Consumer Action INSIDER - December 2012


Table of Contents


What people are saying

Thank you for the opportunity to attend your MoneyWi$e train-the-trainer meeting in Dallas, and for your consumer educational materials. They will contribute to our Financial Literacy programs and our effort to help our local community. — Jesse A. Sanchez, Dallas County Home Loan Counseling Center, Texas


Did you know?

Buying “gently used” products can save lots of money. But before you buy second-hand appliances or children’s items, check their recall history at the Consumer Product Safety Commission ( or 800-638-2772).


Annual event raises $180K for Consumer Action

Consumer Action held its 2012 Consumer Excellence Awards last month, at the Hyatt Regency on Capitol Hill in Washington, D.C. The event raised $180,000, a new record for Consumer Action’s annual fundraiser.

Underwriters for the event were Capital One, Citi,, Google and TracFone. Click here for a list of all 41st Anniversary sponsors.

“Consumer Action’s awards usually reflect our long history of work on consumer financial services issues,” said Ken McEldowney, executive director of Consumer Action. “This year’s awards recognized some of our lesser known focus areas, such as consumer privacy, postal consumer issues and media advocacy. We are proud to spotlight our award recipients for their efforts on behalf of consumers in these issue areas.”

This year’s honorees:

  • The American Library Association’s Office for Intellectual Freedom receives our 2012 Consumer Excellence Award in the Community Organization category. We honor the ALA OIF because of its outstanding efforts to educate consumers on their privacy rights via participation in privacy coalitions, Choose Privacy Week at local libraries and development of the website. For Choose Privacy Week 2012, the office has made an excellent short video called “Vanishing Liberties,” which focuses on the loss of privacy and civil liberties for immigrant communities.
  • Postal Regulatory Chairman Ruth Y. Goldway, a dedicated consumer advocate serving her third term as a PRC commissioner, receives our 2012 Consumer Excellence Award in the Regulatory category. We honor Chairman Goldway for her considerable contributions to protecting postal consumers during a time of unprecedented change and challenges for the U.S. postal community. She has played a key role in the Postal Service’s adoption of the “Forever Stamp” to ensure that stamp buyers can use existing stocks even when rates rise; offered creative suggestions on how to save the nation’s beloved post offices and postal services; and developed a particular expertise in the disparate impacts of postal policy on first-class stamp buyers and low-income, elderly and rural postal clients.
  • Reporter and author Bob Sullivan, who writes The Red Tape Chronicles for, receives our 2012 Consumer Excellence Award in the Media category. We honor Sullivan because of his consumer rights-focused reporting and exposés on fraud and identity theft. Sullivan, who has written more than 100 articles about identity fraud since 1996, is the author of best-selling non-fiction titles Gotcha Capitalism, which details how consumers are confused, deceived and overcharged by big business, and Stop Getting Ripped Off, containing advice that consumers can use to get the best deals and avoid losing money.

Erica Swanson, outreach and policy manager at Google, presented the ALA OIF award. “Librarians are on the frontlines, working directly with individuals and communities to make information accessible, to give people the skills and resources, documents—and e-documents and websites—they need and want, and to be forums for information and ideas. The American Library Association is there, leading the way. Whether it’s the work they do to arm frontline librarians with information about how consumers can be smart and safe online, or advocating for modernized protections against government surveillance of consumer’s data, the ALA Office for Intellectual Freedom is leading the way on issues related to privacy and intellectual freedom.”

Don Soifer of the Lexington Institute presented Chairman Goldway’s award. Soifer serves as executive director of the Consumer Postal Council, a coalition of groups and individuals concerned with postal issues. Soifer said, in part, “Chairman Goldway has supported Consumer Action in its important work fighting to improve postal insurance, again looking out for consumers’ best interests while injecting honesty and integrity to everyday counter transactions at post offices across America.”

