Reopening the economy prematurely has dire consequences for states

By NCL Health Policy intern Talia Zitner

The past month has seen a serious surge in reported coronavirus cases in the United States. It seems the virus is going to be with us for a while. Of states where COVID is spiking, the majority are in the South, many of which had ambitious reopening plans that are now being reconsidered.

Three of these states—Texas, Florida, and Arizona—have current surges. All three pushed to reopen their economies early in an attempt to “return to normal.” The current deluge in cases that resulted was due to a lack of continuing stay-at-home order and a failure to require masks.

Texas officially started Phase 1 of its reopening plan on May 1, but—as of June 26—had to retract much of the opening that it had started. In total, Texas was only able to reopen the state for 55 days. As of July 27, Texas has seen an average of 8,089 new cases of the coronavirus over a seven-day period. Compared to cases in April, when there were 814, this is astounding. Texas Governor Greg Abbott (R) has since ordered everyone to start wearing face masks and has limited the size of public gatherings.

It does not appear that Texas will shut down again, however. As the governor said, “we need to refocus on slowing the spread, but this time we want to do it without closing down Texas again.” Although it is an issue of public health, the issuance of a statewide masking policy and the staggered re-opening of the economy has become a matter of contention across party lines. Some residents find the Governor’s actions to be inadequate, and others feel as if the newly implemented precautions impede their personal liberties.

Florida and Arizona are not faring much better. As of April, Florida had 1,027 cases reported. In July, it was 6,563. Florida started its reopening plan on May 4 and entered into Phase 2 on June 5. Clearly, cases have surged.

Earlier this week, Florida reported 8,892 new COVID-19 cases. Like Texas, there seems to be a mixed reaction among Florida representatives to slow the spread of the virus. Senator Rick Scott (R) has been vocal about his intentions for Florida, and it appears the state will not roll back any of its reopening course. As Senator Scott put it a couple of months ago, “wearing a mask is a choice you get to make.”

Like Texas and Florida, Arizona is hurting badly, with only 115 in April surging to 4,753 cases in July. Arizona’s stay-at-home order lasted until May 15, and was replaced by the new Stay Healthy, Return Smarter, Return Stronger Executive Order, on May 16. When Arizona first reopened, Governor Doug Ducey did not require residents to wear face masks, but as the case numbers increased, he allowed local governments to set their own masking policies. As of July 1, officials said that Arizona saw the highest rate of new cases in the entire country.

Many public officials are starting to realize opening too soon was foolhardy and has spread the virus. New revelations by scientists show the virus can actually be airborne, urging those to take indoor transmission more seriously. The virus is also proving to be more of a blood vessel disease than solely a respiratory one, which may lead to long-term impacts that doctors are still learning about.

There’s one takeaway here: following the example of states like Texas, Florida, and Arizona is not recommended. The more seriously states take this crisis the better, and the sooner the entire country will be able to move towards a newer, safer “normal”.

Talia is a Washington, DC native and a rising sophomore at Wesleyan University, where she is studying English. Beyond health policy, Talia’s interests are in journalism, law, and social justice.

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Scammers coming out of woodwork to prey on vulnerable

Today’s economic news is grim. Nearly 40 million Americans have found themselves without employment due to the COVID-19 pandemic. For the newly jobless, state unemployment insurance benefits are a lifeline that helps them keep the lights on and provide food for their families. Unfortunately, the combination of billions of dollars in federal stimulus money flowing to state unemployment funds and the tens of millions of new claimants has created a once-in-a- lifetime opportunity for identity thieves: unemployment benefits scams.

According to the Secret Service and media reports, organized rings of criminals are working to siphon off unemployment insurance payments, potentially worth hundreds of millions of dollars, intended for workers who have been laid off due to the COVID-19 pandemic. In the state of Washington, for example, scammers reportedly made off with nearly $1.6 million in a single month. This scam is reportedly even affecting consumers who have not yet lost their jobs.

The recent spike in this type of scam is unfortunately not unique. When news captures the public’s attention—think major hurricanes, terrorist attacks, and economic slowdowns—scammers come out of the woodwork to take advantage of legitimate fears and concerns. In today’s coronavirus environment, there is an unprecedented opportunity for criminals to use the public’s fears about the virus and the resulting economic downturn to defraud consumers.

Since the pandemic began, NCL’s Fraud.org project has seen an uptick in complaints about a variety of scams preying on increasingly vulnerable, financially strapped, and fearful consumers.

“Scammers running phishing schemes, stimulus check fraud, and even pet adoption scams have all been working overtime to use the COVID-19 pandemic as a way to defraud consumers,” said John Breyault, director of NCL’s Fraud.org campaign. “We forecast these scams will continue to increase and evolve and are eager to get the word out about how Pennsylvanians can protect themselves.”

