Released: September 30, 2018

Consumer Action INSIDER - October 2018

Table of Contents

• What people are saying
• Did you know?
• Consumer Action, NEFE make it easy to evaluate financial ed programs
• For Consumer Action staff, no time to ‘sit back and unwind’
• Hotline Chronicles: Questions about recurring charges
• Coalition Efforts: ‘No’ to CFPB nominee, excessive airline fees and more
• CFPB Watch: Natural (and other) disasters
• Class Action Database: ‘SmartLease’ program foolishly overcharges
• About Consumer Action

 

What people are saying

I truly enjoyed Consumer Action’s Money Management 1-2-3 training. I highly recommend it, as it covers everything from banking to credit to estate planning and beyond. I work with a variety of individuals and families in different financial states, and this training gave me the tools to help my clients at any stage and the practical advice to empower them to reach their financial goals. — Adelaide Hsu, Family Self-Sufficiency and Continuum of Care Program Coordinator, City of Pomona

Did you know?

You can check the background of an investment professional using the Investment Adviser Public Disclosure website. Run by the Securities and Exchange Commission (SEC), the site offers visitors information on specific investment professionals’ backgrounds, including their registration status; customer complaints made against them; regulatory actions, arbitrations and certain civil or criminal cases they’ve been involved in; and their employment terminations and bankruptcy filings. You can also research investor adviser firms and brokerages on the site, and it even offers a technical assistance phone number if you get stuck: 240-386-4848. (Depending on the results, you may be forwarded to FINRA’s BrokerCheck website.) Do not invest any money until you have visited the Investment Adviser Public Disclosure website!

Consumer Action, NEFE make it easy to evaluate financial ed programs

Consumer Action and the National Endowment for Financial Education (NEFE) joined forces in late August to educate our network partners on NEFE’s Evaluation Toolkit® and other NEFE resources. More than 40 CBO partners participated in the webinar program, which was facilitated by Peggy Muldoon, director of consumer education at NEFE.

In the two webinars, Muldoon provided an overview of NEFE, including its history and the myriad of non-commercial, unbiased and evidenced-based financial education resources it provides to consumers (from high school-age to adults), educators, community partners and researchers. Muldoon also presented the latest iteration of NEFE’s Evaluation Toolkit®. The toolkit enables financial educators to design evaluations that help to demonstrate the impact and effectiveness of financial instruction.

NEFE developed the Evaluation Toolkit® in 2014 and released an updated version this summer. Consumer Action introduced it to our network affiliates shortly after the release (via webinar).

“The current iteration of Evaluation Toolkit® is much more robust than the previous version. Community educators who are hesitant to evaluate their financial education programs can rest assured: The toolkit does all of the difficult work for them, “said Consumer Action Associate Director of Outreach and Training Audrey Perrott.

Muldoon pointed out that many financial educators perceive evaluation to be a scary prospect. But, she warned, a financial educator without an evaluation measurement is like an explorer without a compass. Financial educators need to evaluate their programs for a number of reasons, including: documenting findings for accountability purposes; fostering sustainability of the programs; identifying effective practices in financial education; building a shared meaning of program effectiveness (internally and externally); and generating knowledge of the programs. To engage webinar attendees, Muldoon had them type in which of the reasons resonated with them.

Muldoon covered when to evaluate a financial program as well, laying out the reasons to do so before the program (pre-test), immediately after the program (post-test), and once a short amount of time has passed after the program ends (in order to evaluate long-term changes).

The toolkit includes an evaluation manual (for case managers) and an evaluation white paper (for researchers). Muldoon encouraged attendees to visit the toolkit website and to create a free account. (The only information required is a name, email address and profession.)

The new toolkit is also much more user friendly. It enables educators to: select from a question bank of over 800 questions or input their own evaluation questions; use an existing template or create a custom template for evaluations; email evaluations to learners; create a custom “thank-you” message for learners; track progress over time; view evaluations online or in print; and score evaluations. Currently, the templates are designed for NEFE’s high school financial education curriculum. In the next few months, however, NEFE will be adding additional evaluation templates for various age groups and levels of financial education.

