Data Privacy: What Californians can do about creepy data collection in 2020

From today’s The Mercury News:

Starting New Year’s Day, Californians creeped out by the trove of personal data companies collect on their online shopping, searching and social media habits will get sweeping new privacy rights that will let them opt out of having their information sold or shared and let them demand that it be deleted.

“This is really a watershed moment for consumers,” said Scott W. Pink, a Menlo Park lawyer who advises companies on cybersecurity and privacy. “It’s the first law in the United States outside specialized industries like health care that provides consumers some degree of control and access over data collected on them.”

The California Consumer Privacy Act approved in June 2018 was inspired by public outrage over data breaches at major companies such as Facebook, Yahoo and Equifax that exposed consumers to potential fraud and misuse of their personal information, and by the European Union’s General Data Protection Regulation.

The new law requires that businesses disclose their data gathering and sharing practices and allows consumers to opt out of it and to demand that businesses delete collected information on them. It prohibits companies from penalizing consumers with higher rates or fewer services for exercising their privacy rights and from selling information about children under age 16 without their explicit consent.

But questions continue to swirl as companies scramble to comply. The state attorney general is still finalizing proposed regulations intended to guide consumers and businesses in order to meet a July deadline when enforcement is expected to begin.

And both consumer and business advocates continue to spar over whether the new privacy provisions go too far or not far enough, with proposed state and federal substitutes in the works.

Read the complete article here.

Opinion: One Man Can Bring Equifax to Justice (and Get You Your Money)

From today’s New York Times:

On Dec. 19, District Judge Thomas Thrash of Atlanta will hold a final approval hearing for the Equifax 2017 data breach settlement. There’s a lot at stake. If the settlement is approved, the $31 million pool earmarked for claims will be paid out to some victims. Others will get free credit monitoring (because the cash reward set aside for victims was so small, if all 147 million people affected by the breach filed a claim, everyone would get just 21 cents).

There’s another option. As I wrote in a September column, victims could file a formal, legal objection, which would nullify the settlement. If Judge Thrash finds those objections convincing, Equifax’s class-action counsel wouldn’t receive their $77.5 million fee and Equifax would be liable again to face a substantial penalty for the breach. I’m happy to report quite a few people — maybe even a record number — did just that.

Over the past month Reuben Metcalfe, the founder of Class Action Inc., helped 911 individuals object (another 294 objected but did not provide signatures by the Nov. 19 deadline) by creating a chatbot tool that allowed victims to file objections automatically for the Equifax settlement at no cost (Class Action Inc. waived its 5 percent fee for Equifax). Theodore H. Frank, a lawyer who specializes in class-action suits, has jumped in the ring himself along with another victim, David Watkins. Frank’s objections, which are more formal and detailed than Metcalfe’s many automated ones, argue that the settlement is too broad and doesn’t take into account state-by-state protections for data breaches (in Utah, where Watkins lives, victims could claim damages up to $2,000).

Now it’s up to Judge Thrash to sift through the settlement and its objections and decide. Thanks to Metcalfe and Frank, he’s likely to be feeling some pressure. Back in September a class-action lawyer told me that even if only 1,000 people object, it can send a powerful message. Frank is hopeful the settlement will look weak on its own merits. “If the judge gives an honest look, he’ll realize it doesn’t meet muster,” he told me recently.

I’d argue there’s even more resting on Judge Thrash’s shoulders, including whether companies can get away with abusing our data in the future. Metcalfe, who has steeped himself in the world of class-action suits, suggested that the settlements, initially a method for accountability, have become a mechanism for companies to knowingly skirt liability for not protecting consumers. “It’s becoming cheaper to say sorry after the fact than to obey the law in the first place,” he told me.

This feels especially true in the world of data privacy, where breaches are so frequent that a discovery last week of an open database containing the personal information of 1.2 billion people hardly made news. We seem locked in a vicious cycle: Companies that gather and trade data have few checks or regulations. This allows them to collect more, which means more money. And deeper pockets make it harder to impose meaningful penalties that might deter repeat and future offenders (see: the Federal Trade Commission’s $5 billion slap on the wrist of Facebook). Judge Thrash, then, has a unique opportunity to make a statement by objecting.

Read the complete article here.

CA Senate Approves State Rent Control Capping Increases at 5% Plus Inflation

From today’s KTLA5 News Online:

California lawmakers on Tuesday moved to cap annual rent increases statewide for most tenants as a limited housing supply in the country’s most populous state continues to drive up the cost of living while pushing more people to the streets.

The California Senate voted 25-10 to cap rent increases at 5% each year plus inflation for the next decade while banning landlords from evicting tenants without just cause. Democratic Gov. Gavin Newsom says he will sign the bill into law, but first it must survive a final vote in the state Assembly where the California Association of Realtors is pushing to defeat it. Lawmakers must act by Friday.

