Consumer Action INSIDER - December 2019

 

Table of Contents

What people are saying

Thank you for presenting such an informative [FinTech] webinar! We appreciate you spending the time to put this together and present it for us. We loved hearing about your FinTech work and pilot programs. We had some great questions at the end and the participants seemed very engaged. — Laura D’Alessandro, Senior Program Officer, Local Initiatives Support Corporation

Did you know?

Depending on where Medicare beneficiaries live, an alternative to Original Medicare, called Medicare Advantage, may offer plans that cost less and cover more services—even dental and vision in certain cases. Some Medicare Advantage plans even have earned Medicare's highest rating (five stars). Medicare’s “open enrollment” period is ending Dec. 7; you have until then to research and change your current plan. Go to Medicare.gov to learn more.

How the prescription drug cost crisis is hurting consumers

Few prescription drug users—insured or not—are exempt from the pain of paying for life-prolonging and life-saving medicines. Consumer Action News examines this timely, critical issue in our latest edition—entitled “Prescription drug cost crisis”—through insightful feature articles that delve into the many barriers to lower drug prices and what can be done to combat these challenges and restore balance to the market.

The barriers outlined include the significant role pharmacy benefit managers (PBMs)—the unseen middlemen—have played in the drug cost crisis, due to the enormous control they have over pricing. PBMs essentially receive drugmaker “kickbacks” (called rebates) for promoting one drug over another, and can refuse to include certain medicines on lists of covered drugs, called “formularies,” dramatically impacting cost and consumer access to prescriptions. Combined with monopoly pricing (drugmakers have the right to sell their patented drugs for virtually any price for up to 20 years), the average annual cost of brand-name drugs has more than tripled in the last 10 years!

Other barriers to more affordable medicines include:

  • Failure to negotiate: The federal government is prohibited from negotiating the price of prescription drugs for Medicare “Part D” drug plans, which has led to a rapid rise in Medicare drug spending.
  • Pay-for-delay deals: When patents expire, drugmakers often pay generic drug manufacturers money to delay bringing lower-cost medicines to market.
  • Patent abuse: Often with just minor tweaks to the original patent, drugmakers extend their exclusive rights to sell a medicine to maintain a monopoly on sales.
  • Mergers: Large companies merge with other powerful and related businesses, reducing consumer options and inflating consumer costs. Examples include the corporate marriages of drug manufacturers AbbVie with Allergan and health insurer Aetna with chain pharmacy/pharmacy benefit manager CVS.

Earlier this year, Consumer Action surveyed more than 100 community-based organizations (CBOs) to determine the impact of high drug costs on our network of CBOs and their clients. More than three-quarters (77%) of those surveyed said their clients were forgoing needed good and services—primarily food—to pay for their prescriptions.

There is no single solution to the prescription drug-pricing crisis, but Consumer Action News outlines a number of proposals that would likely lower costs for those most affected by out-of-control drug prices, including:

  • Allowing government negotiation: Medicare should be able to directly negotiate prices with drug manufacturers. (Lawmakers have introduced a variety of bills to permit negotiation, but none have been signed into law yet.)
  • Requiring PBM transparency: Pharmacy benefit managers currently profit from drugmaker rebates without public awareness as to how much they earn. PBMs should be compelled to declare any rebates and pass these savings on to health insurance plans, to reduce the premiums consumers pay.
  • Reducing patent abuse: The government should grant patent extensions only for true drug innovations.
  • Increasing generic options by banning pay-for-delay deals: Doing so would help accelerate access to generic drugs.
  • Capping consumer costs: Lawmakers should limit what insured individuals are required to pay out-of-pocket for prescription drugs.

Click here to read our “Prescription drug cost crisis” issue.

