Consumer Action INSIDER - June 2024

 

What people are saying

"I work with military members and their families providing financial education. The information provided in today's [warranty rights] webinar is both necessary and wanted to educate my clients of their rights.” —Stay Connected: Helping consumers understand smartphone/computer warranty rights webinar attendee Johnna Levins, Navy-Marine Corps Relief Society, Virginia Beach, VA (view our webinars and videos on our YouTube channel

Staff commitment to outreach not dampened by rain

By Monica Steinisch

A recent outreach event could have—quite reasonably—been called for weather, but Consumer Action bilingual outreach staff members Jamie Woo and Nelson Santiago braved the elements to deliver important information about Pacific Gas and Electric’s (PG&E) money- and energy-saving assistance programs to attendees of a pre-game “Cinco de Mayo Fan-Fest” and resource fair at Levi’s Stadium on May 4. 

The Consulate General of Mexico in San Jose, in collaboration with the San Jose Earthquakes, Telemundo and Levi’s Stadium, organized the event, which led up to the San Jose Earthquakes vs. Los Angeles FC match. Consumer Action has frequently conducted on-site outreach about PG&E assistance programs at the Mexican Consulate in San Jose since Financial Education Week, in the spring of 2023, and was invited by the Consulate to have a booth at the event. Levi’s Stadium called it “the largest Cinco de Mayo celebration in Northern California”—a perfect opportunity to get the word out.

Although early on it appeared that the rain might keep the crowds away, and some exhibitors who'd endured the rain (and a good soaking) since early in the morning eventually did decide to go home, the fans turned out. With a large group of shelter-seekers huddled under Consumer Action's tent, and more fans arriving, Woo and Santiago got to work. 

Woo maintains a smile despite challenging conditions

Fortunately, Woo had brought along a supply of clear plastic bags, and she and Santiago quickly began assembling rain-resistant packets of program literature and giveaways. Fan-fest attendees soon started lining up to get the pamphlets on gas and electricity discounts, logo pens, children’s coloring books about saving energy, and other treats. To keep up with the demand, a willing volunteer was recruited from among the crowd who’d huddled under the tent. Despite the challenging conditions earlier in the day, the sun finally came out, and the outreach team ultimately shared PG&E program information with nearly 200 consumers. What could have been a rained-out event turned out to be one of the outreach team’s most successful.

Santiago and volunteer recruit assemble water-resistant packets

Since receiving an education and outreach grant from PG&E, the largest utility provider in California, in 2022, Consumer Action has been spreading the word about the company’s financial assistance programs and resources that help eligible PG&E customers save energy and money and better manage their utility expenses. Energy affordability is an issue for many households, particularly as extreme weather events become more frequent. Yet many consumers never apply for energy assistance programs because they are either unaware of them or think they do not qualify. 

We encourage our readers in California's PG&E service area to visit Consumer Action's “Save Money and Energy” project page for information about the various assistance programs.

For readers outside of PG&E's service area, we recommend that you ask your utility company about assistance programs, or that you get in touch with your state's utility regulator to learn about local energy assistance and energy discount programs.

Webinar sheds light on smartphone/computer warranty rights

By Monica Steinisch

With so much of our lives conducted online and on the go, Consumer Action hosted a webinar last week intended to help consumers stay connected by understanding their rights and options when their computer, tablet or smartphone goes on the fritz.

Attendees of the free 90-minute Stay Connected: Helping consumers understand smartphone/computer warranty rights train-the-trainer webinar came away with valuable information they can share with their clients and communities, including what specific rights consumers have when it comes to device manufacturers’ warranties, how to exercise those rights, what to do if a claim is unfairly denied, how the right-to-repair movement is progressing, and much more.

After a welcome from Consumer Action Community Outreach Manager Nelson Santiago, California attorney Elliot Conn, founder and principal of Conn Law, PC, launched into a presentation of the state and federal laws that protect consumers who purchase defective goods—generally referred to as “lemon laws.” He explained the difference between an express warranty and an implied warranty, went over potential claim remedies (refund, repair, replacement and, in some cases, damages), talked about the pros and cons of binding and non-binding arbitration to resolve warranty issues, and gave tips on how to enforce your rights (the first step being to ask the manufacturer for relief).

