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POSTED: Tuesday, August 13, 2013, 11:42 AM
FILE - In this Thursday, Feb. 14, 2013, file photo, American Airlines and US Airways jets prepare for flight at a gate at the Philadelphia International Airport in Philadelphia. European authorities cleared US Airways Group Inc.'s proposed merger with American Airlines' parent company, AMR Corp., Monday, Aug. 5, 2013, on the condition that they give up one slot at London's Heathrow airport and take steps to foster competition on the London-Philadelphia route. (AP Photo/Matt Rourke, File)

The Justice Department's antitrust division, joined by Pennsylvania and five other states, filed suit in federal court today to block the planned merger between US Airways and American Airlines. The suit states what consumer advocates say is obvious: Reduced competition will mean higher prices for passengers.

If successful, the lawsuit would block the carriers' plan to create the world's largest airline by merging the two companies as American emerges from bankruptcy.

“If this merger goes forward, even a small increase in the price of airline tickets, checked bags or flight change fees would result in hundreds of millions of dollars of harm to American consumers," Bill Baer, the assistant attorney general who runs the antitrust division, said in a statement announcing the lawsuit. "Both airlines have stated they can succeed on a standalone basis and consumers deserve the benefit of that continuing competitive dynamic.”

POSTED: Friday, August 9, 2013, 6:14 PM

Prisoners - literally a captive market - are perhaps the biggest victims of phone deregulation's unintended consequences. On Friday, after a decade of complaints from families and advocacy groups, the Federal Communications Commission finally moved to end the price-gouging that has enriched a handful of carriers, private-equity firms, and jurisdictions that controlled the prisons' phone contracts.

Here's how it works, according to the LA Times:

The prison phone market, which brings in $1.2 billion annually, is dominated by two little-known phone companies. Global Tel-Link, based in Atlanta, and Securus Technologies of Dallas, both backed by private equity firms, make up more than 80% of the market, according to Standard & Poor's.

POSTED: Thursday, August 8, 2013, 1:31 PM

An old phone scam has resurfaced in Pennsylvania: a robocall, claiming to be from the "State Investigations Department," then informs the recipient that his or her name has surfaced in a criminal matter. Typically, the scammer is trying to obtain valuable personal information "to clear the matter up."

Some versions apparently instruct the recipient "to call immediately and provide information or you will be arrested," says the state's actual investigations department, the Pennsylvania Attorney General's Office, which warned about the scam this week.

Attorney General Kathleen Kane's office says:

POSTED: Wednesday, July 24, 2013, 12:14 PM
Sen. Elizabeth Warren, D-Mass., listens to a witness at a Senate Banking Committee hearing March 7, 2013. Warren rose to national prominence as an outspoken consumer advocate decrying Wall Street abuses. (AP Photo / Cliff Owen)

The lingering debate over the Dodd-Frank Act's financial reforms typically centers on what happens after the next financial crisis hits. In particular, many experts from across the political spectrum worry that it won't end the problem known as "too big to fail" - that the federal government still won't feel confident enough about the economic fallout to force one or more of our largest, most complex financial institutions into receivership much as the Federal Deposit Insurance Corp. routinely unwinds smaller banks.

Sen. Elizabeth Warren (D., Mass.) recently joined with Sen. John McCain (R., Ariz.) to address that problem by trying to avert it - by forcing the dismemberment of some of the mega-banks in question. The unlikely pair called for a return of the Glass-Steagall Act - the Depression-era law that walled off ordinary commercial banking, protected by FDIC insurance, from riskier investment banking. (Warren steadfastly defends that proposal, which echoes a stream of similar calls since the 2008 crash, in a CNBC video that you can view below.)

Warren, who formerly headed the panel charged with overseeing the Troubled Asset Relief Program, recognizes as well as anyone that preventing the next crisis - or at least minimizing its likelihood - is as important as mapping out what happens once it hits.  And yesterday, both she and the agency that she first proposed, the Consumer Financial Protection Bureau, again helped turn the spotlight on that crucial goal - and on evidence that some congressional Republicans still haven't grasped a key lesson from the last crisis.


POSTED: Tuesday, June 11, 2013, 1:55 AM
(istockphoto)

If you've been paying attention to banking critics in recent years - including consumer advocacy groups and the Pew Charitable Trusts - the latest news from the Consumer Financial Protection Bureau will hardly be a shocker: A white paper made public Tuesday shows that U.S. banks have become heavily reliant on overdraft and non-sufficient-funds charges, and that a small portion of errant customers are paying the bulk of the bills. In 2011, those two kinds of fees - once considered "nuisance charges" imposed to deter bad behavior - generated about 60 percent of total fees collected on consumers' checking accounts.

