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Released: April 30, 2015
Consumer Action INSIDER - May 2015
Table of Contents
- What people are saying
- Did you know?
- Consumer Action named ‘Innovative Consumer Advocacy Group’
- Consumer Action headquarters is on the move
- Hotline Chronicles: Career training credentials that lead nowhere
- Looking for a ‘Flawless’ retirement, ‘I woke up like this’
- A financial fraud training for advocates
- Coalition Efforts: Tax reform, student prepaid cards and breach laws
- Allow corporations to secretly record us? No thanks!
- CFPB Watch: Protecting consumers and fending off attacks
- Class Action Database: May brings a shower of claims deadlines
- About Consumer
What people are saying
What a wonderful MoneyWi$e training you provided...The trainers just have so much energy, it was very engaging and well organized...Hats off to Consumer Action! —Stephanie Baccus, Capital Area Partnership Uplifting People, Richmond, VA
Did you know?
Consumers who travel abroad can easily find a credit card that won’t tack extra “foreign transaction” fees onto overseas purchases. (Such fees can also be triggered when online purchases are routed through foreign banks.) Last month, CreditCards.com released a list of 60 cards without foreign transaction fees. Learn more.
Consumer Action named ‘Innovative Consumer Advocacy Group’
As with much news these days, the notice that Consumer Action had been named one of the “10 Most Innovative Consumer Advocacy Groups of 2015” came via Twitter: @BadCreditorg Congrats @consumeraction! You're one of the 10 most innovative consumer advocacy groups of 2015. ow.ly/MbmMi
It was a pleasant start to the day (April 27). The recognition came from BadCredit.org, a site created to help Americans with subpar credit find the information and resources they need to make successful credit decisions. Also named are Americans for Financial Reform (a coalition of which Consumer Action is a member), Consumers’ Checkbook, Corporation for Enterprise Development, Insight Center for Community Economic Development, National Poverty Center, Spotlight on Poverty and Opportunity, West Coast Poverty Center, National Low Income Housing Coalition and Class Action.
BadCredit.org’s editor in chief, Steven Richmond, said in his blog post: “Thankfully there are more and more advocacy groups emerging to fight for the rights and opportunities of consumers. Whether you’re looking for access to fair and reasonable housing or a trustworthy guide to products and services, these organizations are committed to the interests of your average consumer.”
BadCredit.org features articles, how-to guides, studies and other consumer-oriented content and provides ratings of various financing sources and other services geared toward the subprime market. The organization’s stated mission is to “raise the overall financial awareness of its visitors.”
Check out the 10 Most Innovative Consumer Advocacy Groups of 2015.
Consumer Action headquarters is on the move
Consumer Action’s San Francisco office is moving this summer. Like thousands of non-profits in the city, skyrocketing rent has forced us to move out of our current space into downsized quarters.
The organization has subleased a new space at San Francisco’s Civic Center, part of the city’s fast-developing Mid-Market district.
Build-out construction has already begun at the location to alter the previous classrooms into a space for an open plan office with cubicles plus a large mailroom. Consumer Action stores and annually distributes close to one million consumer fact sheets and other educational materials, making our mailroom an important piece of real estate.
Fifteen staffers work from our San Francisco office. Activities conducted in the office include hotline consumer counseling services, staff and support for community outreach and training, database servers and technical support, mailroom activities and more.
According to Kathy Li, the San Francisco office director, preparations already have begun in anticipation of the move. Staff members are digitizing Consumer Action’s historical documents and materials (such as copies of Consumer Action News from the ‘70s), archiving decades of consumer education publications, and reorganizing and minimizing our massive collections. In the new space, our mailroom will have only half the space it currently occupies.
For the majority of the San Francisco staff, this move means a transition from individual private offices to cubicles. “Our staff has been very understanding about the changes they will face. Everyone’s clearing out paper files and getting ready to downsize,” said Li.
We’ll keep you posted about our move in the coming months.
Hotline Chronicles: Career training credentials that lead nowhere
Tanya* of Fort Worth, TX called our hotline to discuss ATI Career Training Center, where she was enrolled throughout 2008 and 2009, earning an associate’s degree in respiratory therapy funded by student loans that she’s still struggling to pay while unable to find employment in her chosen field.
Tanya recently had found a 2013 U.S. Department of Justice press release outlining how the Texas-based school chain agreed to pay $3.7 million to settle allegations that it falsely certified compliance with federal student aid programs and submitted claims for ineligible students.
