If that's the profile of their worst 20% of customers, why are they in so much trouble? MORE:

According to the most recent Fed G-19 statistical release, the average APR for customers who don't pay interest is 11.93%; for those who pay interest, 13.64%. Either way my new rate of a minimum of 17.99% is outrageous, even if I don't carry a balance (so I don't pay finance charges).

It may be more likely that I have been re-priced due to the "science" of behavioral scoring: I may live in a zip code or shop in stores where a lot of their other customers are deadbeats. Since I live in the burbs of our nation's capitol, this is troubling-- meaning the country is likely being run by deadbeats. But actually, according to the Fed's dynamic maps of credit card delinquency rates, I live in an area with very low delinquencies.

Maybe their supercomputers are programmed wrong. Probably the same computer that calculated their risk exposure from derivatives and currency default swaps. How's that going for ya? They've blown a gasket (legacy computers may have gaskets, who knows) and yellow lights are flashing on consoles that my shopping and card use profile has changed. Instead of my normal profile of marching through malls looking for dangerous toys, which is about the only time I visit one, perhaps I have a new updated profile in Citibank's South Dakota citadel. I guess Citibank's supercomputers have run an analysis predicting that I'm gearing up for a mall shopping binge tomorrow on Black Friday.

More likely, it means Citigroup is in worse trouble than even the front pages tell us. Despite the extremely favorable terms of the new Citigroup bailout, maybe it just isn't enough and they need me to kick in, too. (The Economist's View blog skewers the terms of the Citi bailout granted by Treasury Secretary Hank Paulson and the Fed.)

And if you are wondering when I would work in turkey and football, I thought we'd close with baseball. Last year Citi bought the naming rights for the new Shea Stadium (also built on the backs of taxpayers). Now that Citi has its own special taxpayer bailout, two New York City Councilmembers have proposed to re-name the new home of the Mets from Citi Field to Citi/Taxpayer Field:

Mr. Oddo quipped: “Not naming the field after Jackie Robinson in the first place: mindless. Tom Seaver stepping onto the new mound for the first time: timeless. Actually acknowledging the contributions of the hardworking taxpayer: priceless.”

Anny Shin reports in today's Washington Post that the CPSC says that Some Toys With Banned Plastics Will Stay on Market. We don't think so. The story is based on a letter opinion to industry lawyers from Consumer Product Safety Commission general counsel Cheryl Falvey who says essentially that because consumer product safety standards have previously been interpreted to apply only to products manufactured after a ban date, that it's ok to keep selling inventory stocks of toys laden with toxic phthalates after the February 2009 ban on toxic phthalate chemicals kicks in. Funny thing is that Falvey's letter ignores and does not even discuss the bold-face underlined words in Section 108 of the new statute that says:

Beginning on the date that is 180 days after the date of enactment of this Act, it shall be unlawful for any person to manufacture for sale, offer for sale, distribute in commerce, or import into the United States any children's toy or child care article that contains concentrations of more than 0.1 percent of di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP), or benzyl butyl phthalate (BBP).

In an exclusive, the Chicago Tribune's Patricia Callahan, one of the nation's leading CPSC watchdog reporters, finds that Feds, Graco withheld bassinet warning:

The U.S. Consumer Product Safety Commission botched the recall of the Simplicity bassinets, telling some American families that they should not put their babies to sleep in the bassinets while allowing others to continue placing their infants in a potentially deadly product.

Federal safety regulators and Graco Children's Products knew two weeks ago that bassinets sold under the Graco name had the same dangerous design that caused two babies' deaths but did not alert the public as part of a larger recall, the Tribune has found.

"Oh, my God," said Cara Smith, Illinois Atty. Gen. Lisa Madigan's deputy chief of staff, who has been investigating the bassinets. "What possible reason would you not get that information out? Utter disregard for the safety of babies. They sat on that information while people continued to use these bassinets believing they were safe."

