More on the markup: The core provisions of S. 2045 were retained, although one amendment we are concerned with, on ATV safety, was added. The committee approved several strengthening amendments, including two by Sen. Barbara Boxer-- one on a long-sought PIRG priority, extending toy safety hazard labeling to the Internet and one on improving the recall effectiveness of durable products like cribs. From our release:

The CPSC Reform Act of 2007, introduced by Senator Mark Pryor (D-Ark.), and co-sponsored by Senators Inouye (D-HI) Brown (D-OH), Durbin (D-IL), Klobuchar (D-MN) and Bill Nelson (D-FL) would require some children's products, including toys, to be tested by independent labs and to be certified to meet safety standards, make it illegal to sell a recalled product, limit the levels of lead in toys and children's jewelry to low levels, improve CPSC's ability to disclose safety information to the public, and raise the cap on the agency's penalties from $1.83 million to $100 million. It also includes provisions giving State Attorneys General the ability to enforce CPSC regulations and includes protections for individuals in companies and safety agencies who blow the whistle on wrongdoing.

Two weeks ago California governor Arnold Schwarzenegger signed legislation to make California the first state in the country to ban the use of phthalates in children's products. The legislation was a big victory for Environment California, the new home of CALPIRG's environmental work:

"When a child puts a phthalate-laden teether in her mouth, it’s like sucking on a toxic lollypop," said Rachel Gibson, Staff Attorney for Environment California. Phthalates have been shown to interfere with the natural functioning of the hormone system. These toxic chemicals have been linked to reproductive problems, early onset of puberty, liver and thyroid damage, and testicular cancer.

I get offered a receipt each morning when I pay cash to buy my cup of coffee, where a mistake is meaningless and I certainly cannot deduct the cost of the coffee on my taxes, or get reimbursed by PIRG, as far as I know.

But do I get a receipt when I vote, where mistakes matter to democracy? Each year, poll workers jokingly give me a "I voted" sticker when I ask, but no real receipt. But worse, many voting machines don't even keep a printed internal "paper trail" receipt for audit purposes. No, not with today's new and "improved" touch-screen voting machines. You can watch U.S. PIRG democracy advocate Gary Kalman (pictured) and other experts in a Voice of America video talking about the need for paper trails in electronic voting machines. Excerpt from commentary by VOA's Jeffrey Young:

The credibility of a democratically-elected government begins with balloting the public believes to be fair and accurately counted. And as the technology of voting advances, election officials have to take new steps to ensure accuracy, and with it, credibility.[...]Unfortunately, many of the electronic voting machines now in use do not create receipts. So, states and [smaller subdivisions called] counties would have to purchase many millions of dollars worth of new equipment to have this capability. But ultimately, what is at stake is the credibility of the election system in a democratic society.

In today's Washington Post, reporter Annys Shin continues her in-depth coverage of product safety issues. In the story Stuck In Neutral, she reports on the CPSC's failure to recall a dangerous ATV:

In June, the Consumer Product Safety Commission issued an unusual warning about a four-wheel all-terrain vehicle designed for children, calling it "defective and dangerous. Children are at risk of injury or death due to multiple safety defects with this off-road vehicle," the agency said in a news release. That vehicle, the Kazuma Meerkat 50, was not recalled, however, which prompted consumer advocates to raise the question: If it was so dangerous, why did the CPSC allow it to remain on the market?

Under the Consumer Product Safety Act, it cannot release information about products for 30 days without getting comment from the manufacturer. If the manufacturer does not like what the agency intends to disclose, then by law it can take the CPSC to court. In practice, that can translate into delays while every word of a recall news release is negotiated. By law, businesses can also choose whether to repair or replace a product, or offer a refund, which can result in hazardous products sometimes remaining on the market. Most recently, dangerous cribs remained in homes and stores even after the deaths of three infants.

In 1987, the CPSC denied a petition led by Consumer Federation of America, and including U.S. PIRG, as well as doctors' organizations, to ban ATV sales to children under 16. Instead it negotiated a consent decree requiring certain marketing practices and warnings. It did at the time ban future sale of treacherous 3-wheeled ATVs, but did not recall existing machines. This ATV facts page from Concerned Families for ATV Safety has some of the latest death and injury statistics:

Between 1995 and 2005, ATVs killed at least 1,218 children under age 16. These children account for 27 percent of all ATV-related deaths during this period. (Consumer Product Safety Commission, 2005 Annual Report of All-Terrain Vehicle (ATV)-Related Deaths and Injuries)

8. Laws should prohibit the use of ATVs, on- or off-road, by children and adolescents younger than 16 years. An automobile driver's license, and preferably some additional certification in ATV use, should be required to operate an ATV. The safe use of ATVs requires the same or greater skill, judgment, and experience as needed to operate an automobile.

Taking a page from deposed predecessor Michael Powell's playbook, FCC chief Kevin Martin has announced a supposedly "public" hearing on localism in the media, for this Wednesday, October 31, Halloween, from 9-2pm. The venue -- his plush downtown offices convenient to the well-heeled communications lobbyists that court him, the time -- daytime, and the announcement itself -- late in the day just one short week in advance, were all designed to limit public participation. Along with Free Press, Consumers Union and the Stop Big Media Campaign, we're supporting a rally at the FCC at 9am Halloween morning. Take Metro to Smithsonian, get off on the Independence Ave. side, turn right off the escalator and go a few blocks to the FCC at 445 12th St SW and do the monster mash (Make the F in FCC stand for Frankenstein.) Print out this rally flyer from Stopbigmedia.com and pass it on. Consumer champions and FCC commissioners Jonathan Adelstein and Michael Copps put out a short statement criticizing Martin. Excerpt:

This is unacceptable and unfair to the public. And it makes putting together an expert panel nearly impossible. "Is the Commission serious about allowing the public to participate in the agency's decisionmaking? Or is the goal to be able to claim that hearings have been held, even if the public has
not had a chance to fully participate?"

