CFP Board Financial Planning Competency Handbook. Board CFP

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      ■ Health Insurance Portability and Accountability Act of 1996.

      ■ Children’s Online Privacy Protection Act of 1998.

      ■ Gramm-Leach-Bliley Act of 1999 (opt-out privacy options).

      ■ Fair and Accurate Credit Transactions Act of 2003.

       Consumer Credit Laws

       Housing Laws

      Competent: In addition to having a working knowledge of the laws, rules, and regulations listed, a competent personal financial planner has the skills necessary to help a client file a complaint or obtain redress under an appropriate consumer protection rule.

      Expert: An expert personal financial planner can work with and inform a client’s legal representative in relation to consumer protection laws. Further, an expert planner can anticipate threats to a client’s financial situation and predict ways to counter such threats through legal and regulatory remedies. In some situations, an expert financial planner can help inform public policy by providing advice to lawmakers and regulators.

      IN PRACTICE

      Terrance is a new financial planner whose target market clientele includes single and widowed retirees. He loves working with older clients because he sees himself as a defender of elder rights, as well as a caretaker of client assets. Recently, one of Terrance’s clients, Sarah, received a phone call from someone claiming to be a financial planner who insisted on talking to her about opportunities to invest in new gold-producing firms in Alaska. Unsure what to do, Sarah consulted Terrance, who explained that the call was likely a scam. Terrance then worked with Sarah to add her name to the National Do Not Call Registry. All was well until last week when, at 7:30 in the morning, Sarah received a call from the same broker. This time Sarah asked that the caller provide his name and return telephone number. The broker did not answer directly but instead attempted to promote another gold mining company. Finally, the broker revealed his name and a phone number. Sarah ended the call but was confused because she thought that she would not receive these types of phone solicitations. Again, she talked with Terrance. Terrance was perplexed because he knew the broker was in violation of the Telephone Consumer Protection Act of 1991: First, the broker had called someone who was on the National Do Not Call Registry; second, he had called Sarah before 8:00 a.m. Both actions are prohibited by the law. Based on this, Terrance helped Sarah file a complaint with the Federal Communications Commission, which took action against the broker and his firm.

      The possibility for a criminal to steal a client’s identity continues to increase as the world of consumer finance becomes more electronically interconnected. Consider the case of Wilma Jee. She recently returned from a two-week vacation when she realized that she had forgotten to request that her mail be held at the post office. When she arrived home she was concerned that she had just a few catalogs and other pieces of junk mail in her mailbox. Her concern became alarm when a few days later she received a call from the fraud department of a credit card company. Apparently, someone had stolen Wilma’s mail while she was on vacation. The thief used one of her credit card billing statements to access her credit. The individual used her credit line to purchase several high-cost items at a large online discount retailer. When the thief attempted to purchase gas, the credit card company put a hold on the card. Unfortunately, damage had already been done to Wilma’s credit history. Given her sense of panic, she turned to her financial planner to learn more about credit and identify theft.

      Wilma learned that under the Truth in Lending Act, she is protected if a thief uses a credit card account illegally. The maximum out-of-pocket expense associated with a lost or stolen credit card is $50. While this may be the maximum financial responsibility, Wilma was startled to learn that the true cost associated with a stolen identity is the time it can take to repair the damage caused by a thief. The Federal Trade Commission, according to the FDIC,39 reports that consumers have been denied loans, deprived of mortgages, and accused of shoplifting as the result of credit reports that inaccurately record charges made by a thief. It can take anywhere from a few months to several years to fix credit reports, records, and related financial damage associated with identity theft. The FDIC recommends the following seven steps as a way to help clients avoid becoming an identity theft victim:

      Wilma’s financial planner provided the following federal resources to help her navigate issues associated with credit and identity theft: