Queens Legal Services

To get help with a consumer problem, call our hotline at 347-592-2181 any Wednesday from 2:30 to 4:30 pm.

The Queens Legal Services Consumer Law Unit answers clients' questions about various issues, offers training on consumer debt issues, and represents some clients in resolving disputes. The information here may help you yourself determine whether you need an advocate. We also refer you to other websites where you can learn more about various issues.

The materials below were compiled by Queens Legal Services attorneys, who work in the office's Consumer Unit.

Topics covered below are:

• What to consider before signing a contract
• Avoiding sleazy sales tactics
• Being a careful consumer
• Avoiding home-improvement scams
• Watching out for predatory lenders
• Starting a case in Small Claims court
• Defending yourself in Civil or Small Claims Court

What to Consider before Signing a Contract

Here are some basic rules to remember before you sign a contract agreeing to purchase goods or services:

1. Shop around. Compare the prices and services agreements offered by more than one merchant. If the sales person you are dealing with is using high pressure tactics, such as claiming that a sale ends in just a few hours or that this is a once-in-a-lifetime deal, be suspicious. Don't fall for high pressure sales tactics.

2. Never sign a contract that you can't read or don't understand. If English is not your first language and a seller has been speaking to you in your language, ask for a contract in your language. If this is not available, ask someone you trust to review it with you and translate it for you. Don't trust someone simply because he or she comes from your country or speaks your language-there are good and bad people from ALL countries.

3. Be sure that you understand all the sections of the contract. As you read through each section, ask yourself, "what am I agreeing to do?" and "what is the seller agreeing to do?" Make sure you understand.

4. Don't sign a contract with blanks that are not filled in. Make sure all blanks are filled in or cross them out yourself.

5. Be sure that all the important terms are written down clearly. If you are buying a product, you should know what the basic price is, how many payments you will have to make, what interest rate you will pay, and the total cost to you of the purchase. Make sure you understand and want to agree to any penalties written into the contract-some contracts allow the seller to collect high fees for late payment or to raise the interest rate if you miss a payment. If you are buying a service (such as home repairs), make sure you know who will be paying for the supplies necessary to complete the job and If the job will be completed. If you are signing a contract to purchase services in the future, such as a contract for a cell phone or to join a gymnasium or health club, make sure that the contract tells you how to cancel the service in the future.

6. Make sure all the seller's promises are written down in the contract. If a promise is important to you, make sure it's in writing and that it says exactly what the salesperson is saying. For example: Sellers will sometimes talk about a "money-back guarantee if you are not satisfied" but the written contract will provide for only a store credit if you return the merchandise.

7. Get and keep a copy of the contract. Make sure that you get a copy when you sign it, and make sure that your copy is readable-if your copy is a carbon and you can't make out all the terms, ask the seller to make a photocopy of the original for you or ask him or her to start over, using a new blank form and press harder, so that your carbon is clear.

8. Understand your rights to cancel the contract. The contract itself may have a cancellation clause. If so, read it and be sure you understand it. If a salesperson solicited you in your home and you signed the contract in your home, you automatically have three days to cancel the contract.

Some shady sellers will back -date a contract, to try to shorten or eliminate your cancellation rights. Make sure that any places on the contract where the date appears actually show the correct date.

Most business people you deal with are honest men and women, just making a living, but there are some folks out there who want to take unfair advantage of you -don't let them.

1. Don't fall for Bait-and-Switch. If you came to a store because the store advertised a $199 air conditioner, be firm about examining that $199 air conditioner. Don't let the sales person lead you immediately to a $400 air conditioner. (Of course, once you see the lower priced product and the higher priced product, you may decide you want to buy the higher-priced one, because it has better features, but that's for YOU to decide.)

2. Don't fall for appeals to your gender. race or ethnicity. Sleazy sales people are masters at manipulating buyers by playing to their natural pride in their homeland or to their prejudices. If a seller tells you anything like, "Those cheap products over there, well, only a _____ would be dumb enough to buy one of those-we have the quality stuff over here for someone like you," be on alert-you are about to hear a sales pitch of questionable truthfulness. Also, be aware that another salesperson is probably at that very moment saying the same thing to another customer, only he or she is making fun of YOUR gender, race or ethnicity. Consider shopping at another store.

3. Don't fall for false flattery. If a salesperson is telling you that a smart person like you doesn't want to buy a piece of junk like the product you are examining, again, you are about to hear a tale that may not be truthful. Ask the salesperson why a great store like this stocks and sells such shoddy products.

