Table of Contents

• What people are saying
• Did you know?
• Advocates, lawmakers galvanized against obnoxious robocalls
• CVS-Aetna merger is bad business for millions of patients
• Hotline Chronicles: Parsing the complexities of Google’s photo storage
• International consumer alliance addresses FinTech, data privacy concerns
• Training addresses debt collection consumer rights
• Coalition Efforts: Protecting borrowers, investors and…bus drivers!
• CFPB Watch: Unlawful student loan debt forgiven, closing cost fraud alert
• Class Action Database: Fiat Chrysler cuts a deal over dirty deeds
• About Consumer Action

What people are saying

I just wanted to say "thank you" for the phenomenal debt collection training! I go to a lot of trainings, and Consumer Action’s was one of the absolute best I’ve ever been to—from the organization of the event, to the materials and presentations, to your great energy and passion. —Jeffrey Hittleman, Esq., Coast to Coast Legal Aid of South Florida

Did you know?

Forty-one states and Washington, D.C., now offer state-based accounts that let certain disabled people work and save money without risking the loss of government benefits. The tax-free accounts are known as ABLE accounts (from the 2014 Achieving a Better Life Experience Act). However, these accounts are not for everyone—don’t wade in without careful study and expert advice (you may want to consult an attorney). Most important, the ABLE Act limits eligibility to those with “significant disabilities” that began before they turned 26. Learn more at the ABLE National Resource Center (ANRC).

Advocates, lawmakers galvanized against obnoxious robocalls

Robocalls (automated telephone calls that deliver pre-recorded messages) have been in the headlines lately, as consumer and privacy advocates, legislators and regulators work to get a handle on the rampant public nuisance. Consumers received a mind-boggling 47 billion robocalls last year alone, with scammers placing nearly half of them!

The public has made their feelings about the intrusions known: In 2017, seven million consumers complained to the Federal Communications Commission (FCC) and Federal Trade Commission (FTC) about robocalls.

The topic is so hot that Consumer Action devoted the latest installment of our quarterly Consumer Action News entirely to the subject of unwanted and scam robocalls. “The Robocall Scourge” issue, published at the end of May, explores how the problem got so far out of hand (hint: VoIP phone lines and Caller ID spoofing contributed quite a bit); what (semi-effective) tools and tactics exist to block the unwanted calls; what the legislative and regulatory landscape currently looks like; and what types of calls are and are not restricted under the Telephone Consumer Protection Act (TCPA). Find the issue here.

“It’s particularly important for consumers to understand the key federal bills either in the pipeline or recently passed that would help provide some relief from robocalls,” said Consumer Action Executive Director Ken McEldowney. “We all need to let our members of Congress know that we support strong legislation to stop these obnoxious and often harmful calls.”

This legislation includes the TRACED Act (S 151), which would require telephone companies to adopt what is known as STIR/SHAKEN technology to authenticate incoming calls and alert consumers if the call was from a “spoofed” (faked) number; the ROBOCOP (Repeated Objectionable Bothering of Consumers on Phones) Act (S 1212 and HR 2298), which would, among other things, require phone companies to supply customers with free call-blocking tools; and California’s Caller ID spoofing ban (SB 208), which would set a deadline for telecoms to prevent “neighbor spoofing”—displaying fake Caller ID numbers that appear to be from a local source.

Consumer advocates have been active in supporting these legislative efforts. In April, Consumer Reports hosted a “Hanging Up on Robocalls” roundtable in Washington, D.C. The event convened members of Congress, state enforcement officials, public interest groups and businesses to discuss the variety of proposed legislation. Consumer Action’s Linda Sherry, who participated in the roundtable, noted that the unwanted calls are a major consumer protection issue.

“Robocalls are more than just annoying. Too often, scammers make the calls aiming, and succeeding, to steal money and sensitive personal data. This has cost consumers billions of dollars each year,” Sherry pointed out.

Maintaining the anti-robocall momentum, the FCC on June 7 passed a rule that allows phone companies to block robocalls by default. While the FCC ruling does not require companies to offer this automatic call-blocking service, it assures carriers that they could do so legally, “as long as their customers are informed and have the opportunity to opt out of the blocking.” (Questions remain about whether consumers will have to pay for such services, should carriers ultimately activate them.) Read the FCC’s decision here.

Despite these promising developments, there’s much more work to be done before people can feel confident about answering their phones again. Consumers who want to urge their legislators to support the TRACED Act can do so through Consumer Action’s online Take Action Center. Those who want to be proactive about thwarting robocalls to their cell and landlines should read Consumer Action’s “Robocall combat tools” article for tips.

