Consumer Action INSIDER - September 2015


44th Anniversary

Table of Contents

What people are saying

I'm very happy at the quick service and resources that were provided by your hotline staff. Thank you for being there for the consumer — Hotline user, June 2015

Did you know?

When it comes to investment and brokerage accounts, you’re not always covered if someone hacks your account. If you are seen to be a party to helping someone obtain your login information, say by responding to a “phishing” email pretending to be from the company, your losses might not be covered. An article by Stacy Johnson of Money Talks News explains some steps you can take to protect yourself.

Publications put car buyers, borrowers in driver’s seat

An automobile is a significant purchase, so getting the financing right and knowing how to protect your investment if the vehicle you buy turns out to be a lemon can save you thousands of dollars. Consumer Action offers updated versions of two popular publications that prepare drivers to shop for and choose the best auto loan and explain how to exercise their rights under California’s Lemon Law should their purchase prove to be a dud.

In “Get a Car Loan That’s in Your Best Interest,” prospective borrowers seeking a loan for a new or used car get a basic education in auto financing that empowers them to identify the best loan source and terms, avoid dealer markups and “loan-packing,” check their credit and resolve problems. Because a car is a necessity and a substantial financial commitment for so many consumers, being prepared to make wise choices regarding financing can mean obtaining the transportation needed to get to work or school, saving thousands of dollars over the life of the loan and avoiding the stress and possible repercussions (repossession) of unaffordable payments.

While much of the content from the original 2003 version of “Get a Car Loan That’s in Your Best Interest” has been retained, it is has been expanded to include even more information and to reflect changes in auto lending practices (longer loan terms, for example). Online resources for borrowers have been added or updated. This consumer fact sheet, currently available in English, will be translated into Spanish, Chinese, Korean and Vietnamese.

“California’s Lemon Law: Protection for new and used car buyers,” first published in 2002, alerts consumers to the protections they have under California law if the warrantied car they purchase or lease has defects that can’t be repaired after a reasonable number of attempts. Redress could come in the form of a refund of the purchase price (less a deduction for miles driven) or replacement of the vehicle—the consumer’s choice.

In addition to general information about the Lemon Law, the fact sheet includes guidance for exercising your rights (such as document your experience in writing and send a letter by certified mail to the manufacturer at the address that appears in the vehicle owner’s manual within the time frame allowed) and points out important considerations when deciding whether to use the manufacturer’s arbitration program, if it has one, to settle your dispute or go straight to court. Like most of Consumer Action’s educational publications, the Lemon Law fact sheet includes a section of resources where users can go to learn more on the topic, file a complaint or get personal assistance. This consumer fact sheet, currently available in English, will be translated into Spanish.

driver photo

Drivers can also benefit from Consumer Action’s “Auto Insurance: The basics” fact sheet, created and published earlier this year. The publication prepares consumers to determine what types and amounts of coverage they need, shop for insurance, evaluate insurers and quotes, manage their auto insurance costs (including, if necessary, reducing premiums), file a claim, and obtain help if they have trouble getting coverage or are dissatisfied with how their claim is handled. Included is information about California’s Low Cost Auto Insurance program, an underutilized state program that enables qualified drivers to obtain the minimum required coverage for a fraction of the cost they would pay on the open market.

Out & About: Legislation targets car rental surcharges

If you’ve recently rented a car, you may have paid for civic projects like roads, bridges, stadiums and convention centers. If you rented the vehicle while traveling, you contributed to projects you may never benefit from. These local projects are supported via surcharges on your rental car bill—fees with names like “convention center surcharge,” “vehicle licensing fee” or “customer facility charge.”

Even if you live in the city where you rented the car, these fees, which are added on top of existing state and county taxes, impose a financial burden on consumers by inflating the cost of rentals. Critics say it’s especially damaging to heap these fees on the backs of low-income consumers, who often need to rent an auto because they cannot afford to own one. Many low-income and minority consumers rent from off-airport locations in their own neighborhoods but still pay these fees.

The Curb Auto Rental Taxes (CART) Coalition held the Congressional briefing to promote the End Discriminatory State Taxes on Automobile Renters (EDSTAR) Act. The bipartisan legislation, introduced in the Senate (S 1164) by Mark Kirk (R-IL) and Richard Blumenthal (D-CT) and in the House (HR 1528) by Sam Graves (R-MO) and Steve Cohen (D-TN), would prevent state and local governments from adding new discriminatory taxes on rental cars. (Consumer Action is a member of the CART Coalition.)

