NCL testimony before the House on Social Security ‘death records’ – National Consumers League

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February 2, 2012

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Good morning Mr. Chairman, Ranking Member Becerra and members of the subcommittee. My name is John Breyault and I am the Vice President of Public Policy, Telecommunications and Fraud for the National Consumers League (NCL).

Founded in 1899, NCL is the nation’s oldest consumer organization. Our non-profit mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL’s connection to the Social Security Administration runs deep. Frances Perkins, who was elected Secretary of the League in 1910, was the nation’s first female Cabinet member and was one of the architects of the Social Security Act of 1935.

I greatly appreciate the opportunity to discuss the issue of Social Security’s death records and the impact the misuse of these records has on consumers. As the Director of NCL’s Fraud Center, I hear on a daily basis about the personal and financial toll that identity theft and other fraud takes on consumers and their families. In 2011, we received nearly 9,000 complaints from victims of a variety of fraud. Consumers reporting fraud to NCL lost, on average, $990.[1] In many cases, these unscrupulous con artists financially ruined their victims. NCL’s statistics represent only a small fraction of the fraud problem. For example, in 2012, the Federal Trade Commission received over 1.3 million complaints, of which more than 250,000 involved identity theft.[2] And that represents only those who knew enough to complain to the FTC. According to research firm Javelin Strategy, 8.1 million adults were victims of identity theft in 2010, with each incident costing $631 to resolve.[3]

Despite these sobering statistics, it never ceases to amaze me the extent to which scam artists will go to defraud consumers. As a father of two young daughters, the reports I have seen of the misuse of dead children’s personal information to commit identity theft sickens me.

The vulnerability of children to identity theft is well established. According to recent estimates, 140,000 identity frauds are perpetrated on minors each year.[4] According to researchers at Carnegie Mellon University, 10.2% of children have had their Social Security Number used by someone else – 51 times higher than the 0.2% rate for adults.[5] While it is unknown how many deceased children’s identities scam artists have misappropriated, the volume of news articles about this scam and anecdotal evidence from parents of the deceased children suggest it is not limited to a few isolated cases.[6]

The role that the public availability of the Social Security Administration’s Death Master File (DMF) plays in these scams requires additional study. However, it is clear that identity thieves can quickly and cheaply gain access online to the so-called “holy trinity” of identifying information of recently deceased children – full name, date of birth and full Social Security Number – using websites that access DMF data. On its face, the public availability of a remarkably complete set of personally identifiable information of 83 million deceased Americans for as little as $995 is extremely troubling.

Additional consumer harm arises when individuals are mistakenly listed as deceased on the DMF. Due to “inadvertent keying errors” by federal workers entering death information, the Social Security Administration has stated that approximately 14,000 living Americans are listed as deceased in the DMF annually.[7] Such mistakes can lead to frozen bank accounts, cancelled cell phone service, loan denials and refused job interviews.[8] Due to the DMF’s public availability, these individuals are also put at increased risk of identity theft. It may require months for the SSA to correct these errors and even then, living individuals’ personally identifiable information may still be exposed.[9]

The public availability of the Social Security Administration’s DMF data is certainly not the sole driver of identity theft. Indeed, its wide availability has clearly benefitted security firms that use it to deter fraud.[10] In addition, pension funds, insurance organizations, and medical researchers use DMF data for completely legitimate reasons.[11] That said, it is clear that reform is needed to address the likelihood that identity thieves will continue to make use of the DMF to harm consumers. We also believe that more should also be done to alert consumers who are falsely listed as deceased on the DMF so that they can take action to protect their identities.

A number of commentators, including the SSA’s Office of Inspector General[12] and the Internal Revenue Service’s National Taxpayer Advocate[13] have recommended ways to better protect consumers from identity theft stemming from personally identifiable information made available via the DMF. Several reforms that the National Consumers League supports include:

  • Limiting the personally identifiable information included in the public DMF to the absolute minimum required and exploring alternatives to the inclusion of the full Social Security Number;
  • Notifying living consumers who have been mistakenly listed in the DMF that their personally identifiable information may have been compromised and recommending steps to safeguard their identities;
  • Restricting access to certain personally identifiable information in the DMF to organizations that can certify that have a legitimate need for the information for fraud prevention or benefits administration purposes;
  • Increasing penalties for failure of DMF recipients to keep DMF data up to date or the misuse or re-disclosure of DMF information; and
  • Requiring the SSA to undertake a study, in conjunction with DMF data recipients, of the usefulness of DMF data in preventing identity theft.

While NCL generally supports transparency of government data, in this case, we believe that the risk that publicly available DMF data could be used for nefarious purposes outweighs the benefit. However, in the interest of the timely provision of survivor benefits and the use of this data for fraud protection efforts, we would not support a total ban on the sale of DMF data. Instead, we believe that SSA and the Department of Commerce should take steps to ensure that DMF data is made available only to organizations that can demonstrate a legitimate need. DMF data recipients should likewise be held to a higher standard of accountability for maintaining the integrity and security of this sensitive data.

