Consumer Action INSIDER - October 2021

What people are saying

I am on a retirement budget and I depend on your information to help me make intelligent decisions. Thanks for your great information.

—Emilio Villalobos, El Paso County, TX, via Consumer Action feedback survey

Did you know?

In the United Kingdom, the Age Appropriate Design Code—aka the Children’s Code—recently took effect. Why should Americans care? Because it’s caused major technology platforms to establish new guardrails to protect kids online, and not just in England! The rule, which provides a high level of online privacy for young users by default, has prompted major platforms to make huge changes. YouTube will turn off default auto-play on videos and block ad-targeting and personalization for all children; TikTok will stop sending notifications after 9 p.m. for 13-to-15-year-olds and after 10 p.m. for 16- and 17-year-olds; and Instagram is preventing adults from messaging children who do not follow them, and defaulting all children’s accounts to private (requiring users to enter their date of birth to log in). For more about these ripples “across the pond,” read articles in the Guardian and WIRED and on the BBC’s website.

November events to mark five decades of consumer empowerment

By Monica Steinisch

Consumer Action has been fighting the good fight since 1971, and on Tuesday, Nov. 16, we will celebrate five decades of consumer education and advocacy and reflect on what we, and the consumer protection movement as a whole, have achieved in these 50 years. We’ll also take a look at where we can build on past successes and break new ground.

The day begins with a virtual Changemakers Convening (1 p.m. Eastern Time), when we’ll bring together (via the internet) a panel of speakers who each have made significant contributions to the consumer movement and who continue to promote change to benefit our lives. Attendees will hear from Washington Post syndicated columnist Michelle Singletary, our keynote speaker; panel moderator Susan Grant, director of consumer protection and privacy at the Consumer Federation of America; and panelists Nikitra Bailey, senior vice president of public policy for the National Fair Housing Alliance; Caitriona Fitzgerald, EPIC’s deputy director; Families USA’s executive director, Frederick Isasi; and Graciela Aponte-Diaz, the Center for Responsible Lending’s director of federal campaigns.

During the 90-minute event, presenters and panelists will highlight key consumer protections that exist today through the tireless efforts of consumer advocates and their supporters in government, the media, and our courtrooms. They’ll also look at the state of consumer protection and fair access in the areas of housing, credit, health care and data privacy, and consider where we need to focus our efforts today and in the future. Attendees are invited to ask questions at the end of the panelists’ remarks.

The virtual Changemakers Convening is open to the public. Click here to register.

Immediately following the convening, beginning at 3 p.m. ET, will be Consumer Action’s annual Consumer Excellence Awards ceremony. Every year, as part of our anniversary celebration, Consumer Action honors three individuals and/or organizations who have been integral in the effort to defend and strengthen consumer rights. This year, the legislative award goes to U.S. Senator Sherrod Brown (D-OH); the community award goes to National CAPACD; and the media award goes to Popcorn Finance Podcast and creator Chris Browning. We also will be recognizing 10 colleagues for their enduring dedication and invaluable contributions to Consumer Action and the consumer movement: Jason Alderman, FAST; Chancela Al-Mansour, Housing Rights Center; David Balto, antitrust attorney; Jenny Backus, Backus Consulting; Maeve Elise Brown, HERA; Susan Grant, CFA; Ed Mierzwinski, U.S. PIRG; Pat Sturdevant, public interest attorney; Erika Toriz-Kurkjian, Haven Neighborhood Services; and Chi Chi Wu, NCLC.

For more information about our 2021 Consumer Excellence Awards ceremony, including sponsorship opportunities, please visit the event webpage. We are pleased to offer a limited number of complimentary tickets to our anniversary celebration for local, DC-based allies. To request a complimentary registration code, email .(JavaScript must be enabled to view this email address). Members of the media/press representatives may also request free tickets by .(JavaScript must be enabled to view this email address).

Hotline Chronicles: Rental car takes a toll on customer

By Linda Sherry

Glenda,* a consumer from Wisconsin, rents a car a couple of times a year to visit family in another state. She wrote to us in an effort to help other rental car customers avoid headaches if their journies involve toll roads. Glenda said she duly noted the disclosures at the rental desk stating that she would be responsible for all toll charges, but she did not expect to encounter vague directions about how to actually pay the tolls she was responsible for.

