Jeff Gelles's Final Consumer Column for the Inquirer

Here. Sad news for those who believe the media should cover consumer law.

Perspectives on the value of a college education

The Sept. 7 New Yorker has a thoughtful piece about what college is really worth today from an economic perspective. The piece explores and criticizes various takes from recent literature on the subject. No one's got a wholly satisfactory answer, but it's definitely a question worth considering as the economy changes and tuition costs soar. One important development highlighted is the recent stagnation in the economic "bonus" one can expect for an undergraduate degree as compared to a high school diploma -- the serious income growth comes with a graduate degree.

At the very least, the article suggests, "Being more realistic about the role that college degrees play would help families and politicians make better choices. It could also help us appreciate the actual merits of a traditional broad-based education, often called a liberal-arts education, rather than trying to reduce everything to an economic cost-benefit analysis."

Read the article here.

Xbox One Promoter Settles FTC Charges That it Deceived Consumers

A California-based online entertainment network has agreed to settle Federal Trade Commission charges that it engaged in deceptive advertising by paying “influencers” to post YouTube videos endorsing Microsoft’s Xbox One system and several games. The influencers paid by Machinima, Inc., failed to adequately disclose that they were being paid for their seemingly objective opinions, the FTC charged.

Under the proposed settlement, Machinima is prohibited from engaging in similar deceptive conduct in the future, and the company is required to ensure its influencers clearly disclose when they have been compensated in exchange for their endorsements.

FTC survey of privacy policies for kids' apps

The Federal Trade Commission has conducted a survey, following up on a December 2012 survey, examining what information children’s app developers are collecting from users, whom they are sharing it with, and what disclosures they are providing to parents about their practices. The findings will be announced in a series of blog posts. Here is the first one.

The FTC's 2012 survey found that only 20 percent of apps had a link to a privacy policy available to parents before downloading the app. The new survey found that more than 45 percent have a direct link to their privacy policy on their app store page. For many children's apps, however, the FTC found that parents still do not have an easy way to learn about data collection and usage practices.

The findings are part of the third annual Global Privacy Enforcement Network (GPEN) privacy sweep. GPEN is a network of privacy enforcement authorities from around the world that promotes information sharing and international assistance.

Lawmakers pressure Fiat Chrysler to support ban on renting recalled vehicles

The Hill Reports that Sen. Barbara Boxer (D-Calif.) and Rep. Lois Capps (D-Calif.) are pressuring automaker Fiat Chrysler to support a bill that would ban car rental companies from distributing recalled vehicles.  Fiat Chrysler was recently fined $105 million by the National Highway Traffic Safety Administration for allegedly failing to properly notify drivers, car dealerships and federal regulators about recalls that affected about 11 million vehicles. The company has also been accused of neglecting to repair cars in a timely fashion, as required by a 1966 law.

The full story is here.

The effects of SAT-optional college admissions

...are considered in a story that ran today on NPR's Morning Edition. Colleges that give applying students the option not to submit standardized test scores say they are trying to broaden the pool of applicants and achieve a more diverse student body. But achieving the first goal doesn't necessarily lead to the second, NPR reports, and preening for the college rankings may be as much as factor in the test-optional trend as more noble goals.

Have a listen, here.

(Relatively) small student debts for most borrowers, but a large problem

Read this article by Susan Dynarski. Here's an excerpt:

Politicians who complain about college costs frequently cite two numbers: one trillion and seven million. Student borrowers owe more than $1 trillion, and seven million borrowers are in default, according to the latest Department of Education data. * * * In many people’s minds, the so-called student-debt crisis revolves around graduates of selective colleges or graduate programs who run up six figures in debt. But such borrowers aren’t the real source of trouble. The vast majority of bachelor’s degree recipients do very well. Only 2 percent of undergraduates borrow more than $50,000, and they also aren’t the ones who tend to have problems with their debt. The unemployment rate for four-year college graduates is currently 2.6 percent, and the typical household headed by a college graduate earns $58,000 more per year more than the typical household headed by a high school graduate. Defaults are concentrated among the millions of students who drop out without a degree, and they tend to have smaller debts. That is where the serious problem with student debt is. Students who attended a two- or four-year college without earning a degree are struggling to find well-paying work to pay off the debt they accumulated.