Tanya told Consumer Action that shortly after her graduation, she began to suspect that “ATI is a fraudulent company and was scamming its students and that I, along with my fellow students, had been deceived by this company.” Tanya said that she was “promised job placement upon graduation” but has been unable to find a job in her field, much less one paying the $50-$60K annual salary the school had said she’d earn.
“Employers laughed when I told them where I earned my degree,” said the mother of three young boys. “I now understand the reason why I have not been granted interviews, nor been able to find employment using my degree—because my degree is useless! What potential employer would want to hire a graduate from a school that knowingly falsified documents and submitted them to the federal government?”
Tanya said, “I don't understand why they were not held responsible for the insurmountable debt that was incurred by so many of their students due to student loans.”
Tanya had not known about the case, and therefore had not tried to lay claim to a refund. According to the Justice Department press release, $2 million was to be disbursed from the U.S. Department of Education “for student loan refunds in relation to cases students filed against ATI in Texas state courts and other related arbitrations.”
Consumer Action recommended that Tanya contact the Department of Education about student loan refunds in the ATI case and consider seeking the advice of a consumer attorney specializing in student loans. We provided the following resources to help her get started:
- U.S. Department of Education. Consumers can call the Inspector General's Hotline at 800-MIS-USED (800-647-8733). More information can be found online.
- National Association of Consumer Advocates. Consumers can use the Find an Attorney feature to find legal counsel near where they live.
- The National Consumer Law Center. NCLC’s Student Loan Borrower Assistance (SLBA) Project provides information about student loan rights and responsibilities for borrowers and advocates.
- LawHelp.org helps low- and moderate-income people find free legal aid referrals.
For general information on choosing a career school, see the Federal Trade Commission’s guide to choosing a college.
Consumer Action has prepared a five-page Student Loan and Education Resource List, with resources to help students figure out what their college education financing options are, what they can afford, which schools are worth the cost and how to get the student loan process started. The publication includes resources specifically for veterans.
*Not this consumer’s real name.
Looking for a ‘Flawless’ retirement, ‘I woke up like this’
By Linda Williams
Baby Boomers, born between 1946 and 1964, are beginning to retire in droves, and the Huffington Post notes that most Boomers heading into retirement have just enough wealth to live on for three years or so.
As a Boomer who randomly selected Dec. 17, 2020, as the date I would hang up my PowerPoint slides and flip charts, I listened intently as Robert Wright of the Society for Financial Education and Professional Development guided participants through the five steps of retirement planning during Consumer Action’s MoneyWi$e Saving for Retirement webinar.
I decided to take the steps myself to learn how far my retirement funds would take me.
It’s never too late to start planning for a secure retirement.
Step 1: Envisioning your retirement
At bedtime, as I washed my face and applied my anti-aging cream, I mulled over Wright’s “Step 1: Envisioning your retirement.” I repeated the words “envisioning retirement” over and over in my head as I made a final check of the locks on the windows and doors of my townhouse, and before I sank into my plush Sealy Posturpedic mattress and drifted off to sleep.
I woke to a blast of blinding morning sunlight. As my eyes fought to adjust, I realized something was strange. My bedroom window is on the left side of the room and this light was coming from the right. As I sat up, the nagging pain in my back told me I was not sleeping on my treasured mattress. I looked down and discovered I had been sleeping on the thin mattress of a sofa bed. As my mind raced to figure out where I was, I noticed that my personal items—hairbrush, alarm clock, lamp, jewelry box and pictures—were all placed neatly around the sofa bed. What the heck? I jumped up and began exploring the room that, while vaguely familiar, was not my bedroom.
As I moved around the room, I saw a closet. Hesitantly, I opened the door and almost stopped breathing. The closet was packed from the floor to the ceiling with my dresses, suits, coats, shoes, purses, videos, books, bags, tubes of anti-aging cream and more. How did those things get here?
On the floor near the door was an envelope with my name on it. As I bent down to pick it up, I heard the clicking of heels on the stairs and a very familiar voice—my daughter. “Mom! Mom! Oh, you’re up. I’m going to the pier to meet the girls for lunch and afterward we're hitting the spa. When you get upstairs, can you change the sheets on the kids’ beds and put them in the washer? And there’s a basket of towels that needs washing and folding. Oh, and can you start dinner? I may be late, so please pick the kids up from school—they have track practice. Bye! Love you.”
