Consumer Action INSIDER - December 2018

Table of Contents

What people are saying

Consumer Action's "Debt Collection: Know your rights" training was really informative and worthwhile! Your trainers are extremely knowledgeable and I came away with a much better understanding of how the debt collection process works and how I (and my agency) can assist our clients in a more meaningful way. I always leave your workshops with a stack of excellent resources and articles that I use in my work and share with my colleagues. — Deborah Hamburger, Volunteer Coordinator, Jewish Community Services of Baltimore

Did you know?

If you are new to investing in mutual funds (through a taxable investment account), you may be unaware that every December the funds typically make “capital gains distributions.” These distributions count as “income” for shareholders and occur when fund managers sell shares from the funds’ holding(s) and distribute the gain to shareholders. Unfortunately, the taxes on capital gains distributions can be surprisingly high, and since they count as income, they may bump you up to a higher tax bracket as well. This can force you to pay more than you expected or prepared for when you withheld taxes or made estimated payments (based on your predicted income) throughout the year. Investors in tax-deferred accounts such as IRAs, 529s or 401(k)s are not affected by capital gains distributions. Learn more here.

Speaking truth to power at Consumer Action’s national conference

Nerdwallet award photo
Attendees and staff at the 9th National Consumer Empowerment Conference in Chicago, IL, last month

Our ninth annual National Consumer Empowerment Conference was held in mid-November at Chicago’s Hyatt Regency O'Hare. The two-day event brought together educators, consumer advocates, regulatory and industry representatives and other key stakeholders to address critical consumer issues and share best practices in community-based consumer education and empowerment.

“Consumer Action’s National Consumer Empowerment Conference offers our allies and community group partners a unique opportunity to network with one another and learn from and converse with some of the country’s top consumer rights subject matter experts,” said Ken McEldowney, Consumer Action’s executive director.

Panelists representing the non-profit and government sectors presented viewpoints at the conference. Keynote speakers such as the number-two official at the Consumer Financial Protection Bureau (CFPB), acting deputy director Brian Johnson, shared the Bureau’s current vision of consumer financial protection and fielded questions from community groups about their concerns for consumers.

Attendees asked Johnson about the Bureau’s plans to gut an upcoming payday loan rule, the result of which would be the elimination of requirements for payday lenders to determine if a borrower has the ability to repay high-cost loans. Community-based organizations (CBOs) and advocates have been particularly worried about this since the Bureau recently rolled back oversight of predatory lenders that target the military and communities of color. Bureau leadership under the Trump administration also changed the agency’s mission statement to be less focused on protecting consumers and threatened to cut public access to its complaint database (which allows consumers to file and view complaints against financial companies, such as banks, that behave badly).

Johnson explained that under new leadership this year, the Bureau is following what is mandated by law, but has chosen to make changes in areas they consider “discretionary.” Johnson said he and his boss, acting Bureau head Mick Mulvaney, decided to focus on “consumer choice” and “smart disclosure.” Interest in changes in policy at the CFPB was so great that conference attendees followed Johnson into the lobby to continue asking questions regarding reductions in enforcement actions, fair lending duties and student loan investigations, among other concerns.

Community-based organizations participating in the invitation-only conference were treated to timely educational sessions, including how to prepare for and protect consumers after disasters such as floods and fires. Consumer insurance advocate Emily Rogan of United Policyholders offered participants tips on how to conduct their own insurance checkup and shared sample letters to ensure that consumers are using the correct language when filing a natural disaster claim.

Attendees also received the latest privacy tips from Consumer Reports’ Katie McGinnis and Facebook’s Claire Gartland on how to improve control over the use of their personal data online, and learned more from McGinnis about the need for a national data protection law in the U.S.

After a brief film on the assassination of Dr. Martin Luther King Jr., attendees heard about cases of continued housing discrimination on the 50th anniversary of the Fair Housing Act. During the session, the National Fair Housing Alliance’s Lisa Rice and Hope Fair Housing of Chicago’s Anne Houghtaling outlined how they have investigated, documented and sued to protect victims of redlining, a discriminatory practice in which minorities and/or people of color are excluded or steered away from renting or buying in certain neighborhoods.

