Consumer Law & Policy Blog

How Driver's License Suspensions Unfairly Target The Poor

...is the title of this NPR piece, which examines both how easy it is to lose one's license because of poverty (in Wisconsin, for instance, failure to pay a ticket can result in a two-year suspension, which is harsher than the penalty for either drunk driving or a hit-and-run), and how losing a driver's license contributes to a downward spiral by limiting a person's economic opportunities.

As one 29-year-old father of four in Milwaukee put it (as quoted in the print text of the story):

"It hinders you because most jobs are not in the inner city nowadays. And they get pushed far back, and the buses don't go out there. So the inner-city jobs that we have are not able to provide for our families that we have and to provide for ourselves," [McArthur Edwards] says.

In 2013, Edwards was stopped by police and ticketed for driving with a broken light over his back license plate. State department of transportation records show that when he didn't pay the $64 fine, his driver's license was suspended for two years.

FDA: Weight-loss products are often ineffective and/or dangerous

Here's what the Food and Drug Administration just said about so-called dietary supplements and foods claimed to promote weight loss:

If you find yourself making this common New Year’s resolution, know this: many so-called “miracle” weight loss supplements and foods (including teas and coffees) don’t live up to their claims. Worse, they can cause serious harm, say FDA regulators. The agency has found hundreds of products that are marketed as dietary supplements but actually contain hidden active ingredients (components that make a medicine effective against a specific illness) contained in prescription drugs, unsafe ingredients that were in drugs that have been removed from the market, or compounds that have not been adequately studied in humans.

If you want detailed information on the topic, the FDA has webpage for you.

Mary Heen Paper Asks: Should Insurers Be Able to Discriminate

Mary L. Heen of Richmond has written Nondiscrimination in Insurance:  The Next Chapter, 49 Georgia Law Review (2014-2015).  Here is the abstract:

For nearly 150 years, American insurance companies have engaged in race and gender pricing practices that would be illegal if followed today by any other major commercial enterprise.  The insurance industry has defended its long-standing practices, first for race and now for gender, based on ideas about insurance “equity” developed in the nineteenth century. The continued application of these ideas, and the practices that have resulted from them, conflict with fundamental civil rights principles and should not be tolerated as exceptions to our national civil rights laws.  As that history shows, classifications used by insurers to determine rates and benefits raise complex distributional, financial, and political issues that cannot be resolved simply as technical questions of actuarial risk or economics.  This Article proposes comprehensive federal civil rights legislation to ban discrimination based on race, color, religion, national origin, and sex in insurance coverage, rates, and benefits. It explains why previous reform efforts have failed and why recent developments, including the adoption of unisex insurance rates in Europe, could make consideration of such legislation in the United States timely once again.

Privacy/technology litigation round up

A couple of significant pro-consumer, pro-privacy rulings over the last two weeks of 2014:

First, a federal district court in Minnesota rejected the argument that putative class of Target consumers harmed by the retail giant's data breach lacked standing to sue over the breach. As Law360 reports, the court "concluded that the plaintiffs' assertions that the breach had caused them to pay unlawful charges, restricted or blocked access to their bank accounts, made them unable to pay other bills, and caused them to pay unfair late charges and new card fees were sufficient to allow them to proceed with their claims at this early stage in the litigation." Read the story here. For a relevant discussion of the harms caused by data breaches, read Public Citizen's amicus brief in FTC v. Wyndham, pending in the Third Circuit.

Second, a federal district court in California rejected a motion to dismiss a class action against Facebook for intercepting the content of users' electronic messages in order to determine if users "like" a webpage (for purposes of Facebook's "like" counter) and in order to help Facebook send users targeted advertising. The putative class in the case, Campbell v. Facebook, alleges violations of both state and federal privacy law. Judge Hamilton's thoughtful opinion rejected the argument that Facebook's snooping into its users' messages is part of its "ordinary course of business" and therefore exempt from privacy protections: “An electronic communications service provider cannot simply adopt any revenue-generating practice and deem it ‘ordinary’ by its own subjective standard. The court instead finds that any interception falling within the exception must be related or connected to an electronic communication provider’s service, even if it does not actually facilitate the service.” Coverage in the Recorder is here, and the opinion is here.

CFPB bars "long-distance lawsuits" against servicemembers

Let's kick off the new year with some good news on the CFPB enforcement front:

We've been following for a few months now the story of Virginia retail chains that take advantage of servicemembers' transience to trap them in a cycle of debt. (See here for my original discussion and here for a discussion of the CFPB's first enforcement action against one of the companies -- a fine for misleading consumers.)

Now the CFPB has taken another, more significant enforcement action: it has settled a lawsuit against two of the companies (Freedom Furniture and Electronics and Military Credit Services) under terms that require the payment of millions of dollars in restitution and bar the companies from using Virginia courts to sue out-of-state consumers. Although a third company (USA Discounters, which was the target of the earlier fine) was not involved in this settlement, it appears to be softening its practices: as Pro Publica reports, "It still plans to file lawsuits in Virginia against out-of-state borrowers, but now will notify them that they can elect to be sued closer to home if they default on their payments."

Read the full Pro Publica story on the CFPB settlement here.