Nathan Proctor, senior director of US PIRG’s Campaign for the Right to Repair, then provided a soup-to-nuts presentation of the effort to enact right-to-repair legislation requiring manufacturers of consumer goods to make available the necessary parts, repair tools (including needed software) and repair documentation (manuals, schematics, etc.) to consumers and independent repair shops so they can be able to fix and maintain electronic devices and other products. He pointed out that the existing system, in which manufacturers essentially monopolize the repair market, is bad for consumers (lack of competition), independent repair shops (a struggle to serve customers), and the environment (electronic waste is the fastest-growing part of our waste stream). He also encouraged anyone who has encountered a warranty or repair issue to respond to the Federal Trade Commission’s call for consumer stories, which the agency will use in its ongoing work to advance better compliance with warranty regulations and better consumer protections for warranty-related repairs.

The speakers also warned that companies will often tell you things about warranties that just aren’t true—good reason for consumers to be armed with basic knowledge about their rights before they have a warranty claim.

If you weren’t able to attend the webinar, you can watch the recording of "Stay Connected: Helping consumers understand smartphone/computer warranty rights" on Consumer Action’s YouTube channel, and get the scoop on what misinformation manufacturers frequently give about voiding your warranty, whether or not paying for an “extended warranty” makes sense, where to find state-specific Lemon Law information, how to support the right-to-repair effort, how to improve the chances of getting your warranty claim approved (tip: Push back!), and more.

Please subscribe to our YouTube channel while you’re there, or you can do so using this link. To be alerted about future training and video release dates, subscribe to Consumer Action’s email list. 

This webinar is part of our project, under a grant from the Rose Foundation for Communities and the Environment, to conduct research and education related to the manufacturer’s warranty included with computer, tablet and smartphone purchases.  

Also part of the project is our fact sheet “Computer, tablet and smartphone warranties: Understanding and exercising your rights,” available for free download in English, Spanish, Chinese, Vietnamese and Korean on the Consumer Action website. 

Pro-bono financial planning opportunity for CBOs and clients

By Anna Flores

As part of our mission to empower low- and moderate-income, limited-English-speaking, and other underserved consumers to financially prosper, Consumer Action is helping the Foundation for Financial Planning (FFP) to spread the word about the availability of pro-bono financial planning guidance for clients of nonprofit community-based organizations.

Founded in 1995, FFP works to expand access to free financial planning services for people in crisis or need. They provide grants to nonprofits to create and expand financial planning programs; connect certified financial planners (CFPs) to nonprofits to provide pro bono services; and provide technology, training and resources to nonprofits to develop and improve their financial planning programs. Their grantmaking and other initiatives are focused on the communities served by Consumer Action’s network of CBOs. 

FFP’s 2023 Impact Report and real-life stories highlight how, despite struggling with bills, credit and savings, low-to-moderate-income households can benefit enormously from working with a financial planner. Volunteer financial planners can help LMI individuals and families by providing objective, ethical advice and action steps on topics such as budgeting, managing debt and building an emergency fund—at no cost. Many nonprofits use these volunteers as a supplemental coaching resource where they have a gap in financial coaching staff, while others use volunteers as a next-stage resource to help clients with more complex financial planning needs, such as preparing to buy a home or getting started investing.

Pro Bono Financial Planning: An Overview for Nonprofits provides a deeper look at how volunteer financial planners can help your organization and your clients, while 7 Steps Nonprofits Can Use to Get Started provides actionable recommendations for nonprofit organizations developing a pro bono financial planning program.

On ProBonoPlannerMatch.Org, CBOs can register to recruit financial planners to conduct free one-on-one or small-group sessions with clients. Here, your organization can also find resources for launching or growing similar pro bono programs in your community.

