Congress Investigates Carriers' Debt Collections

Julie188 writes "'Tis the season for the government to crack down on abusive practices by your secretly evil national wireless carrier. Next up: a congressional committee will be looking into a debt collection practice that prevents customers from filing lawsuits. Rep. Dennis Kucinich (D-OH) will be examining a contract clause that forces customers to waive their right to sue and instead agree to forced arbitration. He is hot on the tails of the carriers after a similar investigation of credit card companies lead to nine banks removing the forced arbitration clause from their contracts. This follows the week's earlier news that the FCC was going to try to come up with new rules to prevent wireless bill shock."

Comments

If you need an honest man

[ciaran_o_riordan]

I think Dennis Kucinich is someone that can be trusted to look after the people instead of pandering to business.

Re:If you need an honest man

[dkleinsc]

He's no communist, and he's definitely not a kook. He's my congressman, and I've spoken with him at several public events. The thing is, he has throughout his career taken stands that upset the rich and powerful, so they often do their best to portray him as a kook.

For instance, the most famous episode from early in his political career (as mayor of Cleveland) was refusing to sell Cleveland's municipal power company to the private company that controls most of Ohio's electricity market. The electric company's pals at the banks then threatened the city with default rather than rolling over the debt as they had been doing for decades. Dennis stood his ground, the banks made good on their threat, and Kucinich lost his reelection bid. But in the long run he saved residents and businesses in Cleveland millions of dollars in electric bills.

His more recent exploits include:
  * Refusing to support the Patriot Act.
  * Refusing to support the wars in Iraq and Afghanistan. He consistantly votes against appropriations for those wars, and has been doing so since before they started.
  * Introducing articles of impeachment against both George W Bush and Dick Cheney.
  * Acting as one of the leaders of the backbencher holdouts for a public option in the health care reform bill. Unfortunately, Obama was able to convince him that HCR without a public option was better than no HCR, so he eventually voted for it.

The Democratic leadership doesn't give a damn what he does, though, because he's not good at getting oodles of lobbyist dollars (gee, I wonder why). So when he was running for President in 2008, the questions he got during debates were about whether he'd seen a UFO, not about his plans for reforming health care without mandating that everyone buy insurance.

Re:Where's the technology?

[Anonymous Coward]

Verizon Droid: $40 voice, $30 "unlimited" data = about $85 after fees, insurance and taxes.

Re:ooh ooh can it be removed form job contracts ne

[DRJlaw]

And having worked for the mobile phone company that has said forced arbitration, that was the favorite cause to beat customers around with when they say lawsuit. Not that anyone in customer care actually had any idea what the difference was between a lawsuit and arbitration was, just that 'we win automatically.'

There's nothing inherently wrong with mandatory arbitration -- it is a cheaper way to resolve a dispute than going to court. However, like all decisions, even one made by a judge or jury, the decisionmakers have inbuilt biases and/or philosophies (I have no desire to argue over semantics, thank you very much).

The problem with mass arbitration is that the ordinally sensible rules of arbitration are susceptible to gamesmanship, and the repeat player, i.e., in these cases the phone companies, have superior information that permits them to shift the odds of a favorable decision substantially towards them.

In normal binding arbitration, each side has some ability to shape the arbitrator by objecting to the randomly assigned arbitrator (if there is a single arbitrator), or some of the members of the panel (if there is a panel of 3, the usual but less common alternative).

Joe Schmoe may have been to arbitration once before in his life. He has no reason to object to an arbitrator that he doesn't know from Adam. MegaCorp keeps records of all its arbitration results. It knows that Arbitrator X rules against it in some non-trivial percentage of the cases before him/her. It objects in the hope of pulling another Arbitrator who is more favorable to it. Arbitrator X does not get paid for being an arbitrator in that case. Lather, rinse, and repeat. On average, the panels can be shifted to be more favorable to MegaCorp by strategic objection (object if record is unfavorable, do not if record is favorable), and Arbitrator X is not making nearly as good of a living as Arbitrator Y because he/she keeps getting removed from potential arbitrations. Arbitrator Y is making a good living due to a good record. You do not need to assign 'evil' motives to Arbitrator Y -- the pool of arbitrators will naturally enrich with those who are philosophically favorable to MegaCorp.

And that, my friends, is why one never ever agrees to binding arbitration involving a repeat player who is permitted to object without cause. Of course, if you are facing a take-it-or-leave-it situation where the practice pervades an entire industry, then you need to turn to those dirty interventionist liberals (says the generally libertarian lawyer -- individuals have liberties, corporations not so much).

