Elizabeth Warren Comes Out Swinging at Banking Regulators

While there are a lot of people you can blame for the state of the US economy, government regulators are at the top of the list. So it’s satisfying that someone has finally taken them to task. Elizabeth Warren, finally on the Senate Banking Committee where she belongs, had some hard questions for banking regulators yesterday, specifically on why they are happy to accept pennies on the dollar to settle claims against banks.

What she got in response was a lot of hemming and hawing by the spineless regulators in question, none of whom seemed to know the last time anyone took a bank to trial.

I’m a little concerned that too big to fail has become too big for trial.

At Senate Hearing, Warren Comes Out Swinging” (NYT) (via Reddit)

Put Free Credit Scores on Congress’s Agenda


Right now, you have a right to a free credit report, but not a free credit score. That’s annoying, because the score is what really matters whenever you apply for credit. Consumer Union wants to make it easier for consumers to get their score, and is putting in motion a grass-roots campaign to put free credit scores on Congress’s agenda.

So contact your representatives, and let them know you want a free credit score. Here’s where you can find out how to contact them:

(via cleveland.com)

(image: http://www.flickr.com/photos/a_ninjamonkey/3448476109/)

The Computer Fraud and Abuse Act May Cost Americans Billions of Dollars a Year

Americans spend nearly $6 billion on digital music every year, and that number is growing fast. That is an already-huge and fast-growing pile of digital things. But there is a problem with all those digital assets. Even though you can take your digital music, movies, and books with you everywhere you go, they are much harder than the physical version to give to someone else.

That is because digital things and physical things are treated differently. When you buy a digital thing, it’s more like you are paying for the right to use it in ways specified by the creator of that thing. When you buy a physical thing, on the other hand, you own that thing. You can sell it, loan it, or give it away. Eventually, we all die and give everything away. Maybe our kids aren’t thrilled to get a complete set of Fleetwood Mac records, but someone else might want them — and be willing to pay money for them.

But you cannot pass on most of your digital assets. Not legally, anyway.

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How a $1,200 Espresso Machine is Cheaper Than a $120 One


It turns out that less-expensive products aren’t always cheaper in the long run, as we found out when comparing a $529 Nexus One to a $199 (on contract) iPhone. The up-front cost is never as important as the ongoing cost.

This holds true even when comparing a $1,200 espresso machine to a $120 one.

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Debt Collector FDCPA Prohibitions Checklist

The Fair Debt Collection Practices Act is basically a checklist for debt collectors, a list of things they must do and things they cannot do. With some regularity, someone actually breaks it up into a list. Consumerist just put together a list of 23 things debt collectors may not do, which includes the obvious:

    3. Use threats of violence or harm;


    5. Use obscene or profane language;

As well as the not-so-obvious:

    17. Use a false company name;


    21. Contact you by postcard.

This list is far from complete, but it is a good place to start. It is also worth pointing out that these prohibitions only apply to consumer debts; they do not apply to business debts. (Via Consumer Law & Policy Blog)

Avoid Refund Anticipation Loans

It’s a new year, and time to start thinking about taxes. Which means it is also time for another warning about refund anticipation loans.

Refund anticipation loans are very similar to payday loans; they are short-term, high-interest loans made in anticipation of future income — your tax refund, in this case. And they are a bad deal.

The best interest rate you can expect from a refund anticipation loan is around 36% APR. That is two or three times the rate someone with decent credit can expect to get from a credit card. But APRs of 100% or more are still common. That means if you paid the loan back in one year, you would actually pay back twice the amount you borrowed.

In other words, the math doesn’t make sense. It is much better to just wait for the check from the IRS.

Should Debt Buyers Have a Higher Burden?

I’ve said as much, and the Minnesota Attorney General thinks so, too. Well, actually, she thinks “a debt buyer should have admissible evidence” to back up its claims. That’s not really a higher burden; it’s what the law requires. Except in cases of default, which is what debt buyers really want, after all.

The reason this is even an issue is that debt buyers often file thousands of lawsuits without the ability to back up their claims. They often have faulty information, and frequently get default judgments, which gives them the right to garnish bank accounts.

The ability to garnish bank accounts is serious. It gives debt buyers the right to freeze money in a defaulted defendant’s account before the court is even aware of the lawsuit. This is too serious to allow without knowing whether or not the debt buyer can even produce evidence to support its claims.

When You Call a Lawyer, Have a Pen and Paper Handy


Never call a lawyer without a pen and paper in front of you. During at least 90% of the calls I receive from people looking for a lawyer, I tell them something they need to write down. These days, it is often the name of a lawyer who can actually help them, since I no longer take consumer cases; formerly it was a list of documents I needed, directions to my office, or things I needed them to do before I could consider taking their case.

There are few things more frustrating than waiting while the person on the other end of the phone apologizes for not having a pen and paper and fumbles around in their purse, asks a waiter for them, or, worst of all, asks me to call them back later in the day. All these happen to me, with regularity, despite the fact that most of the time I am only trying to give a referral to another lawyer.

So when you call a lawyer, be prepared. This is especially true if you are going to ask the lawyer to represent you on contingency, because lawyers who do contingent-fee work want to know that they can rely on their clients. Whether you have a pen and paper handy won’t make up their mind, but it can’t hurt, and it might help.

(image: http://www.flickr.com/photos/simplerich/5462330040/)

Patent Trolls Find More Victims: Scanner Users

Imagine you are a patent troll, holding onto a portfolio of patents you can only assert against a handful of companies. At some point, you start running out of victims. So why not invent some more?

That’s what a group of companies with names like AccNum, AllLed, AdzPro, CalNeb, ChaPac, FanPar, FasLan, FulNer, GosNel, and HunLos do. They send out copies of a letter like this to small companies:

Apparently, something like 18% of companies that receive the letter do actually pay, according to Ars Technica. Why? Fear, I guess. And as Ars points out, invalidating these almost-certainly-invalid patents would be difficult or impossible, and would definitely be expensive. Similar to debt collectors sending thousands of robo-signed demand letters at a time, these patent trolls have found a sort of loophole in the system that allows them to engage in a sort of legalized extortion.

Should Retail Stores Provide Selection or Curation?

While buying gifts this year, I found myself in the monument to consumerism, the Mall of America. To get my bearing, I did a lap to see if I could find what I wanted: a pair of shoes and an insulated travel mug for my wife. Although there were dozens of stores at which I could have bought my gifts, I only walked into two: Williams-Sonoma and Clarks.

That’s because I did not want to stand in front of a wall of insulated tumblers with no indication of which will do the best job. I just wanted a good tumbler, and I didn’t want to have to think too much about it. Williams-Sonoma only carries high-quality stuff, and as it turned out, they only carried one travel mug in two sizes. It’s awesome, and my wife loves it.

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