CVS-Aetna merger is bad business for millions of patients

Healthy competition in the marketplace typically leads to better products and services for consumers, and the healthcare marketplace is no different. Last year, the U.S. Justice Department signed off on a $69 billion deal in which health insurer Aetna and CVS, owner of drug stores and pharmacy benefits manager (PBM) services, would consolidate their operations into an unhealthy merger due to the ensuing lack of competition.

“Not so fast,” said a number of consumer and patient advocacy groups, including Consumer Action and U.S. PIRG, which opposed the deal in front of a U.S. district court judge (per an existing legal requirement), where it is being given the consideration it deserves. The groups and their attorney, David Balto (former policy director of the Federal Trade Commission), have pointed to the problems that arise when companies like CVS become a “one-stop healthcare shop”—essentially prescriber, insurer and pharmacist—able to raise prices unchecked and make decisions about which medications will be prescribed and filled, regardless of doctors’ wishes and patients’ needs. They also pointed out how a minor divestiture is woefully inadequate to protect competition and consumers.

“This mega-merger hands CVS the power to ‘cut off’ access to rival pharmacies for the millions insured by Aetna,” Consumer Action Executive Director Ken McEldowney said. “If this passes, CVS could require that Aetna-insured patients only use CVS mail order or retail pharmacies. CVS also could implement financial disincentives that would penalize the insured for not using CVS.”

The judge hearing the case has said that CVS would gain so many new healthcare clients (including those in Medicare part D) through its merger with Aetna that it would have an unfair advantage with drug manufacturers, who would favor CVS pharmacy benefit managers over those operating on behalf of smaller pharmacies. PBMs work as middlemen in the prescription drug supply chain. They negotiate the price consumers will pay for each medication with drug manufacturers—but oddly, in what many consider a conflict of interest, they are compensated more for creating higher list prices. They also determine what drugs patients are permitted to purchase and how many times patients can fill the prescriptions.

Perhaps even more shocking, patients’ trusted primary care physicians also are at risk of getting squeezed out of the marketplace, as CVS will be able to steer patients covered by Aetna to its own rapidly expanding MinuteClinics/HealthHUBs.

The AIDS Healthcare Foundation testified in the case earlier this month as to how the merger would be “especially hard for patients who face obstacles like stigma, comorbidities, and social determinants,” since “the patients’ trusted providers—doctors as well as pharmacists—play a crucial role in helping patients overcome these obstacles.”

A representative for CVS prompted concerns not only for those with chronic conditions but also for patient privacy when he told the federal judge considering the case that the company wanted to “use analytics and provider networks to build on the existing infrastructure of pharmacies and retail clinics” with the ultimate goal to “change chronic care” in the U.S.

There is little evidence that past vertical acquisitions by CVS have resulted in benefits to consumers, and plenty of evidence that they’ve resulted in harm. In 2007, CVS acquired the pharmacy benefits manager Caremark Rx, and promptly used its new power to exclude competition, reduce patients’ access to vital medications and care from their pharmacists of choice, and drive up drug prices.

The judge, who has indicated in court that he is skeptical that the deal will help patients, has set another hearing on July 17, when he will hear oral arguments for and against the deal.

Hotline Chronicles: Parsing the complexities of Google’s photo storage

Pablo* from Ohio contacted Consumer Action’s complaint and referral hotline about Google Photos, a popular service offering free, unlimited cloud storage of “high quality” photos, along with tools for searching, editing and sharing them.

Pablo told us: “Google advertises ‘free’ photo and video storage through its Google Photos and Google Drive products, if you choose the high quality option.” After using the tool, Pablo learned that if you upload photos and videos directly to Google Drive, they count against your storage quota. However, if you upload them using Google Photos, you’ll get the free, unlimited storage for “high quality” images, but not for “original quality” ones. What’s more, according to Pablo, for Mac users “the only upload tool [offered] is a combined Photos/Drive uploader.”

Pablo complained that if users don’t understand the difference between Google Photos and Google Drive (and if they are Mac users, their photos are being uploaded to both), then “getting ‘quota free’ cloud storage for photos and videos is highly tricky and actually not even possible.” Pablo went on to call Google’s offerings “deceptive.”

While we find this issue is more about complexity than deception, we wanted to flag for other users of these free services, especially newbies, that they require an understanding of what the services offer and the limits to each.

In the free, unlimited version of Google Photos, photos larger than 16 megapixels are resized down to 16 megapixels and videos higher than 1080p are resized down to “high definition” 1080p (i.e., “high quality”). These sizes are suitable for almost every non-professional online viewing purpose, such as posting online or sharing via social media. (To learn more, read this article on PhoneArena.com.)

