Less than 1 percent of slaughtered cows are currently tested for Mad Cow disease under Agriculture Department guidelines, because the agency believes that more widespread testing does not guarantee food safety and could result in a false positive that scares consumers. So when Kansas-based Creekstone Farms Premium Beef tried to increase testing to reassure Japanese consumers, the Ag Dept. sued. Fortunately, some judges are smarter than all that and at least recognize the testing as a good thing for providing the consumer with more information. According to the Associated press larger meatpackers have opposed Creekstone’s push to allow wider testing out of fear that consumer pressure (the free market) would force them to begin testing all animals too. Increased testing would raise the price of meat by a few cents per pound. It appears the Court of Appeals maybe on the side of more information is a good thing.

Like a sort of perpetual-motion machine for debt—a perpetual-debt machine, rather—Oregon debt collection agency Genesis Financial Solutions has started issuing credit cards to consumers, with the balance equal to the debt the consumer allegedly owes. As the consumer pays off the debt, of course, they generate more debt, making sure they remain “customers” for life.

While the interest rates are not terrible, this replaces a dubious debt—debt buyers and collectors can rarely even prove they own many debts, much less that the consumer owes it—with a certain one, renewing the statute of limitations and keeping the cycle of debt going.

That the major credit card issuing banks are conspiring against consumers to force them into mandatory arbitration should come as no surprise to anybody. Why wouldn’t they force people into a system so stacked in favor of the credit card companies that the companies win all but 0.16% of the time. (For the math challenged like myself, that means that of 18,075 cases brought before the National Arbitration Forum arbitrators in California from January 2003 to March 2007, a total of 30 resulted in victories for consumers.)

What might surprise many of us cynics practicing consumer law, is that a court recognized this possibility, and it was a Federal Court of Appeals no less.

Thanks to Sam for bringing Americans for Fairness in Lending (AFFIL) in to the Caveat Emptor blog. We’re really excited to be on board!

As Sam mentioned, AFFIL is a campaign to raise awareness about predatory lending and create support for regulation of the lending industry. Even after the subprime mortgage meltdown, support for real regulation is dangerously absent in Congress, as their recent behavior shows.

At a March townhall event here in Boston organized by MassPIRG and SEIU, Representative Barney Frank lamented that the consumer movement is like a “horseless headman.” This, of course, is a pun on the infamous literary character, the headless horseman.

What he meant to say, I suppose, is that the consumer movement has some top-notch thinkers in DC monitoring legislation and fighting for consumers. But we’re missing the powerful horse; we’re missing enough involvement by everyday American people to make real change.

I learned a curious fact in the course of an arbitration proceeding with the National Arbitration Forum. Once either party obtains a stay of the arbitration, the opposing party has 15 days to file an objection. After that 15 days is up, apparently only the party that requested the stay can lift it.

In other words, if a debt collector requests a stay, and that stay was reasonable at the outset, but the debt collector then does nothing at all for months and months, until it gets to the point of being unreasonable, you are stuck. NAF will not lift the stay.

Yet another way in which arbitration is worse than the court system. In court, you can always ask the judge to make an exception. Apparently the same does not hold true in arbitration proceedings.

The lesson? Always object to a request for an indefinite stay. Demand a definite stay, if anything.

I don’t watch legal shows on TV, because they are so far from reality that they make me crazy, but this clip from Boston Legal, is worth watching. It is of course fictional, but as a comment on the reality of the Court it is the cold hard truth, more real than the fictions that too often pass for justice.

Boy I hope this is a typo. Click for the actual, redacted statement.

I am pleased to welcome Jim Campen and Sarah Byrnes from Americans for Fairness in Lending to Caveat Emptor. Sarah will be posting weekly, and Jim will chime in from time to time, as well.

AFFIL stands for the proposition that maybe the lending industry could use a little regulation, after all (hey, Judge Posner thinks so, too!). They have some excellent ads that bring home the human effects of the wayward lending industry, and have pursued campaigns online and offline, such as helping the documentary, Maxed Out, get nationwide attention, and a campaign to raise awareness of credit card companies’ aggressive marketing on college campuses.

Welcome, Jim and Sarah!