FCC and FTC Team Up for Internet Consumer Protection

The Internet today is everything from a news source, to a personal soapbox, to a shopping hub. With so much of our lives happening online, Internet consumer protection has become crucial. Now the Federal Communication Commission (FCC) and the Federal Trade Commission (FTC) are teaming up to protect consumers from wrongful practices by Internet service providers (ISP).

Internet accessibility and safety have become an increasingly important part of American life. Last year, when Internet service providers threatened to throttle back connection speeds for low-paying consumers, the call went out for a change in the way the industry is regulated.

In February, 2015, the FCC responded, ruling that broadband ISPs were “common carriers” like telephone companies and utility providers. At the open meeting on the decision FCC Commissioner Jessica Rosenworcel said:

“It [the Internet] is our printing press; it is our town square; it is our individual soap box and our shared platform for opportunity. That is why open Internet policies matter. That is why I support network neutrality.”

Under the legislation, ISPs must be a neutral gateway to the Internet. They cannot speed up or slow down the flow of information through their servers.

The ruling also created an overlap between FCC regulations and the Federal Trade Commission – which regulates unfair trade practices of non-common carrier industries. Until February, the FTC was in charge of Internet consumer protection.

To resolve the overlap, the two agencies created the “FCC-FTC Consumer Protection Memorandum of Understanding” (MOU) laying out how they would work together going forward. The MOU says that agencies will coordinate their actions, consult on investigations, and meet to compare marketplace strategies. They also promise to collaborate on consumer education and industry outreach.

The FCC and FTC have also warned ISPs that they will be sharing consumer protection complaints and engaging in joint enforcement actions when carriers cross the line into unfair trade practices. They are already starting. They have collaborated on an ongoing FTC lawsuit against AT&T for throttling “unlimited” plans, exposing the company to a $100 million FCC forfeiture as well.

By coordinating, the FCC will get access to the FTC's years of information and institutional knowledge regarding Internet enforcement issues. The FTC, in exchange, will be able to proceed with its actions without fear of interfering with ongoing FCC investigations.

This improved efficiency can only benefit the consumers both agencies were created to protect. Coordinated enforcement actions by the FTC and the FCC will have more power to persuade service providers to change their practices and treat their customers more fairly.

Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, P.C., in Birmingham, Michigan. She represents consumers who are being harassed or mistreated by collections companies. If you believe you have been the victim of unfair trade practices, contact The Liblang Law Firm, P.C., today for a free consultation.

Bankruptcy Judge Rules GM May Face Punitive Damages

A recent decision by a federal bankruptcy judge has cleared the way for consumer protection attorneys to seek punitive damages against GM for deaths and injuries caused by the company's ignition failure. GM claims its bankruptcy should shield it from liability, but this judge's decision proves manufacturers can't use bankruptcy to excuse their illegal actions.

When GM declared bankruptcy in 2009, the company that emerged was called “New GM.” But an opinion from federal bankruptcy Judge Robert Gerber, has shown that the New GM still has to deal with the same old problems.

On Monday, November 9, 2015, Judge Gerber ruled that consumers injured by GM's faulty ignition switches could sue New GM for punitive damages. This was an exception to the rule that a bankruptcy shields a person or company from liabilities created before the bankruptcy was initiated.

GM has faced years of scrutiny and legal challenges based on ignition switches that can slip out of position and shut off the engine. When this happens, the car shuts everything down, including power steering, brakes, and air bags. The problem caused a wave of car crashes, killing 169 people and injuring hundreds more.

Earlier this year, GM faced claims by the National Highway Traffic Safety Administration that the company had known of the problem for over a decade before finally initiating a recall in February 2014. NHTSA and GM settled those claims in September, agreeing to pay $900 million in fines and three years of federal monitoring to avoid criminal sanctions.

The federal agency's settlement did nothing for the over 250 wrongful death and personal injury lawsuits still pending as a result of the faulty ignition switches. While GM was quick to point out it had not assumed liability for “Old GM conduct relating to Old GM vehicles,” the judge's ruling acknowledges the reality that the same people had the same knowledge before and after the bankruptcy and still the company did nothing.

Now lemon lawyers like Dani K. Liblang at The Liblang Law Firm, P.C., can present evidence that New GM employees had knowledge “inherited from their tenure at Old GM or documents inherited from Old GM and may be based on knowledge acquired after” the new company was formed. If consumer protection attorneys can show that New GM employees had access to knowledge of the defects and failed to act, the company may still have to pay substantial punitive damages to those injured by their silence.

GM's 2009 bankruptcy doesn't excuse the company from failing to warn its consumers of a deadly defect in its vehicles' ignition systems. This decision gives consumers access to hold the company accountable for its behavior. If you or someone you know has been injured because of a vehicle defect, contact The Liblang Law Firm, P.C., today for a free consultation.

