Consumer Law & Policy Blog

Wells Fargo using forced arbitration clauses to avoid suit over its sham accounts

The New York Times reports that Wells Fargo "has sought to kill lawsuits that its customers have filed over the creation of as many as two million sham accounts by moving the cases into private arbitration."

The full article is here.

Charging for putting a bag in the overhead bin

United Airlines is charging consumers for putting a bag in the overhead bin. Oh, wait, United is not really charging extra, it's just creating a level of service called "Basic Economy," in which the consumer pays the lowest fare but can't put a bag in the overhead bin. (Oh, and by the way, in Basic Economy, you can't get a seat assignment until the day of the flight, meaning that you and your little kid probably won't be able to sit together.)

Senator Chuck Schumer is steamed up about this, as explained in this article by Samantha Schmidt. 

Two immediate applications for the Consumer Review Fairness Act

by Paul Alan Levy

Now that both houses of Congress have passed the Consumer Review Fairness Act,  which invalidates the inclusion of clauses barring consumer reviews in form contracts, and sent the bill to the President for his signature (this happened last Friday), we will be looking for situations in which to apply it.  There is a case currently pending in Southern District of New York, where the owners of some Paris apartments have sued an Oregonian couple based on clause inserted into the forum-selection provisions of the form contract.  And, in a situation near and dear to my own consumer heart, my home-town soccer team is demanding that fans promise not to post descriptions of games, photos or videos “in any media” as a condition of getting season ticket packages.

May Landlords Forbid Posting Consumer Reviews on VRBO?

The first situation to which we have in mind to apply the new law is currently pending in the federal court; it was the subject of a blog post by Eric Goldman when the trial court refused to dismiss the complaint early last year.  The case involves a Paris apartment offered for rent on VRBO (an acronym for Vacation Rentals by Owner).  But when James and Judi Johnston arrived at the apartment that they thought they had reserved, they found it already occupied by a different couple, and they found the apartment itself and the building itself to be in a state of disrepair.  They described their adverse experience in a review on VRBO itself so that other prospective renters could take the issues into account in deciding whether to choose that rental, just as the Johnstons had assiduously studied the reviews in choosing that rental for themselves.

Recent announcements of DOJ's Consumer Protection Branch

Here are recent announcements involving the Consumer Protection Branch of the Department of Justice. 

November 21, 2016 - Salesman Sentenced in Scheme to Defraud Consumers Through Debt Relief Firms

November 14, 2016 - Four California Residents Sentenced in Scheme to Defraud Consumers Through Debt Relief Firms

November 7, 2016 - Medical Device Maker Biocompatibles Pleads Guilty to Misbranding and Agrees to Pay $36 Million to Resolve Criminal Liability and False Claims Act Allegations

November 4, 2016 - Two Pakistani Nationals Sentenced for Conspiring to Illegally Ship Pharmaceuticals into the United States

November 3, 2016 - Chief Executive Officer and Manager of Fraudulent Business Opportunity Seller Sentenced to Prison

October 17, 2016 - Woman Formerly Residing in Maryland Pleads Guilty to Conspiracy to Commit Money Laundering in Connection with International Lottery Fraud Scheme

Trying to protect the health of NFL players

We've posted several times about the head-injury settlement between NFL players and the NFL. Go here for instance. That settlement was approved over class members' objections by a federal district court in Philadelphia and by a unanimous panel of the U.S. Court of Appeals for the Third Circuit. Petitions for a writ of certiorari are pending (go here and here), and the Supreme Court is scheduled to consider them at its conference on December 9. Those settlements are important, but they are mainly about compensating for past injuries.

How can football players be protected in the future (besides by not playing football)?

Harvard University has just completed a massive, 76-recommendation study on that topic called Protecting and Promoting the Health of NFL Players: Legal and Ethical Analysis and Recommendations. Its authors are Chris Deubert, I. Glenn Cohen, and Holly Lynch. Here is the abstract: 

This comprehensive report, published as part of the Football Players Health Study at Harvard University, more than two years in the making and 493 pages long, is an unprecedented step towards improving player health, concluding with several important recommendations. To date, there has been no analysis of the universe of stakeholders that may influence the health of NFL players, nor any systematic analysis of their existing or appropriate legal and/or ethical obligations. While clinical health care interventions are essential, player health also depends on understanding the wider context in which players work.

The report examines 20 diverse stakeholders: NFL players, the NFL, the NFLPA, NFL club medical staff, second opinion, neutral and personal doctors, NFL clubs and personnel, NFL coaches, contract advisors, financial advisors, equipment managers and manufacturers, players’ family members, officials, the media, NFL business partners, and fans.

In total, the report makes 76 recommendations.

Highlights of the key proposals are summarized below:

FTC Puts An End to Data Broker Operation that Helped Scam More Than $7 Million from Consumers’ Accounts

The Federal Trade Commission announced this week:

The Federal Trade Commission has closed the book on a data broker operation that the agency alleges got personal information from people who thought they were applying for payday loans online, and sold it to a scam that tapped consumers’ bank accounts and credit cards without their consent.

A stipulated order against Jason A. Kotzker resolves charges the FTC brought in August 2015, alleging that he and his co-defendants, instead of passing the information to legitimate payday lenders, sold it to companies like Ideal Financial Solutions Inc., which raided consumers’ accounts for at least $7.1 million. The FTC also alleged that the defendants helped Ideal Financial hide the fraud from banks.

The order prohibits Kotzker from selling or disclosing consumers’ sensitive personal information, making misrepresentations about any financial or other product or service, and profiting from consumers’ personal information and failing to dispose of it properly. It imposes a judgment of more than $7.1 million that will be partially suspended upon payment of $45,000, which represents virtually all of Kotzker’s assets.

The FTC's full press statement is here.

CFPB Monthly Complaint Snapshot - debt settlement, check cashing, money orders, and credit repair

This month's Consumer Financial Protection Bureau (CFPB) complaint snapshot highlights consumer complaints about financial services such as debt settlement, check cashing, money orders, and credit repair. The report shows that consumer complaints about these types of financial services generally revolve around issues of fraud or problems with reliable customer service. The report also highlights trends seen in complaints coming from Oklahoma.

As of Nov. 1, 2016 the Bureau has handled approximately 1,035,200 complaints across all products, according to the report.

A more detailed summary is here.

The complaint snapshot is here.

CFPB Ombudsman’s Office 2016 Annual Report

A Consumer Financial Protection Bureau' blog post explains:

This month marks the fifth anniversary of the CFPB Ombudsman’s Office, an independent, impartial, and confidential resource that assists consumers, financial entities, consumer groups, trade groups, and others in informally resolving process issues with the CFPB. As we observe this anniversary, today I also want to share with you our fifth annual report , which I delivered to Director Cordray. 

Our annual report summarizes our activities during fiscal year 2016. It includes a description of how our office works in practice, including newly designed materials to inform our stakeholders about our resource. We also have a section with examples that demonstrate our work in practice, an analysis of the individual inquiries we received this year, and a recap of our Ombudsman Forum with national and regional consumer-focused organizations. 

Additionally, the report includes discussion and our accompanying feedback or recommendations on two topics:

• Memorialization of ex parte communications and
• Consumers' options to identify concerns with their companies as provided in the CFPB’s public Consumer Complaint Database.  

The report also contains updated information regarding two previously studied issues, CFPB field hearings and company responses to consumer complaints as provided in the Consumer Complaint Database.  

The report is here.