Consumer Action INSIDER - September 2014


Table of Contents

What people are saying

Keep up the good work! It is refreshing to know that your classes are dedicated to educating the underserved public about financial matters. — Peter Emelue, Inland Counties Legal Services, Southern California

Did you know?

Using a new government search tool, car owners can learn if there are outstanding safety recall issues for their vehicles. The National Highway Traffic Safety Administration’s (NHTSA) new search tool lets you enter a Vehicle Identification Number (VIN) to learn if a specific vehicle has (or has not) been repaired as part of a safety recall in the past 15 years. (Your VIN can be found on your title, auto registration document, auto insurance policy or on a small metal plate on your dashboard that is best viewed through the front windshield.) If the vehicle is under recall but has not been repaired it is listed as “Recall Incomplete.” Visit the database now.

Helping servicemembers and vets protect their finances

Consumer Action has just launched a new suite of educational materials designed to enable servicemembers and veterans to recognize and avoid scams and abusive credit terms, identify better borrowing and banking options, and understand what special consumer protections they may have under the law.

While servicemembers and veterans have many of the same financial goals and responsibilities as civilian households, they face unique financial challenges, including frequent moves, deployment and the transition from military to civilian employment. They also often are the targets of fraudsters and predatory lenders. The Consumer Financial Protection Bureau reported earlier this year that it had received more than 14,000 complaints from servicemembers, veterans and their families between July 21, 2011 and Feb. 1, 2014, including ones that highlight how some military families have been denied the additional consumer protections they are entitled to under the law.

“It’s a sad reality that servicemembers and veterans are often targeted and taken advantage of by exploitative businesses and unscrupulous individuals. Despite the implementation of state and federal laws designed to protect them, there’s an urgent need to educate and inform troops and vets on how to protect themselves,” said Ken McEldowney, Consumer Action’s executive director. “Armed with the right information, we believe current and former military can avoid the financial predators and pitfalls that threaten their long-term financial security.”

The new materials, funded by a grant from Visa as part of its Veterans Financial Coalition project, of which Consumer Action is a member, teach users how to steer clear of expensive or risky financial products and services and take advantage of the many consumer-friendly borrowing and banking options available; recognize and avoid scams, particularly those that target veterans or exploit military loyalty; and exercise the special consumer rights available to active duty servicemembers. The materials also direct servicemembers and veterans to the appropriate complaint-handling agencies, sources of emergency financial assistance and free legal help, and tools, information and counseling that can help them improve their financial wellbeing.

The module includes an eight-page “Economic Survival Guide for Servicemembers and Veterans,” a 20-page trainer’s manual written in Q&A format, a lesson plan that guides educators through a 2½-hour presentation, including group-learning activities, and a 22-slide PowerPoint presentation that provides a visual component to the lesson. Printed publications are free to community-based organizations that serve servicemembers and veterans, and can be requested by submitting a completed order form (PDF). Other groups and individuals can download the files from our website at no charge and make copies if needed.

By-invitation-only train-the-trainer roundtables are scheduled for Sept. 9 in San Diego and Sept. 22 in Hampton, VA. Each training session, led by Consumer Action’s outreach team, will prepare representatives of participating local community-based organizations to conduct one-on-one counseling and group presentations and workshops in their communities.

Translations ‘R’ Us: Consumer Action speaks your language

Many know that Consumer Action translates its consumer education materials into Chinese, Korean, Spanish and Vietnamese in order to empower limited-English-speaking communities. But it’s less known that for the past two decades Consumer Action has helped corporate, non-profit and government clients translate their consumer education materials from English. Our clients have included the Federal Reserve Board (FRB), the U.S. Department of Housing and Urban Development (HUD), the U.S. Treasury, Bank of America, Capital One, Consumer Federation of America and the Securities Investor Protection Corporation (SIPC).

These translations benefit consumers in states with significant populations of limited-English-speaking residents, including New York, Florida, Texas and California.

Unlike many translation firms, which use out-of-context, mechanical, word-for-word translations, Consumer Action has created a network of native speakers who provide our translation services. Our experienced translators can be trusted to accurately convey the meaning and tone of the original English publication. These individuals often earned higher education degrees in their native countries prior to moving to the U.S. We purposely seek out individuals who live and work in their communities because they have the knowledge necessary to bridge the gaps between cultures and social systems.

