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Consumer Action INSIDER - March 2018

Table of Contents


What people are saying

“Thank you for hosting a great conference. I’m debriefing our staff tomorrow to share the great info that your presenters provided.” —Al Alvarez, Business Specialist, Greater Newark Enterprises Corporation, Newark, NJ

Did you know?

What you do when pulled over by the police can be pivotal to the outcome and subsequent legal ramifications. It’s natural to be nervous, but being hostile has led to many a problem with police officers. So, too, has saying more than necessary, so let the officer do the talking. Nolo.com, the legal website, offers tips in its article Police Stops: What to Do If You Are Pulled Over. The American Civil Liberties Union (ACLU) also provides tips for interacting with police and understanding your rights and responsibilities when stopped while walking or driving, or by an officer questioning your immigration status.

EITC fact sheet updated for current tax season

Consumer Action’s editorial staff completed the annual update of one of our core publications, Get Credit for Your Hard Work, just in time for Earned Income Tax Credit (EITC) Awareness Day on Jan. 26. Created in 1975, the EITC is a tax credit designed to put money back into the pockets of low- and moderate-income workers.

Like EITC Awareness Day, our publication is intended to promote and explain a tax credit that is widely regarded as the federal government’s most effective antipoverty program despite the fact it remains underused. The Office of the Comptroller of the Currency (OCC) says that even with more than 25.8 million eligible taxpayers receiving the credit last year, only 80 percent of those who qualify claim the EITC.

With the average credit being around $2,470 last year, households that leave refunds on the table forgo the opportunity to build savings, pay down debt, buy necessities and make needed home and auto repairs. (Unlike other tax credits, qualified taxpayers can get a check back even if they don’t owe any taxes.)

Our annual revisions to Get Credit for Your Hard Work reflect any IRS updates for income limits and maximum credits. For tax year 2017, filers who meet all other eligibility criteria and whose income and adjusted gross income (AGI) are both below the following limits may be eligible for the EITC:

  • Single filer, no children: $15,010. Joint filers, no children: $20,600.
  • Single parent, one child: $39,617. Joint filers, one child: $45,207.
  • Single parent, two children: $45,007. Joint filers, two children: $50,597.
  • Single parent, three or more children: $48,340. Joint filers, three or more children: $53,930.

The maximum credits for parents are $3,400, $5,616 and $6,318, depending on the number of qualifying children. The maximum credit for filers without children is $510.

Since the update, we’ve learned that the IRS is offering qualifying victims of last year’s hurricanes, particularly those affected by Hurricanes Harvey, Irma and Maria, the option to use a special computation method that takes into account a drop in income they might have experienced post-hurricane. Under this method, taxpayers can figure the credit twice, first using their 2016 earned income and then using their 2017 earned income, and go with the option that yields the larger EITC. (Up to a certain level, the credit increases with increases in income; at a point, the credit begins to decrease as income goes up. See IRS Publication 596, Earned Income Credit (EIC), for more information, including an income/credit table.)

To get the credit, households must file a tax return, even if they owe no tax or aren’t normally required to file.

Get Credit for Your Hard Work is available for online reading or PDF download in English, Spanish, Chinese, Vietnamese and Korean.

Help and savings hacks for income tax season

Tax season runs through April 17 this year, when your 2017 tax returns are due. Consumer Action has issued a handful of alerts relating to this tax season: Make your tax refund work for you!, Tax Identity Theft Awareness Week 2018 and EITC Awareness Day.

Here are some additional resources to help you weather tax season. Most are geared toward low- and moderate-income consumers, but not all of them are. For example, anyone can use the online forms at Free File Fillable Forms. And Credit Karma offers free tax return preparation and e-filing software that will work for most filers.

The Volunteer Income Tax Assistance (VITA) program offers free basic tax preparation assistance with electronic filing to consumers making $54,000 or less, people with disabilities, the elderly and limited-English-speaking taxpayers. IRS-certified volunteers provide the service at community agencies, libraries and other public places.

The Earned Income Tax Credit (EITC) helps low-income working taxpayers and families get money back when they file their federal income tax returns. Last year, the average credit was $2,470. Unfortunately, only 80 percent of those eligible to receive the credit claim it. To learn more about the EITC, download the Consumer Action publication Get Credit for Your Hard Work (2017 Tax Year).

