Common Law - The FindLaw Consumer Protection Law Blog

October 2011 Archives

Are High-Interest Payday Loans Legal?

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Payday loans are often thought of as predatory and unfair, but the fact is that high-interest payday loans are legal. At least in 33 states.

Consumer protection groups have succeeded in limiting payday loan interest rates in 17 states and the District of Columbia. But only Georgia outlaws payday loans altogether.

The other 33 states have exempted payday loans from "small loan" rate caps. This has led to annual interest rates (APR) well into the triple digits.

As of this writing, the following jurisdictions have placed double-digit interest rate caps on payday loans:

Arizona, Arkansas, Connecticut, Georgia, Maine, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Vermont, West Virginia and the District of Columbia.

States not listed may still prohibit some types of high-interest payday loans. In particular, price gouging laws may limit interest rates during national or state emergencies. Usury laws may also cap rates to prevent super-high-interest payday loans.

Regardless of legality, such a loan might not be the best option. Between fees and payment plans, a borrower can end up paying a significant amount of money. Some borrowers also end up further in debt.

Instead, the Federal Trade Commission suggests that you consider credit union or small bank loans; seek help from emergency hardship programs; adjust your tax withholding; use a credit card cash advance; or purchase overdraft protection.

It might also be time to create a budget and speak with a local credit counseling agency.

High-interest payday loans are legal, but "legal" does not necessarily equal "good."

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A new Harley motorcycle recall affects some 308,000 of the maker's vehicles. The Harleys are being recalled over a brake issue.

The company says its bikes' brake light switches can become overexposed to heat from the exhaust system.

This heat can cause brake light failure. The heat can also cause fluid leakage and a loss of rear brakes.

The brake issue can be relatively serious, despite the fact that motorcycles are generally equipped with both rear and front brakes. Rear brakes on motorcycles are usually operated by a foot pedal. A hand lever typically controls the front brake. While the front brake does slow the bike, losing the rear brake can result in crashes, according to The Wall Street Journal.

Harley-Davidson says it became aware of the problem in June 2010 when a Trike Harley model lost its brakes. It also investigated a separate crash in Louisiana, though they are unsure as to its cause. An injury was reported, but the company says they don't know how seriously the person was hurt.

Harley says they are unaware of any other crashes or injuries that may have resulted from the brake issue. The company also says that there are no more documents or reports of the problems since July 2010.

The recall extends to some of the company's touring motorcycles, trikes and models from its Custom Vehicle Operations. Recalled model years are between 2009 and 2012.

The company says dealerships will offer rear brake light switch replacements for free for affected owners. The recall will start on October 31st. Customers should check to see if their Harley motorcycle is recalled. For questions about the Harley recall, contact the company at 414-343-4056.

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Florida woman Celina Aarons was shocked when she received her recent cell phone bill. Her usual bill typically totals around $175. This one was at $201,000. And it wasn't a mistake: it was all because of cell phone roaming charges.

Aarons has two deaf brothers. They communicate through text messages and also use their phones to download and watch videos.

Unfortunately, they forgot to switch over to an international plan when they went on a two-week trip to Canada. In total, they sent over 2,000 texts. They also used their data plan, making their cell phone bill skyrocket.

Luckily for Aarons, she negotiated with T-Mobile and managed to get her charges down to $2,500. She was also given six months to pay her bill.

Consumers traveling abroad should be cautious about using their cell phones. Roaming charges can be very expensive.

For example, T-Mobile's international data plan is $10 per MB in Canada and $15 per MB in other countries. Considering many consumers have up to 2 GB (or roughly 2,000 MB) of data allotted in their data plans, a charge of $10 per MB would be much higher than usual.

And Aaron's case is not isolated. About 1 in 6 cell users have experienced bill shock, according to the FCC.

This is a trend that the FCC has noticed. It's worked up a plan in conjunction with the CTIA, which is an organization that represents wireless carriers like T-Mobile. The new plan will implement notifications for consumers to alert them if they are close to surpassing their monthly data use, text message use, and voice call use. It will also alert those who are about to get hefty international roaming charges.

These changes will slowly be implemented so that by October 2013 wireless carriers like AT&T, Verizon, Sprint and T-Mobile will provide notifications in all four areas. These alerts may be useful in preventing cases like Celina Aarons: a shockingly high six-figure cell phone roaming bill.

