Consumer Action INSIDER - June 2019

Table of Contents

What people are saying

I’ve learned so much pertinent information about scams that has been so protective to me and others. The info on Consumer Action’s website can be trusted. — Nettie Walker Wood, via Consumer Action’s Facebook page

Did you know?

Higher-income Medicare beneficiaries pay higher premiums for their Part B (medical insurance) and Part D (prescription drug) coverage, even when their incomes increase only over the course of one year due to rare or unusual capital gains (such as from the sale of a home or an unexpected mutual fund profit). Income-related monthly adjustment amount (IRMAA) guidelines look back two years—so for 2019, the government uses recipients' 2017 tax returns to set their Medicare premiums. This can be an unexpected and difficult financial burden for recipients. Learn more by reading the Kiplinger article “Nine Things You Must Know About Medicare's High-Income Surcharges.” Or take a deeper dive into the topic at the Social Security Administration website.

Out & About: Black women talk finances

JPMorgan Chase and Essence magazine have teamed up to expand economic inclusion for black women with their Currency Conversations campaign. The campaign includes listening tours, educational content, a savings pledge and a safe space for black women to have an open dialogue about their financial goals. Consumer Action’s Audrey Perrott attended the Oakland, CA, listening tour event on April 27.

It is indisputable that a racial wealth gap exists in America, which can be attributed in part to both the institutional and individual racism plaguing all sectors of our society, including education, banking, employment and housing. According to a 2017 Federal Reserve report, Recent Trends in Wealth-Holding by Race and Ethnicity: Evidence from the Survey of Consumer Finances, black families in 2016 possessed a median net worth of $17,600, compared to $171,000 for white families. The numbers are even more dismal for black women according to another 2017 report, co-authored by the Samuel DuBois Cook Center on Social Equity and the Insight Center for Community Economic Development. According to the report, single black women without a bachelor’s degree aged 20–39 have zero net worth; aged 40–59 have just $1,000 to $2,000 in net worth; and those who are 60 and older have just $12,000 in net worth. (Net worth is the difference between one’s assets and one’s liabilities.) Things are not much better for black women with bachelor's degrees: The youngest set (20-39) carries a median $11,000 in debt, while their peers aged 40-59 have a net worth range of $6,000 to $9,500, and those aged 60 and older have a median net worth of $11,000.

JPMorgan Chase and Essence say they are trying to improve this trajectory by providing a forum for black women to talk about finances in a non-judgmental way, support each other and share their hopes, dreams and journeys to financial inclusion.

What can financial educators, coaches and black women do to support black women and expand financial inclusion? Consumer Action encourages them to visit the Currency Conversations website. The site provides video content from past campaign events, as well as resources to help black women identify what is holding them back financially on an individual level; an online pledge to save for a specific goal; and culturally relevant digital tools to facilitate small group discussions with sisters, friends, family, coworkers and accountability partners. (These tools are designed to help black women discuss the sometimes-taboo topic of money.)

Perrott said of the listening tour, “It was refreshing to attend an event where black women were able to walk in their truths and receive financial coaching without judgment. By sharing their pearls of wisdom, as well as some of their past financial missteps, the Currency Conversations campaign ambassadors on the Oakland tour inspired attendees to catapult past silence or shame and towards financial growth.”

Event organizers also provided attendees with a financial journal to help them start reflecting with their peers about what they wanted to accomplish financially. A digital version of the financial journal can be found here.

Consumer Action is sharing information on the Currency Conversations campaign with our network of community-based organizations at our educational trainings and roundtables.

Reporting from Facebook’s 2019 privacy roundtable

Consumer Action’s Ruth Susswein and Alegra Howard recently headed to Facebook’s Menlo Park headquarters for its annual invitation-only privacy roundtable. Privacy advocates, scholars, delegates and legal experts from all over the world participated in the two-day discussion on how the social media giant plans to integrate privacy considerations into its platform. They also learned about the company’s new data projects and products expected to be released in the coming months.

Facebook staffers from its marketing, policy and product teams gave presentations on a host of issues, including public safety, user privacy, data portability, targeted and political advertisements, and algorithmic fairness. One of the new features discussed before its release was Facebook’s “Clear History” feature, which will allow users to opt out of having the company collect and match their off-Facebook browsing history data to their Facebook profile. (The data is used by Facebook to serve targeted ads to users.)

