Protecting Ticket Buyers in Connecticut – National Consumers League

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By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

Today, I am testifying in support of pro-consumer legislation up for debate in the Connecticut General Assembly.  The bill, H.B. No. 6298, would protect consumers’ ability to transfer and resell their event tickets.  Some of the major provisions of the bill include:

  • Prohibiting venue owners or ticket sellers from preventing the resale of tickets by season ticket or subscription package holders
  • Prohibiting the denial of entry to consumers holding a ticket bought on the secondary market
  • Requiring ticket sellers using paperless ticketing technology to give ticket buyers the option to receive a paper ticket
  • Prohibit venue owners from requiring ticket buyers to pick up tickets from a “will call” window at the venue
  • Prohibiting the holding back of more than 5% of available tickets from public sale, subject to certain exemptions
  • Prohibiting venue operators and primary ticketers from charging a service fee when consumers choose to pick up tickets from a box office

These provisions are common-sense consumer protections.  Given the increasingly consolidated nature of the live event marketplace, dominated by the “new” Ticketmaster (Live Nation Entertainment), it’s now easier than ever for this live event behemoth to abuse their near-monopoly.

One of the major ways that Ticketmaster is seeking to cut out competitors is through the proliferation of “paperless” ticketing.  At an event with paperless tickets, consumers do not receive a physical ticket that they present at the venue to gain entry. Instead, the consumer is typically required to present ID and swipe a credit card at the venue on the day of the event.

Ticketmaster advertises the convenience of a paperless system and certainly many consumers will find this more convenient.  Unfortunately, paperless-only events restrict consumers in a number of ways.  First, since the ticket buyer must be present to redeem the ticket, a consumer who wants to buy tickets for their children to attend a Miley Cyrus show would have to stand in line to redeem the ticket so that their kids can get in to the show, even if the parent does not plan to attend.  Paperless ticketing technology itself is still in development, as many attendees at a recent Justin Bieber show learned to their dismay while they waited in long lines to use malfunctioning ticket terminals.  Ultimately, many ticket buyers were prevented from seeing any of the show.

The second major problem with paperless-only events is that they make it difficult, if not impossible for consumers to resell their tickets on the secondary market.  Indeed, cracking down on the secondary market is a key reason that Ticketmaster and many artists, venue owners and event producers have embraced paperless ticketing.  NCL supports consumer access to the secondary market.  As opposed to previous decades, where the secondary market was synonymous with shady ticket scalpers, today’s online secondary market generally offers consumers a safe, secure venue for buying and selling event tickets.  While consumers do often pay a premium for tickets on the secondary market, research has shown that 23% of tickets sold on these markets are sold at face value and 17% are sold a below face value.  In addition, due to the rampant practice of holding back tickets for various credit card rewards programs, fan clubs, radio stations, sponsors or producers, the general public often has little opportunity to purchase tickets on the “on-sale” date.  For instance, at a 2009 Taylor Swift show in Nashville, less than 12% of the 13,300 available tickets were made available to the general public.  Similar incidents at Keith Urban and Hannah Montana shows suggest that this is not an isolated incident.

NCL believes that consumers should have a fair shot at buying an event ticket at a reasonable price.  Given the high service fees and rampant use of holdbacks on the primary market, we think that laws such as those envisioned in Connecticut would do much to preserve consumer access to a safe and competitive secondary market.  To help achieve this, NCL is playing an active role in the Fan Freedom Project, a coalition of consumer advocates, business groups and live event fans seeking to ensure fair access to live events and preserve a competitive, safe secondary ticket market.

To read my testimony from today’s hearing, click here.

Let them play – National Consumers League

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By Sally Greenberg, NCL Executive Director

Football isn’t just a sport; it’s a very big and lucrative business in America, and it’s only getting bigger. The Super Bowl had the most viewers of any sporting event in the United States.  In 2010, each NFL game was watched by an average of 17.9 million viewers, up 13 percent from 2009’s 16.6 million. Even owners of teams with losing records, like Dan Snyder of the Washington Redskins, have more than doubled their investment.  Snyder bought the Redskins in 1999 for $750 mil and today the franchise is valued at 1.6 billion. That kind of success is true across the board for NFL franchises.

But despite these record profits, the National Football League owners are now threatening to lockout the National Football League Players Association (NFLPA) unless the players agree to play 18 official games a season instead of 16, and reduce the share of revenue set aside for player salaries by 18 percent beginning next year.

