don't believe any suggestion that the Federal Reserve endorses or supports the offer, as may be claimed, by the way. The Fed doesn't endorse or sponsor mortgage programs, and consumers should be suspicious.
That's good advice for any offer that arrives at your doorstep, even if it comes from a company with which you already do business. Be suspicious. Evaluating any offer by starting with the presumption that it's too good to be true can prevent you from falling into a financial deal that's not in your best interest.
If you're looking for a financial product, whether it's a loan, credit card, or mortgage, do your own research before jumping at the offers that appear in your mailbox. If you do get a solicitation that sounds promising, don't sign up without making sure you understand everything and have compared it with other products on the market.
The Fed can help you with mortgages through an online guide, "Looking for the Best Mortgage: Shop, Compare, Negotiate." You can also hop over to our Credit Center to get some fascinating insights into the industry.
If you're getting tired of all this junk showing up at your doorstep every day, you can remove yourself from many of the lists that marketers use to pitch their promises at homeowners and credit card users. Start by taking your phone numbers off the market by signing up for the National Do Not Call Registry at 1-888-382-1222 or www.donotcall.gov.
End those pre-approved credit applications and insurance pitches by calling 1-888-567-8688 or logging on to www.optoutprescreen.com. If you want to opt out permanently, you'll have to print a form and mail it. You can also end the real estate pitches by contacting Acxiom, which provides public records for marketing uses. Go to the "Contact Us" portion of its website (www.acxiom.com) and follow the instructions.
A past issue of the Motley Fool Green Light newsletter explained how you can get a better handle on all of your personal information circulating around marketers' hands. You can take a look free for 30 days and ban all that unwanted junk mail from arriving at your door.