House Hearing On Toy Import Safety

U.S. PIRG's Consumer Blog has this informative post on today's hearing before the Commerce, Trade, and Consumer Protection Subcommittee of the Energy and Commerce Committee of the U.S. House of Representatives.  It is apparently a multi-day hearing.  Here is the witness list for today (day 1).  Here is full committee Chair John Dingell's introductory statement.

Recent Third Circuit Fair Credit Reporting Act Case

Take a look at Whitfield v. Radian Guaranty, No. 05-5017 (3d cir. Aug. 30, 2007), a recent Third Circuit decision construing the Fair Credit Reporting Act.  In this case, the Whitfields financed a home purchase through Countrywide Home Mortgage. After the loan documents were signed, Countrywide arranged for Radian to provide mortgage insurance. The premiums would be paid by Countrywide to Radian out of proceeds Countrywide would receive from the Whitfields.  Radian based the price of the insurance in part on Mr. Whitfield’s credit score, which had been obtained by Countrywide (not Radian).  Radian conceded that if the credit score had been higher, the insurance premium would have been lower.  As was its custom, Radian did not provide the Whitfields with an adverse action notice under FCRA.  (A notice would have alerted the Whitfields to the fact that the premium was based in part on adverse information in the credit report and allowed them to challenge inaccuracies in the report; such a challenge, in turn, might have led to an improved credit score and a lower insurance premium.)

The main question in the case was whether Radian had a duty to provide an adverse action notice even though it did not have a contractual relationship with the Whitfields.  Relying on both FCRA’s text and purpose, Judge Dolores Sloviter agreed with the Whitfields that FCRA requires a notice despite the absence of privity.  Judge Sloviter’s opinion indicates that prior authority on this issue was scant but consumer-favorable.

More on the Lerach Guilty Plea and Lerach's Legacy

Following up on yesterday's post concerning plaintiffs' securities lawyer William Lerach's expected guilty plea:  Today's Washington Post has this article discussing Lerach's plea to one count of conspiracy to obstruct justice and Lerach's impact in the legal world.  Lerach agreed to pay $8 million in fines and penalties and plead guilty to the conspiracy charge.  He also agreed to serve one to two years in federal prison.  The courts, of course, will have final say over the terms of Lerach's punishment.  Here's Lerach's explanation:  "I have always fought for my clients aggressively and vigorously in order to hold powerful corporations responsible when their actions harmed people.  However, I regrettably crossed a line and pushed too far. For my actions, I apologize and accept full responsibility for my conduct."

Beyond the description of Lerach's current legal woes, the article contains a breezy discussion of Lerach's impact on securities litigation, the claim that his litigation successes brought about Congressional securities "reform" legislation in the 1990s, and his involvement in Democratic Party politics.  A less detailed New York Times article appears here.

District of Columbia Passes Payday Lending Bill

As you may have heard, a close vote on a procedural motion in the U.S. Senate today means that the residents of the nation's capitol may not get the right to vote any time soon. But not all of today's news about democracy in the District of Columbia today was bad. D.C.'s City Council has the power to enact local legislation and today it voted to pass the Payday Loan Consumer Protection Act, which will make payday lenders subject to the District's 24% interest rate cap. Although the bill had been the subject of some intense and questionable industry lobbying efforts that continued up until the last minute, the members of the Council voted overwhelmingly in favor of it. The only dissenting vote was cast by D.C.'s unpredictable former mayor, Marion Barry, who originally cosponsored the bill but then made a bizarre about-face for which he still hasn't provided a satisfactory explanation.

Four New Books on Predatory Lending, Foreclosures and Mortgage Servicing, Bankruptcy Basics, and Auto Fraud

National Consumer Law Center recently released 9 updates to its manual series, including new editions of Foreclosures and Automobile Fraud, and a 2007 Supplement to Fair Debt Collection.  Those on automatic subscription have received their books, and others can obtain more information and order by clicking on the above links or clicking here to look at the other Summer 2007 updates.

Also NCLC just released a new step by step guide for those new to bankruptcy, Bankruptcy Basics, and also a new edition of our popular "purple book" Stop Predatory Lending, a roadmap for legal advocates to challenging mortgage and non-mortgage predatory lending.  These books are NOT sent out automatically to our manual subscribers (except for legal aid offices subscribing to our whole set, who have received them by now), and can be ordered by clicking on the above links for each book.

NCLC has also just instituted a new "shopping cart" that should facilitate ordering our other books, just some of which include Foreclosure Prevention Counseling, Surviving Debt, Student Loan Law, Fair Credit Reporting, and the NCLC REPORTS newsletter.  To see all NCLC books, often described as the consumer law "Bibles," just  click  here.

