Consumer Action INSIDER - April 2022


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Debt and debt collection are the focus of recent webinar

By Nelson Santiago

In February, Consumer Action presented “Kitchen Table Economics: Dealing with debt and debt collection,” a webinar that covered recently implemented new rules for collectors along with debt demographics, debtors’ rights and the importance of getting control of your finances.

Consumer Action’s Linda Williams, who, along with Nelson Santiago, hosted the webinar, opened by explaining that, in every city and small town across the U.S., the kitchen table is where many households gather to conduct their finances—where they determine whether there's enough money to pay the bills and make it to the next month. When there's not enough money and families fall behind, Williams said, debt collectors start calling and add stress to already difficult situations, especially when the calls involve harassment or intimidation.

On hand to help consumers understand their debt collection rights and get a better handle on their finances were April Kuehnhoff, a staff attorney with the National Consumer Law Center (NCLC) and Vickie Elisa, a community educator and trainer with the Women’s Institute for a Secure Retirement (WISER).

Before discussing the details of new CFPB debt collection regulations, Kuehnhoff explained why we're talking about debt in America: Before the pandemic therewere 68 million Americans with a debt in collections on their credit reports, and by the end of 2021, that number had grown to 77.6 million. "It's a huge problem affecting tens of millions of Americans, and it's growing," Kuehnhoff said. She also cited statistics from the Urban Institute that show that exploding debt is a racial justice issue. According to the data, there are racial disparities in terms of the distribution of debt in collections. At the national level, 24% of the population in predominantly white communities has debt in collections, compared to 39% in predominantly non-white communities.

In a later segment, WISER’s Elisa explained that her organization provides women with basic tools and financial information to help them take control of their financial lives and prepare for a secure retirement. Elisa addressed the question of why women are so important when it comes to talking about reducing debt and figuring out how to have solid credit: There are a lot more women than men in the U.S. Among those 65 and older, there are 5.8 million more women than men. And women make up about 67% of the 85-and-older population. This last age group is expected to double, or even triple, over the next three decades and is the most likely to end up in poverty. "I'll repeat that this group is the most likely to end up in poverty," Elisa reemphasized, issuing a warning to community educators and advocates. She added that many women who have never been poor before end up in poverty in their later years.

Tune into the webinar recording here. The in-depth discussion by Elisa covers everything from jump-starting emergency savings accounts to taking control of debt and credit, to finding help with healthcare expenses. The presentation by Kuehnhoff provided crucial information on the new debt collection rules that became effective last November, including details about when and how collection agencies can contact consumers by text message and on social media platforms. Kuehnhoff also discussed key consumer protections for old, "time-barred” debts.

One attendee, from Birmingham, Alabama, provided feedback on the webinar, saying it included "very valuable and timely information with great presenters." Another viewer, from Los Angeles, said, "Wow! This was great! I needed this like a car needs a tune up every” so often.

Check out the recording on Consumer Action’s YouTube channel.

Have you missed any of our other webinars? Click here to view them now.

Hotline Chronicles: Employment screening complaint

By Linda Sherry

Macklin* from California’s Central Valley reached out to our hotline, saying he was told he was not hired for a job he applied for because of something the potential employer found in a “consumer report.” He said he was not provided with a copy of the report. “I did sign a disclosure agreement and checked the box asking for a copy of the report. But the company never gave me a copy,” Macklin told us. “I even followed up again but they didn’t send it.”

Macklin had applied for the job with a major interstate trucking firm, which certainly should be aware that it’s illegal to withhold the report. Companies are required to inform job applicants if they require background checks and must have the applicant’s written permission to run a report. Applicants have the right to say no, but usually this means they won’t get the job. These requirements are part of the Fair Credit Reporting Act (FCRA), a federal law. The company must give the job applicant written notice that it will conduct a background check, and this notice must be obvious and separate from all other application paperwork (not buried in fine print).

Applicants are entitled to receive a copy of any report used by the potential employer to make the decision to turn them down for employment or to rescind a job offer. Macklin should have received a copy, whether he checked the box asking for it or not.

We suggested Macklin submit a complaint to the Federal Trade Commission (FTC). (If an employer received your background report without your permission, or rejected you without sending you the required notices, report it to the FTC.) And, if Macklin believes he was discriminated against during the hiring process, he should contact the U.S. Equal Employment Opportunity Commission (EEOC) by calling 800-669-4000 or by visiting the EEOC field office nearest him.

The FTC suggests that applicants check their credit reports before applying for jobs. This will give you some time to fix errors, if any, before you let a potential employer view it. To get your free credit reports, visit or call 877-322-8228. (Through the end of 2022, because of the pandemic, everyone’s eligible to get free credit reports from the three major credit reporting bureaus weekly. After that you can request your free reports only once a year, unless the policy is extended.) Also, check if you have criminal records on file. There are a variety of options for U.S. citizens to check on criminal records that may exist in their name.