The New York Times has the latest story explaining the decline of customer service. Far From Always Being Right, the Customer Is on Hold by Alina Tugend explains that some companies may have finally recognized that using voice mail trees as a substitute for customer service is a bad idea. I would agree. Why send customers seeking service into impenetrable, rat maze-emulating voice-mail-jails? It's especially dehumanizing because in the rat version of the game, the rat at least gets one way out, with a reward at the end. What does the consumer learn when there is no reward? To hate the company more. The story notes: "But things have started changing, for a number of reasons. For one, companies discovered that customer turnover was expensive." Duh.

Last week we joined the National Consumer Law Center, the Consumer Federation of America and others in detailed comments (primarily prepared by Chi Chi Wu of NCLC) to the IRS concerning how the sharing of taxpayer information by tax preparers leads to increased marketing of predatory refund anticipation loans, privacy invasions, identity theft and tax fraud (some fraud is perpetrated by household name preparers, other fraud by "fringe" preparers). Fun fact from our comments: the IRS allows liquor stores, used car dealers, lube joints and beauty parlors to link to its website as approved e-file tax preparers.

This week, the U.S. Senate Finance Committee heard testimony on tax-related identity theft from IRS officials and the IRS taxpayer advocate, Nina Olson, who headlined part of her testimony with this salient comment:

Taxpayers Are Essentially Victimized Twice -- Once by the Identity Thief and a Second Time by IRS Procedures that Prevent Them from Claiming Tax Benefits to Which They Are Entitled

Overall, the IRS not only lacks the comprehensive data needed to determine the impact of identity theft on tax administration, it faces enormous challenges in securing the vast amount of personally identifiable taxpayer information that it stores.

On August 29, U.S. PIRG Consumer Blog sharply criticized (see last few paragraphs) Mattel for blaming China for its problems. Well, today, Mattel finally apologized to the Chinese people (AP story) and took the blame for its own failure to trust, but verify. We don't care whether your suppliers are in Kansas or China, your company is responsible if you enter dangerous products into commerce in the U.S. From AP:

The extraordinary gesture by Thomas Debrowski, the Mattel executive vice president for worldwide operations, came in a meeting with the Chinese product safety chief, Li Changjiang, at which Li upbraided the company for maintaining weak safety controls. Mattel has recalled about 21 million toys in a span of five weeks, many because of excessive levels of lead paint.

Meanwhile, over at the latest New York Times piece, by Louise Story, After Stumbling, Mattel Cracks Down In China, yet another Mattel executive, executive vice president for worldwide operations, Thomas Debrowski, blames someone else:

"I think it's the fault of the vendor who didn't follow the procedures that we've been living with for a long time," Mr. Debrowski said.

"It was our fault at Mattel because we trusted, but we did not verify. Squeezing safety to meet low-cost price points, we failed to require independent third-party testing to assure that U.S. quality and safety standards were being met by our suppliers before we put the Mattel/Fisher-Price brands on the toys from China we entered into commerce in America to sell for small children to play with. So, we take full responsibility."

Looks like NJ governor Jon Corzine doesn't have consensus on his plan to privatize the NJ Turnpike. New Jersey PIRG's Abigail Caplovitz Field gets the last word in New Jersey Decides Its Toll Road Plan Still Needs Time in today's New York Times:

"Just saying that it's a public company doesn't mean it's in the public interest," Ms. Field said. "Are the contracts still going to be public? How do we know the state is going to get the best price? Will the state end up having to spend tax dollars to service the debt? There's so many facets of the deal that have to be scrutinized."

On Wednesday, the U.S. Supreme Court reversed lower courts that had stupidly given the Phillip Morris tobacco company essentially the same powers as a federal officer to "remove" cases brought against them in state courts to federal courts, under the legal theory that because PM was somewhat regulated, it must be "acting under" a federal officer. We had joined a merits amicus brief to the court prepared by Public Citizen and AARP. Over at the Consumer Law and Policy blog, Scott Nelson explains the issues. One interesting point in Scott's blog: He points out that at the petition stage, U.S. Solicitor General Paul Clement told the Court that the decision below was "dead wrong," but in his brief urged the Court to decline the case as a narrow "fact-bound" ruling. We recently noted that SG Clement had rejected an SEC request to file a brief on its behalf in support of defrauded small investors.

