From class action to mass arbitration: Exposing corporate evasion in modern commerce

Sally Greenberg

By Sally Greenberg, Chief Executive Officer

July 6, 2023: Several decades ago, clever lawyers for large corporations came up with a scheme to prevent their clients from being held accountable for wrongdoing. They did so by putting “forced arbitration clauses” in consumer and business contracts. The effect was to block consumers and others from getting access to the courts, and instead force them into arbitration, which is a private system for deciding legal cases that is controlled largely by the corporation itself.

It was a sad day for consumers when the Supreme Court gave its blessings to this underhanded scheme; today forced arbitration clauses are put into virtually every contract that we as consumers are forced to sign in exchange for services like cable, cell phone, credit cards, mobile homes, and car sales.

Class action lawsuits have served as a critical safeguard for consumers against powerful corporate interests; they remain an essential pillar of corporate accountability. These collective legal battles help to restore consumer rights and maintain marketplace ethics. Landmark cases such as the Enron scandal, which highlighted fraudulent accounting practices, class actions against the makers of addictive opioids and against those responsible for the Deepwater Horizon oil spill illustrate again the power of collective legal action.

But now, as consumers are fighting back and cleverly using forced arbitration in their favor, corporate America is crying foul. The very companies that championed forced arbitration and blocked class actions don’t much like it when they have a taste of their own medicine.

According to Consumer Reports, for example, a new strategy, mass arbitration, has already had a significant impact. It has pressured several corporate defendants—including Uber, DoorDash, Samsung, Chipotle, and DraftKings—to grapple with accusations they otherwise could have swatted away. And it reportedly led at least one corporate giant, Amazon, to remove mandatory arbitration provisions altogether from its retail website’s terms of use.

According to the magazine, a group of enterprising lawyers representing about 40,000 TurboTax customers employed a kind of legal jiujitsu: They simultaneously filed thousands of arbitration claims, swamping Intuit with fees, prompting the company into a hasty retreat. But it was too late for the company: Several judges have refused to let Intuit out of the arbitrations, with one commenting that the company has been “hoisted by [its] own petard.”

Sadly, the companies are nevertheless employing delaying tactics, exploiting loopholes, and resisting the system they once endorsed and in fact created, all of which points to the need for an overhaul of the system.

Recent arbitration reforms in California offer a glimmer of hope. They champion a justice system built on fairness, transparency, and accountability. Reforms must tackle forced arbitration clauses and corporations from exploiting system vulnerabilities and face strict penalties for stalling or refusing to engage with the system they created.

As consumers, employees, and members of society, we must insist on corporate transparency and accountability; giving consumers a fair shake is more important than ever. Only then can we end corporate evasion, restore balance in our dispute resolution processes, and protect individual consumer rights against corporate wrongdoing.

Team from Hawaii wins its state’s first National LifeSmarts Championship

May 2, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Photos from the 2023 National LifeSmarts Championships can be found here.

The team from Maryknoll School in Honolulu, Hawaii, was crowned the 2023 National LifeSmarts Champion in Cincinnati, Ohio, this past Sunday, April 30. In 29 years of LifeSmarts competition this is the first-ever win for The Aloha State.

The all-senior team, coached by Kit U Wong, competed against Dallas High School from Dallas, Pennsylvania, in the championship match. The 2023 members of the team from Hawaii include: Captain Chris Ho, Adam Nelson, Maddi Agustin, Kaitlyn McLeod, and Benson Leung.

Joining Hawaii and Pennsylvania in Sunday’s semifinal matches were teams from Georgia and Rhode Island. Teams from the District of Columbia, Kansas, Washington, and Wisconsin all made it to the top eight.

Forty-two student teams traveled from across the country to compete over four days at the iconic Hilton Cincinnati Netherland Plaza in Downtown Cincinnati.

“This year’s Nationals, like past competitions, were riveting,” said LifeSmarts Program Director Lisa Hertzberg. “Each year, teams from across the United States come ready to compete, learn from each other, and enjoy their time together. We are thrilled for Team Hawaii’s first ever-win. Congratulations to the Maryknoll Spartans!”

“I commend all of the students who competed hard and demonstrated such a breadth of consumer knowledge,” continued Hertzberg. “They are the best and brightest from across the country, and they should all be proud of their accomplishments.”