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Bagged Salad Recall: Possible Listeria in Iowa, Ohio and PA

River Ranch Fresh Foods of California has issued a bagged salad recall after learning of possible contamination.

Routine tests by the Ohio Department of Agriculture found traces of Listeria monocytogenes, which is the same organism responsible for nearly two dozen cantaloupe deaths.

The recalled bagged salad products were sold in Iowa, Ohio and Pennsylvania. They contain "Best By" dates of October 14, according to Consumer Reports.

The bagged salad recall is limited to the following products, all of which were sold under Hy-Vee's store label, or Giant Eagle's "Farmers Market":

  • Farmers Market, 8 oz Shredded Iceberg UPC Number 30034-30195
  • Farmers Market, 7 oz Parisian Blend UPC Number 30034-30259
  • Farmers Market, 9 oz Leafy Romaine UPC Number 30034-30364
  • Farmers Market, 12 oz Romaine Garden UPC Number 30034-30220
  • Hy-Vee, 8 oz Shredded Iceberg UPC Number 75450-12053
  • Hy-Vee, 12 oz American Blend UPC Number 75450-12047
  • Hy-Vee, 12 oz Garden Supreme UPC Number 75450-12046
  • Hy-Vee, 12 oz Romaine Garden UPC Number 75450-12058

No illnesses have been reported, according to the Associated Press. But if you have consumed one of the above products, be on the lookout for infection.

Listeriosis mostly affects older adults, pregnant women, newborns and persons with weakened immune systems. It will often cause fever, muscle aches, stiff neck, and confusion. Seek medical attention if you fall ill and fit into a high-risk category.

For those who still possess a product covered by the bagged salad recall, you are urged to contact the company at 1-800-762-7708.

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Halloween 101: Top 3 Trick-or-Treat Safety Tips

It's nearly Halloween. Kids and parents across the nation are gearing up for one of the most sugary holidays of the year. But many parents might be interested in some Halloween safety tips. So what should you know about trick-or-treat safety?

Trick-or-Treat Safety Tip #1: Make sure their costume checks out.

Before you let your kids embark on a trick-or-treating excursion check their costumes first. Costumes made with flimsy materials that drag on the floor can trip children and may lead to injuries. Fabrics should preferably be flame-resistant to reduce the risk of fire.

Costumes should also be brightly colored and visible to motorists. It's also a good idea to carry flashlights in case it gets dark early.

Trick-or-Treat Safety Tip #2: Check candy before you let your kids chow down.

Adults should also tell kids not to eat candy until they've been examined properly. Discard treats in wrappers that look like they've been tampered with. Unless you know the neighbors, you might want to consider trashing all treats that aren't commercially wrapped.

Trick-or-Treat Safety Tip #3: Escort young children.

Parents should accompany their children on trick-or-treating excursions. Adults should be wary of traffic signs and lead children when crossing the road. Before leaving the house, it's also best to instruct kids on basic traffic rules.

With these Halloween safety tips in mind, have a great trick-or-treat! Safety might not be a kid's top priority, but it should at least be on the parent's radar.

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The recent Occupy Wall Street protests galvanized individuals against big banks. Now, many Americans are considering closing their bank accounts. But be forewarned:

Banks don't exactly make it easy to break up. In fact, it might end up feeling like a messy divorce before it's all over.

What should you consider before you close your bank account?

Direct payments and online payments. Many Americans opt for online payment options these days. And banks readily offer these services. Why? It's easier for them to retain customers since it's not exactly easy to transfer options like online bill pay.

Closure fees. Some credit unions and banks impose closure fees if you decide to clear out your account. Many of these closure fees will go away if you've been a customer for a long period of time.

Your new account could have fees too. If you've decided to close a bank account to escape mounting fees, don't think that you've escaped them entirely. Who's to say that the bank you've switched to won't start implementing fees as well?

Most likely closing your account won't impact your credit score. Your credit score is typically calculated by looking at various accounts like loans, debt and other obligations. Usually, closing an account won't have any effect.

Think about ATM fees. If you switch to a smaller bank, there will be less ATMs around. Unless your bank reimburses or doesn't have ATM fees, you might end up paying extra regardless.

