Released: June 30, 2014
Consumer Action INSIDER - July 2014
Table of Contents
- What people are saying
- Did you know?
- Policy Buzz: Updating the law to protect your ‘electronic life’
- Financial inclusion training in California
- Hotline Chronicles: ‘Free jewelry’ offer leads to membership charge
- Power of Prepaid card conference gathers industry leaders
- Sacramento surprise: ‘Kill switch’ succeeds but used car recall safety fails
- Class Action Database: Ticketmaster settles case based on inflated fees
- Employee Volunteers: DC staffer advocates for children in the court
- Out and About: Conference explores alternative banking
- CFPB Watch: Actions against SunTrust Mortgage and Sallie Mae
- Coalition Roundup: Pushing the pen for consumer protection
- About Consumer Action
What people are saying
I’d like to thank Consumer Action for offering such an invigorating training. Your trainer exhibited such a depth of knowledge and demonstrated sincerity when speaking about [the needs of] clients. — A. Ahmad, Asset Building Specialist, Capital Area Asset Builders (CAAB), Washington, DC
Did you know?
Data brokers collect consumer data from extensive online and offline sources, largely without consumers’ knowledge. The collected data ranges from consumer purchase details, social media activity and warranty registrations to magazine subscriptions, religious and political affiliations and other details of consumers’ everyday lives. Learn more by watching Sharing Information: A Day in Your Life, a short video created by the Federal Trade Commission (FTC). The FTC has recommended that Congress consider legislation to make data broker practices more visible to consumers and to give consumers greater control over the immense amounts of personal information about them collected and shared by data brokers. Read the FTC Data Brokers report.
'Policy Buzz: Updating the law to protect your ‘electronic life’
Enacted into law in 1986, the Electronic Communications Privacy Act (ECPA) is woefully outdated. For example, under ECPA, police only need a subpoena, issued without a judge's approval, to read emails that have been opened or that are more than 180 days old, which are considered "abandoned."
Digital Due Process, a coalition of advocates and industry members, including Consumer Action, has been working to reform that law for a number of years with little success. Recently, the reform effort gained momentum, however, when the main ECPA reform bill in the House, HR 1852, sponsored by Reps. Kevin Yoder and Jared Polis, hit 218 co-sponsors, meaning that more than half of the House supports it.
The reform bill still faces strong challenges from the Securities and Exchange Commission (SEC) and the IRS, agencies that have a vested interest in having access to citizens' communications.
Financial inclusion training in California
The American economy is now nearly five years into recovery from one of the worst economic downturns in modern history. During the downturn, between 2007 and 2010, American families lost trillions in household wealth as jobs vanished, unemployment soared and bank accounts closed. Historically disadvantaged communities with high unemployment before the downturn were hit especially hard and are still struggling to recover.
Today, nearly one-third of the U.S. population—106 million people—are underbanked or unbanked, according to the Federal Deposit Insurance Corporation. This means they don’t have bank accounts and they regularly make nonbank financial transactions. According to Forbes, one in five households has zero or negative assets. Twenty-five million people in the U.S. don’t have credit scores, which makes them invisible to the mainstream U.S. financial system. This population may be vulnerable to alternative, predatory financial services such as short-term payday loans, pawnshops and auto title loans. These financial services and products use slick marketing campaigns to convince consumers that they offer a quick fix for financial emergencies, but in reality these products and services open a revolving door of debt for most consumers.
Consumer Action trainers Linda Williams and Nelson Santiago highlighted these and other stats at Financial Inclusion train-the-trainer workshops in three California cities: Fontana, Visalia and Oakland. The goal of the trainings was not only to raise awareness of the issues surrounding alternative financial services and how they can negatively impact consumers, but also to roll out a new tool created by Consumer Action: The Checking and Savings Accounts: A Wise Choice module was funded by a grant from the California Rose Foundation.
The latest teaching module targets individuals moving from homelessness to housing, former prisoners re-entering society, the working poor, single-parent households and unbanked/underbanked consumers who rely on alternative financial services. The module is designed to help community educators change these consumers’ overall perception of and attitudes toward mainstream banking services by teaching them how to access and manage mainstream accounts.
