Attorney General James Surrenders $230,000 to New York City in Support of Consumer Financial Education Programs – New York State Attorney General | Vette Leader

Funding from previous settlements will support free consumer literacy programs for New Yorkers

NEW YORK – New York Attorney General Letitia James today donated more than $230,000 to the New York Department of Consumer and Labor Protection (DCWP) to support free financial literacy programs for New Yorkers. The funding, derived from an earlier consumer fraud settlement secured by the Federal Trade Commission (FTC) and the Office of the Attorney General (OAG), will help offer New Yorkers free, confidential personal financial advice at DCWP’s NYC Financial empowerment centers. Today’s action is part of Attorney General James’ ongoing effort to protect consumers.

“Financial literacy is an important path to economic equity and justice, especially for vulnerable communities,” he said Attorney General James. “This funding will support important programs that help protect consumers from fraud and empower New Yorkers to make responsible financial decisions every day. I am proud that the money my office has secured is being reinvested in our communities.”

This funding stems from an earlier FTC and OAG settlement with direct marketer Allstar Marketing Group, LLC (Allstar) over fraudulent practices that concealed charges from consumers who ordered products primarily advertised through television infomercials. Thousands of customers have been hit with unexpected charges added by misleading online and phone ordering processes.

Allstar paid $7.5 million to refund customers under the FTC settlement, and $500,000 went directly to OAG for penalties, costs and fees. After consumers were reimbursed, leftover funds were approved, which were used by the OAG for consumer education.

The $230,926 transferred to DCWP today is the remaining amount from the Allstar settlement and will support DCWP’s Financial Empowerment Center awareness campaign. The campaign will educate consumers about the use of credit, banking, saving, debt, safe and affordable financial services and student loans.

“Whether you’re struggling with job loss or the costs of inflation, struggling with credit card or college loan debt, or struggling to budget your paycheck, the city’s Financial Empowerment Centers can help New Yorkers become more financially stable “, he said DCWP Commissioner Vilda Vera Mayuga. “I thank the Attorney General for recognizing the importance of this assistance and for directing these funds to us to continue raising awareness of this invaluable service.”

Financial literacy is a crucial part of financial well-being, and many Americans are not well-versed in financial literacy. A 2022 annual report from the TIAA Institute and George Washington University shows that more adults in the United States have very low levels of financial literacy than in any other survey year since the survey began in 2017. For example, adults only got half the questions right 28-question survey testing financial literacy. 23 percent could not answer more than 7 of the 28 questions correctly. Only a third of the questions about understanding financial risk were answered correctly. Black, Latino, and younger people had lower levels of financial literacy overall. As the report shows, people with a very low level of financial literacy are (compared to those with a very high level):

  • Six times more likely to have trouble making ends meet;
  • Three times more likely to be debt restricted;
  • Three times more likely to fail a $2,000 financial shock; and,
  • They are four times more likely to spend more than 10 hours a week on personal finance-related issues.

The 2018 FINRA National Financial Capability Study found that 69 percent of New Yorkers could not answer more than 3 out of 5 questions about business and finance in everyday life.

The OAG takes strong measures to protect consumers from fraud and hold unscrupulous companies to account. Funding for this program will help strengthen consumer protection and help consumers avoid fraud.

The NYC Financial Empowerment Centers have helped clients save a total of more than $10 million since its inception and have mentored more than 66,000 clients and helped them reduce their debt by more than $85 million. Anyone age 18 or older who lives or works in New York City can schedule a free and confidential appointment with a professional financial advisor by visiting nyc.gov/TalkMoney or by calling 311 and saying “financial advice.” Services are available in person or by phone and in multiple languages.

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