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Consumer Action INSIDER - June 2017

Table of Contents

 

What people are saying

I learned so much from attending this [debt collection training] class. First: I met some wonderful new people! Second, there were many interesting facts presented; what I found most interesting was the subject of identity theft. I knew that this was a problem but I did not know the extent!                                           — Christina Stacey, Blair County Community Action Program, Altoona, PA

Did you know?

Federal student loan borrowers who have recovered from default are eligible to enroll in affordable repayment plans. But according to the Consumer Financial Protection Bureau (CFPB), nine in 10 rehabilitated borrowers have not enrolled in an affordable plan, primarily because student loan companies (which are responsible for informing borrowers about affordable repayment options) are failing to help borrowers who need it most. To learn more about federal repayment plans, download the CFPB’s Payback Playbook. Also, check out Consumer Action’s Student Loan and Education Resource List.

New publications explain insurance, taxes in ‘sharing economy’

U.S. consumers are increasingly joining the “sharing” economy, where individuals rather than traditional businesses sell goods and services to consumers. These peer-to-peer (P2P) transactions are conducted online, at a website or via an app developed by intermediaries such as Airbnb, Uber and TaskRabbit, to mention just a few big-name “platforms.”

A 3,000-person poll by Time in late November 2015 found that 22 percent of American adults—45 million individuals—had already offered goods or services in the sharing economy. About one-third of those participants reported that they either made more than 40 percent of their income this way; described it as their primary source of income; or reported that they couldn’t find work in a more traditional job (and therefore were participating in the sharing economy).

The “feel good” personal nature of transactions between individuals might lead participants to forget about the business side of buying, selling and renting, but that could be a grave mistake. The fact is, whether you make $100 or $100,000 a year selling your products or services, there are liability and tax implications. To help consumers protect themselves while earning money in the sharing economy, Consumer Action has created two free guides full of information, tips and resources.

In Insuring yourself in the sharing economy, consumers can learn what risks they run when driving paying passengers or making deliveries in their car; hosting paying guests in their home; hiring themselves out to complete tasks and projects; or selling things they make. They can get information on what insurance coverage—if any—some of the larger sharing economy platforms provide; what to know about purchasing insurance for their business endeavors; and where to find more information.

The second publication, Tax basics for earners in the ‘sharing economy,’ provides an overview of why it’s important to keep good income and expense records; how business deductions can reduce independent contractors’ tax liability; the tax forms and filing requirements taxpayers should be aware of; and where to find more information and tax preparation resources.

“The sharing economy can offer benefits for both earners and consumers, but that doesn’t mean that participating is without risks,” said Ken McEldowney, Consumer Action’s executive director. “Our newest education and training module prepares drivers, hosts and other independent contractors to protect their financial wellbeing from liability claims and lawsuits and to fulfill their tax filing obligations while also reducing their ultimate tax bill.”

The two consumer fact sheets are available for free download on the Consumer Action website. The training components of the module—a topic backgrounder (Q&A), lesson plan and companion PowerPoint presentation (to be used by consumer educators in their communities)—will be available later this summer, and will be promoted by email to the Consumer Action’s national network of nearly 7,000 community groups. (The two fact sheets also will be available in Spanish in the near future.)

The “sharing economy” module was created by Consumer Action’s Insurance Education Project.

Consumer Action, Capital One host digital literacy skills webinars

Future Edge SM is a self-directed, video-based curriculum designed to help diminish the digital skills literacy gap in low-to-moderate-income communities.

Future Edge gives consumers access to the digital skills needed for today’s middle-skill roles—jobs that don’t require a bachelor’s degree but do pay above average wages. Capital One developed the free and open program in partnership with the educational organization Grovo to ensure that the thousands of individuals looking to develop their basic digital skills would have access to the learning and tools essential for success in the 21st century workforce.

Consumer Action hosted two webinars on April 26 to educate its community partners on the program. Seventy-five partners attended the webinars led by Katherine Rotunno, a Grovo account management manager.

“Future Edge is excellent because it covers all of the critical digital literacy subjects, with ten different modules, ranging from how to use Microsoft Word to how to establish your personal brand on social media,” said Consumer Action’s Audrey Perrott. “As a national consumer organization working with community groups across the country, we’ve seen a tremendous need for this type of digital skills training. After hosting the Future Edge webinars, we often receive requests from partners on next steps to implement the program at their local sites.”

Community groups that are interested in utilizing the free Future Edge tool can send an email to .(JavaScript must be enabled to view this email address) or .(JavaScript must be enabled to view this email address). The message should include the following: name of organization, description of organization, expected number of program participants, proposed date of program, and a spreadsheet with the email addresses of proposed administrators and students. Currently, the tool is only available in English, but will be available in Spanish by the end of the year. Individuals may also register to access the free educational materials here.

