Category: Other Consumer Issues

Op Ed: Deceptive Tickets Can Ruin Show

By Cara Spencer

St. Louis is fortunate to have a fantastic show scene. International tours stop here regularly and include local artists who perform here multiple times a year, such as Pokey LaFarge and Chuck Berry. And out-of-town big names such as Kings of Leon, The Black Keys and Keith Urban are stopping through this fall. People we thought we’d never see play again, like Merle Haggard, are hopping in buses and stopping here. We even get fantastic comedy like Hannibal Buress.

But before you get ready to enjoy the show, you should be sure to check the fine print that could leave you paying for tickets that cannot be used if something unexpected disrupts your plans.

This fine print describes what the live event industry calls paperless or credit card entry ticketing. This form of ticketing requires consumers to buy tickets online with a credit card and then use that same credit card and their photo ID to gain entry to the event. I’m sure you’ve see it, this required ticket method has been on the rise and many shows are using it, including Lady Antebellum and Arcade Fire earlier this year and the Black Keys and Eric Church coming up.

Here the catch. The best tickets to these shows are totally nontransferable. This can spell a host of problems for unsuspecting consumers who assume they will be able to give away or resell their tickets if they end up unable to go.

What if something comes up and you can’t attend the show you’ve been waiting for? Because your tickets are tied to your credit card and photo ID, you cannot resell them or even give them away. Now you’ve got a worthless piece of paper and you’ve left empty seats in the front row. And of course, most tickets are nontransferable unless you purchase event insurance — a separate issue that takes advantage of consumers.

Additionally, if consumers buy several tickets for family members or friends to sit together, the entire group has to enter at once. If someone in the party is late to arrive, everyone may miss part of the show. No one wants to hear the sound of their favorite act starting up onstage while they’re waiting at the gate because the buddy who bought the tickets is stuck at work.

The worst is the failure of the ticket seller, in most cases Ticketmaster, to adequately explain these restrictions to consumers when they buy tickets. As anyone who has tried to buy tickets online to a popular show knows, the process is often frenzied, with consumers anxiously awaiting the opportunity to buy the best tickets available and a countdown clock ticking to the moment the tickets selected will be thrown back into the mix.

At the very least, Ticketmaster and any other ticket seller that uses technology to restrict what consumers may do with the tickets they purchase, should be required to boldly and clearly disclose to consumers early and through the purchasing process that credit card entry tickets are nontransferable. Anything less deceives consumers into believing they can easily give their purchased tickets away, resell them or distribute ahead of the show.

Consumers should not be forced to lose 100 percent of the cost of the ticket because their plans changed and they are stuck with tickets they cannot use.

Consumers Council of Missouri applauds Missouri Attorney General Chris Koster for leading the effort among state attorneys general to require that the ticket purchasing process be more transparent. We are hopeful that his office will require Ticketmaster or other sellers to end this deceptive practice in our state. We encourage consumers to join us in supporting Koster in this effort.

Cara Spencer is a member of Consumers Council of Missouri. She is director of business development at Nebula Coworking in St. Louis.

NCL Issues Guide to Buying Live Event, Sports Tickets

Washington, DC – With many of the top recording artists on tour through the fall and the NFL season about to kickoff, the National Consumers League (NCL) today released a “Practical Guide to Buying Live Event and Sports Tickets” to help fans navigate the often confusing and cumbersome process of buying tickets online.

Once as easy as going to the box office, stadium, or the local record store, buying tickets to live event and sporting events has become a maze of ticket websites, resellers, online classified ads, and street vendors all competing for consumer dollars.

“We want to make sure fans have the information they need to make the best ticket buying decisions; we also want to raise awareness about anti-consumer practices in the ticketing industry,” said John Breyault, NCL’s Vice President of Public Policy, Telecommunications and Fraud. “For example, fans should be on the lookout for restricted ticketing, undisclosed price floors, and deceptive websites that lure unsuspecting fans into buying resale tickets. NCL has developed a list of tips that will help consumers find their way through this thicket of potential problems.”

Restricted ticketing, which ties the consumer’s ticket to their credit card and ID, makes it difficult, if not impossible, for consumers to transfer their tickets or share them. And the 30 million Americans who do not have a credit or debit card can’t even purchase this type of ticket in the first place.

