Bank-Backed Congressman Praises Betsy DeVos For Cutting Ties With Consumer Protection Agency

Congressman Jeb Hensarling of Texas, whose campaign has received more than $8 million from the financial sector since 2010, has long endeavored to undercut the Consumer Financial Protection Bureau, an agency that regulates many of the businesses that keep Hensarling’s election campaigns flush with contributions. So it’s of little surprise that the lawmaker is thrilled at Education Secretary Betsy DeVos’ recent decision to stop working with the CFPB on student loans — even though the Bureau has returned hundreds of millions of dollars to screwed-over student borrowers.

Hensarling sent a letter to DeVos last week, The Hill reports, praising DeVos for her decision last month to end years of formal cooperation between the Education Dept. and CFPB in combating student loan fraud.

DeVos told the CFPB in September that her department would end agreements established in 2011 and 2013, claiming the Bureau was not living up to its end of the deals, by doing too much to hold loan servicers accountable.

The Secretary claimed the Bureau overstepped its authority by taking enforcement actions against student loan servicers and collectors, rather than simply passing those matters on to the Education Dept. to handle. She also accused the CFPB of failing to abide by its agreement to provide the Department with all complaints related to federal student loans within 10 days of receiving the grievance.

The CFPB fired back the following week, with director Richard Cordray noting in a letter [PDF] that he believes the Department’s decision to end years of formal cooperation combating student loan fraud is based on DeVos’ misunderstanding about the Bureau’s responsibilities and the actions it has taken related to student loans.

Pouring On The Praise

While Hensarling’s office did not return Consumerist’s request for a copy of the letter, The Hill reports the lawmaker called DeVos’s decision “necessary and appropriate” in the face of the CFPB’s “overreach into the education field.”

“Congress never authorized or intended the CFPB to be the regulator of educational services, yet the CFPB entered the field regardless,” Hensarling wrote, as reported by The Hill. “Sadly, it is no surprise that that this unconstitutional agency routinely exceeds the limits of its jurisdiction.”

Hensarling noted the end of the agreements was “most welcome” and that other agencies should take note.

According to the nonpartisan Center for Responsive Politics, Hensarling has regularly been a favorite recipient of contributions from banks since becoming Chair of the House Financial Services Committee after being reelected in 2012.

During the 2016 election cycle alone, his campaign took in nearly $1 million from commercial banks, securities firms, and credit companies. He’s already approaching the $500,000 mark from just these few sectors for the 2018 election.

A Differing Report

Hensarling’s letter of praise for DeVos is in direct contradiction to a recently released report that found the CFPB’s handling of consumer complaints related to student loan servicing resulted in $750 million in relief to borrowers.

According to the CFPB report [PDF] released today, since the agency began accepting student loan servicing complaints in 2012, it has received more than 50,700 private and federal student loan complaints, as well as 9,800 debt collection complaints.

“These complaints have served as the critical link in a process through which government agencies and market participants have repeatedly taken action to improve the student loan system for millions of Americans,” the report states.

The Bureau addressed these complaints with 360 companies, including student loan servicers, debt collectors, private student lenders, and companies marketing student loan “debt relief.”

The report found that relief for student loan borrowers included those harmed by illegal lending practices from for-profit colleges, restitution for military borrowers illegally denied benefits, and refunds and redress to student loan borrowers harmed by servicing failures.

An analysis of the complaints and Bureau action found that these complaints, and subsequent enforcement action, not only returned funds to borrowers, but strengthened key aspects of the student loan repayment process for others.

For instance, the CFPB notes that it received a number of complaints from borrowers that related to processing delays, surprise application denials, and lost paperwork when applying for affordable payment plans.

These complaints, the report notes, resulted in the agency working with the Dept. of Education to add stronger rogueries to ensure student loan borrowers timely, actionable information from their servicer about their application status and how to get an affordable monthly payment.

Likewise, the Bureau’s received complaints from military borrowers who were prevented from accessing their right to an interest-rate reduction under the Servicemember Civil Relief Act.

The CFPB worked with the Dept. of Education to automatically extend the interest-rate reduction to more than 100,000 servicemembers on active duty with student loans.

