Released: May 31, 2021

Consumer Action INSIDER - June 2021

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What people are saying

Consumer Action keeps we the consumers up to date with scams to look out for and how to be more careful not to get scammed. Today they provided me with some information I needed to go forward with a lawsuit being done in which I may be able to get compensation for a scam I fell for. I am very grateful for the information they provided to me and the very quick answers to the questions I sent them. My thanks go out to them.

—Patricia Nadreau, Wisconsin consumer, via Consumer Action feedback survey

Did you know?

More than 4 in 5 voters want a strong law to protect their online data from exploitation. A recent Morning Consult survey found that 86% of surveyed Democrats and 81% of surveyed Republicans said Congress should make privacy a “top” or “important but lower” priority in 2021. Nearly 9 in 10 adults said it was either “very” or “somewhat” important to protect their most sensitive identifiable information under a privacy law, including Social Security number (89%), banking information (89%), biometric data (88%), and driver’s license number (88%).

Consumer Action News enlightens about liability insurance

The Spring 2021 issue of Consumer Action News, published in early May, covers the range of liability insurance—for homeowners, renters, drivers and business owners. The issue is available for free online reading or PDF download.

Often, when people think of insurance, they think of the portion of their coverage that rebuilds their home and replaces their personal belongings in case of a fire, or repairs their car when they get into a fender bender. But the liability protection provided by an insurance policy could actually prove much more valuable than the property protection component if you were ever sued and found responsible for someone’s injury or death, or for costly damage to their property. A single dog bite—and there are 4.5 million of those each year—costs insurers an average of nearly $45,000 in 2019. Of course, that pales in comparison to the cost of the major injuries that could be suffered in an auto accident you cause, the cost of repairing your neighbor’s home after your old, decaying oak tree topples onto it, or any number of other injury or property damage claims that could be brought against you.

If you’ve never thought much about liability insurance before, consider that:

  • Your risk—and, therefore, your liability insurance premium—goes up based on certain choices you make (good to know before deciding, for example, what breed of dog to get, whether to have a swimming pool or trampoline, or whether to let your teenager drive).
  • Not only are your current assets at risk in a lawsuit, so are your future earnings.
  • Liability insurance covers the cost to defend you in a lawsuit, including attorney fees and other related legal costs, as well as the cost of any settlement or damages awarded (up to your coverage limits).
  • Liability claims against you that result from renting out your home (or a room in it) probably aren’t covered under your homeowners or renters insurance (you’ll need to arrange for an add-on to your policy or buy separate landlord or business insurance).

Given that liability insurance is such a crucial tool for protecting your current and future assets, it’s important to understand how to choose your coverage (including how to augment coverage—through an umbrella policy, for example), which “perils” (risks, or covered events) are included and which are excluded, and how claims can affect your premiums and coverage.

Learn more about liability insurance in the Spring 2021 issue of Consumer Action News.

Webinar explores the rise of contactless payments

Since the start of the COVID-19 pandemic, many consumers have begun to see contactless payments as a safer way to pay, without the fears that come with touching “germ-y” cash and PIN pads. Even after health-related concerns subside, this increasingly popular payment option is likely to stick around.

Contactless payment cards are the next generation of bank cards, replacing the swipe card, said Braden More, executive vice president at Wells Fargo. More joined Rachel Siegel, senior associate of consumer finance with Pew Charitable Trusts, and Christina Tetreault, who at the time was manager of financial policy at Consumer Reports, at Consumer Acton’s “Adoption of Contactless Payments During the COVID-19 Pandemic” webinar on April 20.

In his overview of contactless payments and how they work, More pointed out that, in addition to the advantage of being “contactless,” the chip card technology is much safer than the old “strip” technology. He noted that while hacking a credit or debit card chip or a smartphone to conduct illegal transactions is not impossible, it is impractical: Criminals would have to obtain a machine that costs thousands of dollars to hack the chip, and the average criminal is not able to make that type of investment.