“I am honored to be recognized by Consumer Action,” said Chairman Goldway. “The organization encouraged me in my career when I was advocating for improved food labeling in the 1970s. Now, on the Commission, I work to assure that the Postal Service, which is a vital, essential national communications network, continues to provide easily accessible quality services, especially to those who cannot rely on new technology.”

Sullivan’s award was presented by Jennifer Openshaw, columnist for the Wall Street Journal’s MarketWatch and president of Finect, a social network for the financial services industry.

Openshaw introduced Sullivan by paraphrasing a passage from his award-winning book, Stop Getting Ripped Off. “He talks about a woman serving in the Iraq war, and she was comparing her war experience with being a consumer in America. Bob quotes her as saying, ‘It was easier in the war zone.’ The service member’s $480K interest-only mortgage ate up 80% of the family’s salary and after other unexpected surprises, including the inability to refinance, they couldn’t even make it past two payments. The story typifies the perilous situation in play today for consumers in America. That’s why reporter and author Bob Sullivan receives Consumer Action’s 2012 Consumer Excellence Award in the Media category.”

Sponsorships of Consumer Action’s annual event provide key revenue for many of the organization’s core activities, such as its free consumer advice and referral hotline, its quarterly consumer education newspaper, Consumer Action News, and its three-year old e-newsletter, Consumer Action INSIDER. To learn more about our 2012 supporters, click here to download a PDF of the 2012 event program. To view a photo slideshow of the event, visit Consumer Action’s YouTube Channel.


Consumer Action empowers educators with new tools and techniques

Counselors and advocates from community-based organizations (CBOs) across the country gathered for Consumer Action’s National Consumer Empowerment Conference in Chicago in November.

The conference kicked off with tips from Dr. Billy Hensley of the National Endowment for Financial Education (NEFE) on how to evaluate the efficacy of financial literacy training efforts. Dr. Hensley was asked what financial education approach he’s seen that reaches high school students. “Research shows that cumulative information is what works,” said Hensley. He pointed to Colorado, a state where financial education starts in kindergarten and continues through 12th grade, which helps students build on what they learn.

On the second day, counselors were asked to put NEFE’s evaluation toolkit to work in an activity. Linda Williams and Nelson Santiago, Consumer Action outreach managers, demonstrated ways attendees can transform financial seminars into fun activities.

Another session was devoted to credit scores. Sarah Davies of VantageScore—a less widely used alternative to the prevalent FICO score—described how one 30-day-late payment could damage an individual’s credit score. “The first delinquency takes the largest hit,” said Davies. She added that a 30-day-late notation on one’s credit report could lower a healthy score by 70 to 90 points. She discussed how some credit bureaus are interested in adding alternative data such as utility and telephone bill payments and even rental payments to credit reports. However it was noted that much work must be done before such information could be obtained consistently.

CBO representatives in the audience asked if credit bureaus have any plans to separate medical or student loan debt from a typical credit score. Davies said the VantageScore does not include original medical debt unless it is transferred to a debt collector.

“How long does it take to recover after a foreclosure?” asked one participant. Davies, referring to VantageScore, said that with regular on-time bill payment, individuals could see their credit score improve by 80 to 90 points within nine to 12 months after foreclosure. However, a former lender in the audience cautioned that people should not expect to be eligible for a new loan for up to three years.

Conference participants heard from Rich Williams of U.S. PIRG (Public Interest Research Group) about the dire state of student loan debt. Self-governing PIRG advocacy organizations are active in 47 states and on many college campuses. Collectively, the national federation of state PIRGs is known as U.S. PIRG.

Williams noted that in the recent past, one-third of college students borrowed money to attend college. Today, two-thirds of all students take out student loans, and the amount of debt has more than doubled to $26,000, on average. Williams warned of the high cost differential between federal student loans and those offered by private institutions. He also stated that half of the students who attend vocational, technical and certain for-profit institutions are simply “not employable with the degrees they earn.”