As a result of the policy change, the report estimates that military borrowers have saved more than an estimated $20 million in interest charges starting in 2016.

Consumerist has reached out to Hensarling’s office for comment on the CFPB’s report. We’ll update this post if we hear back.

Source: Consumer Reviews

Merkts Cheese Spread Recalled After Reports Of Plastic Pieces

Drop the cracker! Put down that little spreader knife! Before you keep snacking, make sure that your tub of spreadable cheese isn’t the port wine flavor of Merkts spread that has been recalled after customers found plastic pieces mixed in with the cheese.

What to look for

According to the company, “a few” customers have reported finding plastic pieces in their cheese, which means “more than one,” prompting a voluntary recall. There have been no reported illnesses or injuries due to these pieces.

The affected cheese was sold across the country, and comes in a 14-ounce plastic tub. It was produced on Sept. 1, 2017, and has a “best before” date of April 29, 2018.

The batch code for affected cheese is LC2442A, and is printed on the top of the tub, above the Nutrition Facts, as shown in the picture.

What to do

The company instructs customers who have purchased this cheese not to eat it, and to throw it away. If you have any questions about the recall or the product, call the manufacturer, Bel Brands USA, at 888-840-0096.

Source: Consumer Reviews

Facebook May Go For LinkedIn’s Jugular With New Resumé Features

While Facebook is, by far, the dominant “social” networking site, it’s rarely used for professional networking. Instead, people go to places like Microsoft’s LinkedIn when it comes time to look for a job or just put their resumés out there. But in Facebook’s quest to be all things to all users, it is testing new features that mimic much of what you’d see on LinkedIn.

Some new features are popping up in testing on Facebook, The Next Web reports.

The new fields basically expand on Facebook’s current “Work and Education” section, and let users fill in very granular-level details about their jobs, past and present. Basically, you can build in a whole resumé or CV on top of your existing personal profile, with all your job titles and the dates you held them neatly slotted in.

If you’re thinking, “But my aunts, high school classmates, and that guy I dated for three months don’t care about my job titles,” Facebook feels you. The information you add in the resumé feature doesn’t really show up on your profile.

Instead, it basically goes into a big vortex of data that, The Next Web surmises, will become accessible to recruiters and folks who post vacant jobs.

“We’re currently testing a work histories feature to continue to help people find and businesses hire for jobs on Facebook,” a spokesperson for the company confirmed to The Next Web, but declined to say if this feature would be rolled out more broadly anytime soon.

Facebook added the Facebook Jobs module to to the site early this year, to comparatively little fanfare. That service — a digital “Help Wanted” sign, more or less — allows any business with a Page to create and share job listings for their company.

While Facebook would no doubt like to entice users to consider Facebook a professional-friendly platform, and would like to get paid money by companies that list and fill positions, it may not be such a great idea for users.

Alison Green, of Ask A Manager fame, wrote in March that would-be employees should perhaps be leery of the service.

Facebook Jobs connects job seekers and job posters through Facebook Messenger — so anyone who applies for work through Facebook Jobs is, of course, connecting that application to their public Facebook profile. And that means that any employer who clicks your name to learn more about you may, indeed, learn more — a lot more. Including things that you would ordinarily leave out of a job application.

In short, there are reasons that millions of us may be wisely uneasy with combining our work and play personas — and that’s without even branching into the many lines of work, from therapy to adult entertainment, where it’s best to keep one’s friends and one’s clients in completely separate spheres.

Source: Consumer Reviews

Operator Of Payday Lending Venture Found Guilty Of Racketeering, Other Charges

Nearly two years after federal authorities arrested the man behind the company responsible for one of the scammiest payday loans Consumerist has ever seen, the man and his lawyer were convicted of racketeering related to running a $3.6 million online payday lending operation that exploited more than 4.5 million people. 

A federal jury in Manhattan found AMG Services owner Scott Tucker and his lawyer Timothy Muir guilty on 14 charges including violating the Racketeer Influenced and Corrupt Organizations (RICO) Act, three counts of conspiring to collect unlawful debts, and three counts of collecting unlawful debts; as well as violating the Truth in Lending Act.

The U.S. Attorney’s Office for the Southern District of New York announced the verdict Friday after a five-week trial in which the jury found the men had “targeted and exploited millions of struggling, everyday Americans.”

