• What people are saying
• This month's consumer tip: Avoid phony Valentines online
• Save the date for our 41st birthday bash!
• Consumer Action meets with new CFPB director
• Hotline Chronicles: Don’t make the wrong call on prepaid phone cards
• MoneyWi$e Stipend Report: Phase two
• Lifeline roundtable in San Bernardino
• Web spotlight: Consumer Action media advocacy
• About Consumer Action

What people are saying

Consumer Action has been the main force that has brought about positive changes in the way our clients manage their money. … With their new knowledge, clients see a gleam of financial hope in a depressed economy that is finally on the mend. —Juanita W. Rambo, OIC of Ouachita, Monroe, LA

This month's consumer tip: Avoid phony Valentines online

The outcome is far from sweet when “sweetheart scammers” target lonely hearts. Don’t let a con artist “sour” your Valentines Day. Click here to read more.

Save the date for our 41st birthday bash!

Planning has begun for Consumer Action’s 41st annual reception and awards celebration in Washington, DC-a gathering of fellow consumer advocates, corporate partners and government allies.

Each year, Consumer Action recognizes a community group, a journalist and a policymaker, chosen for their significant contributions to consumer protection. In 2011, we honored Congresswoman Carolyn Maloney (D-NY), Eileen Ambrose of the Baltimore Sun, and the Opportunities Industrialization Center of DC. Our 2012 nominees will be announced soon.

Mark your calendars for Tuesday, Oct. 2 from 5:30-7:30 p.m. in the Gold Room of the Rayburn House Office Building (room 2168) on Capitol Hill.

Companies or individuals interested in sponsoring the occasion may contact Carole Berke via .(JavaScript must be enabled to view this email address) or at 301-656-3667.

Consumer Action meets with new CFPB director

In January, while the Senate was on holiday recess, President Obama appointed former Ohio Attorney General Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB). The President’s move was controversial because Senate Republicans had been doing all they could to prevent Cordray’s appointment. Prior to being named director, Cordray had been the head of enforcement for the financial watchdog agency.

Cordray, just days after his appointment, invited key consumer and civil rights groups to meet with him at Brookings Institution. Ruth Susswein, Consumer Action’s deputy director of national priorities, told Cordray that the consumer protection bureau might be the last, best hope for homeowners struggling to save their homes from foreclosure.

“We urged the Bureau to use its full authority to freeze foreclosures while complaints are being reviewed,” said Susswein.

In its early days, the CFPB is helping homeowners with mortgage complaints as well as credit card disputes. While for the time being working only to resolve individual mortgage and credit card problems, the Bureau will accept and log complaints about any consumer financial services at www.consumerfinance.gov and at 855-411-CFPB (2372).

Until its director was appointed and took office, the CFPB did not have full power to oversee unregulated, non-bank financial companies such as mortgage brokers/servicers, payday lenders, check cashers, debt collectors and private student lenders. These unregulated, non-bank financial companies have come under attack in recent years for predatory practices against consumers.

“People need to know that the deal they’re promised is the deal they’ll get,” Cordray told the packed crowd at his first public event as CFPB chief. “Americans don’t want special treatment, they want a fair shake and the CFPB will make sure that financial institutions play by the rules.”

With a director in place, the Bureau now has the authority to write and enforce rules for financial products-no matter what kind of company sells them.

In 2012, Consumer Action will continue to engage with the CFPB as it implements its new authority.

Hotline Chronicles: Don’t make the wrong call on prepaid phone cards

Stephanie* from Minnesota emailed Consumer Action’s hotline to complain that she had run into deceptive advertising when she purchased a prepaid phone card. “I bought a card with 1,000 minutes for $42. After I received the card, I got a notice explaining that each in-state minute I used would be deducted as 5 minutes!” Stephanie said that she made the majority of her calls in Minnesota.

Consumer Action’s hotline team advised Stephanie to submit a complaint to the Office of the Minnesota Attorney General, the Federal Trade Commission and the Federal Communications Commission.

