Consumer Action INSIDER - February 2023


What people are saying

“Consumer Action webinars are a great way to get access to valuable information on important consumer issues. The ability to revisit information provided through their webinars (i.e., slides, links) is very handy and provide tools that can be used with clients.”—Christine Padilla, Redwood City, CA (view our webinars on our YouTube channel)

Consumer Action and FTC warn of tax-related identity theft in new video

By Linda Williams

In observance of Identity Theft Awareness Week, which began on Monday, Jan. 30, Consumer Action has released a short video on tax-related ID theft. Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund, falsely claim one of your dependents on their tax return (to get the deduction or credit), or get a job (and leave you responsible for the taxes on the thief’s wages). This form of identity theft is most prevalent during tax season, and it’s happening more often. The Federal Trade Commission (FTC) reports that the scam has increased by 45% since early 2020. 

The video features presenters Rosario Mendez, an attorney in the Consumer and Business Education division of the FTC's Bureau of Consumer Protection, in the English version, and Gema de las Heras, a consumer education specialist in the same division, in the Spanish version.  

In Tax Identity Theft: Protecting yourself from fraudsters at tax time, Mendez explains how tax-related ID theft can occur and what consumers can do to reduce their risk of becoming a victim. She also explains how having a plan makes it easier to recover from identity theft, and points consumers to, where victims can report incidents of identity theft and get a recovery plan.

The IRS began accepting tax returns on Jan. 23. Mendez strongly recommends filing as early as possible to avoid becoming a victim of tax-related identity theft (once you file, a thief can’t file another return using your Social Security number) or to spot a problem early. If you hire someone to file your return, make sure it’s a reputable tax preparation service. And, as readers of Consumer Action’s SCAM GRAM already know, the IRS will never text or call you or ask you to pay your tax bill in cryptocurrency, gift cards or prepaid debit cards, or via peer-to-peer payment apps or wires. So, Mendez says, ignore such messages. 

View Tax Identity Theft: Protecting yourself from fraudsters at tax time in English here, and in Spanish here. And while you’re there, please subscribe to Consumer Action’s YouTube channel.

Publication updated to reflect changes in California consumer privacy law

By Monica Steinisch

Consumer Action and project partner Consumer Federation of America have just updated their guide on the California Consumer Privacy Act (CCPA)—legislation that regulates the protection of personal data belonging to California residents. The updates reflect changes to the law made through passage of the California Privacy Rights Act of 2020 (CPRA), most of which went into effect on Jan. 1. The California Privacy Initiative project, which includes a consumer survey, a train-the-trainer webinar and two consumer publications, is funded by a grant from the Rose Foundation for Communities and the Environment.

Among the key changes are:

  • The creation of the California Privacy Protection Agency (CPPA), which is responsible for implementing and enforcing the CCPA 
  • The end of the exemption for personal information collected by a business for employment reasons
  • A definition of sensitive personal information and how it must be treated
  • Specific protections for minors
  • Elimination of the 30-day cure period for violations of the law
  • Additional limits on tracking

Read the guide to learn more about these and other changes, and to be informed about all the protections provided to consumers under the law, as well as how consumers can exercise their rights and what options they have for legal recourse.

Take action! Exercise your rights under the California Consumer Privacy Act is available in English and Spanish now, and will be available in Chinese later this month. A condensed version of the full-length publication, for those who want the key points but don’t need as much detail, or who want to print the publication for distribution to clients or community members, is also available.

Coalition Efforts: Protecting investors, insurance customers and veterans

By Monica Steinisch

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

Regulation of the digital asset industry. In the wake of the collapse of cryptocurrency exchange FTX, Consumer Action joined allies in a letter to congressional leaders asking that they advance policies to regulate digital assets and protect individual investors. Specifically, the letter urges the lawmakers to resist pursuing legislative proposals that either are compromised by industry influence or do not adequately address the systemic problems found within the digital asset industry, and instead seek to empower regulators to use their existing authorities. More broadly, the letter recommends that policymakers recognize that there are widespread systemic problems within the digital asset industry, and not characterize the FTX collapse as a case of a “few bad apples.” Read the letter here.

Impact of climate change on insurance for underserved communities. Weather-related disasters have left millions of consumers entirely without insurance or with only the option of expensive state insurance, as private insurers drop customers in higher-risk areas to protect the companies’ profits. Due to a history of racist policies and underinvestment, climate risks like flooding and wildfires disproportionately harm minority and low-income communities. The combination of a climate crisis and an insurance industry retreat could create an affordability crisis that threatens Americans’ homes, life savings, and the economies of already vulnerable regions. Consumer Action and 75 allies wrote to the Department of the Treasury to urge its Federal Insurance Office (FIO) to broaden its proposed data collection on how climate change affects the cost and availability of insurance, particularly for underserved communities. In particular, the FIO should collect data on renters insurance, force-placed insurance and claims delays, which can function as denials for underserved communities; collect data on insurers of last resort and on climate impacts that are not always covered by standard insurance policies, like wildfire and wind; publish granular data; and use the data to inform the recommendations regulators make to insurers. Read the letter here.