To learn more about NEFE and its resources, visit the NEFE website.

For Consumer Action staff, no time to ‘sit back and unwind’

“Summer summer summertime, time to sit back and unwind.”

When Will Smith penned those lyrics he certainly wasn’t referring to Consumer Action’s outreach and training managers Linda Williams and Nelson Santiago, who, over the summer, visited three states within two months to educate 100 community-based organizations on the organization’s three most popular training modules: Money Management 1-2-3; A Guide to Finding the Right Job Training School; and Insurance in the Sharing Economy.

In June, Santiago and Williams delivered Money Management 1-2-3 to a packed audience in Riverside, CA. The goal of the educational module is to prepare financial educators to help consumers better understand the impact that certain life changes can have on their finances. The module also educates them on how to develop a plan that will assist consumers in managing their finances at each stage of life. The module is titled “1-2-3” because it covers three stages:

1) Establish financial goals and build a strong financial foundation.
2) Maintain progress through budget updates, the accumulation of a nest egg and the protection of one’s assets.
3) Look to the future (e.g., create and implement a plan for retirement).

The training featured guest speaker Aeyoung Kim of the California non-profit Housing and Economic Rights Advocates (HERA). Kim gave an engaging session on estate planning, explaining to the audience that ensuring your wishes are carried out in the event of your death or incapacitation is not just for the rich and famous—it’s a crucial step in financial planning.

Ric Lugo, center manager for the Cal State San Bernardino Reentry Initiative, applauded the comprehensive training, saying: “I cannot thank Consumer Action enough. Our client population consists of those who are returning to our community following incarceration. Many of them struggle with establishing themselves financially and becoming self-sufficient. The materials and resources provided by Consumer Action have greatly assisted these clients in so many ways.”

Santiago and Williams next hit the Windy City on July 20 to present Consumer Action’s job training educational module. The module was developed for community advocates to use in helping students find and choose the best vocational training program without exposing themselves to scam for-profit schools (and the often unmanageable debt that follows). The training proved to be very timely as it coincided with the U.S. Department of Education’s push to repeal its borrower defense and gainful employment rules (which were put in place to protect students defrauded by for-profit schools).

Finally, Santiago and Williams rolled out the Insurance in the Sharing Economy module in Atlanta. The widely-attended training provided grassroots advocates with the tools to educate those participating in Atlanta’s booming sharing economy on their liability and how to protect themselves with the right insurance coverage when providing goods or services through a peer-to-peer platform. This includes driving for Uber or Lyft; hosting paying guests in one’s home through a service like Airbnb; hiring oneself out to complete projects via an app like TaskRabbit; selling crafts, etc. over Etsy or other e-commerce sites; and engaging in other peer-to-peer transactions.

Jasmine Burke, a housing counselor with the Partnership for Families, Children and Adults in Chattanooga, TN, applauded the training, saying: “It was super informative and opened my eyes to a market that I engage in everyday. I am a certified credit and housing counselor and I plan to share this information with my clients in hopes that they will be better prepared in protecting themselves from shared economy liabilities.”

Hotline Chronicles: Questions about recurring charges

Consumer Action has noticed a few complaints to our advice and referral hotline in the past few weeks from people who have had difficulty cancelling subscriptions and services.

Certain companies might require that you agree to automatic, recurring charges on your payment card. If not, instead of using a card to pay with, consider using online bill payment linked to your checking account to automate payments in order to make it simpler to end them when you cancel a service.

While most companies and apps make it easy to cancel, others force consumers to jump through hoops. If you don’t keep an eye on your credit or debit card bills, you could go several months, even years, without realizing you are paying for a subscription or service you don’t use or need.

Another way people subscribe to things they might forget about is through “free trial” offers that require you to provide your payment card information to the company. Unless you cancel in time, you can be billed when the free period ends. (See Hotline Chronicles: ‘Free trials’ can be very expensive.)