So why put all the Social Security Numbers of 64,000 Ohio state employees on one apparently-barely-encrypted backup data disk? (AP-Ohio data loss is worse than said) And why add the names and Socials of 53,000 citizens receiving drug benefits? And then, why entrust this identity theft treasure trove to an intern who left it in a car to be stolen? Big companies, and big agencies, need to take data protection a little more seriously. Citizens, consumers and employees deserve better.

After my entry the other day about the credit union that charged a $2 fee for pulling up to the drive-through without your arm hanging out the window ready to lob your pre-prepared envelope through the slot, people asked me: "Ed, was that your own credit union?" The answer is "nope." I heard this from Amy Reinink of the Gainseville (FL) Sun, and now that she has written her story, Bank fees growing more numerous and expensive, I can let Amy tell you the name of the CU and a little bit more:

First, Sun State Credit Union charged Gainesville resident Karen Soesbe $2 for coming in more than four times a month. Next came the charge for not having her transaction slip ready at the drive-through window. When Soesbe was charged for not using the credit union's telephone banking system, she decided to fight back, sending an angry letter to the credit union's president and filing a formal complaint with the National Credit Union Association.

Banks, and some credit unions, have long had a love affair with unfair fees. Over the years, I've learned of fees for just about everything but breathing the air in the branch. But until today, I had never heard of a $2 fee for pulling up to the drive-through without being ready for the transaction. And, this was a credit union fee. Sure, I suppose you're making people wait, but is that the way to run a credit union?

Just a day before a scheduled Senate confirmation hearing, longtime industry lobbyist Michael Baroody withdrew his nomination to chair the Consumer Product Safety Commission (CPSC). Along with numerous allies, we'd opposed the nomination of this unqualified applicant who'd spent his career as a general in the war on consumer and worker protections. According to news stories (Washington Post and New York Times), Baroody may not have wanted to discuss a questionable $150,000 severance bonus from his employer, the National Association of Manufacturers. Now, we urge the President to look for an applicant who meets the statutory requirement: being a consumer safety expert. Three strikes and you're out, Mr. President. In 2001, the Senate Commerce Committee voted down the nomination of Mary Sheila Gall. The subsequently approved chairman, who resigned in 2006 to become a lawyer-lobbyist, Hal Stratton, had a lackluster tenure. Consumers, especially the very young and the very old who cannot protect themselves, deserve better.

When I first came to Washington 17 years ago, and would read the printed Congressional Record, its regular listings of military officers receiving promotions, such as to general officer rank, included names and Social Security Numbers. While SSNs are still the military ID, at least their unwise disclosure in the CR (but not on family ID cards) stopped years ago. Now, in today's New York Times, Ron Nixon reports in U.S. Database Exposed Social Security Numbers that two different agencies, the Agricultural Department and its aider and abettor, the Census Bureau, have been posting SSNS on the Internet. An "unaware:"

Agriculture Department for years publicly listed Social Security numbers of tens of thousands of people who received financial aid from two of its agencies, raising concerns about identity theft and other privacy violations. [...]The problem was reported to the government last week by a farmer in Illinois who stumbled across the data on the Internet.

Teuber said the USDA had been using Social Security numbers as part of a 15-digit federal contract identifier number. The practice dates back more than 25 years, she said, to when Social Security numbers were printed on checks. She said the USDA's information-security division was not aware of this continuing practice until last week.
The loans database was part of a larger public Web site run by the Census Bureau, which collects all federal loan and grant data. The site has been up since 1996.

I've just seen an excellent Bloomberg story Fed, OCC Publicly Chastised Few Lenders During Boom by Craig Torres and Alison Vekshin. I'll admit that I haven't read every story on the issue, but I am trying at least to keep up with the news from Europe this week. But this is the first story on the problem I have seen that attempts to be more than a simple horse-race report. Torres and Vekshin analyze the U.S. sub-prime housing credit collapse now rippling through the broader markets as a regulatory failure by the powerful and arrogant U.S. regulators-- the Federal Reserve Board and the OCC.

