Joint consumer advocacy letter urges senators to support bipartisan FAIR fees provision – National Consumers League

July 25, 2018

The Honorable Mitch McConnell
Senate Majority Leader
United States Senate
317 Russell Senate Office Building
Washington, DC 20510

The Honorable Charles Schumer
Senate Minority Leader
United States Senate
322 Hart Senate Office Building
Washington, DC 20510

 

Dear Majority Leader McConnell and Minority Leader Schumer,

The undersigned 8 consumer advocacy organizations urge you to support the bipartisan FAIR Fees provision that was included in S.1405, the Federal Aviation Administration Reauthorization Act of 2017. This provision would help ensure that the ancillary fees which airlines are increasingly adding to the base cost of a ticket are reasonable.

Airlines often claim that the unbundling of fees for services like baggage and cancellation has reduced the cost of flying. However, an independent analysis by the Associated Press has found that base fares have increased by 5% once adjusted for inflation since 2010.[i] Likewise, the Government Accountability Office has found that the cost of flying has increased, once fees for checked baggage are included.[ii]

Under the FAIR Fees provision, section 3129 of the reported bill,[iii] airlines would be prevented from charging flight change and cancellation fees that are unreasonable and disproportionate to the cost of providing the service. The Department of Transportation would also develop standards for helping assess the reasonableness of other common airline fees.

Flight change and cancellation fees can range anywhere from $125, to as much as $750 for an international flight.[iv] While testifying before a US Senate Commerce, Science, and Transportation subcommittee, United Airlines CEO Scott Kirby admitted that change fees are “not a direct cost when somebody changes,” but rather are a revenue generator.[v] While airlines certainly need to maintain profitability, they should not do so by taking unfair advantage of consumers who must change or cancel travel plans due to unforeseen circumstances. Requiring that change and cancellation fees bear a reasonable relation to the cost to provide the service will improve competition by preventing price gouging and better incentivizing airlines to compete over the actual cost of fares.

For these reasons, the undersigned consumer advocacy organizations urge you to support keeping the bipartisan FAIR Fees provision in the FAA Reauthorization Act.

 

Sincerely,

Business Travel Coalition
Consumer Action
Consumer Federation of America
Consumers Union
Flyers Rights
National Consumers League
Travelers United
U.S. PIRG

cc: Members of the US Senate

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[i] Mayerowitz, Scott and Koenig, David. "U.S. airports increasingly dominated by 1 or 2 carriers.” USA Today. July 15, 2015. Online: https://www.usatoday.com/story/todayinthesky/2015/07/15/us-airports-increasingly-dominated-by-1-or-2-carriers/30152927/
[ii] Government Accountability Office. “Commercial aviation: Information on airline fees for optional services” September 2017. Online: https://www.gao.gov/assets/690/687258.pdf
[iii] Federal Aviation Administration Reauthorization Act of 2017. Online: https://www.congress.gov/115/bills/s1405/BILLS-115s1405rs.pdf
[iv] American Airlines. “Optional service fees.” July 17, 2018. Online. https://www.aa.com/i18n/customer-service/support/optional-service-fees.jsp
[v] Senate Commerce Science and Transportation Subcommittee on Aviation, Operations, Safety and Security. “Questions, answers and perspectives in the current state of airline travel. May 4, 2017. 01:28:55-01:33:48. Online: https://www.commerce.senate.gov/public/index.cfm/hearings?ID=C3586801-EFA9-493C-B3FB-74779C0AC3D2

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

July 19, 2018

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

Dear Councilmember Charles Allen,

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

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

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

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

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

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

 

Sincerely,

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

 

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

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

[ii] Deloitte. “Technology, Media and Telecommunications Predictions,” Pg. 41. 2017. Online: https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/tmtpredictions.html

Public interest groups’ letter to Congress in opposition of Moolenaar pyramid scheme rider

March 9, 2018

The Honorable Paul Ryan
Office of the Speaker
United States House of Representatives
H-232, The Capitol
Washington, D.C. 20515

The Honorable Nancy Pelosi
Office of the Democratic Leader
United States House of Representatives
H-204, The Capitol
Washington, DC 20515

RE: Public interest opposition to including Moolenaar pyramid scheme rider in the omnibus appropriations bill

Dear Speaker Ryan and Leader Pelosi,

Last year, the undersigned consumer advocacy organizations, civil rights groups, and academic experts wrote you to express our strong opposition to an amendment[i] sponsored by Congressman John Moolenaar (R-MI) which was included in the Financial Services and General Government appropriations bill.[ii] In addition to the undersigned organizations, the Moolenaar amendment is opposed by a broad and bipartisan coalition, including current and former FTC chairmen, commissioners, and bureau chiefs[iii][iv] and leading members of the direct selling industry itself.[v] [vi] [vii] We understand that this amendment may now be considered for possible inclusion in the FY18 omnibus spending bill. We urge you to oppose its inclusion.

