Released: November 01, 2015

Consumer Action INSIDER - November 2015

Table of Contents

• What people are saying
• Did you know?
• An open house meet-and-greet at our San Francisco office
• Out and About: Prestigious awards and postal banking
• Hotline Chronicles: Internet ‘speed’ slower than promised
• Coalition demands accountability in T-Mobile, Experian breach
• Weighing in on discounted phone programs
• Consumer Action hosts auto insurance trainings in three states
• Coalition Efforts: Protect retirement savers, prevent financial fraud
• CFPB Watch: Redlining, forced arbitration and student loan servicing
• Class Action Database: One bank’s property inspections go too far
• About Consumer Action

What people are saying

Consumer Action’s recent "Economic survival for servicemembers and veterans" roundtable in San Antonio, TX was one of the best trainings I have ever attended. The information and presenters were awesome. — Elizabeth Contreras, Housing and Community Services, Inc.

Did you know?

Medical identity (ID) theft is a crime where someone uses your identity and/or insurance information in order to receive medical care or make false health insurance claims. The crime can expose you to medical risks because the imposters may seek treatment for conditions and diseases you don’t have. If this information is added to your medical record, it could result in errors in your care. The World Privacy Forum, a leading non-profit expert on medical ID theft, offers a collection of guides to help you prevent medical ID theft and steps you can take to recover if you’ve been victimized.

An open house meet-and-greet at our San Francisco office

On a sunny afternoon in October, Consumer Action welcomed guests at an open house at its new office in San Francisco’s Civic Center area. Consumer Action’s Los Angeles staff had a chance to mingle with attendees before traveling to nearby Oakland to hold a training session on our Economic Survival Guide for Servicemembers and Veterans. Other work-from-home staff dropped in as well to see the new headquarters, reconnect and enjoy crudités and other snacks from the adjacent Civic Center Farmers Market.

Consumer Action donors, volunteers, government agencies, community partners and neighbors also attended. Many of these familiar faces have been volunteering and supporting Consumer Action since the 1980s. At the open house, they enjoyed recollecting past Consumer Action campaigns that they were involved in and even the time spent together mailing out Consumer Action’s printed newsletters and other materials (long before the existence of online publications and email delivery).

The open house also allowed community partners like Cameron House, Mercy Housing, the Chinese Newcomer Service Center and the Southeast Asian Community Center to meet the staff and check out new multilingual publications.

With the new office so close to government agencies, employees from the nearby San Francisco Public Library and the Mayor’s Office of Housing and Community Development also attended.

“It was wonderful seeing folks we work with in the community and old friends of Consumer Action,” said Ken McEldowney, Consumer Action’s executive director.

Out and About: Prestigious awards and postal banking

Each year, the National Consumers League (NCL) holds its Trumpeter Awards ceremony to honor advocates who have committed their lives to raising the voices of and improving conditions for consumers and workers. One of Consumer Action’s key advocacy allies, DC-based NCL, is the “grandma” of all consumer groups—it was founded in 1891.

NCL presented Senator Amy Klobuchar (D-MN) and Federal Trade Commission Chairwoman Edith Ramirez with the awards while a crowd of more than 100 enthusiastic attendees cheered them on.

“The Trumpeter Award is NCL’s highest honor,” said NCL Executive Director Sally Greenberg. “Senator Klobuchar’s leadership on regulation to strengthen consumer product safety legislation, on ensuring a fair and competitive marketplace, and increasing accessibility to communications, specifically in the wireless space, made her a perfect candidate for the award.”

“Chairwoman Ramirez was chosen for her tireless efforts to combat deceptive debt collectors and advertisers, to ensure the privacy and security of consumer data and to promote competition in the marketplace,” added Greenberg.

NCL also honored Maria Elena Durazo, UNITE HERE! union vice president for civil rights, diversity and immigration, with the Florence Kelley Consumer Leadership Award, named after an early leader of NCL.