“Prepaid phone cards are convenient, easy to use and can save you money on long distance and international phone calls at home and on the road,” said Linda Sherry, director of national priorities for Consumer Action. “But a large majority of cards sold use deceptive marketing and hidden fees to misrepresent their true value.”

Prepaid phone cards allow you to dial a toll-free access number, punch in a code and continue your call (or calls) until your available minutes are used up. Some cards are not cards at all-many “virtual” cards with numbers and codes are sold over the Internet. Some cards allow you to buy additional minutes, or “reload” the card, when talk time runs out.

Many states require certain sales disclosures on prepaid phone cards, but the terms and conditions still can be difficult to understand, printed in extremely small font or disclosed only after purchase, such as with the card purchased by Stephanie in Minnesota. Problems may include higher charges for in-state calls, hidden “disconnection” fees, poor customer service or cards that don’t work at all.

Ideally, consumers should seek out cards with no fees or surcharges, however past research by Consumer Action has showed that the majority of cards have fees of some kind even when they are advertised as being “clean.”

In the last Congress, Rep. Eliot Engel (D-NY) proposed federal legislation to require “accurate and reasonable disclosure” of the terms and conditions of prepaid phone calling cards and services. Consumer Action supported the 2009 legislation but the bill never became law.

The Federal Trade Commission has brought cases against prepaid phone card companies for deceptive marketing. This week, the FTC settled a case with Millenium Telecard Inc., an operation that marketed prepaid calling cards to immigrants. The company agreed to pay $2.32 million as part of the settlement to resolve the commission's charges that it made false claims to consumers about the number of minutes of talk time their prepaid calling cards would deliver. (See the FTC press release.)

In its filing, the FTC noted that Millennium is part of an industry that sells billions of dollars worth of cards a year, many of which are sold to immigrants who depend on them to call friends and family in other countries. Millennium cards were sold directly to consumers over the Internet as well as at newsstands, stores and kiosks nationwide. Millennium cards are marketed under a variety of names such as “Africa Magic,” “Hola Amigo” and “Viva Ecuador.”

The FTC alleged that the company misrepresented the number of minutes calling cards provide to a wide range of international locations such as Argentina, Brazil, the Dominican Republic, Ecuador, Mexico, Pakistan, Poland, Vietnam, Ghana, Nigeria and El Salvador. In extensive testing by the FTC between August 2010 and March 2011, the cards delivered an average of only 45% of advertised minutes. Of the 141 cards tested, 139 (or more than 98%) failed to deliver the number of minutes advertised on point-of-sale posters.

The FTC also found hidden fees, including “hang-up fees” and weekly fees that could wipe out the value of cards after even one short call.

Consumer Action advises consumers to seek out cards from reputable wireless companies and well-known national retailers. “Large companies have reputations to uphold,” notes Sherry. “It may be easier to solve complaints directly with the company if your card doesn’t work as promised.” She added that there are “virtual cards” available on the Internet that can be purchased and recharged using a debit or credit card, such as OneSuite, a company that has been in business for many years.

When buying a card, also:

• Pick a card that will give you the best value for the kinds of calls you plan to make-short calls, long calls, in-state or state-to-state long distance calls or international calls.
• Figure the true per-minute rate by factoring in per-call connection and maintenance fees.
• Compare your card’s policy on rounding off minutes: the shorter the interval, the less time you’ll waste.
• If you have limited English skills, look for a card that offers instructions in languages besides English.
• Use the minutes on your card before they expire.
• Consider buying a larger block of time-some cards give you a better per-minute price with a larger purchase.

How to complain Attorneys General You can find contact information for your state’s attorney general at the National Association of Attorneys General (NAAG) website www.naag.org.

(The Minnesota AG offers a consumer education publication on prepaid phone cards.)

Federal Trade Commission If you have a problem with a pre-paid calling card, file a complaint with the Federal Trade Commission.

Consumer Response Center 600 Pennsylvania Avenue NW Washington, D.C. 20580 877-382-4357 Website: www.ftc.gov

Federal Communications Commission The FCC regulates interstate and international communications by radio, television, wire, satellite and cable.

