215-627-2493 | center@oldpine.org

DAVID VS. GOLIATH

 Consumers Corner # 16

WE CONSUMERS DON’T GET
A LOT OF HELP THESE DAYS

And the one agency that seems to be
protecting us is on its way out

 By Jim Murphy

If consumers are feeling unloved, unwanted or even under attack today, it’s no wonder.

In recent years, the housing and financial crisis devastated our economy, tossed people out of homes and eliminated jobs. Large banks like Wells Fargo continue to violate our laws and our trust. And not long ago, United Airlines forcibly carried a ticket-paying passenger off one of its aircraft.

Why? Because they can.

The news media, especially consumer reporters for newspapers and TV, used to act as a check against the power of the system. But news staffs have been cut. And industry lobbyists are rapidly rolling back legislation that was aimed at stopping another financial crisis.

What’s wrong with this picture?

 Do you know how many of those financial leaders responsible for the recent financial and housing crisis went to jail? I believe the number is: 1.

That’s far different from the savings and loan crisis of the 1980s and 90s, in which 1,100 people were prosecuted.

Yet even then, the hubris of the participants was extraordinary. Asked once if his payments to politicians had worked, Charles Keating, the key figure in that economic debacle, told reporters: “I want to say in the most forceful way I can: I certainly hope so.”

It’s a David vs. Goliath world, and all we consumers have is a tiny slingshot against multibillion-dollar agencies with an army of lobbyists and easy access to our politicians.

The one agency that seems to be working, the Consumer Financial Protection Bureau, is now under fire by many in the current administration.

Congressional leaders have declared war on the CFPB and are doing whatever they can to get rid of it, and get back to business as usual.

Why? Because CFPB is holding people accountable for their actions.

CFPB’s website says it all: “We’re on your side.” “We are the Consumer Financial Protection Bureau, a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.”

Making corporations accountable

The CFPB has already has forced the three credit reporting agencies to correct mistakes to people’s records in a timely manner.

It also accused TransUnion and Equifax of luring consumers into enrolling in credit services advertised as free or costing only $1, but that could cost more than $200 a year.

The penalty: the two companies must pay $17.6 million in restitution between them and fines totaling $5.5 million to the CFPB. In addition, the CFPB fined Wells Fargo a total of $185 million for its notorious illegal practice of opening unauthorized deposit and credit card accounts.

It also sued Navient, the nation’s largest servicer of both federal and private student loans, for failing “consumers who counted on the company to help give them a fair chance to pay back their student loans.” A January news release from CFPB said: “For years, Navient, formerly part of Sallie Mae, created obstacles to repayment by providing bad information, processing payments incorrectly, and failing to act when borrowers complained.”

They’ll probably pay more attention now.

But who knows? Navient is one of four companies in the running to become the exclusive servicer of outstanding federal student loans under the current administration, reports Reuters.

Will a company that CFPB says chose “at every stage of repayment” … to  “shortcut and deceive consumers to save on operating costs” be awarded this opportunity? Don’t bet against it.

Here’s CFPB’s scorecard
…  as noted on its website:

  • $11.8 billion in relief to consumers from its enforcement actions
  • 29 million+ consumers will receive relief because of its actions
  • 1.1 million+ complaints handled from consumers
  • 97% of consumers get timely replies when CFPB sends their complaints to companies.

This last one is critical, because it means someone with clout is actually monitoring and tracking response from companies. Or lack of response.

To see what all the agency has done to date, check out its website at consumerfinance.gov. Go through its debt collection stories, consumer tools, even its newsroom to see how it has been protecting American consumers. And then see if you think it should be tossed away by our representatives in Congress.

I understand why so many companies hate the agency. The CFPB is disrupting the “business as usual” mentality so common today … and giving consumers a voice.

Do you remember the all-t0o-common reports of airlines forcibly keeping planeloads of people on the tarmac for hours without food and often restroom facilities? After the Department of Transportation got involved, that craziness, which the airlines said was beyond their control, stopped dead in its tracks.

No wonder. In one incident, the Department fined three airlines a total of $175,000 for their roles in a nearly six-hour ground delay. The bottom line: government regulation can help wayward companies focus on their mission.

Is the CFPB perfect? No. But right now, it’s about all we have. To me, it is the one agency left to help keep us consumers from being exploited or ignored by businesses.

At MyFICO.com, a consumer praised CFPB for helping resolve two problems with the credit reporting agencies (CRAs). “I’ve found CFPB works if the creditors or CRAs mess up somehow, even very little, and refuse to admit it,” the person wrote. “CFPB is kind of like the last fire to hold their hands to before federal lawsuits, and it works.”

Here’s another consumer success story

A 71-year old woman received weeks of abusive phone calls and letters from a collection agency claiming her daughter, who had died, owed $3,000 in credit card debt. The agency demanded repayment from the mother.

Eventually, she was able to obtain the name of the bank that put the “purported loan” out for collection,” says USA Today, “and then filed a complaint with the CFPB.”

Soon after, she received a call from a bank representative voicing sorrow for her daughter’s death, apologizing for the way she was treated and ending with this comment: “You won’t be hearing from us again.” Welcome news to her, I’m sure.

Director Richard Cordray, whose head the politicans want on a platter, simply says this:

“In doing our work, we firmly believe that every consumer counts. The law states that all people must be treated honestly and fairly in the financial marketplace. It is not just the right thing to do. It is good for consumers, good for responsible businesses, and good for the economy as a whole.”

Hard to argue with that.

 

NOTABLE NUMBERS

 67 minutes

 U.S. adults watched this many minutes of online video a day in 2016, says eMarketer. In 2009 the number was just three minutes. That’s a huge jump!

Source: Bloomberg.com

 

2

Philly’s spot on U.S. News and World Reports 2017 list of “Best Places to Visit in the USA.” Nice.

 

$10

That’s the cost of a National Park Service lifetime pass for senior citizens 62 and over – if you apply in-person. Online, it will cost you $20, and a wait of six to 10 weeks, says Philly.com.

But since the closest in-person sites appear to be Scranton and Milford in Pa., and Galloway, N.J. near Atlantic City, online may be your best bet.

 For info, call 1-888275-8747 and press 3, or go to: www.nps.gov/planyourvisit/passes.htm#CP_JUMP_5088578

 Sources: Philly.com and the National Park Service

 

PHILLY FUN FACT

Philadelphia was founded in 1682, fully 58 years after New York City and 52 years after Boston. Yet by 1770, thanks largely to William Penn’s message of religious toleration and powerful promotional efforts, Philadelphia was the largest city in the colonies and also the most important. Take a bow, Mr. Penn.

 

Photo Credit

Photo by David Foster, courtesy of Creative Commons;  www.flickr.com/photos/gregfoster/2834857578/

 

Jim Murphy is a direct marketing copywriter who has run his own consulting business since 2004. For nine years, he wrote and edited “Choices,” an award-winning credit union magazine with a circulation of 80,000. He also is a certified member of the Association of Philadelphia Tour Guides.

Any comments made are Jim’s opinion, and not necessarily those of the Old Pine Community Center.

 

 

 

 

Post a comment

Our awesome programs are only possible with your generous help!