From today's New York Times lead editorial Listen to the States:

For years, most of the important initiatives to deal with global warming have been undertaken at the state and local level, while Washington has largely dithered. This is still true. The hope, as always, is that pressure from below will jolt Washington from its slumber.

U.S. PIRG is working to ensure that states can continue to solve local problems and do what it takes to protect the health and well-being of their residents--especially when the federal government has failed to do so. Every industry lobby, however, to a man and woman, continues to demand federal preemption of state law as the price for accepting even modest watered-down federal regulations. This race to the bottom must be stopped; the price is too high. Congress rarely acts to protect consumer health and safety, even modestly, unless prodded by the states. We should never take that potential prod away.

[Update: Paul Bland of Public Justice has posted a detailed entry on the hearing over at Consumer Law & Policy blog.) A number of consumer, employee, small business and small farmer advocates, including Laura MacCleery of Public Citizen, along with victims, provided testimony before the House Judiciary Committee's hearing on the PIRG-backed Arbitration Fairness Act, HR 3010 (Rep. Hank Johnson (D-GA) and 36 co-sponsors), yesterday. Bob Sullivan of MSNBC's Red Tape Chronicles has a story. And the Annapolis (MD) Capital Gazette reports on committee witness Deborah Williams in its story Annapolis couple brings tale of financial ruin to Congress.

(UPDATE: Here is Nord's letter.) The acting chair of the Consumer Product Safety Commission (CPSC), Nancy Nord, has told Senate Commerce Committee leaders in a letter that large parts of their PIRG-backed CPSC reform bill [S. 2045, the CPSC Reform Act of 2007, sponsored by Sens. Pryor-D-AR, Inouye, D-HI, Durbin-D-IL and others] scheduled for a committee vote next Tuesday are "crippling" and "hampering" to product safety. From Nord:

The result is clear: enactment of S. 2045 would harm product safety and put the American people at greater risk.

While Nord makes some useful suggestions on personnel and rulemaking issues raised by the bill, much of the letter reflects her personal view that holding wrongdoers more accountable is the wrong way to go. We disagree.

What disappoints me most is that Nord reserves some of her greatest ire for one of the most important sections of the bill, its provision granting co-enforcement authority of product safety laws to state Attorneys General, saying that it "would invite nothing short of product safety chaos" and "undoubtedly lead to the inconsistent application of federal law." This section of her letter, which incidentally is addressed not only to full committee chair Daniel Inouye but also to subcommittee chair Mark Pryor, the former Arkansas Attorney General, reads like something out of the big-business-backed American Enterprise Institute's anti-state attorney general campaign organizing materials (previous blog has links). It's clear, from the federal government's abdication of its role as a health and safety enforcer, that we need 51 consumer cops, not one.

Annys Shin of the Washington Post also has a story on the letter: Product Safety Chief Sees Setbacks in Senate Bill.

Today's Wall Street Journal has a front page expose on the business of "lead cards" called Marketers Use Trickery To Evade No-Call Lists (pd. subs. req'd). The story by Jennifer Levitz and Kelley Greene explains that "Older Americans around the country are getting duped by a seemingly innocuous tactic that can expose them to hard-sell pitches from the insurance industry." Read the story and you won't be surprised to find that right in the middle of it are the data brokers, led by ChoicePoint (you remember ChoicePoint, the ones who sold consumer dossiers to identity thieves and paid a $15 million fine including victim restitution to the FTC). Well, according to information obtained during a successful lawsuit by AARP to defend its name:

In internal emails, ChoicePoint employees attributed the cards' success in generating responses to their "fear factor" and described response rates that "tumbled" when AARP's name was temporarily removed from mailings.

In April 2006 it [AARP] won a permanent injunction in U.S. District Court in Jacksonville, Fla., prohibiting a company owned by ChoicePoint Inc., a big Alpharetta, Ga., seller of personal data, from referring to AARP on its lead cards and from using a Washington, D.C., return address unless it had an office there. In a settlement, ChoicePoint also agreed to destroy lead cards violating the injunction and paid an undisclosed sum to AARP.

When the virtually unregulated data brokers lobby Congress for exceptions from privacy laws, they argue that they deserve the right to use non-public personal information like Social Security Numbers because their practices are allegedly in the public's interest. They point to their relatively minor efforts to find lost children or missing heirs, track potential terrorists and expose miscreant "deadbeat dads." Funny, I haven't seen the legislative fact sheet that explains the public benefits of misusing AARP's name to trick seniors into dropping off the federal Do Not Call list so that they can be scammed out of their life savings. Here's some older material of ours explaining the data brokers' unregulated "parallel universe."

The story also explains that many state attorneys generals, including Illinois AG Lisa Madigan, are attacking the deceptive use of "lead cards" to trick consumers, especially seniors, into dropping off the federal Do not call list designed to protect their privacy:

The technique is centered on a marketing tool called the lead card, and it became popular after the federal government created its Do Not Call Registry in 2003 to shield consumers from unwanted solicitors. Sent through the mail, the lead card invites the recipient to mail off an enclosed reply for free information about, say, estate planning. But the cards fail to warn that by sending off replies, recipients are giving up their right to avoid telephone solicitations from the sender -- even if their phone numbers are on the Do Not Call list. "It's a huge loophole," says Pam Dixon, executive director of the World Privacy Forum...

From Jon Swartz's story TJX data breach may involve 94 million credit cards in USA Today:

The massive computer data breach at TJX (TJX) may be worse than expected: At least 94 million Visa and MasterCard accounts -- nearly double the previous estimate by the retailer -- could have been exposed, new court files say.

The Steelworkers Union -- which is running a stoptoxicimports.org campaign -- has issued a sharp rebuttal of the CPSC release (previous blog) calling home lead test kits "unreliable."

"This agency, which sat on its hands for years while literally millions of lead-tainted products flooded this country from China and other unregulated economies, is now preoccupying itself with discrediting lead testing kits -- one of the only real tools parents have for protecting their children in the face of the nation's failed trade policies," said USW President Leo W. Gerard.