LifeSmarts is an education and scholarship program run by the Washington, DC-based National Consumers League (NCL), the nation’s oldest consumer advocacy organization. It competitively tests high school students’ knowledge of consumer awareness, with subjects including personal finance, health and safety, consumer rights and responsibility, technology and workforce preparation, and the environment. LifeSmarts is available in all 50 states, the District of Columbia, and in partnership with student leadership programs such as 4-H, BPA, FBLA, FCCLA, SkillsUSA. and others.

Each student on the first-place team received a $1,500.00 scholarship; second-place team members received $1,000.00 scholarships; and third-place team members received $750 scholarships. Team members who placed fourth received gift cards.

Teens from each of the 42 teams represented at Nationals also competed as individuals, and the top-scoring student in each LifeSmarts subject received a $500 scholarship from NCL. The 2023 winners are:

  • Consumer Rights and Responsibilities: Lucas Carver, Pennsylvania
  • Environment: Hannah Christianson, Washington
  • Health and Safety: Marie Popielarz, Pennsylvania
  • Personal Finance: Mahi Dohl, Pennsylvania
  • Technology and Workforce Preparation: Chris Ho, Hawaii

Natalie Keller from Selah High School in Washington State and Gabe Laster from Norton Wild Card 9 from Lebanon, Missouri, were awarded co-LifeSmarts Students of the Year. They each received $100 Amazon gift cards.

Winning recognition as LifeSmarts Coaches of the Year were Tina Steinert from Kansas, Dave Handt from Varsity Wild Card 4 from North Dakota and Bea Roberson from Oklahoma  All three LifeSmarts coaches received $100 Amazon gift cards.

LifeSmarts State Coordinator of the Year was awarded to Brittani Lee, Georgia State Coordinator, who has been a devoted advocate for LifeSmarts for many years, growing the state program and seeing four teams from Georgia advance to this year’s National LifeSmarts Championship.

The Sarah Weinberg LifeSmarts Memorial Scholarship, given each year to a student who demonstrates an extraordinary commitment to community service, was awarded to Kaitlyn Johnson of Delaware.

NCL’s partnership with UL Standards & Engagement has elevated the issues surrounding counterfeit products. Winners of the Be Safe Buy Real digital poster contest were Bianca Murphy from Colorado, Kianna Siebert from Minnesota, Marie Popielarz, Caiden Brown from Texas, Aminah Ali from Texas, Jesse Peddycord Contreras from Varsity Wild Card 4 in North Dakota, Samuel Steele from Kansas, and Jesse Taylor from Kansas. Bailey Bennett and Anunya Madhavaraman—both from Georgia—were JV (middle school) winners. Each recipient received a $100 cash prize.

Winners in the Norton Identity Theft essay contest were Kaitlyn Johnson, Reyna Brown Muhammad from Alabama, Joe Rutledge from Georgia, Allie Higgins from Idaho, and Alison Thompson from Wisconsin. Each received a $1,000 scholarship for their winning essays providing solutions to identity theft.

Johnson & Johnson Consumer Inc. sponsored five scholarships which were awarded to students who impacted their communities with presentations and social media campaigns about OTC medicine safety. Winners were Emma Bayer of Norton Wild Card 2 in Georgia, Bryan Cabrera Icte from Delaware, Luis Felipe del Solar from Louisiana, Seth Moon from Georgia, and Kianna Siebert.

The LifeSmarts Team Spirit Award went to Calhan High School. The team from Colorado demonstrated outstanding camaraderie and great sportsmanship throughout the four-day championship.

The social media awards for most engaged on Instagram and our new meme contest were very popular among the students. The best meme went to Alyssa Harmon from Norton Wild Card 8. The Instagram winners were Amelia Gindorf from Arizona, Jada Sturdivant from Alabama and Autumn Negen from the Norton Wild Card 8 team. Each team also created a t-shirt and votes for the People’s Choice were collected on Instagram with that award went to the Washington team. The judge’s selections were Alabama and Oklahoma.

Sponsors of the 2023 National LifeSmarts Championship are as follows:

Platinum: Amazon, Johnson & Johnson Consumers Inc., Norton

Gold: Discover, Tide

Silver: Comcast, FICO, Melaleuca, Meta, P&G, Toyota

Bronze: American Express, JPMorgan Chase, UL Standards & Engagement, WSECU

At Sunday’s closing ceremony, NCL also announced that the 2024 National LifeSmarts Championship, which marks the program’s 30th anniversary, will take place in San Diego, California.

