The Survive and Thrive Boomer Guide

First action by new consumer finance protection agency is a good first step, but more needs to be done on bank regulation

By Rita R. Robison

Last week, the Consumer Financial Protection Bureau announced its first public enforcement action with an order requiring Capital One Bank to refund about $140 million to two million customers and pay an additional $25 million penalty.

The bureau identified deceptive marketing tactics used by Capital One’s vendors to pressure or mislead consumers into paying for “add-on products” such as payment protection and credit monitoring when they activated their credit cards.

Its examiners discovered Capital One’s call-center vendors engaged in deceptive tactics to sell the company’s credit card add-on products.

Consumers with low credit scores or low credit limits were offered these products by Capital One’s call-center vendors when they called to have their new credit cards activated, the bureau said in a statement. As part of the high-pressure tactics Capital One representatives used to sell these add-on products, the bureau reported consumers were:

• Misled about the benefits of the products.

•  Deceived about the nature of the products.

•  Misled about eligibility.

•  Misinformed about cost of the products.

•  Enrolled without their consent.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the bureau has the authority to issue consent orders and take action against institutions engaging in unfair, deceptive, or abusive practices.

The bureau also is releasing two consumer advisories. One advisory is to make Capital One customers aware of its action and the other is a general warning to consumers about these types of deceptive practices.

While this action sends a clear signal to the banking industry that the new agency will step in and protect consumers, much more is needed from the Obama administration and Congress on bank regulations.

Bank regulations need to be toughened to prevent another financial meltdown. In addition, the bankers and other “captains of industry” who caused the Great Recession need to be charged and brought to trial.

Consumers have suffered greatly through foreclosures of their homes, loss of their jobs, and reductions in their retirement funds.

While as gratifying as this first action by the new consumer protection financial bureau is, along with this year’s earlier settlement on mortgage foreclosure irregularities by other agencies, the banking industry and Wall Street investment companies need to be held accountable for their crimes.

Copyright 2012, Rita R. Robison, Consumer Specialist

Blogging Boomer Carnival #261: Read about veterans, weight loss, hepatitis C testing, investments, part-time work, and food storage

By Rita R. Robison

This week’s Blogging Boomer Carnival is hosted by Vaboomer.com.

Take a look at the weekly roundup of boomer articles on a variety of topics including remembering veterans, losing weight, testing for hepatitis C, investing, working part time, and solving food storage problems.

Baby boomers, born between 1946 and 1964, are America’s largest age group so far, and a fascinating group they are.

Boomers are leading corporations, serving as governmental officials, heading up non-profits, worrying about retirement, and experiencing layoffs at a higher rate than younger workers. They’re also reinventing themselves in trying economic times, with some looking for their dream jobs to keep them happy in retirement.

At each stage in their lives, boomers have changed things. They’re continuing to make America different as they begin entering into their retirement years.

In addition to The Survive and Thrive Boomer Guide, members of the Blogging Boomer Carnival are: The Accidental Locavore, The Midlife Crisis Queen, Sightings at 60, Arabian Tales and Other Amazing Adventures, So Baby Boomer, Vaboomer, Empty House Full Mind, and Witty Woman Writing.

Copyright 2012, Rita R. Robison, Consumer Specialist

Watch out for Memorial Day schemes that target members of the military and their families and supporters

Memorial Day is a time to honor those who serve and remember those who have died in war. But, it’s also become a time for scammers to target those who are serving or have served their nation, especially elderly veterans.

The Better Business Bureau is urging consumers and donors to be on the lookout for deals that seem too good to be true and for disreputable charities.

“Military personnel are targeted for a few reasons: they get a steady paycheck, they tend to be young, they move around a lot, if they’re deployed they may not be watching their finances/personal info closely, everything in the military revolves around their social security number, so it’s easy for them to have their identity stolen,” Coleen Smith, executive director of the BBB Education Foundation, said in a statement.

To avoid problems, visit www.give.org to verify a charity before donating and be on the lookout for these common scams:

Scams that target military personnel:

• Fraudulent investors try to convince veterans to transfer their assets into an irrevocable trust.
• Callers pose as the Veterans Administration and request military personnel to update credit card, bank, or other financial records with the VA.
• Scammers pose as government contractors recruiting veterans and ask for a copy of the job applicants’ passport.
• Companies specifically target military for services they could get for free or less expensively elsewhere.
• Ads offer “instant approval” military loans – “no credit check,” “all ranks approved” – that can have high interest rates and hidden fees.
• Ads offer military discounts and incentives online on housing and then cheat service personnel out of their security deposit.