Other timely panels included:

  • Protecting your family and assets in an era of detention and deportation threats (during which the non-profit Appleseed’s Annette LoVoi presented an instructional manual to help immigrants protect their children and possessions);
  • Warning signs when purchasing short-term health insurance plans that typically contain wide gaps in coverage;
  • Lobbying tips for consumer advocates (presented by Rose Eichelberger of Ready, Aim, Advocate; Mark Hamm of the United Way of Metropolitan Dallas; and John Paul Soto of Lutheran Social Services of Northern California—all advocates who participated in Consumer Lobby Day 2018 in the nation’s capital);
  • The latest on dangerous payday loans and affordable payday alternatives; and
  • Updates on mobile apps and FinTech tools that help consumers build wealth or borrow affordable small-dollar loans.

Consumer Action appreciates the conference supporters—underwriters Bank of America, Comcast NBCUniversal, Facebook and JPMorgan Chase & Co., and benefactors 1-800 Contacts, Amazon, American Express, DraftKings, Enterprise, VISA, Walmart and Wells Fargo. Their donations, along with those from other sponsors, allow CBOs to attend the National Consumer Empowerment Conference at no cost. For a full list of sponsors and exhibitors, see the 2018 conference program booklet.

Pop Quiz! What are your rights under the Fair Debt Collection Practices Act?

Staff member Linda Williams, who travels all over the country with Consumer Action’s outreach team teaching community-based organizations (CBOs) how to educate and protect the consumers they work with, devised a quiz to test readers’ knowledge of their debt collection rights.

Williams has been using Consumer Action’s debt collection educational module and the accompanying quiz (below) to help CBOs and their clients learn what to do when a collector calls, differentiate between legitimate calls and scams, and know their rights about what debt collection agencies can and can't do to debtors under the Fair Debt Collection Practices Act (the main federal law that governs debt collection practices in the United States).

“No one welcomes a call from a debt collector,” Williams said. “Your first instinct when one calls may be to hang up and ignore future calls. Some people even change their telephone number to prevent further collection calls. But ignoring calls from real debt collectors can just make the problem worse.” (Of course, if you suspect a call or other contact is a scam because you’re sure you don’t owe money, read this.)

Take our quiz and test your knowledge on your rights as a debtor! (Answers are posted below the quiz.)

True or false?
  1. Under the Fair Debt Collection Practices Act (FDCPA), a collector attempting to collect a debt cannot contact you by postcard.
  2. Within five days of first contacting you, every collector must send you a written “notice of debt” telling you how much money you owe.
  3. If a debt collector is trying to collect more than one debt from you, the collector can apply any payment you make to the debt of his or her choice.
  4. Under the National Consumer Assistance Plan (NCAP), debt collectors and debt buyers must wait to report medical debt until the debt is at least 180 days past due.
  5. The Fixing America’s Surface Transportation Act requires the IRS to use private debt collection agencies for the collection of outstanding inactive tax receivables.
  6. The statute of limitations on debt has nothing to do with the length of time a debt can stay on your credit report.

That's the quiz! But before you get to the answers below, you should know that the FDCPA:

  • Protects you against all forms of harassment from collectors, including excessive phone calls, abusive language and threats of violence, harm or arrest.
  • Allows you to seek proof that you owe any money the debt collector claims you do.
  • Prohibits disclosure of debts to others who are not authorized to know about the debts.
  • Bans collectors from contacting you at inconvenient times (i.e., before 8 a.m. and after 9 p.m.)
  • Grants you the right to sue debt collectors for violations of the law (individually or in class actions).
How well did you do?
  • Q1: True. See section 808 (7) of the FDCPA, on “Unfair Practices.” According to the Federal Trade Commission (FTC), debt collectors may not use “unfair or unconscionable” means to collect a debt. For example, they may not take or threaten to take your property (unless it is legal and feasible to do so), or communicate with you regarding a debt in odds ways (e.g., by postcard).
  • Q2: True. According to the FTC, every collector must send you a written “notice of debt” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money and how to proceed if you don’t think you owe the money.
  • Q3: False. See section 810 of the FDCPA, on “Multiple Debts.” If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select, in accordance with your wishes.
  • Q4: True. Under the NCAP, as of September 2017, debt collectors and debt buyers must abstain from reporting medical debt collection accounts until they are at least 180 days past due.
  • Q5: True. In 2015, Congress passed a transportation bill that includes a provision that requires the IRS to use private debt collectors.
  • Q6: True. The statute of limitations prohibits the collector from making a legal claim against you, but it doesn’t mean that the delinquency will be removed from your credit report before it ages off. See Consumer Action’s Debt Collection: Know your rights lesson plan (pg. 5) to learn more about the debt collection statute of limitations.

