Guest blog: NCL encourages FTC to propose new rule regarding protections for franchisees in response to exclusion from the agency’s non-compete covenants

By Tesa Hargis, NCL summer intern

On April 24, 2024, the Federal Trade Commission (FTC) announced its final rule on non-compete covenants (the “Rule”).

Fifteen months earlier, on January 19, 2023, the FTC posted the notice of proposed rulemaking (NPRM) for the Non-Compete Clause Rule. The public comments on the proposed rule sought to answer the question of “whether the proposed rule should also apply to noncompete clauses between franchisors and franchisees.”

The Non-Compete Clause Rule comment period closed on April 19, 2023, after being extended from the original deadline of March 20, 2023. The FTC received 26,813 comments and posted 20,697 comments to the rulemaking docket.

A year after the notice and comment period for the Non-Compete Clause Rule lapsed, the FTC’s Final Non-Compete Rule was issued. The Rule bans non-compete agreements at the national level except for those between franchisors and franchisees. The Rule does, however, apply to non-competes between the employees of a franchisee.

Within the supplemental information of the Rule, the FTC explained that franchisees were excluded from the definition of “worker” within the rule because “the relationship between a franchisor and franchisee may be more analogous to the relationship between two businesses than the relationship between an employer and a worker.” However, many comments argued that franchisor-franchisee relationships are similar to employer-employee relationships because, like employees, franchisees generally lack bargaining power, and their interests are not generally protected “because franchisors generally do not entrust franchisees with trade secrets or details about their broader commercial strategy.”

The final rule ultimately does not apply to franchisor-franchisee non-competes, and those covenants remain subject to State common law and Federal and State antitrust laws.

Franchisor business practices and franchise agreements

Parallel to the comment period for the Non-Compete Clause Rule, in March of 2023, the FTC announced a separate request for public comment on franchisor business practices and franchise agreements in an effort to inform policy and enforcement efforts by hearing from a broad range of stakeholders and ensure a fair marketplace and halt unfair and deceptive franchise practices.

The comment period for the Franchise Agreements and Franchisor Business Practices closed on June 8, 2023, after being extended from the original deadline of May 9, 2023, with 5,291 comments received and 2,216 posted. A rule on Franchise Agreements and Franchisor Business Practices has yet to be proposed in response to the comment period which closed thirteen months ago.

Stakeholder comments

Franchisees such as William Kyle, who owns 14 McDonald’s franchises, have highlighted the restrictive nature of non-compete clauses in their agreements. Kyle describes his situation as a “take it or leave it” scenario, with a non-negotiable contract that includes an 18-month non-compete clause preventing him from starting a similar business within a ten-mile radius after his franchise term ends. This severely limits his ability to use his industry experience to support his family if McDonald’s denies him a contract renewal.

Similarly, Melissa Catalano, a Wellbiz Brands franchisee for over ten years, has expressed concerns about being trapped by franchisors who exploit their position. She detailed issues such as arbitrary fees, forced purchases of overpriced supplies, and restrictive policies that leave franchisees financially vulnerable and powerless.

Mark Liston, with over 40 years in the franchise sector, argues that the franchise model provides significant opportunities for business owners and should not be subjected to broad, sweeping regulations. He emphasizes that strong franchisor-franchisee relationships are mutually beneficial and that the franchise model has helped many achieve the American dream.

FTC developments

In response to the March 2023 request for public comment on franchisor business practices, the FTC released several significant statements on July 12, 2024. These include a Policy Statement asserting that certain contract provisions, such as non-disparagement and confidentiality clauses, are unlawful if they restrict franchisees’ communications with regulators. Additionally, the FTC issued Staff Guidance emphasizing that any new or increased fees not disclosed in the Franchise Disclosure Documents are likely violations of the FTC Act. The FTC also published an Issue Spotlight highlighting the top complaints from franchisees, including issues like unilateral changes to operating manuals and high default rates on SBA loans. Lastly, the FTC reopened the comment period until October 10, 2024, reflecting an ongoing commitment to addressing franchisee concerns.

Furthermore, on July 17, 2024, the FTC published an analysis detailing its stance against undisclosed “junk fees” imposed by franchisors, stating that such practices violate the Franchise Rule and Section 5 of the FTC Act.  This analysis explicitly targets undisclosed fees related to marketing, training, property improvement, and other franchisor-mandated products or services. While this is a step in the right direction, the ongoing process must ensure these guidelines are actionable and that franchisors do not continue to use their size and influence to bully franchise owners.

NCL’s position

NCL strongly urges the FTC to revise its current approach by proposing new rules to better protect franchisees. The exclusion of franchisor-franchisee agreements from the Non-Compete Rule, coupled with the delay in addressing franchisor business practices, has left significant gaps in protection for franchisees. The prolonged inaction following the comment period undermines the urgency to tackle pervasive and often exploitative practices in the franchising industry.

