Life Skills Development/Unit Four/Consumerism

Introduction
Today we are bombarded by the ethic of excessive consumption. As learners, we need to think critically and make informed decisions to spend our money wisely. This unit will expose you to a range of appropriate strategies to employ when making decisions about spending.

Definition

 * Hire Purchase: System for financing the purchase of any equipment where the ownership is vested with the lender until final payment is made. The borrower is required to place a deposit and make periodic, usually monthly repayment at a flat rate of interest.


 *  Warranty: A promise about a product by a manufacturer or a seller about the durability of any product purchased.


 * Guarantee: To accept responsibility and have obligation to compensate if any purchase product does not meet the expected standards.


 * Insurance: Promise of reimbursement in the case of loss paid to people or companies.
 * A Life Insurance: is an investment that is made to ensure a form of security and financial compensation when an unforeseen circumstances such as death occurs.
 * Permanent Life Insurance: Provides coverage throughout your life as long as the premium payments are paid on time and you do not cancel the policy. The premium of permanent insurance policy remains relatively level while the policy is in force.
 *  Term Life Insurance: Provides a coverage during a specified period of time as long as the premium payment are paid on time.


 *  General Insurance: Insurance that is not determine by life insurance for example; automobiles, health, and home owner polices. Payments are to provide for the benefits covered.


 * Advertising: It is making known or calling public attention to a product, service or company by paid promotion.

Sub-Topics

 * 1) Consumer shopping guidelines
 * 2) Loans and hire purchase
 * 3) Insurance
 * 4) Advertising

Topic 1: Consumer Shopping Guidelines Shoppers today have a large variety of shopping alternatives. Whether you are downtown or in the mall or even on the Internet, getting value for money is always a best practice. The following activity can assist you to focus on some key questions when making a purchase.

Consumer guidelines:

Beware of Fraud when you shop or pay your money

How to identify someone who wants to defraud you.
 * Contact you without permission by phone, email or in person
 * Well-spoken and friendly when they come to your door
 * Well-informed and approached you with professionalism
 * Your decision making is often forced
 * You are encouraged and enticed
 * Payment is required before transaction is completed

Types of Fraud:

a. Affinity fraud
 * The con artist gains the trust of a certain group of people (i.e. religion, race, gender etc) and when the time is right, will take advantage of the group.

b. Insurance fraud
 * The con artist tricks by intentionally causing damage or injury to fraudulently collect the insurance policy.

c. Pitiful fraud
 * A con artist tells pitiful lies about his or her family in order to get you to feel sorry and not to call the police.

d. Email fraud
 * Items are offered in advance to get the victim credit card information. Delivery is never made because it is not a legitimate offer in the first place.

e. Credit card fraud There are several types of credit card fraud.


 * A credit card of another person is used to charge for a purchase on that card up until the card is cancelled.


 * A[merchant]] (business, service provider, seller, etc.) is "tricked" into releasing merchandise or rendering services, believing there would be reimbursement. The merchant later learns that they will not be paid, or the payment they received will be reclaimed by the card's issuing bank

Discuss with a friend, a time when an attempt was made to defraud you in one of the ways mentioned above or in another way. Share what was so convincing about this person and how you responded. Discuss if you would respond differently in the future.

Getting justice after fraud: What to do if you are ripped off
 * Fight Back: Do not let anyone get away with fraud, always take action.
 * Become an informed consumer
 * Work with the police and warn others to help prevent these crimes

Letter of complaint:

How to make a complaint:

You can make a complaint in person, in writing, or by telephone to the company, stating the problem that you are experiencing with the item. Even if you complain in person or by telephone, it is always best to document your complaint in writing. Making a written complaint helps you properly describe the problem in chronological order.

