Another KlearGear? Online retailer Accessory Outlet demands $250 from consumer just for saying she'll contact her credit card company; Public Citizen sues

The march of the non-disparagement clauses continues.

This time the business is Accessory Outlet, another web-based retailer. Its terms (fine print, as usual) prohibit “any complaint, chargeback, claim, dispute,” or “any public forum post, review, Better Business Bureau complaint, social media post, or any public statement regarding the order,” or threats to take any of these actions, within 90 days of a purchase. Allowing these actions after 90 days is better than never allowing them at all, but it is, of course, within that 90 days that a customer is most likely to want to post about her experience and most likely to need to dispute a charge on her credit card. On Accessory Outlet's website, the customer is not required to click "accept" on these terms or even view them before making a purchase. In fact, the checkout page contains links to different (and innocuous) sets of terms, thus decreasing the chance a customer would go searching for the terms with the non-disparagement and non-dispute clauses.

A new twist from Accessory Outlet is a prohibition on "threats" to take any prohibited actions, and that's the clause the company seemed to be relying on when it told Wisconsin consumer Cindy Cox, who is a veteran of the U.S. Navy and now works with special needs children in her local school district, that she owed the company an additional $250 penalty on top of the $40 Cox paid for an iPhone case. Cox had contacted the company in mid-July to ask to cancel when the order hadn't shipped for 10 days. Accessory Outlet refused to cancel the order, and Cox said she'd contact her credit card company.

That's when Accessory Outlet took it to the next level.

More on self-driving cars

We have posted a number of times about self-driving cars, including about how they'll be regulated. Go, for instance, here, here, and here. So, now, read this article by Ashley Halsey III about a spin around D.C. in a driverless car.

And, then, read the 15 things you need to know about driverless cars,including when we'll see them on the road and what they'll cost. And here's one: Will they be safer?

Yes, experts say. Driver error causes the overwhelming majority of crashes — 93 percent of them, according to one federal report — and there are more than 5 million crashes each year. Just getting intoxicated drivers from behind the wheel could reduce fatalities by 39 percent.

New NHTSA on-line tool to check for vehicle recall and repair status

So, you want to buy a used or new car. How do you tell whether the vehicle has been recalled and whether the repair associated with the recall has been completed?  Given the large number of high-volume recalls in the last few years, used cars in particular may be the subject of recalls, and you'll want to know before you buy whether the repair has been made. The National Highway Traffic Safety Administration (NHTSA) has this new tool. It's free. Just plug in the car's VIN (vehicle identification number) and find out the car's recall and repair status. Go to NHTSA's website to learn more about the tool.

California's Prop. 46 pairs a good consumer measure with a bad civil-liberties one

As the Washington Post reports, now heating up (in terms of money and ads) is the campaign over California's Proposition 46, which will go to the voters this November. One aspect of the measure would raise the cap on medical malpractice damages from $250,000 to $1.1 million -- an important step for accountability in the medical industry and compensation for victims of shoddy care. Another provision in the same measure would require drug and alcohol testing of doctors.

Over $60 million has been raised in the campaign, in a state in which big-ticket policy proposals regularly appear on the ballot (the infamous Proposition 8, banning gay marriage, is only the most recent -- others in past years include measures banning affirmative action, reforming the state's "three-strikes" law, limiting property taxes, and banning the death penalty). The vast majority of the campaign money has been raised in opposition to the measure. The Post story includes a link to an ad arguing that Prop. 46 was cooked up by trial lawyers to make millions from malpractice lawsuits and that it will cause health care costs to rise. A 2013 Public Citizen report rebuts the argument that malpractice suits is correlated with rising health care costs.

Why is the drug testing measure in there? The Post offers this explanation from a Stanford political scientist:

“Changing the malpractice limits is a more controversial proposal, but requiring doctors to be drug tested is something that’s likely to get a lot of support, so they deliberately stuck that in there to make sure the pot was sweetened,” says Bruce Cain, a Stanford University political science professor.

But the attractiveness of the "sweetener" depends on your point of view. Prop. 46 proponents seem to be taking a gamble in pairing the two measures, forcing consumer-rights voters who also care about civil liberties to pick one or the other. Perhaps proponents are hoping the tail will wag the dog -- that a large group of California voters won't care about medical malpractice suits (perhaps out of irrational optimism that disaster can't happen to them?) but think that doctor drug-testing makes them safer. In any event, the list of organizations opposing the measure is pretty long, and it extends beyond hospitals and insurance companies.

 

Bank of America to Pay $16.65 Billion to Settle Fraud Charges

The Department of Justice has announced a $16.65 billion settlement with Bank of America in connection with charges of financial fraud leading up to and during the financial crisis. According to the DOJ press statement, the settlement is "the largest civil settlement with a single entity in American history."

The settlement will "resolve federal and state claims against Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch." BofA has agreed to pay a $5 billion penalty and to provide billions of dollars of relief to homeowners.

BofA's press statement is available here.

