website utilities

People before Profit

Follow on:

The Consumerist

PayPal Buys Online Money Transfer Company Xoom For $890M

Thu, 2015-07-02 15:13
(Liz Wise)

(Liz Wise)

PayPal appears to be preparing for its upcoming separation from parent company eBay later this month by buying an online money-transfer company to increase its international and online presence.

The Wall Street Journal reports that PayPal will buy Xoom Corp. for $890 million, giving it an entryway into the remittance market.

Xoom Corp. specializes in allowing people to send money internationally, generally through mobile phone transactions.

The company typically collects a fee of $5 to $10 depending on the transaction size, while also keeping the difference in exchange rates.

PayPal’s move to purchase the San Francisco-based Xoom is just the company’s latest push to capture more mobile business. In the past, PayPal has heavily publicized its peer-to-peer money transfer division Venmo, the WSJ reports.

The company says it plans to keep all 300 current Xoom employees and executives.

The proposed acquisition comes as PayPal prepares to spin off from parent company eBay after 13 years on July 17. eBay acquired PayPal in 2002. The payment processing service represented about 41% of eBay’s net revenue in 2013.

PayPal to Buy Online Money-Transfer Company for $890 Million [The Wall Street Journal]

Whole Foods CEOs Admit To “Unintentional” Overcharging

Thu, 2015-07-02 07:56

In 2014, California regulators caught Whole Foods overcharging customers, and things have only gotten worse for the upscale grocery store chain, which is currently under investigation for similar allegations in New York (where it also faces a civil suit from customers). That’s why Whole Foods’ co-CEOs issued a joint, heavily qualified, mea culpa about the situation.

Company founder John Mackey and his co-CEO Walter Robb released the above video on Wednesday, where they acknowledge that Whole Foods did indeed overcharge customers on its packaged food items.

“Straight up, we made some mistakes,” says Robb in the video. “We wanna own that and tell you what we’re doing about it.”

Mackey admits that “a very, very small percentage” of pre-packaged food items like sandwiches, fresh-squeezed juices, and cut fruit may have had weighing errors, but Robb contends these that these were “unintentional because the mistakes are both in the customers’ favor and sometimes not in the customers’ favor.”

“It’s understandable that sometimes mistakes are made,” says Robb. “They’re inadvertent, they do happen, because it’s a hands-on approach to bringing you the fresh food.”

New York City inspectors have reportedly found more than 800 violations at Whole Foods stores in the city since 2010, with overcharges ranging from $.80 to nearly $15.

“We’re going to increase our training in our New York stores and around the country because we want to be perfect in this area,” says Mackey. “We don’t there to ever be any mistakes.”

The company says it is implementing a third-party auditing system to track the progress of its efforts to curb weighing errors and will begin issuing progress reports in 45 days.

“We want to give a 100% guarantee to our customers,” concludes Mackey. “If you think there is a mistake in any of our fresh products, ask the cashier to check on it. And if there’s a mistake that’s not in your favor, we promise to give you that item for free.”

Both Mackey and Robb say they will personally read all of the e-mails sent to That should make for interesting chatter around the co-CEO water cooler.

Among the California overcharging allegations, which Whole Foods agreed to pay $800,000 to settle, were claims that stores failed to deduct the weight of product containers when calculating the price for pre-packaged foods, in violation of state law.

Credit Card Data Breach Confirmed At Trump Hotels

Thu, 2015-07-02 03:26

The Trump Hotel Collection operates luxury properties in a dozen cities around the world.

The Trump Hotel Collection operates luxury properties in a dozen cities around the world.

Hotel properties owned by Donald Trump’s Trump Organization are the latest consumer-facing businesses to become the subject of a cybercrime, with the company acknowledging that a data breach has occurred at locations run by the Trump Hotel Collection. first reported, and subsequently confirmed, news of the data breach at Trump hotel locations in multiple cities, including New York, Chicago, Las Vegas, Los Angeles, Honolulu, and Miami.

In a statement to the site, Eric Trump, an executive VP with the company, explained that, “Like virtually every other company these days, we have been alerted to potential suspicious credit card activity and are in the midst of a thorough investigation to determine whether it involves any of our properties.”

The statement does not indicate how long the breach had gone on for or how long the Trump organization had known about it. According to Krebs’ sources, it looks like the theft extends at least as far back as Feb. 2015, though there is still no mention of the number of compromised accounts or how many fraudulent transactions were made before banks caught on.

Bank sources told the site that financial institutions had been investigating a rash of fraudulent credit card purchases and found that the accounts in question had all previously been used at a Trump location.

What You Should Know About Rent-To-Own Retail Models: Extra Costs, High Interest Rates

Wed, 2015-07-01 22:55

Rent-to-own stores offer cash-strapped consumers the ability to take home a new refrigerator, living room furniture set and hundred of other items by allowing them to pay a little each month. But, as we’ve reported in the past, what seems like a convenient years-long payment plan often adds hundreds – even thousands – of dollars to the price tag of a product. To ensure potential customers of rent-to-own stores know what they’re getting into, our colleagues at Consumer Reports put together a helpful video spelling out the potential dangers of such retail models.

The video warning is the result of CR’s review of several offers from the nation’s two largest rent-to-own stores – Aaron’s and Rent-A-Center – that found some of the monthly payment plans could cost customers hundreds of dollars more than they would spend purchasing the product outright.

“If these were loans, the equivalent interest rate would be between 50% and 150%,” Mandy Walker, money editor for Consumer Reports says in the video. “There’s lots of fine print in the ads and in contracts, and many consumers just don’t realize the full cost.”

That was the case for a Georgia woman who purchased a washer and dryer set from a local Aaron’s store.

The woman says she signed a 24-month lease that included an option to buy the appliances at the listed cash price within 120 days.

She tells CR that she had the funds available, but when she went to the store to pay, an employee told her she’d missed the deadline.

That left her on the hook for the entire 24-month lease, which would total $3,671 – twice the amount she would pay at a big box store, CR reports.

A representative for the industry’s Association of Progressive Rental Organizations tells CR that such companies offer the “only debt-free transaction that allows the customer to return the product at any time for any reason without legal penalty and affecting the consumer’s credit.”

But returning the washer and dryer set wasn’t an option for the Aaron’s customer, as she’d already paid more than $2,000 for the appliances.

CR advises potential rent-to-own customers to read contracts carefully and make sure they can afford to make on-time payments.

“Better yet, save up your money and pay up front,” Walker says.

CR reports that the Georgia woman’s story ends on a bit of a happier note. After the organization publicized her ordeal, Aaron’s forgave her the last four months of the lease and sent a letter telling her she owned the appliances outright.

The company even sent along a coupon for 50% off the first payment of her next purchase at the store, a deal she says she won’t be using.

7-Eleven Testing Delivery Service Because Fetching Your Own Microwaved Burritos Is So 2014

Wed, 2015-07-01 22:54



Sometimes the Slurpee machine is just… too… far… away. Am I right? Sure, because otherwise why would 7-Eleven be testing a delivery service? Yes, that is a thing that is happening, as we have become a people who can’t even be bothered to microwave our own burritos.

The company announced the news today in a press release, saying the new service is a partnership with Postmates, a technology business out of San Francisco that also teamed up with Chipotle recently to offer delivery in some cities.

Select stores in San Francisco and Oakland, CA will have the on-demand delivery service starting now through Postmate’s app for iOS devices or online, with a variety of 7-Eleven products available. From the sound of it, that could include Slurpees and burritos (though it’s unclear), as an assortment of items “from hot foods and snacks to cold beverages and other convenience items” are on the table.

Deliveries will arrive in an hour or less, 7-Eleven says.

“7‑Eleven’s founder, Joe C. Thompson Jr., used to say 7‑Eleven’s mission was to ‘give customers what they want, when and where they want it’,” said Raja Doddala, 7‑Eleven’s vice president of innovation and omnichannel strategy in the press release. “Through the modern-day technology that Postmates provides, we can fulfill that promise in a way we haven’t done before.”

Doddala adds that the company plans to expand delivery later this year to other areas with a high density of 7-Eleven stores, including Austin, New York, Los Angeles, Washington, D.C. and Chicago.

You might just never leave your couch again. Well, if you have a butler. Because someone’s got to answer the door or the Slurpees will melt.

Chicago Residents Now Stuck With A New 9% “Cloud Tax” On Netflix And Other Streaming Services

Wed, 2015-07-01 22:40

(Mike Matney)

(Mike Matney)

There used to be a whole world of brick-and-mortar retail stores and transactions a city could gather some sales tax from and build into a revenue stream. As more and more goods instead become online services, though, those streams have dried up. Now one city wants to go back to gathering its cash… from your transactions in the cloud.

The Verge reports that residents of the Windy City are about to have to start paying a premium on Netflix and their other streaming services, as a new “cloud tax” takes effect in Chicago today.

The logic goes something like this: In the long-gone ancient era of “twenty whole years ago,” when you went down to your corner video store for some rentals and some popcorn, you’d leave a few cents of sales tax behind with your purchase. Those nickels and pennies added up, and your town, city, or county got some revenue out of it.

But now, you’re streaming all your media, not buying it, and as a result there’s no sales tax going anywhere. Worse: record stores, video stores, and bookstores are in large part going the way of the dodo, and cities can’t collect business or property taxes on businesses that don’t exist. So this, then, is Chicago’s attempt to recoup some of those losses.

As The Verge explains, the new tax is actually a pair of rules put together. One covers “electronically delivered amusements” and the other, “nonpossessory computer leases.” The former targets your streaming video and radio sites, and the latter is meant to cover remote computing platforms like Amazon Web Services.

The rules take existing tax law and extend them to add another 9% onto the cost of using those services from a Chicago address — so that $8.99 Netflix subscription is $9.80 for an unfortunate Chicagoan.