In conclusion, I would like to take this opportunity to once again thank the members of the subcommittee for inviting me to testify today on behalf of the National Consumers League and consumers nationwide.

 

[1] Source: NCL fraud complaint statistics, 2011.

[2] Federal Trade Commission. Consumer Sentinel Network Data Book for January-December 2010. Pgs. 3, 5. March 2011. Available online: https://www.ftc.gov/sentinel/reports/sentinel-annual-reports/sentinel-cy2010.pdf

[3] Saranow Schultz, Jennifer. “The Rising Cost of Identity Theft for Consumers,” New York Times. February 9, 2011. Online: https://bucks.blogs.nytimes.com/2011/02/09/the-rising-cost-of-identity-theft-for-consumers/

[4] I.D. Analytics. “More Than 140,000 Children Could Be Victims of Identity Fraud Each Year,” Press release. July 12, 2011. Online: https://www.idanalytics.com/news-and-events/news-releases/2011/7-12-2011.php

[5] Power, Richard. “Child Identity Theft: New Evidence Indicates Identity Thieves are Targeting Children for Unused Social Security Numbers,” Carnegie Mellon Cylab at 4. April 1, 2011. Online: https://www.cylab.cmu.edu/files/pdfs/reports/2011/child-identity-theft.pdf

[6] See e.g. Goldberg, Eleanor. “Why Thieves Are Stealing Childhood Cancer Victims’ Identities,” Huffington Post. November 18, 2011. Online: https://www.huffingtonpost.com/2011/11/17/why-thieves-are-stealing-childhood-cancer-victims-identities_n_1093481.html

[7] Hargrove, Thomas. “Grave mistakes: SSA silent on private data breach,” Scripps Howard News Service. November 6, 2011. Online: https://www.courierpress.com/news/2011/nov/06/grave-mistakes-ssa-silent-on-private-data-breach/?print=1

[8] Id.

[9] Social Security Administration. “Personally Identifiable Information Made Available to the General Public Via the Death Master File,” Office of the Inspector General Audit Report. Pgs. 4-5. June 2008. Online: https://oig.ssa.gov/sites/default/files/audit/full/pdf/A-06-08-18042.pdf

[10] See e.g. ID Analytics. “Keep the Death Master File alive,” Blog posting. December 21, 2011. Online: https://idanalytics.com/idalabs/2011/keep-the-death-master-file-alive/ (stating that “We use this SSA Death Master File as an upfront defense to weed out such applications, and our process successfully stops these attempts.”).

[11] National Technical Information Service. “Social Security Administration’s Death Master File.” Online: https://www.ntis.gov/products/ssa-dmf.aspx

[12] See generally, Social Security Administration. “Personally Identifiable Information Made Available to the General Public Via the Death Master File,” Office of the Inspector General Audit Report. June 2008. Online: https://oig.ssa.gov/sites/default/files/audit/full/pdf/A-06-08-18042.pdf

[13] See Legislative Recommendation: Restrict Access to the Death Master File, infra. See also Identify Theft and Tax Fraud Prevention Act, S. 1534, 112th Cong. § 9 (1st Sess. 2011) Online: https://www.taxpayeradvocate.irs.gov/userfiles/file/2011_ARC_MSP%203.pdf

Greenberg testimony on H.R. 2469, “End Discriminatory State Taxes for Automobile Renters Act of 2011” – National Consumers League

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February 1, 2012

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Testimony by Sally Greenberg, NCL Executive Director:

Good afternoon, Mr. Chairman and Ranking Member Cohen and Members of the Subcommittee. Thank you for the opportunity to appear before you in support of H.R. 2469, a bill entitled the “End Discriminatory State Taxes for Automobile Renters Act of 2011.”

My name is Sally Greenberg and I am Executive Director of the National Consumers League, the nation’s oldest consumer organization, founded in 1899 with the mission of protecting the interests of workers and consumers and creating a more fair marketplace for both.

Mr. Chairman, consumers today feel that in many of their transactions they are nickel and dimed, whether it is their cell phone bill, late fees and finance charges on credit and debit cards, bogus convenience fees added onto tickets for live performances or extra charges for baggage, food or pillows on an air plane. Indeed, a good example is the survey from Consumer Reports, August 2010[1], which found that there are myriad fees that irk travelers: rental car fees, fees for hotel safes, minibars, hotel gym, ice in the drinks, fees for buying a gift card, fees for using that same card and the list goes on and on.

The National Consumers League feels consumers’ pain – and unfortunately most of the time consumers have little power to challenge these fees. Indeed, the Consumer Reports article contained this paragraph:

But our hearts really go out to the couple who rented a compact car in Boston last summer. They paid $444.37 for 15 days of driving. Then came the rental vehicle surcharge, customer facility charge, parking surcharge, energy recovery fee, fleet recovery surcharge, concession recovery fee and state tax.[2]

So today we are here to support legislation that says: Enough!

