Consumer Action INSIDER - February 2021

What people are saying

Today’s training provided me with practical tips on how to create a disaster preparedness and recovery plan that I can share with my clients, family and friends. —Consumer Action webinar attendee

Did you know?

Waiting in anticipation for that package to arrive? Online shopping has (understandably) increased during the COVID-19 pandemic—a trend that’s expected to continue even after the crisis abates. But if you find yourself disappointed each time the delivery van passes by your door, know that there is a little-known federal Mail Order Rule that requires merchants to ship orders to U.S. customers within 30 days (or adhere to their own different, clearly-stated “advertised” shipping time). According to the rule, if shipping deadlines can’t be met, sellers must send buyers a notice offering an option to consent to a delay in shipping or to cancel the order and receive a prompt refund. The rule applies to most orders made by mail, telephone or internet. Failing to comply with this Federal Trade Commission regulation can result in sellers paying civil penalties of up to $43,280 per violation! It can also result in the company providing you with restitution and/or injunctive relief (i.e., being ordered to stop their bad business practices). Read the text of the rule here.

Debt collectors sliding into your DMs?

For those finding themselves in dire financial straits due to the recession, recent job loss, COVID-related medical bills and other pandemic problems, debt collectors can be like sharks circling in the water. And, at what might possibly be the worst possible time, the Consumer Financial Protection Bureau (CFPB), late last year, passed a rule allowing collectors greater leeway in their communications with consumers. Specifically, the rule will allow debt collectors to call, email, text, and even contact consumers by social media direct message (DM) beginning in late November 2021. (DMs are one-on-one conversations with another user on a social media platform.)

Unfortunately, despite seven years of consideration, the CFPB placed no limit on the number of times a collector will be able to attempt to reach consumers online (via text, email or DM). The new rule will, however, curb phone calls to seven attempts, or one actual conversation, per week per debt (which could amount to a lot of calls for people in dire financial straits, who may have defaulted on a number of bills).

“The last thing consumers who are having trouble paying their bills need is to be hounded digitally,” said Consumer Action’s director of national priorities, Linda Sherry. “We hope that a reinvigorated CFPB—with new, consumer-focused leadership—will revisit some of the last administration’s decisions. In the meantime, we encourage everyone to be prepared and to know their rights when a collector contacts them.”

The Winter 2020-21 Consumer Action News report was written to help shine light on the CFPB’s rule and let consumers know that collectors must abide by the Fair Debt Collection Practices Act (FDCPA). This law was created in 1978 in response to “abundant evidence” of abusive collection practices and the real-world consequences for besieged debtors—from “personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.”

Under the FDCPA, consumers must be notified of assumed debts via what’s called a “validation notice.” The mandatory notice must clearly state how much is owed and how consumers can dispute the debts.

The new rule clarifies that collectors can’t sue, or threaten to sue, over “time-barred” debts, on which the statute of limitations has expired. (Head’s up: Making a payment on a time-barred debt can revive the collector’s ability to sue!)

The CFPB rule also forbids collectors from “parking” debts on consumers’ credit reports before they have contacted the consumers about the debt. Collectors must not notify credit bureaus about a debt in collections for at least 14 days after sending notification to the consumer, to establish if the mandatory notice is undeliverable.

Although some collectors might still engage in these illegal practices, you can and should report them.

Learn more about your rights under the FDCPA in Consumer Action News. If you’re up against an aggressive collector, skip straight to our “Tips and tools for dealing with debt collectors” for information on how to report harassment or dispute a debt.

Disaster preparedness and recovery: Be ready for the worst

Participants in Consumer Action’s Dec. 8 webinar were advised to “get ready to be amazed” by the day's presenters—and, in short order, attendees understood why. Three attorneys dedicated to helping consumers and their advocates prepare for and recover from the worst types of natural disasters devoted the next couple of hours to sharing their knowledge and expertise. The attorneys were Meghan Smolensky of Lone Star Legal Aid, Kendall Jarvis of Legal Aid of Sonoma County, and Jeanne Ortiz of Pro Bono Net.

“Our disaster preparedness and recovery webinar couldn’t have come at a more critical time,” said Consumer Action’s Linda Williams. “With major hurricanes hitting Louisiana and Texas, and wildfires constantly menacing the West Coast, millions of Americans need help navigating the complex challenges of a natural disaster striking in the middle of a pandemic.”

