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    Public Citizen Litigation Group
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    St. John's University School of Law
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    US Public Interest Research Group
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    Public Citizen Litigation Group
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    Public Citizen Litigation Group
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    National Association of Consumer Advocates
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    National Consumer Law Center

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The contributors to the Consumer Law & Policy blog are lawyers and law professors who practice, teach, or write about consumer law and policy. The blog is hosted by Public Citizen Litigation Group, but the views expressed here are solely those of the individual contributors (and don't necessarily reflect the views of institutions with which they are affiliated). To view the blog's policies, please click here.

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« June 2016 | Main | August 2016 »

Sunday, July 31, 2016

How Gun Control Advocates Could Save Lives by Manufacturing Guns

by Jeff Sovern

Smart guns--guns that block anyone other than their owner from shooting them-- would save lives.  Children would not be able to grab them and shoot themselves by accident.  People couldn't turn them on their owners. Smart gun technology exists, just as iPhones can be personalized using fingerprints and passcodes.  But gun manufacturers won't sell them because of a New Jersey law that prohibits the sale of any gun in New Jersey that is not "personalized"(the word used in the statute) after such guns are available at retailers.  See here (describing threats to kill smart gun retailer).  Gun rights advocates don't want to limit the ability to obtain regular guns in New Jersey.  So no one in the US sells or makes them. But existing gun manufacturers aren't the only people who could make them.  The statute defines personalized as meaning that:

at least one manufacturer has delivered at least one production model of a personalized handgun to a registered or licensed wholesale or retail dealer in New Jersey or any other state. As used in this subsection, the term "production model" shall mean a handgun which is the product of a regular manufacturing process that produces multiple copies of the same handgun model, and shall not include a prototype or other unique specimen that is offered for sale.

 

If gun manufacturers won't make and gun dealers won't sell such guns because of pressure from gun rights advocates, gun control advocates could make a factory to produce smart guns, and as long as the factory used "a regular manufacturing process that produces multiple copies of the same handgun model," it would qualify under the statute.  I'm not sure that the retailer would even have to sell the gun, or want to receive it, as long as the manufacturer "delivered" it. Or maybe the manufacturer could also set up its own retailer. Sure it would cost a lot of money to set up such a factory, but surely gun control advocates like Michael Bloomberg could afford it. And it would even help people outside New  Jersey, because responsible gun owners might prefer to buy such weapons to what is now on the market, if only to protect their children.  Maybe New Jersey would simply change its law, but even so, smart guns would be on the market. And wouldn't that be better than how things are now? Gun owners can already get guns; wouldn't we be better off if no one else could fire them?

Posted by Jeff Sovern on Sunday, July 31, 2016 at 11:54 AM | Permalink | Comments (4)

An interview with CFPB director Richard Cordray

Michele Singletary, the Washington Post's consumer reporter, is doing a series of articles assessing the first five years of Consumer Financial Protection Bureau. The first in the series is an interview with the agency's director Richard Cordray.

Posted by Brian Wolfman on Sunday, July 31, 2016 at 09:28 AM | Permalink | Comments (0)

Saturday, July 30, 2016

Hoofnagle's FTC Privacy Book: Chapter on Online Privacy

Chris Hoofnagle has posted online Chapter 6, titled Online Privacy, from his excellent book, Federal Trade Commission Privacy Law and Policy (I'm still making my way as my schedule permits through the book and hope to post a review someday).  Here's the abstract:

This is the full text of Chapter 6 (Online Privacy) from Federal Trade Commission Privacy Law and Policy (Cambridge University Press 2016). This chapter introduces the reader to the Federal Trade Commission's (FTC) historical and modern approaches to consumer privacy law.

This chapter explains basic principles of privacy law, including fair information practices, which form the building blocks of most privacy protections. It describes the cases and the landscape of FTC law on online privacy. Then it shifts to present half a dozen controversies critical to the FTC’s privacy stance: the dominance of rational choice theory approaches and their deficits, the "third party problem" in privacy, self-regulation in consumer protection, default choices, the consumer protection problems implicated by the rise of internet platforms, and finally, privacy by design. Other chapters in the book focus on children's privacy, spam, telemarketing, malware, financial privacy, information security, and international privacy.

Posted by Jeff Sovern on Saturday, July 30, 2016 at 01:12 PM in Books, Federal Trade Commission, Internet Issues, Privacy | Permalink | Comments (0)

Friday, July 29, 2016

Possibly interesting to our readers: Fourth Circuit strikes down N. Carolina voter I.D. law

The Fourth Circuit has struck down the N. Carolina voter I.D. law, finding that that it was conceived with discriminatory intent. The opinion is here. The court said this:

In response to claims that intentional racial discrimination animated [the N.C. General Assembly's action], the State offered only meager justifications. Although the new provisions target African Americans with almost surgical precision, they constitute inapt remedies for the problems assertedly justifying them and, in fact, impose cures for problems that did not exist. Thus the asserted justifications cannot and do not conceal the State’s true motivation.