HR 2469 will prospectively bar many discriminatory car rental taxes – which are simply added fees – imposed by states and localities. These fees have been increasingly piled on consumers who rent cars in order to fund pet projects.  HR 2469 will grandfather in existing taxes and not affect the ability of states and localities to impose general taxes that are levied on all citizens or businesses. But NCL believes that these same states and localities should not impose fees on consumers who rent cars when the fees have little or nothing to do with improving the services they receive. Indeed, according to the New York Times, the most common use of these excises is to finance sports stadiums and convention centers.  In a 2006 article, the Times noted that at least 35 sports stadiums were expected to be financed partly with subsidies from car-rental taxes. Other research has shown that in the 1990’s, subsidies provided 94 percent of sports stadium financing. [3]

Legislators who adopt these fees operate under the misperception that taxes on car rentals, which we believe make the taxes hard to justify. My predecessor and former NCL President Linda Golodner discussed the issue of fees and their impact on consumers in the Pittsburgh Post-Gazette[4] several years ago. Golodner noted how Congress has prohibited practices by state and local governments that unreasonably burden or discriminate against interstate commerce and transportation. Examples include the Railroad Revitalization and Regulatory Reform Act (1976), Airports and Airways Improvement Act (1978), Motor Carrier Act (1980) and Bus Regulatory Reform Act (1982).  So enacting HR 2469 would be following a long line of bills that prohibit discrimination in interstate commerce.

The Problem

As of this time, 43 states and the District of Columbia have imposed 118 excise taxes on car rentals. This is eight times the number of these taxes that existed in 1990. As noted above, rental car taxes tend to pay for entertainment items like stadiums, performing arts centers, or culinary institutes and not for vital services like schools, roads, libraries, hospitals or services to the elderly. Industry research indicates that rental car customers have spent more than $7.5 billion in taxes to fund the pet projects of elected officials.

A perfect example has been playing out for the past two years in my hometown of Minneapolis. The Minnesota Vikings already have the Metrodome, a beautiful indoor stadium right in the middle of downtown Minneapolis. But  Zygmunt Wilf, the Vikings’ billionaire owner, wants another one — with a retractable roof! – and state lawmakers were asking consumers who rent cars to help pay for it with a 2.5% tax on rental cars to finance a new billion-dollar stadium.  The state still hasn’t figured out a long-term funding source for the new digs, so we’ll have to wait and see if rental car customers will ultimately foot the bill.

More than half of those who rent cars in Minnesota are residents of the state. To add insult to injury, Minnesota residents are already paying a special 6.2% excise tax on car rentals, a tax that was adopted to pay for the cost to the state of trying to attract the Super Bowl. That tax was supposed to expire in 2005, but it was extended, even though the revenue it raised has far exceeded its original purpose.   Talk about fleecing the consumer!

Tourists are also affected by these pervasive fees. They might be easier to tax as non-constituents, but tourist charges are also spiraling out of control. According to the New York Times, taxes and other costs such as vehicle licensing fees or high levels of excise taxes raise the average rental bill 28 percent at airport locations.

Excise taxes on car rentals hurt nonprofits

In addition, as head of a nonprofit organization overseeing a staff of 16, when my people travel – or even have meetings locally and need transportation- we often must rent cars. I see the bills come in, and the excise fees and sales taxes together represent a hefty percentage of the entire rental.

As an addendum to this testimony, I’ve provided exhibits that demonstrate that the taxes we all pay when we rent cars are similar to what the couple in the Consumer Reports article experienced –  in the form of receipts from my car rentals over the past year.  Here are a few highlights:

In September of last year I rented a car in Minneapolis; the base fee was $128.97, but the following taxes were added on: CFC@2 a day, $6.00, APCONRGFEE – $14.33, State Tax – $10.86, Vehicle Fee $7.47, Rental Tax – $9.26. Total:  $176.89 So 37.5% of the total cost in Minneapolis was fees and taxes.

In November of last year I rented a car in Chicago. The base amount was $123.11, but the following taxes were added on: MTRVEH Tax – $2.75, CFC@ $8.00 a day x 5 days, $40.00, Motor Vehicle Tax  – 5 days @ $1.20 $6.00, State Tax $25.82 Total: $197.68 So 37.7% of the total cost in Chicago was fees and taxes.

It is worth noting that I had no idea when I paid these fees what they were for – what is APCONGRFEE in Minnesota? What is MTRVEH in Chicago? What is VLF? What are CFC fees in both Minneapolis and Chicago? They lack transparency and they seem duplicative.  In Minneapolis, I paid a state tax, plus a vehicle fee, plus rental tax . In Chicago I paid a MTRVEH tax, a CFC, a Motor Vehicle Tax and a State Tax. Where does it end?

These added costs also hurt nonprofit organizations like mine that operate on modest budgets but are vitally important to civil society.

And these taxes hurt the many families who are tourists visiting cities and towns across the country and are being required to fund projects for which they are unlikely to derive any benefit and are not essential services.

