Consumer Action INSIDER - February 2022

What people are saying

I enjoy the content offered in free webinars. The topics are timely and the speakers are knowledgeable. I do presentations on consumer and Medicare fraud to older adults, so Consumer Action helps keep me aware of current issues. —Jennifer Pardini, Legal Assistance for Seniors and HICAP, Oakland, CA, via Consumer Action feedback survey

Did you know?

Data brokers are companies that collect, buy, aggregate and sell data about individuals and their internet-connected devices. They generally do not have customer relationships with the individuals whose data they trade in. The activities of data brokers, which include selling data to marketers and “people search” platforms, are generally unregulated, although some states have placed limits on some of their activities. A December 2021 report by the Center for Democracy and Technology highlights a concerning market for their data: federal agencies. Legal Loopholes and Data for Dollars looks at how law enforcement and intelligence agencies are spending millions of dollars to gain access to private sector databases that often contain very sensitive and very personal information about Americans, thereby evading requirements that they use a legal process, such as a warrant, to obtain data directly from service providers. If you find this objectionable, let your Congressmembers know, in your own words, by using our free webform.

New project, publications unpack California Consumer Privacy Act

By Monica Steinisch

Consumer Action and Consumer Federation of America (CFA) recently created a consumer guide for Californians about their California Consumer Privacy Act (CCPA) rights and how to exercise them. A webinar for consumer educators from community-based organizations, consumer and privacy groups, and consumer agencies that operate in California will also be offered later this year. The new resources, as well as a revealing survey, are part of the California Privacy Initiative, a project that Consumer Action and CFA launched with support from the Rose Foundation to educate Californians about the law and encourage them to exercise their CCPA rights.

All materials are available on both the Consumer Action website and the CFA website.

The CCPA, which took effect in January 2020, gives California residents important rights, including the right to see the personal information businesses have collected about them, the right to delete some of that information, and the right to ask businesses not to sell it. But a survey of Californians commissioned by Consumer Action and CFA revealed that while more than two-thirds of respondents had seen a notice about their CCPA rights on the websites of businesses they visited in the previous 12 months, many had not exercised the law’s three key rights, and the top reason given for not doing so was that they did not realize they could.

Other key findings from the survey of 1,507 California adults conducted in October 2021 include:

  • Nine out of 10 survey respondents said that businesses should be required to get their permission if they want to collect, use or share their personal information for any purpose other than to provide the product or service they requested.
  • Far more consumers knew that they could ask a business not to sell their personal information (largely because of the prominent notice required by the law) than knew they could ask to see the information collected about them or have it deleted.
  • Compared against the responses of older and White people, younger, Black and Hispanic Californians more frequently said they did not know they could make these requests. More survey respondents at the lower end of the income and educational scales also gave that reason for not making these requests.
  • Survey participants who did make these requests were not entirely satisfied with the businesses’ responses. Of those who asked to see or delete their data, 73 percent were very or somewhat satisfied with the responses; 71 percent of those who asked for their data not to be sold were very or somewhat satisfied with the responses. More than a quarter were not too satisfied or not satisfied at all.

Read an executive summary of the survey findings here. The full survey, with more details, is here.

The fact sheet, Take Action! Exercise your rights under the California Consumer Privacy Act, explains who and what is covered by the CCPA, describes how consumers can exercise their rights, and offers tips for keeping personal data under wraps. The publication is available for free download in English now. Spanish and Chinese versions soon will be available. The webinar for consumer educators is being planned for the spring of 2022.

Hotline Chronicles: Sharply higher charges from third-party power supplier

By Linda Sherry

New Jersey resident Jannos* accepted an offer from SmartEnergy, a company offering "affordable renewable energy" from environmentally friendly solar, wind, hydro and geothermal sources. In New Jersey and many other states, energy deregulation allows power customers to choose to purchase electricity supplied through third-party competitors (called “retailers”) instead of from their local, regulated utility company. Customers who switch receive power supplied by the third-party company but continue to pay their local regulated power utility for distribution services. According to a 2014 article in Mother Jones titled “Electric Shadyland,” the retailers are “middlemen who buy power in the wholesale market, largely from the same power plants once owned and operated by the monopoly utilities that were broken apart in the late 1990s and early 2000s. Retail firms then sell the electricity to consumers, delivering it via the transmission lines still owned by traditional utilities. All that really changes is the [supplier] name on your bill.”

Jannos (and many other consumers, as well) is far from happy with the arrangement. Jannos says that after making the switch from his regulated utility, PSEG, to SmartEnergy-supplied power, his bills went from around $60 per month to more than $200. When he signed up, he was attracted by an offer of a $100 gift card. Later, he says, he learned that he had to remain a customer for several months before he would receive the gift card. He also complained that it was difficult to cancel the service because he was locked in for a period. “When I complained, they said the terms were disclosed in the fine print provided during the application process.”

