Consumer Law & Policy Blog

FTC returns money to consumers harmed by mortgage relief services scam

In addition to the Federal Trade Commission action described in the blog post below, the FTC also announced yesterday that it is mailing 474 checks totaling more than $33,000 to consumers who lost money to a scheme that charged homeowners an up-front fee for mortgage relief services they promised but never provided.

In September 2015, a federal court banned Wealth Educators and Veronica Sesma from the debt collection business.

Affected consumers will receive checks in the average amount of $69.99.

Consumers who receive checks and have questions can contact the FTC’s refund administrator, Analytics, at 844-836-3604.

FTC returns money to consumers harmed by scam that collected millions in phantom payday loan debts

The Federal Trade Commission announced yesterday that it is mailing 1,701 checks totaling more than $596,000 to consumers who lost money to a fraudulent debt collection scheme that processed payments for payday loan debts they did not owe.

In September 2015, a federal court banned Kirit Patel, Broadway Global Master Inc. and In-Arabia Solutions Inc. from the debt collection business.

Affected consumers will receive checks in the average amount of $350.39. Approximately 63 percent of consumers’ total loss is being returned.

Consumers who receive checks and have questions can contact the FTC’s refund administrator, Analytics, at 844-449-3587. Learn more about the FTC’s refund program.

Blankenship sentenced to one year in prison for mine safety violations

We've mentioned before the case of Don Blankenship, the former head of Massey Energy whom a jury convicted of conspiracy to violate federal mine safety standards in connection with the Upper Big Branch disaster that killed 29 workers.

Today a federal judge sentenced Blankenship to one year in prison. It's not as much as you might expect given the harm he caused, but it was the maximum available given the charge on which he was convicted. "However limited the Justice Department’s success was in the Blankenship case," the New York Times explains, "the verdict was a landmark" because of how rarely corporate officers are held accountable for crimes related to workplace safety.

Do fans have a legally protected interest in "their" team's success?

This Reuters story explains that 

Seven New England Patriots fans sued the National Football League on Tuesday, asking a judge to reverse a decision by the league to strip the team of a first-round pick in this month's draft over allegations of underinflated footballs. In a lawsuit filed in Boston federal court, the fans contend that NFL Commissioner Roger Goodell acted unlawfully when he took away two draft picks as punishment for the "Deflategate" scandal, in which the team was accused of manipulating balls to better meet star quarterback Tom Brady's tastes in a January 2015 playoff game against the Indianapolis Colts. ... The fans who brought the lawsuit, which alleges the league violated the Racketeering Influenced and Corrupt Organizations Act [RICO], a charge typically levied against mob bosses ... .

Let's assume that the plaintiffs -- pro-football consumers (or, in common parlance, fans) -- have a good RICO claim. What about standing? Maybe the fans are season-ticket holders alleging economic injury because the Deflategate penalty could reduce the value of their tickets? Seems pretty speculative. (The New England Patriots, though, would presumably suffer injury on the ground that a lost draft pick injures the team's bottom line. I doubt a court would say that the Patriots lack standing, though the team's claim of economic injury also would involve some speculation.)

But economic injury aside, are the fans going to say they have a "legally protected interest" in fandom? A team that is not as good as it might be causes fans psychic injuries. (I'm a Philadelphia sports fan, and I suffer that type of injury nearly every day of every year.) The emotional highs and lows are what being a fan is all about. Courts do recognize non-economic psychic injury as a basis for a plaintiff's standing in some contexts, and yet I doubt it would be recognized here.

