Consumer Law & Policy Blog

Educators say free community college is out of reach

…is the title of this eye-opening piece in 538.com, about a Gallup survey of community college presidents about the likelihood of free community college passing in their states. President Obama has proposed to fund two years of free community college “for responsible students across America” but even under a formula providing that the feds would pick up 75% of the tab, a minority of community college presidents think the idea would pass in their states.

This result is discouraging. Free community college, of course, would be a good way to educate high school graduates so that they don’t have to resort to companies like this.

"Misperceiving Inequality"

A provocative paper from the National Bureau of Economic Research this spring argues that, although most political arguments about the implications of income inequality "crucially assume that ordinary people know how high inequality is, how it has been changing, and where they fit in the income distribution," in fact "ordinary people have had little idea about such things. What they think they know is often wrong. Widespread ignorance and misperceptions of inequality emerge robustly, regardless of the data source, operationalization, and method of measurement."

Further, the authors (Vladimir Gimpelson and Daniel Treisman) argue that "the perceived level of inequality—and not the actual level—correlates strongly with demand for redistribution and reported conflict between rich and poor."

You can read the full paper here.

Get more information from the FDA on the relationship between pain drugs and heart attacks and strokes

Many of our readers likely have seen media reports that the Food and Drug Administration (FDA) is strengthening its label warning about the relationship between use of certain pain medications and heart attacks and strokes. The drugs are all in a drug class known as non-steroidal anti-inflammatory drugs, or NSAIDs. Common over-the-counter NSAIDs that will have the new warnings include ibuprofen (Motrin, Advil) and naproxen (Aleve). (Although aspirin is an NSAID, the new warnings do not apply to aspirin.)

Here's what the FDA itself has to say:

Based on our review and the advisory committees’ recommendations, the prescription NSAID labels will be revised to reflect the following information:

• The risk of heart attack or stroke can occur as early as the first weeks of using an NSAID. The risk may increase with longer use of the NSAID.
• The risk appears greater at higher doses.
• It was previously thought that all NSAIDs may have a similar risk. Newer information makes it less clear that the risk for heart attack or stroke is similar for all NSAIDs; however, this newer information is not sufficient for us to determine that the risk of any particular NSAID is definitely higher or lower than that of any other particular NSAID.
• NSAIDs can increase the risk of heart attack or stroke in patients with or without heart disease or risk factors for heart disease. A large number of studies support this finding, with varying estimates of how much the risk is increased, depending on the drugs and the doses studied.
• In general, patients with heart disease or risk factors for it have a greater likelihood of heart attack or stroke following NSAID use than patients without these risk factors because they have a higher risk at baseline.
• Patients treated with NSAIDs following a first heart attack were more likely to die in the first year after the heart attack compared to patients who were not treated with NSAIDs after their first heart attack.
• There is an increased risk of heart failure with NSAID use.

For much more information from the FDA, begin here.

 

U.S. consumers spend $1.2 billion on fish oil supplements based on "empty promises" that fish oil improves health

That's the thrust of this article by Peter Whoriskey.

"Health courts," medical justice, and the Vaccine Injury Compensation Program

Law professor Nora Engstrom has written A Dose of Reality for Specialized Courts: Lessons from the VICP. Here is the abstract:

The latest in a long line of reform proposals, health courts have been called “the best option for fixing our broken system of medical justice.” And, if health courts’ supporters are to be believed, these specialized courts are poised to revolutionize medical malpractice litigation: They would offer faster compensation to far more people, while restoring faith in the reliability of legal decisionmaking. But these benefits are, as some leading supporters have acknowledged, “hoped for, but untested.” The question remains: Will health courts actually operate as effectively as proponents now predict?

The best evidence to answer that question comes, I suggest, from the Vaccine Injury Compensation Program (VICP) — a Program that employs very similar procedures to handle very similar claims and that had, at its birth, a very similar ambition. Mining nearly three decades of previously untapped material concerning the VICP’s operation, this Article analyzes how an American compensation program that wrests jurisdiction from traditional courts has, in practice, fared. Findings are discouraging. Though the VICP and health courts share many of the same procedural innovations, those innovations, in the VICP context, have largely failed to expedite adjudications and rationalize compensation decisions. This fact carries significant implications for health courts, suggesting that they won’t operate nearly as effectively as their proponents now predict. More broadly, this study of an American no-fault regime, in action and over time, enriches — and at times complicates — current understanding of the prospects, promise, and “perceived virtues” of other specialized courts and alternative compensation mechanisms.

For a discussion of Engstrom's article that focuses on the shortcomings of the vaccine program, read this piece.

Judge Upholds Cancellation of Washington Redskins Trademarks

A federal district judge in Virginia on Wednesday rejected the Washington Redskins’ challenge to the cancellation of the football team’s trademarks as disparaging to Native Americans. Judge Gerald Bruce Lee upheld a previous finding by a patent and trademark administrative board that the trademarks violated federal law under the Lanham Act. The judge denied the team’s constitutional challenge to a section of federal trademark law that addresses disparaging language. Lee wrote that, although the court was canceling the team’s registration of the trademarks, the team was still free to use those marks. The Redskins plan to appeal the decision and will continue to use its trademark.

