Consumer Law & Policy Blog

Does compliance with the FDCPA excuse violations of the TCPA?

No, explains the Eleventh Circuit, reversing summary judgment against a consumer who was hounded by State Farm with 327 autodialed calls over a span of six months in an attempt to collect somebody else's debt. The plaintiff told State Farm to stop calling. Even if the FDCPA required him to do so in writing, the TCPA did not, the court reasoned, so judgment for State Farm was inappropriate. Read more here (see pp. 21-26).

Article on High-Pressure Invited In-Home Selling

Paul Harrison, Marta Massi & Kathryn Chalmers have written Beyond Door-to-Door: The Implications of Invited In-Home Selling, 48 J. Consumer Affairs 195 (2014).  Here is the abstract:

Over the past 20 years, consumer groups and policymakers have expressed concerns about the high-pressure selling techniques used during in-home selling, often highlighting the distinction between typical door-to-door selling, and the type of selling that occurs when a salesperson is “invited” through a previous interaction to undertake a sales process in the consumer's home. This article explores these high-pressure selling techniques in the context of the invited in-home selling (IIHS) of educational software and the consequences in terms of consumer vulnerability and consumer protection policy. We conclude by drawing upon earlier discourse in this field to argue that policy-makers, consumer advocates and businesses consider a holistic, multi-dimensional contextualization of consumer vulnerability as a means to consider consumer protection in this, and other contexts.

DOT issues rear-visibility safety rule -- finally

When an essential consumer safety rule is issued after a prolonged delay, do you cheer the life-saving rule, or bemoan the delay? For me, some of each.

We've posted before about the problem of deadly "backover" crashes (collisions in which a vehicle moving in reverse strikes a person behind the vehicle, whom the driver can't see in the mirrors or out the windows because of large blind zones behind all vehicles). In 2008, Congress passed the Cameron Gulbransen Kids Transportation Safety Act requiring the Department of Transportation to act to reduce these types of crashes by imposing a rear visibility safety standard by 2011. The measure was uncontroversial and bipartisan: each year, backovers kill more than 200 people, a majority of them either children under 5 or elderly, and injure 15,000. But DOT stalled and stalled, notifying Congress on four separate occasions that it would be delaying the rule. In June 2013, even though a draft final rule had been pending at the White House for over a year, DOT told Congress it did not expect to complete the rule until January of 2015 -- which would be almost 7 years after the Gulbransen Act, and which would mean DOT had taken more than twice as long as Congress intended to issue the rule.

Represented by Public Citizen, a group of safety advocates -- including Dr. Greg Gulbransen, whose son Cameron was killed in a backover crash; Sue Auriemma, whose daughter Kate was injured in a backover crash; Advocates for Highway and Auto Safety; KidsAndCars.org; and Consumers Union -- sued DOT in September 2013 to force it to issue the rule. Briefing concluded in January, and oral argument was scheduled for April 1.

Today, on the eve of argument, DOT finally issued the safety standard, which is in most respects robust in terms of its scope and its specifications. Obviously this is a step to applaud -- lives will be saved and injuries prevented by the new standard. But it is, in the words of Dr. Gulbransen, a bittersweet victory. Since Congress's original deadline in 2011, by DOT's own estimates, 600 people have been killed and 45,000 injured in backover crashes. In 2010, DOT was on track to meet the congressional deadline, but then the regulatory process broke down, and it took three years to get moving again. Why? Politics? Industry pressure? And issuing the rule on the eve of a court hearing hardly seems like a model of an administration leading the way on safety and accountability -- rather, it feels like the administrative was backed into a political and/or judicial corner and finally gave up. This thoughtful story by the L.A. Times covers the various angles.

In the main, today's rule is a win for public safety and cause for celebration. It is a testament to the hard work and years of diligence by advocates such as our courageous petitioners Greg Gulbransen and Sue Auriemma, and the safety organizations educating the public and pushing hard for congressional and then administrative action. But there was no reason the public should have had to wait so long for the final result. We need to keep fighting to make our executive agencies more responsive and more responsible.