The Moolenaar amendment, modeled after H.R. 3409, the so-called “Anti-Pyramid Scheme Promotion Act of 2016,”[viii] would severely weaken the Federal Trade Commission’s ability to police pyramid scheme activity in the multi-level marketing (MLM) industry. Under the guise of consumer protection, the amendment would blur the line between legitimate direct selling opportunities and illegal pyramid schemes.

For more than forty years, the courts have consistently stated that the critical difference between a legitimate MLM business and a pyramid scheme is that a legitimate MLM’s revenues must come primarily from the sale of products and services to retail customers unaffiliated with the business opportunity. By contrast, a pyramid scheme generates its revenue primarily from the recruitment of new members into an endless chain business opportunity. The FTC recently reiterated this concept to the MLM industry in an updated guidance report.[ix] As the FTC has clearly communicated to Congress, the agency already has sufficient legislative authority to effectively protect consumers from pyramid schemes operating in the MLM industry. As Commissioner McSweeny has pointed out, the Moolenaar amendment would fundamentally weaken the FTC’s ability to police fraudulent conduct by MLMs.[x]

Given these serious concerns, we urge you to oppose the inclusion of this language in the appropriations bill when it is considered by the House of Representatives.

Sincerely,

Consumer Action
Consumer Federation of America
Consumers Union
Consumer Watchdog
MANA, A National Latina Organization
National Association of Consumer Advocates
National Consumer Law Center (on behalf of its low income clients)
National Consumers League
U.S. PIRG
William W. Keep, PhD, The College of New Jersey School of Business
Peter J. Vander Nat, PhD, Senior Economist (retired), Federal Trade Commission

cc:  The Honorable Rodney Frelinghuysen
The Honorable Nita Lowey
The Honorable Tom Graves
The Honorable Mike Quigley
The Honorable Greg Walden
The Honorable Frank Pallone
The Honorable Bob Latta
The Honorable Jan Schakowsky
The Honorable Mitch McConnell
The Honorable Charles Schumer
The Honorable Thad Cochran
The Honorable Patrick Leahy
The Honorable Shelley Moore Capito
The Honorable Christopher Coons
The Honorable Bill Nelson
The Honorable Jerry Moran
The Honorable Richard Blumenthal

———–

[i] House Committee on Appropriations. “AMENDMENTS ADOPTED TO THE FINANCIAL SERVICES APPROPRIATIONS BILL FOR HY 2018,” July 13, 2017. Pg. 37. Online: https://docs.house.gov/meetings/AP/AP00/20170713/106248/HMKP-115-AP00-20170713-SD005.pdf

[ii] National Consumers League. “Consumer groups call on House to oppose pyramid scheme promotion amendment,” press release. July 18, 2017. Online: https://nclnet.org/moolenaar_amendment

[iii] McSweeny, Terrell. “Congress should crack down on predatory ‘pyramid schemes,’ not look away,” The Hill. August 3, 2017. Online: https://thehill.com/blogs/pundits-blog/finance/345073-congress-should-crack-down-on-predatory-pyramid-schemes-not-look

[iv] National Consumers League. “Former senior FTC officials call on Congress to oppose pyramid scheme promotion bill,” press release. September 13, 2017. Online: https://nclnet.org/ftc_alumni_moolenaar

[v] Vandersloot, Frank. “Anti-pyramid measure is really a pro-pyramid bill,” The Hill. September 6, 2017. Online: https://thehill.com/blogs/congress-blog/politics/349537-anti-pyramid-measure-is-a-step-in-the-wrong-direction-for

[vi] Rosen, Eric. Letter from Herbalife to the Honorable Marsha Blackburn and the Honorable Marc Veasey. July 28, 2017. Online: https://www.scribd.com/document/356458302/Blackburn-Veasey-072817

[vii] Bell, Jeff. “Direct Sales Industry Should Commit To Consumer Protection,” Law360. October 26, 2017. Online: https://www.law360.com/articles/977942/direct-sales-industry-should-commit-to-consumer-protection

[viii] Online: https://www.congress.gov/bill/114th-congress/house-bill/5230?q=%7B%22search%22%3A%5B%22hr+5230%22%5D%7D&r=1

[ix] Federal Trade Commission. “Business Guidance Concerning Multi-Level Marketing,” January 2018. Online: https://www.ftc.gov/tips-advice/business-center/guidance/business-guidance-concerning-multi-level-marketing

