Being Financially Fragile in America – National Consumers League

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By NCL Public Policy intern Melissa Cuddington

Nearly 36 percent of working Americans could not cover an unexpected $2,000 expense within 30 days. According to a survey done by the 2015 National Financial Capability Study (NFCS), working adults (ages 25 – 60) who answered “probably not” or “certainly could not” to the question of whether they could come up with $2,000 in 30 days. Such consumers are considered “financially fragile.”

The 2015 Survey for Household Economics and Decisionmaking (SHED) also revealed that 41 percent of respondents are considered financially fragile when faced with an emergency expense of $400. 41 percent said they would have to charge this unexpected expense to a credit card or use money from a savings account.

These statistics are not surprising considering that during the recession of 2008, nearly 50 percent of working adults were considered financially fragile.

Who is financially fragile?

  • Women (42 percent) are significantly more likely to be economically stressed than men (29 percent)
  • Financial fragility decreases steadily with increasing income, thus, paying workers more decreases their precarious finances
  • Financial fragility is about equally distributed across age groups, although fragility is slightly higher among 40- to 49-year-olds

According to a NEFE Digest article, a number of factors can cause financial fragility. A lack of assets include things such as low borrowing capacity on credit cards, inadequate health insurance, renting a house instead of owning and lack of access to traditional bank accounts. The second is debt, including medical, education and credit card debt. Some of these issues can be addressed with improved financial literacy.

The NCL is especially interested financial fragility in the U.S. for reasons that sync up perfectly with our mission: protecting workers and paying them a fair wage and ensuring consumer protections from predatory practices like payday loans and bank fees and excessively high interest on student or auto loans. We also agree with NEFE Digest that financial literacy reduces financial risk because consumers make better, more informed decisions when they have more knowledge and information. NEFE Digest notes that better financial literacy lowers one’s likelihood of being financially fragile–regardless of age or income.

Financially literate consumers bolster the overall health of the economy. This is why programs such as NCL’s LifeSmarts program, which educates youth the environment, health and safety, personal finance, technology and their rights as consumers, are so important. Financial literacy education should start young and continue throughout adulthood. Doing so reduces the risk to all consumers that they will become financially fragile.

Imposters, information theft, and internet scams: the dangers of unregulated online pharmacies – National Consumers League

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By NCL Food Policy and LifeSmarts Caleigh Bartash

With technology improving rapidly over the past few decades, online retailers have proved more convenient, reducing the market share of brick-and-mortar retailers. However, the convenience of purchasing prescription medication online or over the phone can inadvertently trap consumers in internet scams.Countless issues can arise from ordering prescription medication online. Unapproved internet dealers often evade government recognition or detection, failing to comply with drug safety regulations. Consumers can receive counterfeit, contaminated, or expired drugs. In some cases, these drugs may contain deadly opioids like fentanyl. Unauthorized medications can also have varying amounts of a medicine’s active ingredient — if they contain the correct ingredient at all.

Consumers may be attempting to access medications that they have previously been prescribed. However, they face security threats as soon as they give their personal details to an illegitimate pharmacy. These sellers have poor security protections, with leaks of sensitive customer information all too common. Illegitimate online sellers may even outright sell consumer data to scammers. Moreover, these websites can trick unsuspecting consumers into downloading viruses which further risk personal property and information.

Counterfeit drugs, unauthorized data sharing, and cyber attacks are dangerous, but now, a new threat has emerged involving counterfeit letters from the U.S. Food and Drug Administration.

Last week, the FDA released a press announcement alerting consumers to fraudulent warning letters claiming to be sent from the government. They advised that any consumer who received a warning message is likely the victim of a scam.

The July 2018 FDA press announcement is unique in that it is targeted directly to consumers. Commonly, these warning letters are used as a tool to inform the public about drug safety issues and are typically sent exclusively to manufacturers and companies creating products under their jurisdiction. FDA commissioner Dr. Scott Gottlieb summarized the FDA’s policy, stating “we generally don’t take action against individuals for purchasing a medicine online, though we regularly take action against the owners and operators of illegal websites.”