Right now the players receive about 50 percent of the revenue of the NFL, which I think is about where it should be. After all, the players are doing all the work. We go to games not to see Dan Snyder: we want to see Donovan McNabb or Aaron Rodgers.

I confess that when I first heard about this I figured, sure, millionaires going up against billionaires – is this really a fight we need to get into?

Then I recently attended a press conference sponsored by the nonprofit organization American Rights at Work and the NFLPA, which changed my mind. The players there talked about the short working careers of most of their teammates – around 3 ½ years on average. It also takes 3 years of accredited play under current contracts to get only 5 years of post-career health care. Moreover, many players are in dire need of health care after playing professional football – after sustaining all manner of injuries from this very physical game, they often have joint and muscle problems, and have trouble walking and staying healthy after years of the rough and tumble of a football career. And new research is showing the terrible toll head injuries and concussions are having on player’s ability to live healthy and productive lives in their post-NFL careers.

The lockout the owners are threatening won’t just hurt the players and their families; such a lockout would have ancillary effects on workers and businesses across the country. Indeed, estimates are that every NFL city would lose an estimated $160 million, with over 115,000 jobs affected.

The players say they are satisfied with the current system and are willing to be totally transparent about the benefits and salaries they receive. They are asking the owners for the same openness. I think the benefit of the doubt goes to the players – they are the workers here, they are the one’s putting their physical and mental health at risk each day for our entertainment, and it’s their labor that has made millionaire owners into billionaires. The players’ slogan is “Let us Play” and they want to maintain the status quo, where everyone is benefitting from the profits football brings in. I agree with them, and I think we owe them our support.

Our Fragile Earth – National Consumers League

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By Jacob Markey, LifeSmarts Summer 2010 intern

The standard of living for most Americans is far better than even when my parents grew up in the 60s. With advances in industry, medicine, and technology, Americans live longer and have access to goods and information like never before. We can hop on a plane and travel across the world in less than a day and converse with people face-to-face who are thousands of miles away using Voice over Internet Protocol (VoIP), a technology I enjoyed while studying abroad this past fall.

Globalization and industrialization have benefited Americans, but have come at a terrible cost to our planet. To power our cars, planes, and factories, we consume nearly 20 million barrels per day of oil. Combined with coal and natural gas, Americans rely on non-renewable sources for over 80% of our country’s energy needs. Using these energy sources pollutes the Earth. Together with the rapid industrialization of countries like China and India and the world’s continual population growth, a dangerous amount of tension is being placed on the Earth.

The consensus in the scientific community is that substantive change must happen. Many feel a failure to do so will alter the Earth in a plethora of irreversible ways, including an increase in temperature, the melting of the polar ice caps, and changes to ecosystems and agriculture around the world. The sad part is that even with drastic changes, much damage has already occurred.

The good news is that we can change our course! After scientists realized chlorofluorocarbons (CFCs) were the prime cause of the growing hole in the ozone layer, countries around the world signed the Montreal Protocol, eliminating their use. Even though the ozone layer will take decades to replenish, it has begun to recover, signaling a success in the fight against products that can harm our planet.

Dealing with human-created environmental problems is likely to be one of the biggest issues in the 21st century. Teens should therefore follow this issue closely. The world’s youth is responsible for cleaning up the mess left by previous generations. Whether its government policy trying to redress environmental damage or the development of new green technology, the health of our planet is sure to remain a hot topic.

Investment scams: from a quiet Amish community to the Big Apple – National Consumers League

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The Amish, a peaceful, insular community that that eschews the use of modern technology, rarely make headline news. Unfortunately, today the Amish are getting considerable media attention for all the wrong reasons. The Washington Post reported that the Securities and Exchange Commission (SEC) is investigating a Madoff-like scheme in which a 77-year-old Amish man named Monroe Beachy filched more than $33 million dollars from more than 2,600 investors, the vast majority of which were fellow members of his Amish community. Beachy has been running his scheme over a 25-year period and was charged with fraud by the SEC yesterday.

Particularly heartbreaking is the fact that Beachy established such trust among Amish parents that many encouraged their children to invest with him as well—investors included a school cookbook fund and a school capital fund. Armed with just a 10th-grade education and some classes from H&R Block, Beachy lured investors by claiming they were earning money from safe U.S. government securities and would receive higher returns than they would get from banks.

Speaking of Ponzi schemes, Bernie Madoff himself made news this week when he accused banks of being “complicit” in his investment scam in a recent prison interview with the New York Times. Madoff stated that banks must have known about his Ponzi scheme, which lasted 16 years and cost investors billions of dollars, and that banks are to blame for failing to examine discrepancies between his filings and other information they had at their disposal.