The web services businesses, of course, can avoid this tax entirely (and probably get lower rents) by moving out of the city limits entirely. Consumers subscribing to streaming services have fewer ways out, since the tax could be based both on their billing address and also on the IP addresses to which content is streamed.

At least one lawyer is already arguing that Chicago’s new rules violate federal statutes, including the Communications Act and the Internet Tax Freedom Act. For the time being, however, the rules are in place and Chicagoans must pay.

Chicago’s ‘cloud tax’ makes Netflix and other streaming services more expensive [The Verge]

Dept. Of Justice Investigating Alleged Collusion By Airlines To Keep Ticket Prices High

Wed, 2015-07-01 22:16


Just weeks after a legislator voiced concern that a shrinking airline industry has perpetuated potential anti-competitive behavior aimed at keeping the price of airfare high, the Department of Justice revealed it is looking into the possibility of collusion between airlines.

The Associated Press reports that the Dept. of Justice opened an antitrust investigation into whether airlines are colluding to grow at a slower pace in an attempt to keep ticket prices high.

A document obtained by the AP shows that the DOJ has requested information from airlines as part of the investigation.

A spokesperson for the Department confirmed that the agency was investigating potential “unlawful coordination” among some airlines, but declined to specify which ones.

According to the AP, American Airlines, Delta Air Lines, Southwest Airlines and United Airlines currently control more than 80% of the airline industry’s seating capacity.

News of the antitrust investigation comes about two weeks after Connecticut Senator Richard Blumenthal sent a letter [PDF] to Assistant U.S. Attorney General William Baer urging the DOJ to investigate possible collusion and anti-competitive actions in the airline industry that could result in higher airfares for consumers.

Blumenthal cited a recent report which found some airlines plan to cut back on the number of seats offered on certain routes in an attempt to boost profits.

“In light of the recent unprecedented level of consolidation in the airline industry, this public display of strategic coordination is highly troubling,” Blumenthal stated in the letter.

Justice Department investigating potential airline collusion [The Associated Press]

If You Buy The Stuff No One Else Likes, You Just May Be A “Harbinger Of Failure”

Wed, 2015-07-01 22:11

(Paxton Holley)

(Paxton Holley)

If you’re still crying into your pillow at night over the demise of the Zune MP3 player or Crystal Pepsi, take a long, hard look into the mirror: Your shopping habits might have foretold the doom of your favorite, discontinued products. At least, according to a group of researchers pointing the finger at certain early adopters.

In a study published in the Journal of Marketing Research, researchers identified particular kinds of consumers whose preferences can predict products that will flop, calling those folks “harbingers of failure,” reports the Chicago Tribune.

“Certain customers systematically purchase new products that prove unsuccessful,” wrote the study authors. “Their early adoption of a new product is a strong signal that a product will fail.”

Researchers looked at retail purchases made by about 130,000 consumers at a national convenience store chain, and found that 13% of them had buying habits that predicted failure of a new product. Failure in this case means surviving less than three years. About half or more of the products they bought were doomed to die before they had a chance to make it big.

This means if you’re the kind of person who liked the Zune, you probably also liked Frito Lay Lemonade, which apparently was a thing.

And “the more they buy, the less likely the product will succeed,” the researchers wrote.

This is because harbingers of failure are more likely to consistently buy things that other customers won’t, for whatever reason. Maybe they like to be different, or maybe they just have a soft spot for the things no one else likes.

For companies, this means that they’d need to be careful not to just focus on how many people are buying a new product, but who it is that’s doing the buying. If you’ve got a boatload of these harbingers of failure on board, your ship is sure to sink.

There’s a reason all your favorite products are always being discontinued [Chicago Tribune]

No, New York Times, No One Wants To Put Peas In Their Guacamole

Wed, 2015-07-01 21:51

Screen Shot 2015-07-01 at 3.44.23 PMThe Twitter account for the New York Times learned a very important lesson today: Avocados are sacred, and as such, guacamole should not be despoiled by the likes of the pea, a food reviled by any kid ever forced to finish their vegetables before they could leave the table. Any suggestion otherwise is outright HERESY, according to the denizens of the Internet. The responses are numerous, the ire is intense, and discontent reigns. [@NYTimes]

10 Things We Learned About The University Of Phoenix’s Alleged Military Marketing Strategy

Wed, 2015-07-01 21:47

uopx-horix-logo-black-large-highqual-whitebgIt’s no secret that for-profit colleges receive a large chunk of their revenue from military education benefits. To deter unscrupulous for-profit colleges from unfairly targeting these prospective students, the government has imposed several limitations on just how these companies can recruit servicemembers. But a new report shows that one of the nation’s largest proprietary education institutions – The University of Phoenix – spends millions of dollars to allegedly skirt those rules.

While for-profit schools often provide a convenient avenue for former and current military members and their families to receive higher education, several reports over the past few years have shown that in many cases these students are receiving a useless piece of paper in exchange for thousands of dollars in taxpayer-funded military benefits such as the Post 9/11 GI Bill.