California’s largest cities, including Los Angeles, Oakland and San Francisco, have some form of rent control, but a state law passed in 1995 has restricted new rent control laws since that year. In most places, landlords can raise rents at any time and for any reason, as long as they give advance notice.

In Pomona, about 30 miles east of Los Angeles, Yesenia Miranda Meza says her rent has jumped 20% in the past two years. Monday, she marched with other tenants through the halls of the state Capitol chanting: “Once I’ve paid my rent, all my money’s spent.”

“I’m a rent increase away from eviction, and that’s with me having two jobs,” she said “So if this (bill) doesn’t go through and I get another rent increase, I really don’t know what I’m going to do. I’m either going to be homeless or I’ll have to cram into a room with a whole bunch of other people.”

Opponents have likened the proposal to rent control — a more restrictive set of limitations on landlords. California voters overwhelmingly rejected in a statewide ballot initiative to overturn the 1995 law last year.

Read the complete article here.

The Consumer Bureau’s Reckless Plan for Debt Collection

From today’s Wired Magazine:

WE LEARN IN email 101 that hyperlinks from unfamiliar senders are breeding grounds for scams. Microsoft has warned against clicking on foreign links for decades. The Federal Trade Commission has repeatedly cautioned Americans to be wary of malware and phishing expeditions. Last year, the Federal Communications Commission alerted consumers to a new cyber threat it dubbed “smishing”—targeting consumers with deceptive text or SMS messages—and urged consumers to “never click links, reply to text messages or call numbers you don’t recognize.”

The Consumer Financial Protection Bureau apparently skipped these lessons. Despite many warnings, the CFPB has proposed a rule that could require consumers to click on hyperlinks in unfamiliar emails. The proposal allows debt collectors to deliver important information about a debt and a consumer’s rights via links in text messages and emails—without first obtaining consent to electronic communications, as is normally required under federal law.

Debt collectors are required to send a “validation notice” that tells a consumer when a debt has been placed in collection and that the consumer has the right to get information to be able to verify or dispute it. When Congress enacted the Fair Debt Collection Practices Act in 1977, it considered the validation notice critical to minimizing mistaken identity and errors on the amount or existence of a debt.

The risk of collectors going after the wrong person or wrong amount is much greater today. Since 1977, a new industry has bloomed: debt buying. As director of the FTC’s Bureau of Consumer Protection, I initiated a 2013 study that found nine of the largest debt buyers alone collectively held a debt of $143 billion from more than 90 million consumers. (As of 2017, two of the largest debt buyers, Encore Capital Group and Portfolio Recovery Associates, held a combined debt of$17.6 billion, about the GDP of Iceland.) Debt buyers sell and resell debts for years on end, typically without account records verifying that the debts are accurate, making the validation notice even more essential. Without one, a consumer won’t be told how to dispute a debt, and they may be harassed for a debt they do not owe. According to an analysis of the CFPB’s complaint database, 44 percent of complaints against debt collectors concern attempts to collect a debt that the complainant does not owe. Worse yet, the collector could report the debt to credit reporting agencies, damaging the person’s credit, or even bring suit.

Read the complete article here.

Robocall Bill Wins Approval in the House

From Consumer Reports Online:

A crackdown on robocalls moved one step closer Wednesday after the House voted 429-3 to increase consumer protections against the unsolicited and annoying phone calls.

The bill, known as the Stopping Bad Robocalls Act, builds on the TRACED Act passed by the Senate in May. The House and the Senate now need to reconcile the two bills before sending the legislation to the White House for the President’s signature. That’s expected to happen in the fall.

In addition to giving regulators stronger enforcement tools, the House bill would require phone carriers to implement call identification technology and mandate that the Federal Communications Commission report to Congress annually on the state of robocalls.

On Tuesday, 80 consumer rights groups, including Consumer Reports and the National Consumer Law Center, sent a letter to Congress urging passage of the bill. The wireless industry trade group CTIA also supports it.

To date, there have been 29 billion robocalls in 2019, according to YouMail, a robocall blocking and tracking firm. “That’s nearly 90 calls per person in the U.S.,” said YouMail CEO Alex Quilici.

The blocking and tracking firm Truecaller estimates that consumers lost $10.5 billion to phone scams in 2018.

Read the complete article here.