I slid down to the floor as the clicking sound of her heels faded, still clutching the envelope, my brain straining to make sense of it all. Why am I in my daughter’s basement? What the heck is happening? I opened the envelope and found a card inside that said: “Congratulations on your retirement.”
My screaming woke me. It’s 3:00 a.m. Now I’m up, determined to change that vision of my retirement. I “Google” and read every article I can find on retirement planning. Soon I learn that figuring out whether I can afford to retire is like putting together the pieces of a financial jigsaw puzzle. I have to be sure every piece is carefully thought out or I could very well end up in my daughter’s basement.
First up, an estimate of how much money I will need to have a comfortable retirement. At what age will I have enough from guaranteed sources of income, like Social Security, retirement accounts, and other savings to live comfortably in retirement? Taking into account that some of my expenses will go down while others may go up, I visit sites like Bankrate.com, AARP.org and Social Security.gov and use their online calculators to determine how much I will need to retire.
Next, I add up the income I’ll collect in retirement from pensions, Social Security and personal savings accounts.
Lastly, I project retirement expenses, including Medicare premiums, Medicare supplemental insurance and my housing costs (mortgage, insurance, property taxes, association fees, maintenance and repairs). Will I have enough to replace the hot water heater or the washer—not to mention buy food and clothing, pay income taxes and keep up with the cost of just living? When I randomly selected Dec. 17, 2020, as the date I would retire, I didn’t create a plan. Now, after crunching the numbers using calculators from three different sites, I know I’m behind and I need a catch-up plan.
Step 2: Understand the challenges
A survey conducted by Bankrate.com says 26 percent of Americans age 50 to 65 haven’t started to save for retirement, and of those who have started to save, women lag behind men. American women save far less for retirement than their male peers, and they invest too conservatively to close the gap, according to a March 5 survey by asset management firm BlackRock and CNBC.
Further, the National Women’s Law Center says women rely more on income from Social Security than men do. The average female beneficiary aged 65+ receives 61 percent of her income from Social Security, compared to 56 percent for men of the same age. Social Security is virtually the only source of income (90 percent or more) for three in 10 female beneficiaries age 65 and older. By contrast, just over two in 10 male beneficiaries rely on Social Security for 90 percent or more of their income.
These startling stats fuel my retirement planning. First, I simplify my finances by consolidating a few accounts where I had been stashing money, making my finances easier to track. Next, I put together a list of former employers and contact the human resources departments to determine if I left a pension or 401(k) retirement account behind. My expectations were pretty low—I had been a single mother raising five children on one income, and my focus was on survival, not retirement.
Since a few of the companies I worked for are out of business, I visit the Pension Benefit Guaranty Corporation website to check its unclaimed pension database. To my surprise, I did find a record of an old account from a job early in my career. Upon preliminary investigation, however, I could not locate the funds sent long ago to unclaimed funds coffers.
AARP says the Pension Benefit Guaranty Corp., which insures private pensions, is holding about $280 million in unclaimed pensions owed to 37,587 consumers. I checked a few other sites, including the National Registry of Unclaimed Retirement Benefits, but was cautious about the personal information I provided because there are so many retirement scams out there.
Then I jump on the Social Security Administration website to create an account. There I checked to make sure my earnings history is correct and to determine at what age I should first claim my benefits. According to information on the website, over 40 percent of people claim their benefits at age 62, settling for a payout at least 25 percent smaller than if they had waited until full retirement age (which varies depending on your birth date). Social Security benefits increase by 8 percent each year for consumers between the ages of 66 and 70 who delay claiming their benefits.
I use a calculator on the Social Security Administration website to determine how long my money will last. Wake up call—it appears that if I want to continue sleeping on my plush mattress, I need to aggressively pursue a retirement plan.
After long hours at the computer, I push away and grab my gym bag. Not all retirement benefits are financial! I’d better stay in shape because as I advance through retirement steps three, four and five, the cost of medical care figures highly.
The Women’s Institute for a Secure Retirement advises those planning for retirement to “Take time to sound your own alarm.” Many women will face challenges meeting retirement income needs, but educating yourself will help you choose savings and investment tools wisely. It’s not too late! Remember, the promise of retirement is having time for you after a lifetime of hard work.
