The Devils is in the Details: Why it pays to read the fine print
In every aspect of our daily life we come face to face with fine print. From service agreements to advertisements, you are sure to see fine print containing hidden fees, restrictions or reoccurring charges. Consequently, even purchases that on the surface seem minor can have huge affect on our finances.
Why don’t people read?
Whether it is lack of time or inconvenience, many people are too busy to read the details of contracts, agreements or advertisements. Others are too embarrassed too admit they don’t understand what they are reading. Businesses outline the details of their offer in the fine print including hidden charges. The fine print is what protects their interest.
What happens if you don’t read?
Unfortunately, if you sign a contract, agree to terms or buy something without reading the fine print you are still bound by its terms. You are giving your rights to the other party. If there is a dispute later, you will lose especially if the agreement contains an arbitration clause, which prevents you for suing.
Noteworthy examples
Service contracts-Cell phone carriers, cable companies and many other service providers have early termination fees if you decide to discontinue service before the contract ends.
Free trials-Sometimes you are offered a free trial of a vitamin or beauty aid. In exchange, you are subjected to service fees, shipping or reoccurring billing that requires you to call to cancel.
Leases-Leases are no fun. They restrict your use of the apartment, define how you can alter the apartment (no nails in the walls) or levy fees for bounced checks as well as breaking the lease.
Memberships-Many times they entice you with a free item such as a credit report, book or movie. Other times, it is a discounted item that lures you in. Regrettably you agree to a service with reoccurring billing or you are required to buy several items at full price before you can end the contract.
Restocking fees-Sometimes, if you want to return the item, you are subjected to a restocking fee. This is common in consumer electronics, equipment as well as furniture where the fees can be as much as 50%.
Software Licenses-Most people don’t read them but they typically limit the software company’s liability, define acceptable use as well as define restrictions. To demonstrate that most people don’t read the terms of software agreements; Playstation in the UK added a clause where you agreed to sell your soul. It turns out 1 in 10 people didn’t bother to read it and sold their soul to Playstation.
Financial Documents-If you don’t read your financial documents you could be in for a big surprise. Sometimes interest rates change after a trial period and other times you don’t qualify for those low interest rates after all. Credit cards, checking accounts, certificate of deposits (CD), annuities and IRA accounts can have service fees, penalties and other charges hidden in the fine print. Even some structured settlement purchasers may hide additional fees in their contracts.
What should you do?
Read everything thoroughly or have a lawyer or trusted advisor read it for you. Ask questions. Make sure you understand everything. Make sure the terms are clearly spelled out. Do the math? Does everything add up to what they told you? Make sure there are no mistakes such as the wrong price or a higher rate. Always retain a copy of the contract for your records and know what you are signing. If the salesperson or other employees try to rush you along, won't show you the contract or give you time to read it-they're hiding something.
Federal mortgage program for unemployed homeowners ends without using all its money
Alternative ways to save your home
A $1 billion dollar program created to help the unemployed pay their mortgages will end without spending all its funds. In fact, since only a few individuals met the strict criteria, the Housing Department expects that only 10-15k people will be approved out of the 100k that applied.
The Federal program, modeled after a very successful program in Pennsylvania, was passed last year as part of the Dodd-Frank Wall Street reform bill. The program offered interest-free, forgivable loans to homeowners who lost more than 15% of their income due to economic or medical conditions. In order to qualify the homeowner needed to be delinquent for at least 90 days, facing foreclosure and could resume making payments once they were employed. Once approved, they could receive up to $50,000 or 24 months of assistance, whichever came first.
Unfortunately, the once promising program was plagued with delays and restrictions. Many experts complained that HUD used a complicated formula which took monthly payments, income and arrears into consideration thereby preventing many seemingly eligible people from getting approved. In contrast, the Pennsylvania program had more hardship conditions and reached a greater number of people before ending in June due to budget cuts.
For those who were not approved for the program and still require assistance there may be some other ways for you to get help. One such is to sell the future payments of an illiquid asset in exchange for a cash lump sum. An illiquid asset could be a structured settlement annuity, a divorce settlement, a single premium immediate annuity, life insurance policy, inheritance, royalties, cell tower leases, copyrights, patents or even a pension that results in periodic payments. Unlike mortgage programs, loans and home loan modification there are no income requirements or credit checks because selling your future payments isn’t a loan. There is no affect to your credit score and you can’t default. You do not have to pay any of the money back either.
According to John Zepeda at Rescue Capital, "As a result of unemployment, we are seeing many people who have fallen behind on all their bills including their mortgage. Luckily, they can use a portion of their future payments to get the money they need to avoid foreclosure without incurring more debt."
Sometimes people are unsure if their asset is something they can sell. Zepeda stated, “Rescue Capital speaks to individuals that are unaware that their asset can be sold on the secondary market. We evaluate the asset, determine its value and provide a free no-obligation quote to anyone who calls us”.
Many individuals think that they have to sell all their payments and have never heard about the other options available to them such as deferment. You can defer selling your payments for several years, which allows you to get the cash now but your periodic payments won’t be reduced until later.
According to Rescue Capital, COO Maureen Healy, “Sometimes you need a small amount of money to get back on your feet such as money to move or start a business. Deferment makes a lot of sense for those individuals.” To get your free no-obligation quote as well as more information about the entire process, call Rescue Capital today at 866.688.3532.
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