While More focused on the technology side of contactless payments, Siegel concentrated on consumer behavior. Although conducted prior to the COVID-19 outbreak, Pew’s 2018 research on the adoption of mobile payments revealed that half of consumers surveyed made mobile payments that year, with 8 in 10 reportedly linking their bank account or credit card to a mobile app. The research also showed there was some resistance to the adoption of mobile payments: 30% of consumers reported that they avoided using mobile payments to prevent loss of funds and because they viewed mobile payments as riskier than other options.

Siegel noted that, despite earlier trepidations, consumers have leveraged mobile payments more than ever since the outbreak of COVID-19, mainly to avoid contact with others, while still accomplishing transfers and purchases. Further, many of those who started using mobile payments during the pandemic—especially peer-to-peer payments—plan to continue to do so. Siegel emphasized that mobile payments will continue to be a primary vehicle for new payment technologies, as developments in faster payments, regulatory “sandboxes” (FinTech market testing of new technology that is sanctioned by regulators to spur innovation) and other policies are deployed. However, she warned that without thoughtful oversight, these strategies could also undermine consumer protections.

Tetreault’s focus was on educating the audience about pertinent consumer protections. She explained that the two most critical protections that consumers should be aware of are the limits on the dollar amount of fraudulent transactions a cardholder can be held responsible for and the right to dispute unauthorized transactions.

She emphasized that when it comes to contactless payment protections, the type and level of protection depends on the payment type. For example, if you’re using the Walmart app and it is linked to a credit card, all of the protections afforded a credit card user would apply to any transaction made on Walmart’s app. On the other hand, if you’re using the Starbucks app and you’ve linked it to a bank account, bank account-related rules, like the Electronic Fund Transfer Act, would apply.

Tetreault wrapped up with tips for using contactless payments. She noted that using or linking a credit card (instead of a debit card) offers the greatest protections—but only if you’re not carrying a balance on the card, which would increase your balance and cost more in interest. Consumers with a mobile phone were advised to use a mobile wallet, linked to a credit card if possible, but only if they secure their wallet with two-factor authentication (requiring a one-time passcode, fingerprint or other type of key).

View the “Adoption of Contactless Payments During the Pandemic” webinar on Consumer Action’s YouTube channel.

Consumer Action will be hosting another webinar, “Share Financial Data with Care,” on Tuesday, June 29. If you are interested in attending, register here.

Hotline Chronicles: No, I don’t want to sell my house!

Home sales—and prices—rose during the pandemic, leaving a limited inventory of homes for sale. Now investors are beating the bushes for home-sale leads.

Cressida* from Texas wrote to our hotline about calls and text messages she has been receiving from people who want to buy her home. “They are telling me they are getting my information from public records but I've never requested such a thing. I do not want to sell my house!”

Public records are just that: public! That means that anyone who is willing to go to government offices, search state property tax databases, or pay a fee to access commercial databases of public information, can contact you by mail or phone. (Phone numbers aren’t included in property tax records, but they can be found fairly easily in online “white pages” and via commercial information databases.)

States limit what kinds of public information can be accessed or purchased, but property tax records are public information. Potential investors often access a home’s property tax history to find leads on homeowners who are behind in paying their taxes. Then they approach distressed homeowners with cash offers. However, in a hot property market, even homeowners who are not suffering financially may receive such calls if they own desirable homes.

Cressida noted that she hasn’t given these callers permission to call or text her. She asked, “Are they violating my TCPA rights?,” referring to the Telephone Consumer Protection Act, which regulates telemarketing calls.

Calls that do not sell or promote a product or service for sale are not solicitations prohibited by the TCPA. The first non-automated, non-recorded, non-sales cold call you receive is your opportunity to state that you do not wish to be called again

We recommend that you do not answer calls from numbers you don't recognize. If it’s important, the caller will leave a message or call back. If you receive only one or two annoying cold calls, just block the caller’s number—blocking it on a cell phone should stop any text messages from that number as well. Make a note of the identity of the caller if they provide it, just in case they attempt to call you again from a different number.