To learn more about LifeSmarts, visit www.lifesmarts.org.

About LifeSmarts

LifeSmarts is a comprehensive consumer education program that is free to middle school and high school students and educators. The goal of the LifeSmarts program is to create consumer-savvy young people who will be better equipped for adult life in today’s complex, global marketplace. Visit LifeSmarts.org for more information. LifeSmarts: Learn it. Live it.

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.

LifeSmarts announces expanded partnership with Discover® Student Loans

April 3, 2023

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, 202-823-8442

During Financial Literacy Month, LifeSmarts, a teen consumer literacy education program, is expanding lessons to help high school students prepare to get the most out of their post-secondary education.

Washington, DC – The 29th National LifeSmarts Championship is on the horizon for the National Consumers League’s (NCL) youth consumer education program. Through LifeSmarts, students learn about real-life consumer issues and compete to win prizes and scholarships at the National LifeSmarts Championship in April each year. To highlight the start of Financial Literacy Month in April, NCL is proud to announce an expansion of lessons on financial aid and financing a post-secondary education and a new lesson about choosing a college major, made possible by Discover Student Loans.

From April 27-30, 2023, high school students from across the country will meet in Cincinnati, OH, to compete in the annual event. The competition takes place over four days during which students will showcase their knowledge of personal finance topics, as well as consumer rights, technology and career readiness, health and safety, and the environment.

LifeSmarts prepares students for life after high school, including guiding students to consider post-secondary education options, and understanding how their choices will impact their readiness for the careers they wish to pursue. LifeSmarts is active in all states and the District of Columbia, where NCL is headquartered.

Thanks to this partnership with Discover Student Loans, LifeSmarts is expanding upon financial aid lessons created in 2022 and featuring student loan questions throughout the National Championship. In addition, next fall a new lesson will help high school students choose a college major using tools available via the website College Covered. CollegeCovered.com was created by Discover Student Loans to provide students, parents and high school counselors with the know-how to plan and pay for college. The website offers a variety of resources and tips for each step of the college planning process.

“We are pleased to work with Discover Student Loans to help our students learn about all aspects of post-secondary education,” said National Program Director Lisa Hertzberg. “We are especially gratified to expand our educational materials to help students consider their own path and the coursework that will set them up for future success.”

Last year, students answered more than 3.5 million consumer questions about financing post-secondary education, credit reports, nutrition, social media, and everything in between. More than 110,000 students used LifeSmarts materials in their classrooms and extracurricular activities.

“Each year, LifeSmarts brings new opportunities for high school students to learn invaluable information to prepare them for life beyond high school,” says NCL President Sally Greenberg. “Too often, traditional high school curriculum fails to teach students vital information to become successful adults, and LifeSmarts helps to close that gap with lessons that now include choosing a college major.”

“Our expanded partnership with LifeSmarts allows them to add more real-world lessons addressing important topics like financing a college education,” said Nicole Straub, Senior Vice President for Discover Student Loans. “Having a better understanding on how to pay for college sets students and their families up to make smarter financial decisions for their future.”

Discover Student Loans also offers a scholarship opportunity for students and parents. Throughout the year, 12 eligible students or parents will be randomly selected to win a $5,000 Discover Student Loans Scholarship Award to help cover college expenses. Students and parents can click here to enter to win this $5,000 scholarship. Drawings held monthly. No purchase or loan necessary to enter or win.

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About LifeSmarts

LifeSmarts is a comprehensive consumer education program that is free to middle school and high school students and educators. The goal of the LifeSmarts program is to create consumer-savvy young people who will be better equipped for adult life in today’s complex, global marketplace. Visit LifeSmarts.org for more information. LifeSmarts: Learn it. Live it.

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.

LifeSmarts announces partnership with FICO

During Financial Planning Month, LifeSmarts, the National Consumers League’s teen consumer education program, has introduced a new lesson focused on credit scores and establishing credit.

October 3, 2022

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, (202) 207-2832

Washington, D.C.— The National Consumers League’s (NCL) youth consumer education program, LifeSmarts, kicked off its 29th year in September 2022. Through LifeSmarts, students learn about real-life consumer issues and compete to win prizes and scholarships at the National LifeSmarts Championship in April each year. October is both Financial Planning Month and the month in which LifeSmarts students focus on personal finance. To kick off the month, NCL is proud to announce a new lesson about credit scores and how to establish credit, made possible through support from FICO and the FICO® Score, the credit score used by 90% of top lenders.

