Consumer Law & Policy Blog

World Progress Report Gaming Search Engines to Bury Reports Linking It to Scammers

by Paul Alan Levy

I reported a couple of weeks ago that Vision Media TV Group, whose scam directed at unsophisticated non-profit groups thirsting for free publicity on public TV had apparently resurfaced under a new name, World Progress Report.  Since then, a few others have taken up the report (for example, Techdirt and Consumerist).  More remarkable is the response from World Progress Report, which has been churning out press release after press release about series that it is supposedly preparing to show on public television (put a big asterisk after both “show” and “public television), teaching consumers how to recognize “ponzi scams,” “mortgage scams,”and “foreclosure scams.”

At first, my reaction was to think about how ironic it was that the crowd behind World Progress / Vision Media was taking credit for showing up scams.  And wasn’t that cute?

But there is a more sinister explanation for this scam spam.  By this new strategy, World Progress Report is loading up the search results both for its own name, and for its name combined with the word “scam,” with reports about its supposed public television programming.  As a result, the information that impartial critics are calling it a scam are being buried in a welter of search results for its own self-promotion.

What Happens When You Tell Consumers You're Trying to Collect a Time-Barred Debt?

Nathalie Martin of New Mexico and Timothy E. Goldsmith of New Mexico's Psychology Department report the answer in Testing Materiality Under the Unfair Practices Acts: What Information Matters When Collecting Time-Barred Debts? Forthcoming in the Consumer Finance Law Quarterly Report.  Here's the abstract:

Should creditors and debt collectors be required to disclose the fact that a debt is time-barred when attempting to collect from a consumer? This article describes an empirical study that compares how consumers react to two different collection letters, one in which the recipients are told explicitly that the debt being collected is time-barred, and one in which they are not given this information. The study measures whether consumers are equally willing to pay the debt, when they are told that the debt is time-barred. Appended to the article are the survey questions asked of the study participants.

Spoiler alert: telling them the debt is time-barred makes a difference to their willingness to pay it.

Toxie's Dead

If you were listening to NPR this morning, you would have heard that Toxie the Toxic Asset has died. The folks at NPR's Planet Money had purchased for $1,000 (and a 99% discount!) a bundle of mortgages whose values had dropped precipitously in the financial crisis. Did Planet Money make money? Listen to the whole story here. Here's the story's intro:

Toxie, Planet Money's pet toxic asset, died this week. She was killed by one of the worst housing busts in U.S. history. Toxic assets — bundles of mortgages that Wall Street sliced up and sold to investors — were at the center of the financial crisis.  When the housing market tanked, no one wanted to own them. That's when we bought one. When we bought Toxie, in January of this year, she seemed like a great deal.  We paid $1,000. That was 99 percent less than she cost during the housing boom. Every month, when homeowners paid their mortgages, we got a check. We thought we'd make back our investment before she died. But in the end, we collected only $449. It was never really about the money, though. And now that Toxie's gone, we'd like to take a few moments to remember her, and hear from those she’s touched.

An NPR listener also composed a song about Toxie!

Jeff Gelles Column on the Elizabeth Warren Appointment

Here.  An excerpt:

Warren can help for two big reasons, starting with the fact that, unlike most politicians who claim to be outsiders, she really is one. She's not wedded to Washington ways, or a prisoner of expectations that lobbyists rule and nothing can change.

In a conference call Friday, Warren stressed that she'd had Obama's full support in establishing the new agency - an idea she first proposed when he was a senator. And she said Obama's support didn't waver even as other presumed allies - such as Barney Frank, chair of the House Financial Services Committee - voiced doubts.

"Everyone told me a year and a half ago that this idea of getting a consumer agency was a pipe dream," Warren says. "I would like to underline that. Those were exactly Barney Frank's words."

The other big reason that Warren is a breath of fresh air - and I know this will disappoint my libertarian friends - is that she's the anti-Ayn Rand. Warren is a public intellectual of great talent and insight who understands that the real world doesn't operate like some libertarian fantasyland divided between virtuous "producers" and the rest of us ne'er-do-wells.

Is Laurence Summers's announcement that he will resign a signal that the economy is headed for catastrophe?

