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Texas settles another lawsuit against VW

Hard to keep track, I know.

Volkswagen will pay the state of Texas $50 million to settle a deceptive trade practices lawsuit brought against the automaker. The settlement is part of an $14.7 billion nationwide agreement to resolve the nation’s largest auto scandal.

Volkswagen mislead consumers by promoting diesel vehicles as “clean” even though the German manufacturer knew the cars were equipped with software to cheat on emissions tests, according to the attorney general’s office.

The carmaker sold nearly 43,000 vehicles in Texas with 2.0 liter and 3.0 liter diesel engines, according to the agreement. The affected VW, Audi and Porsche vehicles include model years 2009 through 2015, according to court documents.

Under the terms of the agreement, VW is prohibited from falsely claiming its vehicles are environmentally friendly, selling cars with devices that can trigger false readings on environmental tests and misrepresenting emission levels.

The carmaker must also establish a $2.7 billion trust fund for projects to lessen the environmental harm caused by excessive Volkswagen emissions. Texas’ share is estimated to be as much as $191 million, according to the attorney general’s office.

See here for some background, and here for the original AG press release on this lawsuit. The FTC also sued a few months after this. The earlier settlement that was announced had to do with the actual environmental damage, which is what the $191 million Texas will get is all about. I presume money from this settlement will go to the defrauded VW vehicle owners, but the details are a little fuzzy to me. I suppose if you were one of those people who bought a VW diesel car, you might contact the AG’s office to see if you’re owed a few bucks now. The Statesman has more.

Texas v. the Feds: Telemedicine edition

Here’s a new one.

Teladoc, the Dallas-based company that sued Texas over its telemedicine regulations, has a new ally in the Federal Trade Commission.

In a letter sent to the U.S. 5th Circuit Court late Friday, the federal antitrust agency sided with Teladoc in the company’s legal battle, criticizing the Texas Medical Board for allegedly misinterpreting case law.

The telehealth company sued last year to block board rules that in most cases require face-to-face contact between a patient and a physician before a physician can issue a prescription.

That threatened Teladoc’s business model, which virtually connects Texas patients to remote, Texas-licensed doctors, some of whom are based out-of-state. The company says its physicians consult patients over the phone for routine medical issues, and patients can upload photos or other information describing their symptoms and medical history.

Teladoc filed an antitrust lawsuit against the regulatory Texas Medical Board in federal court last year, alleging that the 19-member board made up mostly of doctors had behaved like a cartel by passing rules intended to limit competition.

The state has asked the appeals court to throw out Teladoc’s lawsuit, and federal regulators on Friday urged the court not to.

The Texas Medical Board failed to show that “any disinterested state official ever substantively reviewed” the telemedicine rules “to determine whether the rules promote a clearly articulated state policy to displace competition rather than the private interests of active market participants,” federal regulators wrote.

I hadn’t noticed this before now, and I don’t know much about this, though on the surface it sounds like Teladoc has a good argument. I was hoping to find an analysis of this via Google, but the best I could do was this by the hacks at the TPPF that was just boilerplate business/free market rah-rah. Here’s an interview with Teladoc’s CEO from January about the lawsuit, if you’re interested. The suit was filed by Teladoc, the AG’s office is defending the Texas Medical Board, and the feds have only just gotten involved, so this isn’t a typical Texas-versus-feds situation. It is a reminder that not all such cases fall into the usual narrative.

Rep. Isaac asks FTC to step in on Austin rideshare regulations

Seriously?

Rep. Jason Isaac

State Rep. Jason Isaac has asked the Federal Trade Commission to investigate Austin’s rules for ride-hailing companies, raising concerns that the city’s “burdensome regulations” are anti-competitive.

In the letter dated June 7, Isaac said he thought the city “erected a pernicious barrier to competition” through its rules, which have become a point of contention in the statewide discussion about which layer of government should ultimately regulate the industry.

“I think this turned into an immature battle that left some people really scared and things were done out of a vindictive nature,” Isaac, R-Dripping Springs, said in an interview Thursday. “I personally believe that this is anti-competitive in nature, but I want to ask the FTC if they think it’s anti-competitive.”

[…]

In his letter, Isaac suggested the Austin City Council knew adopting the fingerprinting ordinance would spur Uber and Lyft to leave the city and, in turn, would “return the marketplace” to taxi companies.

“Despite knowing the ramifications of their vote, the Council added burdensome regulations and put the city at risk,” Isaac wrote.

Jason Stanford, a spokesman for Adler, said the city wants to have ride-hailing services.

“Nothing we’ve done would prevent Uber and Lyft from operating now in Austin just as before, and they are welcome to come back at any time,” he said in a statement. “All such companies operating here would be entitled to receive the same kinds of support and encouragement.”

