Consumer Action INSIDER - January 2011


Save the Date!

Join Consumer Action as it celebrates 40 years of service to consumer education and advocacy on Oct. 18, 2011 at the Naval Heritage Center in Washington, DC.

What people are saying

We have been using Consumer Action brochures for more than five years now in several capacities—classes, one-on-one financial health counseling, and at fairs and events. I believe that the Consumer Action brochures are superior to those offered by other agencies such as the FTC because the information is more relevant and up to date. —Chad Rieflin, Credit Education Bureau, Rochester, NY

This month’s consumer tip

Did you find a shiny new gift card in this year’s Christmas haul? Unspent money on gift cards may be used for five years, even if the card carries an earlier expiration date. Learn more by visiting our online Help Desk.

A banner year for consumer protection

Consumer Action constituents, supporters and friends: Congratulations for helping make 2010 a banner year for consumer protections. Here’s a recap of new federal laws Consumer Action has advocated for in the last year that will protect your pocketbook now and into the future.

  • Consumer Financial Protection Bureau (CFPB). For the first time, consumers will have an independent federal consumer protection watchdog to give them the information they need to protect themselves and make wise financial decisions. Created in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB will be up and running by July 2011 to promote fairness in the financial marketplace and provide comprehensive consumer information about mortgages, credit cards, and other consumer financial products and services. The CFPB will solve consumer complaints as well as set and enforce clear, consistent rules for the fairness, costs and features of financial products and services.
  • CARD Act. The Credit Card Accountability, Responsibility and Disclosure (CARD) Act (passed in 2009) took effect in 2010, ending the common practice of increasing the interest rate on existing credit card balances and offering a host of new protections for cardholders.
  • Overdraft fees on debit transactions. The Federal Reserve passed rules to give debit and ATM card users new choices whether they want to pay a fee for having debit overdrafts covered by the bank (so they don’t bounce). Banks, credit unions, and other financial institutions must follow the rules. In the past, some of these financial institutions automatically enrolled you in high-cost overdraft protection. Under the new rules, these companies must get your permission before charging you a fee for covering non-recurring debit card and ATM overdrafts when you do not have enough money in your bank account.
  • Federal Trade Commission debt settlement rules. Marketers of for-profit debt relief services, including credit counseling, debt settlement, and debt negotiation services, may no longer charge consumers in advance of completing a debt settlement. Fees may only be charged if and when a settlement, payment or reduction in the consumer’s debt has been accomplished.
  • Refund anticipation loans (RALs). The Internal Revenue Service no longer makes “debt indicator” information about consumers available to banks, which has made it riskier for the banks to make refund anticipation loans and is expected to result in fewer such loans to consumers. Consumer Action and other advocates believe that these short-term, high cost loans are a waste of money. With electronic filing and direct deposit most filers can get a full tax refund in a few days without having to pay high fees to access their own money.
  • Fair and open Internet. The U.S. Federal Communications Commission (FCC) created new network neutrality rules for broadband providers, requiring cable and telephone companies that provide wired broadband Internet service to clearly explain the service and quickly resolve consumer complaints. The FCC rule prohibits wire-line broadband companies from blocking access to lawful content, applications and services, and prohibits them from favoring access to one content provider over another. While mobile broadband carriers are exempt from the “no blocking” rules, FCC Chairman Julius Genachowski said that the FCC will monitor the mobile broadband industry for signs of anti-consumer behavior.

In addition, consumers can celebrate these crucial food and product safety rules:

  • Safer food. A new food safety law emphasizes prevention to stop outbreaks of food-borne illness before they begin. The law gives the government broad new powers to inspect processing plants, order recalls and impose stricter standards for imported foods.
  • Baby crib standards. The U.S. Consumer Product Safety Commission (CPSC) approved new mandatory standards effective in June 2011 to stop the manufacture and sale of dangerous drop-side cribs, make mattress supports and crib hardware stronger and improve safety testing.
  • Consumer Product Safety Commission database. The searchable online database of consumer product incident reports on called for by Congress as part of the 2008 product safety law will be significantly upgraded by March 2011. The database will give consumers access to far more information so they can make informed choices as well as provide and share information about hazardous products.

Annual report available

Consumer Action continues to grow as a leading force in consumer education and advocacy. As we approach 40 years of service to the public, we celebrate our role in helping create key milestones that brought consumers closer to financial relief and independence. At the conclusion of our most recent fiscal year the Consumer Action staff is proud to report that the organization’s performance has remained consistent despite the uncertain economy.

Between April 1, 2009 and March 31, 2010, Consumer Action distributed more than 600,000 printed fact sheets and educational publications to more than 2,000 community-based organizations. The popularity of Consumer Action financial literature was in part owed to five regional and 20 roundtable training presentations as well as the $141,000 invested in mini-grant recipients. Another half-million unique visitors access our materials online.

