Articles Posted in Consumer Protection

Massachusetts Senator Elizabeth Warren, in an open letter to U.S. president-elect Donald J. Trump, takes aim at the new administration’s transition team, packed with corporate insiders and lobbyists. pen

In her letter, Warren said if Trump intends to keep his promise to voters to “drain the swamp” and rid it of “powerful special interests” that “rigged” the political and economic systems against the average American, he needs to start by reevaluating his own transition team. Although Trump promised he would not be a puppet to lobbyists or special interests or donors – something that struck a cord with many voters – he has since elevated to his team a number of industry insiders, special interest lobbyists, wealthy investors and Wall Street bankers. Several more are reported to be on the short list of possible cabinet members.

For example, the reported top recommendation for treasury secretary is a hedge fund manager and partner at Goldman Sachs, who once worked for George Soros. The proposed commerce secretary is a billionaire private equity executive who owned a coal mine with hundreds of safety violations before an explosion killed a dozen miners. He’s also a top member of a Wall Street fraternity that, according to New York Magazine, finds entertainment in singing drunken show tunes that mock poor people. These are exactly the kind of people Trump vowed he was running against. Continue reading

Many were shocked by Donald Trump’s win on election day. However, it appears there may have been some foreshadowing that was largely ignored by mainstream media outlets. As we take a step back to analyze the anti-establishment, populist movement that fueled this fire, there is one element that shouldn’t be overlooked: The failure of the Obama administration to hold accountable a single, high-ranking executive at any large financial firm for the 2008 economic crisis.american flag

Millions of people lost their jobs. Millions of people lost their homes. And after the smoke had cleared, there was a failure to pursue those who knowingly engaged in fraud. It confirmed for many the suspicion that powerful players on Wall Street receive special attention. Those on Main Street? We get the short end of the stick. Trump’s repeated assertions of a “rigged” system rang true for a huge swath of the electorate.

Although there were a few media outlets that doggedly pursued this lack of accountability (Rolling Stone was one), many were content to simply report it and move one. Those in affluent areas likely overlooked the fact that this failure resonated with people long after the civil settlements had been inked. These high-profile bankers paid some fines, and sometimes shelled out money for penalties from their own pockets. In exchange, they were able to avoid any jail time. Understandably, that left millions of Americans feeling cheated, and as if the justice system was broken. Continue reading

A company that promises to protect consumers from identity theft has been accused of violating a federal court order that requires it to keep those promises and refrain from deceptive advertising. lock

The case against LifeLock dates back several years, but now,  the Federal Trade Commission (FTC) announces LifeLock has agreed to a $113 million settlement in the matter – the largest monetary award ever wrangled by the commission in an enforcement action.

The FTC first took action against the firm five years ago, when it alleged in the U.S. District Court for the District of Arizona that the company didn’t deliver on advertising claims promoting its identity theft services. The firm vows to keep consumers’ sensitive personal information shielded from thieves. But the FTC alleges the company failed to provide the kind of protection it promised, meaning it misled consumers with advertising that was deceptive. Continue reading

The U.S. Senate recently took one major step toward protecting the rights of consumers and the integrity of capitalism in the 21st Century with its passage of the Consumer Review Freedom Act (S. 2044, H.R. 2110). The bill targets so-called “gag clauses” or “non-disparagement agreements,” which some companies use to curb criticism online.enterkey

Although many companies have argued that competitors or others are unfairly using online tools to spread falsehoods or maliciously damaging their reputation without cause, the flip side is that consumers have been penalized thousands of dollars for posting negative – but honest – online reviews. These reviews are widely used by prospective customers to determine whether to buy a service or patronize a location, so there is a lot at stake on both sides.

These dubious non-disparagement clauses are often tucked into the fine print of the purchase agreement, and have been found on even the most seemingly inane purchases, such as cellphone accessories. Others have been found in rental agreements with landlords, wedding contractors or sellers of weight loss products. Continue reading

Renters in Miami are being bled dry by a combination of sharply rising housing costs, stagnant wages and lower-than-average incomes. miami1

A report from the website apartmentlist.com, based on figures from the most recent 2014 U.S. Census, reveals that no other city in the county had as many renters as cost-burdened as those in Miami. Two out of every three renters in Miami are paying a third or more of their salaries to their landlord. Renters who pay more than 30 percent of their income for housing are considered “cost-burdened.”