“We think consumers should have the right to choose what they do with their tickets after purchase. If plans change, no one should have to lose 100 percent of the ticket value because they can’t give it away or resell it,” added Breyault.

In addition, some resale marketplaces, such as Ticketmaster’s TicketExchange, limit how low a ticket can be priced. That’s an outrageous practice. This price floor is not disclosed to consumers, who might think they’re getting a reasonable deal; in reality, there may be cheaper tickets available on other sites that don’t control prices.

However, when shopping for tickets online, particularly when doing an Internet search, consumers should be sure they know where they are buying their tickets from and whether it is a reseller or the box office that they are doing business with.

“Some ticket resellers create websites that pose as a box office or the official ticket seller. These are deceptive, and consumers should take the time to make sure they know if they are buying a resale ticket or not,” said Breyault.

Click here for the ticket buyers’ guide.

Missouri AG Challenges Ticketmaster Sales Tactics

Missouri Attorney General Chris Koster took the lead among state attorneys general in asking Ticketmaster and Live Nation to change disclosures about entering the venue and reselling or transferring tickets to consumers before they buy live event tickets.  In February, Koster reached an agreement with Ticketmaster to change some its sales practices.

Click here to read Attorney General Koster’s news release about the agreement.

Click here to read the full text of the letter Koster had sent Ticketmaster.

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CCM Fights for Consumer Interests During 2015 Legislative Session

Let your legislators know where your opinion on these bills.  To find out who represents you in the House and the Senate, CLICK HERE.

Then email your representative and senator asking them to vote your interests on these bills.

UTILITIES

CCM Supports:

Senate Bill 160 — Utility Transparency and Fairness Act — Sen. Dan Brown

The bill would require all regulated utilities to publicly file quarterly earnings reports so that the public will know when a utility is earning more money than regulations authorize.  Some electric utilities already must file such reports — but those reports are currently secret, according to a rule of the Missouri Public Service Commission.

It would also require the Public Service Commission to determine in a general rate case how any rate increase would impact consumers when it sets the allowable rate of return for a utility.

House Bill 83 — Adjustable Due Date for Fixed-Income Customers — Rep. Paul Curtman

This legislation would allow customers who are on a fixed income due to benefit programs such as Social Security to have their utility bills’ due dates adjusted without incurring a late payment charge.

CCM Opposes:

Senate Bill 310 — Public In-Service Accounting (PISA) — Sen. Ed Emery

This bill would radically change the way the Public Service Commission calculates electric rates in a way that tilts the rules even more in favor of the utilities.  It would add significantly higher charges on the monthly bills of customers of Ameren Missouri, KCPL and Empire District Electric Co.

The worst provision in the bill would mandate “construction accounting.”  It has similar features to the pre-payment scheme called Construction Work in Progress (CWIP), which would allow a utility to charge customers for a new energy generator – like a nuclear plant – while it builds that plant and before the plant ever – if ever – produces any energy.  Such charges are banned in Missouri under a law passed by voters in 1976.

Senate Bill 403 – Infrastructure System Replacement Surcharge for Gas Companies — Sen. Mike Kehoe

The bill would allow unlimited increases in the so-called gas ISRS, a surcharge that requires consumers to take more risk for a gas company’s building projects.  It would loosen the Public Service Commissions oversight of monopoly gas companies by allowing up to 11 years before a company’s rates could be reviewed.

Governor Nixon vetoed this bill last year saying, in part, “While there is much in [the bill] to benefit utilities, there is little, if anything, in it for consumers. Nowhere does the bill mandate increased reliability or enhanced safety and nowhere does it offer the real possibility of lower utility bills.”

PERSONAL FINANCE

CCM Supports:

House Bill 820 — Predatory Lending — Rep. Tracy McCreery

The bill will cap the rate on four types of small dollar lending products (payday loans, car title loans, consumer installment loans and small loans) at 36 percent APR (annual percentage rate).  Currently the APR averages 455 percent in Missouri. The current state of predatory lending compels immediate intervention to prevent continued exploitative interest rates that trap people in cycles of debt.

