• What people are saying
• This Month’s Consumer Tip: Financial consumer watchdog opens
• Consumer Action and Visa Inc. Create Your Digital Dollars
• CBO Spotlight: New Economics for Women, Smart Consumer Program
• Housing Activities Report FY 2010
• Amicus brief: Ardon vs. City of Los Angeles
• Web spotlight: What do you know “about” Consumer Action?
• Hotline Chronicles: Enter Your Cell Number to Join!
• Making complaints work for you
• About Consumer Action

What people are saying

Thank you so much for all the information you shared with us and how I wish I've met you two years ago before my house got foreclosed. I will bounce back but it's not easy when I'm the only one working. Your valuable information will guide me. - Susana Roxas, Breastfeeding Coordinator, TVHC WIC Program

Tip of the month: Financial consumer watchdog opens

July marks the opening of the Consumer Financial Protection Bureau. Among other functions, the CFPB will take consumer complaints. Visit the CFPB website.

Consumer Action and Visa Inc. Create Your Digital Dollars

With significant advances in online/mobile banking and payment systems, consumers have many new choices for banking, paying bills, making purchases and managing their money. But it takes some guidance to try new things with confidence, so Consumer Action and Visa Inc. have teamed up to educate consumers about their online and mobile payment rights and protections with a new three-year project called Your Digital Dollars.

While online and mobile money management has proven for the most part to be safe and secure, consumers can gain confidence and avoid potential problems by being cautious and staying informed. Your Digital Dollars is a roadmap to navigating these complex new consumer services and to avoiding fraud and problems along the way.

“It’s great to be working with Visa again to educate consumers, and its expertise as a global payments processor is invaluable to this project,” said Consumer Action Executive Director Ken McEldowney. “We believe that our collaboration will foster financial inclusion among underserved communities and engage the unbanked in considering cost-effective, safe and secure ways to manage their money.”

“Empowering Americans with the most up-to-date information is crucial in helping them to make informed financial decisions,” said Jason Alderman, Senior Director of Global Financial Education, Visa Inc. “For over a decade, Visa has been committed to educating consumers on how to manage their money and we are proud to work with Consumer Action, to bring Your Digital Dollars into communities that need it most.”

Three multilingual educational brochures will be created under Phase One of the new educational project, as well as a training curriculum and PowerPoint slides. Your Digital Dollars brochures, which will be available for free on Consumer Action’s site in Chinese, Korean, Spanish, English and Vietnamese, include:

• Banking online safely: Protect your identity and accounts while banking by computer
• Mobile banking and mobile payments: Making financial transactions safely on the go
• Privacy in online and mobile transactions: Protect your identity and data while banking or paying digitally

Consumer Action will fill bulk orders for free for its network of more than 8,000 community-based organizations (CBOs) for use in one-on-one counseling sessions, client presentations and distribution at community events, among other uses. The materials will be posted online for free use by individual consumers.

In the outreach phase of the project, Consumer Action also will hold three regional train-the-trainer meetings for CBO staff members in cities across the country. Each meeting will bring together 45 to 55 community group staff members and train them on how to teach adults to use the series effectively at the local level. Meals and a travel stipend are offered to participants to help defray the cost of attending the free trainings.

For more information about the project, email us at .(JavaScript must be enabled to view this email address)..

CBO Spotlight: New Economics for Women, Smart Consumer Program

Consumer Action has the privilege of working with a growing national network of community-based organizations using our materials to educate underrepresented constituents. New Economics for Women (NEW) is one such group that has leveraged financial empowerment to allow consumers to make more informed decisions about their daily interactions.

Since its inception in 1985, NEW has had a tremendous impact on low-income communities by designing housing programs to trigger personal economic transformation in families. To this end, NEW has been providing life skills training for families in the areas of parenting, household finance, computer literacy, personalized case management for families, after school tutorials and enrichment programs for students for the past twenty years.

The Smart Consumer program has been in place for over 9 years, providing culturally relevant bilingual financial education to low-income residents and community members in and around Los Angeles. The program targets mono-lingual Spanish speaking new immigrants and low income families. Smart Consumer relies on curricula from various sources, including Consumer Action’s MoneyWi$e module.