During a robust discussion lead by Williams on barriers to accessing mainstream banking products and services, participants at the Fontana training identified barriers for consumers in the communities they serve. These included lack of proper identification, being listed on ChexSystems (a customer verification service used by banks), a paucity of funds, high banking fees, and the inability to maintain a minimum balance.
Williams shared with participants the results of a 2010 study of the unbanked/underbanked in Los Angeles by the Pew Health Group. The study found that while low-income consumers in Los Angeles face successive barriers to getting bank accounts, once the access hurdle was overcome, consumers faced new and additional obstacles to maintaining and properly managing their bank accounts and to using those accounts to meet their financial needs.
Williams pointed to Consumer Action’s Checking and Savings module and told participants that the new training tool can be used to educate consumers on how to properly manage and use their accounts to meet their financial needs and overcome these barriers.
In Visalia, a discussion led by Williams on the practices used by payday lenders took center stage. Williams pointed to a report issued in 2013 by the Center for Responsible Lending, The State of Lending in America, which outlined practices that contribute to the creation of a “debt treadmill”:
- Lack of underwriting for affordability. Payday lenders don’t assess whether borrowers can afford their loans.
- High cost. Payday lenders typically charge the maximum possible interest rate allowed by state law, which, when combined with fees, often translates to an annual percentage rate (APR) of 400% or higher.
- Short-term due date. Payday lenders know that borrowers cannot repay the loan principal within two weeks and will need to recycle the loans and borrow repeatedly, paying more and more in fees each time.
- Single balloon payment. Lump sum repayment is required instead of longer-term installment payments that would make it easier for low-income consumers to repay the loans.
- Post-dated checks or access to bank accounts as guarantees. When payday loans are not repaid, checks are deposited (or bank accounts debited), which can trigger overdraft fees.
Any one of these five factors alone could create a debt trap for borrowers, said Williams.
During the Oakland training, participants shared some of the horror stories they are hearing about consumers in their communities using alternative financial services to make ends meet.
Williams told participants that most studies show that using these high-risk financial products is unsustainable, and borrowers would be better off improving their money management skills or taking a community college course that would help them increase their income by qualifying for a promotion or a better-paying job.
Williams admitted that while improving one’s money management skills is important, affordable products also are needed. Pointing to a model launched by Community Development Finance (CDF), Williams said consumers need “options and opportunity.” The organization launched the first non-profit check-cashing store in the Fruitvale section of Oakland, which charges a 1% fee to cash checks of $300-$1000. In 2010, CDF rolled out an alternative to payday loan products that cost consumers a maximum of $7.50 per $100 borrowed for two weeks. CDF keeps the default risk low with a careful screening and application process to help serve customers who are more likely to repay.
At the end of each training, participants stressed in their evaluation forms how much knowledge they had gained from the training. One wrote: “This is the best training I have ever attended.”
Hotline Chronicles: ‘Free jewelry’ offer leads to membership charge
Tanya* from Georgia contacted our hotline to warn about Kay Stones, an Internet company based in California that uses pop-up “survey” boxes to entice people to order “free” jewelry in return for a $5.99 shipping and handling charge. To receive the free merchandise, consumers are asked to provide a credit or debit card number. Two weeks later—the same day she received the jewelry—Tanya’s credit card was billed for $95, the yearly membership fee for a Kay Stones jewelry subscription plan. Plan members receive periodic shipments of items they do not choose and the onus is on them to return the jewelry by the deadline if they don’t want to pay for it.
The pop-up surveys are deceptive because they appear when consumers are visiting well-known retail websites like Kohl’s or Amazon.com. Tanya told us she thought the survey was about the site she was visiting.
“I called but they have a way around it—they say I didn’t respond in time to cancel,” said Tanya. “Like a fool, I fell for it, but I don't want other people to do the same.”
The company response: “We encourage our customers to read the terms and conditions prior to placing an order. In fact, we require you to check a box indicating that you agree to be billed the retail price if you do not call or email to cancel your trial.”