Wells Fargo funds Consumer Action’s new FinTech innovation work

Wells Fargo has made a $275,000 commitment to Consumer Action to support the scaling of our financial technology (FinTech) innovation and education initiatives, which directly address America’s savings crisis and will, based on the positive outcomes of our recent FinTech pilot program, help to improve the financial health of low-to-moderate-income (LMI) and underrepresented consumers.

Recognizing that 40% of American families lack enough savings to cover a $400 emergency, Consumer Action is working to combat the pervasive impact of financial setbacks on the lives of LMI, limited-English-speaking and other underrepresented consumers. Consumer Action is introducing FinTech tools to the consumers and non-profit staff who work with them at various sites throughout the country (selected based on the staff’s and consumers’ common, self-identified financial needs).

Bonnie Wallace, channel manager for Wells Fargo’s financial inclusion and philanthropy program, announced the award on Sept. 17 at Consumer Action’s 10th annual National Consumer Empowerment Conference goal of the project is to educate financial educators on measuring financial health through in-person train-the-trainer events. Consumer Action and program participants (including financial coaches and counselors) will integrate the FinTech tools, along with our educational resources, into existing financial capability programs; provide technical assistance at half-day meetings (for those agencies prepared to launch FinTech innovation projects); offer an educational FinTech webinar for the financial educators; and distribute FinTech tools directly to LMI consumers while helping them to improve their financial health through the use of the tools. In order to reach an even greater number of vulnerable consumers, Consumer Action will be translating its existing FinTech fact sheet into Spanish with grant funds.

Consumer Action’s network partners will also measure changes in financial health using the Financial Health Network’s FinHealth Score™, formerly called the Center for Financial Services Innovation (CFSI) Financial Health Score® Toolkit.

Consumer Action Executive Director Ken McEldowney applauded the innovative initiative, stating that support from Wells Fargo “is crucial in our work to introduce financially vulnerable consumers to financial technology tools and platforms that can help them achieve balance in their financial lives. We have found that well-designed FinTech tools can provide consumers with new insights and a path to financial health.”

In 2018, Consumer Action received support from Wells Fargo for a pilot program to distribute FinTech tools and educational resources (including Consumer Action’s FinTech fact sheet) to LMI consumers and to measure changes in users’ financial health.

The fact sheet introduces consumers to the types of FinTech tools available to them and outlines how the tools can help them budget, manage spending and move forward with their money goals. It also tells consumers what to consider when choosing a FinTech app and how to stay safe when using the apps and platforms. The pilot will conclude at the end of the year.

The community development non-profit Local Initiatives Support Corporation (LISC) and Wells Fargo recently cohosted a webinar titled Steps Toward Financial Wellness. Consumer Action Director of Strategic Partnerships Audrey Perrott closed out the series in November with a presentation on FinTech.

“We appreciate the opportunity to partner with LISC and Wells Fargo to train financial coaches and other community-based organization staff on strategies for integrating financial technology into their existing work, the benefits and risks of FinTech and financial health measurement,” Perrott said.

Consumer Action and LISC are members of the Nonprofit-Fintech Exchange, managed by the Financial Health Network with support from the JPMorgan Chase Financial Solutions Lab and the Principal Foundation®.

“The Exchange operates as a valuable marketplace for engaged non-profits and FinTech providers to explore innovative collaboration opportunities and swap insights," Perrott said.

Hotline Chronicles: Your college has closed, now what?

Malinhe* from Rhode Island wrote to our hotline about a student loan that she co-signed with her son to pay tuition at an Institute of Art school. The Art Institute closed its schools in 2017. Our counselors provided specific information to Malinhe, but suggested that this is a good opportunity for Hotline Chronicles to remind the wider world of students and parents that they may be eligible for closed school federal loan discharges if a for-profit school closed while the student still was enrolled in the program. Federal student loans include William D. Ford Federal Direct Loan Program loans, Federal Family Education Loan Program loans and Federal Perkins Loans. Parents who took out PLUS loans on behalf of students also are eligible.