We understand why local elected officials have increasingly turned to car rental transactions to raise fees for stadiums and impose fees. They undoubtedly want to escape the wrath of their own constituents who have the power to vote them out of office if taxes go up. So why not shift the tax burden onto someone else? Who better than out-of-towners who come to their cities and towns to do business or visit friends and family.

Misconceptions about who rents cars in America

Unfortunately, politicians who pass these laws taxing rental car transactions are operating on several false assumptions. First, that the vast majority of people who rent cars live outside of the state or locality. Second, that most consumers who rent cars are either businesses who won’t feel the extra charges or affluent consumers who won’t notice an extra $30 or $40 fee on a car rental.

Let me address each of these issues in turn:

First, the myth that most people who rent cars are from out of state. If local officials conducted research on who rents cars, they would learn that many people who don’t own a car because they can’t afford rent when they have a specific need – like taking an elderly relative to a doctor’s appointment, moving a relative from one residence to another, taking a child to a doctor’s appointment, visiting a relative in prison, or for a special occasion like a wedding or graduation.

Consumers who rent cars for these reasons are not the affluent out-of-town businesspeople that state and local legislators may assume rent most of the cars– far from it. And they need affordable car rental options without the multitude of indecipherable fees and charges.

A June 2010 study conducted by the Brattle Group (A study commissioned by the rental car industry), a Cambridge, MA based consulting group that looks at economic impacts, found that the estimated total revenue for rental cars in the US for 2004 was around $17.6 billion, with home city rentals accounting for $9.5 billion or 54% of the industry’s annual revenues. This conflicts with many legislators’ assumptions about who rents cars. The mayor of a suburb north of Atlanta is a case in point: “We’re not raising any tax. I didn’t think it would be a big deal as most rentals are visitors anyway.” The record is replete with such statements.

A second misconception is that affluent consumers and businesses rent most of the cars. The same Brattle Group study found that this is not the case. In fact, 19% of these car rental excise taxes are paid by working families that earn less than $50,000 a year and 7% of the total was paid by households earning less than $25,000. Enterprise Car Rentals estimates that 25% of its customers have incomes below $40,000.

The Brattle study also found that African-Americans generate 26% of the rental car revenues and pay 27% of the excise taxes, despite accounting for only 12% of the US population. Members of other minority groups pay 13% of the total car rental excise taxes, despite being only 7% of the population, while high-income households –defined as households earning over $100,000 pay only half of these excise taxes, which means the rental car excise taxes are a very regressive tax.

In a similar study, two leading tax policy experts, William Gale of the Brookings Institution and Kim Rueben of the Urban Institute, analyzed the impact of a $4-per-day rental car tax in Kansas City, MO.[5]

Gale and Rueben found that piling taxes onto car rental customers is both inefficient, because it can distort choices about modes of transportation and send people across state borders to avoid even a modest tax, and that the taxes are also inequitable. Communities that already are taxing car rental customers might want to take another look at their working assumptions and long- term strategy.

Conclusion

With an eight-fold increase in taxes on rental cars since 1990, it seems clear that the multitude of fees, taxes, and charges that have so dramatically inflated the cost of renting a car has gotten out of hand. NCL understands the importance of citizens paying their share of taxes to provide critical services that we all rely on – for our schools, hospitals, libraries, roadways, and for clean water and safe roadways. But when rental car customers are asked to pay for sports stadiums and the taxes imposed seem to have no limit, with consumers having no idea what the tax is, let alone what it is being used for, its time to say, enough is enough! Consumers are tired of taxes and fees without having any understanding of where that funding is going or why they are being asked to pay them.

For the reasons stated above, NCL is pleased to offer our support for H.R. 2469, which will help put the brakes on discriminatory taxes on consumers who rent cars. We thank you for inviting the National Consumers League to share our views with you today and urge you to support this important legislation. 

[1] Fees That Irk Consumers, Consumer Reports, August 2010 https://www.consumerreports.org/cro/magazine-archive/2010/august/money/travel-fees/overview/index.htm

[2] Ibid.

[3] How Far Would You Drive to Avoid a Rental Car Tax? NYTimes, David Cay Johnston, July 17, 2006. https://www.nytimes.com/2006/07/17/business/17tax.html

[4]Private Sector: Pain, No  Gain. Car rental excise taxes are discriminatory and bad policy,

https://www.post-gazette.com/pg/07219/807421-28.stm#ixzz1ksWJPsRihttps://www.post-gazette.com/pg/07219/807421-28.stm

[5] How Far Would You Drive to Avoid a Rental Car Tax? https://www.nytimes.com/2006/07/17/business/17tax.html

Scammers targeting their victims by age group, says National Consumers League’s Fraud Center – National Consumers League

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February 2, 2012

 

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC—The National Consumers League (NCL) has released its annual compilation of the top scams reported to its national Fraud Center, finding that the most frequently reported scam to NCL’s Fraud Center in 2011 involved bogus prizes and sweepstakes, with fake check scams and emotion-based pitches involving scammers posing as loved ones appearing in the top ten.