Not only do recurring charges add up, it can be difficult to get older charges removed if you wait too long. To cancel, first try contacting the company or app provider that’s charging you. If your cancellation request doesn’t take effect quickly, consider disputing the transactions with your bank or payment card provider.

There are now companies and apps—some free—that can monitor your credit and debit card statements. One such firm, Trim, found that certain categories of subscription charges were allowed to linger longer: credit monitoring; health clubs; video and audio entertainment; digital services such as website hosting or blogging sites; and newspapers and magazines.

Keep a list of all the subscriptions you have. Review the list and your statements on a regular basis. Even if it takes effort, it can pay off to keep on top of recurring payments and cancel unwanted subscriptions. Consider that cancelling a subscription that costs $14.99 per month will save you close to $180 per year. Find more of them to cancel and the savings just keep growing!

Besides Trim, check out Clarity Money (iPhone and Android app), Truebill (iPhone and Android app) and Hiatus (iPhone app) to help you keep track of payments. If you are a Capital One cardholder, you’re automatically enrolled in a feature called Second Look from Capital One, which monitors users’ Capital One accounts for duplicate transactions and higher-than-usual recurring charges. Even though these are free services, read their privacy policies and make sure you are comfortable with how they will use any data they collect on you.

Coalition Efforts: ‘No’ to CFPB nominee, excessive airline fees and more

Senate should reject Kraninger for CFPB director. Eighty civil rights and consumers groups wrote to Congress urging a “no” vote on the nomination of Kathy Kraninger to head the Consumer Financial Protection Bureau (CFPB). Kraninger has no record of protecting consumers or standing up to powerful Wall Street special interests—a track record necessary for the role of the nation’s chief consumer advocate. The groups wrote that Americans deserve a consumer champion at the CFPB, not someone who will continue implementing CFPB Acting Director Mick Mulvaney’s anti-consumer agenda. Learn more.

Protect consumers from excessive airline fees. Consumer Action joined seven other coalition advocates in urging Congress to support the bipartisan FAIR Fees provision that was included in S. 1405, the Federal Aviation Administration (FAA) Reauthorization Act of 2017. Under the FAIR Fees provision of the bill, airlines would be prevented from charging flight change and cancellation fees that are unreasonable and disproportionate to the cost of providing the service. The Department of Transportation would also develop standards for helping assess the reasonableness of other common airline fees. (Update: Unfortunately, at press time, this provision was dropped from the current version of the FAA Reauthorization Act of 2017.) Learn more.

ED’s latest regulatory rollback favors scam schools over students and taxpayers. Consumer Action joined more than 60 organizations and advocates in submitting joint comments on the U.S. Department of Education's proposal to eliminate the gainful employment rule. The rule protects students and taxpayers from spending money on career education programs that do not prepare students for gainful employment (as required under federal law). The coalition urged the Department to abandon its proposal to eliminate the existing rule and instead start properly enforcing it. Learn more.

HUD’s disaster relief program is limited. In an official letter to the Department of Housing and Urban Development (HUD), advocates urged the federal agency to improve its efforts to expedite the process for home loan borrowers located in disaster areas to access loss mitigation. While a good start, the advocates pointed out that HUD’s Disaster Standalone Partial Claim program does not do enough for borrowers in disaster areas that have not yet fully recovered, and the program includes vague and unnecessary eligibility requirements that will impose barriers to loss mitigation. Learn more.

CFPB Watch: Natural (and other) disasters

The Consumer Financial Protection Bureau (CFPB) has compiled a list of resources to help the public prepare for, recover from and rebuild after a disaster hits. This information is also available in Spanish.

In preparing for a disaster, the CFPB recommends reviewing the Federal Emergency Management Agency (FEMA’s) Emergency Financial Aid Kit. In advance of an emergency or disaster, this kit covers everything from compiling and reviewing essential documents (like Social Security cards, wills and insurance policies) to creating a list of important contacts and medical and financial information.

