Consumer Action Insider - December 2010


What people are saying

It was great participating in the Birmingham MoneyWi$e program with Consumer Action in October. I got so many ideas that I plan to use with my families and agencies and personally. I plan to conduct monthly financial educational brown bag lunch series. I believe so many people in my community will benefit greatly from the series and will want to learn new and/or better ways to handle their financial situations. —Katanga Mants, County Extension Coordinator, Alabama Cooperative Extension System (Lowndes County Office)

This month’s consumer tip

As we enter the season of delayed flights, lost luggage and last-minute changes, otherwise known as holiday travel, consumers are reminded about the pros and cons of travel insurance. Consider the cost and provisions of your policies, learn about who is specifically covered, and beware of the popular “gotchas” that could result in wasted premiums. For details, see the travel insurance issue of Consumer Action News.

Our First annual Financial Empowerment Conference

At the Consumer Action National Financial Empowerment Conference in Chicago (l-r): Ken McEldowney of Consumer Action, Maxine Sweet of Experian, Linda Sherry of Consumer Action and Rod Griffin of Experian. Experian underwrote the first annual conference.

For more than a decade Consumer Action has leveraged a unique outreach and education model to bring financial literacy to local communities. We have built a network of more than 8,000 community-based organizations (CBOs) that use free materials from our growing library of educational modules to initiate or expand their financial literacy programs. In November, Consumer Action partnered with Experian to host its first national conference to showcase some of the country’s top community educators and their best practices in financial empowerment.

The conference was attended by 68 community adult education advocates from 59 organizations in 21 states. The groups include credit counseling and cooperative extension agencies, as well as social services, employment training, diversity and civil rights, legal aid, housing assistance and community development organizations. The participants had previously attended train-the-trainer meetings held by Consumer Action with support from Capital One, Chase and American Express. All participants use Consumer Action's materials to teach financial literacy in their communities.

At the first National Financial Empowerment Conference, Consumer Action enlisted the help of the CBO experts who have used our training and publications to leverage their own community financial literacy programs. Through panel discussions and interactive breakout sessions, participants learned new skills for penetrating local neighborhoods with proven strategies to promote effective and wise money management. Some of the CBO panelists spoke of how to attract support for their financial literacy programs, while others gave valuable feedback to the Consumer Action team’s presentation on grassroots advocacy. Sessions were dedicated to marketing financial empowerment programs as well as how to track and evaluate client progress.

“We envisioned an event designed to facilitate dialogue across specific financial topics, target populations and geographic factors,” says Ken McEldowney, executive director of Consumer Action. “The conference is taking our training to the next level by bringing together a collection of some of our most successful partner groups.”

The conference also served as the setting for the unveiling of new materials in Consumer Action’s library as Experian and Consumer Action introduced a new module highlighting credit reports, credit scores and specialty credit reports. The series of easy-to-read brochures, teaching guides and PowerPoint presentations can be used by participants to help their constituents reduce individual personal debt by teaching better credit management techniques. The module, and relevant conference materials, are available on the Consumer Action website for free download to all interested community-based organizations.

One of the most frequently cited benefits of attending the conference was the networking opportunities that participants said reinvigorated them to go out and double their efforts. Reactions to the conference included references to the event as a self-care retreat and a much-needed opportunity to compare notes with peers. Other participants spoke of having their eyes opened to new resources and tools for teaching people how to manage their money effectively. Maxine Sweet and Ron Griffin of Experian's consumer education department were praised for speaking directly to what is happening to credit reporting in today’s economy rather than reiterating what is broadcast by the media and other companies. One participant shared that she had entered the words “true empowerment among mentors” in her journal to describe the event.

Consumer Action is working to make the conference an annual tradition and is seeking funding to support the event in 2011. Stay tuned for Consumer Action’s plans to keep the momentum going and support the crucial efforts of community financial advocates. If you would like to know more about the conference, email .(JavaScript must be enabled to view this email address)

Staff member attends leadership training program

The November 2010 class of the Nonprofit Leadership Academy is seen with American Express Chairman and CEO, Kenneth I. Chenault (center front). Linda Sherry of Consumer Action is directly behind Chenault (in red top).

Consumer Action's Linda Sherry spent the first week of November in New York City attending the American Express Nonprofit Leadership Academy. After a competitive application process, the American Express Foundation selected 48 nonprofit professionals from among its national and local nonprofit partners, to attend the academy.

In a speech to the class, American Express Chairman and CEO, Kenneth I. Chenault announced that the company would continue its philanthropic commitment to developing nonprofit leaders with a five-year, $25 million funding commitment. "Developing the next generation of leaders in the nonprofit sector will help a wide range of organizations meet the needs of the communities where we live and work," said Chenault.

Bolstering the purpose of the Academy, American Express the same week released survey results that showed that while seven in 10 Americans (71%) trust nonprofits more than they trust government or industry to address some of the most pressing issues of our time, more than eight in 10 Americans (83%) believe that nonprofits do not always have the resources they need to invest in the growth and development of their employees, indicating a clear need for increased investment in nonprofit leadership.