Scams that target military supporters

• Scammers try to sell services such as security systems to spouses of deployed military personnel by saying the service member ordered it to protect his or her family.
• People sell stolen vehicles at a low price and claim to be soldiers who need to sell quickly because they’ve been deployed.
• Individuals pose on online dating services as a lonely service member in a remote part of Iraq or Afghanistan, and ask for money to be wired to a third party for some emergency.

The BBB advises service members, veterans, and all consumers never to give personal identification information – Social Security, bank account, military identification, or credit card numbers – to anyone who contacts you by phone or e-mail, and to be wary of any solicitations that involve purchasing something or transferring money.

Consumers can check out businesses and charities at www.bbb.org.

For more information, visit www.bbb.org/us/military-line.

Copyright 2012, Rita R. Robison, Consumer Specialist

Blogging Boomer Carnival celebrates its fifth anniversary with travel tips, financial discussions, food and health issues, and pet love

By Rita R. Robison

Blog carnivals collect links pointing to blog articles on a particular topic. A blog carnival is like a special interest magazine. It has a title, a topic that flows through its postings, editors, contributors, and a focused audience. Editions of the carnival come out on a regular basis, often weekly.

A couple of weeks ago, I joined the Blogging Boomer Carnival. This week, the carnival is marking its fifth anniversary with a roundup by Laura Carter, blogging at The Midlife Crisis Queen.

Laura reports on using trout in salad, sightseeing in Dubai, helping adult children financially, hearing problems boomers face, challenging investment decisions, loving pets, and looming food shortages. See "Blogging Boomers Blog Carnival #260" for details.

Baby boomers, born between 1946 and 1964, are America’s largest age group so far, and a fascinating group they are.

Boomers are leading corporations, serving as governmental officials, heading up non-profits, worrying about retirement, and experiencing layoffs at a higher rate than younger workers. They’re also reinventing themselves in trying economic times, with some looking for their dream jobs to keep them happy in retirement.

At each stage in their lives, boomers have changed things. They’re continuing to make America different as they begin entering into their retirement years.

In addition to The Survive and Thrive Boomer Guide, members of the Blogging Boomer Carnival are: The Accidental Locavore, The Midlife Crisis Queen, Sightings at 60, Arabian Tales and Other Amazing Adventures, So Baby Boomer, Vaboomer, Empty House Full Mind, and Witty Woman Writing.

Copyright 2012, Rita R. Robison, Consumer Specialist

National Consumer Protection Week: Take action to become an alert, informed consumer

By Rita R. Robison

This week, March 4 through 10, is National Consumer Protection Week.

Here are some suggestions from consumer groups and government agencies on what consumers can do during this important consumer week to improve enhance their consumer lives.

NCPW.com

This is the website for the National Consumer Protection Week organization. For information on how to set up activities in your community, see its Great Outreach Ideas page.

National Association of Attorneys General

Check the Attorney General’s Office website in your state for the resources consumers need to make informed decisions on issues that include home foreclosures, investments, credit, and business opportunities.

Consumer Financial Protection Bureau

Read about the steps the new agency has taken to help protect your financial interests.

U.S. Department of Health and Human Services

The department urges consumers to learn more about their new health insurance rights and the resources offered by the Affordable Care Act.

Federal Deposit Insurance Corp.

The agency encourages consumers nationwide to protect themselves and make better-informed decisions by taking advantage of available resources. Information on credit, debit, and prepaid cards are offered.

Consumer World

The consumer information website urges people to reserve a copy of the great resource, the “Consumer Action Handbook for 2012” or read it online now.

Consumer Action

The consumer group offers a Take Action Center, reviews of consumer books, consumer news, and consumer action publications.

Office of the Comptroller of the Currency

The agency suggests consumers take a look at its HelpWithMyBank web page for answers and solutions for customers of national banks.

Federal Trade Commission

To learn about identity theft, investment scams, shopping tips, and telemarketing and telephone services, see the FTC’s Consumer Information web page.

Better Business Bureau

You can sign up to get a consumer tip a day from the BBB.

And don't forget to file consumer complaints when you have problems in the marketplace. Filing complaints lets companies and government regulators know when things are going wrong when consumers purchase goods and services.