Under what are known as borrower defense to repayment rules, borrowers can also request federal student loan forgiveness or discharge if their school violated its contractual agreement with students or engaged in material misrepresentations (for example, lying about the quality of educational programs or job placement statistics). Learn more.

Under the Trump administration, there has been much uncertainty about the survival of Obama-era policies to help student borrowers. Under the Trump administration’s Secretary of Education Betsy DeVos, the Department of Education has proposed or carried out actions to weaken protections for student borrowers. In fact, a judge recently threatened DeVos with jail time in a court case brought by advocates after she stopped processing borrower defense to repayment applications and ordered the Department to gut the program rules. The Department of Education recently announced, however, that it will proceed with discharging the nearly 4,000 loans in question.

A recent poll commissioned by the non-profit Americans for Financial Reform found that a majority of voters—regardless of political party—were worried about the Education Department’s actions. The poll showed that voters are most concerned about the Department permitting higher penalty fees to be charged to borrowers struggling to repay their loans, making it harder for state and federal law enforcement agencies to pursue wrongdoing by student loan servicers, and blocking debt relief to thousands of student borrowers who were defrauded by for-profit schools. (Download a fact sheet about the poll here.)

You might be eligible for a closed school loan discharge if:

  • Your school closed while you were enrolled, and you did not complete your program because of the closure.
  • You were on an approved leave of absence for purposes of the federal student aid programs, or you withdrew from all classes 120 days or less before your school ceased instruction.

You are not eligible for closed school loan discharge if:

  • You withdrew from all classes more than 120 days before your school closed.
  • You completed all of your coursework for your program prior to your school closing (even if you haven’t received your certificate or diploma).
  • You transferred academic hours earned at your closed school to a comparable program at another school.

If you were a student loan borrower at a for-profit school that closed down while you were enrolled, you should also visit the Federal Student Aid Office of the U.S. Department of Education to learn more about eligibility requirements for discharge. To apply for a closed school loan discharge, complete and return to your loan officer a discharge application, which you can request from your loan servicer or download at the Department of Education website. To learn who your loan servicer is, visit My Federal Student Aid or call 800-4FED-AID (433-3243).

It is important to continue to make payments on your loan while your discharge application is being processed; defaulting on your loan will make the process even more difficult. It also is important for you to obtain your academic and financial aid records if your school closes, since you might need those records if you plan to attend another school or want your student loans discharged. Contact the state licensing agency in the state where the school was located to find out if that state—or another entity—has your records. (There may be a fee to obtain the transcripts.) Find your state licensing agency here.

Additional resources

  • Call your state Attorney General’s office to ask about any ongoing lawsuits against the school in question. A court ruling is likely needed to help student borrowers discharge private student loans, and private loan borrowers should also talk to their loan servicers about their options.
  • Get involved with the Project on Predatory Student Lending, a legal organization representing students against predatory activities by for-profit colleges and government policies that enable the industry to cheat student borrowers and taxpayers.
  • Check out the Debt Collective, a membership organization that “leverages collective power by offering debtors a shared platform for direct action.”
  • Review the Education Department’s Federal Student Aid “Guide to repaying your student loans.”
  • Visit the Student Borrower Protection Center, a non-profit organization focused solely on alleviating the burden of student debt for millions of Americans by engaging in advocacy, policymaking and litigation strategy to rein in industry abuses, protect borrowers’ rights and advance economic opportunity for the next generation of students.

Finally, consider enlisting a student lending lawyer to help you navigate your options. We suggest finding a lawyer who is listed at the National Association of Consumer Advocates. You probably will have to pay for legal representation, but many attorneys will discuss your case with you before requiring you to contract for services, which helps you determine if this is the right option.

*Not this consumer’s real name

Consumer Action awards those “Moving the Needle for Consumers”

In October, Consumer Action celebrated 48 years of consumer advocacy successes during a cocktail awards reception in Washington, D.C., honoring FTC Commissioner Rohit Chopra, consumer advocacy non-profit The Center for Auto Safety, and the consumer investigative television units Telemundo Responde/NBC Responds.

