FTC Comment Before the Consumer Financial Protection Bureau Concerning Effective Financial Education Approaches

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Bureau of Consumer Protection
Office of Policy Planning
Bureau of Economics
Ms. Monica Jackson
Office of the Executive Secretary
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552
November 2,2012
Re: Request for Information on Effective Financial Education, Docket No.
CFPB-2012-0030
Dear Ms. Jackson:
The staffs of the Federal Trade Commission's Bureau of Consumer Protection,
Office of Policy Planning, and Bureau of Economics 1 appreciate this opportunity to
provide comments to the Consumer Financial Protection Bureau (CFPB) in response to
its request for information on effective financial education approaches (Docket No.
CFPB-2012:'0030)?
Federal Trade Commission (FTC or Commission) staff commends the CFPB's
efforts to seek more information about approaches for developing and launching
initiatives to educate consumers and help them make beUer-informed financial decisions.
FTC staff believes that education is the first line of defense against fraud and deception.
We are pleased to have an opportunity to provide an overview of the FTC's education
and outreach program, including tools, topics, and dissemination strategies and to
highlight recent education efforts for consumers and businesses as examples ofthe FTC's
education approach. FTC staff also looks forward to continued coordination with CFPB
staff on financial education issues.
I. 	FTC Authority and Experience
The FTC has a long history as the nation's consumer protection agency. The
Commission has used law enforcement, rulemaking, research, educational efforts,
conferences, and workshops to protect consumers from deceptive, unfair, and other
unlawful conduct.
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A. 	Legal Authority
The FTC enforces Section 5 of the FTC Act, which prohibits unfair or deceptive
acts or practices, against a variety of financial service companies. 3 The Commission also
enforces a number of consumer financial services statutes and regulations. These laws
include the Fair Debt Collection Practices Act,4 the Truth in Lending Act and its
implementing Regulation Z, 5 the Home Ownership and Equity Protection Act, 6 the
Consumer Leasing Act and its implementing Regulation M,7 the Credit Repair
Organizations Act,8 the Equal Credit Opportunity Act,9 the Electronic Funds Transfer Act
and its implementing Regulation E,lO and the Omnibus Appropriations Act of2009 (as
clarified by the Credit CARD Act).ll Further, the FTC is authorized to enforce, with
respect to entities within the FTC's jurisdiction, rules promulgated by the CFPB to
protect consumers of financial services, including rules that implement Title X of the
Dodd-Frank Wall Street Reform and Consumer Protection Act. 12
B. 	Experience in Consumer and Business Education
The FTC educates consumers about issues that affect their daily lives, including
their financial well-being, health, and safety. Within the FTC's Bureau of Consumer
Protection, the Division of Consumer and Business Education (DCBE) seeks to educate
and empower consumers by providing them with simple and practical information
adapted for particular audiences. This information helps people understand their rights
and recognize, avoid, and report frauds.
The 21-p~rson staff of DCBE includes writers, marketers, graphic designers, and
web designers and developers. Four staff members are attorneys. Three have MBAs.
Others have advanced degrees in journalism, public administration, and international
studies.
Consumer education is an integral component of the FTC's law enforcement
initiatives. The agency also uses educational materials to raise awareness of major
consumer protection issues (for example, identity theft). DCBE's business model is to
engage consumers and businesses in three main ways: (1) directly, through the FTC's
website (ftc.gov) or its toll-free help line (1-877-FTC-HELP); (2) through the media
(DCBE drafts consumer or business education materials to accompany virtually every
law enforcement announcement by the agency); and (3) through an informal network of
thousands of community-based organizations, who help distribute FTC materials.
DCBE engages with businesses primarily through compliance guides, speeches
and presentations, blog posts, and articles in industry publications. As for reaching out to
consumers, DCBE creates brochures, guides, web sites, videos, public service
announcements, info graphics, newsletters, and social media pieces like blogs.
To maximize its outreach efforts, DCBE aims to be a wholesaler of information,
rather than a retailer. FTC staff works with an informal network of about 10,000
community-based organizations and other interest groups that order FTC products and
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distribute FTC infonnation to their members, clients, and constituents. Most ofthe 10
million or so print publications the FTC distributes each year are disseminated through
these trusted local partners, who include libraries, police departments, schools, non-profit
organizations, banks, credit unions and other corporations, and government agencies.
Staff offers instructions on how to share FTC materials by linking, reprinting, and co-
branding. In addition, the FTC logs more than 28 million accesses of its publications
online every year. The FTC's channel at YouTube.comlFTCVideos houses more than 80
videos and has been viewed nearly one million times during FY 2012.