Another significant finding is that scammers appear to have targeted their scams at particular age groups more than ever in 2011. For example, complaints involving bogus prizes, sweepstakes, and free gifts made up 26.98 percent of complaints overall. However, among consumers ages 56-65 and above 65, these types of complaints made up 40.96 percent and 60.12 percent of the total, respectively. Similarly, fake check scams made up 26.65 percent of complaints overall. Among consumers age 18-25, fake check scam complaints made up 45.74 percent of the total.

New to the Top Ten Scams list this year is the Family/Friend Imposter Scam, the 9th-most frequently reporter type of fraud. In response to a rash of complaints, NCL’s Fraud Center began tracking this fraud (also known as the “Grandparent Scam”) in 2011. In these scams, a con artist typically poses as a relative in distress or someone claiming to represent the relative (such as a lawyer or law enforcement agent). The scammer frantically describes an emergency situation in which they have found themselves (such as being arrested, in an auto accident, in need of a lawyer, etc.) and asks the victim to send money for bail, lawyer’s fees, hospital bills, or other expenses. The victim is urged not to tell anyone, such as the parent of the “grandchild” because they do not want them to find out about the trouble they’ve gotten themselves into.

“Scam artists will stop at nothing to defraud consumers,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud. “The scary part about these scams is that they prey on our natural inclination to want to help a loved one who is in distress.”

According to the consumer group, the majority of money lost was sent via wire transfer, a popular payment method among scammers because of the difficulty to track – and particularly devastating to consumers because of the improbability of recovering lost funds. Consumers should be wary of any offer that requires wiring of money, said NCL.

The report, which is compiled from consumer complaints submitted to NCL’s Fraud Center, examined trends in Internet and telemarketing fraud in 2011.

“Fraudulent telemarketers and Web-based scammers are hardened criminals out to take their victims’ life savings,” said NCL Executive Director Sally Greenberg. “The best way for consumers to fight back is to get educated and not be afraid to report such fraud to law enforcement. Scammers know all too well that their victims are often embarrassed and count on this to continue to perpetrate their crimes.”

For more information on NCL’s 2011 Top Ten Scams report, click here. Consumers who wish to report a fraud or potential fraud can do so via the online complaint form at NCL’s Fraud.org Web site.

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About the National Consumers League

Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.

NCL, Consumer Action joint statement on Minnesota legislation regarding restrictive paperless tickets – National Consumers League

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January 30, 2012

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC–Consumer Action and the National Consumers League (NCL) jointly issued the following statement regarding legislation scheduled for hearings in the Minnesota House Commerce and Regulatory Reform Committee and the Senate Commerce and Consumer Protection Committee this week.

“Consumer Action and the National Consumers League support legislation to safeguard consumer rights from the practice of restrictive paperless ticketing. Ticket sellers, sports teams and event promoters have seriously damaged the rights of consumers through the use of restrictive tickets and we support attempts to curtail their spread.

“Restrictive paperless tickets dictate how – or whether – consumers can share or transfer their tickets, including whether they are permitted to give away tickets to charitable organizations or re-sell their tickets for any price,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud.  “By dictating that all ticket transfers and resales be made through their own websites, sellers like Ticketmaster and Veritix monopolize resale markets and eliminate consumer choice.”

NCL and Consumer Action applaud Minnesota’s proactive response to this damaging practice and Senator Gerlach’s and Representative Hoppe’s leadership in introducing these bills. We strongly encourage both committees to protect consumer rights.

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About Consumer Action

Consumer Action has been a champion of underrepresented consumers nationwide since 1971. A nonprofit 501(c)3 organization, Consumer Action focuses on consumer education that empowers low to moderate income and limited-English-speaking consumers to financially prosper. It also advocates for consumers in the media and before lawmakers to advance consumer rights and promote industry-wide change.

About the National Consumers League

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 praises USDA for improved school lunch guidelines – National Consumers League

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January 25, 2012

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC—Today the United States Department of Agriculture announced final guidelines on school meal nutrition. Sally Greenberg, Executive Director of The National Consumers League (NCL), has issued the following statement on these new guidelines:

“Today, USDA announced finalized guidelines for the meals children eat at school. The new guidelines represent an important step forward in ensuring that our children have access to healthy, wholesome foods at school. These guidelines are especially important because children consume up to half of their daily calories at school.”

“The new guidelines will provide more fruits and vegetables, offer more whole grain options, set upper and lower calorie limits based on age, and set important limits on the amount of saturated fat and sodium allowed in school meals. NCL commends USDA on the strength of the new guidelines and applauds the agency’s decision to craft these rules based on the strong science of the Institute of Medicine.”

“Besides setting new guidelines, which will change how American children eat at school, the new rules also increase funding to schools for the first time in 30 years. NCL praises USDA for recognizing that resource-strapped schools need additional funding if they are to implement these necessary changes to meal patterns.”