Participants gasped audibly on day two as Doug Heller, executive director of Consumer Watchdog, a California-based advocacy organization, spelled out the disparity in auto insurance rates for low- and moderate-income drivers. Costs range from $481 to $2,517 for people with the same good driving record who live in a lower-income ZIP code and who have a lower education level. Heller called on participants to tackle this discrimination, state by state, by insisting that premiums be based on driving record, length of experience and miles driven.

Scott Pluta, head of the Consumer Financial Protection Bureau’s (CFPB) complaint unit, explained the bureau’s process for handling complaints. Much to the delight of participants, who have seen the financial fallout from predatory lending, Pluta told the group that the CFPB will begin scrutinizing payday loans in 2013.

The conference also covered mobile payments, asset building for the underserved and prepaid cards as a tool for the unbanked.

As they left with new tools to engage and empower their clients, participants deemed Consumer Action’s 3rd Annual National Consumer Empowerment Conference the “most substantive one yet.” Capital One and Visa Inc. were conference Underwriters. AT&T, Bank of America, Consumer Action’s Housing Information and Managing Money Projects and VantageScore Solutions were Leadership Circle patrons; Citi was a Benefactor, and RushCard, a Sponsor.


Know your card? If not, visit Consumer Action’s newest website

The rules have changed in the world of credit, debit, prepaid and gift cards. To help consumers get a handle on new laws and other changes regarding plastic payments, Consumer Action last month unveiled the newest member of its Web family, The website is a joint financial education project of Consumer Action and Visa Inc.

It’s been three years of rapid change for plastic payment cards: The CARD Act revolutionized consumer protections for credit cards, new rules apply to gift cards and debit card overdrafts, debit card merchant “swipe fees” have been capped, minimum purchase requirements for credit card purchases are allowed, and longtime litigation between merchants and payment card processors is moving toward settlement, which will pave the way for merchant surcharging of credit products.

Consumers need to learn how the new rules and regulations could influence their payment choices. is designed to help consumers understand what’s changed, and what those changes mean in practical terms so they can make smart decisions about where to shop and how to pay.

“It’s a new landscape for plastic payment cards,” said Linda Sherry, director of national priorities for Consumer Action. “We want to help consumers to stay in control of the payments process and make the choices that are best for them and their families.”

Right up front, the homepage presents key changes, explains how they could affect cardholders and offers tips to help consumers make the right moves. Sidebar links to the “At-a-Glance Card ‘Rulebook’” provide more detailed information and an overview of changes for each type of payment card.

Finally, a search box allows consumers to access an extensive database of questions and answers (Q&As) and find what they are looking for fast. Visitors can access the Q&As by using the search box or by browsing Q&As by category, or even by asking Consumer Action a question via a form on the site. They can then rate the Q&As, and their ratings will provide feedback on how helpful the answers are.


Fifth Annual Financial Literacy Leadership Conference

Consumer Action’s Community Outreach and Training Manager Linda Williams spoke about the importance of understanding your audience at the Fifth Annual Financial Literacy Leadership Conference in mid-October in the nation’s capital. The event brought together leaders from community-based organizations, businesses, government agencies and academic institutions for discussions on effective ways to empower consumers financially.

Williams led a training session titled “Preparing to Succeed,” which focused on how to deliver financial literacy programs to diverse adult participants. She explored key principles of adult learning, including why and how adults learn best, and provided tips on incorporating the principles into a successful presentation.

“The most effective trainers are able to teach material that reaches the entire audience regardless of their individual learning styles,” said Williams. As part of her session, she grounded her message in a real-world scenario by walking the participants through Consumer Action’s newly revised ID Theft & Account Fraud training module. Later, Williams staffed a table to display a sampling of Consumer Action’s extensive collection of free, financial education resources, including multilingual brochures, leader's guides and fact sheets, all of which were popular with attendees.

Rita Cheng, president of the Financial Planning Association of the National Capital Area, attended the conference. “Linda Williams…was exceptional because [her presentation] was designed to accommodate individuals with different learning preferences/styles. Linda has the unique ability to engage, entertain, and educate her audience,” Cheng commented.

