Early Wage/Income Access Programs

The need for early access to your wages is not a new concept. Early wage access programs might be helpful to workers with unexpected expenses because it is an alternative to high-cost payday loans.

Basically, these programs allow workers to access wages they have already earned ahead of the regular payday — much like payday loans.

If providers charge workers high fees or provide early access to such an extent that it allows what ends up just like repeated balloon-payment loans, it is not so helpful.

Early wage access might be a good thing when used occasionally,  but if there are charges, interest and other fees, they can add up, and result in a situation much like what we see in payday loans.   

The National Consumer Law Center has outlined the differences in the types of earned wage access services as follows: 

Employer-based or direct-to-consumer
Employer-based services operate through a contract with the employer that allows the program to access time-and-attendance records to determine actual earned wages.

Direct-to-consumer programs have methods of estimating earned wages but not with certainty, and they do not need employer approval.

Repayment method
Employer-based services usually are repaid by payroll deduction or other mechanisms through the employer.

Direct-to-consumer and some employer-based services debit bank accounts and can trigger nonsufficient funds (NSF) or overdraft fees when the timing or estimate of the paycheck is off.

Fees. Some providers charge no fees to the worker.

Fees in other programs range from $2.50 per day to $6 per month.

They can be per advance, per pay period, or monthly for a package of services.

Fees may be higher if you want the wages right away.

Some direct-to-consumer models actually rely on purportedly voluntary “tips” but may make it difficult not to tip.

Some of the other options are frequency of access and limits on how much you can access

Frequency of access. Many employer-based services limit access to once or twice a pay period, but others may allow access on a daily basis.

Access limits. Many services OR employers limit access to 50% of gross or net earned wages, ensuring that the worker will receive at least half of their paycheck on payday.

Others allow (and even encourage) “use-it-or-lose-it” access up to 100% of wages earned in a given day.

Although many providers claim their programs aren’t providing loans, if they are fee based and not restrictive, a worker can end up in a cycle of debt much like a payday loan.  The only difference in the early wage access program and living paycheck to paycheck is that your paycheck might get reduced more and more with each pay period with an early wage access program.  State and federal lending laws include fee and rate limits and require certain disclosures. Providers may claim their program is not providing loans and not subject to those laws that protect consumers.

NOTE:  A bill (S. 532) was recently introduced in South Carolina focused on allowing the employer-based model of early wage access programs to operate here.  Providers would have to register the S.C. Department of Consumer Affairs and post a bond. The Department would receive complaints from consumers as they do in other consumer matters. Under the law, the early access services would not be considered a form of lending.

Car Warranties

There are two types of warranties when you purchase a new or used car.  There are express warranties and implied warranties. The express ones apply to specific items or the performance of the car. They can be written or verbal but they have to be “expressly” communicated to the buyer. Most express warranties are in writing and probably come in a special package. But all express warranties don’t have to be mentioned in a special package.

Express warranties could be created by just a simple description of the car like it’s a 1995 Ford Explorer. The dealer or  manufacturer is warranting that it is the make and model the contract says it is. If in fact  that car is a different model or different model year, then the express warranty has been breached.

A verbal representation by the dealer or the dealer’s salesman can be an express warranty. You should not automatically assume it is an actual warranty because a representation by a salesman could be what is called “puffing”.  For example, “this is a great car, it runs really smooth”. That’s not really any specific representation. So, the statement is not a warranty. If the salesman makes a more specific statement, it can be difficult to prove that the verbal statement was actually made. Also, the written warranty will often state that the warranty is the only warranty and any verbal representations are not part of the contract or part of the warranty.

Almost every new car and most used cars, come with some type of written warranty so you should be sure to take the time and effort to read and understand exactly what is being covered and not covered under the warranty. Take note of who has the duty to make warranty repairs. Is it the dealer’s duty or the manufacturer’s duty? That’s found in the warranty.

You should note the difference between a warranty and an extended service contract. Sometimes the difference in these can be confusing.  A warranty and a service contract might require someone to repair problems with the car, but they are just not the same thing. A warranty is really a promise about specific items and the performance of the car. It becomes part of the sale. An extended service contract is a separate contract that is sold for an additional amount of money.

Implied warranties do apply to a sale.  They are not expressed verbally or in writing but are implied by law. There are three types: the warranty of title, the warranty of merchantability and the warranty of fitness for a particular purpose. The warranty of title says that the dealer or manufacturer has good title and they can legally transfer that title to the buyer.  Also, it warrants that there are no liens on the car that the buyer hasn’t been told about. With the implied warranty of merchantability, the dealer or manufacturer warrants that the car is fit for the ordinary purposes for which cars are used. In other words, it is fit for driving. For example, a broken automatic door lock may not be considered as a breach of that warranty of merchantability because the car is still in good driving condition.