Since the 1990s, Consumer Action has consistently produced our printed and online publications in English, Spanish, Chinese, Korean and Vietnamese. Our key languages are selected based on the national census and the preferences of our clients and funders. In the past we have published telecom and banking materials in more than a dozen languages.

Most often, Consumer Action translates short pamphlets or press releases for outside clients. However, among our translations for federal government agencies, several have been extensive projects, including two national multilingual, multi-media campaigns for HUD, a complete Spanish website for SIPC and a 100,000-word Vietnamese homeownership manual for NeighborWorks. Our shorter translations have included FRB fact sheets on “Check Conversion” and “Risky Home Loans,” plus many SIPC press releases.

In addition, some federal agencies use our translation verification service to make sure their non-English publications are accurate and culturally sensitive. For example, we assisted the Consumer Financial Protection Bureau (CFPB) by editing a translation of its 2013 remittance rule fact sheet.

We also have helped many fellow non-profits with translating and verifying materials. This includes the National Consumer Law Center’s student loan permanent disability deferment advice and a 300-page “Guide to Proposal Writing” for the Foundation Center of New York.

For more information about Consumer Action’s translation services, contact .(JavaScript must be enabled to view this email address), director of our San Francisco office.

Hotline Chronicles: IRS calling—absolutely NOT!

Riley* from Indiana contacted Consumer Action’s hotline to let us know that he’d received two voicemails that were “purportedly from the IRS.” (We know that a call from the IRS—the Internal Revenue Service—strikes fear into the hearts of many consumers.) But Riley is one smart cookie, because he recognized a call from a scam artist when he heard it. Unfortunately, not all consumers are this savvy. Some might fall for the scam and return the call at the number left by “Officer Eric Foster.”

The Internal Revenue Service has issued several “strong warnings” for consumers about sophisticated and aggressive phone scams targeting taxpayers, including recent immigrants. The IRS noted that reports of this crime continue to rise nationwide.

Scam artists can be aggressive and cruel when they target immigrants. Potential victims are threatened falsely with deportation, arrest, utility shut-off and driver’s license revocation. Callers are frequently insulting or hostile—apparently to scare their potential victims. After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV. A fake caller ID number is sometimes used to support the claim.

Here are some things to know about the IRS:

  • It always sends taxpayers written notification via the U.S. mail if it believes taxes are owed.
  • It never asks for credit card, debit card or prepaid card information over the telephone.

Earmarks and warning signs of the scam include:

  • Callers use fake names and IRS badge numbers.
  • You may be told you are entitled to a big refund or that you owe money and must pay immediately.
  • Scarily, the callers may know the last four digits of your Social Security number. This is not proof they work for the IRS—nowadays this information can be found in other ways.
  • The IRS toll-free number (800-829-1040) can be “spoofed” on your caller ID to make it appear that the IRS is calling.
  • If you challenge the caller and ask to have information sent to you by email, scammers can send you bogus emails that appear to be from the IRS. Don’t engage with the callers.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do:

  • If you know you owe taxes or you think you might owe taxes, call the IRS at 800-829-1040. IRS employees can verify if you have any issues that need attention.
  • If you know you don’t owe taxes or have no reason to think that you owe any taxes, report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484.
  • Also contact the Federal Trade Commission and use its “FTC Complaint Assistant” at Add the words “IRS Telephone Scam” to the comments about your complaint.

Remember, the IRS does not initiate contact with taxpayers by phone or email to request personal or financial information and doesn’t ask for PINs, passwords, credit card numbers or bank/debit card account information. It never attempts to reach taxpayers through any type of electronic communications, such as text messages or social media channels.

If you receive an email purporting to be from the IRS, do not click on any links or open any attachments in the message. Instead, forward the email to .(JavaScript must be enabled to view this email address) and then delete the email.

*Not this consumer’s real name.

Coalition Efforts: Comments to NTIA on White House big data study

Early this year, the White House released a report on the use of “big data” that recommended key policy changes to protect the privacy of Americans. Big data is the collection of data about consumers online and offline. This data is often gathered by tracking consumers online and collecting information about what they are doing and buying, often without their knowledge or consent. One of the recommendations from the White House is to advance a Consumer Privacy Bill of Rights because it says consumers deserve clear, understandable, reasonable standards for how their personal information is used in the big data era.

The National Telecommunications and Information Administration (NTIA), which has been involved in creating industry guidelines on privacy issues, asked the public for comment on the practicality of these policy recommendations.