Court questions CFPB's structure

In a case filed last November, mortgage company PHH Corp. is appealing the Consumer Financial Protection Bureau’s $109 million enforcement ruling that the company took kickbacks in violation of the Real Estate Settlement Procedures Act. The case is pending in the DC Circuit Court of Appeals, with oral arguments scheduled for next Tuesday, April 12. In an order issued yesterday, the court requested the parties be prepared to address at oral argument which other independent agencies have ever had a single director and what would happen if that director could be removed. Specifically, the court's order asks:

What independent agencies now or historically have been headed by a single person? For this purpose, consider an independent agency as an agency whose head is not removable at will but is removable only for cause; and (2) If an independent agency headed by a single person violates Article II as interpreted in Free Enterprise Fund v. PCAOB, 561 U.S. 477 (2010), what would the appropriate remedy be? Would the appropriate remedy be to sever the tenure and for-cause provisions of this statute, see 12 U.S.C. § 5491(c)? Cf. Free Enterprise Fund, 561 U.S. at 508-10. Or is there a more appropriate remedy? And how would the remedy affect the legality of the Director's action in this case?

The Wall Street Journal (subscription required) has this article on the case and the order.

Recent announcements of DOJ's Consumer Protection Branch

April 4, 2016 — District Court Enters Injunction Against Michigan Cheese Manufacturer and Its Owners to Prevent Distribution of Adulterated Cheese

March 23, 2016 — Judge Orders Recall of Dangerous Magnets

March 21, 2016 — United States Files Enforcement Action Against Kansas Food Manufacturer and Company’s Managers to Stop Distribution of Adulterated Food Products

March 10, 2016 — British Man Indicted for Wire Fraud, Identity Theft and Money Laundering That Victimized Hundreds of Thousands Across United States

March 10, 2016 — United States Files Suit Against California Telemarketer to Halt Unlawful Robocalls Promoting Solar Panel Sales

March 4, 2016 — Woman Indicted for Impersonating FBI Agent in Connection with Lottery Fraud Scheme Based in Jamaica

March 3, 2016 — Delaware Cheese Company Pleads Guilty to Food Adulteration Charge

March 3, 2016 — District Court Enters Permanent Injunction Against Virginia-Based Sprout Producer and its Owner to Prevent Distribution of Adulterated Food

March 1, 2016 — Principal of Dietary Ingredient Companies Pleads Guilty to Multi-Million Dollar Fraud and Meth Precursor Scheme

February 26, 2016 — District Court Enters Permanent Injunction to Prevent Florida Man from Distributing Unapproved Herpes Cure

Paid family leave in San Francisco

City supervisors approved a measure to grant six weeks' fully paid family leave for parents who bear or adopt a child -- the most worker-friendly family leave policy in the nation. Only three states require paid family leave, none at full pay. The federal FMLA provides 12 weeks of family leave, unpaid.

The Times has the story.

Obamacare hasn't uprooted employers' health coverage for their workers

One of the doomsday scenarios about the ACA was that it would prompt employers to stop covering their workers' health insurance and force them to fend for themselves. That threat hasn't materialized, reports the New York Times. Instead, "health care remains an important recruitment and retention tool as the labor market has tightened in recent years. Desirable employees still expect health benefits, and companies are responding, new analyses of federal data show."

More broadly, the durability of employer-based insurance "adds to an emerging consensus about the contentious health law: It has not upturned the core of the country’s health insurance system, even while insuring millions of low-income people."

Read the story here.

FCC unveils nutrition-like labels for Internet service

The Federal Communications Commission is encouraging companies that sell monthly Internet service to use labels that resemble nutritional-fact food labels to inform customers about price and performance of service. The FCC says that the “broadband facts” labels will help consumers make informed decisions about the purchase of broadband service.

The Hill has the story, here. The FCC's press release is here.

A sample label is below:

DOJ resumes controvesial program regarding forfeiture of innocent people's assets

Asset forfeiture is the controversial practice of taking people's stuff when they may be involved in criminal activity. Why is the program controversial? Because sometimes the government seizes the assets of people who are innocent and it's very difficult to get it back. Compounding the problem is a racial disparity in whose stuff gets taken. (See here for a prior discussion.)

Now the federal government has resumed its program of "sharing" asset forfeiture funds with local law enforcement, the Washington Post reports. Under the program, local law enforcement may take advantage of looser federal rules for forfeiture, so it's easier to seize assets, then the feds will "share" up to 80% of the proceeds with the local government. By returning the money to the local governments, DOJ is incentivizing local law enforcement to engage in more seizures.

Read about it here.