Commonwealth Conversations: Consumer Connections

Noticing the Change

Posted by: 
Jayda Leder-Luis

This whole experiment of not using my debit card has made me more aware of each cent I spend. Literally.

I always carried a few pennies and dimes in my wallet, but after a week I’d stash them away in a change jar at home. It’s practically empty, considering how little I used cash in the past, but after these past two weeks I’ve notice substantial growth.

My bank has a “keep-the-change” policy, so that every time I use my debit card the purchase gets rounded up and the change is deposited into my savings account. While this feature is basically the electronic version of my change jar, I never noticed its effects. Seeing the physical jar containing actual money creates a mental note of all my purchases and ultimately has a bigger impact on my spending and saving habits. 

Since I stopped using my debit card, not all of my change gets dumped in the jar. I use it every chance I get and frankly it’s made most transactions easier.

Take the example of a $2.64 cup of coffee. I can either hand the cashier exact change, or pay $3.14 and get 50 cents back.  Keeping exact change for times like these means I don’t receive burdensome amounts of change back, or better yet can control how much I do get. By doing a little math each time I was at the register I was able to collect enough quarters to do a whole load of laundry. It only took me four days and didn’t require a separate trip to see a bank teller.

So far there has only been one downside to using up my change. A few days ago I was in a fairly long line and it was getting longer by the minute. As I reached the counter, ordered and began to pay, I heard the gentleman behind me grumble something about wasting his time. He had his debit card out and was ready to swipe and dash out of there, but my minute-long transaction was too long for him. When I received my change I slid to the side to let him order while I put my change back in my wallet. He was done before I was, and gave me a look that screamed contempt. 

Yes, cash transactions tend to take a bit longer, especially when the cashier has to count change back. It’s still money, though, and using it makes a lot of sense to me.

No Fee? Still No Swipes!

Posted by: 
Jayda Leder-Luis

With all the outrage from consumers, Bank of America announced early last week that it would not be charging a $5 monthly debit card fee.  Despite this turn of events, I am still committed to being a cash-only consumer for the entire month. 

I experienced some minor setbacks in my usual routine because of the no-swipe rule.  On Tuesday, I went to get coffee with my coworker but only had $1, and, although there is an ATM next to the store, my coworker said “forget it” and paid for my coffee. 

A similar situation arose last night.  I didn’t have cash on me when I went to order food, so my boyfriend paid for it and I agreed to pay him back.  Racking up debts certainly was not something I wanted to be part of this ordeal, but at least it doesn’t come with interest like putting the charges on my credit card would have.

Stopping at the ATM held up my roommates when we were going out to watch the Pats’ game, and two of them even offered to pay me $5 to cover the would-have-been-fee if I would “just swipe already!” 

I felt that same way this morning when I tapped my Charlie Card at the train station, only to have the machine flash “NOT ENOUGH VALUE.”  There were already two people waiting at the ATM and I heard the train screech along while I was waiting to withdraw cash.  I was 20 minutes late to work, but my boss understood, given the circumstances.

I learned two lessons from this week: living a no-swipe life means 1) more frequent trips to or more substantial withdrawals from the ATM, and 2) I must always refill my T card before the morning commute.

 

A Month without My Debit Card

Posted by: 
Jayda Leder-Luis

I open my wallet and there it is – my debit card – sitting in the first position of the easy-access pocket just above my credit card, school ID, T pass and driver’s license. 

It belongs in that top spot, I use it all the time. I have never made a point to carry cash, and am amazed if I find myself in possession of a single or five-dollar bill. Usually I only take out cash to get quarters for laundry or to pay my roommate for utility bills.
               
When I heard that my bank, Bank of America, will be charging a $5 monthly fee for consumers who use their debit card, I understood the rationale. As part of the Durbin Amendment that was passed over a year ago, the federal government implemented a cap on fees that banks can charge merchants who accept debit card transactions; in turn, some banks have decided to recoup those dollars by charging consumers directly. Bank of America is now rethinking how it implements the fee, but the prospect of paying for debit card use is still looming in the distance.

