Consumer Protection Terms and Definitions

Closed-End Lease
A lease in which you are not responsible for the difference if the actual value of the item at the scheduled end of the lease is less than the residual value, but you may be responsible for excess wear-and-use charges and for other lease requirements.

CPSC
The U.S. Consumer Product Safety Commission, a Federal Government regulatory agency The U.S. Consumer Product Safety Commission is charged with protecting the public from unreasonable risks of serious injury or death from more than 15,000 types of consumer products

Counterfeit Drugs
Pay attention to packaging. Check for altered or unsealed containers, or changes in the packaging or label. If you know the size shape, color, and taste of the medications you take, you will more easily identify possible counterfeits.

Balloon Payment
A large extra payment that may be charged at the end of a loan or lease.

Collateral
Property, such as stocks, bonds or a car, offered to support a loan and subject to seizure if you default.

Residual Value
The end-of-term value of the item established at the beginning of the lease and used in calculating your base monthly payment. The residual value is deducted from the adjusted capitalized cost to determine the depreciation and any amortized amounts. It is an estimate that may be determined in part by using residual value guidebooks. The residual value may be higher or lower than the realized value at the scheduled end of the lease.

Lessee
The party to whom the item is leased. In a consumer lease, the lessee is you, the consumer. The lessee is required to make payments and to meet other obligations specified in the lease agreement.

SLAMMING
The term used to describe what occurs when a customer’s long distance service is switched from one long distance company to another without the customer’s permission. Such unauthorized switching violates FCC rules.

Annual Percentage Rate (APR)
The cost of credit expressed as a yearly rate.

Investment Scams
Steer clear of “offshore investments.” These are often promoted as a way to avoid taxes. Actually, you are still liable for taxes, and the investments themselves are usually very risky