Capital One and Consumer Action will host another webinar together (the date of which has yet to be determined). It will highlight Capital One’s free CreditWise® credit monitoring tool, which provides consumers with access to credit scores, alerts, credit score simulators and more.

Hotline Chronicles: Shopping around for public storage

Public storage units are big business: There are about 50,000 in the U.S. According to 2015 stats released by the Self Storage Association, about 9.5 percent of all American households rent them. Unfortunately, many renters (like Clara* from Massachusetts, who recently contacted our complaint hotline) fall on hard times and can’t keep up with the payments. The problem is evidenced in the storage industry’s repossession auctions, which are so notorious that they have even spawned the popular reality TV show Storage Wars (which follows buyers who attend storage unit auctions in search of treasure for pennies on the dollar).

What type of people lease storage units? In 2014, the Self Storage Association said that about 47 percent of all self-storage renters had an annual household income of less than $50,000, and 63 percent had an annual household income of less than $75,000. About 13 percent of self-storage renters said they would rent for less than three months; 18 percent for 3-6 months; 18 percent for 7-12 months; 22 percent for 1-2 years; and 30 percent for more than two years.

More than 1.5 million storage units nationwide are rented to military personnel (6 percent of all units). In communities adjacent to domestic U.S. military bases, military occupancy can be from 20 to 95 percent of all rented units. (Military personnel on active duty have special rights under the Servicemembers Civil Relief Act that require a court order before enforcing a lien on them.)

When you rent a storage unit, you sign a lease and are bound by its terms. Typically, if you miss a payment due date, the owner retains the right to tack on late fees in addition to your monthly charges. The storage company can even hold your items if you don’t pay the monthly charges. After a month without payment, renters are typically notified via letter and/or the storage facility owner publishes notices in local newspapers that the belongings will be sold at auction. If your items are sold at auction for less than you owe the storage company, the balance could be sent to collections (where it often accumulates even more fees). If you pay all past due rent and associated late fees before the sale occurs, the owner must return your property, but you’ll probably be forced to vacate the unit and move your things.

It’s worth learning how your belongings may or may not be covered by insurance while in storage. The lease you sign should state your responsibility (if any) for insuring your stored items. Some storage facilities may offer insurance to help protect your belongings, either as part of your contract or for an additional cost. If you have homeowners insurance, it might cover any items you have stored in a storage facility, but the coverage may be lower than for items at your primary residence. If you intend to store valuable items like art or jewelry, you may want to purchase additional personal property coverage to protect them.

Storage unit tips
  • Compare prices and terms among storage companies before deciding on one.
  • Check out companies at the Better Business Bureau and with online review sites like Yelp.
  • Don’t be afraid to try to negotiate a lower monthly rent/lease.
  • Carefully read the terms of any contract or lease before you sign.
  • Inquire about the frequency of rent increases, how you will be notified of an increase and how long you will have to move your items if you don’t agree with the increase.
  • Ask precisely what will happen if you miss a monthly payment.
  • Don’t store irreplaceable items in the unit, like legal documents or family heirlooms.
  • Ask yourself if the monthly cost of leasing the unit worth it given the value of the items stored. Consider whether you could discard or donate items to downsize your needs to a smaller, less expensive unit.
  • Move your items within a few months if you can. Public storage units are not designed for storing items forever.
  • If you are delinquent with your payments, storage facility owners can sell your property at an auction, but only after they have notified you of your right to pay in full (“right to cure”) and given proper public notice about the sale.
  • If your goods are sold at auction, you may still be on the hook for unpaid charges, late fees and collections fees. Collectors can also sue you.

*Not this consumer’s real name

Consumer Action analytics show growth in reach, engagement

Consumer Action has experienced a lot of growth in its online activities. In the past 12 months (compared to same period previously), page views on Consumer Action’s main website have gone up 42.4 percent, from 1,430,024 to 2,036,327. Meanwhile, the organization’s main website users have increased by 8.4 percent, from 689,940 to 748,469.

Also over the past 12 months, users downloaded nearly 17,000 PDF publications (Consumer Action offers all its free educational publications in print-ready PDF format, as well as versions that can be read online). Consumer Action’s Class Action Database, where consumers can browse class action lawsuits they may be eligible to join, is the most popular section of our website.

Consumer Action’s social media accounts have experienced rapid growth as well. On Facebook, the non-profit almost doubled its followers, from 2,201 to 4,241. Twitter followers grew by 1,522, to 3,372, and Consumer Action’s Twitter account was recently verified. (The blue verified badge on Twitter lets people know that an account of public interest is authentic.)

