Consumer Action INSIDER - August 2019

 

Table of Contents

What people are saying

Thank you very much for getting back to me [about my retirement adviser]. I feel much better since their information and phone number have been confirmed. Your services are greatly appreciated. — Carolyn Thompson, via email

Did you know?

Most people don’t consider what they want to have happen to their body after they die. But without your guidance, your family and loved ones will have to tackle what can be a series of bewildering and costly decisions at a difficult time. You can make things easier for the people you leave behind by formalizing your wishes for your remains. Your three main choices include: burial, cremation or donation of your body for medical research. The Funeral Consumers Alliance (FCA) offers free, unbiased advice on its website to educate the not-yet-departed on creating financially sound plans. It also lists a helpful directory of affiliated, local cremation providers.

San Francisco senior ball is a big draw

Each year, TODCO Group, a community-based housing/community development non-profit corporation operating in San Francisco's South of Market neighborhood, holds its Yerba Buena Senior Ball, inviting elders from neighborhood senior housing to socialize while receiving helpful financial information from local non-profit organizations. As in past years, two Consumer Action staff members, Jamie Woo and Cui Yan Xie, attended the ball (held at the Moscone Center) to distribute Consumer Action publications on issues of importance to the elderly.

The Yerba Buena Senior Ball is a highly anticipated annual event in the local senior community, with over 1,000 people in attendance each year. The majority of attendees come from the Yerba Buena housing developments, where more than 2,000 seniors, most of whom are Chinese, Filipino or Russian immigrants, live.

“The Yerba Buena Senior Ball is a great opportunity to increase the community’s awareness about our organization and the services and resources we provide,” Woo said.

Approximately 90 percent of the elders in attendance were Chinese-Americans, so TODCO invited 20 non-profit organizations that provide free Chinese educational publications to take part.

Consumer Action prepared 300 sets of educational brochures (a total of 1,200 pieces)—270 sets in Chinese and 30 in English. The brochures cover topics including: ID theft, account fraud and other scams; the California LifeLine discounted phone program; and how consumers can complain about marketplace injustices. Elderly attendees reported that Consumer Action’s “Just Say No to Scams” brochure was particularly helpful, as they had been receiving scam phone calls and wondering how to handle them.

One attendee reported that she already knew of Consumer Action after calling our hotline number to resolve a complaint about a lemon car she had bought. She gushed about how happy she was to have someone in her corner when she needed the help.

Consumer Action’s materials were such a draw that they were all taken within the first hour.

“We’re happy to represent Consumer Action at the Senior Ball each year because the elders are always so thankful for our publications, which address the financial and marketplace challenges they’re dealing with day-to-day,” Cui Yan Xie added.

Concertgoers, event attendees burned by online 'ticket bots'

In June, the Federal Trade Commission (FTC) hosted a workshop to tackle consumer protection challenges in the online ticket marketplace. The workshop centered on the "bots" (robotic software programs) that are commonly used to buy large numbers of tickets to concerts and sporting events. The event included representatives from primary ticket selling companies, secondary sellers, anti-bot security experts and consumer rights organizations.

Consumer Action’s Joe Ridout participated in a workshop panel, and reported back about how bad actors are increasingly limiting the availability of tickets in the primary market. Bots are commonly used by unscrupulous actors, like ticket scalpers, who purchase masses of tickets to popular shows only to turn around and sell them back to the public at sharply higher prices.

While Ticketmaster claimed that it stopped 10 billion instances of bot activity last year, Distil Networks, a company that helps protect online vendors, apps and the like from automated bot attacks, issued a 2019 “Bad Bot Report” revealing how bot activity has been increasing on ticketing sites, and how bots are becoming increasingly technologically sophisticated.

Further, the Canadian newspaper Toronto Star investigated Ticketmaster’s Trade Desk platform last year, exposing how the massive ticket selling company has been knowingly allowing brokers to network hundreds of different accounts, buy thousands of tickets and then automatically relist them on the secondary market.

