Defend Your Dollars

6 Tips for Graduating with Less Student Debt

2011-12-16T19:29:47Z

The cost of higher education is skyrocketing, and students often end up graduating with massive debts as a result. Student loan borrowers are also defaulting on their loans at a higher rate than ever before.

]]> It’s important to educate yourself about all the options you have to finance your college education, so you can minimize your debt burdens after graduation. Follow these tips to help get you started.

Norma P. Garcia, Senior Attorney

2011-12-14T23:04:12Z

Norma P. Garcia is a Senior Attorney and manages the Financial Services Program for Consumers Union, the policy and advocacy division of Consumer Reports magazine. Since joining Consumers Union?s staff in 1992, Ms. Garcia has become a recognized national and international expert in mortgage lending, credit, finance and insurance regulatory law and policy. She has served as expert advisor and witness on technical matters for legislators and legislative staff and has negotiated and successfully lobbied for the passage of significant consumer protection legislation. Ms. Garcia is the author of several publications on topics including the usage of credit scores in insurance, reverse mortgages and predatory mortgage lending.

Ms. Garcia was honored as a 2000 National Trial Lawyer of the Year Finalist by the Trial Lawyers for Public Justice for her contribution to the public interest while serving as co-counsel on the litigation team which successfully defended Consumers Union in a multi-million dollar lawsuit brought by Isuzu Motors Ltd. Ms. Garcia also served as co-counsel on the Consumers Union litigation team which in 2007 successfully defended landmark anti-discrimination insurance regulations which will save California consumers billions in automobile insurance premiums.

Ms. Garcia received her law degree from the University of California, Hastings College of the Law and her BA from the University of California at Irvine. Garcia?s undergraduate studies include one year abroad at the Universidad Nacional Autonoma de Mexico (UNAM) in Mexico City.

Ms. Garcia is an attorney admitted in California and Hawaii.

]]> Norma P. Garcia is a Senior Attorney and manages the Financial Services Program for Consumers Union, the policy and advocacy division of Consumer Reports magazine. Since joining Consumers Union?s staff in 1992, Ms. Garcia has become a recognized national and international expert in mortgage lending, credit, finance and insurance regulatory law and policy. She has served as expert advisor and witness on technical matters for legislators and legislative staff and has negotiated and successfully lobbied for the passage of significant consumer protection legislation. Ms. Garcia is the author of several publications on topics including the usage of credit scores in insurance, reverse mortgages and predatory mortgage lending.

Ms. Garcia is an attorney admitted in California and Hawaii.

Consumer protections lacking for mobile payments

2011-12-14T17:41:39Z

Consumers Union finds protections fall short when mobile payments are linked to phone accounts

]]> December 14, 2011

Consumer Protections Lacking For Mobile Payments Charged to Phone Accounts

Consumers Union Calls on Wireless Carriers to Strengthen
Mobile Payment Protections for Consumers

SAN FRANCISCO, CA - Most cell phone and tablet users can purchase digital goods and charge them to their monthly bill or prepaid phone account. But they may not get the protections they need to limit their financial liability if something goes wrong with the transaction. The protections consumers receive will vary depending on their wireless carrier's policies and what?s in their cell phone contract, according to a new analysis by Consumers Union.

"Consumers using mobile payments should get the same strong protections they currently enjoy when they make purchases with a credit card or debit card," said Michelle Jun, senior attorney for Consumers Union, the nonprofit advocacy arm of Consumer Reports. "But we found that consumer rights can vary widely between wireless carriers and the protections carriers claim to provide are often nowhere to be found in customer contracts."

In May 2011, Consumers Union called on the top wireless carriers to strengthen their contracts to protect consumers in the event that their phone is lost or stolen or if a merchant makes a billing mistake or the customer is not satisfied with a purchase. The consumer group urged the carriers to provide the same strong protections guaranteed by law when consumers use a credit card or debit card. In addition, Consumers Union pressed the companies to provide consumers across the country with the same protections California phone customers are entitled to receive as a result of regulations issued by the state's Public Utilities Commission (PUC).

Since May, Consumers Union has been in communication with representatives from AT&T, Sprint, T-Mobile, and Verizon Wireless to find out how they handle disputed mobile payment transactions. All four carriers maintain that they provide ample protections for consumers.

However, Consumers Union found that the protections these carriers provide fall short of what consumers get when they use credit cards and debit cards or when California consumers report a disputed charge on their phone accounts. In addition, many of the protections that wireless carrier representatives described to Consumers Union are not disclosed in customer contracts, making it difficult to know whether consumers can count on these safeguards when problems arise.

"As new mobile payment options become available, consumers are better off sticking to services linked to credit cards or debit cards, which come with strong protections required by law," said Jun. "If wireless carriers want consumers to have confidence in direct carrier billing programs, they should strengthen their contracts with the protections consumers need."

Below is a summary of the protections that Consumers Union analyzed and what is provided by the top wireless carriers:

Limit liability when phones are lost or stolen: A credit card customer's liability is limited to no more than $50 for unauthorized charges. In practice, credit card issuers usually shield customers from any financial liability for fraudulent charges. Verizon Wireless? contract makes clear that its customers are not liable for charges related to a lost or stolen phone. Contracts for AT&T, Sprint, and T-Mobile protect customers from fraudulent charges made after a phone is reported lost or stolen but consumers may be on the hook for charges made before making a report.

