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National Consumer Protection Week

Recognizing elder financial abuse

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This post is part of a series for National Consumer Protection Week

National Consumer Protection Week is an opportunity to talk about a particularly troubling and challenging consumer protection issue – elder financial abuse and exploitation. Understanding what elder financial exploitation can look like and why it can be hard to spot can help you protect yourself, your loved ones, or someone you care for who may be at risk for this kind of abuse. We’ll tell you what the Bureau is doing to combat elder financial abuse.

Over the past couple of months, we’ve heard about several cases that vividly illustrate the challenges we face in working to prevent elder financial exploitation.

In one case, a former in-home caregiver and her husband who were indicted in Georgia for allegedly defrauding an elderly veteran with dementia out of about $182,000. More charges are expected, and police say the couple took about $500,000 from the 80-year-old man.

In another case, a handyman convinced an elderly woman to give him power of attorney. He took out a reverse mortgage on the home which the woman had owned since the 1950s, and she never saw any of the money. She almost lost her home due to the scam.

We also heard a troubling story about how the CEO and CFO of a California investment firm were charged with 66 felony counts of elder abuse, securities fraud, and conspiracy for bilking older investors of more than $2.3 million over an eight-year period.

The Government Accountability Office report on combatting elder financial abuse identified cases that are particularly thorny for social service, criminal justice, and consumer protection agencies. These cases involve exploitation by in-home caregivers, agents with power of attorney, and financial service providers—exactly the kinds of cases mentioned above. These cases also demonstrate why family members or others who have close contact with older adults can play an important role in spotting and preventing elder financial abuse and exploitation.

At the inaugural meeting of the Elder Justice Coordinating Council last fall, we heard concerns that echo what the GAO reported. We shared those concerns with Congress shortly after the report came out. We also detailed the work our Office for Older Americans is doing to combat some of these problems. We are:

  • Developing guides for family members and others with legal authority to handle money for older relatives or friends, but who may not have formal training. The guides will help people understand proper record keeping, good frameworks for investing, and other basics of managing a vulnerable adult’s money. They also will help people recognize and respond to financial exploitation.
  • Producing a guide for people who operate group living centers dedicated to serving older adults, such as nursing homes or assisted living facilities. We are also establishing partnerships with organizations to help distribute this information.
  • Partnering with the FDIC to create Money Smart for Older Adults, a community education and training program for older adults and for caregivers.
  • Coordinating with stakeholders in several states to create and sustain multi-disciplinary older American protection networks. We are also developing strategies to communicate that the Gramm-Leach-Bliley Act generally does not prohibit companies from reporting suspected elder financial exploitation. For many of them, this is often a point of confusion.

You can get more details on these and other federal efforts by reading what we said to Congress last November.

If you have your own experience with elder financial exploitation or confusing information on how to recognize or respond to it, please tell us your story. You can also learn more about preventing elder financial exploitation and abuse in your community.

Tax time is the perfect time to save

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This post is part of a series for National Consumer Protection Week

Filing taxes doesn’t have to be the worst. For some, tax time can offer an opportunity to set some money aside for goals or a rainy day.

The Earned Income Tax Credit (EITC) is a refundable tax credit for low to moderate income working individuals and families. EITC can even reduce taxes and result in a refund. Last year, over 27 million consumers received nearly $62 billion in EITC.

Many people who are eligible for free tax services, for example, at IRS-approved Volunteer Income Tax Assistant (VITA) sites, pay to have their taxes prepared. Money saved by using free tax prep, added to part of a refund, could go right into a savings account or be used to pay down debt.

In addition to taking advantage of free tax services, there are many other ways to save. You can save automatically by having a portion of your refund or your paycheck deposited directly to a savings account.

Saving is hard, but a cushion can give you the ability to say “no” to expensive financial products .

For some, information and knowledge in a transparent market is enough to ensure they’re able to choose the best option. But for others, it comes down to having enough money to avoid more expensive products and services . Income alone is often not enough to ensure access to an affordable and beneficial choice, especially for people who are low-income or economically vulnerable.

Everyone’s financial situation is different. Whether you are saving for your next car repair, a month’s rent, or for a personal goal, you are taking the first step to expand your choices by setting savings aside. The power to say “no, thanks” to high-cost products can be one of the most powerful consumer protections of all.

What can students do to protect themselves?

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This post is part of a series for National Consumer Protection Week

Americans owe more than a trillion dollars in student loan debt. That’s more than we owe on credit cards, more than we owe on car loans – and it’s still growing.

So, if you’re going to invest in a college degree, we want you to be able to choose the best deal for your situation. Students are overwhelmed with options and aren’t sure how to compare them. In the absence of apples-to-apples comparisons, they’re left to their own devices when making a choice that will have significant consequences for their financial future.

Here is the suite of tools we’ve developed to help you along the way:

Paying for College
From start to finish, we can help you make informed financial decisions about paying for college.

Repay student debt
While we can’t give you advice for your exact situation, we can point you in the right direction.

Choose a loan
Three steps that can help you get the right loan for you.

