NetSpend, one of the nation’s largest providers of prepaid debit cards, will pay $53 million to resolve federal regulator’s accusations that it misled users about access to funds deposited to the cards.
The Federal Trade Commission announced Friday that it had reached a deal [PDF] with NetSpend to settle a Nov. 2016 lawsuit alleging the company deceived customers by marketing its cards as ready-to-use, with guaranteed approval.
According to the complaint, NetSpend — a division of Georgia-based Total System Services (TSYS) — led customers into believing that funds loaded onto cards would be available immediately, when in reality some users say they had to wait weeks or were never able to access their funds.
While most NetSpend users can purchase a card at a retailer and load money into their account, they aren’t actually able to access the money right away.
Instead, like other debit cards, users must first contact the issuer — in this case NetSpend — to provide personal identification information, such as date of birth, Social Security numbers, and even utility bills — before the card is fully activated and the user can gain full access to their funds.
In some cases, customers reported that despite providing NetSpend with the information their cards were not activated, and they were forced to re-sent the information multiple times.
The FTC argued that NetSpend’s ready-to-use claims were misleading, particularly since these cards are sold at retail alongside gift cards and other pre-loaded debit cards that don’t require this high level of ID confirmation to use.
Additionally, the company allegedly told customers that when a transaction has been disputed, cardholders would be eligible for a provisional credit until the matter was resolved.
However, the FTC claimed this wasn’t the case.
“NetSpend often is slow to resolve account errors, and fails to provide or significantly delays providing provisional credits for account errors,” the complaint states. “These delays in access to funds are especially harmful to consumers who have made the NetSpend card their primary means of financial management, leaving them without alternative means of accessing funds.”
In resolving the lawsuit, NetSpend neither admits nor denies the FTC’s allegations.
As part of the settlement, NetSpent will provide no less than $53 million to certain customers who purchased NetSpend prepaid cards between Jan. 1, 2010, and Aug. 31, 2016. Of the $53 million, $13 million will be used to refund fees charged to cards prior to Aug. 31. NetSpend will notify customers covered by the settlement.
Additionally, the company is barred from advertising, marketing, promoting, or selling any prepaid product by misrepresenting key details about the time or conditions to use the card.
TSYS said in a statement Friday that it is pleased to resolve the matter.
“We agreed to settle in order to avoid the significant costs associated with protracted litigation and to get back to the business of serving our customers,” the company states. “We do a great deal to encourage card activation and comply with federal law.”
For half a century, Ronco products — like the Veg-O-Matic, the Beef Jerky Machine, and Mr. Microphone — have been filling cheap, late-night and mid-afternoon commercial space on American TVs. Now the company that introduced “But wait — there’s more!” to the world is hoping it can sell the public on investing in the company by offering discounts and free stuff as rewards.
Ronco Brands Inc. says it filed IPO documents [PDF] with the Securities and Exchange Company last week outlining its plans to raise $30 million by selling five million shares. There’s a minimum investment of $120, which, at $6 per share, will get you 20 shares of the company.
Spend more than $1,000 on shares and you’ll also get a one-time 20% discount on Ronco.com purchases. If you’re willing to spend more than $5,000, Ronco will throw in a countertop rotisserie oven.
“We have millions of satisfied customers out there,” William Moore, Ronco’s president since 2011, tells The Wall Street Journal. “We are asking them to join us with another vote of confidence in the future of Ronco Brands.”
Ronco has had several owners since founder Ron Popeil first appeared on TV in 1964, filing for bankruptcy in 2007 and going through two more owners before it was bought by its current owners in 2011.
And despite the fact that the company says it has sold more then $2 billion worth of gadgets since then, it’s not much of a moneymaker, the WSJ points out, with a net loss of $2.7 million in the first half of 2016.
Add in an accumulated deficit of $32.2 million and about $17 million in debt, some auditors have “raised substantial doubt” about whether Ronco can stay afloat.