What’s next for those that received a warning letter? The FDA requests that potential victims contact them with information, including pictures and scanned documents if possible, in an effort to help them investigate the scams. Consumers can use the email address FDAInternetPharmacyTaskForce-CDER@fda.hhs.gov as the primary channel for communicating with the agency about suspicious warnings.

The best way to avoid falling victim to any scam involving illegal internet pharmacies is to abstain from suspicious websites. How do you distinguish fake internet pharmacies from safe ones? The FDA offers guidance with their BeSafeRx campaign. Asking a few simple questions at the doctor’s office or calling a certified pharmacist can help consumers protect themselves. Safe online pharmacies usually offer information including address, contact information, and state license. Consumers should be wary if the pharmacy does not require prescriptions to access pharmaceutical drugs. Other warning signs include international addresses, clear spam messages, and unreasonably low prices.

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Have more questions about fraud? NCL’s Fraud.org site has prevention tips, an outlet for consumer complaints, and an experienced fraud counselor to teach you how to avoid common scams. And for those wanting to learn more about proper medication consumption, our Script Your Future initiative has helpful advice and information so you can navigate your prescriptions with the utmost confidence.

BlackRock: Promoting shareholder activism – National Consumers League

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By NCL Public Policy intern Melissa Cuddington

Many consumers think of money management companies, such as BlackRock Inc., Vanguard Group, and State Street Corp., to be solely interested in the finance market and ways to strengthen their investment portfolios. Turns out this isn’t entirely the case. 

The recent action of Laurence Fink, CEO of BlackRock Inc., calling on shareholders to better articulate long-term plans and spell out how their organizations can contribute to society in a positive manner, is a stellar example of a company promoting shareholder activism.

According to a Wall Street Journal article from earlier this year, Fink stated that BlackRock Inc. plans to—over the next three years—double the size of the team that engages with other companies regarding their societal impact. Fink also states that this team will be investigating corporate strategies that can be used when collaborating with investors and shareholders.

Fink states in his annual letter that investors must “understand the societal impact of your business, as well as the ways that broad structural trends—from slow wage growth to rising automation to climate change—affect your potential for growth.”

This statement by Fink caught NCL’s eye as a positive and productive move on the part of the finance industry. It is crucial that money management companies understand their societal impact and ways in which their investments affect structural trends—such as climate change and unemployment. We hope to see other money management companies follow suit.

National Consumers League deeply concerned about Kavanaugh’s anti-consumer, anti-labor record – National Consumers League

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July 12, 2018

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 nation’s pioneering consumer and worker advocacy organization today expressed its deep concern about the nomination of Judge Brett Kavanaugh to fill the seat of retiring Justice Anthony Kennedy on the U.S. Supreme Court. According to the National Consumers League (NCL), this is a critical moment in American history where the rights of consumers and workers hang in the balance.

“After reviewing his extensive record, we believe that Judge Kavanaugh is an extremist who is out of step with American values and in conflict with our mission to protect consumers and workers,” said NCL Executive Director Sally Greenberg. “We are particularly concerned about Kavanaugh’s record on crucial healthcare access decisions. We can’t afford as a country to step backwards when it comes to providing care for our nation’s families.” 

On the issues: consumer concerns

Abortion access. Kavanaugh consistently votes to limit access to abortion services. Just last year he dissented from a decision to allow an undocumented pregnant teenager in federal custody access to abortion. Judge Kavanaugh wrote that the majority’s reasoning was “based on a constitutional principle as novel as it is wrong: a new right for unlawful immigrant minors in U.S. government detention to obtain immediate abortion on demand.”

Affordable Care Act. When ruling on Seven-Sky v. Holder, Kavanaugh dissented from the majority opinion on the Affordable Care Act, which upheld its constitutionality.

Contraception coverage. In 2015, Kavanaugh dissented from the Court of Appeals’ decision not to rehear a case upholding an accommodation offered by the Obama Administration on access to contraception for employees of religious organizations.

