DISB’s New Commissioner to Continue the Work of Protecting Consumers’ Financial Interests
DISB’s new Commissioner Gennet Purcell commented recently that she sees the work of consumer protection as a partnership between agency staff and District consumers. She said that while the agency has been able to preempt certain issues residents had, she said staff relies on District consumers contacting the agency to file a complaint or to get more information. Commissioner Purcell, who was confirmed November 3 in a unanimous vote by the Council of the District of Columbia, said that during her tenure as commissioner, she will continue to work to protect the interests of consumers from financial fraud and abuse, and encourage the growth of the financial-services business sector that brings jobs and tax revenue to the city.
Commissioner Purcell was appointed by Mayor Adrian M. Fenty on August 28, 2009, after serving as DISB’s Deputy Commissioner since 2008. Commissioner Purcell is an attorney and member of both the State of Maryland Bar and the Commonwealth of Virginia Bar. As deputy, her primary responsibilities included oversight of the agency’s core functional areas, including the divisions of Insurance, Securities, Banking, Fraud Enforcement and Investigation, and Risk Finance. During her tenure, Commissioner Purcell has shown strong commitment to consumer protection and access to financial services. In particular, she will be focused on realigning and centralizing the consumer protection and advocacy functions in the office. Also, she is working to ensure that financial-services in the District are more affordable and accessible; that the agency continues to protect and educate investors and consumers; that banking services are expanded to all communities; that partnerships in enforcement and investigation are enhanced; and that the momentum of captive insurance in the District is ongoing.
Commissioner Purcell earned her bachelor’s in political science from York University, and her Juris Doctor degree from Howard University School of Law. She encourages residents to call DISB for one of four things: to file a complaint or report fraud; to verify that a financial institution is licensed with DISB; to access consumer information; or to request a speaker. Contact DISB at (202) 727-8000.
FBI Issues Warning About Haitian Earthquake Relief Fraud
In light of the devastating earthquake that hit the Caribbean island of Haiti on January 12, the Federal Bureau of Investigation reminded Internet users who receive appeals to donate money to apply a critical eye before responding to those requests. Past tragedies and natural disasters have prompted individuals with criminal intent to solicit contributions purportedly for a charitable organization or a good cause.
Therefore, before making a donation of any kind, consumers should adhere to certain guidelines, to include the following:
- Do not respond to any unsolicited (spam) incoming e-mails, including clicking links contained within those messages.
- Be skeptical of individuals representing themselves as surviving victims or officials asking for donations via email or social networking sites.
- Verify the legitimacy of nonprofit organizations by using various Internet-based resources that may assist in confirming the group’s existence and its nonprofit status rather than following a purported link to the site.
- Be cautious of emails claiming to show pictures of the disaster areas in attached files because the files may contain viruses. Only open attachments from known senders.
- Make contributions directly to known organizations rather than relying on others to make the donation on your behalf to ensure contributions are received and used for intended purposes.
- Do not give your personal or financial information to anyone who solicits contributions: providing such information may compromise your identity and make you vulnerable to identity theft.
Anyone receiving an email referencing the above information or anyone who may have been a victim of this or a similar incident should notify the IC3 via ic3.gov.
Protecting Your Financial Interests: DISB Releases 2007/2008 Biennial Report
DISB in early November released its fiscal years 2007/2008 biennial report. Using the theme, “Protecting Your Financial Interests,” the report highlights the collaborative efforts of the agency in the middle of a devastating and arguably unparalleled downturn in the US economy.
DISB Commissioner Gennet Purcell said the report showcases the dynamic and responsive leadership demonstrated by the agency following major financial events. The 52-page report, covering October 1, 2006 to September 30, 2008, includes DISB’s notable achievements and progress in the areas of financial solvency and stability, market regulation, fraud enforcement, spurring economic development, its legislative agenda, modernization, consumer outreach and advocacy, and promoting the District’s Green Agenda. Released during DISB’s third observance of Health Insurance Awareness Month, the report will continue DISB’s branding and social marketing campaign, which was launched 2007, to continue increasing the public’s awareness of the agency as a great resource on financial matters. To view an electronic version of the DISB Biennial Report.
