This Independent RadioShack Isn’t Going Anywhere

(Nicholas Eckhart)

If you don’t happen to live near one, you may have never heard of RadioShack dealers and franchisees. They’re locally-owned stores that happen to sell merchandise from RadioShack. However, they aren’t part of the RadioShack that declared bankruptcy in February and is in the process of closing down most of its stores. The owner of one of these Shacks in Virginia wants to make sure that customers know they’re staying open.

The curious thing, of course, is that remaining RadioShack stores are now part of a joint venture with mobile carrier Sprint. Sprint’s branding is more prominent, or will be once the stores have their new signage. If the new owners don’t win the bidding for the brand name in next month’s auction, they will no longer have the right to call the new stores RadioShack at all. For now, though, the franchise and dealer stores get to call themselves “RadioShack,” and that may be why people are getting confused.

“I want to reassure people that regardless of what happens with RadioShack (corporation), we have no intentions of going anywhere,” explains the president of Kittronics, the local company that owns the store. The store is even going to some effort to assure customers that they’re staying open: they’ve placed ads explaining how they plan to stay open, and also out signs out front and on the sidewalk.

Thank you for your concern!

This store is an independently owned and operated location.

Although we display the name Radio Shack, we will not be closing. Please contact us directly with any questions.

The company also sells DirecTV subscriptions, Exede satellite internet access, and metal detectors, which are arguably more popular than fuses and wires, but the store will continue to sell most of the same merchandise.

RadioShack of Warrenton continues as independent [Fauquier Now]

by Laura Northrup via Consumerist

1-Hour Photo Shops Are The Disappearingest Business In America

(Erin Nekervis)

If you think that video stores are the business category that has disappeared the fastest, you’re wrong. If you found an exposed roll of film in a drawer and wanted to find out what was on it, where would you take it? Most likely, your local photo store is gone, and you might have a drugstore or other business that still does a few rolls of film every week.

Let’s look at just shops that bill themselves as one-hour photo developers: analysis by Bloomberg Businessweek shows that there are only 190 of them left across the country. That’s a 94% decrease over fifteen years ago, the final years before digital photography started to become mainstream. In the same time period, 85% of video rental stores closed. Yes, there are still some video-rental stores.

As a person who studied archives and preservation, I’m obligated to point out that while our digital photos are plentiful and portable, they are only as permanent as the cloud service we’ve uploaded them to or the hard drive they’re stored on.

Twilight of One-Hour Photo, America’s Fastest-Fading Business [Bloomberg Businessweek]

by Laura Northrup via Consumerist

Arbitration Fairness Act Would Reinstate Consumers’ Right To Sue In Court

(Brian Turner)

 

Companies have been taking away your right to sue them when they screw up for years, using small, hidden clauses to require mandatory binding arbitration instead. After years of consumer groups voicing their concern over this anti-consumer practice, there’s finally a new bill in congress that proposes to bring back your right to sue.

The Arbitration Fairness Act of 2015 [PDF], which was introduced by Minnesota Sen. Al Franken and Georgia Rep. Hank Johnson, would eliminate mandatory arbitration clauses in employment, consumer, civil rights and antitrust cases by amending the Fair Arbitration Act to its original intent.

The use of arbitration clauses has skyrocketed by companies since 2011, when the U.S. Supreme Court affirmed that it was perfectly okay for companies to take away a consumer’s right to sue or their ability to join other wronged consumers in a class action case by inserting a paragraph or two of text inside lengthy contracts.

To add insult to injury, most consumers are unaware that they’ve signed away their right to be heard in court. A Consumer Financial Protection Bureau report from March found that 75% of consumers surveyed did not know if they were subject to an arbitration clause in their credit card contract. And among consumers whose contract included an arbitration clause, fewer than 7% recognized that they could not sue their credit card issuer in court.

“There is overwhelming evidence that forced arbitration creates an unaccountable system of winners and losers,” Sen. Johnson said in a statement. “Unlike America’s civil justice system, which has evolved through centuries of jurisprudence and social progress, forced arbitration does not provide important procedural guarantees of fairness and due process that are the hallmarks of courts of law.”

According to a statement from Sen. Franken’s office, the Arbitration Fairness Act would restore the intent of the original Fair Arbitration Act (FAA) passed by Congress in 1925.

When FAA was passed it made it was intended to target commercial arbitration agreements between two companies of generally comparable bargaining power. Over the years, however, the Supreme Court boarded the reach of the law to include consumer and employment disputes, effectively superseding all other federal laws protecting consumers, workers and small businesses.

Under the newly introduced Arbitration Fairness Act of 2015, agreements to arbitration of employment, consumer, civil rights and antitrust disputes could only be made after the dispute has arisen.

To be clear, the Act doesn’t prohibit companies and consumers from going to arbitration to settle a dispute, it simply mandates that the decision to go into arbitration not be made before the dispute has actually taken place.

The Act seeks to ensure transparency in civil litigation by protecting the integrity of Civil Rights Act, the Equal Pay Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act and others that are frequently skirted by companies using forced arbitration.

Additionally, the Act would continue to allow pre-dispute mandatory arbitration to continue in business-to-business agreements, and does not apply to collective pardoning agreements.

“The Arbitration Fairness Act, is a commonsense reform to our justice system that will restore Americans’ right to challenge unfair practices by corporations and ensure meaningful legal recourse when everyday Minnesotans and small businesses are wronged,” Franken says in a statement. “It’s clear that we’re at a point where big corporations can write their own rules and insulate themselves from liability for wrongdoing—this can’t continue.”

Consumer groups, many of which have called on regulators to revise forced arbitration rules, applauded the Act’s introduction.

