CL&P Blog

Times Article on Paid Celebrity Endorsements on Twitter and the FTC

Here.  When consumers see celibrities endorse products on TV, they are likely to believe that the celebrities are being paid.  Do consumers have the same reaction to tweets endorsing things?  Should celebrities disclose that when they are paid for tweets? 

Reports on FTC-CFPB Debt Collection Roundtable

On Thursday, the FTC and CFPB held a joint roundtable titled Life of a Debt: Data Integrity in Debt Collection.  Journalist Fred Williams has a report at the Taking Charge blog. An except:

At Thursday's  meeting, [debt buyer and industry association president Richard] Munroe and other debt buyers didn't repeat the argument the collection  industry has advanced in the past: That regulation will block collection of  legitimate debt and injure the credit system. Instead, industry representatives  pleaded that the new rules, whatever shape they eventually take, be consistent  and nationwide.

And Trevor Salter at Ballard Spahr's CFPB Monitor also had posts here and here.

FTC Issues Staff Report on the Use of Mobile Payments

Here.  The report addresses issues of dispute resolution (e.g., for unauthorized charges or fraud), security, and privacy, among others.

FTC Pursues Phone Text Spammers

The Times report is here.  An excerpt:

The messages, which typically promise gift cards to national chain stores or other prizes, are sent to random phone numbers and usually direct recipients to a Web site where they are asked for personal information like Social Security numbers or credit card numbers, agency officials said.       

Rarely, if ever, do consumers receive any actual reward, said C. Steven Baker, the commission’s Midwest region director. Instead, the Web sites often take users through multiple screens that ask them for more detailed information or entice them to sign up for free trials of products, then charge them for shipping and handling.

* * *

Roughly 60 percent of mobile phone users have received one or more spam text messages in the last year, [Baker] said, and about 15 percent clicked on the link included in the message.

Federal law  bars the use of automated dialing machines to send text spam, which as a practical matter means that such spam is illegal, because it takes so much time to send texts manually that text spam becomes uneconomic. 

Reuters: States probing top U.S. banks over debt collection

by Jeff Sovern

Here.  An excerpt:

As with the mortgage cases, the investigation focuses on the banks' poor paperwork and their weak tracking of the debts.

When they sold delinquent credit card debt to the buyers, often at only a few cents on the dollar, they allegedly failed to provide them with the evidence that the borrowers owed the money. It is unclear, however, if the incomplete information was used to pursue borrowers who were not delinquent.

* * *

Investigators are finding that the banks often did not provide buyers of the debt with evidence that individual credit card accounts were delinquent. Instead the banks only provided basic information about how much money they thought was owed and who the borrower was, without providing original contracts, past statements, or other additional documentation.

I would be curious to know the cause of action  My guess would be a UDAP violation.  The FTC and CFPB are also looking into the matter; perhaps the CFPB could use its power to curtail abusive practices.  One interesting feature about this is that consumers are not parties to the sales of the debts, yet they are the ones who are injured.  The probe raises a host of questions: for example, if creditors are obliged to furnish the underlying information when selling the debts, presumably their costs will increase.  Will they respond by raising prices to debt buyers?  And will those higher prices make the purchase uneconomic for the debt buyers?  If debt buyers have the paperwork, will they use it to prove their claims, thus depriving the rare consumers who are represented by counsel or otherwise well-advised of a successful defense that the debt buyer can't prove the claim?  Will debt buyer claims end up being for lower amounts because the paperwork doesn't substantiate the amounts they have been claiming?  Or will the only change be better-substantiated default judgments?

Bloomberg: FTC Commissioner Edith Ramirez Named by Obama as Chairman

Here.  According to the report, Ramirez was an intellectual property lawyer before joining the FTC.  It's not clear how much expertise she had in consumer law before becoming a commissioner. 

Jon Leibowitz Leaves the FTC

Jon Leibowitz announced his departure from the FTC today, the Blog of the Legal Times reports:

After a four-year tenure marked by an increased focus on privacy and aggressive consumer protection, Federal Trade Commission Chairman Jon Leibowitz announced today that he is stepping down on February 15.

"I don't have any regrets," Leibowitz said in a conference call with reporters. "I like to think we have made America in a small way a better place to live and helped ensure an even playing field for businesses."

Leibowitz's departure is a big loss for the agency and American consumers, particularly because it comes so close on the heels of David Vladeck's departure from his post as head of consumer protection. It also leaves the FTC with 2 Demoratic and 2 Republican commissioners, raising the very real prospect of 2-2 splits that could leave the agency deadlocked on important issues until a successor is confirmed by the Senate.

The Legal Times names current comissioners Julie Brill and Edith Ramirez as leading contenders:

Brill, formerly the senior deputy attorney general and chief of consumer protection and antitrust for the North Carolina Department of Justice, is known of her work in privacy protection and has a reputation for favoring vigorous enforcement.

Ramirez, a former partner with Quinn Emanuel Urquhart & Sullivan, is regarded as brilliant and somewhat reserved. She went to law school at Harvard with President Barack Obama and worked with him on the law review (fellow law review member Julius Genachowski has served as head of the Federal Communications Commission since June 2009).

Many in the consumer advocacy community know and trust Julie Brill and favor her for the job.

Looking Back on David Vladeck's Soon-to-be-Completed Tenure at the FTC

Next month, David Vladeck will a leave the helm of the FTC's Bureau of Consumer Protection--by all accounts reinvograted under his dynamic leadership--to go back to Georgetown Law. Jeff Gelles, the Philadelphia Inquirer's consumer columnist, attempts to sum up David's tenure in a piece entitled "Consumer chief leaves FTC a feistier place." A snippet:

Speaking last week to the Consumer Federation of America, Vladeck said his agency felt a special duty as it saw what happened after the 2008 financial collapse. Scammers were targeting the "last dollar" of people who had already lost nearly everything - jobs, homes, creditworthiness, even their hope.

It doesn't speak especially well of humanity, but the evidence is abundant: People already on the edge are frequent targets for fraudsters who promise to settle their debts, rescue them from foreclosure, dangle new sources of income, or even promise bogus health insurance. Under Vladeck, the FTC has pursued more than 100 cases against such predators, often winning restitution and agreements barring the principals from ever striking again.

President to Nominate Joshua Wright to FTC

You can read a New York Law Journal report here.  Wright is a professor at George Mason.  The article highlights his devotion to Chicago-school economics and reports that he rejects the use of behavioral economics in antitrust. The article also opines that if Governor Romney wins the presidency, Wright would be a potential FTC Chairman. Wright's SSRN page is here and includes links to some consumer protection pieces, including one that claims that the then-proposed CFPB would make it both harder and more expensive for consumers to borrow.

Consumer Protection Personnel Moves

The Senate finally confirmed Thomas Curry as the new Comptroller of the Currency, head of the Office of the Comptroller of the Currency.  It will be interesting to see if the OCC swings more to protecting consumers than banks under Curry's leadership.  In addition, the Senate confirmed FTC chair Jon Leibowitz for a second term (the confirmation is as an FTC commissioner, not the FTC chair; the president designates the chair from among the commissioners) and Maureen Ohlhausen as an FTC commissioner.