Monday, March 30, 2015

POSTED: Thursday, March 26, 2015, 12:32 AM

The Consumer Financial Protection Bureau released a "preliminary outline" of proposals shortly after midnight aimed at addressing one of the persistent problems of the credit market:  "payday loans" with triple-digit interest rates that often become debt traps for borrowers. This is an eary public step in a long process that will test the young agency's ability to regulate an industry that sells a dangerous product to consumers while claiming that borrowers know exactly what they're getting into - as at least some borrowers undoubtedly do.

Although storefront payday lenders do not now operate in Pennsylvania or New Jersey, consumers everywhere are exposed to the risks via Internet-based lending.

Even before the formal release, advocates at organizations such as National Consumer Law Center and the Pew Charitable Trusts warned that the CFPB's alternative approaches could expose borrowers to risky loopholes.

POSTED: Tuesday, March 24, 2015, 4:59 PM
RadioShack. (Mati Milstein / Bloomberg)

This isn't the biggest or worst assault on privacy ever. But if you're interested in what happens to all that data you give up online and off, you should read Bloomberg's latest piece on the RadioShack bankruptcy proceeding. If nothing else, it's a window onto privacy battles to come.

Before it failed, RadioShack essentially promised not to sell its customers' data - names, email and actual addresses, shopping history, and the like. It even boasted of its promise. Now? An offer for the chain's assets suggests your data is just something else to cash in on as it liquidates. Bloomberg says two states and AT&T have already raised objections - though, in AT&T's case, only because it says some of the data belongs to it, not the Shack:

RadioShack's customers—even those whose most recent purchase came years ago—could also find themselves sold off in the deal. The company included personal data in its bankruptcy auction as its own asset class. A website maintained by Hilco Streambank, which is serving as an intermediary for RadioShack, says that more than 13 million e-mail addresses and 65 million customer names and physical address files are for sale. Hilco Streambank is careful to note that the bankruptcy court might not approve the deals, and there have already been two legal filings in attempts to block the sale of customer data.

POSTED: Friday, March 13, 2015, 8:33 AM
A Comcast truck is seen parked at one of its centers on February 13, 2014 in Pompano Beach, Florida. (Photo by Joe Raedle/Getty Images)

Yesterday I heard from not one but two Comcast customers whose supposedly resolved disputes with the Philadelphia company have come back to bite them - after an assist from Comcast's PR staff, offered when they wrote to the Inquirer to complain. Even the worst companies tend to be on their best behavior when a spotlight is shining.

So what's up here - an attack of Zombie Comcast Bills? Comcast seems like a company with a bigger mess on its hands than it admits or is able to fully and effectively handle - though in an update Friday morning, a Comcast spokeswoman assured me that both these cases have now been fully and permanently resolved.

When I first told his story Sunday, Wayne lawyer Edmond Tiryak thought his problems with his former cable and broadband provider had finally been solved. He'd been fighting more than two months to get a $215 refund - owed, he said, because the company had billed him erroneously even though it never actually managed to connect his new service for weeks after he moved.  The last straw was a $215 bill for service never rendered. Before he contacted me, Tiryak had called Verizon for broadband service - an option he was lucky to have - and had written four increasingly frustrated letters to Comcast cable-division president Neil Smit

POSTED: Wednesday, March 11, 2015, 1:52 PM

The Federal Trade Commission says DirecTV has misled customers since 2007 about contracts, early-termination fees, and prices that rise after a promotional price ended - the last a common complaint also about cable-TV companies. But the FTC announced a lawsuit today saying the satellite-TV company has repeatedly crossed the line into unlawful deception - an allegation DirecTV says it will fight:

The Federal Trade Commission has charged DIRECTV, the country’s largest provider of satellite television services, with deceptively advertising a discounted 12-month programming package because it fails to clearly disclose that the package requires a two-year contract. In addition, DIRECTV does not clearly disclose that the cost of the package will increase by up to $45 more per month in the second year, and that early cancellation fees of up to $480 apply if consumers cancel the package before the end of the two-year period.

DIRECTV also fails to disclose that its offer of free premium channels for three months is in fact a negative option continuity plan that requires consumers to proactively cancel to avoid automatic charges on their credit or debit cards, the FTC alleges.“DIRECTV misled consumers about the cost of its satellite television services and cancellation fees,” said FTC Chairwoman Edith Ramirez. “DIRECTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed. It’s a bedrock principle that the key terms of an offer to a consumer must be clear and conspicuous, not hidden in fine print.”

POSTED: Tuesday, March 10, 2015, 1:44 PM

I've written a lot over the years about the need for government to step in when markets fail to protect consumers. The FCC's decision last month to reclassify broadband companies as common carriers was one such case - though, as I wrote Sunday, consumers might actually benefit from more of the "utility-style" regulation that Chairman Tom Wheeler has vowed to eschew. Others include the Federal Reserve's crackdown on credit-card traps and Dodd-Frank's creation of the Consumer Financial Protection Bureau.