The FTC’s recent developments, including the stance against undisclosed “junk fees” and other contract provisions that restrict franchisees, are commendable but only a starting point. NCL calls for the FTC to prioritize robust and actionable regulations that ensure fair treatment of franchisees, promote transparency, and foster a competitive marketplace. It is crucial that the FTC heeds the thousands of stakeholder comments and implements comprehensive protections to address the power imbalances and unfair practices currently faced by franchisees.

NCL recently wrote a letter to FTC Chair Lina Khan on this issue, in which we highlighted that some of the largest franchisors control their franchisees to such an extent that they are effectively operating as the owners and operators of these individual locations while leveraging the legal benefits of being a franchisor. This creates a system where they enjoy the benefits of ownership without any of the risks – which they transfer to their franchisees. We are concerned that private equity firms take advantage of U.S. franchise law, and their heavy-handed control, if left unchecked, threatens to destroy the franchise model and even ruin the American Dream for so many hardworking franchisees.

Sources

Press Release

Non-Compete Clause Rule

Non-Compete Clause Rule Rulemaking Docket

Solicitation for Public Comments on Provisions of Franchise Agreements and Franchisor Business Practices

Solicitation for Public Comments on Provisions of Franchise Agreements and Franchisor Business Practices Rulemaking Docket

Financial Times

TroutmanPepper 

The National Law Review

Melissa Catalano Document (FTC-2023-0026-0001)

William Kyle (FTC-2023-0026-0001)

Mark Liston Document (FTC-2023-0026-0001)

The National Law Review: FTC Issues Statements Signaling Major Changes to its Oversight of Franchise Relationships and Franchise Disclosure Requirements

Lathrop GPM: FTC Takes Action Impacting the Franchise Relationship

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About the National Consumers League (NCL)

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

Guest blog: My background in farmwork

By Luz Vazquez Hernandez, NCL Child Labor Coalition Summer Intern

Coming from a background of farmwork, I know the struggle against heat. At 14 years old, I began picking blueberries in Michigan during the summer, and from there on I learned to pick a variety of crops all over Michigan and my home base in Florida. I spent my weekends and any school days off – including summers – picking strawberries, squash, pickles, peppers, and jalapeños.

I learned to push my body and to handle extreme weather conditions. I suffered pains and aches that my parents felt every day. Complaining to my parents was not an option, and my body adapted.

Working in the fields during intense heat were the worst moments. Covered in layers from head to toe, with pants, a long-sleeve shirt, a hoodie, and a bandana was my daily attire. Covering most of my face, the bandana made it hard for me to breathe in extreme heat; at times, I felt my body, head, and eyes just shutting off. I felt I could not go any longer, but seeing my parents endure the heat and hold it in, I tried to do the same and distract myself from my thoughts.

It was common to see workers faint, as taking breaks in the shade and drinking water were not enough. I witnessed my mom, dad, and brother faint more than twice in 100-plus-degree weather, which always made me scared; somehow, we all managed to continue our 12 to 13-hour shifts because our paycheck depended on how many crops we picked.

We could not afford to take long lunch breaks – we often had a bite or two of lunch and a Gatorade, and then immediately went back into the fields. Before I turned 19, I stopped working as a harvester because I knew that I had greater opportunities than my parents and that farmwork was not the only job I could have.  I have made it a goal of mine to share my story and continue my education so that I can help create the changes that my community needs.

I am now a rising senior at Michigan State University, and I am interning with the National Consumers League (NCL) and the Child Labor Coalition (CLC). I am grateful because I get to work closely on policies affecting my community and interests. However, knowing that I get to work inside an office with air-conditioning makes me feel guilty because I know that my parents and younger siblings are in Michigan picking crops in this summer heat, sweating, thirsty, and hoping for a cloud to bring shade to them.

As a nation, the United States needs to take immediate action to protect farmworkers from extreme heat exposure. As temperatures rise, farmworkers’ suffering is increasing. Farmworkers feed America and deserve protection.

A current legislative effort addressing heat protection is the Asunción Valdivia Heat Illness and Fatality Prevention Act, which sets standards needed to protect workers from heat, such as having drinking water accessible, requiring rest breaks, and providing access to shade. The bill would require employers to educate and train workers to recognize and prevent heat illness and mandate emergency protocols.

In a separate initiative, the Biden administration recently proposed a set of regulations to protect workers in extreme heat. The rules focus on including heat safety regulations at work, and they direct the Occupational Safety and Health Administration to help establish a nationwide protection standard. These two initiatives are vital if we want to protect farmworkers from heat illness.

