NARRATOR (00:00):
Welcome to module three on financial products and identity theft rights. This module is part of a series called Helping clients explore their personal finance rights from the Consumer Financial Protection Bureau.
NARRATOR (00:14):
This presentation is being made by a Consumer Financial Protection Bureau representative on behalf of the bureau. It does not constitute legal interpretation, guidance, or advice of the Consumer Financial Protection Bureau. Any opinions or views stated by the presenter are the presenter's own and may not represent the bureau's views.
NARRATOR (00:36):
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. CFPB FinEx is a place where financial educators, practitioners, counselors, researchers, and others can share information and best practices, learn from one another, advance their work, and see what CFPB is doing to help consumers.
NARRATOR (01:10):
Welcome to module three on financial products and identity theft rights. This module is part of a series designed to help you as a practitioner, help your clients learn about their rights. After watching this module, check out our final module to learn how you can help clients submit complaints if they have a problem with a financial product or service and need a direct response from a company, or tell their story, if they don't have a complaint, but just want to tell the CFPB about an experience, good or bad, that they've had with money and financial services.
NARRATOR (01:45):
In module three, we will learn about consumer rights related to managing money, identity theft, fraud, and scams. Partner with clients to avoid fraud and scams and explore additional resources to help you in your work.
DAVID (02:01):
Hi again. Many of my clients are interested in managing their money with bank accounts or prepaid cards. Let's explore bank accounts and prepaid card rights.
DAVID (02:12):
When a client is shopping for a product or service like a bank account, it is good practice to compare options and prices. Unfortunately, fees a person doesn't shop for when comparing products are becoming more common. These junk fees show up on bank accounts as overdrafts, using out-of-network ATMs and more. With overdraft fees, a cup of coffee can go from $3 to $35. Junk fees drain tens of billions of dollars per year from people's budgets. And when these fees are hidden, it makes it harder for clients to recognize the benefits of competition. I talk with clients about junk fees to make sure they know the true cost of the product or service they are considering. I also share some of the things I've learned about bank account rights.
DAVID (02:59):
Federal law generally does not limit the amount of checking account fees, but a bank or credit union cannot charge a person more than the fee that was disclosed to them when they opened their account. Banks or credit unions can add new fees, but in most cases, they must give a person at least 30 days notice before adding a new fee or increasing an existing one. I get lots of questions about bank and credit union fees, so I will share this information with clients.
DAVID (03:28):
Some clients may choose to manage their money using government benefit cards, payroll cards, and/or prepaid cards. In fact, some state and federal government agencies use prepaid cards to pay benefits like unemployment where each month the benefit amount is loaded onto the card. In general, federal and some state government benefit cards have certain legal protections under federal law, including limitations on liability for fraudulent or unauthorized charges.
DAVID (03:57):
I'll tell my clients to read the card holder agreement carefully before using the card to understand how to avoid the fees. Depending on the benefit, a client can choose to get it by direct deposit or use a prepaid card they choose. Clients may have options. Some employers may also offer a payroll card. However, an employer can't require a person to receive their wages on a payroll card and has to offer at least one alternative. If a person's employer offers a payroll card, the employer or the card issuer must provide the card's terms and conditions to the employee in advance. Whether or not money on a prepaid card is insured by the Federal Deposit Insurance Corporation, FDIC, or National Credit Union Administration NCUA, it depends on the card program. Not all cards have insurance. So be sure to check the card holder agreement.
DAVID (04:52):
What is FDIC and NCUA insurance? For individuals, the government guarantees a person will get back up to $250,000 of the money in their account if the bank or credit union goes out of business. Funds loaded onto prepaid cards are typically held in pooled, not individual accounts at banks or credit unions. These accounts may qualify for FDIC or NCUA pass-through insurance if they meet certain requirements. The CFPB's prepaid rule requires prepaid card providers to inform a person pre-purchase whether the money in the account is eligible for pass-through insurance.
NARRATOR (05:37):
Knowledge check. A person has the right to receive their paycheck another way if their employer uses a payroll card. True or false? If you said true, you are correct. The employer has to offer at least one alternative to a payroll card.
DAVID (05:55):
Thanks for exploring bank account and prepaid card rights together. You might remember Jane from last time. Jane was behind on rent, but was able to access the help that she needed. Separately, Jane reviewed her credit reports while working on improving her finances. Jane thinks she might be a victim of identity theft because of incorrect information on her credit report.
DAVID (06:19):
I'm going to visit consumerfinance.gov to learn more about identity theft. Let's check out the information. Identity theft occurs when someone steals a person's identity to commit fraud. Stealing someone's identity could mean using personal information without permission, such as their name, social security number, or credit card number. Identity thieves may rent apartments, get credit cards, start other accounts using the victim's personal information.
NARRATOR (06:51):
A person can keep an eye out for identity theft by reading their financial accounts and billing statements. The person can look closely for charges they did not make. Even a small charge can be a danger sign. Thieves sometimes will take a small amount from a checking account and then return to take much more if the debit goes unnoticed. Reviewing credit reports can also help someone's spot identity theft. If an identity thief is opening financial accounts in a person's name, these accounts may show up on their credit report.
NARRATOR (07:24):
Remember, consumers can access free credit reports by visiting annualcreditreport.com. A person is entitled to a free credit report every 12 months from each of the three major consumer reporting companies, Equifax, Experian, and TransUnion, and may be entitled to extra reports in special circumstances.