"I accept this award on behalf of brave hotel and food service workers. Now more than ever, America’s working families need allies and advocates who help give them peace of mind, ensure a fairer marketplace and workplace, and provide the security that will allow our economy to thrive in ways that benefit all—not just businesses, but also the workers whose blood, sweat and tears make them successful,” said Durazo.

Postal banking. “There are banking deserts all around our country,” associate professor Mehrsa Baradaran told a crowd at AFL-CIO headquarters last month. Consumer Action attended the University of Georgia Law professor’s event, during which she explained that “fringe” lenders, such as payday lenders, step into these banking deserts “charging heavy interest that crushes the poor.”

She went on to tell the audience that the banks—which are heavily subsidized by the U.S. government through both FDIC-insured deposits and recent bailouts—are supposed to serve all people in an equal manner. Unfortunately, low-income consumers get the short end of the stick. The average underserved household spends more than $2,400 a year (about 10 percent of their income) on fees for financial services, according to the CampaignforPostalBanking.org.

Baradaran’s solution to this financial inequity: Support postal banking. She made the case that, with more than 30,000 post offices located across the country, offering basic banking services through the post office would meet the needs of the millions of low-to-moderate-income consumers who are unbanked and unwanted by most banks. She assured attendees that postal banking would focus on paycheck cashing, remittances, savings accounts and small dollar loans and would not compete with traditional banks. Consumers with more than a $500 deposit could go on to “graduate” to a traditional bank or credit union for further financial services.

Postal banking is commonplace worldwide and was available at post offices in the U.S. until the 1960s. The U.S. Postal Service’s Inspector General released a white paper last year calling for a return to postal banking to meet the needs of cash-strapped consumers.

Baradaran is the author of a new book about the economic challenges faced by low-income families called “How the Other Half Banks.”

Hotline Chronicles: Internet ‘speed’ slower than promised

Filipa* of Walnut Creek, CA contacted Consumer Action’s hotline to say she pays for the fastest Internet broadband service offered by her cable company, which claims to deliver up to 50 megabits per second (mbps). “But I’ve speed-tested my connection and never found more than 30 mbps,” she said.

Filipa lamented that when she calls the cable company they typically run through a bunch of fixes that don’t work before concluding that she’ll have to pay to have them come out for a service visit. “It’s just one big runaround,” added the frustrated consumer.

Consumer Action’s hotline counselors advised Filipa to complain to the Internet service company (ISP) headquarters and to the California Public Utilities Commission. You can find contact information for your state’s utilities commission at the National Association of State Utilities Commissioners.

Many of us are frustrated by clunky Internet connections in our homes and offices. While Internet connectivity issues can be caused by a multitude of factors (and are, therefore, quite complicated to address), Consumer Action believes that consumers should know the speed they’re getting and, if it isn’t adequate, they should call the ISP or manufacturer of the Internet modem, wireless router or other equipment involved.

You’re not alone if your advertised speed doesn’t live up to the hype. The Federal Communications Commission (FCC) says that Internet connections built over copper phone lines (DSL) lag behind cable and fiber broadband connections when it comes to download speeds. Earlier this year, the agency updated its broadband benchmark speeds to 25 mbps for downloads. (“Upload” speeds tend to be much lower—the FCC set its upload speed benchmark at just 3 mbps.)

Regardless of how you’re connecting to the Internet, the speed advertised by providers is not guaranteed (and it’s usually the maximum you could get, not the average speed). To make matters worse, you may not benefit from advertised speeds, or even near them, if you are connecting your device via a wireless (Wi-Fi) router as opposed to an Ethernet cable running from your Internet modem to your device (hardwired).

If you’re concerned about your speed, you can test it at Netmeter. We recommend testing throughout the day and keeping notes on what you find.

Most speed tests advise testing computers on hardwired connections rather than Wi-Fi to get the maximum speeds. It may be useful to test both ways. If you find your speed is poor on Wi-Fi, but good when directly plugged into the modem, your wireless router may be to blame. If the router is newer, call the manufacturer to go over the settings. If the router is older, you may need to pay the manufacturer for customer assistance—or buy a new router.