Stopping Elder Financial Abuse
The North American Securities Administrators Association (NASAA) recently announced strong support for two bicameral bills introduced in Congress aimed at protecting senior investors. The Senior Investment Protection Act would create a new grant program to assist states in their efforts to protect seniors from misleading financial adviser designations by encouraging them to adopt NASAA’s model rule. The Senior Investor Protection Enhancement Act would enhance penalties for violations of securities laws involving senior victims. Colorado Securities Commissioner Fred Joseph, NASAA’s then-president, commended several congressional members for spotlighting the growing threat of elder financial abuse and taking steps to protect the nation’s seniors. He said that NASAA, of which DISB is a member, believes the predators who intentionally seek to deprive retirees of the savings they have worked their lifetime to accumulate should be subject to enhanced penalties. The two bills will assist state securities regulators in their mission to protect every investor, especially seniors who are most vulnerable to fraud and abuse.
Counseling Assists Homeowners Facing Foreclosures, Report Shows
A recent report done by the nonprofit Urban Institute concluded that homeowners in a federal foreclosure counseling program somewhat reduced the likelihood that their homes would end up in foreclosure. The report on the National Foreclosure Mitigation Counseling (NFMC) program estimated that during its first year, counseled homeowners were almost twice as likely to get out of foreclosure, and avoid a foreclosure completion, than they would have been had they not received NFMC counseling. Loan modifications received by NFMC clients resulted in much lower mortgage payments than what they would have received without the help of the program. Lower monthly payments tend to reduce the chances of a subsequent recurrence of borrower mortgage problems. On average, the study estimated that NFMC clients receiving loan modifications reduced their monthly payments by $454 more than they would have without such counseling.
DISB Commissioner Gennet Purcell said this was encouraging news as the agency has reiterated that consumers get counseling, since the start of this housing crisis. DISB has worked with several District housing counselors, forwarding referrals, co-hosting foreclosure prevention seminars and making available the agency’s Foreclosure Mitigation Kit. There have been instances, too, where DISB has intervened with lenders to help keep homeowners in their homes. The NFMC program is a special federal appropriation, administered by NeighborWorks® America, designed to support a rapid expansion of foreclosure intervention counseling in response to the nationwide foreclosure crisis. DISB encourages residents who may have received foreclosure notices, or who may be having problems paying their mortgages, to call DISB at (202) 727-8000.
Select this link for a copy of the full Urban Institute report.
DISB Assists District Residents
Residents Recover Overpaid Taxes and Avert Foreclosure
DISB successfully resolved three consumer complaints from District residents who were in danger of losing their homes to foreclosure due to a property tax error. Each of the residents’ homes had been assessed as abandoned property taxes because of an incorrect coding. The lien holders who had paid the taxes and charged the residents’ escrow accounts for the tax deficit, threatened foreclosure when the residents fell behind in their mortgage payments as a result of the increase in taxes. With DISB’s intervention, approximately $48,000 was refunded to the lien holders and the foreclosures were stopped.
Consumer’s Physical Therapy Benefits Restored
DISB intervened on behalf of a consumer whose benefits for physical therapy were denied by an insurance company. The consumer’s son was receiving physical therapy, for which the company was paying, from a provider that abruptly closed operations. The consumer contacted the insurance company to find another approved physical therapist. The company failed to inform the consumer that a local medical center was an approved provider, and instead advised that there were no approved providers within 50 miles. The consumer obtained treatment from that center but the insurance provider denied coverage citing a policy provision that benefits for physical therapy were limited to 60 consecutive days. DISB cited the company’s failure to direct the consumer to the center as contributing to the delay and as a result, it agreed to waive the 60-day provision and extend physical therapy benefits.