The workshops typically last six hours and cover such topics as: 1) saving and budgeting, 2) the importance of a good credit history, how and why to use credit, and 3) credit cards and consumer loans. The workshop topics are adapted to the unique needs of the audience and are supplemented by interactive activities and worksheets developed by the Smart Consumer program coordinator. The MoneyWi$e module itself contains options for trainers to engage their audience. Workshops are conducted in English and Spanish, and all handouts and visual aids are also provided in both languages. The workshops are taught at residential buildings with on-site childcare as a way to maximize participation.

The Smart Consumer program coordinator facilitates workshops and refers residents to NEW’s trained homebuyer counselors to act on the goals participants have identified for themselves. The aim is to assist clients in articulating their financial goals and to move forward on their path to self-sufficiency. The group’s focus on individual follow-up enables NEW to document changes in consumer habits and helps the organization track consumers’ understanding of financial terminology. Program graduates have reported cutting monthly expenses by $50 a month or saving up to $2,000 over the course of a year.

Consumers are provided budget assistance as well as credit counseling. Clients are given a written financial action plan with a copy of their credit report, and credit scores to help consumers improve their credit records.

NEW has learned that many people in its communities of service do not have a grasp of basic personal financial skills such as opening a bank account, a credit card, or saving money, or evaluating an interest rate. As a result, many have lost a significant amount of earning power. Consumer Action’s materials have proven very helpful in breaking these issues into an easy-to-follow format for the people NEW serves. The flexible nature of the materials makes it possible to appeal to a class with varying degrees of expertise.

The Smart Consumer program uses the following MoneyWi$e brochures for its classes:

• Make your money work for you - Saving to build wealth
• Manage your money wisely - Tracking your money
• Banking basics - You can bank on it
• Improve your credit: Put bad credit behind you
• Building and keeping good creditv
• Credit cards: What you need to knowv
• Preventing credit card fraud: Learn how to protect yourself
• Protect yourself from identity theft: It's your good name!
• The eys to homeownership: You can buy a home

These resources can be downloaded for free at www.money-wise.org.

Housing Activities Report FY 2010

Consumer Action works with both non-profit housing agencies as well as more traditional community based organizations (CBOs) that assist clients on a broad range of issues including housing. Through our network, we work to provide unbiased education so that the consumer can compare and procure title insurance and related products and services. Currently, we have more than 3,500 CBO contacts in our California network alone.

Between April 1, 2010 and March 31, 2011, our work in California fell in several main areas:

Housing-information.org

In the first year of our Housing Project, Consumer Action created www.housing-information.org to serve as a resource for community groups and individuals who were looking for unbiased housing information. We continue to add content to this site.

Unlike other non-profit educational sites, all of Consumer Action’s web sites feature educational materials in five different languages-Chinese, English, Korean, Spanish and Vietnamese.

Consumer Action’s housing web site has several main sections:

• News. Our staff provides links to housing related articles. The links are to Chinese, English and Spanish articles. Recent articles have covered topics such as: reverse mortgages, the reality of buying bigger homes, mortgage bailouts, and filing housing complaints.
• Five Recent Publications. Here Consumer Action lists its most recent housing related publications. Examples: Keeping Your Home brochure, in five languages with leaders guide and training packet, and Specialty Consumer Reports.
• Recommended Publications. In this section, Consumer Action staff recommends materials created by other entities. For example, we have included the Federal Reserve Board’s publications “5 Tips for Shopping for a Mortgage” and the “Foreclosure Mitigation Toolkit for Communities” as well as Consumers Union’s “Faces of Foreclosure.”
• Calendar. Here, Consumer Action lists upcoming housing related meetings and conferences.
• Resources. This currently contains the Housing Information Edition of Consumer Action’s Consumer Services Guide, which lists non-profit and state and federal agencies that assist consumers on a wide variety of topics with a special focus on housing related problems. Topics include housing finance, home repairs, and discrimination, among others. We continued to update it this past year.
• Help Desk. The Help Desk provides consumers with information on a number of topics as well as advice and referral on individual complaints.
• Last year we added a new section, Spotlight On, where we place items of special importance. This section is reserved for items of interest and is rotated constantly to keep pace with news as it develops.
• Outreach. The section provides information on our train-the-trainer meetings, workshops, conferences as well as tips for groups on how best to provide education on housing at the community level.
• A new feature, On Our Radar, includes surveys and reports from other organizations. For example, we promoted a new study by the AARP examining the complicated and more expensive nature of reverse home mortgages for senior citizens. We also share data on a study by EARN evaluating the influence of financial efficacy that helps individuals see greater success when they feel empowered.