“The jury saw through Tucker and Muir’s lies and saw their business for what it was – an illegal and predatory scheme to take callous advantage of vulnerable workers living from paycheck to paycheck,” Acting Manhattan U.S. Attorney Joon H. Kim stated.

Tucker and Muir were ordered to home confinement until they are sentenced next year.

The Case

The Department of Justice first filed charges against Tucker and Muir in Feb. 2016 for illegal actions related to operating a $2 billion payday lending enterprise that “systematically evaded state laws.”

According to the DOJ indictment [PDF], the online payday loan operation — which did business as Ameriloan, Cash Advance, One Click Cash, Preferred Cash Loans, United Cash Loans, US FastCash, 500 FastCash, Advantage Cash Services, and Star Cash Processing — charged illegal interest rates as high as 700% and collected hundreds of millions of dollars in undisclosed fees from consumers, including those in states with laws that bar interest rates in excess of 36%.

High Interest Rates
The indictment alleged that from 1997 until 2013, Tucker’s business issued loans to more than 4.5 million people. On average the loans carried interest rates between 400% and 500% through “deceptive and misleading disclosures” about the loans’ costs.

The company’s disclosure, as required by the Truth in Lending Act (TILA), allegedly materially understated the amount a loan would cost, including the total of payments that would be taken from the borrower’s bank account.

The DOJ claimed that through at least 2012, Tucker and Muir structured the repayment schedule for loans in a way that when borrowers were paid, the company could automatically withdraw the entire interest payment due on the loan. The principal of the loan was left untouched.

Authorities alleged that the company continued this “finance charge” deduction system payday after payday, applying none of the money toward the principal for at least 10 weeks. At that point, the company would increase withdrawals by $50 per payday.

Through this all, the indictment claimed that Tucker and Muir knew the TILA box understated the amount the loan would cost, including the total of payments that would be taken from the borrower’s bank account.

For example, the DOJ found that a disclosure box for a customer who borrowed $500, showed they would only have a finance charge of $150, for a total payment of $650. In reality, the finance charge was $1,425, for a total payment of $1,925 by the borrower.

Misrepresented Affiliations
The indictment claimed that when several states began investigating Tucker’s businesses after believing they were in violation of usury laws, the men devised a plan to evade authorities.

To do so, Muir allegedly created sham associations with Native American tribes, using these filings as a shield against state enforcement actions.

According to the DOJ, starting in 2003, Tucker and Muir entered into agreements with several Native American tribes, including the Miami Tribe of Oklahoma.

The purpose of the agreements was to entice the tribes to claim they owned and operated parts of the payday lending enterprise, so that when states sought to enforce laws prohibiting the loans, the businesses could claim to be protected by sovereign immunity.

In return for claiming part ownership of the company, the tribes were compensated with a potion of the revenues from the business.

Additionally, in order to create the illusion that tribes owned and controlled the payday lending businesses, Tucker opened bank accounts to receive the profits of the companies.

The indictment claimed that Tucker received over $380 million from these accounts, and spent the funds on lavish personal expenses, such as a fleet of Ferraris and Porsches, a professional auto racing team, a private jet, a luxury home in Aspen, CO, and his personal taxes.

Not The First Run-In

Friday’s verdict isn’t the first run-in with the law Tucker has experienced.

Last year, Nevada U.S. District Court Judge Gloria Navarro found that Tucker’s payday loan business harmed consumers by using misleading loan terms and charged usurious interest rates.

Tucker was ordered to pay $1.26 billion to the Federal Trade Commission to resolve allegations of running online payday lending operations that exploited more than 5 million consumers.

The FTC first filed suit [PDF] against Tucker and his business partners in 2012 (amended in 2013), claiming that AMG Services, Inc., three other internet-based lending companies, seven related companies, and five individuals, violated federal law by deceiving consumers when providing and collecting on payday loans.

Regulators accused the company of providing poorly crafted and automatic repayment schedules that caused borrowers to pay significantly more for loans.

For example, the FTC claimed that borrowers of $300 loans ultimately were on the hook for $975 based on the allegedly deceptive disclosures.

