CL&P Blog

"Trump Administration Declares Open Season on Consumers for Subprime Lenders"

At CreditSlips, Professor Adam Levitin writes that a rule proposed today by the Office of the Comptroller of the Currency "provides that nonbank assignees of loans from banks may charge whatever interest rate the bank may charge." In effect, the proposal "green lights unregulated subprime lending nationwide. In particular, [it] allows unregulated payday lending (although it also applies to title lending, installment lending, etc.). Currently payday loans are allowed in only about half of the states, and the other half all strictly regulate it, including through restrictions on finance charges. "

The full post is here.

FTC sues to stop student-loan debt-relief scam

The Federal Trade Commission announced yesterday that it obtained a temporary restraining order halting an operation that bilked consumers out of millions of dollars by pretending to be affiliated with the U.S. Department of Education and falsely promising student loan debt relief. The FTC's press release, with a links to its complaint, is here.

How Much Should Mathew Higbee’s Targets Pay to Get Him Off Their Backs?

by Paul Alan Levy

Because I have written a few pieces about the excesses of the copyright enforcement campaign conducted by Mathew Higbee and his law firm, Higbee and Associates, for nearly a year now I have been getting a steady stream of calls for help from bloggers and others who have received demand letters signed by Mathew Higbee contending that they were liable for the fact that visitors to their web sites could see works (mostly photographs) created by the firm’s clients. (He has told me that he enjoys the fact that I get so many inquiries; serves me right, he thinks.) In a number of such cases, the Higbee firm is overreaching because the blogger has a good defense under established law, but in other situations, a photograph was used in a way that should have been licensed, but was not, and the only issue is how much the alleged infringer has to pay to avoid being a defendant in an infringement lawsuit in which there is no realistic path to victory.

Many Higbee Targets Did Infringe, and Could Be Liable for Damages

In such situations, I have tried to give my inquisitors a realistic sense of their situation, including disabusing them of the all-too-common Internet myth that, if you find a photo or other image online that could help illustrate something you want to talk about, there is nothing wrong with posting that image only because its creator did a good job of portraying the situation about which you are writing; it is an illusion that you can easily defend based on fair use (this recent appellate ruling is representative of the actual rule).   The fact that the use was in connection with a noncommercial discussion, or with web pages that may be lauded as making a valuable contribution to the community in some respect, will ordinarily not be enough to produce a fair use ruling.  Thus, in many situations, the only real question is, what price the Higbee target is going to have pay for having been disabused of a misunderstanding about what is and is not allowed (or, more cynically, having been caught infringing the copyright in the image). Certainly, photographers (and other creators) deserve to get paid a fair license fee for their work.  And we have no issue with the Higbee firm seeking to have its clients paid what they deserve under the law.

But How Much Damages?

Raher Article on Consumer Law in Prisons and Jails

Stephen Raher has written The Company Store and the Literally Captive Market: Consumer Law in Prisons and Jails, 17 Hastings Race and Poverty Law Journal  3 (2019). Here's the abstract: 

The growth of public expense associated with mass incarceration has led many carceral systems to push certain costs onto the people who are under correctional supervision. In the case of prisons and jails, this frequently takes the form of charges and fees associated with telecommunications, food, basic supplies, and access to information. Operation of these fee-based businesses (referred to here as “prison retail”) is typically outsourced to a private firm. In recent years, the dominant prison retail companies have consolidated into a handful of companies, mostly owned by private equity firms.

This paper explores the practices of prison retailers, and discusses potential consumer-law implications. After an overview of the prison-retail industry and a detailed discussion of unfair practices, the paper looks at some potential legal protections that may apply under current law. These protections, however, prove to be scattered and often illusory due to mandatory arbitration provisions and prohibitions on class adjudication. The paper therefore concludes with recommendations on a variety of steps that state, local, and federal governments can take to address the problems inherent in the current model.

Bipartisan bill would ban high-cost loans

In 2006, Congress enacted the Military Lending Act, which protects active duty troops by capping interest rates at 36% and provides other safeguards. Now, some members of Congress want to expand those safeguards to protect everyone from high-interest paydays loans with interest rates as high as 200%. NPR has the story, here.

FTC issues guide on advertising disclosures for online influencers

Yesterday, the FTC released  guide setting forth rules for when and how online influencers should disclose sponsorships to their followers. The guide is here.

AT&T to pay $60 million to resolve FTC allegations about mislading promises of unlimited data

AT&T Mobility and the FTC have settled a case charging that the company misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds. FTC filed the case in 2014, alleged that AT&T failed to adequately disclose to its unlimited data plan customers that, if they reach a certain amount of data use in a given billing cycle, AT&T would reduce—or “throttle”—their data speeds after they used a certain amount of data, making it difficult to use certain apps.

Under the settlement, AT&T cannot make any representation about the speed or amount of its mobile data, including that it is “unlimited,” without a prominent disclosure of any material restrictions. In addition, AT&T will pay $60 million into a fund to provide partial refunds to both current and former customers who had signed up for unlimited plans prior to 2011 but were throttled by AT&T. Affected consumers will not be required to submit a claim for the refunds. Current AT&T customers will automatically receive a credit to their bills while former customers will receive checks for the refund amount they are owed.

The FTC's press release, with links ot the complaint and settlement, is here.

Access your secret consumer scores

New York Times journalist Kashmir Hill explains that little-known companies are amassing your data — like food orders and Airbnb messages — and selling the analysis to clients. She also shares information about how to request a copy of the information that these companies have collected about you. The article is here.