The roundtable followed another year of privacy scandals for Facebook, including alleged violations under the Fair Housing Act (due to Facebook allowing companies to selectively advertise housing opportunities only to certain populations) and its now notorious role as a conduit for election meddling, both in the U.S. and overseas. Participants were bound by “Chatham House rules,” which means they are free to use information from the meeting as long as they don’t identify the speakers or their affiliations. Some of the discussion centered on the company’s intention to prioritize users’ privacy in its advertising policies and products going forward.

As government struggles to keep up with the pace of technology, leaders in both Congress and the tech industry have echoed Facebook CEO Mark Zuckerberg’s own public call on federal regulators to help establish new rules for the internet in order to address the growing privacy, ethical and political impacts on consumers around the world.

Susswein reflected on the meeting, saying it was useful to Consumer Action’s consumer education and advocacy efforts to network with Facebook representatives and fellow privacy rights advocates. “We appreciate that Facebook finds it valuable to hear from consumer advocates. In turn, we hope our feedback results in a better experience for Facebook users.”

Hotline Chronicles: Airport screening rankles woman

While airport screening aims to keep us safer in the skies, the scrutiny can at times be time-consuming and even annoying for travelers who must shed jackets and shoes and wrangle their computers out of their carry-on bags to pass through security checkpoints. But rudeness shouldn’t be part of the drill—either by passengers or security screeners. You have the right to let the Transportation Security Administration (TSA) know when you’re dissatisfied with a screening or with its employees.

Lorelei* from Texas, who volunteered that she is a “70-something” woman, wrote to our hotline with a question about how to address what she saw as “unprofessional” conduct by TSA workers. Lorelei said she was called aside for additional screening and a pat-down “under her breasts” after passing through the imaging scanner at the Skye Harbor International Airport in Phoenix. (TSA pat-downs are required to be thorough, and same-gender TSA staff are required to notify the flyers of what to expect before conducting them.) When Lorelei voiced her dissatisfaction at the airport’s “TSA desk” about the pat-down, she encountered what she described as “two very rude, sarcastic young” employees who, she added, “made very much fun of me” for asking questions about the reasons for the additional search. And, she said she was spooked to see that the employee who patted her down followed her over and stood behind her as she made her complaint.

TSA screenings were implemented after President George W. Bush signed the Aviation and Transportation Security Act into law a couple of months after the terrorist attacks of Sept. 11, 2001. Searches are purposefully “unpredictable” and random, according to the TSA. And “little old ladies” are just as likely to be flagged for additional screening as the rest of the population. TSA says that even passengers who normally receive expedited screenings, such as those paying to use TSA PreCheck, may at times receive a pat-down. The agency’s website states: “TSA is committed to ensuring all travelers are treated with respect and courtesy. Screening is conducted without regard to a person's race, color, sex, gender identity, national origin, religion or disability.”

The TSA says that anyone who “witnessed unprofessional conduct or experienced an inappropriate screening process at a security checkpoint” can submit a complaint here. Complaints must include a description of the issue, the airport location, the airline and flight number, and the complainant’s full name and email address.

Prior to a flight, you can contact the TSA Cares helpline (855-787-2227) with questions about screening policies, procedures and what to expect at a checkpoint.

*Not this consumer’s real name

Consumer Lobby Day gives citizen advocates a voice in Congress

Last month, Consumer Action participated in the annual Consumer Lobby Day and pre-lobby day training event, coordinated by the Consumer Federation of America and sponsored by consumer advocacy groups including U.S. PIRG, Consumer Reports, Public Citizen and Americans for Financial Reform as well as Consumer Action. The event, held in Washington, D.C., attracted over 120 citizen advocates from all parts of the country.

Many event participants were lobbying their members of Congress for the first time on issues of critical importance to consumers, including ending predatory payday lending and capping loan interest rates; protecting the Consumer Financial Protection Bureau (CFPB) from ongoing efforts to destroy its mission and defund/weaken it; and supporting legislation that would ban the inclusion of mandatory arbitration in consumer contracts. Mandatory arbitration clauses prevent consumers from joining together in class actions and/or pursuing their constitutional right to a court trial when corporations and employers wrong them.

Consumer Action’s Ruth Susswein and Lauren Hall attended the pre-Lobby Day training event, where, like others, they were matched up with attendees from their home states and briefed for meetings with House and Senate representatives from those states.