NARRATOR (07:48):
If a person believes they have been a victim of identity theft, they can file an identity theft report by filing a police report or a report with a government agency such as the Federal Trade Commission. They can also notify creditors directly that they have been the victim of identity theft. Identitytheft.gov is the federal government's one-stop resource for identity theft victims. The site provides streamlined checklists and sample letters to guide someone during the recovery process. A person can also consider placing a fraud alert on their credit report. Let's take a look.
NARRATOR (08:26):
If a person thinks that they have been a victim of fraud or identity theft, they can contact one of the nationwide credit reporting companies, Equifax, Experian, or TransUnion to place a fraud alert on their credit report. A fraud alert requires creditors who check a person's credit report to verify the person's identity before opening a new account, issuing an additional card or increasing the credit limit on an existing account. When a person places a fraud alert with one of the nationwide credit reporting companies, that company must notify the others.
NARRATOR (09:03):
There are two main types of fraud alerts. First, initial fraud alerts can be placed on a person's credit report if they believe they are or are about to become a victim of fraud or identity theft. Credit reporting companies keep the alert on file for one year. After one year, the initial fraud alert will expire and be removed. The person has the option to place another initial fraud alert at that time. When a person places an initial fraud alert on their file, they're entitled to order one free copy of their credit report from each of the nationwide credit reporting companies. These free reports do not count as the person's free annual credit report.
NARRATOR (09:45):
The second type is an extended alert. To place one, a person must have filed an identity theft report. An extended alert is good for seven years. When a person places an extended fraud alert in their file, they're entitled to order two free copies of their credit report from each nationwide credit reporting company over a 12-month period.
NARRATOR (10:09):
Knowledge check. A person can place an initial fraud alert if they believe they are about to become a victim of fraud or identity theft. True or false? If you said true, you are correct. Initial fraud alerts can be placed on a person's credit report if they believe they are or are about to become a victim of fraud or identity theft. Credit reporting companies keep the alert on file for one year.
NARRATOR (10:38):
Another option is security freezes. A person can freeze and unfreeze their credit record for free at the three nationwide credit reporting companies. A security freeze is sometimes called a credit freeze and stops new creditors from accessing a person's credit file and others from opening new accounts until the freeze is lifted. The federal law requiring free security freezes does not apply when someone requests a person's credit for employment, tenant screening, or insurance purposes. Unlike fraud alerts, a person must contact each credit reporting company individually if they would like to place a security freeze with all three nationwide credit reporting companies.
NARRATOR (11:21):
Members of the military, such as members of the Marines, Army, Navy, Air Force and Coast Guard have an additional option available to them, active duty alerts, which gives service members protection while they're on active duty. Active duty alerts last for 12 months. When a service member places an active duty alert on their credit report, creditors must take reasonable steps to verify the identity of the person making the request before opening an account, issuing an additional credit card on an existing account, or increasing the credit limit on an existing account. The service member's name is also removed for two years from the nationwide credit reporting company's pre-screen marketing lists for credit offers and insurance.
DAVID (12:08):
Jane was able to put a fraud alert on her credit report and worked to get credit errors removed. Thanks for helping me find the information she needed. I also want to partner with clients to avoid fraud and scams. Let's take a look.
DAVID (12:24):
Criminals and con artists use many scams to target unsuspecting people who have access to money. Consumer scams happen on the phone, through email, over the internet. They can occur in person, at home, or at a business. I'm going to share these tips with clients so they can protect themselves from scams. Don't share numbers or passwords for accounts, credit cards, or social security. Never pay up front for a promised prize. It's a scam if a person is told that they must pay fees or taxes to receive a prize or other financial windfall. After hearing a sales pitch, take time to compare prices, ask for information in writing and read it carefully. Too good to be true? Ask yourself why someone is trying so hard to give a great deal? If it sounds too good to be true, it probably is.
DAVID (13:16):
Watch out for deals that are only good today, and that pressure a person to act quickly. Walk away from high-pressure sales tactics that don't allow time to read a contract or get legal advice before signing. And consider putting your number on the National Do Not Call Registry. Go to www.donotcall.gov or call 888-382-1222.
DAVID (13:46):
Unfortunately, some clients become victims of fraud or scams, but they still have options. They can contact the local police or sheriff's office to report the scam. Contact the state attorney general. They can visit the National Association of Attorney General's website for the contact information of each state. If the victim is an older person or a person with a disability, contact the local Adult Protective Services agency. Submit a complaint with the Federal Trade Commission, and if their credit report was impacted, they can also submit a complaint to the CFPB.
DAVID (14:23):
I feel much better knowing how I can partner with clients in these difficult times. Join me in the next module where we'll explore the CFPB complaint process.
NARRATOR (14:34):
Don't forget. You can always access resources and learn more. On consumerfinance.gov look for information you need to help clients explore their personal finance rights. Our slides featured a variety of resources. Use these links to visit sources.
NARRATOR (15:23):
To continue to learn more, join the CFPB FinEx community. You'll receive updates by email and engage with a large network of practitioners. You can also access the LinkedIn discussion group for news, research, and best practices. Plus, stay-up-to-date with webinars, regional meetings and conferences, all while meeting CFPB presenters who can work with your organization. Use the link to join today.
NARRATOR (15:52):
Thank you for joining us as we explored personal finance rights. Our final module is up next. Please join us.

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