Lone Star Legal Aid’s Smolensky kicked off the webinar by presenting an easy-to-follow description of the Federal Emergency Management Agency’s (FEMA) major assistance programs, along with its disaster assistance application and appeals process. She also discussed the main sources of help with immediate safety and shelter needs post-disaster: the Red Cross, 211, and FEMA's Disaster Recovery Centers. The webinar drew 154 attendees, mainly from community-based organizations in disaster-prone regions.

Peppered throughout Smolensky’s presentation were handy lists of valuable "tips and tricks" for getting things right when seeking help from FEMA, including documenting disaster damage, understanding common reasons for FEMA denials, and knowing how to handle FEMA inspection issues that may arise.

Smolensky also suggested webinar attendees connect with their local VOAD (Voluntary Organizations Active in Disaster) and COAD (Community Organizations Active in Disaster). These critical volunteer-based organizations help disaster survivors by bringing individuals and agencies together and facilitating knowledge and resource sharing among networked members and partners. Smolensky also mentioned her ongoing participation with Long Term Recovery Groups/Committees (LTRG/LTRC)—collaborative hyper-local networks of emergency management, government, faith-based and nonprofit organizations that have proven invaluable to communities during the disaster recovery process.

Following Smolensky’s session, Legal Aid of Sonoma County’s Jarvis gave a comprehensive presentation focused on the myriad challenges that disaster survivors might face when pursuing insurance claims and seeking FEMA assistance. Jarvis included a discussion of disaster recovery disparity in rural and semi-rural areas, particularly as it relates to preexisting income inequality; vulnerable demographics (e.g., seniors, people with disabilities, non-citizens); and/or a lack of an existing recovery infrastructure in certain communities.

Jarvis also presented practical information on homeowners and renters insurance, including tips for filing claims and negotiating with carriers. She discussed how insurance companies can act in “bad faith” by lowballing their customers, failing to pay out on claims that are due, and misrepresenting a policyholder’s rights under their chosen policy. If insurance claims disputes get ugly, Jarvis suggested consumers make use of the systems already in place to help resolve them. For instance, if an insurance company is being unreasonable or unethical, report it to the state’s department of insurance. If the state insurance regulator fails to offer support, then a policyholder can complain to elected state officials (since the job of the department of insurance is to hear insurance-related consumer complaints). Jarvis recommended that consumers avoid litigation whenever possible, due to the significant amount of time, effort and expense required.

Both of these speakers highlighted the value of community-based organizations, particularly since they can help create and/or disseminate educational materials that assist consumers in understanding their rights related to insurance, housing, employment, construction issues, and/or FEMA aid.

Pro Bono Net’s Ortiz delivered the final session of the webinar, focusing on disaster preparedness and recovery resources. One of Pro Bono Net's collaborative projects is the National Disaster Legal Aid Resource Center, also known as DisasterLegalAid.org—a central hub for free legal information (and legal connections) for those who have experienced disasters. During an online tour of the site, Ortiz highlighted many of its critical resources, including: a legal help hotline offered in partnership with the American Bar Association; a "Figuring out FEMA" pocket guide on applying for FEMA assistance; a guided online interview for FEMA appeals; and the National Disaster Legal Advocacy Center (for attorneys and advocates).

Ortiz mentioned that, over the years, a recurring concern in the disaster field has been both individuals’ and communities’ startling lack of disaster preparedness. She offered tips on preparing for a natural disaster, emphasizing Ready.gov as a quick resource for learning about the most basic types of documents we should all keep in a safe and easily accessible place (such as those proving who we are and where we live).

View the entire “Disaster Preparedness and Recovery” webinar here. The webinar was funded by Consumer Action’s Insurance Education Project, as part of our COVID-19 Educational Project.

Hotline Chronicles: Get my name off the internet!

Lonnie* called Consumer Action with a question about how to get her name off Whitepages (dot) com and PeopleFinder (dot) com. “I’ve never searched for my name online,” she lamented. “I was shocked to see myself listed as having a criminal conviction. I have never had any trouble with the law, other than a speeding ticket! How can I correct this?”

