Consumer Action INSIDER - March 2014

 

Table of Contents

What people are saying

The Consumer Empowerment Conference was wonderful. I gained valuable information to utilize in my work at Family Service Agency. I gave a copy of the conference materials to each of my coworkers and we’ll be able to use this information to assist many of the clients we serve. — Ruth Holloway, Family Service Agency, Little Rock, AK

Did you know?

The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free tax help for eligible taxpayers. VITA offers free tax help to people who make $52,000 or less. The TCE Program offers free tax help to all, with priority assistance to taxpayers age 60 and older. Learn more at the Internal Revenue Service website.

Policy Buzz: ‘Safe Harbor’ for international data-sharing

In 2000, the European Union (EU) and the U.S. Department of Commerce came to an agreement to streamline data privacy regulation between the two world powers. Called the "Safe Harbor" agreement, the idea was that companies could agree to certain privacy protection provisions and not be subject to each other's complicated laws and regulations. It came two years after the 1998 EU Directive on Data Protection, which prohibited data transfer to non-European countries without adhering to strong requirements.

Safe Harbor stipulations require that companies collecting personal data must keep it safe and secure and that they inform people that their data is being gathered and what will be done with it. Permission must be obtained from individuals before the information is passed along to third parties. Among other requirements, people must be given access to the data gathered about them. Safe Harbor principles require U.S. businesses to protect the data privacy of EU customers.

Advocates, including Consumer Action, have for years expressed serious concerns about the lack of enforcement around Safe Harbor agreements. “It was a nice idea,” says Consumer Action's Senior Associate for National Priorities Michelle De Mooy. “But all in all, it hasn’t worked and instead makes some data privacy concerns even more complicated.”

De Mooy attended a TransAtlantic Consumer Dialogue meeting in Brussels last year and regularly meets with Federal Trade Commission (FTC) staff and commissioners to discuss the issues around Safe Harbor.

With the recent revelations about large-scale U.S. intelligence collection programs, Safe Harbor moved to the forefront for companies, governments and advocates. At the end of January, Viviane Reding, the European Commissioner for Justice, Fundamental Rights and Citizenship, gave a speech that called for changes to Safe Harbor. "Safe Harbor has to be strengthened or it will be suspended," Reding said bluntly.

Reding’s recommendations for improving the Safe Harbor program included more transparency in the self-certification process, whereby companies attest that they are performing basic privacy protections for consumers. Also, she called for more oversight and enforcement from the U.S. on the tenets of the agreement, such as the U.S. Department of Commerce identifying companies that are not complying with the agreement. Currently, there is little to no investigation of U.S. companies in the program.

Though limited, the FTC has taken some actions to enforce Safe Harbor. In 2012, the agency levied a $22.5 million fine against Google for failure to comply with some Safe Harbor requirements, and in 2014 settled with children's gaming company Fantage.com, claiming the company deceptively claimed it was following Safe Harbor certification requirements.

Hotline Chronicles: Hefty hospital bill hits low-income family

A California woman whose daughter attends college in Washington, DC called our hotline to ask what she could do about a $1,300 medical bill her daughter incurred when she visited an emergency room. “We cannot pay this bill. We are low income. Our daughter is a student with no income,” Mrs. Leung* told us.

The first thing we advised Mrs. Leung is to have her daughter apply for health insurance through her college or at HealthCare.gov, where she likely would be eligible for expanded Medicare or a subsidy.

On to the bill: We advised Mrs. Leung not to ignore it! Doctors and hospitals turn unpaid bills over to collection agencies, which could subject young Cindy Leung* to years of poor credit. Contact the hospital as soon as possible and explain the situation. Some hospitals will forgive some or all bills for people whose income falls below certain amounts.

It’s also worth a try to negotiate a lower amount. First, go to an online health care costs comparison tool such as Healthcare Bluebook or New Choice Health. You can compare doctor’s fees at Health in Reach. For example, New Choice Health showed that the cost of an abdominal ultrasound in Washington, DC, varied from $350 to $1,850—a $1,500 difference! If the amount you were charged for a procedure or medical visit is higher, use this information in your negotiations.

If neither of these suggestions works, ask the hospital about an installment payment plan. When you pay on a structured installment plan—or even send regular, on-time payments of any amount you can afford—the hospital probably won’t add the debt to your credit report or send it to a debt collector. Verify what you need to do to avoid a notation on your credit report.