Ed Mierzwinski, consumer program director for U.S. PIRG, which publishes an annual survey of dangerous toys, staked out the middle ground, advising consumers to use one of the Consumer Reports-recommended test kits as "one of your layers of defense against toxic hazards. But it shouldn't be the only one."

Massive Day of Action Targets Kohlberg Kravis Roberts (KKR) and 88 Toys "R" Us Stores as Activists Turn to Consumers to Join Campaign against Toxic Toys at Toys "R" Us.
Concerned mothers and advocates for children will step up the campaign for toxic free toys on Wednesday as they head out to nearly a hundred Toys "R" Stores nationwide to intensify call on one of the chain's private equity owners -- Kholberg Kravis Roberts & Co. (KKR) -- to make sure Toys "R" Us stops selling dangerous toys and starts requiring its suppliers to adhere to a strict, verifiable code of conduct.

KKR, profiled in the best selling book Barbarians at the Gate, make their money by buying companies with borrowed money and then selling them a few years later for a quick profit -- in some cases, a profit achieved through dramatic cost cutting or downsizing. Last week, the coalition of concerned parents and legislators released a report which detailed safety lapses and multiple recalls associated with Toys "R" Us, Dollar General, and other companies owned in whole or in part by KKR. Hundreds of thousands of products sold by these companies were recalled this summer because of dangerous lead levels. Despite the recalls, another toxic toy was found on Toys "R" Us shelves just this month. The Center for Environmental Health reported Oct. 11 that test results for a Marvel Curious George doll bought recently at Toys "R" Us showed more than 10 times the legal lead-paint limit.

Credit union activists are out on Capitol Hill today promoting their new website: lookoutforthelittleguy.org. USPIRG has long recommended to consumers: bank at a credit union, not at a bank. Credit unions have lower fees and lower minimums to avoid fees, so you'll pay fewer fees. Credit unions also have much better deals on loan interest rates.

Guess what? Everyone benefits from credit unions, even customers of big fee-gouging banks. Credit unions act as a competitive yardstick in the economy; the lure of their obvious lower fees and loan rates tempers the ability of the big banks to make their big fees even bigger.

Except for a very small number of privately insured credit unions (we like these not so much), nearly all credit unions are federally insured by a federal government credit union agency similar to the FDIC called the NCUA that administers the National Credit Union Share Insurance Fund. If you see the NCUSIF logo, you're good.

And, many consumers may wrongly think that they don't qualify to join a credit union because they don't work in the same company. You'd be surprised. Ask. And, once a member, always a member. And, your eligibility makes your family eligible. Still can't find one you qualify to join? In addition, there are many community development credit unions that anyone in the neighborhood can join. Just ask.

Unfortunately, the America Bankers Association and its local affiliates have been running a state and national campaign to demonize member-owned credit unions because they don't pay taxes, as if that is somehow wrong. Of course they don't pay taxes, they're non-profit and return benefits to their members and communities, unlike fee-gouging banks. Lookoutforthelittleguy.org includes helpful information to rebut the banker claims.

Oh, this paragraph is in the interest of keeping my blog fair and balanced: Those privately-insured credit unions we like not so much? They may take on more deposit risk as they move away from traditional credit union values. Not my first choice. But worse, there are a very small number of credit union management types in the thrall of possible individual profits from for-profit conversions. We like these efforts even less so much. But you can count the number of these efforts on your hands, despite banker efforts to encourage them.

Today's Wall Street Journal (pd. subs. req'd) has a long Page One investigative piece explaining how Wal-Mart uses accountants to avoid paying state taxes. It's a big problem for you and me and strapped state legislatures, as the story explains:

Publicly traded companies reduced their federal income taxes by about $12 billion in 2004 through potentially abusive tax transactions, according to Internal Revenue Service data. Some experts say companies save far more than that each year through elaborate tax-cutting maneuvers.

Wal-Mart decided to hire Ernst & Young to help devise complex tax strategies to use in at least four big states. The accounting firm, for example, helped Wal-Mart take tax deductions in California for dividends it never actually paid. And in Texas, Ernst & Young advised, the giant retailer could exploit a wrinkle in the tax law involving limited partners from out-of-state -- a maneuver subsequently shut down by the state's legislature. Big companies hardly ever discuss how outside accountants, lawyers and investment bankers help them cut their tax bills. But Ernst & Young's contributions to Wal-Mart's state-tax minimization project are outlined in a raft of documents filed in recent months in North Carolina state court, where the state's attorney general is challenging a Wal-Mart tax-cutting structure involving real-estate investment trusts.

Today the CPSC announced that home lead test kits were "unreliable." Meanwhile, Consumers Union, publishers of Consumer Reports, countered that

Three of the five home lead-testing kits we tested at Consumer Reports were useful though limited screening tools if you are worried about specific items in your home.

Our colleagues at Knowledge Ecology International have sent a sharply worded letter to the Senate opposing two James Imhofe (R-OK) amendments to the FY 2008 Labor, Health and Human Services and Education Appropriations bill (S.1710) that would weaken open access to NIH (National Institutes of Health) funded research.

Both amendments are naked attempts to eliminate public access to government funded research, in order to protect a handful of publishers.[...] Amendments like these are shocking reminders that citizens have to fight for access to the very research they have paid for as taxpayers. [...] Americans pay about $100 per capita to support the NIH, and deserve policies that promote access. When everyone has access to the research, science advances faster, and the expanded dissemination of new knowledge benefits doctors, patients and others who make more informed decisions.

Last week, Neely Tucker of the Washington Post reported the story of 75-year-old Mona Shaw Taking a Whack Against Comcast. After a several-day long debacle where Comcast apparently left her "Triple Play" installation in disarray then cut off all phone, cable and Internet service, Shaw and husband Don went to Comcast's Manassas (VA) office for a customer service rep to hear her service complaint. Reasonable. There, the reps left her and husband Don sitting outside the office for hours, then all went home. Unreasonable. Not to worry, Mona came back the next day with her hammer. From the Post:

Hammer time: Shaw storms in the company's office. BAM! She whacks the keyboard of the customer service rep. BAM! Down goes the monitor. BAM! She totals the telephone. People scatter, scream, cops show up and what does she do? POW! A parting shot to the phone! "They cuffed me right then," she says. Her take on Comcast: "What a bunch of sub-moronic imbeciles."