Editor’s note: In the next segment, Williams will discuss “Step 3: Take a closer look at your budget,” including the cost of health care, the pros and cons of long-term care insurance and when to apply for Medicare. In the third segment, she’ll tackle “Step 4: Evaluate options and make a plan,” looking at different retirement plans. The series will round off with “Step 5: Don’t go it alone,” examining sources of expert advice on retirement, how to select a professional and how to avoid retirement scams.
A financial fraud training for advocates
Joining local community professionals, victim advocates, housing counselors and legal services attorneys on financial fraud, Consumer Action’s associate director of outreach and training, Audrey Perrott, attended a financial fraud training held by the National Center for Victims of Crime and FINRA at United Way of the Bay Area. The training was held in partnership with the San Francisco Office of Financial Education.
The April 21 training “was informative and the resources that were provided complement our MoneyWi$e identity theft and elder fraud educational modules developed in partnership with Capital One,” said Perrott.
FINRA—the Financial Industry Regulatory Authority—is an independent, non-profit organization authorized by Congress to protect America's investors by making sure the securities industry operates fairly and honestly. The National Center for Victims of Crime is a non-profit organization that advocates for victims' rights, trains professionals who work with victims and serves as a trusted source of information on victims' issues. [https://www.victimsofcrime.org]
At the event, FINRA and Victims of Crime introduced their joint toolkit, Taking Action: An Advocate’s Guide to Assisting Victims of Financial Fraud. The guide explores accessible, vital step-by-step strategies for addressing major types of financial crime, including identity theft, investment fraud, mortgage and lending fraud and mass marketing scams. The toolkit, which includes the guide and companion materials, is available for free download or in print.
The Bay Area training provided comprehensive tools and resources for advocates to assist victims in regaining their financial footing and address the emotional trauma experienced by victims of financial fraud, said Perrott.
Jane Lee of the National Center for Victims of Crime, Susan Arthur of the FINRA Investor Education Foundation and Lori Schock of the Securities and Exchange Commission presented at the training. Sean Rooney from the California Department of Business Oversight provided information on resources available through the state government and spoke about the role of local law enforcement.
A victim of investment fraud, Ingrid Robinson provided a mesmerizing first-hand account of her travails at the hands of investment firm Remington Financial Group (aka Remington Capital). The New York Times covered Robinson’s story last year. According to the Times: “Remington led its victims—scattered around the country and the world—to believe it would either invest in their businesses or find investors for them. The would-be entrepreneurs just needed to provide upfront fees of $10,000 to $40,000, and Remington would do the rest. But the company took the money and did nothing.”
Ultimately, 1,900 investors were defrauded of more than $26 million. The firm’s founder, Andrew Bogdanoff, who pleaded guilty along with five others, was sentenced in March 2014 to 18 years in prison. Co-owner Matthew McManus was sentenced to 16 years in prison last October.
Robinson said that after being duped she made it her mission to report what happened to her to every law enforcement agency and gather victims all over the country. A full account of her ordeal can be found on a website she developed.
At the training, the trainers provided a financial fraud resource sheet that was California-specific, but also included national resources that can be found on the Victims of Crime website.
Other recommended resources included:
- The National Network to End Domestic Violence’s (NNEDV) Moving Ahead Through Financial Management Curriculum features brochures on Ending a Financial Relationship with an Abusive Partner as well as Credit and Credit Repair.
- The Commodity Futures Trading Commission’s SmartCheck allows consumers to check the backgrounds of financial professionals and stay informed on financial fraud.
California has a plethora of resources to assist victims of financial fraud:
- Elder/Vulnerable Adult Financial Exploitation:
California Attorney General’s Bureau of Medi-Cal Fraud & Elder Abuse: 800-722-0432
California Long-Term Care Ombudsman: 800-231-4024
UC Irvine’s Center of Excellence on Elder Abuse & Neglect
- Identity Theft:
California Franchise Tax Board: 916-845-3669
California Attorney General’s ID theft information sheets
- Investment Fraud:
California Department of Business Oversight: 866-ASK-CORP
- Mass Marketing/Consumer Fraud:
California Attorney General
California Department of Consumer Affairs Resource & Referral Guide
Coalition Efforts: Tax reform, student prepaid cards and breach laws
Consumer Action has been working with its allies on a host of important issues, among them supporting a proposed tax on high-frequency trades, preventing conflict of interest in investment advice for retirement savers, pushing back at a federal breach law proposal, and urging the Consumer Financial Protection Bureau to enact pending rules to protect prepaid card users, including college students, from abusive terms and fees.