Unless you are a professional photographer who needs to store “raw,” or original quality, photo or video files, make sure you are uploading your photos to Google Photos, not Google Drive. And if you use the uploader, be careful to specify where you want the photos to be uploaded.

It is important to know that if you delete photos from Google Drive (or delete an entire folder), those same photos will be deleted in Google Photos too, if stored there. (Fortunately you can rescue them from the trash for 60 days before they are actually destroyed.) A better way to create a collection of photos is by creating an “album” in Google Photos. This video, Google Photos vs. Google Drive, which to use?, on the YouTube channel Technically Speaking, can help you learn more.

And, remember, Google is not the only game in town. Tom’s Guide offers a recent rundown: The 10 Best Photo Storage and Sharing Sites.

We advised Pablo to contact Google to address his concerns, and if he still is not satisfied with the company’s response, to submit a complaint to the Federal Trade Commission.

*Not this consumer’s real name

International consumer alliance addresses FinTech, data privacy concerns

Consumer Action is a longtime member of the Transatlantic Consumer Dialogue (TACD), a coalition of U.S. and European Union (EU) consumer rights groups working to understand how their countries are addressing consumer protection while sharing ideas about creating sound consumer rights on both sides of the Atlantic. The group’s annual meeting is held on alternate years in Washington, D.C., and Brussels, Belgium (the seat of the EU Parliament). Consumer Action’s Linda Sherry and Ruth Susswein attended the 2019 U.S. events in Washington on June 3-5, participating in financial services and data privacy-related segments. (TACD also works on food and drug, intellectual property, trade and cybersecurity issues.)

Sherry noted that, among the financial services forums, she found one on the “Benefits and risks of ‘Open Banking’” to be particularly enlightening, as she learned about EU efforts to streamline financial account aggregation services to ensure that banking customers are not locked in to their bank’s own ecosystem. Account aggregation, which many may recognize as the services rendered by FinTech (financial technology) apps like Mint and Yodlee, as well as by banks themselves, allows consumers to pull all their financial services accounts (bank, mortgage, brokerage, etc.) into one application, where they can be more easily monitored. Traditionally, this has been possible only if consumers share their usernames and passwords with an aggregator, which then logs in with the consumer’s permission. For competitive or security reasons, some banks have declined to participate in aggregation services, making it tough for consumers to bring all their accounts into one portal.

“The EU has crafted a somewhat different, highly regulated financial services environment that puts the individual in the driver’s seat,” Sherry said. “Banks there must create interoperable systems that empower consumers to share their data in a secure, standardized format via regulated third parties. Individuals must give their explicit consent before sharing specific financial information with these third parties. Easily sharing only the information necessary for a transaction can make it simpler and safer for consumers to view their overall financial picture, apply for loans and other financial products, and pay for products and services online.”

In the U.S., it is often such an ordeal to switch bank accounts that customers become virtual prisoners of one bank—even when there might be more lucrative offers and lower-fee products available. “The EU plan has been devised to give individuals the power to apply for competitive financial services, aggregate accounts, and make payments without hassle and with more security than if they shared usernames and passwords directly with new financial services firms,” said Sherry.

The EU is not alone in fostering FinTech innovation, but U.S. consumer advocates often find stateside approaches to innovation to be more haphazard. The conversation in the TACD forum quickly turned to the controversial U.S. “regulatory sandbox” approach, which grants special exemptions to companies working on “innovative” products that might improve consumer access to financial services. In the U.S., financial regulators have approved experimentation in these “sandboxes” in order to bring FinTech products, such as new payment services, to market quickly—often too quickly, consumer advocates argue. Consumer Action recently signed a letter to the Consumer Financial Protection Bureau (CFPB) opposing the regulator’s plan to grant FinTech companies the risky exemptions.

“There is more transparency to the EU approach to growing the FinTech market,” noted Sherry. “The U.S. approach, in the name of so-called experimentation and ‘innovation,’ allows companies developing new products to skip important consumer notices and bypass established protocols meant to protect consumers, while allowing real monetary transactions in which consumers are not fully protected by existing regulations.”

Data privacy

TACD’s forum on data privacy was held at George Washington University, where speakers kicked off the first session by outlining how the U.S., unlike more than 100 other nations, has not yet enacted comprehensive data protections laws. While U.S. legislators started the year on a high note, with strong bipartisan agreement on the need for federal privacy legislation to protect personal data, efforts since have been mired in disagreements about federal preemption of stronger state privacy laws; which regulatory agency/agencies should enforce data privacy laws; and whether consumers should have the right to go to court over violations of these laws.