The FTC claimed that the operation told borrowers seeking loans that they would be charged the amount borrowed plus a one-time finance fee.

However, regulators found that the companies made withdrawals from borrowers’ bank accounts and assessed a new finance fee each time, without disclosing the true costs of the loan.

Were You Harmed?

Following Friday’s verdict, the U.S. Attorney’s Office for the Southern District of New York is urging individuals who think they may have been duped by Tucker or his companies to come forward.

Consumers who believe they were a victim of this crime, including a victim entitled to restitution, and wish to provide information to law enforcement should contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900.

Individuals can find additional information online.

Source: Consumer Reviews

Taco Bell Will Once Again Give Out Free Tacos After First Stolen Base In World Series

Even though we don’t yet know who will be playing in the Big Games, one thing is certain about this year’s World Series: Free tacos are on the line.

Like it has in past years, Taco Bell will once again hand out free tacos during the championship series, assuming someone manages to steal a base.

Here’s how the complimentary tacos will be activated:

• If any player on either team steals a base during Game 1 or Game 2, everyone can get a free Doritos Locos Taco on Wednesday, Nov. 1 from 2 p.m. to 6 p.m. (local time) at all participating Taco Bell locations.

• If the first stolen base of the World Series takes place in Game 3 or later, hungry people can get a free taco on Tuesday, Nov. 7 from 2 p.m. to 6 p.m. local time at participating spots.

As the harbinger of free tacos, whoever is the first to steal a base will also be dubbed the “sixth-ever Taco Hero.”

Of course, if no one manages to steal a base throughout the entire series, there will be no free tacos.

Source: Consumer Reviews

Craft Brewers Hoping To Crowdfund $213B To Buy Anheuser-Busch InBev

With Anheuser-Busch InBev, MillerCoors, Sapporo, and other beer behemoths snapping up craft brewers left and right, the Craft Brewers Association is asking why this acquisition spree can’t also go the other way, which is why it’s trying to crowdfund a mere $213 billion to buy AB InBev, and then do… something, maybe, with it.

The group says its “Take Craft Back” effort is aimed at buying AB InBev, which it claims has taken the independence of real craft brewers as well as stealing customers’ freedom of choice.

“Since 2011, Anheuser-Busch InBev has quietly acquired 10 small and independent breweries, but they won’t tell you that on their packaging,” said the face of the campaign, a guy named Andy who appears in a campaign video for the group, and is identified only as “an avowed lover of craft beer.”

“Big Beer creates an ‘illusion of choice,’ but we are presenting them with a reality check — and hopefully, at the end of the day, with a real check too,” Andy said.

On its campaign site, the group accuses corporate overlords at Big Beer of buying up all of certain hop varietals to keep it out of the hands of independent brewers, even though they didn’t need or use the hops.

In addition, Take Craft Back claims on its site that these major companies buy up craft breweries “left and right,” and then use their “sheer financial mass to make sure that independent craft brewers who refuse to sell out get pushed to the margins.”

As of Monday at about 1:45 p.m. ET, the campaign’s site indicated it had received $265,160 worth of pledges. The group says pledges will only be collected after all $213 billion has been secured.

Yes, this is all pretty clearly just a publicity stunt by the craft brewers, but what if — just, what if — every adult in the U.S. each contributed $1,000, and miraculously made this thing happen? What would AB InBev’s new owners do with their new purchase — Break it up? Turn the factories over to homebrew aficionados? Start releasing Bud Light that tastes like something? It would be madness… though it will never actually happen.

Even so, we’ve reached out to the Association to ask about its ultimate intentions if the impossible were to become possible. We will update if we receive a response.

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Source: Consumer Reviews

After Closing 100 Locations, Ruby Tuesday Is Going Private In $146M Deal

Earlier this year, Ruby Tuesday revealed that it was exploring strategic alternatives — corporate speak for a sale — after experiencing continued declining sales and closing nearly 100 underperforming stores. Now, the company has settled on its alternative, a $146 million sale to private equity firm NRD Capital. 

Ruby Tuesday announced today that the chain will go private as it is acquired by a fund managed by NRD Capital, a firm specializing in franchised and multi-location business investments.