The Fed, which is responsible for the stability of the banking system, didn't publicly rebuke any firm for failing to follow up warnings on home-lending practices between 2004 and 2006. The OCC, which supervises 1,793 national banks, took only three public mortgage-related consumer-protection enforcement actions over the same period.

The story goes on to quote Richmond regional Fed bank president Jeff Lacker:

"There is going to be a fraction of people that get the wrong product and that is regrettable," Richmond Fed President Jeffrey Lacker said in an interview. "Should we do something to limit that probability? Well, we could, but it would also limit credit to people for whom that is the right product."

Informing his audience that he would "not be speaking from the perspective you might expect from a banking agency official," Lacker proceeded down a well-worn laissez-faire path. He praised the overall expansion of retail credit, particularly the growth of credit-card lending and the emergence of zero-down-payment mortgages. Then he characterized attempts to moderate speculative bubbles and reform abusive loan practices as a cyclical outbreak of "consumer credit backlash" driven by tear-jerking anecdotes, grandstanding politicians and the irrational "belief that growing debt is a sign of decaying values and thrift."

"There is no question that mortgage brokers are on the street committing systematic fraud on the American homeowner," said Irv Ackelsberg, a Philadelphia attorney who testified at a Fed hearing last year in the city. He said there is a "lack of will" on the part of the Fed to use its power to stop abuses.

Critics say the regulators' private responses harm consumers by depriving them of information they might need to take action on their own behalf. "Borrowers hurt by an abusive practice have the right to a remedy," said Alys Cohen, a staff attorney at the National Consumer Law Center in Washington.

The latest sign of the apocalypse: David Cay Johnston has a story today in the New York Times, I.R.S. Letting Tax Lawyers Write Rules:

The Internal Revenue Service is asking tax lawyers and accountants who create tax shelters and exploit loopholes to take the lead in writing some of its new tax rules. The pilot project represents a further expansion of the increasingly common federal government practice of asking outsiders to do more of its work, prompting academics and other critics to complain that the government is going too far.

A number of esteemed commenters, including former Bush regulations czar John Graham (and we don't often agree with him), raise concerns in the story about the idea. Our colleague Gary Bass of OMBWatch gets the last word: "Why don't we just privatize Congress and outsource the development of our laws?" he asked.

On the eve of today's FCC hearing in Harrisburg, PA, John Eggerton of Broadcasting and Cable reports that National Association of Broadcasters (NAB) President David Rehr sent a letter to FCC chairman Kevin Martin whining that, at the recent Nashville field hearing, citizens from other media markets were there to demand a more robust, fair and local media. MORE:

As a NAB flack told Broadcasting and Cable:

"I was at the Nashville media ownership hearing and there were people from St. Louis and Cincinnati complaining about local media," said NAB spokesman Dennis Wharton. "That suggests to us that there is something curious about these so-called localism hearings."

"There are 210 television markets in the United States — and the FCC has promised to hold public hearings in just six of them," said Craig Aaron, communications director of Free Press. "Yet the broadcasters' lobby is shocked and dismayed that some people might care enough about their local media to take a day off work, get up at dawn, and drive four or five hours for two minutes at the mic during a public hearing. And -- here's the real shocker --they're not even being paid to be there."

In a story today Credit Union Dispute Is Far From Over, Kathleen Day of the Washington Post continues her coverage of the proposed but now-canceled (over member vote count irregularities) conversion of the local Lafayette Federal Credit Union in Kensington, MD to a for-profit bank. Similar conversions have resulted in massive windfalls to officers and managers (my previous blog). Members had disputed a very close vote in favor of the conversion, then, the firm that had run the election decertified its results. According to Day, the dispute is growing online, it's moving to the courts, and it continues among the members. In the courts, Day reports:

Lafayette has sued the credit union's former president and chief executive, William A. Brooks, and his son, William A. Brooks Jr., a former credit union employee. Lafayette is seeking $3 million in damages for the Brookses' role in opposing the plan, claiming the two violated a settlement agreement by publicly criticizing Rosenthal and other executives.