Beginning today, the 125,000 students and 3,000 educators from across the country who participate in LifeSmarts will have access to lessons and activities from FICO’s new Score A Better Future (SABF) Fundamentals program, a credit education curriculum developed for high school students. These lessons will provide students with a firm understanding of credit scores and how to establish and maintain good credit histories throughout their lives.

Thanks to the FICO SABF Fundamentals program, LifeSmarts has created a new lesson on credit scores, with questions that will be featured throughout competition, culminating with the National LifeSmarts Championship in April 2023. New lessons and competition questions are being integrated into the 2022-23 program year.

“We are pleased to work with FICO to help our students and educators learn more about credit reporting and credit scores,” said National Program Director Lisa Hertzberg. “LifeSmarts gives students the skills they need to succeed as adults, and we see students applying what they learn immediately at home and in their communities. We are thrilled to offer this focus into a critical aspect of personal finance, and we look forward to rolling out new resources for educators and opportunities for student participants.”

LifeSmarts is active in all states and the District of Columbia, where NCL is headquartered.

“We are excited to have the opportunity to focus on personal finance for consumers at this age when they are beginning to make decisions for themselves and influencing decisions made by their parents,” said Sally Greenberg, executive director of NCL. “Too often, traditional high school curriculum fails to teach students vital information to become successful adults, and LifeSmarts helps to close that gap.”

“Financial literacy is vital because it’s the foundation to helping students make smart decisions when they navigate their financial futures,” said Joanne Gaskin, vice president of Scores and Analytics at FICO. “Our team created Score A Better Future Fundamentals program to provide valuable free credit education that readies young adults to confidently take control of their financial health.”

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About LifeSmarts

The goal of the LifeSmarts program is to create consumer-savvy young people who will be better equipped for adult life in today’s complex, global marketplace. Visit LifeSmarts.org for more information. LifeSmarts: Learn it. Live it.

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 https://nclnet.org.

About FICO

FICO is a leading analytics software company, helping businesses in 90+ countries make better decisions that drive higher levels of growth, profitability, and customer satisfaction.

Learn more at http://www.fico.com.

National Consumers League applauds President Biden’s plan to cancel $10,000 in federal student loan debt to millions of Americans

August 24, 2022

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, (202) 207-2832 

WASHINGTON, D.C. – The National Consumers League applauds President Biden’s decision to relieve student borrowers of billions of dollars in educational debt and to extend the federal loan repayment moratorium. By cancelling $10,000 in student debt for borrowers earning less than $125,000 and cancelling $20,000 for borrowers who received Pell Grants, this administration is providing direct aid to consumers suffering from the plight of educational debt.

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

“President Biden is providing critical assistance to millions of borrowers across the country. Importantly, this executive order will work to negate the impact of student debt that disproportionately affects women and Black borrowers. As consumers face increased rents, grocery costs, fuel prices, and even student loan interest rates, educational debt cancellation will help provide relief on strained household budgets by reducing—and in many cases eliminating—student debt costs.”

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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.

National Consumers League urges Congress not to allow credit bureaus’ credit scoring company to dominate the credit scoring system

May 13, 2022

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, (202) 207-2832

Washington, D.C. –

The National Consumers League has sent a letter to the Chairs of the Senate Banking and House Financial Services Committees asking these leaders to conduct adequate oversight on the nation’s credit bureaus, TransUnion, Equifax, and Experian. “The three bureaus keep financial records and establish credit scores for hundreds of millions of Americans. For years, consumer organizations like ours have been raising questions about the behavior and actions of these entities, who in recent years have together created their own credit scoring company called VantageScore.”

The letter noted that “On April 12th of this year, the Consumer Finance Protection Board (CFPB) filed a lawsuit against credit bureau TransUnion and their long-time CEO for willfully violating the law and defrauding consumers, with CFPB’s director saying that ‘TransUnion is an out-of-control repeat offender that believes it is above the law.’  The letter also noted that “In September of 2017, the nation learned that another of the big three, Equifax, had been breached and the financial records of close to 150 million Americans had been compromised. “Investigations …found that Equifax had failed to protect the data that they had been entrusted with and a global settlement was reached.”  The letter goes on to say “… the three credit bureaus own a credit scoring company called VantageScore. Vantage Score is vigorously lobbying the FHFA to spend millions of dollars to change the credit scoring system for the GSEs in order to win market share.”

