Harassing calls from debt collectors have become a way of life for many as the U.S. economy has faltered and unemployment soared. Debt collection is big business: About $40 billion each year is recovered from consumers by collectors, according to the International Association of Credit and Collection Professionals. With so much money at stake, aggressive tactics – and outright harassment - are common. Last year, the Federal Trade Commission received 78,000 complaints about debt collectors.

In one FTC complaint I've read, a consumer describes this harrowing episode. He was threatened by a collector over a $600 medical bill that he couldn't pay. Out of spite, the collector managed to break the debt up into nine $70 unpaid bill, just so the consumer would get nine separate dings on his credit report.

But you don't have to put up with dirty tricks. Put one phrase in one letter, and you can stop the harassing calls and interruptions. The beginning of the end of a debt nightmare is to get debt collectors off your back. Here's how.

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When collection agencies call, they can be rude, threatening, and manipulative. But you have the law on your side. The Fair Debt Collection Act has very clear rules about what debt collectors can and can't do. Naturally, collectors often don't follow the rules, so it's important that you know your rights. Don't let the collectors bully you: Even though you owe someone money, and even if you may feel inferior at the moment, you deserve to be treated with respect and integrity. And you are guaranteed protection under the law.

For example, debt collectors may not contact you "at inconvenient times and places, such as before 8 a.m. or after 9 p.m.," according to the Federal Trade Commission. If a collector harasses you by calling you late at night, you can sue for damages. Most will stop when they hear you merely mention the Fair Debt Collection Act.

Other things debt collectors can't do, according to the Federal Trade Commission's interpretation of The Fair Debt Collection Act:
• Use threats of violence or harm
• Publish a list of consumers who refuse to pay their debts (except to a credit bureau)
• Use obscene or profane language, or repeatedly use the telephone to annoy
• Use any false or misleading statements, such as imply that they are attorneys or government representatives, imply that you have committed a crime; hint that they work for a credit bureau, say you will be arrested if you don't pay the debt, or use a false name.

A full list of forbidden tactics is available at the FTC's Web site.

If a debt collector does any of these things, you can in sue in state or federal court and win $1,000 plus recover the cost of any damages you suffered, along with attorney's fees.

In fact, debt collectors must cease contact with you altogether if you send them a letter telling them to stop.

To get a debt collector off your back, write a letter specifically invoking the Fair Debt Collection Act's requirement that it stop contacting you. After that, the collector can only call you or write to you if it is communicating an intent to file a lawsuit or other specific legal action.

Remember, sending such a letter may stop the phone calls, but it does not erase the debt or in any way mean the end of the problem. It just gets the debt collectors off your back so you can start putting your life back together.

You can download a sample "get off my back" letter here.

More details on what can and can't be done by debt collectors are available at ExpertLaw.com

If you believe the debt that you're being harassed about is inaccurate, you should immediately dispute the debt with the collector via certified mail, and you should obtain a credit report for free at AnnualCreditReport.com. If the debt appears there, you should initiate a formal dispute process with the credit bureau that's reporting it. Sample dispute letters are also available here.

 
Here's one way to get a slice of all that bailout money that's being thrown around by the government: buy a car. U.S. automakers are desperately trying to stimulate demand, and there are remarkable rebates on some models. To list a few: Chevy Trailblazer and Dodge Magnum,$3,000; Ford F-350, $3,500 ; Hyundai Veracruz and Nissan Titan $4,000. GM is right now offering the mother of all rebates, at $5,000 off a Hummer.

But that's nothing, says Edmunds.com Consumer Advice Editor Philip Reed. A friend of his recently bought a Chrysler Town & Country minivan for $12,000 off MSRP, after all rebates, dealer incentives, and downright price slashing occurred.

"You can get outstanding deals," Reed says. "If you need a car, and you are secure in your job and have the money, then yes, this is a great time to buy a car."

Of course, you might notice something in common about all those cars I've just mentioned: none of them would be mistaken for a Toyota Prius at the gas pump. In other words, huge rebates are available on cars few people want.

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But don't let that deter you. The automobile industry is under intense economic pressure now, and that means consumers have serious bargaining power. Dealerships are facing their own cash crunch and need to get rid of inventory even more than usual. That means they are willing to share their secret "dealer cash" – incentives they get from automakers - with buyers just to get cars off the lot. Meanwhile, even some smaller, foreign car models have usually high rebates. Nissan is offering $2,250 off Sentra, for example.

"At this time you might as well ask for the stars and the moon," says Jonathan Linkov, managing editor for automobiles at Consumer Reports. "You will at least get a star or two."

It all adds up to this: If you have the money, it's a fantastic time to buy a new car. It's so good that if you've never been the type to buy a brand new car, now might be the time to start.

There are reasons to be anxious about buying a new car. What if the manufacturer disappears? Both Reed and Linkov think that it's very unlikely for an automaker to go under so completely that it wouldn't be able to honor warranties. It's more likely that individual brands – like Saturn - will be shut down, with warrantee coverage sliding to other brands. Parts supplies shouldn't be a problem either, given the similarity of engineering among cars, and the availability of aftermarket parts. But consumers who cherish the convenience of having repair work done by a nearby dealer should think twice before pulling the trigger. There are no guarantees that dealership will be in business three years from now.

Still, the deals are so aggressive, anyone who's considering a car purchase should really test the new-car market. Before we get to the down-and-dirty details you need to protect yourself from the shark-infested waters of showroom, here's a few basics on how to save money.

Don't buy a new car!
Of course, the easiest way to save money is not to buy a car. The economic downturn has reversed a lot of financial equations for consumers, like the old "time is money" axiom. Perhaps two years ago, $35 for an oil change might sound like a bargain. Today, it might sound like a waste when you can do it yourself for $10 and an hour's time. If your economic situation has changed for the worse, you'll likely be joining the ranks of do-it-yourselfers who baby their cars and hold onto them longer. You won't be alone.

J.D. Power & Associates said in January that used cars traded in to dealerships were on average 6.3 years old - a half-year older than just two years ago. That means consumers are becoming a little more familiar with auto parts supply chains Pep Boys, and Schuck's, and that's probably a good thing. Many community colleges offer inexpensive classes on basic and intermediate auto repair. If you have found yourself with some unwanted free time thanks to a change in employment, learning how to perform tune-ups and other vehicle maintenance could be a great investment. The engine you save may be your own.