I wonder, though, can I avoid this fee? I’ve decided to try to go the entire month of November without using my debit card, to see if quitting the debit-card habit is possible. To start my experiment, I made a list of things that I routinely use my debit card for:

• Groceries – at the store and the biweekly delivery of Boston Organics (for which payment is automatically processed on my debit card)
• Household items from CVS or Walgreens
• Car expenses like gas and oil changes
• Coffee, and sometimes lunch in the middle of the work day
• N-Star bill, which I pay online using my debit card
• Refilling my T-pass
• Clothes/books/trinkets that I buy on a whim – although not often, it happens occasionally. For example, last week I went to Boomerang’s, a second-hand store in Jamaica Plain, and bought a book, a shot glass and a wine glass for $1.50. I didn’t have any cash and felt like a fool for using my debit card.

A $5 monthly fee equals $60 a year, which in my book is no chump change. Like many people, I live paycheck to paycheck (that is, when I’m working a paid internship), or rely on student loans as funds for an entire semester. Shopping has never been a hobby of mine, and when I buy things I tend to stick with low-cost versions of whatever I need (Payless shoes, generic cold medicines and cereal brands, $1 shampoos and conditioners, etc.). 

Considering my already frugal personality, I am hoping this transition to a cash-only lifestyle won’t be too far of a leap. It does mean that I’ll have to plan out my purchases somewhat in advance instead of waiting to reach the cashier to find out the total. I expect a few inconveniences for when I’m short a dollar or don’t have time to stop at an ATM, but since I’m going “old-school” anyway, I’ll just have to carry around my checkbook.

Jayda Leder-Luis is a senior at Northeastern University and is the communications co-op student at the Office of Consumer Affairs.

A Month without Swiping

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

 

 

Starting on Monday, we are going to feature here on our blog regular reports from Jayda Leder-Luis, who in preparation for new fees from her bank is going to try to get through November without using her debit card.

Jayda is one of our great Northeastern co-op students here at the Office of Consumer Affairs, and November should be an interesting month. On top of her regular tasks like grocery shopping and traveling to and from work, she will also be traveling home for Thanksgiving and maybe even starting her holiday shopping. She will be providing us regular updates as she avoids swiping her card at retailers, writing about near-misses and the trials and tribulations that will come with rolling back the retail clock a decade or so.

Like millions of others, Jayda is a Bank of America customer. The bank’s wide base allows her access to ATMs and branches both here in Boston and at her home in New York, certainly an importance convenience for college students and others who split their time between two places. But last month, Bank of America announced a new, $5 fee for using a debit card a point of purchase, whether it is used once a month or multiple times a day.

As you’ll hear from Jayda, she wants to try to avoid that fee, and is giving it a tryout in November. She is not alone, as many Bank of America customers are considering their options before the new fee goes into place. I look forward to seeing how her experiment works out, and reading her blog entries throughout November.

Flight Deal Means You Can’t Get Away from Telemarketing

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

 

 

Bubbling up on Facebook are links and messages from your friends, all saying “I love Southwest.” That may be true, but the details in an offer for potentially free tickets may not be all that loveable.

Your Facebook friends, perhaps after being virally tipped off to the offer from other Facebook friends, go to a link, sign up for free tickets, and are asked to “like” the page and include “I love Southwest” in the message. So, you’re news feed on Facebook includes items like this:

 

All this love for Southwest is interesting, so you go to check it out. You see this:

 

You answer three general demographic questions, and then you are asked to link the page on Facebook. And then you are asked for more information, including your name, address, email and phone number.

Generally, we don’t encourage consumers to give personal information, including contact information, to unknown entities. The small print on the website seen above notes your-next-flight.com runs this program. However, you can’t get to your-next-flight.com, and a Google search of “your-next-flight.com” does not get you any usable results, either.

But more of a concern for consumers should be this: Buried in the 4,254 words of terms and conditions is notice that by registering for the free tickets, you are also giving your approval to receive telemarketing calls:

“Further, by registering on the website and providing a valid cell phone number, you are expressly consenting to receive prerecorded telephone messages from Worldwide Commerce Associates ("WCA") that include special offers from affiliated merchants. You are subscribing to receive prerecorded messages only from WCA with offers from its affiliated merchants and only at the specific number(s) you have provided to us. Your consent will be effective regardless of whether the number you have provided: (a) is a home, business, or cell phone line; and/or (b) is or will be registered on any state or federal Do Not Call list, and shall remain in effect until you revoke your consent and cancel your subscription. To unsubscribe: You may cancel your subscription and revoke your consent to receive telephone calls at any time by either (a) utilizing the opt-out procedure included in any message you receive, or (b) by calling 800-269-0281.”

