FCC imposes large fine for robocalls

The Federal Communications Commission announced a $2.96 million fine against Travel Club Marketing, Inc., related companies, and the companies’ owner, for making at least 185 unsolicited robocalls. The calls were prerecorded advertising calls to consumers who had not consented to the robocalls; the majority of the consumers had listed their telephone number on the national Do-Not-Call Registry. According to the FCC press release, the fine is the largest forfeiture order the FCC has issued for robocalling violations.

FTC charges data brokers with helping to scam $7 million from consumers

The Federal Trade Commission announced today:

The Federal Trade Commission has charged a data broker operation with illegally selling payday loan applicants’ financial information to a scam operation that took millions of dollars from consumers by debiting their bank accounts and charging their credit cards without their consent.

According to the FTC’s complaint, the data broker enterprise bought loan applications from the operators of payday loan websites, and got others directly from consumers via their own payday loan websites. Instead of passing on those applications to legitimate payday lenders, the defendants sold the information to companies like Ideal Financial Solutions Inc., which purchased the financial account information for more than 500,000 consumers from the defendants and raided their accounts for at least $7.1 million. As a result, some consumers had to close their accounts or were charged fees for insufficient funds.

The FTC's complaint is here.

The FTC's full press release is here.

NY City bank-disclosure law struck down

A federal judge on Friday struck down New York City’s Responsible Banking Act, holding the city preempted by state and federal banking laws.

The ordinance required deposit banks to disclose information about how the banks serve low-income neighborhoods. Under the ordinance, the information would be published and factor into whether banks would remain eligible to hold city deposits.

The New York Bankers Association challenged the ordinance in the US District Court for the Southern District of New York. In a 71-page opinion, the court held that the ordinance is directed at regulating, more than a disclosure, that it conflicts with federal law insofar as it applies to federally chartered banks, and if field preempted by New York state law insofar as it applies to NY state-chartered banks. The court found that the preempted provisions could not be severed from other parts of the ordinance and declared the entire law void.

The opinion is here.

Rates of people lacking health insurance continue to drop in most states

Read this analysis by Gallup. Not surprisingly, the uninsured rates are dropping in states that opted for the Affordable Care Act's Medicaid expansion. Perhaps more surprising is that states that have set up their own health-care exchanges (or have state-federal partnerships), as opposed to states that depend on the federal exchange, generally are the states that have done the best in reducing uninsured rates.

"FTC to Clarify Its Powers to Police Unfair Competition"

The Wall Street Journal reports:

The Federal Trade Commission in its 100-year history has never agreed on formal principles for policing companies engaged in “unfair” competition. That looks set to change.

Members of the FTC are close to a bipartisan agreement to lay out for the first time how the commission views its authority to bring cases against businesses it believes compete unfairly, according to people familiar with the deliberations.

The full story is here. (Subscription may be required.)

"Why the FTC is showing up at hackers’ biggest conferences"

...is the title of this eye-opening piece in the Washington Post about what the FTC is seeking to learn from hackers about data privacy.

As the Post reports,

FTC Commissioner Terrell McSweeny and the agency's chief technologist Ashkan Soltani are in Las Vegas this week to talk with hackers and security researchers attending the Black Hat and DEF CON conferences. The agency wants their input as it navigates the increasingly complicated digital world in which consumers now live, McSweeny says.

Read the article, in the form of a Q + A with McSweeny, here.

 

"Coca-Cola Funds Scientists Who Shift Blame for Obesity Away From Bad Diets"

That's the title of this article in yesterday's NY Times by Anahad O'Connor. Coke is the world's largest marketer of sugary drinks. O'Connor explains that Coke gives "financial and logistical support" for "a new nonprofit organization called the Global Energy Balance Network." (The group's name -- The Global Energy Balance Network -- is more inscrutable than, say, The Tobacco Institute.) The new group "promotes the argument that weight-conscious Americans are overly fixated on how much they eat and drink while not paying enough attention to exercise."

But many scientists believe that, generally, exercise has only a small impact on a person's weight and that diet can have a much larger one. O'Connor's article is worth a read.

O'Connor's article reminded me of the video recently released by the Center for Science in the Public Interest, which takes off on Coke's famous "Hilltop" ad to focus on the association between drinking a lot of sugary drinks and diabetes (and all the horrible conditions associated with diabetes). Click here or on the embedded video below to watch that video.

 

Fish Oil, Pharma and the First Amendment

     A few weeks back I blogged here about pharmaceutical manufacturer Amarin’s lawsuit aiming to allow it to market a fish-oil based drug for a use not approved by the FDA. The FDA denied approval because it concluded the drug had no demonstrated therapeutic benefits for that use, but Amarin claims a First Amendment right to market it for the use anyway.

    Today Amarin, and by extension big Pharma, won an important early battle in that case when the U.S. District Court for the Southern District of New York, in a 70+-page opinion by Judge Paul Engelmayer, ruled that Amarin was entitled to a preliminary injunction allowing it to promote the drug for the unapproved use.

    I won’t attempt to explain everything in the opinion in a short blog post, but the nub of it is this: Judge Engelmayer held that Amarin was likely to prevail in its argument that when a drug manufacturer has obtained approval to market a drug for one use, the First Amendment entitles it to market the drug for unapproved uses as well unless the FDA can prove that its marketing is false or misleading (or, perhaps, would promote an unsafe use of the drug). The ruling thus effectively reverses the Food, Drug & Cosmetic Act principle that the burden is on a manufacturer to prove a drug safe and effective for a particular use before it may market the drug for that use.

Cell location data and the Fourth Amendment

...is the subject of a pending cert. petition to the Supreme Court, reports Ars Technica (here). The issue is whether law enforcement's use of cell phone data to locate a person is subject to the privacy protections of the Fourth Amendment (such as the warrant requirement). The en banc Eleventh Circuit answered no (here). The petition's chances got a boost this week when the Fourth Circuit took the opposite view, rejecting a "shrunken Fourth Amendment" and holding that law enforcement's use of cell location data requires a warrant (here).

At the heart of the debate is whether the third-party doctrine, under which a person has no reasonable expectation of privacy in information voluntarily disclosed to the third party, applies to cell phone information. The third-party doctrine was developed in the 1970s in a very different technological landscape. Today everyone with a cell phone unavoidably shares information about themselves, including location information, with their providers. If the third-party doctrine applies, none of this information is protected by the Fourth Amendment. Will the same Supreme Court that unanimously rejected the constitutionality of round-the-clock GPS surveillance in U.S. v. Jones and unanimously required a warrant to search the contents of a cellphone in Riley v. California extend the third-party doctrine to today's technology? It seems unlikely.

Pew on prepaid cards

A Pew report from earlier this summer investigates the use of prepaid cards -- who uses them, and how, and what regulation might be needed. The report found a huge rise in use. More specifically: "The report finds that many 'unbanked' consumers, those without bank accounts, are using prepaid cards like checking accounts, underscoring the need for the Consumer Financial Protection Bureau (CFPB) to finalize rules it has proposed that would extend greater safeguards to prepaid card users."

Check it out here.