The second best way to save money buying a car is to buy someone else's car. Everyone knows the second you drive a new car off the lot, 20 percent of the value disappears in an instant, by some measures. This vicious depreciation leads some to believe that there is no way to get a good deal on a new car. U.S. consumers who aren't holding on to their old cars are more frequently opting to buy someone else's old car instead. Dealer sales of one-year-old cars have jumped from 11 percent of total sales to 16 percent in the past year, according to Edmunds.com. The auto research site also says 500,000 would-be new car buyers from December to February switched to used cars instead.

Now's a good time for new
This might be a penny-wise and pound-foolish decision, however. Every car deal is different. Because different models depreciate in different ways, it's impossible to give one-size-fits-all advice about the new vs. used car debate. Naturally, if your budget limits you to a $3,000 point-A-to-point-B car, then used cars are your answer. But if you were thinking of paying $10,000 or more, let me try to convince you to at least consider that new car smell.

We'll start with the obvious. Perhaps your new Ford will lose $3,500 when you drive it off the showroom floor, but if you're getting a $2,500 rebate, that gap has closed considerably.

Then there's the issue of market forces. Buying a new car and buying a used car are fundamentally different. Buying new is akin to shopping for a new television -- they're everywhere, they're easy to compare, and if someone buys the set you were about to pull off the rack, there's always another. And most important, price comparisons are part of the game. You can tell a salesman, "Hey, the guy across the street is charging $100 less on the exact same model," and you will likely get a discount.

Buying a used car, on the other hand, is more like shopping at an antique store. When you find that old Tiffany lamp, there's only one. If you don't buy it, it might be gone tomorrow. "Buying panic" is very likely to take hold of most consumers in this situation. Without question, the buyer has less leverage. It's normally impossible to play one antique dealer off another to get a better price.

That's how things work in the used car market. Sure, you can find similar models with similar odometer readings. But two used cars are always different -- one is more of a cream puff, one has obviously worn brake pedals that hint at aggressive use, one has a cigarette stain in the back seat, and so on. It's very hard to play dealers off each other, because by the time you travel to a competitor, the car you want really could be gone.

So when you shop for a used car, you are surrendering the most powering bargaining tool you have: competition. And nowadays, the Internet has really tipped the scales of comparison shopping towards consumers.

More than 10 years ago, I took a new car off the lot for a solo test drive, drove onto another dealer's lot, and parked next to another car I was considering to show how serious I was about comparison shopping. But driving around like that to multiple dealers would get exhausting very quickly, something economists call "search costs." High search costs prevent consumers from getting the best market price. The idea of haggling with seven different auto salesmen in seven different showrooms probably makes your stomach churn.

Nowadays, thanks to the Internet, you can do the same thing over e-mail, for virtually no search costs. The last time I purchased a car I got price quotes from dealers and e-mailed them to each other.
Experts agree that while Web sites and magazine research can give you a good idea of the price you should pay, a host of local factors mean there's really only one way to make sure you pay a fair price for your car, and that's to get price quotes from multiple dealers. Reed recommends asking for seven price quotes before visiting a dealership. Try doing that when shopping for a used car.

If ever there were a time to put the principles of market forces to work buying a car, it's now. The used car market simply doesn't offer the kinds of downward price pressure that the new car market does, thanks to competition, and our time offers unique leverage to car buyers.

How to buy new
Sadly, getting a price quote is only the beginning of the car buying process. You might not find that much variance in price, once you show the dealer you are a savvy buyer who's done Internet research. Dealers will recognize you and lure with a low price, then hope to cash in on your purchase by larding up your deal with extras and hidden fees.

"If you get seven quotes, you'll likely have five that cluster in the middle, one that's very high, and one that's very low," Reed said. Now you will have a good idea of the real market value of the car you seek.

The low price might seem tempting, but it should raise alarm bells. If you try to purchase from the outlier, you can bet that dealer will try to make up the difference somehow. Dealers often make more money in the meat grinder of the buying process -- at the financing desk, for example -- than they do on the actual purchase. So that's when your antenna should perk up. But even if you go with an average-priced dealer, there are many traps on the way from e-mail quote to your driveway. Here's how to survive the experience and get a good deal:

1.) Purify the negotiation
The most universal tip for saving money buying a car is to show up at the dealership with your own money -- buy the car with cash, or with a pre-arranged loan from your bank. The dealer will hate you, because they make money on those loans, but you don't care. A car purchase is already an incredibly complex transaction, and something you do only every five years or so; don't muck it up with another complex transaction like a loan. Paying "cash" will make your negotiations simple. You only haggle over the price of the car. From the moment you arrive until the moment you sign the contract, make sure all your focus is on the price of the car and not on any side deals, like loan interest rates or extended warranty discounts.

When you settle on a price, make sure it's the "out-the-door" price. Dealers know smart buyers are arriving with Internet printouts that claim to reveal "invoice" prices, and force them to offer rock-bottom sales prices. To counter, they tack on fees for marketing and other intangibles, or they over-charge for license and tags. Some of these fees are legitimate; just make sure you know what they are when you are negotiating and keep the conversation about your out-the-door price.

If you plan on trading in your vehicle, don't bring that up until you've established the price. Remember, you want to keep the conversation simple. If you combine trade-in value, financing, and price all in one conversation, you will give the dealer too many weapons for baiting and switching -- what the dealer giveth in trade-in they'll taketh in interest rate, for example. If you can, sell your trade-in privately. You'll always get a higher price, and Craigslist makes it easy.

This tip leads into another hard-and-fast rule for price negotiating: Never talk about monthly payments. always talk about the total price. Dealers win when you talk about monthly payments – burying hidden costs in those payments is their most common trick. Many consumers who think they're paying $369 a month for four years end up happily leaving the dealership paying $349 for five years, only to have an embarrassing conversation at a cocktail party six months later. This is the chief reason to show up with your own money or loan. When the sales rep says, "What can you afford per month," you say, "What's the total price of the car" and move on.

