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To Members of Congress:
The House Financial Services Committee is considering the Consumer Financial Protection Agency Act of 2009. UCAN strongly urges all Members of Congress to support and vote for the creation of this agency.
Failure to provide proper oversight of the financial industry led to one of the biggest financial downturns in the history of our country. The consumer has become the forgotten party in financial transactions. Financial documents have become so complicated and convoluted that archeologists could not uncover their meaning. Yet, it is these same consumers who are the taxpayers shouldering the burden for the crisis created because regulators failed to protect consumer interests.
In supporting the creation of the Consumer Financial Protection Agency, UCAN urges that you adopt at least the original form of the bill. Do not let lobbyists dissuade you as to what is best for consumers, best for the country, best for the economy, and in the long run best for the financial industry and those asking you to water down the bill.
Do not adopt amendments that will prevent the States from adopting even stronger consumer protections. The Consumer Financial Protection Agency will work best in conjunction with State regulators, not by usurping power of state regulators to their own consumers.
A robust Consumer Financial Protection Agency with strong regulatory oversight working in conjunction with state regulators will help prevent some of the financial products and practices, such as predatory lending, which led to this economic downturn.
In using taxpayer money to clean up this mess, lawmakers have vowed time and time again to protect the consumer. Now is the time for you to show that your constituents are more important than the lobbyists, that you are in fact their representatives.
Create a strong Consumer Financial Protection Agency. It is in the best interest of consumers/taxpayers/constituents and the financial industry.
Balance billing is a practice too many of us are forced to fight. After a doctor or hospital visit, we are sent bills for the difference between what our healthcare plan pays and what the medical provider determines are reasonable rates. The question is: Can patients be billed for this amount?
First, let's make sure we have our terms straight. Having to pay for a deductible or a co-pay does not involve balance billing. These are normal charges that you agree to pay as part of your health insurance plan.
Also, there is a difference between a balance billing dispute and a coverage dispute. If you are being billed because your healthcare insurance provider claims it does not cover the medical service or claims to only cover part of the service, your problem is with your healthcare provider and the specific contract to which you or your employer agreed.
Assuming you have a balance billing issue, you next have to distinguish between the different medical plans.
If you have Medicare or Med-Cal, you cannot be balanced billed. It is prohibited with very limited exception under state and federal law.
In California, if you have individual or group health insurance coverage (insurance regulated by the California Department of Insurance) then balance billing is prohibited for medical services rendered that are covered by your insurance plan.
For medical services that are not covered by your insurance, the medical provider may still bill you.
Lastly, there are managed health plans including HMO plans, and certain PPO plans. These plans are regulated by the Department of Managed Healthcare and often referred to here in California as Knox-Keene plans.
Balance billing most often arises under these plans because your plan provider and medical providers often have agreements that the medical provider will discount the rates. In situations where there is no agreement between the medical provider and plan provider there is often a disagreement about what is the fair rate. At this point, you, the patient winds up in the middle getting assessed charges you never expected.
Under California law, balance billing on Knox-Keene plans is prohibited in most situations. Generally, if a medical provider is contracted with a plan provider for medical services, the medical provider cannot bill you for those covered services. A medical provider is also prohibited from attaching a lien to any judgment you may be entitled to if your medical services are covered by your plan provider
Additionally, the California Supreme Court recently in Prospect Medical Group v. Northridge Emergency Medical Group decided that medical providers cannot balance bill you for emergency services you receive. It is important to know though that emergency services are only those services you receive until you are considered stable by the medical provider.
What is still unclear is whether you can be balance billed when you receive medical services from an off-network provider covered by your plan. In this case, the plan provider determines not to pay a portion of the bill because the fee is considered unreasonable.
The California Supreme Court, did not specifically answer this question in the decision. However, if you receive medical services your plan covers from an off-network provider and your plan provider is only disputing the reasonableness of the rate charged and not whether the service is covered, there is a strong argument to indicate that you cannot be balance billed for those services.
If you receive a bill from a medical provider because he/she is disputing with your insurance provider over the reasonableness of the rate, you should dispute the bill with your medical provider and the Department of Managed Health.
Here is a sample letter you may use to dispute such charges.
If you need and help or have any questions you can always call, email, or submit an online complaint to UCAN's Fraud Squad.
As shocking as it sounds, Congress actually did some things to protect the victims of predatory credit card companies and banks this year. New laws put restrictions upon finance charge increases, additional fees, marketing of credit and notice about changes in financial agreements. Here's a summary of the two major legislative packages:
- Requires card companies to provide a 45-day notice of an increase in your annual percentage rate. Credit card companies may not raise interest rates on new account holders for the first 12 months. Limits have been placed on the creditors' ability to impose changes to the terms, and promotional rates must be offered for at least six months.