Deregulation of energy supplies promised more affordable power bills, but consumers who opt for third-party supply often find themselves facing higher bills. This might be acceptable to some consumers because they feel good about suppliers offering environmentally friendly sources. But to many, “affordable renewable energy” is far less affordable than sticking with their regulated power company. A Wall Street Journal investigation found that third-party suppliers charged more than regulated utilities in nearly every state where competitors operate.

Massachusetts Attorney General (AG) Maura Healey has called for an end to her state’s competitive market for residential electricity consumers. According to reporting by WBUR, Boston’s NPR station, “About 450,000 Massachusetts residents get their electricity from a competitive supplier, an option created under a 1997 law that deregulated the state's electricity generation industry.”

A report released by AG Healey found that Massachusetts electric customers who switched to a competitive electric supplier paid $426 million more than they would have had they stayed with their utility company from July 2015 to June 2020.

One of the traps cited by researchers is “auto renewal” contracts that bind customers to significantly higher rates than those charged by local, regulated utilities. The burden of the higher rates often impacts low-income consumers the hardest. According to Maryland Matters, the burden of that state’s electric deregulation law, which placed no limits on pricing levels and added fees, unfairly impacts Maryland’s low-income, urban households. Maryland Matters notes the electricity prices charged to low-income families by competitive energy retailers were 70% more that they would have paid if they stuck with the regulated utility.

Jannos told us he will go back to getting distribution and supply from his local regulated utility company as soon as he can exit the deal. We suggested that he submit a complaint to his public utility regulator just to register his frustration. (Find your regulator here.)

The National Consumer Law Center, which works on behalf of low-income consumers, argues that states should “end (or don’t initiate) individual competitive energy market for residential customers.”

Given all of this, Consumer Action can’t recommend going with an alternative retail supplier unless you prefer to pay more to encourage environmentally friendly power sources. If you are considering a switch, review the written terms and conditions of the contract before signing. Important information, such as the length of the contract, renewal provisions and early termination fees, is listed in the terms and conditions. Here is an example of questions to ask before signing up (for the first question, replace “Delaware Public Service Commission” with the name of your state’s utility regulator). Also check if your state, like some, gives you the right to cancel the contract within a few days if you have buyer’s remorse.

*Not this consumer’s real name

More people eligible for Earned Income Tax Credit this year

By Monica Steinisch

Consumer Action has just published an updated version of our Get Credit for Your Hard Work guide reflecting changes in eligibility criteria, income limits and credit amounts. The guide for the 2021 tax year (i.e., tax returns due in April 2022) is available for free download now in English, and will be available in Spanish, Chinese, Vietnamese and Korean by mid-February.

Widely considered the federal government’s most effective antipoverty program, the EITC puts money back into the pockets of qualifying low- and moderate-income workers when they file their tax returns. Qualifying workers can get the money even if they don’t owe any taxes—but they must file in order to claim the credit (even if their income is so low that they normally would not file a tax return).

Thanks to the American Rescue Plan Act, which included critical expansions of both the EITC and the Child Tax Credit, the changes this year are more significant than the typically minor annual income limit and credit increases. The provisions in the Act were designed to provide greater help to those experiencing the worst economic fallout from the pandemic.

The temporary changes include:

A much higher investment income limit. You now can have up to $10,000 in income from investments (stocks, mutual funds, etc.) and still be eligible for the EITC, up from $3,650 for the 2020 tax year.

Higher income limits for everyone—much higher for childless workers. While all of the income limits went up by a few hundred dollars, as is typical, the income limits for workers without children went up by thousands. Single workers without children who earned $21,430 or less (up from $15,820) and married couples who earned $27,380 or less (up from $21,710) in 2021 are eligible for the EITC. This makes the EITC available to many more workers, some who may never have qualified before.

Higher credits. Here, too, workers without children are the biggest beneficiaries. While the credits for workers with children have increased the typical annual amount (less than $100), the credit for childless workers is nearly tripled—$1,502, up from $538.

Separated couples are now eligible. Workers with “married filing separately” status used to be ineligible for the EITC. For the 2021 tax year, however, they are eligible as long as they meet certain requirements related to where their children (if any) live, where their spouse lives, and whether or not they are legally separated.

Carrying over from the 2020 tax year, the IRS is again allowing filers the option to figure the EITC using their 2019 earned income if it was higher than their 2021 income. For some workers, this will result in a larger credit, since the more you earn, while still remaining below the maximum, the higher your credit.

