Tag: Consumer Protections

Some Good (Non-Brexit) News Out of Old Blighty

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MasterCard will be subject to a class action suit over anti-competitive and deceptive fees.

This may not seem to be a big deal to Americans, but this is a first in British jurisprudence, and marks a major change in consumer law:

The UK Supreme Court on Friday allowed a 14 billion pound ($18.5 billion) class action to proceed against Mastercard for allegedly overcharging more than 46 million people in Britain over a 15-year period in a landmark judgment.

The complex case, brought after Mastercard lost an appeal against a 2007 European Commission ruling that its fees were anti-competitive, could entitle adults in Britain to 300 pounds each if it is successful.

The court dismissed a Mastercard appeal, setting the scene for Britain’s first mass consumer claim brought under a new legal regime and establishing a standard for a string of other, stalled class actions.

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The case will now be sent back to the Competition Appeal Tribunal (CAT), nominated in 2015 to oversees Britain’s fledgling, U.S.-style “opt-out” collective class actions for breaches of UK or European Union competition law.

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The case centres on so-called interchange fees which credit and debit card companies say they levy on merchants’ banks to cover the costs of card services, security and innovation.

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Anthony Maton, the global vice-chair of law firm Hausfeld, which is advising on other class actions, said: “This is a revolution in English law.”

This is indeed a big move, and a welcome one.

Where Not to Shop for Consumer Electronics and Office Supplies

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Office Depot and a partner company tricked customers into buying unneeded tech support services by offering PC scans that gave fake results, according to the Federal Trade Commission. Consumers paid up to $300 each for unnecessary services.

The FTC yesterday announced that Office Depot and its software supplier, Support.com, have agreed to pay a total of $35 million in settlements with the agency. Office Depot agreed to pay $25 million while Support.com will pay the other $10 million. The FTC said it intends to use the money to provide refunds to wronged consumers.

Between 2009 and 2016, Office Depot and OfficeMax offered computer scans inside their stores using a “PC Health Check” software application created and licensed by Support.com.

“Defendants bilked unsuspecting consumers out of tens of millions of dollars from their use of the PC Health Check program to sell costly diagnostic and repair services,” the FTC alleged in a complaint that accuses both companies of violating the FTC Act’s prohibition against deceptive practices. As part of the settlements, neither company admitted or denied the FTC’s allegations.

The FTC filed its complaint against the companies in US District Court for the Southern District of Florida, while at the same time unveiling the settlements with each company.

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“[W]hile Office Depot claimed the program detected malware symptoms on consumers’ computers, the actual results presented to consumers were based entirely on whether consumers answered ‘yes’ to four questions they were asked at the beginning of the PC Health Check program,” the FTC said. “These included questions about whether the computer ran slow, received virus warnings, crashed often, or displayed pop-up ads or other problems that prevented the user from browsing the Internet.”

PC Health Check “tricked those consumers into thinking their computers had symptoms of malware or actual ‘infections,’ even though the scan hadn’t found any such issues,” the FTC said in a blog post. “Many consumers who got false scan results bought computer diagnostic and repair services from Office Depot and OfficeMax that cost up to $300. Suppport.com completed the services and got a cut of each purchase.”

Of course, as a part of the settlement, “Office Depot neither admits nor denies any of the allegations in the Complaint,” which sucks wet farts from dead pigeons.

Seriously, it would be great if these settlement were required by law to have an admission of wrongdoing.

Well, This Has “Dystopia” Written All Over It

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There is now speculation that Facebook’s new trustworthiness ratings will legally make it a credit rating agency.

I’d sooner get rated by the Chinese Social Credit System:

Facebook, it seems, has developed a system of rating users trustworthiness. It’s not clear if this is just a system for internal use or if users’ trustworthiness scores are for sale to third parties, but if the latter, then would sure seem that Facebook is a Consumer Reporting Agency and subject to CRA provisions of the Fair Credit Reporting Act (FCRA).

FCRA defines a CRA as

any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.


A consumer report is, in turn, defined as:

any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for [credit, insurance, employment or government license].

Thus, if Facebook is selling information about a consumer’s general reputation—trustworthiness—to third parties that might reasonably be expected to use it for credit, insurance, or employment, it’s a CRA, and that means it’s subject to a host of regulatory requirements as well as civil liability, including statutory damages for willful noncompliance.

The author, Adam Levitin, clearly believes that this might subject Facebook to additional regulatory oversight as a CRA.

This ignores the fact that courts have ignored the text of the law to in order not apply this to similar entities.

Facebook sees a buck here, and the courts will not subject them to CRA regulation or potential liability, because in the USA, rich people do not have to follow the law.