Ponzi schemes

While each Ponzi scheme is different, they all involve a perpetrator who promises to invest client money while instead using the cash for something else, usually for personal gain. The scammer creates fictitious profit reports, and—when an investor asks for their earnings or principal—the fraudster uses other investors’ money to pay them. Ponzi schemes normally go on until someone discovers the truth or there’s no longer enough money left to pay investors and the scheme falls apart.

With consumers from residents of small Amish communities to New York power players falling victim to investment scams, now is a great time to go over some safety tips:

  • Be wary of big earnings claims. No one can guarantee how much you’ll make
  • Scammers advertise pyramid schemes as businesses that provide ‘easy money’ or ‘guaranteed income.’ Phrases like these should be red flags
  • Stocks and bonds fluctuate over time. Relentlessly even, positive returns over long periods of time is often a warning bell
  • Protect yourself by diversifying your brokers and not putting all your money in one person’s hands
  • Remember the old adage: if it sounds too good to be true, it probably is

For more information on Ponzi schemes click here.

A Valentine to the Capital Area Food Bank – National Consumers League

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As part of a settlement with a cereal manufacturer, the NCL organized the delivery of close to 100,000 boxes of cereal to the Capital Area Food Bank.

By Sally Greenberg, NCL Executive Director

Monday afternoon, NCL staff paid a visit to the Capital Area Food Bank, the Washington DC area’s largest food distribution facility. With me on the visit were Courtney Brein, our Linda Golodner Food Safety and Nutrition Fellow, Daniel Dahlman, our new communications associate, and Karen Marcus, of Finkelstein Thompson, the law firm that represented NCL in the suit.

NCL’s connection to the CAFB stems from NCL’s case against a cereal manufacturer for false and deceptive advertising. The case settled in 2010, and as part of the settlement, NCL arranged to have 96,000 boxes of cereal delivered to the food bank for distribution throughout some of the poorest neighborhoods in the District. We didn’t know this at the time we negotiated this contribution, but the CAFB told us that cereal is in great demand because it is so expensive, and having cereal in this volume will delight food bank clients.

Lynn Brantley, the CAFB’s renown Executive Director and one of the bank’s founders, greeted us at the entrance. She described how the bank got its start in the 1970s as part of an interfaith campaign drive to address hunger in the District. The CAFB then distributed 1 million pounds of food a year; the facility has grown by leaps and bounds since then, serving 700 distribution facilities in the metropolitan area, including food pantries, soup kitchens, child care providers, faith-based organizations, group homes, senior centers, shelters and youth programs. Today the bank distributes 28 million pounds a year of food, including a great deal of fresh produce.

What I found most interesting were the pre-packed bags of food intended for school children and seniors. CAFB’s Molly McGlinchy, who led us on the tour, told us that a lot of kids whose families run low on money toward the end of the month may get breakfast and lunch at school, but they’ll miss an evening meal. They are sent home over the weekend or at night, therefore, with a bag that includes a box of spaghetti, cans of green beans and pears and peaches, and a big jar of red pasta sauce.

The seniors’ package contained similar nutritious foods. In addition to the donations the CAFB receives, the bank also buys food at reduced rates from retailers. We saw food of every description – cans of Vienna sausage, canned chili with and without meat, peanut butter, cake and brownie mixes (very popular!) even vitaminwater!
NCL is proud indeed that our efforts to prevent false and deceptive advertising in the cereal marketplace resulted in this bountiful contribution to the Capital Area Food Bank. The visit today to CAFB reinforced NCL’s historical connection to those in society who suffer from hunger and poverty. We were really so pleased to be able to direct nearly 100,000 boxes of cereal to those in greatest need of nutritious food.

<3 your tap water - National Consumers League

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By Sally Greenberg, NCL Executive Director

The Environmental Protection Agency (EPA) recently took an important step towards ensuring that drinking water in communities across the United States is free from dangerous chemical residues. Lisa Jackson, Administrator at the EPA, told a United States Senate Committee that her agency is mandating a limit on perchlorate, a chemical found in rocket fuel and, unfortunately, also in the drinking water of between 5 and 17 million people. The effects of ingesting perchlorate include limiting the thyroid’s ability to absorb iodine, an important mineral for good health.