The 9th Circuit just blew up mandatory arbitration in consumer cases

From today’s Reuter’s Online News:

In a trio of rulings on Friday, the 9th U.S. Circuit Court of Appeals blessed a tactic that will allow plaintiffs lawyers litigating California consumer class actions to defeat defense motions to compel arbitration. If appellate rulings in the three cases – Blair v. Rent-A-Center, Tillage v. Comcast and McArdle v. AT&T Mobility – hold up, they represent a dramatic twist in corporations’ long-running, and mostly successful, campaign to force employees and consumers to arbitrate their claims individually instead of banding together in class actions.

If you don’t believe me, just ask the U.S. Chamber of Commerce and the National Association. In an amicus in one of the cases, the pro-business groups warned that under the theory the 9th Circuit just adopted, plaintiffs lawyers will be able to evade arbitration in “virtually every case” invoking California consumer protection statutes.

“It’s a very big deal,” said Michael Rubin of Altshuler Berzon, who represents consumers in the 9th Circuit’s Rent-A-Center case. And not just in California, according to Rubin. The three 9th Circuit decisions, as I’ll explain, involved consumers’ rights under several California statutes to seek injunctions forcing corporations to change their conduct. But Rubin told me the 9th Circuit’s analysis may just as well apply to other states’ consumer and employment statutes that include injunctive rights.

AT&T Mobility, which is represented at the 9th Circuit by Andrew Pincus of Mayer Brown, said in a statement that it is considering its options: “We respectfully disagree with the court’s decision, which we believe is inconsistent with the arbitration provision agreed upon by the parties, the Federal Arbitration Act and United States Supreme Court precedent.” Comcast counsel Mark Perry of Gibson, Dunn & Crutcher declined to provide a statement. Rent-A-Center’s lawyer, Robert Friedman of Littler Mendelson, did not respond to my email requesting comment.

The three appeals called upon the 9th Circuit to review the California Supreme Court’s 2017 ruling in McGill v. Citibank. In McGill, the state justices held that as a matter of California public policy, corporations cannot require consumers to waive their right to seek a public injunction. The California Supreme Court also held, without engaging in deep analysis, that California’s policy is not pre-empted by the Federal Arbitration Act.

Read the complete article here.

Comcast faces $9.1 million penalty for violating consumer protection laws

From today’s Seattle Times:

Comcast violated Washington’s Consumer Protection Act by charging nearly 31,000 residents without their knowledge for a service-protection plan, a King County Superior Court judge ruled Thursday.

But the order by Judge Timothy Bradshaw also rejected parts of what started as a $100 million lawsuit alleging “deceptive” practices surrounding repair fees and credit checks brought against the Philadelphia-based company by state Attorney General Bob Ferguson in 2016.

Ferguson in late 2017 expanded that complaint to include allegations about the service-protection plans. Those plans — which at that time cost $5.99 per month — are intended to cover repairs for customer-owned wiring related to Xfinity voice, TV and internet service.

In Thursday’s order, Bradshaw imposed $9.1 million in civil penalties against Comcast. He directed the company to pay additional money in restitution to the affected customers within 60 days, according to a news release from the Attorney General’s Office.

The ruling found that Comcast had signed up 30,946 Washington residents to the plan without their consent, according to the news release. Additionally, the company did not reveal the true cost of the plan to another 18,660 state residents.

Read the complete article here.

Clarence Thomas Voted With Liberals in a Big Consumer Rights Case. Why?

From today’s Slate Magazine:

On Tuesday, the Supreme Court issued a surprising 5–4 decision in Home Depot v. Jacksonthat progressive advocates view as a win for consumers and class actions. The lineup in Home Depot was unusual: Justice Clarence Thomas wrote the majority opinion, joined only by the liberals; the other conservatives dissented. Home Depot marked the second time this term that Public Justice, a public interest advocacy firm, has triumphed at SCOTUS. Earlier this year, the firm won a unanimous victory in New Prime v. Oliveira, an important labor rights case. How did it nab Thomas’ vote this time around?

The story of Home Depot is a tale of greed, grift, and civil procedure. It centers on a scheme that involved three companies: Home Depot, Citibank, and Carolina Water Systems Inc. Here’s how it allegedly worked. Representatives from Home Depot or CWS called homeowners and claimed that “contaminants” were found in nearby tap water. They urged homeowners to let them perform a test for “contaminants,” which was really just a test for water hardness; almost all tap water tested positive, even if it was perfectly safe. But CWS told homeowners the positive result proved their water was unsafe and required a $9,000 water purification system that other companies sell for $1,400. The company then told homeowners they had been approved for a Home Depot–branded Citibank credit card, which they could use to pay for the system with deferred interest.