If you find the speed is poor when you’re hardwired, call your ISP. Chances are you’re paying to lease a modem from them. If you continue to have problems, even if you don’t pay to lease, ask the ISP to replace the modem with more modern equipment.

A few other issues can affect Internet speed as well. Mobile broadband is not consistent everywhere and ISP service can vary by type of connection, how many other customers are nearby and the time of day. If necessary, ask your ISP to show you how to log into your modem and adjust its settings. Most newer modems can be configured into two networks, 2.4GHz and 5GHz. The latter network may be more efficient at home, especially for playing video and gaming, because it’s less congested and can transmit higher amounts of data.

Another key issue is password protection. It’s important to make sure that your Internet modem and wireless router are protected. If you leave your Wi-Fi connection open, unauthorized users can piggyback on it, which can jeopardize the security of your equipment and information as well as degrade your speeds.

Finally, if you are a heavy Internet user (for instance, streaming movies or playing video games), you may be subject to “throttling.” This occurs when providers of mobile data use “network management” to slow down those heavy users who are still fortunate enough to have “unlimited” data plans. Similarly, modem-based ISP service may come with contract terms notifying users that connections can be slowed or blocked when necessary to manage Internet traffic.

As Filipa noted, she pays for the speediest Internet connection offered by her cable company. If you don’t have the fastest package, or you have DSL, consider upgrading your package or switching to a cable or fiber optic provider, which tend to have faster connections.

*Not this consumer’s real name

Coalition demands accountability in T-Mobile, Experian breach

Consumer Action recently joined a coalition of more than 200 consumer, civil rights and data privacy groups in sending a letter to the chairs of the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) urging them to take immediate action in the wake of the Experian data breach of T-Mobile customer data.

On Oct. 1, news broke that hackers had stolen the Social Security numbers, home addresses, birthdates and other personal information of 15 million T-Mobile users through Experian’s server (T-Mobile had entrusted Experian with the data for the purpose of customer credit checks).

The coalition is calling for a federal investigation into the privacy hack to determine the conditions surrounding the breach, the extent of the breach and its impact on consumers. Experian is currently claiming that only T-Mobile’s records were breached (because it houses T-Mobile data on a separate server). If this is the extent of the breach, it still impacts approximately 15 million consumers.

The coalition, however, fears that not only T-Mobile but also Experian—which is a huge, nationwide consumer reporting agency—may have been affected by the breach. The advocates wrote in their letter that a “security breach that affected Experian’s credit report files would be a terrifying and unmitigated disaster” since Experian holds data on over 200 million consumers.

The coalition is also requesting that the companies offer free security freezes to all affected customers (a sensible move that would prevent stolen customer data from being used by identity thieves). Signers also urged Experian to remove a mandatory arbitration clause from its credit monitoring agreement (a provision that further victimizes consumers by depriving them of their right to bring court actions against the company).

Fortunately, it appears that Congress, led by ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs U.S. Sen. Sherrod Brown (D-OH), has started to demand answers from Experian.

At least five federal class action lawsuits have been filed against Experian and T-Mobile alleging negligence and violations of consumer protection laws.

Weighing in on discounted phone programs

Consumer Action has long been an advocate for the California LifeLine telephone subsidy program, which, along with the federal Lifeline program, provides discounts on phone service for the state’s low-income residents. As such, we actively educate consumers on the program so that eligible households can take advantage of the subsidies available to them.

We also work to protect and improve the program. Consumer Action’s executive director, Ken McEldowney, serves on the Federal Communications Commission (FCC) advisory board that provides recommendations regarding the Lifeline program as well as other telecommunications issues. (The federal program is spelled without the second capital L in LifeLine.)

In August, Consumer Action staff updated our free California LifeLine guide to reflect important changes in program benefits and rules, eligibility requirements and carrier contact information. This publication helps California consumers determine if they are eligible for state LifeLine, discover their appropriate service provider and/or program administrator contacts, choose the subsidized telephone service plan that best fits their needs, apply for the program and make sure they continue to qualify for the program.