Both the National Consumer Law Center and the National Association of Consumer Advocates say they support the new measure, calling on Congress to follow through restoring consumers’ Constitutional rights.

“We should never have to give up our Constitutional rights just to do the everyday things in our lives,” NACA’s legislative director Ellen Taverna said in a statement. “The Arbitration Fairness Act stands up for consumers, servicemembers, workers and all Americans and restores our right to hold corporations accountable when they break the law.”

Sen. Franken, Rep. Hank Johnson Lead Charge to Protect Legal Right to Day in Court [Al Franken]

by Ashlee Kieler via Consumerist

Hey, AT&T Customers: If You Plan To Grab A Slice Of The Cramming Settlement, Do It Right Now

(So Cal Metro)

A friendly reminder to AT&T wireless customers: as a result of their $105m settlement with the FTC, the company has to pay refunds for cramming. The application deadline for refunds is May 1 — that’s tomorrow. You can visit the settlement website to see if you’re eligible or to submit a claim.
by Kate Cox via Consumerist

Former NFL Player Wins Case Over Cleveland’s “Jock Tax” Methods

(EDrost88)

Most people dreaming of a career in professional sports that will take them around the country to play for huge crowds in major U.S. cities are probably imagining the glitz and glamor that goes with that job. But then there’s the un-fun parts, like paying taxes in each one of those states, as well as some cities that levy taxes against income earned locally. One former NFL player filed a lawsuit against Cleveland’s so-called “jock tax,” not to dispute that he owed taxes there, but because of how the city calculated what he owed.

Former Chicago Bears linebacker Hunter Hillemeyer won a lawsuit today in Ohio Supreme Court claiming Cleveland unfairly taxed him during his playing career when it came time for him to pay income taxes based on his time working there in the NFL, reports the Chicago Tribune.

In his case going back to 2007, he argued that he was overtaxed for the games he played in that city. Cleveland had imposed a 2% tax on income allocable to the city, and determined that 5% of his income was taxable for the one game he played with the Bears each year in the city for the years 2004, 2005 and 2006.

Not so fast, Hillenmeyer argued — he said players are compensated not just for the games they play, but for the work they put in practicing, attending strategy meetings and promotional activities. He said that his duty days added up to 163 days those years, only two of which each year were spent in Cleveland.

Based on his calculations of the time spent in Cleveland, he should only have owed about 1.25% each year, he argued in the court papers. The court agreed in a unanimous opinion, finding that Cleveland’s tax method violated the due process clause of the 14th Amendment.

“Cleveland’s power to tax reaches only that portion of a nonresident’s compensation that was earned by work performed in Cleveland,” the opinion said. “The games-played method reaches income for work that was performed outside of Cleveland, and thus Cleveland’s income tax violates due process as applied to NFL players such as Hillenmeyer.”

He’s due a partial refund of the tax paid, the court said, which he claims comes down to a total refund of $5,062 for the three years.

Former Chicago Bear wins suit over Cleveland’s ‘jock tax’ [Chicago Tribune]

by Mary Beth Quirk via Consumerist

Comcast Decides Competing Against Municipal Fiber Is Just Fine, Brings 2 Gbps Service to Chattanooga

Chattanooga: pretty blue bridges, municipal broadband, and Comcast. (ash)

While most of us languish away without even a flicker on the horizon of someday getting gigabit speeds or real broadband competition, residents in a handful of cities are lucky enough to have both. This summer, Chattanoogans will join the shortlist of Americans who not only have blazing fast internet, but also a choice of providers.

The Times Free Press reports that Comcast is promising Chattanooga the same “Gigabit Pro” service they’re rolling out elsewhere: fully symmetrical 2 Gbps, fiber-to-the-home connections. The roll-out is planned to begin in June and will reach up to 200,000 homes.

“But wait,” you might say. “Chattanooga sounds really familiar. Something something municipal fiber internet?”

Chattanooga, as we’ve discussed several times over the past year, is well known for its super fast, globally competitive symmetrical gigabit fiber network — a public utility that the FCC recently granted permission to expand, despite restrictions in Tennessee state law.

Comcast’s previous Gigabit Pro announcements have been oh-so-coincidentally appearing in cities that are either currently targeted by Google Fiber (as in Atlanta) or by AT&T’s GigaPower service (as in Florida and California). So in bringing their new service to Chattanooga, they’re doing essentially the same thing, only targeting the public sector.

Chattanooga created its municipal fiber network in the first place because existing, incumbent ISPs (*coughComcastcough*) were unwilling or unable to provide high-speed, reliable, affordable service to the city and its residents. We’re sure it’s entirely coincidental that Comcast should have chosen now, right after the city’s gotten permission to expand and improve their popular network even farther, suddenly to bring their A-game to town.

Comcast is staunchly against the existence of publicly-owned or -operated networks and does not believe it should have to compete with them. The company and its executives work fiercely to make sure that as many states as possible (currently about 19) pass or maintain protectionist laws that block public networks.

There’s still no word on how much Comcast plans to charge for their double-gigabit service. Chattanooga’s Electronic Power Board (EPB) currently offers its 1 Gbps service to area residents for about $70 per month. Google Fiber also runs $70 monthly, in cities where it’s offered, and AT&T more or less matches the price point if there’s a competitor in town.

by Kate Cox via Consumerist

Popeyes Manager Fired After Armed Robbery Returns To Work Tomorrow, Announces Plans To Sue

(KHOU 11)

Last week, we shared the story of a Popeyes shift manager who was fired after an armed robbery while she was on duty. Depending on whether you ask the manager or the franchisee, she was fired for refusing to pay back the $400 taken in the robbery, or for keeping too much money in the cash drawer at a time. After the story made headlines nationwide, she received a job offer and an apology from the store’s owner, and says that she plans to sue for emotional distress.