Consumer Action uses another online advocacy tool, called Salsa Labs, to help people reach members of Congress and build its grassroots activist network. In the past 12 months, 15,616 new subscribers joined Consumer Action’s Salsa email list, for a current total of 141,214. Twenty-five thousand of these list members have engaged actively with the organization’s timely advocacy efforts by sending emails to their federal lawmakers in defense of consumer-friendly policies.

Debt collection trainings a big success

The Consumer Financial Protection Bureau (CFPB) reported that in in 2016 it handled a whopping 88,000 debt collection complaints from consumers! According to the Bureau’s report on debt collection, the most common debt collection complaints involved collectors attempting to collect a debt that the consumer reported was not owed. Issues with disclosures or providing information sufficient to verify the debt were the second most common type of complaint consumers made. Communication tactics used when collecting debts, specifically improper and repeated telephone calls, were the third most common complaint.

When Consumer Action recently trained Ohio and Pennsylvania community groups on the Debt Collection: Know Your Rights module, it made sure to highlight the debt collection issues outlined in the CFPB’s report. Consumer Action trainers Nelson Santiago and Linda Williams also demonstrated to the staff of community-based organizations how their clients could exercise the powerful rights afforded them under the Fair Debt Collection Practices Act (FDCPA).

During the Pennsylvania training, attorneys Scott Torguson, with The Legal Aid Society of Columbus, OH, and Robert Taylor, with Southwestern Pennsylvania Legal Services, Inc., were on hand to discuss their respective state’s debt collection laws and other issues like statutes of limitation surrounding debts. The attorneys also pointed out how their state laws related to the federal FDCPA.

Kathleen Seminatore, an investigator with the Summit County Office of Consumer Affairs in Akron, OH, attended and evaluated the training, saying: “My overall experience of the seminar training was very good. It gave me a better understanding of debt collection rights, and the presentations gave me some very useful tools to use in my job as a consumer affairs investigator. Williams’ presentation was informative, engaging and kept me focused.”

She added that she particularly enjoyed it when Williams and Santiago gave attendees a quiz to gauge their knowledge of debt and collections.

“I am looking forward to using that type of approach at my next financial literacy presentation workshop as well, outlining the three strategies Williams outlined for dealing with debt collection: Verify the debt, verify the collector and fight back against unethical collectors,” Seminatore said.

Sharon Butler-McCray, a certified educator of personal finance from Ohio, attended the training as well and shared her experience, calling the workshop “phenomenal,” and adding, “It provided not only helpful information in working with clients plagued with problems encompassing debt collection, but also insightful resources to hone my skill sets as a trainer and counselor in aiding populations in protecting their consumer rights. I know the training will assist me in empowering others, as I felt empowered as a result of the training.”

If you’re interested in accessing this free training module, click here for the Debt Collection: Know Your Rights lesson plan and class activities and here for the companion PowerPoint slides.

Housing Rights Summit attendees honor National Fair Housing Month

In honor of the anniversary of the passage of the Fair Housing Act, and in remembrance of the assassination of Rev. Dr. Martin Luther King Jr., Consumer Action’s community outreach and training manager, Linda Williams, participated in a housing rights summit, where she distributed Consumer Action’s financial education empowerment brochures and guides to over 250 attendees.

The housing rights summit Williams attended is an annual event that has been sponsored by the Housing Rights Center of Los Angeles for the last 18 years. Chancela Al-Mansour, a long-time Consumer Action ally, leads the Housing Rights Center.

This year’s summit offered sessions on local rent control, just-cause eviction ordinance and short-term rentals. It also detailed challenges to the Affirmatively Furthering Fair Housing legal requirement that federal agencies and federal grantees further the purposes of the Fair Housing Act. The summit also provided information on housing programs for homeless people.

Williams, attending the event for the second year, said. “In honor of Martin Luther King Jr., we should consider his words on housing.”

Quoting the late civil rights activist, Williams recited: “Let us therefore continue our triumphant march to the realization of the American dream. Let us march on segregated housing until every ghetto or social and economic depression dissolves, and Negroes and whites live side by side in decent, safe and sanitary housing.”

The Chicago Freedom Movement (also known as the Chicago Open Housing Movement), which lasted from 1965 to 1967, is said to be one of Dr. King’s greatest civil rights campaigns. The massive demonstration that he led nearly five decades ago is often credited as the inspiration for the Fair Housing Act. Signed into law on April 11, 1968, by President Lyndon B. Johnson, Title VIII of the Civil Rights Act of 1968 (Fair Housing Act) prohibited discrimination concerning the sale, rental and financing of housing based on race, religion, national origin, sex, (and as amended) handicap and family status.