Submit a complaint about a student loan or a bank account or service
We’ll forward your issue to the company, give you a tracking number, and keep you updated on the status of your complaint. Even if you have federal loans, we can help make sure you get to the right place to submit a complaint.

Managing your college money
Choosing your first bank account is an important decision. Unlike that first school ID photo, your first banking relationship could last long after you graduate. Making a smart decision now will mean fewer surprise fees that can add up later.

Compare financial aid and college cost
We’re building a tool that will let you compare financial aid offers so you can see how all those numbers impact your payments down the road.

Twitter: Let’s chat!

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We’re excited to co-host a twitter chat with the Federal Trade Commission and the General Services Administration as part of National Consumer Protection Week to answer questions about consumer issues on March 6, 2013, at 2 p.m. ET.

We’ll be taking questions on consumer finance products and services and other consumer issues.

Join the conversation

To participate, tweet questions with the hashtag #NCPW and follow us @CFPB.

So, how do I submit a complaint?

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This post is part of a series for National Consumer Protection Week

We began taking credit card complaints in July 2011, and we now can help with complaints about mortgages, bank accounts and services, student loans, vehicle and other consumer loans, and credit reporting.

How do I submit a complaint?
Submitting a complaint and tracking your status is simple and secure. The fastest way to get started is to go consumerfinance.gov/Complaint. If you need help while you’re online, you can chat with one of our team members on the site.

You can also submit a complaint over the phone by calling us at (855) 411-CFPB (2372), toll free. Our U.S.-based call centers can help you in over 180 languages, and can also take calls from consumers who are deaf, have hearing loss, or have speech disabilities.

What makes an effective complaint?
The best complaints are the ones that explain, clearly and concisely:

  • What happened, including key details and documents,
  • What you think would be a fair resolution, and
  • What you’ve done to try and resolve it.

What happens after I submit?
After you’ve submitted your complaint you can check its status at consumerfinance.gov/Complaint or by calling us at (855) 411-CFPB (2372). We’ll also send you email updates along the way so you know where you are in the process, and what’s next.

After the company responds to your complaint, we’ll email you, and you can log back in to review the response and give us any feedback.

Every complaint helps us in our work to supervise companies, enforce federal consumer financial laws, and write better rules and regulations. You speaking up gives us important insight into the issues you face as a consumer, so thank you!

Learn more about submitting a complaint: consumerfinance.gov/Complaint

Protect yourself from buyer’s remorse

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This blog post is part of a series for National Consumer Protection Week

When you buy something it’s hard to know if you’re getting the best deal – and that includes when military families, who are often targets for marketers, are making big financial decisions. Even though some companies might try to take advantage of people, there are things servicemembers can do to make sure they’re getting their money’s worth.

Have you ever bought something online and clicked the box that says “accept” without having any idea of what you’re actually accepting? Or maybe you looked at the fine print but it didn’t make any sense.

Or, you sit in an office with a salesperson who has a stack of paperwork for a product you’re financing. They give you a two-minute explanation of what it all means and ask if you have any questions. You say “no” because it’s embarrassing to say that you didn’t understand what they just said. And when they say “sign here” you do it. Congratulations! You’ve just bought an iPad for… $3,600?!!

So, what can servicemembers do when they’re confused at signing time?

  • Get help.
    If you can’t make heads or tails of a contract, take it to someone who can: your installation Personal Financial Manager or JAG. If the seller doesn’t want to give you a copy of the contract before you sign, that’s a red flag; so is pressure to sign it “right now, while the offer is still available!”
  • Don’t be afraid to step away and say you want to take time to think the purchase over.
    You are the buyer and you should be in the driver’s seat in this transaction. You are under no obligation to please the seller; don’t cave even if they act like they are disappointed or disgusted that you won’t commit.
  • Think about the total cost of what you’re buying, not just the monthly payment.
    I can’t tell you how many times I’ve seen servicemembers sign up for what seems to be an affordable monthly payment, and then realize they’re paying an outrageous total price for the item. The $3,600 iPad I mentioned above is a true story. So is the story of the servicemember who signed a contract to borrow $1,600 – at a cost of $15,000 in finance charges!
  • If someone says they only accept payment by allotment, consider walking away.
    Under federal law, a business generally can’t require consumers to make payments by automatic electronic payment, but there’s an exception to this that leaves out military allotments. When you pay by allotment directly from DFAS (Defense Finance & Accounting Service), it may be convenient for your creditor, but it means you miss out on protections that you might have had if the money was deposited in your bank account and then paid out from there (like not being required to pay by automatic electronic payments).
  • Never give someone access to or control over your financial accounts unless they are someone you trust completely and there is a compelling reason to do so (like a power of attorney when you are deployed).
    Many scams on servicemembers, veterans, and their families have started with giving a persuasive acquaintance or “advisor” access to their accounts.

The term “buyer beware” goes all the way back to the Roman era: caveat emptor. Take a hint from Caesar and his legions and protect yourself from getting into a bad deal. But if you do feel that you’ve been scammed or treated unfairly, come see us at consumerfinance.gov/Servicemembers.

We are here to help!