After years of seeing my parents toil in the fields and working beside them, I feel the need to be an advocate for my community. Interning with the NCL and CLC, I have become acquainted with numerous congressional bills, but the Asunción Valdivia Heat Illness and Fatality Prevention Act is one that would affect me and fellow farmworkers. The work of the National Consumers League and Child Labor Coalition and groups like the National Heat Network, organized by Public Citizen, gives me hope that soon farmworkers and other outdoor workers who work in extreme heat will have safer working conditions.

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About the National Consumers League (NCL)

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

Understanding the transformative potential of the Juneteenth holiday

By Sally Greenberg, Chief Executive Officer, NCL

As I sat in my home study and contemplated the meaning of the Juneteenth holiday last month – with all the division in the country, with states banning discussions about racial and other forms of discrimination in schools, 8 States Debat[ing] Bills to Restrict How Teachers Discuss Racism, Sexism, and a Supreme Court decision banning schools from considering affirmative action in admissions – I could be just sad. But, unexpectedly, the Washington Post brought some encouraging news.

More on that in a minute.

First some definitions: Juneteenth is a federal holiday that marks the day when enslaved people in Galveston, TX were informed by a Union general  two years after the Emancipation Proclamation that they were free. What is Juneteenth? Learn the history behind the federal holiday’s origins and name. Their enslavers had not bother to tell them.

So, Juneteenth gives Americans the opportunity to think, talk, discuss, and learn about the scourge of slavery in the United States and how it finally ended. Juneteenth is also an opportunity to talk about history and what followed emancipation; the passage of Jim Crow laws intended to keep emancipated slaves in a state of poverty, and included rampages against Black communities in many cities throughout the nation, most notoriously in Tulsa, OK where the  1921 Tulsa Race Massacre took place and where thousands of lynchings of African Americans and others, including Native Americans. And in 1913, Frank Leo, a Jew who was tried and pardoned, was hanged by an anti-Semitic lynch mob in Georgia. In fact, no ethnic group was immune from these attacks,  including the Irish and Italian Irish and Italian neighborhoods.

Shouldn’t we be teaching our kids about these events?

Sadly, there is a backlash from conservatives across America to “talk” about our history, as evidenced by the Supreme Court’s decision noted above. That recent decision also unleashed attacks on corporate efforts at diversity.

But a new survey in published in the Washington Post (WAPO) today buoyed me. Yes, there has been backlash against teaching American history; this includes bans on discussing the history of slavery, but also a long history of discrimination against Black, Hispanic, Asian, Jewish, Native, and LGBT Americans citizens throughout our nation’s existence.

However, the WAPO poll suggests the public supports teaching about these issues. The April 2024 survey found that most Americans – 61 percent overall – thinks that having Diversity, Equity and Inclusion programs in U.S. companies is a good thing.

Support for programs to increase racial diversity in the workplace remained steady over the past year, despite the attacks from conservatives. Last year, 62 percent of Americans said efforts to increase racial diversity in workplaces were a good thing, according to a Post-Ipsos poll. Most popular were mentorship opportunities for underrepresented groups with 75 percent of Americans supporting.

Republican Florida Gov. Ron DeSantis has banned DEI in his state, including at public colleges and universities. America First Legal, a group backed by former Trump adviser Stephen Miller, has filed legal complaints over diversity practices at scores of companies, including United Airlines, Kellogg’s, Nike, and organizations such as the FBI, National Football League, and Major League Baseball.

But the WAPO poll also found that more than 8 in 10 Americans overall said they believe the country has made progress on that front since the 1950s, but perceived progress differs by racial and ethnic groups.

The Post article didn’t take sides or draw any broad conclusions but what this polling says to me is that there is a lot more support for raising awareness about civil rights, teaching about our nation’s history – and all of it – and conducting mentorship and DEI trainings, and with it teaching and learning about the history of racial and other forms of discrimination in America. That should give all of us who support more – not less – education and DEI in general – cause for hope. What better day to celebrate that hope than Juneteenth.

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About the National Consumers League (NCL)

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

What we need now isn’t just abortion access; it’s time for a reproductive justice framework

By Sam Sears, Health Policy Associate, National Consumers League

For two years now reproductive justice – as a term, a framework, and an ideal – has been thrust into the mainstream. While those who work in reproductive healthcare access and advocacy, particularly abortion access and rights, are familiar with the term, not many people knew about it before the Supreme Court of the United States handed down its decision in Dobbs v. Jackson Women’s Health Organization. Given the most recent rulings from the Court this past month, and what’s been happening in the states in the two years since Dobbs, reproductive justice is all that more important.

So, what is reproductive justice?

It’s actually a very simple concept and framework from which advocacy work stems. Coined by Black women in 1994 before the International Conference on Population and Development in Cairo, the term mashes together reproductive rights and social justice. These women recognized that the pro-choice movement at that time was not accomplishing enough for women of color. Expanding upon the human right to maintain personal bodily autonomy, reproductive justice is often defined as the right to have children, the right to not have children, and the right to parent the children in safe and sustainable communities and environments. Thus, reproductive justice not only includes access to reproductive healthcare, such as birth control and abortions, but it also encompasses economic factors, such as pay equity, childcare costs, and more.