Go to the site and read their stories. The growth of these "mycompanysucks.com" Internet sites -- and this isn't the only one (See cybergriping.com) -- shows the power of the Internet to give small speakers an unfiltered voice and an opportunity to organize at low-cost. It also shows, of course, that consumers are getting fed up with the impersonal, arrogant, over-priced and nuisance-fee-laden so-called services of banks, airlines, cable companies, phone companies and other behemoth firms. And while companies use phalanxes of lawyers to try and take down the sites using copyright and other legal arguments (but mostly blustery threats designed to intimidate), Paul Levy of the Public Citizen Litigation Group has been leading efforts to protect the First Amendment free speech rights of consumers to complain.

Under deregulation, market competition, rather than pesky bureaucratic regulators, is supposed to restrain the most unfair tendencies of large, powerful corporations. But it doesn't seem to be working. Many firms use Early Termination Penalty fees and other tactics, including counting on consumers not wanting to pay the high switching costs (lost time in phone calls, getting new account numbers and new email addresses, waiting on new equipment service calls, or whatever) of switching providers, to establish a virtually captive customer base so they don't need to have good service to compete.

But Comcast at least, didn't count on Mona, who took the hammer into her own hands. She's not the first, and she won't be the last, consumer to take direct action. Corporations need to wake up. Consumers who pay good money for service deserve a better deal than the pathetic, impersonal treatment many get. Consumer complaints about bad service are not isolated incidents -- bad service is economy-wide (previous blog).

We'd all be better off if states figured out a better way to raise money for education and other government services than their regressive lottery systems, which rely heavily on the dreams and paychecks of the poor for funding government programs. It's the wrong way to run a government. Even worse, as the New York Times points out on Sunday in its latest expose (link to the series) on these legalized gambling systems, just two firms have used "heavy-handed" tactics to divide up the domestic state and now international lottery business into their own cash machines. The story Divide and Conquer: Meet the Lottery Titans, by Ron Stodghill and Ron Nixon, alleges that the duopoly has used "heavy-handed" tactics, sometimes including bribes, to dominate the industry and make billions feeding at the public trough:

Every business has its titans, of course. But according to analysts, lottery officials and public documents, Gtech and Scientific Games have done more than just ride the gambling boom -- they have strong-armed their way to the top of a publicly sponsored industry that they now dominate. [...] Gtech, in particular, has been heavy-handed at times. According to court papers and regulatory filings, the company's representatives have drawn persistent allegations of bribing their way into contracts.

Our colleagues at Consumers Union, publishers of Consumer Reports, have launched a new campaign against toxic and contaminated food and consumer products: Notinmycart.org.

Mission: Consumers Union created NotInMyCart.org to give you a place to check for recent product recalls and take action to make all products safer in the future. The U.S. market is now flooded with imported products--tens of millions of items arriving in cargo ships stacked high with containers. Recalls, after a dangerous product is found on store shelves, are important, but not enough. Manufacturers, retailers, government and ordinary Americans must all take responsibility to keep our children and our homes safe, and we've tried to make it easy for you to help.

Over at the Center for American Progress, law professor Peter Swire has posted an important paper rebutting the conventional wisdom that privacy should not be part of the FTC's antitrust analysis in the pending Google/DoubleClick merger. We strongly agree with Swire that privacy should be part of the analysis. U.S. PIRG, in coalition with the Center for Digital Democracy and EPIC (its detailed Google merger page) has filed joint papers at the FTC opposing the merger. From Swire's paper:

In brief, privacy harms can reduce consumer welfare, which is a principal goal of modern antitrust analysis. In addition, privacy harms can lead to a reduction in the quality of a good or service, which is a standard category of harm that results from market power. Where these sorts of harms exist, it is a normal part of antitrust analysis to assess such harms and seek to minimize them.

U.S. PIRG staff attorney and telecom expert Amina Fazlullah testified Wednesday (her testimony, full hearing) on the consumer impacts of the so-called DTV transition before Rep. Ed Markey's (D-MA) Telecommunications subcommittee of the House Energy and Commerce Committee. Other witnesses included FCC chair Kevin Martin. We're concerned, as Amina's testimony points out, that many consumers will be left in the dark:

One other thing will happen on February 17, 2009. Every consumer who watches over-the-air TV with an analog set will have their set go dark. Including in the estimated 22 million consumers in this category are 8 million households with at least one member older than 50. The government is of course at least aware of this problem. Congress has allocated funding for an education program. The relevant agencies have required that manufacturers stop producing new analog televisions and that retailer properly label the remaining analog televisions at the point of sale. Congress has also allocated funding to provide coupons to help consumers pay for the necessary converter boxes to get their analog television sets to work again. Yet, based on preliminary U.S. PIRG research, which we will discuss today, neither government nor retailers are adequately preparing consumers for the impending DTV transition.

Amit Paley's story Confusion Cited In Overpayments To Student Lenders in today's Washington Post details the long-running machinations over at the Department of Education concerning the Brobdingnagian student loan scandal that cost taxpayers hundreds of millions of dollars while unjustly enriching student lenders. The story points out that "Some inside the department sounded alarms," which were apparently ignored at headquarters by Education Secretary Margaret Spellings.

"I have come across what appears to be significant federal waste," department researcher Jon H. Oberg wrote in a 2003 memo to agency officials. "I estimate it amounts to about $30,000 per day, perhaps more."

"I don't know if it's a knowable number," she said. "I guess it's knowable by somebody. But my inspector general doesn't know it, to my knowledge. And I don't. We haven't found out."

In September, Congress passed, and the president signed, without inviting us, PIRG-backed legislation eliminating the subsidies and reforming the program (previous blog).

