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Cell phone companies show no mercy to consumers
By Ed Mierzwinski - 11/15/2009 Over at the Boingboing blog, (LINK) Rob Beschizza just rips a New York Time story (Click "read more" for LINK) today on cell phone pricing plans. From Boingboing: ** "Throughout his piece, [reporter Saul] Hansell writes often of people's confusion. He claims that even economists find cellphone plans baffling. But they're not hard to understand except in the nickel-and-dime details. Hansell's repeated evocation of "confusion" is reminiscent of when characters in novels continually ask what's going on, or when they wake up in white rooms: it's because the writer himself doesn't know. Excepting the Yale professor whose words introduce the article, the people quoted in it are carrier flacks and cellular industry analysts: a fair sign of a piece tossed off inside a snowglobe of PR." ** We think Beschizza has a point. Our research has shown that cell phones are not subsidized and that the purpose of onerous Early Termination Fee penalties is not to pay for the supposedly deeply-discounted phones, it's simply to "lock you in a cell" phone plan, even it the service just ain't that good. (Link to blog with more info and PIRG report).
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NYT editorial : That $35 Cup of Coffee
By Ed Mierzwinski - 11/14/2009 Today's New York Times editorial That $35 Cup of Coffee (LINK) supports bounced overdraft fee reform. Senator Chris Dodd will hold a hearing in his Senate Banking Committee Tuesday at 3pm. Our previous blog "New Fed rules not enough, Congress must act" is here. New York Times story by Steve Labaton on new Fed rules. USA Today story by Kathy Chu on new Fed rules. The Federal Reserve's final overdraft rules (LINK). Click read more for links.
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Report: Campaign funds "grease the wheels" for highway construction
By Ed Mierzwinski - 11/14/2009 My U.S. PIRG colleagues, transportation reform attorney John Krieger and democracy advocate Lisa Gilbert, have a new report called Greasing the Wheels (LINK) showing that massive campaign contributions, not public safety needs, determine highway construction plans. "The nation has 73,000 crumbling bridges, but year after year startlingly few federal transportation dollars go to fixing them." The report examines the latest publicly available data on spending earmarks and found that "only about one in ten of the projects, and about ten percent of the funding, focused on fixing the nation’s crumbling infrastructure." (from release). More in the New York Times.
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Wall St. Bank JP Morgan Sued Again After It Pays SEC Millions in Smelly Sewer Deal
By Ed Mierzwinski - 11/14/2009 About ten days ago the SEC settled a sewer bond case with the venerable JP Morgan Wall Street investment bank -- for $75 million in penalties and forfeiture of $647 million in alleged amounts owed it -- ""The transactions were complex but the scheme was simple. Senior J.P. Morgan bankers made unlawful payments to win business and earn fees," said Robert Khuzami, Director of the SEC's Division of Enforcement." Yesterday, the county that is on the brink of bankruptcy over the deal filed another suit. The Birmingam (AL) Business Journal story Jefferson County sues Larry Langford, JP Morgan has more. So, those of you who always thought that all of these Wall Street firms were called "white shoe" firms because they didn't get themselves dirty in smelly deals, think again. According to the SEC, $50 million of the penalty is "for the purpose of assisting displaced county employees, residents and sewer rate payers."
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RELEASE: Fed action on overdrafts not enough, Congress must act
By Ed Mierzwinski - 11/12/2009 Today, the Federal Reserve issued final rules (LINK) on unfair bank overdraft protection schemes that are expected to bring banks $38 billion in income this year. The rules are “not good enough” and “Congress still needs to act.” If we had a full-time Consumer Financial Protection Agency, we wouldn't get part-time protections.like these from the Fed. Full statement after the jump.
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Ed Mierzwinski
U.S. PIRG Consumer Program Director
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