Update: here's a NY Times followup about more flight cancellations today at Jet Blue: JetBlue Cancels More Flights in Storm's Wake.

The New York Times story today Long Delays Hurt Image of JetBlue on the nightmare faced by Jet Blue passengers in nine separate planes left stranded for six hours each on runways at JFK Airport in an ice storm this week says that the incident may spur passengers' bill of rights proposals in the Congress. As a student of corporate spin-speak, I find some of Jet Blue CEO David Neeleman's comments absurd:

Is our good will gone? No, it isn't. We fly 30 million people a year. Ten thousand were affected by this.

Nina Olson, the taxpayer advocate at the IRS, released her encyclopedic annual report (release, executive summary, full report) to Congress yesterday. It focuses on solutions to major problems taxpayers face and continues her past, deserved harsh critique of the performance of the agency's dumber-than-dirt recent program to hire private debt collectors (my previous blog) and urges the program's repeal. From Olson's report:

The IRS's solution to early intervention is to relegate many of these taxpayers to the Private Debt Collection Initiative, whereby the government (aka taxpayers) has the "privilege" of paying up to 25 percent of any taxes collected to private collection agencies, even while estimates show that IRS employees could perform the work far more efficiently, with a return on investment of approximately 13:1. We ask, in this report, what business case exists for such an arrangement, and conclude that there is none. As a result, we recommend that Congress repeal Internal Revenue Code section 6306 and terminate the Private Debt Collection initiative once and for all.

UPDATE: 30 Jan 2007. I should have been clearer that while NJPIRG has serious concerns, its position is not in full opposition to what is a not-yet-fully-described plan to privatize NJ toll roads.

Here's a note from Abigail Caplovitz Field, NJPIRG legislative advocate: To clarify, NJPIRG's position is one of open-minded but serious concern. We will listen to the details of a deal before judging it. That said, there are many reasons to be concerned. We recognize that addressing these concerns would make the road less valuable to potential investors. Nonetheless, the furtherance of the public interest, not the size of the payout, must be the focus of any decision about a possible privatization deal. Our chief concerns are the following:

1. The length of deals in other states--50, 75, and 99 years--is too long to cede public control over key pieces of infrastructure; the unforeseeable can occur that changes everything. After all, the interstate highway system was created 50 years ago; the Model T was introduced 99 years ago.

2. The size of the scheduled toll hikes: Indiana and Chicago allow punitive increases that may become unaffordable to many drivers.

3. Loss of public control over the state's transportation decision making -- particularly given the long time-frames involved.

4. Use of proceeds: To the extent that the proceeds were used for anything other than paying off other long-term debt and restructuring the state's transportation fund, a sell-off would seriously worsen the state's existing revenue shortfalls by eliminating public use of toll revenues for generations to come.

ORIGINAL POST: New Jersey PIRG has organized a coalition (news release and other links and news story) to oppose raise concerns over the potential privatization of the New Jersey Turnpike as a one-time revenue gimmick that will end up costing taxpayers more in the long run. "New Jersey's highways should be managed for the public's interest, not private profit," explained Abigail Field, Legislative Advocate for NJPIRG. "Decisions about where and when to build or expand our roads, and what tolls to charge, should all be made based on New Jersey's needs, not a company's profit margin." Excerpt from NJPIRG fact sheet:

New Jersey's Infrastructure Decisions Should Be Based on Public Needs, Not Protection of Investor Profits To ensure high numbers of toll payers for investors, privatization contracts typically include "non-compete" clauses that restrict the state from building or improving nearby roads that would be attractive alternatives to paying the high tolls. California was forced to buy a private road when it insisted on improving "competing" roads. In Colorado, non-compete clauses required communities to lower speed limits and add traffic lights on competing roads. When the details were disclosed, Coloradans passed a law to forbid similar non-compete clauses in the future.