- Double-cycle billing is no longer allowed. Nor can you be penalized for on-time payments.
- You have the right to prohibit a creditor from completing any over-the-limit transactions resulting in a fee.
- Over-the-limit fees can be billed only once unless the debtor gets an additional extension of credit.
- It requires penalty fees to be reasonable. The Federal Reserve is required to adopt regulations to determine what is reasonable.
- Creditors can't use the term "fixed rate" unless the credit card actually has a fixed rate.
- Creditors must send you their bills 21 days before they are due. Payment due dates must be on the same day of each month. When a payment due date falls on a weekend or holiday, the consumer can pay the bill on the next business day without being late.
- Card issuers must consider your ability to pay before giving you a credit card or increasing the credit limit.
- Your credit card bills must now tell you the following: The date a payment is due before you are charged a late-payment fee; and if your interest rate changes because your payment was late.
- Companies must now publish their credit card agreements on the Internet, and provide an archive copy to the Federal Reserve Bank.
- There are new protections for card holders under the age of 21.
- It is now generally unlawful for companies to issue gift certificates ( including store gift cards and pre-paid cards ) that have an expiration date. In addition, stores and credit companies may not charge you a fee for not using the gift card/certificate immediately.
Truth in Lending Amendments, Mortgages.
In 2008, Congress enacted the Mortgage Disclosure Improvement Act which amends the Truth in Lending Act. The new law took affect in 2009. Specifics include:
- Creditors must now make early disclosures on closed-end loans that are secured by a consumer's home, even when it is not the consumer's primary residence.
- You must now be given a disclosure statement before you are charged any fees. The only exception is a fee for obtaining your credit report. Disclosures must be mailed or delivered seven business days before fees can be levied.
- If the annual percentage rate in the disclosures becomes inaccurate, the creditor must provide a new notice of disclosure.
Author David F. Scranton has just published an extensive summary of your new rights as a credit-card user, bank savings account holder, and mortgage customer. The article, titled "Year of the Consumer," is published on Mondaq. Viewing articles on Mondaq.com requires registration, but if you are interested in a summary of most of the new rights you now enjoy as a debtor, this scholarly article is for you.
Easy Access to Credit (the old-fashioned way)
Ten days after thieves smashed my car window and stole my purse at Sunset Cliffs; ten days after they ran up about $1,000 worth of charges at stores a few miles away from the scene, the San Diego Police Department returned my call to take a report.
The SDPD's telephone report unit has a backlog of 700 crime victims waiting to give reports - 590 on the day my purse was stolen. A very candid member of the unit told me that they take the reports mainly to help victims with their insurance process.
"When it comes to the credit cards, because you don't have to pay, the credit card company becomes the victim," I was told.
And will they follow up on the information I have, the surveillance tapes at the stores and the Verizon phone card numbers? Not likely. Or did they let the local patrol officers know about the theft? No, because there were no witnesses and no suspects, and Sunset Cliffs is a highly transient area.
Well, okay. But what if there's someone working the area looking for joggers getting out of their cars? What if the same people are returning to Target and J.C. Penney's again and again with different cards?
Seems likely. According to creditcards.com, a website that offers people credit cards, Americans suffered $48 billion in all types of credit card fraud last year. While fraud losses are increasing at 7 percent a year, use is up 20 percent, suggesting that card companies are finding ways to detect fraud sooner.
Here's a really simple way: engage the local police to enforce the law and go after thieves! That $48 billion in losses is most assuredly passed on to consumers through higher interest and fees. Why not treat them like they've left a trail - as they have - and begin enforcing the law.
And why not create a method to let officers know about similar thefts on their beats? Right now, the thieves are free to return right back to where I left my car as soon as they finish their shopping and hit the car next to mine. There's no mechanism to let police know if an area is being worked, beyond a 10-day-old report.
That would take the fun out of the shopping spree!
As it stands, we're paying for it anyway.
- photo by Marty Graham
A hallmark of your credit card was that your interest rate was always fixed. Well let me correct that you had a fixed introductory rate. Then you had a new fixed rate until you made a late payment. Then you had a very high fixed rate (the default rate) for making that late payment.
Then when the financial crisis hit the company likely changed your interest rate again to a new higher interest rate regardless of what rate you were paying before. And now you can forget all I just wrote because the industry is again changing your cards and giving new cards variable interest rate.
Now instead of fixed 17.99% your interest rate will say something such as "prime + 13.99%" meaning you will pay at least 13.99% (or whatever percentage the company decides to make it) and then the current Federal Reserve Prime Rate.