 

Med Express faces $20,000 sanctions award for frivolous libel suit against eBay buyers

by Paul Alan Levy

Med Express, a Medina Ohio company that faced serious and widespread online obloquy during the spring of 2013 for filing a libel suit against two eBay users who posted mildly negative (but entirely truthful) feedback, has been ordered to pay nearly $20,000 in attorney fees and expenses for the work of Tom Haren and the Jeff Nye, the two Ohio lawyers who stepped forward to provide the users with a pro bono legal defense.  Although Ohio does not have an anti-SLAPP statute, the Court of Common Pleas for Medina County held this week that the lawsuit was frivolous in several ways – (1) the choice among overall positive, negative and neutral ratings, as well as the detailed seller ratings, are so clearly matters of constitutionally protected opinion that basing a lawsuit on them was legally frivolous; (2) to the extent that the two eBay buyers had made factual statements in their prose feedback, the statements were undeniably true, and Med Express had no tenable basis for believing the statements to be false; and (3) the entire purpose of the lawsuit was improper:  “to thwart eBay’s seller ranking system for financial gain by obtaining an injunction against out of state defendants unlikely to be able to defend themselves.”  The Magistrate Judge made clear that Med Express owner Richard Radey had compounded the situation when he presented false testimony, gave "testimony [that] was not credible," and made "misrepresent[ations] to the court" at both sanctions trials.

Second Circuit to consider First Amendment challenge to GMO labeling law

Guest post by Julie Murray (Public Citizen Litigation Group)

Some states have recently adopted, and dozens of others have considered, laws that require food manufacturers to disclose whether their products have been made through genetic engineering (GE). These laws would at least give consumers useful information to guide their purchasing decisions amid the federal delay in updating standards to evaluate GE products. Vermont’s labeling law is the first in the nation to take effect, and a First Amendment challenge to the law by industry groups is now wending its way through the Second Circuit.

The Vermont law generally requires that companies disclose on food labels whether the products were produced in full or in part with genetic engineering. It also bans companies from using the term “natural” or similar words in advertising or labeling of GE food, in light of survey evidence showing that consumers are misled by these descriptions.

The Grocery Manufacturers Association and other industry groups sought a temporary injunction of the law in federal court in Vermont, raising various constitutional arguments and asserting that the law was preempted. That court denied their request, and the groups appealed.

In the Second Circuit, the groups contend that the labeling law violates companies’ First Amendment rights, teeing up yet another court decision to address the appropriate First Amendment test for assessing the constitutionality of commercial disclosure requirements. (We’ve blogged about some of the cases in which Public Citizen has been involved here and here.) The plaintiffs argue, among other things, that the lenient First Amendment review set out in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985), does not apply to the labeling law because the disclosure relates to the controversial topic of GE food, conveys an implicit message that companies believe production through genetic engineering is an important fact about a product, and serves no interest other than consumer curiosity.

In a brief filed last week, Vermont contends that the disclosure requirement mandates only a factual, accurate statement and serves state interests in preventing deception, protecting the environment, preventing risks to human health, and accommodating religious practices. Accordingly, Vermont says, Zauderer review applies, and even if it doesn’t, the disclosure requirement satisfies the more stringent First Amendment standard—set out in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980)—that is typically reserved for commercial speech prohibitions rather than disclosures.

Amici of all stripes are participating, including Public Citizen, in a brief here. Other key briefs in the district court and court of appeals are here.

U.S. adult smoking rate appears to have hit new low

Jonathan Cohn reports that smoking in the U.S. has hit an historic low. He explains:

New survey data, which the U.S. Centers for Disease Control and Prevention released Tuesday morning, suggests that just 15.2 percent of American adults are now using cigarettes on a regular basis. That smoking rate is nearly 2 percentage points lower than what the same survey reported for calendar year 2014. The basis for the findings are responses to the National Health Interview Survey, which the Census Bureau operates on behalf of the CDC and is among the most reliable instruments government has for measuring health habits and status. The data is preliminary, because it comes from January through March and the smoking rate might yet creep up before the year ends. Among other factors, people have been known to quit in January, after making a New Year’s resolution, and then resume a few months later. But even allowing for that possibility, and the margin of error that all surveys have, it’s likely the adult smoking rate for the full 2015 calendar year will be lower than it was in 2014.