Last but not least, we urged Mrs. Leung to speak with her daughter about avoiding emergency rooms except in a true medical emergency. Have her reach out to a local doctor or nurse practitioner for regular preventive care. In doing so, Cindy will have access to health care for the price of an office visit.

*Not these consumers’ real names.

MoneyWi$e combats recidivism with education

A 2013 study from the University of Illinois has found that offering comprehensive financial literacy skills training to individuals re-entering society from incarceration can provide them with new life skills that help reduce repeated jail time. The researchers surveyed 155 incarcerated men in two Midwestern prisons and discovered that inmates viewed programs specific to investing, self-employment, managing a checking account, maintaining a balanced budget and building savings as critical to their success outside of prison.

Consumer Action’s Community Outreach and Training Manager Linda Williams provided this kind of in-depth training to 30 participants in the City of Fontana (California) Re-entry Program. All participants at the January training are re-entering on parole or probation.

The training used the identity theft module from Consumer Action’s popular MoneyWi$e financial education curriculum. Williams engaged participants in an interactive discussion about their financial goals and strategies for achieving success on the outside. Every hand in the room went up when she asked who wanted a job and to become self-sufficient.

“If you get a job on the outside,” asked Williams, “would you want to open a bank account, get an apartment, buy furniture, and a car?” Every hand stayed in the air.

Stressing the importance of good credit, Williams explained how a fraudulent credit history resulting from ID theft could prevent consumers from prospering financially. She noted that a 2011 study by the Federal Reserve Bank of St. Louis identified incarcerated individuals as easy targets for identity thieves because they often have clean credit files.

As a first step Williams advised the men to obtain copies of their consumer reports. In addition to credit reports from Experian, TransUnion and Equifax, she urged them to order “specialty consumer reports” that are sold to employers, insurance companies, banks and landlords. These national databases are a good resource for early detection of possible identity theft. Scanning other national databases such as LexisNexis “person reports,” CLUE insurance loss reports, MIB medical reports and ChexSystems banking history reports also may reveal fraud and misuse of Social Security numbers, said Williams. (See Consumer Action's Specialty Consumer Reports.)

At the end of the training, participants eagerly picked up information on ID theft, ways to obtain copies of their consumer reports and mechanisms for disputing inaccurate credit information. The men shared stories about being victims of ID theft, citing some of the signs Williams mentioned.

Every year upwards of 700,000 inmates are released from federal and state prisons nationwide with the potential to make a fresh start, according to the University of Illinois report. Unfortunately, 70% of these inmates are rearrested and 52% become re-incarcerated. Along with ID theft, other stumbling blocks to success include significant debt from lengthy court trials and no immediate source of income. The Brennan Center for Justice reports that some inmates incurred as much as $2,464 in court fees, a figure that does not include other debt such as fines and court-ordered restitution.

Consumer Action is committed to empowering community-based organizations to use quality financial literacy programs to encourage successful re-entry and prevent recidivism. Since, individuals re-entering society from incarceration are likely to be victims of ID theft, and as a result face impediments to their success, Williams recommends that re-entry trainers start with ID theft and educate trainees on how they can obtain and clear up their financial records before sending them out on job searches, to open a bank accounts, or to find rental housing.

Williams points out that the Federal Reserve Bank of St. Louis recommends that formerly incarcerated individuals monitor their credit reports for two or three years after being released.

A newly revised MoneyWi$e ID theft module and interactive teaching game will be available for download March 15. You will be able to find these materials here.

New module promotes banking inclusion

Accounts at banks and credit unions can help people better manage their money, however many people avoid the banking system because of lack of knowledge or unfounded fears. Many more have been locked out of the banking system after they made missteps.

To address these issues, Consumer Action created a new education and training module that encourages unbanked and underbanked consumers to get checking and savings accounts and guides them through selecting, opening, using and managing the accounts. The module was created with a grant from the Rose Foundation Financial Literacy Fund.

Consumer Action staff will be holding small trainings this spring on the materials for local community-based organizations in Visalia and Oakland, CA; Austin, TX; Rockville, MD; and Washington, DC. For more information, email .(JavaScript must be enabled to view this email address).

The module can be found on Consumer Action’s website.

