Table of Contents

• What people are saying
• Did you know?
• National Consumer Empowerment Conference tackles the tough issues
• JPMorgan Chase funds Consumer Action’s innovative new FinTech initiative
• Hotline Chronicles: Home weatherization woes
• Coalition Efforts: Prescription problems, Pell Grant cuts and poor “protections”
• CFPB Watch: Good news for consumer complaints; ombudsman expectations
• Class Action Database: One Chipotle burrito with a side of…breach?
• About Consumer Action

What people are saying

All of your National Consumer Empowerment Conference speakers were excellent and very knowledgeable in their respective areas. I can’t thank Consumer Action enough for awarding me with a scholarship to come to the conference. Had I not received this scholarship, there is no way I could have attended! I am certain that I don’t have to tell you how tight finances can be when you are a non-profit….Thank you again. — Tonya Diggs, Executive Assistant to the President, PathWays PA

Did you know?

Credit scores are important! A borrower with a low score could pay thousands more in interest over the life of a typical five-year auto loan than a buyer with a high score. But how much do you really know about your credit score and how to improve it? How much is myth vs. fact? Take this 12-question quiz. It doesn’t take long, but the knowledge could go a long way toward improving your own score. And feel free to share!

National Consumer Empowerment Conference tackles the tough issues

Consumer Action held its 10th annual National Consumer Empowerment Conference last month at the Hyatt Regency O'Hare just outside of Chicago. More than 120 financial education coaches from community-based organizations, advocates, policymakers and financial industry reps gathered for the multiday, invitation-only event. Each year at its national conference, Consumer Action brings these parties together, including those working on behalf of vulnerable populations such as low-income and immigrant communities, veterans and seniors, for cutting-edge presentations, panel discussions and interactive sessions that address our increasingly complex marketplace and its impact on consumers.

At this year’s conference, top community educators and subject matter experts spoke on timely topics ranging from the life-threateningly high cost of prescription drugs to data privacy challenges (including those introduced by largely unregulated new technologies) to the harmful long-term impact arrest records can have on individuals’ ability to secure jobs or housing.

This year, Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger spoke on the Bureau’s approach to financial industry regulation and consumer protection. During her prepared remarks, Kraninger announced—to the relief of the consumer advocates in the room—that the CFPB will continue to maintain and publish its valuable Consumer Complaint Database, which was launched in 2012. The public database allows individuals to alert the Bureau and other consumers about unfair or deceptive business practices and to get assistance from the Bureau in resolving their problems with the companies involved.

Shortly after Kraninger spoke, Jacob Wright, an associate attorney with Edelson PC, a law firm specializing in consumer privacy, and Abe Scarr, the director of Illinois Public Interest Research Group (PIRG), outlined new threats to consumers’ privacy online, specifically facial recognition and digital “fingerprinting,” which allows companies/government to identify and track users online and make sometimes harmful inferences about them based on their activities. Facial recognition, for instance, could have a major chilling effect on political demonstration and speech, and has already shown to wrongly identify certain demographics. Wright and Scarr spoke on how the government must establish rules reining in the use of individuals’ personal information and likenesses for the purpose of mass surveillance or discrimination (e.g., targeting certain races or a particular gender). Wright emphasized the importance of consumers contacting local elected officials to encourage strong biometric privacy laws in their states since these legislators rarely receive feedback from their constituents on privacy matters relating to emerging technologies.

Immediately after the session on “Today’s Privacy Frontier,” Consumer Action’s Lauren Hall gave a lively presentation on the latest scams and frauds impacting consumers. Hall pointed out, to the surprise of many in the audience, that millennials are actually the victims of scams much more than seniors (43% for those aged 20-29 versus 15% for those aged 70-79). Hall explained that this is likely due to younger people being more confident, in general, with making online purchases, including (unwittingly) from fraudulent parties.