What Mandatory Arbitration Means to Consumers

You may not realize it, but buried in your cell phone contract, mortgage documents, or credit card contract is a mandatory arbitration agreement. This paragraph can keep you from taking your bank to court when problems arise. Now the Consumer Financial Protection Bureau is cracking down on mandatory arbitration agreements to protect consumers' rights.

Consumers used to be able to bring problems with their banks to court and ask a judge to decide if the bank had done something wrong. Then, to save companies' time and expense, business contracts started to include arbitration provisions. These agreements allowed either party to take a case out of court and have it decided informally by a neutral arbitrator (often a retired judge or attorney).

But mandatory arbitration agreements almost always turn out in favor of the company. Consumers usually don't know they have signed them, and so will not force arbitration when it would help them. When the banks do enforce arbitration provisions, the arbitrator they choose is often biased toward the industry.

Arbitration can't be appealed like a judge's ruling. When the consumer gets an arbitration decision she doesn't like she is out of luck. So bad decisions go unchallenged and companies are able to continue bad practices that hurt consumers.

When a consumer signs a mandatory arbitration agreement, he is also signing away his right to participate in class-action lawsuits against the company. When an individual's claim is small, but the company's behavior affects a large number of customers, consumer protection attorneys can use class-action lawsuits to get the company to change its ways. Class-action lawsuits combine the claims of a broad category of people into one legal action – letting them share the cost of litigation.

Mandatory arbitration agreements take away that tool. By requiring each individual claim to be taken to an arbitrator, rather than to court, companies are able to ensure they won't have to face classes of consumers whose cases are stronger together.

That's why last month the Consumer Financial Protection Bureau (CFPB) issued a new regulation banning “class-action waiver” language in mandatory arbitration agreements. Under the new rule, consumers with small claims would still be able to pursue a class-action lawsuit even if they had signed mandatory arbitration agreements. If they sue individually, the banks can still remove the case from court and take it to arbitration.

Some commentators believe this move is too little to provide meaningful consumer protection. They believe CFPB should have banned mandatory arbitration agreements entirely.

A ban on mandatory arbitration agreements would protect consumers from businesses who take advantage of a corrupt arbitration system. It would restore their access to the courts. It would put tools back into the hands of consumer protection attorneys like Dani K. Liblang who fight for their clients against big businesses and their harmful practices. If you have a dispute with your bank and are worried about arbitration, contact The Liblang Law Firm, P.C., for a free consultation today.

Good News, Bad News for Consumers with Student Loans

The federal government has given and taken away key protections to consumers with student loans. Changes in department regulations and deals with the legislature will leave some borrowers cheering, and others shaking their heads.

Tuition Reimbursement Cards

The good news starts with current college students. On October 27, 2015, the Department of Education proposed new rules that would protect students from overdraft fees and other costs when trying to access their student loans.
Right now, many schools automatically deposit tuition reimbursement funds into debit or pre-paid cards, created and maintained by banks. When students overdraw their accounts, they can face up to a $37 overdraft fee, as well as burdensome penalties if the account stays negative.
The new regulation would cut back on fees associated with using campus cards, including ATM fees and transaction fees. In addition, colleges would have to provide students with a neutral list of options to receive tuition refunds. The student's preexisting bank account has to be first on the list, and the default option. Education Undersecretary Ted Mitchell told the Washington Post:

“The regulations will help protect students from unreasonable account fees, safeguard taxpayer dollars, provide transparency.”

REPAYE Loan Repayment Plans

Paying back your student loans may have just gotten easier too. The Department of Education has expanded a student loan repayment plan called, Pay as You Earn (PAYE), to include all loans made directly by the government. The revised plan, called REPAYE, caps participants' monthly student loan bill at 10 percent of their income. After 20 years of payments (25 years for graduate degrees), any remaining balance is forgiven.

Auto-Dialers, Cell Phones, and Student Loans

Now for the bad news. Part of a tentative budget deal between the Obama Administration and the legislature makes it easier for student loan debt collectors to harass consumers who are past due. The deal authorized the use of auto-dialers to borrowers' cell phones.
As of June, 2015, $111.4 billion in federal student loans were in default. That's 6.9 million borrowers behind on their student loan payments. Under the new deal, those borrowers will be left vulnerable to abusive debt collection practices banned elsewhere in the industry.
The federal government has drastically changed protections for millions of Americans facing student loan debt. It has given protection from fees and provided a way out, but it has also allowed collections agencies to torment borrowers. All in the hopes of bringing a little more money into the federal budget.
Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, P.C. She helps people behind on their student loans end creditor harassment. If you know someone facing overwhelming student loans, contact The Liblang Law Firm, P.C., today for a free consultation.