Bank of America will pay a total of $9.65 billion in cash and provide approximately $7.0 billion worth of consumer relief. The cash portion consists of a $5.02 billion civil monetary penalty and $4.63 billion in compensatory remediation payments. - See more at: http://newsroom.bankofamerica.com/press-releases/corporate-and-financial-news/bank-america-reaches-comprehensive-settlement-us-departm#sthash.cKwH2UUc.dpuf

"The settlement does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution," according to DOJ.

"Good news for Obamacare: Health coverage is soaring, but health care prices aren't"

That's the name of this article from Vox, which is worth a read. Here's an excerpt:

Health care prices have grown really slowly this summer, a piece of good economic news released by the Bureau of Labor Statistics Tuesday. The price of medical care commodities, which includes drugs and other medical  devices, grew 0.3 percent from June to July. That was one of the lowest monthly increases all year. Growth over the previous year was 3 percent. Prices for medical care services (like health insurance and hospital care) grew an even smaller 0.1 percent over the same time month and 2.5 percent over the year. (emphasis added)

We've told you before that, since the Affordable Care Act went into effect, the percentage of Americans without health insurance has been dropping.

Is there a better (even decent) alternative to the payday loan?

There's no question that, for some low-wage workers, it can be finanically difficult or impossible to wait for pay day. So even if pay day loans are a bad thing for consumers, the demand for them is created by a very real problem. So, in Is ActiveHours A True Payday Alternative Or Just Another Too-Good-To-Be-True Letdown?, Ashlee Kieler at the Consumerist asks whether there's a better, more consumer-friendly alternative. Here's an excerpt:

We’re largely a society built on convenience: fast food, one-stop shops and other we-need-it-now services. Unfortunately, that need for timeliness seeped in to the financial system in the way of quick-fix payday loans, which can provide the convenience of a quick, low-value loan but which often result in a revolving cycle of high-interest debt. Now a new lending product aims to take the predatory stigma out of short-term loans, but, like many payday alternatives of the past, a closer look reveals reason for concern. ActiveHours, a new startup, takes a different approach than typical payday alternatives, like RISE Credit, that simply extend loan repayment time. The service purports to allow hourly employees the ability to collect their wages the day they worked, rather than waiting for their paycheck to arrive. When payday does roll around, ActiveHours users, who have given the program access to their bank account, will have the funds they were fronted deducted in a lump sum. So far, that sounds a lot like a typical payday loan: taking an advance on your paycheck, repaying it when payday comes. What ActiveHours claims sets it apart from others is the idea that it doesn’t charge a fee. Instead, the company asks users to give a voluntary monetary tip as thanks to the service. On the surface ActiveHours sounds significantly better than traditional short-term, high-risk payday loans that have been known to leave consumers in a revolving door of debt by charging three-digit annual percentage rates and tacking on exorbitant fees. But some consumer advocates warn that there are likely more similarities between ActiveHours and payday loans than there are differences.

Postal Banking History

by Jeff Sovern

Various advocates have been calling recently for the Postal Service to get back into banking to seve the unbanked or underbanked. The financial industry has largely opposed postal banking, preumably because it doesn't want the competition.  One way to determine whether postal banking would be a mistake or a positive is to examine how well it worked when we had it in the US, as we did from the early twentieth century until 1966.  Mehrsa Baradaran of Georgia Law has written for Slate an interesting piece called A Short History of Postal Banking, presumably drawn from her forthcoming book on the subject. Here are the last two sentences:

Postal banking was America’s most successful experiment in financial inclusion—a problem we face again today. As we contemplate whether it has a place in our future we must recall the vital role it played in our past.

Ninth Circuit: website's terms of use unenforceable where consumer lacked reasonable notice

We've posted before on the subject of contract formation in the digital age (see here, for instance). A key question is: what online terms can a consumer be held to if she hasn't read them? The answer depends on how prominent the terms were, whether the consumer had to indicate assent, and whether a reasonable user would know that the terms applied.

In an opinion by the characteristically direct Judge Noonan, the Ninth Circuit yesterday gave an excellent summary of the relevant rules and applied them wisely to hold that a website user was not bound by terms available via a link at the bottom of a website, where the user was not required to check a box agreeing to the terms and was not given reasonable notice that the terms were there. Rejecting an argument that the "terms" link was "close enough" to other key content that the user should have clicked on it, the court held:

[W]here a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice. . . . [C]consumers cannot be expected to ferret out hyperlinks to terms and conditions to which they have no reason to suspect they will be bound.

As a result, a retailer's attempt to enforce an arbitration clause buried in those terms failed.

The case is Nguyen v. Barnes & Noble. (HT: Paul Bland.)

Collecting cable company complaints

What happens when consumers only have one choice for a cable company? Well, judging by reports on Reddit and Gawker, the answer is bad service and bogus fees. If these practices (particularly the bogus "unreturned equipment fees") are widespread, I wonder if this is something a large class action firm ought to look into (or is already).

(We've previously flagged a story about how this monopoly situation came about in the cable industry.)