Nearly every time, I get angry push-back from tea-party types and libertarians who question any intervention - even against monopolists or near-monopolists. Among the rare exceptions: the nation's three main credit-reporting agencies, which generate anger that crosses all political and ideological bounds.  They're the quintessential example of companies you've got to deal with whether you want to or not, and they don't also deliver stuff you partiicularly like. Seriously, would you rather watch House of Cards or view your credit report?

That lack of consumer affection has never much restrained the credit reporting agencies (CRAs), since their business model has never depended on our voluntary patronage.  So let's all credit New York Attorney General Eric T. Schneiderman, who yesterday announced what both sides call major changes to improve the credit-agency experience for consumers - including, at long last, an end to the infuriating practice of allowing a creditor to "verify" a disputed line on a credit report merely by verifying that the creditor said one more time that it was true. The settlement requires that "when a creditor verifies a disputed credit item through the automated dispute resolution system, the CRA will not automatically reject the consumer’s dispute, but rather, a CRA employee with discretion to resolve the dispute must review the supporting documentation," the New York AG's office says.

POSTED: Wednesday, March 4, 2015, 12:22 PM

That political survey robocall? Agree to answer the questions, and you just might end up with something beyond insight into what's on politicians' minds.  Some consumers instead discovered in that a "survey" was a thinly veiled pitch for a Bahamas cruise, according to an enforcement action announced today by the Federal Trade Commission.

The FTC and 10 states took action against a Florida cruise company and seven affilliates that federal officials said engaged in "a massive telemarketing campaign resulting in billions of robocalls" in 2011 and 2012.  The survey-call ruse was designed because, as savvy consumers know, political surveys are among the exceptions to the federal Do Not Call list. The FTC says the companies made millions of dollars from the scheme, and have agreed to pay $500,000 in penalties in a settlement.  The FTC says the scheme, which averaged 12 to 15 million illegal sales calls a day, used the surveys as a cover:

Consumers who answered the Cruise Call Telemarketers’ robocalls heard the following prerecorded message, or a nearly identical version:

POSTED: Tuesday, March 3, 2015, 4:31 PM
From American Banker

American Banker - for good reason - is celebrating the counterintuitive: Despite the seemingly endless flow of data breaches, identity theft complaints and associated losses dropped for the second year in a row, according to a new  survey by Javelin Strategy & Research.  True, about 12.7 million Americans suffered $16 billion in losses, but 2014's victim count was down by 3 percent, and ID theft's costs to victims fell by 11 percent.

Al Pascual, Javelin's director of fraud and security, credited financial institutions that are upping their game. "What we've seen is an extraordinary response," he told the Banker, including the replacement of 95 percent of the credit and debit cards compromised in the Target breach in 2013, compared to the usual fraction, which he said was in the single digits.  "That's an extreme response. That does not happen,"  Pascual said.

Other factors? The Banker said:

POSTED: Wednesday, February 4, 2015, 12:25 PM
U.S. FCC Chairman Tom Wheeler. (Reuters / Gary Cameron)

FCC Chairman Tom Wheeler just unveiled the first details of his plan to protect net neutrality by accepting the obvious: that broadband Internet is a "telecommunications service" under the definitions of federal law - a so-called "Title II" service - and not a loosely overseen "information service." His plan is outlined in an FCC fact sheet here.  A senior FCC official said the new rules plainly answer objections raised a year ago by the D.C. Circuit Court of Appeals when it sided with Verizon and rejected the FCC's last attempt to write net-neutrality rules without such a reclassification.

Earlier today, Wheeler offered a plain-language preview of his move - sure to be challenged by network owners - in an op-ed in Wired (here). Both came a day before the FCC itself was scheduled to announce initial details of his proposal, which Wheeler will propose to the five-member commission and hopes will be backed at least by its two other Democrats at its Feb. 26 meeting.  As neutrality's defenders have for a decade, Wheeler reached back into telecom history to illustrate why FCC rules guaranteeing net neutrality aren't "regulating the Internet" in new ways, as opponents like to argue, but preserving basic principles that have governed telecommunications for decades - principles that, as Wheeler puts it, have made the Internet "an unprecedented platform for innovation and human expression":

The internet wouldn’t have emerged as it did, for instance, if the FCC hadn’t mandated open access for network equipment in the late 1960s. Before then, AT&T prohibited anyone from attaching non-AT&T equipment to the network. The modems that enabled the internet were usable only because the FCC required the network to be open.

About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

Reach Jeff at jgelles@phillynews.com.

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