KHOU reports (auto-play video) that the manager’s attorney has sent the local franchisee a letter about her demand for $5.5 million for emotional distress. The company has 30 days to respond to her demand.

It’s understandable that she felt distressed: living through an armed robbery is stressful enough, but she had abruptly lost her job while pregnant and responsible for her three other children.

The manager maintains that even if her mistake was keeping too much cash in the register at a time, they were so busy in the period before the robbery that she didn’t have time to deposit cash in the safe, and the $400 taken represented only about an hour’s sales.

She had accepted a job with a different local Popeyes restaurant: it’s not clear whether that location has the same owner as the franchise that fired her.

Popeye’s manager fired after robbery, asking for $5.5M [KHOU]

by Laura Northrup via Consumerist

American Airlines Passenger Accused Of Stealing From Crew Member, Fellow Traveler Mid-Flight

(benh57)

While you might expect a pickpocket working amid a large crowd of people, it’s not the norm to worry about your possessions getting swiped mid-air. Law enforcement authorities say an American Airlines passenger flying from Los Angeles to New York yesterday has been accused of stealing from not only a fellow traveler onboard the flight, but a crew member as well.

When a flight attendant noticed her tote bag containing her iPad, among other items, had gone missing, the pilot made an announcement on the loudspeaker asking passengers to look around for it, reports NBC New York.

A passenger eventually spotted the cover of the missing iPad under a seat, and the area was searched until the tote bag was found — sans iPad.

The crew member told authorities she saw the suspect put the tote bag under the seat where it was later found, prompting a search of her belongings. The iPad turned up in the passenger’s carry-on bag.

In the meantime, another passenger said she swa the suspect near her purse after she woke up from a nap, and found that her passport and bank card were missing. Authorities said a search revealed the suspect had hidden the items in her underwear. A prescription bottle containing marijuana was also allegedly discovered in her possession.

She was brought in for questioning by Port Authority of New York and New Jersey officers when the flight landed, and was ultimately charged with grand larceny and possession of stolen property.

Woman on Flight to NYC After “Judge Judy” Appearance Allegedly Stole iPad, Hid Bank Card in Underwear [NBC New York]

by Mary Beth Quirk via Consumerist

FTC Halts Mortgage Relief Operation Targeting Consumers In Foreclosure

(Jim Perry)

Financially distressed consumers on the brink of foreclosure have enough to worry about without having to be on the lookout for shady mortgage relief companies making hollow promises to save their homes. Today, the Federal Trade Commission put an end to an operation that took advantage of homeowners’ vulnerabilities.

The FTC announced today that a court had granted the agency’s request to halt the operation of HOPE Services – also doing business as HAMP Services – alleging that the mortgage relief enterprise promised homeowners it would help get their mortgages modified, but instead effectively stole their mortgage payments, leading some to foreclosure and bankruptcy.

According to the FTC complaint [PDF], the operation targeted consumers facing foreclosure – especially those who had failed to get any relief from lenders – by pretending to be “nonprofit” with government ties.

The company allegedly sent homeowners mail bearing what looked like an official government seal, and indicated that the recipients might be eligible for a “New 2014 Home Affordable Modification Program” (HAMP 2).

HAMP 2 was described by the company as “an aggressive update to Obama’s original modification program,” saying that consumers’ banks now have an incentive from the government to lower interest rates.

The company drew consumers into its scheme by falsely claiming it had a high success rate, special contacts who would help get loan terms modified, and an ability to succeed even when consumers had failed, the FTC complaint states.

Once HOPE Services obtained consumers’ financial information, the company falsely told them they were “preliminarily approved” and claimed they would submit loan modification applications to the U.S. Department of Housing and Urban Development, the Neighborhood Assistance Corporation of America and the “Making Home Affordable” program.

Shortly after this, the company told consumers they were approved for a low-interest rate and monthly payments significantly lower than their current payment. They were also told that making three monthly trial payments and providing a fee to reinstate a defaulted loan would get them a loan modification and make them safe from foreclosure.

Consumers were also allegedly advised not to speak with their lender or an attorney.

In reality, the FTC alleges in its complaint, homeowners who made the payments did not have their mortgages modified and their lenders never received their trial payment.

Consumers who were promised the loan modifications were then contacted by an Advocacy Department’ run by one of the defendants named in the FTC complaint, and told that the fictional department could get them an even better loan modification than the one purported obtained by through the Making Home Affordable program.

The Advocacy Department was developed to allegedly trick consumers into continuing to make all of the monthly trial payments. When concerns were raised by consumers about continuing foreclosure warnings, sale date notices and court dates, they were told their loan modifications were being processed or nearly completed.

According to the FTC, by keeping consumers on the hook for months, the operation was able to significantly increase consumers’ trial payments.

Consumers were told their payments were put in escrow accounts and would eventually be used to pay off lenders.

Instead, the company took the payments for themselves, often leading consumers to lose their homes, and incur additional penalties and interest as they fell behind on their mortgages.

In addition to halting the operation’s business, the FTC has filed a contempt complaint against one of the scheme’s principals, Brian Pacios, who is already under a court order that prohibited him from mortgage relief activities.

Court Halts Mortgage Relief Operation that Targeted Homeowners Facing Foreclosure [Federal Trade Commission]

by Ashlee Kieler via Consumerist

Internet Money Guys Start Asking The FCC Not To Implement Net Neutrality

(Tom Richardson)

Net neutrality has already made a lot of enemies, and the new rule hasn’t even been implemented yet. Along with big ISP lawsuits and hostility in the House, the FCC’s Open Internet Rule is now facing pushback from some of the big money entrepreneurs who make the internet their business.

An “ad hoc group of Internet gray beards,” as tech reporter Katy Bachman aptly styles them, have filed a petition to the FCC requesting that the agency put a stay on their own order.

If that sounds unlikely to happen, that’s only because it is. The petition therefore also includes a threat: if the FCC doesn’t hold its own order by May 11, then the “Tech Innovators” group will file a suit asking the court to issue a stay.

Daniel Berninger, founder of VCXC, filed the petition (PDF). VCXC is a tech group pushing to hasten the IP transition — that is, the move away from copper wire telecom service and onto replacement phone-over-broadband services.

You may or may not have heard of Berninger or of most of the other executives among the group (Marc Cuban is probably the most recognizable name), but you’ve heard of many of their companies and products, like Vonage and Lotus Notes.

In short, these are entrepreneurs who have backed successful internet venture bets before, and they are now telling the FCC that it’s in everyone’s best interest if future would-be entrepreneurs aren’t guaranteed the same equal playing field they got their starts on.

The petition claims, much like the lawsuits, that the Open Internet order exceeds the FCC’s authority, is “arbitrary and capricious,” and will harm future innovation and investments in internet businesses.

Berninger and the others are pushing for a Congressional, non-Title II solution to the problems of net neutrality, and to that end are meeting with some members of Congress today. Realistically, the most likely outcome of the stay is one more lawsuit to be rolled together with all the others and eventually decided in one fell swoop years down the line.

[via Katy Bachman]

by Kate Cox via Consumerist

Sales Of $100 Million Homes Are Way Up

(.sanden.)

The housing market simply can’t keep up with the demand from a very specific part of the market…people who seek houses worth $100 million or more. Sales of houses with nine-figure price tags have reached an all-time high of…well, five of them sold last year, but there are many more on the market or being sold away from the general real estate market, and the fabulous-homes-for-billionaires market will just keep growing.

Not that the lovely people at Christie’s International Real Estate are objective observers of the high-end real estate market. However, looking at the very highest end of the real estate market does give us some interesting insights into global trends. First is the fact that billionaires see giant houses as an investment. “It’s something they’ll hold onto for a lifetime,” the CEO of Christie’s Real Estate told Bloomberg News, “the same way they’ll hold onto a Picasso or a Warhol or any number of the great pieces of art we’ve sold over the years.” You can put a painting inside your house, but you can’t live inside a painting.

Some of these mega-homes aren’t really “homes” for their owners, anyway: they’re a place to park money. It was just three years ago that uber-rich people from mainland China were first allowed to buy houses abroad, and many of the nine-figure residences on the market have sold to them.

Good news for people with more modest means, though: in the world’s wealthiest areas, the experts say that luxury homes usually only start at around $2 million.

Sales of $100 Million Homes Rise to Record Worldwide [Bloomberg News]

by Laura Northrup via Consumerist

Guy Pours Molten Aluminum Into Watermelon Because He Knew We Couldn’t Resist Watching The Video

(TheBackYardScientist)

There is no question we never fail to answer in this Internet age, and it’s, “What’s gonna happen next?” We have to know. We were born needing to know. And so of course, we must click a button and find out what could possibly occur when some guy pours molten aluminum into a watermelon and films it.

Because something must happen, if the video is posted on the Internet in the first place, especially when it pairs two things that don’t normally interact, right?

Probably, but it’s not always what you’d expect: In the case of watermelon-plus-melty-metal, even The Backyard Science guy behind the clip admits that he had a pretty buzzworthy result in mind.

Did he achieve instant virality? Is Gallagher going to be very jealous? We’re not in the habit of spoiling the end of stories, so you’ll just have to watch and findout for yourself. I will say it’s pretty cool, regardless of your expectations when it comes to molten metals and fruit.

by Mary Beth Quirk via Consumerist

PRO Students Act Aims To Protect Students From For-Profit Colleges’ Bad Behavior

(Dustin Michelson)

It’s difficult to go a month or even just a few weeks without hearing of another for-profit college being under investigation for unscrupulous practices, such as inflated job placement rates and pushing students into costly student loans. New legislation announced today aims to curtail the number of investigations we hear about by protecting students from predatory, deceptive, and fraudulent practices in the for-profit college sector, before they even enroll.

The Protections and Regulations For Our Students Act – also known as the PRO Students Act – would, among other things, ensure that students have access to accurate information and data about schools, strengthen oversight and regulation governing the for-profit college industry, and hold schools accountable for violations and poor performance.

California Representative Mark Takano announced the bill during a press conference on Thursday afternoon saying the legislation would ensure that student and taxpayer funds are being well spent, and that students are receiving quality, affordable education.

“It is critical that our students are able to make informed decisions about where they will receive the quality, affordable higher education that is right for them,” Takano said in a summary [PDF] of the PRO Students Act prior to the announcement Thursday. “Unfortunately, some schools, particularly those in the for-profit college sector, are employing predatory, fraudulent, and deceptive practices to enroll students, and then leave them with unsustainable debt, worthless credits, certifications, and degrees, and dismal job prospects.”

The PRO Students Act includes provisions that:
• Require proprietary institutions to derive at least 15% of their revenue from non-federal student aid and ensure that military and veterans’ education benefits are included in that calculation.

• Prohibit schools from using revenues derived from federal student aid for recruiting and marketing.

• Launch a complaint tracking system for students to report grievances.

• Establish a Proprietary Education Oversight Coordination Committee and create a framework for targeting and prioritizing program reviews by the Department of Education.

• Strengthen sanctions for violations, establish a Student Relief Fund, and bolster consumer protections for students.

• Improve the quality of and access to key information, such as the student default risk index, cohort default rates, loan repayment rates, degree completion rates, and accreditation documents.