Residents needing any financial-services assistance such as these, please call DISB at (202) 727-8000.
DISB in the Community
Light Up Washington 2009
Light Up Washington 2009 was designed to stimulate the growth of small businesses and provide employment to the unemployed. Held May 12, at the Walter E. Washington Convention Center, DISB was on hand to provide information, along with other government agencies, private industry firms and other small business owners.
DC Homeownership Expo and Foreclosure Clinic
DISB cosponsored a free event, the DC Homeownership Expo & Foreclosure Clinic, in conjunction with the DC Housing and Community Development, the Housing Finance Agency, DC Housing Authority, and the Greater Washington Urban League on June 20, where hundreds of residents showed up at the Walter E. Washington Convention Center in a torrential downpour. The agency was able to assist residents who were facing home foreclosure.
Akoma Project Health Fair —Saturday, February 6, 2010, 10 am to 3 pm, DISB will have an exhibit table at this annual event at the Union Temple Baptist Church, Fellowship Hall, 1225 W Street, SE. Staff will be on hand to answer questions and to give information about the agency to attendees.
Student Council Dental Health Fair —Saturday, February 13, 2010, 9 am to 3 pm, DISB will be present at 600 W Street, NW, to provide information on its consumer protection and health insurance information.
Ward 8 Financial Services Townhall Meeting —Thursday, February 25, 2010, 6:30 pm to 8:30 pm, THEARC, 1901 Mississippi Avenue, SE. DISB hosts a community-based town hall meeting designed to connect federal and local government officials with the District’s Ward 7 and 8 residents. Speakers include representatives from Securities and Exchange Commission, the Federal Deposit Insurance Corporation and the Federal Reserve Bank. The goal is to provide up-to-date information and stimulate dialogue on financial policy, programs and services that affect the community and document issues important to area residents and stakeholders..
Consumers Satisfied With Insurers, New Study States
An overwhelming majority of consumers with auto and homeowners insurance are satisfied with their insurance companies, according to a new public opinion study by the Insurance Research Council (IRC) released last August. Ninety-one percent of respondents with auto insurance said they were either very satisfied (61 percent) or fairly satisfied (30 percent) with their current auto insurer. Eighty-nine percent of homeowners said they were either very satisfied (56 percent) or fairly satisfied (33 percent) with their homeowners insurance company. The study also found that most consumers are satisfied with the experience of shopping for auto insurance. Among respondents who had shopped for auto insurance in the previous 12 months, three out of four respondents said they were very satisfied (24 percent) or fairly satisfied (51 percent) with the overall experience. Sixty-nine percent were very or fairly satisfied with the range of product and price options they found. The study also looked at satisfaction among respondents in two groups of states with different levels of government involvement in the insurance market. It found that respondents in states with government-based regulation of the insurance market were no more likely than those in states in which insurance is primarily regulated by market forces to say they were satisfied with their auto or homeowners insurer. For more information, visit the IRC’s website at ircweb.org.
DISB Issues Bulletin on Impact of Same-Sex Marriage Law on Insurance
In July, DISB issued a bulletin informing licensed insurance providers of the enactment of a new law on marriage and domestic partnerships, which may impact insurance coverage eligibility. The bulletin stated that all insurance companies licensed to do business in the city must include in the policies coverage for the same-sex spouse or same-sex domestic partner of the insured, according to the new law. The law was applicable to health insurance policies as well as life, auto and home insurance policies. The bulletin instructed them to apply requirements of the law to all policies, issued or renewed, regardless of the description of the relationship as a civil union or domestic partnership. In December 2009, Mayor Adrian M. Fenty signed a law recognizing same-sex marriages in the District of Columbia. It will be in effect March 2010. In July, he had signed the law recognizing such marriages performed in other states or countries. In response to this July law, the new bulletin states that insurance products covering the spouse of a primary insurance policyholder must also cover the same-sex spouse or same-sex domestic partner of the insured in the same manner.