The letter urges these members of Congress to “ask tough questions and share your concerns directly with the FHFA, especially before that agency takes any action that could send millions of dollars into the pockets of VantageScore.”

Read the letter here.

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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.

 

LifeSmarts announces partnership with Discover® Student Loans  

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, (202) 207-2832

During Financial Literacy Month, LifeSmarts teen consumer literacy program has introduced a new lesson focused on financing a college education and understanding student loans.

March 31, 2022

Washington, DC– The 28th National LifeSmarts Championship is on the horizon for the National Consumers League’s (NCL) youth consumer education program. Through LifeSmarts students learn about real-life consumer issues and compete to win prizes and scholarships at the National LifeSmarts Championship in April each year. Tomorrow, April 1, is the start of Financial Literacy Month. To commemorate this month, NCL is proud to announce a new lesson about financing a college education, made possible through financial support from Discover Student Loans.

On April 21, 39 teams from across the country will meet in Washington, DC, to compete in the 2022 National LifeSmarts Championship.  The Championship competition takes place over four days in which students will showcase their knowledge of personal finance topics as well as consumer rights, technology and workforce preparation, health and safety, and the environment.

Thanks to Discover Student Loans, LifeSmarts has created a new lesson on financial aid, with questions that will be featured in the National Championship. In the fall, the lessons and new competition focus will be fully integrated into the program for the new school year. Students and educators will see a concentration on personal finance topics at both the 2022 and 2023 National LifeSmarts Championships.

“We are so pleased to work with Discover Student Loans to help our students learn more about the important subject of paying for post-secondary education,” said National Program Director Lisa Hertzberg. “We know LifeSmarts gives students the skills they need to succeed as adults, and we see students applying what they learn immediately at home and in their communities. We are thrilled to be able to give special focus to the most crucial lessons in personal finance, and we look forward to rolling out new resources for educators and opportunities for student participants.”

Last year, students answered more than 3.5 million consumer questions about credit reports, nutrition, social media, and everything in between. More than 100,000 students will participate this year.

LifeSmarts is active in all states and the District of Columbia, where NCL is headquartered. “We are excited to have the opportunity to focus on personal finance for consumers at this age, when they are beginning to make decisions for themselves and influencing decisions made by their parents,” said Sally Greenberg, executive director of NCL. “Too often, traditional high school curriculum fails to teach students vital information to become successful adults, and LifeSmarts helps to close that gap.”

“It’s important that students and their families plan and save for college expenses, pursue free financial aid such as grants and scholarships, and understand the options for federal and private student loans,” said PK Parekh, senior vice president of Discover Student Loans. “We are very happy to work with LifeSmarts to help students learn through real-world lessons about personal finance, financial aid, and responsible borrowing.”

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About LifeSmarts

LifeSmarts is a comprehensive consumer education program that is free to middle school and high school students and educators. The goal of the LifeSmarts program is to create consumer savvy young people who will be better equipped for adult life in today’s complex, global marketplace. Visit LifeSmarts.org for more information. LifeSmarts: Learn it. Live it.

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 https://nclnet.org.

National Consumers League joins LGBTQ+ coalitions to address credit issues for transgender and nonbinary community

March 17, 2022

Media contact: National Consumers League –  Katie Brown, katie@nclnet.org, (202) 207-2832

Washington, DC— The National Consumers League has joined efforts with LGBTQ, consumer, and legal advocacy groups to address credit-related problems encountered by transgender and nonbinary consumers.

The letter  to the major credit reporting companies, notes that transgender and nonbinary consumers face a myriad of issues after they change their names — with serious consequences for their financial and personal lives. The transgender and nonbinary community have reported to the Consumer Financial Protection Bureau that they cannot get Experian, Equifax and TransUnion to correct their credit reports.

Some issues reported are that their credit report fragments into two or more unconnected files upon their name change or are not there at all. Many times their credit scores drop by hundreds of points, precluding them from accessing banking services, mortgages, auto financing, employment, and rental housing. Transgender and nonbinary consumers find that even when they were able to contact and persuade a customer service representative at one of the Big Three credit bureaus to manually fix their report, a new upload of data reverts their credit histories back to fragmented or incomplete files. Some have even reported serious fallout after their credit histories reflected their “deadname” or former name, thereby outing them as transgender to potential employers, rental agents, car dealerships, or financial institutions.