Since the Dobbs decision, there has been an influx of state bans on abortion at various points of gestation and with ever-varying limitations. The most common in the mainstream knowledge base would be Idaho’s ban, one of the nation’s strictest which went into effect in August 2022 (not long after Dobbs). Idaho bans abortion at 6 weeks, with minimal exceptions for the life of the mother and in cases of reported rape or incest, making it one of the most restrictive bans in the country. However, there are 15 other states with some of the most restrictive abortion bans as well.

Anti-abortion conservatives have also begun attacking other aspects of reproduction, further bringing the need for reproductive justice to the forefront. In the last two years, there has been an increase in the dis- and misinformation being spread regarding birth control – calling them abortifacients.

Now, I want to be explicitly clear here. Birth control, be it intrauterine devices (IUDs), the standard pill, or a Plan B emergency contraceptive are NOT abortion-inducing drugs. Contraception prevents pregnancy; it does not end it. Because of this misinformation, attempts to secure the right to birth control or attempts to increase access are not passing within state legislatures. And in Idaho, state elected officials are seeing are being pushed to ban access to emergency contraception and IUDs.

Let’s not forget the chaos surrounding in-vitro fertilization (IVF) because of Alabama and this state’s Supreme Court. As a reminder, in February the Alabama State Supreme Court ruled that frozen embryos are recognized as children under state law. Now the big question is whether, because of this decision, IVF is banned within the state given that not all embryos are viable after being frozen and thawed for placement. So many of the state bans on abortion also include fetuses within the definition of personhood. The impact of the Alabama IVF decision is further-reaching than just the state, especially with the nation’s patchwork web of definitions of personhood because of these bans.

Federal lawmakers have begun trying to clarify and codify access to birth control and IVF. Earlier in June, Senate Democrats hoped to bring a floor vote forward to establish the right to IVF as a method of conceiving. However, the bill, which was authored by Sen. Tammy Duckworth (D-IL), who conceived her children with the help of IVF, was blocked by the GOP because of claims of religious freedom and states’ rights concerns. Senate Democrats have also seen the Right to Contraception Act be blocked by the GOP around the same time. Missouri Sen. Hawley states that his concerns regarding the Right to Contraception Act are regarding state laws and how the bill could lead to mifepristone, one of two medications used in the abortion pill, being available in states regardless of their laws.

Last month there were two small wins within the reproductive justice space. SCOTUS had two cases before it that were related to abortion – Alliance for Hippocratic Medicine v FDA and Idaho v. United States. For the first case, the suit took aim at the Food and Drug Administration (FDA) challenging the agency’s approval of mifepristone, arguing that the FDA did not adequately consider the evidence back in 2000. SCOTUS unanimously ruled that the Alliance for Hippocratic Medicine and the other plaintiffs in the case did not have the standing to challenge the FDA. SCOTUS ruled to dismiss Idaho v. United States thus leaving in place the order that blocks Idaho from enforcing its current abortion ban, described above. In this case, the Department of Justice (DOJ) filed against Idaho, arguing that the state’s abortion ban violates the Emergency Medical Treatment and Labor Act (EMTALA).

Overall, the anti-abortion groups are expanding their work well beyond simply abortion. Thirty years ago, the Women of African Descent for Reproductive Justice recognized that the then-pro-choice movement was not enough; it left women of color and other disenfranchised women behind and out of the conversation. These women expanded their work to also include childbirth and child-rearing. With the current attacks against contraception, as well as the uncertainty and expected attacks against IVF, the pro-choice movement must expand as well. It is time for the nation to begin working toward reproductive justice.

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About the National Consumers League (NCL)

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

Guest blog: Kids and car safety

By Sydney Greenberger, NCL Summer Intern

On June 20, the first day of Summer 2024, 1,086 baby onesies were placed in a display across from the U.S. Department of Transportation headquarters in Washington, DC, representing the number of young lives lost to hot cars since 1990 in the United States. Kids and Car Safety predicts that over 7,500 more children have survived being left in hot cars, with various injuries. Already in 2024, three young children have lost their lives; the situation is exacerbated because the National Highway Traffic Safety Administration (NHTSA) has failed to issue a regulation requiring technology to be placed in new cars to stop hot car deaths despite a mandate from Congress to do so.

In 2022, Congress directed the NHSTA to issue a federal safety standard requiring new vehicles to be equipped with technology to prevent hot car deaths by November 2023. The NHTSA has delayed action until November 2024. The technology is there, and it isn’t expensive, but the NHTSA has priorities other than protecting the lives of innocent children and companion animals at risk of being forgotten in hot cars this summer.