DISB Recognizes September’s Life Insurance Awareness Month
According to LIMRA International, an insurance research firm, an estimated 68 million adult Americans do not have life insurance; and most of those with coverage are underinsured, carrying far less than most experts recommend. Life insurance is used as a financial tool to protect loved ones against the risk that a person will die too soon and be unable to fulfill the financial obligations left behind. In the event of your passing, life insurance provides money directly to your beneficiaries. To urge more District residents to consider life insurance in their financial planning, DISB used the month of September to encourage residents to take stock of their life insurance needs during this year’s Life Insurance Awareness Month.
If persons have doubts about how their family would manage without them, DISB’s Commissioner Gennet Purcell suggested it was time to take charge of the situation by getting a life insurance check-up. She offered the following tips:
- Step 1:
Check out DISB’s website, which offers a wealth of information on types of life insurance, and allows the opportunity to check whether an agent or company is licensed in the District.
- Step 2:
Know the right questions to ask. Once you’ve determined you need life insurance, the very first question you always need to ask is, “How much do I need?” If you die prematurely, you want to know that loved ones will have enough to continue living the kind of life you hoped they’d have.
Remember, there is no substitute for the guidance and assistance from meeting with a licensed insurance agent or other financial professional. So if you’re seriously considering ways to protect your family’s future, seek professional advice. When you’re ready to shop, it’s always a smart idea to seek assistance from a qualified life insurance professional. A good insurance advisor will take the time to carefully assess your needs, and provide you with options from which to choose. To find out whether an agent or company is licensed in the District of Columbia, contact DISB at (202) 727-8000.
Senior Fraud Forum
Older members of the District of Columbia’s population are particularly susceptible to financial fraud, so during the summer, DISB joined the DC Office on Aging, the Department of Consumer and Regulatory Affairs and the Office of the Attorney General to host a senior fraud forum on investor fraud during the city’s fifth annual Financial Fraud Awareness Week. The Ward 7 event gave seniors an educational opportunity to address the various types of financial fraud affecting them. They learned how to spot fraud and what tools are available to protect themselves.
Any District resident needing more information on Fraud Awareness Week or to report suspected fraud should contact DISB at (202) 727-8000 or its Enforcement and Investigation Bureau at (202) 727-1563.
New AARP Survey Shows High Level of Concern About Impact of Financial Scams Among 55+ Population
More than three-quarters of older Americans are concerned that financial scams will damage their retirement nest eggs or those of someone they know, AARP and North American Securities Administrators Association (NASAA) said early November.
In a survey released by AARP, 78 percent of Americans age 55 and over said they are very or somewhat concerned about financial scams affecting them or someone they know. A common setting for fraudsters to engage with their victims is by offering a free lunch or dinner, by which an older individual near retirement age is solicited to attend and learn more about investing in retirement.
For attendees of these free seminars, the potential cost can be quite high. Of those who attended a seminar, more than three out of four (78 percent) expected that the free financial seminar would center on opportunities to learn more about financial issues. However, once at the seminar, half of seminar attendees said the presenter asked them for personal information, such as their contact information or information about their finances and 46 percent reported that presenter attempted to make a follow-up appointment at their home. Nearly 40 percent reported that the presenter tried to sell them financial products either during or after the seminar.
Nearly 6 million Americans age 55 and older have attended a free lunch or dinner in the past three years, and with more than a quarter receiving 10 or more invitations.
In response to such solicitations, AARP launched the Free Lunch Monitor program in collaboration with NASAA, of which DISB is a member, in October 2008. Its goal was to raise public awareness about the possible dangers of attending free lunch seminars, empower investors of all ages with the tools to decipher fraudulent educational presentations, and share a tool to report suspicious activity.
To learn more about the Free Lunch Monitor program or to become a monitor, visit aarp.org/nofreelunch.