Rule allowing class action suits against banks nullified.

In July, the Consumer Financial Protection Bureau (CFPB) announced a rule that would have allowed groups of consumers to file class action lawsuits against banks.

President Trump has just signed a bill nullifying that rule.

In nullifying the regulation, Congress made use of the Congressional Review Act, which allows new rules to be blocked by Congress and is immune to a Senate filibuster. Needing only a simple majority, the vote in the Senate was tied 50-50. Vice President Mike Pence cast the 51st vote to pass the bill.

Companies often insulate themselves from being sued by adding a clause to the agreement you sign saying that any disputes will be resolved through arbitration.

One company that uses arbitration clauses is Wells Fargo Bank. In 2016, the bank created unwanted accounts for unwary customers. While Wells Fargo ended up paying more than $100 million in fines imposed by the CFPB, affected customers were unable to sue the bank.

Click here for more information about the bill.

Click here to read about the CFPB rule that the bill nullified.

For more, read the Washington Post story.

House passes bill to revoke consumer and financial protections

The House of Representatives has passed a bill that would weaken consumer protections and repeal many of the regulations intended to prevent a repeat of the 2008 financial crisis.

The  Financial CHOICE Act (CHOICE stands for Create Hope and Opportunity for Investors, Consumers, and Entrepreneurs) would roll back financial protections created by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Its provisions include...

The bill also includes versions of the REINS Act and the Regulatory Accountability Act - bills that would make it extraordinarily difficult for federal agencies to enact regulations protecting consumers and the environment. These bills were among the first bills passed by the current House of Representatives, but have been blocked in the Senate by a Democratic filibuster.

This bill still must pass the Senate - where it also is subject to a filibuster - in order for President Trump to be given the opportunity to sign it into law.    

Click here to read our description of the Financial CHOICE Act.

For more, read the New York Times analysis of the bill.

Click here to read our discussion of the current Congress' assault on regulations.

Rule protecting retirement will take effect in June

A rule requiring financial advisors to act in their clients' best interests when planning retirement investments will take effect June 9.

The Obama administration Fiduciary Rule was supposed to take effect in April, but a memorandum by President Trump demanded that it be reviewed first.

Secretary of Labor Alexander Acosta says that the Labor Department will continue to review the rule, but could not identify a legal issue that would cause further delay.

For more, read the New York Times story.

For more about the delay in implementing the rule, read the NPR story.

Click here to read the memorandum from President Trump ordering a delay of the rule.

Bills would eliminate Consumer Financial Protection Bureau

Rep. John Ratcliffe and Sen. Ted Cruz have introduced legislation to eliminate the Consumer Financial Protection Bureau (CFPB).

The CFPB was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Among other things, the agency has...

To become law, either version would need to pass both houses of Congress and then be signed by the president.

Click here to read more about CFPB enforcement actions.

Click here for information about the bills calling for the CFPB's elimination.

House resolution would remove protections for prepaid cards

A resolution has been introduced in the Hosue of Representatives that would revoke a regulation that creates consumer protections for prepaid accounts. The resolution would overturn a Consumer Financial Protection Bureau (CFPB) rule that requires disclosures about prepaid account fees and protects users from errors, loss and theft.

Prepaid accounts allow users to pay with money that has been loaded onto cards in advance. They are used by people who don't have bank accounts, but also are becoming one of the most common ways to pay for things.

The resolution was introduced by Rep. Tom Graves.  

While eliminating a protection to consumers, blocking the regulation would benefit commercial banks, which were Graves' top industry donors in the 2016 campaign cycle.  

The repeal also would need Senate approval, as well as a signature by President Trump. It cannot be filibustered because the rule is being nullified under the Congressional Review Act.

Click here for more information on the resolution.

For more on the regulation, read our story below.

Click here to see what other Obama administration protections Congress is working to revoke using the Congressional Review Act.

New protections for users of prepaid cards

The Consumer Financial Protection Bureau (CFPB) has issued a rule that would protect users of prepaid cards.

