Kudos to DOJ’s ‘Operation Malicious Mortgage’ – National Consumers League

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By Sally Greenberg, NCL Executive Director

BRAVO to the Department of Justice, which has arrested 500 people involved in scamming homeowners into believing they would save their homes. In announcing its effort to stop the scammers, “Operation Malicious Mortgage,” Attorney General Eric Holder described the fraud as “…truly astonishing.” What is interesting about this latest investigation is that it targets some of the smaller operators, not the big Wall Street operators involved in subprime loans. One fraudster was sentenced to 22 years in prison for stealing $400,000 from homeowners who were told they were refinancing their homes but were tricked into selling them.

DOJ says the number of mortgage fraud cases reported to DOJ has risen 5 percent in 2009. I think it’s terrific that the FBI has been put to work on stopping these frauds; the Wall Street Journal reports that investigations into mortgage fraud has more than doubled to 3,000 in 2009.

The FBI can do things we can’t at NCL’s Fraud Center, which logs more than 15,000 complaints each year and sends them to local state and federal law enforcement. For example, the FBI worked with a tax preparer turned informer who recorded conversations with mortgage brokers, real estate agents and others who purchased fake pay stubs, tax returns, and other documents used to inflate income of homeowners so they could obtain bigger mortgages. This group was able to secure $15 million in fraudulent loans. In another case, several fraudsters appealed to Haitian immigrants, using their personal information to apply for mortgages without the victims’ notice.

These are precisely the kind of stings – complete with arrests and hefty prison sentences – that the Department of Justice and FBI should be focused on. One arrest and conviction is a loud warning to other scammers that they’d best change their ways or they too will end up behind bars.

Uplifting and discouraging: the 2010 ILO Report on the Worst Forms of Child Labor – National Consumers League

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By Elizabeth Gardner, NCL public policy intern

The child labor movement seems to constantly be scrambling to gather more data about the size and scope of the child labor problem and the trends within the employment of children. While it’s true that graphs, charts, and data only get you so far, they are great tools to be able to wield to demonstrate the problem we’re up against. The ILO recently published its 2010 report on child labor—Accelerating Action Against Child Labour. Both uplifting and discouraging, it has already begun to inform discussions about child labor.

The good news is that the worst forms of child labor have continued to decrease since the last ILO report, which came out in 2006. Child labor among children under 15 has dropped by 10 percent. And there have also been some big victories for girls: investigators found that there was a 15 percent drop in female child laborers. There is still a lot of reason for concern though, for it’s hard to tell if these gains represent forward progress or if these children have just moved to other areas of child labor—like domestic service which are harder to track. Despite possible reductions in child labor there are still 215 million children laboring away, and 115 million of those kids are working in hazardous conditions.

As in previous years, agriculture continues to be the sector where the most children are still working—nearly seven in ten child laborers are in agriculture. This is true abroad—from Asia to Africa. And it is true at home. Here in the United States, 12-year-olds and even younger children are still legally working long hours in the fields, for low wages, and under dangerous conditions.

Child labor tends to propagate itself, depriving children of an education and continuing the cycle of poverty. That’s why alongside efforts to eliminate child labor, campaigns like the Global Campaign for Education are so important; they seek to address some of the root causes of child labor: the lack of access to basic education for more than 70 million children.

The new ILO report helps us direct our attention and on-the-ground efforts. For it’s these background factors of poverty, discrimination, and lack of access to education that we can’t ignore as we push to eliminate child labor at home and abroad.

Nine terms for labor: West Virginia’s favorite son and the relentless protection of workers and families – National Consumers League

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West Virginia’s Senator Robert C. Byrd – who died last week at age 92 – fought relentlessly for fair labor standards throughout his career as senator, which spanned five decades, making Robert Byrd the longest serving Senator in Congressional history. The National Consumers League celebrates his lifelong accomplishments, including vastly improving the conditions under which coal miners’ work.

Byrd fought for health care reform and greater access to higher education. And Byrd championed labor and employment protections, especially for mine workers. As President Cecil E. Roberts of the United Mine Workers of America said upon learning the news of Byrd’s passing, “The United Mine Workers and all coal-mining families have lost their best friend in U.S. Sen. Robert C. Byrd.”

To improve mine safety, Byrd secured funds to hire additional inspectors; he worked to develop newer and better safety equipment underground. In 1969, Byrd helped pass the Coal Miner Health and Safety Act and convinced President Nixon – who had threatened to veto the bill – not to do so. The passage of the Coal Miner bill helped to improve health and safety in the mining fields and likely saved thousands of lives. In fact, there was a ten-fold decrease in lives lost from the 40 years prior to passage of the bill to the 40 years after: recorded miners’ deaths totaled 32,000 before passage of the bill and 3,200 after. After passage of the act, Byrd continued to champion provisions to protect miners. He supported the 1977 improvements to the 1969 act and later fought to protect mining families by securing their access to health care. In 2006, he helped pass the Mine Improvement and New Emergency Response (MINER) Act, which ensures coal operators are planning, training for, and better able to respond to emergencies.