Fairness in tax reform. As the Senate Finance Committee considers reform policies to the nation’s tax code, coalition advocates, including Consumer Action, on April 15 wrote to remind legislators of the implications taxes have on low-wage earners, the middle class and retirees. Advocates are pushing for specific changes, including a Wall Street transaction tax of .01 percent, which despite its small size could generate close to $350 billion per year in new revenue and have the effect of limiting high frequency trading, which adds to market volatility and robs returns from retirement accounts. Learn more and read the letter.
Protecting the consumer watchdog. On April 20, advocates wrote a joint letter of opposition to the Bureau of Consumer Financial Protection Advisory Boards Act (HR 1195), which passed the House on April 22. Authored by Rep. Robert Pittenger (R-NC), the bill would create three advisory committees (composed of small businesses, credit unions and community banks) to advise the CFPB on issues relating to burdensome regulation. However, the $9 million price tag over 10 years comes from the CFPB’s budget, severely limiting Bureau resources. Learn more and read the letter.
Groups welcome financial advisor conflict-of-interest rule. Last month, the Department of Labor released its long-awaited conflict of interest proposed rule, which would improve conflict of interest rules under the Employee Retirement Income Security Act (ERISA) and benefit retirement savers. Consumer Action and its allies have pushed the Administration for a strong rule and are gratified by the proposal, which would require advisors to put their clients' interests first and aims to protect unknowing customers from being put into high-cost, poorly performing investments that enrich brokers and other financial advisors but eat away at retirement fund returns. On April 14, Consumer Action signed on to a statement applauding the rule, along with members of the Save Our Retirement coalition. Learn more and read the statement.
Federal data breach law should not preempt stronger state laws. Proposals for a federal data breach law are sought after by businesses irritated by a patchwork of state laws. But consumer advocates are pushing back against any federal bills that would preempt state laws, effectively weakening protections for consumers in states with higher standards. On April 9, Consumer Action joined its allies in a letter to the House Committee on Energy and Commerce opposing the Data Security and Breach Notification Act of 2015 (HR 1770). The groups noted that the bill, contrary to its name, offers little new to protect consumers and, because of its preemption clause, would weaken consumer protection. Learn more and read the letter.
Predatory prepaid cards target college students. The relationship between colleges and payment card issuers comes under increased scrutiny as legislators, advocates and the Consumer Financial Protection Bureau (CFPB) question the benefits of linking student ID cards to a student’s credit or checking account. These debit and credit cards, often used to distribute student aid funds, are marketed with low upfront costs but come with hefty ATM and overdraft fees. On March 23, Consumer Action joined its allies in a letter to Richard Cordray, director of the CFPB, in support of the Bureau’s pending prepaid card rulemaking, which would regulate these student financial aid disbursement cards. Learn more and read the letter.
Why was Nobel laureate blocked from SEC panel? Consumer and investor advocacy groups wrote to the chairwoman of the Securities and Exchange Commission (SEC) to protest the blocking of economist Joseph Stiglitz, who previously called for a tax on high-frequency trading, from an SEC panel that’s set to advise regulators on issues facing U.S. equity markets. The SEC Equity Market Structure Advisory Committee is a panel composed of experts who will advise the agency on a wide range of topics relating to stock trading, investing and taxes. The groups wrote that “it appears that valuable and eminently qualified voices are being shut out from the conversation, as evidenced by the exclusion of...Stiglitz from the....committee.” They asked that the Committee reconsider its decision and, at minimum, publicly explain why Stiglitz wasn’t seated. Learn more and read the letter.
Allow corporations to secretly record us? No thanks!
Consumer Action opposes AB 925 introduced by California Assemblyman Evan Low (D-Campbell). The misguided legislation would rewrite California’s privacy laws to the detriment of consumers by allowing businesses to secretly record cellular or cordless phone calls with “customers.”
According to our California legislative liaison, Joe Ridout, this proposal would drastically weaken strong California statutes preventing calls and other communications from being recorded without the consent of both (or all) parties. It would create a new exemption to state law that would allow companies to record—without notice—“nonconfidential” phone conversations that relate to (or that might relate to) a business or customer relationship.
“The vague wording invites businesses to invade the privacy of their customers,” said Ridout. “If AB 925 passed into law, it’s likely that many individuals and businesses would begin to record calls surreptitiously, without providing any notification to the other party.”