Posted by Brian Wolfman on Friday, July 29, 2016 at 01:30 PM | Permalink | Comments (0)

Journalist Emails Advance Cash Services for Comment on Story and Gets Asked to Pay Phantom Payday Debt

Journalist Bob Sullivan emailed Advance Cash Services to elicit a comment on a consumer's story of how she had been dunned for a phantom debt.  He didn't get the comment, but the collector sent him an email demanding he repay a payday loan that he never took out, for $935.76.  His story is here. 

Posted by Jeff Sovern on Friday, July 29, 2016 at 01:19 PM in Debt Collection | Permalink | Comments (0)

The Mystery of Why Starbucks Changed its Arbitration Clause Solved?

Back in February, Gregory Gauthier wondered why Starbucks changed its arbitration clause. Now, he writes:

I was looking through the Q2 2016 Consumer Arbitration Statistics for the American Arbitration Association, and I found a case filed against Starbucks on January 18, 2016 (case #011600001646, row 5053).  The Colorado pro se consumer in that case brought an $825 claim.  Steve A. Miller (apparently based in Denver so the forum selection clause must not have been enforced) was appointed as arbitrator on April 25.  The case settled June 28 (which explains its appearance in the Q2 data).

So I think I've solved the mystery.  Starbucks must have been asked by the AAA to waive the offending provisions.  Instead of waiving them and having the waiver posted on the Consumer Clause Registry, Starbucks instead decided to amend the entire clause.  (The amended clause was listed March 28.)  So it appears safe to say that the Consumer Clause Registry directly caused the beneficial change to the arbitration terms.  (To be sure, there are still shortcomings with the registry, which is why I plan to propose that the CFPB start its own registry and review of financial services arbitration clauses.)

Posted by Jeff Sovern on Friday, July 29, 2016 at 01:03 PM in Arbitration | Permalink | Comments (0)

Student loan reform through the tax system

Law prof John Brooks has written Student Loans As Taxes. Here is the abstract:

The growth of college tuition and the corresponding rise in student loan debt have become major issues of public importance. Total outstanding student debt is at least $1.3 trillion, and tuitions keep growing, even while we arguably need to invest more in higher education to add skills and grow our economy. Sen. Bernie Sanders, I-Vt., has made higher education reform a major part of his Democratic presidential campaign platform, proposing a new financial transactions tax to pay for large grants to states that offer free tuition to public universities. His opponent, Hillary Clinton, has proposed grants to states to offer ‘‘no-debt-tuition,’’ paid for in part by repealing several tax expenditures. These and other plans would essentially increase federal spending on higher education through expanded progressive taxation.

Posted by Brian Wolfman on Friday, July 29, 2016 at 11:38 AM | Permalink | Comments (0)

Thursday, July 28, 2016

Some First Thoughts About the CFPB's Validation Proposal

by Jeff Sovern

Brian posted this morning on the CFPB's debt collection proposal.  I wanted to focus just on the validation requirements.  Appendix F to the Bureau's proposal speaks to the validation notice.  The Proposal indicates that the Bureau has conducted and continues to conduct extensive consumer testing of validation notices.  I don't know what that testing showed, but it appears the model form in the proposal is the product of such testing.  Without knowing what that testing indicated, it's hard to be certain, but the model form certainly seems dramatically easier to read and understand than, for example, the dunning letter we tested in our study, which was based on a letter in a Seventh Circuit case.   I also should note that I don't know much about how much latitude the Bureau has in promulgating FDCPA regulations. With the understanding that some of what I would like to be done may exceed the Bureau's authority (and so require an amendment to the statute), here are some comments:

Overall, the Bureau's model form seems like a huge improvement over where things stand now.  That being said, it isn't perfect. The Bureau’s model form indicates that the Bureau is considering requiring a “tear-off’ at the bottom which consumers could remove, fill out, and return to the collector to request verification and indicate the nature of the dispute.  This would certainly be much better than the current system, which requires consumers either to create their own form or find one elsewhere, such as on the web. But many people find it more convenient to communicate via telephone call, email, or the web.  In other contexts in which consumers have had to send mailings to obtain a benefit—such as to secure rebates—they often don’t bother and forego the rebate.  Consumers redeem rebates at rates of as low as 4%, and while rebates are different from debt collection, that's not the only case in which consumers don't bother filling out forms to obtain a benefit.  Accordingly, the Bureau should consider alternative ways for consumers to communicate verification requests if the statute can properly be so interpreted. If that's not possible, because it exceeds the Bureau's authority, Congress should amend the statute.

