Consumer Law & Policy Blog

National Consumer Rights Litigation Conference this week!

Over 800 consumer advocates will be converging on Philadelphia this week and weekend for the Consumer Rights Litigation Conference and Consumer Class Action Symposium, both put on by the fine folks at the National Consumer Law Center.

If you are a consumer lawyer and you don't plan to attend the Conference, you are missing the best conference going, where you can attend talks on an incredible number of topics by the leading consumer lawyers in the country (and also by me). It's not too late to go. Info is on NCLC's website.

If you are a defense lawyer and you don't plan to attend the Conference, good — since you aren't invited and can't get in.

Fed Action on Bounce Loans?

In Senate testimony last Wednesday, Federal Reserve governor Daniel Tarullo promised a final regulation on bounce loans (overdraft fees) within the month.  Banks are charging an average fee of $34 for average overdrafts of $17.  One hot issue raised by the proposed rule is whether customers should have to opt in to overdraft loans and fees, or whether banks can enroll them automatically while allowing them to opt out.  Any behavioral economist will tell you that far more consumers will "choose" to avoid overdraft fees if an opt-in mechanism is required than if they are required to opt out.

 

USA Today recently reported that the Fed has decided to require banks to have consumers affirmatively opt in before paying overdrafts and charging hefty fees, based on Wednesday's testimony.  The Wall Street Journal also announced the Fed's decision.  I watched the video of the exchange between Senator Shumer and governor Tarullo, and did not hear the governor announce any decision on the opt-in/opt-out issue.  On the other hand, given the intense pressure to demonstrate some consumer protection moxie, or lose jurisdiction to the proposed CFPA, it would not be surprising to see the Fed opt consumers out of expensive bounce loans, and require banks to get them to opt back in.

Article on Bank Charging Fees to Pay Checks Drawn on Its Own Accounts

Here. 

Do the FTC's New Advertising Guidelines Run Afoul of Section 230?

by Paul Alan Levy

Since Eric Goldman is our leading scholar on the issue of section 230 immunity, I hesitate to question the soundness of anything he says on the subject.  But I have qualms about his recent posts here and, with greater detail, here, arguing that the FTC has overstepped the bounds of section 230 immunity in one of the examples it gives in its new Guides Concerning the Use of Endorsements and Testimonials in Advertising. 

Professor Goldman questions example 5, in which the advertiser pays for a blog advertising service that

matches up advertisers with bloggers who will promote the advertiser’s products on their
personal blogs. The advertiser requests that a blogger try a new body lotion and write a
review of the product on her blog. Although the advertiser does not make any specific
claims about the lotion’s ability to cure skin conditions and the blogger does not ask
the advertiser whether there is substantiation for the claim, in her review the blogger
writes that the lotion cures eczema and recommends the product to her blog readers
who suffer from this condition. The advertiser is subject to liability for misleading
or unsubstantiated representations made through the blogger’s endorsement.

Professor Goldman argues that such liability would be subject to section 230 immunity, because both the company and the blogger are “users” of the advertising service’s interactive computer service.

However, it seems to me that Professor Goldman has not taken adequate account of the fact that the FTC is regulating the advertiser, not in its capacity as the provider or user of an interactive computer service, but in its capacity as the employer (in a larger sense) of the blogger.

New Jersey School Board Subpoenas Citizens Who Criticize Its Staff to Sue Them for Defamation

The Freehold School Board has subpoenaed New Jersey Online to identify several citizens who chimed in to discuss stories published in the Newark Star Ledger and New Jersey Online about several high administrators who got fake degrees from an online diploma mill, and hence received higher pay.  After New Jersey Online notified its subscribers of the subpoena, the ACLU of New Jersey and Freehold attorney Stuart J. Moskovitz stepped in to represent various anonymous posters, and NJ.com has refused to furnish identifying information about the posters.  Moskovitz points out that the subpoena violates the Electronic Communications Privacy Act, which limits the ability of governmental entities to obtain information about online speakers.

I contacted Marc Zitomer, the School Board’s lawyer, to get his explanation for the subpoena. 