When price comparing, expand your local area. Reed recommends getting at least one quote from an entirely different metropolitan area -- if you live in DC, get at least one quote from Baltimore, for example. "The price differences can be enormous," he said, and fluctuations have been exaggerated in recent months because of the economic downturn. When a dealer goes bankrupt, for example, a flood of cars can hit the local market and impact prices. Now more than ever, it pays to expand your shopping region.

Finally, if you hear anything you don't like, you can employ the most important bargaining tool you have: walk out. Some people believe that if you haven't walked out of a dealership at least once, you haven't really bargained for your car. Keep in mind that if you're buying a new car, there will always be another one just like it somewhere else. And despite what the salesman says, the price you're getting is never only "good for today."

2. Give yourself time
This seems obvious, but it's not. Dealers brag about how fast they'll get you into a new car. You might be busy running back and forth to soccer practice. But buying a car is the second-biggest financial decision most people make, and it deserves sober reflection. Take at least a full weekend to shop and *not* buy. One helpful trick: Find out if a local dealership is closed on Sundays, or another day of the week, and walk the lot on that day so you can survey cars without being hassled.

3. Avoid extras
This sounds like point No. 1, but it's the most common error car buyers make, so it deserves separate mention. Reed's friend, who saved $12,000 on a Chrysler car, gave part of that savings back by buying a $2,000 extended warranty from the dealer. "The car's power train already had a lifetime warranty," he noted.

It's easy to get sucked into warranties. Sales reps just pack consumer loans with them. You might hear, "Oh, it's only $15 extra a month." Some dealers even hint – or lie – that they are required by banks. They're not, and they can be purchased separately. Extended warranty sales abuse has been so extreme that several states, such as Washington, have passed separate consumer laws that give buyers "regret" rights. Extended warranties bought at time of sale can be voided for seven days after purchase.
Other extras, like undercoating protection, are usually unnecessary and can turn a good deal bad very quickly.

4. Take the cash
Zero-interest loans sound like a deal that's too good to pass up. Often, you should. When offered the choice of rebate or low-interest financing, you should almost always take the cash. For starters, it gets you out of the car dealer's financing office, which helps you avoid the booby traps there. And generally, the math works in favor of applying the rebate to your down payment and using your bank loan instead. Bankrate.com offers a calculator to help you decide.

But generally, take the zero-interest deal only when you are borrowing a lot (more than $20,000) and the rebate is small.

5. It's OK to ask about dealer financing…at the end.
When you get through all the steps of negotiating, and have the final out the door price, it's worth asking the dealer if it can beat the financing deal you already have from your bank. Often, the dealer can offer a better rate. But before you even ask the question, make sure you know exactly what your payments and terms would be with your bank loan. Using that comparison is the best way to make sure you aren't missing some hidden cost that's shoved into your dealer loan

6. Take a friend
When the time comes for doing the deal, another pair of eyes really helps. It's impossible for a mere mortal to follow everything that's going on when you are sitting in those dealership back-rooms surrounded by the sales posse. Generally, at that point, the buyer is worn down and just wants to go home. It's very helpful to bring a dispassionate friend who can ask extra questions on your behalf and act as your own posse.

7.) Price isn't everything.
Finally, you don't always have to go with the absolute lowest price. Many shoppers get hung up on those last few pennies as a point of negotiating pride. That's silly, and can hurt in the long run. I'd happily pay $100 more to buy a car from a dealer I trusted, and who didn't make me miserable during the purchase process. There's a high likelihood that you will end up back at the dealership at some point in the first two years – to get a small repair, or to ask a question. At that point, you'll be glad you purchased from a good dealership.

If you're interested in a deeper look into the shady back-room dealings that happen at auto dealerships, read this spectacular account by Chandler Phillips, a reporter who was hired by Edmunds.com to work at a dealership and write about the experience. The epic take he produced should be required reading for anyone buying their first car.

Meanwhile, for a quick overview of the car buying process, a Youtube video called "How to Buy a Car and Not Get Screwed" is a cult favorite.

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How do you save on car buying? Leave your comment below or visit Newsvine and join the Red Tape Raiders.

If you're wondering why mobile phone carriers get away with imposing blatantly unfair policies, there's a simple reason: No one stops them.

If the carriers were to be stopped, the Federal Communications Commission would be doing the stopping.  But when a carrier is accused of misbehaving, the FCC has a simple procedure for adjudicating the claim: It simply asks the cell phone company if it's guilty.  When the answer is "no," the case is closed.

Imagine a world where judges simply ask defendants accused of stealing if they are guilty. The jails would be pretty empty. So it is with cell phone companies. I know this first-hand.  Let me share my story of an encounter with the FCC's kangaroo court after a deeply troubling incident of being billed for months after I'd closed my account.

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In December, I canceled my Sprint cell phone after several years of service. I had nothing against Sprint, but I had finished my contract, my handset had broken and I simply found a better deal.

I called on Dec. 4 to close my account.  The operator obliged me, but told me I owed $48.65 for my last month of service.  I questioned the amount, noting with some conviction that of course my final month would be discounted, as I would only have to pay through Dec. 4.

I was wrong.

My billing cycle ran through Dec. 15, I was told, and I had to pay through that day.  Never mind that I couldn't use Sprint's service during those 11 days.  I had to pay for them.

I protested and spoke to a manager.  She told me the same story. Last-month bills aren't prorated, I was told. That was "policy."
"How could this be?" I wondered aloud. Bills are prorated at the beginning of the contract,

why not the end?  When home phone service is canceled, the service is prorated.  And most important, how could a cell phone company force me to pay for something I wasn't using?

It turns out that all major carriers have the same policy. Let's call it the "kick-your-customer-out-the-door" policy.  This is the worst kind of gotcha transaction, because the consumer has absolutely no leverage at all.  In this case,

I can't bargain in good faith over the price of this "kick-you-out" fee.  What would I do, threaten to cancel my service?

Filing a complaint
I had only one possible recourse: complain to the authorities. After all, it's up to the FCC to make sure telecom companies operate on a fair playing field.  Just because a company says something is "policy" does not mean it's right. What if Sprint said I had to surrender $100, or $500, or my first-born child to quit the service? Surely, someone has the authority to step in and draw a line.