Another concern: our study found that a non-trivial number of consumes believed that if they didn't dispute the debt within the thirty day time frame, they would either have to pay the debt or would lose their ability to defend against a suit to collect the debt, even as to debts they didn't owe. The Bureau should consider adding language to the model form that indicates that a failure to dispute the debt within thirty days would not have that effect. The model form now says "If we do not hear from you, we will assume that our information is correct," but I wonder if consumers will interpret that as meaning that they can still contest payment. Maybe the consumer testing will offer reassurance on that score.

The Bureau also wants collectors to give consumers a one-page statement about their rights.  A great idea, but I wonder about information overload. Probably the Bureau tested for that in the consumer testing, but if they didn't, I hope they will.  In that regard, I also hope that if their discretion permits, they limit the amount of extraneous statements collectors can make (like saying we haven't made up our mind whether to sue and this could result in a judgment against you, etc.) when giving the validation notice.

In the past, when the Bureau has tested disclosures, they have examined whether consumers can understand them, but not whether consumers would actually use them. That is to say, they show them to consumers and ask questions to see if consumers get the right answers, but they don't verify, for example,  that consumers who are being dunned by a debt collector would take the time to read them and act on them.  That latter is much harder to test, but if the disclosures are perfect, they still don't do any good unless consumers use them. We need to find ways to convey information so that consumers use it, not just give them perfect disclosures that they ignore.  So I hope they tested the extent to which consumers would use the forms. How many consumers who think they don't owe the debt will actually use the tear-off?  I don't know, but I hope the Bureau does.

Just my two cents.  Our article has more.

 

 

 

 

 

 

Posted by Jeff Sovern on Thursday, July 28, 2016 at 05:32 PM in Consumer Financial Protection Bureau, Debt Collection | Permalink | Comments (2)

Montana Law Seeking Candidates for Consumer Law Chair

More information here.  Here's a quote from the announcement (some may disagree with the first nine words but the rest is exciting):

Best place to live and teach in the U.S.: The Alexander Blewett III School of Law at the University of Montana, the only law school in the state, anticipates hiring a full-time, tenure-track professor beginning in the 2017-2018 academic year to serve in the newly created Blewett Chair in Consumer Law and Protection. Supported by a substantial endowed program fund, the Chair has an exciting opportunity to build a nationally-renowned and innovative consumer law and protection program from the ground up. In addition to teaching consumer law and related courses, the Chair will organize academic programs and develop student opportunities in consumer law and protection through clinical placements, externships, and/or internships. We are committed to integrating theory with practice, making substantial practice experience in the areas of consumer law and protection particularly valuable.* * *

Primary Duties: Primary duties involve leading the law school's new Consumer Law and Protection program (including interacting with state, tribal, and federal constituencies), organizing academic programs and conferences, developing student opportunities for clinical placements in consumer law and protection, teaching consumer law and protection related courses, producing scholarship, and providing professional service * * *

Posted by Jeff Sovern on Thursday, July 28, 2016 at 11:32 AM in Teaching Consumer Law | Permalink | Comments (0)

Protecting drinking water through law

Law prof Margot Pollans has written Drinking Water Protection and Agricultural Exceptionalism, which you may want to read in light of the water crisis in Flint. Here's the abstract:

Providing safe drinking water is a basic responsibility of government. The US system is inefficient, unfair, and sets up local water utilities to fail. Under the Safe Drinking Water Act these utilities bear primary responsibility for providing safe water, but the Act provides few tools for utilities to engage in pollution prevention and instead emphasizes water filtration and treatment. At the same time, the Clean Water Act, which regulates water pollution, broadly exempts nonpoint source pollution in general and agricultural water contamination in particular from its strict requirements. As a result, water utilities are often the first line of defense against agricultural water contamination’s many human health harms. This allocation of responsibility is inefficient and unfair. It is inefficient because it prioritizes end-of-line clean up even where pollution prevention would be less expensive. It also fails to account for the ancillary benefits of pollution prevention, including, among other things, protection of aquatic habitats. This allocation of responsibility is inequitable not only because of its disparate impact on low-income and minority communities but also because of its arbitrary application of the polluter pays principle. Although there are some limited legal mechanisms by which water utilities can shift costs and clean up responsibility to farmers, the legal regime creates a default in favor of end-of-line cleanup. To address these concerns, this Article calls for a suite of legal reforms that would both empower water utilities to adequately protect their source waters and revoke the special status of farms in environmental law.

Posted by Brian Wolfman on Thursday, July 28, 2016 at 09:35 AM | Permalink | Comments (0)

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