The module includes:

  • Checking and savings accounts: A wise choice. This brochure—available now in English and Spanish and in Chinese, Korean and Vietnamese in a few weeks—presents the basics of checking and savings accounts, highlighting the advantages that bank accounts offer over “fringe” banking services such as check cashers. The publication covers, among other topics, how checking and savings accounts work, how to choose a financial institution and open an account, and how to reduce or avoid account fees.
  • Questions & answers about bank accounts. This backgrounder (or “leader’s guide”) answers many questions about checking and savings accounts in much greater detail than the companion brochure. Written in Q&A format, the guide includes in-depth information on more than a dozen banking topics, from selecting a bank account, using an ATM and understanding overdraft protection to overcoming barriers to getting an account and how to use online and mobile banking services.
  • Lesson plan. This 40-page plan guides community educators through a two-hour presentation on selecting, opening, using and managing checking and savings accounts. Each section of the lesson highlights the key points to be covered in that segment and offers questions to generate class discussion.Three exercises give learners the opportunity to practice writing and recording a check and balancing a checking account, and asks them to identify ways to avoid or minimize account fees. Handouts direct learners to other trusted consumer resources and to video tutorials that demonstrate how to do things like use an ATM or deposit a check via mobile banking. An evaluation, to be completed by participants at the end of the class, helps instructors gauge success and improve future presentations.The lesson plan includes thumbnails of the slides that make up the companion PowerPoint presentation. This format enables educators to learn and practice the presentation without having to switch back and forth from lesson plan to screen.
  • PowerPoint presentation. The 31-slide presentation, which can be downloaded and displayed during trainings and printed in handout format, is full of photos and graphics to engage visual learners. Each slide includes instructor's notes.

Consumer Action appreciates the ongoing support of the Rose Foundation.

Educating seniors on health care fraud

Months before the Affordable Care Act (ACA) was signed into law in 2010, seniors were bombarded with misinformation claiming that the law would slash their Medicare benefits, create so-called “death panels,” and eliminate the Medicare Advantage managed care program. When key provisions of the law went into effect last October, many senior citizens were confused about how the law would impact them and their Medicare health benefits.

Despite the fact that the ACA does not directly affect Medicare, scammers had a field day around the law. Seniors nationwide came under unrelenting attack from false messages about the need to re-apply for Medicare, bogus money saving programs and threats of jail and fines for not signing up for new health care programs. These efforts were really intended to gain unauthorized access to personal information that could be used to commit credit fraud.

For two days in January, Consumer Action joined Congressman Raul Ruiz (D-CA), a former emergency room physician, to educate seniors in his Southern California district about health care fraud. Dr. Ruiz introduced a bill last year that would task the U.S. Department of Health and Human Services to work with the Department of Justice to generate a report with policy recommendations to combat the most prevalent health care schemes. The findings would be used to educate and inform senior citizens. Dr. Ruiz has said his bill is designed to provide more information “on ways criminals are working to defraud seniors through health care scams and to bring criminals to justice. It’s vital that seniors know and recognize the warning signs of fraud and report the activity to law enforcement.”

Linda Williams of Consumer Action said she was gratified to participate, not only professionally as a consumer advocate, but personally as well. She recounted having to convince her 92-year-old mother that calls warning of the need to buy additional health care coverage because of Obamacare were a telemarketing scam. “My mother was convinced she was about to lose her Medicare benefits,” said Williams.

Williams reviewed portions of Consumer Action’s MoneyWi$e ID theft module to educate seniors on how to protect themselves against medical ID theft, provided steps to avoid fraud when a loved one dies and outlined tricky techniques scammers use to obtain personal information. She also reviewed Consumer Action’s Health Records Privacy module, which covers what information is found in medical records, the benefits and risks of electronic records, what medical privacy rights you have, and what to do when your medical privacy rights are violated.

Williams encouraged the group to report suspected fraud related to Obamacare. She provided the number of a new federal health care marketplace call center (800-318-2596) that can answer questions about suspected fraud. To report Medicare fraud, or to inquire about possible scams relating to Medicare recipients, Williams suggested calling Medicare (800-633-4227) directly.

The Medicare website (www.Medicare.gov) offers Top 5 things to know about the Affordable Care Act if you have Medicare.