In her regular Basic Instincts column, New York Times financial columnist M.P. Dunleavey today warns of the fees associated with some gift cards, especially bank-issued cards (often, a "mall" card that can be used at several stores is actually a bank card). It's a well-timed piece as the holiday shopping frenzy kicks in soon. More and more gift givers who want to avoid the hassle choose cards. But Dunleavey's well-headlined piece points out that buying a gift card is often like Giving a Gift to Merchants and Banks:

Although Mr. Riley of Tower Group is an industry analyst, not a consumer adviser, after 25 years in this business he urges gift card users to read any fine print carefully. "And just as you might ask what a store's return policy is before you buy something, ask them what their gift card policies are." Mr. Riley said he was hit with some unexpected fees not long ago, when he bought a bank gift card for his son, who was leaving for college. He was surprised to learn, when he read the terms of service, that there was a $5 monthly maintenance charge.

Most of the nation's bank regulators don't have an adequate understanding that their role as public servants involves protecting the public, not merely serving the interests of regulated banks. Over at the Federal Deposit Insurance Corporation (FDIC), Chair Sheila Bair and Vice-Chair Marty Gruenberg have a different plan. They're public servants who try and make safe and sound regulatory policy as if people mattered. In today's New York Times, Bair's op-ed column Fix Rates to Save Loans says that subprime servicers and lenders should work with borrowers to restructure costly and dangerous 2/28 and similar mortgages into fixed rate loans, as she proposes an effort to save homes, and neighborhoods: "Subprime borrowers need a better deal -- one that they can afford."

Steve LaBaton's lead story in the New York Times today -- Plan Would Ease Limits on Media Owners -- describes the troubling possibility that FCC chair Kevin Martin claims he's got the votes to allow further media consolidation, including elimination of the cross-ownership rules that guarantee that a town's biggest TV station and newspaper will compete with each other to uncover municipal chicanery and corporate crime, instead of being owned by the same firm. Under Martin's proposal, which has been opposed by a vast majority of the thousands of Americans who have attended field hearings on media ownership this year, the winners would be some media moguls (think, Rupert Murdoch) and the losers would be a marketplace of democratic ideas and the American people who want to read or hear them to make informed choices. From the story:

"This is a big deal because we have way too much concentration of media ownership in the United States," Senator Byron L. Dorgan, Democrat of North Dakota, said at a hearing on Wednesday called to examine the digital transition of the television industry. "If the chairman intends to do something by the end of the year," Mr. Dorgan added, his voice rising, "then there will be a firestorm of protest and I'm going to be carrying the wood."

No, they aren't altruists. They're still monopolists. But now that Senator Amy Klobuchar (D-MN) has proposed legislation to rein in the worst practices of the companies consumers hate about as much as they hate the cable company, the wireless firms have realized they ought to offer some sop of consumer protection to derail her efforts. Their most heavily-criticized practice, and the subject of litigation in several states as an unconscionable practice, is locking you into a longterm contract with an early termination penalty. If your only choices when you complain about dropped calls, disputed items on your bill, or tricky and deceitful rate plan gimmickry are either to agree to a two-year extension and "we'll gladly fix that mistake" or, "don't like it, pay $200 to buy out your contract and walk," you're locked in a cell (recent PIRG report). Just the threat of the ETF (they call it a fee, not a penalty) allows them to have mediocre customer service in the first place. According to the Washington Post, AT&T, Verizon Loosen Cell Contracts: Changes Come as Senators Seek Prorated Cancellation Fees. Weird. Earlier this year, Chase and Citibank eliminated certain unfair credit card practices the very same day as Senator Carl Levin (D-MI) took them to the woodshed at a hearing. Maybe this new Congressional oversight concept that's been going on this year is worth continuing. Seems promising.

The U.S. PIRG Education Fund's new truthaboutcredit.org campaign to get predatory credit card marketing off college campuses is picking up steam, with major stories yesterday in the New York Times (Pushing Colleges to Limit Credit Offers to Students by Charles DelaFuente) and today in the Washington Post. And, we're even getting requests for our FEESA--Free Gifts Now, Huge Fees Later counter-marketing project's cool light blue FEESA logo polo shirts. I don't even have one yet! Here's an excerpt from Washington Post syndicated columnist Michelle Singletary's story The Extra Credit Students Don't Need:

Many schools have signed lucrative affinity deals with credit card companies in which they provide contact lists of students or allow sidewalk-marketing by the credit pushers. It's an insidious relationship. [...] I don't think any college student needs a credit card. If students don't have the money to pay for school supplies, textbooks or food (the top reasons they use credit), what are they going to do when the bill comes due? Oh yes, they'll do what many seasoned cardholders do. They will roll over their balances to the next month and dig themselves deeper into debt.

Kevin Sack of the New York Times reports that Bacterial Infection Killed Almost 19,000 in 2005 , according to a new U.S. Centers for Disease Control study of infection caused by a "virulent drug-resistant bacteria" known as methicillin-resistant Staphylococcus aureus.

The state PIRGs have worked closely with the Consumers Union Stophospitalinfections.org campaign to enact state laws requiring greater attention to this serious problem.

Here's a release -- Gov. Schwarzenegger vetoes the College Textbook Affordability Act -- from CALPIRG's Nicole Allen condemning the veto of a bill that would have lowered the price of textbooks by California Governor Arnold Schwarzenegger (his veto message). From CALPIRG:

It has been clearly documented many times over that the textbook market is a broken market. The person who orders the book (faculty) is not the same person who buys the book (students). Therefore, the cost of a textbook is not the primary factor during the purchasing process. Publishers, cynically aware of the immense market power this gives them, respond by withholding the price of textbooks. As has now been clearly documented by a rigorous study released by CALPIRG, 77% of faculty report that publishers rarely or never report the price of a book during sales interactions.

You can always find a few interesting items in the New York Times to blog about. From Monday's paper:

Home buyers in predominantly black and Hispanic neighborhoods in New York City were more likely to get their mortgages last year from a subprime lender than home buyers in white neighborhoods with similar income levels, according to a new analysis of home loan data by researchers at New York University.