Given the financial repercussions of the pandemic for many low- and moderate-income workers—evictions, foreclosures, job loss, repossessions, etc.—it’s more important than ever that everyone who is eligible for the EITC file a tax return and receive the dollars that could help them get back on their feet.

Download the Get Credit for Your Hard Work (2021 Tax Year) fact sheet here. Community educators are welcome to reproduce and distribute the publication to their clients and community members.

New video educates consumers about COVID-19 vaccine fact and fiction

By Nelson Santiago

Are you and your community sick and tired of all things COVID? So are we. That's why Consumer Action is continuing to get the word out about the importance of getting vaccinated. Getting the vaccine not only protects you, but others in the community as well, and the more people who get vaccinated, the closer our country comes to building a defense against coronavirus. We've produced a new video to help dispel vaccine myths and to equip community educators with one more tool for use in their community education efforts.

Although vaccination rates have improved in the past months, vaccine hesitancy is still a problem in many parts of the country, and about a quarter of the population is still not vaccinated. A recent Kaiser Family Foundation report analyzed CDC data that showed that, as of Jan. 10, 74.4% of the U.S. population had received at least one dose of a COVID-19 vaccine. The KFF report noted that, amid the current Omicron surge, unvaccinated people are at particularly increased risk for infection, severe illness and death.

The need for continued community education about vaccines is clear and also supported by recent research. A study published last month by the American Journal of Infection Control found that characteristics of vaccine-hesitant individuals included racial minority status, age older than 65 years, children younger than 18 years in the household, and unemployment. The study also found that the lack of a high school education was the most important predictor of COVID-19 vaccine hesitancy in 3,142 U.S. counties. The report's authors recommended that policy makers and community leaders tailor vaccine information and efforts to those with limited education, and we're hopeful that our user-friendly vaccine education resources, including the new video, can be helpful in this effort.

The new Consumer Action video, available online in English and Spanish, is based on the Consumer Action fact sheet released last summer, Coping with COVID-19: Distinguishing between vaccine fact and fiction. Both the fact sheet and the video address vaccine misinformation and myths, including, for example, that the vaccine will give someone the coronavirus or alter their DNA.

The video is chock-full of colorful visuals and goes easy on text, while still delivering all the key points in the fact sheet, such as where to obtain the vaccine and tips for finding reliable sources of information. The video may be especially helpful for reaching consumers who might be less inclined to read a printed publication.

For more information about Consumer Action's vaccine fact sheets, including the companion fact sheet for educators, Coping with COVID-19: Coronavirus vaccination outreach resources for community-based organizations, see the INSIDER piece we published in August.

View the video "Distinguishing between COVID-19 vaccine fact and fiction" in English or Spanish on Consumer Action’s YouTube channel.

Coalition Efforts: CFPB urged to protect P2P payment customers, restore complaint narratives

By Alegra Howard

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

A CFPB revamp of data collection rule could end discrimination in small business lending. A coalition of 60 groups wrote a letter urging the Consumer Financial Protection Bureau (CFPB) to develop a strong rule requiring small business lenders to report on the race, ethnicity and gender of their borrowers, the neighborhoods where they lend, and what they charge for their loans. Members of the coalition have been advocating for data collection and transparency within the small business market for decades. Robust small business data collection through the Section 1071 rule would result in enhanced transparency, more responsible lending practices, targeted enforcement of fair lending laws, informed policymaking, healthier markets, and reduced racial and gender wealth gaps. Learn more.

Require person-to-person payment systems to protect consumers. Consumer Action was one of the 65 consumer, civil rights, faith, legal services and community groups that submitted comments to the Consumer Financial Protection Bureau (CFPB) in response to its inquiry into certain business practices of six large technology companies operating payments systems in the United States. The groups urged the CFPB to require person-to-person (P2P) payment providers to protect consumers from fraud and errors and to work with the Federal Reserve Board to ensure protections are in place before the Fed launches its new FedNow P2P service. Learn more.

FDIC’s GOP Chair plays partisan politics—should be removed by Biden. Twenty-two organizations called on President Joe Biden to remove Federal Deposit Insurance Corp. (FDIC) Chair Jelena McWilliams for violating the agency’s statutes and bylaws that provide for majority rule. McWilliams has refused to allow publication in the Federal Register of a request authorized by three of the four board members for public input on the FDIC’s bank merger policy, proving that she is not fit to serve as Chair. Learn more.

Advocates urge the CFPB to reveal details in the consumer complaints it receives. Dozens of consumer, civil rights, community, housing and privacy groups urged the new director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, to stop burying the complaint details (called narratives) in the agency’s consumer complaint database. Under its former, Trump-appointed director, Kathy Kraninger, the CFPB made it more difficult for consumers to access the most useful portion of the complaints. Burying the complaint narratives was one of many big gifts Kraninger gave to financial firms that long fought public display of the consumer-provided descriptions that reveal the unfair practices companies would rather keep hidden. Learn more.