But Moore tells the WSJ that the company’s $110 million valuation is right on the money — citing Ronco’s investment bankers — and that those auditor warnings are “pretty standard stuff… in an environment where you are losing money.”
Ronco now has six months to complete the offering.
Frozen burritos are a pretty innocuous food, but danger may lurk inside some bean and cheese burritos currently on the market. Frozen bean and cheese burritos from the brand Menu Del Sol have been recalled because random tests turned up Listeria in a sample.
What to look for: The recalled product is 2-packs of Menu Del Sol frozen burritos, the wrapper of which is pictured above. On the front of the label, look for the lot code and “best by” date, which will be C3018 and March 1, 2018, written as “MAR01 18.”
“Consumers are reminded to fully cook frozen food products according to package instructions,” the company reminds us in their announcement, and that includes heating the food to a high enough temperature to kill most foodborne pathogens. Most of us don’t sit near our microwaves with a meat thermometer, but at least follow the directions and make sure that your food has been heated all the way through.
What to do: Return the burritos to the store where they were purchased. If you have questions, call the Menu Del Sol consumer hotline at 800-706-8289.
Listeria monocytogenes is a common foodborne pathogen, but one that can cause serious health complications in pregnant women, children, people with compromised immune systems, and elderly people.
Listeria is one of the sneakiest foodborne illnesses, since it can wait around in your body for as long as 70 days without making you sick. Do you remember what you ate 70 days ago?
For healthy adults, the infection may pass with no symptoms, or as only a brief gastrointestinal illness. It manifests as brief flu-like symptoms in pregnant women, but can cause serious complications for the fetus, which can lead to miscarriage, premature birth, or stillbirth.
Invasive Listeriosis can cause life-threatening meningitis in other patients, and symptoms to watch for include fever, body aches, headache, stiff neck, confusion, loss of balance, and convulsions.
Navient, the largest student loan servicer in the country, is here to simply collect your monthly education loan payments, not help you find ways to more easily afford those payments.
“There is no expectation that the servicer will act in the interest of the consumers,” Navient said in the March 24 filing, adding that courts routinely agree that servicers and lenders “do not owe borrowers any specific fiduciary duties based upon their servicer/borrower relationship.”
This icy argument, notes Bloomberg, is very different from the warm, borrower-friendly sentiment the company (formerly part of Sallie Mae) and its CEO Jack Remondi have long professed publicly.
In fact, in a blog post published just two weeks ago, Remondi talked up Navient’s desire to aid borrowers in getting out of debt.
“At Navient, our priority is to help each of our 12 million customers successfully manage their loans in a way that works for their individual circumstances,” wrote the CEO.
But in last week’s filing, Navient claimed that it simply isn’t being paid enough by the Department of Education to provide such thorough services to borrowers.
The CFPB, along with the attorneys general of Illinois and Washington, sued [PDF] Navient for allegedly cheating borrowers out of repayment rights back in January.
The lawsuit alleges that for years Navient engaged in a series of illegal and deceptive practices, including providing borrowers with incorrect information, processing payments erroneously, and failing to address customers’ complaints.
According to Navient, borrowers could not reasonably rely on Navient to counsel them into alternative payment plans because it simply wasn’t the law.
The company argues that there is no legal basis to prove that there is more than an “arm’s-length relationship” between the servicer and borrowers.
For example, the CFPB points to four statements on Navient’s website that allegedly show borrowers can rely on the company to act in their interests, including that the servicer would “work with” borrowers or “help” them find an affordable repayment option.
Navient claims that these statements — which reached millions of borrowers — do not create a fiduciary-type relationship or obligation.
Additionally, even if the statement had been made to individual borrowers, Navient argues, general pronouncements by a lender or servicer to borrowers that “we can work with you” or “help” do not create a fiduciary relationship.
“If such statements were enough, virtually every lender and loan servicer would be transformed into a fiduciary, which is not the law,” Navient states.
Consumer advocates quickly took issue with Navient’s filing, saying it ranks amongst the most appealing statements they’ve heard.