"There's no question that if you live in a predominantly African-American and Latino neighborhood you're going to be paying more for your mortgage," said Sarah Ludwig, executive director of the nonprofit [Neighborhood Economic Development] Advocacy Project, which is based in New York.

Sunday's New York Times has a story by Andrew Martin: Did Your Microwave Nuke the Bacteria? which quotes ConAgra, maker of Banquet pot pies that may have sickened over 165 people, according to the Centers for Disease Control, initially blaming consumers for not heating (nuking) the food enough. But the story goes on to say:

But it's preposterous to expect consumers to know how the cooking power of their microwave compares with others. Some have more watts than others, and the makers of ready-to-cook products expect you to know the difference.

ConAgra Foods finally came to its senses on Thursday night and recalled all of its pot pies. It also acknowledged problems with its cooking instructions.

Member-owned worker, producer and consumer cooperatives play an important role in our economy, promote the welfare of members and the communities that they live in and help act as a competitive yardstick against other businesses that may not put the customer first. If you're not a member of a credit union, the outdoor product co-op REI, a neighborhood food buying club, or a farm or worker co-op, or don't live in a housing co-op, get out and celebrate Co-op Month by joining a co-op today! More at www.go.coop. (Yes, cooperatives have their own Internet top-level domain.) As I often say, bank at a credit union, not at a bank.

Two of the nation's leading consumer protection groups, our close allies the Center for Responsible Lending and the National Association of Consumer Advocates, have launched "the Institute for Foreclosure Legal Assistance (IFLA) to support groups giving legal representation to families facing foreclosure and financial ruin because of abusive subprime mortgages. The Institute was launched with a $15 million grant from investment management firm Paulson & Co. Inc." Full release should be up soon on their sites.

Campus chapters across the country rolled out the U.S. PIRG Education Fund's (previous blog) new Ford Foundation-funded credit card counter-marketing campaign yesterday. Here's a nice story in the Tucson Citizen by Renee Shafer Horton called Wise credit card use by students urged at UA (University of Arizona) with a great photo of PIRG student Angela Yazzie collecting a petition signature (At right's a thumbnail of the photo by Norma Jean Gargasz) in her light blue FEESA polo shirt. There are numerous other stories explaining the campaign, including an AP story by Justin Pope, Project targets credit cards on campus by Becky Yerak in the Chicago Tribune and the story Colleges urged to rein in credit card companies' activities on campus by LA Times' syndicated personal finance columnist Kathy Kristof. Here's Groups target campus sales tactics in the Michigan Daily by Daniel Strauss. In the Arizona Daily Wildcat, here's Cody Calamaio's story UA students join effort to urge safe credit usage. Clark Kauffmann of the Des Moines Register has been detailing the problem of exclusive credit card marketing contracts at Iowa public universities in an investigative series (previous blog); here's his piece on the campaign launch. More information is available at our campaign website Truthaboutcredit.org.

Juliet Eilperin's followup story EPA Joins Settlement of Lawsuit but Adds a Waiver in today's Washington Post points out that even though the Bush EPA and DOJ joined U.S. PIRG, a dozen other environmental groups and eight states in bringing the polluting utility American Electric Power to heel with yesterday's settlement of a long-running Clean Air Act case, (previous blog), that the Bush administration disagrees with the rest of us on liability for continued violations. It's offered AEP a Get Out of Jail Free Card until 2018. Not to worry, the rest of us have not:

Although the nine state attorneys general and 13 environmental advocacy groups that are party to the lawsuit praised the administration for Tuesday's settlement, they explicitly rejected this prosecutorial amnesty in the consent decree: Paragraph 140 says these parties "do not release any claims under the Clean Air Act and its implementing regulations." That means they could again sue the utility over violations of the law.

Today's Wall Street Journal explains that Escalating Health-Care Costs Fuel Medical Identity Theft (pd. subs. req'd.). As reporter Victoria E. Knight explains:

Medical identity theft can imperil your health and finances. Unfortunately, detecting this form of thievery isn't always easy for consumers, who are often unaware of its existence, and remedying the damage can be difficult. However, there are steps to take to protect yourself from becoming a victim, experts say. "You need to treat your medical ID card as if it were a Visa card with a million-dollar credit limit," says Nils Frederiksen, a spokesman for the Pennsylvania attorney general's office, which has successfully brought prosecutions against medical ID thieves.

UPDATE: CLICK "Continue reading" here or below for more information about local campus counter-marketing FEESA Credit Card events being held today and later in the campaign.

We held a telephone news conference this morning to formally announce our Truthaboutcredit.org campaign to urge colleges to adopt strong principles to get unfair credit card marketing off college campuses. The campaign is a project of the U.S. PIRG Education Fund and the Student PIRGs and it is supported by the Ford Foundation.

Speakers included:

We'll post more information later.

Reporters-- Campus FEESA counter-marketing events will be held today and on other dates at the following campuses. For specific times and local contact information, contact Christine Lindstrom-- EMAIL is Chris.Lindstrom [AT] pirg.org (replace [AT] with @ of course] and her PHONE is 617-747-4330.

Campus

Yesterday, EPA and the Department of Justice announced a settlement with the polluter utility American Electric Power over its violations of the Clean Air Act that resulted in massive emissions violations. The case had been filed in 1999 by the U.S., eight states and over a dozen citizen groups including U.S. PIRG (our clean air pages). Here's a Medill Chicago story quoting Becky Stanfield, former U.S. PIRG Clean Air director:

"This is a huge settlement and a long time coming," said Becky Stanfield, state director of Environment Illinois and former head of the U.S. Public Interest Research Group's air quality program. "Those [plants] are the sources we have to address for global warming."

Brian Wolfman of the Consumer Law & Policy blog has posted an analysis of yesterday's Supreme Court argument in an important investor protection case, Stoneridge Investment Partners v. Scientific-Atlanta. We filed an amicus brief jointly with AARP and Consumer Federation of America, on behalf of investors. Our brief supports the view that investors would be better protected by making it easier to hold professionals (investment banks, lawyers and accountants) that aid and abet wrongdoers who cook the books (think Enron), accountable.