You can find the report, a 72-page white paper based on a year-long study of how overdraft fees play out in the marketplace, here.  Beyond the many data points it discusses, the report plainly reflects regulators' doubts that the Federal Reserve's three-year-old "opt in" rule does enough to reduce consumers' risks from overdraft fees - doubts, to be sure, that were already evident in February 2012 when the CFPB announced the study

Opt-in rates vary dramatically, below 10 percent at some banks and above 40 percent at others, which CFPB Director Richard Cordray said raised questions about how the plans are pitched. He said a key concern was that plans presented as offering "protection" to customers "may actually be putting consumers at greater risk of harm.”

POSTED: Friday, June 7, 2013, 3:39 PM

In a column last month, I told the latest tale of Patrick Rodgers, who runs an actual store in Queen Village and a virtual store on eBay, and who complained that the online-marketplace giant had treated him like, well, a virtual serf. Earlier this year, eBay had summarily shut down his online business, The MTG Place, for 46 days in a case of mistaken identity. EBay had apparently received complaints against the man who founded The MTG Place and sold it to Rodgers three years ago. Rodgers sued for $5,000 in lost revenue, contending that eBay had no grounds to shut him down before investigating - an inquiry that led to his reinstatement and a sorry-for-the-inconvenience email. Now eBay wants to clarify its position. It says Rodgers essentially had no right to buy the store without its prior consent.

Rodgers is no stranger to the David-vs.-Goliath thing. He's the same Philly homeowner who made national news two years ago with his claim to have "foreclosed on a bank." He had won a default judgment against Wells Fargo in a mortgage dispute, and when the megabank didn't pay a $1,000 fine, Rodgers got a "Sheriff Sale" order for the contents of one of its Philadelphia offices - a small victory but enough to make Rodgers' story go viral after I wrote about for The Inquirer. He even went on The Colbert Report, though Colbert was more interested in the Goth music promoter's cosmetic fangs than his financial victory. How, Colbert demanded, could the rest of the media overlook an obvious vampire?

EBay didn't respond to my questions in time for last month's column, but afterward said it wanted to make its position clear. In an email, spokesman Ryan Moore wrote:


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POSTED: Thursday, June 6, 2013, 12:42 PM
FILE - In this Feb. 10, 2011 file photo, Chris Cioban, manager of the Verizon store in Beachwood, Ohio, holds up an Apple iPhone 4G. Britain's Guardian newspaper says the National Security Agency is currently collecting the telephone records of millions of U.S. customers of Verizon under a secret court order. The newspaper said Wednesday, June 5, 2013 the order was issued in April and was good until July 19. The newspaper said the order requires Verizon on an "ongoing, daily basis" to give the NSA information on all telephone calls in its systems, both within the U.S. and between the U.S. and other countries. (AP Photo/Amy Sancetta, File)

Writing for Britain's The Guardian newspaper, Glenn Greenwald has disclosed a large-scale, top-secret data demand by the U.S. government: The FBI asked the Foreign Intelligence Surveillance Court in April to order Verizon to turn over three months of certain call records - including records of purely domestic calls - to the National Security Agency. 

As he has done in the past, Greenwald has focused attention on the vast reach of the post-9/11 U.S. security apparatus. You can read his report here, and find a link to the highly classified document he posted. Greenwald has lifted at least a corner of the veil shrouding the U.S. government's focus on phone records as a counterterrorism tool - a focus reported to date back to the 2001 attacks, or perhaps even before .

Presuming the accuracy of the document - and the White House has already defended the intelligence-gathering practice, though without confirming any details - it's worth noting how much Greenwald's report leaves unclear, and also how it fits into what we already know but don't seem willing to face. For instance:

POSTED: Thursday, June 6, 2013, 11:55 PM

If the disclosure of a top-secret court order requiring Verizon to turn over call records to the National Security Agency stirred renewed anger at the "surveillance state" that's arisen since 9/11 and passage of the Patriot Act, the latest allegations could prompt a real furor - not to mention lots of gallows humor about who's peeking at your emails and chats.

Britain's Guardian newspaper and the Washington Post both reported Thursday night that under a 2007 program called PRISM, the NSA and FBI have been able to tap into Internet content controlled by Microsoft, Google, Facebook and other leading companies to mine communications involving at least one person believed to be overseas - and that more than so-called "metadata," or records about the communications, is involved.

The Post says that with PRISM, the NSA and FBI are "tapping directly into the central servers of nine leading U.S. Internet companies, extracting audio and video chats, photographs, e-mails, documents, and connection logs that enable analysts to track foreign targets, according to a top-secret document obtained by The Washington Post."

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.

Jeff Gelles Inquirer Business Columnist
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