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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."
I think Dennis Kucinich is someone that can be trusted to look after the people instead of pandering to business.
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Tis the season for the government to crack down on abusive practices by your secretly evil national wireless carrier
That is the worst kept secret EVER. They are all evil, every last one of them, and if you don't know this by now then you must not have ever had a cellphone before.
They should ban forced arbitration clauses in any one-sided contract including credit cards, telecommunications service, cable service and utility service.
Arbitration is essentially a system of parallel, private courts run by corporations, for corporations and for the express purpose of denying justice and avoiding the laws of the land. It's an absolutely corrupt system and should not be allowed to exist in any form whatsoever. Allowing seemingly innocuous instances of this practice has lead to private companies forcing rape victims to give up their rights. Corporation employees can abuse people in any way they please and can rely on their own private courts to avoid any reprecussions. Judges support this creeping privatisation of the judiciary as they are rewarded with handsome salaries as the private magistrates of these twisted courts.
Around the time of the Jamie Leigh Jones rape arbitration scandal, I remember speaking with someone in management about arbitration--I live in Ireland. He claimed that the trend in business--magazines, conferences and so on--was pushing arbitration heavily. As the "modern" way of doing business. The conversation sent a chill down my spine. The laws of my country and the people in it were being put in dire jeopardy, our legal protections being replaced right under our noses by this latest innovation in American savagery. At least I live in the EU; I can only imagine what must be occurring in Latin America or indeed the US itself.
Arbitration is lawlessness. It is rule by the powerful over the weak. It's not even a form of order, as arbitration courts have no strict rules, no obligation to consider precedent, no means of appeal, and are not even obliged to publish their rulings, let alone have an open court. The North Koreans have a more enlightened legal system--and again that is not hyperbole. Any society that accepts the rule of such courts has abandoned all pretence of justice and equality and has turned the clock back a thousand years before even the Magna Carta. And no other society should follow them down the path to ruin.
May the Maths Be with you!
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).
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.
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.)
--
"It is now safe to switch off your computer."
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.
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.
Yes, and this is done by denying people their rights. It's much cheaper to pay a rent-a-judge to deliver the verdict you'd prefer; I'm not disputing that. But my position is that this is an illegitimate system, and is essentially lawlessness in a pinstriped suit.
It was the purest form of arbitration. The whole rotten system was laid bare for the world to see just how corrupt it really was, and exactly what its true purpose is. There are numerous examples of companies having people signaway their rights with smallprint mines in contracts. It's fraud, and the financial system once again leads the way, with credit card contracts being rife with these crooked mandatory binding arbitration clauses.
So where there is no law, we must rely on private industry to make its own. No. Never. Better no law at all than a corporate one--and that's not hyperbole!
May the Maths Be with you!
They're taxes, yes. The thing is, they're taxes on the telco that they are passing through to you based on an estimation of your share" of their actual obligation. The money you pay the telco goes in their pocket and if they slightly over-collect from enough people they can pocket it. This is distinct from sales tax which mandates any over-collection to be turned over to the state. The "taxes" section is taxes you owe that the business collects on the government's behalf. This distinction is why they're separate.
Honestly, what a business should do when they get a tax increase is raise their rates. People object, of course, so the telcos lobby heavily to be allowed to "pass this on" directly so they don't look like the bad guy. In reality, it's a simple cost of doing business and should be rolled into the normal rate. At least, that's my opinion.
You know the thing about UDP jokes? I don't care if you get it or not.
Arbitration is useful in many circumstances.. just not when it's in one-sided contracts. My grandfather, for example, served as an arbiter for quite a few years after he retired. Most of the disputes he presided over had to do with local business disputes over payment, quality of goods, etc.. they were too large to be adjudicated in small claims court, and too small for it to make sense paying lawyers for full blown civil litigation. Sometimes there initially would be a court filing, and the judge would recommend the parties go to arbitration instead since it would be cheaper for both, in which case most of the time the parties both go and select a mutually acceptable arbiter.
The main problem with arbitration occurs when one party gets to choose the arbiter, which leads to moral hazards and conflicts of interest. Even consumer-corporation binding arbitration would not ipso-facto be a bad thing, so long as the consumer had equal say in choosing the arbiter (which would tend towards local arbiters). The two problems with binding arbitration in the consumer contract world is that the corporation chooses the arbitration firm, and the locale. This means that it's often no cheaper for the consumer to go into arbitration than it would be for them to sue (since say, they live in Kansas and the arbitration firm is in California), while the corporation can put a lot of pressure on the arbitration firm to find in their favor as the price of continued business.
As long as arbitration remains essentially local, and the arbiter is mutually acceptable to both parties, it's often a lot cheaper while being just as equitable as a civil tort (more so in some cases, since you can pick an arbiter that has expert field knowledge, rather than hoping the judge is a quick learner).