In addition, on the right side of the housing home page is a pull down menu where consumers can access more specialized information on six key housing-related topics: Foreclosure, Buying A Home, Discrimination, Home Financing, Home Repair and Insurance. Foreclosure was added last year because of rising problems with mortgages. Each of these sections is broken down into: News Headlines, Consumer Action News and Special Reports, Book Notes, Events and Publications.

Publications

We fulfilled orders placed by community groups for 101,356 publications to give to their clients around the country. Our MoneyWi$e project covers the cost of providing these materials to consumers outside California. All of the following resources are posted at www.housing-information.org. Brochures can be downloaded in English, Spanish, Korean, Chinese, and Vietnamese.

• You Can Buy A Home (47,055 orders)
• Keeping Your Home (43,541 orders)
• Saving Your Home From Foreclosure (9,425 orders)
• True Life Stories (novella) (1,335 orders)

Consumer Advice and Referral

Consumer Action provides advice and referral to consumers on its telephone hotlines in San Francisco and Los Angeles. Calls are handled in Chinese, English and Spanish. Consumers also contact us by email using the Help Desk on our web site.

As part of this project, Consumer Action expanded the housing related assistance we provide to consumers. During the period covered in this Annual Report, our counselors handled more than 503 housing complaints, close to a 5% increase from last year. The major areas in order of frequency were: landlord/tenant, home construction, mortgage foreclosure, and mortgage refinance. Within the mortgage category, foreclosure problems ranked the highest. Nearly 20% of the housing complaints we received were from consumers who did not speak English.

Community Outreach

Consumer Action has four full time, multilingual community outreach staff based in California who conduct train-the-trainer roundtables, give presentations, participate in street fairs and work directly with community group and government agency staff. Much of their work focuses on housing related issues. The outreach staff conducts presentations and assist consumers in Chinese, English and Spanish.

During the year, we conducted two roundtables at which we trained local community group staff on how to most effectively use our housing-related materials to educate their clients. Each meeting also featured a panel of local housing experts. A total of 45 community group staff attended the roundtable we held in Visalia, California and 40 people attended the roundtable we held in Monterey, California.

In addition, outreach staff covered housing issues at events like the following:

• Provided general outreach to community groups in Coalinga, San Jose, Salinas, and Monterey
• Met with AARP to discuss Consumer Action publications and services.
• Met with MEDA to discuss Consumer Action publications and services as well as to conduct a site tour for a potential roundtable training in the future.
• Provided literature as part of several trainings sponsored by the Community Action Partnership of San Bernardino County.
• Training at the WIC State Conference.
• Assisted Community Trust Credit Union staff in preparation to conduct homebuyer workshops in Porterville, CA).

Media

Consumer Action also makes extensive use of in-language and mainstream media outlets in order to provide housing information and advice to a broader audience. While our bi-lingual staff conducts many interviews in English and Spanish, we have concentrated much of our media work on Chinese newspapers and radio and television stations based in San Francisco and Los Angeles. These outlets work closely with our Chinese speaking staff on many stories that have appeared in newspapers such as: Sing Tao Daily, Ming Pao Daily and the World Journal. In addition, our staff members are featured on numerous housing-related stories on radio and TV stations such as: Sing Tao Radio, KMTP and KTSF. There continues to be a large number of media interviews on mortgage and foreclosure related topics.

In addition, staff posted consumer alerts on our web sites on topics such as: the new government web site established to help homeowners struggling to keep their homes; and, mortgage modification scams.

Conclusion

Consumer Action is very excited about the work it accomplished in the most recent year. “We are proud of what we have been able to do so far and believe that our future educational work will provide valuable assistance to individual consumers and the community agencies that serve them,” says executive director, Ken McEldowney.