Under the deal, NRD will pay $2.40/per share for all of Ruby Tuesday’s common stock, a 37% premium over Ruby Tuesday’s share price in March when the chain announced it was looking at alternatives.

The deal, which is expected to close early next year, has been approved by Ruby Tuesday’s board of directors and NRD. It must still be approved by shareholders.

“With a well-established brand, differentiated from other casual dining restaurants by its Garden Bar, we see significant opportunities to drive value for Ruby Tuesday,” Aziz Hashim, founder of NRD, said in a statement.

A Tough Time

Ruby Tuesday, which currently operates nearly 600 locations, has seen sales dip in recent years.

Back in March, the company announced sales had declined 4% during the third quarter. That loss is on top of declines the company reported in August when revenue declined 5.9% during the 2016 fiscal year, with same-store sales declining 3.7% over the previous year.

Also in Aug. 2016, the company announced plans to close 95 underperforming locations as part of a “Fresh Start Initiative.” Performance at the targeted locations was not meeting exceptions, the company said.

At the time Ruby Tuesday said it believed its Fresh Start plan will ultimately create long-term value for shareholders. Under the plan, the company says it will attract more women and young families, as well as increasing visits from current Ruby Tuesday guests.

Source: Consumer Reviews

T-Mobile Does Away With Unlimited LTE Data In Mexico And Canada

Here’s some bad news for T-Mobile customers who like to travel around North America while streaming Netflix. As of next month, the carrier is ending one of its more interesting perks on most plans: Unlimited LTE data in Canada and Mexico will no longer be available.

Instead, customers will be limited to five gigabytes of international roaming, with their internet access throttled down to 2G speeds after that.

In its announcement of the change, T-Mobile claims that fewer than 1% of customers who use the international data actually go over the limit, but apparently some of those customers are going way over the limit, and it’s imposing a cap “in order to prevent usage beyond the intent of the product.”

For customers who have plans with a data limit, data used in Canada and Mexico will count against their total monthly allotment. The carrier provides this handy chart to help customers with these plans understand how it would work:

Customers with the T-Mobile One unlimited plan can add on unlimited LTE for an additional $25 per month. Voice and text are less precious resources, and are not capped when roaming.

Source: Consumer Reviews

County Worker Accused Of Stealing $1.2M Worth Of Fajitas Over 9 Years

We hate handing out tips to wannabe white-collar criminals, but if you’re going to use your job to steal millions of dollars in food, at least make sure you’re in the office to answer calls about your latest shipment of embezzled Tex-Mex arrives.

An employee of the Cameron County, TX, Juvenile Justice Department stands accused of stealing some $1.2 million worth of fajitas over a nine-year period, reports The Brownsville Herald.

How did he get caught? By being away from his desk.

In August, a driver from a food service company that supplies the department’s meat called to let them know that 800 pounds of fajitas were on their way.

Problem was, the woman who answered the phone had no idea what he was talking about. Not only hadn’t the county recently ordered any fajitas; they were never on the menu. That surprised the driver, who’d been delivering the fajitas for nearly a decade.

The employee who’d picked the wrong day to be out of the office, returned to work, where he reportedly admitted to the long-running fajita theft. He was fired, then subsequently arrested.

After checking documents from the vendor and the county auditor’s office, officials concluded that he’d allegedly swiped $1,251,578 worth of fajitas.

“He would literally, on the day he ordered them, deliver them to customers he had already lined up,” District Attorney Luis Saenz told the Herald. “We’ve been able to uncover two of his purchasers, and they are cooperating with the investigation.”

The county Juvenile Justice Department said it will be reviewing its policy in light of the crime.

“The Juvenile Justice Department is working closely with the Auditor’s Office to institute procedures, controls and safeguards to avoid a recurrence of this type of situation,” Chief Juvenile Probation Officer Rose Gomez said in a statement.

Saenz says the investigation showed a “total failure” of the chain of authority, and that someone should have caught this earlier.

“If it wasn’t so serious, you’d think it was a Saturday Night Live skit,” he told the Herald. “But this is the real thing.”