Net neutrality. Judge Kavanaugh dissented from a full DC Court of Appeals decision on net neutrality. Judge Kavanaugh rejects the idea that Internet providers should remain neutral. His dissent included the following arguments: “The government can no more tell internet service providers what content to carry than it can tell bookstores what books they can sell,” and “The net neutrality rule is unlawful because the law impermissibly infringes on internet service providers’ editorial discretion.”

Hostility towards workers

Limiting collective bargaining. In 2007, Kavanaugh gave the Defense Department a temporary win against its 700,000 civilian workers, represented by a union coalition led by the Government Employees (AFGE). Kavanaugh wrote that the 2004 Bush-era Defense Department law gave Bush’s DOD temporary authority to curb civilian defense workers’ collective bargaining rights. Dissenting justices said Kavanaugh would let the government “abolish collective bargaining altogether.”

Undocumented workers’ right to organize. Kavanaugh, dissenting in a 2008 case involving Agri Processor, Inc., a Brooklyn kosher meat packer, said undocumented workers can’t unionize under the National Labor Relations Act. The appeals court majority said they could. 

Right to picket. In 2015, Kavanaugh gave the Venetian Casino in Las Vegas a win in a fight with union organizers over the right to picket on a public sidewalk. The National Labor Relations Board (NLRB) ruled they could, under their constitutional rights to freedom of expression and freedom assemble peaceably. The NLRB also tossed out the casino’s claims that the sidewalk, which was temporary due to road construction, was private property. The walk was on the Venetian’s land. “Where employers assert a private property right and ask the police to enforce that right against demonstrators, the employers are ‘seeking redress of wrongs committed against them.’”

“This is the most important Supreme Court vacancy in many years,” said Greenberg. “NCL stands with consumers and workers and with those groups who see the nomination of Brett Kavanaugh to the U.S. Supreme Court as a threat to our values and our mission.”

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About the National Consumers League

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 https://nclnet.org.

Regulations Can Save Lives, Like Ted’s – National Consumers League

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Sarah Aillon, NCL internWritten by National Consumers League Intern Sarah Aillon

The Trump administration is waging war against regulations. In January, President Trump announced in his State of the Union address that “in our drive to make Washington accountable, we have eliminated more regulations in our first year than any administration in history.” Since entering Office, the Trump administration rolled back many environmental, and economic regulations which secure the health, safety, and security of the American people. While the Trump Administration boastfully describes these rollbacks as progress, many public protection advocates have sounded their alarms.

Earlier this June, the Coalition for Sensible Safeguards and Georgetown Law organized a symposium which addressed the threat deregulation poses in the Trump era. Titled, The War on Regulation: Good for Corporations, Bad for the Public, the event featured a wide range of public protection advocates, including the mother of an accident victim, professors, and Senator Elizabeth Warren (D-Mass.) Their stories prove just how critical many regulations are for individual well-being and what happens when regulations do not monitor dangerous products.

Janet McGee, an advocate on the event’s second panel, and described the harrowing death of her 22-month-old son, Ted. In 2016, the toddler was in his room napping. When Janet went in to check on him, she found Ted under a dresser that had fallen on him. Ted was unresponsive and cold but had a faint heartbeat. McGee started CPR and then rushed him to the hospital. Tragically, the boy passed away four short hours after she first found him.

McGee’s story is not outstanding: every 17 minutes someone in the United States is injured by falling furniture, televisions or appliances. These furniture tip-overs kill a child every two weeks.

Voluntary safety standards in the American furniture industry perpetuate the high risk of furniture tip-overs. Voluntary safety standards threaten the consumer’s safety and security. A Consumer Reports investigation tested 24 dressers against the industry’s voluntary safety standards and found only six dressers met the industry’s standards. In response to their findings, Consumer Reports suggested raising the test weight for furniture tip-overs from 50 pounds to 60 pounds and to apply tests to dressers that are 30 inches high and higher. Anchoring dressers to walls with brackets and straps is an effective strategy to prevent the problem, but few consumers are aware of the need to secure their furniture from tip-overs.

Voluntary safety standards make enforcement of furniture safety difficult. Companies can pick and choose what standards they comply with. Voluntary safety standards allow product design to remain poor and increase the threat of injury and death.