  1. Medicare isn’t part of the Health Insurance Marketplace established by ACA, so you don’t have to replace your Medicare coverage with Marketplace coverage.
  2. You get more preventive services, for less. Medicare now covers certain preventive services, such as mammograms or colonoscopies, without charging you for the Part B coinsurance or deductible. You also can get a free yearly “Wellness” visit.
  3. You can save money on brand-name drugs. If you’re in the Medicare donut hole, you’ll get a 50% discount when buying Part D-covered brand-name prescription drugs.
  4. Your doctor gets more support through new initiatives to support care coordination.
  5. The ACA will help extend Medicare to at least 2029 due to reductions in waste, fraud and abuse, and Medicare costs.

Out and about: Monitoring your ‘digital footprint’

At a Cybersecurity Forum held in Washington, DC by the Federal Communications Commission last November, a New York Times article They Loved Your G.P.A. Then They Saw Your Tweets was referenced several times.

The article revealed how indiscreet social media posts can scuttle your college applications. A poll by Kaplan Test Prep found that 30 percent of admissions officers surveyed had discovered information online that had worked against prospective applicants.

The panel’s large audience included just the right demographic: Teenagers from high school classes around the country attended or tuned in for a live Webcast. During two panels, experts discussed cybersecurity risks faced by teens, parents and guardians. Panelists also discussed the importance of preventing risky online behaviors and provided tips on how to protect young people from these risks.

Where the first panel mostly represented academics and tech policy wonks, the second included representatives from tech giants Microsoft, Google, Instagram, Snapchat, Comcast and CTIA-The Wireless Association, who addressed technological advancements in cybersecurity for consumers, especially as they relate to privacy strategies around social media and mobile phones.

Parents were advised to “Get online!” If your child has a Facebook account, an Instagram account or an Xbox profile, it’s a wise move to create one, too. The more parents and guardians understand the account settings and technology, the more effective they’ll be in protecting young people and monitoring their presence online.

Since colleges, universities and prospective employers could be monitoring the Internet to research reputations, its important to build a positive image online. Staying off the Internet may not be a good idea, as those with practically no online presence may also be penalized. Adela Ghadimi, assistant director of the University of Miami’s Washington DC program, reminded teens to use blogs and Tumblr and Pinterest posts to show their “human side,” interests and personal achievements.

Whether you’re a teen, parent or educator, Consumer Action suggests these websites that offer tools and resources to help protect your digital footprint and keep your family safe online:

A Platform for Good

A project of the Family Online Safety Institute (FOSI), A Platform for Good is designed to help students, parents and teachers use the Internet for positive purposes. Its resource center provides basic information on popular social media websites and mobile applications, provides parent guides on cybersecurity, parental controls and mobile security, and offers a checklist outlining steps to take to clean up your “digital footprint.”

Common Sense Media (en español)

This non-profit organization reviews video games, apps and websites and rates them by age-appropriateness, educational content, violence, sexual content and profanity to help parents decide what is best for their kids to watch and download.

DuckDuckGo

An alternative search engine to Google, Yahoo and Bing, DuckDuckGo vows not to track users, doesn’t use filter bubbles to provide search results based on your previous Internet use and displays less spam and clutter in search results.

Entertainment Software Rating Board (ESRB)

This website provides guidance about video games and apps so that consumers, especially parents, can make informed choices for their family. A searchable database allows parents to enter the name of an app or video game to get ratings and other information.

Family Safety Center

Google offers this guide to staying safe online. Consumers can learn about Google privacy settings and safety tools that help parents filter their child’s searches online and on mobile phones.

Growing Wireless

Sponsored by CTIA-The Wireless Association and The Wireless Foundation, the website helps parents stay up-to-date on the latest mobile products and services kids may be using.

OnGuardOnline.gov (en español)

A collaboration of more than a dozen government agencies, the website provides guides to help parents discuss topics like texting, sexting, cyberbullying and computer security with young people.

Coalition Efforts: Debt buyers, gainful employment and ‘big data’

Working in coalition with consumer, privacy rights and civil rights organizations, Consumer Action advocates for regulatory changes to improve consumers’ lives. Here are three recent efforts.

Better records needed for banks selling consumer debt. Debt buyers—companies that buy defaulted credit card accounts and loans for a fraction of the amount the consumer owed—can make life difficult for the debtors they chase. They can place collections on credit reports and obtain court judgments allowing them to freeze bank accounts, garnish wages and even place liens on property. Their actions can make it difficult for people to pay for their basic needs, such as housing, utilities, food or medication. Advocates, including Consumer Action, wrote to the Office of the Comptroller of the Currency (OCC), regulator of banks that sell the loans to debt buyers, urging the OCC to issue best practices for selling debt that include solid documentation that the debtor actually owes the debt. Read the letter.