The 2016 BOTS Act makes it illegal to “circumvent a security measure, access control system or other technological control or measure on an internet website or online service that is used by the ticket issuer to enforce posted event ticket purchasing limits or to maintain the integrity of posted online ticket purchasing order rules.”

Unfortunately, the BOTS Act, passed in 2016, imposes only civil penalties for vendors using illegal bots. “If Ticketmaster and other primary vendors would provide data to state attorneys general and the FTC on bot activity, it would go a long way in holding illegal bot users accountable,” Ridout said. “Without more extensive information sharing, it's not surprising that the BOTS Act hasn’t been effective in stopping the bad actors using bots.”

Workshop panelists also addressed drip pricing (the process in which unadvertised fees are added right before checkout), holdbacks (when a company withholds available tickets from the public), and the controversial practice of “nontransferable paperless ticketing,” which companies claim safeguards consumers against ticket scalping, but which comes at a steep cost to consumer freedom. (The policy on these tickets mandates that the original purchaser is required to enter the venue simultaneously with all other attendees, which can be burdensome and unfair to a buyer who falls ill, a parent who wants to give tickets to a child and her friends, a group of friends who will miss the event if the initial buyer isn’t present, etc.)

Unfortunately, Ticketmaster and other ticket sellers are able to keep the extent of any given supply of tickets a secret (through pre-sales, holdbacks and staggered sales).

“Consumers suffer from the information asymmetry ticket vendors have over them. We are in the dark about the number of available tickets in the primary market, even when the event takes place at publicly-subsidized or publicly-owned venues,” Ridout explained.

There’s good news, however. The newly-introduced BOSS Act would, if passed, require ticket sellers to disclose to the public: how many tickets are available; the number of tickets in different “batches” (like those being sold to members of fan clubs, etc.); which specific groups can buy the tickets if they are not available to the general public; and when batches of tickets will be made available.

Ridout pointed out that there was also good news coming out of the FTC workshop: Attendees tended to agree that consumers were entitled to an “all-in” price that would include fees before any online checkout process began, and that StubHub, SeatGeek, Ticketmaster and Eventbrite were likely to support legislation mandating such a policy.

“Overall, the FTC’s workshop was fascinating and informative, and we hope that the agency will take an assertive role in protecting ticket-buying consumers going forward,” Ridout concluded.

Hotline Chronicles: The real price of an airline ticket

Tomasita* from Orange County, California, called our Hotline to complain about how airlines don’t include all the fees in the original price of a ticket. We agree: It’s maddening, unfair and all too common! As a matter of fact, Consumer Action is pressing for change, so that consumers will not be duped into purchasing low-cost plane tickets that do not include advance assigned seating but do tack on fees for checked (and even carry-on) baggage.

“Artificially low airplane fares entice consumers,” said Consumer Action’s Linda Sherry. “Then come the ancillary fees...and they can be a shock to folks who fly infrequently, making the whole process more stressful.”

Checked bag fee: check! Cancel and change ticket fee: check! Reserved seat fee: check! The fees keep piling up, said Sherry, who finds it particularly galling that most of today’s “basic economy” fares come without a specific pre-boarding seat assignment.

“Yes, we know that we’re guaranteed a seat and it will be assigned at the airport upon check-in, but solo travelers might not want to be stuck in the middle seat, and families with children want to be sure they’ll be seated together. This leaves no choice but to pay more for specific seat assignments. It feels like extortion,” Sherry added.

In 2016, Congress added an amendment—the Families Flying Together Act—to the Federal Aviation Authority (FAA) Reauthorization Bill. The amendment would ensure that children under 13 could sit by their parents when flying. However, the FAA hasn’t finalized the amendment, nor determined what would happen if airlines didn’t comply.

Sherry, who is a member of a consumer coalition advising the Department of Transportation (DOT) Aviation Consumer Protection Division, noted that the DOT told advocates that it actually doesn’t hear many complaints about the seat assignment issue or families flying together. Consumer advocates countered that this is probably because infrequent flyers don’t know there's a place to complain!