As Brian explains:

The case may help draw the dividing line between aiding and abetting a violation of the federal securities laws, which does not give rise to a private suit under those laws, and a primary violation, which, of course, does. The question presented, more formally stated, is whether claims for deceptive conduct under Section 10(b) of the Securities Exchange Act of 1934 are barred by the Court's decision in Central Bank v. First International Bank (which rejected aiding-and-abetting liability), when the defendant engaged in fraudulent transactions designed to inflate a corporation's financial statements, but made no public statements concerning those transactions.

Today's New York Times story Dangerous Sealer Stayed on Shelves After Recall by Eric Lipton points out that even imminent hazards -- 80 injury reports, 2 known deaths, and the lungs of Walter Friedel left "chemically inflamed" -- don't always result in immediate recalls of products like Stand 'n Seal by the CPSC.

The product offered "a revolutionary fast way" to seal grout around tiles and, its label boasted, any extra spray would "evaporate harmlessly." "It sounds like no big deal," Dr. Friedel said, looking back. But instead of watching football that afternoon, Dr. Friedel, a 63-year-old physician, ended up being rushed to the hospital, where he would spend four days in intensive care, gasping for air, his lungs chemically inflamed.

As Lipton notes, recalcitrant corporate wrongdoers routinely try to dodge responsibility for recalls, and often move slowly to disclose critical information (even when the law requires it to be to be passed on to the CPSC within 24 hours), but the problems are also partly the fault of the CPSC.

And then, after receiving repeated complaints that the hazard persisted long after the recall, the agency failed to follow up adequately, documents show.

Even if the slip-ups were a result of companies having concealed important evidence, the commission still has a responsibility to use its enforcement powers to investigate and, if appropriate, to issue fines. To date, more than two years after the commission became aware of the problems with Stand 'n Seal, no fines have been issued.

In my Senate testimony on the CPSC last week I emphasized that recalls don't always result in dangerous products being removed from the shelves. It isn't only that not every ma-and-pa store hears about the recall. That's a problem, but many others exist. Often, for example, companies refuse to agree to a recall, and stall for weeks or months. Then, they capitulate only to a corrective action, where old product stays on store shelves while new product is supposedly made safe. Or, consumers who complain are sent repair kits, but no on else is helped. Lipton's story goes on to talk about the recent Hasbro Easy-Bake oven debacle:

"A recall is not necessarily a recall, that is what it comes down to," said Stuart L. Goldenberg, a Minneapolis lawyer who represents a family whose child was injured using an Easy-Bake toy oven. The maker, Hasbro, alerted consumers about injuries to children's fingers from the ovens, first [February 2007] simply offering a repair kit, but then expanding to a full-fledged recall after dozens of additional injuries [in August 2007, and the "additional injuries' included a "partial amputation"] were reported. [Material in [brackets] added by me.]

Along with other consumer groups in the U.S. and Europe, we also anxiously await any announcement by the CPSC as to whether Mattel will be fined for its own magnet debacle. Polly Pockets were originally recalled in November 2006. The recall was expanded in August 2007, during the tsunami wave of Mattel recalls. Did Mattel withhold any information and all of a sudden come clean? Its Fisher-Price unit paid CPSC a big (sort of) fine this year: Fisher-Price Fined $975,000 for Failing to Report a Serious Choking, Aspiration Hazard with a Popular Children's Toy. And that was not the first time. And Mattel chief Eckert has been widely reported (Hope Yen of AP in USA Today) as having his own interpretation of CPSC rules requiring hazard to notification within 24 hours:

Under federal rules, manufacturers with a few exceptions must report all claims of potentially hazardous product defects within 24 hours. Mattel reportedly took months to gather information and privately investigate problems after receiving complaints from consumers. On Wednesday, Eckert said Mattel has been working with the Consumer Product Safety Commission to "develop a new set of reporting protocols" but denied any suggestions of a feud with the agency.

A story by Aaron Lucchetti -- A New Mortgage 'Cop' -- in today's Wall Street Journal (pd. subs. req'd) profiles Marc Dann, Ohio's attorney general elected in 2006 on a campaign against predatory mortgage lending.

Mr. Dann says he wants to "punish" not only out-and-out criminal fraudsters, but also deep-pocketed parties that benefited from the problem and helped enable it.

More and more, we not only face fights over whether state consumer laws should be preempted when Congress passes a federal law, no matter how weak, but also over whether state attorneys general should maintain their long-standing right to be co-enforcers of federal consumer and environmental laws.

At a markup (voting session) of the House Financial Services Committee last year, one member claimed that "uneven" enforcement by a "rogue" state attorney general could even jeopardize a system of business-friendly uniform national laws. Not-so-thoughtful but politically connected and cash-rich "think tanks" such as the Competitive Enterprise Institute even have campaign pages ( here's one and here's one more) attacking state attorneys general. It even held a pseudo-academic conference in 2005.

The business lobby has an organized strategy:

These are bad trends worth watching, and worth organizing to stop. Here's more information.

We testified (my testimony) yesterday at a hearing on CPSC/China/toy recall issues before Senator Mark Pryor's (D-AR) subcommittee of the Commerce Committee in favor of his bill: the CPSC Reform Act of 2007, S. 2045 (we also suggested improvements) to reauthorize and modernize the Consumer Product Safety Commission.

Obviously, the National Association of Manufacturers opposed the bill, especially its provisions to increase civil penalties, let state Attorneys General police the product safety beat, and eliminate unnecessary secrecy in CPSC activities. But, astonishingly, acting CPSC chair Nancy Nord largely agreed with NAM, especially when she said that eliminating secrecy would be "counter-productive." She essentially said that their relationship with corporate wrongdoers would be jeopardized. Former CPSC Chair, Ann Brown, in Annys Shin's Washington Post story Head of CPSC Opposes Measure on the hearing, said, and we agree:

"She thinks it's the industry product safety commission," said Ann Brown, CPSC chairman under President Bill Clinton. The current law "stands in the way of consumers getting prompt information, and it should be amended and changed."

