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on not sounding too good to be true… November 13, 2014

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Investors who used the search term “secure investment” seemingly found their way to a website at secureinvestment.com which “acknowledged that currency trading was risky” – and it was.

how can we tell what is too good to be true? November 13, 2014

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Financial regulators try to help people make good decisions bout their money by encouraging them to focus on whether what they were being offered was too good to be true or not. I think any scheme that calls itself a “Profits Paradise” (a scheme operated from India, although designed to appear to be American) sounds too good to be true. It isn’t clear from the SEC’s announcement how many people responded to the rich promises by investing, although the SEC Order states that “By mid-January 14, 2014, the Website had more than 4,000 visits each day, including more than 200 U.S. visits.” The fact that the SEC published an investor alert alongside the press release suggests that the SEC thinks that people need to be reminded to be careful about investing. But if this scheme didn’t scream “too good to be true” what would?

wolterskluwer/aspen casebook petition May 7, 2014

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I just signed the petition here to urge this publisher to abandon its plan to require students to return their books at the end of the semester.

uk: payday lending plans November 25, 2013

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The UK government plans to cap the cost of payday loans in amendments to the Financial Services (Banking Reform) Bill. According to the Chancellor of the Exchequer:

It’s all about the government being on the side of hardworking people.

cfpb: payday lending enforcement and final rule on mortgage disclosure November 20, 2013

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The CFPB announced an enforcement action against Cash America International, Inc with respect to its payday lending practices which includes refunds to customers, a fine of $5m for the violation and for destroying records before the investigation and promises with respect to future compliance. I have been feeling grim because I will be discussing McKenzie Check Advance v Betts in class tomorrow, and this is a step in the right direction. The CFPB also announced new rules on mortgage disclosures. There’s lots of information about this rule on the CFPB website, including a blog post which explains how the final rule is different from the proposed rule, a report on the study of old and new mortgage disclosures, and a page for consumers. Much more user friendly than the usual sort of financial regulation rule announcement.

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payday loans – a policy problem on both sides of the atlantic November 6, 2013

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The CFPB invites the submission of complaints about payday loans starting today (and the Pew Charitable Trusts published a report last week on payday lending). Meanwhile, the UK Business, Innovation and Skills Committee yesterday held an evidence session on the regulation of pay-day loan companies (a follow-up to the Committee’s 2012 report).

but then felix salmon lost out with a bank too July 1, 2013

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Not just the poor. Felix Salmon describes his experience with costly “free banking” here. Perhaps we should make the CEOs of employers who pay their employees with prepaid cards pay themselves with those same cards? And subject the CEOs of large banks to the sort of consumer-friendly treatment described in Salmon’s article?

the poor lose out: nytimes on wages via prepaid cards July 1, 2013

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Jessica Silver-Greenberg and Stephanie Clifford have a great (but depressing) article in today’s NY Times. Banks and employers are increasingly paying hourly paid employees via prepaid cards which carry a range of fees which the payees have to incur to access their money. Employers are given financial incentives to use these cards. There’s a great quote from Chuck Harris, the president of NetSpend, the largest issuer of these cards:

We built a product that an employer can fairly represent to their employees as having real benefits to them

He doesn’t say that the cards actually have real benefits to employees but that employers can “fairly represent” that they do. Netspend’s mission is:

to provide products and services that empower consumers with the convenience, security and freedom to be self-banked

Of course this isn’t about empowerment at all, but about cynical exploitation of those with few choices and limited voice.

more on the sec investor advisory committee January 11, 2013

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The SEC published a Sunshine Act notice about the meeting on January 18th because a quorum of the SEC may attend the meeting. Meanwhile, I notice that there seems to be no mention of the Investor Advisory Committee on the SEC’s “website dedicated to retail investors” at investor.gov.

accountability failures September 30, 2012

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If we ever do get a treadmill from Sears after the weeks of waiting, getting up early to wait some more, being woken up early just to be reminded that we are still waiting, it’s pretty likely that we will get another robocall asking us how the delivery went (unless it is easier for Sears folk to disable follow-up calls than reminder calls that tell us we’re still waiting). And here is what is to me the worst part of all this. The people we can manage to speak to are limited by the scripts they are required to follow – they have almost no agency in any of this by design. The only people we may be asked to evaluate in any of this are the people who perform the scripts and not the people who write them. The people without power are made accountable rather than the people with power. But if you only choose to ask customers how they were treated by the script-followers you won’t get real feedback about the consumer experience. The systems may be designed that way on purpose, but if that is so it’s a pretty sad state of affairs.