“Generally we find that infrequent flyers don’t know their rights,” Sherry said. “It’s important that we let regulators know when we’ve had a bad experience.”

Of course, before you file a complaint with the DOT, you should contact the airline directly to give it a chance to resolve it. However, complaints about ancillary fees and other airline passenger travails often fall on deaf ears at airlines. So, here’s where you can file a complaint online with the DOT’s Aviation Consumer Protection Division.

Complaints also can be filed by phone, at 202-366-2220 (TTY 202-366-0511), or by mail, at Aviation Consumer Protection Division, C-75, U.S. Department of Transportation, 1200 New Jersey Avenue, SE, Washington, DC 20590. (Note that a different division handles aviation safety and security complaints.)

In addition, no matter how infrequently you fly, it pays to understand your rights. You can learn more by reviewing the DOT webpage “Fly Rights: A Consumer Guide to Air Travel” or checking out the Fall 2018 Airline passenger rights issue of Consumer Action News.

Flying overseas? The little known 1999 Montreal Convention was created to protect air passengers traveling on international flights. It sets common rules of compensation for 120 countries. Learn about your international air passenger rights and how to claim compensation for a disrupted flight (through the Montreal Convention) at AirHelp’s website. (AirHelp is a third-party fee-based service that helps travelers get compensation they are entitled to.)

It’s important for international travelers to know that the European Union (EU) specifically boasts strong rules to compensate airline travelers (up to $700) whose flights are delayed. Flights inside the EU and those on European carriers are covered, as are flights departing from an airport in the EU. Learn more at AirHelp.

“We believe the airline industry is going the wrong way in pricing tickets, with higher fees and less transparency,” noted Sherry. “Consumers deserve to know what the full price of a ticket involves. And we feel strongly that any airline ticket should come with a pre-assigned seat. There is enough anxiety around air travel today without the added stress and uncertainty that these barebones tickets engender.”

*Not this consumer’s real name

Who’s tracking your location (and collecting the data)?

Consumer Action recently released a survey on location data tracking alongside a revealing report entitled “Location Tracking and Data Collection.” The survey and report focus on the collection and use of consumer location data by various industries, and examine who or what parties have access to consumers’ location information, how the data is used, whether it’s shared with others, and what, if any, control consumers have over the tracking and sharing of their location data.

The report specifically analyzes tracking and data collection by internet service providers (ISPs); social media companies; auto, ridesharing and insurance companies; food delivery companies; “wearable” technologies (think: Fitbit); and employers. Among some of the more shocking revelations in the report:

  • Consumers often unwittingly provide permission (buried in fine-print terms) for ISPs to collect all sorts of data on them—just by signing a cell phone service contract. Users’ cell phones act as personal trackers, collecting very accurate accounts of individuals’ locations (within a few feet to a few hundred meters). The data collected on users’ day-to-day movement has been resold to third parties, including car salesmen, property management companies—even stalkers and bounty hunters.
  • Monitoring by tech and social media companies can go on even when consumers are not logged in to their email or social media accounts.
  • The personal health information that users share with wearable devices (which includes location and, often, personal biometric data) is not covered by the Health Insurance Portability and Accountability Act (HIPAA). While users are told the data is “de-identified” when shared, researchers have been able to re-identify people from “anonymized” location data.
  • Some retailers use location data for dynamic pricing—price adjustments based on a customer’s proximity to their store or a competitor’s store, or whether the consumer is shopping online. Mobile apps have hiked the price on certain goods as shoppers enter the corresponding brick-and-mortar stores, for instance.

2,475 consumers participated in Consumer Action’s associated online location data preference survey earlier this year. Respondents overwhelmingly opposed companies sharing or selling user location data to third parties, and stated that they believe location data should only be used for the reason it was collected; all other purposes should require express, upfront consent. For more information on the survey, click here.