Tax Counseling for the Elderly (TCE) provides free basic tax preparation with electronic filing for older people (age 60-plus). The IRS trains and certifies volunteers from non-profit agencies and offers them technical assistance. TCE relieves the financial burden of tax prep fees for elderly consumers living on fixed incomes.

Benefits.gov features a page dedicated to tax assistance, where consumers might find tax credits that they are eligible to claim.

If you owe taxes, it is always best to communicate with IRS and make payment arrangements. Avoidance will not make the tax debt go away; interest and late fees will accrue, and you will owe more. Those who are unable to pay their tax bill by the due date can establish a payment plan, or installment agreement. Depending on the length of the agreement or method of payment, there may be set-up fees and convenience charges. Interest and penalties continue to accrue until the debt is paid.

An offer in compromise allows qualifying delinquent taxpayers to settle their debts for less than the amount owed. After receiving your application along with a non-refundable fee of $186 and all required documentation, the IRS will review your request and base its decision on a number of factors, such as your income, expenses, ability to pay and assets. This is by no means a slam-dunk; generally, the IRS won’t approve an offer in compromise if it decides you can pay through an installment agreement.

Saving your refund

Two non-profit fintech innovators, Commonwealth and EARN, have tax-time savings programs that enable low-to-moderate-income consumers to save their tax refunds. Both agencies have been on the front lines advocating for programs that provide financial stability and security for consumers.

Commonwealth’s Save Your Refund program offers cash prizes for consumers who use IRS Form 8888 to split their tax refund and save a portion of it. (Participants can deposit the saved portion of their refund in a savings account, individual retirement account [IRA], 529 college savings account or prepaid card, or use it to buy U.S. savings bonds or a certificate of deposit [CD].)

EARN’s Savers Win offers consumers that take a pledge to save all or part of their tax refund a chance to win cash prizes. There are a couple of caveats to this sweet deal: You need to take the Savers Win pledge to save some of your tax refund, sign up for SaverLife and save at least $50 to be eligible to win prizes—50 weekly prizes of $100 and a $5,000 grand prize. EARN is a long-term partner of Consumer Action and we have featured their innovative work in past articles.

If technology and prize-linked savings are not for you, there are other meaningful ways to use your refund that will help build or improve financial health.

  • Use your refund to pay down high-interest credit card debt.
  • Build or boost your emergency savings account (46 percent of Americans do not have enough in savings to cover a $400 expense).
  • Deposit your refund in your IRA (traditional or Roth) retirement savings account or your health savings account (HSA).

For other financial and tax preparation hacks, download Consumer Action’s Money Management 1-2-3 publications. Working as an independent contractor? Check out our Tax Basics for Earners in the ‘Sharing Economy’.

Hotline Chronicles: Out of pocket for out-of-network charges

Brutus* from North Carolina called our hotline to warn consumers to make sure they know where their doctors are sending lab tests because the laboratory might not be “in network” with the consumer’s insurance provider. When this happens, the doctor has no liability, and the consumer is hit with an out-of-network provider charge—often accompanied by a deductible payment triggered by going out of network.

Brutus was billed about $650 dollars for a routine colon cancer screening test that patients take at home and mail to the lab. (Doctors routinely and widely prescribe the Cologuard test the doctor gave Brutus, which comes with a pre-addressed mailing package.) Ironically, the Affordable Care Act (aka Obamacare) requires that colon-cancer screenings be covered at no additional cost because of their value as a preventative measure. However, most plans are not required to cover out-of-network preventive services.

“We’ve been hearing more and more such stories,” said Linda Sherry of Consumer Action. “It is so unfair, because it puts an undue, and often impossible, burden on patients to question their doctors about the providers they use and whether they are in network.”

Sherry mentioned three other cases she heard of recently:

  • A patient sees his in-network dermatologist routinely twice a year and often has biopsies for suspicious moles and possible skin cancer. He received a bill for more than $500 for fees and a portion of his deductible because his doctor sent his sample to an out-of-network lab. The doctor had used the same lab on several previous occasions but the insurer’s terms changed during the patient’s most recent open enrollment period.
  • A patient got a colonoscopy, a covered preventative service, during which the doctor found and removed a polyp. The fact that the doctor removed the polyp morphed the treatment from preventative to “clinical” and she was billed for most of her $1,000 deductible because her insurer determined the charge was outpatient surgery.
  • A woman who went to the trouble to make sure her foot surgery was done at an in-network facility was, nonetheless, charged a very high fee by an out-of-network anesthesiologist on call that day.

