Video Shows You Don’t Need All That Fine Print In Prepaid Card Fee Disclosures

Prepaid debit cards may offer a convenient alternative for unbanked consumers, but there are often unexpected costs buried in all the fine print of the cards’ disclosure documents that most people never read. It doesn’t need to be that way.

Today, the Pew Charitable Trusts unveiled the above video comparing a typical prepaid card packaging to their own disclosure box that aims provide easy comparison of prepaid card fees and terms and conditions.

The video features two consumers, Lisa and Jim, who are purchasing prepaid cards to better budget their expenses for a vacation. While Lisa’s prepaid card uses the Pew disclosure box, Jim’s does not.

Jim’s “typical” prepaid card box only lists some of the fees associated with the card. To see the full list of fees, Jim has to purchase the card and then read the fine print on a hard to find Terms and Conditions paper.

While Jim’s struggling to read his card’s fine print, Lisa is off enjoying a Hawaiian vacation.

“We wanted to show in a very accessible way how the disclosure would work,” Susan Weinstock, director of consumer banking research for Pew, tells Consumerist. “We thought doing something fun and engaging would provide that opportunity.”

Although the short video may not be groundbreaking, it does get the point across that prepaid cards can be tricky products to invest in; because there are no federal laws or regulations to protect consumers who use the cards, they could be subjected to hidden fees, unauthorized transactions, or loss of funds.

The video is Pew’s latest effort to bring awareness to the hidden dangers of prepaid cards. Back in February, Pew unveiled the model disclosure box in conjunction with a study detailing the lack of transparency in current card disclosures.

“Many prepaid cards have summary disclosures and leave other fees buried in terms of conditions, or in longer complicated disclosures that are harder to reach – either online or in the case of retail you have to open the package,” Thaddeus King, senior reseacher for consumer banking tells Consumerist.

Pew’s disclosure box – which shouldn’t be confused with a similar box that the Consumer Financial Protection Bureau is working on – fits on the inside flap of the existing card packaging, making it more convenient for consumers to find fees before purchasing the prepaid card.

Pew researchers found that nearly all of the 66 cards included in its study failed to disclose at least one type of fee, service, or consumer protection.

That research was echoed in an April Bankrate.com survey that examined 30 popular prepaid cards and found that while all charged fees, the actual fee structure varied considerably.

Officials with Pew say the use of its disclosure box would allow for less surprises when it comes to using prepaid cards.

The first company to embrace Pew’s box was JPMorgan Chase. The company announced earlier this year that its Chase Liquid prepaid cards would be the first product to employ Pew’s disclosure box. The company also uses Pew’s checking account disclosure box.

Pew is working on expanding the reach of its box by partnering with Visa in the future. The major credit card company has decide to create a seal of approval designation for Visa-backed prepaid cards. In order for a card to receive the seal they must employ the disclosure box, Weinstock says.

Aside from bringing awareness to consumers, Pew officials hope the prepaid video encourages federal regulators to finish their work on creating consumer protections when it comes to the cards.

“Once rules are in place this will be a safe product that can be a much cheaper option than a checking account,” Weinstock says.

Pew previously made several recommendations to the CFPB to make prepaid cards safer for consumers:

• Prepaid cards should not have overdraft or other automated or linked credit features.


• Prepaid cardholders should be protected against liability for unauthorized transactions that occur either when a card is lost or stolen or a charge is incorrectly applied.


• Prepaid cardholders should have access to account information and transaction history.


• Prepaid cards should be required to provide information about terms, conditions, and fees in a uniform, concise, and easy-to-read format. This information should be included with the card packaging so that it is accessible pre-purchase at retail outlets as well as online.


• Prepaid card funds should be federally insured against loss caused by the failure of an institution.


• Predispute binding arbitration clauses in cardholder agreements, which prevent cardholders from having the choice to challenge unfair and deceptive practices or other legal violations in court, should be prohibited.

by Ashlee Kieler via Consumerist

AirBNB Guest Refuses To Leave Condo, Tries To Air-Condition The Desert

(Jonathan Coffey)

An AirBNB “guest” is taking advantage of gaps between the site’s policies and California rental law to squat indefinitely in a Palm Springs condo. Does that sound like a sharing economy nightmare? It is.

