A Message from Consumer Action

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Consumer Action INSIDER - March 2021

What people are saying

The Consumer Action grantee calls [on financial health measurement, COVID relief programs, FinTech innovation] facilitated by Audrey Perrott have been extremely beneficial. As a grant writer who supports the Bon Secours Community Works program implementation team, I found the calls for mini-grantees very valuable in keeping our agency informed and on track. I also appreciated hearing about other participant agencies’ successes and lessons learned. —Anne Bennett, Bon Secours Community Works Grant Writer

Want to add a testimonial? Click here!

Did you know?

In recent years, tax identity theft has been a growing problem. Criminals are able to claim taxpayers’ refunds by filing in their name early in the tax season (before the taxpayers do). As a preventive measure, the Internal Revenue Service (IRS) allows taxpayers to get an Identity Protection (IP) PIN—a six-digit number that prevents someone else from filing a tax return using your Social Security number. The IP PIN, valid for one year, is known only to you and the IRS, and helps the agency verify your identity when you file your electronic or paper tax return. You must obtain a new IP PIN every year. To opt in and receive the unique PIN, you must pass an identity verification process. Learn more about taxpayer identity theft at the IRS website.

Anyone can now get free, virtual financial help from the experts!

AFCPE® (Association for Financial Counseling & Planning Education)-certified financial counselors and coaches are now offering unbiased and fully confidential virtual financial counseling and coaching sessions. The sessions are free to individuals and families who have questions about their money—regardless of financial situation, and whether COVID-19 has impacted them directly or not.

“The pandemic exposed the financial fragility of many Americans,” said Rebecca Wiggins, executive director of AFCPE. “AFCPE-credentialed financial counselors and coaches are ready to help.”

AFCPE professionals are not only highly trained in personal finance (operating as Accredited Financial Counselors® or Financial Fitness Coaches®), but they bring cultural awareness and empathy to help those they serve achieve financial security based on their unique needs and goals—whether they be creating a plan to pay off debt, building savings or managing immediate expenses.

“AFCPE and Consumer Action are long-term partners. We have worked together for many years to help servicemembers, veterans and military families improve their financial health,” said Consumer Action’s director of strategic partnerships, Audrey Perrott. “We were not only ready, but eager, to offer our collaborative expertise to help all individuals and families weather the financial shocks caused by the pandemic.”

Help us share this opportunity. If you or someone you know is interested in meeting with a financial counselor or coach, have them visit the Yellow Ribbon Network here.

For assets to help spread the word, including via social media channels, in emails and in news articles, click here.

Keeping individuals, families housed amid an “eviction tsunami”

Consumer Action's first webinar of the year couldn't have come at a better time: The Jan. 26 virtual event focused on the looming threat of an eviction crisis, which populations are most impacted by evictions, and how eviction moratoriums and financial assistance programs can help tenants remain housed. Bridgett Simmons, staff attorney with the National Housing Law Project (NHLP), and Sam Gilman, co-founder of the COVID-19 Eviction Defense Project, led participants through the timely topics before offering them a wealth of helpful resources relevant to both federal and state evictions policies and moratoriums. (The free webinar, produced and presented as part of our COVID-19 Educational Project, can be viewed online here.)

Citing a January 2021 report by the Center on Budget and Policy Priorities, Simmons explained that an estimated 14 million renters are behind on their rent and could potentially be evicted after the expiration of the Center for Disease Control’s national eviction moratorium (which runs through March 31, but may be extended again). She also pointed to research revealing that the lifting of state eviction bans in 2020 led to hundreds of thousands of additional COVID-19 cases, due to displaced people moving into shelters or homes with family or friends, thereby increasing exposure. Besides the risk of catching COVID, Simmons described how difficult it is for evicted tenants to secure future housing, and emphasized the current shortage of affordable housing.

Citing a report by the National Low Income Housing Coalition (NLIHC), The Gap: A Shortage of Affordable Rental Homes, Simmons explained that only 36 affordable and available rental homes exist for every 100 extremely low-income renter households (those whose income is at or below the poverty guideline, or 30% or less of their area median income). According to the report, the U.S. suffers from a shortage of 7 million rental homes that are both affordable and available to extremely low-income renters. Simmons encouraged participants to check out the NLIHC report to view data about the need for affordable housing in their particular states.