[x] McSweeny, Terrell. “Congress should crack down on predatory ‘pyramid schemes,’ not look away,” The Hill. August 3, 2017. Online: https://thehill.com/blogs/pundits-blog/finance/345073-congress-should-crack-down-on-predatory-pyramid-schemes-not-look

Groups send letter to FCC calling for action on broadband privacy and data security – National Consumers League

January 20, 2016

Tom Wheeler
Chairman
Federal Communications Commission
445 12th St., SW
Washington, D.C. 20554

Re: Broadband Privacy Rulemaking

Dear Chairman Wheeler: 

The undersigned organizations urge you to commence a rulemaking as soon as possible to protect the privacy of broadband consumers. As Commissioner Julie Brill of the Federal Trade Commission (FTC) stated in a recent speech on broadband and privacy, the Federal Communications Commission’s (FCC) reclassification of broadband as a Title II common carrier service adds it as “a brawnier cop on the beat” on privacy issues. She welcomed the opportunity for the two agencies to work in cooperation to create “strong consumer privacy and data security [that] are key ingredients of our data-intensive economy, including the practices of broadband providers.”

Providers of broadband Internet access service, including fixed and mobile telephone, cable, and satellite television providers, have a unique role in the online ecosystem. Their position as Internet gatekeepers gives them a comprehensive view of consumer behavior and until now privacy protections for consumers using those services have been unclear. Nor is there any way for consumers to avoid data collection by the entities that provide Internet access service. As the role of the Internet in the daily lives of consumers increases, this means an increased potential for surveillance. This can create a chilling effect on speech and increase the potential for discriminatory practices derived from data use. By contrast, commonsense protections may lead to a broader adoption and use of the Internet, as individuals gain confidence in conducting everyday business and exploring new services online.

With the recently signed Memorandum of Understanding on Consumer Protection between the FCC and FTC outlining continuing interagency cooperation on privacy, the FCC is now well positioned to take its place as that “brawnier cop on the beat” focusing on broadband providers. We therefore strongly urge that the FCC move forward as quickly as possible on a Notice of Proposed Rulemaking proposing strong rules to protect consumers from having their personal data collected and shared by their broadband provider without affirmative consent, or for purposes other than providing broadband Internet access service. The proposed rules should also provide for notice of data breaches, and hold broadband providers accountable for any failure to take suitable precautions to protect personal data collected from users. In addition, the rules should require broadband providers to clearly disclose their data collection practices to subscribers, and allow subscribers to ascertain to whom their data is disclosed.

We thank you for your continuing commitment to consumer privacy protection. In addition to the Commission’s important decision last year to retain authority to protect consumer privacy on broadband telecommunications services, the FCC has worked diligently under your administration to enforce existing privacy protections for voice communication, and to require greater transparency for broadband provider service practices. We look forward to working with you to modernize these existing rules to clarify crucially important protections for consumers online.

 

Sincerely, 

Access
Access Humboldt
Access Sonoma Broadband
American Association of Law Libraries
American Civil Liberties Union
Appalshop, Inc.
Ashbury Senior Computer Community Center
Benton Foundation
Broadband Alliance of Mendocino County
California Center for Rural Policy
CALPIRG
Campaign for Commercial-Free Childhood
Caney Fork Headwaters Association
Center for Democracy & Technology
Center for Digital Democracy
Center for Rural Strategies
Center for Science in the Public Interest
Chicago Consumer Coalition
Children Now
Common Sense Kids Action
Consumer Action
Consumer Assistance Council of Cape Cod and the Islands of Massachusetts
Consumer Federation of America
Consumer Federation of California
Consumer Watchdog
Cornucopia Network NJ/TN Chapter
Cumberland Countians for Ecojustice
Electronic Frontier Foundation
Free Press
Institute for Local Self-Reliance
Kentucky Equal Justice Center
Maryland Consumer Rights Coalition
Massachusetts Consumer Council
Maui County Community Television
Mountain Area Information Network
National Association of Consumer Advocates
National Consumer Law Center (on behalf of its low income clients)
National Consumers League
National Digital Inclusion Alliance
National Hispanic Media Coalition
Network for Environmental & Economic Responsibility of United Church of Christ
North Carolina Consumers Council
Oklahoma Policy Institute
Open Library
Open Technology Institute at New America
Oregon Consumer League
Privacy Rights Clearinghouse
Privacy Times
Public Citizen
Public Health Advocacy Institute at Northeastern University School of Law
Public Knowledge
Rudd Center for Food Policy & Obesity, University of Connecticut
Schools, Health & Libraries Broadband Coalition (SHLB Coalition)
Southern California Tribal Digital Village
Texas Legal Services Center
U.S. PIRG
United Church of Christ, OC Inc.
World Privacy Forum
X-Lab