 

Copyright 2012, Rita R. Robison, Consumer Specialist

Top 10 consumer stories of 2011

By Rita R. Robison

In the three plus years I’ve been writing consumer blogs, I complained about how consumer news isn’t covered at all in the top news stories of the year.

While, again, there weren’t many stories on leading consumer stories of the year, with “Consumer Protection Made Big Gains in 2011” by David Lazarus of the Los Angeles Times a notable exception, consumer news was so big this year, it made many top 10 lists.

These are the top stories, in my opinion, that are important to American consumers in 2011:

1. Occupy Movement shows consumer power

The Occupy Wall Street demonstrations brought the nation’s attention to consumer issues in ways that haven’t been seen since the 1960s and the Great Depression. The increasing division between the haves – the 1 percent – and the rest of us – the 99 percent – was a clear part of protesters message. It’s great that consumers are taking action to make their voices heard. This is serious consumer power.

2. Congress fails to lead due to right wing machinations

It’s hard to remember a time when the political contentiousness in Congress has so hurt the American consumer. Time after time, Republicans blocked important consumer measures, fueled by the anti-government Tea Party movement.

For baby boomers who have just seen their retirement funds recovering, the wild swings in the stock market brought about by congressional inaction, such as a dragged out process to increase the debt limit, were troubling.

Hopefully, 2012 will bring an end to such divisive partisan bickering that is harming the American consumer.

3. Student loan debt increases dramatically

During 2011, the amount of money college students owe for their college debts grew to exceed the amount of the nation’s credit card debt.

The amount of student loans taken out last year was more than $100 billion, and total loans outstanding will exceed $1 trillion for the first time this year.

The average student debt for 2011 college graduates is $22,900, according to The Wall Street Journal article “Number of the Week: Class of 2011 Most Indebted Ever.”

4. Sluggish economy bad for consumers with financial woes

The economy this year grew at an unimpressive rate of 1.8 percent. For those out of work or underemployed, the job situation is grim.

5. Consumers make their voices heard on bank charges

A number of banks introduced a debit card fee of $3 to $5 each month that the debit card was used for a purchase. But consumers rebelled when Bank of America added a $5 fee in September. Some consumers declared a Bank Transfer Day on Nov. 5, switching their money to not-for-profit credit unions. Banks backed down and dropped the fee at the end of October.

6. Federal consumer financial bureau now protects consumers

A big consumer breakthrough this year was the establishment in July of the Consumer Financial Protection Bureau. The agency keeps a closer watch on credit card issuers, mortgage lenders, payday loan companies, and other businesses with a direct effect on people's financial lives.

Because banks and other firms fought against the agency every step of the way, the mere fact that it's up and running is a major accomplishment, says Lazarus. But Republican lawmakers are blocking appointment of a director until they can water down the agency's leadership structure and have more say over its finances.

7. Nuclear disaster in Japan shocks world

The Fukushima Daiichi nuclear disaster in March shows how lax the nuclear industry is in designing plants and their placements. The good news is that many countries are backing away from their heavy investment in nuclear power plants for the future.

8. Housing market still sluggish

It’s likely that housing sales for 2011 will be the lowest in 20 years. For battered consumers who have seen the value of their homes decrease, a recovery of the housing market would be appreciated.

9. War continues to take money from domestic programs

Even though the Iraq War has ended, the War in Afghanistan trudges on. The U.S. needs to stop these senseless wars that rob out nation of its vitality and the lives of its young people.

10. Wall Street criminals still not tried and sentenced

It’s a national tragedy that those businessmen and women who created the Great Recession have not gone to jail. I hope that changes in 2012.

Copyright 2011, Rita R. Robison, Consumer Specialist

Occupy Wall Street: Americans are furious, and they're right to be, says consumer group

Public Citizen, a consumer advocacy organization, is supporting the Occupy Wall Street protest.

Robert Weissman, Public Citizen president, offered the following comments in a statement:

It’s no mystery why the Occupy Wall Street and related protests are capturing the country’s attention. Americans are furious about the state of our nation, and they’re right to be. Millions of people are out of work because of Wall Street’s recklessness. Millions more have been thrown out of their homes for the same reason. Meanwhile, the federal government fails to take obvious steps to address these problems because of the outsized influence of the very Wall Street firms and giant corporations that caused our economic problems. The country is past due for a mass protest movement demanding justice.

