Consumer Law & Policy Blog

William Lerach Reportedly Will Plead Guilty

In a story based almost entirely on unnamed sources, the Washington Post reports today that former Milberg Weiss law firm partner William Lerach is planning to plead guilty to conspiracy charges and has agreed to serve at least one year in prison.  As readers may recall, federal prosecutors have been investigating whether Lerach and some of his former partners at Milberg Weiss recruited people to purchase shares in large companies and then paid those people to serve as plaintiffs in lawsuits, without disclosure to the courts or other class members.  An earlier blog entry in July discussed the guilty plea of another former named Milberg Weiss partner, David Bershad.  Milberg Weiss is probably the most famous plaintiffs'-side securities fraud law firm.  It also handles a range of plaintiffs' consumer class actions outside of the securities area.   

Table of Contents for the Winter 2007 Issue of the Journal of Consumer Affairs

Here's the Table of Contents for the Winter 2007 Issue of the Journal of Consumer Affairs:

Using the Survey of Consumer Finances: Methodological Considerations and Issues

Suzanne Lindamood, Sherman D. Hanna and Lan Bi

Commentary by: Jeanne M. Hogarth, Darryl E. Getter and Sandra J. Huston

What's in a Score? Differences in Consumers' Credit Knowledge Using OLS and Quantile Regressions

Angela C. Lyons, Mitchell Rachlis and Erik Scherpf

Trading Off Fish Health and Safety: Female Decision-Making Processes Toward the Risk of Methylmercury in Fish

Deana Grobe, Melinda M. Manore and Elizabeth Still

Nutritional Improvements and Student Food Choices in a School Lunch Program

Corbett Grainger, Benjamin Senauer and C. Ford Runge

Disclosures Exposed: Banner Ad Disclosure Adherence to FTC Guidance in the Top 100 U.S. Websites

Mariea Grubbs Hoy and May O. Lwin

Bits Briefs and Applications

Consumer Awareness of the Legal Obligations of Funeral Providers

Steven W. Kopp and Elyria Kemp

Gift Cards: Disclosure One Step Removed

Daniel R. Horne

Shopping for Privacy on the Internet

James P. Nehf

A Reply: An Ecosystem Perspective on Privacy

Leyland F. Pitt and Richard T. Watson

Editorial Postlude

Theory, Data, Interpretations and More Theory

Herbert Jack Rotfeld

FTC Warns Mortgage Brokers and Media About Deceptive Ads

The FTC has sent more than 200 warning letters about ads that may be deceptive or violate TILA.  The FTC statement gives the following examples of some of the ads the FTC discovered:

[S]ome ads touted rates as low as “1%” but failed to disclose adequately:

• that the stated rate was a “payment rate” – not the interest rate – that applied only during the loan’s initial period;
• that low advertised payments applied for only a short period; and
• the loan’s Annual Percentage Rate, the uniform measure of the cost of credit that enables consumers to shop for and compare mortgage offerings.

You can read more here,

Hoax or Spam Scam?

Earlier today I received an email which had been forwarded numerous times that read as follows:

Hello everyone!

The Ericsson company is distributing free computer lap tops in an attempt to match Nokia that has already done so. Ericsson hopes to increase its popularity this way. For this reason, they are giving away the WAP Laptops. All you need to qualify is to send this email to 8 people you know.

Within 2 weeks, you will receive Ericsson T18. But if you can send it to 20 people or more, you will receive Ericsson R320.

There are people within our building who have received their laptops so I thought I would share this information with you in hopes that you get one before they give them all out.

Make sure you send a copy to: [deleted].

Of course it doesn't make much sense that a company would give away free computers.  A little research turned up this web site reporting that the email is in fact a hoax and Ericsson itself has asked people not to forward the emails.  But I wonder: is it only a hoax or is this a clever attempt to generate lists of email addresses that can then be sold to spammers?  Recipients of the message who take it seriously can be expected to use real email addresses for their friends and the instruction to send a copy to the address I deleted above makes it possible for someone at that address to receive those addresses.    Anyone know?