4. Don't fall for "My Boss Won't Let Me" Some salespeople will hide behind "store policy" for not offering you something you want. If the person you are dealing with tells you that his or her boss won't allow a written cash-back guarantee or won't let customers try on clothing or whatever, ask to talk to the boss. If the salesperson reports that the boss is out, ask when the boss will return. Be persistent. If you don't get a chance to talk to the boss, consider shopping elsewhere.

5. Take time to think about a big purchase. Salespeople, naturally, want to sell. All of them want to sell today rather than tomorrow and will push you a bit for a decision. However, a merchant with a quality product should not be too upset if you decide to think about the purchase overnight or bring in a family member to see the product. If a salesperson is pushing you to decide NOW, ask yourself why. Better yet, ask he salesperson. Be very suspicious of "once-in-a-lifetime" deals that force you to sign up immediately.

6. When a deal sounds too good to be true. it probably ISN'T true. All of us exaggerate, but if the salesperson tells you that the $19.99 bottle of vitamin supplements will raise your child's I.Q in a week, or that the $12.00 box of tea bags will allow you to lose 100 pounds in 100 days or re-grow a full head of hair in a month, be on alert. Miracles do happen, but be very suspicious of any amazing promises.

1. Keep the contracts and warranties for anything you buy or lease in a safe place where you can find them. If a product has a mail-in warranty, read it, fill it out, and mail it in, but keep a copy for yourself.

2.  When complaining, do it in writing. Keep copies of your letters of complaint.

3. If you want to be able to prove for sure that you mailed something, send it by certified mail and request a return receipt. This costs additional money (approximately $4.50—check with the post office for the exact amount.)

4. Examine your bills as soon as they arrive (even if you know you can't pay them right away). There may be a time limit to dispute certain charges on credit cards or phone bills or the like.

5. When disputing a bill, do it in writing. Keep copies of all your letters. Read the material your creditor sends you, because the address where you mail your payments may be different from the address to which you should direct a letter disputing a bill.

Naturally, if you own your own home, you will sometimes need to hire someone to make repairs. Here are some guidelines for avoiding future legal problems or becoming the victim of a con artist.

1. Make repairs on your schedule. not someone else's. Be suspicious of someone who knocks on your door to tell you that he or she has "noticed" a serious problem with some aspect of your house that should be fixed immediately. [Conveniently, such a person will claim to have all the equipment to fix it in his or her truck at that very moment, and may try to thrust a contract under your nose right then.] Also be suspicious of a business person who approaches you offering to make a free [or very low-cost] inspection of some portion of your house and during this "free inspection," discovers a problem that must be fixed right away. Trust your instincts and your own intelligence: if you've never noticed a dangerously leaning chimney, it's unlikely that your roof is going to cave in this week if it is not fixed. It is especially important in the area of home repair to take some time to shop around and get more than one estimate before agreeing to an expensive job.

2. Make sure that the business you are dealing with is both able to and licensed to do the work. Before agreeing to a major repair, check out the contractor with both the City Department of Consumer Affairs and the Better Business Bureau. Ask the business for references and call those references. If you are hiring someone to do work that is visible (painting your house, redoing your driveway, putting on siding), ask for the addresses of other houses the business has worked on and go look at them. Ask how long the business has been in operation. Ask if the business is insured.

3. Do not arrange the financing of a home repair with the person who is offering to make that repair. All of the alarm bells should be ringing in your head if the person who is offering to make your home repair is also offering to help you arrange financing Go to a reputable bank or credit union to secure a loan, if that's necessary. [An exception to this rule governs an established not-for-profit organization whose purpose is helping low-income homeowners make repairs. Even with such an organization, proceed cautiously.] Never take out a loan and have the money go directly to the contractor making repairs.

Even a very modest home here in New York City is generally worth at least a hundred thousand dollars and often much more. There are outright criminals and sleazy business people out there who see your home as their opportunity to get rich quick. Don't let them!

The section above discusses one sort of scam: financing arranged through a home improvement contractor. Another time when home owners are vulnerable to con artists is when the homeowner has fallen behind in mortgage payments or in taxes. You should be concerned about falling behind on your mortgage, but realize that mortgage foreclosure is a very s-l-o-w legal process, something that occurs over many months, not over several days: you may need to take steps to avoid foreclosure, but don't let yourself be rushed into anything.

1. If you are considering using your home as collateral to borrow money, shop around.

Talk to several commercial banks and credit unions. Wa1k away if a lender tells you that you have "no other option." Don't allow yourself to be pressured.

