Scare tactics prove fruitful against devious lenders

Dear Bruce: I am a 75-year-old female with no debt. I pay my credit cards at the end of every month. About five years ago, I bought a home and paid cash for it. I needed a small loan to tide me over until the funds from the sale of my old home were available. I arranged for a home equity loan on my new home, which I paid off in about three months. I asked the lender to close the equity loan account at that time. However, they kept it open and in addition have charged me $45 a year to do so. Now they have started to charge me interest on this balance.

I have telephoned them and written to them as well and have told them to close this account, but they refuse to do so since there is a “balance” on the account. I do not feel that this is my responsibility, since I have repeatedly requested that they close this account. What shall I do? Can they start foreclosure proceedings on my home? – D.R., via e-mail

Dear D.R.: Let me share a secret that lenders, banks, savings and loans, credit unions, etc., would much prefer to keep secret: Organizations like the Federal Deposit Insurance Corp., Federal Reserve banks, and state banking regulators take very seriously complaints of this nature. You might wish to write a one- or two-line letter to this lender saying that unless this matter is cleared up you will bring it to the attention of the appropriate authorities, including the ones that I have mentioned. I think you’ll find that this will get them off-center. If it doesn’t, a well-written (not telephone) complaint to the FDIC and other regulatory agencies involved almost always will get results. Lenders like yours deserve to get their knuckles rapped.

Dear Bruce: We have found out that we are receiving a very large legacy in seven figures. The most money I’ve ever had at one time in my entire life is $20,000, and that was after a struggle. It’s a wonderful thing. We didn’t know that the person who left it to us had anything like this kind of money or that we would be a beneficiary, but it’s been investigated and that’s what we are getting. The question is where do we go from here? Already we are being pestered by people that want to tell us how, where and what to invest in. We’ve never had to think about investing but we surely do now. Can you help us please? – R.T., via e-mail

Dear R.T.: You’ve got a problem that a lot of people would like to have. I hope you will consider nothing dramatic at the outset. You won’t make as much money in buying government bonds or Treasury bills, but they are safe. The reality is that you, your spouse or both are going to have to get an education with regard to money. There is language to be learned. There are things that you will have to understand. Otherwise you’ll be a sheep waiting to be sheared. Community college courses, financial magazines and newspapers, and programs and columns such as mine all can contribute to your knowledge. You have to make a concentrated dedicated effort. There is no other way. Yes, you can hire financial advisers, but the question there is how do you even know what they are talking about unless you do what I’ve described. Six months to a year of extremely conservative investing and educating will bode well for you.

Dear Bruce: Later this month I am flying to the West Coast and returning 25 days later on the same airline. That major airline has filed for Chapter 11 bankruptcy. I’m wondering if they are going to be around to fly me back. Do you think I have much to worry about? – R.C., via e-mail

Dear R.C.: I don’t think you have anything to worry about. Lots of airlines have gone through bankruptcy and come out. Many of the major airlines are teetering on Chapter 11 bankruptcy. In most cases, even if they do go completely belly up, as was the case with Eastern Airlines, other airlines will honor their tickets.

Furthermore, if you charged the ticket on your credit card, you would have redress from the credit card company. The reality is that many airlines will be either entering or threatening to enter bankruptcy. That would not dissuade me from flying with them.

Dear Bruce: I know you are a dog lover. I only have one dog, but I can’t find anybody that will sell me a homeowner’s policy on the house that I’m trying to buy. The reason is my dog – which is cuddly, lovable and has never hurt anybody – is a Rottweiler. The insurance companies’ position is that this breed of dog is dangerous, and if they’re in the house, they will not issue liability insurance. What can I do? – T.C., via e-mail

Dear T.C.: I don’t know. There are certain breeds, and Rottweilers are one of them, that have earned a bad reputation. That doesn’t mean that all of them are bad. It’s my contention that in most cases it’s irresponsible owners, not vicious dogs, that are the problem. This notwithstanding, the underwriter takes one look and sees a pit bull or Rottweiler and says it’s not worth the risk for liability insurance. I doubt seriously that even if you were to volunteer to have a dog exclusion that they will write the policy. You might write to the American Kennel Association and see if they can be of some value as an information source. I invite my readers to contact me too.

Bruce Williams is a national radio talk show host and syndicated columnist.