Consumer Law & Policy Blog

Mark Budnitz on the History of the National Consumer Law Center

Mark Elliott Budnitz of Georgia State has written The National Consumer Law Center From Its Birth to 2013.  Here is the abstract:

The article describes, analyzes and evaluates the role played by the National Consumer Law Center, a public interest law firm dedicated to promoting the legal rights of low income consumers, in the development of consumer protection law. It does this by first providing a brief summary of the origins of federal funding of legal services through the Office of Economic Opportunity, an agency established by Congress to fight the “War on Poverty.” The article then describes the circumstances surrounding the initial funding of NCLC by OEO. Most of the paper consists of a detailed exposition of NCLC’s work product from 1969 to 2013. That work involved significant activities on both the federal and state levels. It included litigation, legislation and administrative agency advocacy. There were major victories as well as many setbacks. The paper highlights NCLC’s role in the development of the law under the Truth-in-Lending Act as well as NCLC’s efforts to ameliorate the disastrous effect of the Great Recession on low income home ownership. The paper provides details on NCLC’s joint projects with other consumer and civil rights organizations. The paper also notes the crucial role played by NCLC’s publications, training and conferences in establishing a national consumer lawyer bar. The article concludes with an examination of the challenges NCLC faces due to changes in the marketplace caused by technology.

In addition to relating NCLC’s substantive accomplishments, the paper discusses the significance of non-substantive developments. The article explores the political battle that resulted in the Legal Services Corporation’s termination of all future funding for NCLC and how NCLC successfully responded to that existential crisis by diversifying its funding sources. Having a satellite office in Washington, DC enabled NCLC to substantially increase its participation in the federal venue. Purchasing its own building in Boston provided it with a measure of stability.

The article is a case study of how a non-profit legal services organization can endure and significantly influence the law despite major adversity. It did this by being flexible, adapting to changed circumstances and adopting an entrepreneurial spirit while remaining faithful to its mission.

Inside the VW emissions scandal

The NYT reports today on revelations by senior Volkswagen officials about when and why the company decided to design their cars to trick U.S. emissions tests.

For a refresher, see our first discussion of the scandal here.

Here's today's NYT piece.

Ninth Circuit revives product defect claims over "tire eating" Ford Focus

Last week, the Ninth Circuit reversed a grant of summary judgment to Ford in a class action seeking damages for a latent defect in the Ford Focus's rear suspension from 2005 to 2011. The defect allegedly causes "premature tire wear, which in turn leads to safety hazards such as decreased control in handling, steering, stability, and braking, the threat of catastrophic tire failure, and drifting while driving on wet or snow-covered roads." The key legal holding of the court of appeals was that the one year time limit for California's implied warranty of merchantability does not apply to latent defects. The decision in Daniel v. Ford Motor Co. is available here. Courthouse News Service has coverage.

Trouble in Toyland 2015

Ready for this year's holiday gift-buying binge?

Before you give gifts for kids, read U.S. PIRG's 30th annual edition of Trouble in Toyland. Go here to read PIRG's press release, which serves as an executive summary.

The report surveys the dangers to kids posed by toys. The report covers toxins (such as lead and arsenic), choking hazards, excessively loud toys, laceration hazards, and strangulation risks. It contains a lot of data on toys that maim and kill and makes detailed policy suggestions.

 

Public Citizen: FDA Delay in Safety Rule Leaves Patients Nationwide at Risk

From our press release:

The U.S. Food and Drug Administration (FDA)’s postponement to July 2016 of a significant patient safety rule leaves open a safety gap for the millions of patients who take generic medications, Public Citizen said today. The agency proposed the rule in 2013 in response to a 2011 Public Citizen petition (PDF).

Currently, brand-name manufacturers are permitted to make safety updates without prior FDA approval. But generic manufacturers are not permitted to update warnings to reflect new safety information unless instructed to do so by the FDA.

The FDA’s proposed rule would solve that problem by giving generic manufacturers the option to update labeling to provide warnings about newly discovered risks to patient safety without prior FDA approval– much as brand-name manufacturers have been able to do for nearly 30 years.

Here's the whole release, the government's page showing the status of the rule, and our original petition in 2011 seeking this fix.

CFPB acts against debt collector for pursuing unverified cellphone debts

This week, the the Consumer Financial Protection Bureau filed a federal complaint against a Massachusetts debt collection firm called EOS CCA for reporting and collecting on old cellphone debt that consumers disputed and EOS did not verify. The company also provided inaccurate information to credit reporting companies about the debt and failed to correct reported information that it had determined was inaccurate. The CFPB filed a proposed consent order that, if entered by the court, would require EOS to overhaul its debt collection practices, refund at least $743,000 to consumers, and pay a $1.85 million civil money penalty. 

The CFPB press release is here.

Lawsuit Claims Barbie Doll Invades Kids' Privacy

In a class action against Mattel, two mothers allege that the talking Hello Barbie doll invades children's privacy by recording their conversations and storing them in the cloud.

Courthouse News reports:

    Mattel says on its website that Hello Barbie complies with the privacy requirements under the Children's Online Privacy Protection Act (COPPA). But Archer-Hayes and Johnson claim that kidSAFE, an independent company that certifies toys under COPPA, has not certified the doll or its software.
     Among other things, COPPA bans companies from collecting personal information from children unless they indicate what kind of information is collected and how it is used, and get parental consent to collect the information.
     "Personal information' includes the child's identifying contact information, geolocation, and voice captured in an audio file," the complaint states.
     Companies must allow customers to refuse data collection, make available any personal information they do collect, and protect the confidentiality of that information.
     But the plaintiff parents say Mattel does not protect the privacy of children who are recorded by a Hello Barbie doll that belongs to someone else.

The complaint alleges that Mattel and ToyTalk should have known that children would play with the doll with other kids, who would be recorded, and created a process to recognize when someone other than the owner uses the Hello Barbie doll and either delete those recordings or seek parental consent to store them in the cloud.

The full article is here.

Short Video Demonstrates That Consumers Sign Contracts Without Reading

Here.  Definitely worth watching. (HT: ContractsProf Blog)

DOJ Consumer Protection Branch announcements

December 4, 2015 (Blog)

Protecting Consumers from Bad Medicine

 

December 1, 2015

Dietary Supplement Manufacturer Pleads Guilty to Criminal Contempt of Court

 

$39 million settlement over Target data breach

NBC News reported last week:

Target Corp. has agreed to pay $39.4 million to resolve claims by banks and credit unions that said they lost money because of the retailer's late 2013 data breach. The preliminary settlement filed on Wednesday resolves class-action claims by lenders seeking to hold Target responsible for their costs to reimburse fraudulent charges and issue new credit and debit cards.

Target has said at least 40 million credit cards were compromised in the breach, and that as many as 110 million people may have suffered the theft of personal information such as email addresses and phone numbers. The Minneapolis-based retailer has taken steps to avoid a recurrence, including being among the first U.S. retailers to install microchip-enabled card readers at all stores.

Here's the story.