Most toll roads are limiting cash payments and using toll pass systems that can remotely read a driver’s “transponder”—a wireless device tied to an online account in the driver’s name that registers tolls and pays for them automatically using the driver’s credit or debit card. (Regional names for the devices include E-ZPass, I-Pass, SunPass, TxTag and FasTrak.)

Rental car companies might offer customers a transponder for an additional one-time or daily charge. Using one usually opens you up to additional surcharges by the company administering the toll pass. If you rent from a company that has an all-inclusive toll pass program and you don’t opt in, you’ll be charged for the toll and an added fee on each cashless toll you drive through. For example, if you drove through four tolls on a given day, each costing $4, and were also charged a rental car company fee of $15 for each toll, you would be billed $76. (Some of the programs have a daily cap on charges, such as $90 per day.)

Glenda expected to pay her tolls in cash. However, arriving at the first toll of her journey, she entered a toll booth lane and found a sign stating that the toll booths were closed and drivers had to pay the toll online. “When I got home I went online and tried to figure out how to pay the tolls. I didn't really understand so I called the state office and a customer service rep walked me through it. I had to set up an online account to pay the tolls I’d gone through and thought I’d got it right, but after about two weeks a charge came through for $1.90 on my credit card. Two days later I received another charge on my card for $17 from another third-party toll company for an unpaid toll from the same journey. After several hours on hold and on the phone with several entities, I learned that I evidently entered the wrong date for my toll.”

The best advice for avoiding trouble and extra expense is to take your own toll transponder with you. Today, many toll plazas do not accept cash tolls, especially in the COVID era. If you don’t have a transponder but you frequently rent vehicles, you can get one even if you don’t own a car (as long as you have a debit or credit card to link the toll pass to). In some cases, toll pass holders get a discount, paying less than the cash or billed cost per toll.

What if you just drive a rental car through a cashless toll area without a transponder? Cashless systems bill drivers based on their license plates, so any bills will be sent to the rental car company, which would then forward them to you, along with added fees. AutoSlash, a website that helps consumers find car rentals for the “cheapest possible price,” recounted a story one man told the Chicago Times: “His toll bill from tolls: $9.96. His bill from (now bankrupt) Advantage Rent-A-Car: $102.37. The difference: $92.41, or the $12.99 daily pass fee for six days plus taxes and fees.” AutoSlash lists the toll policies of major rental car companies.

If you don’t pay your tolls, your state could place a hold on the title of your personal vehicle. This means you will be required to pay the overdue charges, plus fees, in order to renew your own car’s registration.

A car rental can go from reasonable to excessive very quickly for consumers who say yes to every program offered at the rental counter. Some you can’t avoid (such as liability coverage on rentals overseas), while your credit card may save you from others (like collision damage waiver). Remember that the companies make lots of money from optional, or “convenience,” fee-based add-ons. Before renting, think through your needs and develop alternative strategies, such as relying on your own car’s liability coverage on rentals or filling the gas tank before you turn in the car instead of paying for the gas plan, which typically charges a higher-than-market cost per gallon to replace the gas you used. To avoid the company’s “easy” toll pass option, bring your own transponder or map out a route that allows you to avoid tolls. Make sure to put any rental company-owned toll transponders you’re not using in the glove compartment, where they can’t be read. If you do pass cashless tolls on your journey, note the dates and times so you can pay the tolls yourself before the third parties get involved.

As Glenda noted: “This may not be a scam but it sure sounds like an easy way for the rental companies and third-party companies to make easy money from unaware consumers. I spent many hours trying to first find out what the charge was, then trying to figure out what the ensuing problems were. Many people may not have the time or knowledge to figure all this out, and may just pay the bills to be done with it.”

*Not this consumer’s real name

Coalition Efforts: Promising bids, and an appeal to keep SSNs under wraps

By Alegra Howard

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

A welcome return to housing fairness. Advocates joined together to support the U.S. Department of Housing and Urban Development’s (HUD) decision to reinstate its Discriminatory Effects Standard, which ensures that housing practices that appear neutral in their design do not create or perpetuate discrimination on the basis of race, ethnicity, religion and other characteristics protected under the Fair Housing Act. During the Trump administration, HUD gutted this critical civil rights protection and made it nearly impossible to pursue fair housing violations that had discriminatory effects. HUD’s announcement ensures that strong protections against discriminatory housing practices are clear and remain in force. Read the letter.