CCM Opposes:

House Bill 256 – Merchandising Practices – Rep. Tony Dugger

Missouri law prohibits fraud in business deals.  When a business commits fraud it can’t be sent to jail the same way an individual can.  Instead it can be held liable by the attorney general of the state or the person it harmed under the Merchandising Practices Act.

This bill would excuse businesses with a track record of shady practices from fraud claims under the Merchandising Practices Act.

OTHER ISSUES

CCM Supports:

House Bill 939 — Protections for Ticket Buyers — Rep. Tracy McCreery

The bill requires transparency in online ticketing and puts restrictions on ticket vendors’ practices in selling paperless tickets and reselling tickets to protect the purchaser of such tickets.

To learn more about this issue, CLICK HERE.>>

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PSC Supports Restricting Payday Lenders As Sites for Consumers to Pay Utility Bills

St. Louis Post-Dispatch, September 4, 2014

Missouri utility regulators want to limit the relationship between the companies they regulate and the payday lenders where some customers pay their bills.

A majority of the Missouri Public Service Commission expressed support for a new rule keeping utilities from using payday lenders as “authorized pay stations,” which are locations authorized by a utility to accept bill payments.

“There’s still a long way to go before we have a final rule,” said acting Missouri Public Counsel Dustin Allison, whose office advocates for utility customers before the PSC. “But the commission took a good step today in enhancing consumer protection.”

The commission’s staff last month recommended against a rule keeping payday lenders from acting as payment stations for utilities, concluding it wasn’t clear the PSC had the legal authority to do so.

But chairman Robert Kenney said on Wednesday that restricting utilities’ official use of payday lenders as pay stations is “good policy.”

“I do not think that it’s questionable whether we have the authority to do this or not,” he said.

The PSC still needs to approve an order initiating a rulemaking, which comes with a process of its own that requires further review and public comment. But commissioners’ support for a rule is a reversal from 2011, when they did not act on a proposal to restrict payday lenders as bill payment posts.

“I think we should roll up our sleeves, start drafting a rule and get it in place as soon as possible,” Commissioner Daniel Hall said.

Consumer advocates have railed against the industry for years because of high interest rates and the fees and penalties its short-term loans levy on borrowers in mostly poor neighborhoods. The public counsel’s office had proposed restrictions on the use of payday lenders as payment stations for utilities five years ago, citing concern that utility customers might be lured into a loan while paying their bill.

Utilities often contract with places such as grocery stores to act as bill-payment stations, but relatively few payday lenders are used.

Only four of 247 authorized Ameren Missouri pay stations are payday lenders, according to information submitted to the PSC. Laclede Gas uses five payday lenders out of an authorized payment network of 184, and Missouri American Water said only eight of its pay station locations are at payday lenders, less than 1 percent of its total network.

Laclede and Ameren did not respond to a request for comment, and Missouri American said it would comply with any PSC rules.

But the Missouri Energy Development Association, which represents the state’s for-profit utilities, said in comments submitted to the commission that the PSC had not received any complaints regarding authorized payday loan companies and a rule prohibiting their use as pay stations would amount to “a solution in search of a problem.”

Randy Scherr, executive director of the United Payday Lenders of Missouri, said it’s “a problem that simply does not exist” because his group’s member companies don’t extend loans to borrowers without a checking account.

“Those people who are walking in and cashing a check and paying their bills are doing it because they don’t have a checking account,” Scherr said. “They’re chasing after a ghost here.”

The commission still must decide what language to advance. Kenney endorsed a staff proposal that bars only payments from authorized lenders. The public counsel’s more restrictive proposal would bar payments from all payday lenders to utilities, whether they are authorized by the utilities as pay stations or not.

“At a minimum, they need to prohibit the practice of formally associating, of contracting with payday lenders,” said John Coffman, an attorney for the Consumers Council of Missouri. “When the utility’s logo is on the door, on the wall, I think there’s a sense that this is a safe place to do business.”

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How To Buy Live Event, Sports Tickets

National Consumers League, August 19, 2014

With fall concert series being announced, the NFL season ready to kick off, and MLB playoffs just around the corner, it is a great time to be a live music and sports fan. However, ticket sellers such as Ticketmaster, artists, sports teams, and venues do not always have consumers’ best interests at heart. NCL wants to make sure fans have the information they need to make the best ticket buying decisions they can.

