FindLaw's Common Law

CARD Act Move-Up: Credit Card Reform May Come Early

2009-11-06T13:39:56-08:00

With growing reports that credit card companies are gouging their customers before new rules take effect, the House of Representatives has approved legislation to speed up the effective date of portions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (known as the CARD Act), which otherwise would not go into effect until February or August of 2010.

The Consumers Union gives a good breakdown of the law. Here is what the law is about in a nutshell:

It restricts interest rate increases during the first year
It prevents interest rate increases on existing balances except for three instances
Longer amounts of notice are required in order to raise rates on future purchases
Keeps payment terms the same... meaning credit card companies can't change the terms on you
Places limits on the fees and penalty interests that companies can charge consumers
Companies must consider the consumer's ability to pay before allowing limit increases or issuing a new card
Requiring companies to set reasonable due dates
Preventing companies from targeting young consumers
Stopping deceptive advertising for credit reports
Setting Gift Card Protection

As you can tell, the CARD Act sets up a number of protections for you as a consumer. As a result, credit card companies have been scrambling to add last minute interest rate and penalty fee hikes before the new credit card reform takes effect.

However, the House passed a bill to ensure that consumers are protected from these last ditch attempts to milk consumers. They passed a bill this past Wednesday in order to move up the CARD Act's effective date from Feb and Aug 2010 to Dec. 2009.

CNN quotes a statement released by bill co-sponsor Rep. Carolyn Maloney (Dem-NY) as saying: "Just in time for the holidays, Congress can lock in a ban on interest rate hikes on existing balances, and the tricks that have kept far too many consumers trapped in a never-ending cycle of debt."

She continues by saying that credit card companies "brought this on themselves" by taking advantage of the time between when the credit card reform reform act was signed and when it would go into effect by pushing through even more rate and fee hikes.

"This marks a step forward in bringing consumers badly-needed relief," Maloney said in the statement.

While the House has voted 331-92 on this issue, it still must pass in the Senate. Stay posted on whether the Senate will OK the rush on this legislation.

Related Resources:

Credit Card Practices Bilk Cardholders Waiting for New Rules (Findlaw's Common Law)
First Part of New Credit Card Laws Take Effect (Findlaw's Common Law)
US House speeds up credit card rules (AFP)
Overdraft Fee Bonanza (Findlaw's Common Law)
Debt Collectors and the FDCPA (provided by Grand Law Firm)
Emotional Effects of Debt Collections (provided by Affordable Bankruptcy Company)

Finding Lost Luggage: Arizona Stolen Luggage Case Offers Lessons

2009-11-06T11:46:00-08:00

You might want to hold onto your luggage.

We all know how much of a hassle it is to find checked bags that are lost, mishandled, damage or stolen.

Investigators at Sky Harbor International Airport in Phoenix continue to sort through piles of stolen bags.

They now face the challenge of matching the recovered property with victims after a couple was accused of stealing more than 1,000 pieces of luggage from unsuspecting travelers.

Authorities said they were in touch with a handful of victims from the Sky Harbor heists, though returning stolen items to them would be difficult because each of the bags was stripped of any identification tags.

According to the Associated Press, police served a search warrant earlier this week to the couple's home in Waddell, AZ.

Keith King, 61, remained held Thursday in a Maricopa County jail on a $25,000 bond. His wife, Stacy Lynne Legg-King, 38, posted bond and was released from jail, according to police.

Detectives found clothing stacked from the floor to the ceiling. They found digital cameras and laptops. They also found prescription-pill bottles with the prescription scratched off. Passports and adoption paperwork was among other personal stolen property found.

On average of nearly 14,100 a day, checked bags are lost, delayed, damaged or stolen, according to the U.S. Department of Transportation.

Neighbors reported to police seeing a trailer full of material arriving to the home in the middle of the night, which they described as suspicious.

At least one neighbor told police the couple frequently held garage sales to sell a variety of merchandise, including luggage.

A Phoenix airport officer said he watched Keith King for about three weeks enter the airport and grab random bags off the luggage carousel before leaving.