The theme of the anniversary was “Moving the Needle for Consumers.” Advocates and allies from the non-profit, corporate and government sectors met at the Microsoft Innovation & Policy Center to celebrate awardees who have made impactful, positive change in the marketplace by aggressively investigating and fearlessly combatting corporate malfeasance on behalf of all consumers.

Event chair Daniel Nestel of credit scoring company FICO welcomed guests and kicked off the first award, to The Center for Auto Safety. The national non-profit won Consumer Action’s community award for its tireless work to improve automobile safety for consumers through industry accountability, sensible regulations and issue-focused advocacy. Founded in 1970, the Center has been dedicated to improving not only vehicle safety but also automobile quality and fuel economy.

Guest presenter Bob Adler, acting chairman of the U.S. Consumer Product Safety Commission, presented the award to Jason Levine, the Center’s executive director. Levine outlined the long history of “wins” that the Center has fought hard for, including the passage of lemon laws in every state, airbags in every vehicle and recall repairs at no cost to the consumer.

Frank Torres, director of consumer affairs and senior policy counsel at Microsoft, presented our media award to Telemundo Responde/NBC Responds. The award was accepted by a group of colleagues that included Kevin Keeshan, of NBCUniversal Owned Television Stations, and Ozzie Martinez, of Telemundo Station Group.

The NBCUniversal Owned Television Stations division launched its first consumer investigative units in 2014 across six Telemundo markets before expanding its consumer units to all NBC stations, with more Telemundo stations launching their local units every year. Working with the units’ Consumer Investigative Center team of producers tasked with responding to every incoming consumer email and call, the “Telemundo Responde/NBC Responds” units have answered more than 350,000 consumer complaints across 20 markets and collectively returned more than $35 million (and counting) to aggrieved consumers.

Attorney Sarah Bloom Raskin, formerly a member of the Board of Governors of the Federal Reserve System, was the guest presenter of our award to FTC Commissioner Rohit Chopra, in the government category. Raskin praised Chopra as “a person of integrity who wants to fix the financial system, and believes that we can do it. We can stay true to our values—that our nation works only if every part of it is thriving.”

Commissioner Chopra has advocated for a fair and fully functioning marketplace through vigorous FTC enforcement efforts that protect families and honest companies from those that break the law. During his tenure at the FTC, he has pushed for aggressive remedies against law-breaking companies, especially repeat offenders, and has worked to reverse the FTC’s reliance on no-money, no-fault settlements.

After the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Chopra joined the Department of the Treasury to launch the new Consumer Financial Protection Bureau (CFPB). He then served as assistant director of the CFPB, overseeing the agency’s student loan agenda. The secretary of the Treasury also appointed him to serve as the CFPB’s student loan ombudsman, a new position established in the financial reform law. In these roles, he led efforts to spur competition in the student loan financing market, developed new tools for students and student loan borrowers to make smarter decisions, and secured hundreds of millions of dollars in refunds for borrowers victimized by unlawful conduct by loan servicers, debt collectors and for-profit college chains.

Chopra later served as special adviser to the secretary of education to advance the department’s efforts to improve student loan servicing, reduce unnecessary defaults and bolster enforcement. He was also a senior fellow at the Consumer Federation of America, where he focused on consumer protection issues facing young people and military families, and a visiting fellow at the Roosevelt Institute.

“Each year our anniversary fundraiser brings much deserved attention to the efforts of the dedicated and committed advocates who have educated, empowered and watched out for consumers and the organizations that serve them,” said Ken McEldowney, Consumer Action's executive director. “This year, I’d also like to give credit and thanks to our host, Microsoft, and to the generous underwriters, donors and contributors who made this special night possible.”