“NCL congratulates USDA on the strong stance it has taken to protect and promote children’s health and encourages the agency to continue its work to see that the new guidelines are implemented in a timely manner.”

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About the National Consumers League

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 statement mourning closing of Hull House – National Consumers League

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January 23, 2012

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC–Sally Greenberg, Executive Director, National Consumers League issued this statement today:

The National Consumers League (NCL) laments the news that the historic Hull House in Chicago is going to be closing. NCL’s roots are closely tied to Hull House. It was inhabited for years by the first head of the NCL, Florence Kelley, who did much of her earliest pioneering work from Hull House and was inspired and supported in that work by her dear friend Jane Addams and many other notable residents.

Kelley met and worked closely with other renown Hull House residents and Progressive-era reformers – including Grace Abbot, Frances Perkins, Julia Lathrop, and Alice Hamilton, and of course Jane Addams.

In a nation with as much wealth as we enjoy here in the United States, it is indeed a sad commentary on our values that a historic institution like Hull House that has, throughout its history, provided basic services to the poor would be forced to close its doors.

The Board of Directors and staff of the NCL, in light of our deep historical connections to Hull House and its mission, are greatly saddened at this news. We wish the institution well and we thank those members of the Hull House Board who worked so hard all these years to keep a historical icon working so long and so hard to provide assistance to those in greatest need.

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About the National Consumers League

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.

Child Labor Coalition announces Top 10 Child Labor Stories of 2011 – National Consumers League

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January 12, 2012

Contact: Reid Maki, (202) 207-2820, reidm@nclnet.org

Washington, DC—Advocates from the Child Labor Coalition (CLC), a group representing more than two dozen organizations concerned with protecting working youth, has released a list of the top ten child labor stories from 2011. The list represents international and American issues in child labor that received considerable attention in 2011 and what advocates hope is an increase in attention to exploitation faced by vulnerable child workers that has previously gone unnoticed by mainstream media.

“The year brought some much needed attention to serious child labor problems in the supply chains of some of the world’s largest companies,” said Reid Maki, Coordinator of the Child Labor Coalition and the Director of Social Responsibility and Fair Labor Standards for the National Consumers League (NCL). “However, we also saw a disturbing move in a few states to roll back long-standing child labor protections and a much-publicized attack on child labor laws by a presidential candidate.

The year’s 10 biggest stories, according to the CLC, included (in no particular order):

    1. Apple admits products manufactured by Chinese child laborers
    1. Victoria’s Secret’s dirty secret about child-labor harvested cotton
    1. DOL proposes rules to protect child farmworkers for first time in 40 years
    1. NBC News spotlights dangerous child labor in gold mining
    1. Newt Gingrich calls child labor laws “stupid”
    1. Advocates oust Uzbek designer from NYC Fashion Week
    1. Nestle hires independent monitoring group to examine supply chains
    1. Media reports highlight backbreaking child labor in American agriculture
    1. States try to turn back the clock on child labor protections
    1. Obama approves miliary aid to countries employing child soldiers

1) Apple hit with allegations that its iPhones and other electronic gadgets are manufactured in Chinese factories by child laborers. In February, Apple announced that it had found 91 children worked at its suppliers in 2010—a nine-fold increase from the previous year. The company also acknowledged that 137 workers had been poisoned by the chemical, n-hexane, at a supplier’s manufacturing facility and that less than a third of the facilities it audited were complying with Apple’s code on working hours. In the year prior to December 2010, Apple had sales of over $65 billion.

2)  Victoria’s hidden “secret”: children help harvest the cotton that goes into garments. Bloomberg Markets Magazine revealed in December that some of the cotton retail giant Victoria’s Secret uses is harvested by young children in the West African nation of Burkina Faso. The piece profiled 13-year-old Clarisse Kambire, who works on a cotton farm, where she said she is routinely beaten by the owner. By hand, Clarisse performs work that many farmers use a plow and oxen to perform and often works in 100-plus degree heat and eats just one meal a day. Some days she gets no food. Many of the children like Clarisse are considered “foster children” and receive no wages— most do not attend school. Limited Brand, the parent company of Victoria’s Secret, has annual sales in excess of $5 billion.

3)  U.S. DOL issues proposed child labor rules to protect children on farms from dangerous work. For the first time in four decades, the Department of Labor has issued proposed rules to prohibit work on farms that is dangerous for teen employees. The regulations would ban kids from driving tractors and other machinery, work from heights greater than six feet, work in grain facilities, and other dangerous activities. Despite a far-reaching “parental exemption” that would exempt the sons and daughters of farmers from the proposed protections, many members of the farm community and many farm-related groups attacked the proposed regulations as an assault on the family farm that would make it hard to train the next generation of farmers. DOL received more than 18,000 comments about the regulations. CLC members remain strong supporters of the proposed protections, which we believe will save 50-100 teen workers over the next 10 years.