Because of this, President Obama signed a 2012 executive order intended to prevent for-profit colleges from gaining preferential access to the military, such as freely dispatching recruiters to bases. While these rules have helped to hamper aggressive recruitment tactics of some schools, the report by Reveal with the Center for Investigative Reporting shows the University of Phoenix might not be one of them.

The University of Phoenix has never appeared to be one to hold its purse strings tightly – allegedly spending millions of dollars each year on marketing events and sponsorships to gain the attention of prospective students. The company famously paid $155 million for the naming rights of a monstrous football stadium, even though the school has no athletic teams.

But, according to Reveal, the school may just spend the most money covertly recruiting servicemembers.

We really recommend that you head over and read the entire report on Reveal, but here are the 10 things that we learned from the exposé, which relied on statements from officials with the Department of Defense, former servicemembers recruited by the school, University of Phoenix staff, lawsuits against the school and internal documentations from the company.

1. The University of Phoenix allegedly regularly sponsors events – such as a $25,000 concert at Fort Campbell – for servicemembers as a way to sidestep an executive order that bans “inducements, including any gratuity, favor, discount, (or) entertainment” for the “purpose of securing enrollments of Service members.”

2. Internal company documents suggest that such events are part of the school’s “deliberate effort” to create the impression that it is sanctioned and even recommended by the armed forces.

3. An investigation by Reveal found that the University of Phoenix paid five military bases more than $1 million over the past five years to sponsor events for servicemembers such as concerts, Super Bowl parties, father-daughter dances, festivals, fashion shows and résumé workshops.

4. According to Dept. of Education records, these covert recruitment strategies likely paid off, as the school brought in $345 million in GI Bill funding to educate 50,000 veterans in 2014. The school also received $20 million from the Pentagon for the education of some 10,000 active duty servicemebers last year, Reveal reports.

5. The University of Phoenix’s online program enrolled 24,000 Iraq and Afghanistan veterans last year. The graduation rate for that program sits at about 7.3%, with nearly one in five students eventually defaulting on their loans within three years.

6. The University of Phoenix has been partnering with the U.S. Chamber of Commerce Foundation to host employment workshops at Hiring Our Heroes job fairs. The school has allegedly worked out a deal to be the only institution of higher learning showcased at the fairs. Officials say that the school is prohibited from marketing itself at these events. But…

7. A servicemember wearing a camera recorded representatives of the company marketing its services to military personnel. In one case, a workshop trainer repeatedly encouraged those in attendance to visit the college’s website. Additionally, the trainer used an example of a “good” resume featuring the University of Phoenix under education, while a “bad” resume did not.

8. A recent lawsuit filed by former University of Phoenix employees allege the school required them to “operate stealthily” in order to “utilize job fairs as a vehicle for recruitment.” The two employees allege they were fired for not recruiting enough servicemembers.

9. Internal documents show the college has placed recruiters in leadership positions at a plethora of veterans groups such as local chapters of AMVETS, the Navy League of the United States and the Association of the United States Army. The company has also allegedly courted leaders of the American Legion, which once backed legislation to forbid for-profit colleges from spending taxpayer money on marketing and recruitment.

10. The University of Phoenix allegedly uses military insignia without proper licenses. In an effort to better ingrain itself in military culture, Reveal reports, the company purportedly hands out a custom engraved coin on military bases. The coin, which features the school’s logo on one side and the emblems of all military branches on the other, is similar to a “challenge coin” given to military personnel by officers to mark major accomplishments.

Reveal reports that reps for the University of Phoenix declined to be interviewed for their report, but a senior vice president for the school’s parent company, Apollo Education, says the school plays an important role in offering degrees to servicemembers and that the company supports the executive order to “rein in bad actors from all sectors of higher education.”

Following the release of Reveal’s report, Illinois Senator Dick Durbin called on the Department of Defense to investigate the University of Phoenix’s marketing practices.

“I am astonished at the Department’s willingness to accept payment for access, in violation of the spirit of Executive Order 13607, and disappointed in the conduct of its personnel, shielding the company from public scrutiny,” Durbin wrote in a letter to Secretary of Defense Ashton Carter. “I urge you to investigate these allegations swiftly and take immediate steps to bar the company from further access to service members until these issues are resolved.”

“The University of Phoenix is a for-profit company that makes much of its money off of service members and veterans, including $1.2 billion in GI Bill benefits alone since 2009. In return, the company offers degrees of questionable value, below-average graduation rates, and a student loan default rate almost forty percent higher than the national average.”

University of Phoenix sidesteps Obama order on recruiting veterans [Reveal: from the Center For Investigative Reporting]

Report: AT&T, DirecTV Merger Likely To Be Approved By Justice Dept. With No Conditions

Wed, 2015-07-01 21:33

It’s been over a year since AT&T and DirecTV publicly announced their intention to become one big happy mega-media company, and the two are clearly getting a little restless waiting for their approvals. However, it looks like they are about to get the green light they so badly want.

Bloomberg News has the scoop (as they did for the Comcast/TWC merger), and the business news site is reporting that the Department of Justice is ready to give this one the go-ahead.