You might think me naive to imagine the FCC would help. But I was trying not to be cynical.  So I paid the outstanding bill to make sure nothing ended up on my credit report. Then on Dec. 5, I dutifully exercised my consumer rights by visiting the FCC Web site and filling out the online complaint form. I did not identify myself as a reporter. I simple wrote as a consumer who, after being treated poorly, was seeking redress.  I immediately received an e-mail indicating my complaint had been received.

Then I didn't hear anything else. A day, a week, a month went by. Still nothing.

On Jan, 13, I called the FCC to ask about its complaint process. In this case, I identified myself as a journalist.  Before the day was over, a high-ranking official from the FCC's Consumer Inquiries and Complaints Division called and talked to me on background.

He said most complaints were handled within 20 days, but conceded that "every once in a while, something can take a little longer."

But he assured me I was in the queue for what he called the FCC's "informal complaint process."  The agency would forward my complaint to Sprint and encourage Sprint to settle the matter with me directly.

First contact
On Jan. 30, I received an e-mail from an "analyst" in Sprint's Executive & Regulatory Services  department. She asked me to repeat my complaint. I replied to her e-mail explaining my situation, and got this deflating response.

"If services are terminated before the end of the billing cycle, we do not prorate monthly service charges. ... We regret that this may not have been explained to you; however, this information is provided in our Terms and Conditions of Service," her note said.

But that wasn't all.  There was also this troubling conclusion:

"In addition, based on my research, your account is currently in an active status and was not terminated.  If you would like to terminate your account, it will be necessary to speak with you directly."

Soon after, I received a new e-mail from Sprint: a bill for $104! The customer service agent who insisted that I pay $48 to close my account had never closed my account.

The Sprint analyst and I swapped e-mails for the next two weeks. She said I had to speak directly to her on the phone in order to cancel my account, but I was busy working and missed her calls. Then she didn't answer mine, and then she went on vacation for a week.

During this stretch, on Feb. 11, Sprint replied to the FCC with a simple message: "Please be advised that Sprint advertises and provides services in monthly increments. …The monthly charge is valid." The letter was signed by the analyst I'd been communicating with.  It said she had tried to contact me on "three different occasions" but was "unsuccessful."

At this point, unlike my first encounter with the FCC, the agency responded with incredibly efficient haste. Within two days, a follow-up letter was mailed.

And I opened it, I was hoping my government stood at the ready to fight for my rights. I hoped for a tough-as-nails reply. I was disappointed.

"The information in the company's response appears to address the issues raised in your complaint. Therefore, we are closing your case," it read.

Closing my case? What about truth, justice and the American Way? What about judicial proceedings? What about my side of the story? What about basic fairness? Wasn't someone at the FCC going to consider my claim that this "policy" was unfair?

And oh, there's the biggest question of all: Who is the judge here, Sprint or the FCC?

Here I was, more than two months after calling Sprint, with my case closed but my account still open.  I looked more closely at the Sprint letter to the FCC. It included this really disturbing sentence.

"Upon completion of our review, we determined during a subsequent call on December 4, 2008, Mr. Sullivan contacted our customer service department and requested to postpone the account cancellation," it read. "As such, the account remains active and continues to incur monthly service charges."

I could hardly believe my eyes.  Who calls back after complaining about cancellation charges and "postpones account cancellation?"

From earlier reporting I've done, I know many call centers have perverse incentives for employees. Bonuses are often based on the number of people who are talked out of cancellation, for example.  Sometimes, customer service agents or their managers flat-out lie.

I don't know why Sprint failed to close my account on Dec. 4; it could have been a clerical error. But it is troubling that a review by Sprint's Regulatory Services group didn't immediately recognize the obvious error, and instead passed it along to the FCC as part of its argument against me.

To the Sprint analyst's credit, when I reached her by telephone a few days later, she quickly closed my account and canceled the $104 bill.  One wonders how much harder that would have been if I hadn't found my way into Sprint's regulatory affairs office with my other complaint.

Meanwhile, she offered only cold comfort for my original complaint -- paying for a service I could not use.

She apologized for any inconvenience, but said that if the firm prorated final-month charges, it would have to send out refund checks, which  would be inconvenient for Sprint.

Whose side are you on?
If you want to know why U.S. companies seem to run rough-shod over consumers on a regular basis, now you do: federal regulators hold the door open for them. The inconvenient truth of this tale is that the FCC seems to simply do whatever the telecommunication firm tells it to do -- in this case, close my case.

In our prior conversation, the FCC official had indicated that I might be better served by filing a petition for rulemaking at the FCC, so the agency could consider a more general rule about end-of-service situations.  Forgive me if I am now cynical about that route.

I did have one other option.  The letter I received from the FCC said that if I was "dissatisfied" with the company's response I had the right to file a "formal" complaint within six months. So I went back to the FCC's site and dug around for the rules on formal complaint procedures.

Alas, there was a catch: formal requests require payment of a $190 filing fee. That's even more than Sprint's early-termination fee.

When the people of a nation have nowhere to turn for justice or redress when treated unfairly, cynicism sets in. If the Obama administration is truly interested in restoring the confidence of U.S. consumers, it needs to deal with the lawlessness of this Wild West we are being forced to live in.  President Obama needs to send us a sheriff who will do more than simply enforce punishments handed out by corporations.

Home telephone service is a utility bill you probably don't think much about. And why would you? Prices never change, right?

Wrong.

A study by the Utility Consumers Action Network released this week shows the prices for common services like call waiting and unlisted number requests have skyrocketed. Since 2004, call waiting is up 86 percent, while keeping your number out of the phone book costs 346 percent more, the study found.

Numbers like these keep Bruce Kushnick up at night. Kushnick runs New Networks Institute, which investigates the lingering impact of the breakup of the old AT&T. One impact, he says, is higher bills. As evidence, he points to his Aunt Ethel's basic phone bill service, which cost $7.63 cents in 1980 but $39.36 in 2006. Aunt Ethel has lived in the same New York City apartment the entire time.

Subscribers to the plain old local telephone service have probably noticed similar bill creep, no matter where they live.