For more information about the Housing Information Project, or any other Consumer Action programs, please write to us at .(JavaScript must be enabled to view this email address). .

Amicus brief: Ardon vs. City of Los Angeles

Consumer Action signed onto an amicus brief in support of the plaintiff, Estuardo Ardon, who alleges that his local municipality illegally collected taxes and refused to pay a refund on those levies. Ardon argued that the Los Angeles Telephone Users’ tax was unconstitutional, and taxpayers have the right to file a class action suit seeking refunds. Consumer Action joined the National Association of Shareholder and Consumer Attorneys, The Utility Reform Network, Consumer Federation of California, The Tax Foundation and others in filing the brief.

It is not unusual for local governments to impose a number of small inconspicuous taxes that translate into millions of dollars for the jurisdictions. Items like property taxes are visible and feature refund policies laid out in California’s tax code. Other charges like telephone utilities’ taxes (TUT) are less noticeable and can yield income of up to ten percent of telephone charges.

In 2006 Ardon discovered the TUT had been collecting taxes on long distance and bundled services despite several court rulings that the federal telephone tax did not apply to these services. Ardon filed an administrative refund claim on behalf of himself and other taxpayers. The claim was rejected, prompting Ardon to file for relief, using a case called City of San Jose v. Superior Court as a precedent. In a 2008 Second Appellate district case the court rules that class refund claims to recover local taxes were permissible. Nevertheless, the same appellate court refused to apply the City of San Jose ruling to Mr. Ardon’s case. The California Supreme Court is now reviewing the state Court of Appeal’s opinion to clarify the discrepancy between the two cases.

The amicus brief states in part:

“Local governments should not be permitted to retain illegally collected taxes merely because they claim to have planned upon the flow of such illegally collected funds.”

We will continue to follow this case and report on its final outcome.

Consumer Action has added a new section to its website listing amicus briefs it has participated in. This section can also be located under the “About” section of our home page.

Web spotlight: What do you know 'about' Consumer Action?

For 40 years, Consumer Action has fought for the rights of all consumers and provided them with the information they need to protect themselves and make intelligent choices in the marketplace., The “About Consumer Action” section of our site provides a comprehensive view of where we came from, where we are now, and how we plan to fight for consumers in the future.

One resource visitors will find in “About Consumer Action” is a record of Consumer Action’s successes. In 2009, Consumer Action began publishing annual reports to give stakeholders a closer look at how their contributions have supported noteworthy accomplishments. For an in-depth look of our finances, we invite visitors to review Consumer Action’s 990s which we post each year.

Companies and individuals interested in making a donation to Consumer Action will find convenient links to do so. To contribute click here. There is also information on financial and educational partnerships that have been instrumental in promoting the critical mission of Consumer Action. Among other sources of funding, visitors will find information about cy pres court awards that support Consumer Action’s work.

Visitors will also find descriptions of our projects. These projects include: the Consumer Services Guide, Housing Information project, Insurance Education project, Money Management, and MoneyWi$e, and the Privacy Information project.

At the bedrock of Consumer Action’s foundation is the organization’s unique community education model. With this model, Consumer Action is able to promote informed participation in the marketplace by people of color, low income and rural consumers, recent immigrants and seniors. Visitors will find a link to this unique community education models well as case studies of our successful work in specific communities on the About section.

In 2004, Consumer Action opened its Washington D.C. office, sending a clear signal that it would be taking a more prominent role in national advocacy efforts to promote consumer rights. Information about our participation in multiple coalitions, amicus briefs, testimonies and general policy positions can be found in About Consumer Action.

These and other interesting facts about the work of Consumer Action can be discovered by clicking here.

Hotline Chronicles: Enter Your Cell Number to Join!

Kathleen* from Iowa emailed the Consumer Action hotline to complain about charges on her cell phone bill from a company that provides access to movie reviews on mobile devices. The company, IglooMobile, charges $9.99 per month for summaries of reviews from all the major publications and movie critics.

Consumer Action’s counselors were surprised by how easy it was to trigger ongoing subscription charges from a cell phone. The IglooMobile website asks for a mobile phone number, and notes: “Subscription will renew automatically until service is canceled.” It provides a short code to stop the service (“To Cancel, SEND STOP to 33886”).