Lastly, the implied warranty of fitness for a particular purpose. In that situation the dealer or manufacturer by implication warrants or promises that the car is fit for a special purpose. For this warranty to come into play the seller must know what specialized purpose the buyer has for the car.  The buyer is going to rely on the dealer’s skill or judgment in recommending that the car is fit for that particular purpose.

Most dealers and even some manufacturers have clauses in their contracts that try to limit warranties or even prevent them from being given at all.  This is what we call a disclaimer. The law does allow the use of disclaimers, but they have to do it properly.  For example, express warranties cannot be disclaimed at all.  Implied warranties of fitness for particular purpose can be disclaimed, as long as the contract provides clearly and conspicuously that all implied warranties of fitness for a particular purpose are disclaimed.

So be sure to read all the warranties and disclaimers in a contract before you sign it.  Of course, be especially careful when buying a used car because the warranties are most likely limited or completely disclaimed in the sale of a used car. Federal law requires dealers to give basic warranty information on the window sticker of a used car as well as a new one.  If the window sticker says the car is being sold “as is”, the dealer is giving no warranty at all. That means that the dealer does not even warrant that you could drive the car off the lot. So be very careful when you are buying a car that has a sticker that says it’s being purchased “as is” because you’re really going to have little, if any, recourse against the seller.

When and How to Use the Three-Day Right To Cancel

People often think they have 3 days to change their mind on any purchase. It’s often called the right to cancel or the right of rescission. We think of it as buyer’s remorse.  The Federal Trade Commission (FTC)  regulations refer to it as the cooling off rule.

This especially comes up in car sales. Many states just like South Carolina do have laws that will give the buyer the right to cancel on certain types of purchase contracts but it’s very limited. The one most often misunderstood is the car sale. The three day right to cancel does not exist in the purchase of a car or other vehicle. The rule exists because consumers will sometimes get caught up in a persuasive sales pitch and make a purchase they later regret. 

Under South Carolina law there are specific, though limited, circumstances where the right to cancel arises: door to door sales, sale of a health club or gym membership, refinance of a home mortgage and the purchase of a vacation timeshare unit. Let’s take a closer look at these.

  1. Any kind of service or product that was sold to you at your home by someone coming to your door and selling it to you is subject to your right to cancel the purchase.  You’re entitled to a full refund if you notify the seller that you are cancelling the sale within three business days. But that doesn’t apply when you bought the item in the store or online and it’s delivered to your home. That is not considered a door to door sale. Likewise, if you go to the premises of the business and you buy it from them there and they are going to deliver it to your house that is not a door to door sale and the right to cancel within three days doesn’t apply.
  2. Gym and health club memberships sold in South Carolina are subject to a three day right to cancel. That right of cancellation applies no matter where the transaction purchasing the membership takes place.
  3. If you refinance a mortgage on your primary residence you have a three day right of cancellation. That doesn’t include a second home or commercial property.
  4. Finally, in South Carolina the purchase of vacation timeshare units are subject to an even longer right to cancel of five days.

The FTC cooling off rule which is essentially the same, provides the three day right to cancel a sale that’s made at your home, your workplace, a dormitory, or a temporary location. Keep that in mind if you go to a sale in a hotel or motel room, convention center, fairground and so on, you do have the right to cancel sales at those type locations. Certain types of sales can’t be canceled, even if they take place in places normally covered by the Rule. The Cooling-Off Rule does not cover sales that are:

  • under $25 for sales made at your home;
  • under $130 for sales made at temporary locations;
  • for goods or services not primarily intended for personal, family or household purposes. (The Rule applies to courses of instruction or training.);
  • made entirely online, or by mail or telephone;
  • the result of prior negotiations at the seller’s permanent place of business where the goods are sold regularly;
  • needed to meet an emergency;
  • made as part of your request for the seller to do repairs or maintenance on your personal property (purchases made beyond the maintenance or repair request are covered).

Also exempt from the Cooling-Off Rule are sales that involve:

  • real estate, insurance, or securities;
  • automobiles, vans, trucks, or other motor vehicles sold at temporary locations if the seller has at least one permanent place of business;
  • arts or crafts sold at fairs or places like shopping malls, civic centers, and schools.

How do you cancel?

You don’t need to have a reason for cancelling. You have the right to change your mind.