C. 	Coordination with CFPB on Education
In January 2012, the FTC and the CFPB signed an agreement to coordinate efforts
to protect consumers and avoid duplication of federal law enforcement and regulatory
efforts. 13 Among other things, the agreement requires the agencies to meet at least
quarterly to discuss consumer education materials and their distribution. The agencies
have met and frequently coordinate on these issues. For example, the agencies hosted a
joint webinar in June 2012 for military financial counselors on mortgage-related scams
and the CFPB' s process for resolving complaints from military consumers. The CFPB
distributed the FTC's identity theft outreach materials to military counselors at hundreds
of locations worldwide. FTC staff looks forward to continued coordination with CFPB
staff on financial education issues.
II. 	FTC Education Initiatives
Recent FTC education initiatives offer insights into successful dissemination
approaches that may be considered when designing effective education and outreach
strategies and campaigns: 	C
• 	Digital and Hard Copy Resources on Consumer.gov. Conversations with legal
services attorneys were the impetus for a major effort that involved a re-think of
the infonnation the FTC presents, in both style and substance. FTC staffused
training from the Center for Applied Linguistics in writing and designing for
audiences with low literacy levels and limited English proficiency to create a bank
of basic materials on a variety of topics, including: making a budget, using
prepaid cards, dealing with debt collectors, and payday loans. By focusing on
what the intended audience needs to know, and delivering it in a way they will
understand, these resources go beyond the government's Plain Language
initiative. Short videos, info graphics, read-along audios make this infonnation
even more accessible for site visitors, who can order one-page fact sheets on each
topic. Resources for attorneys, teachers, librarians, and other local leaders to use
in their communities also are available for free. Topics and text were vetted by
lawyers and teachers whose clients and students will use the site. These materials
launched in October at the Consumer.gov and Consumidor.gov sites. Both sites
are mobile-friendly.
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• 	Military Outreach. In an effort to reach the military community, the FTC has
partnered with the CFPB, military contractors, and Military One Source, a one-
stop counseling site for service members, to produce webinars on dealing with
debt, avoiding mortgage fraud, identity theft, job scams, and online safety. More
are scheduled for FY 2013.
• 	Legal Services Education Initiative. FTC staff works with a variety of
community, grass roots, and legal services organizations to reach traditionally
hard-to-reach populations. The groups aim to disseminate educational materials
and gather complaints about their consumers' marketplace experiences. Staffhas
created media available in various foreign languages focusing on recognizing
immigration services scams and providing advice about how to get legitimate
help.14 These resources, now widely used by the U.S. Citizenship and
Immigration Services, the Department of Justice, and many Congressional offices,
are available in English, Spanish, Haitian Creole, Chinese, Korean, and
Vietnamese. In addition, based on conversations with our community partners,
staff released an "easy-to-use" resource on sending money overseas (available in
English, Spanish, Chinese, Korean, Vietnamese, and Tagalog). 15 Another FTC
resource alerts job hunters about their rights regarding background reports. 16 The
Department of Labor has made this information a centerpiece of its career
resources.
• 	Business Center. Business education plays a prominent role in the FTC's
engagement strategy. In September 2010, the FTC's Bureau of Consumer
Protection launched the BCP Business Center (http://business.ftc.gov/) to offer a
one-stop compliance resource for businesses and lawyers. In FY 2012, the
Business Center logged more than 9.7 million unique visitors. As of October
2012, the Business Center blog has more than 8,500 subscribers. Here are a few
examples of positive feedback from users:
"I just want you to know how much I enjoy reading blog updates
for the FTC's Business Center. Your ability to use humor and to
sound like a real human while still getting serious points across is
absolutely amazing. Thank you for bringing knowledge to my
days."
"Too often, the government in general and regulatory agencies in
particular are seen as the bad guys by small businesses, and it's
great to have you reach out to them and give them some insight as
to why the FTC does what it does as well as advice on how to
make compliance work."
• 	Hispanic Outreach. Efforts to reach out to Spanish-speaking consumers include:
(1) development of bilingual consumer education materials, as well as materials in
Spanish; (2) outreach to Spanish-language media; (3) outreach to national
Hispanic organizations; and (4) outreach to state and local organizations. The
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FTC has conducted campaigns for Spanish-speakers on identity theft, online
safety and security, being an informed consumer, and managing money, among
other issues. The agency has more than 220 consumer publications, 20 videos,
and dozens of web sites and online games available in Spanish. In FY 2012, the
FTC logged more than 925,000 page views to its Spanish-language websites and
distributed more than half a million Spanish-language publications. Nearly 4,000
Spanish speakers have subscribed to receive consumer tips and news releases via
email.