Key changes include::

• Removal of the price caps of $3.66 for measured service and $6.84 for flat rate service on landline accounts;
• Removal of the discount (of up to $39) on a wireless service connection (although wireless providers may offer a free mobile phone and/or cost-free connection independently);
• The addition of a new online tool that enables consumers to search (by ZIP code) for California LifeLine service providers that serve their area and, in the case of wireless service, lists providers’ plan(s), minutes, text messages, data offered and prices;
• An update of annual income limits (effective 6/1/15 through 5/31/16); and
• The addition of a section explaining that consumers may receive Lifeline discounts on either a landline or a wireless phone—not both.

This last change was made in part to address an issue that was brought to the attention of Consumer Action community outreach manager Jamie Woo in March. One of our community partners, the Chinese Newcomers Service Center of San Francisco, reported that it had received dozens of complaints from consumers in the City’s Chinatown neighborhood. These consumers had been offered free cell phones and told they could sign up for wireless California LifeLine service on the spot as long as they had a Medi-Cal health care card. Landline Lifeline subscribers who accepted the offer soon found their landline removed from Lifeline and billed at the regular, non-discounted rate. While they could cancel their wireless Lifeline account to get their landline discount back, they would be out the cost of the early termination fee on the wireless account and the reconnection fee on the landline account. Consumer Action alerted the California Public Utilities Commission (CPUC) to the issue and they added a section to their materials to address the problem.

On Aug. 31, just a few days before Consumer Action’s updated guide was made available, we also submitted comments to the FCC in response to the agency’s invitation for feedback on proposals to expand the Lifeline subsidy to include broadband (high-speed Internet) service and to pay the subsidy to individual consumers each month rather than directly to carriers.

In the comments, McEldowney:

• Reiterated the value of federal Lifeline telephone service for its ability to give program participants access to job opportunities, healthcare providers, social services, educational programs, caregivers and family.
• Agreed that expanding the Lifeline program to subsidize broadband services is essential to leveling the playing field for school children living in poverty; enabling low-wage workers to enhance their job skills and/or continue their education; and providing an accessible way for seniors, veterans and people with disabilities to interact with government and social programs and avoid isolation. (Nearly 30 percent of Americans don't have broadband at home and low-income consumers disproportionately lack access.)
• Recommended that the FCC implement a broadband plan through a phased-in approach to smooth out any “bumps” in implementation; that it allow for maximum consumer choice and opportunities in the marketplace; and that it set up a separate broadband subsidy program so that low-income households do not have to choose between telephone service and high-speed Internet.
• Raised concerns about the amount of the subsidy and whether it would be sufficient to increase broadband adoption among low-income consumers, as well as the concept of a voucher/PIN system and how that might negatively impact program cost and participation.

Click here to read Consumer Action’s letter to the FCC in its entirety.

On Sept. 30, Consumer Action submitted reply comments to the FCC reiterating our concerns with its recommendations to transition the Lifeline program to a direct benefit or voucher system. We also voiced concerns with the FCC’s proposal that participation in the Supplemental Nutrition Assistance Program (SNAP) be the only way applicants could qualify for Lifeline and that SNAP serve as the conduit for distributing Lifeline benefits directly to program participants. As stated in our reply, “We think these proposed reforms would hurt millions of low-income consumers who need and would otherwise qualify for and benefit from the program, especially veterans and older adults.”

According to recent estimates, three in five Lifeline-eligible elderly individuals do not participate in SNAP. Moreover, roughly one million of the nation’s poorest people will lose their SNAP benefits over the course of 2016 due to the return (in many areas) of a three-month limit on benefits for unemployed adults aged 18-50 who aren’t disabled or raising minor children. Linking Lifeline to SNAP would cause these individuals to lose two vital programs at once. Separate from this issue, in the absence of any evidence to the contrary, we remain unconvinced that a voucher system for distributing Lifeline benefits would be technically feasible, reduce program costs or be easy for participants to use.