 

Reminder: "Making the fine print fair" symposium at Georgetown Law this Friday, April 4

I don't like repeating posts, but an exception is warranted here. I am reproducing Jeff Sovern's post about the "Making the fine print fair" conference set for this Friday, April 4, at Georgetown law. Note that the conference is free and open to the public. So, if you are in D.C. on Friday, feel free to drop by.

Making the Fine Print Fair Symposium at Georgetown Law April 4

The Georgetown Consumer Law Society and Citizen Works are hosting a symposium, Making the Fine Print Fair, at Georgetown on April 4 from 8:30 a.m. to 6:30 p.m.  Speakers include FTC Chairwoman Edith Ramirez; Ralph Nader; Georgetown Dean William Treanor; Associate Dean Gregory Klass; Professors David Vladeck, Adam Levitin; CL&P bloggers Deepak Gupta, Scott Michaelman, and Jeff Sovern; NACA Executive Director Ira Rheingold; Citizen Works Executive Director Theresa Amato; Professors Nancy Kim, Omri Ben-Shahar, Margaret Jane Radin, Florencia Marotta-Wurgler, Michael Rustad, and Lauren Willis; former Illinois Attorney General and Justice Neil Hartigan; PIRG's Ed Mierzwinski; Arent Fox's Marc L. Fleischaker, ALICE's Peter Bailon; Public Justice's Matt Wessler; columnist Bob Sullivan; Consumers Untion's George Slover and others.

More information here.

The minimum wage and the effort to raise it

Our readers may be interested in a couple new items about the minimum wage. First, this piece by Emily Badger discusses the difficulties faced by low-wage workers living in places where the cost of housing is high. Badger highlights a new report by the Naitonal Low Income Housing Coalition, which claims that

a minimum-wage worker in the District of Columbia -- where the wage floor is currently $8.25 an hour -- would need to work 137 hours a week to afford what the Department of Housing and Urban Development considers a fair market rent for a modest two-bedroom home. Put another way: A local household would need 3.4 full-time minimum-wage workers to afford such a home. Or, a single earner in that household would need to make a lot more money: $28.25 an hour to be exact.

Meanwhile, on Saturday, Vice President Joe Biden (substituting for President Obama, who was out of country) urged congressional approval of the President's $10.10 per hour minimum-wage proposal in the White House's weekly radio address. (You can also watch VP Biden's address by clicking on the embedded video below.)

(HT to Roo on the Badger piece.)

 

Michael Collins Study of High-Risk Mortgage Regulation

J Michael Collins has written Protecting Mortgage Borrowers through Risk Awareness: Evidence from Variations in State Laws, 48 J. Consumer Affairs 124 (2014).  Here is the abstract:

In the wake of historic levels of mortgage defaults, regulators have debated how to regulate certain high-risk loans because of the risks of foreclosure involved. This study examines state laws that required loan applicants to receive information about the risks of foreclosure before they could sign certain mortgage contracts. Skeptics suggest that disclosures are largely ignored by consumers, yet controlling for other factors this study shows that loan applicants in states with enhanced warnings about foreclosures were more likely to reject high-cost refinance mortgage loan offers from a lender. Enhanced disclosures with features such as risk warnings, signatures, and referrals to counseling are being implemented as part of Dodd–Frank consumer finance reforms. This study suggests these strategies may be useful to balance consumer protection and access to high-risk credit.

Register now for "Teaching Consumer Law Conference."

Registration is now open for the Teaching Consumer Law Conference, to be held in Santa Fe, New Mexico, May 30-31. Presented by the Center for Consumer Law at the University of Houston Law Center, this year's Conference features more than thirty speakers discussing issues of importance to those teaching consumer law, interested in teaching consumer law, or just wanting to keep up with the subject. Topics include: debt collection, virtual currency, consumer credit, arbitration and class action updates; several presentations about the role of consumer law professors, the importance of consumer clinics, and the role of the FTC and CFPB; as well as many international speakers discussing topics of interest in today's global economy. A brochure and registration form is available here. Hope to see you in Santa Fe.

