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MontPIRG's consumer program works to strengthen consumers'
power in the market place, which is of continuing importance today in
light of increasing corporate consolidation and the proliferation of special
interest influence in government. MontPIRG investigates and exposes consumer
businesses that prey on the good faith of customers, educates consumers
about their rights and remedies under the law and advocates for consumer
reforms where appropriate.
To this end MontPIRG watchdogs the financial services industry and
utilities, provide information on tenant-landlord right and responsibilities,
and protect consumers' right to privacy.
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$$ Predatory Lending $$
in Montana
The ads are
on the radio, TV, the Internet, even in the mail. They promise quick
cash, convenience and no credit checks. They may go by the name of
payday loans, check loans, or deferred deposit loans, but no matter what
they’re called, they are all the same. The loans are small, short-term
and outrageously expensive.
A deferred deposit loan is a small loan secured by a personal check, usually
post-dated to the customer’s next payday. In Montana, the maximum legal
interest rate on a deferred deposit loan is 25% of the face value of the check,
over 500% APR, one of the highest legal limits in the country. Lenders
defend these usurious rates by saying that since the loan may be for only
a few days and is never longer than a month, quoting the APR is misleading.
The facts are, however, that many low income consumers get sucked into a
downward spiral of debt, often taking out one payday loan to pay off another,
racking up interest and fees without paying down the principal. A financial
analyst covering the payday loan industry reports that the average user takes
out 11 loans per year. Payday lenders prey on low income consumers
without access to other forms of credit, extracting interest rates that would
make a loan shark blush.
Montana needs to reform the Deferred Deposit Lending Act to better protect
these vulnerable consumers. The maximum interest rate allowed should
be lowered and the minimum term of loans should be extended to at least 14
days. Without these basic reforms, Montana’s low-income community will
continue to abused by unfair and unconscionable payday lending practices.
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Qwest & Consumer Privacy
Under pressure from
MontPIRG and other consumer groups Qwest Communications recently announced
it would temporarily cease sharing private customer account information.
MontPIRG has called on Qwest to permanently reject the sale of detailed
calling records of their customers without a customer’s specific consent.
“The practice of selling detailed customer calling
records without specific consent from the customer is unfair and jeopardizes
the privacy of consumers,” said Joshua Davis, MontPIRG Consumer Advocate.
“Qwest should recognize their customers’ right to privacy and to vigorously
advocate for explicit customer consent before having their private information
shared, traded, or sold.”
Last December, Qwest Communications notified
customers that they would begin selling detailed calling and account information.
Buried in the fine print, customers were told they had thirty days to “opt-out”
of the process by calling a toll free number or visiting the company’s
web site. Most Qwest customers, however, never saw the notice and even
those who did read it had a difficult time understanding the convoluted
legalese in which it was written.
MontPIRG encourages all companies considering
sharing or selling customer information to adopt an “opt-in” standard.
With an “opt-in” standard a customer must give explicit consent to have
their private information shared, traded, or sold. Montana’s privacy
laws already require the “opt-in” standard for both nonpublic personal
financial information and nonpublic personal health information.
Responding to the outcry by MontPIRG, consumer
advocates, and angry customers Qwest, in January, decided to delay their
planned release of customer information until the Federal Communication
Commission (FCC) finalizes rules regarding the use of such information.
MontPIRG has worked with Attorney General Mike
McGrath and members of the Public Service Commission to actively pursue
the issue in order to protect Montanans’ constitutional right to privacy.
In February, McGrath joined attorney generals from 39 other states in submitting
comments to the FCC supporting an opt-in rule.
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Tenant-Landlord Hotline
Consumer Federation of America