NCL calls upon state legislators to protect their residents from dishonest automatically renewing contracts

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August 12, 2019

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), the nation’s pioneering consumers and worker advocacy organization, calls upon state legislatures across the country to take action to protect consumers from deceptive automatic renewal clauses.

While automatic renewal provisions in consumer contracts, also known as negative option clauses, are billed as helping consumers avoid service disruptions, they can result in financial hardship for consumers. Dishonest companies continue to place these clauses into the fine print of contracts to mask rate hikes, renew gym memberships, generate recurring deliveries, or cause other services to renew without a consumers’ knowledge or consent.

The following statement is attributable to Brian Young, NCL’s public policy manager:

At least 22 states have some protections from automatically renewing contracts; however media reports have shown that companies are now using the guise of a ‘free trial’ to secretly roll consumers into binding contracts, sometimes after as little as a few days. Such clauses can trap consumers in expensive and unwanted contract renewals.

NCL is calling upon each state legislature to review their laws and enact comprehensive legislation. Recently enacted legislation in the District of Columbia is a model bill which requires:

  • clear disclosure of all automatic renewal clauses;
  • a consumer’s affirmative consent for free trials to be rolled over into a contract at the end of a free trial period; and
  • notification by mail, email, or another method of the consumer’s choosing, to be sent to consumers if their long-term contract is set to renew to a “month to month” or longer subscription.

Thirty-five percent of consumers have complained that they have signed up for an automatically renewing contract without realizing it. Likewise, 48 percent of consumers have had a free trial roll over into a contract without their knowledge. The time is long overdue for state legislators to step in and take action to ensure consumers are not tricked into costly and deceptive business practices.

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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 www.nclnet.org.

NCL statement on White House “Protecting Americans from Online Censorship” proposal

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August 12, 2019

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, America’s pioneering consumer and worker advocacy organization, is urging the Trump Administration not to move forward on its reported proposal to require the Federal Communications Commission (FCC) and Federal Trade Commission (FTC) to regulate speech on the Internet. As reported, the draft proposal would severely curtail the protections that website operators receive under Section 230 of the Communications Decency Act. These protections are crucial to website operators’ abilities to moderate content, including hate speech, violence, and other objectionable content.

The following statement is attributable to John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League:

An open and well-moderated Internet is crucial to consumers’ ability to get the information they need to make informed marketplace decisions and to hold industry and government officials accountable. Nonetheless, the Trump White House seems determined to pursue a fairness doctrine for the Internet in order to placate a small, but vocal portion of the President’s base. In the name of protecting against largely fictitious ‘conservative bias,’ the Administration’s proposal would direct the independent FCC and FTC to exercise authority they don’t legally have and which their leaders have said they don’t want. If reports about the draft executive order are true, the results could be disastrous for consumers and free speech online. This proposal is deeply misguided. We urge the Administration to consign it to the dustbin of history.

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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 www.nclnet.org.

NCL: Consumers should be able to access broadcast channels for free via Locast

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August 5, 2019

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

Washington, DC—Last week, the four largest broadcast networks—ABC, CBS, Fox, and NBC—filed suit against Locast, a free streaming service operated by the non-profit Sports Fans Coalition NY. The networks’ lawsuit seeks to block Locast’s streaming of local broadcast programming. The suit alleges that Locast violates copyright laws by failing to compensate the networks for their programming.

The following statement is attributable to NCL Vice President of Public Policy, Telecommunications, and Fraud John Breyault:

Consumers can already legally obtain free over-the-air broadcast channels via an antenna on their roofs. We think broadcasters would be better off embracing an innovative technology that allows consumers to more easily access their ad-supported content.

To secure public accessibility of broadcast signals, the Copyright Act expressly permits non-profit organizations to retransmit free over-the-air broadcasts. Locast is operated by the non-profit Sports Fans Coalition NY as a free public service. NCL supports broad consumer choice for access to local broadcast channels.

This year alone, the four largest broadcast networks are expected to generate more than $10 billion in retransmission-consent fees from cable and satellite providers that carry the networks’ programs. These fees are largely passed onto consumers in the form of higher monthly cable and satellite bills. Along with advertising that networks and local television stations sell, retransmission fees support the production of critically important local news content as well as traditional entertainment programming. 

NCL and Sports Fans Coalition (SFC) have a history of working together on a range of important consumer issues. In 2014, together we successfully petitioned the Federal Communications Commission to repeal the Sports Blackout Rule. In 2018, we jointly urged the Federal Trade Commission to protect consumers in the live event ticketing marketplace by cracking down on deceptive “white label ticketing websites.” We have also worked with SFC to create a landmark “Sports Bettor’s Bill of Rights” to ensure that consumers are protected as more states move to legalize online sports betting.