4)  Human Rights Watch and NBC News draw much needed attention to child labor in gold mining. Artisanal mining for gold is a common but brutal and dangerous form of child labor for West African children. In early December, the NBC News show Rock Center featured a chilling report about child gold miners in Mali, Africa. As many as 20,000 kids are estimated to work in artisanal mines, according to Human Rights Watch (HRW), which found that kids as young as six years old “dig mining shafts, work underground, pull up heavy weights of ore, and carry, crush and pan ore.” As if this backbreaking labor wasn’t bad enough, many children also work with toxic mercury to separate the gold from the ore. Many child miners are not paid wages for their labor, receiving bags of dirt which may or may not have any gold dust in them. Many children work instead of going to school.

5)  Presidential candidate Newt Gingrich calls child labor laws “stupid” and urges U.S. to save money by hiring school children to clean school bathrooms. Republican Newt Gingrich made headlines this November when he suggested that poor kids in struggling schools be given jobs as janitors. Gingrich suggested that poor children typically lack the example of a working parent and that cleaning school bathrooms would help develop a strong work ethic. Gingrich has previously made headlines for having spent $750,000 on jewelry at Tiffany’s, raising questions about his ability to empathize with the struggling poor.

6) Advocates draw attention to the forced labor in Uzbekistan to harvest cotton by getting a dictator’s daughter ousted from Fashion Week. It’s not always easy to get the attention of one of the world’s most brutal dictators, but that’s what the advocacy community did during New York City’s Fashion Week in September 2011, when several CLC members and the Cotton Advocacy Network successfully got Uzbekistan’s Gulnara Karimov ousted from the prestigious fashion show. A designer and a Uzbek diplomat, Gulnara is the daughter of Uzbekistan’s brutal leader Islam Karimov. Each fall, Uzbek school children and their teachers are forced to leave their classrooms and perform arduous hand-harvesting of cotton for up to two months. The children, whose numbers are estimated to range from several hundred thousand to almost two million, receive little or no pay. Recently, the European Union voted not to ease import rules for Uzbek cotton, hoping to force the regime to allow independent investigators to survey child labor in the country.

7)  Nestlé agrees to hire a third-party monitor to examine child labor in its supply chain. For a decade now, the world has known that cocoa in West Africa is often harvested by children under difficult and dangerous conditions. That cocoa is purchased by the world’s leading chocolate companies and eventually becomes the chocolate treats that we all love to eat. For years, the advocacy community has pushed the chocolate industry to do more to combat this intractable problem. This year, Nestlé agreed to hire the Fair Labor Association, a nonprofit monitoring group, to look for child labor and other problems in the Côte d’Ivoire.

8)  60 Minutes and “The Harvest” film bring much needed attention to the problem of child labor in American agriculture. Children as young as 12—and sometimes even younger—toil in the fields beside their migrant farmworker parents, harvesting fruits and vegetables. The work—legal under U.S. child labor law—is often back-breaking and sometimes dangerous. “The Harvest,” a brilliant and poignant film by director Roman Romano and producers Shine Global, followed the lives of three migrant children as they struggled to overcome exhausting work, missed educational opportunities, and social disruption.

9)  State attempts to roll back child labor laws. Conservative legislators in Missouri, Wisconsin, and Maine worked to reduce child labor protections in 2011. The Maine legislature increased the number of hours teens can work during the school week from 20 to 24 and allowed them to work till 11 p.m. at night. In Wisconsin, legislators pushed through changes—without a public hearing or debate—that removed restrictions on the total hours that 16- and 17-year-olds can work. A bill to weaken protections in Missouri went down to defeat but legislators essentially got their way by defunding the state labor investigation team.

10) President Obama issues waivers for countries that use child soldiers. For the second year in a row, the President decided to waive congressionally mandated restrictions on giving military assistance to Chad, the Democratic Republic of Congo, South Sudan, and Yemen because they continue to use children in their armed forces. Issued in the name of “national security,” the waivers will result in thousands of children—some of them very young—being forced into armed conflict, including many young girls forced into sexual slavery.

“This list serves as a painful reminder that much work needs to be done in 2012,” said Sally Greenberg, a co-chair of the CLC and NCL’s executive director. “Corporations need to tighten their supply chain monitoring. Consumers need to make informed purchases and let companies know that child labor is an issue that they care about. It’s also imperative that we let the Department of Labor and congressional members know that the safety of children working in U.S. agriculture requires the immediate implementation of the proposed child safety rules, which are 40 years overdue.”

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About the Child Labor Coalition

The Child Labor Coalition is comprised of 28 organizations, representing consumers, labor unions, educators, human rights and labor rights groups, child advocacy groups, and religious and women’s groups. It was established in 1989, and is co-chaired by the National Consumers League and the American Federation of Teachers. Its mission is to protect working youth and to promote legislation, programs, and initiatives to end child labor exploitation in the United States and abroad. For more information, please call CLC Coordinator Reid Maki at (202) 207-2820[reidm@nclnet.org].