The Ikea dresser responsible for the death of Janet McGee’s son did not meet safety standards. McGee’s Ikea dresser is not the only one from the company to fail their consumers. Over the course of 19 years, 8 children have died from Ikea dressers. As stated by McGee, the longstanding effects of furniture tip-over represent an industry-wide problem. However, with voluntary safety standards, little enforcement or change occurs.

Despite the danger many dressers on the market hold, little has been done to resolve the threat. Safety standards remain voluntary instead of mandatory. “Parents should worry about their children for many reasons, but furniture falling on them should not be one of them,” said McGee. Eventually, Ikea offered to take back 29 million chests and dressers in the Malm line, but very few consumers knew about the recall. Tens of millions of the Malm dressers are thought to still be in use and unsecured today.

McGee’s tragic, cautionary tale is just one example of why consumer regulations are necessary. President Trump’s focus on slashing regulations endanger everyday people, favoring big business at consumers’ expense. Regulatory safeguards enable people to live and work safely. “Strong government rules matter. We cannot, we must not accept a government that works only for a privileged few,” Warren said.

To learn more about furniture tip-over and Janet McGee’s story, click here.

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Sarah Aillon is a rising senior at Dickinson College pursuing dual degrees in Political Science and History. She is passionate about the National Consumers League’s work and is a child labor policy intern with them this summer.

Carpenter v. United States: Impacts on privacy legislation – National Consumers League

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The U.S. Supreme Court decision last week in Carpenter v. United States will shape the relationship consumers have with their wireless devices and the services they use every day for years to come. In a 5-4 decision, the Court held that by obtaining cell-site records, the U.S. government performed a search. By doing so without a warrant, this search was judged unconstitutional, violating petitioner Timothy Carpenter’s Fourth Amendment rights and reversing two previous decisions.

In the case, the FBI had requested records as part of an investigation into several Detroit-area armed robberies, and those records included details about call dates, times, and approximate locations. Carpenter asked that the cell phone evidence be suppressed because it was obtained in a search without a warrant.   

You’re thinking, “And? I’m not accused of armed robbery,” but it’s bigger than Timothy Carpenter. The Carpenter decision affects all of us, and in essence redefines government searches in a digital age.

Think of your relationship with your cell phone. According to Pew, 95 percent of Americans now own one. The same study found that for one in five of us, our smartphone is our sole source of Internet service. We carry them to work, to school, to our homes, and to meet up with friends. They go with us to our meetings, appointments, and vacations. They are a key vector through which we’re understood. Part of that is an unprecedented ability to locate us. When 95 percent of us are moving and communicating with our phones, and when 20 percent of us are using them as our only personal Internet connection, government access to when and where we use cell phones becomes an inroad to very intimate surveillance.

The FBI obtained records defined by the Court as “personal location information maintained by a third party” under the Stored Communications Act (SCA). SCA compels service providers to hand over records of electronically stored communications to government, without a warrant requirement, provided there is evidence for the information’s relevance to an ongoing investigation. Last week’s decision sets a new standard for expectations of digital privacy at a time when consumers and government are grappling with how to think about our lives online using documents drafted by the nation’s founders.

NCL has previously stated that consumer privacy is an integral part of the data economy, and we advocate for robust consumer protections in this space to encourage safe and secure use of online services. We applaud the Court’s decision and see it as an important step in the fight to safeguard consumers’ data in the United States and beyond.

Rebecca Kielty is spending the summer with John Breyault’s team, working on consumer privacy issues as NCL’s 2018 Google Public Policy Fellow. Rebecca received her B.A. from the University of South Florida Saint Petersburg and her M.A. from Georgetown University.

Automobile industry ignoring safety packages – National Consumers League

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NCL Public Policy Intern Melissa Cuddington contributed to this post.

In November 22, 2004, Automotive News, the publication that covers the auto industry, ran one of my favorite editorials of all time:

“All safety related devices should become standard equipment on all vehicles. No choice. It’s not an economic decision; it’s a moral decision. When the choice becomes profit vs. lives, the decision should be simple.”