Corporations have called for federal preemption in order to avoid having to adhere to what they claim is a “patchwork” of state data privacy laws. Consumer rights advocates, however, want states to continue to be able to create stronger laws that are not pre-empted by federal law and to enjoy flexibility in responding to emerging privacy issues.

Rep. Jan Schakowsky (D-IL), chair of the U.S. House Consumer Protection and Commerce subcommittee, gave attendees reason to hope that eventually Congress will introduce a federal data privacy protection bill when she outlined how her office is drafting legislation that will, in addition to providing other protections, limit the use of big data for discriminatory purposes. Schakowsky stated that any prospective bill must not only address this critical issue, but also allow consumers the ability to correct and even delete the information companies compile about them. She added that her office is discussing introducing a private “right of action” as well, to enable individuals to sue or join class action lawsuits against those companies that violate their privacy.

Groups that would like to know more about TACD membership can visit the organization’s website.

Training addresses debt collection consumer rights

As Democratic Senators Jeff Merkley and Ron Wyden of Oregon joined 24 of their colleagues from across the country in calling on Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger to reverse a proposed rule that would allow debt collection companies to send unlimited texts and emails to consumers, our trainers were educating consumer groups on existing debt collection rules. Consumer Action trainers Nelson Santiago and Linda Williams were on the ground in Florida—a state the Federal Trade Commission (FTC) dubbed the “scam capital of the nation”—conducting two free train-the trainer roundtables on one of our most popular training modules, Debt Collection: Know your rights.

The roundtables, held June 5 in Delray Beach and June 6 in Plantation, were geared toward frontline advocates who serve victims of domestic violence, farm workers, seniors, disabled veterans, immigrants and low-income consumers, and provide them with information, tools and resources. The roundtables work to educate this critical population on:

• Consumer rights under federal and state laws when owing a debt;
• Spotting debt collection scams;
• Responding to debt collection calls;
• Disputing a debt;
• Time-barred debts;
• Where to find free and low-cost help; and
• Where to file a complaint.

Rachel Bentley, Esq., from the Legal Aid Society of Palm Beach, provided attendees of both trainings with an engaging session on the Florida Consumer Collection Practices Act, which adds to existing protections under the national Fair Debt Collection Practices Act. The Florida law prohibits not only debt collectors, but also original creditors collecting a debt, from engaging in unfair and abusive collection practices, such as calling debtors at work or making empty threats of legal action. Bentley highlighted the issues and trends in debt collection that her office is seeing in Florida, including debt collectors who coerce consumers into reviving old debts that have passed the statute of limitations, and inadequate (or non-existent) attempts to serve notices of debt collection lawsuits that result in people with debts never knowing they are being sued and losing by default when they fail to show up in court.

The Florida training was such a success that Santiago and Williams have been invited back in the fall to educate a delegation of Palm Beach County employees on debt collection issues. The two will also continue visiting various cities and towns across the U.S. to help vulnerable populations push back against bad debt collection practices.

Coalition Efforts: Protecting borrowers, investors and…bus drivers!

Relaxing fair lending laws would make it harder to prove discrimination. Consumer Action joined coalition advocates in urging the Consumer Financial Protection Bureau to abandon a rule it recently proposed, arguing that the rule would undermine the government’s ability to enforce fair lending laws and prevent discrimination (based on race, gender, etc.) in the mortgage lending market. Learn more.

Opposition to bus driver labor standards puts California workers, drivers at risk. Advocates have opposed an outrageous American Bus Association petition to the Federal Motor Carrier Safety Administration (FMCSA) encouraging the FMCSA to preempt California’s longstanding meal and rest break laws for passenger-carrying commercial motor vehicles. The laws, which govern when the drivers must take the breaks, were enacted almost two decades ago to reduce worker fatigue and protect everyone on the road from workplace-related accidents, injuries and deaths. Learn more.

California to lead the effort to protect student loan borrowers. AB 376, the Student Borrower Bill of Rights, would make California the first state in the nation to create a comprehensive set of rights for people holding student debt, by requiring student loan companies to treat borrowers fairly and by giving borrowers the right to hold these companies accountable when they fail to meet basic servicing standards. Learn more.

New Jersey steps up to protect investors from predatory products and advice. New Jersey’s Bureau of Securities announced a proposal that would impose a fiduciary duty on anyone giving investment advice, including brokers. Those financial advisers who operate in accordance with a fiduciary duty are giving clients investment advice and making financial decisions that are in their clients’ best interests (as opposed to being based on their own profit motives). Advocates touted states, such as New Jersey, that are willing to step in to fill what they call a national regulatory “void” on investor protections. New Jersey is one of several states—including Nevada and Massachusetts—moving towards enacting investment advice regulations. Learn more.