Of course, rents aren’t necessarily as high as what you might see in Boston or New York or San Francisco. But people here in South Florida are earning much less in terms of salary. Further, home ownership is not an option that is available to many people who live here because home prices have skyrocketed as the housing market stabilizes from the housing crisis. South Florida had been hit particularly hard by the economic downturn, and while the uptick in housing prices has been good for some folks, it has meant others have lost their homes and/or are stuck in high-price rentals. Continue reading

Florida residents are protected from dubious debt collection practices by two laws: The federal Fair Debt Collection Practices Act and F.S. 559.72. cash

The laws prohibit things like:

  • Using or threatening to use violence;
  • Communicating or threatening to communicate with a debtor’s employer before obtaining a final judgment against debtor;
  • Disclosing information to anyone other than debtor or family information that may affect debtor’s reputation;
  • Using abuse, vulgar or obscene language;
  • Claiming or enforcing a debt when it is known the debt isn’t legitimate.

The problem, as highlighted recently by The New York Times, is that most state laws were written many years ago, long before the digital age. At the core, these statutes were written to protect people from becoming completely destitute. But debt collectors are now finding new ways to secure court judgments that allow them to garnish paychecks or seize bank accounts belonging to debtors. Continue reading

There’s an old saying regarding two certainties in life: Death and taxes. As it turns out, you can also be pretty certain of another: The U.S. government is probably never going to forgive your student loan debt. elderly

In fact, not only with the government hound you throughout all your working years – no matter how little you actually earn – you can bet calls for payback won’t end when you retire. That’s due to legislation passed by Congress in 1996. The little-known law gives the government the power to garnish the wages of Social Security checks (paid to those over the age of 65) for student loan debts.

As of right now, according to a new report from the Government Accountability Office, there are approximately 700,000 senior citizens receiving Social Security who still have student loan debt. Of those, more than a quarter are in default and are having their monthly stipends garnished to repay those loans. The government takes 15 percent of the total, assuming that leaves the retired worker with at least $750 a month. Continue reading

The latest report from the Federal Reserve Bank of New York indicates a quarter of all borrowers whose loans have come due are severely delinquent.students1

That tells us the percentage of Americans who have fallen further behind on student loan debts has spiked over the last 12 months, even though other measures indicate an economy that is steadily getting better.

As of June 30th, the number of outstanding student loan debts that were at least three months late stood at nearly 12 percent. That’s up from 10.9 percent one year earlier. Continue reading

That high interest rate on your credit card could be giving you more than a headache. It could potentially make you clinically depressed.
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That’s the conclusion of a recent study conducted by the researchers at the University of Wisconsin-Madison’s Institute for Research on Poverty.

Gleaning information from the National Survey of Families and Households in the U.S. and a series of regression models, study authors discovered household debt is positively correlated with a higher number of depressive symptoms. This was more true of short-term unsecured debt – like credit card debts or payday loans – as opposed to mid- or long-term debts, like mortgages or car payments.

Long-term debts might actually be considered a positive for some people, as they may be deemed good investments in the future. However, it should be pointed out that this data was collected in the late 1980s and early 1990s, which means housing debt might now in fact be a source of significantly more stress, especially if the home is not worth nearly as much as it used to be. That sense of financial security may no longer be what it was before the recession.

Also interesting was that the association was especially acute for those adults between the ages of 51 and 64 (those nearing retirement) with a high school diploma or less. It was also true for those not in a stable marriage for the duration of the study period (which was two separate two-year time frames).
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The middle class is on its way out. The income gap between wealthy and the rest of is continues to widen, as the share of middle class wealth has been contracting for most of the last three decades.
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A new study conducted by economic researchers at the University of California Berkley found it recently fell to the lowest seen since 1940. To put that into perspective, remember that after WWII, the “average” American accumulated unprecedented wealth, and this was the formation of the middle class. But today, all of that is gone, at least according to the new study.

Researchers defined “middle class” as the bottom 90 percent of Americans, with wealth being all of their home equity, bond and stock holdings, pensions and other assets after subtracting the debt.
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