California law makes it a crime to record any confidential communication, including a private conversation or phone call, without the consent of all parties to the conversation. This law does not preclude recording; it merely prohibits a party from recording the conversation without first informing all parties to the conversation that the conversation is being recorded. People calling businesses that record calls have the option of hanging up once they are notified.
It’s likely that companies being sued for failing to notify customers that their incoming cell phone calls are being recorded have a hand in this legislation.
CFPB Watch: Protecting consumers and fending off attacks
Last month, Consumer Action INSIDER’s Hotline Chronicles column featured a piece about complaints we had received from customers of Green Tree Servicing, a national mortgage servicing company. We wrote about a growing chorus of pushback on the company’s tactics, including thousands of complaints lodged at the Consumer Financial Consumer Bureau (CFPB) and a Facebook page, Victims of Green Tree Financing.
The negative publicity over Green Tree exploded on April 21, when it was announced that the company agreed to pay $63 million to resolve CFPB and Federal Trade Commission (FTC) charges that it had harmed homeowners with illegal loan servicing and debt collection practices.
The FTC and CFPB alleged that Green Tree Servicing made illegal and abusive debt collection calls to consumers, misrepresented the amounts people owed and failed to honor loan modification agreements between consumers and their prior mortgage servicers, among other charges.
Under the proposed settlement, Green Tree will pay $48 million to affected consumers and a $15 million civil penalty. The company also will stop its alleged illegal practices, create a home preservation plan for some distressed homeowners, and take steps required by the regulators to ensure that it collects the correct amounts from consumers.
Proposal to end payday debt traps. Four out of five payday loan borrowers need to renew their loans within two weeks, according to a Consumer Financial Protection Bureau analysis of 12 million payday loans. The Bureau also found that more than half of borrowers (60%) who renewed loans ended up paying more in fees than the amount they originally borrowed.
On a mission to nail shut that revolving door of debt, the Consumer Financial Protection Bureau headed to Richmond, VA last month for its latest public field hearing, where lenders, borrowers and consumer advocates aired their views on high-priced payday loans. While some spoke of the need for short-term loans, most shared stories of consumers who got stuck in a cycle of debt. The high fees and high interest rates make it nearly impossible to repay these pricey short-term loans. Payday lenders require borrowers to give post-dated checks or electronic access to their accounts to guarantee repayment, often triggering overdraft fees for consumers who don’t have money in their accounts when the lender attempts to collect.
The Bureau is considering ways to require payday lenders to vet customers’ ability to pay back the loans without having to enter a cycle of debt. The Bureau is expected to issue rules that cover not only payday loans, but vehicle title loans, bank deposit advance products, and certain high-cost installment loans and open-end loans.
“Low-income consumers need access to affordable small-dollar loans rather than extremely high-cost credit that traps them on a debt treadmill,” says Consumer Action’s Ruth Susswein.
Some of the payday loan proposals the CFPB is considering are intended to prevent a debt cycle by verifying borrowers’ income, credit history and other debts. However, the Bureau has proposed to exempt loans of $500 or less from verification. Consumer Action and other advocates argue that lenders should be required to determine that borrowers can repay potential loans of any size.
In addition to vetting borrowers, the Bureau is considering a limit on the number of times a short-term loan could be “rolled over.”
For loans of more than 45 days that require access to consumers’ bank accounts for repayment and have rates of 36% or higher, the Bureau proposes limiting loan payments to no more than five percent of a borrower’s monthly income or capping interest rates at 28% with a $20 application fee.
The Bureau also is seeking to reduce harmful payday debt collection practices, such as repeated attempts to collect on post-dated checks or electronically access the consumer’s bank account. The CFPB is contemplating a limit on the number of times a lender can attempt to withdraw money from a borrower’s account and requiring a three-day notice prior to withdrawals. This would give borrowers a heads up before the lender accesses their bank account or cashes a post-dated check.
The public will be able to comment on the payday loan proposal when the CFPB finalizes its proposed rules. Meanwhile, you can share your thoughts using the Tell Your Story section of the CFPB website.
Military allotment fees. Military members who were wrongfully charged hidden service fees for military allotment payments will receive $3.1 million in relief. The military allotment system allows servicemembers to have money automatically deducted from their earnings to cover bill payments and send money home.
The CFPB found that payment processor Military Assistance Company (MAC) unfairly charged tens of thousands of servicemembers recurring fees because money was left over in their accounts. In addition to a monthly fee for its processing services, MAC, unbeknownst to servicemembers, charged recurring fees of $12 to $20 for maintaining what were in most cases small account balances.