• Prohibit pre-dispute arbitration clauses in loan contracts that waive the rights available to borrowers against loan servicers.

• Prohibit incentive compensation based on recruitment or academic success.

• Strengthen whistleblower protections for faculty and staff. The legislation is co-sponsored by California Rep. Susan Davis and Tennessee Rep. Steve Cohen.

Rep. Mark Takano to Introduce Higher Education Regulation Legislation to Protect Students [Mark Takano]

by Ashlee Kieler via Consumerist

Sprint Customers Will Get Access To Free WiFi At 35 Airports In Deal With Boingo

(JeepersMedia)

When faced with wasting precious data allotments, many travelers submit to paying for WiFi on the go. But Sprint customers will find their wallets staying a bit fatter with new, free access to Boingo Wireless hotspots in 35 U.S. airports, starting today.

Sprint and Boingo announced their deal today, without disclosing financial details of the arrangement. Customers will be able to automatically connect to WiFi networks at a slew of airports, the companies said in a press release today, without dinging their data allowances.

“With WiFi being the world’s largest wireless ecosystem, we view it as a highly complementary layer to our network,” said Stephen Bye, Sprint CTO. “By enabling customers to move seamlessly between secure Wi-Fi and cellular, our customers will have a better mobile experience in more locations, all while lowering their cost of data usage.”

Sprint’s been pushing WiFi connectivity in other ways as well, introducing free calling over WiFi for iPhone customers last month.

by Mary Beth Quirk via Consumerist

Sears To Sell $300 Million In Property To Joint Venture With Mall Owner Macerich

Pete Kraynak

A few weeks ago, Sears Holdings announced that it would be starting a joint venture with mall operator Simon Properties. This new company would buy Sears stores, then lease them back to the company in an effort to raise some quick cash and keep the company’s retail operations retailing. Now Sears has announced a similar deal with another mall owner, Macerich Properties.

Each company had its own valuable contribution to the joint venture: Sears contributed nine stores, whose real estate value is $300 million. Macerich kicked in $150 million in cash, which is now in the coffers of Sears Holdings. The company that Sears started to serve as a partner in this joint venture, Seritage Growth Properties, will raise money for its contribution to the joint venture through a rights offering of its stock: that means that current Sears shareholders will have the right to buy shares of Seritage, and then Seritage will pass that money on to Sears in exchange for its share of the real estate.

“We are pleased to be in a position to unlock substantial value for Sears Holdings shareholders and further facilitate the company’s transformation,” Sears Holding chairman Eddie Lampert is quoted saying in the announcement of the joint venture. “Through these transactions, we have additional capital to invest in our membership and integrated retail platforms.”

If the Sears stores involved in the deal close or simply don’t use all of their floor space, Seritage will have the right to “recapture” that space and lease it to another retailer at whatever the market rate happens to be. Picture the current arrangements that Sears has with other retailers like Dick’s, Primark, and Whole Foods: for future arrangements like that in stores that are part of a joint venture, Seritage would be their landlord instead of Sears.

by Laura Northrup via Consumerist

Legislation Would End Forced Arbitration In Student Enrollment Agreements

(sparkle-motion)

When Education Credit Management Corporation announced late last year that it would buy 56 of for-profit education chain Corinthian College Inc.’s Everest University and WyoTech campuses, consumer advocates expressed great concern that the new company – which would operate under the name Zenith – would continue the unfair practice of requiring students to sign away their right to seek any legal action against the company if they’re wronged. While ECMC ultimately said it would do away with the practice, new legislation aims to strengthen students’ legal rights when it comes to forced arbitration.

The Court Legal Access & Student Support Act (CLASS) – introduced to the legislature by Sen. Dick Durbin of Illinois and Rep. Maxine Waters of California – would prohibit any school receiving student aid funding from the Department of Education from including any restrictions on students’ ability to pursue legal claims, individually or with others, against higher education institutions in court.

Durbin and Waters say their new bill [PDF] is an attempt to end the growing, strategic use of mandatory arbitration and class action waiver clauses in enrollment agreements by all education institutions.

The use of arbitration clauses have skyrocketed by companies – including those focused on education – since 2011, when the U.S. Supreme Court affirmed that it was perfectly okay for companies to take away a consumer’s right to sue or their ability to join other wronged consumers in a class action case by inserting a paragraph or two of text inside lengthy contracts.

By using arbitration clauses, for-profit colleges such as CCI have shielded themselves from taking responsibility for their own alleged deceptions such as misrepresented job placement statistics.

Colleges that use arbitration clauses also retain the right to choose their own arbitrator and other key aspects of the potential dispute resolution process.

“For years, unscrupulous for-profit colleges have enriched themselves by devouring billions in federal student loan dollars while leaving students with worthless degrees and a mountain of debt,” Durbin said in a statement. “The practices of requiring binding, mandatory arbitration or prohibiting students from seeking a jury trial or bringing class action suits against a company unfairly stacks the deck against students.”

The most recent case of forced arbitration in student enrollment agreements came to a head this week when Corinthian Colleges announced it would close its remaining campuses.

“If this bill had been law in the last several years, students defrauded by the now-failed Corinthian Colleges would have been able to seek redress from the courts and relief directly from the school,” the legislators say in a statement.

CCI, which is party to a number of federal and state investigations, allegedly engaged in fraudulent conduct at its campuses across the country, including misrepresenting the quality and success of its programs.

Although several investigations have found basis for the allegations, students at the schools have had few options for recourse because of the binding arbitration clauses in their enrollment agreements.

“This legislation will take bold action toward eliminating these types of provisions, putting an end to many troubling practices and ultimately giving students’ back the right to their day in court,” Waters says in a statement.

