Editorial: Consumers finally get some help
One of the reasons the wealth disparity is so far out of whack in this country is that the middle class has gotten nickled and dimed to death through corporate rip-offs.
Big banks have long been some of the worst offenders, with practices that include raising interest rates arbitrarily on credit cards and stacking transactions largest to smallest to reap hundreds of dollars in overdraft fees.
The new Consumer Financial Protection Bureau will help stop the most egregious abuses, and its creation was a big win for the little guy.
White House "consumer czar," Elizabeth Warren said recently as part of a public panel: "This is an agency that was formed notwithstanding the fact that the most powerful lobbying group in Washington said -- and I quote -- 'We will kill this agency. It will never see the light of day. In effect we will smother it before it's even born,'" said Warren. "And yet here it is."
According to the Politics Daily website, Warren said she will focus on regulation of financial businesses that "compete in ways that are not visible to the consumer of the product," taking no issue with groups that "compete in ways that consumers can see."
She said her work would be transparent, saying the bureau "Goes back to the American people, goes back to Congress, every six months and says, "Here's where we are and here's what we're doing. You can hold us accountable.'"
The big banks are far from alone in abusing consumers, as two recent news items show, some cell phone companies and mortgage companies are also guilty, and you don't have to look too far to find other examples.
U.S. Sen. Al Franken recently pressed the Government Accountability Office to investigate whether Ally Financial, JP Morgan Chase, Bank of America and other mortgage servicing companies and banks routinely filed false affidavits, triggering thousands of illegal foreclosures on unwitting homeowners in Minnesota and across the country.
The senators also asked the GAO to investigate the role of government entities involved in overseeing mortgage servicing, identify any regulatory problems, and give recommendations on whether regulatory agencies should be given additional authority to remedy any problems
U.S. Sen. Amy Klobuchar, meanwhile, is among those calling for greater oversight of billing practices in the wireless industry.
Verizon Wireless' recent announcement that it will reimburse 15 million of its customers for charges incurred when they inadvertently accessed the Internet.
"As Verizon Wireless' recent decision makes clear, wireless consumers are often faced with confusion over wireless charges and uncertainty about their bills," the senators wrote in the letter.
Wireless billing practices often leave customers confused. A recent survey conducted by the FCC showed that only 36 percent of cell phone customers who are familiar with their bills said that they include "very clear" information on Early Termination Fees.
Additionally, 43 percent of wireless customers feel compelled to stay with their current carrier because of ETFs, and 1 in 6 customers suffer from "Bill Shock."
It's high time the pendulum swung back the other way to give consumers some protection from corporate chicanery.