The rule requires banks (and other issuers of prepaid cards) to more clearly disclose fees associated with the account. It also protects you if your prepaid card is lost or stolen, or if your account is wrongly charged.

For more, read the Consumer Financial Protection Bureau description of the regulation.

Bill would make it easier to buy event tickets

Your favorite performer is coming. You jump online the second tickets become available. And the website tells you the show's already sold out. What happened?

Several things, actually. It's likely that about half of the tickets never were available in the first place - having been reserved for the artist, fan clubs, and promotions. But that still leaves a lot of tickets for the public to have bought up in such a short amount of time.

Those tickets weren't bought by the public. They were purchased by ticket resellers such as StubHub and TicketsNow, who will sell them to you at a much higher price. To buy so many tickets so fast, resellers use computer programs known as bots.

Bots effectively lock out the general public from buying tickets at face value. They buy thousands of tickets both by being lightning-fast and by using tactics to circumvent ticket limits imposed by artists and venues.

The House of Representatives has passed the Better On-line Ticket Sales (BOTS) Act, that would make it illegal for resellers to use bots in an unfair way. In order to become law, it still must pass the Senate and be signed by President Obama.

For a clear explanation of how ticket sales work and how bots cause you to pay much more for event tickets, read the report by the New York Attorney General office.

For more, read the Rolling Stone article.

Bill would prevent companies from squelching bad reviews

You buy something that doesn't live up to expectations. Or maybe it doesn't get delivered at all. So you go online and write an honest review.

So the company sends you a bill for hundreds - or thousands - of dollars.

Some companies add a clause to their terms of sale that prohibits you from publishing anything negative about them or their products - even if it's the truth.

A new bill that would end that practice. The Consumer Review Fairness Act would make clauses such as this automatically invalid.

The bill passed both houses of Congress, and President Obama signed it into law Dec 14, 2016.

For more, read the Consumerist.com story.

Wells Fargo fined for creating secret accounts

Wells Fargo Bank opened about 2 million bank and credit card accounts for some of its customers in the past five years. One problem. The customers didn't know about them.

The Consumer Financial Protection Bureau (CFPB) has fined the bank $100 million. The bank also will pay $85 million to other government agencies.

The accounts were opened by employees in order to help them reach their sales quotas and receive commissions. Lax oversight by the bank allowed the practice to persist, the CFPB reported.

Although the customers weren't aware of the accounts opened in their name, they still paid for them. Many of the savings accounts were funded by having money secretly transferred from their existing account - resulting in charges for things like insufficient funds and overdrafts in the existing account. For the credit cards opened in their name without their knowledge, customers were charged annual and other fees.

In addition to the fines, the the bank was ordered to refund all fees and charges that customers paid due to the rogue accounts.

For more, read the CFPB press release.

Regulations would curtail payday loan debt cycle

The Consumer Financial Protection Bureau (CFPB) has proposed regulations to protect those who use payday loans from falling into a cycle of continually-growing debt.

The regulations would include...

The regulations would cover loans required to be paid back within 45 days. They also would cover longer-term loans if it is paid back directly from the borrower's checking account or is secured by the borrower's car, and the Annual Percentage Rate (APR) is greater than 36 percent.

The regulations could go into effect by early 2017. There is a public comment period through Oct. 7.

For a clearer understanding of payday loans, read our discussion of this issue.

For more on the new regulations, read the New York Times story.

You can read a summary of the planned regulations (as well as the full proposal) at the CFPB website.

Click here to read public comments already submitted or to add your own comment.

Fiduciary Rule will protect those investing for retirement

When you receive retirement investment advice from your financial planner, do you want that advice to represent your best interests?

Though the answer seems obvious, your planner has not been obligated to give that advice - and often does not.

For example, while an advisor is required to recommend investments suitable to your goals, he can suggest an investment that will earn him a higher fee - rather than one that would provide you with the best return.

Conflicted advice such as that has led to a total annual loss of $17 billion to American families according to the President's Council of Economic Advisers.