While ECMC, which completed the purchase of more than 50 CCI campuses in February, said it would refrain from using such clauses in its new enrollment agreements with former CCI students, Durbin says that simply isn’t true. He pointed out during a speech on the Senate floor earlier this year that ECMC continues to limit students’ legal rights through the fine print of enrollment agreements, spreading the unfair practice into the non-profit sector.

The CLASS Act was quickly greeted with support from a number of consumer and student advocacy groups including the Center for Responsible Lending, Consumer Action, the Consumer Federation of America, our colleagues at Consumers Union and the National Consumer Law Center.

In a statement [PDF] released about the legislation, NCLC said it strongly endorsed the bill.

“For-profit schools that defraud students should not be allowed to use forced arbitration before a biased, secretive, and lawless system as a get-out-of-jail-free card,” Lauren Saunders, associate director of the National Consumer Law Center, said.

Durbin, Waters Introduce Legislation To Strengthen Students’ Legal Rights [Dick Durbin]

by Ashlee Kieler via Consumerist

Drinking Collagen-Infused Booze Probably Won’t Make You Look Any Younger

If life was fair, we could all be our ideal body shape/type/weight and look as young/old/smart as we wanted while eating/drinking/doing whatever we felt like. Life, however, is not fair, and as such, it’s unlikely that drinking booze infused with collagen will give you both the buzz of alcohol and the fresh-faced appearance of youth in one bottle. You just can’t have it both ways.

Not too long ago, the parent company of Jim Beam, Suntory Holdings Limited, introduced a beer aimed at women in Japan that includes two grams of collagen per can, Fortune pointed out last week.

Dubbed “Precious” and only available in Hokkaido right now, the beverage comes with a tag line that promises the attention of men: “Guys can tell if a girl is taking collagen or not.”

The fountain of youth, made from beer? Probably not, a collagen expert told Fortune, as alcohol isn’t great for the body or your skin (think of how puffy and tired you look the next day after one too many). And at only two grams of collagen in each can, “there isn’t enough collagen to make a remarkable difference for your skin’s complexion,” Dr. Ariel Ostad of New York University Medical Center told Fortune.

That, and ingesting collagen isn’t the most effective way of turning back time, Dr. Ostad says, because our bodies break it down in the digestive process like any other protein.

And if you didn’t know — he added, “the advertisement claiming that ‘guys can tell if a girl is taking collagen or not’ is totally misleading.”

Suntory told Fortune it couldn’t vouch for any anti-aging effects, but that there are “findings that Japanese women wanted to take collagen, so we created this regionally-marketed product to meet their needs.”

You want it, you got it — but don’t expect it to actually do anything.

Suntory Launches Collagen-Infused Beer Aimed at Japanese Women [Fortune]

by Mary Beth Quirk via Consumerist

House Panel Strikes Provision That Would Delay Added Military Lending Act Protections

(Hammerin Man)

Yesterday we reported that Congress would make a decision whether or not it would intervene to slow the Department of Defense’s work to create new rules aimed at closing loopholes in the Military Lending Act that often leave military personnel vulnerable to predatory financial operations. Thankfully, legislators saw the need for more protections regarding military lending and determined the rules could go into effect as planned.

According to the Military Times, Congress narrowly voted to remove controversial language that would have delayed the rules from the annual defense authorization bill.

The 32-30 vote in the House Armed Services Committee concerned a small provision (Sec. 594) in the 2016 National Defense Authorization Act [PDF], that would require the Sec. of Defense to submit a report to Congress by March 1, 2016 on any new MLA-related rules.

While the crux of the Act is good, the passage that many consumer groups feared would be the undoing of the Military Lending Act read:

“Additionally, the Secretary of Defense may not implement any final regulation concerning [the Military Lending Act] until the end of a 60 day period beginning when the required report is submitted to the Committees on Armed Services of the Senate and the House of Representatives.”

That small clause would have pushed any new rules from the DoD off until at least May 2016, leaving servicememebers vulnerable to losing millions of dollars to unscrupulous lenders and other companies.

The Military Lending Act, as it stands, prevents military personnel from being caught in revolving debt traps of triple-digit interest loans from predatory financing operations like payday and auto-title lenders. However, there are loopholes in the Act that allow some lenders to get around the MLA’s 36% APR interest rate cap, resulting in the loss of millions of dollars to servicemembers each year and raising issues of national security.

Examples of companies and products taking advantage of the loopholes in the current MLA include retailers that provide financing for servicemembers’ purchases of electronics and other goods, without clearly stating the cost of the financing to the buyer.

One such case made headlines last July, when a Virginia-based company that marketed always-approved credit offers to members of the military with bad credit or no credit history was found to have charged customers several times the price of products thanks in part to exorbitant markups and finance charges. In one case, a servicemember ended up paying $8,626 for a $650 laptop.

Other financial products currently not covered by the MLA are credit cards and deposit advance loans. According to the Consumer Financial Protection Bureau, nearly 1-in-4 servicemembers will take out a deposit advance loan — often with an APR of around 300% — each year, paying millions in fees.

The DoD’s new rules would expand the MLA Act to cover these products and financiers, reaching nearly 40,000 creditors, most involving credit cards, deposit advance loans, installment loans and unsecured open-end lines of credit, the Military Times reports.

Advocacy group Public Citizen said in a statement that the push to delay the protection from taking effect illustrated “the horrendous abuses prevalent in underregulated markets, where corporations routinely target vulnerable populations. It demonstrates how smart regulations are needed and can make a huge difference in people’s lives.”

The final vote on the proposal came in the early hours of Thursday after more than 18 hours of debate. There’s still a possibility that the delay clause could be reintroduced when the bill reaches the full House next month.