We told Lonnie that she had an uphill battle. There are dozens, if not hundreds, of data brokers and so-called “people finder” companies that not only track your movement online, but also collect (or “scrape”) data from websites and public sources (such as court records, motor vehicle departments, voter rolls, social media, etc.). These companies sell the information they compile to almost anyone who will pay for it. Buyers include advertisers, background report providers, and even just nosy parkers (although these types are less likely to ante up for a paid report). More concerning—and frightening—is the fact that abusive spouses, dangerous stalkers, and others who may wish to do you harm can also buy these reports.

If Lonnie knew the source of her alleged “criminal history,” she could reach out to the specific law enforcement entity to learn if it could be corrected or removed. (And even if she had been convicted of a crime, she could contact the court about getting her record expunged.) But since Lonnie is certain she never had a criminal record, we wouldn’t recommend she purchase her report just to find out why PeopleFinder (dot) com displayed a teaser about a “criminal record” on her Whitepages listing. However, we suggested she consider “opting out” of Whitepages by following this link. (There is a conundrum to opting out of these sites: They may ask for even more information about you to “verify” it’s you. This article has some suggestions for preserving your privacy that, admittedly, might be more than most people are willing to take on.)

The Privacy Rights Clearinghouse, a California-based nonprofit, has a listing of data brokers and your opt-out rights (if any), along with the company’s contact information and a link to its privacy policy. Most people-search sites have opt-out procedures. However, each site has different instructions that you need to follow to have your information removed, and this can be time-consuming. Plus, even if you do succeed in getting the information removed from one company’s site, the information could surface again on other sites in the future, so your work may not be done.

There are companies that will charge you to remove all information about you from the internet. Some offer free “scans,” but these require your contact information, and are typically a prelude to pitching you additional paid services.

Unfortunately, there is no magic bullet to wiping the internet clean of your private information. It may be impossible to remove certain public records without a court order. Trying to remove your information from the internet can feel as futile as a game of whack-a-mole!

It is possible, however, that Lonnie’s “criminal record” is a result of someone stealing her identity. Be sure to check your credit report frequently (it’s free!) to make sure no one else is using your personal information. While you won’t usually see criminal records on your credit report, you might notice that credit or collections accounts or public records that do not belong to you are being reported. This might justify further steps.

If you are serious about getting to the bottom of whether “you” have a criminal record, you can follow the steps outlined here. You will have to provide fingerprints at a police station or post office, and pay a fee. The results of a criminal history check could help you learn if someone has used your identity to commit a crime. If records indicate that there is a criminal record that doesn’t belong to you associated with your name, we recommend you hire an attorney to help you investigate.

We suggested that Lonnie consider adopting practices to protect her privacy online. Our guide “Put a Lock on It” offers tips for securing your online accounts and mobile apps, shopping and banking safely online, preserving your privacy on social media (as much as possible), and more.

You may also consider installing anti-tracking and ad-blocking software in your browser, or using available built-in browser tools:

  • All About Do Not Track (published by the Future of Privacy Forum) explains some things you can do to block trackers.
  • Privacy Badger is a browser add-on developed by the Electronic Freedom Foundation that blocks advertisers and other third-party trackers from following you around the web.
  • Adblock Plus is a free extension that allows you to block annoying ads, disable tracking, and more on all major desktop browsers and on your mobile devices.
  • Ghostery highlights trackers on websites you visit and allows you to block them.

For more information and helpful resources, check out:

  • 6 ways to delete yourself from the internet (CNET)
  • Best identity theft protection and monitoring services for 2021 (CNET)
  • DeleteMe Opt-Out Guides
  • How to remove yourself from Internet search results and hide your identity (ZDnet)
  • Have I Been Pwned? to discover if your account information has been compromised or included in a data breach (If you find that your email address(es) are compromised, change your passwords on affected sites.)
  • The Federal Trade Commission (FTC), which accepts complaints about data brokers (Note: The complaints may be shared with law enforcement.)
  • The National Conference of State Legislatures to learn if data brokers are regulated in your state
  • Our online tool for emailing your representatives and senators, so you can urge them to pass a federal data privacy law that includes regulation of data brokers

*Not this consumer’s real name

Coalition Efforts: Prioritizing affordable meds, data privacy and health equity

Trump banking rule aims to prop up fossil fuel industry. Consumer Action joined dozens of consumer groups in opposing the Office of the Comptroller of the Currency’s (OCC) deceptively titled Fair Access to Financial Services rule. The proposed rule would pressure, and in some cases require, banks to lend to fossil fuel companies, without regard to the strategic or reputational risk taken on by the banks. The proposed rule flatly contradicts the OCC’s mission by threatening the safety and sovereignty of those banks seeking to mitigate climate-related risks. It twists the language of racial justice and redlining to justify pressuring banks to lend to the increasingly risky fossil fuel industry. Forcing banks to take on dangerous investments will stress the financial system and prop up a dying industry that continues to damage our environment with impunity. Learn more.