Byrd’s work on behalf of mining families is unparalleled, but Byrd will also be remembered for a number of other accomplishments. The West Virginia Senator co-sponsored the Employee Free Choice Act, to promote the ability of workers to form unions. Byrd dedicated substantial resources to improving access to education nationwide. His original concept for an honors scholarship in West Virginia soon became the model for the first and only federal based merit scholarship, the Robert C. Byrd Honor Scholarship Program. He brought money into the state for improved health facilities, medical schools, and medical care, expanding these benefits to other states across the U.S.

The Senate will not be the same without the unique presence of Robert Byrd of West Virginia. His legacy of landmark legislation -for miners, education, and health care – will be felt for decades to come. The National Consumers League mourns his passing but is grateful for all that he gave to American workers.

Fighting excessive rental car taxes – National Consumers League

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By Jacob Markey, NCL LifeSmarts intern

Jacob is the National Consumers League’s LifeSmarts intern this summer. He will be a senior at the University of Wisconsin-Madison in the fall, majoring in political science with a certificate in business.

On only my fifth day as an intern at the NCL, I had the extraordinary opportunity of witnessing Sally Greenberg testifying on Capitol Hill in support of H.R. 4175, a bill that would eliminate the ability of state and local municipalities to levy future discriminatory taxes on renting cars. What sounds like a mundane issue is actually a growing source of contention. Many municipalities erroneously believe the average person who rents cars is someone from out of state on a vacation or business trip. Yet, a substantial subsection of the car rental population is actually local residents, such as someone who needs a car for a week after a car accident, the consumer who needs a car for grocery shopping on a weekend, or even a family that rents a car to help drive their child to college.

Unfortunately, many municipalities have their eyes set on instituting rental car taxes to generate revenue. Back home in Milwaukee, there is talk about raising rental car rates in order to fund a commuter train in Southeastern Wisconsin. Sally noted in her testimony that while some purposes are valid, these taxes often go towards what many would consider unnecessary private projects, such as new stadiums and performing arts centers. She mentioned that the number of rental car taxes has exploded, with 118 separate car rental taxes in 43 states and the District of Colombia today, eight times that of 20 years ago, and exponentially more than the single case found in 1973. As they can add as much as $15 to a $25 rental, more than a 50 percent increase, it should come as no shock that they have raised a substantial amount of revenue — according to industry research, more than $7.5 billion. Regardless, many people support these taxes with the false expectation that this is a method to effectively tax tourists from out of town to fund tourist attractions.

Additional statistics from the rental car industry demonstrate that discriminatory rental car taxes disproportionately affect the poor and minorities. The Brattle Study, conducted by the Brattle Group, notes that 19 percent of car rental taxes are paid by families earning less than $50,000 per year, and that African Americans pay 27 percent of rental car taxes, even though they represent only 12 percent of the population.

H.R. 4175 represents an opportunity for consumers to fight back against unnecessary, excessive taxation to pay for politicians’ pet projects and for all those who feel they are “nickled and dimed” to stand up to the taxation. The National Consumers League is joined by a wide range of organizations in support of this bill, spanning from the American Car Rental Association to the United Auto Workers, and the National Urban League. We urge you to take a stand against these types of unwanted taxes by contacting your local representative and asking them to join us in support of this bill as well to ensure that these unfair taxes are eliminated.

Raise a glass to hydration – National Consumers League

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By Courtney Brein, Linda Golodner Food Safety and Nutrition Fellow

Come rain, shine, snow, or sleet, the human body will require water. While it is important not to neglect one’s liquid diet throughout the year, during the summer months staying hydrated often requires additional effort. The body more easily becomes dehydrated – meaning it loses more fluids than it takes in – in warm weather, and, without adequate fluids, it cannot carry out its normal functions.

To complicate matters, by the time individuals feel “thirsty,” they are often already slightly dehydrated. This problem is exacerbated in older adults, whose bodies less readily sense dehydration.

How can one prevent dehydration? Drink up! All liquids “count” when it comes to hydrating the body, although – for health reasons – sugary drinks should only be consumed occasionally. Eating fruits and vegetables also helps provide the body with the liquid it needs.

Doctors generally recommend that individuals drink approximately eight or nine cups of fluid per day, but check with your physician or consult this calculator to more precisely determine your unique needs.