To cancel the sale, you just need to sign and date one copy of a cancellation form that should have been given to you at the time of the sale. But if they didn’t give you a form you can just write a cancellation letter. The notice needs to be mailed to the seller and postmarked within three business days of the sale. That means weekdays and Saturdays but, not Sundays and federal holidays.

If you cancel the purchase, that seller has 10 days to cancel and return any check you signed, refund all your money and tell you whether any of the products that you still have will be picked up and return any trade-in that you may have provided in a particular sale.

Within twenty days the seller must either pick up any items you have or reimburse you for mailing expenses if you agree to send the items back by mail.

If you did receive the actual goods from the seller before you did the cancellation, you do have to make them available to the seller in as good a condition as when you got them.

If you think a seller has violated the FTC’s cooling off rule, you can file a complaint at consumer.ftc.gov and here in South Carolina you can file a complaint for violations of state law with our S.C. Department of Consumer Affairs and that is at consumer.sc.gov.

Operation of Trial Courts

The South Carolina Supreme Court updated its Order regarding Operation of Trial Courts during the Coronavirus Emergency on December 16, 2020. The specific Order may be found at Supreme Court Order December 2020.

A few pertinent points about the Court’s Order are as follows:

  • Non-jury trial and motions may be conducted using remote technology.
  • In person trials and hearings may be conducted if a judge determines it is appropriate and it can be safely conducted.
    • trials will be staggered to decrease the number of people;
    • generally, only the attorneys, parties and witness may attend;
    • remote testimony may be allowed;
    • masks must be worn;
    • remote administration of oaths is allowed.
  • Courthouses should remain open to accept filings and payments
    • drop boxes are allowed and the public will have specific instructions and notification;
    • all persons will be screened for fever and must wear a mask.
  • Family Court
    • uncontested divorces may be granted without holding a hearing;
    • approval of settlement agreements and consent orders may be done without a hearing;
    • contested hearings in Family Court will be conducted remotely or in person as ordered by the Judge.
  • Bench warrants for non-payment of child support and alimony may be executed by law enforcement. The of suspension of those warrants has expired.

Social Security: Online Video Hearings

SSA has finalized its Online Video Hearing program and sent out letters on December 21st to every person who has a pending hearing request. These hearings will be conducted using Microsoft Teams; a platform similar to Zoom. Participants in this program must have an email address; a smartphone, tablet or computer with a camera and microphone; stable internet access; and a private area in their home. SSA does not require an individual to agree to online video or telephone hearings and you retain the right to an in-person hearing. You should contact an attorney or authorized representative before making a decision.  

We Are Better Together

On November 7, 2020, South Carolina Legal Services collaborated with National Expungement Week, a national nonprofit that provides funding to pay fees associated with expungements, pardons and pretrial intervention, and Path2Redemption, a nonprofit group that provides training and mentorship programs for ex-offenders transitioning back into society. These like-minded organizations came together for an expungement and pardon clinic, “Pardon My Behavior” at the Colony Apartments in Columbia, S.C.  South Carolina Legal Services provided attorneys and paralegals to assist over 50 people in applying to have with their criminal records expunged or offenses pardoned. National Expungement Week provided funding to South Carolina Legal Services’ applicants and clients to pay the cost of SLED checks, expungement, pardon, and court fees.  Path2Redemption provided re-entry mentorship and counseling at the event.

On December 5, 2020, South Carolina Legal Services collaborated with National Expungement Week, Communiversity, a nonprofit that hosts presentations on legal and wrap around serves for ex-offenders, and The Black Liberation Fund, a nonprofit that provides bail and incarceration support to formerly incarcerated persons. Together the organizations facilitated an expungement and pardon clinic, “The Gift of Freedom” at Center Station in Charleston, S.C. South Carolina Legal Services, with 7 attorneys and 2 paralegals onsite for the event, assisted over 120 attendees with applications to have their criminal records pardoned or expunged.

Both of these events highlight the immense need for strategic and targeted collaborations. These collaborations created a “one stop shop”, where qualifying participants received free legal assistance, including free legal screening for additional civil legal issues, payment for expungement and pardon fees and information about mentorship, training and wrap-around services for ex-offenders. These events have created a “referral boomerang”. South Carolina Legal Services is still receiving applicants from both events following these collaborations.

South Carolina Legal Services is seeking to maintain current collaborations and develop new ones that will create a communal network of services to assist a common client base.

To inquire about a possible collaboration, please contact Andrea Loney, Executive Director of South Carolina Legal Services at andrealoney@sclegal.org.