There are other factors you'd likely have to consider besides fees when closing a bank account. Online banks like Ally and ING Direct offer low fees, according to USA Today, but they're lacking in convenience. It's harder to deposit checks without a physical branch. If you're still wondering how to close a bank account, you should contact your bank to find out the exact process.

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A contact lens recall has come under scrutiny by the FDA. The government agency is asking that the CooperVision recall be more widely announced after a "stealth recall."

The recall is for the company's Avaira Toric contact lenses. It affects around 600,000 packages.

This is the company's second recall announcement in the last few months. The company said the first time they issued the recall notification they targeted eye care professionals who sold the lenses.

But the FDA says the company needs to do more to alert consumers. In fact, some consumer watchdog groups have dubbed the company's actions a "stealth recall," according to MSNBC.

The lenses have a residue on it due to a manufacturing problem. Consumers who have used the lenses have cited symptoms including pain, red eye, and blurry vision. Some have even been hospitalized. Mellisa Cotton of Atlanta told MSNBC that she suffered from two corneal abrasions after wearing the recalled lenses.

CooperVision so far has said they are unaware that anybody has been permanently damaged as a result of the recalled lenses.

Though even if nobody was permanently injured, they could still be held liable. Product manufacturers can be held accountable for harm caused by their goods if they were defective in some way.

What should you do if you think you have a recalled Avaira Toric lens? Take precautions.

Check the CooperVision recall webpage and enter in the lot number to find out if your lenses are affected. The number can be found on your contact lens package. You can return recalled lenses to wherever you originally purchased them. CooperVision can be reached at their customer service line at 855-526-6737.

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The Netflix/Facebook bill has won a preliminary battle.

Netflix's bill, backed by Facebook, has cleared the House Judiciary Committee.

What exactly is the bill about? The bill was introduced in order to ease the Video Privacy Protection Act (VPPA), passed in 1987. The act protects the privacy of video rental customers.

This decades-old law puts a damper on Netflix and Facebook's plans to integrate their services. Netflix recently announced plans to allow users to share their streaming history with their Facebook friends. But doing so could violate the VPPA.

It's unclear if the VPPA would specifically prohibit sharing of viewing history with Facebook friends. Risking penalties, however, would be financially dangerous for the company. If the VPPA does apply, consumers could sue. Which would end up costing the companies a whole lot of cash: each violation can amount to $2,500 in damages.

Would the Netflix/Facebook bill create privacy loopholes? It probably depends on how Netflix plans to roll out the integration if the VPPA is relaxed.

Consumers may not want all their Facebook friends to have instant access to all their viewing history. Making it so that consumers have a level of control over what they share might make it less intrusive. The streaming site might also want to consider making it clear to subscribers how to opt out of sharing.

Of course, all of this would only come into play if the bill is actually passed.

Will it? It does seem to have some powerful backers. Besides Netflix and Facebook, Bloomberg reports the bill also received support from Google.

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National Coming Out Day Focuses on Acceptance

October 11 is National Coming Out Day.

If you're a closeted gay or lesbian, will today be the day you choose to come out? If you do, know that there is a social media movement encouraging individuals to come out. Started by a group of activists in California, it's called the #CountMeOut campaign.

There's also support from celebs like Ke$ha.

The goal of National Coming Out Day is to encourage greater acceptance of the LGBT community. It also encourages closeted individuals to come out to family members and friends. It is a way for youngsters can be protected and can find emotional support.

And support is something that gay teens likely need. LGBT youth are at high risk of suffering through verbal and physical harassment. A survey in 2009 conducted by the CDC showed that 8 out of 10 LGBT high school students had been verbally harassed and 4 out of 10 had been physically harassed. The majority of those surveyed felt unsafe at school.

LGBT youth are also more at risk for suicidal behaviors. Some parents also react negatively to closeted kids coming out, so LGBT teens are more likely to be homeless.

What can concerned parents do? Talk to their children. Parents should openly discuss issues like bullying and suicide. Also, be aware that the way that parents react to the news that their child is gay will likely have a strong impact on their child's emotional well being.

But should a person choose National Coming Out Day to come out? It's ultimately up to the individual. After all, coming out is a very personal decision. You should never force someone to come out until they're ready, and that can take years.

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What Are Your Rights When You Buy a Car?

Despite economic concerns and high gas prices, U.S. vehicle sales were up last month, with an overall 10% increase in the last year.