Policymakers and advocates do not expect the FCC to act in this proceeding until the first quarter of 2016 at the earliest. In the meantime, Consumer Action has offered to be available to meet with commissioners and others at the FCC as it moves forward in the rulemaking process.

Click here to read Consumer Action’s reply comments to the FCC in their entirety.

Consumer Action hosts auto insurance trainings in three states

Consumer Action’s Auto Insurance module explains the importance of having adequate auto insurance and prepares drivers to determine what coverage they need, shop for insurance, manage their auto insurance costs, and obtain help if they have trouble getting coverage or are dissatisfied with how their claim is handled.

Consumer Action trainers Nelson Santiago and Linda Williams were back on the road in August and September to introduce the module and conduct auto insurance trainings for staff and volunteers of cooperative extension programs, credit counseling agencies, housing counselors, immigrant and social services, and faith-based community groups in Alabama, Massachusetts and Minnesota.

Williams kicked off the trainings with a session on engaging the adult learner (key when it comes to complicated topics like insurance). Williams identified various learning styles and stressed the importance of piquing the learner’s interest, challenging them, providing interactive games and activities and entertaining them. Williams incorporated all of the recommended learning styles in her own training, demonstrating the use of videos to enhance her presentation and encouraging attendees to work in groups on various interactive projects.

Williams and Santiago had the participants work in teams on a true-or-false activity called Myths and Facts Regarding Auto Insurance. The activity helped the trainers gauge how much attendees knew about auto insurance coming into the training. The participants had a great time working in teams to answer auto insurance questions.

“It was nice to see the camaraderie amongst the team members, as well as the competitive edge. It kicked the training up a notch,” Santiago said.

Santiago went on to teach attendees why consumers need insurance, the various types of insurance, how to determine needs, why good credit matters and how to shop for insurance. He also outlined how poor credit could almost double what a consumer pays in premiums.

Santiago provided great insight into the importance of selecting a policy, explaining that consumers can save as much as 32 percent if they shop around. Santiago also told participants about the various factors that drive premium costs up, including driving record, usage, coverage, deductibles, vehicle type, age and gender, residential location, marital status and credit score.

Santiago had the participants engage in an activity where they examined five vehicles and ranked which were the most and least expensive to insure. After the participants ranked the vehicles, he discussed why each vehicle received its specific ranking. For example, a sporty convertible would be more expensive than a minivan to insure because of expensive repairs, more vandalism and more theft. The minivan would be less expensive because it has more safety features and (presumably) gets better mileage.

Williams then went on to tell participants about the two major sources of auto insurance loss reports: the Comprehensive Loss Underwriting Exchange (CLUE) and Insurance Services Office, Inc. (ISO). Underwriters look at the reports generated by these companies to determine rates and coverage, and the information contained in each report stays on a consumer’s record for five to seven years. Consumers may obtain one free copy of these reports annually, dispute inaccuracies and, in the event that an entry cannot be removed, have the right to submit a 100-word statement providing their side of the story.

Williams concluded the training by discussing policy cancellation and how to manage premium costs. Consumers have a right to cancel their insurance policy at any time, but Williams advised participants not to cancel a policy before they have another because the lapse could cost the consumer more money. Williams also covered reasons why an auto insurer might cancel a policy, including fraud, false information, non-payment and driver’s license suspension. She also provided tips to manage consumer costs, including shopping around and increasing your deductible.

Community groups that are interested in including the Auto Insurance module in their education programs may download it for free or order free printed copies of the multilingual publications, in bulk.

Coalition Efforts: Protect retirement savers, prevent financial fraud

“Coalitions are the lifeblood of our advocacy efforts,” says Linda Sherry, who heads up Consumer Action’s DC-based team. “When we struggle alongside other organizations with similar goals, our impact to improve the lives of consumers through regulation and legislation grows exponentially.”