Another reason to hang up and/or block the calls: It’s likely these callers will make a below-market offer for your home. Don’t bite! Contact a local real estate agent to learn the true value of your home.

Listing your phone number with the Federal Trade Commission’s National Do Not Call Registry can help cut down on the number of telemarketing calls you receive, but it won’t stop individuals from cold-calling you to ask if your home is for sale. (The Do Not Call Registry doesn’t prevent charities, political candidates or surveyors from calling.) On your cell, you can block the callers you don’t want to hear from.

If you have received unsolicited faxes, telemarketing calls, or prerecorded or autodialed calls, you may be able to bring a suit against the caller if the caller is found to be in violation of the TCPA. Your case will have a better chance if you have saved records of phone calls and voicemails, or kept a log with the dates and times of the calls and the caller’s identity. You can use the National Association of Consumer Advocates’ Find an Attorney directory to find a lawyer in your area.

More information

*Not this consumer’s real name

Old and new ‘Lifeline’ programs aim to keep low-income households connected

Consumer Action has just updated its “Connect to California LifeLine and Save!” fact sheet, which provides detailed coverage of the decades-long program that enables nearly two million low-income Californians to afford telephone service. Included in the update is an introduction to the new Emergency Broadband Benefit (EBB) program, launched on May 12, that similarly provides discounts on high-speed internet service for eligible households.

This year’s update of the California LifeLine fact sheet reflects the usual annual increase in income limits (though the income limit for one- and two-person households actually went down a couple hundred dollars due to an earlier miscalculation by the program administrator). It also explains the temporary (through June 30, 2021) pandemic-related policy to accept alternative proof of income, such as a notice of approval for unemployment benefits or an unemployment check stub, from applicants who do not have three consecutive months of income documentation. Also suspended until June 30 are the standard annual renewal requirements, where program participants are required to verify that they are still eligible for the program; the standard procedure will resume in July. Another change is elimination of the outdated measured rate plan option, which allowed landline phone customers 60 local calls per month, with each additional call costing 8¢; all landline customers who were on a measured rate plan have been, or will soon be, transitioned to the flat-rate plan.

Learn more in “Connect to California LifeLine and Save!”, available for online reading and free PDF download. Updates of the Spanish, Chinese, Vietnamese and Korean versions will be available by the end of June.

“With each update of our California LifeLine guide, our hope is that more eligible consumers learn about and apply for the vital but underused program," said Ken McEldowney, Consumer Action’s executive director, and a member of the California Public Utilities Commission's Universal Lifeline Telephone Service Trust Administrative Committee. In 2021, it’s estimated that only 54% of eligible households will participate, undoubtedly due largely to lack of awareness of the program.

Added to the 2021 edition of the fact sheet is information about a new program providing discounts on high-speed internet. Households that qualify for Lifeline (including California LifeLine) also qualify for the Emergency Broadband Benefit (as do non-Lifeline households that meet income-based or program-based criteria). Under the emergency program, eligible households can receive a monthly internet service discount of up to $50; residents of tribal lands can receive up to $75. There’s also a one-time discount of up to $100 to purchase a laptop, desktop computer or tablet from participating providers.

You can receive both Lifeline benefits and the Emergency Broadband Benefit at the same time—for example, a mobile phone with a Lifeline discount and home internet with the Emergency Broadband Benefit. The EBB is not automatic, however; even if you already receive Lifeline benefits, you must opt in with your existing provider or enroll with another participating broadband provider.

Visit the Get Emergency Broadband site for more information, an application and a list of participating broadband providers. The FCC also offers a directory of participating providers by state. The program will end when the funding runs out or six months after the government declares an end to the COVID-19 crisis, whichever comes first.