Interesting Newsweek Take on CFPA Proposal

The story is titled You Call This Financial Reform?  Why there's been a lot of talk about protecting consumers but little action . . .

Teaching Consumer Law Conference – Houston, Texas, 21 & 22 May 2010

Once again, the Center for Consumer Law at the University of Houston Law Center is organizing an international conference on “Teaching Consumer Law."   The Conference will focus on how, if at all, the teaching of consumer law should be affected by the recent recession and eventual recovery. The Conference is directed at those currently teaching or interested in teaching consumer law at the law school or college level. A discussion of prior conferences may be found here (2006) and here (2008).

The conference will deal with themes such as:

• How should we integrate recent economic developments into a consumer law course?
• How has the economic downturn affected consumer law outside of the U.S.?
• Does the U.S. need additional consumer regulation?
• Are there innovative ways to resolve consumer problems that should be taught? 
• How can we teach the multitude of subjects encompassed within the term “consumer law”?
• A consumer law update

Papers are invited on any of the above themes, or any other topic related to the teaching of consumer law and recent economic developments. Proposed papers may discuss the law of any jurisdiction; however, the emphasis is on topics of interest to law school professors and those with an interest in entering the profession.

 

Those who wish to submit a paper are invited to forward a paper proposal including a brief abstract of not longer than 400 words and contact information for the author of the paper. The proposals should be sent to Dean Richard M. Alderman at alderman@uh.edu. Proposals should be submitted no later than 4 December 2009. Authors will be promptly notified of acceptance by 18 December 2009. Final drafts of the papers are to be forwarded by not later than the 1st of April  2006. The language of the conference is English.  

 

The conference will be held in Houston on the 21st and 22nd of May 2010 and will consist of one full-day and one half day session. Conference registration fees will be waived for all presenters. Some scholarships are available for travel and room costs. Selected papers will be published in the Journal of Consumer and Commercial Law, http://www.jtexconsumerlaw.com.

 

More information about the Conference will be posted as the program is finalized.

 

 

Car Sales Plummet After Cash-for-Clunkers Program Ends

Retail sales in the U.S. dropped in September by 1.5%, driven by a whopping 10.4% decrease in auto sales. (Excluding the drop in auto sales, retail sales actually rose by .5%, which was better than what analysts had predicted.) This data is consistent with, but does not prove, the theory that the cash-for-clunkers program, which ended in late August, did not spur new car sales overall, but simply pushed purchases forward somewhat. This blog has taken a hard look at the clunkers program in a number of posts, including here, here, here, and here.

Jenzabar Joins Trademark Abusers Hall of Shame

Jenzabar, a company that makes software systems for colleges and universities, has joined the trademark abusers’ hall of shame by relentlessly pursuing trademark claims against the makers of a documentary film about the student protests at Tiananmen Square.  Jenzabar objects to the fact that, on the handful of pages on a web site about the film that discusses Jenzabar, the name “Jenzabar” appears in the keyword meta tags.

The trademark claims are based on the fact that a Google search for “Jenzabar” brings up the main Jenzabar-related page on the web site about the film in the first ten search results.   But these claims are preposterous, for many reasons.  Not only has Google announced that it stopped supporting keyword meta tags in its search algorithm “many years ago,” (Yahoo! has also dropped keywords) but even if meta tags still mattered, their use would be protected as truthful speech that accurately describes the content of those web pages.  Moreover, trademarks are “infringed” only if users are confused about the source of a product or service, and no reasonable Internet user would be confused about whether Jenzabar is the sponsor of the web page.  Jenzabar also relies on the questionable theory of “initial interest confusion”; but as Public Citizen’s brief explains, that doctrine has no application here and in any event runs afoul of the First Amendment.

Because the trademark claims are so tenuous, it is hard not to assume that Jenzabar’s real agenda lies elsewhere. 

When Wall Street talks, Secretary Geithner Listens

Interesting story on Treasury Secretary Geithner's telephone logs, showing he talks with Goldman and Citi CEOs more frequently than the chairs of the House and Senate Banking committees.  HT Melissa Huelsman.