FTC's busy week - debt collection and payday loans

The Federal Trade Commission has had a busy week.

Yesterday, the FTC announced that it had stopped a "massive payday loan fraud scheme."

The operators of a payday lending scheme that allegedly bilked millions of dollars from consumers by trapping them into loans they never authorized will be banned from the consumer lending business under settlements with the Federal Trade Commission.

The settlements stem from charges the FTC filed last year alleging that Timothy A. Coppinger, Frampton T. Rowland III, and their companies targeted online payday loan applicants and, using information from lead generators and data brokers, deposited money into those applicants’ bank accounts without their permission. The defendants then withdrew reoccurring “finance” charges without any of the payments going to pay down the principal owed. The court subsequently halted the operation and froze the defendants’ assets pending litigation.

Also yesterday, the FTC announced that "a federal court has halted, and frozen the assets of, a nationwide debt relief telemarketing scam that bilked millions of dollars from consumers, pending resolution of allegations made by the [FTC] and the State of Florida."

The scammers, who used a variety of phony business names with associated websites, cold-called consumers with credit card debt and falsely promised that, for an up-front fee of, on average, between $695 and $1,495, they would save them thousands of dollars by reducing their credit card interest rate. The defendants also allegedly falsely promised to refund consumers’ money if they failed.

Today, the FTC announced that it has acted to "Put an End to Fraudulent Debt Collection Scheme that Targeted Spanish-Speaking Consumers."

The operators of a fraudulent debt collection scheme have agreed to be banned from the debt collection business and telemarketing, to settle Federal Trade Commission charges that they bilked millions of dollars from Spanish-speaking consumers throughout the country by demanding that they pay bogus debts.

The settlements stem from an FTC complaint filed last year against [several] defendants ... alleging that they threatened consumers with lawsuits, arrest and immigration status investigations if they failed to make payments on phony debts. ....

Under the settlement orders, [defendant] Sumore [LLC] and the individual defendants are banned from debt collection activities and telemarketing, and they are permanently prohibited from making the misrepresentations alleged in the complaint, and material misrepresentations about any product or service. These defendants and the relief defendants are also barred from selling or otherwise benefitting from customers’ personal information.

The settlement orders impose judgments on the defendants totaling nearly $6.8 million, which are suspended upon the transfer of approximately $776,000 worth of assets, including Florida real estate. In each case, the full judgment will become due immediately if the defendant is found to have misrepresented his or her financial condition. The order against relief defendant Allianza Inmobiliaria imposes a $172,000 judgment against the company.

Supplement marketers settle FTC deceptive advertising charges

The Federal Trade Commission has announced:

The marketers of a dietary supplement called Procera AVH will relinquish $1.4 million under settlements resolving Federal Trade Commission charges that they deceived consumers with claims that the supplement was clinically proven to significantly improve memory, mood, and other cognitive functions.

Under the terms of the settlements, the defendants will pay $1 million to the FTC, and another $400,000 to satisfy a judgment in a case brought by local California law enforcement officials. They also will be barred from making similar deceptive claims in the future and from misrepresenting the existence, results, or conclusions of any scientific study.

“The defendants in this case couldn’t back up their claims that Procera AVH would reverse age-related mental decline and memory loss," said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Be skeptical of ads promising quick and easy cures.”

According to the FTC’s complaint, the defendants marketed and sold Procera AVH as a “solution” to memory loss and cognitive decline, including as associated with aging. The defendants advertised the product using infomercials, direct mail flyers, newspapers, and the Internet.

The FTC's full press release is here.

Voters want stronger Wall Street regulation

The Washington Examiner reports:

Voters overwhelmingly say they want stronger regulations for banks and less Wall Street influence in Washington even as the financial crisis recedes into the past, according to a new poll released Tuesday by advocates of tougher rules on the financial industry.

Seventy-three percent of likely 2016 voters favor the provisions of the 2010 Dodd-Frank financial reform law, the poll conducted by Democratic pollster Celinda Lake found. The poll was commissioned as the law's proponents and critics alike prepare to mark the five-year anniversary of its passage.

The full story is here.

A summary of the poll results is here.

CFPB, 47 States and D.C. Take Action Against JPMorgan Chase for Selling Bad Credit Card Debt and Robo-Signing Court Documents

From the CFPB press release:

Today the Consumer Financial Protection Bureau and Attorneys General in 47 states and the District of Columbia took action against JPMorgan Chase for selling bad credit card debt and illegally robo-signing court documents. The CFPB and states found that Chase sold “zombie debts” to third-party debt buyers, which include accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible. The order requires Chase to document and confirm debts before selling them to debt buyers or filing collections lawsuits. Chase must also prohibit debt buyers from reselling debt and is barred from selling certain debts. Chase is ordered to permanently stop all attempts to collect, enforce in court, or sell more than 528,000 consumers’ accounts. Chase will pay at least $50 million in consumer refunds, $136 million in penalties and payments to the CFPB and states, and a $30 million penalty to the Office of the Comptroller of the Currency in a related action.