States give consumers more protection

Iowa moves ahead on consumer rights bill
Iowa would join every other state in allowing consumers to individually sue companies for fraud under the state consumer protection law. But the bill is criticized for too many exemptions: insurance companies, banks, lawyers, cable TV providers, doctors, veterinarians and architects.The governor still must sign the measure.
Des Moines Register

Now, how do you pay for college?
The Illinois state treasurer is trying to recoup money parents had invested in a state-sponsored college savings program. One investment option lost $85 million last year.
CBS 2 Chicago

New Jersey plan would require greater notice on debt
A bill in the New Jersey General Assembly would require debt collection agencies in the state to provide debtors with additional information about their accounts, a copy of the Fair Debt Collection Practices Act and would increase fines per violation to at least $10,000.
InsideARM

Industry study: Consumer bankruptcy filings up 41% from last year

Forty-one percent more consumers filed for bankruptcy in March 2009 than in March 2008, according to an analysis by a loan industry group.

Last month there were 121,413 consumers who filed for bankruptcy, the American Bankruptcy Institute said, noting that number is also a 24 percent jump from February.

“Given the great financial stress facing U.S. households today, the March numbers are consistent with our prediction of over 1.4 million consumer filings for 2009,” ABI Executive Director Samuel Gerdano said in a statement.

If you're worried about your personal finances, check with CR's Money team for advice on protecting yourself during the recession.

Congressional hearings tackle consumer credit issues

More and more of us having trouble paying the bills--whether they're from the mortgage, credit cards, or car loans--and it doesn't look like there is a bailout in store for individual consumers. But all of our tough times being talked about in Washington.

Today two Congressional hearings tackled the problems consumers are having in this recession. A House subcommittee examined "Consumer Credit and Debt: The Role of the Federal Trade Commission in Protecting the Public,” while a Senate subcommittee took on “Abusive Credit Card Practices and Bankruptcy.”

The head of the FTC told the House Subcommittee on Commerce, Trade, and Consumer Protection that his agency is trying to protect regular folks, but it needs more funding and more authority.

"The agency has used its traditional consumer protection tools of law enforcement, broad-based research and policy development, and consumer and business outreach to provide important protections for consumers of financial services," FTC Chairman Jon Leibowitz said. "However, the Commission must do more. To enable the FTC to perform a greater and more effective role protecting consumers, it recommends changes in the law and resources to enhance its authority to promulgate needed rules, prosecute cases against law violators, and conduct critical research. If given more authority, the Commission certainly will use it to protect consumers."

The Senate hearing focused on one area of personal finance over which the FTC chief said his agency had very little authority: credit cards.

Senators on the Judiciary Subcommittee on Administrative Oversight and the Courts heard about how credit card companies--some of which have taken billion-dollar bailouts from the government--are treating their customers.

"The standard credit card agreement gives the lender the power to bleed their customer through evolving and ever more crafty trick and traps," Sen. Sheldon Whitehouse said. "Under this business model, the lender focuses on squeezing out as much revenue as possible in penalty rates and fees, pushing the customer closer and closer to the edge of bankruptcy."

Whitehouse is sponsoring legislation that would limit interest rates that credit card companies can charge consumers who are in bankruptcy proceedings.

The proposal would change bankruptcy laws to dissolve claims for repayment of debt carrying interest over a certain level, now 18.5 percent, according to the Associated Press. It could affect millions of dollars in claims made by credit card companies from consumers who have filed for bankruptcy protection.

Bankrupt Fortunoff to honor some pre-paid furniture sales

New York's Attorney General Andrew Cuomo is claiming a victory for consumers who pre-paid for furniture at the now-bankrupt Fortunoff, a New York-based clothing, jewelry, and home goods store.

Cuomo's office said that after it declared bankruptcy, Fortunoff canceled its deliveries of pre-paid furniture orders and was selling those items in its liquidation sales.

The state attorney general's office yesterday announced that Fortunoff will "fulfill consumers’ pre-paid orders of in-stock furniture."

"The Attorney General urges all consumers who paid in full for furniture that has not been delivered to contact Fortunoff immediately to request delivery of any in-stock items," Cuomo's office said in a statement.

Some advice from Cuomo's office for Fortunoff customers who aren't covered:

While fully-paid orders of in-stock furniture will be fulfilled, partially-paid orders and fully-paid orders of furniture that is not in stock do not qualify for delivery under the bankruptcy court proceedings. Consumers that do not qualify for delivery and used a credit card to purchase the undelivered furniture should dispute the charges with their credit card companies. Consumers should dispute these charges as soon as possible in order to meet deadlines for disputing charges.

This is not the first time Fortunoff's post-bankruptcy plans have been reversed by New York's attorney general. In February, Cuomo's office reached an agreement with the store's liquidators to to accept the retailer’s gift cards and credit slips at its going out of business sale.

For more on how you as a consumer can deal with a bankrupt business, see Tightwad Tod's tips to avoid becoming a creditor.