Simmons shared some good news too: In addition to the recent eviction moratorium extension, the Biden Administration is expected to support another extension (which must be passed by Congress) through September 2021. Simmons directed attendees to NHLP's website to learn about federal, state and local moratoriums, and also recommended this helpful map of state eviction moratoriums, along with this map of COVID-19 emergency rental assistance programs.

Next, Gilman, of the COVID-19 Eviction Defense Project, issued a dire warning: Unless we do more to stop it, we are facing an eviction tsunami. Gilman went on to describe how the current level of housing insecurity has evolved from a history of inequity and deep housing unaffordability that is disproportionate in Black and Brown communities. He displayed U.S. Census data showing that more than one in four Black families, and one in four Latino families, are behind on rent.

Gilman explained that although housing moratoriums keep roofs over the heads of those who are housed temporarily, they can pose "payment cliffs" at the end of the moratorium periods, when mortgages and rents come due. Moratoriums generally don't waive rent, and most don't turn rent debt into "non-evictable" civil debt. Rental assistance, however, can help tenants avoid the remaining risks of eviction: Gilman pointed to rental assistance programs in Illinois, Massachusetts, Pennsylvania and Washington for their best practices.

Gilman shared several resources to help advocates and consumers learn more about moratoriums and rental assistance programs, including how these programs might be improved and/or better administered at the federal and state levels:

  • The Eviction Lab at Princeton University has been tracking evictions that have occurred despite the moratoriums. It also offers news and information to help consumers understand their rights under the CDC moratorium.
  • NHLP’s write-up on recent federal legislation authorizing $25 billion in rental assistance can serve as an example for policymakers, and those educating them, on how to create relief packages/funding for moratoriums.
  • A joint report by the Aspen Institute and the COVID-19 Eviction Defense Project details best practices for the distribution of rental assistance, and highlights states that incorporated innovative programs in the first wave of rental assistance distribution.
  • NLIHC’s Best Practices For State and Local Emergency Rental Assistance Programs is an excellent “how to,” recommending, in particular, that program administrators “create simple, accessible application processes to deliver rental assistance efficiently and effectively to those tenants most in need.”
  • The COVID-19 Eviction Defense Project's regularly updated tabulations of U.S. Census Bureau data on the number of renters (households and individuals) who are behind on rent (by state) and at risk of eviction is very helpful for media and advocacy purposes.
  • A report reveals the impacts of utility disconnection and eviction moratoriums on COVID-19 infection and deaths across U.S. counties.
  • A comprehensive January 2021 report by the Urban Institute on Averting an Eviction Crisis summarizes the size and impact of the wave of evictions to come, and concludes that policymakers have not done enough to mitigate the problem.

Hotline Chronicles: Where's my W-2?

Time to file your taxes! For most employees, the W-2 is a necessary piece of the tax-filing puzzle. How do employees obtain their W-2s? Employers are required to send the form (aka “Wage and Tax Statement”) to them each year, with copies going to the Internal Revenue Service (IRS). Unfortunately, as Lev* from Ohio—who lost his restaurant job last spring due to the pandemic—reported to us, it doesn’t always work out that way. Lev only worked his restaurant gig for three months, but he still should have received a W-2. When it didn’t arrive by the middle of February, he reached out to his employer.

“My old boss said he isn’t going to send the W-2 because the restaurant is now closed,” Lev explained. “Can I pay my tax with just the payslips I have as proof?”

Employers are required to send W-2s by Jan. 31. If they don’t arrive, employees can try to contact their employers, as Lev did. You can also complain to the IRS. But if you’re sure your employer won’t send you a W-2, you should simply file your taxes without it.

We advised Lev that he could submit Form 4852 (“Substitute for Form W-2, Wage and Tax Statement”) with his return this year, using the last pay stub received in 2020 as a guide. This might delay his return and any refund he is owed, however.

Another option is to request an extension for more time to file your tax return. You can complete IRS Form 4868 for an automatic six-month extension. If you request an extension, you will still need to pay any taxes you owe, or you may face interest and penalties.

Taxpayers can take these actions on their own, or by using a paid tax preparation service. Either way, make sure to file your return or extension request by the April 15 filing deadline.