Limit liability for disputed charges: If a billing error appears on a monthly credit card statement, there is no liability for the customer as long as the customer reports the error within 60 days. "Billing error" also includes a dispute with a merchant about the delivery or acceptability of goods or services. While all four wireless carriers insist they provide refunds for billing errors or when customers are unhappy with purchases, these rights are not clearly disclosed in their contracts.

Re-credit pre-paid customers within 10 days for disputed charges: After a consumer reports a fraudulent transaction involving a debit card, the bank must either complete its investigation within 10 business days or provisionally re-credit the consumer's funds within that time. AT&T, Sprint, and T-Mobile indicated that they strive to provide prompt refunds but none guarantee in their contracts that pre-paid customers will get a provisional refund within ten days after reporting fraudulent charges. Verizon Wireless does not allow customers with pre-paid phone accounts to make mobile payment charges.

Give customers the right to withhold payments for disputed charges: California's PUC rule gives phone customers in that state the right to withhold payment of disputed charges while an investigation is conducted and requires investigations to be completed within 30 days. Sprint's contract indicates that customers don't have to pay for disputed charges as long as they are reported within 60 days. AT&T said that it gives all customers the right to withhold payments during an investigation but its contract only discloses this right to Californians. T-Mobile discloses these rights for California customers but not for customers living in other states. Verizon Wireless' contract allows customers to withhold payment for charges related to lost or stolen phones but it does not indicate that consumers have this same right for other kinds of disputed charges.

Enable customers to set a cap on mobile payment charges: The California PUC rule allows consumers to block third party charges on their accounts. All four wireless carriers allow customers to block third party charges but AT&T and Sprint do not disclose this right in their contracts. AT&T, Sprint and Verizon Wireless set their own dollar limits on allowable charges (AT&T has a $100 limit per month per line while Sprint and Verizon Wireless limit charges to $25 per month per line). AT&T enables consumers to set their own limits but charges $4.99 per line each month to do so.

For more details, see How Top Wireless Carriers Compare on Consumers Protections for Mobile Payments.

For Consumers Union's mobile payment tips for consumers, see: Mobile Payments Tip Sheet: What Can Consumers Do Now

Michael McCauley, 415-431-6747, ext 126 (office) or 415-902-9537 (cell)

How Top Wireless Carriers Compare on Consumer Protections For Mobile Payments

2011-12-14T05:51:53Z

How Top Wireless Carriers Compare on Consumer Protections For Mobile Payments

Most cell phone and tablet users can currently make mobile payments charged to a prepaid phone account or their monthly bill. But when consumers use these payment options, they may not get the protections they need to limit their financial liability if something goes wrong with the transaction. The protections they receive will vary depending on which wireless carrier they use and what's in their cell phone contract. That leaves consumers at risk and means they could end up losing money if they discover a fraudulent transaction or billing error, or when they aren't satisfied with their purchase.

In May 2011, Consumers Union called on the top wireless carriers to strengthen their contracts to provide consumers who make mobile payments charged to their wireless accounts with the same strong protections they are guaranteed by law when they shop with a credit card or debit card. In addition, Consumers Union urged the companies to provide consumers across the country with the same protections California phone customers are entitled to receive as a result of regulations adopted by the California Public Utilities Commission.

These protections are:

-- Limit a consumer's liability for unauthorized transactions when false charges are made with a lost or stolen phone. A credit card customer's liability is limited by law to no more than $50 for unauthorized charges resulting from a lost or stolen credit card. In practice, credit card issuers usually shield customers from any financial liability for fraudulent charges. Wireless carriers should do the same.

-- Limit a consumer's liability for disputed charges to a prepaid wireless phone deposit or a wireless phone bill. If a billing error appears on a credit card customer?s monthly statement, there is no liability for the customer as long as the customer reports the error within 60 days. "Billing error" includes a dispute with a merchant about the delivery or acceptability of goods and services. Wireless carriers should provide their customers with the same protection.

-- Give consumers the right to have missing funds from disputed transactions re-credited within 10 business days. After a consumer reports a fraudulent transaction involving his or her debit card, the bank must either complete its investigation within 10 business days or provisionally re-credit the consumer's funds within that time. Wireless carriers should provide the same re-credit rights for customers who make mobile payments linked to prepaid phone accounts.

-- Give consumers the right to withhold payment of any disputed charges while an investigation is pending and protection from penalties for withholding payment. California's PUC rule gives California phone customers the right to withhold payment of disputed charges while an investigation is being conducted.

Investigations of disputed charges must be completed within 30 days. Wireless carriers should provide this same right to customers nationwide.

-- Enable consumers to set a cap on the dollar amount for mobile payments which can be directly made to wireless accounts. The California PUC Rule allows consumers to block third party charges on their accounts.

Over the past few months, Consumers Union has been in communication with representatives from AT&T, Sprint, T-Mobile, and Verizon Wireless to find out how they handle disputed mobile payment transactions and whether the carriers are willing to adopt the protections outlined above in their customer contracts. All four carriers maintain that they provide ample protections for consumers.

However, the protections these carriers provide fall short of what consumers get when they use credit cards and debit cards or when California consumers report a disputed transaction on their phone accounts. In addition, many of the protections the wireless carriers described to Consumers Union are not disclosed in their contracts, making it difficult to know whether consumers can count on these safeguards when problems arise.

Below is a summary of the responses Consumers Union has received from AT&T, Sprint, T-Mobile, and Verizon Wireless and why they fall short of what consumers need.

