• Celebrating Consumer Action at age 39
• Protecting your privacy on Facebook
• The fight for a consumer protection watchdog
• New grant focuses on hotline complaints
• CARD Act training in Memphis
• About Consumer Action

Celebrating Consumer Action at age 39

Consumer Action’s 39th anniversary party in San Francisco in late June was marked by spirited mingling among supporters and fellow advocates, whose generosity raised close to $50,000 for our financial empowerment activities.

A highlight of the evening was the presentation of Consumer Action’s Consumer Excellence Awards. This year’s awardees were California Senator Ellen M. Corbett (D-San Leandro), KTSF Chinese News, and the Public Justice public interest law organization. The Consumer Excellence Awards have been a tradition with Consumer Action for two decades, noted Ken McEldowney, Consumer Action's executive director.

“The mission of Consumer Action could not be fulfilled without the collaboration of all our key partners,” he said. “This year’s awardees represent media and advocacy organizations that have proven their commitment to important consumer issues in California and across the U.S.”

Senator Ellen Corbett

The 2010 Consumer Excellence Award for Outstanding Advocacy was awarded to Senator Corbett (D-San Leandro), who throughout her legislative career has proven to be one of the strongest defenders of the rights of California’s consumers.

“From banking to housing, product safety to healthcare, personal privacy and environmental protection, I have been so lucky to work on so many issues and so lucky to have been able to work with people like you,” Senator Corbett told the crowd. “For almost 40 years, Consumer Action has led the fight to enact tough laws to protect people in all walks of life and has made sure that consumers know and exercise their rights.”

KTSF Chinese News

In our media category, Consumer Action recognized KTSF, a widely viewed Chinese-language news station broadcasting in the San Francisco Bay Area. KTSF founder Lillian Lincoln Howell launched the station in 1976 with the mission to “serve the underserved.” KTSF coverage has helped Consumer Action reach consumers in the Asian-American community and to help those viewers to become savvy consumers.

Rose Shirinian, KTSF news director, accepted the award. “When we started the Cantonese news in 1989 and the Mandarin version in 1991, Consumer Action was there to help us in bringing vital information to our consumers and to our viewers,” said Shirinian.

Public Justice

Public Justice was the recipient of our award in the area of Outstanding Community Service. Since 1982 Public Justice has fought for the rights of vulnerable consumers, earning its well-deserved reputation as the David against a Goliath who would close the courthouse doors on the disenfranchised.

Arthur Bryant, managing attorney, accepted the award on behalf of Public Justice. He began his speech by noting the involvement of Consumer Action and its employees in the precedent setting case, Ting v. AT&T, against binding mandatory arbitration clauses in consumer contracts. Darcy Ting, the lead plaintiff, was a Consumer Action employee.

“We might have wanted to sue AT&T, but if we didn’t have you and Darcy Ting and consumers who are actually affected and are willing to join the case, we could not have made a difference at all,” said Bryant, also acknowledging the role of longtime Consumer Action supporter, attorney Jim Sturdevant, in bringing the case. “It is Consumer Action and groups like you that really make sure that these victories happen and that they have the kind of impact we need to have to protect consumers.”

Up next: 40 years

Join us on Facebook and Twitter as we approach our 40th anniversary in 2011. On Facebook, we are facebook.com/consumeraction, and on Twitter we are twitter.com/consumeraction.

Protecting your privacy on Facebook

What does privacy mean in a world dominated by social networking, when sharing detailed personal information online has become a part of everyday life? Protecting privacy online has gained more public attention since last year after social networking giant Facebook made big changes to its privacy policy. Consumer Action’s DC office brought its concerns straight to the top during a call with Facebook CEO Mark Zuckerberg.

Consumer Action, long an advocate for personal and workplace privacy, believes it is crucial to continue a dialogue with Facebook, as the altered privacy settings affect 500 million consumers. This spring, the company switched certain elements of non-public information (such as items designated for “Friends Only”) to public status (or “Everyone”) for all users without their consent. The new default settings disclosed previously restricted personal information to third parties, such as companies that build applications for Facebook. (Facebook applications include games such as the popular Farmville.)

The company claimed to be operating within new “social norms” that indicated people were more willing to publicly share their personal information online. Many Facebook users disagreed with this assessment and felt the company was disregarding their privacy concerns.

A few months later, under pressure from advocates, users, and Congress, Facebook underwent a privacy revamp that included a new, cleaner look for its privacy settings, an option to “opt-out” for all third party sharing of information, and more user control over information. Provided an advanced preview of the new settings, Consumer Action gave Facebook feedback on the changes and urged the company to go further to protect users’ online privacy.

“With the most recent changes, Facebook appears to be committed to improving user access and control of its privacy settings, and increasing its ability to opt-out of information sharing, but more needs to be done,” said Michelle De Mooy, senior associate for national priorities at Consumer Action. “Facebook should commit to asking its users before any changes to the site, such as sharing their personal information with third parties or automatically enrolling them into new programs such as “Instant Personalization” that force them to further link or share their personal information.”