Below are just a few of the anti-consumer practices we want consumers to be aware of.

Restricted Ticketing

A growing number of artists, including Eric Church, Arcade Fire, and The Black Keys are using credit card entry or “paperless” ticketing this summer and fall for the most desirable seats in the house. Garth Brooks, who is going back on the road for the first time in 12 years, is using restricted ticketing for his upcoming tour.

This ticketing system replaces a paper ticket, a PDF, or a print-at-home ticket with the original purchaser’s credit card and photo ID and the tickets are non-transferable.  If you purchased tickets to your favorite concert and then had to change your plans because of a work or family emergency, you are now stuck with tickets you cannot use, resell, or even give away. And if you are one of the 30 million Americans who do not have a credit or debit card, you won’t be able to purchase this type of ticket in the first place.

In addition, because restricted ticketing may only apply to the best seats, it decreases the supply of tickets available on the secondary market, inevitably leading to higher prices.

Undisclosed Price Floors

Often times the secondary market can provide consumers with great deals on sports tickets. Unfortunately, some ticket resale websites, such as Ticketmaster’s TicketExchange, set an arbitrary minimum on the price of tickets. For example, the Buffalo Bills TicketExchange sets its price floor at face value, even for pre-season games. For the pre-season game against the Detroit Lions, a ticket in Section 139 with a face value of $58 can only be listed on TicketExchange for $58, while SeatGeek showed other resale sites selling tickets for as low as $3. And of course, there is no notice to unsuspecting fans that such a price floor exists.

In addition, last year, the New York Yankees and Los Angeles Angels of Anaheim opted out of Major League Baseball’s deal with StubHub because the resale website would not allow the teams to set a price floor.

Deceptive Websites

For too long, unscrupulous ticket resellers have been taking advantage of unsuspecting consumers and deceiving consumers into believing they are purchasing a ticket from the box office website or official primary ticket seller at face value. These resellers use Internet ads or other advertising, along with pictures of the venue and descriptions such as “official” tickets, to dupe consumers.

The Federal Trade Commission and the Connecticut Attorney General recently settled a $1.4 million case with a group of ticket resale websites for violating the FTC Act and the Connecticut Unfair Trade Practices Act.

This is a strong step in the right direction towards protecting consumers from unfair practices, while still allowing good actors in the secondary market to offer consumers choices and flexibility when purchasing live event and sports tickets.

To help fans avoid these, and other common, ticket-buying pitfalls, the National Consumers League (NCL) developed the following tips and suggestions.

1.  Read the Fine Print: Artists are increasingly selling restricted tickets, also known as paperless or Credit Card Entry tickets, which require the buyer to show up at the stadium and present the purchasing credit card and photo ID. The fine print indicates these tickets are nontransferable and cannot be given away as gifts or resold. Consumers can easily miss this important information unless they pay close attention during the ticket buying process.

2.  Look into Presales: Popular artists, venues, and ticket vendors tend to allocate large blocks of tickets to fan club members, VIPs, premium credit card holders, and personal acquaintances, leaving only a small portion of tickets to the general public. For example, a 2011 Justin Bieber concert in Nashville, only made 1,001 out of 14,000 seats available to the general public.

3.  Beware of Hidden Price Floors: When purchasing resale tickets on secondary sites, check multiple sources to make sure you get the best price. Some teams and ticket vendors dictate the minimum price that tickets can be sold for, preventing consumers from buying tickets at the cheapest price possible.

4.  Use Reliable Sellers: If you’re unsure whether a company is legitimate, check its ratings with the Better Business Bureau. Also be sure to be certain as to whether you are buying tickets from the box office, official ticket agent, or a reseller. Some ticket resellers hide the fact that they are a reseller or even pose to look like the official ticket agent. If purchasing from a ticket broker, check to see if it is a member of the National Association of Ticket Brokers, whose Code of Ethics requires members to adhere to basic consumer protections. Be especially careful buying tickets from Craigslist or resellers on the street since they offer no refund guarantees.