AT&T

Unauthorized Charges Due to a Lost or Stolen Phone

What AT&T told Consumers Union: Consumers have no financial liability once they report a lost or stolen phone and don?t have to pay for disputed charges during the investigation.

What's in AT&T's contract: If a call was placed from the customer's phone then the charge is considered authorized. Once the customer reports a lost or stolen phone then there is no liability for subsequent charges. The customer will get a response from AT&T about its investigation within 30 days. The customer is responsible for "all other obligations" while a phone is suspended.

What's Missing: Even though AT&T representatives told CU that customers are not responsible for disputed charges during the investigation, this is not made clear in the contract. AT&T should strengthen its contract by making it clear that customers are not responsible for fraudulent charges -- even those incurred before a customer reports a lost or stolen phone.

Billing Errors

What AT&T told Consumers Union: Customers can get a full refund for valid claims of unauthorized charges.

What's in AT&T's contract: Customers have to pay disputed charges that are not due to a lost or stolen phone. The customer must dispute these charges in writing within 100 days of the date of the bill. The customer must pay a collection fee plus interest if they fail to pay billed charges when due and their bill is sent to collections. Customers can seek refunds for purchases if they are not satisfied.

What's Missing: There is no reference to billing errors in the contract. Consumers may have to pay for disputed charges unrelated to a lost or stolen mobile device during the investigation. Customers with a prepaid wireless phone deposit don't have the right to have funds re-credited during the investigation. AT&T should strengthen its contract to make clear that customers are not liable for disputed charges involving a billing error as long as the customer reports the error within 100 days.

Re-Credit Rights

What AT&T Told Consumers Union: Adjustments will be made immediately and customers will be re-credited within 2-3 business days. Most adjustments are immediate. Customers will get a response within 2 days. In rare cases a response may take up to 30 days.

What's In AT&T's Contract: There is no disclosure about re-credit rights other than that the customer will find out the results of an investigation within 30 days.

What's Missing: While AT&T says that most investigations are completed within 2 days, some can take as long as 30. The customer may have to wait as long as 30 days before an investigation is complete and has no contractual right to get funds re-credited before the investigation is complete. AT&T should strengthen its contract by making it clear that customers using a prepaid account have the right to a provisional re-credit of their account within ten days if investigations involving fraudulent transactions have not been completed within that time period.

Right to Withhold Payment for Disputed Charges

What AT&T told Consumers Union: AT&T does not require payment of disputed charges and/or associated fees. Customers don't have to pay for disputed charges during the investigation.

What's In AT&T's Contract: The contract only specifies that California consumers can withhold payment for disputed charges while an investigation is pending. The contract implies that payment is required. Customers can contest charges for purchases if they are not satisfied.

What's Missing: Even though AT&T told Consumers Union that customers don't have to pay for disputed charges during an investigation, the contract does not disclose this right except for those customers living in California. AT&T should strengthen its contract to make it clear that customers nationwide have the right to withhold payments while disputed charges are being investigated.

Limits on Allowable Charges

What AT&T Told Consumers Union: AT&T provides customers with multiple options to control purchases. AT&T caps mobile purchases to $100 per line per month. Customers have the right to block all third party charges at no cost.

What's In AT&T's Contract: The AT&T contract does not provide information regarding blocking third party charges. AT&T's contract does refer to "Smart Limits" in the context of limiting others from making purchases with a device. A link to the "SmartLimits" service provides information that customers will be charged a $4.99 monthly fee per line and indicates that it doesn't work if using WiFi.

What's Missing: AT&T should disclose in its contract that customers have the ability to block third party charges at no cost. And AT&T should enable its customers to set their own limits at a particular dollar amount at no cost.

Sprint

Unauthorized Charges Due to a Lost or Stolen Phone

What Sprint told Consumers Union: Consumers should lock their mobile devices or use applications that will mitigate problems with lost or stolen mobile devices. Sprint will investigate and typically credit the consumer for unauthorized charges.

What's In Sprint's Contract: Customers must call or write immediately about a lost or stolen phone or may be liable for charges made before notifying Sprint.

What's Missing: Sprint should strengthen its contract by making it clear that customers are not responsible for fraudulent charges -- even those incurred before a customer reports a lost or stolen phone.

Billing Errors

What Sprint Told Consumers Union: Sprint indicated that it has a "liberal refund policy" for disputes involving Premium SMS charges (such as for games, ringtones, and screen savers). After a consumer reports an initial dispute, Sprint will grant a credit or refund and opt out the customer from the disputed short code campaign or subscription. If the customer re-subscribes and reports a second dispute, Sprint will typically issue a second credit or refund. If the customer continues to opt-in to the program, he or she will be held responsible for all charges. For unauthorized charges involving Sprint's Direct Carrier Billing (DCB) program, the carrier directs the customer to contact the DCB aggregator to resolve the dispute. However, Sprint indicated that its systems and policies are designed to permit refunds for these purchases.

What's In Sprint's Contract: Customers have to pay for all undisputed charges. The customer must pay a late payment charge if they fail to pay billed charges when due. Customers must properly report disputed charges in writing or by calling Sprint within 60 days of the date of the bill that initially contained the charge.