Coalition Efforts: Outrage over vaccine patent shenanigans and a loss of FTC powers

Consumer Action and its allies recently called on policymakers and regulators regarding these important issues:

Public health policy versus pharmaceutical industry IP rights. Advocacy groups asked the White House to ensure that vaccines whose development was wholly or in part funded by taxpayers are not held hostage by unfair patent restrictions that hinder public health goals. The basic research for COVID-19 vaccine technology was underwritten by taxpayers, giving the United States the ability to produce the vaccines in less than a year. The signatories urged the Biden administration to stand up for the taxpayer’s intellectual property rights for COVID-19 vaccines and use its executive powers to prioritize public health ahead of the interests of those who claim the rights to intellectual property developed with taxpayer dollars. (Subsequently, on May 5, the Biden administration said it would support waiving pharmaceutical industry patents for coronavirus vaccines in order to allow drugmakers throughout the world to make the vaccines.) Learn more.

Congress asked to restore FTC’s monetary relief powers. Advocacy groups penned a letter to Congress in support of expanding the FTC’s powers to protect consumers, which have been jeopardized by a recent Supreme Court decision compromising the FTC’s authority to demand monetary relief in its enforcement actions. Writing to the leaders of the Senate and House commerce committees, the signers urged legislative action to ensure that the Federal Trade Commission (FTC) has the full range of authority to curb unfair, deceptive, fraudulent and anticompetitive acts and practices. The groups called on Congress to amend the FTC Act (the law in question under the recent court decision) to ensure that the Commission’s “full slate of enforcement tools is preserved,” including its ability to seek injunctive as well as monetary and equitable remedies on behalf of affected consumers. Learn more.

Utility pole access is a barrier to widespread broadband deployment. Organizations supportive of increased broadband deployment in underserved areas called on Congress to ensure a fast, fair process for access to privately owned utility poles. Unreasonable demands by pole owners lead to disputes that slow progress and shift resources away from using the poles to further deploy broadband, and can significantly delay or even derail projects. “Utility poles form the backbone of America’s broadband infrastructure and are critically important for enabling connectivity across the nation, especially in rural areas,” wrote the groups. Learn more.

Limit ways robocallers can evade the law. The TRACED Act was passed by Congress to protect consumers from robocalls and to give the Federal Communications Commission (FCC) enforcement authority over illegal calls. Led by the National Consumer Law Center, advocacy groups pushed back at industry requests for exemptions to rules developed by the FCC under the TRACED Act that give consumers opt-out rights. The groups stated that they oppose any deviations from the rules that allow recipients to stop robocalls. Learn more.

Climate change threatens vulnerable residents’ housing opportunities. Eighteen organizations sent a letter to the Federal Housing Finance Agency (FHFA) to voice concern that climate risk mitigation efforts could cause inadvertent harm to communities already vulnerable to the adverse effects of climate change. The group letter provides recommendations for next steps in the FHFA’s work on mitigating climate risk and urged the agency to make sure climate risk mitigation efforts do not cause inadvertent harm to communities of color and low- and moderate-income neighborhoods that already are most vulnerable to the adverse effects of climate change and that face the most challenges in accessing and sustaining homeownership. Learn more.

CFPB Watch: Collectors held to tenant protections; beware of duplicate mortgage payments!

There has been some confusion as to whether the Centers for Disease Control’s (CDC) moratorium on evictions still applies to all renters. Some recent court cases have ruled in favor of the renter, and other judges have argued that the CDC does not have the authority to stop landlords from evicting struggling tenants. As the courts sort out contradicting rulings, tenants may have to rely on state and local eviction bans (if any) in the days ahead. Visit the nonprofit Eviction Lab to learn about local rulings.

Nevertheless, the CFPB wants tenants to know that they are entitled to receive notice about eviction protections from the lawyer or debt collector who files an eviction case against them on behalf of a landlord. Likewise, collectors cannot mislead renters into thinking they are not eligible for eviction protection.

The Bureau encourages renters to reach out to a HUD-approved housing counseling agency for help; find one online or call 800-569-4287.

As federal dollars start flowing to help tenants repay their rental debt, renters also should visit the National Low Income Housing Coalition’s database of rental assistance programs searchable by state.