The EEOC enforces federal laws designed to protect you against employment discrimination. While employers generally can ask about your criminal history, they can’t use your criminal history to discriminate against you based on a protected category, such as your race.

Under the FCRA, you have a right to sue the employer. While you may be able to find a private attorney to take your case without upfront fees, most likely you will have to pay out of pocket for representation. With a strong case, the law entitles successful plaintiffs up to $1,000 in statutory damages (a standard award set by the FCRA); additional “punitive” damages; your attorney’s fees and costs; and money for damages incurred because of a lost job opportunity. You can search for a consumer attorney at the National Association of Consumer Advocates Find an Attorney page.

*Not this consumer’s real name

Consumer Action salutes CBO partner with award nomination

By Audrey Perrott

Consumer Action’s director of strategic partnerships, Audrey Perrott, nominated Heath Carelock, director of the Financial Empowerment Center at Prince George’s Community College (FEC@PGCC), for the Community Champion award in the Financial Education and Capability Awards Program. The awards are made possible by the Maryland Society of Accounting and Tax Professionals and the Woodside Foundation and are coordinated by CASH Campaign of Maryland, the Maryland Council on Economic Education, and the Maryland State Department of Education. They highlight the dedication and success of public school teachers, community champions and outstanding organizations that deliver financial education. Winners receive a certificate and $1,000.

The FEC@PGCC is long-term community partner of Consumer Action. Under Carelock's leadership, the FEC has scaled its programming and broadened its target audience and service area. Some of the innovations that have been initiated under Carelock's leadership include: adoption of tools such as the SavvyMoney app and the Money Habitudes financial personality assessment; internet radio podcasts featuring subject matter experts; a strong social media presence and archived webcast workshops on Facebook; research into the effectiveness of the Financial Empowerment Center’s programming; COVID-19-specific financial empowerment programming; and ongoing virtual and in-person financial and small business coaching.

Carelock has also facilitated Association for Financial Counseling & Planning Education (AFCPE®) trainings on trauma-informed care in personal finance, identifying how personal traumas impact financial capability and wellbeing and exploring trauma-sensitive approaches to financial counseling and coaching.

Consumer Action has collaborated with the FEC@PGCC for years. FEC@PGCC staffers have attended Consumer Action-hosted train-the-trainer events and consumer empowerment conferences, invited Consumer Action employees to present at its events, and met with Consumer Action to learn best practices on integrating FinTech and matched savings into existing financial coaching and capability programs. We have also been able to participate in some of FEC@PGCC’s “Virtual Empowerment Hour” programming.

“Consumer Action is revered not just because of its national reach and ethical touch, but also because of its constancy of relevant information, focused on financial wellbeing, and its emphasis on equipping citizens and residents with up-to-the-minute economic information,” said Carelock. “Consumer Action [has] given the FEC@PGCC an added edge in supporting clients, and that makes their resources and reinforcement irreplaceable!”

Carelock will receive his award at a ceremony on April 27.

Coalition Efforts: Advocates urge updates to the CRA and support Capitol Hill staffers’ attempt to organize

By Alegra Howard

Consumer Action and its allies recently called on policymakers and regulators about these important issues:

Stronger CRA rules needed to ensure equal access to credit. With a new proposal imminent from federal bank regulators, community, civil rights and consumer advocacy groups have been stressing the urgency of updating the Community Reinvestment Act (CRA). The CRA is a civil rights-era law meant to end and reverse the impact of 20th century redlining by requiring banks to lend in all communities where they are chartered to do business. Critical changes to both the process and metrics of CRA exams that evaluate lender performance, as well as updates to how digital banks are assessed, are needed to ensure that communities of color have equal access to credit to buy homes or build and grow businesses. Learn more.

Protect retirees and savers from conflicted investment advice. A broad coalition of leading worker, consumer and investor advocates has urged the Department of Labor (DOL) to quickly update and strengthen the rules governing retirement investment advice to help protect workers and retirees from harmful conflicts of interest. Conflicted retirement investment advice costs retirement savers tens of billions of dollars every year. Learn more.

Advocates support Hill staffers’ effort to organize. Coalition advocates expressed support for congressional staffers who have begun a campaign to unionize lawmaker offices and committees. Besieged with long hours, measly pay and demanding bosses, congressional employees are hoping for better outcomes if they organize and bargain collectively. Learn more.

Credit issues affecting transgender and nonbinary consumers. Consumer Action joined over 140 organizations in sending a letter to the “Big Three” credit bureaus (Equifax, Experian and TransUnion) urging them to take needed actions to correct credit report problems for transgender and nonbinary consumers. After a legal name change, many transgender and nonbinary consumers end up with multiple credit files in different names and suffer a loss of credit history and score as a result. Additionally, credit reports “out” trans and nonbinary people to landlords, employers and lenders when they apply for loans, jobs and housing, because the report still includes their deadname (the name given at birth that they no longer use). Learn more.

CFPB Watch: Consumer watchdog probes for discrimination and targets medical debt

By Ruth Susswein

Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra put banks on notice that the Bureau will be watching for signs of unfairness and discrimination when it reviews the institutions’ lending practices.