Occupy Wall Street has been criticized for not offering a clear set of demands. In fact, the protesters have been eloquent in rejecting the idea that they produce 'one demand,' and also in articulating in broad terms what they want. More to the point, it’s not for a lack of ideas that the country is in crisis.

Put the unemployed to work retrofitting energy-inefficient buildings, teaching children, and meeting other unmet needs. Invest in a green energy revolution. Impose a financial speculation tax, and increase taxes on the wealthy and corporations - and make them pay. Put in place a single-payer, Medicare-for-All health care system. Undo NAFTA-style corporate trade agreements – and don’t enter in any new ones. Force banks to renegotiate mortgage terms, and let foreclosed-upon families stay in their homes as renters. Overturn the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission with a constitutional amendment and reestablish the principle that corporations exist to serve the people, not the other way around.

The country’s problem is not the lack of a policy agenda. It’s not even winning strong public support for the policy agenda – the public does support these ideas. The problem is translating the popular anger about the nation’s state of affairs into a political movement strong enough to overcome the corporate opposition. We can only hope that Occupy Wall Street serves as a spark to that political movement.

Public Citizen stands in solidarity with Occupy Wall Street. We thank the protesters in New York and at Occupy protests around the country and world for their courage, commitment, creativity, and leadership.

Yes, let's move the country forward instead of fighting. So much needs to be done to help consumers who are struggling.

Consumer coalition applauds Obama’s jobs plan, but says what country needs is large-scale mortgage modifications

By Rita R. Robison

Americans for Financial Reform, a coalition of more than 250 national and state organizations working for Wall Street reform, said it applauds President Obama for focusing on measures to create jobs and the problem of unemployment.

However, the coalition says what consumers and the economy need are large-scale mortgage modifications:

The unresolved housing crisis – including the millions of families facing foreclosure and the millions who owe much more than their homes are worth – remain another persistent drag on the economy. We support ways to make it easier for families to refinance, but we continue to believe that much more needs to be done. The country needs large-scale mortgage modifications, including deep principal reductions, to resolve the problem and to help spur consumer demand.

The coalition also believes that fair rules are needed for financial markets so that similar crisises can be averted. 

In its statement, the coalition said it’s troubling that Republican leaders in the Senate this week renewed their pledge to refuse to implement the consumer protection law passed last year by refusing to consider a nominee to direct the Consumer Financial Protection Bureau. 

“This may work well for Wall Street banks, and financial industry special interests, but it leaves the public at risk, the coalition said. “As families navigate hard times, it is especially important to prevent financial tricks and traps that leave them poorer.”

Copyright 2011, Rita R. Robison, Consumer Specialist

Wall Street and big banks ambush appointment of Elizabeth Warren to head new consumer financial protection bureau

 

By Rita R. Robison, Consumer Specialist

Consumer news doesn’t often make headlines, but the selection of Richard Cordray, a former Ohio attorney general, instead of Elizabeth Warren to head the new Consumer Financial Protection Bureau is big news.

Public Citizen, a consumer advocacy group, says Warren was the obvious best choice, but Wall Street and the big banks didn’t want her to get the job.

“President Barack Obama decided to succumb to those interests, rather than fight for the American people,” Public Citizen President Robert Weissman said in a statement.

Weissman also said:

Warren originated the idea of the bureau. She was a tireless advocate for its inclusion in Wall Street reform legislation and creation of the bureau is the signal achievement of that legislation. She has done an excellent job leading the team that is setting up the agency. She knows the issues better than anyone. She is an unparalleled communicator about the importance of protecting consumers from predatory financial interests.

In appointing Cordray, Obama said:

Rich will be a strong leader for this agency. He has a proven track record of fighting for families during his time as head of the CFPB enforcement division, as Attorney General of Ohio, and throughout his career. He was one of the first senior executives I recruited for the agency, and his hard work and deep commitment make it clear he can make many important contributions in leading it. Rich is smart, he is tough, and he will make a stellar director. I am very pleased for him and very pleased for the CFPB.

The DNA of the new consumer agency is well established. Our mission is clear: No one should be tricked in any financial transaction. Prices and risks should be clear. People should be able to make apples-to-apples comparisons. Fine print should be mowed down, not used to hide nasty surprises. And, everyone – even trillion dollar banks – should follow the law.

The bureau officially begins operation Thursday.

Forty-four Senate Republicans have said that they won’t confirm anyone to the position until the agency is restructured in ways that would undermine its authority to protect consumers, according to Public Citizen.