Prevent abuse of presidential powers. Presidential fiats can undermine congressional authority. Lawmakers on both sides of the aisle and in both chambers have an interest in restoring the checks and balances entrusted to them in our Constitution. Consumer Action joined more than 150 groups signing an open letter urging Congress to pass the Protecting Our Democracy Act (HR 8363 and S 4880), crucial legislation aimed at preventing future presidential abuses of power, restoring checks and balances, and protecting elections from foreign interference. The legislation would create or strengthen guardrails to protect against executive branch abuses of power that, left unaddressed, could contradict the public’s interest in environmental protection, climate change, immigration justice, civil rights, racial justice, safe food, worker protection, public health, national security, and other fundamental issues. Learn more.

Keep consumer SSNs under wraps. Consumer Action joined its privacy allies in a letter urging Congress to reject a U.S. Treasury Department proposal to increase compliance by taxpayers by requiring banks to report accountholder transactions. The proposal also would require peer-to-peer payment app users to disclose their Social Security numbers (SSNs). Instead, advocates urged Treasury to explore ways to improve tax compliance that do not put Americans’ SSNs at risk. Advocates objecting to mandatory reporting suggest that the requirement should apply only to business accounts or to individual accounts with a high level of transactions. Peer-to-peer payment apps and other similar services that currently do not collect Taxpayer Identification Numbers should not be required to do so. Read the letter.

Fair funding of new Medicare benefits. Consumer Action joined 45 leading consumer, disability, minority health and provider organizations asking Congress to consider the impact on Medicare Advantage beneficiaries if and when lawmakers add new benefits to fee-for-service (original) Medicare. While most of the signers support Congressional action to add vision, hearing and dental benefits to original Medicare as part of the emerging reconciliation package, they fear that, if not done carefully, it could limit Medicare Advantage plans’ ability to offer services on top of those offered under original Medicare. Since many Medicare Advantage plans already offer vision, hearing and dental benefits, their funding stream for additional benefits could become more limited, curtailing Advantage plans’ ability to offer additional benefits, such as transportation to medical providers and meal delivery, without raising premiums for enrollees. Read the letter.

CFPB Watch: LendUp sued again, ensuring equity for small business loans, and ISAs are loans

By Ruth Susswein

The Consumer Financial Protection Bureau (CFPB) has sued installment lender LendUp for allegedly deceiving borrowers about their loan costs and the benefits of repeat borrowing.

“LendUp lures consumers with false promises that repeat borrowing would allow them to ‘climb the LendUp Ladder’ and unlock lower interest rates. For tens of thousands of borrowers, the LendUp Ladder was a lie,” said CFPB Acting Director Dave Uejio.

Instead, the Bureau accuses LendUp of keeping borrowers in a cycle of debt. A CFPB investigation found that 140,000 repeat borrowers were charged the same or higher interest rates for loans after they moved to a higher level on the LendUp Ladder.

According to the CFPB, LendUp Loans LLC violated a 2016 consent order in which they had already agreed to stop misleading consumers about the cost of LendUp loans and return $1.8 million to borrowers.

LendUp also is accused of not accurately explaining why tens of thousands of consumers were denied credit. The Equal Credit Opportunity Act requires that consumers be notified within 30 days of application if they were denied credit and what the primary reasons were for the denial.

Better lending for small businesses through better data

Small businesses account for 99% of all U.S. companies, according to the Small Business Administration (SBA). The CFPB is trying to improve access to fair and affordable credit for small businesses—particularly for women- and minority-owned small companies.

Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010, requires the CFPB to gather and disclose small business lending data. The point of collecting such data is to assess if the borrowing needs of women- and minority-owned businesses are being met. Lending to underserved businesses is expected to spike once this data is disclosed. According to the National Community Reinvestment Coalition (NCRC), “home mortgage lending to African Americans and Hispanics surged” after home mortgage lending data was publicly reported in the 1990s, revealing that these minority groups suffered from a dearth of credit.