Here's a fun one: Georgetown law prof Adam Levitin says at Credit Slips that there may be a "plausible personal reason" for Summers' decision to leave as head of the President's National Economic Council. But Levitin is worried that the real reason is that Summers thinks that the economic "shit is really going to hit the fan" and that Summers doesn't want to be at the White House when it happens. I guess that also means that Levitin thinks that Summers may knows something that we don't.

GMAC Mortgage Halts Tainted Foreclosures

Bloomberg has a report today that GMAC Mortgage is halting foreclosures in 23 states due to unspecified defects.  Apparently this action results from depositions of an employee who admits to signing tens of thousands of summary judgment affidavits and lost note affidavits with no knowledge of whether any of the facts being affirmed are true.  This is another illustration of the need for stronger enforcement of laws and rules governing mortgage servicer conduct, at a point when the stress of foreclosure volumes inevitably leads to shortcuts and worse by mortgage collectors.

Update:  Ally Financial, parent company of GMAC Mortgage, has issued a statement clarifying that it has only stopped some sales of foreclosed homes and evictions, not all foreclosures.  The release is otherwise uninformative.

FDA Won't Require Labeling on Genetically Modified Salmon

A few weeks ago, we described the battle between an emerging industry and consumer groups over whether the FDA should approve the first genetically modified animal for human consumption: genetically modified salmon. The FDA hasn't come to a decision yet, but we learn in this morning's Washington Post that if the FDA does approve the salmon, the agency will not require the manufacturer to label the product as genetically modified. The FDA says that the law does not require the labeling unless the modified product is "materially different" from the "regular" product--in this case, non-genetically modified salmon. And, the agency goes on to say that, if approved, the genetically modified product would not be materially different from the regular product. Moreover, the Post notes that the new product's competitors may have difficulty, under current law, labeling their regular products as "not genetically modified."

 

 

 

The Post article also explains that current Alaska state law will require the seller of genetically modified fish to label it as genetically modified. So . . . if the FDA approves the genetically modified salmon, look for the agency and the seller of the genetically modified salmon to argue that the Alaska law is preempted by a (supposed) federal policy against that kind of labeling.

What Should the CFPB Tackle First?

We just got done telling you what Alan White thinks Elizabeth Warren's Consumer Financial Protection Bureau should do immediately on the housing front. Now, Ron Lieber in today's New York Times tells us the 7 things the CFPB should do on the student loan, credit card, and credit disclosure front. By the way, when Lieber asked Warren to give her own priority list, she said in an email “Thanks for the offer, but I can’t say anything about anything.” We earlier posted an excellent piece by the National Consumer Law Center on a proposed agenda for the CFPB.

 

What New "Consumer Czar" Elizabeth Warren Can Do On Housing

At Credit Slips, CLP blogger Alan White has this interesting post explaining what Elizabeth Warren can do as "consumer czar" on housing-related issues, even before the Consumer Financial Protection Bureau's regulatory authority kicks in. Here's the slimmed down version:

The Bureau's authority to write regulations and enforce laws does not begin until the transfer date next year.  In the meantime, however, the Warren/Geithner acting director team can take action immediately on several urgent issues. First the foreclosure crisis.  The statute requires the Treasury Secretary to make several improvements in the Home Affordable Modification Program, including greater transparency for homeowners dealing with mortgage servicers and greater public accountability for the servicers (who are dominated by the four big banks.) . . . Second, Dodd-Frank requires a report on the future of the Fannie and Freddie "conservatorship", i.e. nationalization, to be submitted by January 31, 2011.  The prevailing thinking at the White House seems to favor a gradual exit from securitization for the GSEs [Government Sponsored Enterprises], converting them to insurance providers similar to FHA. . . .Third, the new law calls for major improvements in gathering and reporting information about credit markets, information which will be vital to developing fact-based regulations after the CFPB is open for business.  HUD and the CFPB are charged with creating a new public national foreclosure database.  The sooner this happens, the sooner policy can be based on timely and accurate information, available to researchers, the media and the public, rather than relying on surveys and reports from trade associations and data vendors.

Poverty in America Soars

Depressing U.S. census data show that, in 2009, more Americans were living below the poverty line -- $22,000 per year for a family of four -- than at any time since poverty statistics were first kept more than 50 years ago. More than 44 million Americans, or 1 in 7, are living in poverty. To get a more complete picture, read several related stories from the Washington Post.