Unfortunately, industries typically don’t seek permission to collect location data, or blanket permission for access is hidden in “the fine print.” The “Location Tracking and Data Collection” report recommends a number of federal policy changes to protect consumer location data, including the passage of a robust data protection law that would require those seeking data about an individual to obtain express consent prior to collecting, using or sharing a user’s personal data. Consumer Action also recommends the government establish a federal data protection agency to create and enforce privacy protection rules and oversee the many companies that use individual data for company gain.

Coalition Efforts: From sham schools to scam calls

DeVos clears the way for more fraudulent schools at taxpayers’ expense. The Trump administration proposed an overhaul of federal standards for college accreditors, arguing that the current rules “stifle innovation.” Advocates are warning that the proposed changes will weaken existing oversight and give low-performing schools even more leeway to defraud students and taxpayers. Learn more.

Overhauling the nation’s broken credit reporting system. Democratic members of the House Financial Services Committee are calling upon Congress to enact legislation to reform the credit reporting system, enhance consumers’ credit reporting rights, create more transparency over the consumer reporting and credit scoring process, and increase the accountability of those who develop credit scoring models. Learn more.

Robocall madness: It’s time to stop the scams and harassment. In a letter to the ranking members of the U.S. House Energy Subcommittee on Communications and Technology, advocates announced their support of the bipartisan Stopping Bad Robocalls Act (HR3375) and urged legislators to pass the bill without amendments, in order to stop the abuse Americans endure through robocall violations. The bill would allow the Federal Communications Commission (FCC) to prohibit most unwanted calls (including from telemarketers, scammers and debt collectors), improve caller ID technology and hold callers who violate the law accountable, among other sorely-needed improvements. Learn more.

Don’t water down banks’ overdraft opt-in rule. While overdraft fees are still a huge source of income for many banks, regulations (created in 2010) have restricted the financial institutions’ ability to charge the fees unless customers opt in through the bank’s overdraft coverage programs. Banks used to automatically enroll customers in overdraft coverage without their knowledge or consent, and although they now sometimes misleadingly collect “opt-ins” from customers, the 2010 rules have, for the most part, resulted in a big improvement in consumers’ ability to avoid being charged for overdrafts. Inexplicably, the Consumer Financial Protection Bureau (CFPB) under Trump administration leadership is now considering weakening the 2010 overdraft rule. Advocates are warning the Bureau that relaxing the rule would be detrimental to consumers and their bank accounts. Learn more.

CFPB Watch: Freedom Debt Relief pays for its deceitful deeds, says CFPB

Last month, the Consumer Financial Protection Bureau (CFPB) settled a 2017 suit with the nation’s largest debt settlement company, Freedom Debt Relief, and announced that the company must pay $20 million in restitution to harmed consumers.

The Bureau accused the company of charging consumers for debt settlement services it did not provide, forcing them to negotiate their own repayment plans and misleading them about its fees and debt negotiating ability. The Bureau also charged Freedom Debt Relief with imposing advanced fees on consumers (which is illegal under the Telemarketing Sales Rule), and failing to inform consumers of their right to retrieve the funds they deposited with the company.

The debt relief company is now banned from engaging in such fraudulent practices. Freedom Debt Relief must also identify and report all affected consumers to the Bureau, as they will be eligible for compensation through the $20 million that the company has been ordered to contribute to a CFPB fund. (Unfortunately, any money not distributed to harmed customers will be deposited into the U.S. Treasury, instead of remaining in a CFPB account to assist other injured consumers, as was customary under prior CFPB leadership.) Freedom Debt Relief has also been ordered to pay a $5 million penalty.

Moving forward, the company must advise customers that they may need to negotiate directly with some of their creditor(s). Consumers who choose not to do their own negotiating will be withdrawn from Freedom’s program without charge.

Financial empowerment training for community-based organizations

If your organization assists economically vulnerable consumers, the CFPB wants to help you help the communities you serve to better manage their money. The Bureau aims to support about 40 organizations through its Your Money, Your Goals financial empowerment materials.