Source: Consumer Reviews

Supreme Court Will Decide If American Express Can Stop Stores From Encouraging Customers To Use Less-Expensive Cards

If you have multiple credit cards in your wallet, you probably decide which one to use based on factors like each card’s interest rate, current balance, and rewards programs. Merchants want to make that choice easier by offering discounts or other incentives for using cards that cost the retailer less to process, but American Express forbids its merchants from offering such deals, but it will soon be up to the Supreme Court to decide whether or not that’s legal.

This is a legal dispute we’ve been covering for a few years as it’s made its way through the court system. It involves the “anti-steering” or non-discrimination provisions (NDP) of the AmEx merchant agreement. In plain English, it states that merchants who accept American Express aren’t allowed to do anything that would encourage customers to use a competing credit card network like Visa, MasterCard, or Discover.

That’s a problem for some retailers, since American Express typically charges more per transaction than the other networks. In 2010, the U.S. Department of Justice, along with the attorneys general for 17 states, filed a federal lawsuit against American Express, alleging that the credit card company illegally restrained trade by barring merchants from doing anything to steer customers toward non-AmEx payment card options.

AmEx Loses…

In Feb. 2015, a U.S. District Court judge in Brooklyn sided with the states, saying that the AmEx contract conditions run counter to long-held practices of merchants being able to direct customers toward certain products and services.

“Merchants routinely attempt to influence customers’ purchasing decisions, whether by placing a particular brand of cereal at eye level rather than on a bottom shelf, discounting last year’s fashion inventory, or offering promotions such as ‘buy one, get one free,’” explained the judge. “Under American Express’s NDPs, a merchant may not attempt to induce or ‘steer’ a customer to use the merchant’s preferred card network by, for example, offering a 10% discount for using a Visa card, free shipping for using a Discover card, or a free night at a hotel for using an American Express card.”

Since these merchants are making less money every time a customer uses an American Express card when they could have used something else, the judge concluded that AmEx’s anti-steering rule results in higher prices for all customers.

Then AmEx Wins

The merchants’ victory was short lived. In Sept. 2016, the Court of Appeals for the Second Circuit overturned the lower court’s ruling, finding that the judge had focused “entirely on the interests of merchants while discounting the interests of cardholders.”

“Though merchants may desire lower fees, those fees are necessary to maintaining cardholder satisfaction — and if a particular merchant finds that the cost of Amex fees outweighs the benefit it gains by accepting Amex cards, then the merchant can choose to not accept Amex cards,” explained the three-judge appellate panel. “Indeed, many merchants have already made and continue to make this choice.”

The lower court judge had also taken issue with AmEx’s fee hikes, finding that the purported new benefits and rewards offered after the cost increase were not sufficient to offset the higher price. But again the Second Circuit disagreed, saying that there is no rule requiring a one-to-one correspondence between a fee hike and any associated benefits.

Taking It To SCOTUS

With the Justice Department and several states dropping off after losing that appeal, the remaining plaintiff states — Ohio, Connecticut, Idaho, Illinois, Iowa, Maryland, Michigan, Montana, Rhode Island, Utah, and Vermont — filed a petition [PDF] with the Supreme Court in June 2017.

The states argue, among other things, that there are at least two distinct “markets” for the credit card industry: There is the relationship between the card company and the consumer, and then there is the relationship between the card company and the merchants who accept these cards. Therefore, contends the petition, the states only need to show that AmEx’s anti-steering condition illegally restrains trade in one of these markets, not both as the Second Circuit concluded.

The petition also claims that, even if you accept the appeals court’s ruling that antitrust actions must affect both merchants and consumers, the Second Circuit should not have directed a verdict in AmEx’s favor. Rather, say the states, the case should have been remanded back to the District Court with instructions regarding the burden of proof.

Southwest Airlines, Discover, CVS, Kroger, Walgreen, Publix, Safeway, and several others, have filed briefs in support of the states’ petition.

This morning, the Supreme Court agreed to hear arguments in this appeal — now titled Ohio v. American Express Co. — meaning a decision will likely come in the first half of 2018.

“I am pleased that the U.S. Supreme Court has agreed to take on this case,” said Ohio Attorney General Mike DeWine this morning. “The issues in this appeal involve anti-competitive practices that hinder Ohio consumers and Ohio retailers and merchants.”

Source: Consumer Reviews