“What this means for the Education Department is that it needs to fire Navient,” David Bergeron, former deputy assistant secretary of Education and director of the Office of Postsecondary Education at Dept. of Education.
Rohit Chopra, the former assistant director and student loan ombudsman at the CFPB, tells Bloomberg that he’s never heard a loan servicer argue it wasn’t their obligation to provide borrowers with options.
“When consumers call their servicers, they’re not expecting them to withhold information,” Chopra said.
Each year, more and more states continue to legalize medical and even recreational marijuana use for their residents. But the drug remains illegal at the federal level, and conflicts abound, confusing consumers, businesses, and law enforcement alike. John Oliver shared some thoughts this week about how we got into this mess, and how we can get out.
1. When — and why — marijuana became illegal
Marijuana was totally legal at the start of the 20th century, as Oliver points out. That changed at the federal level a little more than 50 years ago, in 1970, when President Richard Nixon signed the Controlled Substances Act into law.
“Naturally,” Oliver notes, “it was Richard Nixon, the Mozart of racially-motivated lawmaking, who targeted [marijuana] in his war on drugs, for reasons that he was open about in conversations that he inexplicably recorded.”
Given the disparate impact of drug laws particularly on African-American communities by the 21st century, you might be surprised which particular racial group Nixon was targeting, however: Oliver then plays a clip of Nixon, in his own words, blaming the push to legalize marijuana exclusively on “the Jews.”
2. Legally, marijuana’s still worse than meth or cocaine.
The Controlled Substances Act sets up groups of drugs, or “Schedules,” classified from most bad to least bad.
As we’ve covered before, marijuana sits right at the top of the list, as a Schedule I drug, the highest classification there is.
Heroin is also classified as a Schedule I drug — but, as Oliver notes, drugs like cocaine and methamphetamine don’t even get that distinction. They’re at Schedule II, a step down.
Many would find that assertion questionable at best, and Oliver is right there with you: “Marijuana is not a Schedule I drug any more than a hedgehog is an apex predator,” he notes.
3. Businesses need banks.
Federal law and state law clash hard when it comes to all the money that marijuana growers and sellers make.
“Legal marijuana businesses have struggled to get bank accounts, because at the federal level, they are still seen as criminal enterprises,” Olver notes. So if banks took their deposits, that could be seen as money laundering.”
So the businesses do everything in cash. Great, huge piles of cash. They use cash for payroll, for taxes, for everything — which is awkward to say the least, and doesn’t exactly scream “legitimate enterprise” to most folks.
“That is a shitty way to be forced to do business,” Oliver dryly notes. “On the suspicious scale, ‘cash-stuffed envelopes’ rank somewhere between ‘unfurled hundreds dusted in white powder’ and ‘a wad of damp ones containing a single pubic hair.'”
This has been a problem for years, as marijuana businesses slowly become legal around the country. For example, dealers in Oregon, Colorado, and Washington have to go through a complicated process to safely and legally pay their taxes in cash. It’s even more complicated for an entrepreneur who wants to grow a multi-state business, and after another wave of states voted to legalize marijuana use in 2016, Sen. Elizabeth Warren and others called on the Treasury Department to make it easier for legal marijuana businesses to do banking.
4. Federal tax code is actually kind of bonkers.
Marijuana businesses absolutely have to pay both their state and federal taxes. And as Oliver notes, this isn’t just because they’re businesses — it’s because our actual federal tax laws require you to report income from illegal activities.
The tax code, “even has provisions like, ‘If you receive a bribe, include it in your income’ and ‘If you steal property, you must report its fair market value,’ Oliver notes.”
Oliver is not making this up; you can read it yourself in IRS publication 17 [PDF], which specifies that, “Income from illegal activities, such as money from dealing illegal drugs, must be included in your income … if from your self-employment activity.”
The guide also helpfully includes information about when you do or don’t have to include a Pulitzer or Nobel prize in your taxable income. Just in case.