Consumer Action continues to advocate on behalf of individuals across a wide range of pocketbook and privacy issues. From working to create the new Consumer Financial Protection Bureau to pushing for new mortgage and foreclosure protections, from digital privacy to medical privacy, Consumer Action is working on the front lines to ensure the voice and needs of consumers are heard in an arena dominated by lobbyists looking to protect corporate profits.

Consumer Action helped launch a report card on online personal health records, advocated for stronger patient privacy protections at the World Congress 2nd Annual Leadership conference on health information technology, and attended other key conferences including the TransAtlantic Consumer Dialog in Brussels, Belgium.

In each annual report, we profile two of the community-based organizations (CBOs) we work with and two staffers. This year’s CBO profiles include Mujeres Unidas en Accion in Boston, Mass., and the Louisiana State University Ag Center. The staff profiles feature Nani Susanti Hansen, associate director of Consumer Action’s San Francisco office, and Ruth Susswein, our DC-based deputy director for national priorities.

Click here to view our annual report.

Our privacy work in 2010

Online privacy exploded into a highly charged public debate this year, attracting the attention of Congress, federal regulators, and Internet users. Consumer Action was in the heart of the action, advocating for strong consumer rights with government agencies, industry representatives and legislators alike.

This year, Consumer Action engaged in extensive outreach with industry, arguing that directly engaging companies on privacy concerns can produce substantive success in protecting consumers. After Facebook kicked the year off with its announcement that it was changing its privacy settings in order to make more user information public, it faced an uproar in the media and the public. Facebook CEO Mark Zuckerberg famously claimed that less privacy had evolved into a “social norm.” After advocating for specific fixes to some of these changes, Consumer Action was invited to work directly with Facebook to help re-design more user-friendly, control-enhancing settings. Michelle De Mooy also met with Zuckerberg to discuss the changes and urge the company to increase transparency around how user information is shared with third parties and install more robust protections for this sharing.

Consumer Action also met with executives at Yahoo! to review the company’s changing privacy preference settings, participated in a cloud computing event convened by Microsoft, met with Google on mobile privacy issues, sat on a Vodaphone panel about the future of privacy in a data-driven world, spoke about pending privacy legislation at an event held by the Congressional Internet Caucus (a private organization), and joined the advisory board of the Future of Privacy Forum, a Washington, D.C.-based think tank heavily dominated by industry. Most recently, Consumer Action joined a panel at a Future of Privacy Forum-sponsored event on the Federal Trade Commission’s (FTC) “Do Not Track” proposal.

Consumer Action was active in meeting with government officials on the issue of digital privacy in 2010. The Federal Trade Commission announced earlier this year that it would be convening a series of public roundtable discussions about the issue of online privacy, culminating in a staff report to be issued later in the year. Consumer Action attended the roundtables and worked with the FTC to ensure the topics were timely and relevant to consumers. Throughout the year, we met with all of the FTC Commissioners, including Chairman Jon Liebowitz numerous times to advocate for a strong pro-consumer privacy report, enhanced transparency with regard to the FTC’s investigations, and stronger enforcement cases against companies with anti-consumer policies. Consumer Action also met with members of the National Telecommunications and Information Administration, the President’s principal advisor to telecommunications issues such as online privacy.

The advocacy team also worked hand-in-hand with key members of Congress and their staff on their legislation directed at protecting online privacy, meeting multiple times with Representatives Boucher, Rush and Waxman, as well as Senators Markey and Kerry.

A critical component to Consumer Action’s advocacy effectiveness is working in tandem with other like-minded groups. This year Consumer Action was an active participant in a number of coalitions focused on increased consumer protections online, including the Center of Digital Democracy Coalition, in which Consumer Action staff worked with lawmakers and aides to write, review, and comment on pending privacy legislation; the Digital Due Process Coalition to craft legislation updating the Electronic Communications Privacy Act, and the Electronic Privacy Information Center’s Privacy Coalition, with whom Consumer Action partnered with EPIC to launch their Privacy Campaign targeted at 2010 Congressional elections. Consumer Action also participated in numerous working groups convened by the Center for Democracy and Technology to craft best practices for industry and policy makers on a wide variety of issues in digital privacy such as data privacy and security, Internet privacy, application development, online marketing and research, and online subscriptions marketing.

Health privacy was also a big topic in 2010. Consumer Action was again at the heart of this issue, advocating for more consumer control over health data, especially with the launch of e-health in the coming years, as well as increased transparency around the access and use of this data by hospitals, insurance companies, and other third parties outside of doctors' offices.

Michelle De Mooy, senior associate for national priorities at Consumer Action, met with Dr. David Blumenthal, the head of implementing HIT at the Office of the National Coordinator and persuaded him to hold a Consumer Privacy Conference to review the technology available for implementing privacy in electronic medical records and other activities. The conference, held in this summer in Washington, D.C., was considered a success and led the Department of Health and Human Services (HHS) to acknowledge the importance of protecting consumer health privacy.

