Consumer Action INSIDER - January 2019

 

Table of Contents

What people are saying

Saying that Consumer Action's 9th annual National Consumer Empowerment Conference was amazing is an understatement! From the logistical arrangements to the hospitality, speakers, and information and materials provided, EVERYTHING was seamless!....I left this conference informed and empowered! — Jernessa Jones, Financial Wellbeing Coach, Operation Hope, Florence, AL

Consumer Action’s annual report is here!

Our 2017-2018 report chronicles our efforts, activities, accomplishments and partnerships during a year of change and challenge for both consumer rights and the nation. Download the report here.

Did you know?

The CARD Act—the 2009 federal law governing credit cards—placed caps on credit card late fees but allowed the Consumer Financial Protection Bureau (CFPB) to increase the cap if there are changes in a consumer price index. In January 2019, issuers will be able to increase already steep credit card late fees by $1 (up to $28 for the first late payment) and charge up to $39 if cardholders make a late payment on the same card twice or more in a six-month period. Consumers facing a late fee can call their credit card issuer and ask them to waive it, however—a courtesy that the issuer may offer, particularly if it’s the cardholder’s first time being late. Learn more.

Consumer Action joins Keep Me Posted campaign

In an effort to reduce costs, a growing number of companies are switching customers from paper to electronic communications—sometimes without their consent. Moves by service providers to make digital communications the “default” often frustrate consumers, who prefer a choice of how they receive bills, statements and other information.

Consumer Action joined the Keep Me Posted North America campaign, which launched publicly last month, in order to work with industry and consumer groups to educate and challenge corporations that are removing consumer choice and charging fees for paper. In addition to Consumer Action, non-profit supporters include Haven Neighborhood Services, Montana Organizing Project, National Consumers League, the Coalition for Paper Options* and the National Grange. A number of paper and envelope manufacturers help fund the campaign.

Keep Me Posted encourages service providers to give consumers a choice in how they receive bills and other communications. Companies that allow consumers to choose paper or electronic delivery of bills and statements—and don’t automatically default consumers to electronic delivery—are eligible to feature the Keep Me Posted supporter logo on their websites and consumer correspondence.

Consumer Action’s Linda Sherry joined the campaign’s advisory board last summer.

“Despite a perception that ‘everyone’ is on the internet, many consumers lack computer skills and/or access to high-speed broadband,” Sherry explained. “Still others prefer not to do business on the internet because of very valid concerns about fraud and cybersecurity.”

“The population preferring paper to electronic communications includes many seniors, limited-English speakers, disabled people and those living in rural areas,” Sherry continued. “Displaying the Keep Me Posted logo is a sign that forward-thinking companies understand that vulnerable and underserved consumers, in particular, are adversely impacted when deprived of the ‘paper option.’”

Learn more about the campaign, join its mailing list and watch a short animated video explaining its mission at the Keep Me Posted North America website.

*The Coalition for Paper Options has been a donor to Consumer Action’s annual Consumer Excellence Awards fundraiser.

Updated EITC guide helps taxpayers claim hundreds, even thousands!

Consumer Action has again updated one of our core publications, Get Credit for Your Hard Work. Published annually since 2004, the fact sheet is designed to help eligible workers claim the Earned Income Tax Credit (EITC), which, in 2019, can put as much as $6,431 back into the pockets of low- and moderate-income working parents filing taxes for 2018. Qualifying workers without children are eligible for a credit of up to $519. The publication is available in English, Spanish, Chinese, Vietnamese and Korean.

Created in 1975, the EITC is widely regarded as the federal government’s most effective antipoverty program. (Nearly 30 states and Washington, DC, also provide an Earned Income Tax Credit to state taxpayers who qualify, as do some local governments.)

Unfortunately, the program remains underutilized, with only an estimated four out of five eligible workers claiming the EITC they’re entitled to. The demographics missing out on the credit include those who live in rural areas, are self-employed, are childless, are not proficient in English, or are grandparents raising their grandchildren. Unlike some other credits, qualified taxpayers can receive money through the EITC even if they don’t owe any taxes.