Panel votes to dump delay in military lending rules [The Military Times]

by Ashlee Kieler via Consumerist

Brazil Suspends Uber, Uber Keeps Driving

(Roger Schultz)

Car-hailing app Uber has racked up another municipality on its list of places where the service has been banned, yet drivers remain on the roads anyway. That distinction belongs to the entire nation of Brazil, where a judge has ruled that providing rides to strangers is the exclusive right of licensed taxi services.

Yesterday, a judge ruled that Uber must stop giving rides in Brazil, imposing a fine of 100,000 real or about $30,000 USD per day that they remain on the road. However, a Sao Paulo-based Bloomberg News reporter noted that the service was still running locally and drivers were ready to pick up fares. Maybe the service was slow to shut down, or maybe Uber is betting that the government won’t really impose those fines, and would consider them part of the cost of doing business if it does. When contacted, the company claimed not to have heard about the decision yet.

The order also affects companies that offer downloads of mobile apps: Google, Apple, Microsoft and Samsung have been ordered to stop offering the Uber app to consumers who are known to live in Brazil, and to remotely block users who have already downloaded it.

“Thousands of professional taxi drivers are being harmed daily by the dizzying expansion of the company,” the judge wrote in his decision. The country’s taxi drivers were the ones who brought the case against Uber.

Uber Is Ordered to Suspend Services in Brazil by Sao Paulo Court [Bloomberg News]

by Laura Northrup via Consumerist

Report: Apple Watch Customers May Face Longer Waits After Faulty Component Delays Shipments

Because it wouldn’t be an Apple product without some kind of hubbub over a wait or delay involved, a new report says some shipments of the Apple Watch will take a while after one of two suppliers made a faulty component.

That means that Apple will have to limit how many watches are out there for sale, the Wall Street Journal reports, citing insiders in the know.

This isn’t just your garden variety component, if there is such a thing — the taptic engine is the piece of the watch that makes it feel like you’re being tapped gently on the wrist, a feature Apple thinks is superior to a ding or a ring or a vibration.

A play on the word “haptic,” (technology that delivers a physical sensation) the taptic engines were being made by two companies when reliability testing revealed that some of the parts supplied by AAC Technologies Holdings in China were breaking down over time.

Apple reportedly tossed completed watches because of the problem, and is likely to move all manufacturing of the taptic engines to the other company, Nidec Corp. of Japan. The engines made by Nidec reportedly didn’t show the same issue.

There won’t be a recall because it appears at this point that Apple hasn’t shipped any watches with a fault taptic engine to customers.

“Our team is working to fill orders as quickly as possible based on available supply and the order in which they were received,” Apple told the WSJ in a statement. “We know many customers are still facing long lead times and we appreciate their patience.”

It isn’t clear how much the wonky taptic engines contributed to limited availability, though the spokesperson added that “we will be able to get customers the model they want earlier and faster by taking orders online.”

Apple Watch: Faulty Taptic Engine Slows Rollout [Wall Street Journal]

by Mary Beth Quirk via Consumerist

McDonald’s Testing Simplified Version Of Build-Your-Own Program, Adds Drive-Thru Option

(Mike Mozart)

A day after we learned that McDonald’s had eliminated nine items from its menu so far this year, the fast food giant announced it would also adjust its build-your-own-burger test program to be easier for customers and franchisees to use.

Reuters reports that McDonald’s has started testing TasteCrafted, a more modest version of its “Create Your Taste” pilot that began late last year, at several restaurants around the country.

The new version of the customizable meal program will reportedly cost less for franchisees to install and have the ability to be offered through drive-thru windows.

A spokesperson for McDonald’s says the TasteCrafted program is currently being testing in a limited number of restaurants near Atlanta; Portland, OR and Southern California.

Citing a filing from an analyst for Janney Capital, Reuters reports that the new test allows diners to choose burgers, sandwiches, McWraps and salads in a variety of “chef inspired flavors.”

While the TasteCrafted program may be a simplified menu, it still offers a plethora of options for customers including the choice of sandwiches made with beef or chicken, three choices of buns and four different topping flavors: bacon clubhouse, pico guacamole, hot jalapeño and ranch deluxe.

Because of the slimmed down nature of TasteCrafted, analysts say that the program could be rolled out nationally by the fast food chain in just a few months, whereas the original Create Your Taste Program would have taken two to three years.

Reuters reports that franchisees had expressed displeasure with the original customized program that was introduced prior to new CEO Steve Easterbrook taking the helm in March.

Owners of the restaurants had complained that the program – which was being tested in more than 2,000 stores in California, Illinois, Wisconsin, Georgia, Missouri and Pennsylvania – was too slow and that the installation price of more than $100,000 was too much considering it wasn’t available through drive-thru windows.

McDonald’s tests custom burger program with drive-thru option [Reuters]

by Ashlee Kieler via Consumerist

Wendy’s Jumping On Organic Bandwagon With Addition Of Honest Tea At Restaurants Nationwide

(kc2gvx)

Though not many of its fast food rivals have taken the plunge into organic waters, Wendy’s is just going with the trend embraced increasingly by consumers, announcing that it’ll be serving Honest Tea nationwide at its restaurants, brewed fresh by workers and sweetened with fair-trade sugars and natural flavors approved in USDA certified organic foods.

According to the Wall Street Journal, this move into organic beverages around the country makes Wendy’s a bit of a standout among its peers, and shows that it’s ready to get on board with the the kind of healthier eating lifestyle that has become popular among consumers in recent years.

The tea will be brewed on site, Seth Goldman, co-founder and chief executive of Bethesda, Md.-based Honest Tea (its parent company is Coca-Cola) told the WSJ. Wendy’s has an exclusive deal to sell one flavor — Honest Tropical Green Tea.