*Not this consumer’s real name

Coalition Efforts: Opposing pandemic-induced inequities

More than 100 groups call on Federal Reserve to strengthen the CRA. National and local civil rights, fair lending and consumer advocacy organizations urged the Federal Reserve Board to strengthen the Community Reinvestment Act (CRA), a cornerstone of anti-redlining and civil rights law. In detailed comments that address issues including access to credit for low-income people, location of bank branches in urban areas and investments in underserved communities, the groups have laid out a plan for the Biden administration to leverage the CRA to ensure an equitable recovery from the ongoing economic, housing, racial justice and public health crises. Learn more.

The pandemic has widened the digital divide for low-income Americans. The pandemic didn't create the digital divide, but it has certainly exacerbated it. Consumer Action and the National Consumers League wrote to the Federal Communications Commission (FCC) to applaud its recent efforts to bridge this divide by bringing broadband internet connections to low-income households through the Emergency Broadband Benefit Program, and expanding the Lifeline subsidy program to reach more low-income households in need of discounted phone/broadband service. Today, Lifeline recipients can use a modest $9.25 monthly subsidy to connect to phone and/or internet services, yet only one in four eligible households enroll in the program (many are unaware of it). As Americans are increasingly required to work, attend school and conduct healthcare appointments online during the pandemic, it becomes even more critical that everyone has reliable access to broadband internet. Learn more.

Key DOT aviation committee lacks consumer representation. Coalition members wrote to the new U.S. Department of Transportation (DOT) Secretary, Pete Buttigieg, urging him to appoint a new slate of members to the DOT’s Aviation Consumer Protection Advisory Committee (ACPAC)—members who genuinely represent key stakeholders in the travel marketplace seeking to address real-world issues, like forced separation of families seated on airplanes, an air travelers bill of rights and airfare pricing transparency. In its current state, the ACPAC membership is skewed to preserve the interests of the airline industry instead of consumers. Groups pointed out that the ACPAC is supposed to be a forum to bring consumer interests and concerns to the DOT, but that it cannot adequately address issues of concern to the traveling public without meaningful consumer representation. Learn more.

Immediate action needed to help keep families in their homes. As millions of Americans face continued financial hardship due to the COVID-19 pandemic, advocates are imploring the Consumer Financial Protection Bureau (CFPB) to do more to keep individuals and families in their homes. Consumer, housing and legal aid groups co-wrote a letter recommending specific steps the Bureau should take to prepare for the next wave of foreclosures, such as ensuring there is a protected period (i.e., a 120-day cushion) available to homeowners whose forbearances (pauses in mortgage payments) end, even though they still cannot afford to pay the mortgages due to the COVID-19 crisis. The letter outlines how these borrowers must be considered for alternative help (e.g., loan modifications), rather than thrown into foreclosure without further consideration. Advocates are asking that the CFPB partner with other federal agencies to increase forbearance eligibility and focus on implementing policies quickly during the crisis, analyzing successes and adapting strategy along the way, rather than embarking on a larger, more time-consuming and labor-intensive disaster-related rulemaking. Learn more.

CFPB Watch: New leadership and priorities, specialty reports

It’s a new day at the Consumer Financial Protection Bureau (CFPB): The agency’s mission-driven priorities have returned, with a fresh focus on protecting “economically vulnerable” consumers, according to CFPB Acting Director Dave Uejio.

Uejio has been at the Bureau for a while, most recently as acting chief of staff, and before that as chief strategy officer. He now is actively managing the agency until Federal Trade Commissioner Rohit Chopra is confirmed by the Senate to assume the job of CFPB director.

Uejio has announced that his priorities for the Bureau are to provide relief for consumers facing financial hardship due to COVID-19 and to promote racial equity. He has directed the Bureau’s departments to focus on industry practices that are causing economic suffering, and is concentrating the Bureau’s attention on helping to avert an impending national foreclosure crisis and tenant eviction catastrophe (once existing foreclosure/eviction moratoriums are lifted) by ensuring that consumers are aware of their rights and know where to turn for housing help. The Biden administration is relying on the CFPB to be the centralized government resource for COVID-related housing assistance.

Uejio assured consumers that he already is working to reverse harmful policies the former administration enacted to weaken Bureau oversight and enforcement, and that he also is committed to addressing consumer complaints.