With the average credit being over $2,400, a household that leaves this money on the table forgoes the opportunity to build savings, pay down debt, buy necessities, make needed home and auto repairs, and otherwise improve their financial wellbeing. In an effort to help taxpayers avoid this, the IRS has been educating the public about the tax credit over the last 13 years through national EITC Awareness Day. This year, the government agency, consumer groups and educators will be holding live events, publishing articles, generating media coverage and otherwise spreading the word about the EITC (as well as the Child Tax Credit, the Additional Child Tax Credit and the American Opportunity Tax Credit) throughout the day of the event (Jan. 25.)

The IRS is encouraging community organizations, employers and others to join them in getting the word out this year. For sample articles, social media messages, posters and other materials to do so, the IRS offers a Partner's Outreach Toolkit and Quick EITC Outreach kit.

There are no major changes to the EITC for tax year 2018 (although, as usual, income limits and credits have edged higher to keep pace with inflation). The main change for the 2019 tax filing season, which will affect all individual (personal) filers, is the adoption of a single, shorter and simpler Form 1040 that will replace the three versions—1040, 1040A and 1040EZ—that were used in the past.

The IRS will begin accepting tax returns on Jan. 29, with returns due by April 15 (unless you live in Maine or Massachusetts, where returns are due April 17 due to state holidays on the 15th and 16th). You must file a return in order to receive the EITC.

Get Credit for Your Hard Work for the 2018 tax year (2019 filing season) is available for online reading or free PDF download in all five languages.

Hotline Chronicles: Hate that holiday gift? Here’s how to return it

Consumer Action receives quite a few complaint hotline queries from consumers asking about product returns and refunds. With the holiday season over, you too may find you have some unwanted gifts to return or exchange. The good news is, most major retailers will accept returns for weeks following December’s gift-giving season—some well into January.

If the giver has included a “gift receipt,” you can use that for mostly trouble-free returns. Even if you don’t have a receipt or packing slip, many merchants will still offer an in-store credit for returned merchandise.

However, there are certain items that may be difficult or costly to return (cell phones, computers) and items from stores that don’t extend their refund window for the holidays. (See “Beware of Retailers With Difficult Gift Exchange and Return Policies.”)

While merchants are not required to accept returns, except sometimes in certain situations (e.g., if the item is defective), many states have laws requiring that refund policies (or lack thereof) be prominently displayed at the place of purchase and on receipts. Learn more here.

Before attempting a return, review the business’s return/exchange policy. Practices can range from “returns accepted at any time for any reason” to “all sales are final.” (ConsumerWorld publishes an annual review of top retailers’ return policies, including “noteworthy” policies, which can be found here.)

For online shopping specifically, Consumer Action’s “Savvy Online Shopping: How to resolve a dispute” is a helpful guide to resolving problems with merchandise/returns. It explains how you can, as a last resort, file a dispute with your card issuer (if you used a credit, prepaid or debit card) or payment processor (such as PayPal).

Here are a few tips for navigating post-holiday returns, whether in person or online:

  • Returning electronic gadgets may cost you, as many stores charge “restocking fees,” especially for items with opened packaging.
  • On high-cost purchases (typically $250 or more), some retailers limit on-the-spot refunds and instead prefer to mail a check. Don’t leave or agree to this without documentation of the amount you’ll receive and how to follow through if your refund doesn’t arrive.
  • When buying gifts online, indicate during the check-out process if the item is a gift (which will help the recipient return the item if need be).
  • Return policies may not be equal on all products, even at the same merchant. Make sure you understand what’s allowed and how to return the merchandise. Are returns given in cash or put back on the card used during the purchase? What are the policies for consumers who lack a receipt or packing slip?
  • Before you pay to send returns, check to see if free return shipping is available at the online merchant where the gift was purchased.
  • Even if a gift was sent to you directly from the online merchant from where it was purchased, you may be able to return the item at one of the merchant’s local brick-and-mortar stores (if they exist).
  • Merchants only are required to accept returns in certain situations—usually when items are defective. (You may be required to return defective items still under warranty to the manufacturer instead of the merchant.)
  • Many retailers may ask for your identification, so bring it with you when you return an item.
  • Pro tip: You can quickly and easily sell unwanted gift cards for a portion of the full value through companies such as GiftCardGranny.com or Cardpool.com. You may also find kiosks or vending machines at local malls and supermarkets that allow you to trade in your gift cards for cash.