Media mega-mergers have to be approved by two agencies: the Antitrust Division at DoJ, which scrutinizes them for competitive concerns, and the FCC, which scrutinizes whether they are going to harm or to promote the public interest.

According to Bloomberg, this merger’s now officially cleared one of those hurdles, as DoJ officials have closed their investigation without even demanding any conditions be applied to the merger.

The final decision over whether or not to approve the merger has not yet been made, and representatives for the DoJ declined to comment to Bloomberg about the matter.

Just because the Justice Department is not imposing conditions, however, does not mean none will be imposed. The FCC still has to do its work, and AT&T has made a massive pile of promises to that agency about benefits the merger could deliver, including increasing their GigaPower footprint, increasing competition with Comcast, and increasing broadband penetration in underserved, rural areas.

AT&T Said to Win Antitrust Approval for DirecTV With FCC Pending [Bloomberg]

Dunkin’ Donuts Working On Ditching Styrofoam Cups Nationwide By 2016

Wed, 2015-07-01 20:53

Soon these cups will belong to the non-recyclable past. (m01229)

Soon these cups will belong to the non-recyclable past. (m01229)

While Dunkin’ Donuts previously announced it would comply with a new law in New York City banning styrofoam cups and containers, which goes into effect today, the company might bring its new plastic, recyclable cups to the rest of its locations across the country as well.

Replacing the familiar styrofoam (actually expanded polystyrene, for you sticklers) cups in NYC wasn’t easy for the company, the Huffington Post reports, going through tests of double-layered paper cups and others in an attempt to find something cheap and disposable.

The company finally settled on beverage containers made from polypropylene, a type of plastic that’s recyclable, unlike styrofoam. Those cups might be the future for Dunkin’ Donuts stores across the country, as a company rep told HuffPo that they’re being tested in select locations in Massachusetts, Vermont and California right now.

Dunkin’ is also eyeing other alternatives with the goal of phasing out styrofoam completely in 2016. That would save the country’s landfills a lot of waste, as HuffPo notes that the company sells 30 cups of coffee every second.

The Dunkin’ rep says that the company will settle on a replacement for styrofoam by the end of 2015, and in the meantime, Dunkin’ will “continue to evaluate and test all available cups until we believe we have found the best solution based on cost, performance, commercial viability and environmental impacts.”

Dunkin’ Donuts Is Phasing Out Styrofoam Cups [Huffington Post]

AT&T, CBS Make Nice And Sign New Contract, Avoiding Network Blackout

Wed, 2015-07-01 20:22

(So Cal Metro)

(So Cal Metro)

In a nice change for consumers, a content company and a distribution company managed to save everyone the rigamarole of a blackout and a finger-pointing yell-a-thon when they instead settled their differences and negotiated a new contract hours after the old one expired.

The Wall Street Journal reports that representatives from CBS and AT&T negotiated through the night to come to an agreement that will keep CBS’s broadcast networks, as well as the Showtime premium channel, available for U-Verse subscribers.

Had the late-night talks not been productive, approximately 2.5 million of U-Verse’s six million subscribers would have lost their local CBS affiliates, and millions more would have lost Showtime. Happily for all involved parties, that didn’t have to happen.

Negotiations had been taking place since March, according to the WSJ, but stalled out as CBS called out AT&T for being more focused on its planned acquisition of DirecTV than on its existing TV contracts.

The detailed terms of the agreement have not been released, because contract carriage fee agreements never are. However, the deal will put extra CBS networks on U-verse subscribers’ screens in 2016, including Pop, CBS Sports, and the Smithsonian Channel.

CBS, AT&T Reach New Distribution Deal [Wall Street Journal]

Companies Must Refund Millions Of Dollars For Credit Card Add-On Services Customers Never Received

Wed, 2015-07-01 19:59


As a rule of thumb, if you’re a company and you charge a customer for a service or product, you’re supposed to actually provide that service or product. That apparently wasn’t a practice adhered to by two credit card add-on companies that must now pay millions of dollars in fines and refunds.

The Consumer Financial Protection Bureau took action today against Affinion Group Holdings, Inc. and Intersections Inc. for unfairly charging consumers for credit card add-on benefits they never received.

Add-on services such as credit monitoring or identity theft protection are often offered to customers by their credit card companies or third-party vendors for an extra monthly fee.

According to the CFPB complaints, Affinion and Intersections are both vendors of these types of products, and partnered with banks to provide such services to credit card holders and other bank customers.

An investigation into the companies found both engaged in unfair practices related to the billing or administration of these products, in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In Affinion’s case [PDF], the CFPB alleges that from about July 2010 through August 2012, the company enrolled consumers in add-on products that claimed to provide benefits including credit monitoring, credit report retrieval, or both.

The services generally cost between $6.95 and $15.99 per month, and customers were typically billed directly to their credit cards or bank accounts.

The Bureau alleges that Affinion or its partner banks billed full product fees to at least 73,000 accounts while failing to provide the full credit monitoring or credit report retrieval services promised, and failed to refund fees to those consumers.