Consumer Action thanks Tanya for the warning on behalf of others. On the Web, we found several other complaints about Kay Stones’ sales techniques. Many of those who posted online complaints were able to get a full refund. One complainant wrote: “I was misled into agreeing to such terms, as I would have never paid for this poor-quality jewelry that looks as if it had come from the 99¢ store.”
We advised Tanya to contact the company again to cancel the plan and ask for a full refund. If the charge is not removed, she should file a complaint with the Better Business Bureau.
Tanya also has the right to dispute the charge on her credit card. Click here to learn more about disputing credit card charges.
“We seriously question this company’s marketing techniques,” said Consumer Action’s Linda Sherry. “Every step of the way, business is conducted in a way most consumers would find counter-intuitive. If the jewelry is such a good deal, why does Kay Stones need to sell it using what we call ‘negative option’ billing? This is a red flag—don’t provide your credit or debit card numbers for a so-called ‘freebie’ or trial offer.”
Negative option sales are not illegal but are subject to Federal Trade Commission disclosure requirements. Before agreeing to any free offer, know the rules.
*Not this consumer’s real name.
Power of Prepaid card conference gathers industry leaders
The Network Branded Prepaid Card Association (NBPCA) conference, Power of Prepaid, is the prepaid/payroll card industry’s big annual event. At this year’s conference, held last month at Maryland’s National Harbor near Washington, DC, representatives from a broad array of banks, financial companies, regulatory agencies and consumer organizations networked, exchanged ideas and participated in a variety of sessions.
On the first day of the gathering, Linda Sherry of Consumer Action joined a three-hour workshop titled “A Focus on Payroll Card Programs: Implementing Industry Best Practices and Ensuring Regulatory Compliance.” Co-panelists were Cathy S. Beyda, Of Counsel, Paul Hastings LLP; Mike Pancotto, SVP, Internal Risk and Audit Execution, FSV Payment Systems; Seth Brennan, VP, Product Manager, Citi Prepaid Services; and Jess Sharp, Managing Director, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce.
Among the topics discussed was a letter about payroll cards written by the National Consumer Law Center to the Consumer Financial Protection Bureau and the U.S. Department of Labor. Consumer Action and numerous other consumer and civil rights organizations signed the letter, which asked for specific rules, including limits on inappropriate fees and better access to statements and transaction history.
Payroll cards are reloadable prepaid cards offered by employers as a way for employees to receive wages electronically. Payroll cards, like direct deposit, are a form of electronic payment and an alternative to paper paychecks. Each payday, the employee’s net wages are deposited directly into the payroll card account. The employee can then use the card anywhere a debit card is accepted, to buy things, get cash and pay bills.
The American Payroll Association (APA), one of Beyda’s clients, sent the CFPB a response to the consumer letter. While she said the vast majority of payroll card providers already adhere to many of the principles in the consumer letter, the APA pushed back against the idea of “overly restrictive regulation” and said it believed that “the solution is education.”
During the workshop, the huge growth of payroll cards and the consequential reduction in paper paychecks was noted. The CFPB last year released a bulletin reminding employers that they cannot require their employees to receive wages on a payroll card after the New York Times reported on a McDonald’s franchise that was sued by an employee who felt she was forced to accept her wages on a card.
Sherry noted that there are many benefits for unbanked consumers who receive their wages on a payroll card, but that employers should work hard to keep costs to payees low. She advised employers to negotiate a good deal with the payroll card provider, drawing questions from the audience wondering if this was possible. Fellow panelists from the industry agreed that employers have the power to negotiate and that many employers are sensitive to ATM fees and seek free access to a wide network of cash machines on behalf of their employees.
Sherry said, “Payroll card programs save employers money, so share the wealth by choosing a program that doesn’t nickel and dime employees.”
Consumer Action has created a four-page guide designed to help employees who work for companies that offer a payroll card to determine whether that is their best option, understand how the cards work and how to avoid fees, and know their rights. An Employee’s Guide to Payroll Cards was produced in partnership with Visa Inc. and NBPCA. A guide for employers was also part of the project.