Chopra said that the CFPB will scrutinize banks’ advertising, pricing and decision-making for discriminatory behavior—even if unintentional. The Bureau defines unfairness as causing “substantial harm” that consumers “cannot reasonably avoid.”

It will focus on discrimination in the areas of credit, loan servicing, credit reporting, debt collection, remittances and deposits. The Bureau also will prioritize the identification of unfair practices in mortgage servicing, such as failing to review a borrower’s loan modification application within 30 days, failing to terminate private mortgage insurance (PMI) once the principal balance owed reaches 78%, and failing to end automatic electronic payments when an account is closed, which can result in unexpected debits and overdraft fees for mortgage holders.

Medical debt

About 43 million people have overdue medical bills on their credit reports that were listed by debt collectors, according to a recent study by the CFPB. In fact, of all the debt collection items on our credit reports, more than half (58%) are medical bills.

The damage this debt does to people’s credit records affects their chances of renting or buying a home or a car, or getting a credit card or a job. Medical bills often are unexpected, and it can be difficult to know who is responsible for payment—the health insurance company or the patient.

“I am concerned that the credit reporting system is being weaponized as a tool of coercion to get people to pay medical bills they may not even owe,” said the CFPB director.

To help address these concerns, the Bureau intends to:

  • Carefully examine the Big Three credit bureaus’ (Equifax, Experian and TransUnion) efforts to accurately report medical debt and prevent access to the credit reporting system by companies that regularly supply inaccurate data;
  • Consider what government can do to ensure low-income patients have access to hospitals’ financial assistance programs; and
  • Assess whether it is appropriate to include unpaid medical debt on a credit report.

Previous CFPB research has shown that medical debt is less predictive than other types of debts of whether people will be able to repay future bills.

Likely in response to the Bureau’s attention to medical debt reporting, the Big Three credit bureaus recently announced that they will not report medical debt on credit records until the debt has been in collections for one year. Also, starting July 1, paid medical debt will be removed from credit reports. In 2023, medical debts under $500 will no longer be listed.

The Veterans Administration (VA) also has a new rule under which the agency no longer reports medical debt on credit reports unless all methods of debt collection have been exhausted and the veteran is not catastrophically disabled or entitled to free medical care.

Redesign for a clear consumer focus

“On your side through life’s financial moments”—that is the Bureau’s new motto. The CFPB has redesigned its homepage, with the goal of making the site simpler and more user-friendly. They kicked off this effort with improvements that make it easier to access their complaint data. Among other changes, they’ve added a section called “Payments to Harmed Consumers” (under the Enforcement tab) that details the amount consumers were compensated by a company, or by the Bureau on behalf of a company. They're now featuring how to find a housing counselor on the homepage, after learning from website users that the information was too tough to locate.

The Bureau's been testing its revisions on users to make sure the message and tone are clear, credible and trustworthy, and to ensure that the changes make the information more usable.

Class Action Database: RoundPoint settles case involving mortgage fees

By Rose Chan

A class action settlement involving Safeway gas stations and the company’s alleged violation of the Fair and Accurate Credit Transactions Act (FACTA) (by printing more digits of the payment card number than allowed on customer receipts) was among 10 new settlements added to Consumer Action’s Class Action Database during March.

Of note this month is the class action Elbert v. RoundPoint Mortgage Servicing Corp. (RoundPoint).

Plaintiffs filed a class action against RoundPoint claiming that the servicing company charged and collected unpermitted processing fees from borrowers making their monthly mortgage payments by phone (“pay-to-pay” fees). RoundPoint charged $10 for using the interactive voice response (IVR) system and $12 for speaking with a representative when making a mortgage payment. Plaintiffs claim that RoundPoint’s pay-to-pay fees were not authorized by HUD and violated the mortgage agreement.

Among the mortgage loans that RoundPoint services are those insured by the Federal Housing Administration (FHA), which restricts fees to those authorized by the Secretary of Housing and Urban Development (HUD). HUD does not allow fees for activities that are part of normal mortgage servicing activities, which would include accepting payments.

RoundPoint denied the allegations but agreed to a $1.6 million settlement to end the lawsuit. RoundPoint also agreed to stop charging fees for payments made online or by phone/IVR system from June 1, 2021, for at least two years after the final settlement date.

You are part of the class if you paid fees to RoundPoint when making mortgage payments on residential property by phone or interactive voice response system between Jan. 1, 2016, and May 31, 2021.

If the settlement is approved, class members will automatically receive payment or account credit.

The final approval hearing is on Apr. 15, 2022.

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Consumer Action is a nonprofit 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 both in 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, visitors have instant access to important consumer news, downloadable materials, an online “help desk,” the Take Action advocacy database, and more. 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. Our in-language media outreach allows us to share scam alerts and other timely consumer news with a wide non-English-speaking audience.

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 more than 6,500 community-based organizations. Outreach services include in-person and web-based training and bulk 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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