Fixing Consumer Protection Law So Borrowers Understand Their Payment Obligations

by Jeff Sovern

The Journal of Consumer Affairs published my paper, Fixing Consumer Protection Laws So Borrowers Understand Their Payment Obligations, 48 Journal Consumer Affairs 17 (2014). Here is the abstract:

The millions of consumers who defaulted on their mortgages in recent years should all have received disclosures mandated by the federal Truth in Lending Act (“TILA”), which requires that lenders inform borrowers of certain loan terms including monthly payments required. Yet many of those borrowers seem not to have understood what their payment obligations were. In fact, TILA, which was intended to enable consumers to borrow wisely, not only failed the subprime borrowers in that goal, but was interpreted to require lenders to provide misleading disclosures that might have persuaded borrowers that their loans were more affordable than they would turn out to be. This article attempts to substantiate the claim that the laws in place during the years in which the subprime loan buildup occurred did not provide the aid consumers needed in making borrowing decisions, and explores strategies to improve the disclosure environment.

Kirsch, Mayer, & Silber: What to Do About Payday Lending

Larry Kirsch, Roert N. Mayer and Norman I. Silber of Hofstra have authored, The CFPB and Payday Lending: New Agency/Old Problem, 48 Journal of Consumer Affairs 1 (2014). Here's the abstract:

The Dodd-Frank Act of 2010 brings nonbank payday lenders under federal regulation for the first time. The question of precisely how to regulate the payday loan industry creates a number of difficult challenges for the newly created Consumer Financial Protection Bureau (CFPB). Whereas most consumer advocates would prefer to ban or strictly limit high cost payday lending activity and address unfair/abusive lending practices, the CFPB must also be attentive to the impact of regulation on credit access for low-wage, credit-constrained payday borrowers. This article highlights the policy, legal, and institutional issues raised during the CFPB's decision-making process. The CFPB has the opportunity to dramatically shift the longstanding consumer protection paradigm in favor of real-world protection of vulnerable borrowers and, thereby, to realize the hopes of the activists who helped to bring the Bureau into existence.

Ruminations about Dietz v. Perez

by Paul Alan Levy

I have blogged a few times about the libel suit brought by Washington, DC contractor Christopher Dietz against one of his customers, Jane Perez, who posted on Angie’s List and Yelp unfavorable reviews  of his work on her newly purchased condo and included an assertion that, after their contractual relationship broke down, she noticed that some of her jewelry had disappeared and only Dietz had a key.

Dietz unsuccessfully sued her for non-payment for his construction services, but had initial success suing for libel: he obtained a preliminary injunction against two small parts of her original statements.  We contested that injunction as a prior restraint; the Virginia Supreme Court reversed with amazing alacrity.   We at Public Citizen generally do not take libel cases at the trial court level, but with our help, Perez obtained pro bono representation from a seasoned Virginia lawyer, Raymond Battocchi; with his help, Perez counterclaimed against Dietz for defamation based on what he had said about her, and the whole shebang went to trial before a jury in Fairfax Virginia last  February.  As I discussed in my last blog post about the case, the jury returned a verdict that each side had defamed the other (without saying precisely how), but awarding no damages.  I suggested then that the verdict could be seen as suggesting that neither side really belonged in court.

Perez appears to have followed just that reading of the verdict — she accepted the harsh judgment of her peers, removed her online criticisms from both Yelp and Angie’s List, and was ready to move on with her life.  Not so contractor Dietz, who made a number of media appearances in connection with this litigation and has apparently come to love the life of a litigant whose case attracts significant media attention.  He filed motions for injunctive relief against the posts that had already been removed, and for additur, a judicial award overriding the jury and fixing a specific amount of damages to be assessed against Perez, or in the alternative for a new trial on the issue of damages alone. 

I looked at both motions carefully, and they both struck me as problematic for a variety of reasons. By way of disclaimer:  although I have not represented Perez since the Virginia Supreme Court ruled, I have kibitzed with Ray Battocchi about his legal arguments, and I have offered to enter the case again if there is any appeal (see below).