To that end, the Bureau has proposed a new rule regarding small business lending that is meant to increase access to credit and make credit decisions more transparent. Under the proposal, lenders would be required to report data collected on credit applications—for example, information provided voluntarily by applicants about their ethnicity, race and sex; how the borrower applied (in person, online, etc.); and whether the application was approved, withdrawn or denied, and, if denied, the reason(s) for denial.

The Bureau is seeking firsthand stories from small business owners about their experiences applying for credit. Click here to tell yours.

Click here for more about the CFPB’s proposed rule.

CFPB declares college financing alternative a student loan

A growing way to finance college has been through income share agreements (ISAs). Under the pacts, students choose to commit a portion of their future earnings toward repaying money borrowed to cover college (or training program) costs. By some estimates, ISAs then take 2% to 10% of a graduate’s monthly salary for two to 10 years, depending on the contract.

However, ISAs have become controversial because their providers have argued that their contracts are not loans and do not create debt. In September, the Bureau announced a consent order against ISA provider Better Future Forward for misrepresenting its financing agreements. The CFPB clarified that these income share agreements are private student loans, and consumer financial protection laws do apply. The consent order requires the Virginia nonprofit to:

  • Stop deceiving borrowers that ISAs are not loans and do not create debt;
  • Disclose the amount borrowed, the finance charge and the annual percentage rate; and
  • Never charge prepayment penalties.

Class Action Database: Wells Fargo pays for unearned GAP fees

By Rose Chan

Class action settlements involving S.C. Johnson & Son and its advertising of Method and Windex cleaning products were among 11 new settlements added to the Consumer Action Class Action Database during September.

Of note this month is the class action Herrera et al. v. Wells Fargo Bank. Plaintiffs alleged Wells Fargo breached its contract with borrowers by failing to refund unearned fees for Guaranteed Automobile Protection or Guaranteed Asset Protection (GAP) waivers in their automobile finance agreements when the vehicle loan was paid off before the loan matured.

When you finance a new car and put little or no money down, the car's value is often lower than the remaining loan payments (negative equity) due to early depreciation. GAP protection covers the difference between the value of your car and your remaining auto loan balance if your vehicle is totaled in an accident.

With a GAP waiver, the borrower pays for the protection directly to the creditor and the creditor waives future loan payments if the borrower suffers a total loss and the insurance settlement is not enough to pay off the remaining loan balance. (GAP insurance is different in that the borrower pays premiums to an insurance company, and the insurance company pays off the remaining loan balance in the case of a total loss.)

The cost of the GAP waiver is added to the automobile finance agreement and is paid for over the life the loan. If borrowers pay off their loans early, they are supposed to receive a GAP fee refund.

Plaintiffs claimed that when they paid off their finance agreements early, Wells Fargo failed to refund GAP fees. Wells denies the allegations but has agreed to a settlement to end the lawsuit.

The settlement provides a $45 million fund and requires changes to Wells Fargo’s GAP refund process. The class members are borrowers who entered into a finance agreement with a GAP waiver assigned to Wells Fargo, paid off the loan early during the effective timeframe (which varies depending on the state in which the borrower entered the finance agreement), and did not receive a GAP refund from Wells Fargo. Borrowers whose finance agreements fall under state refund laws and did not receive a GAP refund during the class period are also members of the “Statutory Subclass.” Learn more. The claims deadline is Oct. 6, 2021.

About Consumer Action

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, visitors have instant access to important consumer news, downloadable materials, an online “help desk,” the Take Action advocacy database, and more. Consumer Action also publishes unbiased surveys of financial and consumer services that expose excessive prices and anti-consumer practices to help consumers make informed buying choices and elicit change from big business. Our in-language media outreach allows us to share scam alerts and other timely consumer news with a wide non-English-speaking audience.

Community outreach. With a special focus on serving low- and moderate-income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of more than 6,000 community-based organizations. Outreach services include in-person and web-based training and bulk mailings of financial and consumer education materials in many languages, including English, Spanish, Chinese, Korean and Vietnamese. Consumer Action’s network is the largest and most diverse of its kind.

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




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