2.  Do not agree to make monthly payments you know you cannot afford.

3. Never allow someone to put false information on your loan application. Sometimes shady lenders will write on the application that you have income or savings that you do not have, in order to get you into a loan that you will not be able to re-pay. Do not sign such an application.

4. As with any important contract, read and understand the documents before you sign them. Ask for copies in advance, so that you can review them. Consider reviewing them with a lawyer. Never sign a contract with blank spaces not yet filled in.

5. Avoid a loan that has extremely high closing costs (upfront costs to borrow the money) or a balloon payment (a big payment due in a few years). Make sure you understand the interest rates and any late-payment penalties.

6. Never give your power of attorney (a legal document allowing someone else to act for you) to someone unless that person is a trusted family member or a long-standing friend whom you trust. Never, ever give your power of attorney to a mortgage broker to arrange a loan for you.

Starting a Case in Small Claims Court

The Small Claims section of the New York Civil Court is designed to make it reasonably easy for a person who does not have an attorney to resolve small disputes up to $5,000. In Small Claims Court, you can collect only money damages-the court has no power to order anything else. Also, in this court, you can sue only New York residents or businesses operating in New York.

To start a case in small claims court, go to the courthouse at 89-17 Sutphin Boulevard, where you will give a clerk the name and address of the person or corporation you want to bring to court to sue and a description of the facts about your claim. There is a fee of $15.00 for a claim of up to $1000 or $20.00 for a claim over $1000.

Unlike in other courts, you do not have to serve court papers on the person you are suing. Instead, the court itself mails notice to the defendant. The clerk will tell you when to return to court for your trial. On the day of your trial, bring all your proof to court: bills, receipts, pictures, even physical things (such as the jacket the dry cleaner ruined). Also, you can bring witnesses who know facts about the dispute you have with the defendant. Other resources to look at in preparing for small claims court include "A Guide to Small Claims Court," a booklet the clerk will give you if you ask for it when you file your case in court.

There are a few important things to remember about being a defendant in a case where someone is seeking money damages from you.

• First, don't default.
• Second, S-L-O-W the process down.
• Third, don't agree to something that is worse than the worst that could happen after trial.
• Fourth, if you are going to go to trial, be prepared.

What does that mean in practice?

1. Don't default in answering, if this case was brought in civil court. In civil court, you must file a written answer. (In small claims court, you need not file a written answer.)

When to answer: within 20 days if served personally within 30 days if mailed

Your answer should raise any defenses you have:
Procedural defenses

You were not properly served
You were too young to sign a contract
The debt is more than six years old

The debt has been discharged in bankruptcy

Substantive defenses

• You are not the person who owes the money claimed. (Confusion/fraud)
• You did owe the money, but you have already paid it.
• You dispute the claim, because
• You were the subject of a deceptive practice
• You never ordered the goods sent to you
• You never received the goods
• You received only part of the goods
• You received defective goods
• What you received was not in the condition advertised/promised
• You cancelled the agreement
• The business suing you is not licensed, though required to be Counterclaims

2. Don't default in going to court

Some basics about court: Arrive on time; dress respectfully; turn off your cell phone and beeper; don't eat, drink, smoke, or chew gum in the courtroom; treat the people in the courthouse with civility. Don't give anyone the impression that you are physically dangerous.

Court dates are not optional.
What to do if you must miss court.

3.  Don't default in answering papers that are sent to you.
          Motion for summary judgment
          Discovery requests

You may have had a good reason for missing a court date. One of the most compelling reasons for missing a court date is that you had NO IDEA that there was a case brought against you, possibly because you never received the papers.

You may learn about a judgment against you when your bank account is seized or part of your wages are taken. You should receive some document telling you what the name of the case is. Go to the court and ask the clerk to allow you to fill out an "order to show cause."

Whether you defaulted because you didn't know about the case or because you had a very good reason for missing court, you need to open the default by seeking an order to show cause.

You need to show two things in your order to show cause:

(1) excusable default/ why you didn't go to court before
Examples: you didn't receive the court papers
You didn't understand the papers
A family member told you that s/he would handle it
The creditor told you it was okay to ignore the court papers

(2) meritorious defense/ why you do not owe all the money that the creditor claims you owe

For examples, see the items listed above under "answer"

If you are the defendant, this usually means that the plaintiff wants a money judgment against you. If you are in small claims or civil court, the money judgment is not for a huge amount of money. Usually, the plaintiff has a lawyer or lawyers who are being paid, sometimes by the hour and sometimes by the court appearance. Usually, there is no way that the plaintiff will be able to make you pay his or her legal fees. Moral of this story? The plaintiff will want to wrap this up QUICKLY , spending as little lawyer-time as possible on this case. The more you can slow everything down, the better the settlement offer will be.