Once disaster strikes, the Bureau offers a checklist to direct consumers in contacting home and auto insurers and alerting mortgage servicers, credit card issuers and utility providers.

The resources also cover rebuilding after a disaster and offer a variety of tips, including how to work with an insurance adjuster and how to detect con artists who opportunistically prey on disaster victims.

If you need help delaying mortgage or student loan payments, see the National Consumer Law Center’s mortgage relief guide and student loan debt relief fact sheet. NCLC provides a variety of disaster relief resources in both English and Spanish.

Pension advance loans lawsuit

The CFPB recently filed suit against a group of companies that make loans against a consumer’s future pension payments. The Bureau charged these companies with luring in vulnerable senior citizens and disabled veterans in need of fast cash. Consumers received lump sum payments of $100 to more than $60,000 from the companies in return for making monthly payments (to be automatically debited from their pensions or other recurring future income streams) over the next four to 10 years.

The suit against Future Pension Payments and about a dozen related companies (Cash Flow Investment Partners, LumpSum Pension Advance, etc.) charges that the companies misrepresented their pension advance products in stating that they were not loans, were not subject to interest and were cheaper than credit cards.

The Bureau says this is not true: The lump sum payment deals were in fact loans, charged interest and were more costly than credit cards.

Reconfigured advisory board light on consumer advisers

Acting director Mick Mulvaney abruptly and unexpectedly fired all 25 sitting members of the CFPB’s legally mandated Consumer Advisory Board (CAB) this summer. The CAB is required to meet twice a year to provide advice and guidance to the Bureau on topics that the agency addresses, including predatory lending and housing discrimination.

The new board looks very different, with only nine newly installed board members, who will serve a one-year term, down from three years. It has also been stacked with representatives from FinTech firms, with very few consumer advisers as members. The board is expected to deal with issues that the Bureau anticipates addressing in the year ahead. The CAB is one of four CFPB advisory boards; members of the Community Bank Advisory Council and the Credit Union Advisory Council were also replaced. The Academic Research Council is the only board left intact.

The first meeting of the new CAB was held on Sept. 27 at the CFPB’s headquarters in Washington, DC. The meeting will focus on financial technology.

Class Action Database: ‘SmartLease’ program foolishly overcharges

The settlement in a case alleging P.F. Chang’s China Bistro recorded California residents’ calls to the restaurant’s toll-free phone numbers without the callers’ knowledge or consent and another in a case accusing 3 Day Blinds of sending unauthorized advertising text messages were among nine new settlements added to the Consumer Action Class Action Database during September.

Of note this month is the class action settlement Schreiber v. Ally Financial, Inc.

The plaintiffs filed a class action against Ally claiming it violated the Federal Consumer Leasing Act and breached its lending contracts by failing to disclose in its leases that consumers would have to pay additional fees if they opted to purchase the leased automobiles.

Ally’s SmartLease program provides an option for the consumer to buy the car at the end of the lease term (for a set price) and lists official fees and taxes associated with the purchase. The SmartLease states that these fees/taxes include the governmental license, title, registration, testing and inspection associated with the car. Plaintiffs claimed that at the end of the lease term, however, Ally sold the car at a higher price than established in the SmartLease by including even more fees that were not listed.

For example, one SmartLease listed the automobile’s purchase price option as $21,367.50, plus official fees and taxes. The plaintiff was charged $21,221.44 as the cash price for the car, along with a $250 documentary fee (plus the official fees and taxes), resulting in the plaintiff paying $103.94 more than agreed upon in the SmartLease.

Ally has denied the allegations but says it has agreed to the $19 million settlement to avoid the burden, expense and risk of continuing the lawsuit.

Consumers who, between June 4, 2009 and June 18, 2018, were charged documentary or dealer fees in connection with the purchase option in Ally’s SmartLease may be eligible for reimbursement of up to 100 percent of the documentary/dealer fee.

The final hearing to approve the settlement is Oct. 11, 2018. The deadline to submit a claim is no later than 90 days after the effective date of the settlement.

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 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.