When customers called to complain or cancel the add-on service, Affinion retention specialists provided inaccurate or incomplete information about the value and benefit of add-on products, the CFPB claims.

During some calls, Affinion retention specialists claimed they could directly remove inaccurate information from consumers’ credit reports and raise their credit score as a result. However, according to the CFPB, the company had no control over the information contained in a consumer’s credit report.

According to the CFPB complaint against Intersections [PDF], the company began its unfair billing practices earlier.

The company – which had agreements with about 35 banks – marketed and sold add-on products to consumers, promising them access to their credit reports and a credit score, email, or phone alerts when new credit accounts were opened, and access to a phone representative to respond to their credit report questions from 2009 to early 2013.

Intersections’ add-ons generally cost between $8 and $10 per month, which was typically billed directly to customer credit cards.

The CFPB alleges Intersections billed or instructed the banks to bill approximately 300,000 consumers who signed up for their products knowing they were not receiving all the benefits.

To settle the unfair billing charges, the CFPB announced that Affinion [PDF] and Intersections [PDF] entered into proposed consent orders that require them to provide refunds to affected customers.

Affinion must pay approximately $6.8 million in refunds to about 73,000 eligible consumers who enrolled in the credit monitoring products between July 2010 and August 2012 and were charged for services that were not received, but who have not already received refunds.

The company must also pay a $1.9 million fine to the CFPB’s Civil Penalty Fund.

Intersections must pay approximately $55,000, to customers who, for at least one month, were billed for identity theft or credit monitoring products, but were not receiving full product benefits.

The company previously entered into an agreement with the CFPB that required it to refund some customers. The Bureau estimates the company only has about $55,000 in refunds left to disseminate.

Intersections must also pay a penalty of $1.2 million to the CFPB’s Civil Penalty Fund.

CFPB Takes Action Against Companies For Unfair Billing Of Credit Card Add-On Products And Services [CFPB]

Sprint Backpedals, Won’t Slow Video Speeds For Unlimited Data Customers

Wed, 2015-07-01 19:44



Well, that was fast: A day after Sprint stirred up the ire of customers with its new “All-In” unlimited plan that stuck users with 3G speeds for streaming video, the company has now reversed course.

CEO Marcelo Claure wrote on Twitter that he was “asleep in Tokyo” when the backlash was in full cranky mode, and said in another Tweet that there won’t be limits on streaming video:

We heard you loud and clear and we are removing the 600 kbps on streaming video. #Allin and we won't stop

— MarceloClaure (@marceloclaure) July 1, 2015

But as these things go, that’s not the whole story: In a press release from the company about the decision, Claure added that that there might still be some times when the company has to “manage the network in order to reduce congestion and provide a better customer experience for the majority of our customers.”

So what does “manage the network” mean, in light of the fact that Sprint recently announced it wouldn’t throttle data for unlimited users?

The Washington Post asked for clarification on that end, and was told that Sprint won’t slow down streaming video for any of its postpaid customers either, along with those on All-In plans. But the company didn’t explain what “standard network management practices” would mean other than not choking video speeds.

Below are the plans that Sprint says will no longer have streaming video limits:


Watch The Tiny Hamster At A Tiny Barbecue With His Tiny Friends (Because It’s Wednesday)

Wed, 2015-07-01 18:57

Feel like you just can’t make it through the next few days before the holiday weekend? We interrupt your regularly scheduled Wednesday programming with a perfect panacea for the hump day blues: The Tiny Hamster at a tiny Fourth of July barbecue with his tiny friends (and one normal-sized human). Sure, the video is two days old, but that doesn’t make it any less adorable or brain soothing. Or tiny. [Hello Denizen on YouTube]

Macy’s Dumps Trump Over Controverial Comments, He Says It Was His Idea

Wed, 2015-07-01 18:35
(Nicholas DiMaio)

(Nicholas DiMaio)

What do a southern chef, the owner of a professional basketball team and a candidate in the 2016 presidential election have in common? They’ve all been ditched by brands, retailers and other companies after being accused of making racist comments. The latest addition to the list comes as Macy’s announced it would sever its decades-long relationship with businessman Donald Trump.

CNN reports (warning: link contains video that autoplays) that Macy’s joined the growing list of businesses cutting ties with Trump after he recently made controversial remarks about Mexican immigrants.

The department store plans to begin pulling Trump brand merchandise from its stores, saying it “stands for diversity” and that it has no tolerance for discrimination. It was unclear when or if the company would pull television advertisements in which the presidential candidate appears.

“In light of statements made by Donald Trump, which are inconsistent with Macy’s values, we have decided to discontinue our business relationship with Mr. Trump and will phase-out the Trump menswear collection, which has been sold at Macy’s since 2004,” the company said in a statement.

Following Macy’s announcement, Business Insider reports that Trump announced he wasn’t the ditchee, he was the ditcher – saying it was his idea to end his relationship with the department store.