Here are some of the group efforts we’ve been involved in lately:

Financial professionals should act in their clients’ best interest. Consumer Action joined coalition advocates in urging Congress to vote “no” on the deceptively named “Retail Investor Protection Act” (HR 1090) when the bill came up for a vote in the Financial Services Committee. HR 1090 is an attempt to cripple and delay the Department of Labor’s ability to implement protections for retirement savers. It would do so by stopping the Department of Labor from finalizing its pending fiduciary-duty rulemaking until the Securities and Exchange Commission first passes a fiduciary-interest rule, which could take months if not years. (Unfortunately the bill subsequently passed the committee by a vote of 34-25, so we’ll be working to keep it from advancing.) Learn more and read the letter.

Payment processors can play a key role in mitigating fraud. With the increasing role of electronic commerce and the alarming escalation of data breaches, stronger efforts to deter, detect and remedy fraud are needed. Payment processors (also called third-party senders) play a key role in many fraudulent schemes by enabling scammers to take unauthorized and fraudulent charges from consumers’ accounts. Coalition groups called for strong registration requirements and enforcement tools to help NACHA (the National Automated Clearing House Association) protect consumers with strong anti-fraud controls. Learn more and read the letter.

CFPB Watch: Redlining, forced arbitration and student loan servicing

In our regular CFPB Watch feature, we detail recent actions taken by the Consumer Financial Protection Bureau to protect consumers. This month’s roundup outlines the Bureau’s work to combat a discriminatory practice known as redlining; ban forced arbitration (which corporations use to keep consumers from engaging in lawsuits against them); and set unhelpful student loan servicers straight.

Action to resolve redlining allegations. Redlining is the practice of carving out neighborhoods to not lend to based on the race or ethnicity of the people living there. Recently, the CFPB and Department of Justice accused Hudson City Savings Bank of doing just that by illegally denying Black and Hispanic consumers access to mortgages in New York, New Jersey, Connecticut and Pennsylvania. According to regulators, the bank systematically avoided locating branches and loan officers in majority Black and Hispanic communities and excluded these neighborhoods from its marketing plans and its loans.

To resolve these redlining allegations, the agencies ordered Hudson City to pay $25 million in loan subsidies to provide the residents with more affordable loans than would otherwise be available. The subsidies can be used to help reduce interest rates, closing costs and downpayments.

“[This] action seeks to remove the redline by bringing…mortgage subsidies and outreach programs, along with new bank branches to the communities who should have had access from the beginning," CFPB Director Richard Cordray said.

The bank must also spend an additional $2.25 million to promote itself to minority neighborhoods (through advertising, outreach, local partnerships and consumer education) in order to generate mortgage applications from the communities and, ultimately, provide access to home loans. Finally, Hudson City has been ordered to open two new full-service branches in Black and Hispanic neighborhoods.

Arbitration and class action bans. Forced, or mandatory, arbitration is a bad thing for consumers. It makes them give up their rights to sue a company that does them wrong. Frequently, companion clauses restrict consumers’ rights to join class actions (class action bans). Corporations impose these clauses on consumers so that, instead of having access to a fair courtroom trial, they are forced to engage in the arbitration system—a private, secret and binding system without a judge, jury or right to an appeal. You may not know it, but your cell phone, credit card, student loan and bank account contracts probably contain these prohibitive clauses.

Outcomes of forced arbitration cases historically favor the corporation over the consumer, and rarely are arbitration cases initiated by consumers. See the CFPB’s own arbitration study released in March. (Read a fascinating study by the Center for Justice and Democracy looking at the outcomes of cases tossed out of court because of forced arbitration clauses and class action bans.)

Fortunately, the CFPB has proposed banning companies from forcing consumers to waive their right to participate in a class action lawsuit. And while the CFPB has said it would not prohibit the use of mandatory arbitration for individuals, it would require that companies report the results of arbitration cases to the Bureau and possibly to the public.

Consumer Action welcomes the CFPB’s consideration of a rule that would prohibit companies from barring their customers from joining class action lawsuits. “We also strongly support the CFPB’s plan to require companies that use forced arbitration to report dispute outcomes and we encourage the Bureau to make the results public on its website,” said Ruth Susswein of Consumer Action. “We hope such scrutiny will someday result in an outright ban on forced arbitration and a change in contracts of adhesion, in which consumers have no choice.”