Plaintiffs' Supreme Court Brief Filed in Important Federal Preemption Case

As CL&P blog readers may recall, on June 25, the Supreme Court agreed to hear an important federal preemption case involving a man allegedly injured by a defective medical device.  The case presents the question whether state-law damages suits seeking recovery for injuries caused by medical devices that received FDA pre-market approval are preempted by the Medical Device Amendments to the Food, Drug, and Cosmetic Act.  The plaintiffs recently filed their opening brief on the merits.  We have blogged about the case on five prior occasions, including in this post, which links to several other posts.  Public Citizen Litigation Group, lead counsel in the case, has collected other relevant materials here.

Bank of America Raises Non-Member ATM Fees To Record High

This USA Today story explains that Bank of America has raised to $3 the fee it charges non-customers for using its ATMs.  The industry standard had been $2.  The article suggests that other banks will follow suit.

Conference on Regional Economic Integration and Consumer Protection in the Americas and in Europe

The Groupe de Recherche en Droit International et Comparé de la Consommation (Gredicc) and the Euro Americana Chair for the Protection of the Consumer will hold an international conference in Montreal (Canada) on the 18 and 19 October 2007 on  Regional economic integration and consumer protection in the Americas and in Europe.  

The  conference will deal with the status of consumer protection policy in six regional integration processes: the North American Free Trade Agreement (NAFTA), the Southern Common Market (MERCOSUR), the Caribbean Community (CARICOM), Andean Community (CAN), the Central American Integration System (SICA) and the European Community (EC).   Among the topics to be given attention are:

• The foundations and legitimacy of consumer protection initiatives being taken at regional level and a first assessment of the regional consumer or acquired legislative corpus;
• How potential conflicts between open borders policy and national consumer protection measures are solved.

Speakers include a great many officials and professors from around the world. For more information, email Thierry Bourgoignie, Directeur du Département and Professeur titulaire, Département des sciences juridiques, Faculté de science politique et de droit, at bourgoignie.thierry@uqam.ca.

August Vehicle Recalls from NHTSA

The National Highway Traffic Safety Administration's August 2007 vehicle recalls are available here.

How Do Low-Income Consumers Feel About Access To Credit

Angela K. Littwin of Harvard discusses that question in a forthcoming article in the Texas Law Review titled "Beyond Usury: A Study of Credit Card Use and Preference Among Low-Income Consumers."  Here's the abstract:

The question of whether to re-impose usury restrictions lies at the heart of the debates over consumer credit regulation. Advocates of interest rate regulations argue that creditors are exploiting low-income borrowers, making huge profits while they lure these families into financial traps from which they can never emerge. Opponents of regulation note the benefits of expanding credit to low-income consumers. This debate has continued for more than two decades, but until now no one has asked the affected families their views about access to credit or what safety features they would welcome. This paper presents original data from a study of low-income women. The findings suggest that usury regulation may be an unnecessarily blunt instrument to provide protection for low-income families, as low-income families themselves can identify credit protection devices that would be more nuanced and more useful.

You can download it at http://ssrn.com/abstract=968330.

Working Paper on Buckeye Arbitration Case

Timothy S. Hall of the University of Louisville - Louis D. Brandeis School of Law has authored "Judicial Policing in Consumer Contracting after Buckeye Check Cashing." Here's the abstract:

The Supreme Court's 2005 decision in Buckeye Check Cashing v. Cardegna explicitly extended the Court's separability doctrine from commercial contracting to consumer contracting. This Article will discuss the conflicts between the traditional judicial role in policing the bargaining process and the imposition of mandatory arbitration through separability. The Article further discusses questions left open after Buckeye regarding the appropriate scope of the Court's embrace of mandatory arbitration in the consumer context. While this Article does not argue, as some have done, for abolition of binding pre-dispute arbitration clauses in the consumer context, it does argue that common-law doctrines designed to ensure fairness and freedom of assent in consumer contracting should be entrusted to those best able to apply them and implement their underlying policies — the courts.

You can download it here.