This issue is more pertinent now than ever. The National Consumers League strongly supports enhanced auto safety technologies and, like the quote above says, it’s a moral decision to make safety technologies standard equipment. Case in point: driver-assist technology, has been available for about a decade in the United States. It includes automatic breaking, lane-changing aids, and cruise control, each of which has made driving safer.

One would think that these driver-assist programs would be included in “standard safety packages,” but they are not. As such, it’s sad to read that the auto industry is doing a poor job marketing and selling these systems. According to the Wall Street Journal, salespeople are apparently not being properly trained to discuss the benefits of these safety technologies. In a recent survey done by the MIT AgeLab, only six out of 17 car sellers were able to explain the safety technologies. In fact, many car salespeople say they don’t have the knowledge or the time to explain these packages. Car sellers are not incentivized to explain these technologies because they drive up the cost of the car and take “excessive” time in the showroom. What a loss! Thirty percent of traffic accidents and fatalities could be avoided if the majority of cars had these standard safety packages, according to the Boston Consulting Group.

This lack of enthusiasm for selling the safety that exists today is ironic. Automobile manufacturers are trying to rush through Congress a bill that gives nearly carte blanche for the deployment of autonomous vehicles (AVs) with little regulation. Safety is one of the top reasons AVs are being touted by the auto industry as a means for greatly reducing auto injuries. But we are skeptical; just look how industry gives short shrift to the safety devices we have access to now!

There are notable exceptions. NCL applauds carmakers Honda Motor Co., Subaru Corporation, and Toyota Motor Corporation for their plans to include safety packages in their standard car models, such as the 2019 Subaru Ascent and the 2018 Honda Accord. These companies have also made a concerted effort to keep prices down for models featuring the safety technology. We’d like to see them and their competitors expand these features to their whole fleet.

We urge the automobile industry take a second look at the cost of these driver-assist packages that aren’t standard equipment, to train their sales force to sell these lifesaving packages, and—most importantly—to start to include these safety packages in standard car models. Consumers shouldn’t have to choose between affordability and safety. Like Automotive News said nearly 15 years ago, “All safety-related devices should become standard equipment on all vehicles.”

National Consumers League statement on Supreme Court’s 5-4 ruling in Janus v. AFSCME – National Consumers League

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June 27, 2018

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242

Washington, DC–The National Consumers League (NCL), the nation’s pioneering consumer and worker advocacy group, has announced its disappointment in today’s narrow 5-4 anti-worker and anti-union ruling by the U.S. Supreme Court in Janus v. AFSCME, in which the Court ruled that unions cannot collect “fair share fees” from workers who have not joined the union but receive the benefits of organizing.

The following statement is attributable to Sally Greenberg, NCL Executive Director:

Janus v. AFSCME is the unfortunate capstone of a decades-long assault on working Americans who choose to collectively stand up to improve their workplaces and their communities and is the result of a right-leaning court that favors business interests over workers.

The potential harm caused by this decision is great and will not only be felt by union members. Millions of individual consumers who rely on government services will feel the consequences of this decision as public servants choose to leave in search of better opportunities and as the ones who remain face greater workplace insecurity.  

The Supreme Court today sided against working families. We call upon Congress to step in to correct this injustice. Powerful lobbyists may have won today, but in the end working Americans understand the importance of joining together to create better working conditions. While this decision is disappointing, we will continue to fight alongside our labor allies for a fair and just workplace and marketplace.

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About the National Consumers League

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 https://nclnet.org.

Feeling the pressure to go paperless? – National Consumers League

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By Melissa Cuddington, NCL public policy intern

Feel forced to go digital or pay for paper bills and statements? You are not alone. Many consumers are beginning to push back against the “going paperless” trend that has become so popular among credit card and other companies that send bills to millions of consumers.

Charging for a paper bill is not a popular practice among consumers. In fact, according to a survey conduced by Toluna and Two Sides North America, 83 percent of American consumers believe that they should not be charged more as a result of opting for a paper bill. 

NCL and Consumer Action have agreed to work with “Keep Me Posted North America” (KMPNA), based out of Chicago, and yes supported by the paper industry — to raise these concerns. We happen to agree that preserving consumer choice when it comes to choosing what type of bill you receive is important. Keep Me Posted is working in the United Kingdom, Australia, and Europe. 