Another conference participant, Betty Habershon, director of the Office of Service-Learning at Prince George’s Community College in Largo, Maryland, agreed, saying that Williams “provided an excellent foundation for working with our community members. The tips were extremely beneficial and practical.”


Making strides on mobile app transparency

Last year, the Obama Administration (via the Department of Commerce) unveiled a Consumer Privacy Bill of Rights that proposed a framework for protecting individual privacy online. It also announced plans to convene meetings this summer with privacy advocates and industry representatives to develop industry codes of conduct around online privacy. The National Telecommunications and Information Administration (NTIA) has been facilitating these monthly meetings since August and Consumer Action's Senior Associate for National Priorities Michelle De Mooy has attended them all.

De Mooy reports that smaller break-out groups have organized to tackle specific issues, such as mobile application transparency. Breaking into manageable working groups is seen as a solution to the lack of consensus that has plagued the larger effort to develop the Consumer Privacy Bill of Rights.

“It’s important to ensure that companies that make and distribute apps make their data collection and tracking practices clear to consumers,” says De Mooy. She has joined forces with the Application Developers Alliance (ADA), World Privacy Forum (WPF) and the American Civil Liberties Union (ACLU) to draw up plans to make important information and disclosures visually eye-catching and effective on small-screen mobile devices.

"One of the biggest challenges for developers and companies alike has been how to cram a bunch of information about data collection onto a screen that fits into the palm of your hand,” she said. “It's a thorny problem but our group has made encouraging progress in figuring out what consumers really need to know when they are considering an app and how that information can be conveyed in a clear way."

De Mooy says the group has developed screen mock-ups that it plans to unveil during a briefing at the next NTIA meeting, at the end of November.


Hotline Chronicles: Credit card holds for rental cars

Arturo* sent an email to Consumer Action’s hotline to complain about renting a car on a recent trip to Texas. He was put out because at the time he made the rental reservation he was not informed that the company required a deposit and would place a hold on his credit card for more than the amount of the rental.

Consumer Action counselors told Arturo that it is very common for rental car companies to require deposits and place holds on customers’ credit cards until the vehicle is returned. The holds can vary from a flat amount (such as $200) to a percentage of the value of the car or an amount specific to the location of the rental.

Holds for cars rented overseas can be even higher. And sometimes the deposit amount is higher if you use your credit card’s “collision damage waiver” (CDW) insurance instead of purchasing separate coverage from the rental car company.

“Consumers often are shocked by these holds, which can far exceed the amount of the reserved rental,” said Consumer Action’s Linda Sherry. “And since many rental car companies are franchise operations, the policies can be different on a local level. On a trip to Mexico a couple years ago, Hertz required a $1,200 deposit on a $275 compact rental. The required deposit was 10% of the value of the car if you did not take the company’s collision damage waiver insurance.”

The required deposit amount is frozen until you return the car. When you settle the final bill, the hold is removed.

We suggested that Arturo — and others like him with tight credit limits on their cards — should ask in advance about holds. If one company’s policy is not to the renter’s liking, consider renting a car from a company that doesn’t require such a large hold.

Before renting a car, make sure you have enough available credit to cover the rental and the deposit or you might not be allowed to rent a vehicle.

*Not this consumer’s real name


Advice for ensuring that financial education makes $ense

Last month, Consumer Action weighed in with the Consumer Financial Protection Bureau (CFPB) on how to encourage consumers to save and achieve long-term financial progress. Our submission was in response to the Bureau’s call for comments on effective ways to provide financial education.

Without savings or assets, many consumers find it nearly impossible to avoid succumbing to the quick “fix” of a payday loan or other forms of credit. Unaffordable balances can easily mount on credit cards when the car breaks down or when medical bills pile up. Many people who live paycheck-to-paycheck don’t set aside money for savings because they believe one can’t save on a limited income.