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Meanwhile, since 1980, a host of new utility-like bills have been added to Americans' monthly budgets -- all which may directly impact the price of your telephone. Among these are Internet access, wireless phone service and pay television. Enter the "bundle." Consumers can buy some combination of all these services (and perhaps all of them) from a single firm. But as many consumers quickly learn, seductive bundle offers often lead to even higher bills. They also tie your fortunes as a consumer to a single company. If that relationship goes sour, you'll put all those services at risk. And you'll probably face a hefty termination fee if you try a hasty breakup.

That said, it's smart to think of all these services as a group because there are ways to save money when you purchase them together. You may ultimately decide a bundle is easiest and cheapest for you. But it's always best to at least price the services separately and see if you can do better.

We've already discussed how to save money on pay TV and cell phone service in earlier pieces, so today we will focus on the other part of that bundle -- phone service and Internet access.

BROADBAND
Many of the money-saving tips I'll offer today require a reliable broadband connection. If you want to watch cable TV programs over the Web, or use an Internet-based telephone, you'll need broadband you can count on.

It's hard to give generic advice on broadband pricing, because even national companies like Cox and Verizon vary their prices by locale. And thanks to bundling, it can be hard to compute the real price of broadband. In one deal I've seen from a cable provider, broadband costs $59 per month -- unless it's purchased with a cable TV package. Then the price drops to $33 per month.

The Pew Internet and American Life Project estimates the average monthly bill for broadband users was $34.50 in 2008. If you're paying more, you should find a better deal. Watch for advertisements from competitors.

Regardless, low-speed DSL is still the price champion in most area codes -- under $20 for most consumers who already have phone lines -- and it provides perfectly adequate bandwidth for most applications. You really can watch episodes of "The Daily Show" on Hulu.com over a DSL connection. If you're looking for a way to cut monthly expenses, downshifting to DSL is a fine way to do that.

In fact, while broadband providers often throw out through-put speeds the way teen-age boys brag about car engine size, many consumers end up unimpressed when they upgrade to high bandwidth. Speed is good, of course. But you just don't need 4 megabits per second to follow someone on Twitter, read your e-mail or update your Facebook status. And many consumers have PCs or modems that can't really handle that faster speed anyway.

 

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Read the whole 'How To Save Money On' Series

 

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You also might not be getting what you pay for. Anyone who pays for Cadillac-level broadband should regularly check their real-life broadband speed. Speakeasy.net offers my favorite free test. One of the most nefarious hidden fees is paying for broadband you don't really get.

On the other side of the spectrum, bandwidth hogs who stream HD movies or play interactive videos should know that all Internet service providers are testing tolls that will penalize excessive users. If that's you, be sure to read the fine print on overage charges, and be sure to watch for new policies in the coming months that may increase your bill.

The arrival of Verizon FiOS in some U.S. cities is a great development for consumers, because it has forced cable Internet providers to either lower prices or raise speeds, or both. But beware trial offers. Broadband firms love to hook customers with low three-month offers that rise when you stop paying attention. So don't ignore those monthly bills.

Also, don't ignore smaller, local Internet service providers, which can sometimes offer surprisingly competitive deals.

Finally, one drastic way to cut back during the economic downturn is to dial your Web service all the way back to dial-up. Today, according to Pew, only 9 percent of Web users get their Internet over an old-fashioned modem. But dial-up providers seem to think they have an opening with the sour economy. Earthlink, for example, has just cut its price to $7.95 per month and is marketing the service as a budget-saver.

Dial-up service is inadequate for many Web services, and even many Web sites that are optimized for broadband. But it's certainly better than having no Internet connection at all.

LAND LINE
There's a catch with dial-up and DSL, however. You need a phone line. There's really no way to get Internet access for $7.95 per month -- you have to pay $7.95 plus $25 or so for a home phone line. Ditto for DSL in most cases (so-called naked DSL, which doesn't require a telephone subscription, is still not widely available). The true cost of DSL is more like $45 per month.

This is why it's important to consider phone line, Internet and other services together. You might save money by backing down to dial-up Internet service, but perhaps you could save more by ditching your phone line, getting Internet through a cable provider and signing up for an Internet telephony service.
Plain old telephone service -- POTS -- is clearly in the autumn of its life on the American scene. The National Center for Health Statistics recently reported that the number of wireless-only adults exploded last year, jumping from 13.6 percent in 2007 of adults to 16.1 percent in the first half of 2008. In some parts of the country, one in five adults don't have a landline.

And why not? As Aunt Ethel found out, land line service is expensive. So if you haven't cut the phone cord yet, there are a few ways to do that and save a lot.

1. Cancel your land line phone and just use your wireless, taking advantage of free long-distance calling plans. If you need to call internationally, try an online service like Skype or an international mobile-phone/Internet telephone bridge service like CellularLD.

2.Keep the home phone line, but cancel long-distance service. This will lower your bill by 25-50 percent, because you'll save on phone costs and some federal taxes, such as the Universal Service Fund tax. You'll still need a calling card or cell phone to make long distance calls. If you go this route, make sure you actually formally disable your long-distance service. Otherwise you'll be subject to a monthly fee, like Verizon's "short fall" fee, which is assessed to callers who don't make any long distance calls. If you do disable your long distance calling, you may have to pay a $5 disconnect fee, but it's worth the savings you'll see.

3. Get rid of your land line and sign up with an Internet telephone product like Vonage or Skype. Be aware though that these products do charge monthly fees and may not be as inexpensive as they initially appear. Also note that not all IP phones handle 911 calls correctly, so be sure to discuss potential emergency calls when you sign up. The FCC has an information page here. Because of these 911 issues, Internet phones might not be for everyone. A cheap, local-call-only phone combined with an Internet phone might be a better compromise.

One VOIP product that's gotten a lot of attention lately -- thanks to a blitz of late-night commercials -- is Magic Jack, a small USB device that lets consumers plug telephones directly into their PCs. While the quality of the phone calls has received some critical acclaim, there are also numerous customer service complaints online about the firm, including some from unsatisfied customers who say they have difficulty obtaining refunds.