I am a big fan of drinking tap water and therefore applaud the EPA’s efforts. Tap water has many benefits, including the fact that it’s free! But consuming tap water is also much better for the environment. America’s consumption of bottled water, and the concomitant cost of production and disposal, costs billions of dollars every year. Tap water also has an important health benefit since it is often fluoridated, thus preventing tooth decay. Bottled water doesn’t have fluoride and many dentists say the increase in consumption of bottled water is reflected in patients with higher levels of tooth decay. Fluoridated water provides a critical public health benefit for children especially, and it can save them from a lifetime of dental disease.

One of the great health breakthroughs in the United States was the creation of safe drinking water right from the tap. But keeping that water safe is important; which is why the EPA’s action to curb perchlorate, which will also include a separate effort to set lower limits for 16 other chemicals in drinking water, is of critical importance.

Some popular Valentine’s Day gifts not so sweet when it comes to labor issues – National Consumers League

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This February 14th, millions of lucky loved ones will be receiving chocolate and flowers, the ubiquitous staples of Valentine’s Day gift giving. But the beautiful flowers and delicious chocolates we all enjoy this time of year often come at the expense of exploited adult workers or child laborers in the cocoa and flower industries.

Flower farm abuses

Valentine’s Day accounts for 40 percent of annual fresh flower sales in the United States. To meet the holiday’s huge demand for flowers, flower retailers regularly purchases large amounts of flowers from farms in Ecuador and Cuba. According to Change.org, two-thirds of flower farm workers in these countries are women. The women are routinely forced to work 80-hour weeks with no overtime pay, are subjected to harassment and abuse from male supervisors, and often suffer from health problems such as eye infections and miscarriages brought on by prolonged contact with dangerous pesticides. Despite these well-documented abuses, 1-800-Flowers (the largest florist in the world), has so far refused to offer consumers Fair Trade flowers that require farms to adhere to certain worker’s rights standards. Concerned consumers can sign Change.org’s petition urging 1-800-Flowers to sell Fair Trade flowers by clicking here and those who want no part in the exploitation of women can buy their flowers from local farmers or from competitors, such as Whole Foods and Stop & Shop, that sell Fair Trade flowers.

Forced and child labor at cocoa plants

The cocoa industry has its own record of worker abuse and exploitation. Since 2001, cocoa produced from West Africa has fallen under great scrutiny because of allegations that children are involved in harvesting the crop under sometimes harsh conditions. The U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor includes cocoa from five countries, including the Ivory Coast and Ghana. According to the International Labor Rights Forum, the U.S. Department of State estimates that more than 109,000 children in Cote d’Ivoire’s cocoa industry work under “the worst forms of child labor,” and that some 10,000 are victims of human trafficking or enslavement. Just last month, two Ivory Coast workers died while loading cocoa onto a United States-bound ship because they were overworked and never received proper training. The disappointing labor rights record throughout the West African cocoa industry has prompted the Payson Center for International Development at Tulane University to urge chocolate companies to take responsibility for their supply chains by working to ensure labor rights compliance and implementing traceability systems for their cocoa supply chains. Hershey has so far has remained conspicuously absent from labor rights discussions and has made no effort to help ensure the safety of its cocoa suppliers despite posting record earnings in 2010. Click here to sign a petition to urge Hershey to support Fair Trade certified cocoa.

Continuing the drive to enact bill shock protections – National Consumers League

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By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

Yesterday, NCL joined with eight other consumer and public interest groups to file reply comments in the FCC’s bill shock proceeding.  As we have previously mentioned, the FCC is considering new rules that would require wireless carriers to provide alert notifications to consumers when they are close to running out of voice minutes, text messages or data allotments.  Such alerts would, we argue, help consumer avoid expensive overage charges and roaming fees.

Joining with NCL in our comments were the Center for Media Justice, Consumer Federation of America, Consumers Union, Free Press, Media Access Project, the National Hispanic Media Coalition, New America Foundation Open Technology Initiative, and Public Knowledge.

In our reply comments, we argue that the wireless industry’s current usage control mechanism is not adequately protecting consumers from these charges.  We further argue that all consumers would benefit from a common baseline of consumer protection and that such rules would enhance competition and innovation in the wireless market.  Finally, we argue that customers of smaller rural and regional carriers and prepaid companies should also benefit from the proposed rules.

The issue now goes to the FCC, which will review our comments as well as the comments of other stakeholders, including the wireless industry, state public utilities commissions and attorneys general, other consumer groups and individual consumers. NCL will continue to play an active role in this issue as we work with the FCC to implement common-sense protections that benefit consumers and address the bill shock issue.