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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 www.nclnet.org.

Consumer group: Capital One breach highlights need for Congressional action on data security legislation

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July 30, 2019

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

Washington, DC—Just one week after consumers received relief from the massive Equifax breach, yet another massive breach—this time at Capital One bank—is placing consumers at risk, yet again, of identity theft.

In one of the largest financial breaches in history, more than 100 million Capital One accounts and 140,000 Social Security numbers were reportedly compromised. As was the case in previous breaches, the Capital One breach appears to have stemmed from a third-party cloud hosting vendor that stored Capital One’s data.

The National Consumers League (NCL), the nation’s pioneering consumer and worker advocacy organization, is calling on Congress to immediately pass comprehensive privacy legislation and protect highly personal data.

“Consumers are sitting ducks if big banks like Capital One, giant hotel chains like Marriott, and credit scoring companies like Equifax don’t take the necessary steps to protect our data,” said John Breyault, NCL’s vice president of public policy, telecommunications, and fraud. “When companies like Capital One are sloppy in protecting consumers’ data, it allows hackers steal consumer information which ultimately fuels identity theft and other frauds against us.”

“More than five years after hackers compromised the personal information of nearly 110 million Target customers, criminals are still breaking through supposedly strong firewalls and stealing consumers’ personal data from companies. Any data security legislation must require that consumer data be protected with strong fines and criminal penalties for failing to do so,” said NCL Executive Director Sally Greenberg.

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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 www.nclnet.org.

Coalition of consumer advocacy groups send letter DC Council regarding auto-renewal – National Consumers League

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July 19, 2018

The Honorable Charles Allen
Council of the District of Columbia
1350 Pennsylvania Avenue, NW
Washington DC 20004

Dear Councilmember Charles Allen,

The undersigned 9 consumer and community advocacy groups urge your immediate action and support for Title II of the Consumer Disclosure Act of 2017 (B22-0020). The bill, which has been pending before the Judiciary and Public Safety Committee since January 2017, will prevent District residents from unknowingly becoming trapped in a complex web of hidden automatic renewal contract clauses they did not knowingly consent to.

In order to participate in commerce, consumers must sign lengthy fine print contracts. These contracts often contain automatic renewal clauses which will cause the contract or membership to renew automatically if the consumer fails to notify a merchant of their desire to cancel prior to a date of the merchant’s choosing. When these clauses are clearly disclosed, they can help consumers avoid service interruptions. However, unscrupulous merchants slip automatic renewal contract clauses into the fine print of contracts without properly disclosing their presence in order to trap consumers into lengthy contracts. The proliferation of these hidden automatically renewing contract clauses has caused one in three Americans to be tricked into agreeing to an automatically renewing contract.[i]

In the coming years, the trend of unscrupulous businesses hiding automatic renewal clauses in the fine print of contracts is unlikely to change. Deloitte predicts that online media subscriptions, subscriptions, which almost always contain these clauses, will grow by at least 20% in 2018.[ii] Fortunately, the Consumer Disclosure Act of 2017 would prevent these unwelcome financial surprises by:

  • Requiring clear disclosure of any automatic renewal clause; and
  • Requiring that a notification be sent to enrollees 30-60 days prior to the deadline for canceling a multi-month automatically renewing a contract

The unplanned expense that these clauses inflict on their victims is of particular concern for the socio-economically disadvantaged members of our community who are less able to weather surprise bills. Action on this issue is long overdue. In the absence of legislative action, District residents will continue to receive surprise bills for products or services they no longer need or desire.

Through Title II of the Consumer Disclosure Act, the D.C. Council has a real opportunity to improve the lives of Washingtonians by granting District residents the tools they need to avoid becoming ensnared by unwanted automatically renewing contracts. We urge you to quickly take action and to provide District residents with this long overdue protection which is already enjoyed in several states across the country.