For more about the Power of Prepaid event, click here.
Sacramento surprise: ‘Kill switch’ succeeds but used car recall safety fails
Our California legislative coordinator, Joe Ridout, was in Sacramento, the state capital, on June 17 to attend a committee hearing on two key bills supported by Consumer Action. SB 962, which would require a “kill switch” to be built into future smartphones in order to stop the epidemic of cell phone thefts, passed the Assembly Business, Professions and Consumer Protection Committee that day by 11-3. (The aye votes included Republican Assemblyman Brian Maienschein of San Diego.) On June 23, the bill passed through the Assembly Utilities and Commerce Committee on a 9-2 vote and is now headed for the Assembly floor. Senator Mark Leno (D-San Francisco) introduced SB 962.
Lobbyists for wireless carriers previously had claimed that implementing a kill switch would be “untenable, unworkable, undoable,” but at the hearing they admitted the technology actually is quite easy to deploy. Carrier representatives wanted the kill switch to be voluntary and activated only if consumers requested it. Ridout says, “By making it voluntary, the industry would have protected its $8 billion per year profit on cell phone loss/theft insurance. Fortunately, few bought into the industry argument.”
At the same Assembly business committee hearing, lawmakers addressed SB 686, introduced by Assemblymember Hannah-Beth Jackson (D-Santa Barbara) to ban auto dealerships from selling used vehicles subject to safety recalls without having repaired the defect. Unfortunately the bill was defeated.
Since the 1960s, federal law has prohibited new car dealers from selling new cars under recall, but used car dealers are not prohibited from doing so. Consumers for Auto Reliability and Safety (CARS), a Consumer Action ally, sponsored the state bill.
Assemblymember Jackson related her own recent purchase of a used car at a dealership. She asked the salesman if the car she was considering had an open safety recall, and he replied that it would be illegal to sell such a vehicle. Jackson corrected him, pointing out that such sales unfortunately are permitted. She told the salesman she wrote a bill that would make the practice illegal, to which he replied, “Well, it should be!”
The bill failed passage in its committee, 3-4, after heavy lobbying by used car giant CarMax and its allies. No votes were cast by committee chair Susan Bonilla (Concord) and fellow Democrats Raul Bocanegra (Los Angeles), Nora Campos (San Jose), Susan Eggman (Stockton), Richard Gordon (Menlo Park), Chris Holden (Pasadena) and Philip Ting (San Francisco). Casting no vote—neither for nor against—helped kill the bill while minimizing public scrutiny of their voting records. Ting was the one who seconded the motion to bring the bill to a vote, making his refusal to weigh in even more questionable.
“Car dealers may think that the battle is over, but in reality, we're just getting warmed up,” said Rosemary Shahan, president of CARS.
Ridout sounded off about the practice of withholding votes. “Not voting creates a barrier to transparency and allows our representatives to weasel out with little accountability,” he said. “All we know is that lawmakers who cast no vote acted to keep hazardous vehicles on our roads.”
Class Action Database: Ticketmaster settles case based on inflated fees
In June, we added eight class action settlements to our Class Action Database.
One notable class action settlement is Schlesinger v. Ticketmaster. The plaintiffs filed a class action against Ticketmaster, claiming that some fees on the Ticketmaster website are deceptive and misleading.
The company’s “Order Processing Fee” led consumers to believe it was based on Ticketmaster’s actual costs to process orders. Attorneys for the plaintiffs charge that the fee generated profit for Ticketmaster.
Additionally, Ticketmaster’s site suggests that its fee for UPS delivery of tickets is a pass-through of the amount that UPS charged Ticketmaster for that delivery. Plaintiffs alleged the fee is inflated above the actual costs.
Ticketmaster denied the allegations but agreed to a settlement to avoid the burden, expense and risk of continuing the lawsuit.
If you are a U.S. resident who purchased tickets on Ticketmaster.com between Oct. 21, 1999 and Feb. 27, 2013 and did not receive a full refund of the Order Processing Fee, you are eligible to join the class. Consumers who were charged the UPS delivery fee are eligible to join the “UPS Subclass.”