“The training event is a critical component for Consumer Lobby Day attendees,” Hall said. “Many have never set foot in the halls of Congress, let alone spoken to their representatives about the complex issues related to, say, supporting a regulatory agency’s ability to create and enforce rules to keep corporations from misleading and financially abusing them and their families.”

The Lobby Day training, which included a role-play presentation demonstrating how attendees should interact with a member of Congress (or his or her aide) during an office visit, armed attendees with the knowledge and confidence they needed for the upcoming Lobby Day. Handouts and presentations from leaders in the consumer advocacy field gave the fledgling lobbyists an arsenal of facts and figures that they could present in support of their arguments. For instance, consumer rights lobbyists learned that attacks on the CFPB (particularly under the anti-regulatory Trump administration) have resulted in an 80 percent reduction in enforcement actions taken against corporate wrongdoers and a whopping 96 percent decrease in the average monetary relief awarded to the victims of financial crimes and malfeasance!

“Interestingly, a couple of days before we went in to educate our members of Congress on some of the most egregious consumer abuses, the current CFPB leadership announced that it would be considering a rule to allow debt collectors to barrage consumers with seemingly endless calls, texts and emails,” Hall said. “We were able to use this breaking news as a prime example of why Congress needs to get serious about consumer protections!”

Senator Sherrod Brown (OH), a ranking member of the Senate Banking Committee and strong supporter of an empowered CFPB committed to its mission to protect consumers, provided attendees with a pep talk at a breakfast held near the Hill on the morning of the event. Senator Brown applauded attendees for their efforts and emphasized how important it is for Congress to hear consumer voices, as opposed to just legions of corporate lobbyists.

Coalition Efforts: Chaos at the U.S. Department of Education

Education Department’s internal problems frustrate, harm struggling borrowers. A coalition of legal aid, civil rights, consumer advocacy, public interest and veterans organizations wrote to U.S. Department of Education (ED) Secretary DeVos to demand that the federal agency take immediate steps to address its ongoing, unprecedented and system-wide problems, including a major staffing shortage and delays currently plaguing its student loan servicing system. Borrowers calling the ED in pursuit of loan rehabilitation have complained of dropped calls and hours-long wait times. These borrowers who can’t get their loan payments “back on track” are likely to suffer wage garnishments, tax refund seizures, Social Security offsets and worse. Learn more.

Corporations must not use personal data to fuel discrimination! A group of civil society organizations sent a letter to Congress calling on legislators to ensure that any federal privacy legislation it creates addresses the discriminatory impacts of commercial data collection practices and aims to protect the populations vulnerable to this data misuse, including people of color, women, religious minorities, members of the LGBTQ+ community, persons with disabilities and others. Abuse of personal data enables outcomes ranging from voter suppression to digital redlining and discriminatory policing. Learn more.

Flawed HUD report lets Bank of America off the hook for possible lending violations. Consumer Action joined a group letter to the Department of Housing and Urban Development (HUD) to express serious concerns regarding a recent flawed report that incorrectly concluded that Bank of America complied with HUD rules prior to selling defaulted loans to homebuyers through its Distressed Asset Stabilization Program. The report relied on an inadequate sampling of loans (just 10!), unquestioningly referenced information provided by Bank of America, and failed to interview aggrieved consumers in making its determination about the mega-bank’s behavior. Learn more.

Stop the onslaught of annoying robocalls. Consumer Action signed on to support public testimony to the U.S. House Subcommittee on Communications and Technology regarding potential legislative solutions to the rampant problem of illegal scam and spoofed robocalls. Consumer groups are warning Congress that the current Federal Communications Commission may loosen robocalling restrictions, allowing consumers to be barraged with an even greater number of these obnoxious and harmful autodialed calls. Learn more.

CFPB Watch: Out-of-control debt collectors, credit ‘repair’ cons

Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger last month proposed new debt collection rules that could allow collectors to saturate consumers with texts and emails in attempts to collect debts.

The proposal, which was introduced at a town hall meeting in Philadelphia, would weaken the existing Fair Debt Collection Practices Act (FDCPA) passed in 1977 to eliminate abusive debt collection practices. Although harassment would still technically be prohibited, the CFPB rule would allow debt collectors to send an unlimited number of texts and emails to borrowers, and place up to seven telephone calls (or voicemails) per week—per debt. For borrowers with six loans, for example, that could mean 42 calls or voicemails per week (six loans multiplied by seven allowed calls). If a debt collector actually reaches the intended consumer on the phone, they cannot call again for seven days.