CFPB Watch: Tuning out consumers with credit bureau complaints

By Ruth Susswein

The Big Three credit bureaus (Equifax, Experian and TransUnion) failed to fully respond to consumers’ complaints, says the Consumer Financial Protection Bureau (CFPB) in its latest report of credit and consumer reporting complaints. Consumers tell the CFPB that they get caught in an automated dispute system that does not address their issues.

One consumer told the CFPB, “I sent letters...at least 4 times and never got an update or any kind of correspondence. At this point I am very much frustrated to keep trying to receive an answer from the Credit Bureaus.”

The CFPB found that many consumers did not receive meaningful responses to their credit reporting complaints submitted last year through the Bureau’s complaint process. (More than 60% of all the complaints the CFPB received last year were about problems with credit reports.) The agency’s analysis reveals that:

  • Experian frequently chose to “take no action” when it believed that complaints were submitted by a third party.
  • TransUnion also stated it would “take no action” when it thought complaints were submitted by third parties. (Consumers are allowed to have a third party assist them in filing a complaint.)
  • Both Equifax and TransUnion promised consumers they’d investigate their concerns and send the results to the consumer, but often, each failed to report the outcomes to the Consumer Bureau as required.

What’s more, less than 2% of consumers received any relief after complaining to Equifax, Experian and TransUnion in 2021. That’s down from nearly 25% in 2019, according to the Bureau.

The Bureau says each of the Big Three rely heavily on template responses, even though they have 60 days to draft a meaningful reply.

Inaccurate credit reports can have a profound impact on consumers’ ability to access credit, insurance, mortgages, car loans and employment. Credit history also plays a crucial role in the price people pay to borrow money.

The Bureau investigated credit bureau complaint responses because of the overwhelming growth in credit bureau complaints, coupled with the poor quality of responses and lack of investigations conducted in the last two years.

Credit bureaus defend their decision to ignore some consumer complaints by blaming credit repair companies for submitting disputes on behalf of consumers and clogging their dispute process with bogus claims. (Some have filed frivolous disputes over the years, but this does not justify credit bureaus’ choice to ignore many complaints submitted by third parties.)

According to the Fair Credit Reporting Act, if a consumer disputes the completeness or accuracy of information in their credit file, the credit bureau “has an obligation to conduct a reasonable reinvestigation.” Part of the credit bureau’s duty is to evaluate the validity of the information it receives from companies (furnishers) and correct the data if it is wrong.

Holding credit bureaus accountable

“The credit reporting oligopoly doesn't compete on customer service or accuracy, and we will be looking at ways to correct these serious deficiencies,” CFPB Director Rohit Chopra tweeted in January.

While the CFPB says it intends to hold credit reporting companies accountable for incorrect reports and shoddy service, it offers tips on how to dispute errors and report inaccurate information.

  • You can order a free weekly credit report from each of the Big Three bureaus through December 2022, at AnnualCreditReport.com. (After that, you can get one free report every 12 months from each of the reporting agencies.)
  • If your credit report complaint is ignored or if you need to continue to dispute the problem, you have the right to add a brief statement to your credit file. Your continued dispute must be shared with those who review your report.
  • You do not have to pay a company to dispute a credit reporting problem.
  • You can submit a complaint to the CFPB online or by calling 855-411-CFPB (2372).

Class Action Database: Benecol spreads unhealthy labels

By Rose Chan

A class action settlement against Mondel─ôz Global LLC related to misleading representations of the health and wellness benefits of the company’s belVita breakfast products was among 11 new settlements added to the Consumer Action Class Action Database during January.

Of note this month is the class action Martinelli v. Johnson & Johnson. The plaintiffs filed a class action against Johnson & Johnson and McNeil Nutritionals, LLC claiming that they falsely labeled Benecol Regular and Light Spreads (collectively “Benecol Spreads”) with “No Trans Fats” and “No Trans Fatty Acids” when the products do contain trans fats. One of the Benecol Spreads ingredients is partially hydrogenated oil (PHO), a major source of artificial trans fats in processed foods. Eating trans fats increases the risk of developing heart disease. The Food and Drug Administration determined in 2015 that PHOs are not safe for human consumption.

The defendants denied the allegations but agreed to a $2 million settlement to end the lawsuit.

You are part of the class if you bought a Benecol Spread between Jan. 1, 2008, and Dec. 31, 2011.

The deadline for claims in the Martinelli v. Johnson & Johnson lawsuit is Feb. 25, 2022.

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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 6,500 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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