New regulations from the Department of Labor (DOL) will change that.

The Fiduciary Rule will require financial advisers and brokers to act in the best interests of their clients when offering advice on retirement investments. The regulations are expected to take effect around mid-2017.

For more, read the New York Times story.

Click here to read the White House fact sheet for the rule.

Did you buy StarKist tuna recently? You're entitled to $25.

Did your 5-ounce can of Starkist Tuna contain a few tenths of an ounce less than feceral law requires? If it did, would you even notice?

It doesn't matter. What matters is that if you bought that can between 2009 and 2014, you can get a $25 check from the company. Or you can choose $50 in vouchers for StarKist products.

It is the result of a class action lawsuit in which a customer alleged that StarKist slightly under filled its 5-ounce tuna cans. The company agreed to settle the case without admitting fault.

To receive either a check or a voucher, you must file a claim by Nov. 20. You won't need a receipt, but you'll need to certify that you actually bought at least one can of StarKist tuna during the affected period.

For more, including how to file a claim, visit the official website for Hendricks v. StarKist Co.

Time Warner must pay woman $200,000 for robocalls

A judge has ordered Time Warner Cable to pay a Texas woman more than $200,000 for calling her more than 150 times with robocalls - half of those after she filed a complaint.

For more, read the BBC News story.

FCC makes it easier for you to control telemarketers

The Federal Communications Commission (FCC) is making it easier for you to control automated marketing calls (referred to as robocalls) and text messages.

The new rules extend the protections implemented under the 1991 Telephone Consumer Protection Act (TCPA). They include...

For more, read the Tech Times story.

To read the FCC announcement of the new rules, click here.

Credit reporting agencies will become more consumer-friendly

The three primary credit reporting agencies have agreed to new policies that will benefit consumers. Their new National Consumer Assistance Plan will limit the types of information that they keep, and make it easier for you to dispute errors.

Features of the agreement include...

In addition, the agencies are working on ways to better deal with situations such as fraud, identity theft, and mixed files - where two consumer files are mistakenly mixed together.

The new procedures also could benefit businesses - who might otherwise turn down a dependable borrower because of an error. They are expected to start taking place in about six months.

For more, read the New York Times story.

Snuggies marketer pulled the wool over consumers' eyes

If you ever bought a Snuggie or Magic Mesh by calling the phone number on the infomercial, you almost definitely received two in the mail. Which sounds okay, because you were told if you bought one for $19.95 you'd get another one free.

One problem... your credit card was charged $35.85. That's because the television marketer added $7.95 for "processing and handling" of each item. And they provided no way to understand that or to back out.

Allstar Marketing Group will pay an $8 million settlement for its deceptive practices, the Federal Trade Commission (FTC) reported.



The FTC alleged the company violated several provisions, including...

The company has been ordered to change its practices, and the fine may be used to provide refunds to customers.

For more, read the FTC press release.

To read the FTC's complaint describing some of Allstar's practices in detail, click here.

You legally can unlock your cell phone again

President Obama signed a law that makes it legal again for you to "unlock" your cell phone so that it can be used with a different carrier.

Unlocking cell phones had been technically illegal since 1998, when Pres. Bill Clinton signed the Digital Millennium Copyright Act. It still could be done legally, however, because the Library of Congress granted unlocking temporary exemptions from the law. The last exemption expired in Jan. 2014 and was not renewed, making the practice illegal again.

Several variations of the new law were discussed in Congress, including one that would have made it legal for a business to unlock used phones and resell them - potentially saving consumers money. The House of Representatives refused to consider that bill.

For more, read the Cnet.com story.

For a clearer understanding of unlocking, how laws restricting it likely are costing you money, and what you can do about it, see our discussion of this issue.

House passes bill to re-allow cell phone unlocking

The House of Representatives passed a bill on Feb 26 that would allow you unlock your cell phone to allow it to be used on another carrier's network. More significant, however, is what the bill would prevent you from doing.