A common misconception among parents in the U.S. is ‘this would never happen to my family; how could you ever leave your child in a car?’ However, history proves that these tragedies can happen to anyone. More than half of these accidents occur because a parent unknowingly left their child in their vehicle. It happens to parents who are absent-minded. But it also happens to the most attentive parents. Parents who are well-educated and well-off. Over the past decade, it has happened to a dentist, a social worker, a police officer, a nurse, an assistant principal, a pediatrician, and many more. Preventable hot car tragedies can happen to anyone.

On average, 38 American children die yearly from these tragedies. 88% of these victims are under three years of age. 43% of children who were unknowingly left in cars were supposed to be dropped off at their daycare. Rear-facing car seats look the same to parents whether there is a child in them or not, and if a child is asleep, it can be easy to forget they are there.

Once a child has been left in a hot vehicle, saving them from these preventable tragedies is a race against the clock. A child’s body temperature rises 3-5 times faster than an adult’s. Cracking the windows and parking in the shade do little to slow the heating process or decrease the maximum temperatures in a vehicle, and temperatures in cars rise fastest within the first 10 minutes of being parked. Hot car deaths have occurred on sunny days with temperatures as low as 60 degrees. Heatstroke starts when the body reaches a core temperature of 104 degrees, and death can occur at just 107 degrees. By the time parents realize what has happened, it is almost always too late.

Technology could have prevented most of these accidents from occurring. Most car manufacturers support rear-seat reminder systems, which are audio and visual systems that remind drivers to check the backseat after shutting off the engine and exiting the vehicle. The hot car provision passed by Congress calls for these audio and visual reminders, but advocates believe that occupant detection systems are needed to prevent hot car deaths and injuries. Occupant detection systems use motion, radar, lidar, and carbon dioxide to detect a living being inside a vehicle. These systems can distinguish between living things and inanimate objects in the back seat. The system cannot be overridden or disabled, and minimizes false alarms.

Rather than require occupant detection and alert technology that costs less than $20 per vehicle, the NHTSA has decided that a “Stop. Look. Lock.” campaign is more effective than inexpensive life-saving technology.

Until the NHTSA passes these required regulations to ensure child safety in hot cars this summer, it’s up to parents to ensure the safety of their children and pets. If you see a child left unattended in a vehicle, immediately call 911. Teach children that vehicles are not a play area, and store car keys out of reach. Have a plan that your childcare provider will call you if your child fails to show up for school. Create a “look before leaving” routine whenever you get out of the car. Many parents leave their briefcase or ID badge in the back seat, so they must check before going into the office. Others always keep a large stuffed animal in the car seat. If their child is in the car, the stuffed animal moves to the front seat, reminding parents that the child is in the back.

The most effective way to prevent hot car deaths of children and pets is through the life-saving technology that the NHTSA has failed to regulate and require. The NHTSA has left it solely to parents to ensure child and animal car safety. We should all be calling our members of Congress and urging government officials to prioritize and regulate the safety of children and pets.

Sources

Safety recommendations from noheatstroke.org

Kids and Car Safety

Kids and Car Safety Occupant Detection vs. End of Trip Reminder

From the NHTSA

32304B. Child Safety

Advocates for Highway and Auto Safety

Press Release

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NCL staff attends consumer protection brownbag

By Sally Greenberg, Chief Executive Officer, NCL

On June 25, 2024, the National Consumers League (NCL) joined the Consumer Protection Brownbag event, moderated by Adam Teitelbaum, the Director of the Office of Consumer Protection at the DC Attorney General’s Office.

I shared the history and mission of NCL and discussed our more recent successes, including NCL’s advocacy role for workers in DC receiving minimum wage through the “One Fair Wage” initiative and the Federal Aviation Administration Reauthorization Act of 2024, which now includes automatic refunds for flight cancellations and excessive delays and the elimination of fees for parents to sit with their children. We also discussed anti-trust concerns with the Ticketmaster-Live Nation merger and the ongoing lawsuit involving the DOJ and DC OAG. Moreover, I spoke about our case against Starbucks for false claims regarding ethically sourced products. Finally, I covered a range of consumer protection efforts, from fraud prevention and unit pricing enforcement to proposed alcohol labeling reforms.

Erin Witte, Director of Consumer Protection at the Consumer Federation of America (CFA), spoke about the mission of CFA and her personal journey from criminal lawyer to consumer protections advocate. She outlined CFA’s current focus areas, including tackling junk fees, combating forced arbitration clauses that limit consumers’ legal recourse, and advocating for product safety, food and alcohol regulations, investor protection, and insurance reforms. She also discussed the link between credit scores and car insurance, and how this association is one of the primary drivers of rising insurance costs. Witte highlighted CFA’s collaboration with regulatory agencies to address these pressing consumer issues.