Advocates urge the Biden administration to slash prescription drug costs. Advocates wrote to the Biden administration asking the president to immediately implement a series of reforms to slash medication costs. The coalition urged the new president to use executive actions to: authorize generic competition through increased patent licensing; launch a “Medicare demonstration project” to lower prices for certain Medicare prescription drugs; and investigate and prosecute pharmaceutical companies for anti-competitive behavior. Americans currently spend more on prescription drugs than anyone else in the world: In the first month of 2021 alone, there have been 717 drug price increases (just seven of which have impacted generics), bumping overall costs up by 4.5% on average. It’s time to improve the lives of patients and families by lowering drug prices and making medicines affordable! Learn more.

Prioritizing health equity to overcome the coronavirus pandemic. The COVID-19 pandemic has exposed stunning gaps in the U.S. public health and health care systems and highlighted the negative effects of hundreds of years of structural inequities and systemic racism on our communities. The U.S. COVID-19 response has been marked by the politicization of public health, rampant skepticism of science, and, remarkably, the absence of a national plan to reduce infections. For people with disabilities, low-income families, communities of color, and those living in congregate settings, COVID-19 has exacerbated inequities, with fatal consequences. Advocates have joined together in making recommendations to the Biden administration: from community mitigation, to testing and tracing, to safe quarantine, to working with and sharing lessons for reducing COVID-19 infections with other nations around the world. An equitable and fair COVID-19 response ensures the safety and healthcare needs of our most vulnerable communities. Learn more.

The new California privacy agency should prioritize consumers’ privacy. The California Privacy Rights Act (CPRA) recently approved by voters augments and supplements California’s existing privacy law, the California Consumer Privacy Act (CCPA). It also creates a new supervisory authority for consumer data protection and privacy in California—the California Privacy Protection Agency. Last month, privacy advocates wrote to California Governor Gavin Newsom, urging him to select members for the new agency who not only have demonstrated experience working on behalf of consumers, but also have exhibited a commitment to civil rights and to ending discriminatory business practices. Learn more.

CFPB Watch: A real watchdog, reckless credit reporting and climbing complaints

Dark clouds are lifting at the Consumer Financial Protection Bureau (CFPB) since President Joe Biden nominated Federal Trade Commission (FTC) Commissioner Rohit Chopra to be the next Bureau director. Chopra had served as the CFPB’s first student loan ombudsman during the Obama administration.

Chopra is expected to return the Bureau to its mission of consumer protection, restore its fair lending office, strengthen its student lending oversight, and crack down on abusive financial firms subject to a light touch under the Trump administration’s deregulatory agenda.

“The days of sympathy for payday lenders and others who abuse consumers are over,” said Consumer Action’s director of national priorities, Linda Sherry. “We’re confident that Rohit Chopra will reinstate the Bureau to its rightful position as the consumer protection agency by aggressively fighting economic injustice and holding companies accountable when they resort to unfair and deceptive tactics.”

Because of his efforts to protect consumers during his tenure at the FTC, where he pushed for aggressive remedies against law-breaking companies (especially repeat offenders), and due to his work to improve student loan servicing at the CFPB, Consumer Action presented Chopra with a Consumer Excellence Award during our 48th anniversary celebration, in 2019.

Reckless reporting

The CFPB slammed subprime auto lender Santander Consumer USA Inc. with a $4.75 million penalty for providing erroneous loan information to the Big Three credit bureaus.

Santander’s faulty reporting of customer information—riddled with errors—affected millions of consumers and may have damaged customers’ credit scores and, ultimately, their access to credit.

The CFPB said the subprime lender “knew or reasonably should have known” that, from 2016 to 2019, it was supplying the credit bureaus with inaccurate information about whether customers’ accounts were open or closed, carried a balance or had become delinquent. What’s more, Santander failed to correct these errors in a timely way, even after being notified by a credit bureau.