If the settlement is approved, Ticketmaster will issue approximately $386 million in “discount codes” to an estimated 50 million class members. Each code will be worth $2.25. The codes will be good for four years and will allow class members to receive discounts for future ticket purchases and/or receive additional discounts of $5 on future UPS ticket deliveries. Ticketmaster will issue up to 161 million credits for $2.25 each and up to 4.9 million credits for $5 each. Class members can obtain up to 17 codes, depending on their past ticket purchases.
If class members do not use at least $42 million worth of codes, Ticketmaster has agreed to make up the difference with free tickets for certain events available to class members on a first come, first served basis. Class members will not have to wait four years to determine if free tickets will be issued. Redemption rates will be evaluated each year to ensure that at least $10.5 million a year in discounts have been redeemed. If not, Ticketmaster will make free tickets available immediately.
Ticketmaster also agreed to add disclosures on its website clarifying that these fees are not an actual pass-through of its costs.
If the court approves the settlement, the class members will automatically receive the discount codes. The final approval hearing is on January 13, 2015.
For more information on the suit, visit the claims administrator’s website or call 877-317-9139 to hear prerecorded information.
Employee Volunteers: DC staffer advocates for children in the court
Michelle De Mooy, DC team member, has long had an interest in working with women and families. Over the last 20 years she has worked with a array of non-profits serving the needs of women and families. Recently, De Mooy, the mother of two young children, became trained as a Court Appointed Special Advocate (CASA).
CASA volunteers are appointed by judges to advocate for the best interests of abused and neglected children in court and other settings. The primary responsibilities of a CASA volunteer are to act as the “eyes and ears” of the court by gathering information about the case, providing written reports at court hearings, advocating for the child's best interest by seeking cooperative solutions among caregivers and others involved in the child's life, monitoring court orders and recommending services.
De Mooy was assigned her CASA child in March of 2014 and has been enormously gratified by her work. “It's really true that kids give you more than you could ever give them,” she said. “This work has given me a very different perspective on how our society disempowers children, particularly those in the foster care system, and how important it is to have strong, objective advocates for them.”
De Mooy adds that the kids she has met so far are incredibly courageous and strong, and work hard to overcome their difficult beginnings. “Most people in the system care about the kids, but it’s my job to make sure they are doing everything they can to follow through and help the child move forward, whether it's to help find a "forever" family or to support a family that has fallen through the cracks.”
To learn more about becoming a CASA volunteer, visit the National Court Appointed Special Advocates Association.
Out and About: Conference explores alternative banking
In May, Americans for Financial Reform (AFR) held a day-long conference in Washington, DC. The “Banking Without Wall Street” event explored a range of options that can better provide fair and accessible products for all consumers and better support local community development.
Consumer Action’s Ruth Susswein attended and reports that the panels included discussions of public banks, credit unions, community development financial institutions, the possibilities of postal banking, alternative avenues for municipal finance and forms of finance that support equitable, real economic growth.
Postal Inspector General David Williams spoke about a proposal for the U.S. Postal Service to offer expanded financial services.
In a report earlier this year, the Office of the Inspector General examined the use of the nation’s post offices to provide low-cost basic banking services.
Williams pointed out that the average underserved or unbanked consumer spends 10 percent of his or her income on fees to access financial services. He said that the postal system can offer “universal financial access,” even in rural communities, and save consumers billions of dollars in fees. Postal banking services could include low-fee check cashing, prepaid cards, bill payment and, possibly, affordable small dollar loans.
Basic banking was offered at post offices from 1911 to 1966, when the program ended because of falling interest rates at commercial banks. University of Georgia law professor Mehrsa Baradaran proposed reigniting the system. She said it was most popular with immigrants, and served customers in 23 languages. Those in favor of postal banking are hoping to see pilot projects begin later this year.
Representatives from two credit unions, Self-Help (North Carolina) and Freedom First (Virginia), spoke of the access they offer low-to-moderate-income borrowers through microloans and credit builder loans, combined with financial education, to meet community needs. Both credit unions have innovative partnerships with foundations, corporations and traditional banks that have helped people of color, women, rural residents and low-wealth families to buy homes, build businesses and strengthen communities.