Another way to deal with unwanted gifts is to “re-gift” them to others who may like them better (or use gift cards to purchase gifts for others). Just make sure you don’t give a gift back to the original giver—or even to someone else in that person’s social circle!

Family Economic Success Series partnership helps immigrant consumers

In the last quarter of 2018, Consumer Action partnered with Portola Family Connections to deliver two money management presentations for women participating in its Family Economic Success Series (FES). Portola Family Connections supports and empowers low-income, immigrant working families and individuals throughout certain neighborhoods in San Francisco. The consumers participating in the series originated from across Latin America and attended the FES workshops on credit, starting a business, saving for college, managing their finances and more.

Portola Family Connections has offered the six-week FES series for over five years, and Consumer Action staff have partnered with Portola Family Connections several times over the past six years. Consumer Action’s Audrey Perrott conducted the presentations, while a Portola Family Connections staff member, Jessica Arevalo, translated them into Spanish. The trainings featured Consumer Action’s Tracking Your Money educational module, which covers the basics of money management and helps consumers develop a budget or spending plan to control expenses.

“It is always a pleasure to work with Portola’s FES consumers,” Perrott said. “Attendees were eager to learn as well as share best practices on how they’ve been implementing what they’ve learned to improve their lives and the financial health of their families.”

From the very start, the series of sessions were relevant and timely. The first session, for instance, covered the importance of tracking expenses and balancing accounts in preparing and managing a budget, ways to save money, ideas to increase income, financial goal-setting and more. The consumers worked through various “real-world” case studies in the module.

At the end of the six-week session, Consumer Action returned on graduation day. The participants shared their personal goals and more information about how they planned to save to execute them. The goals ranged from having the extra money to take family members on getaway trips, to saving for college, to buying property in their home countries.

Coalition Efforts: Opposing an awful anti-immigrant proposal

Trump wants to use credit scores to keep immigrants out of the country. The Department of Homeland Security has issued a terrible proposal that intends to use immigrants’ personal credit information as part of an assessment to qualify for a Green Card or visa to stay in the country. Using an irrelevant, often error-prone measure like a credit score to determine immigration status is not only absurd, it misuses credit information and places financial stress and economic harm on families. Learn more.

Creating national privacy principles that really protect consumers. The National Telecommunications and Information Administration (NTIA) was tasked with making data privacy policy recommendations to the Trump Administration. Advocates submitted comments to the NTIA recommending improvements to its current proposal, which takes a risk-management rather than rights-based approach to consumer privacy and fails to provide an acceptable roadmap for strong, meaningful privacy protections. Learn more.

Groups renew call for no ‘poison pill’ policy riders. Consumer Action is among nearly 50 groups renewing a call to keep spending measures free of poison pill policy riders: unpopular, unnecessary and partisan provisions that get tacked on to existing legislation (often in secret). The coalition pointed out that these riders have nothing to do with government funding and everything to do with undermining essential government programs in order to fulfill special interest wish lists. Poison pill riders also stand in stark contrast to unmet national policy needs, such as ways to guard consumers from scams and corporate wrongdoing or defend campaign finance and election systems. Learn more.

Opposition to Kathy Kraninger as CFPB head. Despite the nominee’s lack of experience or qualifications for the job, the Senate voted in a lame duck session to confirm Kathy Kraninger as the next director of the Consumer Financial Protection Bureau (CFPB). Advocates urged the Senate to oppose Kraninger due to her lack of finance, banking regulation or consumer protection experience, as well as for her central role in administering the widely reviled, inhumane policy of separating thousands of children from their parents along our southwest border. Learn more.