The company provides warnings that “You must be 18 years or older. You must be the account holder or have authorization of the account holder to subscribe.”

But in this case, Kathleen told us that an unsolicited text message from the service was sent to a family plan phone line used by her son, a minor. She said that her son had been told to delete any text messages from people he doesn’t know. “Evidently by deleting and not responding with a STOP text to them, this enabled them to start charging his cell phone,” she complained. “How can a third party charge for a service that we did not sign up for? How does this company ensure that the person with the cell phone actually signed up, as it appears on their website that you can enter anyone’s cell phone number.”

Our counselors found that when they entered a cell number on the website, a confirmation text with a code was sent to the phone. Apparently the code has to be sent back in order to activate the service. So while it is not entirely clear what happened to Kathleen and her son, complaints about text messages that automatically trigger subscription services are widespread. This is called “premium messaging.”

Premium messaging is an option to purchase or subscribe to messaging programs, provided by third party content providers, for a fee on top of your standard text message charges. Premium charges for subscriptions recur monthly, while the premium charges for purchases occur only once. Many programs offer both one-time purchases and recurring subscriptions. These programs are initiated through special numbers, which are four, five or six-digit numbers, known as Short Codes.

Premium messaging services may include interactive voting during TV shows; content, such as ringtones, wallpaper or screensavers, and alerts for weather, sports scores, daily jokes, horoscopes, trivia etc.

Most such services have clear disclosures that minors are not allowed to use the service, but there is really no way to keep kids from signing up. Vickie Tse, a Consumer Action hotline counselor, says she is receiving more complaints from parents about how easy it is for young people to trigger premium subscriptions on mobile phones and on the Internet.

To control access to premium messaging, Consumer Action recommends:

• Watch your wireless phone bills carefully and call your carrier if unexpected charges appear. The longer the charges are being billed and you are paying them, the less chance you have of getting your money back.
• Investigate the “parental controls” available from your wireless carrier. Last month, Consumer Action published a survey of these controls at the top six wireless carriers, as well as third-party options for setting limits on and monitoring your children’s wireless phones. See our Wireless Parental Control Survey.
• Consider blocking all premium messaging services. Most carriers give you this option.
• Let your family know they shouldn’t reply to a message from anyone they don’t know because it may be a trick to get you to reply and unwittingly subscribe.

*Not this consumer’s real name.

Making complaints work for you

Consumer Action has been leading a group of advocates who meet regularly with the new Consumer Financial Protection Bureau (CFPB) to encourage the bureau to make their complaint process as helpful to consumers as possible.

Consumer Action and other advocates have been working to assist the CFPB in standing up the agency before it opens its doors on July 21.

The new financial watchdog was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Part of the CFPB’s job is to collect and respond to consumer complaints. Most federal agencies collect complaints, but do not respond to individual consumers.

As the only financial regulator representing consumers, people will turn to the agency to respond to and resolve their complaints, where possible.

But Consumer Action and others have made the case that the CFPB can help empower people by making its complaint information easily available. Consumer Action has recommended that the CFPB create a complaint database that is user-friendly and accessible to the public. Consumers who can access individual complaint data are far more apt to make smart pre-purchase choices about what financial products and services to buy, and who to do business with.

If the database is designed so that consumers can easily gather information on complaints based on product, industry, and type of complaint, the agency and the general public will be able to spot early warning signs before isolated issues balloon into widespread problems.

What’s more, companies that care about their image are likely to resolve consumer complaints more efficiently if the consumer complaints are made public. If they are, companies should be given the opportunity to include their position.

Advocates have also requested that complaint forms be available in many languages including: Spanish, Chinese, Amharic, Vietnamese, Korean, Hmong, French and other critical languages. Complaint specialists should be available to assist non-English speakers online and by phone. For persons with disabilities the forms should be made available in specialized formats like Braille and large print.

Personal or sensitive information (such as Social Security numbers, or account numbers) should not be publicly available.

As some conservative lawmakers work to destabilize the new consumer agency before it even begins its work, Consumer Action has committed to helping the bureau become the best consumer financial watchdog it can be.

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.