The Bureau has proposed allowing consumers to notify collectors to stop contacting them at certain “inconvenient” phone numbers or email addresses, such as their work phone numbers. Collection emails sent to a borrower’s place of employment would be prohibited outright—if it can be proven that the debt collector knew, or should have known, that they were emailing the target at work.

Consumer Action and other consumer rights organizations support limiting collection calls, texts and emails to no more than three per week, and requiring collectors to obtain consumers’ permission prior to texting or emailing.

Debt collection is one of the top areas of complaint to the Bureau. In 2017, approximately one in three adults with a credit file had a debt in collections. These included medical, credit card and auto debts.

Consumers can weigh in on the CFPB’s proposed rules by submitting their comments via .(JavaScript must be enabled to view this email address), or online at regulations.gov, by Aug. 19, 2019. We encourage you to add your personal experiences with abusive debt collection (if any) to your comments. Please include this number with your comment: Docket No. CFPB-2019-0022.

Credit repair firms get clipped

The Bureau accused some of the nation’s largest credit repair companies of illegally charging consumers hundreds of dollars in upfront fees for false assurances of help in removing negative information from the consumers’ credit files. Credit repair firms cannot legally charge a fee until they’ve proven that they’ve successfully “repaired” a customer’s credit record.

The CFPB filed suit against industry leaders Lexington Law, CreditRepair.com and PGX Holdings and its subsidiaries (Progrexion Marketing, etc.) for violating the Telemarketing Sales Rule by charging consumers upfront fees.

The Bureau also accused the companies of baiting consumers with deceptive ads guaranteeing low- or no-downpayment home loans (even to borrowers with poor credit). When consumers responded to the pitch, they learned that Lexington Law just wanted them to enroll in credit repair services.

Just a reminder: Consumers do not need to pay someone to “repair” errors on their credit reports; they can dispute actual errors directly with the credit bureaus for free. If negative information listed on a credit report is accurate, there is nothing a credit repair company or you can do to legitimately remove that data. Derogatory information can remain on a credit file for seven years, but as the information ages, it has less and less impact on the consumer’s credit score.

Chinese financial glossary

In honor of Asian American and Pacific Islander Heritage Month (commemorated in May), the CFPB released an updated version of its Glossary of English-Chinese Financial Terms.

In 2010, more than 24 million U.S. consumers told the Census that they do not speak English very well. Both the CFPB’s English-Chinese and English-Spanish financial glossaries are intended to help limited-English-speaking consumers overcome language barriers when making important financial decisions or applying for credit.

The CFPB offers consumer education materials in multiple languages, including Korean and Vietnamese, which can be ordered here. The Bureau also accepts complaints in more than 180 languages at 855-411-2372.

Class Action Database: Overpriced optical disc drives cost tech companies

A class action settlement involving Hyundai’s defective sunroofs was among 19 new settlements added to the Consumer Action Class Action Database during May.

Of note this month is the class action settlement Optical Disk Drive Products Antitrust Litigation.

The plaintiffs in the suit allege a plethora of tech companies, including Samsung, Toshiba, Sony, Hitachi, Pioneer and others, violated antitrust laws by artificially inflating the price of Optical Disk Drives (ODDs). ODDs use a laser light to read and write or store data onto discs, such as CDs, DVDs or Blu-ray discs. The ODDs covered in this lawsuit include DVD-RW, DVD-ROM and/or COMBO types. ODDs can be installed internally or attached externally to a consumer’s computer.

The defendants denied the allegations but agreed to a $205 million settlement to avoid the burden, expense and risk of continuing the lawsuit.

ODD products eligible for the settlement include: internal ODDs installed in new computers, stand-alone ODDs designed for internal use in computers, and ODDs designed to be attached externally to computers slated for individual use and not for resale.

You are part of the class if you made these purchases between April 1, 2003, and Dec. 31, 2008, while a resident of one of 24 states (AZ, CA, DC, FL, HI, KS, ME, MA, MI, MN, MS, MT, NE, NV, NH, NM, NY, NC, OR, TN, UT, VT, WV or WI).

ODDs purchased directly from the manufacturer are excluded from the settlement. ODDs built into Panasonic-branded computers also are excluded from the settlement.

The claims deadline is June 28, 2019.

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 seven 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 7,000 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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