Witte, Teitelbaum, and I responded to questions during the question and answer session about the obstacles faced by attorneys and advocates pursuing consumer protections and how the possible changes in administrative deference could affect the future of consumer protection.

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Patients can’t afford Congress delaying PBM reform another year

By Robin Strongin, Senior Director of Health Policy

As the 2024 political campaigns intensify, we’re going to be hearing a lot from candidates about what they’re going to do to make healthcare more affordable. The problem is, we’re dealing with high out-of-pocket costs right now and we shouldn’t have to wait until after another election for something to be done about them, especially when the current Congress has solutions today.

As I navigate my husband’s care through his battle with Lewy body dementia and speak to other patients and their loved ones, I have become all too familiar with the practices certain players in our healthcare system use to boost their already extraordinary profits at our expense. Pharmacy benefit managers, or PBMs, are a prime example of this and we urgently need legislation to rein in their actions that are affecting both the costs we pay for care and access to the medicines our families need.

Several committees in both the U.S. House and Senate have been working on PBM reform legislation for months and there are multiple bills that could be passed now and sent to President Biden for his signature. With the time they will be taking off for campaigning, lawmakers have very few days left that they will be in Washington, D.C. this year. It would be all too easy for them to kick this can down the road and let the next Congress deal with it.

We need to raise our voices to demand that they don’t pass on this opportunity to make a difference.

There are two elements of PBM reform that could have an immediate impact on costs and prescription drug accessibility that Congress should pass without hesitation:

  • Disconnect PBM profits from drug prices. Right now, PBMs generate revenues from the rebates they demand from drug manufacturers. The higher the drug costs, the more they make in rebates and, consequently, they steer patients to medicines that cost more and block access to lower-priced generics and biosimilars. Enough is enough. Pass legislation that will have PBMs paid a flat fee for their services and remove the perverse incentives that are forcing patients to pay more and that place financial interests between patients and their healthcare providers.
  • Mandate that the PBMs pass along those negotiated rebates and discounts to consumers. Currently, these middlemen are moving those dollars into their own pockets. These savings should be going to patients at the pharmacy counter. It’s just common sense.

These are urgent issues that affect the lives and pocketbooks of millions of Americans. Yes, it’s great that politicians are making promises about how they will fix healthcare costs next year, but we need action now. Congress must pass PBM reform legislation before they adjourn this year.

The Pain Project: Pain management doesn’t just mean opioids*

By Sam Sears, Health Policy Associate, National Consumers League

Earlier this year, the National Consumers League (NCL) produced, as part of its health series, an episode of the “We Can Do This!” podcast focused on alternatives to opioids for pain control. In this podcast, listeners were able to hear directly from those with lived experience with opioid use disorder, both personally and as the loved one of someone with the disorder. You can listen to the podcast here. Each of the speakers on this episode was brought together, through the creation and launch of “The Painful Truth” campaign.

The campaign features a three-minute film, which features real individuals looking for pain control, discussing their options and the complications that can come with opioids. Matt Robinson, who is featured in the film and one of the speakers on our podcast, discusses his experience with opioid use disorder, and shares with NCL that his first experience with opioids for pain control was when he was 12; the result of a sports injury. Former Congresswoman Mary Bono discusses the founding of Mothers Against Prescription Drug Abuse, and her experience with a loved one who experienced opioid use disorder. Our final guest, Charlene Ng, Vice President of US Medical Affairs at Bayer, shares how recently her teenage son was offered a prescription for opioids for pain management after wisdom teeth removal.

I think it’s really important to highlight how in two of the stories the speakers shared on this episode how they or their loved one were first offered a prescription for opioids as young adults and as teens. We know we’re in a mental health, and, specifically a substance use disorder, crisis within the States, and while the overall national dispensing rate for opioids has declined between 2019 and 2022, our nation still consumes over four-fifths of the world’s opioids. Given that the US makes up less than 5% of the world’s population, that’s a truly staggering number.

Generally, we trust doctors. They’re highly educated, specialize in their field, and pledge an ethical code of conduct to ‘do no harm’. It’s understandable that when a doctor recommends something, especially a medication for pain management, there isn’t a whole lot of questioning or concern. However, opioids are not the only option for pain management that is out there and available for consumers – especially considering the significant side effects that come with such an addictive substance.

Not too long ago, in 2022, the CDC issued new and updated clinical guidelines for prescribing opioids for pain. There are 12 total recommendations for these guidelines, grouped into four categories, and I think the most important recommendations happen to be the first two related to determining whether or not to initiate opioids for pain. Regardless of the type of pain, be it chronic or acute, the CDC states that nonopioid options, both nonpharmacological and other medications that aren’t opioids, are preferred to opioid use for pain management. What really resonated with me in these is that nonopioid therapies can be as effective, if not more so, for common types of acute pain (which includes wisdom teeth removal and acute musculoskeletal injuries like common sports-related sprains and breaks). These therapies include non-pharmacological options such as heat therapy, massage, acupuncture, chiropractic care, and more, and pharmacological non-opioid options such as NSAIDs, acetaminophen, and more, depending on the cause of the pain.