Exercise (or any other activity that causes sweating) requires additional consumption of liquids. Make an effort to hydrate before, during, and after exercise, in order to replace lost fluids.

Advocates hail passage of financial reform bill – National Consumers League

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By Sally Greenberg, NCL Executive Director

President Obama is hailing the deal reached between Senate and House negotiators and passage of the regulatory reform bill. Mr. Obama called it the “toughest financial reform since the ones we created in the aftermath of the Great Depression.” And he plans to sign the bill before the Fourth of July recess. Our consumer colleagues were largely the driving force behind this legislation, though the financial industry won some important victories. Those groups include the Consumer Federation of America, National Consumer Law Center, U.S. PIRG, and several others. With Harvard Law Professor Elizabeth Warren providing the inspiration for regulating the “gotchas” consumers face in fees and charges buried in the fine print of financial documents, our colleagues led the drive for a consumer protection agency to oversee the financial industry.

Under this bill, we will have a new regulator to oversee and enforce fair rules on checking accounts, mortgages, and payday loans, while preserving the power of state regulators to enforce their own consumer protection laws. That’s important because federal legislation too often preempts state consumer protection laws from being enforced in favor of a federal law – a loss of enforcement power that consumer advocates fight every time.

Lenders will have to make disclosures in complicated legal documents much easier to understand and cannot impose fees – late fees, prepayment fees, willy-nilly.

The bill also contains important protections for investors, calling on banks and others that issue securities to have limit their risks and to have some skin in the game themselves. I particularly liked that Senator Blanche Lincoln (D-AK) tried hard to regulate the derivatives industry but was forced to scale back her original amendment; nevertheless, the industry will now be required to segregate their dealings only in the riskiest categories of derivatives, including the highly structured products like credit default swaps, which sound more complicated than they are (betting that people will default on loans or mortgages). People made millions betting the housing market would implode, and it was in their interest to see it implode.

This is a far-from-perfect bill, but we should take our hats off to all the consumer advocates that led the fight for the bill and Chairman Barney Frank (D-MA) in the House and Chairman Chris Dodd (D-CT) in the Senate for getting the bill over the finish line.

Dangerous drywall demonstrates need for import safety regulation – National Consumers League

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By Sally Greenberg, NCL Executive Director

The verdict is in: a Miami court recently awarded $2.4 million in damages to a couple who had to flee their home because of corrosive Chinese drywall that disintegrated, giving off noxious fumes and turning pipes black in the process. This case is the first one where a jury found the drywall manufacturers liable for the defective, sulfur-emitting product. Previously, a federal judge awarded $2.6 million to seven Virginia families to compensate them for damages related to rotten drywall. The product is found most frequently in homes built in Florida, Virginia, Mississippi, Alabama, and Louisiana, and became a crisis after the housing boom.

The Florida couple who brought the case against Banner Supply, importers of the drywall, had to leave their home with their two young sons so it could be gutted and renovated. There are thousands of similar cases.

Documents uncovered at trial, including a secret memo between the manufacturers and importers, revealed that Banner was warned that the drywall was defective and shouldn’t have been used. Meanwhile, the Virginia families haven’t been able to collect because the Chinese drywall maker didn’t respond to the court papers. This is precisely the problem that new legislation NCL is backing will address, ensuring that any company that imports products into the United States has a representative to take service of process if the company is sued and that the company puts up a bond to ensure there are funds to compensate anyone who is hurt by a product imported. The problem the Virginia families face is increasingly common when imports contain harmful chemicals or prove dangerous and defective. There’s too often no one around to take responsibility.

NCL shares the concerns of those whose lives have been turned upside down by this Chinese drywall debacle. This is a product that should never have been brought into the United States, much less allowed to poison hundreds of thousands of homes. Adults and children have become ill, had their lives disrupted, and have had their life savings ruined. The fact that the importer and manufacturers both knew it was defective as they installed it proves that the regulatory – and liability – system need to do far better to protect American homeowners and consumers.

Risk vs. benefits – National Consumers League

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By Mimi Johnson, Director, NCL Health Policy

In the world of health care – and more specifically treatments – there is a constant battle between risks and benefits.

This is a dilemma we’ve all faced as we’ve chosen treatments for ourselves or our loved ones. We want the best possible outcome. Policy makers, drug manufacturers, health practitioners, and every day consumers must decide what the best possible outcome is, in addition to determining how to weigh the risks and benefits in achieving the outcome.