De Mooy went on to say that the company must recognize that consumers are increasingly aware of their privacy online and tired of companies giving away their information under the guise of openness.

“People care about privacy now more than ever,” De Mooy said. “We are pleased that Facebook has pledged to improve user control and choice and we look forward to working together to help them follow through on this commitment. We believe the company must work with a broad coalition of consumer and privacy advocates, regulators, and legislators in order to raise the bar and lead the industry toward empowering and protecting consumers online.”

De Mooy added, “We also hope that this step forward from Facebook will send a message to industry that strong privacy standards aren’t just good policy, they’re good business.”

The fight for a consumer financial watchdog

Throughout 2010, Consumer Action worked tirelessly to create an independent federal watchdog agency devoted exclusively to consumer protection and empowered to write rules for financial products and prevent predatory lending.

July 15 was a victorious day for Consumer Action and other organizations that fought for financial reform. The legislation passed its final hurdle in the U.S. Senate on July 15, and the president signed it into law on July 21.

“Consumers will now have one regulator whose only job is consumer financial protection,” said Ruth Susswein, Consumer Action’s deputy director of national priorities. “This new watchdog has enormous potential to change people’s lives in tangible ways by spotting and banning abusive lending in home loans, credit cards, and other loans.”

New financial protection safeguards will help consumers save money, avoid hidden “gotcha” fees and terms in consumer financial products and reduce risks in the financial system. The reform bill includes:

• New mortgage rules to protect home buyers
• Oversight of student loans
• Help for unemployed homeowners
• Ability to limit future bailouts

Consumer Action has been an active participant in Americans for Financial Reform (AFR), an umbrella group of consumer, civil rights and labor organizations, since its inception in 2009. AFR is a coalition of more than 200 groups who sought regulatory reforms to the U.S. financial system.

In addition to fighting for a new consumer financial watchdog to oversee credit cards, mortgages, payday and other loans, Consumer Action and the coalition advocated for mortgage reforms to protect borrowers from abusive rates and fees, broker kickbacks, and for assistance to families who are on the brink of foreclosure. The coalition also fought for rules to prevent future bailouts of “to big to fail” financial firms at taxpayer expense.

As Congress geared up to debate financial reform legislation this spring, Consumer Action’s advocacy team took part in daily strategy sessions, advocated on Capital Hill at meetings with U.S. Senate and House staffers and worked to make the bill stronger when it came before a House/Senate Conference committee. Our DC office has participated in coalition working groups on consumer protection, lobbying efforts and mortgage reform. Consumer Action called and emailed members of Congress and signed onto dozens of letters in support of financial reform. In addition, we worked to keep our constituents and network of community based groups (CBOs) informed of changes to the legislation. On many occasions this year, we asked our constituents to take action by contacting their representatives in Congress and asking them to support financial reform.

As the rules are written that will bring this legislation to life, our DC office will continue its work to ensure that the rights of consumers are adequately represented in Congress and in the halls of the new bureau.

New grant focuses on hotline complaints

Recently Consumer Action received a $35,000 grant from the California Consumer Protection Foundation (CCPF) to lead an educational effort targeting the most common telecommunications complaints received by our advice and referral hotline. For 2009, the top telecom-related complaints were: cable/satellite, wireless contracts, Lifeline low-income telephone assistance, telemarketing, and problems with Internet service providers.

Among other issues, staff discovered a disproportionate number of Chinese consumers who never got promised wireless phone rebates. Spanish speakers increasingly complained of early termination fees and international roaming charges. Staff learned of telemarketers who continued to pester consumers despite their registration on the National Do Not Call List.

Under the grant, Consumer Action will organize two roundtable discussions in and around the Los Angeles area to help community groups inform their constituents how to avoid these deceptive behaviors.

March 2010 Hotline Report

Consumer Action’s national hotline receives calls at its San Francisco and Los Angeles offices. Inquiries are also processed via the online Help Desk on our website. The advice and referral hotline is run by multilingual staff members and trained volunteers who use the organization’s database, educational modules and Consumer Services Guide to provide consumers with the most up-to-date information for resolving a variety of complaints. The hotline receives complaints in English and Spanish as well as two Chinese dialects: Cantonese and Mandarin.

Our hotline provides Consumer Action with a direct link to individuals and the wide range of unfair practices they encounter. The consumer complaints are stored in a sophisticated database and used to identify trends, track businesses and learn about the nature of the practices that victimize unsuspecting consumers.

In March (the most recent report available) Consumer Action's top complaint categories were: credit and finance (23%); automotive (16%); product and retail (10%) and utility and telephone (7%). Complaints were received from all over the country, but the top complaint states were California, Texas, New Jersey, Pennsylvania, New York and Florida. Fifty-five percent of the complaints were handled in English, 18% in Spanish and 21% in Chinese.