NCL: ICANN’s domain name expansion plan a boon for scam artists – National Consumers League

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January 6, 2012

Contact: 202-835-3323, media@nclnet.org

Washington, DC – The planned expansion of the generic Top-Level Domain (gTLD) name system poses significant threats to consumer protection from online scam artists, according to the National Consumers League. Starting January 12, 2012, the Internet Corporation for Assigned Names and Numbers (ICANN) plans to begin accepting applications for new gTLDs despite the significant concerns expressed by hundreds of stakeholders in the non-profit and business communities as well as the Federal Trade Commission (FTC) and members of Congress. As an organization that receives thousands of complaints from consumers about online fraud, NCL is extremely concerned that expansion of the gTLD system will be a boon to scam artists intent on deceiving consumers.

In particular, NCL is troubled by the findings of the FTC that:

“[a] rapid, exponential expansion of gTLDs has the potential to magnify both the abuse of the domain name system and the corresponding challenges we encounter in tracking down Internet fraudsters. In particular, the proliferation of existing scams, such as phishing, is likely to become a serious challenge given the infinite opportunities that scam artists will now have at their fingertips.”

In a letter sent today to ICANN Board Chair Stephen Crocker and ICANN President and CEO Rod Beckstrom, NCL called for a delay in the implementation of the gTLD expansion program until safety and security concerns can be more adequately addressed.

“We are wary of changes to the domain name registry system that could allow unscrupulous scam artists to proliferate to an even greater extent than they exist today,” said NCL Executive Director Sally Greenberg. “A delay in the implementation of the new gTLD program is urgently needed to allow adequate time to address pressing security concerns and, ultimately, to better protect consumers from abuse of the domain-name system by fraudsters.”

To view the full text of NCL’s letter to ICANN, click here.

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About the National Consumers League

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 statement on the new NLRB appointees – National Consumers League

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January 5, 2012

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC—The National Consumers League (NCL) issued this statement: The National Consumers League (NCL) applauds President Obama for appointing Sharon Block, Terence F. Flynn and Richard Griffin to fill the vacancies at the National Labor Relations Board (NLRB).

“These three appointments to the NLRB, a five seat board which as of January 3rd had only two members, helps to ensure that the Board is able to continue in its vital role,” said Sally Greenberg, NCL Executive Director.

All three appointees are exceptionally qualified sit on the NLRB.  Block was the Senior Labor & Employment Counsel to the Senate Health, Education, Labor and Pensions Committee under Senator Edward M. Kennedy and most recently served as the Deputy Assistant Secretary for Congressional Affairs at the Department of Labor. Flynn served as Chief Counsel to NLRB Board Member Brian Hayes and has previously served as Chief Counsel to former NLRB Board Member Peter Schaumber. Griffin was the General Counsel for the International Union of Operating Engineers and serves on the Board of Directors for the AFL-CIO Lawyers Coordinating Committee.

“We applaud these appointments, ” said Greenberg. “We applaud President Obama for ensuring that an independent NLRB is able to continue in its mission of safeguarding employees’ rights to organize and promoting civil and efficient union-management relations and collective bargaining.”

“There is a common misperception that the NLRB is merely ‘pro-labor’,” said Michell McIntyre, Project Director for NCL’s Special Project on Wage Theft. “The reality is that the NLRB is an impartial independent agency designed to foster open, productive dialogue between employers and employees on fair labor practices, including collective bargaining, elections, and union representation—common sense goals intended to benefit both labor and management.”

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About the National Consumers League

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 statement on the new FDA limits on antibiotic use in livestock – National Consumers League

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January 5, 2012

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC—Sally Greenberg, Executive Director of the National Consumers League (NCL), issued the following statement today applauding the U.S. Food and Drug Administration (FDA) for banning the extralabel (“extralabel” means use of a drug for a purpose not intended when the drug was originally developed) use of a class of antibiotics, cephalosporin,  in livestock.

“NCL applauds FDA for issuing an order of prohibition regarding cephalosporin antibiotics.  Use of these medications in cattle, swine, turkeys and chicken will now be limited.  The order will go into effect on April 5, 2012.

80% of antibiotics used in this country are administered to livestock, not only when the animal is ill but also, unfortunately as a prophylactic measure against possible infections. This vast overuse of antibiotics in livestock has been mirrored by an increase in antibiotic resistant- disease-causing bacteria.  The trend means that we have fewer treatment options to treat sick patients, leading to higher health costs and sadly, more patients succumbing to illnesses caused by antibiotic resistant bacteria.

Cephalosporin drugs many important applications in treating human infections and illnesses. A reduction in the use of these antibiotics in animals will be enormously helpful in reducing antibiotic resistance in humans and in treating disease.

NCL applauds FDA for its actions in limiting the use of cephalosporin in livestock.  This is an important first step toward reducing antibiotic use across the board in animals. NCL urges FDA to continue studying the issue and to take steps to limit the livestock applications of other drugs important to treating human illnesses.”

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About the National Consumers League

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.