What's Missing: It remains unclear whether consumers will get a refund for disputed DCB charges. While Sprint maintains that its policies permit refunds for disputed charges, these rights are not made clear in the contract. With Premium SMS charges, Sprint will make a refund for the first and second consumer dispute and educate the consumer as to how to block these types of charges. However, consumers may be liable for disputed charges after the second complaint. Sprint should strengthen its contract to make it clear that the customer has no liability for disputed charges involving billing errors reported within 60 days.

Re-Credit Rights

What Sprint Told Consumers Union: Refunds are provided after the first and second time a consumer complains about disputes involving premium SMS charges. These refunds are reflected in the next invoice if the amount has already been paid. If the amount has not been paid, it is credited back to the account. The customer may or may not receive a refund for disputes involving DCB purchases which are made through third parties such as BilltoMobile and Google and depend on the third party's terms of service.

What's In Sprint's Contract: There is no disclosure about re-credit rights. Additionally, the contract does not specify how long an investigation regarding disputed charges will take.

What's Missing: While Sprint indicated that it provides prompt credit for the first two times a customer reports a dispute and that customers can seek a credit from the DCB aggregator for disputed DCB charges, these re-credit rights are not disclosed in the contract. Sprint should strengthen its contract by making it clear that customers using a prepaid account have the right to a provisional re-credit of their account within ten days if investigations involving fraudulent transactions have not been completed within that time period.

Right to Withhold Payment For Disputed Charges

What Sprint Told Consumers Union: Sprint did not address this issue in their letter to Consumers Union.

What's In Sprint's Contract: Customers do not have to pay for disputed charges as long as disputed charges are properly reported within 60 days of the date of the bill that initially contained the charge.

What's Missing: Sprint's contract provides needed protections. Customers do not have to pay for properly disputed charges according to Sprint's Terms.

Limits on Allowable Charges

What Sprint Told Consumers Union: Sprint currently has a $25 monthly limit per mobile number for purchases. Sprint also gives customers the ability to block all third party charges at no cost.

What's in Sprint's contract: There is no language in the contract regarding a customer's right to block third party charges at no cost.

What's Missing: Sprint should disclose in their contracts that customers have the right to block all third party charges and consumers should be informed about the $25 monthly limit per phone cap on third party charges.

T-Mobile

Unauthorized Charges Due to a Lost or Stolen Phone

What T-Mobile Told Consumers Union: T-Mobile?s letter to Consumers Union says that its Terms and Conditions offer customers contractual protections against liability for unauthorized charges. The letter says to refer to the contract for more details

What's in T-Mobile's Contract: Charges made with the phone are considered authorized. A customer's phone will be suspended after it is reported lost or stolen and the customer will not be liable for subsequent charges. Californians are not responsible for charges before a lost or stolen phone is reported.

What's Missing: Customers outside of California are responsible for charges made before reporting the phone lost or stolen. Therefore, the consumer could end up paying for more than $50 in fraudulent charges. T-Mobile should strengthen its contract by making it clear that customers are not responsible for fraudulent charges -- even those incurred before a customer reports a lost or stolen phone.

Billing Errors

What T-Mobile Told Consumers Union: T-Mobile's letter to Consumers Union says that its Terms and Conditions offer customers contractual protections against liability for unauthorized charges. The letter says to refer to the contract for more details.

What's in T-Mobile's Contract: Customers must pay all charges billed to phone. Customers must dispute charges in writing within 60 days after the date a customer first receives the disputed bill or charge.

What's Missing: Customers may have to pay for disputed charges during the investigation. Customers with a prepaid wireless phone deposit don?t have the right to have funds re-credited during investigation. T-Mobile should strengthen its contract to make clear that customers have no liability for billing errors as long as they report the errors with 60 days. All customers should be notified within 30 days about the result of investigations involving disputed transactions.

Re-Credit Rights

What's in T-Mobile's Contract: California customers will be notified within 30 days about the result of investigations involving disputed charges.

What's Missing: There isn't a limit on the amount of time a customer may have to wait, except for California customers who have to wait as long as 30 days before an investigation is complete and have no right to get funds re-credited before the investigation is complete. T-Mobile should strengthen its contract by making it clear that customers using a prepaid account have the right to a provisional re-credit of their account within ten days if investigations involving fraudulent transactions have not been completed within that time period.

Right to Withhold Payment For Disputed Charges

What's in T-Mobile's Contract: Consumers must pay for disputed charges while an investigation is pending. California consumers do not have to pay for disputed charges.

What's Missing: T-Mobile's contract only allows customers living in California to withhold payment during an investigation (which is required by the California PUC rule). T-Mobile should strengthen its contract to give customers nationwide the right to withhold payments for disputed charges while an investigation is pending and that investigations will be completed within 30 days.

Limits on Allowable Charges

What T-Mobile Told Consumers Union: T-Mobile's letter to Consumers Union says subscribers can block direct carrier billing transactions at no charge by calling Customer Care or going to a T-Mobile store.

What's in T-Mobile's Contract: Customers can block third party products or services.

What's Missing: T-Mobile's contract provides needed protections and discloses customer options for limiting charges.

Verizon Wireless

Unauthorized Charges Due to a Lost or Stolen Phone

What Verizon Wireless Told Consumers Union: Verizon will provide a full refund when a customer calls Customer Care to report fraudulent charges due to a lost or stolen phone.

What's in Verizon Wireless' Contract: Customers don't have to pay for disputed charges during an investigation after they have reported a lost or stolen phone.

What's Missing: Verizon Wireless' contract provides the needed protections. Verizon expressly states in its Customer Agreement that its postpay customers do not have to pay for disputed charges relating to a lost or stolen wireless device.