The letter asks the credit reporting industry to:

  • Utilize consumers’ full 9-digit Social Security numbers in matching algorithms to ensure credit information is associated with the correct credit file.
  • Facilitate name changes by having clear procedures to update a consumer’s name on their credit report when presented with a legal name change order and ensure that staff are sufficiently trained in those procedures and are able to provide culturally competent service to transgender and nonbinary consumers.
  • Reduce the burden on transgender and nonbinary consumers to submit name-change documentation to each credit reporting agency by instituting a “one-stop” system that allows a consumer to submit a single request to have the legal name on their report updated, and ensures the request is communicated to all consumer reporting agencies.
  • Prevent the occurrence and recurrence of fragmented credit files by creating procedures to detect when a consumer changes their legal name with a creditor, to associate the new name with their credit file, and to consolidate a consumer’s credit information in their current and previous names in a single credit file — as the industry presently does when cisgender women and other consumers change their last names.
  • Prevent the disclosure of transgender and nonbinary consumers’ deadnames to landlords, employers, and underwriters by disclosing only a consumer’s current legal name in reports provided to credit report users.

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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.

NCL #DataInsecurity Project – National Consumers League

databreach.jpgNCL recently debuted the first issue of The #DataInsecurity Digest, a twice monthly publication curated by NCL’s own, John Breyault, to deliver important consumer-focused data security news, policy and news analysis, and information about upcoming events directly to your inbox. Click here to subscribe.

In 2013, there were 614 data breaches that led to more than 550 million identities compromised. New data breaches means more identity theft and other fraud, and more consumers facing financial loss, great inconvenience, and a loss of trust in the marketplace. That is why NCL is working on the #DataInsecurity Project — to raise awareness about the need for reforms aimed at better protecting consumer data.https://www.youtube.com/watch?v=z6GD9UNbgAs&list=UUXfyCJGEBaMOTcf5l7W_GTg

Data breaches impact consumers, credit unions, banks, and retailers. Last December, the retail giant Target suffered a massive data breach that made national headlines. In the breach, as many as 110 million identities were compromised.

Take a look at the impact of just this single incident:

  • $200 million: the cost to credit unions and community banks for reissuing 21.8 million credit and debit cards
  • 1-3 million: the estimated number of cards stolen in the Target breach that were sold on the black market and successfully used to commit fraud
  • $18-35.70: the price per card stolen from Target and resold on the black market in the months after the breach

Shocking as these numbers are, they represent the fallout from just a single data breach. Data breaches are happening with frightening regularity.

Malicious hackers are going to continue to exploit existing weaknesses, and many businesses lack the incentive or ability to adequately protect their customer data against evolving threats. That is why NCL believes that consumers need to be proactive about protecting their own data and calling on policymakers for improvements.

The current landscape of protection for consumer data is woefully inadequate.

NCL’s #DataInsecurity Project is calling for reforms such as:

  • Creating a national data breach notification standard, modeled on strong state protections such as California’s;
  • Requiring businesses that maintain consumers’ personal data to protect that information via specific data security requirements;
  • Giving the Federal Trade Commission and state Attorneys General civil penalty authority to enforce violations of data security requirements;
  • Increasing civil and criminal penalties for malicious hacking;
  • Increasing efforts to enhance cooperation with international partners to bring overseas hackers to justice; and
  • Requiring retailers and banks to implement the highest level of security available to protect consumers’ payment data.

To promote these goals, NCL is taking its #DataInsecurity Project on the road to four states across the country, to meet with policymakers, industry experts, consumer advocates, law enforcement officials, and members of the academic and business community. The tour is designed to raise awareness about the frequency of data breaches and to encourage the adoption of comprehensive reforms so that consumers can be better protected.

As a part of the #DataInsecurity Project, NCL has also unveiled important new research by Javelin Strategy & Research investigating the impact of data breaches on consumer trust, on who consumers feel should be responsible for their data, and on current responses to data breaches. Check out NCL’s survey report.

You can get involved!

Help us send the message that the time for reform is now! Sign our petition to the White House calling on policymakers to step up and protect consumers’ data.