To learn more about how you and your clients might benefit from working with volunteer financial planners, contact FFP’s Rachel Roth, at .(JavaScript must be enabled to view this email address)

Coalition Efforts

By Monica Steinisch

Consumer Action and its allies recently called on policymakers and regulators about these important issues:

Airline passenger rights. Consumer Action was one of nine consumer and passenger advocacy organizations signed on to a letter to President Biden and Transportation Secretary Buttigieg urging the administration and the Department of Transportation (DOT) to implement the changes mandated by the Federal Aviation Administration (FAA) Reauthorization Act of 2024 as expeditiously as possible. While acknowledging the numerous benefits to airline passengers of the directives in the reauthorization—among them a tripling of the amount DOT can fine airlines for violations, a requirement that airlines allow families to sit together at no extra cost, and automatic cash refunds for cancellations and significant delays—the groups pressed for timely action on particular items, pointing out that FAA has failed to establish minimum seat size standards, despite that action being mandated in the 2018 FAA reauthorization law. Among the actions the signers want to see prioritized are the nomination of a pro-passenger Assistant Secretary of Aviation Consumer Protection; improved reporting of the causes of flight delays; assurance that airline customer service channels are staffed by humans; and, after years of delay, establishment of  minimum seat size standards. Read the press release, which contains a link to the letter, here.      

Foreclosure prevention for VA borrowers. Consumer Action was among nearly three dozen consumer and housing advocacy organizations signed on to a letter to the Department of Veterans Affairs (VA) urging the agency to extend the foreclosure pause on VA-guaranteed loans from May 31 to Dec. 31, 2024, so that veterans have the opportunity to access the new VA Servicing Purchase (VASP) program—a remedy of last resort for VA mortgage borrowers whose loan servicer has determined that no other option exists to help them avoid foreclosure. While the VASP program officially launches on May 31, 2024, it is expected that some servicers will not offer it until Oct. 1. Without extending the foreclosure pause, there is a real risk that some of the 40,000 veterans and their families who the VA estimates could keep their homes under the new program will end up in foreclosure because there was a gap between the end of the pause and their servicer’s implementation of the VASP program. Read the letter here.

A permanent free, accessible tax filing system. In a letter to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel, more than 250 organizations and entities voiced their support for making Direct File—a free, accessible online tax filing system piloted during the 2024 tax season—a permanent filing option for eligible filers. The existing tax filing system is complex and expensive, with Americans paying billions of dollars to companies such as Intuit and H&R Block to file returns they are supposed to be able to file for free. Low- and middle-income families, in particular, are disadvantaged by the current system. The letter commended the IRS’s work on establishing Direct File, applauded the pilot’s notable success, and urged the agency to make Direct File a permanent fixture of the American tax system. The letter also encouraged future improvements, such as expanding the tool to cover more tax situations, such as gig work and other scenarios that apply to a broad swath of low- and middle-income Americans, and streamlining the filing process by pre-populating filers’ tax data. Read the letter here. (Update: The IRS announced on May 30 that Direct File will be a permanent, free tax filing option and invited all 50 states and D.C. to join in Filing Season 2025.)        

CFPB Watch

By Ruth Susswein

The Consumer Financial Protection Bureau (CFPB) is “firing on all cylinders” since the Supreme Court ruled 7-2 last month that the CFPB‘s funding, which comes through the Federal Reserve System rather than via congressional appropriations, is what Congress intended and is constitutional. Payday lenders had sued the Bureau after the agency pursued actions against lenders who continued to debit borrowers’ empty bank accounts, which violates a CFPB rule. Baseless industry arguments against the Consumer Bureau didn’t sway the Supreme Court.

CFPB Director Rohit Chopra announced, “The CFPB will be able to forge ahead with our law enforcement work. During the pendency of this Supreme Court case, a number of the CFPB’s enforcement actions were put on pause.…That means justice has been delayed for too many.”

The director said that the Bureau will continue to focus on:

  • Repeat offenders;
  • Stopping the creep of junk fees;
  • Defending the CFPB’s credit card late fee rule and overdraft/NSF fee rule; and  
  • Removing medical bills from credit reports. 

And, added Director Chopra, “there’s so much more.”

Even though there will be other court challenges to the Bureau’s authority, the CFPB and Director Chopra are intent on protecting consumers, ensuring that financial markets are fair, and returning funds to those who’ve been harmed—$20 billion to hundreds of millions of consumers in the last 13 years, $1 billion of which came from the agency's victims relief fund, which compensates consumers when companies fail to. Full speed ahead!