CFPB Watch: Unlawful student loan debt forgiven, closing cost fraud alert

Former students of the now defunct ITT Technical Institute will be relieved of the financial burden of repaying the rest of their Student CU Connect (CUSO) LLC student loans. The Consumer Financial Protection Bureau (CFPB) has settled with CUSO, a student loan company, for misleading student borrowers into obtaining the loans to fund their education at ITT Technical Institute, which went bankrupt in 2016.

According to the CFPB, CUSO “knew or was reckless in not knowing” that students did not understand the terms of its loans and/or could not afford to repay them.

Under the agreement, CUSO must:

• Stop collecting on the loans,
• Forgive the balance of the loans, and
• Delete all CUSO loan data from borrowers’ credit reports.

The Bureau estimates that $168 million in “unlawful” CUSO loans will be forgiven.

CUSO will notify affected borrowers directly and will supply a phone number to assist borrowers with any outstanding questions.

In a separate action in 2018, a federal judge erased $600 million in tuition and loans owed to ITT Technical Institute and ordered that $3 million be returned to former students.

Scammers target homebuyers just before closing

Imagine being conned out of your life savings days before you finalize the purchase of your new home!

The FBI is warning consumers about spoofed (fake) emails that are scamming homebuyers out of their closing costs and downpayment funds. Thieves are posing as the buyers’ real estate or settlement agents, changing money transfer instructions at the last minute, and rerouting the crucial funds to fraudulent accounts. In most cases, wired funds cannot be recalled if the scammer receives them. The FBI estimates that nearly $1 billion has been lost to phony closing cost transactions.

The CFPB has created a new fact sheet to help alert homebuyers and prevent these scams. The Bureau’s tips include:

• Never simply follow closing instructions from an email;
• Independently confirm closing instructions by phone or in person with your trusted real estate agent or title company (don’t use phone numbers or links provided in an email); and
• Create a code phrase that only you and the trusted person know.

Report fraud attempts to the FBI’s Internet Crime Complaint Center.

Mortgage servicer fails to honor loan mods

According to a CFPB investigation, the Texas-based mortgage servicer BSI Financial Services did not recognize home loan modifications borrowers had been approved for or that were in process, and failed to honor those modifications. A loan modification would have lowered their monthly mortgage payments, but BSI nonetheless withheld the modifications from the borrowers.

The CFPB also found that BSI violated federal laws by mishandling mortgage servicing transfers, failing to enter interest rate adjustments in a timely manner (which resulted in efforts to collect the wrong amount of principal and interest) and submitting late payments for the homeowners’ property taxes and insurance premiums (collected through an escrow account).

This is only the second time since Director Kraninger began running the agency that the CFPB has required any financial services firm to make any restitution to consumers—in this case, estimated at a mere $36,500. BSI was also fined $200,000. The Bureau has stated that the mortgage servicer (owned by Servis One, Inc.) also must maintain a “comprehensive” program to significantly improve data accuracy and completeness.

Class Action Database: Fiat Chrysler cuts a deal over dirty deeds

A settlement in a case alleging that Volaris recorded California residents’ calls to the airline’s toll-free phone numbers without the callers’ knowledge or consent was among 10 new settlements added to the Consumer Action Class Action Database during June.

This month we highlight a major proposed settlement involving 3.0-liter diesel Ram and Jeep vehicles. In January 2017, the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) alleged that Fiat Chrysler installed emissions cheating software in over 100,000 EcoDiesel Ram 1500 and Jeep Grand Cherokee vehicles dating back to the 2014 models. Since then, the Department of Justice (DOJ), California Attorney General and other plaintiffs have charged that Fiat Chrysler falsely advertised the vehicles’ emissions levels. Fiat Chrysler agreed to a settlement that will provide over $300 million to compensate consumers and approximately $400 million in civil penalties to the EPA, DOJ, CARB, and state attorneys general for environmental and consumer claims. Consumers who have purchased or leased a 2014-2016 Ram 1500 (with a 3.0-liter V6 diesel engine) or a 2014-2016 Jeep Grand Cherokee (with a 3.0-liter V6 diesel engine) may be eligible to join the settlement and receive cash payment (between $990 and $3,075), free approved emissions modifications and extended emissions warranties. The claims deadline for former owners/lessees is Aug. 1, 2019. The claims deadline for current owners/lessees is Feb. 3, 2021.

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.