If you were unable to answer any of the questions, or you got one or more incorrect, read Debtors’ Rights: Protecting yourself from debt collection lawsuits and The Fair Debt Collection Practices Act: How it restricts collectors and protects consumers, both of which are published in English, Spanish, Chinese, Vietnamese and Korean.

Hotline Chronicles: Predatory towing from private property

Irma* of Maryland wrote to our hotline to ask what kind of evidence she needed to take a towing company to small claims court for removing her car from private property and “for being in violation of towing codes and laws.”

First, not every state has laws governing towing from private property. Find out if yours does by searching online for “vehicle towing rights + your city, county or state,” or by checking with your local police office, state consumer protection office or state attorney general’s office.

If your car has been towed and you are being asked to pay what you believe is unfair or excessive towing or storage charges, attempt to learn the name of the owner of the parking space and/or towing company and contact them directly. Go to the place you were towed from and check for any signs warning that you could not park, that unauthorized vehicles would be towed, etc. If no such signs exist, take photos and notes about the location.

You can also research the company that towed your car to see if they’re legally allowed to do so. The East Bay Express (a San Francisco Bay Area daily newspaper), for instance, found that nearly half of the towing companies in the region weren’t properly registered with the state (and were illegally confiscating people’s personal property)!

When contacting the company, give reasons why you feel the charges are unwarranted or unreasonable. For example: Your car was parked in the spot for only a short time, warning signs were not posted, or the charges are unreasonably high (your state consumer protection office may be able to help you determine this).

If the company will not waive or reduce the charge, you can take legal action in small claims court. (Learn more about small claims court.) Sometimes just the threat of a lawsuit will scare the company into releasing your car. If you end up having to take the tow company to court, consider suing the owner of the property where the vehicle was parked and/or any property management company at the same time. You have a better chance at winning in court if you have evidence of a lack of signage or a witness who can testify that you were parked only briefly.

If you feel that you do not have enough evidence of wrongdoing or a valid argument to persuade a court, file a complaint with the Better Business Bureau, consider posting negative reviews of the company online, and contact the offices of your local, state or federal elected officials. For more detailed advice, see Consumer Action’s Protect yourself from predatory towing and wikiHow's How to Take Action Against a Predatory Towing Bill.

It’s quite common, especially in hard-to-park areas, to park your car during a quick visit to a friend or to pick something up from a business like a dry cleaner and come out to see your car on the back of a tow truck. This type of towing is commonly known as “trespass” or “predatory” towing. And unfortunately, while many apartment complexes and businesses have signs saying that unauthorized parked cars will be towed, the signs might not disclose the amount of towing fees or that many tow outfits will only accept cash to free your car.

Several states, including California, Massachusetts, Oregon and Virginia, have laws that regulate aspects and circumstances of towing. Some laws are designed to prevent predatory towing when vehicles are clearly towed in order to charge high fees. (Rarely are towing fees regulated or capped.) Some laws (such as those in California and Oregon) may give consumers the right to avoid a tow fee if they show up while their car is on the tow truck. Laws often exist to avoid the likelihood of potentially violent confrontations between vehicle owners and towing operators, or of vehicle owners and their passengers ending up stranded at dangerous locations and/or hours.

*Not this consumer’s real name

Free consumer education at San Francisco’s Chinatown resource fair

Community outreach manager Jamie Woo and project associate Cui Yan Xie represented Consumer Action at the 14th annual Chinatown Community Resource Fair in early November in San Francisco’s Chinatown neighborhood.

The office of San Francisco District Attorney George Gascón hosted the popular community-wide event to address the myriad issues that affect the region’s Chinese and Chinese-American population. Over 25 government and community-based agencies attended the event to provide and promote education and assistance with issues such as immigration and citizenship, scams and fraud (including those disproportionately impacting the Chinese community, such as “blessing scams”), and public safety, healthcare, housing, emergency preparedness and finances.

"The Chinatown Community Resource Fair offers the opportunity for the Chinese community to engage with representatives from city agencies and community organizations,” Gascón said. “Access to valuable services and resources serves to make residents safer and our communities stronger and better for all.”

A few hundred people attended the fair; most were Chinese-American seniors and Chinese-speaking immigrants. Consumer Action prepared 110 sets of educational brochures in Chinese and 10 sets in English (representing a total of more than 1,000 brochures) to educate the participants on senior scams, ID theft, “how to complain” effectively about a bad or deceptive product or service, how to keep your home in the face of foreclosure, how to find low-cost auto, homeowners or renters insurance, and how to manage debt.