You can read Rep. Isaac’s letter to the FTC here. Putting aside the absurdity of a Tea Party legislator calling in the Federal Government to intervene in a local matter – does Rep. Isaac want someone to pin a “Primary me!” sign on his back? – there’s the small matter of ridesharing startups sprouting in Austin like bluebonnets in March since the Prop 1 vote and subsequent Uber/Lyft pullout. How terrible can these regulations be if new options keep appearing in Austin (here’s another one!) seemingly every week? I pity the poor FTC official who will have to reply to this silliness with a straight face.

How much do payday lenders suck?

This much.

paydayloanssized-712x475

Pursuing, or even threatening, criminal charges against payday and title borrowers is strictly prohibited by Texas law, with very few exceptions. The Texas Constitution unequivocally states, “No person shall ever be imprisoned for debt.”

But new research released this morning by Texas Appleseed shows that criminal charges against payday borrowers for missing payments is common in Texas. Texas Appleseed documents more than 1,500 criminal complaints of bad check and theft by check allegations filed by payday loan companies in Texas between 2012 and the spring of this year. Many of them resulted in fines, arrest warrants and even jail time.

The research builds on reporting by the Observer published in July 2013, which found 1,700 instances in which payday lenders in Texas have filed criminal complaints against customers. The Observer story prompted an ongoing investigation by the state Office of Consumer Credit Commissioner, which regulates the industry in Texas, into one payday loan business, Cash Biz. It also led regulators to issue an advisory bulletin to lenders warning them to stop pursuing criminal charges against their customers.

Texas Appleseed found 13 different payday loan companies pursuing criminal charges in eight different counties, including Travis, Dallas, Harris and Collin. Texas Appleseed filed a complaint today with the federal Consumer Financial Protection Bureau, the Federal Trade Commission, the Texas Attorney General’s Office and the state Office of Consumer Credit Commissioner. The complaint letter, which includes 700 pages of supporting documentation calls for state and federal authorities to launch an investigation and take enforcement action against lenders abusing the law and their customers.

“In addition to their outrageous rates and lending practices, payday loan businesses are illegally using the criminal justice system to coerce repayment form borrowers,” said Ann Baddour of Texas Appleseed. “This directly contravenes state and federal law, which eliminated debtor’s prisons long ago.”

In one justice of the peace court in Harris County, the group found that arrest warrants were issued in more than 42 percent of the cases and at least six people served jail time. In Collin County, there were 740 documented criminal cases against payday borrowers—636 from a single lender, PLS Loan Store—and $132,000 collected from borrowers.

Go read the whole thing, and read that Observer story from last year that I managed to overlook at the time. I don’t know about you, but I don’t want my county’s law enforcement apparatus acting as a debt collector for private companies. Here’s the Texas Appleseed press release and the complaint they filed, which lists all the offenders. Consider this your pre-session reminder of why we need state regulation of these shysters. I don’t know what any of the offices that received these complaints can do about it, but I would suggest that boiling them in their own pudding and burying them with a stake of holly through their heart would be poetically just, if perhaps not quite constitutional.

Fighting identity theft

The U of Texas is studying it.

Identity theft is a cradle-to-grave problem that costs U.S. businesses $50 billion and affects at least 10 million consumers each year.

At least 1 million children’s identities are stolen over the course of a year — often misused by their parents, said Stephen Coggeshall, chief technology officer at ID Analytics. Adults are victimized, online and offline. Companies are compromised when unwitting employees use their company log-ins and passwords surfing the Internet.

Even death offers no respite: One study by Coggeshall showed that the identities of 800,000 dead Americans are being used for illegal purposes.

The Center for Identity at the University of Texas on Monday convened a two-day conference to discuss the scope of the problem and what can be done.

Peter Tippett, who helped create the first anti-virus software, is now with Verizon, which compiles the annual Data Breach Investigative Report.

“We do more computer crime cases than all other companies combined,” Tippett said.

Criminal organizations in the United States, Russia and Brazil are targeting consumers and businesses, Tippett said. He cited a Federal Trade Commission study for the $50 billion a year cost to businesses and the 10 million affected consumers.

Tippett said that 82 percent “of all data stolen by anybody on the planet was stolen because of your password.”

In a world where 123456 remains the most popular password, Tippett said making passwords longer and changing them more often isn’t the answer, with so much hacking and malware.

“If bad guys see what you type, it doesn’t matter how strong your password is,” Tippett said.

He likened the problem with passwords to seat belts in cars. He said seat belts were only 50 percent effective in saving lives, but making them stronger was not the answer. Adding air bags made cars safer.

A second identifying factor needs to be added to the passwords, Tippett said.