The regulator also charged that Santander’s incorrect auto loan data violated the Fair Credit Reporting Act (FCRA)—the law that protects the accuracy and privacy of information in consumer credit reports.

In addition to the monetary penalty, Santander was ordered to correct all credit report errors it was responsible for, and to create and improve its reporting processes to prevent the same errors from happening again.

Reports of consumer grievances as complaints accelerate

Consumer complaints lodged with the CFPB have been steadily climbing each month since the COVID-19 pandemic hit. The Bureau received almost 54% more complaints in 2020 than in 2019, the bulk of which related to credit reporting problems.

Early in the crisis, the Bureau analyzed 8,000 coronavirus-related complaints (i.e., those that mentioned “coronavirus” or related terms) filed from January through May 2020. Most of the grievances centered on mortgages, credit cards and/or credit reports.

More than half (55%) of the mortgage complaints mentioned struggling to pay and/or the inability to reach customer service. Nearly one-quarter (23%) of credit card complaints were related to consumers not receiving advertised flexibility for non-payment or interest deferments, or other purchasing problems. More than half (55%) of credit reporting or credit problems pertained to incorrect information on a consumer’s credit report and collectors’ continued attempts to collect on wrongful debts. As the year continued, credit reporting complaints mounted.

In December of 2020, the CFPB ombudsman released a report that addressed a number of misconceptions consumers reported regarding the Bureau’s complaint process and the help it offers. The Bureau’s independent ombudsman’s role is to report annually on consumer and industry feedback it receives and to provide analysis and advice to the agency.

Some consumers told the ombudsman that they had expected the Bureau to advocate for them in their disputes with companies. The Bureau assists consumers in getting a response and monitors company responses, but typically does not advocate for individuals.

Consumers who provided additional information (on a closed complaint they had filed) reported that they had expected a new updated company response to their complaint, but learned that the Bureau does not send the company follow-up information on closed complaints.

The report also reiterated that complaints companies consider to be “duplicative” of another complaint from the same consumer are excluded from the CFPB’s publicly accessible complaint database.

Consumer Action, which regularly meets with CFPB staff and leadership to discuss the consumer complaints process, has previously raised these issues and other public concerns with the Bureau to encourage deeper CFPB engagement and stronger consumer protection. With new leadership on the way, consumer advocates are hopeful that the agency will return to a more proactive role in holding companies accountable. Consumers who want to contact the Bureau’s ombudsman, Wendy Kamenshine, can reach her at .(JavaScript must be enabled to view this email address) or (855) 830-7880.

Class Action Database: Trusted Media Brands violates readers' trust

A class action settlement in a case charging Cel MD Cosmetics with deceptive advertising regarding the efficacy of their hair thickeners was among seven new settlements added to the Consumer Action Class Action Database during January.

Of note this month is the class action Everett v. Trusted Media Brands, Inc. (TMB), a company offering subscription magazines (such as Reader’s Digest and Taste of Home) and books. The plaintiffs in the case filed a class action against TMB alleging that the publisher violated California’s Automatic Renewal Law. Plaintiffs alleged that TMB failed to state its automatic renewal policy in clear and conspicuous language and failed to obtain consent before charging its readers to renew their subscriptions. Additionally, plaintiffs charged that TMB sent readers invoices for goods that they had not even ordered!

California law requires that such “invoices” notify consumers that the documents are not bills, and that the consumer does not need to pay unless they accepted the related products. In the case, plaintiff John Everett ordered a one-year subscription to Taste of Home magazine. Subsequently he received a cookbook he didn’t order and an invoice for the cookbook. After receiving a second invoice for the unwanted book, Everett, unaware that the invoices were in violation of California law, paid for the unordered cookbook to keep any “debt” he believed he would owe from being sent to collections.

TMB denied the allegations, but agreed to a $1.5 million settlement to end the lawsuit.

California residents who were enrolled by TMB in an automatic renewal or continuous service program between July 26, 2015, and March 5, 2020, are eligible for a payout from the settlement, although the exact amount will not be known until attorney fees and other costs of the lawsuit have been accounted for.

The claims deadline is Feb. 15, 2021.

About Consumer Action

Consumer Action is a nonprofit 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 more. 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. Our in-language media outreach allows us to share scam alerts and other timely consumer news with a wide non-English-speaking audience.

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 more than 6,000 community-based organizations. Outreach services include in-person and web-based training and bulk 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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