Consumer Action encouraged the CFPB to promote “incented” savings plans, where employers match employees’ monthly savings contributions, and other innovative approaches such as California’s new retirement savings law, the Secure Choice Retirement Savings Program, which requires employers with five or more workers to use automatic payroll deductions to redirect 3% of an employee’s wages to a mandatory, portable 401(k) account.

Consumer Action passed along some of the most effective approaches that community-based organizations (CBOs) have shared with us. Our community partners have noted that some financial education topics are more popular with clients because they include practical steps that can be implemented immediately. For example, a banking basics workshop can lead clients to open a bank account on the spot; a money management class can get clients started tracking their spending.

Incentives help draw people to financial literacy classes and motivate them to return for additional education. Incentives include meals, childcare, bus passes and/or gift cards to assist people in buying groceries and other necessities.

Community groups regularly commend Consumer Action for providing educational materials in five languages (English, Spanish, Chinese, Korean and Vietnamese). Resources in Russian, Thai, Somali, Hmong and other languages would also be of value in many communities.

Consumer Action has had great success using hypothetical case studies developed as part of our education modules. Many CBOs agree that figuring out solutions for fictional characters provides an objective and non-judgmental way to encourage interaction among participants, reinforces new financial concepts and generally makes classes more enjoyable.

Consumer Action offers free financial education training using a train-the-trainer model. Each training module contains reader-friendly financial literacy publications in multiple languages, lesson plans, training tools and engaging activities.

Consumer Action also provides funding in the form of mini-grants to some community groups to ensure that they can offer personal finance training to their local communities using our materials. With funding often short, many groups are creative in ways to leverage small grants to make their programs more effective. For example, a group in Washington, DC used its training stipend to provide meals and materials, such as calculators, note pads and ledger books, to clients. It also bought materials for participants to design their own piggy banks.

Consumer Action suggested that the CFPB consider adopting these types of outreach and education models to achieve its mandate to ensure that consumers get the information they need to make wise financial decisions.


Thousands participate in 2012 Protect Your Identity Week

Protect Your Identity Week (PYIW), an annual campaign to promote public awareness about identity theft and ways to protect personal information, took place the week of October 20-27. Consumer Action joined with other organizations in support of the campaign. In the weeks leading up to the event, we contacted our network of more than 7,000 community-based organizations to encourage them to participate, use the resources provided on the PYIW website, and engage their clients and community members. Please note the website is no longer available currently.

The National Foundation for Credit Counseling (NFCC), the lead organizer of Protect Your Identity Week, reported that this year:

  • 84 events were held across the country, attracting close to 20,000 consumers;
  • 1,650,000 pounds of personal documents were shredded;
  • 68,000 pounds of electronic devices were recycled, including unused cell phones that will be donated through Verizon’s HopeLine to victims of domestic violence; and
  • there were more than 64,000 visits to during the campaign, with nearly 4,000 consumers taking the online quiz to assess their risk of ID theft related to mobile devices. 

“Much of the success of Protect Your Identity Week can be attributed to the support of the Coalition members. Consumer Action was instrumental in this effort, utilizing their outreach tools to increase awareness of the week,” said Gail Cunningham, spokesperson for the NFCC.

The PYIW website remains live throughout the year, enabling educators, consumers and identity theft victims to use it as a resource at any time.


‘Money Out, Voters In’ mantra seeks to expose election shenanigans

Leading up to Election Day, Consumer Action joined with 50-plus organizations to express concern about two critical threats to our democratic system: corporate influence in elections and laws and official actions that suppress the vote. Under the banner “Money Out, Voters In,” the organizations issued a joint statement pledging to fight special interest money in politics and to support the rights of all voters.

“Nothing, and nobody, should stop eligible voters from casting a ballot,” said Linda Sherry of Consumer Action. “We pledge to fight the takeover of our electoral system by special interests and corporations and corrupt attempts to block citizens from casting their vote.”

