Consumer Law & Policy Blog

And speaking of technology and privacy: if Sen. Feinstein isn't safe, no one is safe

It may sound like something from House of Cards, but it appears (or it has been alleged, at the very least) that the CIA is now hacking the U.S. Senate.

Here's the Post's lede describing the speech on the Senate floor today by Sen. Dianne Feinstein of California:

The head of the Senate Intelligence Committee on Tuesday sharply accused the CIA of violating federal law and undermining the constitutional principle of congressional oversight as she detailed publicly for the first time how the agency secretly removed documents from computers used by her panel to investigate a controversial interrogation program.

Several Republicans seemed to shy away from commenting, but not South Carolina Sen. Lindsey Graham, who had this remarkable reaction, as reported by CNN: "[T]he legislative branch should declare war on the CIA, if it's true."

You've got to read the rest of the story for yourself.

As when the sequester started affecting Congress members' own flights (thereby prompting action), this incident might bring the privacy issue home for some in Congress.

 

Snowden speaks about security, privacy, and the evolution of the internet

At SXSW, by video conference. You can watch the conversation here. The technology is a little glitchy but one can hardly blame him -- he's appearing through "seven proxies," notes the ACLU's Ben Wizner, who moderated the discussion -- and the content makes up for the image quality.

Nicastro Decision Impedes Access to Justice

    Public Citizen has released a report analyzing the impact of the U.S. Supreme Court’s decision in J. McIntyre Machinery Co. v. Nicastro, 131 S. Ct. 2780 (2011), on the ability of people injured by the products of out-of-state and foreign manufacturers to obtain access to the courts to remedy their injuries. Nicastro significantly limited the ability of a U.S. court to assert jurisdiction over a manufacturer that did not specifically target the marketing of its products at the state where the court is located, even though the product was sold in and caused injury in that state. The report finds that in a significant and growing number of cases, Nicastro has prevented plaintiffs from turning to their own states’ courts for redress of in-state injuries that resulted from foreign or out-of-state manufacturers’ release of their products into the stream of commerce.

Is bankruptcy an effective tool in preventing foreclosure?

For a variety of answers, see an empirical study by Alan White and Carolina Reid called Saving Homes? Bankruptcies and Loan Modifications in the Foreclosure Crisis. Here is the abstract:

Do homeowner bankruptcy filings work to delay or prevent home foreclosures, and how do they compare to voluntary loan modifications specifically targeted to mortgage relief? The 2007–2012 financial crisis provides a unique opportunity to assess whether bankruptcy can help homeowners avoid the negative consequences of over-indebtedness and mortgage default. This empirical study analyzes a large, loan-level mortgage dataset to determine which variables are associated with delinquency and bankruptcy filing, and in turn, whether filing bankruptcy or receiving a loan modification measurably influences subsequent loan outcomes (e.g., foreclosure sale, prepayment, or default cure). Overall, we find that bankruptcy filings delay foreclosures but are not generally effective in curing payment defaults, especially when compared to modifications negotiated outside of bankruptcy, which are highly effective. We also find, consistent with prior research, that variations in state bankruptcy and foreclosure law greatly influence debtor outcomes from one state to another. Bankruptcy filing is more effective in states with nonjudicial foreclosure and limited homeowner protections.

 

Why do I have a crappy credit score?

by Brian Wolfman

The major consumer credit scoring company, FICO, devised a model (first constructed in 1989) that produces what is known as a credit score. So, almost any consumer with any sort of credit history has what is known of as a FICO score. The basic FICO score ranges from 300 (very very bad) to 850 (very very good), with the median score generally in the low 700s. The three major credit reporting agencies -- Trans Union, Equifax, and Experian -- use the FICO score to rate the credit worthiness of consumers. Go here to learn a bit about the component parts of the FICO score and how the score can affect a person's ability to obtain credit (and the price of credit).

This article by Lew Sichelman explains that it can be difficult for a consumer to learn why her FICO score is what it is -- and, therefore, how to improve it. Sichelman goes on to describe a website called reasoncode.org, which makes it easier for consumers to get that information. reasoncode.org is a project of VantageScore, a FICO competitor.