Rental car taxes are a relatively new revenue generator. Since their introduction in the late 1970s, however, the practice has exploded. Today, 43 states and Washington, DC have burdened renters with over 100 of these “special” taxes. Approximately 50 percent of all rentals are by local and car-sharing drivers.

So what can you do to help get EDSTAR passed so that you’re not hit with extra fees the next time you rent a car? Visit the CART Coalition website, where you can register and send a message to your elected officials asking them to pass EDSTAR and put an end to discriminatory excise taxes on car rental customers.

Hotline Chronicles: Hello, this is a ‘charity’ calling...

Carmella from Florida contacted Consumer Action’s hotline to complain about repeated calls—some at 8 a.m.—from a charity called the Children’s Cancer Fund of America. “No matter what company you are with, you should not be calling anyone’s home at 8 a.m. That is disrespectful and unprofessional,” said Carmella, who was awoken by the call.

There’s bad news and good news for Carmella. The bad news is that registering your phone number with, the National Do Not Call Registry, doesn’t stop calls from charities. Registering your number can prevent only unwanted sales calls.

The good news is that charitable solicitations by for-profit telemarketers are subject to the Telemarketing Sales Rule (TSR). Under this law, “telefunders”—telemarketers who solicit charitable contributions on behalf of non-profits—can’t engage in acts defined as abusive under the TSR, such as calling before 8 a.m. or after 9 p.m. Of course, this isn’t going to stop the Children’s Cancer Fund of America from calling Carmella at 8 a.m.

The law allows you to ask the calling entity to remove you from its list. For-profit telemarketers calling on behalf of charitable organizations must honor your request on behalf of that charity. Click here to learn more about how the TSR pertains to charities and for-profit companies calling on their behalf.

Online resources such as Guidestar, Charity Navigator, and Charity Watch can help consumers check out non-profits before they give so that their charitable dollars can be spent wisely.

So how does the Children’s Cancer Fund of America stack up? Not so well. It is number nine on the Tampa Bay Times’ list of America’s Worst Charities. According to the resource, the Children’s Cancer Fund of America is one of five “charities” owned by a single family “that raises millions in the name of cancer, but spends most of that paying for-profit companies.” Read more.


On the reviews page for Children’s Cancer Fund of America at the Great Nonprofits website, there is an alert that says “this organization's nonprofit status may be in question.”

“Bob_58” posted on Great Nonprofits: “I gave a couple of times. Then decided to do the research I should have done long ago. Now when they call I simply tell them I have done some research and won't be giving to them anymore. They usually slam the phone down.”

“KyleDay118” wrote: “DO NOT GIVE! They need to be shut down. They called everyday early morning even evenings, sometimes 3-4 times a day. I can hear all the other solicitors in the background making calls.”

To see a list of organizations that can help you check up on charities, visit the Wall Street Journal online.

To file a complaint about abusive telefunder calls with the Federal Trade Commission, email .(JavaScript must be enabled to view this email address), visit the FTC website or call 888-CALL-FCC (888-225-5322).

You also may wish to contact your state attorney general. Find contact information for your state at the National Association of Attorneys General website.

*Not this consumer’s real name.

Still time to sponsor Consumer Empowerment Conference

On Nov. 18, Consumer Action will kick off its National Consumer Empowerment Conference in Chicago. The annual two-day event, now in its sixth year, provides a forum for community educators, consumer advocates, subject matter experts, regulatory and industry representatives and other key stakeholders to address critical consumer issues and share best practices in consumer education and empowerment.

The dozen or so sessions on this year’s agenda include presentations on:

  • Lending circles (Jose Quinonez, CEO of San Francisco’s Mission Asset Fund)
  • Fair lending and fair housing (Kevin Stein, associate director at the California Reinvestment Coalition)
  • Financial fraud (John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League)
  • Creative ways to incentivize savings (Timothy Flacke, executive director of the Doorways to Dreams (D2D) Fund)

The complete conference agenda will be available for download by Nov. 1.

The invitation-only National Consumer Empowerment Conference brings together the most effective community group partners from Consumer Action’s 7,000-member network of consumer educators, advocates and program administrators. Conference participants, who last year represented agencies and organizations as varied as Easter Seals, VetsGroup, the Central Virginia Housing Coalition, the Cornell Cooperative Extension, the Texas NAACP, the Chinese Mutual Aid Association and Consumer Credit Counseling Service, attend the event free of charge thanks to the generous support of conference sponsors. Contributions cover all attendee expenses, including meals, and also allow us to provide a travel stipend to ensure that transportation costs do not prevent someone from attending.

