Consumer eViews

Volume 2, Number 10, March 7, 2005    

Last Wednesday we heard from nearly 1,000 panhandle residents at a town hall meeting in Pensacola. Time and time again, people recounted that their insurance companies are unresponsive, stalling payments or low-balling claims.  It’s been nearly six months since Hurricane Ivan hit this community.  These people have had enough and so have I.   

Among the issues are insurers failing to show for state-ordered mediation with policyholders, or companies sending representatives who aren’t authorized to make a settlement offer. Others are sending policyholders partial settlements mislabeled as "final payment."  These practices are unconscionable.  

As I listened to story after story about companies not taking care of their policyholders, the names of five insurance companies came up repeatedly.  As a result, I am meeting this week with the executive officers of  Universal Property and Casualty Insurance Company; Vanguard Fire and Casualty Insurance Company; Capital Preferred Insurance Company; First Protective Insurance Company; and Citizens Property Insurance Corporation.    

Another issue raised in Pensacola that is hampering hurricane victims is inconsistent application of the valued policy law when there are losses from both flood and wind. Some of the confusion stems from differences of interpretation of legal precedent arising out of a 2004 District Court case called Mierzwa. A class action has been filed in Leon County that should clarify the applicable law in these circumstances. In an effort to expedite this matter, I strongly urge Citizens Property Insurance Corporation to cooperate in establishing the class which should provide a clarification of Mierzwa and other related cases. 

On Thursday, we’ll be in Sebastian talking with residents struggling to recover from two storms, Frances and Jeanne, then on Saturday we will be in Punta Gorda.

Let’s keep our Florida neighbors trying to rebuild in our thoughts and prayers.


                      -- Tom Gallagher


Florida’s Chief Financial Officer Tom Gallagher presented a Cabinet resolution thanking Florida’s commercial and savings banks, credit unions and securities dealers for their efforts during the past five years to help the state collect child support payments from delinquent parents. 
“Through this voluntary partnership, the State of Florida has been able to collect and distribute millions of dollars annually to benefit Florida’s children with such necessities as food, shelter, clothing, medical and educational requirements,” Gallagher said. “Florida’s financial services industry has willingly established programs and dedicated resources toward this effort, and the result has been an improved quality of life for children.”
Gallagher also thanked Gov. Jeb Bush and the Cabinet, saying, “Your support of this plan ensures children get the financial support and opportunities they deserve.”
Since 1999, the financial services industry in Florida has actively partnered with the Florida Department of Revenue’s Child Support Enforcement Program to administer the Financial Institution Data Match Program.  Through confidential exchanges of information, the financial services industry helps identify parents who are past due on child support.
As Florida’s Chief Financial Officer, Gallagher oversees the Department of Financial Services, which houses the Office of Financial Regulation.  The office and the industry have worked closely to encourage participation and facilitate the information exchanges.




As W-2 forms hit the mailboxes of millions of Floridians, state Chief Financial Officer Tom Gallagher is warning consumers to be wary of refund anticipation loans - loans that offer cash up front by borrowing against your anticipated tax refund from the Internal Revenue Service (IRS).

“Money today may sound attractive but signing up for quick refund services can be very costly to consumers,” said Gallagher. “I’m urging Floridians to beware of the fees and interest rate associated with a refund anticipation loan.”
Consumers may fall prey to refund anticipation loans with promises of “instant refunds” or “quick cash.” Loan fees range from $30 to $105, with administrative fees between $25 and $60 often tacked on to the loan. The effective Annual Percentage Rates (APR) for these loans may start at 60 percent and be as high as 700 percent.
Refund anticipation loans are offered by tax preparers who are often located within the offices of check cashers, payday lenders, title loan lenders and other retail vendors.  The tax preparers serve as a conduit for state and national banks or federal thrifts that provide the loans.
The Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) are the regulatory agencies that govern the activities of national banks and federal savings associations. National banks and federal thrifts are able to assign interest rates and fees from any state they are authorized to do business in, including those states that do not have caps on the amount of interest and fees charged.
Refund anticipation loans are especially appealing to consumers who need money quickly and don't want to wait the six weeks it can take to get a mailed refund from the IRS.  A pitfall, however, is that if the IRS turns down any of their claimed deductions or credits, the consumer is still obligated to pay back the loan.
According to Gallagher, there are alternatives to high-cost refund anticipation loans.  The IRS E-File, found at, is one alternative.  Taxpayers can use this free, online tax preparation service to file their income tax returns and can anticipate receiving their refunds more quickly than if they filed through the mail. 
Another way to save money at tax time is to go to a Volunteer Income Tax Assistance (VITA) site, which is sponsored by the IRS.  VITA sites provide free tax preparation to low- and moderate-income taxpayers.  They can be found in libraries, community centers and other convenient locations. To find a VITA site, call the IRS helpline at 1-800-TAX-1040 or visit  AARP also sponsors Tax Counseling for the Elderly sites in many communities.
“Most consumers don't need refund anticipation loans and can get their hard-earned money back, in its entirety, by waiting a few extra days,” said Gallagher. 

Consumer Services HelpLine
(800) 342-2762.