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payday loans: csr and regulation May 13, 2016

Posted by Bradley in : consumers , add a comment

Google’s new policy on payday loan ads which will be banned defines the relevant loans as follows:

We will no longer allow ads for loans where repayment is due within 60 days of the date of issue. In the U.S., we are also banning ads for loans with an APR of 36% or higher. When reviewing our policies, research has shown that these loans can result in unaffordable payment and high default rates for users so we will be updating our policies globally to reflect that.

The policy doesn’t just seem to apply to the worst sort of payday loans. The NY Department of Financial Services says that payday loans are typically repayable within 2 weeks and can carry an interest rate of 400%. The Google announcement doesn’t say how Google will think about issues such as roll-over of loans (where loans originally repayable within a two week period end up being outstanding for longer because they are rolled over into new loans) or high fees which might not be characterized as part of an APR. A study by the FCA in the UK published in 2014 found that payday lending consumers were frequently surprised by roll-over or extension of the loans and the fact that this would raise the cost of the loans.

Reactions (NYT) focus on whether companies like Google should engage in this sort of censorship. One article (by Danny Yadron and Maria L La Ganga) states:

What’s different now is that an increasingly small number of technology firms control what an ever expanding number of people see online. And they’re willing to go beyond what is circumscribed in law to make their own decisions – maybe shaping society in areas where governments won’t act.

This article, and the Google announcement, seem to suggest that what Google is doing here is engaging in corporate social responsibility (CSR). But in fact payday lending is an area where Governments are becoming more active: payday lending is already illegal in a number of states (such as New York, although the rules in different states do vary) and it has been targeted by the CFPB: just this week the CFPB announced that it had taken Action Against Check Cashing and Payday Lending Company for Tricking and Trapping Consumers and last month the CFPB published a report which shows that online payday lending customers are at risk of being subject to overdraft and non-sufficient funds charges imposed by their banks and even of having their checking accounts closed. New rules on payday lending are expected soon. And other jurisdictions, such as the UK and Australia, regulate payday lending. So it’s really about getting ahead of (or alongside) regulation rather than CSR, isn’t it?

critiquing consumer surveys May 5, 2016

Posted by Bradley in : consumers , add a comment

This article identifies some of the problems with the endless consumer surveys we are subjected to all the time:

Problems with surveys are two-fold, researchers said. First, too many surveys with too many questions turn off consumers. Second, results that are tied to employee bonuses — or jobs — prove inaccurate. Combined, these problems are turning a useful method of interacting with customers into a headache.

But there’s often an additional problem, as the surveys tend to focus on the performance of the people who are actually providing the services. If I book Sears to provide repair services for a washing machine the survey will ask me how happy I was with the service provided by the person who actually came to my home to work on the machine. The surveys control the service providers pretty well. They don’t tend to ask for feedback on how pleasant or unpleasant it is to interact with the firm as a whole rather than the particular individuals you deal with. And if the experience overall is horrible but the person you actually interact with seems to do a good job and is pleasant to deal with, of course you will give them the high score. But this may be misleading.

The article suggests that it can be a problem if customers are effectively “bribed” to give positive feedback. I am not so sure: asking your customers to speak to you before giving you a lower score than 10 so you can persuade them to give a higher score is in some sense about consumer satisfaction.

new jotwell post February 3, 2016

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On Jotwell I have reviewed Mihailis Evangelos Diamantis, Corporate Criminal Minds, 91 Notre Dame L. Rev. ___ (forthcoming 2016).

lying as normal October 14, 2015

Posted by Bradley in : truth , 1 comment so far

It is surprisingly hard to find a link to this, but there’s a Best Buy ad I have seen a few times recently. A girl is doing a science project and the video of the simulated volcanic eruption isn’t as impressive as she would like so her Dad goes to Best Buy and buys what is probably an expensive screen on which she can display her unimpressive video in a way that looks impressive. The tag li[n]e: “So even small successes can be big triumphs.”
The takeaways: people who have money to burn can do better on school science fair projects than people who don’t and lying is OK. If you can present what you have done as being exceptional [by the application of money] it doesn’t matter that it is merely ordinary.
Obvious, but depressing.

October 21 update: The line is actually “So even small successes can look like big triumphs.” For a few days I saw the ad a couple of times without this line. I just saw it again with that line included. Encouraging a new generation to prepare for work at Volkswagen and other large corporations?

thinking about financial stability October 12, 2015

Posted by Bradley in : financial regulation , add a comment

I’d really like to go to this conference, but don’t think I have the time. Meanwhile I am working on a paper with the title Financial Stability: Regulation and Politics which I plan to present at Law and Society next summer.

cambridge international symposium on economic crime September 4, 2015

Posted by Bradley in : events , add a comment

I’ll be speaking at this symposium next week in a panel focusing on Managing the consequences of suspicion (the symposium program is here).

university of miami lecture announcement September 2, 2015

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On Friday, September 4 (Aresty Graduate Building (AGB) 431, 11:00am – 12:30pm), Lucian Cernat, Chief Trade Economist of the European Commission, will offer a lecture on “Mega-FTAs, Globalization and Technological Change”. The event is generously co-sponsored by the Center for International Business and Education Research (CIBER), headed by Dr. Joseph Ganitsky.

gender and scholarship July 1, 2015

Posted by Bradley in : gender , add a comment

Formatting a recent paper according to Palgrave’s criteria – which ask for author citations by initials and surname (although unlike the Blue Book they require the identification of the publisher of books) – I was struck by how disturbing I found it to be eliminating hints of the gender of the authors I cite, even while recognizing that gender neutral citations might be beneficial.

little england rather than great britain May 11, 2015

Posted by Bradley in : inequality , add a comment

What we have to look forward to after the election: more austerity, more deregulation, fewer rights for the disadvantaged, the poor, the helpless (more cuts to public services, more stress for those who can least bear it, no human rights, just money rights), a reduction in Britain’s stature in the world (talk about leaving the EU, reductions in financial regulation to prevent business moving offshore): in a few years it really will no longer be possible to use the terminology of “Great Britain.”

rethinking insider trading regulation May 11, 2015

Posted by Bradley in : jotwell , add a comment

My new post at Jotwell: Caroline Bradley, Rethinking Insider Trading Regulation, JOTWELL (May 11, 2015) (reviewing Yesha Yadav, Insider Trading in Derivatives Markets, 103 Georgetown L.J. 381 (2015) and Yesha Yadav, Structural Insider Trading, Vanderbilt Law and Economics Research Paper No. 15-8 (March 27, 2015)), http://corp.jotwell.com/rethinking-insider-trading-regulation/.