Consumer Law & Policy Blog

"FCC proposes millions in fines, collects $0"

Politico reports:

The FCC has announced a series of eye-popping fines against companies over the past two years: Roughly $100 million against nearly a dozen firms for defrauding a phone subsidy program, $35 million against a Chinese company for selling illegal wireless jamming equipment, and $100 million against AT&T this June for throttling customers on unlimited data plans.

But how much of that money has the commission actually collected? $0.

While the FCC has always had a cumbersome process to impose penalties, the increasingly large fines proposed by the FCC are highlighting the gap between attention-grabbing press releases and slow-moving collection. The disconnect is drawing scrutiny in Congress as the FCC’s enforcement bureau ... is aggressively targeting companies on everything from their billing practices to data security to Wi-Fi blocking.

The full story is here.

Times: Foiling Electronic Snoops in Email

Here.  Excerpt:

*  * * Trackers, which come in many forms including a single invisible pixel inserted into an email or the hyperlinks embedded inside a message, are frequently being used to detect when someone opens a message and even where that person is when the email is opened. By some estimates, trackers are now used in as much as 60 percent of all sent emails.  

* * *

Yet, the prevalence of these trackers raises consumer questions. Because trackers are invisible, many people are unaware of them and have no inkling of how to dodge them. “It’s definitely a privacy concern,” said Cooper Quintin, a technologist and privacy advocate for the Electronic Frontier Foundation. “There’s no mechanism for people to opt out.”

Times: Bipartisan Bill Would Protect Service Members’ Right to Avoid Arbitration

Here.

S.I Strong Chapter: Incentives for Large-Scale Arbitration

S.I. Strong of Missouri has written Incentives for Large-Scale Arbitration: How Policymakers Can Influence Party Behaviour.  Here's the abstract:

At this point, the future of large-scale arbitration (i.e., class, mass and collective procedures) can best be described as mixed. On the one hand, class arbitration has been curtailed in the United States as a result of various US Supreme Court decisions upholding waivers of large-scale suits in arbitration. On the other hand, mass and multiparty arbitration in investment proceedings appears to be on the rise. Collective arbitration seems to exist somewhere between these two extremes, since there are an increasing number of collective procedures around the world (for example, various types of collective arbitration can currently be found in Spain, Germany and the United States) but parties appear to use such mechanisms relatively infrequently.

The uneven status of large-scale arbitration raises the question of why parties and states choose to use or develop class, mass or collective procedures. To answer this question, it is necessary to analyse the legal and social environments in which these procedures exist to determine whether parties have sufficient incentives to pursue large-scale arbitration and whether states can or should do more to promote these forms of dispute resolution.

This chapter attempts to address these concerns by considering the use and availability of incentives for large-scale arbitration and in particular whether and to what extent lawmakers can or should seek to influence party behaviour through default rules and other policymaking tools. In so doing, this chapter attempts to provide parties, practitioners and policymakers with a better understanding of how class, mass and collective arbitration operate within various legal and social environments and how the choice of certain legal frameworks can optimize both public and private values.

Second Circuit rejects antitrust attack on credit card arbitration clauses

With so many avenues to challenge the use of forced arbitration clauses in consumer contracts closed off by Supreme Court precedent, plaintiffs tried another one: allege that so many credit card companies' parallel adoption of the clauses was collusive and therefore violated antitrust law. But the district court dismissed the challenge and yesterday the Second Circuit affirmed, finding that the record supported the district court's conclusion that the “final decision to adopt class-action-barring clauses was something the Issuing Banks hashed out individually and internally.” The case is Ross v. Citigroup, available here. (HT: Julie Murray.)

CFPB's fall 2015 rulemaking agenda

The Consumer Financial Protection Bureau today posted its current rulemaking agenda.

Its "current initiatives" address arbitration; payday, auto title, and similar lending products; pre-paid accounts; overdraft; debt collection; larger participants and non-depository lender registration; Women-owned, minority-owned, and small businesses data collection; mortgage servicing; and implementation of various mortgage rules.

The CFPB announcement has a summary.

The agenda, which indicates the stage of each rulemaking, is here.

Planet Money on the TPP

In response to our recent discussion of the TPP, alert reader Matthew Bruckner pointed out that NPR's Planet Money podcast covered the trade pact recently. Unfortunately, many of the aspects covered were the traditional tariff-related aspects of the deal rather than provisions like ISDS that make it so dangerous. And even as to ISDS, the reporters seem to conclude that because the deal prohibits tobacco companies from using ISDS, it can't be too bad (ignoring the possibility for a country's regulations to be attacked before a slanted tribunal by, for instance, polluters who want to water down environmental regulations or automakers frustrated by safety requirements). Still interesting and well worth a listen, here. Thanks, Matthew.

FTC bans payment methods used by telemarketing scammers

The Federal Trade Commission has approved final amendments to its Telemarketing Sales Rule, including a change that will help protect consumers from fraud by prohibiting four discrete types of payment methods favored by con artists and scammers.

The rule changes will stop telemarketers from dipping directly into consumer bank accounts by using certain kinds of checks and “payment orders” that have been “remotely created” by the telemarketer or seller. These two payment mechanisms make it easy for unscrupulous telemarketers to debit bank accounts without consumers’ permission, and can make it difficult to reverse the transactions with consumers’ banks.

The FTC's press release, with a link to the new rule, is here.

House votes to revoke CFPB mortgage, auto-lending policies

A bill that would limit the Consumer Financial Protection Bureau’s 2013 auto lending guidance passed the House of Representatives late Wednesday. Automotive News explains that "H.R. 1737 -- the Reforming CFPB Indirect Auto Financing Guidance Act -- would revoke 2013 auto lending guidance from the CFPB. The guidance suggests lenders should either impose limits on or eliminate dealerships’ ability to adjust, on a case-by-case basis, the amount of compensation they keep for arranging a consumer auto loan, a discretionary practice that the CFPB says can lead to discriminatory loan pricing."

The full story is here.

DOJ announces series of dietary supplement cases

The Department of Justice has announced:

As part of a nationwide sweep, the Department of Justice and its federal partners have pursued civil and criminal cases against more than 100 makers and marketers of dietary supplements.  The actions discussed today resulted from a year-long effort, beginning in November 2014, to focus enforcement resources in an area of the dietary supplement market that is causing increasing concern among health officials nationwide.  In each case, the department or one of its federal partners allege the sale of supplements that contain ingredients other than those listed on the product label or the sale of products that make health or disease treatment claims that are unsupported by adequate scientific evidence. 

Among the cases announced today is a criminal case charging USPlabs LLC and several of its corporate officers.  USPlabs was known for its widely popular workout and weight loss supplements, which it sold under names such as Jack3d and OxyElite Pro.

...

During the period of the sweep, 117 individuals and entities were pursued through criminal and civil enforcement actions.  Of these, 89 were the subject of cases filed since November 2014.

The DOJ press release has details.