Billing Errors

What Verizon Wireless Told Consumers Union: Consumers will be refunded for erroneous charges when they call Customer Care. Consumers who use BilltoMobile's service are subject to BilltoMobile's Terms of Use, and will be first referred to contact the merchant to resolve the disputed charge.

What's in Verizon Wireless' Contract: Customers must report disputed charges in writing within 180 days of the date the disputed charges was incurred. Customers are responsible for charges unless they are for a lost or stolen phone and they can be charged a late fee for withholding payment.

What's Missing: Verizon's contract terms are out of sync with what a representative of Verizon told Consumers Union. While Verizon officials maintain that the carrier credits disputed charges immediately once they receive a customer report, the contract indicates that customers are responsible for charges unless they are for a lost or stolen phone and that they can be charged a late fee for withholding payment. Verizon should strengthen its contract to make it clear that the customer has no liability for billing errors reported within 180 days.

Re-Credit Rights

Does not apply. Verizon Wireless does not allow prepaid customers to make direct carrier billing charges

Right to Withhold Payment For Disputed Charges

What Verizon Wireless Told Consumers Union: Verizon indicated that they may credit customer accounts immediately when they call customer service to dispute a charge so there is no need for customers to withhold payment.

What's in Verizon Wireless' Contract: Customers can withhold payments for charges related to lost or stolen wireless devices.

What's Missing: Consumers may have to pay for disputed charges unrelated to a lost or stolen wireless device during the investigation. California consumers should be explicitly informed of their protections to withhold payment of disputed charges and that an investigation must be conducted within 30 days. Verizon should strengthen its contract to make it clear that customers nationwide have the right to withhold payment for disputed charges unrelated to a lost or stolen phone.

Limits on Allowable Charges

What Verizon Wireless Told Consumers Union: Mobile payment charges are limited to $25 per month

What's in Verizon Wireless' Contract: Customers can block third party charges at no cost.

What's Missing: Verizon?s contract provides needed protections and discloses customer options for limiting charges.

December 14, 2011

Senate blocks confirmation of Cordray for CFPB

2011-12-08T18:14:53Z

CU: Vote shows who is standing with consumers and who is standing with big banks and Wall Street

]]> Thursday, December 8, 2011

Senate Blocks Vote on Confirmation Of Richard Cordray as Director of New Consumer Financial Protection Bureau

Consumers Union: Vote Shows Who is Standing With Consumers And Who Is Standing With Big Banks and Wall Street

WASHINGTON, D.C. - Opponents of the Consumer Financial Protection Bureau (CFPB) in the Senate today succeeded in preventing a vote on the confirmation of Richard Cordray to head up the new financial watchdog. Senate leaders were unable to break a filibuster organized by a group of lawmakers who refuse to consider Cordray?s nomination until changes are made to the CFPB that would weaken its ability to protect consumers.

?Richard Cordray?s nomination is being held hostage by lawmakers who seem intent on undermining this vital new watchdog for consumers,? said Pamela Banks, senior counsel for Consumers Union, the advocacy arm of Consumer Reports. ?Today?s vote makes it clear who is standing with consumers and who is standing with the big banks and Wall Street.?

The CFPB was created by the Wall Street reform law passed by Congress last year and is working to make sure financial companies provide consumers with the information they need to understand the true costs and risks of different financial products. It has been charged with identifying and stopping unfair, deceptive, and abusive financial practices and keeping the rules governing financial service products up-to-date.

Opposition to the nomination is preventing the CFPB from exercising its full powers to protect consumers. Without a director, the CFPB is not able to exercise its authority to oversee non-bank financial institutions like payday lenders, debt collectors, check cashers and certain mortgage lenders who target vulnerable consumers, according to a report by the Treasury Department?s Inspector General. In addition, the report indicates that the CFPB cannot exercise its authority to require model disclosure forms that ensure fees for financial services are disclosed fairly and accurately unless it has a director. Likewise, its ability to prohibit unfair, deceptive, or abusive financial practices is limited without a director.

It's no wonder there?s so much cynicism about Washington these days,? said Banks. ?Americans spent billions of dollars to bail out the big banks and now the agency that was created to protect consumers from unfair financial practices is under attack by some lawmakers in Congress.?

###

Contact: David Butler or Kara Kelber, 202-462-6262 or Michael McCauley, 415-431-6747, ext 126 (office) or 415-902-9537 (cell)

Senate Blocks Vote on Confirmation Of Richard Cordray

2011-12-08T17:15:09Z

Vote shows who is for consumers and who is for the Big Banks and Wall St.

]]> Opponents succeeded in preventing a vote on the confirmation of Richard Cordray to head up the Consumer Financial Protection Bureau. Senate leaders were unable to break a filibuster organized by a group of lawmakers who refuse to consider Cordray?s nomination until changes are made to the CFPB that would weaken its ability to protect consumers. By blocking this vote they also prevent important consumer protections going into effect like reigning in mortgage brokers that sunk millions of American families.