Some 49 years later, advocates are still advancing the principles of fair housing opportunities for all by learning what housing discrimination looks like in the communities they serve, by familiarizing themselves with the Affirmative Fair Housing planning process, and by working to help their community stakeholders analyze and address barriers in their communities.

Work on housing issues remains a priority for Consumer Action. According to the U.S. Department of Housing and Urban Development’s (HUD) annual report on fair housing, the agency investigated 8,342 complaints in 2016 alone. The majority of complaints (4,908) filed under the Act were on the basis of disability. Race was the next most common cause of complaint (2,154). National origin was third, with 917 complaints.

Coalition Efforts: Consumer, privacy and student protections at risk

Bad FCC rule threatens consumers’ privacy. Consumer Action joined coalition advocates in urging the Federal Communications Commission to repeal a rule that requires phone companies to retain the detailed call records of their customers. The rule, known as a data retention mandate, is unduly burdensome and ineffectual and poses a threat to American consumers’ privacy and security. Learn more.

The Choice Act is the WRONG choice for consumers. Advocates are urging Congress to oppose the GOP-driven Financial “Choice” Act, which aims to repeal and eviscerate parts of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and the consumer watchdog agency it created, the Consumer Financial Protection Bureau. This (wrong) Choice Act would turn the CFPB into a gridlocked commission and eliminate its independent funding. This irresponsible assault on consumer protections takes all of the worst ideas of past attacks on Dodd-Frank and the CFPB and combines them into one toxic package. Learn more. Learn more.

Advocates call on states to fill void left by U.S. Department of Education. Consumer Action joined a coalition of labor, civil rights and consumer organizations in urging state regulators and law enforcement agencies to step up their oversight of student loan servicers following Education Secretary Betsy DeVos’s decision to rescind Obama-era policies that were aimed at protecting borrowers. Learn more.

The U.S. Deptartment of Education must step in to prevent another for-profit scandal. Consumer Action joined over 30 student, consumer and veterans groups in calling on Education Secretary Betsy DeVos to seek public comment and impose conditions on the sale of several for-profit Education Management Corporation colleges (including Argosy University, South University and the Art Institutes) to a Los Angeles “non-profit” called Dream Center Education Holdings, LLC. The Dream Center is a Christian missionary organization that says it will convert the for-profit colleges into non-profit enterprises. The schools' new status as non-profit institutions could, however, allow operators to skirt federal rules imposed on for-profit institutions in recent years. Learn more.

Regulatory Accountability Act (RAA) would hurt consumers. Advocates penned a letter to the Senate urging legislators to oppose the Regulatory Accountability Act (RAA), which should be called the “Regulatory Paralysis Act,” as it aims to cripple the process for issuing and enforcing regulations that ensure Americans have clean air and water, healthy food and consumer products, fair wages, safe workplaces and many key financial protections. Learn more.

CFPB Watch: Mortgage, student loan servicer failures and small business data

The Consumer Financial Protection Bureau (CFPB) sued mortgage servicer Ocwen Financial Corp. for “failing borrowers at every stage of the mortgage servicing process.” The CFPB says Ocwen illegally began or completed foreclosures for at least 1,000 homeowners. The Bureau accused the servicer of costing consumers their homes because of botched paperwork, improper crediting of payments, widespread errors and unnecessarily burdensome requirements.

The CFPB charged Ocwen with illegally foreclosing on homeowners, ignoring their complaints, and selling the servicing rights on home loans without revealing that many customer accounts they transferred were riddled with errors. (CFPB mortgage servicing rules require that servicers credit customer payments promptly and correct errors.) The Florida Attorney General has filed a similar suit against the giant non-bank mortgage servicer.

Ocwen also allegedly foreclosed on homeowners with loan modifications who were paying their mortgages as agreed. In addition, the servicer is accused of failing to credit tax and insurance payments, cancel private mortgage insurance (PMI) and investigate and correct a myriad of servicing complaints. The CFPB reports that more than 300,000 borrowers have filed formal complaints and notices of error against Ocwen in the last two years.

Monthly complaint report: Student loans

Many student loan servicers rank high for failing borrowers. Nearly two-thirds (64%) of the student loan complaints received by the CFPB focus on student loan servicers.