5.  Check your ticket vendor’s guarantee policy: For example, websites like StubHub, TicketExchange, Ace Tickets, and members of the National Association of Ticket Brokers guarantee every ticket sold on their sites and will replace them or provide refunds to consumers if the event that they receive the wrong tickets, their tickets are invalid, or an event is cancelled.

6.  Buy with a Credit Card: Regardless of where you buy tickets, be sure to use a credit card so you can dispute any unfair or unauthorized charges. Before entering your credit card information online, double check the company’s URL to ensure you don’t get duped by an imposter and be sure the site has “https://” at the beginning of its address.

7.  Check if the Price Includes Additional Fees: Unlike airline tickets, which are now required by law to disclose all taxes and additional fees upfront, the ticket price listed at the start of the purchasing process will likely not be your final price. If you are shopping between multiple websites to compare prices, make sure you know if you are comparing ticket prices that include fees.

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GM Announces Support for Bill Banning Rental, Sale of Unrepaired Recalled Cars

Office of U.S. Sentator Charles Schumer, July 16, 2014

General Motors is First Major Car Manufacturer to Support Bill Closing Dangerous Loophole

Schumer: GM’s Support for Our Bill Shows the Real Danger of Having Defective Cars on the Road and Opens Door for Other Manufacturers to Endorse the Bill and Keep Consumers Safe

U.S. Senator Charles E. Schumer (D-NY) has announced that General Motors is the first major car manufacturer to support his legislation that would close a dangerous loophole and prohibit rental car companies from renting or selling vehicles under manufacturer recall. The legislation is co-sponsored by Senator Barbara Boxer. Current law bans only auto dealers from selling a new car under recall unless the defect has been remedied.

The Raechel and Jacqueline Houck Safe Rental Car Act would, for the first time, hold rental companies to the same standard as auto dealers.

The bipartisan legislation, which already has the support of all the major rental car companies, the American Car Rental Association, Consumers for Auto Reliability and Safety and a broad coalition of auto safety and consumer groups, was first introduced in 2013 by Senators Schumer, Lisa Murkowski and Barbara Boxer.  The bill is named after sisters Raechel and Jacqueline Houck who were killed driving a rental car that had been recalled for a power steering hose defect but had not been repaired.

General Motors announced its support for the legislation in a letter to Senator Schumer. It comes after bill sponsors negotiated new legislative language to make clear the authors’ original intent not to change the status quo or interfere with contractual obligations between the auto manufacturers and rental companies regarding loss of use liability.

“When buying or renting a car, the last thing we should worry about is if the car is defective or recalled,” said Senator Schumer. “I thank General Motors for endorsing our common sense legislation and hope it opens the door for more car manufacturers to do the right thing and support our bill to keep consumers safe.”

“The safety of anyone who drives or rides in a GM vehicle is extremely important to us,” said GM CEO, Mary Barra.  “We have worked constructively with Senator Schumer, and the cosponsors of The Raechel and Jacqueline Houck Safe Rental Car Act. Through those conversations we have addressed our concerns, and with changes agreed to by the sponsors, GM is able to support their legislation. If enacted, it will give those who rent a vehicle, regardless of make or model, the peace of mind that the car they are in is safe.”

“I welcome GM’s support for Senator Schumer’s bill, named after my treasured daughters and co-sponsored by my Senator Barbara Boxer,” said Carol “Cally” Houck, mother of Raechel and Jacqueline Houck. “It’s time for the rest of the auto manufacturers and the auto dealers to follow the rental car industry, and GM, and support the bill.”

“General Motors’ endorsement is an important step in our campaign to pass the Raechel and Jacqueline Houck Safe Rental Car Act and keep unsafe rented vehicles off the roads,” Senator Boxer said. “Today I am calling on all the other automakers who currently oppose this common-sense bill to join GM in supporting this effort to protect American families.”

A copy of the letter from Lee R. Godown, Vice President of Government Relations at General Motors, indicating support for the legislation can be found below:

Dear Senator Schumer:

On behalf of General Motors, I would like to thank you, as well as the cosponsors, for reviewing our proposed changes to S. 921 as described in my June 26, 2014, letter to you (herewith again attached).