When complaining: Facts: when, where, when Cause: the reason, how it happened Effect: the impact of what happened to your life Solution: your suggestions and demands e.g. finance and other details. Clearly state the form of redress you require. State a deadline for a resolution of your matter
 * 1.Ensure that you give a clear description of the problem: the Facts, Cause and Effect of the problem and Solution


 * 2.Keep a copy of your letter - a record and documentary evidence
 * Enclose/ present photocopies of receipts, warranties or other relevant documentation, not originals.
 * Give a phone number where you can be reached

When complaining by letter:

My address full date:

Title of the person you are writing to Name of the company Address of the company Dear Ms. Smith, or Sir/ Madam (if you do not know the name of the person)

First paragraph: Aim of the letter - the reason for the letter and outcome you want Second paragraph: Helpful information: FACES Last paragraph: Polite ending: If you need to be very serious, "If I do not get redress, I will be forced to seek legal action"

Final salutation - Yours sincerely, or Yours truly signature

When complaining by person


 * Take your letter along to remind of the details
 * Get the name of the person with whom you are speaking
 * Jot down the date and time and what you said
 * Keep calm even in the midst of provocation.

You have bought an appliance you saw in a store. When you got home, the sealed box contained an appliance that was not as modern as the one you chose and with less features.

4. Read the following letter of complaint and with your friend, evaluating it using the directions above.

Payless Ltd

Main Street

St. James

Dear Sir/ Madam,

I wish to inform you that a pair of shoes was bought on Tuesday 16th March 2007 and it was defected. When I arrived home, one side of the shoe heel was not attached. Also when I tried the other shoe, I discovered that the heel was loose. As a result I was unable to attend my daughter's wedding. I am requesting reimbursement for the shoe I purchased at your store on Tuesday 16th March. I hope I will be reimbursed by 30th March 2007.

Respectfully Yours

Sandra Rammath

View the and write in the dialogue you imagine in the dialogue boxes. You may want to act this out to your peers. Discuss what is good consumer and employer relations and behaviour and what was not so good in this slide/comic.

Topic 2: Loans, Hire Purchase and Credit Unions

Loans from banks, credit unions or other financial institutions can assist a buyer in providing cash. Many items such as cars, homes, vacation or tertiary education cannot be personally financed. Selecting a loan can be difficult especially with hidden charges and different rates. A loan consists of a principal, an interest rate % and a time period in years to payback. A financial advisor can assist you in making a wise decision.

The following activity can assist you to focus on some key questions when selecting a loan:

Hire Purchase is a way of financing items from stores when not purchasing with cash. You may have seen famous furniture stores advertising hire purchase options of 3 month, no down payment and 12 month plans. Selecting a hire purchase plan can be tricky as you can pay back much more than you planned. It is important to work out each option and the total payback before making your choice. A hire purchase plan consists of a down payment ,a principal, an installment and a time period in years.

The following activity can assist you to focus on some key questions when selecting a hire purchase plan:

Credit Unions are cooperative financial institution, owned and controlled by people who use it services. They serve groups that are common in interest e.g. their work or where they live. These organizations are non-profitable and exist as a safe, convenient place to save money and get loans at a reasonable interest.

Advantages of Credit Union


 * Owned by their members
 * Offer competitive interest rates compared to Banks
 * Services are much more reliable and better, especially in terms of the knowledge given to its clients
 * It is cheaper to open accounts

Disadvantages of Credit Union


 * There are few branches available to the members
 * They do not facilitate the use of ATM machines.

'''Topic 3. Insurance.''' Insurance can be described as a form of risk management, it is a strategy used by you to protect yourself against any unforeseen events. There are two types of life insurances, namely permanent life insurance and term life insurance. Permanent life insurance caters for coverage through life time; however you have to make premium payments. With regard to the term life insurance, it provides coverage for a stipulated period of time, you also have to make monthly payments.

'''Topic 4. Advertising.'''

Advertising is a means of marketing goods and services. Advertisements can be either in print or electronic forms. Advertisements are usually placed anywhere the public can easily access them. They are paid for by the consumer in most instances, however in certain circumstances they are provided free. Advertising is considered as very essential for promoting economic growth.

Summary
At the end of this unit, the learner will have been exposed to consumer guidelines and will be able to follow and make informed decisions when deciding to purchase any items. Various types of insurances have been discussed with a view to assist the learner to make informed decisions when opting to take any type of insurance.

Checklists of Performance Task
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