Police said surveillance video also showed Keith King parking in an airport garage and walking to the baggage-claim area to steal luggage.

The two had been taking luggage from the airport over a period of a year or more, authorities said.

Here are some quick tips to keep a closer eye on your bags while traveling:

Put your name, phone number and address on the inside of your bags as well in case the luggage tag gets ripped off
Put your itinerary in your bag so the airline will know where to re-route your luggage if it gets misplaced
Take a photo of your bag with you in your carry-on so you can give it to the airline if they lose it
If you can afford it, ship your belongings to your final destination and avoid the baggage claim terminal all together

BPA in Canned Foods: Feds to Examine Bisphenol A Health Risks

2009-11-05T11:48:45-08:00

Consumer Reports found that many canned foods had significant levels of the chemical additive bisphenol A (BPA) within the food itself, including canned foods labeled "BPA free."

The Los Angeles Times reports that Consumer Reports released findings showing measurable levels of BPA in a wide range of foods, including some labeled to be free of the chemical.

BPA is a plastic hardener and a component of epoxy resin used to help extend shelf life without affecting flavor. Currently, BPA is approved for use by the Food and Drug Administration. However, the FDA is now taking a closer look at reviewing the existing evidence about BPA's health effects.

The consumer advocacy group's analysis raises concerns about the level of BPA in food products and bolsters arguments for banning it from metal can linings and infant products, such as bottles and sippy cups.

Studies show bisphenol A is linked with increased risks of certain cancers, diabetes, reproductive abnormalities, heart disease early onset puberty, infertility, and weight gain in animals.

The National Health Institutes is pouring $30 million to study the safety of BPA. NIH officials say the almost half the money comes from economic stimulus funds.

About 19 name-brand foods were tested by Consumer Reports, including soups, juice, tuna, and green beans. Consumer Reports found that almost all of the 19 name-brand foods tested contained BPA.

The Consumers Union (publisher of Consumer Reports) is urging manufacturers and government agencies to act to eliminate the use of BPA in all materials that come into contact with food.

They also suggest the following tips to consumers:

Choose fresh food whenever possible.
Consider alternatives to canned food, beverages, juices, and infant formula.
Use glass containers when heating food in microwave ovens.

Credit Card Practices Bilk Cardholders Waiting for New Rules

2009-11-03T14:17:49-08:00

We've been hearing for months about credit card reform slowly making its way to us. As cardholders wait for new rules to protect them from systematically unfair and deceptive practices, card issuers scramble to jack interest rates and fees before new rules go into effect. A study by the Pew Charitable Trusts finds that as of July, 2009, 100% of credit cards from the nations 12 largest banks were using "unfair or deceptive practices" under Federal Reserve guidelines, and that none would meet the requirements which will take effect next year.

A few other highlights from the study:

The percentage of bank card issuers raising interest rates by unilaterally changing the cardholder agreement went from 93% last December to 97.3% as of July.
90% of bank issued credit cards imposed penalty interest rates on outstanding balances as a result of late payments or overlimit transactions. A vast majority of these had "hair trigger" penalty interest rates (meaning a single late penalty could cause you to owe penalty interest on your entire balance).
The median penalty interest rate was 28.99%, with 90% of the penalty rates continuing indefinitely. That's right, with most bank issued cards, one or two late payments could mean around 30% interest on your entire balance from the past and on your future balance even if you resume timely payments.
95% of bank issued credit cards allowed the issuer to apply payments to customer accounts in a manner harmful to cardholders. (The other 5% of bank card issuers refused to disclose their policy.)

Many might be asking: but what about all that credit card reform we heard about?

Well, the CARD Act (Credit Card Accountability, Responsibility, and Disclosure Act of 2009) was passed by Congress and signed by the president, but the majority of new rules within it won't go into effect until February of 2010 or later. Until then, it looks like credit card issuers (particularly banks) are going for the throat.

The silver lining? Cards from credit unions proved less prone to unfair or deceptive practices and did a much better job complying with the changes that are coming. They too have late fees, overlimit fees and penalty interest rates, but these costs are generally lower on the credit union cards.