Consumer & Governmental Affairs Bureau Consumer Inquiries and Complaints Division 445 12th Street, SW Washington, D.C. 20554 888-225-5322 Email: .(JavaScript must be enabled to view this email address) Website: www.fcc.gov

* Not this consumer’s real name

MoneyWi$e Stipend Report: Phase two

MoneyWi$e, the long-standing financial literacy partnership of Consumer Action and Capital One, brings financial literacy and empowerment to local communities. The MoneyWi$e mini-grant program offered stipends of $5,000 each to a select number of community groups to establish or enhance their capacity to provide financial education in their communities. The projects, which ran between October 2010 and April 2011, resulted in the following:

• 4,280 consumers established or updated budgets or spending plans;
• 2,678 consumers ordered credit reports; and
• 1,209 consumers opened new checking or savings accounts.

"Financial literacy delivers a critical boost to the health of local communities," said Consumer Action Executive Director Ken McEldowney. "Opening a bank account and maintaining a monthly budget are key steps to economic empowerment."

Consumer Action’s outreach and training team has prepared a detailed report on the outcomes of the most recent MoneyWi$e mini-grant program. To read the report, click here.

Consumer Action makes MoneyWi$e mini-grants available to members of its community-based organization (CBO) network on a competitive basis twice per year. Invitations are sent out to the groups that are most successful in using MoneyWi$e materials in the community. For more information on how to join the network, please contact .(JavaScript must be enabled to view this email address)

Lifeline roundtable in San Bernardino

Consumer Action conducts outreach and education on the California LifeLine program under a partnership with AT&T. Last December, Consumer Action Community Advocates Nelson Santiago and Linda Williams led a free training in San Bernadino, CA to help community groups understand how their low-income clients can apply for the discounted telephone service. More than 30 local participants registered for the event, representing organizations that serve a diverse pool of clients ranging from youth to senior citizens.

California LifeLine provides discounts on basic residential phone service to eligible low-income households. Landline consumers who qualify for California LifeLine residential service pay a fraction of the regular cost for telephone connection and monthly local telephone service. AT&T Director of Regulatory Affairs Jeff Mondon joined the training to help field questions about the California Public Utilities Commission’s regulations for California LifeLine.

The training was based on Consumer Action’s California LifeLine educational module. The materials include a brochure that explains eligibility, the application process and how to renew participation in the program (available in English, Spanish, Korean, Chinese and Vietnamese). The module also includes PowerPoint slides and classroom worksheets. A chart is also available listing companies approved to offer wireless (cell) phone service in California under the federal Lifeline program.

"Consumer Action's Lifeline Training has been a benefit to our community," said Loistine Herndon, executive director of the Temple Community Outreach Center and a participant of the roundtable. "The trainers used real life examples that show they have a concrete understanding of the people we serve."

“The California LifeLine Program is the best in the country. The discounts are great and no other state comes close to the number of consumers that benefit,” said Ken McEldowney, executive director of Consumer Action. “About 1.7 million households currently receive the California LifeLine discounts, yet thousands of eligible households aren’t on the program. Our education program aims to ensure that they are.”

Web spotlight: Consumer Action media advocacy

Consumer Action serves as a resource for the media on emerging and existing consumer issues, most notably in the fields of personal finance, privacy and telecommunications. Our online Media and Press page provides contact information for expert staff available to handle media inquiries and respond to interview requests. Our expertise draws on independent research, consumer hotline data and historical knowledge of consumer issues. We also have representatives to speak with the media in Spanish and Chinese.

Media representatives can stay up to date with our activities by joining our News Distribution List via a link from our press page.

Other resources on the press page include a collection of Consumer Action’s press releases and links to daily headlines, video clips, and opinions and editorials from major news organizations. The topics range from financial services, insurance and credit to housing, privacy and telecommunications.

Consumer Action also serves in-language media outlets in the Spanish and Chinese speaking communities with select releases and headlines of interest to Latino and Asian American/Pacific Islander (AA/PI) consumers.

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 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.

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 and Vietnamese. 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.