If you are anxious about missing work and also want to settle quickly, try to hide this fact. Pretend that you have A-L-L the time in the world, that you find the courtroom endlessly fascinating and would like to spend days, even weeks, there.

Generally, this means not jumping at the plaintiff's first offer. If the plaintiff has sued you for $5,000 and offers to settle for $4,000, s/he will come down. Hang in there. Ask for proof of the claim against you. Ask for details. Ask for an extended pay-out. Ask for whatever terms seem reasonable to you.

You may be judgment proof. If you do not own your home or apartment, if you don't have a car or other assets (stocks, a bank account) and if your income is "exempt", you are probably currently "judgment proof." Exempt income is income that creditors cannot seize: Social Security, SSI, pension income, unemployment income, public assistance, alimony, child support, or veterans' benefits. Nor can they seize a bank account with only exempt funds in it.

If you have work income, a creditor with a judgment can take 10% of your work income, but must always leave you at least the exempt amount. The exempt amount is the federal minimum wage times 30 per week. The minimum wage will br $6.55 starting July 24, 2008 and will rise to $7.25 in July of 2009. Example: if you have an income of $200/week, normally a creditor could take 10% or $20; however, the creditor cannot touch the first $196.50 and could take only $3.50 per week from you. In making a settlement, consider this.

However, also consider this: you may not be judgment-proof in the future. Judgments last for 20 years, and they build interest at 9%. Also, you may be forced to pay the costs of collecting a judgment from you.

Assuming that you don't default, there will be a trial date.

Is the claim based on a written agreement? Read it carefully. Don't rely on the attorney for the plaintiff to tell you what it says. Bring the original and copies

Is your defense based in whole or in part on a payment you made? Bring proof, if you have it. (Receipt, cancelled check, credit card statement, money order stub)

Are you defending or counterclaiming because the plaintiff damaged something of yours or failed to fix it, as promised? Bring damaged object if possible, or pictures of it

Do you have estimates of the cost of repairing your damaged possession? Bring three estimates, written on the letterhead of the business offering the estimate and signed by the business person.

Bring your correspondence about the subject.

Bring witnesses. Subpoenas, the pluses and minuses: You can ask the court to help you issue a subpoena for a witness. However, ask yourself-is a person who is forced by the court to attend going to give me helpful testimony? Generally, if testimony is not voluntary, it may not be too useful. On the other hand, if a friend needs a subpoena to show to a boss to get out of work, then, sure, go ahead and subpoena the person. You will have to go to court before the day of your hearing and talk to the clerk there to get the subpoena.

Practice telling your side of the events: tell a neighbor or relative who is unfamiliar with the dispute and ask for feedback. Practice again with a new "audience"

In rehearsing your side of the events, remember that the court is a busy place. You want to tell all the important facts, and you want to tell them in an organized way.

Adjournments: Even though you or the creditor may have had adjournments in the past, if your case is marked for trial, or marked "final," you may not be able to get another adjournment. Assume that you will have to proceed to trial. Nonetheless, if you have a very good reason for an adjournment (you are sick, your witness is sick, there is a family funeral, etc), you can always ask, but be prepared for a negative reply.

Choosing to stick with a judge or allow arbitration (Applies to small claims cases)

You cannot go to arbitration if either party is a minor or an incompetent. Assuming that's not the case, you will be asked if you want a judge or an arbitrator. You have an absolute right to wait until a judge can hear your case. If you do this, your case will probably be adjourned at least two times. Only you know whether this delay (and the need to come back to court again and again) is good or bad for you. If you have the time to continue going back to court, the delay probably pressures the other side into offering you a better settlement; however, if you are missing work to attend court, it may make sense to agree to arbitration. The decision of an arbitrator is NOT APPEALABLE. A judge's decision is appealable, but this should not be a big factor in your thoughts, because an appeal is expensive and difficult to do without an attorney.

Who can speak for the defendant business? An attorney, an officer, a director, or an employee can represent a business in small claims court.

Presenting your defense or counter-claim: organization is key. Tell your side of the story, including all the relevant details. Present your evidence. Ask questions of the other party and its witnesses.