“But baby boomers, you aren’t off the hook,” Hall said to the audience. “When you do lose money, you tend to suffer more costly losses through ‘big money’ criminal efforts like online romance scams, mortgage closing wire fraud, or bogus vacation home rentals.”

Hall went on to explain the dangers certain scams pose to the vulnerable populations many in the audience work with, including immigrants and limited-English speakers, who are often the targets of visa approval/renewal scams and deportation threats. In addition to instructing participants on how to identify scammers and avoid falling victim to scams, Hall encouraged attendees to sign up for Consumer Action’s free monthly SCAM GRAM e-newsletter and to report scams to the Federal Trade Commission, state attorneys general, and other appropriate agencies, such as the FBI’s Internet Crime Complaint Center (ic3.gov). “Share them with Consumer Action, too, so we can warn of new threats in SCAM GRAM,” she suggested.

Other timely panel topics included:

• Emerging credit trends, such as the new types of alternative data being used to help underserved consumers establish good credit, presented by FICO Vice President of Scores and Analytics Joanne Gaskin, attorney Chi Chi Wu of the National Consumer Law Center, and Credit Karma Chief Legal Officer Susannah Wright;
• The problem of high-cost prescription drugs, the lack of transparency in drug company marketing, and the problematic middlemen known as “pharmacy benefit managers,” who are costing consumers big-time, presented by Michael DeLong, a community organizer from the Law Offices of David Balto, which specializes in antitrust law. (The fall 2019 edition of Consumer Action News covered the prescription drug cost crisis in depth.);
• Innovative tools to help low-income consumers, with presenters from Upsolve, a non-profit that helps qualifying consumers file for bankruptcy for free, Code For America, which announced their free online service Clear My Record to help eligible consumers wipe their arrest records clean, and the Contra Costa County Public Defender’s Office;
• Professional financial coaching, with an interactive session on how to save money to reach personal goals;
• Retirement planning;
• Home-buying for low-to-moderate-income consumers; and
• Jumpstarting a micro business.

The conference also provided participants with the rare opportunity to network with other consumer literacy education providers from across the country during a pre-event dinner.

Consumer Action appreciates our conference supporters—underwriters Bank of America, Facebook, JPMorgan Chase & Co. and Tracfone Wireless, as well as benefactors and sponsors Wells Fargo, FICO, Walmart, Comcast/NBC Universal, Credit Karma and Self Lender. Their donations enable scholarships for community-based organizations to attend the event. For a full list of sponsors and exhibitors, see the 2019 conference program booklet.

JPMorgan Chase funds Consumer Action’s innovative new FinTech initiative

JPMorgan Chase has made a $100,000 commitment to Consumer Action to support the scaling of our financial technology (FinTech) innovation and education initiatives, which directly address America’s savings crisis and will, based on the positive outcomes of our recent FinTech pilot program, help to improve the financial health of low-to-moderate-income (LMI) and underrepresented consumers.

Knowing that four out of 10 American families lack enough savings to cover a $400 emergency, Consumer Action is working to combat the pervasive impact of financial setbacks on the lives of LMI consumers by introducing FinTech tools to the consumers and non-profit staff who work with them at various sites throughout the country. The tools are selected based on the staff’s and consumers’ common, self-identified financial needs.

Courtney Hodapp, head of the Office of Nonprofit Engagement for JPMorgan Chase, announced the award on Sept. 17 at Consumer Action’s 10th annual National Consumer Empowerment Conference.

“Sound financial health is key to building resilient households and communities,” noted Hodapp. “At JPMorgan Chase, we are pleased to support Consumer Action as part of our $125 million, five-year commitment to improving the financial health of people in underserved communities across the U.S.”

The goal of the project is to distribute financial technology tools to LMI consumers, help them improve their financial health through the use of FinTech tools, and measure ensuing changes in financial health. In order to reach an even greater number of vulnerable consumers, Consumer Action will also translate its existing FinTech fact sheet into Vietnamese, Chinese and Korean with grant funds.