What can you do besides watch your card company like a hawk? Go to Consumer Reports' website to tell your Congressperson to pass legislation pushing up the date for the new credit card rules to December 1, 2009.

Still Waiting: "Unfair orDeceptive" Credit Card Practices Continue as Americans Wait for New Reforms to Take Effect (full Pew study)
Are There Loopholes in the Credit Card Act? (Wall Street Journal)
First Part of New Credit Card Laws Take Effect (FindLaw's Common Law)
Best ways to pay down credit card debt (Consumer Reports)
Credit Card Debt Relief (provided by Law Office of Thomas P. Hogan, Attorney At Law)
Bankruptcy: What Debts are not Discharged? (provided by John Turner Attorney At Law)

Beef Recall: 500,00 Pounds Due to E. coli; 2 Deaths Linked

2009-11-03T11:50:00-08:00

Two deaths have been connected to yet another large recall of ground beef contaminated with E. coli.

The AP reports that beef contaminated with E. coli has caused the death of two individuals, one in New York, the other in New Hampshire. Twenty eight others may have become ill, according to the Center for Disease Control.

Here is the USDA's release about the beef recall.

To summarize, Fairbank Farms, in Ashville, New York is recalling 545,699 pounds of fresh ground beef sold at Trader Joe;s, ACME, Price Chopper, Lancaster and Wild Harvest, Shaw's, BJ's, Ford Brothers and Giant Food Stores.

Fairbank Farms originally stated that the beef was sold in 8 states, but has extended its warning to the entire Northeast and Mid-Atlantic regions, where beef may have been sent after going to distribution centers.

The USDA will update its list of retail locations as the information becomes available.

These beef products were likely sold with sell-by dates between September 19 and 28, 2009, except for a few products with sell-by dates after that.

Here are images of product labels for some of the recalled beef, which was sold as ground beef, beef patties and meatballs.

Each product should include "Est. 492" inside the USDA mark of inspection or on the nutrition label.

What should you do? Check your fridge and freezer if you've recently bought beef from these stores. Also ask your local retailer if any of the beef they've sold has been recalled.

Over 400 Tons of Beef Recalled in Fear of Salmonella (FindLaw's Common Law, August 2009)
10 Riskiest Foods that Aren't Meat or Poultry (FindLaw's Common Law)
FoodSafety.gov: Feds Launch Food Safety Website (FindLaw's Common Law)
Personal Injuries from Dangerous or Defective Products (provided by Law Offices of Michael M. Kaplan, P.C.)
Wrongful Death Claims (provided by Hal Waldman & Associates)

Driving While Texting: Apps to Block It and Toughening Laws

2009-11-02T11:50:00-08:00

About 97 percent of Americans support a ban on texting while driving, according to a recent New York Times/CBS News poll.

The survey also showed that half say that texting while behind the wheel should be punished at least as harshly as drunken driving.

The growing concerns about districted drivers was highlighted in a recent New York Times story.

In the article, Michael Brooks, 38, from Limerick, Pa., said "Someone who is texting creates just as much of a danger as someone behind the wheel who is inebriated."

Though technology appears to be distrating drivers, technology might also help control the problem.

The Consumerist blog reviewed 3 cell phone applications meant to disable texting in certain circumstances. These programs are marketed mainly to parents of teenagers. They can disable texting if the phone's GPS detects that the phone is moving faster than 10 mph.

Texting while driving is already banned for federal staff, according to an executive ordered signed by President Barack Obama last month.

Currently, the federal government is also considering plans to ban text messaging by bus drivers and truckers traveling across state lines, and may also prevent them from using cell phones while driving, except in emergencies.

Senators Charles E. Schumer, Democrat of New York, and Robert Menendez, Democrat of New Jersey, have introduced legislation to force states to ban texting while driving or lose federal highway funds.

So, far Utah has passed the nation’s toughest law to crack down on texting behind the wheel. A New York Times article, reports that offenders in Utah now face up to 15 years in prison.

This has sparked lots of debate among legislators across the country about how to reduce multitasking behind the wheel.