Over the last several months, NCL has devoted monthly Fraud Alerts to giving consumers the tools to spot and avoid some of the many types of scams related to COVID-19. Alerts have featured the most pernicious types of scams that are increasing due to coronavirus, ranging from job scams to increased reports of fraudulent robocall activity.

“As the coronavirus has upended daily life, robocall operators have quickly shifted to blasting out spam phone calls offering all manner of coronavirus-related products and services,” said Breyault. It’s estimated that at least one million robocalls per day are inundating Americans’ cell phones. Fraudulent robocallers are offering air duct sanitation services, work-from-home opportunities, cut-rate health insurance, and immune-system boosting nutritional supplements. Other robocalls have reportedly offered free insulin kits to diabetics, along with free coronavirus testing kits.

“At best, consumers who respond to these calls are setting themselves up to lose money for a non-existent product or service,” said Breyault. “At worst, delaying needed emergency treatments on the belief that a fake coronavirus treatment will save your life could be deadly to you and those you come into contact with.”

In May, NCL hosted a virtual fireside chat with Pennsylvania Attorney General Josh Shapiro and a panel of consumer protection experts on the growing threat of scams linked to the COVID-19 pandemic. NCL’s Breyault and AG Shapiro discussed what they are hearing from consumers, tactics for reaching the most vulnerable populations, and the importance of collaboration for getting key messages out to consumers.

“The work [NCL] is doing to get the word out is so important,” said General Shapiro. “There will be some people who hear my voice, and some people who hear your voice. But the key is that collectively we are warning people about scams and that we’re working together to share actual information—not myths—and not propaganda by one group or the other.”

Everything’s canceled. Now what?

The COVID-19 pandemic upended the daily rhythms for hundreds of millions of consumers, seemingly overnight. Airlines cancelled more than 90 percent of their flights. Gyms and health clubs closed en masse. Tens of thousands of concerts, Broadway shows, and sporting events have been cancelled or postponed indefinitely. What do all these businesses have in common?

They all take money from consumers in advance for services (e.g., flight, concerts, yoga classes) to be provided at some point in the future. For consumers, this meant that they have hundreds or even thousands of dollars tied up for services that cannot be provided due to COVID-related lockdowns.

While many businesses have done the right thing and refunded consumers, many have not. For example, many airlines have made obtaining refunds for canceled flights difficult even though Department of Transportation regulations require prompt refunds in the event a flight is cancelled. Big ticketing companies like Ticketmaster have given ticket-holders mixed messages on whether and how they can obtain refunds. And many gyms continue to collect membership fees even though they are closed to the public.

“There is no question that businesses are struggling with unprecedented difficulties due to the COVID-19 pandemic,” said John Breyault, NCL vice president of public policy, telecommunications, and fraud. “The airlines that are unable to fly still must maintain their airplanes and pay their employees. Ticketing companies facing canceled events are often at the mercy of promoters, artists, and sports leagues. But the needs of these businesses must be weighed against the needs of consumers, tens of millions of whom are newly jobless and struggling to make ends meet.”

It is for this reason that NCL has been actively pressuring airlines and ticketing companies to promptly provide consumers with full refunds for cancelled and postponed flights and live events. NCL experts have contributed to dozens of newspaper, television, and radio interviews raising awareness about this problem and communicating the outrage they are hearing daily
from consumers.

“What consumers are being asked to do, essentially, is give airlines, ticketing giants, and other businesses long-term no-interest loans with no expectation for when the service they paid for will be provided,” said Breyault. “At a time when millions of families are wondering where the next mortgage or rent payment is going to come from, we can’t let unscrupulous businesses get away with that.”

In addition to raising alarm in the press, NCL has endorsed consumer protection legislation like the Cash Refunds for Coronavirus Cancellations Act of 2020. That bill, proposed by consumer champions like Senators Ed Markey, Richard Blumenthal, and Elizabeth Warren, would require airlines to refund the more than $10 billion on consumers’ money they are holding on to from cancelled flight reservations. NCL is also a long-time supporter of the Better Oversight of Secondary Sales and Accountability in Concert Ticketing Act of 2019 (BOSS ACT). That bill, introduced by Congressmen Bill Pascrell and Frank Pallone and Senator Blumenthal would require that any refunds provided for cancelled or postponed events include all ancillary fees paid.

With the return to a pre-COVID “normal” still far away, and new outbreaks expected in the fall, it is likely that consumers will continue to encounter difficulties receiving refunds for some time. NCL will continue to be on the front lines to make sure that consumers are not left holding the bag when big businesses cannot hold up their end of the bargain.