According to the president of the American Express Foundation, Timothy J. McClimon, "We believe that we can do the most good by offering targeted resources and expertise to the best and brightest at some of the most important nonprofit organizations in the world, along with providing the much-needed grant dollars that we contribute. We're giving these individuals the skills and tools needed to grow in their roles and evolve their organizations as they address issues that are critical to society."

The Leadership Academy is conducted in partnership with the Center for Creative Leadership (CCL) of Greensboro, North Carolina. The program immerses participants in a series of leadership training and development courses to help participants polish the personal, business and leadership skills needed to help run successful nonprofit enterprises.

The curriculum of the week-long program held at American Express offices in New York City features interaction with guest speakers and top executives from American Express. Sherry said her class heard from two dynamic speakers from the nonprofit arena, Geoffrey Canada of the Harlem Children’s Zone, and Nancy Lublin, founder of Dress for Success and the author of “Zilch: The Power of Zero,” an original viewpoint on how companies can learn from not-for-profits to “get more done with less of just about everything.” Canada is prominently featured in the 2010 documentary “Waiting for Superman,” an examination of the state of American public education.

Sherry’s fellow students came from a variety of national nonprofits, including the United Negro College Fund (UNCF), Year Up, Big Brothers and Big Sisters, the Red Cross and United Way, as well as New York City-based organizations such as the Brooklyn Academy of Music (BAM). The participants are drawn from organizations that have received support from American Express.

“I found tremendous value in this time spent with staff members from other nonprofits because we all face the same challenges despite our different missions,” said Sherry. “I am truly devoted in helping Consumer Action grow and prosper and I believe the tools and advice I gained at the Academy will help me be more strategic in our day-to-day activities and in our future planning.”

For lasting impact and measuring effectiveness, participants worked to set goals and action plans and are provided with access to follow-up support in the form of online networking tools, telephone coaching sessions, leadership goal checkpoints and a one-year review to complete their training. In addition, Sherry was one of 15 in the class who also participated in a media training component presented by News Certified Exchange.

Polishing our key message points

The Taproot Foundation created a stir when it came on the scene posing the question: “What if nonprofits had access to the same marketing, technology, HR, and strategy resources as corporations?” A unique notion indeed, and this past year Consumer Action experienced firsthand the benefits of what can in fact happen when this access is provided.

Taproot is a nonprofit organization that makes business talent available to organizations working to improve society. The national foundation selects business professionals to provide pro bono services both through its award-winning programs... One day, the foundation envisions all organizations with promising programs will be equipped to successfully take on urgent social challenges. Its signature Service Grant program operates in five cities and, since its inception in 2001, has engaged professionals in over 780,000 hours of pro bono service on over 1,300 projects.

Consumer Action turned to Taproot to help it better promote itself as a national organization. The Consumer Action of today is not the Consumer Action that began operating out of a church basement in 1971. The staff size has more than quadrupled. What began as a single website at a time when the Internet was still a relatively new concept has now swelled into a family of sites that churn out a plethora of data on a daily basis. The distribution center fills bulk order requests for popular publications from thousands of community-based organizations nationwide.

With so much growth, the organization’s leadership felt it necessary to bring in experts who could help Consumer Action’s three offices unite behind a common and consistent message. It’s crucial for the Consumer Action family to speak as one voice about all the activities to potential partners and sponsors.

Consumer Action was awarded the Key Message and Brand Strategy service grant in the winter of 2010. The management team had the privilege of working with a team of marketing experts who delved deep into the organization’s programs to get a firm understanding of what the organization is and what it does. The pro bono team met with Consumer Action’s partners, spoke with board members and staff, as well as with beneficiaries of the organization’s services. The feedback itself proved a valuable tool in helping the organization learn more about how it is perceived both internally and externally. But, the greatest value of the grant was in learning how to present itself in the language the consultants developed for a myriad of scenarios, from elevator pitches to press releases.

Consumer Action thanks the Taproot Foundation for helping it restructure its messages. The staff feels more connected in conveying its activities to its network of colleagues. The project has helped Consumer Action find ways to better resonate with its audience, and it strongly recommends other organizations in the foundation’s five markets to consider applying for one of the many beneficial service grants.

Funding Report: Georggin vs. Collection Services Bureau

Part of Consumer Action’s success stems from its long-standing relationships with attorneys working hard on behalf of consumers in the courts. Over the years, courts have awarded Consumer Action a significant number of cy pres grants to support of its consumer education and advocacy efforts. Cy pres is a term meaning "as close as possible" and is used to describe a legal doctrine that allows the courts to disseminate funds from class action litigation to public service organizations when the money cannot be returned to individual members of the class of aggrieved consumers.

In this particular case the plaintiff alleged that the Arizona Corporation invaded his privacy by calling him on his cell phone, in violation of the Telephone Consumer Protection Act. The law prohibits the use of any automatic dialing system or an artificial or prerecorded voice to call any telephone number assigned to a cellular telephone service absent an emergency purpose or the prior consent of the called party.

The class action suit was filed in San Diego County Superior Court. Under the settlement, members of the class were not entitled to refunds, but funds were distributed to three non-profits: Consumer Action, the Consumer Federation of California, and the Legal Aid Society of San Diego.