Similarly, a private manager of the Turnpike would have a strong incentive to reduce any costs. A private company would have no reason to spend on new environmental or safety improvements, such as for future road-sensor technology or less toxic ice melt. A private company also has no obligation to act on communities' concerns regarding changing off ramps or limiting noise.

In addition to shutting research libraries (previous blog), the U.S. EPA has aggressively sought to weaken hazardous waste reporting rules known as the Toxics Release Inventory (TRI) (previous blog) despite overwhelming support from the American people, health experts and state pollution agencies. U.S. PIRG staff attorney Alex Fidis has joined OMB Watch in its release of a new report (pdf) analyzing the comments to the agency on the proposal. Excerpt from the release:

According to OMB Watch’' analysis, EPA received comments from 122,420 individuals and groups. The vast majority of those commenting, 122,386 (99.97%), strongly opposed the changes, while only 34 commenters (0.03%) expressed some degree of support for the proposals. This support came almost entirely from companies and industry associations, with a few government agencies and individuals voicing partial support.

"The weakening of TRI reporting requirements provides yet another example of EPA's attempts to curtail public access to environmental information," said U.S. PIRG Staff Attorney Alex Fidis. "In this case, EPA wants to help hide toxic pollution rather than being upfront with the American public. The overwhelming repudiation of EPA's proposal is an unmistakable sign that no one is fooled by what the agency is trying to do here."

Comments opposing the changes cited concerns about threats to public health and the environment from increased, unmonitored pollution; the reduced ability of government agencies to make sound decisions on toxic pollution; and the lack of burden reduction that will result from the changes. For example, the Oklahoma Department of Environmental Quality argued that if the changes go into effect, the department "would no longer be able to track potential hot spots without the amount and location of [toxins] released in Oklahoma."

In defiance of requests from incoming Congressional committee chairs, Bush administration factotums at the EPA have begun shuttering regional libraries that have been important to citizens, first responders, plant workers and EPA's own scientists seeking information about hazardous chemicals and other environmental problems in their communities and workplaces. Today's New York Times op-ed column Keep the E.P.A. Libraries Open by Leslie Burger, president of the American Library Association, explains the important right-to-know and access to knowledge issues:

Anyone who needs to understand the environmental impact of, say, living downwind or downstream from a new nuclear power plant, or the long-term public health impact of Hurricane Katrina, cannot afford to find the doors barred to potentially lifesaving information. But neither can the rest of us, whose daily lives and choices will be affected by global warming. We all have a right to be able to get access to information about our air, water and soil.

After years of pressure (previous blog) from the Consumer Federation of America (CFA), National Consumer Law Center (NCLC), U.S. PIRG, Community Reinvestment Association of NC, Senators Chuck Grassley (R-IA) and Max Baucus (D-MT), and even its own taxpayer advocate, the IRS has finally realized that its corporate welfare program known euphemistically as "Free File" was nothing more than a conduit allowing predatory lenders to use the imprimatur of the federal government to deceive lower-income taxpayers into paying them millions of dollars in unnecessary triple-digit APR Refund Anticipation Loans (RALs), even as they paid their taxes online for "free." This week IRS announced that the tax preparers could no longer trick Free File taxpayers into buying RALs. (In Washington, stopping dumb, unfair programs is actually progress.) Now, the IRS needs to take the next step: giving every taxpayer the right to pay taxes online for free. The tax preparers will still be the government's contractor for online filing, and only some taxpayers can file for "free."

What can only happen in Washington, of course, is that the person responsible for the dumber-than-dirt program, IRS chief Mark Everson, and the person speaking for the groups feeding at the taxpayer trough, Tim Hugo, claimed they made the change voluntarily. According to USA Today:

Commissioner Mark Everson said the change was made voluntarily after we heard many legitimate concerns about the marketing of ancillary products during the last filing season. The head of the Free File Alliance, Tim Hugo, said that with the voluntary elimination of the offers, "the Free File Alliance takes another giant leap forward on behalf of the taxpaying public.