Consumer Action strongly urges insured consumers to dispute surprise medical bills, especially if the mishap originated in the doctor’s office. Check the explanation of benefits (EOB) form you received from your health insurer, as most list the procedure for filing a dispute. Typically, there are two opportunities to appeal: internally, with the insurance company, and an external review administered by an independent third party. If you received a surprise bill or have unresolved questions, call your state insurance department. It may be able to help find answers and determine whether there's been an error. Find your state insurance department at the National Association of Insurance Commissioners website.

Unfortunately, in today’s healthcare environment, consumers have to know the ins and outs of their health insurance. It’s difficult to find plans without deductibles—even managed care plans. Plans that allow you to visit the doctors of your choice may seem attractive, but when you visit an out-of-network doctor or facility you trigger higher out-of-pocket charges.

The Affordable Care Act requires group health plans to provide a Summary of Benefits and Coverage and a glossary of commonly used terms before consumers enroll in group or individual plans and at renewal time. Even with these prescribed formats, it can be very difficult to understand your responsibilities, so call or email the insurer with any questions. Also contact your plan before visiting specialists or having procedures—even if you believe they are preventative in nature. Most health plans allow you to search for in-network providers online, but it pays to call in advance just to be sure. Keep notes about what you are told and whom you spoke to.

Here are some articles with helpful information about surprise medical bills:

As always, we love hearing from you. Submit your complaints online in English or Spanish. Or call 415-777-9635; we speak English, Spanish and Chinese. If you don’t have a complaint but want to tell us something, .(JavaScript must be enabled to view this email address).

*Not this consumer’s real name

Teaching adults: ‘Making your training stick’ slides

Consumer Action is rolling out a new “Teaching Adults” slide deck titled “Making Your Training Stick.” Whether you’re a trainer, facilitator or life coach, making learning stick is at the heart of what you do. After all, it is only when learning translates to action that a return on investment (ROI) is realized. A successful outcome greatly depends on what your class participants do when they’re back to “real life”—balancing their checking accounts, dealing with debt collectors, selecting the right insurance product, or protecting their privacy, identity and money while online.

Experienced trainers, facilitators or coaches can use the new “Teaching Adults” as a reference tool or as inspiration for breathing new life into their presentations. Newbies can use it to plan, design and deliver their first adult training session.

The slide deck is divided across several topics that broadly cover the following issues:

  • How and why adults learn. When it comes to learning, adults are not over-sized children. Maturity brings unique characteristics that affect how adults are motivated to learn. Highlighted in the slide deck are five core adult learning principles developed by the late adult ed guru Malcolm Knowles along with suggestions and best practices for incorporating the principles into your training sessions.
  • Understanding learning styles. Each of us has a preferred way of receiving and processing information and experiences as we interact with the world. These different learning styles are described in the slides to help you create training content that enables all your attendees to learn effectively.
  • Preparing to succeed. Proper preparation and practice prevents a poor performance and helps you deliver a training that sticks. Guidance and strategies are provided for avoiding and overcoming procrastination, dealing with difficult participants, facilitating learning though reiteration, reinforcing key points through de-briefing activities, and more.

“Adults generally learn and retain information they need, and nothing more, so whether you’re a trainer, facilitator or life coach, make sure your training material is relevant for your training participants,” advises Consumer Action’s Linda Williams, creator of the new training deck. “It makes no difference if the information is interesting or valuable to you, the trainer. In order for your content to stick, it must be interesting, valuable and accessible to the people taking your training.”

Download the Teaching Adults: Making your training stick PowerPoint slide deck from Consumer Action’s website.

CFPB Watch: Lending discrimination setback and access to financial coaching

Disruption and restructuring continues at the Consumer Financial Protection Bureau (CFPB) under its temporary leader, Office of Management and Budget Director Mick Mulvaney. Mulvaney, appointed by President Donald Trump to run the CFPB on an interim basis, switched the watchdog’s mission statement from making effective consumer protection rules and “fairly enforcing those rules” to “regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations.”