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You're the federal agency charged with protecting consumers. You have a $250 million annual budget, subpoena power and the ability to refer cases to the Justice Department for prosecution. So what do you do when one of America's biggest companies continually flouts the law?

You challenge the company to a joke-off.

At least, that's what the Federal Trade Commission has done. On Tuesday it released two videos that spoof the popular FreeCreditReport.com commercials and their trademark catchy tunes.

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The government's ads never mention FreeCreditReport.com by name, but the target is clear.

"Beware of others, there's always a catch," the singer croons in one ad that's a dead-ringer for the FreeCreditReport spot set in a restaurant. "They claim to be free but strings are attached."

FreeCreditReport.com is owned by credit bureau Experian, which has been engaged in a decades-long battle with the Federal Trade Commission over alleged misbehavior. Most recently, in 2005, the FTC settled charges with the firm that it intentionally misled customers with its FreeCreditReport.com Web site. The FTC said in its lawsuit that the company was confusing consumers who were looking for their congressionally mandated free annual peek at their credit reports. Experian agreed to refund customers, but admitted no wrongdoing.

Even after the settlement, it kept right on marketing FreeCreditReport.com, where consumers must sign up for a $15-a-month service in order to get their credit reports. The lead singer in the ads has even become a cult figure on the Web, as my colleague Helen Popkin explained recently.

But the ads are a frequent target for consumer advocates. The Internet -- and my inbox -- is awash with complaints from consumers who were charged unexpectedly by the service, and have difficult canceling to avoid automatic renewal charges.

Consumers who wish to see their credit report for free should visit AnnualCreditReport.com

Experian did not respond to a question about the FTC spoof ads, but issued a statement arguing that consumers who sign up at FreeCreditReport.com receive valuable services.

"While AnnualcreditReport.com provides a free credit report once every 12 months, FreeCreditReport.com provides paying members with continuous access to their credit report and credit score with a paid membership," it said. "It also monitors a consumer's credit report at the three national credit-reporting companies and alerts members via e-mail if key changes are detected, like if a new account is opened in their name, which could help members identify potential identity theft early and take immediate action."

So why is the FTC making jokes instead of enforcing the law?

Nat Wood, a spokesman for the FTC, says the agency must work within "a legal framework." The FTC is actively monitoring Experian's compliance with the 2005 agreement, he said, adding that the agency "does not have the power to take arbitrary actions."

He also said the FTC has another mission: to educate consumers. The videos fit that bill, he said.

"We think education is an important resource and strategy for preventing bad things from happening to consumers," he said.

The ads, which were produced by California-based Aperture Films, are not designed for television. Instead, the FTC hopes they "go viral" and spread over the Internet, Wood said. Similar audio-only versions of the ad are being distributed to radio stations around the country in hope that they will run as free public service announcements.

The FTC is not buying any advertising time for the spoof. "We don't have that kind of budget," Wood said.
Experian spent $70 million dollars on advertising for FreeCreditReport.com in 2007, and even more in 2008, according to TNS Media Intelligence.

Last year, an Experian spokesman told the New York Times that FreeCreditReport ads had run 90,000 times in the previous year.

The FTC ads are hysterical. In a second spot, called "Apartment," the FTC band is playing in a basement apartment with someone's girlfriend cleaning the kitchen in the background, a clear parody of the similar FreeCreditReport spot. In this case, the singer urges consumers to visit AnnualCreditReport.com, then protests:

"All the others charge a fee. Read the fine print and you'll see. … I should know 'cause it happened to me."

The FTC ads will undoubtedly help cut through the "confusion marketing" that helps a company like Experian trick consumers into paying for something that's free, and that makes them an innovative tool for the FTC, and an effort that should be applauded. The agency says it has future video projects in the works.

But it says something eerie about the state of consumer protection in America that the federal agency charged with protecting us has resorted to satire. Given the size of advertising budgets at companies like Experian, I can't imagine the FTC can win a marketing war.

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There's been a lot of talk lately about loan modifications for homeowners facing foreclosure, a discussion that reached a crescendo on Wednesday when the White House announced details of its "Making Home Affordable" plans.

A woman I'll call Mags (we're preserving her anonymity) had heard the talk too. The suburban Virginia woman in her 60s is homebound, recovering from ankle surgery. Her husband has recently declared bankruptcy. Three months ago, she started contacting her lender to ask for help. She ran into a wall of busy signals and vague answers. So when she heard about a private company that said it could help work with her bank to modify her loan and save her home, she began to investigate. That's how she landed in my inbox.

"How can we tell that this company is legitimate, will do what they say they will?" she asked. "We desperately want to modify our mortgage, but we don't want to be stupid!"

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There was a red flag right away. Mags said the company wanted a $3,000 up-front payment.

I e-mailed Mags that day to ask her what this firm would do that she couldn't do for herself. She didn't write back. A few days later, I called. That morning, she'd sent the company a check for $2,881. And she was very sure she'd done the right thing. She'd checked the company out at the Better Business Bureau and there were no complaints. The employees sounded very competent, she said, and the company was advertising on television. I asked her if she'd seen advice on various Web sites telling consumers not to pay up-front fees for loan modifications. She said she had, and she'd asked the company about this.

"They said, 'Has anything else you've done so far worked?"

I talked to Mags about how to get free loan modification help, through the list of approved housing counselors on the U.S. Department of Housing and Urban Development's Web site. I sent her a link to HUD's "find a counselor" Web page. She said she'd already been to the site, but didn't find what she was looking for there.

"There are so many different agencies listed, how do you choose?" she asked, noting that about three dozen are listed in Virginia. "Are they all free? How can you tell?"

In the end she said she relied on the personal recommendation of a co-worker who had also signed up with the for-profit company.

Within minutes, Mags politely thanked me, rushed me off the phone and then didn't respond to my additional e-mails. I had the sick feeling she wouldn't get anything for her $2,881, but for some reason the modification company was more persuasive than I was. She was willing to pay for something that should be free.

No answer
So I went back to the HUD site and looked up the counselor that was geographically closest to Mags. When I called, the phone went unanswered. There wasn't even an answering machine to leave a message, and an e-mail got no response.

