Safe Online Shopping

The monthly newsletter of
Sheila Freeman Consulting

Issue 9, August 2003


In this Issue:	From our Quote Collection: "When wealth is lost, nothing is lost; when health is lost, something is lost; when character is lost, all is lost." - Billy Graham "A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain." - Robert Frost "With money in your pocket, you are wise and you are handsome and you sing well too." - Yiddish Proverb "Money can't buy you happiness, but it does bring you a more pleasant form of misery." - Spike Milligan
Welcome to the latest issue of "Smart Money". This month we have important information on what to watch for if you shop online and tips on how to compare home loan offerings. If you're a Coles/Myer customer who didn't get their promised "12 months interest free" we show you what to do about it. Have you received emails about massive Lottery wins or contact from widows or business people trying to get money out of Africa? Or perhaps you've been asked to re-enter internet banking information into Westpac's "secure" site. If so, you are one of thousands of people who have been approached by scam artists. We have a growing gallery of Internet Scams on our website. You owe it to yourself to check out the scam files. Warm regards Sheila Freeman Email me
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Safe Online Purchasing
E-commerce – the buying and selling of goods and services online - has increased enormously in recent years. Buying items from services such as eBay, online travel companies or bookstores has become commonplace for many. While most online vendors have policies to ensure that transactions are secure, there are less legitimate vendors, and purchasing goods in this way involves risk – of the goods never arriving, of credit card fraud, and so on. You should never take security for granted, whether your transaction is face-to-face or online. Below are some suggestions for safe online shopping: Always choose "secure" Web sites, i.e. one that displays a small lock icon in the bottom pane of your Web browser window, or one where the URL is displayed in your browser's address bar starts with "https". Where possible, stick to web sites owned by established vendors. Especially cautious buyers may prefer to buy only from vendors with shops or branches in their state, so there is a place to contact if problems arise with the online order. Explore the site for signs of a trustworthy vendor. Does it have a published security and privacy policy? Is there a money-back guarantee? Does the site publicise valid email, telephone and fax contact details, as well as a physical location? (These are not conclusive, of course, as you cannot assess a vendor's reliability by the appearance of the web site; an honest vendor may not be able to afford a glossy web site, while a dubious vendor may have a very impressive site.) Check that there are no "hidden" costs (such as freight or sales tax) before you buy. Always calculate the cost in your local currency. Many online vendors are based in the US or bill in US dollars. Some will convert the payment amount at the time of purchase and charge you in your own currency, but most will simply charge you in their currency, putting you at risk of any currency fluctuations between the time of purchase and the time the amount is billed to you by your credit card provider. Also, check with your bank, as some impose an additional fee for handling a foreign currency transaction. You should also check your credit card statement when it arrives, and raise any discrepancies with your bank sooner rather than later.
Home Loans
(a) ‘Low-doc’ loans Have you had trouble obtaining a home loan because you cannot provide proof of income, for example, because you are self-employed or a casual worker? It has always amazed me that financial institutions reject loan applications from workers with irregular incomes, even though they may be paying rent (often an amount equal to or more than the proposed mortgage repayments), have a good credit rating, and the capacity to repay the loan. Well, it seems that, at last, mortgage providers have ‘seen the light’, with the Melbourne Credit Union (MCU) joining the ranks of providers offering ‘low-doc’ loans. Decisions will be made on a case by case basis, instead of the applicant having to fit into a pre-set mould. With regard to home loans, always remember to shop around for the best deal, and if you find it, let us know! (b) Comparison Rates When trying to work out the cost of a loan in order to compare it to others, most people simply look at the interest rate. While the interest rate is a major component, you should also take into account other costs that will impact on a loan over the full term. Costs such as up-front charges and ongoing fees vary between loans and lenders, and can obscure the full cost of a loan. New legislation effective from 1st July, 2003, requires lenders to display the Comparison Rate when advertising. The Comparison Rate is calculated based on an average loan amount and loan term relevant to the advertised product, and takes into consideration all costs associated with setting up a loan, including the interest rate, the loan approval fee and any other up-front or ongoing fees (government fees and charges are not included because they are standard across all loans). Thus Comparison Rates reveal the full cost of a loan, allowing potential borrowers to compare the products offered by different lenders.
Attention - Coles/Myer Customers
From 1-19 August, 2002, Myer, Grace Bros and Megamart had a promotion: if you spent $500 or more in one transaction on furniture or electrical appliances, you were entitled to 12 months interest free on that purchase. It seems there was a ‘glitch’ and many customers did not receive the 12 months interest free. If you made a purchase of that amount or more during that time from one of those stores, check your statement. If you were entitled to that interest-free period and did not receive it, telephone 1300-369-340.
Disclaimer
Every effort has been made to ensure that the information on this newsletter is accurate. However, the information is not intended as professional advice and the authors shall have neither liability nor responsibility to any person or entity with respect to any loss or damages arising from the information contained in this newsletter.
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Copyright 2003 Sheila Freeman Consulting