Our advocacy staff attended numerous meetings of the HIT Policy Committee’s Privacy and Security Workgroup, which is tasked with developing policy around the launch of health IT, and attended meeting of the HHS Office for Civil Rights individual rights under HIPAA (Health Insurance Portability and Accountability Act). Consumer Action was also a panelist on medical privacy and HIPAA at the World Health Congress earlier this year.

“Privacy continues to be at the forefront of consumer rights,” said Consumer Action's De Mooy. “2011 is already shaping up to bring new debates and challenges about how to best protect consumer privacy online and offline, and we will again be right in the thick of it, helping to craft the best outcome for consumers.”

Hotline Chronicles: Phony debt collectors

Sarah* from Virginia contacted Consumer Action’s hotline with a complaint about ACS, or Affidavit Consolidation Systems, which had called her home and work phone and left messages about a debt the caller said Sarah owed. The caller said Sarah had taken a cash advance of $400 on the Internet and never paid it back. Sarah told us she never took out such a loan.

Sarah returned the call, and reached a rude and abusive individual who threatened her with legal and law enforcement action.

It turns out that scammers who use the name ACS (or Affidavit Consolidation Systems) were the ones who contacted Sarah. Dozens of people have posted online complaints about similar calls from ACS and a common theme seems to be that they are told they owe an unpaid short-term loan such as a payday loan. Most say they never took such a loan and some have found fraudulent charges on their bank account statements after speaking with the callers.

Consumer Action’s hotline counselors informed Sarah about the numerous online postings about ACS, as well as the fact that ACS has been reported to the Better Business Bureau. The Bureau report notes:

According to information provided to BBB, fraudulent people using the telephone numbers listed in this report are calling consumers in an effort to perpetrate a fraud. They identify themselves as working for the Better Business Bureau or a well-known business/agency. The callers usually have a foreign accent and have been identifying themselves in a couple of different manners: (1) as phony debt collectors or (2) by informing consumers that they have won a lottery (which is nonexistent).

The debt collectors have been overly aggressive, calling the consumer at both home and work. They have much of the consumer's personal information, which may include bank account and social security numbers. The consumer is told that if he pays off the outstanding debt, they will not turn him in to the sheriff's office. They embarrass the consumer by calling his place of work, talking to his boss, and informing the boss that the consumer is a thief and owes money.

In the lottery scheme, the caller tries to convince the consumer that he has won a lottery, and in order to collect the winnings he must provide his bank account number or wire money. Better Business Bureau is not associated with calls from these telephone numbers. Any consumers who receive such calls should notify BBB. It appears that ACS is a widespread scam placing calls from telephone numbers in various area codes, including Florida and upstate New York. Many consumers note that the callers have heavy accents and are rude and abusive.

Sarah already had submitted a complaint to the Federal Trade Commission ( Our hotline counselors advised Sarah to submit a complaint to the Better Business Bureau as well.

Scammers are calling

Never, ever give anyone who calls you any personal or financial information about yourself. If someone calls and accuses you of owing a debt that you don't owe, just ignore the call or hang up quickly, after stating you are not the person they are seeking.

If you think the call might be legit, ask the caller to provide you with a “validation notice” noting the amount owed, the name of the creditor and the process you need to follow to dispute the bill or verify the debt. If this information is not provided within five working days as required by law, it is likely you are dealing with a scammer.

Many people complained that ACS had somehow accessed their personal and checking account information, so be sure to check your bank account for fraudulent transactions.

Consumer Action Consumer Services Manager Joe Ridout says that such scams are on the rise. Participating in a segment on “Seven on Your Side” on KGO-TV in San Francisco, Ridout told reporter Michael Finney that “the Internet payday lenders are the nexus for how this scam is working. We don't know at this point if they are selling the information to the scammers, if they are in league with the scammers or if perhaps their database has been hacked.”

Bottom line: Be very cautious about providing any information to strangers who call.

Legitimate debt collectors usually belong to the industry group ACA International (, where you can search the membership for contact information for member collection companies. ACA International has created a consumer website called “Ask Dr. Debt” ( which has extensive and accurate information about your consumer rights when you are dealing with debt collectors.

Click here to submit your own complaint to Consumer Action's advice and assistance hotline.

*Sarah is not this consumer’s real name.

About Consumer Action

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 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.

Financial Education. To empower consumers to assert their rights in the marketplace, Consumer Action provides a range of education resources. The organization’s extensive library of free publications offers in-depth financial information, while its hotline provides non-legal advice and referrals. Consumer Action also publishes an unbiased Annual Credit Card Survey that exposes 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 to moderate income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of more than 8,000 community-based organizations. Outreach services include training and free mailings of financial education materials in many languages, including English, Spanish, Chinese, Korean, Vietnamese, and others. Consumer Action’s rapidly expanding 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, regulations, and legislation by taking positions on almost 200 bills per legislative session and testifying at least three times per year. 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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