With no public explanation, Mulvaney recently ordered CFPB staffers to drop a pending lawsuit against online payday lender Golden Valley Lending, accused of charging borrowers as much as 950% interest, and has allegedly scrapped investigations into other payday lenders. He’s also suspended a payday lending rule that requires lenders to evaluate a borrower’s ability to repay high-cost loans before provisioning such loans. It’s believed Mulvaney intends to gut or kill the modest payday rule. Meanwhile, the temporary director is reevaluating numerous other pending investigations and lawsuits.

In his effort to overhaul the consumer watchdog agency, Mulvaney has pulled the teeth out of its Office of Fair Lending—the team that works to prevent loan discrimination. He’s removed the lending office’s enforcement and oversight functions, saying he wants to promote operational efficiency. Congresswoman Maxine Waters (D-CA) has demanded answers from Mulvaney about the decision to neuter the Office of Fair Lending.

The Office of Fair Lending is credited with curbing many illegal lending practices: “dealer markups” (rate increases that can result in auto lending discrimination), racial discrimination against minority mortgage borrowers, and redlining (steering people of color away from buying homes in certain neighborhoods).

Fair lending cases, like GE Capital/Synchrony Bank’s credit card and debt relief discrimination settlement, resulted in $225 million returned to harmed minority consumers.

Mulvaney has also relocated the complaints (“Consumer Response”) department, placing it under the consumer education division. While the move may seem harmless, this may not bode well for consumer complaint handling and public complaint data at the Bureau.

According to a survey of attorneys by the National Association of Consumer Advocates (NACA), consumers and their legal advocates rely on the CFPB to help resolve their private disputes with financial companies and provide the Bureau with evidence of wrongdoing. A full 96 percent of respondents found the CFPB “very helpful” to attorneys who were representing low-income clients.

If you or someone you know has been helped by the CFPB with a financial problem, email information about your CFPB success story to Consumer Action’s .(JavaScript must be enabled to view this email address).

Mulvaney has released a torrent of requests for information (RFIs) from the public and industry seeking “evidence” for the need of vital Bureau functions. Most topics are quite weedy, but you can read the RFIs and add your voice by submitting a brief or detailed comment to the CFPB. Topics include enforcement actions, complaint reporting, consumer education, and more.

Financial coaching

The CFPB is offering free, one-on-one financial coaching to help servicemembers and “economically vulnerable” consumers create personalized plans to meet their financial goals. Through contractor AFSC-Magellan, the CFPB will provide individualized money management help by financial coaches at U.S. Department of Labor American Job Centers and other community-centered organizations. The Bureau lists one coaching site per state, which will make it difficult for many needy people to access an in-person financial coach.

Tax tips

Last month the CFPB provided tax filers with a guide to refund advance checks and loans. With a refund anticipation check (RAC), you pay fees to delay paying your tax preparation costs until your refund comes in. With a refund advance loan (RAL), you borrow part of your refund upfront; loan fees and any interest are taken out of your tax refund. Consumer Action generally advises taxpayers to hold off on the advance loans, especially if they are filing their return and receiving their refund electronically, which can arrive in as little as a week or two after filing. If you have a simple tax situation, consider filing your own taxes and avoiding a tax preparation fee. (See articles on the Earned Income Tax Credit and other tax “hacks” in this issue.)

Coalition Efforts: Poison pills, disabled access and SAFE-ty from predatory loans

A ‘poison pill’ for CFPB’s independent funding. Friends of Wall Street and the banking industry in Congress tried to remove the Consumer Financial Protection Bureau (CFPB) from under the Federal Reserve System, where it is currently housed and funded, by attempting to add a “rider” to unrelated legislation. They’d like to relegate the Bureau to the appropriations process in hopes of sabotaging its independence—a key element in its success overseeing consumer finance markets.

Consumer Action joined Americans for Financial Reform in a Feb. 7 letter to U.S. Senators and members of the House of Representatives to oppose backroom deals like this. “We have seen hundreds of ideological and unpopular policy proposals raised as possible riders to continuing resolutions on the budget and other popular legislation in order to gain the votes these poison pill provisions would not garner on their own,” wrote the groups. “We believe this is an irresponsible avenue for enacting policy change and these riders should be rejected based on process concerns as well as on the merits.” Learn more.