As Oliver points out, though, while marijuana businesses have a tax liability, they can’t take any deductions. In a clip, one marijuana business owner tells local media that his business’s tax burden could be higher than any profit his business could possibly make before Oliver notes that if you sell marijuana, your tax burden could be basically double that of any other kind of business.
5. It can be confusing, to say the least, for a consumer.
Oliver points to the story of one medical marijuana user profiled on CNBC, who had a legal medical marijuana use card from his state of residence but still was fired from his job after failing a drug test.
“Did you think because you had a medical marijuana card that you had license to go ahead and use it?” the reporter asks.
The man replies basically, well, yeah, who wouldn’t? “I was under the impression that we had passed a law and made it legal,” he reasonably replies, what with having had the actual state-issued license to do so.
“It’s frankly understandable that he thought he was doing nothing wrong,” Oliver observes. “The state had given him a license to use medical marijuana legally … and also he couldn’t turn to the Amercans with Disabilities Act for help, because that is a federal law and it doesn’t protect marijuana use.”
It’s frustrating, Oliver notes. “That’s like driving exactly the speed limit, then getting pulled over by a cop who tells you, ‘Sorry, the federal speed limit is three, and the legal age to drive is 62, and also, you have to be drunk. Surprise, you’re f**king under arrest now!'”
6. Scientists want to study marijuana better, but can’t.
Federal agencies want better scientific, peer-reviewed research on hand before they consider reclassifying marijuana, and scientists would love to give it to them.
But they can’t. Why? Because the feds restrict their access to the very substance they want to study.
There is one sole source of government-sanctioned marijuana, Oliver notes, who works for the University of Mississippi.
Researchers need to wait for years to get studies approved by three different agencies, even while individuals — like combat veterans — anecdotally continue to report that it can be extraordinarily useful for assisting with symptoms of PTSD and other conditions.
“For all the talk you hear about marijuana being a gateway drug,” Oliver says, in the case of one veteran’s testimony, “that gateway led to peaceful sleep, rigorous exercise, and community service. Pretty nice f**king gate, it turns out! Nice one to walk through if you get the chance!”
7. Under federal law, doctors can’t actually prescribe medical marijuana.
Several states have some kind of work-around for this, Oliver notes — but that continues to leave anyone at a federal hospital or federal medical care, like every single veteran in the VA system, high (…or not, as the case may be) and dry.
Federal law prohibits VA doctors from even mentioning marijuana, regardless of state law where they are and regardless of their own professional medical opinion about its potential use and benefits in a given case.
8. This may well get worse before it gets better.
The Obama administration, Oliver notes, stopped making it a priority to enforce federal anti-marijuana laws on folks legally using marijuana in states where it’s okay — at the state level — to do so.
Oliver refers to this policy as, “I’m not going to hassle you about this unless you make me,” an easing-off that isn’t the same as legalization, but that looks the other way when possible.
But those guidelines aren’t permanent — and new Attorney General Jeff Sessions really, really hates marijuana, and always has.
“Federal laws desperately need to be brought up to date,” Oliver concludes, and points out that Congress, which has formed a cannabis caucus, seems to agree.
“If even an 83-year-old Republican from Alaska has come around on this issue,” Oliver notes, showing a photo of Alaska Rep. Don Young, “then it’s probably time for our laws to catch up.”
One reason some TV fans are tempted to cut the cord? Having to pay for a whole slew of basic channels when all you really want to watch is a few. Those are the people Apple is after with a reported plan to sell HBO, Showtime, and Starz as a bundle.
According to Re/code, Apple is busy trying to talk those networks into becoming part of one standalone product that customers could access via iOS devices and Apple TV.
It’s unclear how much Apple would charge for a bundle, as HBO is currently $15/month, Showtime is $11/month, and Starz is $9/month.
While companies like AT&T and Dish sell web TV packages, Re/code notes, Apple has said in the past that it wouldn’t get into pay TV bundles. Apple has either changed its mind, or it just can’t resist the thought of all those eager Game of Thrones fans gearing up for a final season with the Starks, Snows, and Targaryens.