And with increased sales, comes increased questions about car purchase contracts and a buyer's rights when purchasing a car. In particular, people want to know whether there is a "cooling-off" period.

Can a car be returned post-purchase?

Generally, the answer is no.

There is a federal "cooling-off" period, but it does not apply to car purchase contracts. It only applies to goods purchased at your home or at a location that is not the seller's permanent place of business. Automobiles are a listed exception.

However, there are still some situations in which you may be able to return a car.

State laws may provide a special right. California, for example, allows purchasers of used cars to buy a special two-day cancellation option. Persons who buy new cars are out of luck.

Contracts can also be cancelled if there is dealer fraud, or specified financing conditions are not met. For cars that experience substantial defects, a state may also have a used or new car lemon law that applies. A lemon law can lead to a full refund when a car cannot be sufficiently repaired.

Car purchase contracts themselves may also contain a return policy. Some dealers offer a "cooling-off" period for marketing purposes, but the terms must be written in the contract. Buyers also may not be entitled to a full refund.

Because laws vary, consider researching your state's "cooling-off" laws prior to buying a car. And always make sure that you read a car purchase contract before you sign. You never know what it may contain.

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Four Loko Cans Will Now Show True Alcohol Content

On Monday, Four Loko maker Phusion Projects settled with the Federal Trade Commission over claims of deceptive advertising. Now, Four Loko cans will be required to show its "true" alcohol content.

The labels will disclose that one can of the sugary sweet alcoholic beverage contains as much alcohol as 4 to 5 cans of beer.

The move comes after the company has already been beleaguered by federal scrutiny and lawsuits. In one wrongful death case, a Virginia family says their teenage son Johnny "Bo" Rupp wandered into oncoming traffic and died after drinking Four Loko.

Last November, Phusion removed stimulants from the drink including caffeine, gaurana and taurine. Because of the addition of these additives many health experts considered Four Loko to be dangerous. It can be difficult for drinkers to feel "drunk" and can encourage individuals to drink more heavily.

The drink might be especially dangerous for younger drinkers. The drink is sweet and the can is brightly labeled. Some say the design of the cans make it appear non-alcoholic.

Even if Four Loko's cans properly reflect the drink's alcohol content, parents should try to talk to their kids about alcohol abuse.

Concerned parents should find time to sit down with their teens and discuss the ramifications of drinking. In many cases, teens will feel pressured into drinking by their peers or friends. Talking about how to handle these types of influences may be vital in helping kids avoid trouble.

When will Four Loko cans start displaying alcohol content? Soon. The settlement needs to pass through a 30-day public comment period before it's finalized, according to the Washington Post.

As the economy remains stagnant, many Americans are struggling to make ends meet. That's why some have turned to payday loans. But, these loans come with high interest costs and can be difficult to pay back, which is why more individuals are turning to payday loan alternatives.

One such alternative in California is something called the Self-Help Micro Branch. Millions of Americans do not have access to traditional banking accounts. But the Micro Branch fills a niche by providing basic services to those who live paycheck-to-paycheck.

The Micro Branch offers services such as check cashing and remittances.

And low-income individuals have other alternatives such as using BillFloat, a new company designed to be more affordable than traditional payday lending. The company's fees clearly posted on the website. There's a $14.99 fee for the bill payment service and a 3% per month interest rate. There is also a late fee of $10 if borrowers are behind in their payments.

Why should you look for alternatives for payday lending? It's because these types of loans can actually make life harder for struggling Americans.

Payday loans can sometimes border on being predatory, which is why they are illegal in some states. Signs of a predatory loan can include:

  • High interest rates: some loans will have interest rates as high as 400% APR.
  • Short loan term: lenders may only allow a very short loan term, such as a 2-week term, making it difficult for borrowers to pay them back.
  • Balloon payment: some payday lenders do not allow for installment options and mandate a single lump-sum payment.
  • Loan flipping: trapping consumers in debt is one way for payday lenders to make money, and can mean they continually make multiple loans to the same individual.

If you're in financial trouble, you might want to consider payday loan alternatives. Or, if you think payday lending is your only option, read the fine print carefully to avoid high interest rates and unwanted fees.

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Facebook's use of tracking cookies has landed the company in the middle of two class action lawsuits. Facebook has been sued by six Facebook users in federal courts in California and Missouri.