“One of my top priorities is making sure that consumers who submit complaints to us get the response and the relief they deserve,” Uejio said. “Consumer complaints are our lifeblood; our direct connection to consumers in distress, and they are at an all-time high right now. I understand that some companies have been lax in meeting their obligation to respond to complaints. It is the Bureau’s expectation that companies provide substantive responses that address the issues consumers describe in their complaints. I also understand that consumer advocates have found disparities in some companies’ responses to Black, Brown, and Indigenous communities. This is unacceptable.”

Uejio has called on the complaints division to prepare a report that will highlight companies with a poor track record of handling complaints from communities of color.

This is new ground for the Consumer Bureau—naming names and insisting on substantive responses from companies are some of the key asks that Consumer Action has made of the agency, in order to hold companies accountable.

The acting director has also committed to expanding investigations into harms detected by the Bureau in the past six months, particularly in areas such as inaccurate and/or incomplete forbearances (lender-sanctioned pauses in mortgage payments), denied student loan forbearances, mortgage servicer mistakes, and company-generated credit bureau errors.

Uejio said he intends to address racial inequity, in part by acknowledging that the “experiences of our neighbors, our families and our communities serve as crucial data,”—not mere anecdotes.

“These are excellent early signs of the Consumer Bureau we’ve been longing for,” said Consumer Action’s deputy director of national priorities, Ruth Susswein.

The Bureau updates access to specialty reports

Credit reports can directly impact your ability to get a loan, obtain a mortgage, purchase insurance and even get hired at a job, which is why it’s so important that these reports share correct information about you.

What you may not realize is that the “Big Three” credit bureaus (Equifax, Experian and TransUnion) are not the only companies collecting and selling information about you: Other companies sell specialty reports that reveal your history regarding rent payments, check writing, insurance claims, employment, and more.

The Bureau recently updated its list of specialty bureaus, which you can filter by type, such as tenant screening or personal property insurance. Typically, you can request a free copy of these specialty reports once a year. Should you find any errors, you have the right to dispute the information and have it corrected.

It’s wise to check your reports well in advance of making key financial moves, such as renting a new apartment, switching banks, applying for insurance or even pursuing a job. Make sure to leave time to correct any errors you may find.

Class Action Database: A $3 million lawsuit? Earnin earned it

A class action settlement involving Think Finance’s dubious lending practices was among eight new settlements added to the Consumer Action Class Action Database during February.

Of note this month is the class action Perks v. Activehours, Inc., doing business as Earnin.

The plaintiffs filed a class action against financial technology (FinTech) company Activehours, Inc., purveyor of the Earnin app, alleging that the company misrepresented its payday loan services and fees. Earnin gives consumers loans through its app, claiming to provide them with immediate access to their next paycheck with “no fees, interest or hidden costs.” However, the loans do cost borrowers.

Earnin collects users’ banking and work details, such as their employer’s office location and the worker’s timesheets, to monitor their hourly pay and time worked. The company directly deposits money into and withdraws money from consumers’ bank accounts. When a consumer requests an advance on their paycheck, they must pay a “tip” to Earnin, who then deposits a loan into the user’s bank account and waits until the borrower’s payday to withdraw both the “tip” and the loaned amount.

Plaintiffs allege that Earnin failed to disclose that it would deduct money from users’ bank accounts even when there were insufficient funds, causing users to incur overdraft or insufficient funds charges. For example, one plaintiff used Earnin to receive a $50 advance from her paycheck a week early. On payday, Earnin deducted the “tip” amount she had committed to and the $50 repayment, even though it knew the plaintiff had insufficient funds in her bank account, which caused her to incur a $35 overdraft fee. As a result, the plaintiff was charged $35 plus the promised tip amount just to receive a $50 “advance” on her paycheck.

Earnin denied the allegations, but agreed to a $3 million settlement to end the lawsuit.

You are part of the class if you incurred a third-party overdraft or insufficient funds fee associated with an Earnin withdrawal between Sept. 3, 2015, and May 28, 2020. Class members will automatically receive payment (no need to file a claim) through their Earnin-linked bank account or their debit card linked to Earnin Express in the Earnin app.

The final approval hearing is March 25, 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 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 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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