“Each year we hear from conference attendees that the knowledge they gained and the new associations they formed during these two days will benefit their communities and clients for years to come,” said Ken McEldowney, Consumer Action’s executive director. “We’re gratified by the far-reaching impact the conference has had, and we are so grateful to our sponsors, who have demonstrated their commitment to underserved and underrepresented consumers, for making such success possible.”

Underwriters for this year’s conference are, so far, JPMorgan Chase, Citi, TracFone and Visa Inc., with a number of other companies making commitments at the Leadership Circle or Benefactor levels.

There is still time for new sponsors to join and to be acknowledged on the conference website, in the conference materials and at the event itself. “Each sponsorship makes it possible for us to invite additional attendees,” explained McEldowney, “so we welcome and greatly appreciate support at any level.”

To learn more about sponsorship opportunities, visit the conference webpage or contact McEldowney directly via email or phone (510-333-4886).

Consumer activism is focus of new reference guide

“Watchdogs and Whistleblowers: A Reference Guide to Consumer Activism,” released in July, is a fascinating examination of the individuals and groups who played important roles in the establishment of major new consumer protections in areas as diverse as financial services, privacy and product safety. Edited and coordinated by longtime consumer advocates Stephen Brobeck, who has been executive director of the Consumer Federation of America since 1980, and Robert N. Mayer, a sociologist who has written extensively about the consumer movement, the book features 140 entries written by activists themselves. (Linda Sherry of Consumer Action drafted Consumer Action’s entry.)

Mayer, who worked for many years with the American Council on Consumer Interests, says, “Readers of the book will come away with an appreciation of the geographic and topical breadth of the consumer movement. From Australia to Tanzania, from advertising advocacy to whistleblowers, the book comprehensively surveys the landscape of consumer activism.”

The book gives a nod to the influence of many longtime, impactful consumer advocates, including Ken McEldowney of Consumer Action, Ed Mierzwinski of U.S. PIRG, Rosemary Shahan of Consumers for Auto Reliability and Safety, Joan Claybrook of Public Citizen, Jim Guest of Consumer Reports, the late Esther Peterson, who served the American people as a consumer adviser to Presidents Lyndon Johnson and Jimmy Carter, Ralph Nader and many others too numerous to mention here.

“Watchdogs and Whistleblowers” gives readers:

  • Insight into how activism has influenced laws and regulations affecting more than 40 consumer issues
  • Personal accounts from activists about how their work reshaped the economic wellbeing of consumers
  • A comprehensive listing of national consumer organizations and many state and local consumer groups and their impact
  • A glimpse into the ways consumer activist groups interact with other non-profits, policymakers, regulators and business groups

The book is published by ABC-CLIO/Greenwood and, at $89, is one that most consumers will want to borrow from the library. For more about the volume, visit the ABC-CLIO/Greenwood website. The book can also be purchased at

Consumer Action tackles homeownership at LA workshop

Residents of the El Centro Loretto affordable housing development in Los Angeles learned about homeownership at a recent workshop provided by Consumer Action's Nelson Santiago.

The 76-unit development, steps from the eclectic Sunset Junction neighborhood in Silver Lake, is run by the Filipinotown-based non-profit Search to Involve Pilipino Americans (SIPA). The non-profit provides residents with programs that include case management, health and skills building workshops and afterschool and recreational programs.

The idea behind offering the homebuying workshop, explained SIPA's business development specialist John Swing, is to give residents information that will help them with their financial goals.

“I was excited to invite Consumer Action to our site,” said Swing. “Your expertise on financial topics and the education and resources you provide are invaluable in enhancing our residents’ quality of life.”

Santiago based his presentation on the MoneyWi$e “Keys to Homeownership” educational module. The module covers the benefits and responsibilities of homeownership, offers downpayment resources and information about qualifying for a mortgage, gives tips on shopping for a home and much more.

Santiago said that he finds the classroom activities in the module’s lesson plan both fun and useful. In one of the activities, “Hopeful Homebuyers Need Your Help,” workshop participants, working in groups, were able to review descriptions and photos of sample home listings and help a fictional couple choose the home and mortgage that best fit their needs.

“There are no wrong answers to the activity,” explained Santiago. “It’s an opportunity for everyone to discuss the many factors that go into choosing a home and a loan, all while interacting with—and learning from—insightful fellow participants.”