Consumer Action Executive Director Ken McEldowney applauded the innovative initiative, stating that support from JPMorgan Chase “is crucial in our work to introduce financially vulnerable consumers to financial technology tools and platforms that can help them achieve balance in their financial lives. We have found that well designed FinTech tools can provide consumers with new insights and a path to financial health.”

Tools will be distributed based on the individual financial needs of the consumers. Financial coaches and counselors provide assistance to consumers while introducing them to the financial technology tools. Coaches and consumers will use the tools together. Consumer Action network partners then measure financial health using the Center for Financial Services Innovation (CFSI) Financial Health Score® Toolkit survey.

In 2018, Consumer Action received support from the Nonprofit-Fintech Exchange, managed by the Financial Health Network with support from the JPMorgan Chase-backed Financial Solutions Lab and the Principal Foundation®, for a five-month pilot program that involved distributing FinTech tools and educational resources to LMI consumers, measuring their financial health and creating/distributing the financial technology fact sheet. The fact sheet introduces consumers to the types of FinTech tools that are available and outlines how the tools can help them budget, manage spending and move forward with their money goals. It also tells consumers what to consider when choosing a FinTech app and how to stay safe when using the apps and platforms.

The Consumer Action-run pilot program resulted in 38 consumers and nine non-profit staffers saving nearly $22,000.

Consumer Action was one of nine grantees in a cohort of pilot partnerships, and our work was featured in the Financial Health Network report “Cross-Sector Solutions: A Guide to Nonprofit-Fintech Partnerships.”

"We are very excited to introduce financial technology and financial health measurement to the community-based organizations we work with. We conducted a recent survey of our network partners and the demand was high for education on financial technology and information on how to distribute tools to underserved consumers," said Consumer Action Director of Strategic Partnerships Audrey Perrot.

Hotline Chronicles: Home weatherization woes

Consumer Action received a note from Harry* from Minnesota with a warning for low-income people who are seeking assistance to weatherize their homes. Harry said that he contacted his state’s weatherization agency about the Weatherization Assistance Program (WAP). The WAP has helped low-income households across the country by providing energy-related weatherization services, such as improvements for heating and cooling systems, electrical systems and appliances. The average expenditure per eligible home is $6,500. The valuable program was greatly expanded under the American Recovery and Reinvestment Act of 2009 and, as with any government subsidy program, has its share of fraud and waste.

When Harry contacted the state agency, the program sent out a contractor’s crew to evaluate his needs. “The crew they sent told me I would have to mortgage my home to get money to pay them to fully weatherize my 24’ x 40’ home’s main floor exterior walls. When I refused, they walked off the job,” Harry said.

In light of the incident, Harry wants to warn people of the possibility that some weatherization crews might not follow WAP guidelines. We are happy to oblige him.

The U.S. Department of Energy (DOE) Office of the Inspector General’s fraud awareness program has identified some contractor frauds operating alongside the program. These have included contractors that:

• Charge for expenses not incurred or work not performed (i.e., phantom charges);
• Seek reimbursement for substandard or incomplete products or services (e.g., performing less weatherization work than they were funded for, or using inferior weatherization products); and
• Misrepresent the project’s status and progress in order to continue receiving funds.

To apply for weatherization assistance, contact your state’s weatherization agency. Each state sets its income requirements within DOE guidelines. Services are provided by the states, and each state has slightly different criteria.

Under DOE guidelines, you are automatically eligible to receive weatherization assistance if you receive Supplemental Security Income (SSI) or Aid to Families with Dependent Children (AFDC). In other cases, states give preference to people over 60, families with disabled members and families with children (in most states).

In addition to WAP, the Low Income Home Energy Assistance Program (LIHEAP) provides financial support for low-income families that need help with their energy bills.

Still wondering if you qualify for the WAP program? Click here to learn more.

