InfomercialScams.com is no more — a sad end for a useful consumer web site

I have been receiving inquiries about the apparent disappearance of two consumer commentary web sites operated by Justin Leonard, whose rights I (and other colleagues at Public Citizen) have defended in the past — www.infomercialscams.com and www.infomercialratings.com. Said one such correspondent, Antoine Simmons (quoted here with permission):

Is it under a different name or have the deep pockets of the INDUSTRY finally won? I truly hope the latter is not the case. It would be a shame if the masses will not have a venue to warn and encourage (depending on the product) each other before sinking their hard earned cash into an unknown and largely unsupported product.

The answer is that the sites are down for now, and the reason has its roots in both the deep pockets of an infomercial purveyor and, apparently, the efforts of the new owners of the web site to exploit the site for extra profits. But as discussed at the end of the post, there remains some hope that a new version of the site may be restored to the web soon.

Medical Bankruptcy and Health Care Reform

by Brian Wolfman

Several years ago, David Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Woolhandler wrote a piece indicating that a large percentage of U.S. bankruptcy filings are prompted by medical debt. They argued for universal health care coverage, and they pointed to the low rate of medical bankruptcy in Canada, which has universal, single-payer health coverage. The Fraser Institute has recently issued a study claiming  that comparisons with Canada do not make the case for single-payer national health insurance because bankruptcy rates are, the study claims, higher in Canada than in the U.S. The study is getting some play in the press. Putting aside the question whether a comparison between overall bankruptcy rates in the U.S. and Canada is relevant, Bob Lawless over at Credit Slips has just responded to the Fraser Institute's study, seriously questioning its statistical validity. Here's a couple sentences to give you a flavor: "Before anyone takes this study seriously, a few important facts are needed to place the Fraser Institute findings in context. To be as charitable as possible, the study's use of the bankruptcy data is extremely selective." Worth reading.

Lots of Stuff Posted Online Regarding Judge Sotomayor

by Brian Wolfman

We've previously posted here and here about Judge Sotomayor's record in consumer and so-called business cases. A large amount of information on Judge Sotomayor has just been posted on the web, and I thought our readers might be interested. Take a look at a ton of stuff posted by the Clinton Library and smaller releases from the National Archives and the Bush I Presidential Library.

Barney Frank Introduces CFPA Bill

by Deepak Gupta

House Financial Services Committee Chairman Barney Frank has formally introduced President Obama's plan for a Consumer Financial Protection Agency (CFPA). The bill adopts the Administration's proposal with a few limited exceptions. Unlike the Administration's draft, the bill preserves the current federal banking regulators' role to enforce the Community Reinvestment Act (CRA). In addition, the Administration's proposal presupposes the creation of the National Bank Supervisor (NBS), a new prudential regulator that would merge the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The introduced bill takes no position on that issue, making references to the OCC and OTS instead of the NBS.

You can read the full text of the bill here. An excerpt from Rep. Frank's press release is below the jump.

Today's House Hearing on the CFPA

You can access here the written testimony from today's House subcommittee hearing on the proposed Consumer Financial Protection Agency -- including that of Assistant Treasury Secretary Michael Barr, and of Gail Hillebrand on behalf of national consumer groups -- as well as complete video of the hearing.

FTC Testifies on Proposed Consumer Financial Protection Agency

The Federal Trade Commission today told the U.S. House Subcommittee on Commerce, Trade, and Consumer Protection that the FTC will continue to vigorously enforce consumer protection laws as Congress considers the Administration’s proposal to protect consumers of financial services, including the creation of a Consumer Financial Protection Agency (CFPA).

The testimony presented by FTC Chairman Jon Leibowitz briefly described the Commission’s authority and activities regarding financial services, its priorities in this time of economic distress, and some preliminary comments on the impact of the Administration’s proposal on the FTC. The News Release follows after the jump.

Public Citizen Releases Statistical Survey of Public Interest Cases in the Latest Supreme Court Term

  The Supreme Court's October 2008 Term ended June 29th, when the Court released the final opinions of the Term. In an attempt to quantify the Court's decisions, Public Citizen's Supreme Court Assistance Project has gone beyond its usual Watch List to conduct a statistical survey of the Court's treatment of public interest cases.

Our survey--prepared by Public Citizen's current Supreme Court Fellow Leah Nicholls--measures how often the Court and each of the Justices decided in favor of expanding individual and environmental rights versus contracting those rights. Via both text and graphs, it examines cases in four categories:

• Access to Courts and Remedies
• Civil Rights
• Constitutional Rights, and
• Environmental Claims.

The report concludes with a brief discussion of the opinion-drafting assignments in the Term's most important public-interest cases. We hope you find the survey interesting and useful.

Public Citizen Litigation Group Gets a New Director

On July 1, 2009, Allison Zieve became the new director of Public Citizen Litigation Group. Allison replaces Brian Wolfman, who had been with the group for nineteen years, five of them as its director. Brian moves on to the faculty of Georgetown University Law Center, where he will be co-director of the Institute for Public Representation clinic (a position recently vacated by David Vladeck, the new head of consumer protection at the FTC and himself a Public Citizen attorney for many years).

Allison's practice at the Litigation Group has focused on health and safety matters, federal preemption, open government, class action fairness, due process issues, and the first amendment. She has argued four cases before the United States Supreme Court, including two recent preemption cases—Riegel v. Medtronic, Inc., 128 S. Ct. 999 (2008), and Warner-Lambert v. Kent, 128 S.Ct. 1168 (2008)—and has spoken and published articles on the preemption of state-law damages actions, tobacco regulation, and the Freedom of Information Act, and taught courses as an adjunct professor of law.  Allison is also now the director of the Litigation Group’s Alan Morrison Supreme Court Assistance Project.

Allison joined the Litigation Group as a staff attorney in 1994, after practicing in California for several years. She received her undergraduate degree from Brown University in 1986 and her law degree from Yale Law School in 1989.

June 2009 NHTSA Recalls

Go here for the June 2009 vehicle and associated product recalls issued by the National Highway Traffic Safety Administration.

What Happens When Disclosures Contradict What Consumers Believe?

by Jeff Sovern

I recently came across a study by Macro International conducted for the Federal Reserve Board in 2008 titled Consumer Testing of Mortgage Broker Disclosures that sheds some light on that question. Macro had consumers read disclosures stating that mortgage brokers had an incentive to arrange for loans with higher interest rates, because that would increase broker compensation. Macro’s report of its finding stated:

Nearly all participants were surprised to read about the brokers’ conflict. . . . Shortly after reading the disclosure, about half of the participants made statements that directly contradicted what they had read in the agreement about broker incentives. Several, for example, stated late in their interviews that they would expect the broker to show them the loans with the best terms available. However, the disclosure they had just read specifically pointed out that brokers would in fact have incentives not to do so.

So Macro disclosed the conflict more explicitly. The following paragraph describes the result:

As in [the earlier round], most participants understood upon their first reading of the agreement that the broker would have a financial incentive to provide them with higher-interest rate loans. Again, however, participants’ preconceived belief that brokers were working in the best interest of borrowers made this conflict difficult to accept. As a result, many became confused or reverted to their prior assumptions. * * *

And, Macro found, the revised disclosures led to other misconceptions. In short, even under perfect conditions, when no one is attempting to distract consumers from focusing on disclosures, deceive them, or rush them into a particular transaction, disclosures may not be useful to consumers when they create cognitive dissonance.