Santiago, who strives to connect workshop attendees to the most useful and up-to-date resources, created a new resource sheet for the June workshop. The sheet not only contains state and federal homebuying resources but also resources specific to Los Angeles City and County.

“Even if you’re not in the LA area,” Santiago advises INSIDER readers, “you can use the linked resource sheet as a model for creating your own handout with resources local to your city, county or parish and state.”

Consumer Action offers two MoneyWi$e homeownership-related modules (Keys to Homeownership and Successful Homeownership) that can be downloaded from our Housing Information Project site.

Class Action Database: False advertising settlements

Consumer Action keeps track of class action cases and settlements in its Class Action Database, a free public service that lets consumers know about cases they might be eligible to join. This month, there are claims deadlines on three cases involving false advertising charges.

In Trewin v. Church & Dwight Co., Inc., plaintiffs filed a class action over the labeling, advertising and marketing of Arm & Hammer Essentials Deodorant. Plaintiffs claimed that the “Natural Deodorant” and “Natural Protection” labels were misleading because not all of the ingredients are natural substances. Deodorant maker Church & Dwight denies the allegations but agreed to a settlement. Consumers may be eligible for up to $4 for each deodorant they bought. The deadline to file claims is Sept. 2, 2015.

In Hofmann v. Peg Perego U.S.A., Inc., et al., plaintiffs claimed that Peg Perego mislabeled its “children’s riding vehicle” as “Made in USA” when the company should have labeled the product “Made in the USA of domestic and global parts.” Consumers who bought these Peg Perego toy vehicles between Aug. 11, 2010 and Dec. 31, 2014 may be eligible for a safety vest valued at $20. The claims deadline is Sept. 28, 2015.

In Lerma v. Schiff Nutrition International, Inc., et al., it was alleged that the labeling and packaging of certain Schiff joint health products contained misleading statements and failed to warn of potential harmful side effects. The case was settled, providing compensation to consumers who bought Schiff branded joint health products (Move Free, Move Free Advanced, Pain Free, Lubriflex, Great American Nutrition, Metaform, Muscle Tribe, Victory, Schiff, Kirkland, Member’s Mark, Spring Valley). Those who purchased these products between Jan. 1, 2005 and May 27, 2015 may be eligible for refunds of up to $50 (five bottles at $10 per bottle) with proof of purchase. Consumers without proof of purchase may submit a claim for $3 per bottle for up to four bottles ($12 maximum). Claims are due by Sept. 24, 2015.

Other settlements with September deadlines are:

Sony (PlayStation Network) The lawsuit alleged that Sony had inadequate security measures and failed to protect accountholder information from hackers in April 2011. Those who established PlayStation Network, Qriocity and Sony Online Entertainment accounts before May 15, 2011 may be eligible for cash payments, game and online service benefits or reimbursement for identity theft-related charges. The claims deadline is Sept. 4, 2015.

Howard Johnson International (California call center recordings) California residents who called Howard Johnson’s toll-free reservations line from Feb. 28, 2011 to March 23, 2012 and did not consent to having the calls recorded may be eligible for up to $5,000. The claims deadline is Sept. 5, 2015.

Ocwen Financial Corporation (lender-placed insurance) Ocwen, a mortgage servicer, agreed to settle allegations that it forced homeowners whose insurance lapsed to pay for unnecessarily expensive policies and that it received kickbacks for placing borrowers in these higher-priced policies. Borrowers who paid above-market rates at certain insurance companies between Jan. 1, 2008 and Jan. 23, 2015 may be eligible to receive a refund of 12.5 percent of the premium they paid. The claims deadline is Sept. 9, 2015.

Lenovo (IdeaPad Wi-Fi connectivity) Consumers who bought Lenovo IdeaPad computers (models U310 or U410) that shipped in 2012 may be eligible for up to $100 cash or a $250 credit certificate. The computers had faulty Wi-Fi connectivity. Customers who don’t want the $100 refund or the voucher are eligible for free repairs to their laptops and to have their warranty extended by a year from the date of repair. The claims deadline is Sept. 11, 2015.

Mercedes-Benz (balance shaft sprockets) An alleged defect in the balance shaft sprockets of certain 2005-2007 Mercedes-Benz vehicles (M272 and M273 engines) causes their gears to wear prematurely. Consumers who purchased or leased those models may be eligible for repairs or cash reimbursement for repair expenses. The deadline for claims is Sept. 25, 2015.