Underwriters for the 2019 event were Amazon, Bank of America, Capital One, Facebook and TracFone. Click here for a list of other sponsors.

Click here for a gallery of photos taken at the event by Stephen Baranovics.

Annual report considers past, present and future of consumer advocacy

Consumer Action’s 2018-2019 report, covering the period of April 2018 through March 2019, not only chronicles our efforts, activities, accomplishments and partnerships during another year of change and challenge for both consumer rights and the nation, but also reflects on the history of consumer advocacy, as well as our role in responding to present and future challenges.

In December 2018, we learned of the passing of Consumer Action’s founder, Kay Pachtner. Her groundbreaking work began in 1971, with Consumer Action’s complaint phone line—a lifeline that we still offer today, predominantly online, for people who lack the agency and influence to fight back when sold a bill of goods by deceptive or fraudulent corporations and businesses. Pachtner continued to grow Consumer Action throughout the 1970s, during what current Consumer Action Executive Director Ken McEldowney calls “a golden age of consumer activism.” However, as McEldowney’s introduction to the annual report points out, “The consumer movement soon met with backlash from big businesses that ‘woke’ to the perceived threats to profits and shareholder wealth. One could say that the fledgling consumer movement ran smack into a wall of corporate influence that continues to stymie it today. Regulations—even consumer protections—became the enemy.”

With the backdrop to the consumer movement established, Consumer Action’s annual report describes how we have been fighting back against heightening assaults by the current administration (and many in Congress) on regulations, marketplace fairness, transparency, consumer rights and individual privacy. Even in the face of this extreme opposition, Consumer Action’s “wins” over the last year have included:

• Continuing to lead a coalition of consumer, civil rights, community, privacy and fair lending organizations to maintain and improve the Consumer Financial Protection Bureau (CFPB) complaint process, which came under threat by Trump-appointed officials. (Subsequently, in September, due in no small part to our work, CFPB Director Kathy Kraninger announced at our National Consumer Empowerment Conference that the CFPB would be keeping its complaint database accessible to consumers and improving access to the information it contained on complaints filed against corporations accused of misleading, defrauding or otherwise mistreating consumers.)

• Helping Congress draft legislation that influenced the language in Rep. Hank Thompson and Sen. Richard Blumenthal’s groundbreaking Forced Arbitration Injustice Repeal (FAIR) Act (HR 1423/S 610). (Subsequently, in September 2019, the FAIR Act passed the House.) If both houses of Congress pass the bill, it would prevent corporations from forcing consumers, employees and small businesses to resolve disputes through private, company-controlled arbitration systems.

• Getting in front of the media on the issue of payday lending, particularly as it relates to a CFPB rule under attack by Trump-appointed Bureau leadership. The rule would require lenders to ensure that borrowers have the ability to repay before provisioning them with high-interest debt. We were quoted in a number of national publications, including U.S. News & World Report and the Los Angeles Times, on the importance of the rule and the current Bureau leadership’s attacks and attempts (on behalf of industry) to gut the rule.

• Celebrating two significant court rulings pertaining to student lending regulation, which we advocated for with our partner Project on Predatory Student Lending. One ruling banned the DeVos-led Education Department from using private earnings data to grant only partial student loan forgiveness to Corinthian Colleges students who had been misled and defrauded by the sham school; another cleared the way for what is known as the borrower defense to repayment rule to take effect immediately, meaning that DeVos could no longer legally delay implementing this critical 2016 Obama-era regulation aimed at providing relief for scammed student loan borrowers.

As our annual report reveals, Consumer Action has also been increasingly involved in the many cutting-edge technological issues impacting consumer rights, such as threats to data privacy and the dangers of facial recognition, along with the promotion of commonsense FinTech (financial technology) regulations and FinTech literacy for consumers. In 2018, we also joined Consumers for Quality Care, a coalition of advocates and former policymakers partnering with health advocacy organizations to provide a voice for patients, who are increasingly left out of our country’s health care debate. We outlined our support for three key principles in the fight for better health care: ensuring that high-quality, comprehensive care is available and affordable; improving insurance design to better meet the needs of consumers; and transforming the health care delivery system to put patients at the center.