Consumer Action extends warm thanks to the law firm of Keegan & Baker, LLP, of Carlsbad, California, for recommending our organization for a portion of the case settlement. The funds will support the organization’s national consumer hotline, its growing family of websites dedicated to up-to-date financial education, as well as media campaigns designed to spread word of consumer protection news to mainstream and multilingual publicity outlets.

Cy pres grants enable Consumer Action to maintain its educational and advocacy efforts.

Hotline Chronicles: ‘Free trials’ can be very expensive

Don,* a consumer from Illinois, contacted our hotline to complain about an online company called Privacy Matters 1-2-3, which “provides you with the tools you need to access and monitor your financial/credit information through the program's credit score and monitoring benefits.” The company offers free credit scores to people who sign up for a free trial. But Don, like many other consumers who posted complaints on the Internet, did not understand that he would be charged $19.95 per month for the service after the free trial unless he contacted the company to cancel within seven days.

When Don signed up for the free trial he provided his credit card information and his card was charged for 12 months before he noticed and tried to cancel the service. (Red flag alert: If it’s free, why are you being asked for your debit/credit card information?) When Don called to cancel, he learned that all fees already paid for the service are non-refundable—whether or not he used the service. He says he met resistance when he tried to cancel the service and he asked Consumer Action for advice. Vickie, our hotline counselor, did a quick search on the Internet and found that the Illinois man was not the only person who had trouble canceling the service. Some consumers were charged the monthly fee even after canceling.

We tested the notification by going through the first screen on the free trial offer, and provided a name, address and email. The next screen asked us to enter a credit card number. This screen featured the following information (“Offer Details”) in gray text on the left of the credit card form:

To activate your trial membership with Privacy Matters 1-2-3, you will be charged/ debited a $1.00 refundable processing fee, and then you can immediately access your Privacy Matters 1-2-3 account. After your 7-day FREE trial period, it's just $19.95 per month for Privacy Matters 1-2-3. Remember, you can call Privacy Matters 1-2-3 at 1-888-239-0316 within the first 7 days to cancel, and you will not be charged/debited. To ensure continuous service, at the end of your trial period your membership will be automatically charged/debited each month, on or about the same date, to the credit card you provide today or from the checking account associated with the debit card you provide today. If for any reason you are dissatisfied, call our toll-free number to cancel, and you'll no longer be charged/debited. Any membership fees you may have paid at the time you cancel are non-refundable.

Why should consumers have to cancel within the first 7 days? Why not give them the whole month to cancel without charge? Even the most proactive consumers may be charged for at least one month under this scheme.

Negative opt-out marketing is not fair to consumers and we question why companies would use such tactics. Regardless of disclosures, Consumer Action strongly recommends that consumers do not take advantage of such “free trials” unless they are absolutely sure they can cancel in time. Remember, you will continue to receive the product or service unless you specifically cancel it. Often the company makes you jump through hoops in order to cancel. Or, when you call to cancel you are subjected to sales pressure to continue.

Many services notify the consumer that the service is about to expire and if the company doesn’t hear from the consumers, they are billed for renewal fees, or worse, locked into a service agreement of a year or more. This means you could be locked into a long-term contract because you missed an email message! We also found that the first screen had a pre-checked option inviting the company to “Send me special offers from Privacy Matters 1-2-3 and partners.” This is a bad way to get consumers to sign up for marketing offers. Such options should be left unchecked so that the consumer has to make an active choice — not just by neglecting to “uncheck” the box — to allow offers to be sent.

Privacy Matters 1-2-3 may be a legitimate company offering a service that some consumers may find valuable. However, this part of its Privacy Policy raises questions about how much it really values the privacy of its customers: If you accept a third-party offer provided via or linked to from our Web site, you consent to our providing your Personal Information and/or billing information to the third-party marketer that offered the product or service so they may process your acceptance of the offer. It’s just not appropriate to share billing information with affiliates.

Here are our tips for avoiding problems with negative opt out offers:

  • Read the terms and conditions of the plan carefully so you understand the obligations of membership before you join.
  • Keep copies of the website pages by printing each one before you go onto the next screen. Print any pages that explain the terms and conditions of the plan and what you must do to cancel.
  • Check out all companies by placing their names in a search engine to find posts by other consumers, or by verifying the company’s record of complaints with the Better Business Bureau ([url=][/url]).
  • If you are charged for something that you believe you did not sign up for, or a company makes it difficult to cancel a recurring charge for goods or services you do not want, make a complaint to the Federal Trade Commission online at [url=][/url] or by phone at 877-FTC-HELP.

Don, the aggrieved consumer, makes a lot of sense when he points out: “How are companies like this allowed to continue to do business in this manner? If they had a decent product for sale they would not have to trick people into being charged for this.” Don admits he was remiss in not catching this situation earlier, but we agree with Don that making money this way is “simple theft from people like myself.”

Click here to submit a complaint, or call 415-777-9635.

*This consumer’s name is not really Don.



Quick Menu

Facebook FTwitter T