Stronger gainful employment rule is needed to protect taxpayers. Consumer Action and dozens of other advocacy organizations sent a letter to President Barack Obama about proposed regulations that would establish rules for vocational and educational programs that prepare—or say they prepare—students for jobs. Advocates believe that a strong rule requiring schools to adequately educate students for “gainful employment” in a recognized field is necessary. Otherwise students could indebt themselves with student loans and remain unprepared for employment in their chosen fields. Currently, many students borrow significant sums to pay tuition at for-profit schools and end up saddled with debt and unable to get a good job. Read the letter.

Get public input on ‘big data’ and privacy rights. In a January speech, President Barack Obama addressed the delicate balance between keeping citizens safe from terrorism while upholding liberty and privacy. During the speech he announced that his administration would conduct a comprehensive review of “big data” collection and its implications for privacy, the economy and public policy. In response, a coalition of consumer and privacy groups including Consumer Action wrote to the Office of Science and Technology Policy (OSTP) urging an open comment period to gather feedback from consumers—those affected by policies that fail to protect their privacy. Read the letter.

Class Action Roundup: Large settlement in case claiming FCRA violations

In February, we added 10 class action settlements and two pending class actions to our Class Action Database.

One notable class action settlement is Roe, et al. v. Intellicorp Records, Inc., et al. Intellicorp Records, Inc. and Insurance Information Exchange (IIX) (“Intellicorp”) provides employment background screening reports and meets the definition of a consumer reporting agency under the Fair Credit Reporting Act. The plaintiffs filed a class action against Intellicorp claiming that Intellicorp (1) gave inaccurate criminal background reports to employers and (2) failed to notify individuals that their criminal history information was reported to employers in violation of the Fair Credit Reporting Act.  Intellicorp denied the allegations but agreed to a settlement to avoid the burden, expense and risk of continuing the lawsuit.

The class members are defined as persons in the United States “who were the subject of one or more consumer reports furnished to a third party by Intellicorp or IIX for employment purposes, which report(s) contained an Intellicorp Criminal SuperSearch result reflecting a record of criminal or traffic arrest or conviction or other criminal history, during the period April 16, 2010 through Sept. 16, 2013.”

The settlement provides an $18.6 million settlement fund, changes to Intellicorp’s business practices, free copies of class members' criminal history information, and a fast and easy dispute process. There are two types of cash payments: Individuals who were not given notification of the report may be eligible for up to $50. Individuals whose criminal history information reports were inaccurate may be eligible for up to $2,000. Claim deadline is Monday, April 21, 2014. Click here for claim form. The final fairness hearing is on May 23, 2014.

About Consumer Action

Consumer Action is a non-profit 501(c)(3) organization that has championed the rights of underrepresented consumers nationwide since 1971. Throughout its history, the organization has dedicated its resources to promoting financial and consumer literacy and advocating for consumer rights in both the media and before lawmakers to promote economic justice for all. With the resources and infrastructure to reach millions of consumers, Consumer Action is one of the most recognized, effective and trusted consumer organizations in the nation.

Consumer education. To empower consumers to assert their rights in the marketplace, Consumer Action provides a range of educational resources. The organization’s extensive library of free publications offers in-depth information on many topics related to personal money management, housing, insurance and privacy, while its hotline provides non-legal advice and referrals. At Consumer-Action.org, visitors have instant access to important consumer news, downloadable materials, an online “help desk,” the Take Action advocacy database and nine topic-specific subsites. Consumer Action also publishes unbiased surveys of financial and consumer services that expose excessive prices and anti-consumer practices to help consumers make informed buying choices and elicit change from big business.

Community outreach. With a special focus on serving low- and moderate-income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of nearly 7,500 community-based organizations. Outreach services include training and free mailings of financial and consumer education materials in many languages, including English, Spanish, Chinese, Korean and Vietnamese. Consumer Action’s network is the largest and most diverse of its kind.

Advocacy. Consumer Action is deeply committed to ensuring that underrepresented consumers are represented in the national media and in front of lawmakers. The organization promotes pro-consumer policy, regulation and legislation by taking positions on dozens of bills at the state and national levels and submitting comments and testimony on a host of consumer protection issues. Additionally, its diverse staff provides the media with expert commentary on key consumer issues supported by solid data and victim testimony.

 

 

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