Unlocking cell phones has been technically illegal since 1998, when Pres. Bill Clinton signed the Digital Millennium Copyright Act. It still could be done legally, however, because the Library of Congress granted unlocking temporary exemptions from the law. The last exemption expired on Jan. 26 and was not renewed, making the practice illegal again.

The bill passed by the House would once again extend the exemption, making unlocking legal again until the next review process by the Library of Congress.

But, because of a last-minute change, the bill won't help consumers in the way that would help them the most - by lowering their monthly bill.

The change, put in by the bill's sponsor, Rep. Bob Goodlatte after the bill was already approved by the House Judiciary Committee (which Goodlatte chairs), explicitly prohibits companies from unlocking cell phones for bulk resale.

Allowing the bulk resale of unlocked phones not only would give consumers more choices of phones, but could encourage carriers to reduce their service fees for customers who bring their own phone. A competing bill sponsored by Rep. Zoe Lofgren that does not have such a restriction has yet to be considered by the House.

For a clearer understanding of unlocking, how laws restricting it likely are costing you money, and what you can do about it, see our discussion of this issue.

FTC will investigate ads disguised as news content

The Federal Trade Commission is investigating what to do about advertisements on websites that are disguised as news stories. Almost 3 out of every 4 online publishers offer such ads, according to FTC surveys.

Even when labeled as sponsored content or something similar, the ads give the misleading impression of being unbiased news stories.

For more, read the New York Times story

Note: Lobby99 does not accept paid advertisements on its website. We do not expect this to change.

Credit Card protection law saving consumers $20 billion a year

Protections created by a 2009 law to limit stop deceptive and excessive credit card fees are saving Americans more than $20 billion a year, according to a recently-released study.

The Credit Card Accountability Responsibility and Disclosure (CARD) Act outlawed practices such as charging a fee for every transaction that would cause someone to exceed his or her credit limit. Banks now can only charge the fee once in a billing period - and only if he or she had explicitly agreed to allow such transactions (by default now the credit card company must decline such transactions).

The law also prohibits other practices such as varying payment due dates from month to month, or specifying a time of day as well as a date for when a bill must be paid.

For more, read the New York Times story.

Click here to read the full report.

Changing jobs? 401(k) rollover advice often misleading

When you change jobs, what should you do with the money you have contributed to your old employer's 401(k) retirement plan? Your old employer might refer you to a money management company for advice.

That advice often is misleading, according to a Government Accountability Office report released on April 3.

The GAO, a nonpartisan investigative arm of Congress, found that plan providers often encourage workers to roll their plans into IRAs (Individual Retirement Accounts) even when they'd be better off leaving their money in a 401(k). The companies can collect bigger fees when workers move their money into IRAs, according to the report.

Both IRAs and 401(k) plans were created by the 1974 Employee Retirement Income Security Act (ERISA).

Part of the problem, the GAO says, is that it's easier for an employee to move their money into an IRA. Reducing the waiting period to roll over money into a new 401(k) plan and streamlining the process could allow participants "to make distribution decisions based on their financial circumstances rather than on convenience," the report states.

For more, read the Washington Post story.

The full report from the GAO, which you can read here, also contains a good description of the two types of retirement plans.

Taxes simple and for free? Not if Intuit has a say (and it does)

If your tax situation is simple, you might have wondered why it's necessary to fill out a tax form. After all, the IRS already has all your information. You also might wonder why you might pay someone to do it for you, or pay for a service such as TurboTax.

The answer has little to do with technology. Other countries such as Spain and Sweden already do this.

The answer in the United States is much more ironic. The corporations you pay to help make your taxes simple are paying your elected representatives to keep them complex. Intuit - the maker of TurboTax - has spent more than $11 million in the past five years lobbying against making tax filing simple and free for the overwhelming majority of Americans.

For more, read the ProPublica story.

White House, Congress seek to legalize cell phone unlocking

The White House, several members of Congress, and the Federal Communications Commission (FCC) have announced that they support making it legal for cell phone owners to "unlock" their phones.