You can see the entire roll call vote here. These are the Senators that voted NAY:
NAYs ---45
Alexander (R-TN)
Ayotte (R-NH)
Barrasso (R-WY)
Blunt (R-MO)
Boozman (R-AR)
Burr (R-NC)
Chambliss (R-GA)
Coats (R-IN)
Coburn (R-OK)
Cochran (R-MS)
Collins (R-ME)
Corker (R-TN)
Cornyn (R-TX)
Crapo (R-ID)
DeMint (R-SC)
Enzi (R-WY)
Graham (R-SC)
Grassley (R-IA)
Hatch (R-UT)
Heller (R-NV)
Hoeven (R-ND)
Hutchison (R-TX)
Inhofe (R-OK)
Isakson (R-GA)
Johanns (R-NE)
Johnson (R-WI)
Kirk (R-IL)
Kyl (R-AZ)
Lee (R-UT)
Lugar (R-IN)
McCain (R-AZ)
McConnell (R-KY)
Moran (R-KS)
Murkowski (R-AK)
Paul (R-KY)
Portman (R-OH)
Risch (R-ID)
Roberts (R-KS)
Rubio (R-FL)
Sessions (R-AL)
Shelby (R-AL)
Thune (R-SD)
Toomey (R-PA)
Vitter (R-LA)
Wicker (R-MS)

CU urges Senate to confirm Cordray for CFPB

2011-12-07T17:22:36Z

Senate finally expected to vote on nominee to head the Consumer Financial Protection Bureau

]]> December 7, 2011

Consumers Union Urges Senate to Confirm Richard Cordray
as Director of New Consumer Financial Protection Bureau

Senate Vote on Cordray Nomination Scheduled for December 8

WASHINGTON, D.C. – Consumers Union called on the Senate today to confirm former Ohio Attorney General Richard Cordray as the director of the new Consumer Financial Protection Bureau. The Senate is expected to vote on the Cordray nomination as early as this Thursday, December 8.

The effort to confirm Cordray has been held up in Congress by a group of Senators who have pledged to oppose any nominee to head the new consumer watchdog. The Senators opposing the Cordray nomination are seeking changes to the CFPB that would weaken its ability to protect consumers. Opposition to the nomination is preventing the CFPB from exercising its full powers to protect consumers, according to Consumers Union.

“Richard Cordray has a solid record fighting for consumers and tough but fair enforcement of the law,” said Pamela Banks, senior counsel for Consumers Union, the advocacy arm of Consumer Reports. “Americans can’t afford the endless stalemate in the Senate over this nomination. It’s time for Congress to set aside politics and confirm Richard Cordray so the CFPB can use all of its tools to protect consumers.”

As Attorney General, Cordray recovered over $2 billion for consumers in Ohio who lost money and their financial security from shady Wall Street investments, deceptive financial products, and wrongful foreclosures. He has a reputation for bi-partisan efforts and his nomination has been endorsed by former Ohio Republican Senator Mike DeWine. In October, more than thirty state attorneys general -- including ten Republicans -- urged the Senate to confirm Cordray.

The CFPB was created by the Wall Street reform law passed by Congress last year and is working to make sure financial companies provide consumers with the information they need to understand the true costs and risks of different financial products. It has been charged with identifying and stopping unfair, deceptive, and abusive financial practices and keeping the rules governing financial service products up-to-date.

But without a director, the CFPB is not able to exercise its authority to oversee non-bank financial institutions like payday lenders, debt collectors, check cashers and certain mortgage lenders who target vulnerable consumers. In addition, the CFPB cannot exercise its authority to require model disclosure forms that ensure fees for financial services are disclosed fairly and accurately unless it has a director. Likewise, its ability to prohibit unfair, deceptive, or abusive financial practices is also limited without a director.

“Millions of Americans are struggling to stay afloat because lax federal oversight allowed the financial industry to run amok and ruin the economy,” said Pamela Banks, senior policy counsel for Consumers Union, the nonprofit advocacy arm of Consumer Reports. “Now that consumers finally have a financial watchdog in Washington, some senators are still standing in the way of tough oversight and preventing the CFPB from doing its job. Richard Cordray should be confirmed so that the CFPB can use its full powers to protect consumers from financial tricks and traps.”

Contact: Michael McCauley, mmccauley@consumer.org, 415-431-6747, ext 126 or David Butler, dbutler@consumer.org or Kara Kelber, kkelber@consumer.org, 202-462-6262

Dec 8th: Senate To Vote on Cordray

2011-12-07T16:48:22Z

Take action and call your Senators!

]]> Tell your Senators to vote YES for Richard Cordray as head of the CFPB. Use our toll free number : 1-800-944-6762 to be connected directly to your Senators. (When you call back we will automatically connect you to your other Senator).

Tell your Senators what you want! A strong consumer watchdog to stand behind you. Call 1-800-944-6762, and tell your Senators staff that you expect a YES vote on Richard Cordray's nomination.

Wrestling with the credit bureaus: One consumer's cautionary tale

2011-12-06T22:48:17Z

Red Tape Chronicles featured a credit error horror story. His pain can be an important lesson for you to fix any credit errors you may find.

]]> We all know that our credit reports and credit scores can have a huge impact on our lives. They are used to determine whether we can get a loan, and at what price. They can be used to screen us as tenants or even job applicants. And if a credit report has a damaging error on it, that error can be tough to fix.

Really tough.

Red Tape Chronicles featured a story from Tom Tupper, a consumer who found an error on his credit report that the credit bureau refused to remove, even after he sent them a huge stack of evidence to prove that it had made a mistake. TransUnion had listed that Tupper was late on a car loan, but Tupper had the records - including copies of checks, account statements and payoff statements - showing he was fully paid up and on time. He disputed the error and produced the documents, only to be told that his request was denied:

"It is really quite appalling when you really think about it," Tupper said. "When I gave that proof to TU and demanded they remove the incorrect entry, they basically ignored me and sided with the data furnisher... So here is the rub: What's to stop anyone from reporting anything derogatory about you to a (credit bureau)?"