Consumer Action responded to this request via written comments on behalf of a coalition of organizations including the American Civil Liberties Union (ACLU), Consumer Federation of America, Privacy Rights Clearinghouse, and Common Sense Media. The comments asked the White House to immediately implement a strong and resolute Consumer Privacy Bill of Rights that includes limitations on how consumer data can be used and collected, with carve-outs for sensitive categories of information such as financial information, health, race, ethnicity, location, age, and data collected in an education context. Click here to read the comments.

Additional Coalition efforts

Here are two other coalition efforts by Consumer Action and its allies:

Guidelines for banks that sell old consumer debt to collectors. Banks have come under increasing public and regulatory scrutiny for the key role they play in perpetuating anti-consumer debt collection practices. Banks, which often sell debts without adequate documentation, can set the stage for collection problems such as collecting debts subject to bankruptcy and seeking payment from the wrong consumer. In a letter to the Office of the Comptroller of the Currency (OCC), consumer advocates praised a recent move by the agency to require banks to vouch for the accuracy and completeness of the debts they sell. Click here to learn more and read the letter.

Pushback on weaker mortgage rules. Senate Bill 1577—the Mortgage Choice Act of 2013—would reintroduce some of the higher fees borrowers faced in the lead-up to the mortgage crisis. New mortgage rules are now in effect that limit certain fees. Specifically, S. 1577 creates a loophole that would allow risky, high-cost loans to be considered Qualified Mortgage (QM) loans by creating exceptions to the points and fees threshold. Consumer Action joined it allies to urge Congress not to weaken the QM standard. Click here to learn more and read the letter.

Meeting with FTC Commissioner Terrell McSweeny

This spring, Terrell McSweeny was sworn in as a Commissioner of the Federal Trade Commission. McSweeny, formerly with the U.S. Department of Justice Antitrust Division, was a guest at the Future of Privacy Forum advisory board gathering attended by Consumer Action.

A longtime DC insider, McSweeny talked about the FTC's latest rulings and cases, as well as her personal commitment to consumer protection. She also discussed finding common sense solutions to hot topics like online privacy.

Consumer Action's senior associate for national priorities Michelle De Mooy attended the meeting and asked McSweeny about her interest in health privacy concerns.

McSweeny replied that the FTC was very interested in looking further into these issues, especially as more people use commercial health apps to manage their medical care.

Fair Arbitration Now meeting looks ahead to CFPB study release

Forced arbitration clauses are found in many types of employment contracts and in many consumer agreements, such as banking, cell phone, student loan and credit card contracts. By accepting the product or service, consumers are required to use private arbitration rather than the court system to resolve disputes. The arbitration process is notoriously secretive, unfair and biased against consumers. Studies have shown that consumers in arbitration cases lose in their disputes 90 percent of the time. The same clauses often prevent consumers from filing or joining class action lawsuits.

Momentum in the fight against forced arbitration appears to be growing.

The Fair Arbitration Now (FAN) coalition, including Consumer Action, met in July to strategize about mobilizing and informing the public and legislators about the perils of forced, pre-dispute arbitration requirements. Looking forward to the results of a Consumer Financial Protection Bureau (CFPB) study on forced arbitration expected this winter, the coalition explored ways of making the public aware of the study and pushing Congress to enact the Arbitration Fairness Act, which would prohibit pre-dispute binding arbitration clauses.

The CFPB’s preliminary research on the use of arbitration clauses in connection with consumer financial products and services was released in December 2013. Preliminary findings indicated that large banks commonly use arbitration clauses in credit card and checking account agreements and that roughly nine out of 10 clauses also allow banks to prevent consumers from participating in class actions.

CFPB Watch: Protecting heirs’ mortgage rights and more

A new rule by the Consumer Financial Protection Bureau (CFPB) will help family members of a deceased homeowner assume the mortgage on the family home and be eligible to apply for a loan modification if needed. “Losing a loved one should not mean also losing your home,” said CFPB Director Richard Cordray.

Now when a homeowner dies, heirs can assume an existing mortgage without the same underwriting requirements a new mortgage holder would be subject to. The CFPB says this will help widows, divorced spouses or other surviving family members assume the loan, obtain account information and save the dwelling from having to be sold to satisfy the mortgage. Click here to learn more.

Preventing financial abuse. The consumer financial watchdog has released a guide to help prevent the financial abuse of older Americans and the disabled. Older adults with cognitive problems are particularly vulnerable to financial exploitation, according to the CFPB.