In yet another editorial, Common Sense and Credit Cards, the New York Times has called for strong actions to rein in sharp credit card company practices that unfairly strip wealth from consumers, including college students.

All too often, these companies sometimes deluge students with cards, even when they have no verifiable income, luring them and sometimes their families into debt.[...]Congress also needs to take a close look at the school-themed credit cards that are often offered by privately run college alumni associations. The associations earn royalties and sometimes share a portion of the money with the colleges, which are then required to promote the cards on campus. These deals resemble the unsavory arrangements under which student loan companies paid kickbacks to colleges in exchange for being placed on so-called "preferred lender" lists.

Ten years ago, PIRG helped draft the first security freeze law, which was eventually enacted in California over the objections of the 3 credit bureaus, who were forced, kicking and screaming, to reluctantly give consumers a powerful tool that stops identity theft. Now 39 states and the District of Columbia have followed suit (although not all laws have taken effect), after a three year PIRG/Consumers Union campaign. Now the bureaus, in an effort to stave off better federal legislation that would allow the states to continue to modify and improve their laws to make them better, are offering expensive, clunky freezes nationwide (Washington Post story on Experian announcement; Trans Union has already announced.) It's a cautionary victory as long as we keep the momentum moving for better state laws and a better federal floor. Protection from identity theft is not something that should be left to a market that has failed miserably for ten years to stop the problem.

No other tool stops identity theft before it starts. Only the security freeze does. Other options don't work. The bureaus say-- "get a 90-day fraud alert" (a federal right available since late 2003)." But a fraud alert doesn't stop the issuance of credit. And, of course, you have to keep renewing it. Really, the bureaus prefer to market, sometimes deceptively, their rip-off credit monitoring services, which for as much as $15/month, will tell that your credit data have already left the barn.

Consumers deserve a freeze that's easy-to-use, with a business-friendly instant unfreeze when they want to purchase credit themselves. And consumers should pay once for a security freeze from each of the three bureaus, not each time time they temporarily lift or unfreeze their reports. You buy a lock for your front door once-- you don't pay every time you use the key. These features -- 15 minute lifts and one-time fees -- are features of the best state laws. Heck, Indiana's law is totally free; even Delaware, home of the banks and proud of it, has a 15-minute unfreeze and a one-time fee.

We testify this afternoon at a hearing of a U.S. Senate Commerce Committee subcommittee on major legislation, the CPSC Reform Act of 2007, S. 2045. The bill has the potential, if improved in a few ways and not watered down in others, to go a long way toward:

The bill is introduced by subcommittee chair Mark Pryor (D-AR), a former state attorney general, along with full committee chair Daniel Inouye (D-HI) and the Senate's #2 leader, Majority Whip Dick Durbin (D-IL), as well as committee members Amy Klobuchar (D-MN) and Bill Nelson (D-FL). Watch on the Internet at 2:30pm.

U.S. PIRG's Gary Kalman released a new report yesterday documenting that serious fraud and previous failure are no impediments for beltway bandits lining up for new government contracts at the taxpayer-funded trough.

The report, Forgiving Fraud and Failure: Profiles in Federal Contracting, highlights nine representative examples of new, often no-bid contracts that were granted to companies with recent records of questionable performance. U.S. PIRG Education Fund report cites secretive practices, lax oversight, weak rules and lack of competition for the problems uncovered by the study.

In each of the cases profiled, companies received new contracts during or shortly after having negotiated settlements in cases of poor performance. In several instances, contracts were actually awarded with less competition after problems surfaced than before.

NYPIRG has launched a new website called
cyberstreetsmart.org. Check it out:

Many of us are so dependent on the Internet and wireless gadgets that we can barely shop, socialize or do business without them. While taking care of business online is convenient, if you are not careful it can leave you exposed to con artists and thieves. CyberStreetSmart.org can help you avoid online scams and frauds, become a smart online shopper, recognize fraudulent emails, protect your identity and steer clear of predators who stalk networking and dating sites.

I got a new credit card this week, partly because my insurance company told me earlier this year that my insurance credit score (and cost of car insurance) was hurt by having "too few" revolving accounts. Who knew?

When I called the 800-number from my home phone to activate the card (calling from your home phone is a nice, simple security feature), they had a tricky ad for PrivacyGuard, the over-priced credit monitoring service from Trilegiant. "Press one to get your credit report from PrivacyGuard for only one dollar."

What if you don't want PrivacyGuard and just want them to turn on your new credit card? Do they say "Press 2?" No. They say nothing. So I did nothing.

I waited for about ten seconds, to see what would happen. And sure enough, the voice comes on again: "Are you sure you don't want to fight identity theft? Press one now for PrivacyGuard." I was sure, so I waited them out. Ten seconds later, the little voice said: "Your new credit card is activated. Good bye." Waiting was the right thing to do. Credit monitoring is over-priced and doesn't stop identity theft.

After your one-dollar 2-month trial, the rate goes up, way up, as the following, tortured 58 word sentence explains. From the small print:

For my convenience, unless I call toll free to cancel during the two months of my $1 trial, my privileges will automatically continue at the low $11.99 monthly membership fee, or then-current month's fee, automatically billed to the credit card I provide which I verify is not a debit card without my having to do anything further.

No credit monitoring service stops identity theft. Only the security freeze does. Don't spend $8-15/month on these useless, over-priced subscription services that don't fight identity theft.

In Gretchen Morgenson's story Can These Mortgages Be Saved? about Countrywide in the Sunday New York Times, every consumer and community advocate says the same thing:

But borrower advocates who work with a broad array of lenders say that none make it harder to modify loans than Countrywide, the nation's largest mortgage originator and loan servicer.

"When you look under the surface, they are counting deeds-in-lieu as a modification," said Martin Eakes, chief executive of the Center for Responsible Lending, a nonprofit and nonpartisan research organization. "When you've taken someone's house, even without the foreclosure process, to count that as a modification is worse than fiction."

The story points out that, in general, consumers trapped in bad mortgages with other lende