George Jackson got suckered into this alleged scam and, like many others, couldn’t afford to pay off the charges he put on the credit card to pay for the overpriced water purification system. A company representative allegedly told Jackson the Citibank card had zero interest for two years—but in fact, the interest rate jumped to 25.99 percent after one year. Jackson couldn’t afford to pay, so Citibank sued him in state court to collect the debt. Eventually, he secured the representation of consumer protection lawyers who filed a counterclaim against Citibank, as well as class-action claims against Home Depot and CWS on behalf of about 290 other homeowners targeted by the alleged scam. He claimed that the companies, working together, had violated North Carolina laws prohibiting unfair and deceptive trade practices.

Home Depot promptly tried to move the case from North Carolina court to federal court—a typical corporate tactic, since federal courts are widely considered to be more business-friendly than state courts. F. Paul Bland, the executive director of Public Justice who argued Home Depot at the Supreme Court, told me that there’s a strong perception among most corporations that “federal courts are more hostile to consumer class action.” Federal judges “are overwhelmingly former prosecutors, corporate lawyers, and law professors,” and “very few ever represented a consumer or worker against a corporation.” By comparison, “about 40 percent of state court judges were plaintiffs’ lawyers.” State courts, as a result, are considered much friendlier to consumer class actions, hence Home Depot’s desire to get the case before a federal judge instead.

Republican lawmakers also think state courts are too favorable toward class actions, which is why the GOP-controlled Congress passed the Class Action Fairness Act in 2005. CAFA was designed to expand the kinds of class actions that corporations could move from state to federal court. It has, Bland said, “been a great boon to corporate America.” And predictably, in response to Jackson’s claims, Home Depot argued that CAFA allowed it to move the entire case out of North Carolina court and get it before a federal judge.

But Home Depot had a problem. Under a long line of cases going back to the 1940s, only a defendant can move a case from state to federal court. And a defendant is defined as the party sued by the original plaintiff. Here, Jackson is the defendant; remember, Citibank sued him to collect the debt he owed—that’s how the whole case started. Under the usual rules, then, Home Depot can’t escape North Carolina court.

Read the complete article here.

Google workers want to end mandatory arbitration—Here’s why this matters

From today’s Washington Post:

Employees at Google recently organized a phone drive to lobby Congress to end the practice of mandatory or forced arbitration, in which an arbitrator — typically designated by the company — resolves a legal dispute, rather than a judge.

Over the last three decades, more and more corporations have forced their employees or customers to sign these contracts, agreeing to take their disputes to private arbitration instead of to court. A recent studyestimates that currently more than 60 million U.S. workers signed these mandatory arbitration agreements when they were hired. Anotherfound that, last year, consumers signed almost three times as many consumer arbitration agreements as there are people living in the U.S.

Arbitration’s spread has become controversial. Many on the left criticize it, while many conservatives support it. So it may be surprising that liberal reformers were the first to make arbitration popular. Here’s how the Supreme Court and Congress helped change arbitration from a liberal cause to conservative rallying cry.ADVERTISING

Businesses win — and employees lose — more often in arbitration than in court

Arbitration produces clear winners and losers. Employees win less frequently and receive lower damages in arbitration than in litigation. Employers win more frequently, especially if they use the same arbitrators repeatedly. That’s hardly surprising, given that the employers typically choose the arbitrators. Given recent public criticism, many prominent companies have discontinued mandatory arbitration requirements for sexual harassment claims.

The Supreme Court has helped expand private arbitration. Just last week, in Lamps Plus, Inc. v. Varela, conservatives decided that workers cannot join to bring similar complaints against a company through class arbitration unless their contracts specifically allow it. The 5-4 majority opinion relied heavily upon a controversial case from last term, Epic Systems Corp. v. Lewis.

These cases are just the latest in a three decades-long trajectory toward disallowing anything that discourages private arbitration, as part of a larger political strategy employed by business-friendly conservatives in Congress, the courts, and the private sector to constrict both access to courts and class-action lawsuits.

Read the complete article here..

Facebook Halts Advertising Targeting Cited in Bias Complaints and Lawsuits

From today’s New York Times:

After years of criticism, Facebook announced on Tuesday that it would stop allowing advertisers in key categories to show their messages only to people of a certain race, gender or age group.

The company said that anyone advertising housing, jobs or credit — three areas where federal law prohibits discrimination in ads — would no longer have the option of explicitly aiming ads at people on the basis of those characteristics.

The changes are part of a settlement with groups that have sued Facebook over these practices in recent years, including the American Civil Liberties Union, the National Fair Housing Alliance and the Communications Workers of America. They also cover advertising on Instagram and Messenger, which Facebook owns.

“We think this settlement is historic and will go a long way toward making sure that these types of discriminatory practices can’t happen,” Sheryl Sandberg, the company’s chief operating officer, said in an interview.

The company said it planned to carry out the changes by the end of the year and would pay less than $5 million to settle five lawsuits brought by the groups.

Read the complete article here.