Scams, shams, and predators: online dating in a digital age – National Consumers League

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Valentine’s Day is just a short week away. Rather than spend what has often been called “the loneliest day of the year” without that special someone, some of the single among us are weighing their options and plotting on how to secure that last-minute date. Over the past few years, an increasing number of singles have been turning to the digital world of online dating, social networking sites, and singles forums to find romantic partners. If popular Internet dating site, Match.com’s, claims are to be believed, 1 in 5 relationships now begin online. Internet dating can be a great, low pressure way to meet new people and expand your social circle. However, online mingling comes with its own unique set of risks that consumers should keep in mind this February 14th.

Sweetheart swindles: In this scam, a fraudster begins a drawn-out process by setting up a profile on a dating or singles site and wooing potential victims by showering them with affection, quickly professing love, and even going so far as to send small gifts like flowers and chocolate. The romance period can last for several months. Eventually, the scammer will invent some imagined hardship—car crash, medical bills, travel expenses—and solicit their new love for money. Once the kind-hearted victim sends some cash, their new “sweetheart” will often begin a cycle of continuous requests for additional funds due to recurring “catastrophes.” Due to the very personal nature of the scam, many victims are too embarrassed to report the crime even when they have suffered substantial losses—the average victim loses around $7,000 dollars in a typical swindle.

Child predators: According to Online Dating Magazine, a consumer watchdog publication for online daters, sexual predators can use online dating services to target single parents. These criminals woo single parents and gain their trust and affection to secure what they are really after: access to the children. Online Dating Magazine issued a warning about the issue after Parents for Megan’s Law, a child advocacy group, set up a fake profile of a mother with two boys. A registered sex offender named Michael Bradley, who was convicted of abusing a 15-year-old-boy, showed interest in the woman, violating a court order not to seek relationships online.

Fake dating sites: While most consumers know to be wary of those they meet online, sometimes it’s the site itself that can put consumers at risk. Scammers can be quite technologically sophisticated when it comes to online fraud. There are cases where fraudsters have been known to set up sham dating sites full of fake profiles in order to charge unsuspecting users monthly membership fees.  Just this month, two men launched Lovely-Faces.com, a sham dating site complete with 250,000 fake member profiles the men created by importing data from public Facebook profiles. The site’s creators maintain that Lovely-Faces is a prank designed to expose the dangers of online fraud and identity theft. “Facebook, an endlessly cool place for so many people, becomes at the same time a goldmine for identity theft and dating — unfortunately, without the user’s control,” the two explained.

Here are a few tips to keep in mind:

  • Stick to well-known dating sites that have a reputation
  • Do some research online to ensure you are dealing with a legitimate business before becoming a paying member of a site
  • Some red flags that you might be dealing with a sweetheart swindler include proclaiming immediate feelings of love, refusal to speak by phone, consistent misspelling of common words, and requests to wire money or ship merchandise to a third-party
  • If you are at all concerned about introducing your new partner to your children, use a site like https://www.familywatchdog.us that lets you search by name and zip code for registered sex offenders

Online dating is often a great way to find and connect with new, interesting people. Most users of these sites aren’t scammers out to steal your life savings or poach your personal information. However, that doesn’t change the fact that caution, good judgment, and common sense go along way—whether your romancing takes place online or face-to-face.

Senate health care vote a troubling relief – National Consumers League

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By Sally Greenberg, NCL Executive Director

Thankfully the Senate vote this week on the health care reform bill went down on a 51-47 vote. But what’s troubling – very troubling – is that every single Republican in the Senate voted to repeal health care reform. Even senators who voted for the bill when it passed last year have now switched sides – these include both Senators from Maine Olympia Snowe and Susan Collins, and Senator Scott Brown from Massachusetts.

This landmark care bill will expand coverage to 32 million Americans who currently don’t have health insurance, most frequently because they cannot afford it. That doesn’t mean they don’t need the insurance – or won’t use health care services. It just means that when they get sick or get into an accident, they either forego care or end up paying out-of-pocket what are often exorbitant rates. Prior to passage of health reform, the United States was the only industrialized country that didn’t provide health care for its population. As the richest nation, that should be source of shame, not pride.

Republicans who voted to repeal say they feel the health reform law violates the Constitution by mandating that most individuals be required to buy insurance. The problem with that argument is that unless everyone buys into the insurance system, we won’t be able to spread the risk among both the healthy and sick. If only sick people opt into the insurance, soaring costs of taking care of those needing the most care will overwhelm the system.

The House of Representatives has already voted to repeal the bill. We salute those Senators who stood their ground on the vote this week and are standing up for the principle that all Americans deserve access to high quality and affordable health care.