For example, in Alaska it is a felony punishable by up to 20 years in prison if a driver causes a fatal accident when a television, video monitor or computer is on inside the car and in the driver’s field of vision. However, the law applies to phones used for texting, but not to phones used exclusively for calling.

Swine Flu Scams Rampant on Internet Warns FDA

2009-11-02T09:50:15-08:00

If there was ever an over the counter or self-care product guaranteed to protect to prevent or treat swine flu, it probably would be flying off the shelves by now.

Since there isn't any such product, the Food and Drug Administration is warning people to beware of swine flu scams on the internet.

The FDA's web site is alerting the public to watch out for bogus claims Internet sites and other promotions offering a quick fix for the swine flu. Scam artists know how to play on public's fears and are selling everything from pills to protective shampoos to treat or cure swine flu, FDA officials said.

In addition, they have sent warning letters to promoters of more than 140 swine flu-related products.

Consumer Reports also warn the public to be wary.

"Swine Flu...Gone," a product made by Secrets of Eden caught the attention of the FDA because it contained silver. The web site claimed that with ionic silver on your hands and on any surface where these germs may exist and kill the virus.

As reported by the AP, Secrets of Eden sells supplements and oils with a biblical flair, said its general manager, Rick Strawcutter, a former pastor in Adrian, Mich.

The staff "got a little carried away" on marketing for one product and "drew the ire of the FDA," he said. Strawcutter said he ordered a stop to it.

FDA officials said fraudulent products emerged shortly after swine flu did last spring.

Alyson Saben, head of a swine flu consumer fraud team formed by the Food and Drug Administration says new sites are popping up every day. The FDA is working to alert consumers about web sites that are or were illegally marketing unapproved, uncleared, or unauthorized products in relation to the 2009 H1N1 Flu Virus.

Swine flu scammers are driving consumers to pharmacy Web sites. To avoid getting the Better Business Bureau is offering some tips:

Don't believe online offers for vaccines against swine flu. They don't exist.
Avoid opening e-mail from an unknown source, and don't click on any links in the body of the e-mail.
Make sure your anti-virus software is up to date to avoid your computer catching a deadly virus.

CFPA Update: House Committee Approves Creation

2009-10-23T12:11:12-07:00

Yesterday the House Financial Services Committee approved legislation that would create the much anticipated Consumer Financial Protection Agency (CFPA). Though the process is far from over, as it looks now, the CFPA would bring financial products from payday loans to credit cards to mortgages under one federal regulator. It would not, however, have power over auto financing by auto dealers.

As reported by the AP, the CFPA legislation passed an important hurdle, but much debate remains before it becomes a reality. Though details could very well change when the full House and the Senate get their hands on it, the legislation approved yesterday shows who at least won this round of battle.

Here is some background about the fight for creating the CFPA. Here is a visual depiction of how CFPA proponents believe it could simplify the regulation of financial products.

So, what are the takeaways from the legislation approved yesterday?

Common financial products like credit cards, mortgages and payday loans would be regulated by the CFPA.
Though all banks selling regulated financial products would have to follow CFPA rules, only banks with more than $10 billion in assets will have to open their books to CFPA compliance tests.
Auto dealers who engage in car purchase financing will not come under the CFPA (though any banks involved in such deals would). This had been a particular subject of contention.
Retailers would also not come under the CFPA. For example, stores would not be under CFPA jurisdiction because they offer a store branded card, but the institution that provides the financing behind the scenes for such cards would have to answer to the CFPA.
There is no requirement to offer "plain vanilla" contracts such as fixed 30 year mortgages. Nor is there any mechanism for ensuring that consumers understand the financial products they buy (which was viewed as difficult to enforce). These were part of the original call for a CFPA.

While it will still face further wrangling within the House and Senate, CFPA proponents already faced an intense lobbying and PR assault by the banking and financial industry lobbies, as well as the US Chamber of Commerce (which spent $2 million in advertising against the CFPA, and launched stoptheCFPA.com).

The stage is now set for the next round of debate.