The Office of Inspector General (OIG) maintains a hotline where you can report fraud, waste, abuse or mismanagement in DOE programs or operations. Consumers can call (800-541-1625), .(JavaScript must be enabled to view this email address) or send a letter to the OIG at: U.S. Department of Energy Office of Inspector General, Attn: IG Hotline 1000, Independence Avenue SW, Mail Stop 5D-031, Washington, DC 20585.

*Not this consumer’s real name

Coalition Efforts: Prescription problems, Pell Grant cuts and poor “protections”

Healthcare mergers: Good for businesses’ bottom line; bad for consumers. Healthcare mergers generally result in less choice and higher prescription drug prices for consumers, and the proposed deal between pharmaceutical companies AbbVie (maker of the popular drug Humira) and Allergen would be no different. Advocates are warning the Federal Trade Commission (FTC) that signing off on the $63 billion merger (under consideration now) will reduce competition in a number of markets where AbbVie and Allergan directly overlap with each other. The deal will also exacerbate competitive problems that already exist in the pharmaceutical drug industry relating to prescription rebates and patent abuses. Learn more.

Cuts to Pell Grant program will destroy the dream of college for many. Pell Grants are foundational to the federal government’s investment in college education for low-income students (nearly 60% of black students and half of Latino undergrads have been able to attend and graduate from college due to the grants). Unfortunately, some in the Senate want to cut the amount of money allocated to the Pell Grant program...by $1.3 billion! Consumer Action joined a letter to Senate appropriators urging them to oppose this cut to the reserve fund and not reduce the funding for the other education programs in the budget. Learn more.

Proposed rule empowers debt collectors and their attorneys. In an effort to update a rule that governs debt collectors, the Consumer Financial Protection Bureau, under anti-regulatory Trump administration-appointed leadership, released a proposed rule that would actually make debt collector harassment worse for consumers! The rule would allow debt collectors to make seven attempted calls to a consumer and have one actual conversation per week for each debt in collection. In addition, it would allow the collectors to send unlimited texts, emails and other private messages and, inexplicably, to include hyperlinks, which typically come from scammers in digital communications. Learn more.

New bill purporting to “improve” the lot of student borrowers does just the opposite. Consumer Action joined over 40 organizations in a letter to Senator Lamar Alexander (R-TN) to express concerns regarding his recently introduced bill, the Student Aid “Improvement” Act. Contrary to its name, the bill fails to include any provisions that hold low-quality and sometimes predatory colleges accountable to students. The legislation (S 2557), written to reauthorize the existing Higher Education Act (HEA), offers no improvements to the HEA and does nothing to protect students and taxpayers from deceptive schools. The organizations argue that any reauthorization of the HEA must include robust consumer protections. Learn more.

CFPB Watch: Good news for consumer complaints; ombudsman expectations

Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger announced at Consumer Action’s annual National Consumer Empowerment Conference, held in late September, that the Bureau’s Consumer Complaint Database will remain publicly accessible. Her predecessor had threatened to shut off public access to the valuable tool.

• Consumers will continue to be able to:
• Report financial harms—including complaint details—in their own words;
• Be alerted to financial harms outlined in consumer complaints; and
• Review and evaluate companies’ behavior to make decisions as to whether to do business with them and/or to hold them accountable.

During her presentation, Director Kraninger also announced changes in language and tone to the complaint portion of the online database. The disclaimers were revised in response to complaints from financial corporations that consumer complaints would “unfairly” harm their reputations. On its website, the Bureau has noted that the complaints are the consumer’s opinion and have not been verified by the Bureau.

Finally, Kraninger said that the CFPB plans to add new visualization tools to the database starting next spring. She stated that these will help consumers better understand complaint data trends. The Bureau is also considering ways to allow companies, if they choose, to publicly respond more fully to consumers’ complaints.