Together, the allies across the political spectrum pledged to fight for the rights of all voters. The organizations and companies that took the pledge are; AFL-CIO; AIDS United; All Education Matters; Alliance for a Just Society; Alliance for Justice; American Sustainable Business Council; American-Arab Anti-Discrimination Committee (ADC); Asian & Pacific Islander American Vote; Ben & Jerry’s; Center for Media and Democracy; CODEPINK; Common Cause; Communications Workers of America; Constitutional Accountability Center; Consumer Action; CREDO Action; DC Vote; Democracy 21; Democracy Unlimited;; Demos; Ethical Markets Media, Florida; Food & Water Watch; Franciscan Action Network; Free Speech For People; Greenpeace; Institute for Agriculture and Trade Policy; International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW); Leadership Conference on Civil and Human Rights; Main Street Alliance; Move to Amend Coalition; Political Action; NAACP; National Center for Transgender Equality; National Congress of Black Women, Inc.; National Council of Jewish Women; National Gay and Lesbian Task Force; The New Bottom Line; New Progressive Alliance; People For the American Way; Pesticide Action Network North America; Project Vote; Public Campaign; Public Citizen; Rock the Vote;; Sierra Club; U.S. PIRG; United for a Fair Economy; United Steelworkers International Union; unPAC;; and We the People Campaign.


California groups review ‘Year in Privacy’

Consumer Action met with privacy groups and other California-based public interest organizations in Sacramento this month to review California’s 2012 privacy-related legislation and to plan for the upcoming legislative session. Also in attendance were legislative staffers and members of the state attorney general’s Privacy Enforcement and Protection Unit, the new privacy-focused unit created by Attorney General Kamala Harris.

Our California legislative coordinator, Joe Ridout, reports that among the privacy issues discussed were how to ensure patient privacy as California's Health Benefit Exchange is phased in, the use of drone surveillance by law enforcement, and litigation regarding retailers' collection of shoppers' personal information—a violation of the state's Song-Beverly Credit Card Act.

A great deal of discussion centered on how the new health insurance exchanges (HIEs) might impact patient privacy and the legal mechanisms available for protecting medical privacy as the HIEs take shape. Ridout says there has been much emphasis among industry on streamlining or removing “barriers” to the efficient implementation of digitized records. On the other hand, consumer advocates charge that medical privacy itself is one of the barriers industry seeks to remove.

“The push for electronic records should not come at the expense of patient privacy,” said Ridout.

Consumers consistently indicate that it is important to them that their medical records remain private. A recent poll commissioned by the Consumer Federation of California, for example, found that the vast majority of Californians want their medical records safeguarded and want businesses to face significant financial penalties when they fail to protect their personal data.

One key bill from the past session was SB 439, which at one point threatened to create harmful loopholes in the California privacy law and remove penalties for corporations that mishandle patient records. McKesson Corporation, which recently suffered a privacy breach of over one million records, had asked the legislature to change the law as a way to insulate itself from damages for future breaches. Fortunately, thanks to organizations in attendance (particularly the Consumer Federation of California, Privacy Rights Clearinghouse, Consumer Watchdog and Consumer Action), the bill was re-written in a way that preserved California’s medical privacy law without creating the loopholes desired by McKesson.

Also discussed was how SB 1161 (which essentially exempted Voice over Internet Protocol (VoIP) calls from regulation) makes it difficult to restore telecommunications privacy protections.

Advocates agree that a challenge for the upcoming session will be to offset the loss of Senator Joe Simitian, the Palo Alto Democrat who has been a notable champion of privacy legislation in the state. Simitian left the legislature because term limits kept him from running again.

For more information on Consumer Action's work on privacy, please visit


About Consumer Action

Consumer Action is a non-profit 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 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.

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 unbiased surveys of financial and consumer services to expose excessive prices and anti-consumer practices, 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 7,500 community-based organizations. Outreach services include training and free mailings of financial 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 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.

Click here to learn more about our staff.



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