The one bit of good news is that the “host” didn’t rent out her primary residence while she happened to be out of town: no, she rented out her vacation home for 44 days. The problem is that 30 days into the stay, the guest quit paying. Why 30 days? After renting a place that long, a tenant, even a temporary one, gains rights to their new “home” under California law. Now it will cost the homeowner thousands of dollars in legal fees and take three to six months to evict the unwanted tenants.

He had complaints about the condo initially, but now isn’t budging. The owner says that the power usage is quadruple the normal levels while the home is occupied or rented out, perhaps because the tenant has been leaving doors and windows open with the air conditioning on.

The problem for AirBNB hosts is that in a crisis like this, they can expect to get an e-mail response from the company within 48 hours, and there’s no “guest won’t leave my home” crisis hotline.

Squatters don’t sit well with Airbnb hosts [San Francisco Chronicle] (via ABC News – auto-play video)

by Laura Northrup via Consumerist

Delta, Other U.S. Airlines Cancel Flights To Israel Due To Missile Concerns

(kevindean)

In the wake of the tragedy that befell Malaysian Airlines flight 17 last week over Ukraine, and amid escalating hostilities in the Middle East, multiple American airlines have now suspended flights into Israel.

The Associated Press reports that following earlier reports of a rocket landing near Tel Aviv’s Ben Gurion Airport, Delta has canceled all flights to Israel until further notice.

One such flight, Delta 468, was over the Mediterranean approaching Turkey when it made a dramatic turnaround and Delta rerouted it back to Paris, one flight-tracking site reported.

NBC News confirmed that US Airways has also cancelled flights today to Tel Aviv and American Airlines is meeting to discuss whether they should continue or cancel flights to Israel.

Airlines cancel flights to Israel over missile fears [AP/CNBC]

by Kate Cox via Consumerist

You Can’t Sell “Made In The USA” Seals Without Checking That Products Live Up To That Label

This screengrab from the company’s website was used as evidence in the FTC’s complaint.

As we’ve talked about in previous stories, while there are federal guidelines about what constitutes a “Made In America” product, manufacturers are operating on an honor system because it would be too onerous a task for the government to actually investigate every product claiming to be American-made. But if a company charges thousands of dollars for seals that indicate that a product’s Made In USA bona fides have been verified, it should actually be doing something to check those claims.

This morning, the Federal Trade Commission announced a proposed settlement [PDF] with Ohio-based Made in the USA Brand, LLC to settle charges that the company was selling its “Made in USA” certification seals for anywhere from $250 to $2,000 per year to companies without verifying that labeled products were indeed made in the United States, or disclosing that the manufacturers had done the certifying themselves.

In order to use a statement like “Made in USA” or “Made in America,” the product must be “all or virtually all” made in the United States, according to FTC guidelines.

Many manufacturers use these rules to determine themselves whether their products comply with the FTC standards, but some companies will provide seals indicating that a product has been certified to meet the federal guidelines.

The FTC believes that any company selling such seals should need to either certify that the products are in compliance, or clearly state that products containing the seal were self-certified by the manufacturer.

The government accused the company of falsely advertising that it independently and objectively evaluated whether certified products met its accreditation standard; that it made false or unsupported claims that companies listed in its database as certified marketers were in fact selling products that complied with the FTC’s Made in USA standard; and that it “provided the companies it licensed with the means to deceive consumers into believing that the companies were marketing products that were made in the United States.”

“Seals can be very helpful when consumers purchase products based on claims that are difficult to verify – like the Made-in-the-USA claim,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “When marketers provide seals without any verification, or without telling consumers the seal is unverified, consumers are deceived and the value of all marketers’ seals is diminished.”

by Chris Morran via Consumerist

Glitch In FAFSA Form Changes Thousands Of Future College Students’ Financial Aid Offers

The current FAFSA form includes 108 questions, enough to confuse just about anyone. (TheeErin)

Federal financial aid is a vital part of funding many college careers; even the slightest mistake on a form could mean the difference between attending school and taking out costly private student loans. For thousands of prospective college students a glitch in this year’s Free Application for Federal Student Aid (FASFA) form may have put their financial aid offers at risk.