With these changes made to the committee-reported text of S. 921, “The Raechel and Jacqueline Houck Safe Rental Car Act of 2013,” such a revised bill will have the support of General Motors.

Let me offer our appreciation to you, as well as to your staff for their professionalism, as we worked through this process.

Sincerely,

Lee R. Godown
Vice President
Global Government Relations

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CFPB Acts Against Payday Lender for Pressuring Consumers into Debt Cycle

Consumer Financial Protection Bureau, July 10, 2014

ACE to Pay $10 Million for Illegal Debt Collection Tactics 

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) took enforcement action against ACE Cash Express, one of the largest payday lenders in the United States, for pushing payday borrowers into a cycle of debt. The CFPB found that ACE used illegal debt collection tactics – including harassment and false threats of lawsuits or criminal prosecution – to pressure overdue borrowers into taking out additional loans they could not afford. ACE will provide $5 million in refunds and pay a $5 million penalty for these violations.

“ACE used false threats, intimidation, and harassing calls to bully payday borrowers into a cycle of debt,” said CFPB Director Richard Cordray. “This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back. The CFPB was created to stand up for consumers and today we are taking action to put an end to this illegal, predatory behavior.”

ACE is a financial services company headquartered in Irving, Texas. The company offers payday loans, check-cashing services, title loans, installment loans, and other consumer financial products and services. ACE offers the loans online and at many of its 1,500 retail storefronts. The storefronts are located in 36 states and the District of Columbia.

Payday loans are often described as a way for consumers to bridge a cash-flow shortage between paychecks or other income. They are usually expensive, small-dollar loans that must be repaid in full in a short period of time. A March 2014 CFPB study found that four out of five payday loans are rolled over or renewed within 14 days. It also found that the majority of all payday loans are made to borrowers who renew their loans so many times that they end up paying more in fees than the amount of money they originally borrowed.

The CFPB has authority to oversee the payday loan market and began supervising payday lenders in January 2012. Today’s action resulted from a CFPB examination, which the Bureau conducted in coordination with the Texas Office of Consumer Credit Commissioner, and subsequent enforcement investigation.

Illegal Debt Collection Threats and Harassment

The CFPB found that ACE used unfair, deceptive, and abusive practices to collect consumer debts, both when collecting its own debt and when using third-party debt collectors to collect its debts. The Bureau found that ACE collectors engaged in a number of aggressive and unlawful collections practices, including:

Threatening to sue or criminally prosecute: ACE debt collectors led consumers to believe that they would be sued or subject to criminal prosecution if they did not make payments. Collectors would use legal jargon in calls to consumers, such as telling a consumer he could be subject to “immediate proceedings based on the law” even though ACE did not actually sue consumers or attempt to bring criminal charges against them for non-payment of debts.

Threatening to charge extra fees and report consumers to credit reporting agencies: As a matter of corporate policy, ACE’s debt collectors, whether in-house or third-party, cannot charge collection fees and cannot report non-payment to credit reporting agencies. The collectors, however, told consumers all of these would occur or were possible.

Harassing consumers with collection calls: Some ACE in-house and third-party collectors abused and harassed consumers by making an excessive number of collection calls. In some of these cases, ACE repeatedly called the consumers’ employers and relatives and shared the details of the debt.

Pressured into Payday Cycle of Debt

The Bureau found that ACE used these illegal debt collection tactics to create a false sense of urgency to lure overdue borrowers into payday debt traps. ACE would encourage overdue borrowers to temporarily pay off their loans and then quickly re-borrow from ACE. Even after consumers explained to ACE that they could not afford to repay the loan, ACE would continue to pressure them into taking on more debt. Borrowers would pay new fees each time they took out another payday loan from ACE. The Bureau found that ACE’s creation of the false sense of urgency to get delinquent borrowers to take out more payday loans is abusive.

ACE’s 2011 training manual has a graphic illustrating this cycle of debt. According to the graphic, consumers begin by applying to ACE for a loan, which ACE approves. Next, if the consumer “exhausts the cash and does not have the ability to pay,” ACE “contacts the customer for payment or offers the option to refinance or extend the loan.” Then, when the consumer “does not make a payment and the account enters collections,” the cycle starts all over again—with the formerly overdue borrower applying for another payday loan.

