On this episode of How to Money, Joel and Matt give us some great information about knowing our rights when it comes to debt collection; then they welcome on Scott Keyes from ScottsCheapFlights.com to share some tips about flight cancellation, travel insurance, and whether or not it’s really safe to fly right now. Even though unemployment is still sky-high and more jobs are disappearing permanently, debt collection agencies have gotten emboldened lately, stepping up the volume of calls to borrowers and causing a lot of stress and worry for them. Matt and Joel explain that often, these collection agencies will encourage you to pay just a small amount toward your debt to get them off your back. But what you may not know is that in most states, there’s a statute of limitations on how long collections agencies can attempt to collect on a debt. If you pay any amount toward your loan, it can restart the clock on that statute, enabling the collections agencies to sue you in court for the debt amount.
The Consumer Financial Protection Bureau (CFPB) have proposed a rule that consumers should be notified about the debt collection clock, but unfortunately it’s not a law yet. But you do have existing rights you can exercise to get those calls to stop. First, send a letter to the collections agency telling them to stop harassing you. If they continue, you can file a complaint with the CFPB and your state’s attorney general’s office so they can fight on your behalf. The guys also caution against getting a payday loan, “probably the worst financial product ever,” which offers small loans against your paycheck that have astronomically high interest rates – sometimes as high as 500%. They seem deceptively easy to pay off, because they aren’t for huge amounts, but because of the interest, they can trap you in a debt cycle that becomes impossible to break free from. The guys’ advice? Avoid them at all costs.
Speaking of knowing your rights, they ask Scott to explain important information about cancelled or rescheduled flights. Many people don’t realize that if a flight is cancelled, or rescheduled by more than two hours, by the airline, you’re eligible for a full refund. Airlines don’t tell you this – they typically offer a voucher instead. But as Scott points out, you can’t buy groceries with a travel voucher. If you get any pushback from the airline, you can file a complaint with the Department of Transportation, or dispute the charge on your credit card. Then, your credit card company will fight with the airline instead of you – you’ll just get your money back. This is another great reason to purchase flights with a good credit card instead of with debit cards or cash – there are often great protections in place for travellers, depending on the company, to compensate you for cancellations, misplaced or lost bags, or medical evacuations. Listen to the episode for more about how safe it is to fly right now, where the best deals are found, what the simplified rules around PPP loans mean for your small business, and much more on How To Money.
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