Supplemental Security Income and Unemployment Benefits

The COVID-19 pandemic may have a devastating impact on individuals who are receiving SSI disability benefits.  SSI beneficiaries who were working and lost their jobs because of COVID-19 may have been eligible for unemployment insurance (UI) benefits; including the expanded federal UI benefits that were available through the CARES Act.

SSI benefits will be reduced or suspended if a participant has earned or unearned income. SSI is reduced $1 for every $1 of UI benefits after the first $20. By comparison, earned income reduces SSI by $1 for every $2 that is earned after the first $85. The enhanced federal UI benefit would have reduced an SSI participant’s benefits to $0.00 when it was $600 a week or $2400 a month, far greater than the $783 SSI monthly payment. The enhanced UI benefit stopped on July 26, 2020 but state UI benefits continued and may have been low enough that it would not result in a loss of all SSI income. The newly passed COVID-19 Relief Act provides for a federal UI enhancement at a rate of $300 per week or approximately $1200 a month. This will also result in a suspension of SSI benefits for anyone receiving it. SSI suspensions for 12 consecutive months could result in the need for the individual to reapply for disability benefits which could be a long process if the individual has to prove that they are still disabled. There is also the possibility that SSI beneficiaries will receive notices that they were overpaid SSI because SSA suspended most overpayment actions from March through September 2020. Individuals who receive notice of an overpayment because of UI income should file a waiver to avoid collection. Finally, Medicaid benefits should not be stopped because of the loss of SSI benefits during the COVID-19 Pandemic.

The receipt of UI benefits should not have an impact on SSDI benefits because SSDI is not reduced for unearned income.

Evictions Update

With time running out on the eviction moratorium imposed by the Centers for Disease Control and Prevention, Congress approved, and the President signed into law on December 27, 2020, an extension of the CDC’s moratorium through January 31, 2021.

The new law did not change the requirement for tenants to provide a declaration to their landlord under penalty of perjury that they meet the criteria for invoking the protection of the CDC’s order.  However, anyone wishing to invoke that protection under the new law should update the declaration to indicate that it extends through January 31, 2021 instead of December 31, 2020. 

Also included in the legislative package was an additional $25 billion for rental assistance.  It remains to be seen whether that assistance will be up and running in time to help people who are protected under the moratorium only until January 31st.  There is concern that the funds will not be available in only one month.   

The National Low-Income Housing Coalition estimates that South Carolina counties and localities will receive $342,731,000. 

The funds are available only for low-income tenants.  This means tenants at or below 80% of the Area Median Income, with a priority for households at or below 50% AMI.  Eligible households also need to be receiving unemployment benefits or have experienced a COVID-19-related hardship (loss of income, significant expenses, etc.).  And finally, an eligible household must demonstrate a risk of experiencing homelessness or housing instability.

The maximum assistance period is 12 months, with an additional 3-month extension, subject to availability of funds, if necessary to ensure housing stability.  Also, three months of prospective rent payments can be paid in addition to past due payments.  Households that need more than three months of prospective rent payments can re-apply and receive additional assistance if funds are available.

Another innovation in the new law is that it allows landlords to apply for rental assistance on a tenant’s behalf.  The landlord must get the tenant’s signature on the rental assistance application, must provide documentation of the rental assistance application to the tenant and must actually apply the funds to the tenant’s rent owed. 

Foreclosure Update

All the main federal entities that own or insure mortgages announced extensions of their single-family mortgage loan foreclosure moratoriums that were set to expire December 31, 2020.  Fannie Mae and Freddie Mac extended the foreclosure moratorium on their single family loans through January 31, 2021, while those insured by the Department of Housing and Urban Development, the Department of Veterans Affairs, and the Department of Agriculture have been extended through the end of February. 

COVID-19 Restrictions Make It More Difficult for Veterans to Get Records

SCLS has veteran accredited attorneys who can assist low-income veterans and their families navigate through the record request process for VA compensation and VA pension benefits claims. These attorneys are available to share legal information on the benefits process to VA offices and others who serve veterans and accept referrals.

Veteran claims, especially VA Compensation Claims, can be a very record intensive process. An Official Military Personnel File and treatment records can prove a service connection for a veteran’s disabling condition which may be dismissed without those records, particularly in cases where a veteran is applying for benefits long after their separation from service. Applying for assistance early in the claim process can improve odds of success by allowing a representative to help develop a record and present a clear case for the claims. Even with some limits on record processing in place, it is better to make referrals or apply for assistance early.