One panel was devoted to public banking, where cities or states would own and operate banks, potentially saving municipalities money on student loans, agriculture loans and financing for cities and towns. Speakers argued that keeping community deposits local would create alternative capital for the government. The Bank of North Dakota—more than a century old—is currently the only state-owned bank in the nation. Vermont has an economic development authority that allows state agencies to borrow money more affordably. San Francisco has been working on creating its own public bank. However, it has run up against state laws designed to protect taxpayer funds from risky investment.
Several of the day’s speakers insisted that the way to build community control of its wealth was to decrease financial reliance on Wall Street, which they said is a “perpetual debt machine” dependent on “fee extraction” to the detriment of both individual and municipal borrowers.
CFPB Watch: Actions against SunTrust Mortgage and Sallie Mae
The Consumer Financial Protection Bureau (CFPB) brought two significant enforcement actions recently. The bureau requires SunTrust Mortgage to return cash to consumers who suffered illegal foreclosures and to offer mortgage modifications to certain homeowners whose properties are valued at less than their mortgage balances. The CFPB also went to bat for student loan borrowers in the military who were not afforded their rights under a law to reduce interest rates for active duty servicemembers.
Homeowner relief
The CFPB has filed a court order requiring SunTrust Mortgage to pay $500 million to help underwater homeowners avoid foreclosure, plus spend another $40 million to compensate consumers who lost their homes due to SunTrust’s allegedly deceptive and illegal practices. A federal judge must sign off on this action before compensation will be authorized.
According to the CFPB, SunTrust provided untrue and misleading information about loan modifications, falsified foreclosure documents, used inadequate automated document processing (“robo-signing”) and improperly denied borrowers’ mortgage modification requests. As a result, the CFPB charges that 48,000 people lost their homes from 2008 to 2013. The CFPB would require the mortgage servicer to compensate borrowers for the loss of their homes by distributing equal shares of a $40 million fine. Later this year, a fund administrator will contact eligible consumers.
SunTrust also would pay more than $500 million to reduce the principal loan balance for borrowers who are at risk of defaulting on their mortgages, and must lower interest rates for homeowners who are current on their mortgage payments but are “underwater” (own a home worth less than the mortgage balance). Consumers who are interested in loss mitigation can contact SunTrust Mortgage at 800-634-7928 or www.SunTrustMortgage.com.
The CFPB brought the action along with the U.S. Department of Justice, Department of Housing and Urban Development (HUD) and 49 state attorneys general.
Servicemember student loans
Sallie Mae, the nation’s largest student loan lender and servicer, has been ordered by the U.S. Dept. of Justice (DOJ) to pay more than $96 million to borrowers in the military around charges that Sallie Mae violated the Servicemembers Civil Relief Act (SCRA).
Servicemembers have complained to the CFPB since 2012 that they were not receiving the interest rate reductions they are entitled to under the SCRA while on active duty. Under the law, annual interest rates on loans can be reduced to six percent to ease the financial burden on families with a member on active duty.
According to the CFPB and DOJ, Sallie Mae did not provide rate relief for servicemembers with student loans, and it put up illegal roadblocks to avoid providing SCRA relief. These complaints led to the enforcement action against Sallie Mae Bank and Navient Solutions. The companies will be required to provide restitution to military families with federal and private student loans.
Payments will be made directly to those servicemembers who’ve already complained. Military members with student loans who did not receive SCRA benefits still may file for restitution with the CFPB. Submit your details to the CFPB online or call 855-411-CFPB (2372).
Click here to review the CFPB’s student loan debt guide for servicemembers. It explains how active duty military members can apply for rate reductions on student loans and other loans that qualify.
Managing mobile payments
With so many consumers using smartphones for mobile banking and financial transactions, the CFPB has put out a call for information on the use of mobile devices for financial purposes. The announcement was made last month at the CFPB public field hearing in New Orleans.