Price gouging a threat to consumers in new economy

In past natural and man-made disasters, whether in the aftermath of Hurricane Katrina or the 2008-09 financial crisis, opportunistic bad actors have sought to squeeze every last penny from desperate consumers. Unfortunately, the COVID-19 crisis seems to be a little different in this respect.

In the earliest days of pandemic panic, reports of overpriced goods were widespread; products were flying off of shelves, and those that remained were often dramatically marked up. NCL learned of $10 milk, $100+ dollar masks, and outrageous prices on toilet paper. Two Tennessee brothers who stockpiled 17,700 bottles of hand sanitizer with the intent to sell them at a mark-
up online earned instant national notoriety.

“Like moths to the flame, profiteers cannot resist the allure of easy money. In this time of national emergency, it should perhaps come as little surprise that those who wish to make a quick buck off the desperation of consumers are finding few obstacles in their way,” said NCL Executive Director Sally Greenberg.

This spring, price gouging proved to be an immediate threat to consumers across the nation, as unscrupulous sellers increased pricing online and in-person of essentials ranging from personal protective equipment, hand sanitizer, disinfectant products, and even toilet paper and paper towels.

According to the National Law Review, “in normal times, there would be nothing problematic about a seller’s unilateral decision to increase its prices in response to higher consumer demand. However, with emergency declarations in most—if not all—states, such price increases may lead to hefty civil fines and even imprisonment under state laws prohibiting price gouging.”

Indeed, price gouging in times of crisis is illegal in most states. For example, Maryland’s anti-gouging statute prohibits raising the price of many consumer goods and services that increase the seller’s profit by more than 10 percent while the COVID-19 emergency, declared by Governor Larry Hogan, is in effect. California has a similar statute, punishable by up to a year in jail and a $10,000 fine.

“While state laws are important, enforcement alone won’t solve this problem,” said Greenberg. “Reputable businesses must also play their part to keep price gouging off their shelves. We are encouraged when we see sellers committing to stomping out price gouging, such as Amazon’s announcement in April of a ‘zero tolerance’ policy against it.”

In practice, Amazon’s policy means the company is working to remove price gougers from its marketplace, forwarding reports of price gouging to law enforcement, and making it clear to their sellers that price gouging is not allowed. Amazon has removed more than half a million products and suspended thousands of seller accounts in the United States since its commitment to stopping price gougers in its ecommerce platform.

Others are fighting against gouging in different ways. In May, in response to more than 500 complaints from residents about price gouging on essential goods, the Los Angeles County Department of Consumer and Business Affairs announced the launch of a mobile app to make it easier to report cases of price gouging and phony COVID-19 remedies.

“The overwhelming majority of sellers on sites like Amazon, eBay, and other online marketplaces are honest,” said Greenberg. “But these e-commerce marketplaces are where millions of consumers are going to find much-needed products. Particularly for consumers who are at high risk, these online services can be a lifeline, enabling them to stay home, avoid going out into public, and decreasing their chances of contracting the virus. We call on retailers to do the right thing during this terrible pandemic.”

Advocating for emergency air transport coverage

This spring, NCL sent a letter to the CEOs of Cigna, Aetna, and UnitedHealth Group, urging them to enter into productive negotiations with air medical service providers to ensure coverage of emergency air medical transportation. The ask came as the COVID-19 pandemic spread across the country, making air medical services even more essential, particularly in rural America.

“We are increasingly concerned about emergency air medical access during this crisis, and believe this life-saving care should be covered by every insurance plan,” said NCL Associate Director of Health Policy Nissa Shaffi.

“We are asking that insurers review the robustness of their coverage policies and immediately enter into network negotiations with air medical providers so that this critical service is covered, and patients are never left with a bill they cannot pay.”

Sorting through bogus health claims

Across the United States, people are rising to the historic health needs and challenges posed by coronavirus, with healthcare workers on the frontlines risking their lives, and businesses pivoting to manufacture much-needed medical and protective supplies.

But deep concerns about the health implications—what happens to people who contract the disease from a health and financial perspective—are top of mind for many of us. And a cynical minority has seized on the crisis to employ unscrupulous, and frankly dangerous, marketing tactics to promote bogus products claiming to protect users against the coronavirus or provide relief for those infected—as well as peddling downright phony coronavirus testing products.

“These false claims touting unproven medical benefits are nothing more than craven attempts to take advantage of fearful consumers,” said NCL Executive Director Sally Greenberg.

“Moreover, they spread misinformation among consumers anxiously seeking ways to stay safe and healthy amidst the coronavirus crisis.”

In an op-ed in The Hill published in May, Greenberg noted that a number of CBD manufacturers and stores are falsely promoting unproven medical benefits of CBD products.