• 	Youth Outreach. Admongo, the FTC's advertising literacy campaign launched
in 2010, aims to educate "tweens" (children between the ages of 8-12) about how
to skillfully identify, read, analyze, and understand advertisements. A central
feature of the campaign is Admongo.gov, an interactive website that teaches core
ad literacy concepts through an entertaining game with multiple levels. Other
important elements of the campaign include in-school curricula and marketing
initiatives developed with Scholastic. The campaign emphasizes learning and
applying critical thinking skills. As part ofthis initiative, the FTC created Living
Life Online,17 a website and brochure to encourage digital literacy skills in kids
and teens.
The FTC's You Are Here site - at FTC.govNouAreHere - targets middle level
students who are learning about the role of government agencies. Set in a virtual
mall, the site uses an experiential approach to teach youngsters and their teachers
about the mission of the FTC. Students experience the market from their own
perspective as consumers and learn about advertising, competition, privacy,
identity theft, and common frauds and scams, as they play games, design ads, and
foil alien invaders bent on stealing their personal information.
• 	Identity Theft. For the past 12 years, identity theft has been the top category of
complaint filed in the FTC's online consumer complaint database, Consumer
Sentinel. The FTC receives thousands of contacts each week through its toll-free
hotline and dedicated website. Callers to the hotline receive counseling from
trained personnel on steps they can take to prevent or recover from the crime.
In 2012, the FTC released a second generation of identity theft materials,
including: Taking Charge: What To Do /fYour Identity Is Stolen 18 (a booklet for
victims), Safeguarding Your Child's Future19 (a guide for parents), Identity Theft:
What To Know, What To Do2o (a brochure with just the basics), a brochure for the
military community,21 a bookmark on identity protection, three short videos,22 and
an Identity Theft Outreach Toolkit. 23 In FY 2012 alone, consumers and
organizations asked for more than 2 million copies of these materials and logged
more than 3.6 million web accesses. Since the education campaign's inception in
FY 1999, the FTC has distributed more than 73 million copies of identity theft
materials and logged more than 76 million web accesses.
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• 	OnGuardOnline. The FTC built and manages OnGuardOnline.gov, which has
become the federal government's one-stop website to help people be safe, secure
and responsible online. Sixteen federal agencies are currently partners in
OnGuardOnline. The site receives over 3.6 million unique visits per year. The
site's Net Cetera project grew out of the 2008 Broadband Data Act, which
directed the FTC to conduct a national education campaign on children's online
safety. A guide for parents~ Net Cetera: Talking with Kids About Being Online,24
was the first phase ofthat campaign. Since October 2009, the FTC has distributed
more than 8.2 million copies of the guide. In 2010, staff followed up with a kit to
help peorle reach out to their communities. The Net Cetera Community Outreach
Toolkil 	includes Net Cetera; a booklet for kids (Heads Up); presentation slides
and notes; videos for both parents and children; and ideas to help people spread
the word about being safe online. The toolkit includes practical information about
cyberbullying, texting, file-sharing, and using mobile phones, and current
information about online privacy and security. According to the American
Customer Satisfaction Index, which is used by more than 100 government
agencies to measure customer satisfaction, OnGuardOnline resonates with users,
who gave it an 81 % satisfaction rating. In 2012, the Center for Plain Language
gave the FTC a ClearMark Award of Distinction for the OnGuardOnline.gov
website?6
• 	National Consumer Protection Week (NCPW). The FTC coordinates NCPW
during the first week of March each year, highlighting the consumer education
efforts of local, state and federal consumer agencies and advocacy organizations.
As part ofNCPW, the agency develops an interactive website,27 distributes PSAs
to English and Spanish-language radio stations nationwide, reaches out to partner
organizations, and pitches blogs and websites. During NCPW 2012, partners
organized dozens of events to shine a light on consumer protection messages.
• . Conferences/Workshops/Town Hall Meetings. As part of our outreach
strategy, the FTC presents at conferences and workshops across the country. FTC
staff have participated in events held by the American Library Association,
AARP, the Jump$tart National Educator Conference, Teachers of English to
Speakers of Other Languages (TESOL), NAACP, the Annual Financial Literacy
Leadership Conference, and Financial Literacy Day on the Hill. The FTC also
organizes Common Ground Conferences, which bring together legal services
lawyers, consumer advocates, state Attorneys General, and other law enforcement
agencies to discuss issues affecting vulnerable populations. The FTC also works
with congressional staff to present at town hall meetings, and to provide
constituents with free consumer publications.