We cut-and-pasted the terms and conditions into a Word document, and the above notice was found at the bottom of page seven of 11 pages. It’s highly unlikely that most consumers will see this, and chances are they will start being barraged by telemarketing phone calls. At a time when consumers usually rage at inconvenient calls, chances are by signing up for these free Southwest tickets, they will want to use them to get away from unwanted telemarketing calls.

Netflix Users Face a Different Kind of Choice

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

 

 

  Netflix, which offers consumers DVDs mailed to their home or instantly streamed through a wide number of devices, offers subscribers so much variety that sometimes choosing what to watch can be a hard choice. But the company announced yesterday a new choice that will be particularly difficult and one to which consumers should pay attention.

The company has been offering a flat-fee plan to consumers that includes DVDs mailed to the house plus access to its instant streaming catalogue. The new plan, however, splits those offerings into two separate plans, and does not offer a discount for both plans.

For example, a current plan that includes Blu-ray disc access and unlimited streaming is currently $11.99 a month (including an additional charge for Blu-ray discs). That plan would become two plans, starting on or after Sept. 1: A $7.99 per month streaming plan, and a $9.99 a month DVD-by-mail plan. That would be $17.98 per month, a 50 percent increase from the current membership.

So, consumers face something of a choice. They can pay a steep increase in their monthly fee – in the above example an additional $72 a year – or they can reduce services. That reduction, however, is a difficult one for consumers. While instant streaming offers incredible convenience through a number of platforms, the library offers significantly less depth than the hard-copy DVD library. The DVD-by-mail option, however, does not allow the same freedom as the instant streaming option. Already, consumers are voicing displeasure at having to make a choice.

Netflix is the dominant entity in the market, but others – like Hulu and Amazon – have been mounting challenges. How they react to the news – and whether they can pull market share away from Netflix as consumers review their options – will be interesting to see in the long run.

In the short-term, consumers should review their Netflix and decide how to proceed. The company’s emailed note to subscribers make clear that by doing nothing, the subscriber will be put into the dual plan with both services – essentially agreeing to a steep price increase. Consumers should decide how they want their plan to be managed going forward, and they should keep an eye out on the competition and see if they find an offering that they feel is better suited to their needs.

There Is Freedom from Big Banks Fee-dom

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

 

 

The Boston Globe has a story today outlining some new fees facing Bank of America customers. Generally, the bank is raising minimum balance standards and other requirements that would erase fees, meaning more consumers will be paying a monthly fee.

This is not a new phenomenon in the banking industry. Once upon a time, most bank customers were able to get a bank account with no monthly fees attached. Those days are now fading – if not already gone. According to the Globe, Bank of America’s monthly fees range from $6 to $25 a month.

The good news for consumers in Massachusetts is that there options for low-cost, or even no-fee, accounts.

On the no-fee side of the ledger, state-chartered banks must offer accounts with no fees to anyone 18 or younger and 65 or older. These “18-65" accounts are some of the best-kept secrets in Massachusetts, and they shouldn’t be, because they offer a great option for teens learning how to manage money or seniors living on a fixed income. We recently did a survey that found banks do a good job with the required disclosure of the accounts’ availability, but there is plenty of opportunity for more education and attention to these accounts.

Many state-chartered banks also offer low-cost banking accounts to all consumers. These low-cost accounts require no more than $25 to open the account, charge a monthly fee of no more than $3, provide at least 15 free withdrawals per month (including at least eight checks), and charge no more than $1 for additional withdrawals. Last October, we launched our “Save Money! Bank on It” campaign with banking and community organizations around the state, encouraging use of these accounts.

Getting hit with new fees – no matter the bank – is no consumer’s idea of a good time. But options exist at our great community banks for those who are looking for a better deal on their bank accounts.

A New Level of Scare Tactic

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

 

 

We’ve seen our share of scam emails and heard more than a few phone scams in our Office, but I don’t think we’ve ever seen a scam that ratchets up the fear to the level of one received through our Office email this past weekend.

An email from “Investigations Department” with the subject line “Email from FBI” included a PDF attachment (Download FBI letter 6.11) with the seal “FBI Headquarters” on the letterhead demanding a “clearance certificate” and $350. While the scam is old, the tone of one portion is new. Check out this paragraph:

WARNING: Failure to provide the above requirement in the next 24 hours, legal action will be taken immediately by arresting and detaining you as soon as international court of justice issues a warrant of arrest, if you are found guilty, you will be jailed as terrorism, drug trafficking and money laundering is a serious problem in our community today and the world at large. The F.B.I. will not stop at any length in tracking down and prosecuting any criminal who indulges in this criminal act. Nobody is above the law and the law is not a respecter of anybody. We presume you are law abiding citizen whom would not want to have scuffles with the authority, in an outside of the United States.