A CBD store in Portland, OR, for example, was recently ordered by the office of the state’s attorney general to take down signs claiming that its products could boost immunity against COVID-19.

“False claims such as this are particularly dangerous as consumers anxiously attempt to stay safe and healthy amidst the coronavirus crisis,” said Greenberg. “The need for science-backed treatments is significant and we must ensure products are tested and regulated for safety.”

Contrary to claims being made by CBD marketers that products containing cannabidiol can help those suffering from coronavirus, recent studies have actually found potential harmful side effects of cannabis products on infected coronavirus patients. Aurelius Data cautions the public against the potential harmful side effects that can come from consuming cannabis products with Tetrahydrocannabinol (THC) if a patient is infected with COVID-19. And studies have shown that many unregulated CBD products have been found to contain THC, though the labels may not disclose this.

“In these uncertain times, we urge consumers to continue to take precautions,” said Greenberg. “We urge everyone to follow CDC guidelines for COVID-19, practice safe social distancing, and at the same time avoid THC products and all untested, unregulated CBD products to help keep your family, friends, and communities safe.”

Price gouging and usury and fraud, oh my!

Ben Wiseman, director of the Office of Consumer Protection at the Office….

NCL hails sweeping Supreme Court decision protecting LGBTQ employees

June 19, 2020

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—With a mission of protecting workers and consumers, the National Consumers League (NCL) applauds the Supreme Court’s landmark employment protection decision this week finding that employment discrimination on the basis of sexual orientation or gender identity is prohibited under federal civil rights law. This statement is attributable to Sally Greenberg, NCL’s executive director:

We are applauding this week’s landmark 6-3 Supreme Court decision finding that the law’s prohibition on sex discrimination in employment extends to those who identify as LGBT (lesbian, gay, bisexual, transgender). We commend and thank Justice Neil Gorsuch and his five fellow justices for concluding that ‘An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.’ NCL was founded to advocate for the rights of workers to receive decent pay, work in safe conditions and be free from discrimination in the workplace. This decision further extends these critical protections to the LGBT community.

Title VII of the 1964 Civil Rights Act prohibits discrimination in the workplace on the basis of race, religion, national origin and sex. We are pleased that the court found that “sex” is a distinct characteristic but inseparable from the concepts of sexual orientation and gender identity.

The decision is the most significant affirmation of LGBT rights in the United States since the 2015 Supreme Court decision that legalized same-sex marriage and the Court’s first decision addressing transgender civil rights.

Before the decision, LGBT job discrimination was still technically legal in much of the nation. Less than half the states have laws explicitly prohibiting workplace discrimination on the basis of sexual orientation or gender identity. An estimated 11 million Americans identify as LGBT, according to the Williams Institute.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL applauds Supreme Court decision protecting DREAMERS

June 18, 2020

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—The National Consumers League (NCL) applauds the Supreme Court’s decision today to block the Trump Administration’s attempt to end the DACA (Deferred Action for Childhood Arrivals) program for so-called “DREAMERS”—young people who came to the United States as children with parents who were not documented citizens at the time. Millions of these young people grew up in the United States, but their citizenship status is precarious. Thus, under this Obama-era program established in 2012, DACA is critically important to protect these young people and give them a path to citizenship.

This statement is attributable to NCL Executive Director Sally Greenberg:

NCL applauds the 5-4 decision of the U.S. Supreme Court today blocking the Trump Administration’s efforts to undo the protections of DACA. Thousands of aspiring and promising young people who arrived in the United States as children of undocumented immigrants will not, as a result of this decision, lose critical protections DACA provides. Today we join with them in celebrating the Supreme Court’s decision to block Mr. Trump from undermining these essential protections. NCL’s long history of fighting for the rights of workers and consumers includes the rights of immigrants, who remain among the most vulnerable targets of workplace and marketplace abuses. They deserve the same protections that flow to all American citizens. NCL’s policy position on this issue was adopted in 2013.

The Development, Relief, and Education for Alien Minors Act—the proposal to grant temporary conditional residency, with the right to work, to qualifying immigrants who entered the United States as minor—and, if they later satisfy further qualifications, they would attain permanent residency.  

DACA was introduced by President Barack Obama in 2012 and allows young people who were brought to the U.S. illegally as children to stay in the country and work without being deported on a two-year, renewable term. As of March 31, 2020, 640,000 people have active DACA status, and since 2012, more than 825,000 people have utilized the program. The 5-4 Supreme Court majority, written by Chief Justice John Roberts, determined that President Trump and DHS did not adequately consider the impact on the DACA recipients themselves and the potential hardships for the some 700,000 young immigrants brought to the U.S. illegally as children by their parents. 

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.