Government efforts so far to help out troubled homeowners have been equally ineffectual. The Hope for Homeowners alliance program announced last year with great fanfare has so far only helped a few hundred mortgage holders.

It's no wonder Mags would turn to a company that promised immediate assistance. In fact, swarms of for-profit companies are advertising loan modification help right now. They are succeeding because consumers still don't really know where to turn, said Seattle-based mortgage fraud expert Richard Hagar.

"They are filling in where our government is failing," he said. "The government says go get a housing counselor, but when you make a call there is not always somebody there."

Many consumers have hit similar brick walls when dealing with lenders, Hagar said, creating an ideal opportunity for loan modification con artists.

At the unveiling of the White House loan modification program on Wednesday, officials reiterated that consumers don't have to pay for mortgage help. Still, the pitches by for-profit firms can be very powerful, Hagar said.

"They say they have special phone numbers and can get you help right away," he said.

The problem for people like Mags is that criminals and government-backed counselors can look identical to consumers who need help. The organizations listed on HUDs Web site – with names like Consumer Credit Counseling Services – seem indistinguishable from for-profit firms at first glance.

"Whether it's a scam or it's legitimate, it all starts off the same way," he said.

Mortgage brokers piling in
To some struggling homeowners, the salesman behind the mortgage modification sales pitch might sound familiar, says Curtis Novy, a California-based mortgage broker who is also an expert on mortgage fraud. He said many of his former colleagues are trying to make a quick buck in the loan modification market.

"A lot of former subprime loan officers have discovered all this is a money maker," he said. "They made money selling mortgages people couldn't afford and are now making money modifying those mortgages."

One online advertisement targeting real estate professionals recently viewed by msnbc.com promises mortgage brokers a healthy new revenue stream if they attend a class and learn loan modification skills.

"It just makes sense that you learn how to do loan modifications. A certain percent of the sellers you are coming across will qualify for a loan modification and you should be the one providing this service (and earning a fee for doing it)," it said.

Tanisha Warner, a spokeswoman for the Consumer Counseling Credit Services, she said she hears about consumers paying for modification help all the time.

"When people find their backs are against the wall, they are willing to believe that someone is going to help them," she said, while stressing that her firm's mortgage assistance services are free.

Not all for-pay loan help services are scams, though, so it's hard to give blanket advice, Hagar said. Many consumers find it necessary to pay a lawyer to work out a complicated loan restructuring, for example, and there's nothing wrong with paying a lawyer an up-front fee. Hagar said he's also seen some legitimate services that charge a small up-front fee, and ask for larger payment upon the completion of a successful modification. As a rough guideline, he said, consumers should not pay more than a few hundred dollars up front, unless they are dealing with a lawyer.

Some government regulators have begun to take notice of potentially misleading modification services. In February, Connecticut Attorney General Richard Blumenthal announced his office was investigating a company named H.O.P.E. Alliance after it allegedly asked for $1,500 in up-front payments from consumers. In order to afford the fee payment, the firm told customers to stop paying their mortgage, he said. The firm's name also deceptively mimics the name of the government-backed, nonprofit modification effort, Blumenthal alleges.

On the Web site announcing the new White House loan aid plan – FinancialStability.Gov – federal officials also make clear that up-front payments are not necessary to get help.

"Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay – walk away!" it reads.

Still, that message hasn't gotten through to consumers like Mags. And when HUD's Web site lists phone numbers that go unanswered and banks give consumers the runaround, it's no wonder troubled homeowners are tempted to pay when they finally find someone who will answer the phone.

As federal officials continue to create programs to help troubled homeowners, they should be sure their marketing plans are at least as extensive as those designed by con artists. HUDs counselors should be the first link that lands in a Google search, for example. Public service announcements from the president telling consumers where to get free help wouldn't hurt either.

RED TAPE WRESTLING TIPS
There is no reason to pay for mortgage help. When trying to get a HUD-approved counselor, persistence will pay off. Visit the HUD Web site and try several phone numbers until you reach someone who sounds genuinely interested in helping. Msnbc.com reached a counselor on our second try.

Beginning this week, you can test your eligibility for a government-backed loan modification at the Financial Stability Web site.

If you are tempted to pay someone, don't do so until you get results. You wouldn't pay for auto repairs or a home remodel until the work is done, so why pay a mortgage modification company? As a rough guideline, Hagar said, consumers should not pay more than a few hundred dollars up front unless they are dealing with a lawyer.

People facing mortgage problems often are embarrassed and try to deal with them privately. If anyone in your family might be in trouble, don't be shy. Recommend they visit the HUD Web site – take them to a computer and show them the site if need be. HUD counselors can offer a variety of solutions to consumers. Warner said a surprising number of consumers are able to refinance and avoid foreclosure, thanks to new government-backed programs.

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If you're struggling to make ends meet, one obvious place to cut costs is to stop paying for something that gets you nothing. I'll bet you've looked more than once at an insurance bill and asked yourself the simple question: "Why?"

The average American spends more than $2,000 each year on auto, life and homeowners' insurance. And what do you get for that money? Not very much. For example, only about one in 15 drivers makes an auto insurance claim every year.

On the other hand, you probably know better than to question the need for insurance. Even if you've never had an accident, you know your time will likely come. And when it does, it'll be costly. The average auto insurance claim payment is nearly $4,000. Plus, auto insurance is required by law, so you don't really have a choice.

It is not required that you overpay, however, and many people do just that. Here are a few tips you can use to pare down your insurance bills without putting yourself at unnecessary risk. I'll focus on auto insurance, but mix in a few tips about life and homeowners policies as well. And many of the principles apply to any kind of insurance you buy.

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It helps to think of insurance as a concept as well as a product. Insurance was designed centuries ago to ease catastrophic losses by individuals by spreading risk over wide pools of contributors. One oft-told story has it that Chinese traders invented insurance by spreading their goods among each others' trading ships, so that no merchant would be wiped out if a single ship was lost at sea.

Notice I used the word "catastrophic." Insurance was never designed to make your life easy, and it's not really designed to make you whole after an accident either. It's designed to prevent you from being wiped out. If you get in a small fender-bender that requires some paint touch-up, you should expect to pay for those losses yourself. Save the insurance for the big event when you really need help.