Clearly, the tortured grammar of this paragraph (which is indicative of the confusing nature of the entire letter) should fire off a number of red flags. But for unsuspecting recipients, seeing an email from the FBI and the threat of being jailed and being tracked down by the FBI can create some anxiety.

Despite the warning in the letter, “our authority is irrevocable so don’t dare dispute our instruction, just act as instructed,” our advice is to, indeed, dispute the letter. Contact the Federal Trade Commission and report the scam. If you are ever unsure about an email or phone call you receive, track down contact information for the entity yourself, and call and find out if the entity contacted you. Chances are, if we called the FBI we’d find out pretty quickly they were not getting ready to throw us in jail, and they certainly aren’t looking for $350 to process a “clearance certificate.”

This Bank Shot Goes Awry

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

 

 

The mailer received by someone in our office last week names Bank of America seven times, creating the impression it was from Bank of America, but it was not. It was from an outfit called Novation Marketing Center or Novation Law Center, but they are not mentioned anywhere.

That’s funny, because the mailer (Download Loan mod scam mailer 5.11) – claiming to be a “payment reduction notice” to help modify a Bank of America mortgage – came from Novation Marketing Center and Novation Law center. The only way you would know it was not from Bank of America is in the small type, where one of those Bank of American mentions is used to note the mailer did not come from Bank of America.

This is, clearly, a loan modification outfit trying to deceive Bank of America customers into seeking a modification. The wording is carefully used to give the impression the mailer is coming from the bank. “Bank Of America realizes that sometimes things happen that are out of your control, which can keep you from meeting your most financial obligations,” the first paragraph reads. “Bank Of America is committed to helping homeowners keep their homes.”

That second part might be true, but Bank of America’s commitment surely does not include the services of Novation.

In the last few months, we have studied the loan modification industry, surveying a dozen companies and referring six of them to the Attorney General’s Office for further investigation after we found they may charge up-front fees, in violation of state regulations. We are also going to refer Novation to the Attorney General, after seeing this deceptive advertising that is unfair and confusing to consumers.

We’re not alone in having concerns regarding this company. Recently, the Attorney General in Connecticut and the Office of the Comptroller of the Currency raised the red flag when it comes to Novation.

Thousands of homeowners in Massachusetts are facing foreclosure or are so worried about paying the mortgage that they worry about foreclosure. This kind of advertising preys on those concerns and takes advantage of homeowners.

If you are worried about foreclosure, avoid unsolicited mailers or phone calls, and seek out assistance from a HUD-approved housing counselor. Contact your lender directly and being the dialogue about potential modifications and other options. Seek out help and start working on a solution now, but avoid “help” that comes out of nowhere or seems too good to be true.

The Uncomfortable Shipping Rules of PajamaJeans

Posted by:
Barbara Anthony, Undersecretary of the Office of Consumer Affairs and Business Regulation

 

 

In the world of infomercials, PajamaJeans are some of the most popular products around, at least in terms of ad recognition. However, it appears their rules regarding shipping are significantly more uncomfortable than DormiSoft.

If you don’t know what DormiSoft is, you haven’t seen the PajamaJeans ad. Take a look:

 

  

Last week, our Hotline staff received a call from a consumer complaining about the cost to get an order of PajamaJeans shipped. As you’ll see from the section of the PajamaJeans Website highlighted to the  
right, PajamaJeans are $39.95 plus $7.95 in shipping and handling costs. Our consumer called to complain that the shipping costs are actually per pair of PajamaJeans. Her order of two pairs of PajamaJeans would cost $15.90 for shipping, even though both pairs would be in the same box.

Retailers can set whatever price they want on shipping costs, including charging shipping costs per item, not per shipment. That said, the advertising used by PajamaJeans is unclear and misleading in terms of what shipping and handling would cost a consumer. If you’re buying multiple pairs of PajamaJeans, those costs can add up fast, even with all of your order being in one box.

Consumers need to pay careful attention to these hidden add-ons when they are ordering products online or on the phone. If the math doesn’t seem right to you, ask for an itemized rundown and explanation of your bill. You may or may not be able to talk the retailer into a reduced charge, but with all the facts you can make what you think is the best decision in terms of buying the product or not.