Read all about our national and California advocacy efforts, outreach projects, publications, online and social media activities, hotline stats, anniversary event, national conference, milestones and more in our annual report, which you can download here.

Coalition Efforts: Lecherous lenders and airplane evacuations

HUD’s attack on a core civil rights tool opens the door for housing discrimination. Consumer Action joined hundreds of organizations in submitting comments in response to a Department of Housing and Urban Development proposed rule that would gut an essential civil rights tool. The Trump administration’s proposal would severely weaken a mechanism for addressing housing discrimination under the Fair Housing Act, called “disparate impact.” This is one of the current administration’s most extreme and harmful moves to dismantle anti-discrimination laws. Learn more.

Stop banks from helping predatory payday lenders evade state regulations. More than five dozen public interest groups expressed deep concern about “rent-a-bank schemes” in letters they recently sent to three of the top federal banking agencies, explaining that several nonbank consumer payday lenders have set their sights on using partnerships with banks to evade newly enacted interest rate restrictions in California. The letter details how the federal agencies are critical in “preserving the integrity” of our national banking system by continuing to protect consumers against sham “rent-a-bank” arrangements that allow payday lenders to issue borrowers dangerous loans with triple-digit interest rates. Learn more.

Advocates applaud the Fed’s faster payments system, but urge fraud protection. Consumer and privacy advocates applauded an announcement by the Federal Reserve Board (Fed) that it will develop a real-time payments system (our current electronic payments system takes at least a business day to move money, meaning that a bank transfer sent on a Friday might not arrive in the recipient’s account until Monday). While the advocates supported the change, they urged the Fed to ensure protection against scammers and criminals who use faster payment systems to get away with fraud without recourse. The Fed is the U.S. central banking system, tasked with promoting the stability of the financial system and minimizing and containing systemic risks. Learn more.

FAA evacuation tests could lead to unsafe and inhumane airline seating. The Federal Aviation Administration’s (FAA) upcoming airplane passenger “evacuation tests” are based on outdated standards that do not reflect the realities of today's airline travel marketplace, said a coalition of 10 consumer and fliers rights organizations in a letter sent to FAA Administrator Steve Dickson and Department of Transportation (DOT) Secretary Elaine Chao. The decades-old tests fail to account for multiple factors that could prevent safe and quick plane evacuation, including more cramped economy seats, the presence of emotional support animals in the cabin, parents who may not be seated with their minor children, and the fact that the average body size has increased. Learn more.

CFPB Watch: Deceptive debt relief; a good ol’ grilling on Capitol Hill

A federal District Court has temporarily banned a student loan “debt relief” company from misleading borrowers, falsifying their information and charging them illegal fees, based on allegations by the Consumer Financial Protection Bureau (CFPB) and others. According to the CFPB, Premier Student Loan Center misrepresented its ability to obtain student loan forgiveness or to reduce borrowers’ monthly loan payments.

Instead of lowering loan payments, Premier automatically placed the loans in forbearance—a process by which loan payments are postponed. However, interest still accrues on the payments, which causes the balance to swell. The Bureau argued that Premier knew that placing the loans in forbearance would lead to borrowers having more money on hand, thereby making it more likely that they could better afford the firm’s expensive fees. Students were unaware that their loans were being placed in forbearance.

The CFPB also has accused Premier of submitting false information to loan servicers in an attempt to qualify borrowers for lower monthly payments, and of illegally charging the borrowers costly fees before securing any loan payment reduction on their behalf.

The CFPB, along with the Minnesota Attorney General, the North Carolina Department of Justice and the Los Angeles City Attorney, accused the debt relief operators of deceiving thousands of student loan borrowers and charging them more than $71 million in illegal upfront fees. The court has agreed to place a temporary restraining order on these practices by the company until the case is resolved. The Bureau is seeking refunds for consumers for the fees wrongly received by the company.