In November, Everson had given a major speech (previous blog) to the rapacious tax preparation industry warning he was under intense pressure and was going to have to turn off the profit spigot soon. Voluntary? Giant leap forward? This week's IRS release explained how the program worked:

Preparation and e-filing of federal tax returns have been free since the inception of Free File. However, manufacturers have offered refund anticipation loans and other products for which they charge a fee. RALs use a taxpayer's refund as collateral for a same-day, interest-charging loan. Taxpayers must enter Free File through the IRS Web site.

This short USA Today story from Tuesday links to an older (September) story with rich detail. Here's a recent RAL warning from CFA and NCLC. Here's a blog from Martin Bosworth at ConsumerAffairs that summarizes a lot of the issues.

And as for anyone who thinks there's no money in offering services to these modest-income taxpayers, think again. One of the nation's most important tax programs is the Earned Income Tax Credit (EITC), which most of these taxpayers were eligible for. The tax preparers didn't just want a cut of the modest taxes that the taxpayers might owe; they wanted a cut from all of us -- they wanted to skim off the top of the EITC transfer that all taxpayers shift to lower-income taxpayers. That's where the really big money was for preparers such as HR Block, Jackson Hewitt and their ilk. That's corporate welfare at its worst.

Let's hope Sens. Grassley and Baucus keep the pressure on the IRS to allow all Americans to completely eliminate the relationship between IRS and these tax preparer companies. All citizens should be able to directly pay their taxes online for free. The IRS shouldn't be propping up businesses that can't make it unless they're fed at the taxpayer trough.

Looks as if pressure from U.S. PIRG (our campaign materials), other public health groups and environmental champions in the Congress has forced EPA to re-think a "dumber-than-dirt" plan to roll back the reporting of toxic chemical hazards, as Juliet Eilperin reports in today's Washington Post story EPA Backtracks on Easing Toxin Rule.

[Update 7 Dec- corrected bad internal URL] IRS Commissioner Mark Everson gave a big speech (report from Government Executive Magazine) Friday to tax industry companies, where he warned them that that their long corporate welfare ride on the backs of taxpayers may be over. He said Congress is ready to allow taxpayers to file taxes online directly with the IRS for free. What, we can't now? No, we can't. MORE:

The tax preparers have been beneficiaries of something called the Free File on-line program, which is only free for certain low-income taxpayers, not everyone, and, even then, allows the companies to load up a shopping cart for themselves full of extra fees, including massive predatory Refund Anticipation Loan (RAL) fees and triple-digit interest, so long as there is no fee for actually clicking the button that sends the file off to the IRS.

Everson referred to a harsh letter from Senators Grassley (R-IA) and Baucus (D-MT) he received last week. Excerpt from Sen. Grassley's press release:

"It seems the tax preparation industry was holding all the cards in the renegotiation of this program," Grassley said. "The industry appears to be using the Free File program as an opportunity to bolster its revenue through the sale of ancillary products at taxpayer expense. I'm all for private enterprise, but not when it co-opts taxpayer service. The IRS is losing the game and doesn't even seem to realize it. The IRS' first priority is supposed to be the taxpayer. It shouldn't be taking away from taxpayer service to subsidize the tax preparation industry."

According to some press reports, Everson apparently tried to blame the demise of the program on the companies' greed and complaints about their sloppy tax preparation, forgetting that it was a dumber than dirt idea from the get-go to try and force most taxpayers to pay a private company if they want to file their taxes online. Our previous blog on Free File.

The ID Theft Task Force's most important recommendation is one that consumer and privacy groups have been calling for for years -- better protect the Social Security Number:

The Office of Personnel Management (OPM) should accelerate its review of the use of SSNs, and take steps to eliminate, restrict or conceal their use, including assignment of employee identification numbers where practicable....OMB should require all federal agencies to review their use of SSNs to determine where such use can be eliminated, restricted or concealed in agency business processes, systems and paper and electronic forms.