Washing down French fries with an organic drink might seem like a stretch, but traditional soda isn’t the ruler of the roost it once was — consumption of Diet Coke alone has decreased 15% in the past two years, the WSJ points out, with Coke’s sales volumes from soda rising a measly 1% in each of the last two years worldwide.

Coke is now hoping to reap the rewards of owning Honest Tea, with Goldman saying it’s hoped the drink will hit $500 million in sales in five years, after making $134 million in sales in 2014.

The company is aiming to do some of that with the Wendy’s deal, where Honest Tea will be sold at a suggested price of $1.69 for a small drink (compared to $1.39 for a small soda), in the hopes that if you can’t be convinced to part with your money to drink soda while you’re eating fries — dusted in sea salt, even — maybe you’ll fork over a little extra for a trendy organic drink.

Wendy’s to Start Selling Honest Tea [Wall Street Journal]

by Mary Beth Quirk via Consumerist

United Airlines Foots The Bill To Fly Dog Missing For Four Years Back To Family

(Dave Transier)

It’s not every day you see a dog flying first class – for free – on an airplane. But that’s exactly what passengers on a flight from Iowa to Louisiana witnessed Wednesday, as United Airlines footed the bill to reunite a dog with his family after going missing four years ago.

ABC News reports (warning: link video autoplays) that United pulled out all the stops when it came to reuniting Sam, a Yorkshire terrier, with his family in Louisiana.

The ordeal began in 2011, when the family says Sam went through a hole in their backyard fence into the surrounding wooded area. The family tried everything they could to find the dog, but had no luck.

That is until this April when an animal control officer in Cedar Rapids, IA, spotted the pup and brought him to a local shelter.

“The Yorkie was in fair condition, but was straggly and weighed only 5 1/2 pounds,” according to the press release from the city of Cedar Rapids. “Despite the dog’s condition, Animal Care and Control staff was able to determine that the Yorkie had a microchip.”

After scanning the microchip, the shelter contacted the family, who had all but given up hope on finding their furry friend.

“We were waiting to hear around here if someone found him,” the family’s mom says. “They would have called us. After four years, you kind of give up hope.”

Because the family couldn’t afford to bring Sam home themselves, they set up a fundraising page and raised more than $250. But after hearing the story, United Airlines stepped in and paid for the dog’s return trip in first class with an animal worker.

Upon landing at Louis Armstrong New Orleans International Airport on Wednesday, the dog and his newly reunited family were welcomed with balloon and refreshments provided by the airline.

ABC News reports that the individuals who initially donated for the dogs transport have agreed to allow the family to put the funds toward caring for Sam.

Dog Found in Iowa Returned to Louisiana Owner After Missing Nearly 4 Years [ABC News]

by Ashlee Kieler via Consumerist

Ad Watchdog: Scooter Commercials Show Too Much Unsupervised Fun

Zooming along the sidewalk at up to 13 miles per hour on an electric-powered scooter sounds like a lot of fun. However, one scooter company has run into trouble by running its ads that show an unsupervised teen zipping around the neighborhood during shows for inappropriately young kids. Their commercials caught the attention of the ad watchdogs over at the Children’s Advertising Review Unit of the Advertising Self-Regulatory Council.

Because I spend too much time on the Internet, I wasn’t aware that anyone under 13 actually watched the current generation of “My Little Pony” cartoons. In all seriousness, though, the CARU found this spot inappropriate for the audience of “Friendship is Magic,” which is when it aired.

Based on the description, the ad in question appears to be this one:

While the subject of the ad scooters around a residential neighborhood, the ad’s disclaimers tell us that it’s a “closed and controlled course.” The bigger problem, though, is that the more powerful scooters displayed in the ad aren’t appropriate for kids under age 13 or so. The main character in the ad films himself and there aren’t any adults present, which is a key part of the industry’s self-imposed safety rules. “children are prone to exploration, imitation, and experimentation and may imitate product demonstrations or other activities depicted in advertisements without regard to risk.”

The ASRC is a self-regulation body that reviews current ads and responds to complaints from competitors about problematic advertising. In this case, Bravo Sports informed the watchdogs that they are no longer airing this ad, and that they will keep the concerns about safety and adult supervision in mind if they make more electric scooter ads in the future.

CARU Recommends Bravo Sports Depict Safety Gear, Supervision in Future Scooter Ads Directed to Children Under 12 [ASRC]

by Laura Northrup via Consumerist

Apple Now Requires ResearchKit Apps To Get Ethics Board Approval

(iDiapo)

Since introducing ResearchKit, its open-source framework for scientists to develop iPhone apps for medical research, Apple has made a few tweaks to the submission guidelines for apps that aim to collect and use sensitive medical data. One new addition is that anyone submitting an app that does research on humans must submit proof that the study has been approved by an independent ethics review board.

Whether the research includes simply taking a survey or experimental drugs or surgery, any research that involves experimenting on people must be approved by an ethical review board. That doesn’t mean that you take a research proposal down the hall to friendly colleagues and say, “Hey, guys, does this look ethical to you?” For researchers who work at a hospital or a university, for example, their institutions will have their own review board which should function independently. Review boards for hire are also available. Apple is now leaving those decisions to the respective review boards of researchers who are submitting apps.

This probably won’t matter very much in the context of apps that will be part of ResearchKit, since it’s difficult for taking a survey or monitoring your heart rate on a smart watch to kill or significantly harm you. Still, participants’ privacy is important, and so is their overall well-being: asking remote research subjects to perform tasks that could be dangerous for them or questions that are potentially upsetting.

App Store Review Guidelines [Apple]

by Laura Northrup via Consumerist