New protections coming for Buy Now, Pay Later consumers

Consumers who choose to use Buy Now, Pay Later (BNPL) financing to pay for purchases over time will gain some of the same key protections they have when paying by credit card. 

BNPL offers consumers the opportunity to pay in installments (typically four), sometimes charging fees but not interest, sometimes encouraging customers to support this payment option with tips. (BNPL relies on merchant [interchange] fees for income, sometimes coupled with “junk” fees.) The arrangement is akin to what used to be called a “layaway plan,” but the customer gets the product—and the debt—immediately.

The Consumer Bureau released an interpretive rule that defines BNPL lenders as credit providers and, as such, requires them to comply with some of the same rights and protections of the Truth in Lending Act that apply to traditional credit cards. 

The consumer watchdog has determined that BNPL lenders must:

  • Investigate when consumers report a dispute to them;
  • Credit refunds when customers return a product or cancel services; 
  • Disclose fees, pricing structures and dispute rights; and
  • Provide periodic billing statements, like those for credit cards, to track transactions.

What’s more, the CFPB says, while a dispute is being investigated, consumers will be able to pause payments on a BNPL loan. (Disputes include billing errors, unauthorized charges, and merchant issues, such as merchandise not meeting expectations or services not being performed.)

The CFPB has been studying this booming market for the last three years, focusing on the top five lenders: Affirm, Afterpay, Klarna, PayPal and Zip. The Bureau’s research revealed that more than 13% of BNPL transactions result in a return or a dispute. 

The new BNPL protections should take effect in August.

Update: Credit card late fee cap on hold  

You may recall that the CFPB capped credit card late fees at $8—enough to cover card issuers’ costs. The rule was put on hold by a Texas district court just days before it was to take effect on May 14. Bank trade groups (representing credit card lenders) argued that the late fee cap would significantly harm card issuers.

In preparation for the reduction in late fees (from $35), some lenders have already raised interest rates or tacked on a $1.99 paper statement fee, according to the Detroit Free Press. The article cites a T.J. Maxx card holder who was notified that the rate on the store rewards card would jump to 34.99%, with a penalty rate of 39.99%. Cardholders beware: Do not pay your credit card bill late!

Class Action Database: Mortgage loan servicer settles over fee markups

By Monica Steinisch

Among recent settlements added to the Consumer Action Class Action Database is the $2 million Unilever will pay to settle a case alleging that the company’s Suave 24-Hour Protection Powder Aerosol Antiperspirant and Suave 24-Hour Protection Fresh Aerosol Antiperspirant products contain elevated levels of benzene, a known carcinogen. If you purchased either of these products between Jan. 1, 2018, and March 7, 2024, you may be eligible for a payment. The deadline for claims is July 15, 2024. 

Of note is the settlement that Ocwen Loan Servicing, which does business under brand names PHH Mortgage and Liberty Reverse Mortgage, agreed to. The case alleged that the company overcharged borrowers for certain property valuation expenses, known as broker price opinions (BPOs) and hybrid valuations. A BPO is an informal appraisal of a property by a licensed real estate agent, broker or appraiser that is similar to a Comparative Market Analysis, but real estate professionals typically get paid to do a BPO. A hybrid valuation is an appraisal that relies largely on available data and/or a property inspection completed by a third party (not the appraiser). The plaintiff alleged that Ocwen charged undisclosed markups on the fees for these services.

If you have or had a loan serviced by Ocwen and you paid for one or more BPOs or hybrid valuations charged by Ocwen through Altisource between Nov. 5, 2010, and Sept. 29, 2017, you may be entitled to a $60 reimbursement for each BPO fee you paid and $70 for each Hybrid fee you paid. California class members can receive reversals or credits in these amounts for any fees that were assessed but not paid. The deadline for claims is Sept. 29, 2024. 

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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 and consumer literacy and advocating for consumer rights both in 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. At Consumer-Action.org, visitors have instant access to important consumer news, downloadable materials, an online “help desk,” the Take Action advocacy database, and more. Our in-language media outreach allows us to share scam alerts and other timely consumer news with a wide non-English-speaking audience.

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