According to the Seattle Times, nearly 200,000 future college students, many of them low-income, may received incorrect financial aid offers due to an error in the online FASFA form.

The issue was discovered earlier this month when officials at colleges and universities noticed a lot of applications with unusually high salaries entered in the “Income Earned From Work” box.

So were these future students seeking financial aid really making hundreds of thousands of dollars? Not even close.

The sky-high reported incomes resulted from the combination of a FAFSA decimal-point error and aid applicants who wanted to provide precise information.

For example, if an applicant whose personal income was $3,000.49 entered that exact amount into the form — instead of just using the rounded $3,000 amount — the decimal point would disappear and the government mistakenly thought that the applicant had earned $300,0049. And since most people with 6-figure incomes don’t need financial aid for college, this error would likely have a negative effect on the student aid offer.

To remedy the issue, the Department of Education plans to reprocess some 200,000 forms that are believed to contain the error.

Additionally, the FASFA website has been reprogrammed to drop fractional dollar amounts entered by mistake.

Students who submitted a FAFSA for the upcoming school year should be on the lookout for a notice about their Student Aid Report that indicates their application contained an error.

If students receive a notice and have already been granted financial aid, their future college may need to amend the amount.

In an attempt to better streamline future FAFSA forms and prevent error, several senators have been promoting a proposal that would cut the current forms 108 questions down to just two.

Even the feds screw up FAFSA: Online glitch affects thousands [Seattle Times]

by Ashlee Kieler via Consumerist

Ambitious Dutch Company Proposes $70 Billion Broadband Network For Los Angeles, Whole Country

(Louis Abate)

The city of Los Angeles last year started taking proposals for a plan to build out a gigabit fiber broadband network for every business and residence in the city. Only one company publicly shared their full proposal publicly, and it doesn’t exactly make the future of L.A. fiber look bright.

Reporting on the proposal, Ars Technica calls the company’s claims “overly optimistic,” which looks like an understatement.

The Dutch firm, Angie Communications, says they can run fiber through the entire city in five years for an initial cost of $2.5 billion. (L.A.’s original estimate was that the project would cost $3 – $5 billion.) But that’s just to get started with fiber in the city, they say. Their projected full cost, in the end, will be $70 billion.

That’s not $70 billion just for one California city; that’s for the nation. As in, the entire United States. Angie Communications wants to build out connections to the whole country. In addition to fiber for Los Angeles, their proposal also included a plan to build out a robust 4G mobile network covering 95% of the country, and a 100 Mbps wifi network covering 90% of the country.

Angie, apparently of the “go big or go home” school of thought, also expressed a desire to build out wired and wireless networks in the UK, Germany, France, and the Netherlands, in addition to their American plan.

Building out a fiber network isn’t an easy undertaking, though, and it requires expertise. That’s what sank Seattle’s plans earlier this year with a company called Gigabit Squared.

At the moment, Angie isn’t exactly in the best position to follow through with their plan to cover the U.S. coast-to-coast. The company has about $68 million around from investors… about $2.4 billion short of what they say they need to get going in Los Angeles. Their current funding, they say, will be used to go out and raise more money, and also to cover basic operations expenses like making payroll.

Angie Communications is not the only company that responded to L.A.’s call for input; 33 other entities, both public and private, also submitted responses. However, the contents of the others are not public at this time.