Peter Holland Study of Debt Buyer Collection Suits Finds Mass Produced Default Judgments

Peter A. Holland of Maryland has written Junk Justice: A Statistical Analysis of 4,400 Lawsuits Filed by Debt Buyers, 26 Loyola Consumer Law Reporter 179 (2014).  Here's the abstract:

Debt buyers have flooded courts nationwide with collection lawsuits against consumers. This article reports the findings from the broadest in-depth study of debt buyer litigation outcomes yet undertaken. The study demonstrates that in debt buyer cases, (1) the vast majority of consumers lose the vast majority of cases by default the vast majority of the time; (2) consumers had no lawyer in ninety-eight percent of the cases; and (3) those who filed a notice that they intended to defend themselves without an attorney fared poorly, both in court and in out of court settlements.

This study challenges the notion that there is an “adversary system” within the context of debt buyer lawsuits. The findings suggest that no such adversary system exists for most defendants in consumer debt cases. Instead, these cases exist in a “shadow system” with little judicial oversight, which results in mass produced default judgments.

The procedural and substantive due process problems which are endemic in debt buyer cases call for heightened awareness and remedial action by the bench, the bar, and the academy. As lawyers who are “public citizens, with a special responsibility for the quality of justice,” the profession can do better.  This article proposes suggestions for further study, and several common sense reforms.

The lack of broadband competition in the U.S.

Read this article by Kate Cox on the lack of competition in the broadband industry in the U.S. It's chock full of maps showing that, in many areas, there is no competition. Here's how Cox starts:

When announcing Comcast’s intention to buy Time Warner Cable, Comcast CEO Brian Roberts called cable a “highly competitive and dynamic marketplace.” Dynamic it might be, but competitive it isn’t. Most of us live [in] a local monopoly, cable-wise: it might be a Comcast city or a Time Warner town, but we don’t have that much choice with our providers. And those companies also, hugely, provide our broadband access. So what does 75% reach or a 15% market share really look like, to a city and the people in it?

Then, Cox goes on to use maps to provide various examples. Go to the National Broadband Map to map out your area. Here's the Boston area:

 

Norm Silber and Diego Matamoros on the Dangers of Relying on Groupon Vouchers

Here, in the Huffington Post.

A plain-language explaination of some class action settlement pitfalls

For reasons we've discussed many times before, class actions are important and powerful tools for holding bad actors accountable. But sometimes the settlements they produce aren't as beneficial to class members as one would hope.

For an useful and accessible discussion of the types of problems that can arise in some class action settlements, check out this pro se objection to a class action settlement involving a product called Muscle Milk. Focus on the four-page introduction, which explains the case by way of a hypothetical dialogue that gets straight to the point. The brief's author is a student at Georgetown Law School.

To be clear, I don't know enough about the case to say whether this particular settlement as a whole is good or bad. But the objection raises some important questions.

Regulating Data Brokers

by Jeff Sovern

In a column last week, The Wild West of Privacy, Times columnist Joe Nocera called for, among other things, regulating data brokers.  In response, I wrote a letter to the Times, which they ran here.  Here's what I said:

Joe Nocera argues that data brokers should be obliged to tell consumers what information the brokers have collected about them.

To understand why consumers might want that, consider that Acxiom, a company that tells consumers what data it has collected about us, reports incorrectly all of the following: my income; whether I live with children; that I own a truck; that I have bought art, antiques, jewelry, bathroom furnishings, window treatments and golf products; and that I am interested in fine cooking, crafts, collecting antiques and golf. (Acxiom thinks that I’m much more fun than I am.)

It accurately reports my ethnicity, birthday, marital status, political party and lots of other information about me.

I wonder what other companies know about us, how much of it is incorrect, and to whom they provide the information. What consequences flow from the incorrect records? Why should strangers be able to buy private information about us without our knowledge, and what do they do with the information they collect? Laws of the sort Mr. Nocera calls for might help us learn that.

Want to know what Acxiom knows (or thinks it knows) about you? Go here. For readers teaching consumer protection and using our casebook, this might be a useful exercise when you get to chapter five of the book.