The Bureau also reminds renters that landlords who’ve received mortgage relief from the government during the pandemic are prohibited from evicting tenants. The Bureau offers links to tools to learn if you are protected based on the property you live in. Click here to learn more about tenant rights.

Consumer Action joined other advocates in urging the Bureau to go one step further and ban debt collectors from reporting pandemic-related rental debt to the Big Three credit bureaus (Equifax, Experian and TransUnion). A damaged credit report can harm renters’ chances of securing new housing or new credit, and might even harm employment prospects.

Mortgage overpayments

The CFPB reported that hundreds of thousands of customers of mortgage servicer Mr. Cooper in April saw their bank accounts debited multiple times for the same mortgage payment. This left some consumers thousands of dollars in the red. Mr. Cooper reported that a payments processor made an error and that they are working to refund affected borrowers.

The Bureau is warning consumers serviced by Mr. Cooper to contact the company immediately if unauthorized mortgage withdrawals hit their account. Consumers can also contact the CFPB if the problem is not resolved. Last December, Mr. Cooper (formerly Nationstar) agreed to pay $90 million to 115,000 consumers to settle a federal lawsuit against Nationstar for wrongly foreclosing on borrowers who had loan modifications. Homeowners with a mortgage can have more control over their payments by sending checks or online bill payments instead of allowing their servicer to take payments directly from their bank account.

Refunds for SettleIt customers

Online debt settlement firm SettleIt has been ordered to return $646,000 in fees to consumers after misleading them into taking out expensive loans with companies like CashCall and LoanMe, according to the CFPB. The Bureau said that part of the deception was that while SettleIt called itself an independent debt settlement company, in fact it was owned by CashCall and financially affiliated with LoanMe.

The SettleIt pitch was to negotiate with a borrower’s creditors for a discounted lump sum payoff. The Bureau, however, accused the firm of steering consumers into high-cost loans to pay off their debts, and charging a fee of about 25% of the debt, which was not clearly disclosed to consumers. If the court accepts the Bureau’s order, SettleIt also will pay a $750,000 penalty to the CFPB and be barred from settling debts with any company it’s affiliated with.

Class Action Database: Hy-Vee pays out over hijacked customer data

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

This month we highlight a settlement involving a data breach at Hy-Vee, a chain of supermarkets and gas stations in the Midwestern United States. The plaintiffs allege that Hy-Vee did not adequately protect customers’ personal and financial information, leading to a breach of the sensitive data.

Between Dec. 14, 2018, and Aug. 2, 2019, criminals hacked certain Hy-Vee computer systems and accessed customer names, credit/debit payment card numbers, card expiration dates, and internal verification codes. While Hy-Vee used card encryption technology inside its stores, the company did not use card encryption technology at the affected locations.

Plaintiffs allege that Hy-Vee did not promptly disclose the extent of the data breach and did not provide meaningful assistance afterwards. Hy-Vee detected the data breach on July 29, 2019, and announced the data breach to the public on Aug. 14, 2019. However, Hy-Vee did not disclose the massive scale of the data breach until Oct. 2, 2019, and did not offer to provide credit monitoring or fraud insurance to the affected customers.

Hy-Vee denied the allegations that it did not protect consumer information, but agreed to a settlement to end the lawsuit.

The class members are consumers who used a credit or debit card at the in-store point-of-sale system in an affected Hy-Vee fuel pump, drive-thru coffee shop or restaurant between Dec. 14, 2018, and Aug. 2, 2019, and, subsequently, suffered harm as a result of their cards having been compromised (i.e., the victims incurred out-of-pocket expenses or fraudulent charges, spent time correcting fraudulent charges or replacing their cards, etc.).

Consumers whose payment cards were compromised are eligible for up to $225 in out-of-pocket expense reimbursements for unreimbursed bank fees, long distance telephone charges associated with the incident, credit report or credit monitoring fees, and other related costs. They may also receive “extraordinary reimbursement” of up to $5,000 for less common, well-documented out-of-pocket monetary losses.

The claims deadline is June 22, 2021—so act quickly to file a claim.

About Consumer Action

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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 both in 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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