The consumer bureau created the guide to help staff at nursing homes and assisted living facilities recognize, record and report financial abuse by family members or other trusted people who are responsible for an impaired person’s finances. Click here to read the guide.

In addition, the CFPB’s Office for Older Americans has many resources to help protect and educate senior consumers.

Credit card discrimination costs GE Capital. The CFPB ordered GE Capital Retail Bank, issuer of many store-brand cards, to pay $225 million to consumers who were harmed by deceptive sales pitches and discriminated against based on their national origin.

The Bureau says GE Capital—which has changed its name to Synchrony Bank—tricked customers into buying debt cancellation credit card products they “did not want or could not use.” Some customers were ineligible because they were retired or disabled. GE telemarketers misled consumers into thinking that these credit card add-on products were free or a no-fee benefit to cardholders.

Consumers will receive $56 million in direct refunds because of deceptive marketing and $169 million will go to consumers who were excluded from debt relief because of discrimination.

Affected consumers will automatically receive a refund directly to their GE Capital (Synchrony) credit card. Checks will be mailed to those who no longer own a GE account.

In another aspect of the same case the CFPB charged GE with discriminatory credit practices because it did not offer Spanish-speaking consumers, as well as customers in Puerto Rico, promotions to allow customers with delinquent credit card accounts to settle their debt by paying less than they owed. For the 108,000 consumers affected, GE will work with the major credit bureaus to remove negative account information from their credit records and forgive the debts. Affected consumers will obtain this relief automatically. Click here to learn more about the case.

Foreclosure rescue scam relief. The CFPB filed suit against several law firms and management companies that it says deceived homeowners seeking to modify their mortgages. The sweep was a joint effort by the CFPB, the Federal Trade Commission (FTC) and 15 state attorneys general.

The companies are charged with making false promises, using misleading marketing messages and charging illegal upfront fees. These firms lured thousands of struggling homeowners and collected $25 million in upfront fees to modify their mortgages but modifications never materialized. The CFPB is now seeking compensation for victims, some of whom lost their homes while seeking modifications.

Companies that promise to help homeowners with mortgage modifications or refinancing generally are not allowed to request or receive payment until a mortgage modification has been agreed to by the lender and signed by the consumer. The CFPB warns consumers to be wary of signing third-party authorization forms for companies that claim to be acting on their behalf. Click here for tips on spotting a mortgage relief scam.

Consumer Action participates in used car safety campaign

CarMax, the nation’s largest used car retailer, has come under fire by consumer groups, including Consumer Action, for endangering drivers’ lives by selling used cars with open, unrepaired safety recalls. CarMax is not alone in the practice, the groups say.

“CarMax is selling unsafe, ticking-time-bomb cars to its customers, while promising them all their cars have been checked out bumper-to-bumper," says Rosemary Shahan, president of Consumers for Auto Reliability and Safety (CARS), a key ally of Consumer Action on automotive and vehicle safety issues.

More than 36 million cars on U.S. roads today have an outstanding safety recall that needs repair, according to the vehicle history report company Carfax.

While new car dealers are required to repair safety defects before sale, used cars are exempt from the requirement. The National Highway Traffic Safety Administration (NHTSA) has asked Congress for the authority to make repairs mandatory for used cars as well. Shahan and her allies have pushed for a law to protect used car drivers and their passengers from undisclosed safety defects but no federal legislation has been introduced to address this issue.

CarMax has said that auto manufacturers do not pay them to repair safety defects on the cars they own that are under recall. CarMax and other independent dealers could have the cars they sell repaired for free by taking them to authorized dealers but choose not to do so. CarMax says it provides customers with information on how to register vehicles with the manufacturer so that the new owners will be notified of recalls.

Consumers can check to see if a car is under a safety recall at NHTSA’s SaferCar website. (See “Did you know?” in this newsletter for more information.) Also, as of August 2014, manufacturers of 25,000 or more cars must supply safety recall information on their websites, searchable by VIN and updated weekly.

CARS, Center for Auto Safety, Consumers Union, Consumer Action, Consumer Federation of America, Courage Campaign, National Consumer Law Center, National Association of Consumer Advocates, National Consumers League, Trauma Foundation and U.S. PIRG petitioned the FTC to stop the sale of unsafe recalled used cars to the public. Click here to read the FTC petition.

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, 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.



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