Related Resources

The early returns on the CFPA vote (Politico)
Consumer Financial Protection Agency: Obama Makes the Case (FindLaw's Common Law)
Why We Need a Consumer Financial Protection Agency (FindLaw's Common Law)
Consumer Financial Protection Agency, Hold the Plain Vanilla (FindLaw's Common Law)
Credit Card Debt (provided by George R. Belche, Attorney at Law, LLC)
Bankruptcy Abuse Prevention and Consumer Protection Act (provided by Law Office of Jonathan Garrett)

MoneyGram Fraud: $18 Million to Settle FTC Charges

2009-10-21T12:39:32-07:00

The nation's second largest money transfer service, MoneyGram International agreed to pay $18 million dollars to settle charges by the Federal Trade Commission (FTC) that MoneyGram allowed its system to be used by scam artists. The FTC alleged that MoneyGram not only did too little to watch out for fraud, but that it punished whistle-blowers and turned a blind eye to the fact that MoneyGram employees were actually participating in some of the schemes.

According to the FTC, from 2004 to 2008 consumers were likely bilked to the tune of at least $84 million in MoneyGram transfers solicited by scam artists. MoneyGram, the FTC alleged, either knew about it or turned a blind eye to it.

The FTC claimed that 131 MoneyGram agents accounted for a whopping 95% of all consumer complaints regarding MoneyGram transfers from the US to Canada. The FTC also claimed that "at least 79 percent of all MoneyGram transfers of $1,000 or more from the United States to Canada over a four-month period in 2007 were fraud-induced."

How did the scams most often go down? According to the FTC, the most common scams were telemarketing scams that told people they’d either won a lottery or prize, or were eligible for a no questions loan, and that the person simply needed to send a MoneyGram to cover taxes, fees, interest or “insurance” on their free money.

The FTC accused MoneyGram of not only knowing about fraud occurring on their system, but of retaliating against employees who brought it up and discouraging the enforcement of its own internal policies.

At least 65 MoneyGram agents in Canada have reportedly been charged or are being investigated for participating in fraudulent schemes.

Under the settlement order, MoneyGram has to implement a comprehensive anti-fraud program and must pay $18 million, which will go toward reimbursing fraud victims.

Money Transfers Can Be Risky Business (FTC)
Canadian crooks defrauded millions (The Financial Post)
Auction sites: Wire transfers a bad bid (cnet, 2002)
Fraud Explained (provided by Muller & Sommerville, P.A.)
Whistleblower FAQ (provided by Rawls, Dickinson & Scheer, P.A.)

SMiShing: Phishing via Text Messages for Your Identity

2009-10-20T13:20:25-07:00

As consumers are repeatedly forced to learn, identity theives will attempt to utilize just about any form of communication to part you from private information such as your social security number, your bank account number or your credit card number. Phishing is the use of email or websites that look to come from a trustworthy source, but actually trick people into handing over private information. SMiShing is doing this through SMS messages (text messages) sent to mobile phones.

As reported by the Dayton Daily News, the Better Business Bureau has received reports of SMiShing attempts. One such scam involves text messages sent warning recipients of an emergency with their bank account, and giving them a telephone number to call immediately. The phone number leads to a recording purporting to be a 24 hour banking service, and asks callers to leave their credit card number.

Like any form of phishing, SMiShing can be done in many ways. The text message might ask you to directly respond in order to "confirm" private information like your account number. Or it might direct you to a phone number or website that will ask you to enter your information.

One rule to remember: Never, ever include sensitive information in a text message. This includes social security numbers, bank account numbers, credit card numbers and passwords. Text messages are not encrypted, and an actual bank will not ask you to send such information through a text.

Next, call your bank or credit card company if you get any sort of text message relating to your account. This can quickly let you know if you've been SMiShed, and can help your bank get the word out to others.

How to Avoid Phishing Scams (antiphishing.org)
Avoid Identity Theft (ftc.gov)
What Are The Most Common Ways To Commit Identity Theft? (usdoj.gov)
Identity Theft and the Law (provided by Schwartz Law Firm, P.C.)
Protecting Against Identity Theft (provided by Cirignani Heller & Harman, LLP)