The CFPB director also announced a controversial decision to side with critics that claim that the Bureau’s structure is unconstitutional. Kraninger believes that the consumer agency has far too much independence, and that the president should be able to remove the director “at will,” rather than for the reason currently allowed by law (“for cause” only). This argument will soon go before the U.S. Supreme Court in the Seila Law v. CFPB case. Consumer Action disagrees with Kraninger and other critics on this point, and has joined previous amicus brief filings supporting a strong, independent CFPB.

In light of the controversy, two California Democratic congressmembers, U.S. House Speaker Nancy Pelosi and House Financial Services Committee Chairwoman Maxine Waters, have filed a brief in support of the agency’s independence.

“As part of comprehensive Wall Street reform, Congress established an independent cop on the beat to protect seniors, servicemembers, veterans, college students and all consumers in America against the abusive and predatory financial marketplace practices that led up to the Great Recession,” Pelosi said. “By not defending the Consumer Bureau’s independence, the Trump Administration is choosing special interests over America’s consumers.”

After making the announcements during her presentation at the National Consumer Empowerment Conference, Kraninger left the room without taking questions from conference attendees, who were critical of the director’s choice not to participate in Q&A.

Senators set expectations for new student loan ombudsman

Senators Sherrod Brown (D-OH) and Patty Murray (D-WA) have put the Bureau’s recently hired student loan ombudsman, Robert Cameron, on notice that they expect him to “serve as an advocate for student loan borrowers” of both private and federal loans.

The Senators spelled out the responsibilities of the student loan ombudsman, including:

• Providing direct assistance to borrowers;
• Leading on student loan policymaking; and
• Referring cases for law enforcement investigation where evidence or risk of illegal practices have been brought to the office’s attention.

Days later, the ombudsman’s office released its 2019 annual report, noting that it had handled approximately 20,600 private and federal student loan complaints—a 50% decrease in the number of private student loan complaints handled the year before.

The student loan ombudsman’s office had taken a highly active role in advocating for borrowers until its last leader, Seth Frotman, quit over a year ago, declaring that the CFPB had abandoned its responsibilities to borrowers. Frotman has gone on to found the Student Borrower Protection Center, a non-profit organization focused on alleviating the burden of student debt for millions of Americans.

New taskforce on consumer finance law

The CFPB is creating a new Taskforce on Federal Consumer Financial Law that will be charged with researching and analyzing current financial rules and laws, with the stated intent to “harmonize and modernize” them, including seeking out “inconsistencies” or gaps in current regulations.

Taskforce members, who will have expertise in financial products, services or consumer protection, will serve a one-year term.

Class Action Database: One Chipotle burrito with a side of…breach?

A class action settlement involving Digital Federal Credit Union and its “improperly charged” overdraft fees was among 10 new settlements added to the Consumer Action Class Action Database during October.

This month we highlight a settlement involving a data breach at thousands of Chipotle/Pizzeria Locale restaurants across the country. The plaintiffs allege that Chipotle did not adequately protect customers’ personal and financial information, leading to a breach of the sensitive data.

Between March 24 and April 18, 2017, criminals hacked certain Chipotle and Pizzeria Locale computer systems and accessed customer names, credit/debit payment card numbers and card expiration dates. Chipotle denied the allegations that it did not protect consumer information, but agreed to a settlement to avoid continuing the lawsuit.

The class members are consumers who used a credit or debit card at the in-store point-of-sale system in an affected Chipotle or Pizzeria Locale restaurant between March 24 and April 18, 2017, and, subsequently, suffered from their card having been compromised as a result of the incident (i.e., the victim incurred out-of-pocket expenses or fraudulent charges, spent time correcting fraudulent charges or replacing their card, etc.). Consumers whose payment cards were compromised are eligible for up to $250 in out-of-pocket expense reimbursements for unreimbursed bank fees, long distance telephone charges associated with the incident, costs of credit reports or credit monitoring, and other related costs. They may also receive “extraordinary reimbursement” of up to $10,000 for less common, well-documented out-of-pocket monetary losses (click here for more information.)

The claims deadline is Nov. 16, 2019.

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 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.