However, do not be surprised if instead of a fixed rate plus the prime that the Company has offers a fixed range for example 8.67% to 17.47%. The range is just another method through which the company will try to maintain a high rate of return for itself. Through this method when your balance is paid off your interest rate can be the low end of the range plus prime, but when you have a balance due the interest rate will magically shift to the high end of the range.
It is enough to make one wonder why Credit Card companies do not merely set the interest rate at the typical default rate of 29.99%. At least then a consumer would know their rate and could choose whether it is worth it to have a credit card. Enough with these hide the ball tactics on interest rates and how those rates are calculated.
"Too Much Credit" created by Flickr user Andres Rueda, used under Creative Commons Attribution-Noncommerical 2.0 license.
We'd like to think that the President of the United States is reading our blogs as we observe a federal crackdown on Medicare fraud picking up steam. Fraud has been bleeding the government's health care program for seniors dry for years, but investigating it was seldom a priority in the federal budget.
As suggested in a UCAN blog on October 1, 2008, written before Obama was elected: " A new president looking for ways to fund a better health care system for Americans should take a hard look at increased policing of the Medicare systems for fraud..." Apparently, he has.
The Associated Press (AP) reports that in the past two months the newly empowered Medicare Fraud Strike Force has recovered $371 million in false Medicare claims and charged 145 people across the country.
Today, the AP reports the feds nabbed arrested 32 more scammers -- including doctors -- in New York, Louisiana, Boston and Houston.
Some of the scams include:
Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius have added millions of dollars to fund staff to step up fraud investigations nationwide to curb the BILLIONS of dollars stolen from Medicare each year. Yes, folks, that's BILLIONS.
Is it any wonder that dire predictions are made about the future solvency of this system that funds health care for so many older Americans?
Thanks for listening, Mr. President, and keep those fraud busters in the field!
Loan modification, deed in lieu, short sale, walk away, jingle mail, work-outs. You cannot turn on a TV, pick up a newspaper, or even walk down the street without hearing these terms. In this deluge of information it's becoming more and more difficult to know which services are legitimate, whether or not you should pay for these services, and what if anything is a fair price to pay for these services. Oh and did I mention there may be tax implications you have to consider.
So your behind or feel you will soon be behind in your mortgage payment, your interest rate has sharply risen, and you need to do something to ensure you can stay in your home. Even if in the long term you would prefer to sell your home and move on.
First off beware of scams. The California Department of Real Estate has a long list of individuals and companies served with "cease and desist" orders for engaging in improper loan modifications and/or foreclosure rescues.
As a general rule of thumb avoid anyone who wants you to sign over your property to them or pay upfront fees. It just isn't necessary. A good place to start is with HUD certified housing counselors. They either charge no or very low fees, have to be upfront about everything, and should be able to help you organize necessary documentation and explain the process. If any of these certified counselors are anything less than upfront let the Fraud Squad know so that the word may spread to other consumers.
If your thinking of getting help from an attorney, check and see if the attorney has been subject to any disciplinary actions and check with individuals and sources you trust to help you find out if the Attorney is someone you should be seeking help from. Then find out what the attorney's rates are for helping you with the loan modification and what work the attorney intends to perform for that rate. Since you can apply for a loan modification yourself think over whether having an attorney handling the issue is really in your interest at this point. There is no guarantee that even with the help of an attorney your loan will be modified, so find out upfront if the attorney will help with other pre-foreclosure options if the loan modification is not approved and what additional charges, if any, would apply.
Remember though no one cares more about your financial state than you and you can always try to get your own loan modification. The benefit of using a certified housing counselor or other service is the ability to have someone (hopefully with experience) help you go through the process and push through some of the delay tactics lenders might utilize. As much as you might want the problem to just go away and let someone else handle it you really should stay informed and make sure upfront that the person assisting you is going to keep you in the loop.
As for the process it will likely take months, not days, not weeks, but months. Despite this a lot of key decisions have to made (by you!) early on. Many of the decision you have to make depend on your circumstances and when you decide to pursue a loan modification. Are you only anticipating missing payments, but have so far kept your payments up? Are you behind on your mortgage payment but haven't been told by your lender that they are starting the foreclosure process? Have you received a notice of default? Have you received a notice of sale?
The answer to those questions will dictate not only the type of response you get from your lender, but the actions you need to take. For instance if you have already received a notice of sale then the first thing you need to do in discussing the modification is to get the lender to postpone the sale, and don't just accept the lenders word it will get done get it in writing, this is your house after all. The key here though is do not wait that long. You should start the process as soon as you that in your current situation you will not be able to keep up with the monthly payments.
If you have not fallen behind on your payments you may want to try refinancing your mortgage rather than modifying. Depending upon who your lender is you may qualify for refinancing even if you are underwater.