The ACE cycle-of-debt training manual graphic is available at:http://files.consumerfinance.gov/f/201407_cfpb_graphic_ace-cash-express-…

Enforcement Action

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive, or abusive practices. The CFPB’s order requires ACE to take the following actions:

Pay $5 million in consumer refunds: ACE must provide $5 million in refunds to the overdue borrowers harmed by the illegal debt collection tactics during the period covered by the order. These borrowers will receive a refund of their payments to ACE, including fees and finance charges. ACE consumers will be contacted by a third-party settlement administrator about how to make a claim for a refund.

End illegal debt collection threats and harassment: The order requires ACE to ensure that it will not engage in unfair and deceptive collections practices. Those practices include, but are not limited to, disclosing debts to unauthorized third parties; directly contacting consumers who are represented by an attorney; and falsely threatening to sue consumers, report to credit bureaus, or add collection fees.

Stop pressuring consumers into cycles of debt: ACE’s collectors will no longer pressure delinquent borrowers to pay off a loan and then quickly take out a new loan from ACE. The Consent Order explicitly states that ACE may not use any abusive tactics.

Pay a $5 million fine: ACE will make a $5 million penalty payment to the CFPB’s Civil Penalty Fund.

The full text of the Bureau’s Consent Order is available at:http://files.consumerfinance.gov/f/201407_cfpb_consent-order_ace-cash-ex…

CFPB takes complaints about payday loans. To submit a complaint, consumers can:

–  Go online at consumerfinance.gov/complaint
–  Call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372)
–  Fax the CFPB at 1-855-237-2392
–  Mail a letter to: Consumer Financial Protection Bureau, P.O. Box 4503, Iowa City, Iowa 52244

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

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McCaskill Takes on Television Services over Consumer ‘Truth in Billing’ Tactics

Missourinet, June 26, 2014 

Senator Claire McCaskill’s Consumer Affairs Committee is going to investigate billing practices of the cable and satellite television industry.

She’s asking customers to send their horror stories to her as part of her committee’s look into possible “truth in billing practices” legislation. She says some of the practices are unfair to consumers and need to be cleaned up. In fact, she says, she’s a victim.

“You’ve got a ten dollar charge on your bill and when you call in, you find out what you’ve been charged ten dollars for is now standard. This happened to me. They were charging ten dollars for a certain speed of internet. Well, I call in and I find out that’s the standard speed now. And I said, ‘When were you going to quit charging me the ten dollars?’ and they said, ‘When you called in.’”

She says consumers should not have to put up with stuff like that. She says cable and satellite TV companies make a lot of money by continuing to bill people for something that is now free. She also wants to look at the tier system that makes customers pay for a lot of channels they don’t want.\

McCaskill says she doesn’t want government to interfere with a healthy and competitive market place, but she says there clearly are some questionable practices in the industry.

Click here to get the audio interview.

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Activists Denounce Payday Lending Bill Passed by Legislature, Sent to Governor

Advocates for Fair Lending Urge Governor to Veto Bill

St. Louis Post-Disptach, May 1, 2014 

JEFFERSON CITY • Regulations passed by the Missouri Legislature Thursday to restrict payday loans don’t go far enough for some community and faith-based groups.

Supporters of the legislation said the bill provides protections for consumers while still allowing payday lenders to operate and provide emergency loans for individuals who need them. Bill sponsor Sen. Mike Cunningham, R-Rogersville, said it was a step in the right direction.

“This bill does not allow any rollovers, and that was a major thing,” Cunningham said. “By stopping rollovers it stops this cycle of debt that people are in.”

But opponents of payday loans and the legislation sent to the governor Thursday said the only real reform for the industry would be a strict cap on annual interest rates and fees at 36 percent.

Under the current law, short-term loans for between 14 and 31 days and up to $500 can be renewed or “rolled over” up to six times and interest can continue to accumulate. Critics argue that these renewals trap low-income people into a cycle of debt and end up costing them far more than the original loan in fees and interest.

Four out of five payday loans are renewed or extended, according to a March 25 report by the Consumer Financial Protection Bureau.