Eventually, Tupper resolved the problem by going to the lender that had furnished the data to TransUnion and had the lender fix the error. Consumers now have the right to go straight to the furnisher to fix an error - a little-known right that was implemented by the federal government in 2009.

Unfortunately, Tupper's story is not uncommon. Credit reports can have substantial errors, and those errors can harm your credit score and cause you to be wrongfully denied credit or be offered credit on worse terms. (This is yet another reason why we need a strong, fully-functioning CFPB - the CFPB will have the authority to examine the credit bureaus' practices, but it needs a permanent director before it can begin its nonbank supervision program. Which is being blocked by a group of Senators.)
Consumers should check their credit scores annually for errors. You can check it for free by going to AnnualCreditReport.com/a>. If you do find and error use these tips to help you fix it.

College Students Raise Concerns About Higher One Card Fees

2011-11-29T16:13:08Z

A small group of students and parents at Western Washington University are taking their consumer rights seriously.

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UPDATED

Over 700 colleges and universities have a contract with Higher One Holdings, Inc that have the ability to double student IDs into debit cards. A small group of concerned students and parents at Western Washington University is raising questions about the fees associated with the Higher One card, which can be used to distribute funds leftover from student loans and grants after tuition and other school expenses have been paid. The Higher One card has a number of fees associated with it, some of which aren’t typical of other bank accounts. Some of Higher One's OneAccount fees are 50 cents every time a PIN is used when making a debit card purchase, $2.50 every time the card is used at a non-Higher One ATM, a $20 fee to replace a lost card, and an inactivity fee of up to $19 per month if the account is not used for more than nine consecutive months.

From OregonLive.com

There's even a link on each school's card web site: "How to use the OneAccount for free." Students must then click through three pages to read the fee schedule.
The most confusing fee? The cards are stamped "debit" on front. "THIS IS NOT A CREDIT CARD!" warns the website for Mt. Hood Community College's "Mountain Card."
Yet students who swipe the card as a "debit" and enter their personal identification number get charged a 50-cent fee each time. To avoid that fee, they must press "credit" and sign the receipt.

Do you know a student with this kind of card at his or her campus? If so, here are some useful tips:

•Read Higher One's fee schedule before you activate the card: Make sure you understand all the different ways you can be charged for using your card. Your cost will vary widely depending on which OneAccount choice you pick and how you use it. *Warning: It is 3 pages long!
• Try to figure out how you will use your card and review the fees: You may be charged a monthly fee depending on which Higher One account you choose. While the OneAccount comes without a monthly fee, you'll be charged $5.95 each month to use the OneAccount Flex or $8.95 each month to use the OneAccount Premier unless you meet certain criteria. You may also be charged for making purchases, making cash withdrawals, inactivity, or for using customer service to handle an issue that takes additional research to resolve.
• Take steps to reduce your fees: If you decide to get the Higher One Card try not to use non-network ATMs so you can avoid the $2.50 charge. You can also avoid fees by getting cash back when making purchases and checking your balance online or over the phone.
• Keep track of your balance: Be sure to keep track of your balance to avoid potentially high fees for charging more than the amount you have loaded onto your card.
• Beware of debit card holds: Do not use the Higher One card to purchase gas at the pump or for hotel charges or rental cars. If you do, you may be subject to an extended hold on your funds for more money than what you purchased.
• Your fees may vary depending on how you make purchases: Higher One has different fees for choosing PIN instead of signature, or for selecting the “debit” option instead of “credit” when you make purchases.
• Select your own bank account: You don't have to use the Higher One debit card. Choose to have your money deposited at a local bank or credit union that offers free or low cost checking accounts.

If you or a student you know has had an experience with a Higher One card tell us about it in the comments.

CFPB urged to enact prepaid card protections

2011-11-18T17:22:45Z

CU: Consumers need the same protections for prepaid cards that come with traiditonal debit cards

]]> November 18, 2011

Consumer Groups Call on CFPB to Enact Prepaid Card Protections

Consumers Need The Same Protections For Prepaid Cards
That Come With Traditional Debit Cards Linked To Bank Accounts

WASHINGTON, D.C. -- Consumers groups urged the Consumer Financial Protection Bureau (CFPB) today to require prepaid card issuers to provide consumers with the same kinds of protections they get when using a traditional debit card linked to a bank account.

“As the cost of bank accounts continue to rise, more and more consumers are turning to prepaid cards as an alternative,” said Michelle Jun, senior attorney for Consumers Union, the advocacy arm of Consumer Reports. “But prepaid cards offer weaker protections than bank accounts and can be loaded with hidden fees that make them costly to use. Prepaid card issuers should be required to provide consumers with the same mandatory protections that come with traditional debit cards and to clearly disclose all fees so consumers know these costs up front.”

Many consumers are relying on general purpose, reloadable prepaid cards to manage their finances and make purchases. However, consumers who rely on prepaid cards are only entitled to voluntary protections provided by card issuers when cards are lost or stolen and used to make unauthorized charges. Those voluntary protections come with loopholes and could be subject to change at any time. Prepaid card fees often are poorly disclosed and can make the cost of using these cards much higher than anticipated by consumers.