The challenge of weighing risks versus benefits is one that sometimes divides the patient advocates from the consumer advocates. Some say that we are all “consumers” of health until we are diagnosed with or seek treatment for a problem … and then we are likely to identify as a “patient.” Traditionally, consumer advocates examine and push others to understand the risks associated with a treatment in an effort to have the safest possible treatments available. Alternatively, patient advocates tend to focus on the benefits of a treatment and the need to have greater and timelier access to treatments, sometimes overlooking risks.

Having battled against a historically bad allergy season, I faced firsthand the challenge of weighing risks and benefits. When treatments weren’t working, my doctor changed my inhaler. The new inhaler helped improve my ability to breathe, but it had a funny side effect … it altered my voice! This was not one of the top-line risks listed in the consumer medication information, and I was not warned about this side effect by my doctor. I did a little sleuthing of my own, and low-and-behold it is a very commonly reported upon side effect by users of this particular inhaler. Though I was feeling 100 percent better, everyone – particularly when talking on the phone – would ask if I was alright and often assumed I was upset by something. In this instance, I was happy to take the risk of changing my voice a bit, knowing that I would once again be able to breathe and resume my normal activities.

Many of the risk versus benefit discussions center on far more serious risks and benefits. For example, it was *recently announced that a groundbreaking treatment is available for melanoma patients. The new treatment essentially melts the cancer away. While this has been deemed monumental by doctors and cancer researchers, it does not come without its pitfalls. Risk number one – there is a great chance that it won’t work on you, as it is believed to be effective in only about 20 percent of the population. Risk number two – a common side effect includes developing rheumatoid arthritis. These risks, among others, need to then be weighed against the benefit of extending one’s life.

This challenge of determining what the best outcome is and what we’re willing to face in order to achieve it is nothing new, and it will only intensify as we begin to implement health reform.

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings.

Wall Street taking 28 percent from your 401(k) pie – National Consumers League

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By Amy Blume, NCL Public Policy Intern

At a press conference last Wednesday, we learned that many participants of 401(k) plans lose up to 28 percent of the retirement savings that they would have over their working life due to Wall Street’s high investment fees.  The worst part is that most people are entirely unaware of how much of their money goes to fees because the bulk of these fees, which go straight into Wall Street pockets, are hidden fees, invisible, and undisclosed.

Several members of the House of Representatives Education and Labor subcommittee are encouraging adoption of an amendment provision to H.R.4213: “American Jobs and Closing Tax Loopholes Act,” hoping to remedy the problem.  Chairman George Miller (D-CA) wrote the provision to make information about fees more accessible for consumers and their employers.  The provision requires investment companies to disclose all fees upfront and to help workers understand their investment options.  But the Senate has been resistant to the provision, likely due to pressure from Wall Street.

To get its point across and urge the Senate to adopt the provision in the bill, the House subcommittee leadership took an innovative approach in a June 16 press conference.  The committee designated an apple pie for each Finance Committee Senator, each pie marked with a specific Senator’s name.  In each one, a large piece was cut out – equaling roughly 28 percent of the pie – and replaced with a sign which read, “Wall Street’s cut of your 401(k) pie.”

The visual was humorous but also effective.  Participants in 401(k) funds deserve to know where their money is going and how much they’re paying in fees upfront.  401(k) plans and other investment options are complex enough without the side problems of hidden fees or penalties.  People rely on retirement plans for their future and use these funds to know when a family member can stop working.  It’s important for consumers to know how much they’re paying for their investments, with fair and accurate disclosure of all potential taxes and fees, and NCL supports the disclosure amendment.

Watch statements from the Press Conference here.

NY Times exposing child farmworker dangers – National Consumers League

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By Sally Greenberg, NCL Executive Director

NCL staff woke up to find that Saturday’s New York Times had a front page above the fold story about one of NCL’s core issues: getting farmworker kids out of the field and into school. NCL’s roots, going back to 1899, were focused on eradicating child labor and sweatshop labor. Florence Kelley is largely responsible for advocating, legislating, and litigating most child labor out of existence in the United States.

However, a loophole in landmark worker protections the Fair Labor Standards Act, which prohibited most child labor in the United States, had an exception for agricultural workers. Farmworker kids are often victims of a cycle of poverty – they are pulled out of school while their family migrates for work and end up working 10-hour days in stifling heat exposed to pesticides, sun stroke, lack of water and toilets, and other hardships that come with working in the fields. Many have such a spotty academic record they can’t graduate from high school, thus perpetuating the burden of low-wage jobs and no chance of advancement through education.

Some of the parents quoted in the article feel ambivalent about the law. They want their kids with them – or working – because they need their pay, but they also know the best place for them is school. But that was true 100 years ago when Florence Kelley ran the League. If you look at the problem of child labor from that prism, keeping children out of the fields is ultimate the best solution.