The next thing you need to be aware of is that you may not get a loan modification. Your lender will connect you with its loss mitigation department and may offer various options including forbearance, a repayment plan, a partial claim (depending on who owns the loan), or modification. There are different benefits and drawbacks to each option. Remember, your lender does not have to offer you anything and you do not have to accept any offer they make. If the offer from the lender does not seem fair to you or will not help you keep your home in the end, you can reject it. A lender may be willing to offer more than one resolution so do not feel that a situation is "take it or leave it."
If you ask for a loan modification and your lender is willing to consider it they will next request a myriad of financial documentation detailing income (paychecks, W-2s), monthly expenses, a statement of hardship, and anything else the lender may desire. Send these documents certified mail that way you can prove that your lender received the documents, the last thing you want to deal with is your lender constantly telling you to resend documents because they did not get them.
After receiving your document your lender will review those documents to determine if they will grant you a loan modification. If the lender agrees to grant you a loan modification do not just sign the document, rather read the document over carefully, find an attorney (preferably pro bono) to assist you if you are unclear on any of the terms. Remember it might have been unclear terms in the lending agreement that lead you to this point in the first place so make sure you are not just delaying the problem, but have actually been offered a real solution. Again do not assume that this is the only deal you will get and if it does not help it is not worth taking, but it is worth notifying government organizations and the Fraud Squad if lenders are not offering solutions that actually help consumers.
If you do not receive a loan modification and you know you will not be able to keep up with your mortgage payment then it might be time to turn to some of the home leaving options or prepare as best you can for the foreclosure process.
This little trick forces a mortgage lender to respond quickly.
If you are having trouble getting a response from your mortgage servicer (the people you send your mortgage payment to) you may need to try sending an old fashioned letter. Not just any letter however, but a RESPA "qualified written request" letter. Under federal law (12 USC 2605e). Within 20 days of receiving a written correspondence a loan servicer must acknowledge receipt of the letter and within 60 days must take such action as appropriate, meaning that they either have to correct your account, respond to your inquiry, or provide you with a written explanation as to why they are not going to answer your inquiry or take any action.
The key to sending this letter is that it has to be considered a qualified written request. A qualified written request is a written correspondence that includes the borrower's name, the borrower's account number, and a statement detailing either the information sought or giving the reasons for believing the account is in error.
For help constructing the letter see our template.
This little trick forces a mortgage lender to respond quickly.
If you are having trouble getting a response from your mortgage servicer (the people you send your mortgage payment to) you may need to try sending an old fashioned letter. Not just any letter however, but a RESPA "qualified written request" letter. Under federal law (12 USC 2605e). Within 20 days of receiving a written correspondence a loan servicer must acknowledge receipt of the letter and within 60 days must take such action as appropriate, meaning that they either have to correct your account, respond to your inquiry, or provide you with a written explanation as to why they are not going to answer your inquiry or take any action.
The key to sending this letter is that it has to be considered a qualified written request. A qualified written request is a written correspondence that includes the borrower's name, the borrower's account number, and a statement detailing either the information sought or giving the reasons for believing the account is in error.
For help constructing the letter see our template.
This little trick forces a mortgage lender to respond quickly.
If you are having trouble getting a response from your mortgage servicer (the people you send your mortgage payment to) you may need to try sending an old fashioned letter. Not just any letter however, but a RESPA "qualified written request" letter. Under federal law (12 USC 2605e). Within 20 days of receiving a written correspondence a loan servicer must acknowledge receipt of the letter and within 60 days must take such action as appropriate, meaning that they either have to correct your account, respond to your inquiry, or provide you with a written explanation as to why they are not going to answer your inquiry or take any action.
The key to sending this letter is that it has to be considered a qualified written request. A qualified written request is a written correspondence that includes the borrower's name, the borrower's account number, and a statement detailing either the information sought or giving the reasons for believing the account is in error.
For help constructing the letter see our template.
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UCAN.org is made available by the Utility Consumers' Action Network to assist you in becoming what you always knew you could be, a consumer ROCK STAR! We take no corporate money, and are beholden only to you, the consumer. As such, the site is here for educational, advocacy, and empowerment purposes, as well to to give you general information and a general understanding of the law. Just remember this site is NOT here to provide specific legal advice. By using this web site you of course understand that there is no attorney client relationship between you and the Web Site publisher, UCAN. The Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
That said, get to digging on the site, inform yourself, speak your mind, and earn Watchdog Bones! This is YOUR site, and we mean it. So comment on any of the content, discuss the latest issues in the forums, file a complaint on a company with the fraud squad, and generally cut loose.
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