Specifically, the Bureau will offer training and technical assistance relevant to a range of common financial challenges, including dealing with debt, creating a bill management plan, and establishing and growing credit. The Bureau will also provide financial guides targeted to staff who work with underserved populations, including those recently released from prison, Native Americans, and people with disabilities.

If your organization is interested in applying for CFPB support, click here to learn more or join the CFPB’s informational webinar on Aug. 7 at 3:00 p.m. (Eastern Time). Email .(JavaScript must be enabled to view this email address) to RSVP for the webinar. The deadline to apply is Sept. 6, 2019.

Reverse mortgage guide en español

The CFPB has translated its Reverse Mortgage Guide into Spanish. The guide is designed to help older consumers understand if reverse mortgages—home loans that use the equity in a homeowner’s property (while they live there)—are appropriate loans for them.

To bulk order the guide in English or Spanish, click here.

The Bureau also offers a free two-minute video explaining reverse mortgages (in English).

Dispelling the financial myths around military members

The CFPB has written a helpful blog post entitled “Five myths in the military community about personal finance.” Here’s an example of the types of myths the post covers:

Myth: The Military Lending Act (MLA) doesn’t protect my spouse or my dependent children.

Fact: If a servicemember is on active duty, his or her spouse and children (under 21) are protected by the MLA. Under the Servicemembers Civil Relief Act (SCRA), interest rates are capped on the existing loans a servicemember’s family has taken out, while the Military Lending Act (MLA) limits rates on most new loans. These protections also cover reservists and members of the National Guard.

For more mythbusting, check out the CFPB’s blog; at the bottom of the page is a link to subscribe to the blog via RSS feed, or follow the CFPB on Twitter or Facebook for new content and other updates.

Class Action Database: Forced set-top box rental arrangement costs Comcast

A class action settlement involving FoodState’s advertising of its MegaFoods and Innate Response Formula dietary supplements was among 15 new settlements added to the Consumer Action Class Action Database during July.

Also of note this month is a massive class action settlement involving Comcast and its set-top box fees.

The plaintiffs who filed the class action against Comcast alleged the telecomm giant violated anti-competition laws by forcing the consumers who subscribe to its “premium cable” package into solely renting and using Comcast’s own set-top boxes. Subscribers must rent the boxes (and pay a separate rental fee) in order to access the premium package. Comcast does not allow subscribers to purchase the set-top boxes, and the monthly rental fees that subscribers pay for the set-top boxes quickly exceeds the price that Comcast originally paid to purchase them.

Plaintiffs claim that this “tying arrangement” restricts competition in the set-top box sale or rental market and violates antitrust laws.

Comcast denied the allegations but agreed to a $15.5 million settlement to avoid the burden, expense and risk of continuing the lawsuit.

You may be a class member if, between Jan. 1, 2005 and Sept. 5, 2018, you:

  • Subscribed to Comcast’s “premium cable” and paid the rental fee for the set-top box(es) in California, Washington or West Virginia; or
  • Opted out of Comcast’s arbitration clause, subscribed to Comcast’s “premium cable” and paid the rental fee for the set-top box (anywhere in the U.S.).

Consumers eligible to join the class action will receive restitution based on the amount of time they were Comcast customers:

  • Class members who rented Comcast’s set-top box from one to 35 months may be eligible to choose from $10 cash; three free months of the Showtime television channel; or five movie or TV show rentals through Comcast.
  • Class members who rented the set-top box from 36 to 59 months may be eligible to choose from $12.50 cash; three free months of Showtime (with one movie or TV show rental); or six movie or TV show rentals.
  • Class members who rented the set-top box for 60+ months may be eligible to choose from $15 cash; three free months of Showtime (with two movie or TV show rentals); or seven movie or TV show rentals.

The claims deadline is Aug. 31, 2019.

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 seven 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 7,000 community-based organizations. Outreach services include 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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