The letter submitted to the CFPB was signed by Consumers Union, Center for Public Policy Priorities, Center for Responsible Lending, Coalition of Religious Communities, National Consumer Law Center, SC Appleseed Legal Justice Center, and U.S. PIRG.

The groups called on the CFPB to enact a number of mandatory protections for consumers using prepaid cards, including:

• a cap on how much money consumers can lose if their card is lost or stolen or when unauthorized charges are made;

• a guarantee that missing money will be recredited promptly and no later than 10 business days after the consumer reports it;

• clear and conspicuous disclosures of all fees before the consumer signs up to use the card;

• the right to receive a statement or other forms of transaction information; and

• a prohibition on overdraft fees for all prepaid cards.

Contact: Michael McCauley, mmccauley@consumer.org, 415-431-6747, ext 126 or 415-902-9537 (cell)

Senate stalemate on CFPB is hurting consumers

2011-11-15T17:15:29Z

Senators opposing Cordray nomination are preventing the financial watchdog from fully protecting consumers

]]> November 15, 2011

Senate Stalemate Over CFPB Nominee is Hurting Consumers

Senators Opposing Cordray Nomination Are Preventing New Financial Watchdog From Fully Protecting Consumers

WASHINGTON, D.C. – The continuing stalemate in the Senate over Richard Cordray’s nomination to head the Consumer Financial Protection Bureau is leaving seniors, students, servicemembers and other consumers at risk to costly financial scams, according to Consumers Union, the advocacy arm of Consumer Reports.

Without a director, the CFPB is not able to exercise its authority to oversee non-bank financial institutions like payday lenders, debt collectors, check cashers and certain mortgage lenders who target vulnerable consumers.

“It’s time to end the deadlock over this nomination in Congress,” said Pamela Banks, senior policy counsel for Consumers Union. “At a time when millions of Americans are struggling to stay afloat, opponents of the CFPB are standing in the way of the kind of tough oversight we need to rein in financial scams.”

David Butler or Kara Kelber, 202-462-6262 or Michael McCauley, 415-431-6747, ext 126

Confirm Cordray: We need a Wall Street watchdog!

2011-11-15T15:36:04Z

Enough is enough. Join us on November 15th for a national day of action to give consumers the financial watchdog we deserve.

]]> Way back in July consumers were told that Richard Cordray -- a former Ohio Attorney General who went after the big banks -- would be nominated as our new financial watchdog.

Today, he's still cooling his heels, waiting to be confirmed by the Senate. Enough is enough. Today is the day to take action.

A group of 45 Senators are still vowing to block anyone from leading the new Consumer Financial Protection Bureau unless they get to politicize its independence and authority to go after wrongdoing!

It’s time to stop playing political games, and approve nominee Richard Cordray to protect hardworking Americans from the abusive tactics of banks, credit card companies and Wall Street. Tell your Senators to confirm him NOW.

Happy Bank Transfer Day!

2011-11-05T18:21:42Z

We provide a how to video and some tips to help you move your money today

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Happy Bank Transfer Day! Finding the local bank or credit union that works best for you is important. However, moving your money can be complicated and time consuming. Here are some tips to help make sure your transfer goes smoothly.

Step 1. Open your new bank account with a small deposit.
Step 2. Make a list of all the automatic payments and deposits that are scheduled to go in and out of your old account each month.
Step 3. If you have direct deposit, ask your employer to reroute your paychecks to your new account. Ask what date the first deposit will occur and use this date to guide you through Step 4.
Step 4. Once you know what date your direct deposits will transfer, reschedule each automatic payment or debit to come out of your new account. Make sure to ask the company what date the change will apply.
Step 5. Leave at least a small amount of cash in your old checking account for at least one more month.
Step 6. Once you are sure that all automatic payments and all direct deposits are coming and going from your new account, electronically transfer the final funds from your old account into the new account.
Step 7. Once the transfer clears in your new account, follow the procedures for closing an account at your old

financial institution. Make sure to obtain written confirmation that your account is closed.

The Latest Gift Card Advice

2011-11-03T22:04:24Z

In response to consumer inquiries about gift cards, and in light of the holiday season, we thought it’s time for a refresher on existing gift card protections for consumers.

]]> In response to consumer inquiries about gift cards, and in light of the holiday season, we thought it’s time for a refresher on existing gift card protections for consumers.

Most gift cards have limits on expiration dates and fees provided by federal law and many state laws .
At a minimum, the value of your gift card won't expire for at least 5 years unless you don't use the card for 12 months.

Of course, there are certain exceptions to these gift card consumer protections. You might have a devalued or worthless gift card…leaving you empty-handed and frustrated.

Know that the following do NOT have gift card protections:
1. Rebate Cards (like rebate checks)
2. Loyalty, rewards or promotional gift cards (such as gift cards redeemed with credit card points)
3. General Purpose Reloadable “Prepaid Cards”

They following may NOT have gift card protections:
1. “E-Gift cards” (electronic gift cards)
2. Discounted gift cards
3. Paper gift certificates

Finally, retailers may declare bankruptcy and shut their doors. If you have a gift card from one of these businesses, you could also be out of luck.

Our final words of advice on gift cards:
If you HAVE or RECEIVE a gift card, use it ASAP!
If you don't know what else to give, wrap some money in a nice box because it won't expire, won't go bankrupt and will hopefully keep its value.