Student loan servicing failures. Tens of thousands of student loan borrowers reported widespread loan servicing failures to the CFPB this year. Loan servicers collect borrowers’ monthly payments, manage their accounts and arrange for loan modifications and deferments.

Students complained to the CFPB about a variety of servicer roadblocks that affected their ability to repay their federal and private student loans and, ultimately, contributed to many ending up in default. The borrowers reported servicers’ losing loan documents, misapplying payments and making it difficult to correct payment processing errors. Borrowers at risk of default also reported having trouble accessing affordable repayment plans. These complaints, along with the Bureau’s own investigations, led the CFPB to conclude that student loan servicing problems are pervasive.

What’s more, a recently released Bureau report revealed that a vast majority of students in or near default could have benefited from income-based repayment plans. These plans allow borrowers with low income or high debt to pay less toward their loans each month until their finances improve. However, many borrowers had never heard about these repayment options.

To address these chronic problems, the CFPB has recommended that:

• Loan servicers be held accountable for resolving errors and providing adequate customer service;
• Servicers provide accurate, timely information about alternative repayment options; 
• Outcomes of alternative payment plans be disclosed; and 
• Consistent student loan servicing standards be created.

Class Action Database: One bank’s property inspections go too far

Consumer Action added 11 new cases to our Class Action Database in October. One notable case is Young v. Wells Fargo & Co.

The plaintiffs in this case filed a class action against Wells Fargo claiming that Wells Fargo’s property inspection policies for mortgages violated both California’s Unfair Competition Law and the Racketeer Influenced and Corrupt Organizations Act. Plaintiffs alleged that Wells Fargo unnecessarily ordered property inspections when borrowers fell behind on mortgage payments by 45 days or more and continued to order property inspection every 25 to 30 days for as long as the borrowers remained delinquent. Additionally, the property inspection fees were disguised as “other charges” on the borrowers’ mortgage bills.

Wells Fargo argued that its property inspection policies were reasonable and necessary but agreed to a settlement to avoid the burden, expense and risk of continuing the lawsuit.

Eligible class members are borrowers who have or had a mortgage serviced by Wells Fargo and owe or paid a property inspection fee assessed between August 1, 2004 and December 31, 2013. The settlement is in the form of a $22.5 million cash fund. Class members are divided into three categories: 1) Active loans: Loans with an unpaid principal balance greater than zero; 2) Paid-in-full loans: Loans paid in full by the borrower; and 3) Post-sale loans: Loans where there was a foreclosure sale, short sale, deed-in-lieu or charge-off.

Class members who are in the active and paid-in-full categories will automatically receive payment. Class members in the post-sale category must provide proof of the property inspection charges and file a claim before the deadline. The claims deadline is March 16, 2016.

About Consumer Action

Consumer Action is a non-profit 501(c)(3) organization that has championed the rights of underrepresented consumers nationwide since 1971. Throughout its history, the organization has dedicated its resources to promoting financial and consumer literacy and advocating for consumer rights in both the media and before lawmakers to promote economic justice for all. With the resources and infrastructure to reach millions of consumers, Consumer Action is one of the most recognized, effective and trusted consumer organizations in the nation.

Consumer education. To empower consumers to assert their rights in the marketplace, Consumer Action provides a range of educational resources. The organization’s extensive library of free publications offers in-depth information on many topics related to personal money management, housing, insurance and privacy, while its hotline provides non-legal advice and referrals. At Consumer-Action.org, visitors have instant access to important consumer news, downloadable materials, an online “help desk,” the Take Action advocacy database and nine topic-specific subsites. Consumer Action also publishes unbiased surveys of financial and consumer services that expose excessive prices and anti-consumer practices to help consumers make informed buying choices and elicit change from big business.

Community outreach. With a special focus on serving low- and moderate-income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of nearly 7,000 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.