Unlocking a cell phone allows it to work on another carrier's network. It is different from "jailbreaking" or "rooting", which allows a phone to run otherwise blocked software.

The 1998 Digital Millennium Copyright Act (DMCA) made all of those illegal. Unlocking, jailbreaking, and rooting cell phones all were exempted from the law. The exemptions for jailbreaking and rooting are in effect until 2015. The Library of Congress decided to allow the exemption for unlocking to expire on January 26.

Though the stated purpose of the DMCA is to protect creative works, wireless carriers want the protection to prevent people from reselling subsidized phones, according to both the Electronic Frontier Foundation, which represents consumer rights and CTIA - The Wireless Association, which lobbies for the wireless industry. Carriers sell phones at reduced prices (or even give them away) in exchange for the buyer agreeing to stay with the carrier for a length of time - commonly two years. Buyers pay a penalty if they cancel the contract early.

A petition to the Obama administration gathered more than 114,000 signatures, prompting the White House response.

"The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties," wrote R. David Edelman, the administration?s senior adviser for Internet, innovation and privacy. "It?s common sense, crucial for protecting consumer choice."

Read the FCC response here.

For more on reactions from Congress, read this story at TheHill.com.

For more, read this article from the Electronic Frontier Foundation

One in five report errors on their credit reports

Five percent of consumers had errors on their credit reports that could force them to pay more for financial products such as auto loans and insurance, according to a study by the Federal Trade Commission released today.

Overall...

The congressionally mandated study involved 1,001 participants, who used the Fair Credit Reporting Act to fix potential errors.

The full 208-page FTC study can be viewed here.

The Fair Credit Reporting Act requires each of the three nationwide credit reporting agencies - Equifax, Experian, and TransUnion - to provide you with a free copy of your credit report once a year, upon request. Details about how to order reports are available here.

Credit reports are used to evaluate applications for credit, insurance, employment or renting a home. They include information about how you pay your bills, bankruptcies, criminal history and lawsuits. The FTC describes the procedure for correcting errors here

Smartphone apps for children don't disclose personal data they gather

From games to educational tools, the smartphone apps your children use are transmitting information about them to third parties such as advertising servers and social networks. And it's usually taking place without your knowledge or consent - according to two reports by the Federal Trade Commission (FTC).

The FTC reviewed 400 of the most popular childrens' apps for Iphones and Android phones. The first report, released in February, examined the privacy policies for apps provided by the app seller. The followup report, released in December, re-examined those stated policies, but also the apps themselves to determine whether they followed the stated policy. They found that almost 60 percent of the apps reviewed collected or transmitted information from the mobile device. Yet only 20 percent disclosed any information about the app's privacy practices.

Having that information prior to downloading an app is important for parents when deciding whether they consider it appropriate. "Once an app is downloaded, the parent already may have paid for the app and the app already may be collecting and disclosing the child's information to third parties," the report stated.

Even when apps did disclose what they did, the information often was confusing - either buried in a long, technical privacy policy or simply misleading, according to the report.

The data collected and transmitted included the ID that uniquely identifies the device, phone number, location, and usage information. Clicking on the thumbnail at the top of this story will explain why this can be a large concern for parents. In addition, apps can ask for other personal information through interractions.

The FTC is continuing to pursue this issue, including...

You can read more in this New York Times story

The actual reports from the FTC are brief and accessible. We recommend that you read them (PDF format)...
Click here to read the Feb 2012 report
Click here to read the Dec 2012 followup report

Seniors losing homes due to reverse mortgages

The Consumer Financial Protection Bureau is working on rules to protect senior citizens from losing their homes due to fraudulent reverse mortgage practices.

Reverse mortgages allow many people over 62 years old to remain in their homes by essentially lending them money that does not need to be repaid until they move out or die. But some lenders have issued the loans knowing the borrowers could not afford the fees or pay their property taxes. And some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.

For more, read the New York Times report