Coalition Efforts: Advocates counter anti-consumer moves

Three recent actions taken by Consumer Action and its coalition partners push back at a plan by the Securities and Exchange Commission (SEC) to make investors opt-in to paper copies of shareholder materials, object to cuts at the U.S. Postal Service and oppose efforts in Congress to limit the Consumer Financial Protection Bureau’s authority over auto lenders.

Don’t default to online shareholder reports. Consumer Action, Consumers for Paper Options and the National Consumers League last month submitted joint comments to the SEC saying that its proposed rule to default to online shareholder information, instead of today’s paper-based default, will potentially harm millions of investors. The groups point out that the fact that most investors haven’t opted into paperless reports shows they prefer paper-based materials. In addition, many consumers may not be able to reliably access the Internet. Learn more and read the comments.

Opposing mail service cuts. Fifty-four organizations concerned with ensuring prompt, reliable mail service wrote Congress asking representatives to co-sponsor two bipartisan resolutions to protect and strengthen the U.S. Postal Service. Cuts to service, says the group, provide little to no savings, are counterproductive and are in opposition to the mission of the institution. And, delayed or unreliable service drives away frustrated customers and businesses and leads to decreased revenue. Learn more and read the letter.

Don’t restrict the CFPB’s oversight of auto financing issues. In the latest effort to restrict the Consumer Financial Protection Bureau’s (CFPB) jurisdiction, legislators target the Bureau’s regulatory power over the auto financing industry. The Reforming CFPB Indirect Auto Financing Guidance Act (HR 1737) places unnecessary restrictions on the agency and is designed to hamper the Bureau’s attempts to bring fairness and transparency to the auto lending market. You can make your voice heard on this issue here. You can also learn more and read the letter.

CFPB Watch: Debt issues, student loans and profiting on customer mistakes

Last month, Consumer Action reported that the Consumer Financial Protection Bureau (CFPB), along with 47 state attorneys general, ordered JPMorgan Chase to stop collecting debts for more than a half-million accounts and to stop selling debts that were for the wrong amount, too old to collect (“zombie” debts) or not even owed by the target of the collection. Now we can add some more details on the consent decree Chase entered into. (A consent decree is an agreement to resolve an enforcement action without admitting guilt or liability.)

Chase must refund at least $50 million to customers and:

  • Verify its debts with written proof before selling them to debt buyers,
  • Ban such debts from ever being resold to other debt buyers,
  • End rubber-stamping of documents (“robo-signing”), and
  • Notify consumers if their debt is sold and provide details about the debt buyer and the amount owed by the consumer.

The conditions in this consent decree may be a foreshadowing of what’s to come as the CFPB considers creating rules for the entire debt collection and debt buying industry. We’ll keep you posted.

Student loan ‘payment shock.’ After hearing from more than 30,000 consumers this year about student loan payment processing problems and customer service blunders, the CFPB now warns borrowers to beware of student loan “payment shock.” This occurs when students who participate in income-based repayment (IBR) plans are unexpectedly hit with much higher payments because their annual recertification is not completed on time.

IBR borrowers submit information each year to prove they still qualify for their monthly loan payments (recertification). Payment shock occurs when recertification is not completed on time, causing loan payments to increase. Any underpayments during the delay must be paid back with interest.

The Department of Education reports that more than half of all borrowers (57%) in their sample missed the recertification deadline and saw their payments increase. Borrowers may learn of the increases only when they are hit with higher payments.

The CFPB wants to learn why so many recertifications are not processed on time. If this issue affects you, you can tell your story or submit a complaint to the CFPB.

Timely recertification can save thousands of dollars for student borrowers whose income hasn’t changed. IBR borrowers who qualify for a lower payment and recertify on time each year avoid interest on any unpaid balances. Those who miss the deadline to recertify lose this benefit. For more tips on income-based repayment plans, click here.

Citizens pays for pocketing over-deposits. The CFPB has ordered Citizens Bank to refund $11 million to customers and pay a $7.5 million penalty for keeping overages when consumers mistakenly understated deposit amounts. The Bureau says that when there were discrepancies between the deposit slip and the deposit, Citizens pocketed the difference. Over time (2008-2013), the difference added up to millions of dollars. The Bureau stated that the bank told customers it would investigate the missing funds, but did not correct discrepancies unless they were greater than $50 (later $25).

Citizens Bank must repay customers, including any fees incurred and unearned interest. Citizens must automatically credit customers’ accounts or send a refund check to customers who no longer bank there.

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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