Consumer Law & Policy Blog

Distracted driving kills thousands of people every year

According to the National Highway Traffic Safety Administration, more than 3100 people were killed in 2020 alone because drivers were distracted. A significant percentage of the problem is caused by cell-phone use while driving. We all see people texting while driving. Sending or reading a text can take the driver's eyes off the road for about 5 seconds. Here's a scary thought: At 55 mph, that's like going the length of a football field with your eyes closed. Read more about the problem here.

Chao paper suggests unjust enrichment claims confer standing, even after TransUnion

Bernard Chao of Denver has written Unjust Enrichment: Standing Up for Privacy Rights. Here is the abstract:

In TransUnion LLC v. Ramirez, one of the country’s largest credit reporting agencies violated the Federal Credit Report Act (“FCRA”) by failing to “follow reasonable procedures to assure maximum possible accuracy . . ..” As a result, thousands of credit reports incorrectly said that consumers were potential terrorists, drug traffickers, or serious criminals. The case wound its way to the Supreme Court on the issue of Article III standing. For plaintiffs that had their reports disseminated, the Court found standing. For victims that did have their reports disseminated, the Supreme Court concluded that they had not suffered a “concrete injury.” Accordingly, these victims did not have standing and could not recover the statutory damages provided by the FCRA.

TransUnion has the potential to impact several types of modern data privacy rights. While the European Union (“EU”) has led the way in recognizing several new rights, this country has followed, and federal and state laws are beginning to adopt their own versions of these rights. Specifically, privacy statutes are now giving individuals the right to: 1) not have their personal data collected, 2) access their data, 3) rectify inaccurate data, and 4) have their data deleted. But after TransUnion, the Supreme Court may have eliminated the ability of Congress to use statutory damages to enforce such rights. This Essay suggests an approach that will restore this option to Congress.

Earlier work (by myself and others) has already explained why unjust enrichment can help overcome issues of harm, causation and standing in privacy law. This Essay builds on that work by addressing TransUnion and arguing that restitution and unjust enrichment can provide standing to plaintiffs that sue under emerging privacy statutes. Because unjust enrichment is based on the defendant’s gain instead of the plaintiff’s injury, plaintiffs can surmount standing’s “concrete injury” requirement. Moreover, plaintiffs have pursued various unjust enrichment claims in courts for centuries. Therefore, it is precisely the kind of historically rooted theory endorsed by TransUnion. Finally, both Congress and state legislatures should consider expressly including a disgorgement remedy in their privacy statutes to allow victims to recover the money the companies wrongly receive (or wrongfully save) for violating these laws. Such carefully drafted laws will prevent courts from somehow limiting the availability of the unjust enrichment remedy.

CFPB issues advisory to protect privacy when companies compile personal data

The Consumer Financial Protection Bureau has issued a legal interpretation to ensure that companies that use and share credit reports and background reports have a permissible purpose under the Fair Credit Reporting Act. The CFPB’s new advisory opinion makes clear that credit reporting companies and users of credit reports have specific obligations to protect the public’s data privacy. The advisory also reminds covered entities of potential criminal liability for certain misconduct. The advisory is available here.

Regulators fine BofA $225 million over botched disbursement of unemployment benefits

Today, the Consumer Financial Protection Bureau fined Bank of America $100 million for botching the disbursement of state unemployment benefits at the height of the pandemic. The CFPB said that "Bank of America automatically and unlawfully froze people’s accounts with a faulty fraud detection program, and then gave them little recourse when there was, in fact, no fraud." The order requires Bank of America to undertake a process that is estimated to result in hundreds of millions of dollars in redress to consumers. In a separate order, the Office of the Comptroller of the Currency fined the bank $125 million.

Read more about it here.

Consumer protection and the Supreme Court's new "major questions doctrine"

On the last day of its term, the Supreme Court issued its decision in West Virginia v. EPA—a decision highly anticipated, and perhaps dreaded, by federal agencies, administrative law experts, and members of the public who care about the ability of the government to act to protect public health, safety, consumer interests, and the environment. The suspense stemmed from the likelihood that the Court would address the so-called “major questions doctrine”—a new approach to judicial review of agency rules that hovered in the background of a case that primarily concerned an already defunct Clean Air Act regulation.

The Court’s majority opinion in the case did not disappoint … in that it addressed the major questions doctrine. The majority opinion adopted the “major questions doctrine” as the “label” for “an identifiable body of law that has developed over a series of significant cases all addressing a particular and recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.” The Chief Justice explained that, “in extraordinary cases” concerning agency action, “something more than a merely plausible textual basis” is necessary to support the agency’s claim to statutory authority. “The agency instead must point to clear congressional authorization for the power it claims.” The “major questions doctrine” is thus a “clear statement rule” applicable when an agency makes an “extravagant” assertion of statutory authority.

Where the new doctrine applies, the Court will not defer to the agency’s interpretation of its statutory authority, even if the scope of the authority is ambiguous. To that extent, the decision is a step back from the Court’s longstanding approach to review of agency action, under which it gives so-called Chevron deference to the agency’s interpretation of ambiguous statutory language, when the language reflects that Congress intended for an agency to fill in the gaps. That step back is no small thing. At the same time, deference had already failed to save the agency actions in those few “extraordinary” cases that the Court cited as forerunners of the major questions doctrine.

CFPB moves to reduce fees charged by debt collectors

The Consumer Financial Protection Bureau last week issued an advisory opinion affirming that federal law often prohibits debt collectors from charging “pay-to-pay” fees. These charges, commonly described by debt collectors as “convenience fees,” are imposed on consumers who want to make a payment in a particular way, such as online or by phone.

The press release, with a link to the advisory opinion, is here.