Borrowers told the Bureau that servicers failed to alert them to more affordable repayment options (such as income-driven repayment plans) when they contacted their servicer for help. Instead, servicers often recommended plans that temporarily suspended payments, causing interest to accrue during the suspension. Those who applied for lower-cost, income-driven repayment plans complained they either were wrongly denied access, delayed enrollment for many months or denied sufficient information to meet plan deadlines. In other cases, consumers were not even enrolled in the public service loan forgiveness programs that they believed they had been paying into for years.

Consumers also criticized student loan servicers for misapplying their loan payments (which triggered credit-reporting problems as well).

The Bureau released a report in 2015 outlining these types of widespread student loan servicing failures.

Seeking small business information

The Bureau wants to know about small businesses’ access to credit, particularly those owned by women and minorities. The CFPB is seeking the information so that it can better understand business owners’ use of lines of credit and the terms on personal and business credit cards and loans.

The financial watchdog held a May field hearing in Los Angeles to discuss how to evaluate small business owners’ lending options. The Bureau wants to learn about the types of lending products now available to small businesses, what impact location has on financing and who the primary lenders are—traditional institutions or alternative online lenders.

The CFPB is required by law to study the small business lending market and to develop a data collection rule related to small business. The Bureau is seeking more details on the data that financial institutions collect and maintain as part of the lending process. The Bureau also is studying how financial information can be shared for research while still protecting the privacy of loan applicants and borrowers.

Women-owned and minority-owned small businesses are especially encouraged to comment, along with lenders, community organizations and other interested parties. For more information, click here.

Class Action Database: Homeopathic hokum, deceptive decking, fake fees

Class action settlements involving retail store The Body Shop and Discover Home Loans, Inc. were among 14 new settlements added to the Consumer Action Class Action Database in May.

Of note this month is the class action Forcellati v. Hyland’s Inc. The plaintiffs filed suit against Hyland’s Inc., Standard Homeopathic Laboratories Inc., and Standard Homeopathic Company (collectively “Hyland’s”) alleging that Hyland’s falsely advertised the effectiveness of its homeopathic products. Plaintiffs claim that Hyland’s products consisted only of sweetened, flavored water with highly diluted concentrations of active ingredients that did not offer fast, safe or effective relief from cold and flu symptoms.

Hyland’s denied the allegations but agreed to a settlement to avoid the burden, expense and risk of continuing the lawsuit.

Consumers who purchased the following Hyland’s products between March 8, 2008 and March 20, 2017 may be eligible to join the settlement:

  • Cold 'n Cough 4 Kids
  • Cough Syrup with 100% Natural Honey
  • Sniffles 'n Sneezes 4 Kids
  • Cold Relief Strips 4 Kids with Zinc
  • Nighttime Cold 'n Cough 4 Kids
  • Complete Flu Care 4 Kids
  • Baby Teething Gel
  • Baby Cough Syrup
  • Baby Gas Drops
  • Baby Infant Earache Drops
  • Baby Nighttime Tiny Cold Syrup

The settlement provides a full cash refund in the amount of the manufacturer’s suggested retail price (MSRP) of the product purchased. Class members who claim more than two products purchased must provide proof of purchase to receive a full cash refund of the actual price paid based on the receipt or MSRP.

The claims deadline is June 28, 2017.

Potential class actions

We’ve caught wind of two new investigations that recently opened up, one into composite decking company Rhino Deck and another into CitiMortage and other mortgage servicing companies that may be illegally charging condo owners “property inspection fees.”

Rhino Deck. Have you installed Rhino Deck composite decking in your outdoor area? The product is billed as a low-maintenance alternative to wood decking. Homeowners around the country are reporting, however, that Rhino Deck products are swelling, warping, buckling, fading and are subject to moss and mold growth (despite proper installation). Worse, they say that the manufacturer, Master Mark Plastics, is often refusing to stand behind its product. If you’ve had a similar experience, it may be a good idea to learn more about your legal rights by contacting the law firm representing these clients.

CitiMortgage. CitiMortgage and other mortgage servicing companies may be charging high-rise condominium owners so-called “property inspection fees” in violation of the law. If you live in a condominium tower with good security, the inspections may be completely worthless and it may be illegal for your mortgage servicer to charge you for them. And if you miss a few mortgage payments and go into default, you may suddenly have a monthly mortgage statement littered not only with late fees, but also a variety of new charges for “default services,” including the aforementioned property inspections. (If you see codes like “INVO” listed on your paperwork or in your mortgage records, this may be a sign that you’re being charged.) Property inspection fees are typically small (in the range of $10 to $15), but since they are often charged monthly, they can add up. If you live in a secure high-rise tower and have paid property inspection fees to CitiMortgage or others, you can contact the law firm representing these clients to learn more.

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 more than half a dozen 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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