The bill bans the practice in which a consumer would take out a new short-term loan instead of paying off the previous one. It also requires lenders to offer “extended payment plans” to a borrower.

No additional interest or fees could be charged during the extended 60- to 120-day payment period. Borrowers would only be able to get one of these deals in a year.

But Barbara Paulus, who leads the Economic Task Force for the Metropolitan Congregations United in St. Louis, said the legislation is sham reform and does nothing to help consumers. She said the rollover ban had done little in other states and consumers would still be able to take out back-to-back loans.

“Even though they’re not calling it a rollover, if you’re taking out nine loans a year it’s basically the same thing,” Paulus said.

Few consumers utilize extended repayment plans that are required by law, according to the Center for Responsible Lending. In Washington State, only 15 percent of eligible loans were repaid under the extended plan mandated there.

During debate on the House floor, opponents of the bill pointed out that there was nothing to stop a borrower from simply walking next door to a different lender and getting another loan – even if they were using an extended payment plan or could not pay off an existing loan. Rep. Gina Mitten, D-Richmond Heights, compared it to check kiting, where bad checks from one account are used to inflate another account.

“I end up in another extended payment plan, then another payday loan with another lender, until I have six different loans from six different payday loan companies – none of whom I can pay,” Mitten said. “That’s the fundamental issue.”

Unlike other forms of lending, the lender has no obligation to check or share with other lenders how much the borrower is already in debt, opponents said. Sen. John Lamping, R-Ladue, said the possibility of multiple loans with multiple vendors was a serious concern.

“At best this is neutral,” Lamping said. “This came from within the industry itself.”

Missouri currently caps interest and fees on a loan at 75 percent of the original principal, and payday loans can last for between 14 and 31 days. That would allow a lender to charge $75 on a $100 loan over 14 days – an interest rate over 1,950 percent. The average interest rate of payday loans in Missouri was 454 percent from 2011 to 2012, according to a report by the state’s finance division.

The bill lowers that cap to $35 in interest and fees per $100 in principal. The version initially passed by the Senate removed the cap entirely, which alarmed consumer advocates.

The 35 percent cap on the period of the loan means over the course of the shortest allowable payday loan of 14 days that would be an annual rate of 912 percent. On the longest 31-day loan, it would be a 412 percent annual interest rate.

Even though the bill’s cap is lower than current law allows, Paulus said it’s not enough. She said the annual interest rate should be capped at 36 percent as is required by federal law for military borrowers.

Molly Fleming-Pierre, policy director of Kansas City-based Communities Creating Opportunity, said the bill was deceptive.

“I think it is egregious for the Legislature to try to pass off something that allows payday lenders to charge 900 percent interest as reform,” Fleming-Pierre said.

Advocates who worked hard to get a 36 percent annual rate cap for short-term loans onto the ballot in 2012 faced aggressive opposition from the payday loan industry. The measure failed to gather enough signatures.

With a 36 percent annual interest rate cap, the maximum companies would be allowed to charge on a 14-day $100 loan would be less than a penny a day. Some Republican lawmakers argue this is unrealistic and would effectively end the payday loan industry in the state.

The example commonly used by supporters of the bill is that of a single mother or working parent who needs a short-term cash infusion for an emergency purchase. But a 2013 Pew Research Report showed that 58 percent of those using payday loans were borrowing to cover basic living expenses.

According to the report paying back the loan usually means doing what the consumer would’ve done if no short-term loan were available, with 41 percent of borrowers selling assets, relying on friends or relatives or taking out a different type of loan.

Mark Rhoads, an industry lobbyist, said during a House hearing that payday lenders were supportive of the changes in the bill – including the 35 percent cap over the course of the short-term loan.

“There are provisions in this bill that are going to be financially damaging to payday companies. We think it’s a fair and balanced approach,” Rhoads said. “We need to rein it in and bring it back to a more prohibitive, more strict regulatory scheme.”

Opponents said the support from the industry just proves it’s not real reform.

“In my experience, if the industry is for it it’s not something that’s going to serve consumers well,” Fleming-Pierre said.

The bill passed the House 112-39 and the Senate 26-4. It now goes to the governor’s desk for his signature or veto.

The bill is SB 694.

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