Expansion of loss mitigation options for veteran homeowners. An estimated 100,000 to 130,000 veteran borrowers with mortgages backed by the Department of Veterans Affairs (VA) are seriously delinquent (three or more payments past due). At the same time, the loss mitigation options currently available to veteran borrowers are fewer and significantly less effective than those available to other government-insured borrowers. Consumer Action joined 18 other advocacy groups in urging the VA to bring its program into alignment with the assistance provided by other government agencies. Specifically, the groups recommended reactivating and updating the partial claim program, which allows borrowers to receive payment relief and/or assistance in resolving missed payments while keeping their original mortgage rates (which are much lower than currently available rates); reconfiguring and expanding the statutorily authorized refund program, which enables the VA to purchase delinquent loans from servicers and change the terms of the original loans to reduce veterans’ monthly payments; extending mortgage repayment out to a full 40-year term if needed to reduce a veteran’s monthly mortgage payment to an affordable level; and expanding the use of limited documentation applications, which lowers the administrative burden for veterans to qualify for loss mitigation. Read the letter here.

CFPB Watch: Bureau settles Wells mess and sues auto lender for hidden pricing

By Ruth Susswein

The Consumer Financial Protection Bureau (CFPB) wrapped up 2022 with compensation for consumers who were—once again—taken advantage of by Wells Fargo.

The Consumer Bureau settled a lawsuit with Wells under which the company will return $2 billion to 16 million consumers for long-term unfair, deceptive or abusive practices linked to the bank’s faulty mortgages, auto loans and frozen bank accounts. In some cases, people lost homes or cars, or paid unjustified fees or interest. Here’s a summary of Wells’s wrongdoing:

Auto loans: From at least 2011 through 2022, Wells Fargo misapplied or incorrectly processed many borrowers’ auto loan payments because of failures with the company’s technology, training, customer service and compliance, according to the Bureau. In some cases, the bank wrongly repossessed borrowers’ cars. A whopping 850,000 Wells customers suffered repossession-related harms. Accordingly, $1.3 billion is being returned to 11 million customers for auto loan servicing problems. Consumers are expected to receive at least $4,000 per wrongful repossession.

Mortgage servicing: Wells Fargo’s process for evaluating mortgage loan modification applications was filled with errors, says the CFPB. Calculation mistakes resulted in qualified homeowners being denied a loan modification. Wells also failed to pay homeowners’ property taxes, miscalculated interest, and failed to alert consumers to stop paying private mortgage insurance (PMI) when they could, according to the CFPB. Sometimes these borrowers were wrongly foreclosed on. While Wells became aware of these problems in 2013, the Bureau says, the bank mistakenly concluded that borrowers were not missing out on mortgage modifications. Ultimately, the bank is providing $77 million in remediation to about 3,200 mortgage holders.

Frozen accounts: More than 1 million Wells customers had no access to their funds for at least two weeks because Wells mistakenly suspected the accounts of a fraudulent deposit. Each of the 1 million-plus accountholders will receive $150 for their trouble. Another $205 million is being refunded to customers who were hit with surprise overdraft fees—even when they had the funds to cover the debits to their accounts. Refunds will be automatically sent by the bank.

Director Rohit Chopra credited consumers who filed complaints with the CFPB for alerting the Bureau to some of the harmful activities that Wells engaged in. Chopra calls Wells one of the “most problematic repeat offenders” that the Bureau has had to regularly deal with.

For its repeat offenses, Wells is also required to pay a record $1.7 billion penalty to the CFPB’s civil relief fund. 

CFPB sues ‘predatory’ lender for setting borrowers up to fail

“Credit Acceptance Corporation makes predatory loans to millions of financially vulnerable consumers trying to buy a used vehicle.” 

That is how the CFPB and the New York Attorney General opened their lawsuit against Credit Acceptance Corporation, filed on Jan. 4, for allegedly “tricking” customers into paying “inflated” car prices with excessively high-cost loans. Credit Acceptance is one of the nation’s largest lenders of subprime car loans—sold indirectly through auto dealers to consumers with low credit scores and few credit options. 

The agencies accuse the auto lender of setting low-income consumers up to fail by masking loan costs in the price of the car and intentionally subjecting borrowers to unaffordable monthly payments, car repossessions and very aggressive debt collection practices. 

The agencies say Credit Acceptance uses a complicated formula to predict how much the lender is likely to collect from each borrower, instead of calculating how much the consumer can afford to pay. The lawsuit also alleges that Credit Acceptance pushes dealers to tack add-ons (like service contracts) to the purchase, hide the cost of the extra products in the loan, and knowingly make unaffordable car loans.

Because of these tactics, many borrowers default on their car loans within the first year, and others have had their cars repossessed, the agencies say. 

Class Action Database: Settlement takes a $50 million bite out of Apple

By Monica Steinisch

A $7.8 million settlement against the maker of Celsius fitness drinks alleging that the company falsely marketed its beverages as containing no preservatives was among the new settlements added to the Consumer Action Class Action Database during December.
Of note is the class action settlement in a case against Apple claiming that 2015-2019 versions of the MacBook laptop were sold with defective keyboards that caused keys to repeatedly stick or fail entirely. Consumers who purchased certain Apple MacBook products and had a keycap replacement or a topcase replacement performed by Apple or an authorized service provider within the first four years of ownership may be eligible for payment. Class members are divided into three groups, based on the number and types of repairs they had. Payment amount—predicted to range from $50 to $395—depends on which group you’re in and the number of valid claims submitted. 

The claims deadline is March 6, 2023. 

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

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