Servicemembers who unknowingly paid millions of dollars in hidden fees are now entitled to a refund from MAC, a subsidiary of the Fort Knox National Company. The CFPB will contact accountholders directly about the refunds.
Continued attacks on the CFPB. Despite its successes on behalf of consumers, Congressional Republicans still are bent on whittling away the Bureau’s budget and reducing its authority over financial services companies. HR 1195, establishing a small business advisory board to advise the CFPB on potential impacts on small businesses and financial products and services, passed the U.S. House of Representatives on April 22. A provision in the legislation would cut the CFPB’s independent funding by $100 million over the next 10 years, severely weakening its ability to protect consumers.
Visit Consumer Action’s Take Action Center to quickly and easily contact your Congressional representatives to let them know you want them to keep their hands off the CFPB. Just type in your ZIP code and you will be able to write and send a note in support of the Bureau (or any other topic).
Class Action Database: May brings a shower of claims deadlines
Instead of flowers, May brings a shower of claims deadlines. Click through to the claims pages to see if you are eligible to join any of these settlements.
AT&T Mobility (third-party billing). AT&T’s mobile division agreed to a $105 million settlement with the Federal Trade Commission (FTC) over allowing unauthorized third-party charges on consumer bills for ringtones, wallpapers and text message subscriptions. The FTC charged that AT&T hid the third-party charges (“cramming”) on the bills and made the unauthorized charges difficult to find. Affected customers must apply for a refund today (Friday, May 1), the deadline for claims.
Airgas USA, LLC (privacy violation). Consumers who used a credit or debit card for Airgas retail store transactions between April 4, 2011 and Aug. 28, 2012 and received a receipt that showed the payment card’s expiration date may be eligible for a $30 check. The company reached a settlement over allegations of violations of the Fair and Accurate Credit Transactions Act (FACTA). Today (Friday, May 1) is the deadline for claims.
Bayer (One-A-Day WeightSmart supplements). Consumers who bought Bayer One-A-Day products in Florida between Jan. 1, 2002 and Jan. 8, 2015 may be eligible for up to $250 cash. The company reached a settlement over allegations of false and deceptive advertising and marketing of the One-A-Day weight loss supplements and vitamins. The claims deadline is May 4.
SiriusXM (billing). The satellite radio company agreed to a $3.8 million settlement with the Ohio Attorney General and attorneys general of 44 states and DC, who charged that the company deceptively misrepresented its cancellation and renewal policy, automatically renewed contracts without notice or consent and failed to provide timely notice. If you have an unresolved complaint with SiriusXM, check claims page to see if you qualify. The claims deadline is May 3.
Alltel (early termination fees). Arkansas consumers who were charged early termination fees by the telecommunications company between Feb. 15, 2001 and Nov. 10, 2014 may be eligible for a payment of up to $70 per line, under a settlement reached over allegations of violations of the Arkansas Deceptive Trade Practices Act. The claims deadline is May 5.
Rue La La (gift certificates). Customers of the online retailer who bought or received a voucher before May 3, 2013 may be eligible for Rue La La account credit. Settlement has been reached in a class action charging that vouchers purchased from the Rue La La website are “gift certificates” and, in violation of state and federal gift card and gift certificate regulations, were subject to expiration dates. The claims deadline is May 12.
Wacoal (iPants). Consumers who purchased Wacoal’s “shapewear undergarments” anytime after January 2011 may be eligible for a refund in this case brought by the Federal Trade Commission for making claims not supported by science. Wacoal will provide $1.3 million in consumer refunds to settle the FTC complaint, which charged that the caffeine-infused underwear did nothing to reshape the wearer’s body and reduce cellulite, as claimed. The claims deadline is May 19.
Gateway (XHD 3000 LCD monitors). Consumers who purchased these Gateway 30-inch monitors may be eligible for $195 cash following the settlement of a lawsuit that claimed Gateway falsely advertised the performance features of the electronic display device. The claims deadline is May 21.
BSH Corporation (Bosch front loading washers). Consumers who are the original purchasers of 27” Bosch Nexxt, Bosch Vision or Siemens ultraSense horizontal axis/front-loading washing machines may be eligible for up to $55 cash. The company reached a settlement over allegations that the machines are defective, leading to smelly laundry because of the growth of mold, mildew and bacteria. The claims deadline is May 28.
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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.
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