Are you a new home owner in the area? Has a salesman come up to your door and tried to sell you a water treatment system? Buyer be ware.
If you purchase a system in this manner, it is possible you may wind up with a lien being placed on your house without your knowledge or consent. Consumers should be especially wary of such sales, since military legal assistance offices and state consumer
protection agencies have received several complaints concerning this home solicitation near military installations.
The sales pitch generally begins with a claim that there is some problem with the water. There may be some type of test, purportedly demonstrating that the water is harmful. The water treatment system may cost anywhere from about $5,000 to about $7,500 and will be financed with a high interest loan and monthly payments.
The financing contract will not provide any information
concerning the number of payments, the total cost of financing, or the total cost of the sale after all of the payments have been made. These finance cost items are required to be disclosed for closedended credit under the Truth in Lending Act (15 USC 1601) and the implementing rule, Regulation Z (12 CFR 226).
For example, when you purchase a motor vehicle on credit or obtain a personal loan, this important information will generally be conspicuously disclosed in the so called “TILA box” in the contract,
a little graph containing these cost elements.
However, contracts for financing some of these water systems are designed as open ended or “revolving” credit, similar to that extended with a credit card and therefore avoid these disclosures. Accordingly, the consumer has no idea how much the deal will ultimately cost … and it will be far, far more than the price of the water system. In fact, consumers report receiving monthly statements
indicating that the majority of each payment goes to pay interest rather than principal, and that hardly a dent is made in the principal debt despite years of payments.
Make sure you understand the agreement and what you will owe. Do your research. Is there really a problem with the water in your area? Is this the best deal on a filtration system or can you get a different company with a lower interest rate, etc.?
Consumers should also be aware that the Federal Trade Commission’s trade regulation rule concerning home solicitation sales (16 CFR 429) applies.
When an item costing $25 or more
is sold at the consumer’s home (or at a place rented on a short term basis by the seller), the buyer has until midnight on the third business day after the sale to cancel and obtain a full refund. The seller is required to notify the buyer of this right, verbally and in writing, providing two copies of the cancellation form and instructions on how to
The rule does not cover sales in which the buyer has initiated contact and specifically requested the seller to visit the buyer’s home for the purpose of repairing or performing maintenance on the buyer’s property.
However, if the seller sells the right to receive additional services or goods, the sale of those additional goods or services is
Consumers are urged to contact the XVIII Airborne Corps and Fort Bragg Legal Assistance Office or make appropriate complaints online to the Consumer Finance Protection Bureau, to the Federal Trade Commission Military Sentinel and to the consumer protection office of your state’s attorney general.
XVIII Airborne Corps and Fort Bragg Legal Assistance Office
First floor of Soldier Support Center in Wing D.
Monday, Tuesday, and Friday from 9 a.m. to 4:30 p.m.; Wednesday from 1 to 4:30 p.m.; Thursday from 7:30 a.m. to 4:30 p.m.
396-0396 or 396-6113