This specific issue is of significant importance when it comes to the work that NCL does on behalf of consumers and promoting their best interests in the marketplace. The campaign is currently working to represent more vulnerable consumers: seniors, low-income populations, the disabled, and those on Indian Reservations and in rural areas who may not have access to broadband. Charging them $3.50 or more because they choose a paper bill is just plain wrong. We believe anyone who chooses a paper bill should not have to pay for it. 

This consumer issue also has relevance to the increasing occurrence of digital fraud in the United States. According to a 2017 survey done by the Competition Bureau in Canada, digital fraud is increasing at a rapid rate. From 2011 to 2016, digital fraud increased significantly from $4.95 billion to $7.95 billion. This paperless trend is increasing the likelihood that consumers are the victims of telemarketing and Internet fraud. 

It is important that consumers, especially elders and those in low-income and rural areas have the option to receive a paper bill without incurring additional costs. For many Americans, $3.50 x 12 months is extra money they don’t have — and multiply times several bills and it really adds up. Additionally, the option of receiving a paper bill is seen as a more convenient and secure form of payment. In fact, 78 percent of people keep hard copies of important documents at home, because they believe it is the safest and most secure way to store their information (Two Sides North America, 2017). 

We believe this is a good coalition and one that will push hard to preserve consumer choice and do away with the odious practice of charging consumers who can least afford it for the convenience of a paper bill.

The role of technology in meeting consumer demands for product info – National Consumers League

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Entering the grocery store, more than 40,000 products are right at your fingertips. As our Food Policy Fellow Haley Swartz has written about previously, choice overload and the “tyranny of too much” are increasingly common for consumers in grocery store aisles.

In an age when nutrition, health, and product safety are major consumer priorities, it becomes increasingly important to know what are in the items you purchase, and how they compare to the many other options on the grocery shelf.

Transparency itself is in high demand, as some have even called it the must-have ingredient for successful food companies in the modern era. Substantial consumer research data also indicates consumer demand for industry transparency, particularly in food and beverage manufacturing. The 2016 Label Insight Food Revolution Study found that 71 percent of consumers believed product transparency influences their purchasing decisions at the grocery store. A July 2017 survey found even more striking results, that 70 percent of purchases were influenced by transparency content.

A more recent survey from May 2018 found that if consumers were provided with additional information about a product, 80 percent said they would be more likely to buy it. In fact, more than two-thirds of respondents said that their interest about the information on product labels has increased over just the past two years.

Shoppers across the country are hungry for detailed information about what is in a product, why it is there, how it is produced, and what impact it has on the environment and their health. This call for more product information could be a result of the increasing complexity of food manufacturing, occurrence of allergies in the United States, and heightened awareness about the effect food has on our health.

A variety of tools aim to help anxious consumers wade through the noise to find the information they seek. But product packaging is becoming increasingly complex, enough so that some have called it a “competitive piece of real estate.” Only some of the information consumers want can be available directly in sight during grocery shopping experiences or when they are at home making out their shopping lists.

One tool that answers this question is SmartLabel, a digital disclosure tool which makes more information than can ever fit on a label available to consumers. SmartLabel works using a smartphone to scan barcodes or QR codes on food, beverages, personal care, and household products in the grocery store. Once the barcode is scanned, a SmartLabel website page provides detailed information about a range of things: ingredients, nutritional facts, allergens, usage instructions, third-party certifications, such as Kosher, and other information such as whether a food contains genetically modified organisms (GMOs). The information can also be found by going to www.smartlabel.org on a computer while you’re at home.

As of June 2018, SmartLabel is being used on nearly 28,000 food, beverage, personal care and household products in grocery stores, with many more products on the way.

The National Consumers League food policy team applauds the grocery manufacturers and retailing industry for responding to consumer demand and working to create a way for consumers to find more transparent information about the products they are purchasing. We hope that the industry will continue to roll out similar initiatives that promote the best interests of consumers and respond to demand in the marketplace.