Improving consumer financial protection is something that has been needed for a long time. The Great Recession certainly showed how consumers were duped into buying homes they couldn't afford and how Wall Street and big banks profited by repackaging and reselling the mortgages. I hope big money interests and conservative politics don't mow down the new agency before it has to provide vital consumer protection.

Copyright 2011, Rita R. Robison, Consumer Specialist

Six ways to avoid the baby boomer retirement bust

By Richard Barrington, Money-Rates Columnist
Guest Blogger
  
Baby boomers and retirement. They thought that day would never come – and unfortunately, many of them saved money as if it never would. If you are in that situation, there is still time to improve your retirement savings – but only if you start getting serious about it now.

Low savings rates come home to roost

In the past, people typically accumulated wealth as they grew older, but not so with baby boomers. Here are some statistics that tell the story of the spendthrift habits of this generation:

Low savings rates. Why don't baby boomers have enough money for retirement? According to the Bureau of Economic Analysis, personal savings rates have been declining steadily: from 9.59 percent in the 1970s to 8.60 percent in the 1980s, to 5.49 percent in the 1990s, to 3.19 percent in the 2000s.

Accelerating bankruptcy rates. Americans appear to be getting poorer, not richer, as they get older. According to a study by the Administrative Office of U.S. Courts, the average age of personal bankruptcy filers is increasing, and Americans 45 and older represent the fastest-growing age group for bankruptcies.

Grim retirement outlook. The most recent Retirement Confidence Survey by the Employee Benefit Research Institute found that 70 percent of American workers are behind on their retirement planning and saving, and only 13 percent say they are very confident of having a comfortable retirement.

As if these poor savings habits weren't enough, retirement nest eggs have been battered further by over a decade of weak stock returns, and by low interest rates on savings accounts which diminish the earning power of savings.

Six ways to improve your retirement outlook

With the first baby boomers now reaching retirement age, the problem of low retirement savings takes on an added sense of urgency. If you find yourself gaining weight and grey hairs faster than you are accumulating wealth, here are six things you can try to avoid the baby boomer retirement bust:

1. Work longer. Prolonging your career has a doubly-beneficial effect: it not only gives you some extra saving years, but it also reduces the number of years you'll be living off your savings in retirement. In any case, viewing age 65 as retirement age may be an outdated notion. According to the Centers for Disease Control, in 1950 the average person reaching the age of 65 could expect to live another 13.9 years. Since then, the life expectancy for 65-year-olds has risen to 18.6 years. If people have added about five years to their life spans, it would make sense to add a similar amount to their careers.
2. Diversify your investments. The past decade has seen boom-and-bust cycles in such investments as tech stocks, real estate, and oil, with disastrous effects for people who chased those booms. Don't risk your savings by trying to get rich quickly; diversify your investments to manage risk. Even conservative vehicles like bank accounts may need to be diversified to make sure you don't exceed Federal Deposit Insurance Corporation insurance limits.
3. Use laddering to manage interest rate risk. Today's low interest rate environment has created a dilemma for savers: Do you accept relatively low savings account rates or money market rates, or do you reach for higher CD rates by locking your money in for a few years? You can hedge this dilemma by laddering CDs – deposit money in CDs with different maturity dates, so you can capture some of the highest rates available today in longer-term CDs, while still having some money becoming available on a regular basis to take advantage if a rise in rates occurs. 
4. Save on bank fees. Though more and more banks are instituting checking account fees, free checking does still exist. Shop around for free checking, and also avoid overdraft fees by opting out of overdraft protection programs. 
5. Shop actively for savings account rates. Though average savings and money market rates are down around 0.20 percent, you can find savings account rates and money market rates that are four or five times the national average. Once you find a good rate, keep an eye on the market and be prepared to switch if a better opportunity arises. 
6. Monitor progress towards your goals. Retirement savings may be a long-term program, but you can't just put it on auto-pilot. Set goals, monitor progress towards those goals regularly, and make adjustments accordingly.

Collectively, the baby boom generation has done a terrible job of saving for retirement. However, individuality is at the core of this generation's ethos, so you can go your own way by taking a more active – and effective – approach to building your retirement savings accounts.

Related articles

“Baby Boomers Approach Retirement: Is It a Summit or a Cliff?”

 “Nine Things Your Banker Won't Tell You”
 
“Six Positive Steps Towards Better Savings Rates”

Copyright 2011, Rita R. Robison, Consumer Specialist