In general, the most important thing for consumers to know is to talk to their doctor or health professional. Doctors work for and with us. Substance use disorder and addiction are a huge problem within the US currently, and it can be very scary to have to take a medication that can lead to that. But opioids aren’t our only option. If you are getting an opioid prescription, ask why, or ask about nonaddictive options! Make sure your health team talks to you about all the possible side effects and consequences that may develop, and if moving forward with an opioid is the right step for you.

If you or someone you know is struggling, options for treatment and help can be found on SAMHSA’s website.

*Medical Disclaimer: All information in this blog post is strictly for informational and educational purposes only.  Nothing in this post is a substitute for medical advice, diagnosis, or treatment.

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 About the National Consumers League (NCL) 

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

Consumers and music lovers beware: My piano-moving scams saga

By Sally Greenberg, Chief Executive Officer, National Consumers League

The National Consumers League fights scams. We manage Fraud.org and James Perry on our staff is a world expert on scams.

I often tell the staff that the only recent scam I almost fell for was the piano moving scam.

Here’s how the scam works. Someone posts that their uncle, friend, brother, or parent has a beloved, very expensive, and fancy piano that needs a good home. It’s always a grand piano or baby grand piano, always “in excellent condition,” often “just tuned,” a valuable instrument, and in demand. It needs “a good home, someone who will love it like my relative/friend always has.” That person is “giving away the piano for free, all that is required to pay to have it moved.” A picture of the piano is often posted, and it is indeed a baby grand piano. A very authentic photo will often be included. The payment options are nonrefundable options. Another red flag.

Here’s a classic scam email:

Hope your day is going great. The ” Wurlitzer 200A Electric Piano” used to be owned and played by my husband who is now deceased and it was last tuned in November last year before he passed, I’m almost done moving my properties and I don’t think my husband will be happy if I was to sell his piano, at the same time I’m not happy seeing it around because of less storage I have in my new house, so I’m hoping to give it out to someone who is a passionate lover of the instrument.

The first lady I thought would get it didn’t show up as she promised, and I wasn’t going to leave it alone in an empty house. It’s currently going to be with the movers I employed to move my properties from my place, which they’ve moved for onward delivery, if you really don’t mind making new arrangements with the movers, I can attempt to get in touch with them to reroute it, this should not attract many charges. I’m sorry for the inconvenience but do let me know if you wish that I get through to the movers. Just so you know I’m not giving out a scrap or a waste. It’s in good shape and condition.

Regards,

John Doe

Family Piano has some great tips for recognizing the scam, including that no one gives a valuable piano away to strangers.

A few years ago, I got such an email and thought, “Oh boy, finally a great piano I can play and for free as long as I pay to have it moved!” So I called and was told that the owner would put me in touch with the movers. However, the piano was in Oklahoma. Hmmm, I thought this email came from someone in my synagogue, just down the street. I smelled something fishy, so I googled “piano scams,” and up popped hundreds of stories about people attempting to take advantage of a wonderful piano given away for free, paying moving costs to get it, and finding out the cost of moving the piano is the scam.

The Better Business Bureau has a whole site devoted to piano-moving scams here.

Here’s one example from the BBB site:

One consumer reported this experience after contacting the so-called moving company: “The customer service rep sent me a picture of packaged piano and asked me to pay the moving fee. They sent me an invoice for $843 and instructions on how to send the money through PayPal. They asked me to send them the receipt via email so they could prepare for the shipment. Three days later, they gave me a ‘trucking number.’ But on the morning the item should’ve been delivered, they sent me an email saying there was an unexpected payment owed on the piano and I would need to pay an additional $1,424… If not, they said they would return it to their warehouse.”

So, of course, that was the end of that. In fact, the offer I received exactly replicated many other consumers had received. I didn’t go through with the transaction, thankfully.

Then, just last week, someone named “George Hooper,” from “East Chevy Chase” posted this note on Nextdoor app:

“A friend of mine, who lives in McLean, VA, can’t take her piano with her. (George Steck – Paris, London, New York – baby grand piano. It was a practice piano at the Kennedy Center. In excellent condition.) She’s willing to give it away for free providing the recipient pays for moving the piano. Let me know if you want a pic of the instrument and the owner’s contact info, but please don’t respond to this extraordinarily good deal unless you are very serious about acquiring it.”

I hadn’t realized, though in my line of work I should have, that Nextdoor has become rife with scams and people are more trusting because they think everyone is a bona fide neighbor. Repair scams are especially prevalent on Nextdoor, such as described here on BuzzFeed.

And Nextdoor itself is posting this warning to users.