Startup claims it will build fiber network in LA and wireless throughout US [Ars Technica]

by Kate Cox via Consumerist

Arby’s Celebrates 50th Anniversary By Giving Out Free Shakes Tomorrow

For humans, the 50th anniversary is the golden anniversary. For fast-food restaurants, it’s apparently the “give everyone free shakes” anniversary, since that’s how Arby’s is celebrating its 50th year in business tomorrow. Print out this coupon and head over for a Jamocha (which is just mocha) shake tomorrow, Wednesday, July 23rd, 2014. No other purchase required. [Brand Eating]

by Laura Northrup via Consumerist

Even Millionaires Can’t Urinate On The Candy At CVS

(zipsonic)

Even if you’re a wealthy real estate heir who has previously been acquitted of murder charges, you will probably get arrested if you decide to expose your private parts to CVS employees… and then use said private parts to urinate on the store property and products.

ABC 13 in Houston reports that police arrested millionaire Robert Durst on Sunday at a local drugstore after getting into an altercation with employees. The situation allegedly escalated to the point where Durst exposed himself and did about $100 worth of damage-by-urination to the store’s candy supply. KHOU-TV later wrote that the store in question was a CVS.

“I have been notified Mr. Durst was arrested for a Class B Misdemeanor and is in the bonding process,” his attorney told ABC. “He will go through the process like any other citizen of Harris County. We will deal with the case on its merits once he is released from jail.”

In 2001, Durst was charged with the murder of a neighbor whose dismembered body was found in Galveston Bay. He was later acquitted of the charges by a jury.

[via Chron.com]

by Chris Morran via Consumerist

Credit Card Breach May Have Hit Goodwill Thrift Stores, Could Go Back To 2013

(C x 2)

Banks can figure out the source of a major credit card breach long before the targeted company announces that something went wrong, and that site shares the scary news with the rest of the world. Have you used your credit card at a Goodwill Industries store lately? Bad news from that not-for-profit thrift store chain.

If you want to learn where your credit card number may have been stolen by evil fraudsters long before the rest of the world, you should keep an eye on the blog Krebs on Security. It will make you want to lock your credit cards up in a safe in a secret room in your basement and use cash for every transaction, sure, but isn’t it better to be paranoid than to be uninformed?

In any case, banker sources say that cards hit with fraud were used in Goodwill Industry retail stores in Arkansas, California, Colorado, Florida, Georgia, Iowa, Illinois, Louisiana, Maryland, Minnesota, Mississippi, Missouri, New Jersey, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, Virginia, Washington, and Wisconsin.

Goodwill confirmed that it is working with the Secret Service regarding a possible payment information breach at “select U.S. store locations.”

Goodwill Industries International was contacted last Friday afternoon by a payment card industry fraud investigative unit and federal authorities informing us that select U.S. store locations may have been the victims of possible theft of payment card numbers.

While Goodwill didn’t confirm this, financial industry sources said that their evidence indicates that the breach may go back to the middle of 2013. If we learn anything more that thrift shoppers should be terrified about, we’ll let you know.

Banks: Card Breach at Goodwill Industries

by Laura Northrup via Consumerist

Walmart Offers Teachers A Discount On School Supplies (Yes, There’s A Catch)

(walkerspace)

Buying school supplies can put a pretty significant dent in one’s pocketbook, especially when you don’t have a lot of expendable income to begin with. For teachers who bear the burden of supplying a classroom full of students, Walmart is offering a new discount – but there’s a catch.

Walmart announced this week that it will be offering teachers across the country a 10% discount on classroom supplies purchased during its “Teacher Appreciation Week.”

That’s all well and good, but the discount will only be given in the form of a Walmart eGift card after making a purchase; meaning the savings won’t be realized until later and teachers will have to come back to Walmart to spend it.

Only certain school supply purchases made between July 25 and July 31 are eligible for the deal.

The savings process works like this:

• Shop at a Walmart store for classroom supplies;


• Register your receipts online by August 15;


• Receive an eGift card with the savings from your eligible purchases.

Sure, it’s better than nothing, but it also seems like a lot of extra work for the teacher. And any teacher who’d hoped to spend those savings at a store other than Walmart is out of luck.

But then again, it’s probably a better option than the small personal loans to pay for classroom supplies that Consumerist reported on earlier this year.

Teachers Chalk Up 10 Percent Savings at Walmart’s First-Ever Teachers’ Savings Event [Walmart]

by Ashlee Kieler via Consumerist