The users allege that Facebook was tracking their activity even after they logged off the site.

One lawsuit claims that Facebook violated federal wiretap and electronic communications laws. The plaintiffs are requesting that Facebook stop installing tracking cookies on their site. And they're asking for damages.

Under federal wiretap laws like the Wire and Electronic Communications Interception and Interception of Oral Communications Act, a court order is usually required. A judge has to decide if there is probable cause that a crime is about to be committed before a wiretap can be issued.

Traditionally, wiretap laws were applied to surveillance on phone lines. But with new technology comes new ways for the government (and companies like Facebook) to monitor individuals. Most wiretapping laws have been expanded to electronic communications.

How exactly does a tracking cookie monitor your data? They collect bits and pieces of information in the background. Information collected can include previous site history. Some of Facebook's tracking cookies are actually pretty useful. One, called "datr," identifies suspicious login activity. Another, called "lu" helps guard users who login using public computers, according to PC Magazine.

Even so, knowing that Facebook is monitoring some of your logged-off activity can feel like an invasion of privacy.

So do Facebook's tracking cookies amount to "wiretapping"? Many companies, including Facebook, have been sued in recent months over privacy concerns. Apple and Google were both sued last year.

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Facebook 'Sister' Scam: Woman Lost $2,000 After Fake Chat

Edythe Schumacher fell victim to what is being called the Facebook 'sister' scam.

Last month, Schumacher's sister messaged her to apply for a government grant. If she donated $2,000, she could gain access to $500,000 in financial aid. Schumacher was told to contact Sgt. Chris Swecker, who claimed to be with the Federal Government Humanity and Empowerment Program. He had her wire the money to a Massachusetts charity.

Swecker is a retired FBI agent who investigated computer crimes. The charity exists. Neither of them participated in the scam. Her sister's account had been hacked, and now Schumacher's money is gone.

The Facebook 'sister' scam is not entirely new. It's common for scammers to use real names attached to fake accounts.

If this is news to you, it's time to be more vigilant. Even if an offer appears to be verified by someone you know, remember the following:

  • You should call and verify an organization or government agency. Use a phone number plucked from an official site or phonebook.
  • If the government is involved, the program will have a .gov web address.
  • A charity will be registered with the state and IRS.
  • If asked to donate by a friend or family member over the internet, give them a call.
  • Reputable institutions will not ask for your financial information online or over the phone.
  • If you choose to send money, do not send it to an account with Western Union or a similar service. Actual bank accounts require government-issued ID. Checks can be cancelled.

Another Facebook 'sister' scam is entirely preventable. Just remember that some offers really are too good to be true.

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Health officials say that the number of cantaloupe deaths has hit 16 people. The Listeria outbreak has also sickened more than 72 others across 18 states.

And officials only expect these numbers to grow. The outbreak is now the deadliest food outbreak in the U.S. in more than a decade.

The tainted cantaloupe was traced to fruit sold by Jensen Farms of Colorado. The farm said it's shipped cantaloupe to 25 different states. However, illnesses have surfaced in states not on their original shipping list, according to the AP.

Not all of the affected cantaloupes are labeled with a sticker. But those labeled as "Colorado Grown," "Distributed by Frontera Produce," "Jensenfarms.com," or "Sweet Rocky Fords" should be destroyed.

The CDC advises consumers to throw out cantaloupes that are labeled from Jensen Farms. It also encourages consumers to ask grocers about the origin of cantaloupes if they are unlabeled, reports the AP. Cantaloupe fruit suspected to be contaminated should not be eaten.

Listeria is a bacterium that can get into vegetables, fruit, meat and dairy products. The bacterium is found in soil and water. Listeria is usually killed if food is cooked or pasteurized. But fruit like cantaloupe is traditionally eaten raw.

The bacteria is also able to grow in refrigerator-like temperatures. Fruit and vegetable shelves that may have contained tainted fruit should be disinfected.

Those most at risk for the infection include pregnant women, the elderly, newborns and those with deficient immune systems. The CDC says that one in five who are infected with the bacteria can die, and the median age of those who have fallen sick is 78.

A real concern is that the cantaloupe outbreak is expected to spread. The bacteria can incubate for up to a month or longer, so some may have already eaten contaminated cantaloupe without even realizing it. The CDC warns that the cantaloupe death toll is only expected to rise.

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