Consumer Law & Policy Blog

Times Article Shows How Business Uses Science to Deceive Consumers: "Doubt is our product."

From an op-ed in today's Times, Climate Change in Trump’s Age of Ignorance, by Robert N. Proctor (behind paywall):

[S]science was one of the instruments used by Big Tobacco to carry out its denial (and distraction) campaign. Cigarette makers had met at the Plaza Hotel in New York City on Dec. 14, 1953, to plan a strategy to rebut the evidence that cigarettes were causing cancer and other maladies. The strategy was pure genius: The claim would be that it had not been “proved” that cigarettes really cause disease, so there was room for honest doubt. Cigarette makers promised to finance research to get to the truth, while privately acknowledging (in a notorious Brown & Williamson document from 1969) that “Doubt is our product.”

For decades thereafter, cigarette makers poured hundreds of millions of dollars into basic biomedical research, exploring things like genetic and viral or occupational causes of cancer — anything but tobacco. Research financed by the industry led to over 7,000 publications in peer-reviewed medical literature and 10 Nobel Prizes. Including consulting relationships, my research shows that at least 25 Nobel laureates have taken money from the cigarette industry over the past half-century. (Full disclosure: I’ve testified against that industry in dozens of tobacco trials.) 

 

 

John Oliver on Pyramid Schemes

 

Or click here.

CFPB Petitions DC Circuit for Rehearing En Banc of PHH Case Holding CFPB Structure Unconstitutional

PHH was the case that held that the CFPB's structure is unconstitutional and that the remedy was to provide that the CFPB director could be fired without cause.   The petition is here.  It describes that case as "what may be the most important separation-of-powers case in a generation." National Law Journal coverage (behind paywall) here.  Excerpt:

Trump will be powerless on Jan. 20, when he takes office, to remove Cordray without cause. The challenge to the panel ruling could run for months, if not more than a year. Until then, the panel decision’s ruling against the CFPB cannot be enforced.

 

Trump University lawsuits settled for $25M

Associated Press reports:

New York's attorney general says President-elect Donald Trump has agreed to a $25 million settlement to resolve three lawsuits over Trump University, his former school for real estate investors.

The deal announced Friday by Attorney General Eric Schneiderman would settle two class-action lawsuits in California and a civil suit filed by Schneiderman.

The suits had alleged that Trump University failed to deliver the quality real estate investing education it promised.

Schneiderman says the $25 million to be paid by Trump or one of his business entities includes restitution for students and $1 million in penalties to the state.

The deal doesn't require Trump to acknowledge wrongdoing.

Meet our next attorney general

The Department of Justice plays a role in consumer protection. So for that reason (and there are plenty of others), our readers may want to meet our next attorney general (assuming Mr. Trump's nominee is confirmed). See this article by Ari Berman.

AAJ: Forced Arbitration: How Corporations Use the Fine Print to Bully Americans

Here.  And here is the abstract:

Though few realize it, forced arbitration clauses are endemic in today’s marketplace — hidden in credit card agreements, bank accounts, corporate social media pages, even Starbucks gift cards. More than half a billion arbitration provisions infiltrate our everyday lives. Despite their prevalence, few consumers are aware of the forced arbitration clauses they are bound to, and fewer still realize they have been stripped of their constitutional rights.

CFPB request for information regarding consumer access to financial records

The Consumer Financial Protection Bureau has announced a request for information regarding consumer access to financial records:

The Dodd-Frank Wall Street Reform and Consumer Protection Act provides for consumer rights to access financial account and account-related data in usable electronic form. The [CFPB] is seeking comments from the public about consumer access to such information, including access by entities acting with consumer permission, in connection with the provision of products or services that make use of that information. Submissions to this Request for Information will assist market participants and policymakers to develop practices and procedures that enable consumers to realize the benefits associated with safe access to their financial records, assess necessary consumer protections and safeguards, and spur innovation.

The comment deadline is in mid-February (90 days from the date yesterday's CFPB notice is published in the Federal Register).

The "notice and request for information" is here.

CFPB reviews servicemember complaints related to mortgage refinancing

Since the Consumer Financial Protection Bureau began accepting mortgage complaints in 2012, it has received more than 12,500 mortgage complaints from servicemembers, veterans, and their families. In a new report, the CFPB reviews and analyzes about 1,800 of those complaints related to mortgage refinancing.

The report finds that veterans complain that "the solicitations and advertisements they receive are often misleading. Many complain that lenders fail to deliver on the promises made during the application process. And the quick underwriting often results in the borrower’s failure to clearly understand important loan details, like how the new escrow account will be set up."

The report is here.

FTC unveils financial readiness website for military members and personal financial managers

The Federal Trade Commission has a new financial readiness website designed for mobile devices to help members of the military community navigate personal financial decisions in light of the unique challenges they face, such as frequent relocations and deployment.

The FTC's provides the details, here.

Three Year Rule for 1099-C Changed.

The IRS has finalized a proposed rule issued in 2014 removing the three-year nonpayment testing period from the list of “events” for determining when debt had been discharged for purposes of issuing a Form 1099-C, Cancellation of Debt, to taxpayers. Prior to the change in the rule, individuals would receive a 1099-C after three years, regardless of whether the debt had in fact been cancelled or was still in collection. The final regulations make the new regulations applicable to returns filed and payee statements furnished after Dec. 31, 2016.

The IRS changed the rule because it believed the rule confused taxpayers and did not increase compliance. Under the rule and its regulations, cancellation-of-debt (COD) income of $600 or more must be reported on Form 1099-C when any of eight identifiable events occur. Seven of these events are specific instances that actually result in a discharge of debt, such as an agreement between the creditor and debtor. The eighth, the expiration of the nonpayment testing period, does not actually result from a discharge and may be difficult to determine.

Although creditors were required under the old rule to file Form 1099-C at the end of the 36-month period, it did not mean the debt had necessarily been canceled, or was not being collected by a debt collector. As a result, the recipient of the form was often confused about whether he or she still owed the debt or must report the amount as COD income if the debt had not actually been discharged. The new rule eliminates the 36-month period as an event requiring the filing of a 1099-C.