William Lerach Reportedly Will Plead Guilty

In a story based almost entirely on unnamed sources, the Washington Post reports today that former Milberg Weiss law firm partner William Lerach is planning to plead guilty to conspiracy charges and has agreed to serve at least one year in prison.  As readers may recall, federal prosecutors have been investigating whether Lerach and some of his former partners at Milberg Weiss recruited people to purchase shares in large companies and then paid those people to serve as plaintiffs in lawsuits, without disclosure to the courts or other class members.  An earlier blog entry in July discussed the guilty plea of another former named Milberg Weiss partner, David Bershad.  Milberg Weiss is probably the most famous plaintiffs'-side securities fraud law firm.  It also handles a range of plaintiffs' consumer class actions outside of the securities area.   

Table of Contents for the Winter 2007 Issue of the Journal of Consumer Affairs

Here's the Table of Contents for the Winter 2007 Issue of the Journal of Consumer Affairs:

Using the Survey of Consumer Finances: Methodological Considerations and Issues

Suzanne Lindamood, Sherman D. Hanna and Lan Bi

Commentary by: Jeanne M. Hogarth, Darryl E. Getter and Sandra J. Huston

What's in a Score? Differences in Consumers' Credit Knowledge Using OLS and Quantile Regressions

Angela C. Lyons, Mitchell Rachlis and Erik Scherpf

Trading Off Fish Health and Safety: Female Decision-Making Processes Toward the Risk of Methylmercury in Fish

Deana Grobe, Melinda M. Manore and Elizabeth Still

Nutritional Improvements and Student Food Choices in a School Lunch Program

Corbett Grainger, Benjamin Senauer and C. Ford Runge

Disclosures Exposed: Banner Ad Disclosure Adherence to FTC Guidance in the Top 100 U.S. Websites

Mariea Grubbs Hoy and May O. Lwin

Bits Briefs and Applications

Consumer Awareness of the Legal Obligations of Funeral Providers

Steven W. Kopp and Elyria Kemp

Gift Cards: Disclosure One Step Removed

Daniel R. Horne

Shopping for Privacy on the Internet

James P. Nehf

A Reply: An Ecosystem Perspective on Privacy

Leyland F. Pitt and Richard T. Watson

Editorial Postlude

Theory, Data, Interpretations and More Theory

Herbert Jack Rotfeld

FTC Warns Mortgage Brokers and Media About Deceptive Ads

The FTC has sent more than 200 warning letters about ads that may be deceptive or violate TILA.  The FTC statement gives the following examples of some of the ads the FTC discovered:

[S]ome ads touted rates as low as “1%” but failed to disclose adequately:

• that the stated rate was a “payment rate” – not the interest rate – that applied only during the loan’s initial period;
• that low advertised payments applied for only a short period; and
• the loan’s Annual Percentage Rate, the uniform measure of the cost of credit that enables consumers to shop for and compare mortgage offerings.

You can read more here,

Hoax or Spam Scam?

Earlier today I received an email which had been forwarded numerous times that read as follows:

Hello everyone!

The Ericsson company is distributing free computer lap tops in an attempt to match Nokia that has already done so. Ericsson hopes to increase its popularity this way. For this reason, they are giving away the WAP Laptops. All you need to qualify is to send this email to 8 people you know.

Within 2 weeks, you will receive Ericsson T18. But if you can send it to 20 people or more, you will receive Ericsson R320.

There are people within our building who have received their laptops so I thought I would share this information with you in hopes that you get one before they give them all out.

Make sure you send a copy to: [deleted].

Of course it doesn't make much sense that a company would give away free computers.  A little research turned up this web site reporting that the email is in fact a hoax and Ericsson itself has asked people not to forward the emails.  But I wonder: is it only a hoax or is this a clever attempt to generate lists of email addresses that can then be sold to spammers?  Recipients of the message who take it seriously can be expected to use real email addresses for their friends and the instruction to send a copy to the address I deleted above makes it possible for someone at that address to receive those addresses.    Anyone know?

Plaintiffs' Supreme Court Brief Filed in Important Federal Preemption Case

As CL&P blog readers may recall, on June 25, the Supreme Court agreed to hear an important federal preemption case involving a man allegedly injured by a defective medical device.  The case presents the question whether state-law damages suits seeking recovery for injuries caused by medical devices that received FDA pre-market approval are preempted by the Medical Device Amendments to the Food, Drug, and Cosmetic Act.  The plaintiffs recently filed their opening brief on the merits.  We have blogged about the case on five prior occasions, including in this post, which links to several other posts.  Public Citizen Litigation Group, lead counsel in the case, has collected other relevant materials here.