CFPB Watch: New Bureau chief, complaints and debt boot camp

Kathy Kraninger was confirmed last month (in a 50-49 Senate vote along party lines) as the new permanent director of the Consumer Financial Protection Bureau (CFPB). The vote took place in the “lame duck” session—in the weeks following the mid-term election, before the new Congress takes control. Kraninger, who worked under former CFPB Acting Director Mick Mulvaney in the Office of Management and Budget, has no background in consumer protection or financial services regulation.

Kraninger has stated that she plans to conduct a three-month listening tour of CFPB staff, consumer advocates, the financial industry and, hopefully, the public. Consumer advocates, including Consumer Action, will tell Kraninger their concerns about the Bureau’s plan to gut its own rule on payday lending; cuts to CFPB oversight of Military Lending Act violations; and Mulvaney’s threats to ban public access to the CFPB’s consumer complaint database.

Consumer Action and its allies also will encourage Kraninger to reinstate the powers of the CFPB’s Office of Fair Lending, in order to investigate systemic discrimination by auto lenders, mortgage lenders and others, and to revive the Student Lending office, in order to protect students, particularly from fraudulent lenders and for-profit colleges.

Advocates plan to keep the heat on Kraninger to return the Consumer Bureau to its primary mission of informing and protecting U.S. consumers, which Mulvaney (appointed by President Trump) derailed over the last year during his tenure at the CFPB. Mulvaney’s actions led members of the Senate to send a letter to the CFPB accusing it of having “abandoned the very consumers it is tasked by Congress with protecting” and instead operating to “serve the wishes of the most powerful financial companies in America."

Brian Johnson, second in command at the CFPB, is expected to remain in his position and continue to play a pivotal role in shaping the future of the Bureau. Johnson spoke at Consumer Action’s national conference in November, where he heard directly from the many community-based organizations in attendance about consumers’ continued lack of access to affordable credit and fair lending.

Consumer Action will encourage Kraninger, who holds the director’s post for the next five years, not to follow temporary director Mulvaney’s lead to dismantle the Bureau from within, but instead analyze each consumer issue before her with an eye toward the populations most affected.

Complaint Snapshot

The Bureau released a sampling this fall of the types of complaints it received from every state in the nation last year. Debt collection complaints again top the list, nationally, with “attempts to collect debt not owed” as the primary problem consumers report. Credit report complaints came in number two, with “incorrect information” in consumers’ credit files being the main problem. Mortgage complaints came in third, with most complaints relating to “trouble during the [mortgage] payment process.” You can view your state’s top complaints in the Bureau’s Complaint Snapshot: 50 state report. For the details behind consumers’ financial disputes, visit the Bureau’s complaint database and explore “What happened?” in the consumer narratives section.

Debt boot camp

As consumers suffer the consequences of their generosity over the holidays, the CFPB offers strategies for dealing with debt, and offers a “Debt Boot Camp” to manage it. This includes the ability to sign up for emails featuring tips on how to track spending and reduce bloated balances. Click here to sign up for the boot camp.

Class Action Database: Move over Jared, Subway’s got a new problem

A class action settlement involving clothing retailer Van Heusen and its advertising of sale prices was among seven new settlements added to the Consumer Action Class Action Database during December.

Of note this month is the class action settlement Flaum v. Doctor’s Associates, Inc.

The plaintiffs filed a class action suit against Doctor’s Associates, Inc. (“Subway”) alleging that the sandwich shop violated the Fair and Accurate Credit Transactions Act of 2003 (“FACTA”). Congress enacted FACTA to thwart identity thieves’ attempts to figure out a cardholder’s full account information. FACTA mandates that receipts provided at the point of sale print no more than the last five digits of the card number or expiration date.

Plaintiffs claim that Subway defied FACTA rules in printing the expiration date of the payment card on receipts it issued between Jan. 1, 2016 and March 23, 2017.

Subway denied the allegations but agreed to a $30 million settlement to avoid the burden, expense and risk of continuing the lawsuit.

Consumers who used a credit or debit card for Subway transactions between Jan. 1, 2016 and March 23, 2017, and received a receipt that showed their payment card’s expiration date may be eligible for a pro rata share of the settlement.

The claims deadline is Jan. 22, 2019. For more information, click here.

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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