Hrrrrm What is Congress up to

[LouisJBouchard]

The problem is that the Federal Government did not do anything to get arbitration removed by Credit Card issuing banks.

What happened was that the banks used an organization called NAF which was literally funded by the banks. Of course NAF found for the banks 99% of the time. Then the MN Attorney General looking to make a name for herself took NAF to task and NAF folded. That left 2 arbitration forums that were more expensive for the banks and more consumer friendly than NAF.

Some consumers actually read their contract and when they were brought to court for not paying their debts, used the contract against the banks to force the banks into paying 5-figure arbitration fees for 4-figure debts. The court judges in some states started to go along with the consumers. Hence, the banks removed arbitration from their contracts because they could not outright use it to screw over the customer anymore. Of course, the banks have a 98% success rate in court but that is because people do not answer the cases when summoned and even if they do answer, most answer "I cannot afford to pay".

Do a search on credit debt collection boards and you will find what I mean about the above.

So, since congress did not remove the arbitration clauses, why are they saying they did. Are they trying to turn this into something like the Providian case where they OCC entered at the last minute then turned around and said that state AGs cannot take banks to court for violations using that case as a success (again, look up Providian Credit Card Case)? I wonder if they are trying to protect the cell phone companies rather than the consumers.

Re:In California -

[TheGratefulNet]

I'd care MORE about employment contracts and forced arbitration.

note: sorry for the very long post, but its important as it deals with employment in the tech field.

I spent a good month dealing with an asshole company who would not give in on basic simple concepts. they created an employment contract, I rejected many lines in it and asked them to rewrite it. at first they understood that what they were asking for was illegal in california and unenforceable. a week later, their legal 'team' refused to edit even a single line in the employment contract. we tried another tact and gave them our own (I was going thru a middelman at the time) contract which I believed was a lot more fair to both sides. they refused.

this went around and around for over a month. in the end, I walked away, at the advice of pretty much everyone.

cellphones are BS, I can (and do) live well without one. nope, I don't own or carry one (at all). but I do need to have a job and the jobs are coming with 'strings attached' when you read the current crop of contracts.

even if you say 'this is not enforceable in XYZ state' they won't back off.

I learned one thing: when you get an employment offer, say 'thanks!' and then follow it with 'as soon as my lawyer reviews this, I'll get back to you'. non-confrontational but do NOT EVER EVER EVER sign an employment contract (these days) without YOUR legal guy looking it over.

the way it has to work (again, as I learned my lesson) is: my 'guy' will call your guy and they'll talk legal shit to each other. 'where did you go to law school? oh yeah, did you know so and so?' etc etc.

they connect and they review the doc and say 'you don't REALLY think its legal or fair to ask for clause #3, do you?' and it progresses with both lawyers comparing dick sizes (so to speak) and eventually coming to an agreement. what makes this work is that they both know that they know the laws and you can't BS a BSer. that's one key concept. the other is that you have to allow your layer to be the 'bad guy' and you should NEVER come off to the new company as the bad guy. you WANT to sign that contract but your lawyer (the 'bad guy') won't let you. you appear good to the new company but you also do NOT give up your rights.

in the end, the company respects you, you KNOW you have a fair contract and no 'cannot work for competitors for next 10 years' BS clauses in there. your lawyer played good cop/bad cop with you and the company and you get a straight deal.

if you do not do that, dollars to donuts you signed an indentured servant contract and didn't even realize it.

especially NOW when the econ is in the dumps, companies are trying to screw you over with your employment contract. they count on the fact that you are 'desparate' enough to sign anything.

don't object to HR when you are there. smile, thank them and tell them that as soon as your 'guy' checks this over, you'll be happy to sign it. then let your hired guy defend you before you sign that rotton scummy endentured servant agreement.

lesson learned! please use this procedure next time you get an offer letter. I've found that in sofware (my field) almost NO ONE reads or even tries to cross out any lines in their contract. get a lawyer. its not just for 'top execs' anymore. we ALL need those guys to review our docs and fight for us.

(you would not believe the legally unenforceable things in the text of my last contract. it made me and my recruiter pretty sick, I'll tell you.)

The Fed

[sjbe]

Dennis Kucinich and Ron Paul. I saw them on television recently, discussing all the things they had in common.

How they are both fringe loonies that few people take very seriously? I've met Dennis Kucinich in person. Not a guy I'd vote for.