“I have decided to terminate my relationship with Macy’s because of the pressure being put on them by outside sources,” Trump said in a statement. “While selling Trump ties and shirts at Macy’s is a small business in terms of dollar volume, my principles are far more important and therefore much more valuable.”

The pressure Trump alludes to came in the form of a petition calling for the removal of his products from the department store. The effort on had garnered more than 700,000 signatures as of Wednesday morning, CNN reports.

Macy’s is just the latest company to distance itself from Trump following his disparaging statements last week.

NBC Universal, which airs the Celebrity Apprentice reality TV show and jointly owns the Miss USA and Miss Universe pageant with Trump, severed ties with the entrepreneur last week.

Trump’s recent rejection by corporate entities is the most recent evidence that companies feel little obligation to stand behind celebrities – or athletes – that allegedly say or partake in controversial behavior.

Last fall, the NFL found itself in the rejected corporate sponsorships arena following several domestic violence scandals.

Specific players – like Adrian Peterson and Ben Roethlisberger – were personally dumped by brands for alleged domestic violence and sexual assault cases.

In the spring of 2014, L.A. Clippers (now former) owner Don Sterling was accused of making racist comments. What followed was a long list of high-profile brands – like CarMax and Virgin America – cutting ties with the NBA team.

And we certainly can’t forget 2013’s Deengate, in which southern chef and restaurateur Paula Deen lost a bevy of endorsement deals, closed several restaurants and had products phased out by Walmart and Target after copping to using racist language in her past.

First on CNN: Macy’s dumps Donald Trump [CNN]
Donald Trump: It was my decision to cut off ties with Macy’s [Business Insider]

Visa, MasterCard Cut Ties With After Pressure From Law Enforcement

Wed, 2015-07-01 18:25



After pressure from law enforcement, both Visa and MasterCard have announced they will no longer process payments for classified ads on The site has often been criticized for its “Adult” section, which some say makes it easy for pimps and sex traffickers to solicit customers for sex.

Illinois’ Cook County Sheriff Thomas Dart sent a letter to both companies on Monday, asking them to bar patrons from using them cards to purchase ads on the site, reports the Wall Street Journal. Dart has been on’s case for some time, tracking solicitations for prostitution. The classified ads site features subcategories in the Adult section like for “escorts,” “male escorts,” “body rubs” and other things.

In his letter, Dart asked MasterCard and Visa to “immediately cease and desist from allowing your credit cards to be used to place ads on websites like, which we have objectively found to promote prostitution and facilitate online sex trafficking.”

“After years of unchecked growth in the online sex trade, it has become increasingly indefensible for any corporation to continue to willfully play a central role in an industry that reaps its cash from the victimization of women and girls across the world,” the sheriff wrote.

MasterCard announced yesterday that it’d be cutting ties with, with Visa following suit today.

“They are being removed as a merchant in our system based on a request from the sheriff’s office that we received,” a MasterCard spokesman said on Tuesday, according to the WSJ.

“MasterCard has rules that prohibit our cards from being used for illegal or brand-damaging activities. When the activity is confirmed, we work with the merchant’s bank to resolve the situation,” the company told the Chicago Tribune.

Visa cited “moral, social and legal” reasons in its decision to cease processing transactions from

“Visa’s rules prohibit our network from being used for illegal activity,” a company spokesman said in a statement, via USA Today. “Visa has a long history of working with law enforcement to safeguard the integrity of the payment system and we will continue to do so.”

The WSJ cites people familiar with the matter who say American Express previously stopped processing ad payments on the site earlier this year.

This isn’t the first case of cutting straight straight to the middlemen who move the money in an attempt to take down illegal content online: In November, Sen. Patrick Leahy of Vermont wrote to the heads of Visa and MasterCard asking them stop serving file-sharing sites.

MasterCard Stops Processing Purchases of Ads on [Wall Street Journal]
MasterCard says its cards can’t be used to pay for adult ads on Backpage [Chicago Tribune]
Visa follows MasterCard, cuts off business with [USAToday]

Risk Evaluation Report Finds Mobile Banking Leaves Some Banks More Vulnerable to Cyber Attacks

Wed, 2015-07-01 17:26


While mobile banking is no doubt convenient for customers – and banks – there’s a significant downside to the fact that more and more financial institutions are using the technology: an increased risk that your personal information will fall in the hands of a cyber criminal.

A new report [PDF] from the U.S. Office of the Comptroller of the Currency suggests that banks’ strategies to implement mobile technology often leaves their infrastructure open to cyber attacks, the Chicago Tribune reports.

According to the OCC’s semiannual risk perspective report released on Tuesday, banks are increasingly embracing the use of technology such as cloud computing and mobile banking to stave off the competition.

While the ease of mobile banking and other advances can not only save customers time but save banks money, the OCC found that these systems can “increase exposure to technological and operational risk.”

“Banks and their employees, customers and third-party service providers continue to be vulnerable to cyberattacks that can compromise data or systems or allow criminals to illegally obtain personally identifiable information,” the report states.