The Bureau wants to know how the use of mobile payments might help improve the financial lives of people who live paycheck to paycheck. The consumer watchdog would especially like to hear from consumers who are older, disabled or live in areas with few if any bank branches and might benefit most from mobile financial services. For example, would it be helpful to deposit checks without a trip to a bank branch, by taking a photo of them with one’s smartphone, as many banks now allow?
The CFPB asks, too, about mobile services that are helping consumers track spending or better manage their money. Are there specific programs that you find helpful?
The Bureau also asks about mobile security and privacy risks. What protections are needed for your personal and financial information when a mobile device goes missing? Do concerns about security and privacy inhibit your use of mobile banking or mobile payments?
Click here to send comments to the CFPB. The deadline is Sept. 10.
Coalition Roundup: Pushing the pen for consumer protection
Is the pen mightier than the sword? Consumer Action and other advocacy groups make good use of their pens (or computers) to fight injustices and uphold legitimate efforts to protect consumers. Recently, missives signed by top groups have been sent to protect consumers from fraudulent transactions, rip-off career education schools, private bill collection of back income taxes and other pressing issues.
Note: The links in this article will take you to Consumer Action’s Coalition Efforts pages, where you can find links to the referenced letters.
“Choking” banks that profit from consumer fraud. The Department of Justice (DOJ) Operation Choke Point fights financial fraud by targeting banks and payment processing companies when they allow wrongdoers to use the legitimate banking system. The program has become a flashpoint for Republicans, who allege that the program is an abuse of the DOJ’s power. In June, Consumer Action and its allies urged the Senate to support the program as well as other efforts that protect consumers and taxpayers from fraud. Click here to learn more.
Students and taxpayers ripped off by shoddy career education schools. According to the Department of Education, an astonishing 72 percent of the for-profit college programs it regulates produced graduates who on average earn less than high school dropouts. In late May, Consumer Action joined its allies to urge the Education Department and Congress to improve its proposal to strengthen existing federal gainful employment law. The purpose of the gainful employment rule is to ensure that career education programs that accept federal student loans for tuition payments fully prepare students for a career in a recognized occupation. Click here to learn more.
Standing up in favor of more transparent banking. In response to 11 proposals and bills designed to harass and undermine the authority of the Consumer Financial Protection Bureau (CFPB), coalition advocates in mid-May urged Congress to stop obstructing reasonable regulation that serves to protect consumers and the financial industry from another financial meltdown. Far from its enemies’ portrayal of a too-powerful agency that threatens consumer freedom and privacy, the CFPB is a watchdog that gets big results for consumers and makes markets work better. Click here to learn more.
Privatizing tax collection is a bad idea. Coalition advocates wrote a letter in late April to oppose language in the EXPIRE Act of 2014, which would require the use of private collection companies to collect back taxes on a commission basis. The plan would open consumers to potential harassment and abuse and line the pockets of private companies at taxpayer expense. Click here to learn more.
Housing finance bill needs work. Consumer advocates who are part of the National Community Reinvestment Coalition wrote to the Senate Committee on Banking, Housing and Urban Affairs calling for significant changes to improve and strengthen S 1217 (Johnson-Crapo housing finance reform legislation) so that it would provide access to affordable mortgages by the working class, people of color, Millennials and other traditionally underserved communities. Click here to learn more.
Strengthening mortgage reform protections. In late April, Consumer Action joined coalition advocates in support of Senator Sherrod Brown’s (D-OH) amendment to the Johnson-Crapo housing finance reform legislation (S 1217) that would require mortgage servicers to disclose any new fees, the loan's default status and whether a loan modification application has been submitted prior to transferring servicing duties to a new mortgage servicer. Click here to learn more.
Opening the ‘black box’ of credit reporting. Consumer Action and its allies wrote in April to the Senate in support of the Stop Errors in Credit Use and Reporting (SECURE) Act, which would help consumers clear up credit reporting and credit score errors. The proposed legislation also would allow consumers to request an annual free copy of their credit scores. Click here to learn more.
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 nine 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 7,500 community-based organizations. Outreach services include training and free 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.