Bogus Fee Alert

My daughters and I are in Las Vegas after a wonderful trip to 3 national parks. I bid for and prepaid for a hotel in Las Vegas, "New York, New York." Priceline told me that my "Total Price," including "Room Cost," "Taxes" and "Fees" was $80.88. When I stepped up to to register for the room. the NY NY employee told me that I owed a "Daily Resort Fee" of $24. She pointed to a pamphlet on her desk (see the attached photo) and told me that the "fee" is for these items, including "unlimited local and 800 number calls." I told her that I already paid the "Total Price," and I would not pay this "Fee." She told me "Everyone pays this fee." I told her that I wouldn't pay this "Fee," because I already paid all "fees." She said I needed to take it up with Priceline. I told her I needed to speak with her manager. The manager (another woman) came to the front desk and told me "All of the resorts in Las Vegas charge the fee." This was no consolation to me. She told me that I had to pay the fee. She told me that Priceline discloses that I would be responsible for paying this additional fee (this is false). I told her that I wouldn't pay the fee, that it was fraud to charge the fee, and that I would pay it under protest, contesting it through my credit card company. I told her that I was a class action attorney and that they should be sued for a class action. The manager finally admitted to me that since Priceline told me that I had prepaid my "Room Cost," "Taxes" and "Fees," that it would be "unfair for me to pay an additional "fee." She wagged her finger at me and stated that she would waive the fee this time only. I am disturbed that this is going on. I assume that hundreds or thousands of people are being hit for this "Fee," and that most of them are paying it rather than making a scene at the registration desk. For any of my FB friends who are using Priceline to book rooms in Las Vegas (or elsewhere), beware that this is going on. In my experience as a consumer lawyer, merchants are increasingly tacking on these BS fees for illusory services, fraudulently making millions of dollars in the process.New York New York Resort Fee

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How long is the iTunes terms and conditions?

How long are the iTunes terms and conditions? 32 feet. The set of iTunes disclosures was printed out in 8 pt font and measured by Omri Ben-Shahar's and Carl E. Schneider. They have written a new book on the failures of consumer disclosures titled: More Than You Wanted to Know. In the following video, Ben-Shahar characterizes mandated consumer disclosures as the "most common and possibly the least useful form of regulation." Watch the demonstration of the physical length of the iTunes contract here.

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The failure of mandated disclosures aimed at consumers

Who takes the time to read all of the disclosures that comes with software and products? Not most of us. A new book reviewed by Bloomberg says that this is not only ineffective, but harmful.

[I]s mandatory disclosure really that beneficial? During the housing bubble, having to sign 50 documents stuffed with financial disclosures didn’t stop people from taking out ill-advised subprime loans on overpriced houses. An alarming number of female college students are still attacked on campuses despite the federal Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, which imposes stiff crime reporting obligations on school administrators. And disclosure forms in routine transactions, from getting a car fixed to signing for a FedEx package, have become meaningless annoyances. A new book, More Than You Wanted to Know: The Failure of Mandated Disclosure, takes the critique one step further: It argues that mandatory disclosures aren’t just useless but outright harmful in many cases.

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Grass roots effort versus payday loan industry money.

Last year my law partner John Campbell and I (we are two of the three attorneys at Campbell Law) donated our time and energy to serve as legal counsel to more than 118,000 Missouri citizens who sought enact a new law to cap the interest rates of payday loans (often 400% to 500% interest per year). What is it like to gather voter signatures when hundreds of thousands of dollars in industry money is pushing back? This excellent article by Propublica details the obstructionist tactic called "blocking" and the misleading ads sponsored by the payday loan industry. What else can happen as part of a hotly contest ballot initiative? Notice the article's description of the incident where someone broke into the car of a petitioner and stole 5,000 voter signatures. PayDayLoanShark Most people I know are shocked to learn that payday loans carry such high interest rates. If Missouri voters were really allowed to vote on this issue, I do believe that they would overwhelmingly cap interest rates at 36 percent. Last year's battle was between grass roots supported interest rate caps versus immense amounts of industry money funding an AstroTurf movement. The issue never came to a vote last year--the signature collection efforts barely fell short. In 2014, we are looking to try once again to cap these predatory loans that are deceptive and dangerous products for most of those who fall prey to using them.

Continue ReadingGrass roots effort versus payday loan industry money.

Time to ban predatory lenders and rent-to-own shops

David Ray Papke has recently published "Perpetuating Poverty: Exploitative Businesses, the Urban Poor, and the Failure of Liberal Reform," suggesting that it's time to pull the plug entirely on predatory lenders and rent-to-own outlets. If only legislators would base their decisions on what is just rather than the flow of money to their re-election campaigns. Why ban them rather than regulate them? Because it's been attempted for a long time, unsuccessfully. These business are great at evading the spirit of regulation.

In the end, the urban poor who shop and borrow at rent-to-own outlets, payday lenders, and title pawns do in fact pay exorbitant amounts that are much higher than what they would pay for goods at Walmart or loans at the local bank. As scholars have argued for almost fifty years, it is routinely the case that the poor pay more than middle and upper-class Americans for comparable goods and services.1 This includes food, housing, transportation, insurance, mortgages, and health care,2 and it certainly includes goods and loans from rent-to-own outlets, payday lenders, and title pawns. This article has four major sections. The first three examine the business models of, in order, the rent-to-own outlets, payday lenders, and title pawns. Each of these business models features a highly-crafted, standardized contractual agreement that does not merely support the business but rather is central to it. The fourth section of the article reviews reformist efforts related to these businesses and also argues that these liberal efforts at reform have been ineffective. The business models and concomitant contractual agreements of rent-to-own outlets, payday lenders, and title pawns are so sophisticated and adjustable as to make them virtually impervious to regulation. As a result, rent-to-own outlets, payday lenders, and title pawns continue not only to exploit the urban poor but also to socio-economically subjugate the urban poor by trapping them into a ceaseless debt cycle. A blanket proscription of these tawdry businesses might be the only way to drive them from our midst and to eliminate their active role in the perpetuation of urban poverty. . . . Some practices so fundamentally affront our shared values that they should quite simply be prohibited. It is one thing to exploit the urban poor, but it is another thing to systematically worsen their socio-economic condition and to thereby subject them to greater control and subservience. Exploitation, in other words, might be tolerable in our market economy, but subjugation should not be. You can take people’s money and the value of their labor, but you not should be able to yoke them permanently or even semi-permanently to subordination. By actively making the urban poor even poorer, the rent-to-own, payday lending, and title pawn businesses do just that and should be banned.
Papke's article can be found here. It is published by Marquette University Law School. For more on payday loans, see various articles at this site with the word "payday," including this look at how the battle between reformers and the industry wages on the ground.

Continue ReadingTime to ban predatory lenders and rent-to-own shops