The report also found that many banks lacks sufficient response plans if they find themselves on the wrong side of a cyber attack.

“There are many systems out there that have known, existing vulnerabilities that need to be addressed and can be addressed,” Beth Dugan, the OCC’s deputy comptroller for operational risk, tells the Wall Street Journal. “As the larger institutions do put in mitigating controls and strengthen their systems, the bad actors are just going down [to smaller firms] looking for the weakest link.”

In addition to pointing out some financial institutions’ lack of cybersecurity, the OCC’s report found other worrisome issues in the banking industry, mainly in the form riskier of lending.

According to the report, competition pushed banks to make more exceptions to their lending and underwriting policies during the first part of 2015.

The banking regulator said it’s seen a “loosening of standards” – such as less underwriting – across many credit products including business loans, commercial real estate loans and vehicle loans.

“Bankers continue to express concerns about the effects that intensified competition with other regulated financial institutions and nonbank financial firms are having on underwriting standards,” the comptroller wrote.

The OCC says that a change in standards could be seen in the way banks have altered terms for auto loans, specifically extending the life of a loan.

Last month, a report from credit reporting agency Experian found that the average loan terms for new and used vehicles span 67 and 62 months, respectively.

In all, that report found that even longer loans – those with terms lasting 73 to 84 months – are on the rise, with 29.5% of all new vehicles financed with such terms. Long-term used vehicle loans for the same duration represented 16% of that market.

Banks making riskier loans; consumers vulnerable to cyberattacks: report [Chicago Tribune]

Verizon Threatens To Disconnect NJ Landline Customer Unless They Switch To Fiber

Wed, 2015-07-01 17:15



Copper wire is expensive and old-fashioned. Phone companies don’t want to maintain or use it anymore. Still, some customers like their reliable old land-lines, and the law creates certain obligations for phone companies to provide and maintain them. But Verizon is apparently so sick and tired of providing plain old telephone service that they’re threatening to disconnect customers who don’t “voluntarily” upgrade to fiber A.S.A.P.

Local media outlet NJ TV News is reporting that a resident in northern New Jersey is receiving disconnection threats from Verizon. It’s not that she hasn’t paid her bills; it’s that Verizon just isn’t interested in providing her phone service anymore — unless she lets them come run fiber to her house.

The customer received a letter dated May 15 saying that “services will be suspended on or after 45 days from the date of this letter, if you do not allow Verizon reasonable access to your premises … to move your service to our fiber-optic network.”

“Once your service is suspended,” it continued, “you will only be able to call 9-1-1 and our customer service number … 14 days after being suspended, Verizon service at your address will be disconnected.”

The customer contacted the NJ Division of Rate Counsel, a state-level agency that represents consumer interests in dealing with utility companies (including cable and telecom services). The division has filed a petition with New Jersey’s Board of Public Utilities, asking the Board to investigate the letter.

The director of the Division, Stefanie Brand, told NJTV News she thought the letter was “pretty heavy-handed,” and added, “We were shocked. We thought this was clearly a violation of a bunch of state statutes and certainly Verizon’s obligation to be the provider of last resort.”

The AARP has also become involved, with the organization’s interim state director telling NJTV News, “Where Verizon gets the chutzpah to take such rude and inappropriate steps with their own customers is completely beyond belief and it’s completely unjustifiable. The people of New Jersey need to be able to live by the rule of law and not the rule of Verizon’s corporate fiat.”

Verizon’s “get lost” attitude toward copper-wire landline subscribers — those who connect to plain old telephone service, as the FCC calls it — is nothing new.

The company started pushing hard on New York and New Jersey area subscribers in 2012. Later that year, when Hurricane Sandy damaged or destroyed cables in the region, Verizon took it as an opportunity to not replace them at all and just do away with the lines instead.

By 2013, AT&T and Verizon were accused of cutting off copper-wire DSL customers without warning, to force FiOS and Uverse upgrades. In 2014, Verizon was accused of deliberately neglecting their copper-wire network in order to force consumers to upgrade to fiber. And not even a month ago, the union representing telecommunications workers publicly accused Verizon of failing to meet their network maintenance obligations.

The eventual transition off of copper wire and onto an entirely data-based network is basically inevitable. About 18 months ago the FCC approved trials that would lead to the end of copper landlines, and late in 2014 the commission proposed a set of guidelines for consumer protection as the IP transition continues.

The New Jersey Board of Public Utilities has recently signed an agreement with Verizon to slowly transition the state from copper to fiber, and to phase out and deregulate the old lines. However the Division of Rate Counsel is disputing the agreement, and the state agencies are still fighting it through in court.

Customers may be wise to be wary. Verizon in particular has also been called out recently for their total failure to meet their promises for FiOS rollout coverage. And the company has said more than once that they are basically done building out that network, and have no plans to expand any further. That explicitly includes New Jersey, despite promises the company made to wire the whole state with fiber broadband.

Verizon Threatens to End Service If Customers Don’t Switch to Fiber-Optic Network [NJTV News]