For example, both think the Federal Reserve (central bank) is a business monopoly that screws the customers by devaluing paper money...

A retarded notion. First off, only a tiny percentage of the money in the economy is actual paper/coin currency. We're talking single digit percentage. Second, the fed adjusts the amount of money in circulation both up and down to respond to the needs of the economy. Devaluing (usually called weakening) the currency is not necessarily bad because it makes exports more competitive. This is exactly what China has done with their currency - they hold it below its natural market value because it makes their exports cost less in other markets. Conversely, if you strengthen the dollar (take dollars out of circulation) you make imports cheaper but you hurt exports.

, and should be audited at least once per decade to find out where the money is being spent, and possibly dissolved.

While there are limits which are deserving of criticism, the Fed is regularly audited by the GAO. There are as we speak transparency laws and some (recently successful) lawsuits that should address some of these issues.

As for dissolving the Fed, you'll need to first address how you are going to resolve the issues that the Fed currently exists to handle including check clearing, being a lender of last resort, managing nation wide payment systems, balancing the interests of private for-profit banks with that of government, keeping reserve funds for the banking system, adjusting the money supply, providing liquidity to lending institutions, reducing the chance of and impact of bank runs, controlling systemic financial risk and more. While the Fed is hardly a perfect institution (far from it), it serves a number of vital purposes. I have yet to hear anyone who proposes eliminating the Federal Reserve System actually address in any detail a replacement system. Central banks exist for some very good reasons.

Re:The Fed

[cob666]

If a candybar cost 1 penny in 1910, and now costs about a dollar for the Same candybar, it's obvious the money has been devalued to 1/100th its previous value.

You're confusing devaluation with inflation.

Re:Where's the technology?

[Sponge Bath]

Here is what AT&T charges above the advertised rate for my wireless:

Credits, Adjustments, and Other Charges:
* Regulatory Cost Recovery Charge: 0.66
* Federal Universal Service Charge: 1.04
* TX Franschise Tax Recovery: 0.30
* Texas Universal Service: 0.65

Taxes:
* 911 Service Fee: 0.50
* Tx State Telecom Tax: 2.72
* City Telecom Tax: 0.44
* City District Telecom Tax: 0.29

The important thing to note here is the "Credits, Adjustments, and Other Charges" section is not taxes. They are fees with names made up by AT&T to sound like taxes so customers won't complain. In reality this section is just an additional $2.65 monthly charge not included in the advertised rate. They should clearly state a rate for everything that is not taxes. But, of course, they are evil and regulation is weak so that will never happen.

Re:Where's the technology?

[commodore64_love]

>>>"Credits, Adjustments, and Other Charges" section is not taxes.

Uh, yes, yes they are taxes (and all it took was a google search to find this shit):

- "The Federal Universal Service pays for four programs: Lifeline/Link-Up, High-Cost, Schools and Libraries, Rural Health Care (fcc.gov)
- TX Franschise Tax Recovery is a tax (www.state.tx.us)
- Texas Universal Service - ditto (www.state.tx.us)
- "The Regulatory Cost Recovery Charge is a charge assessed by AT&T associated with payment of government imposed fees and to recover the costs of compliance with government imposed regulatory requirements." (att.com) It includes: Federal Regulatory Fee- annual fee imposed on AT&T by the Federal Communications Commission (FCC). Telecommunications Relay Service (TRS) - AT&T is required to make into the Federal TRS fund. Enhanced 911 (E911) - surcharge inposed by certain states. And so on for about ten more government-imposed items.

Taxes. Every one of them.

Re:Hmm this word you keep using...

[sonicmerlin]

Oh just shutup you stupid corporate troll. No one likes to read your drivel nearly as much as you do.

Re:Arbitration == Corporate Justice

[commodore64_love]

>>>private companies forcing rape victims to give up their rights

Nice spin, but you blatantly skipped a crucial piece of information - The rape happened in Iraq, not here at home where US laws apply. No corporation could ever get away with raping a woman on US soil, and then force her to go to arbitration. The US and State Laws would apply.

.

>>>At least I live in the EU; I can only imagine what must be occurring in Latin America or indeed the US itself.

Yeah it's like the Wild West in the US. (rolls eyes) I'm all for hating on corporations, but that doesn't mean it's okay to Lie via omission, or twisting the facts, which is what you are doing. No wonder every time I speak to a European, my compass gradually tips from the "love" to the "anger" part of the scale. The ANTI-american Hatred directed towards us is really growing tiresome (dare I say? racist?).