My immediate response to the offering was to warn users that this is a piano moving scam and not to fall for it. This George Hooper, whoever he is, became irate and said I had “poisoned” his benign email. He then listed the name of the woman with the piano and phone her number was a Northern Virginia area code. I called her and she confirmed she had the piano and I could come and look at it, but she would have to get me through security. Then I asked whether I could get my own movers and her response was, “Yes, well I have to get it tuned and I have a moving company that has moved it twice and it has legs so it’s complicated.”

It all sounded so believable, but I was still suspicious.

It occurred to me that if you’re giving away a piano for free and it is going to be moved, why would you get it tuned?

A few people said they wanted the piano and George said, “It’s gone. I’ll send a photo of the person who bought it who can play a concert for you once it has been delivered.” That’s the last we heard.

So I went online and read the thousands of piano moving scams, such as this story. The lengths they will go to!

This article points out all the red flags for piano moving scams. Be wary of them and be wary of people like “George Hooper”!

Stopping the epidemic of catalytic converter theft

By Sally Greenberg, Chief Executive Officer, National Consumers League

For many years, I drove a 2007 Toyota Prius. I loved my little fuel-efficient and quiet machine, getting 45 mph and putting almost 189,000+ miles on it. All went well until one night a few years ago when—being an insomniac, I was up reading at 3 am—outside my window I heard what sounded like someone taking bolts off a tire, a loud buzzing or whirring sound. It lasted about 5 minutes. I thought some kindly father or uncle was putting air in a kid’s tire or changing a flat.

The next morning when I headed out for work, I started up my Prius, and to my shock, it sounded like a jet engine driving down the street! It dawned on me that the sound I heard last night was guys cutting the catalytic converter (CC) off my Prius! To borrow a phrase my mother used to say, I was mad as a wet hen!

 So I called my insurance company.

And, sure enough, they confirmed that 2005-2009 Priuses are a prime target because their CCs have precious metals that can be melted down and sold by unscrupulous actors. The CC is used to filter out harmful byproducts from the car’s exhaust, using precious metals like platinum, palladium, and rhodium to accomplish this. These metals can sell for hundreds to thousands of dollars per ounce.

While my auto insurer, State Farm, thankfully covered most of the replacement cost, I had to cancel going to work. I couldn’t drive the car so I had to have it towed to my garage seven miles away. I ended up paying for a shield to be placed on the CC to prevent it from happening in the future. In total, I was out of pocket $1,000 while the repair cost more than $3,500.

According to State Farm, the average cost of a repair comes in at around $2,900. As of October 2023, $41.7 million had been paid out to State Farm customers to repair and replace the part. In addition to the cost of replacement, customers report that repairs can take weeks to months, depending on the vehicle and due to a shortage of available replacement parts. Used vehicle lots are bearing a large brunt of this wholescale theft and insurance companies are also paying needless costs.

Ever since my catalytic converter incident, I’ve taken a closer look at this issue and learned that there is no legitimate use for a sawed-off CC because it cannot be used in another vehicle. The only thing it’s good for is its melted-down metals. Thus, the business model is illegal. In other words, there are bad guys on both sides—the theft rings and those who accept and pay for the scrap metal for melting down.

The good news is that in the first half of 2023, claims are down. There were around 14,500 claims filed then, compared to the 23,000 claims made during the same timeframe in 2022.

Carfax, however, issued a warning that the nation might be underestimating how widespread the problem is because many car owners don’t file insurance claims. Some drivers don’t have full coverage on older vehicles and some don’t have insurance at all.

That is why we welcome efforts by Congress to pass laws to deter catalytic converter theft. The bills introduced so far in the House and Senate include marking the part with a unique number and requiring the identity of those selling and buying the CC. NCL supports both!

H.R. 621, the PART Act,  was introduced by Reps. Jim Baird (R-Ind.), Betty McCollum (D-Minn.), Angie Craig (D-Minn.), Randy Feenstra (R-Iowa), and Michael Guest (R-Miss.). S. 154 was introduced by Sens. Amy Klobuchar (D-Minn.), Mike Braun (R-Ind.), Ron Wyden (D-Ore.), and J.D. Vance (R-Ohio).

We are working with the National Auto Dealers Association and 20 other organizations who all sent a letter to the leadership of the House and Senate Commerce Committees in support of the PART Act in May. NCL urges members to cosponsor H.R. 621/S. 154.

As for me, I replaced my 2007 Prius last summer with a new Prius Prime, whose CC is relatively worthless in terms of precious metals. I love my new car and am so relieved to know it won’t be a target for thieves in the night.

NCL looks forward to working with Congress to pass the PART Act, which will protect consumers and insurance companies from the hassle and expense of catalytic converter theft.

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Resources:

Issue Brief

Request to Cosponsor

Current Cosponsors

Coalition Letter to Commerce Committees