Featured complaint

A Delaware woman borrowed $300 from a payday lender in 2006, while living in Virginia. As is typical, she left a post-dated check for $300 to guarantee the loan. Four years later, a man contacted her who said he worked for “investigation services” on behalf of the payday lender, which apparently was not able to cash the woman’s check. She was told that the debt had grown to $2,300 with fees and penalties.

The woman called to tell Consumer Action that the caller had been abusive on the phone. “We’ve got you on tape,” he said. The man also claimed to be a “cop” and threatened her with prison. “It’s a federal offense to write a bad check,” he said.

Consumer Action’s counselors determined that tape recording of a phone call in Delaware is legal without notification of the person who is being taped. Our counselors advised the woman to ask the company to provide (1) the name of the original creditor and the last four digits of the original account number; (2) the date of default or charge-off and the amount due at that time; (3) the name of the current owner of the debt; (4) the total amount currently owed on the debt; (5) the total amount owed broken down by principal, interest, and fees; and (6) the relevant terms of the underlying credit contract.

“If a debt collector can’t provide this information, the collection effort is not valid,” said Joe Ridout, Consumer Action’s consumer services manager.

In addition, the woman should ask the debt collector to stop calling her, and before she takes any action to pay on the debt, to check with her local legal aid office to determine the statute of limitations that applies to the debt. In some jurisdictions, making a payment on a “time-barred” debt may restart the statute of limitations. For much more information about your debt collection rights, see two special reports in Consumer Action News:

• Debt Collection Issue (Winter 2007-2008)
• Dealing With Debt (Winter 2008-2009)

As to whether taping conversations is legal in your state, Ridout also suggests checking a website run by the Reporters Committee for Freedom of the Press that lists state laws on taping phone calls and in-person conversations (www.rcfp.org/taping/quick.html).

CARD Act training in Memphis

Consumer Action held a train-the-trainer event on credit cards in Memphis, Tennessee in May. Consumer Action developed the Credit Cards: What You Need to Know and Families and Credit modules in partnership with American Express. The popular program, first issued in 2005, was updated to reflect changes stemming from the new federal CARD Act, which took effect this year.

The Memphis training drew financial educators from 49 community-based organizations, academic institutions and government agencies in Tennessee, Alabama and Arkansas. Attendees were evaluated before and after the training. Of the participants, 78% felt that they had obtained sufficient information to promote credit card literacy in their communities.

Community Outreach Manager Linda Williams unveiled a new segment on How Adults Learn, which outlined the differences in learning styles among adults and what their motivations are for increasing their skills and knowledge, as well as some of the barriers that adult trainers face. Williams reviewed the three types of learners: auditory, visual and kinesthetic, and asked audience members to identify their own learning style. The exercise reinforced that trainers need to consider all types of learners and to combine various teaching methods to reach every participant.

Community Outreach Manager Nelson Santiago led the training on Credit Cards: What You Need to Know. Santiago discussed the different types of credit cards, explained about the kind of offers consumer may receive, and discussed appropriate uses of credit cards.

Director of National Priorities Linda Sherry was on hand to give participants an overview of the new consumer protections for credit cardholders under the CARD Act of 2009. Some of the new protections afforded to cardholders include: no interest rate changes during the first year of the account except under specific conditions, no interest rate increases on existing balances, 45 day advance notice of interest rate increases, timely posting of payments and a prohibition on over limit fees unless cardholders give their express permission to exceed their credit limit. Click here for more about CARD Act protections.

The Families and Credit Cards module created by Consumer Action in partnership with American Express, was the focus of an afternoon training. The training covers aspects of how family members may want to use credit, and how parents can discuss credit use with their children. Consumer Action trainers used the Credit Yesteryear exercise to encourage participants to discuss topics such as how their parents handled credit, how they handle credit and how they want their children to handle credit. During a Wants vs. Needs exercise, the participants identified the differences in various real-life scenarios.

About Consumer Action

Consumer Action is a nonprofit organization that has championed the rights of underrepresented consumers nationwide since 1971. Throughout its history, the organization has dedicated its resources to promoting financial 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.

Financial Education. To empower consumers to assert their rights in the marketplace, Consumer Action provides a range of education resources. The organization’s extensive library of free publications offers in-depth financial information, while its hotline provides non-legal advice and referrals. Consumer Action also publishes an unbiased Annual Credit Card Survey that exposes 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 to moderate income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of more than 8,000 community-based organizations. Outreach services include training and free mailings of financial education materials in many languages, including English, Spanish, Chinese, Korean, Vietnamese, and others. Consumer Action’s rapidly expanding 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, regulations, and legislation by taking positions on almost 200 bills per legislative session and testifying at least three times per year. Additionally, its diverse staff provides the media with expert commentary on key consumer issues supported by solid data and victim testimony.

Click here to learn more about our staff.