The student loan debt relief company operates under the name Consumer Advocacy Center Inc., which conducts business as Premier Student Loan Center; True Count Staffing Inc. (also known as SL Account Management); and Prime Consulting LLC (also known as Financial Preparation Services).

Consumer Bureau director grilled on Capitol Hill

CFPB Director Kathy Kraninger was grilled by Democratic lawmakers for her agency’s failure to seek financial relief for cheated consumers and student loan borrowers when she testified before both the U.S. House Financial Services and Senate Banking committees in October. Kraninger also appeared on Capitol Hill to release the CFPB’s mandatory semiannual report to Congress.

Some Senators blamed the Bureau’s failure to supervise federal student loan servicers on Kraninger’s unwillingness to challenge Education Secretary Betsy DeVos. Under DeVos’s direction, the loan servicers have failed to comply with the CFPB’s requests for data. What’s more, a full 99% of student loan borrowers who applied for loan forgiveness (after 10 years of payments) under the Department of Education’s Public Service Loan Forgiveness Program have been denied. Director Kraninger told lawmakers that the Bureau is working on an agreement so that it can return to sharing complaint data between the two agencies.

Committee members from both chambers criticized the director for repeatedly providing little to no monetary refunds for cheated consumers as part of enforcement actions. Chairwoman Maxine Waters (D-CA) gave as an example the CFPB settlement with payday lender Enova International. The company debited $2.6 million from thousands of consumer bank accounts—without authorization—and offered no restitution to the people it harmed. Kraninger defended the Bureau’s lack of enforcement and financial relief efforts by noting that the CFPB had returned more than $777 million to consumers from other cases in the last fiscal year. It should be noted, however, that two cases settled this year—the joint Equifax data breach settlement and a for-profit college loan case—amounted to a third ($228 million) of the loan forgiveness; the majority of the cases settled in the last year were brought during the Obama era, under then-director Richard Cordray.

Other Democratic lawmakers opined that Kraninger empowered payday lenders and debt collectors—as opposed to the very consumers the Bureau was created to protect—through the agency’s limited oversight, weak enforcement, and creation of ineffective or harmful rules that, rather than rein in the predatory industries, allow them to continue to harm the public with impunity. Kraninger, however, was not without her defenders at the hearing: GOP members praised her tenure and experience. Senate Banking Committee chairman Senator Mike Crapo (R-ID) said, “Given her depth and diversity of public service experience, I have the utmost confidence that she is well-prepared to lead the Bureau.”

Class Action Database: Breaking a sweat over “sweatproof” headphones

A class action settlement involving SmartPay’s unsolicited text messages was among 10 new settlements added to the Consumer Action Class Action Database during November.

Of note this month is the class action settlement Shin v. Plantronics, Inc.

Plaintiffs charge that electronics company Plantronics falsely advertised its BackBeat FIT wireless headphones as “sweatproof” and “waterproof.” Plaintiffs also claim that Plantronics marketed the headphones as providing up to eight hours of wireless listening on a single battery charge when, in reality, the battery life diminished much faster, particularly with exposure to sweat or water.

The defendant denied the allegations but agreed to settle the case without admitting wrongdoing.

You are part of the class if you bought a pair of BackBeat FIT wireless headphones (version Genesis or 16M) manufactured between April 1, 2014 and Oct. 31, 2019.

The settlement provides class members with one of three options:

  • Class members who bought headphones on or after Jan. 1, 2018, may opt to receive a 12-month limited warranty extension;
  • Class members who provide proof of purchase and proof of prior claims or written complaints about the defective headphones may select a $50 cash payment; or
  • Class members who provide proof of purchase may select a $25 cash payment.

The claims deadline is Dec. 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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