Sincerely,

Allied Progress
American Family Voices
Consumer Action
Consumer Federation of California
DC Fiscal Policy Institute
National Association for Latino Community Asset Builders
National Consumers League
Tzedek DC
Workplace Fairness

Cc: Members of the Committee on the Judiciary and Public Safety

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[i] Porche, Bradley. “Poll: Recurring charges are easy to start, hard to get out of,” Creditcards.com. August 21, 2017. Online: https://www.creditcards.com/credit-card-news/autopay-poll.php

[ii] Deloitte. “Technology, Media and Telecommunications Predictions,” Pg. 41. 2017. Online: https://www2.deloitte.com/global/en/pages/about-deloitte/articles/gx-tmt-predictions-press-release.html

National Consumers League applauds the Department of Justice for bringing phone scam perpetrators to justice – National Consumers League

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July 24, 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 National Consumers League (NCL), America’s pioneering consumer and worker advocacy organization, today commended the U.S. Department of Justice (DOJ) for its crackdown on impersonation scams targeting vulnerable Americans. Last week, following their arrest in 2017, 24 perpetrators of a phone scam in which fraudsters extorted money from victims by impersonating IRS agents, or employees of the U.S. Citizenship and Immigration Services were sentenced to up to 20 years in prison. The following statement is attributable to James Perry, Customer Services Coordinator and John Breyault, Vice President, Public Policy, Telecommunications, and Fraud, both of the National Consumers League:

“Imposter scams consistently rank amongst the most prevalent scams reported to NCL’s Fraud.org campaign. Last year alone, Americans lost a whopping $327 million to scammers who were impersonating individuals or government agencies. With the DOJ’s announcement that they have ended a massive operation that extorted hundreds of millions of dollars from vulnerable consumers, Americans can feel a little bit safer from a threatening phone call from a scammer. While we applaud the DOJ for this hard-won victory, we must all continue working hard to both educate consumers about this scam and redouble our efforts to put other perpetrators of this scam behind bars.”

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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.

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.

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.

Leading consumer organizations decry ‘mutual fund industry giveaway’ by SEC – National Consumers League

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June 6, 2018

Contact: Consumer Action’s Linda Sherry (202) 544-3088, NCL’s Sally Greenberg (202) 207-2830

Washington, DC–Despite overwhelming opposition to abandoning the default paper format delivery method for mutual fund disclosures, the Securities and Exchange Commission (SEC) yesterday voted behind closed doors to ignore investor sentiment and allow funds, as of Jan. 1, 2021, to deliver shareholder reports online, with a paper notice of online availability sent by mail. The adoption of Rule 30e3 flips the current process on its head—investors who already have chosen to receive paper mutual fund reports will now have to take the trouble to reach out to funds to request that paper versions (continue to) be mailed to them.

The National Consumers League (NCL) and Consumer Action have worked for more than two years to ensure that the delivery of paper fund disclosures wasn’t flipped. The organizations have filed comments opposing Rule 30e3, spoken at SEC Investment Advisory Committee meetings, and urged investors to press for the paper default. They were expecting to hear a public discussion of the rule at the SEC’s public meeting on June 5, before it was pulled from the agenda the evening before and circulated for written consent from the commissioners in lieu of a meeting.

Sally Greenberg, executive director of the National Consumers League, said: “We are very disappointed in the 4-1 vote—taken behind closed doors—from the SEC to make it more difficult for mutual fund investors who want paper documents to get fund disclosures delivered in paper; an SEC survey in 2011 found that one-third of consumers say they prefer paper copies of their mutual fund reports. The mutual fund industry trade association estimated in 2016 that this will save investors $2 billion in printing and mail costs over 10 years. The winners are clearly the companies, the losers are those consumers who need or want access to paper versions of fund disclosures and will have to know to sign up for paper delivery. We are disappointed the SEC didn’t take into account the extensive evidence that the change is likely to reduce investor readership of key disclosures.”

Linda Sherry, director of Consumer Action’s DC office, said: “More than 90 percent of the comments submitted to the SEC in 2016 opposed the idea to make electronic delivery the default delivery method for shareholder reports. Despite the concerns raised, which included lack of access to the internet by vulnerable populations, exposure to online fraud and difficulty of reading reports on mobile devices, the SEC chose to vote on its proposal before the public was able to read it.”

Currently (and for close to 20 years) investors have the option of requesting e-delivery. Some estimates say as many as half of all mutual fund investors have chosen e-delivery already. Those who have chosen to keep paper delivery will, under the new rule, be bothered to act to ensure paper reports keep coming. The new measure is an example of “negative consent—or “passive consent”—which means failure to take action is interpreted as agreement. This method of notification is know to decrease consumer participation and likely will reduce investor readership of important disclosures about fund performance, costs and makeup.

While the rule offers the switch to e-delivery as an “optional” method for delivering shareholder reports, it is highly unlikely that the mutual fund industry will choose to leave the status quo of paper statement delivery.

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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.

About Consumer Action

Consumer Action has been a champion of underrepresented consumers nationwide since 1971. A non-profit 501(c)(3) organization, Consumer Action focuses on consumer education that empowers low- and moderate-income and limited-English-speaking consumers to financially prosper. It also advocates for consumers in the media and before lawmakers to advance consumer rights and promote industry-wide change.