“Attendees were so excited to pick up our educational materials that we ran out of them by the end of the fair!” Woo exclaimed. “We’re thankful to have had the opportunity to attend the fair again this year. It’s a great opportunity to interact with the public and inform them of our valuable and free services.”

Consumer Action offers consumer education materials in both English and Chinese (as well as other languages) on our website. Non-profit agencies and government groups may also use our website to order print copies of many of the free publications.

Coalition Efforts: College comparisons and costly medications

Department of Education omits valuable college comparison data. The Education Department recently weakened its college comparison tool, College Scorecard, by omitting key metrics that had allowed prospective students to view colleges’ net attendance costs, graduation rates, student loan repayment rates and graduates’ typical earnings (compared to the national median salaries). In response, consumer, higher education and student advocates wrote to Secretary Betsy DeVos urging her to reinstate these key outcome metrics, which provide critical statistics for would-be students and increase accountability for schools. Learn more.

Hands off the Medicare donut hole deal! Consumer Action joined a coalition of over 40 advocates in calling on Congress to reject any measures that would increase prescription drug costs for consumers, including rolling back what is known as “donut hole” provisions in the Bipartisan Budget Act of 2018. As it stands, the legislation would make brand-name prescription drugs more affordable for people with Medicare, specifically by requiring pharmaceutical companies to reduce the cost of medications purchased in the Medicare Part D donut hole by anywhere from 50 to 70 percent. Learn more.

Advocates set the bar for upcoming discussion on national privacy legislation. More than 30 civil rights, consumer and privacy organizations recently joined together in releasing public interest principles for data privacy legislation. The public needs and deserves strong and comprehensive federal legislation to protect their online privacy and to afford meaningful redress if their personal information is lost or stolen. The set of principles the groups released provides the bare minimum in privacy protections that advocates argue must be part of any comprehensive national data privacy law Congress considers. Learn more.

Oppose rollback of fuel efficiency requirements. In comments to the Environmental Protection Agency, consumer advocates argued that the cuts outlined in the Trump administration’s so-called Safer Affordable Fuel-Efficient Vehicles Rule pose a threat to public safety by weakening clean air standards and driving up costs for consumers. They say the proposals pose the most harm to the low-income households that would suffer not only from higher fuel costs but also higher rates of asthma and premature death. Learn more.

Class Action Database: Taking the fall for violating “Do Not Call”

A class action settlement involving Premier Nutrition falsely advertising the amount of protein in its protein shakes was among nine new settlements added to the Consumer Action Class Action Database during November.

Of note this month is a class action settlement in the Federal Trade Commission, State of Florida v. All Us Marketing LLC (formerly known as Payless Solutions, LLC) case.

The Federal Trade Commission (FTC) and the Florida Attorney General brought the action against Payless Solutions under the provisions of the Federal Trade Commission Act, which prohibits unfair or deceptive business practices. The FTC charged Payless Solutions’ telemarketers with violating the National Do Not Call Registry, the FTC’s Telemarketing Sales Rule and Florida’s Telemarketing and Consumer Fraud and Abuse Act.

The class action charges the telemarketing defendants with making robocalls (pre-recorded telephone messages) from an entity calling itself “card member services.” Card member services claimed it would reduce consumers’ credit card interest rates and save them $2,500 or more. When consumers pressed a number on their phone indicating interest, a live representative claiming to work for their bank or credit card company would ask them for their credit card information.

Once the call recipients gave up their credit card information, the defendants would immediately charge the cards in amounts ranging from $300 to $4,900 (without providing any services). And instead of lowering consumers’ interest rates, the defendants sent them unrequested financial education packages or used their personal information to apply for additional credit cards without their knowledge or permission.

Consumers who were duped into paying for Payless Solutions’ “interest rate reduction program” between 2011 and 2015 may be eligible for a refund.

The claims deadline is Jan. 4, 2019. For more information, click here.

About Consumer Action

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

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

Community outreach. With a special focus on serving low- and moderate-income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of nearly 7,000 community-based organizations. Outreach services include training and free mailings of financial and consumer education materials in many languages, including English, Spanish, Chinese, Korean and Vietnamese. Consumer Action’s network is the largest and most diverse of its kind.

Advocacy. Consumer Action is deeply committed to ensuring that underrepresented consumers are represented in the national media and in front of lawmakers. The organization promotes pro-consumer policy, regulation and legislation by taking positions on dozens of bills at the state and national levels and submitting comments and testimony on a host of consumer protection issues. Additionally, its diverse staff provides the media with expert commentary on key consumer issues supported by solid data and victim testimony.

 

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