• 	Consumer Redress. When the FTC sues companies that make deceptive claims
about their products or services, the lawsuits sometimes result in refunds for
people who bought the product or service. The FTC's dedicated web page-
ftc.gov/redress - offers answers to common questions about the refund process,
and presents an additional opportunity to share tips to help people avoid scams
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David C. Vladeck, Director
Andrew I. Gavil, Director
Howard A. Shelanski, Director

This staffletter expresses the views of the Federal Trade Commission's Bureau of Consumer
Protection, Office of Policy Planning, and Bureau of Economics. The letter does not necessarily represent
the views of the Federal Trade Commission or of any individual Commissioner. The Commission,
however, has voted to authorize staff to submit these comments.
2 	77 Fed. Reg. 46069 (Aug. 2, 2012).
See 15 U.S.C. § 45(a). The FTC Act, however, exempts banks, savings and loan institutions, and
Federal credit unions from the Commission's jurisdiction.
4 	15 U.S.c. §§ 1692-1692p (prohibits abusive, deceptive, and unfair debt collection practices by
third-party debt collectors).
15 U.S.C. §§ 1601-1666j (mandates disclosures and other requirements in connection with
consumer credit transactions); 12 C.F.R. 226; 12 CFR 1026.
6 	15 U.S.c. § 1639 (provides additional protections for consumers entering into certain high-cost
mortgage loans).
7 	15 U. S.c. §§ 1667-1667f (requires disclosures, limits balloon payments, and regulates advertising
in connection with consumer lease transactions); 12 C.F.R. 213; 12 C.F.R. 1013.
15 U.S.C. §§ 1679-1679j (mandates disclosures and other requirements in connection with credit
repair organizations).
9 	15 U.S.C. §§ 1691-169lf (prohibits creditor practices that discriminate on the basis of race,
religion, national origin, sex, marital status, age, receipt of public assistance, and the exercise of certain
legal rights).
10 15 U.S.C. §§ 1693-1693r (establishes the rights, responsibilities, and liabilities of consumers and
businesses engaged in electronic fund transfers); 12 C.F.R. 205; 12 C.F.R. 1005.
11 	Omnibus Appropriations Act of2009, Pub. L. 111-8, 123 Stat. 524; Credit Card Accountability
Responsibility and Disclosure Act of2009, Pub. L. 111-24, 123 Stat. 1734; 12 C.F.R. Part 1014 (prohibits
deceptive mortgage advertising practices); 12 C.F.R. Part 1015 (prohibits deceptive and unfair practices in
connection with mortgage assistance relief services).
12 The Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat.
1376 (July 21,2010). See § 1061(b)(5)(C)(ii), 12 U.S.C. § 5581(b)(5)(C)(ii) (2010).
J3 	See Federal Trade Commission, Consumer Financial Protection Bureau Pledge to Work Together
to Protect Consumers, available at http://www.ftc.gov/opaJ2012/01lftccfpb.shtm.
14 	Avoiding Scams Against Immigrants, available at
http://www.ftc.gov/bcp/edulmicrosites/immigrationiindex.shtm.
15 FTC Offers Advice in Six Languages for People on Wiring Money Overseas, available at
http://www.ftc. gov/opaJ20 12/06/wiremoney. shtm.
16 	What to Know When You Look For a Job, available at
http://ftc.gov/bcp/eduipubs/consumer/alerts/alt080.shtm.
17 	Living Life Online, available at
http://www.ftc.gov/bcp/edulmicrosites/livinglifeonline/index.shtm.
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18 	Taking Charge: : What to Do If Your Identity Is Stolen, available at
http://www .ftc. govlbcpledulpubslconsumer/idtheftiidt04. pdf.
19 	Safeguarding Your Child's Future, available at
http://ftc. govlbcpl edulpubsl consumer/idtheftiidt08. pdf.
20 	Identity Theft: What To Know, What To Do, available at
http://www .ftc. govlbcpledu/pubslconsumer/idtheftiidtO l.shtm.
21 	Identity Theft: Military Personnel & Families: What To Know, What To Do, available at
http://www.ftc.govlbcp/eduipubs/consumer/idtheftiidt02.shtm.
22 	What Is Identity Theft?; Rapid Response Tips; and What To Do If You're A Victim ofIdentity
Theft, available at http://www.ftc.gov/multimedialvideolidentity-theft.shtm.
23 	Protect Your Identity Outreach Toolkit, available at
http://www.ftc.govlbcp/edulmicrosites/idtheft20l2ltoolkit.shtml.
24 	Net Cetera: Chatting with Kids About Being Online, available at
http://www. ftc. govlbcpledulpubsl consumer/techitec04. pdf.
25 	Net Cetera Community Outreach Toolkit, available at
http://www.onguardonline.gov/features/feature-0004-featured-net-cetera-toolkit.
26 	Center for Plain Language, 2012 ClearMark Awards (2012),
http://centerforplainlanguage. orglawardslclearmark20 12/.
27 	National Consumer Protection Week, available at www.ncpw.gov.
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