Gutting key provision of Americans with Disabilities Act. The Americans with Disabilities Act (ADA), landmark bipartisan legislation adopted in 1990, affirms and protects the civil rights of disabled people. A new bill, the ADA Education and Reform Act (HR 620), introduced by Rep. Ted Poe (R-TX), would make it harder for people with disabilities to hold businesses accountable for inaccessibility. The proposed legislation was recently adopted in the House Judiciary Committee and specifically takes on a section of the ADA that gives disabled people the right to sue public businesses (including restaurants, hotels and movie theaters) that don’t comply with the ADA’s accessibility requirements.

In a Feb. 13 letter, Consumer Action and allies urged House leaders to oppose the legislation, as it would weaken incentives for businesses to comply with the ADA, which mandates equal access to public accommodations. The proposed bill removes a business’s incentive to proactively ensure that it is accessible to people with disabilities, said the groups. Learn more.

SAFE Lending Act protects working families from cycle of debt. In an effort to end predatory lending practices, both online and offline, that are leaving many Americans trapped in a cycle of debt, Consumer Action and allies wrote on Feb. 13 in support of the SAFE (Stopping Abuse and Fraud in Electronic) Lending Act (S 2760). Introduced by Sen. Jeff Merkley (D-OR), the bill aims to curb predatory lending practices and promote financial stability among working families. Learn more.

Bill would block competition and choice in the contact lens market in Kentucky. Consumer Action joined the National Taxpayers Union in a Feb. 15 letter to members of the Kentucky State Senate opposing legislation (HB 191) that would restrict the right of close to one million Kentucky state residents to renew contact lens or glasses prescriptions online. Currently Kentucky and 38 other states allow residents to renew contact lens or glasses prescriptions online. Learn more.

Protect employees by ending forced arbitration in the workplace. Consumer Action joined advocates in a Feb. 7 letter calling on the leaders of the tech industry’s biggest companies, including Apple, Google and Facebook, to remove forced arbitration provisions in employee contracts and take the first steps toward creating a harassment- and discrimination-free environment. Unfortunately, while forced arbitration provisions are now common in many types of consumer contracts, forcing an employee into arbitration is equally harmful because of its ability to silence systemic wrongdoing in the workplace.

Recent revelations of sexual harassment across industries have spotlighted the way in which forced arbitration provisions silence complaints of workplace misconduct and abuse. Arbitration clauses are often a condition of employment, impacting an estimated 60 million Americans. Eliminating these clauses would aid victims by pulling back the veil of secrecy on bad behavior in the workplace. Learn more.

Visit the Coalition Efforts page of our website to learn about other activities.

Class Action Database: A discounter’s incomparable ‘compare at’ prices

Class action settlements involving Monsanto Company, manufacturer of Roundup weed killer, and NPAS (National Patient Account Services) Solutions, LLC, a medical debt collector that called cell phones without permission, are among 12 new settlements added to the Consumer Action Class Action Database during February.

California discount shopping mavens will be interested in the class action settlement of Chester, et al v. TJX Companies, Inc. (parent of T.J. Maxx, Marshalls and HomeGoods).

The plaintiffs filed a class action alleging that TJX misleadingly labeled the price of its merchandise, which features price tags with “compare at” original retail prices. Plaintiffs claim that the higher retail prices were designed to make consumers believe their TJX purchases were bargains when they were not. (According to a disclosure on TJX’s website, TJX estimates the “compare at” prices charged by other retailers for “comparable” products. For example, the plaintiff purchased a Jessica Simpson handbag with the sale price of $24.99 and a “compare at” price of $48 + Up with a purportedly original MSRP tag price of $68. Plaintiffs allege that other retailers were not selling the Jessica Simpson bag at the $48 or $68 MSRP price.

As is common practice for companies charged with wrongdoing, TJX denied the allegations but agreed to settle to “avoid the burden, expense, and risk” of continuing the lawsuit.

You are part of the class if you purchased items with a TJX “compare at” price tag from a T.J. Maxx, Marshalls or HomeGoods store in California from July 17, 2011 to Dec. 6, 2017 and did not receive a credit or refund. The $8.5 million settlement provides merchandise credit for use in any T.J. Maxx, Marshalls or HomeGoods store in California.

The claims deadline is April 9, 2018.

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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