In practical terms, this means most people are better off keeping deductibles on their policies high. The two most common optional coverages on auto policies are collision and comprehensive – collision covers the cost of repairing your car after accidents that aren't covered by someone else's policy, and comprehensive covers everything else (mainly fire and theft). Since you shouldn't make a claim for a $565 repair, you shouldn't pay for that level of coverage either. Raising the deductibles on your auto insurance policy is probably the single quickest way to save money. How much? Raising the deductible from $200 to $1,000 on comprehensive insurance will save an average of 40 percent or about $100 per year.

As a matter of sound financial planning, you should "self-insure" against the cost of these smaller incidents. That means when you raise your deductible to $1,000, you should simultaneously put $1,000 in an interest-bearing account that's earmarked specifically for small auto-related troubles. This way, when a theft or fire occurs, you can cover the expense relatively painlessly. In the meantime, you have the extra $100 each year – not your insurance company -- and you earn the interest.

There are many consumers who should consider dropping collision and comprehensive coverage altogether. Remember, these insurances are designed to protect you from a catastrophe. If your beloved clunker is only worth $1,800 and has a real replacement value of $1,200, it doesn't make sense to pay for comprehensive coverage with a $1,000 deductible. Many consumers fail to realistically assess the replacement value of their car and the real value of their comprehensive and collision coverage. In 2006, the last year for which figures are available, the National Association of Insurance Commissioners said 77 percent of drivers bought comprehensive coverage and 72 percent bought collision. I know there are more clunkers out there that that. This is why it's so important to reassess your insurance policy every year.

When should you stop paying for collision and comprehensive? It's a personal choice, but here are some rules of thumb: As soon as you get to the point where you wouldn't spend $2,000 to fix your car, drop the extra coverage. Or, if you'd like a more complex formula that's often used, drop coverage when your annual premium multiplied by 5 exceeds the value of your car. If you already have that $1,000 set aside as your own "self-insurance" policy, that money can ease the blow if your car is stolen.

There's no way to skimp on the third main element of most drivers' insurance policies: liability. In fact, many insurance experts think consumers generally buy too little liability coverage. Minimum coverages are specified by each state's insurance regulators. Here's one list of state-by-state requirements.

You will often see liability insurance expressed as a series of three numbers, like this: 25/50/10. That means your state requires $25,000 in coverage for a single person's injury in an accident, $50,000 in coverage for all people who might be hurt, and $10,000 coverage for any property damage. It's important to note that who gets paid by your insurance company after an accident varies based on whether your state is a "tort" state or a "no-fault" state. In tort states, the responsible party's insurance firm pays. In no-fault states, your insurance will pay you no matter whose fault the accident is. So if you skimp on coverage, you might actually be skimping on your own payouts. Twelve states currently have no-fault rules, according to the Insurance Information Institute (click for a list).

How much coverage should you have? Consumer Reports last year recommended 100/300/100 for an average middle-class worker. To be more specific, your coverage should grow with your income and assets. Think like a lawyer for someone you've hit in a car accident. If you have assets in excess of $300,000, someone might sue you for their value. So you should have at least enough liability coverage to protect your assets in case of an accident.

One other thing to look for: Many insurance companies load up policies with unnecessary extras like roadside assistance or rental car reimbursement. While roadside plans from insurers can be a good deal, make sure you aren't covered twice (perhaps by AAA, or your cell phone or your car manufacturer).
Rental car reimbursement can be handy, but it doesn't fit into the category of preventing catastrophe. In this economy, it's probably a luxury you can live without.

Even if you've done all these things to keep your insurance premiums down, you should take the time to get price quotes from competitors once each year. Auto insurers have a secret sauce they use to price policies. It includes arcane and unexpected items like your credit score. The only way to find out if you are paying a fair price is to see what the competition charges. Make sure you compare apples to apples when pricing polices -- same collision deductible, same liability and so on. Some insurers make that difficult, but it's worth the effort.

Other insurance tips
Finally, if you want to switch providers, do a little background check before you do. About half of U.S. states maintain extensive databases of complaints against insurers. The numbers are boiled down to a single rating called a "complaint ratio," which is essentially the number of complaints per customer each company gets. If you are thinking of signing up with a new company, make sure you aren't jumping to a leaky ship by first checking the complaint ratio database on your state's regulators Web site. How do you find that?

Here's a link to a state-by-state listing of insurance commissioners

Homeowners
Once consumers get into a home, they often allow their bank to pay their homeowners' insurance automatically through escrow payments. Then they forget all about it. Big mistake. Homeowners premiums can vary widely and also can be impacted by seeming unrelated items, such as a change in credit score. It's important to get competitive bids for your home insurance at least once every few years. Also, it's really important to avoid filing homeowners claims, and there's evidence that you shouldn't even place a call to your insurer asking about whether or not you should file a claim. Insurers share information on claims through a big database called CLUE -- Comprehensive Loss Underwriting Exchange. Sometimes, insurers make entries simply based on consumer inquiries. Avoid getting into this database at all costs. Handle small home accidents yourself.

And, if you've done anything to make your house safer – such as adding an alarm or helping to pay for a new fire station nearby -- make sure your insurer knows about it.

Life
Life insurance comes in so many flavors that I can't address then all in this column. My colleague Laura Coffey covered most of the basic ways you can save on life insurance in a recent column.

A few points should be stressed. Just like any other kind of insurance, life insurance should be there to prevent a disaster, such as premature death of a family's wage earner. It should not be confused with an investment vehicle. Life insurance policies that are bound up in retirement plans are generally a bad deal, and they are almost always confusing. Keep it simple. Buy what you need to take care of your loved ones if you die. How much do you need? Here's one calculator

The most common mistake people make is ignoring other sources of income available to the surviving spouse, such as Social Security benefits, when making the calculation. You'll need less insurance as life goes by and the kids finish college.

The best way to save money is to be healthy. Life insurers punish smokers with higher premiums. Ditto for those with high blood pressure or heart-related health issues.

The good news is that life insurance rates, overall, are plummeting. Premiums dropped 50 percent from 1994-2007 according to the Insurance Information Institute, thanks to better risk-assessment formulas and, naturally, competition.

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