Two-factor authentication has a lot going for it, but it’s also another point of failure. One common way of delivering this without having to provide some kind of gadget that contains a personal certificate is to arrange to send an authorization code via text or voice to your phone, which is a great idea as long as you’re never without your phone. I suppose it or something like it is inevitable, though, so there’s no point complaining about it.

One thing this story doesn’t touch on is that a significant factor in identity theft isn’t just careless people with easily-cracked passwords, it’s also the many corporate and government entities that have all your data and which have become lucrative targets for evildoers, or in some cases have screwed up and let supposedly secure data out into the public, as Texas Comptroller Susan Combs did last year. Seems to me there needs to be greater incentive for the keepers of these databases to prevent their theft. One model I often hear discussed is to put the financial onus for this data loss on the entity that loses it and not the individuals who are affected by it. It’s the model we use for credit cards and ATMs, where your liability is limited and the financial institution bears the risk. Those transactions are pretty darned safe nowadays because of that. That takes legislation, which is clearly a tougher row to hoe than convincing millions of people to use better passwords. As the man said, there’s only so much benefit to be gained by strengthening passwords. The back end needs to be shored up as well.

Meet the robocallers

I didn’t think it was possible for me to hate the auto warranty robocallers any more than I already do, but apparently it is.

[C]ourt documents filed this month in a Federal Trade Commission case against a Florida company — Transcontinental Warranty — provide what authorities say is a look inside a telemarketing operation that used widespread recorded calls and misrepresentations in selling its product.

A declaration from a former employee describes how he was supposed to go through hundreds of calls in a shift, trying to sell auto service warranties, which the FTC said typically cost $2,000 to $3,000, without giving up too much information about the company, especially if consumers became combative or suspicious.

“Transcontinental’s company motto was ‘Hang up. Next,’ ” said Mark Israel, who worked the evening shift with about 30 other operators at company headquarters in Fort Lauderdale, Fla. “Essentially, this meant that if the consumer did not readily go along with the scripted telemarketing pitch, I should immediately hang up.”

[…]

Israel, who did not respond to requests for an interview, worked for the company only four days before quitting and contacting the FTC.

His description of the calls mirrored those of people nationwide, the FTC said, who complained to government agencies and consumer organizations. The FTC said some Transcontinental calls went to numbers registered on the national Do Not Call list. But all recorded sales calls are illegal with the exception of those that go to people with whom there’s an established business relationship.

But it was difficult for consumers to report a company if it couldn’t get its name. “I understood it to be an acceptable practice at Transcontinental to say whatever was necessary to get the consumer to divulge his or her credit card number,” Israel said in the court documents.

Some people have left comments on previous posts about these jerks saying they’d managed to hang on the line long enough to get to a person and get that person to take them off their call list, at least for awhile. I never bothered with that – I always hung up as soon as I recognized the call, if I was unfortunate enough to answer it in the first place. I think that was for the better, all things considered. And I must say, I haven’t received one of these calls in a few days now (knock wood), so maybe the feds are having an effect, One can only hope.

Injunction issued against auto warranty robocallers

Yes! Yes, yes, yes!

A federal judge has issued two temporary restraining orders designed to stop what officials describe as a wave of deceptive “robo-calls” warning people their auto warranties are expiring and offering to sell them new service plans.

[…]

The FTC filed suit against two companies and their executives on Thursday, asking a federal court in Chicago to halt a wave of as many as 1 billion automated, random, prerecorded calls and freeze the assets of the companies.

Officials say the calls have targeted consumers regardless of whether they have warranties or even own cars and ignore the Do Not Call registry. They say telemarketers have misrepresented service agreements consumers have to buy for warranties that come with the price of the car.

Sen. Charles Schumer, D-N.Y. had asked for an FTC investigation into what he described as the scam of “robo-dialer harassment.”

“These calls are annoying, but worse, many Americans have been fleeced,” he said.

U.S. District Judge John F. Grady issued the temporary restraining order against Transcontinental Warranty Inc. on Thursday and Voice Touch Inc. on Friday.

Grady’s orders also applied to Transcontinental CEO and President Christopher Cowart, Voice Touch executives James and Maureen Dunne, Voice Touch business partner Network Foundations LLC and Network Foundations executive Damian Kohlfeld.

[…]

Besides ordering a halt to the automatic telephone sales calls, Grady’s order froze the assets of the two companies. The FTC alleged in its complaints that the calls were part of a deceptive scheme and asked the court to assure the assets will not be lost in case they might be needed to repay consumers who have been victimized.

The temporary restraining orders are to remain in effect until May 29, when Grady scheduled a hearing on the FTC’s request for a preliminary injunction.

Halle-freaking-lujah. May this put these bastards out of business once and for all.

The FTC isn’t immediately seeking civil fines against the companies but may do so later, agency officials said.

I still think public execution would be a just outcome, but I’ll take what I can get. Thanks to Kevin Drum for the pointer.