The red flag guidelines are supposed to require financial instiutions and credit bureaus to implement policies and programs that would spot "patterns, practices, and specific forms of activity that should raise a "red flag" signaling a possible risk of identity theft." The rules also require specific additional steps to take when address changes are made "followed closely by a request for an additional or replacement card." The problem, as we point out in our comments (drafted primarily by the Privacy Rights Clearinghouse), is this:

overall, the proposal incorporates far too much discretion that allows financial institutions and creditors to reject even the most obvious signs of identity theft. An effective Program should not allow companies to choose not only which red flags to incorporate but also which accounts are subject to the red flags. To do so creates the prospect that companies will adopt perfunctory Programs that amount to no more than the status quo. For the final rules and guidelines, the Agencies should act to eliminate the many layers of discretion incorporated into the proposal.

Indeed, it is the identity thief's ability to provide enough information to the credit card issuer for the issuer to access the victim's credit report ... that facilitates this form of theft. Allowing creditors to verify identity by obtaining the victim's credit report ... would be to permit a practice that enables identity theft and that fails to ensure that a credit card applicant is really who the person claims to be.

Indeed, the identity verification standard should, if anything, be higher for credit card issuers. In general, at least a minimum threshold of identity verification, tailored to types of financial institutions and the specific nature of identity threat, should be included in the Red Flag guidelines. Such verification should include requiring the use of documentary identification for individuals and contacting the consumer when there are address discrepancies.

A fraud alert or active duty alert is the number one red flag for both the banking and the FTC list. The proposal not only allows discretion about whether to include a fraud alert as a red flag, but incorporates leeway in deciding what actions to be taken -- assuming a fraud alert is even included as a red flag. A fraud alert should always trigger a notice requirement.

Internet guru Jeff Chester has a chilling new online piece in The Nation called Replaced By A Chimp: Life After Net Neutrality. Coming to the Internet after the 2007 Super Bowl is Budweiser's Bud.TV. We are not making this "network" up. Replaced by a Chimp is one of its "shows" in development. Chester argues that without net neutrality, expect this sort of lame programming to do well on the web: MORE:

The broadband content most likely to benefit from the new "pay us the most to get the best service" Internet will be online programming from our biggest advertisers and media conglomerates. Take, for example, the recent announcement about the new online entertainment channel network called Bud.TV, in which Anheuser-Busch plans to use high-speed and interactive video to attract a new generation of steady beer drinkers. One Bud.TV show already in production--which will likely be able to enjoy the fruits of non-network-neutrality US Internet--is called "Replaced by a Chimp." According to an Anheuser-Busch executive, for each show they will "grab a profession, such as a waiter, or a bartender or a trial attorney and replace those people with a chimp, and film the reaction of the consumers who happen to be in the same environment as the chimp...at the end of the show, the consumer will vote on whether the chimp should stay and continue on the job."

On Tuesday I appeared on CNN Headline News to discuss which choice made more sense:
(1) Should the IRS use its professional in-house staff to collect $87 billion in unpaid taxes from middle-class taxpayers at a cost of 3 cents on the dollar...
OR
(2) Should the IRS use private debt collectors to collect only a little over $1 billion in unpaid taxes at a cost of 24 cents on the dollar while subjecting taxpayers to the risks of identity theft and potentially to the generally abusive actions common to third-party debt collectors?

If you guessed that the Bush Administration's IRS, backed by Congress, would be dumber than dirt and select (2) as making more sense, you guessed correctly. I can only agree with Washington Post syndicated financial columnist Michelle Singletary who writes on the problem today: "Isn't outsourcing supposed to save money?" MORE:

If you're a delinquent taxpayer who gets a call from a debt collector purporting to be from the IRS, my advice is this: at a minimum, call the IRS to make sure you're not dealing with a scammer purporting to be IRS-approved and (2) even if it is an approved collector, consider exercising your right to have the IRS itself collect your delinquent debts. I don't know about these particular debt collectors, which have supposedly been carefully vetted, but third-party debt collectors in general are a business class that routinely tops FTC complaint categories.

Dumber than dirt ideas at the IRS aren't just a casual Friday thing; they're a way of life. Again, both the administration and the Congress have encouraged some of these plans:

In honor of the IRS private debt collector plan, we've established a new blog category: dumber than dirt.