Personal Finance & Consumer Rights Blog

Bob Sullivan has exposed a new fee imposed on credit card users on his blog “The Red Tape Chronicles” on msnbc.com:  The “foreign fee” now charged by Bank of America. 

Online shoppers take note:  It’s now possible that you’ll be charged a foreign transaction fee on some purchases without ever leaving the U.S.

Information that auto insurance companies use in a controversial scoring method that helps them set your car insurance rates is available to you for a fee.  ChoicePoint has made available to consumers their “insurance score” at its ChoiceTrust.com web site:  http://tinyurl.com/mnltns

ChoicePoint provides scores to more than 400 insurance companies.  It maintains a database of 16 billion public records but that does not necessarily mean your data will be available through ChoicePoint.  Some insurance companies use their own scoring systems.  

The insurance industry uses insurance scores because it says a high degree of correlation exists between a person’s overall credit history and the likelihood that he or she will file an insurance claim.  ChoicePoint charges consumers $12.95 for the ability to access their insurance scoring records for 30 days. 

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Filed under: Credit Reports

Nancy Trejos, a writer for the Washington Post, did a great job in breaking down the new credit card law.

 Analysts said the law will transform the industry, which has gone largely unregulated since usury laws were relaxed in the late 1970s. Consumer advocates said it would protect borrowers from actions that have made it difficult for them to pay off their debt. But card executives have said it will hamper their ability to manage risk and will force them to withhold credit or raise interest rates for all their customers. The law will go into effect in nine months.

Here is the link to Ms. Trejos’ breakdown of what you will find in the law and how it will affect you. http://tinyurl.com/nxh8kg

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Filed under: Credit Cards

In a nationwide, federal-state crackdown on fraudulent telemarketers claiming to help police, firefighters, and veterans, the Federal Trade Commission, together with 61 Attorneys General, Secretaries of State, and other law enforcers of 48 states and the District of Columbia, announced “Operation False Charity.” Federal and state enforcers announced 76 law enforcement actions against 32 fundraising companies, 22 non-profits or purported non-profits on whose behalf funds were solicited, and 31 individuals. These include two FTC actions against alleged sham non-profits and the telemarketers who made deceptive claims about these so-called charities. The FTC and state agencies also released new education materials, in both English and Spanish, to help consumers recognize and avoid charitable solicitation fraud.

The two FTC cases involve federal court complaints and proposed settlement orders against defendants who allegedly tricked consumers into giving by claiming that donations would support police or firefighters disabled in the line of duty, often in the donors’ communities, or that the donations would assist military families in need, and by misleading consumers about how much of the money would go to those causes. According to the FTC, the defendants used legitimate-sounding names and described sympathetic causes to give their sham organizations a veneer of credibility. Their real goal, however, was to dupe consumers into contributing money that the defendants used overwhelmingly just to support themselves and their fundraisers.

According to the FTC’s complaint, the defendants misrepresented that donations would go to a legitimate charity, that the organizations have programs that do not actually exist, and that those programs benefit the donors’ local communities. The complaint also alleges that the defendants misrepresented its affiliation with police officers and sheriffs, and charges the defendants with assisting others to commit deceptive acts and practices.

The proposed order settles the FTC’s complaint by barring the defendants from making false claims, or assisting anyone else in making false claims, in connection with charitable solicitations, or in connection with telemarketing. It also prohibits the defendants from violating the Telemarketing Sales Rule, requires that they make certain disclosures when fundraising, and it requires that they monitor any fundraisers that solicit on their behalf. 

The FTC also issued a new consumer alert providing tips about charities that solicit donations on behalf of veterans and military families. According to the alert, which can be found on the agency’s Web site at www.ftc.gov/charityfraud, while many legitimate charities are soliciting donations to support the nation’s military veterans, not all “charities” are legitimate – some are operators whose only purpose is to make money for themselves. Others are paid fundraisers whose fees can use up most of your donation.

The new alert, “Supporting the Troops: When Charities Solicit Donations on Behalf of Vets and Military Families,” offers the following tips to help consumers ensure that their donations go to a legitimate charity. Many of these tips apply to charitable giving to other types of organizations, as well.

• Recognize that the words “veterans” or “military families” in an organization’s name don’t necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.
• Check out an organization before donating. Some phony charities use names, seals, and logos that look or sound like those of respected, legitimate organizations.
• Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.
• If you have any doubt about whether you’ve made a pledge or a contribution, check your records. If you don’t remember making the donation or pledge, resist the pressure to give.
• Call the office in your state that regulates charitable organizations to see whether the charity or fundraising organization has to be registered.
• Do not send or give cash donations. For security and tax-record purposes, it’s best to pay with a check made payable to the charity.
• Ask for a receipt showing the amount of your contribution.
• Be wary of promises of guaranteed sweepstakes winnings in exchange for a contribution. You never have to give a donation to be eligible to win a sweepstakes.

Some sites where consumers can check out a charity include:

*www.nasconet.org - National Association of State Charity Officials, where you can look up and contact your state’s charities regulator for more information.

*www.guidestar.org - Guidestar

*www.bbb.org/charity - Better Business Bureau Wise Giving Alliance

*www.charitynavigator.org - CharityNavigator

*www.charitywatch.org - American Institute of Philanthropy

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Filed under: Consumer Protection

Tomorrow, April 29th is Arbitration Fairness Day in D.C.   Corporations are using forced arbitration to take advantage of consumers and avoid accountability when they do harm.  Arbitration is a private system companies use to solve disputes with consumers.  There are no judges or juries.  There is no appeal process.   Forced arbitration traps consumers into waiving their rights to sue, participate in a class action lawsuit, or appealing an unfair resolution to a conflict.  The consumer does not have access to a courtroom, a judge or a jury.  Most forced arbitration clauses are buried in the fine print of credit card agreements, car loans, insurance agreements and other contracts - clauses that people like you and I are agreeing to everyday. 

Let’s do something to end forced arbitration.  Here’s what you can do:  (1) Visit the website www.FairArbitrationNow.org.  It is an action center for putting an end to forced arbitration.  (2) Sign the petition on the www.FairArbitrationNow.org website.  The petition will be used in conversations with congressional leaders to show how important this issue is to voters.  Adding your signature will help make a strong case for banning forced arbitration now.  (3) Attend Arbitration Day on April 29th in Washington, D.C.  (4) Meet with your local representatives in their offices or write to your local newspaper.  Companies have been stacking the deck against consumers, forcing consumers to waive their rights and play by the companies rules.  Now is the time to stop companies from evading accountability.

Thankfully, there is already legislation moving through Congress to put an end to forced arbitration.  The Arbitration Fairness Act would disallow companies from using forced arbitration in civil rights, employment, consumer, or franchise disputes.

Join me in asking members of Congress to support the Arbitration Fairness Act, which will end the practice of forcing employees and consumers to sign away their rights to legal protections and access to courts.  Sign the petition today:  http://action.citizen.org/t/9119/petition.jsp?petition_KEY=1904

Thanks!

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Filed under: Arbitration