Category Archives: Consumer Protection

News Report: HUGE Health Insurance Cost Increases

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From the LA Times, Blue Shield of California seeks rate hikes of as much as 59% for individuals,

Another big California health insurer has stunned individual policyholders with huge rate increases — this time it’s Blue Shield of California seeking cumulative hikes of as much as 59% for tens of thousands of customers March 1.
Blue Shield’s action comes less than a year after Anthem Blue Cross tried and failed to raise rates as much as 39% for about 700,000 California customers.
. . . Michael Fraser, a Blue Shield policyholder from San Diego, learned recently that his monthly bill would climb 59%, to $431 from $271.
“When I tell people, their jaws drop and their eyes bug out,” said Fraser, 53, a freelance advertising writer. “The amount is stunning.”
. . . Blue Shield said the cost of health coverage was being driven up by large hospital expenses, doctors’ bills and prescription drug prices. Blue Shield’s Epstein said other factors also contributed to the three increases in five months.

California needs to look into a statewide “single-payer” health care plan,

California Needs Fairness Doctrine

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Roy Ulrich of the California Tax Reform Association and Richard Holober of the Consumer Federation of California have written an important op-ed on the need to restore the Fairness Doctrine. They argue that the unlimited funds that big corporations can throw at California’s ballot initiatives — props 16 (the “PGE Initiative”) and 17 (the “Mercury Insurance Initiative”) in particular — are stifling the ability of opponents of these measures to be heard.
From their op-ed,titled California Needs The FCC To Restore The Fairness Doctrine,

Neither was able to get the legislature to do their bidding, so they hired political consultants, paid millions of dollars to gather signatures, and proceeded to put these self-serving measures on the ballot. Now, they are flooding the airwaves with well-crafted bunk.
… a core principle of the First Amendment’s guarantee of free speech is the ventilation and airing of opposing points of view.
There can be little doubt that the effect of broadcasters’ refusal to provide under-funded campaigns free response time since the repeal of the Fairness Doctrine for ballot measures in 1992 has been to increase the amount of one-sided information voters receive before entering the voting booth. This is hardly the kind of open and free debate the framers of our Constitution had in mind when they wrote the First Amendment.

It is time to restore the Fairness Doctrine so the non-wealthy can reach the public too.

Anti-Consumer Actions By Governor

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Just so you know, the Governor vetoed several pro-consumer bills, including one prohibiting retailers from selling out-of-date baby food and medicine, and another requiring financial institutions to tell you if your identity has been stolen.  He also signed several anti-consumer bills.

From the Consumer Federation of California:

“Pro” Consumer Bills Vetoed by the Governor

AB 1512 (Lieu) – would have prohibited a retailer from selling baby
food, infant formula, and over the counter medicine after the “use by”
date on its packaging. Citing the need for the bill, CFC stated,
“California consumers should have the right to purchase medications
that are safe and effective and parents and children deserve assurances
that their baby food is nutritional and healthy.”

SB 20 (Simitian) – would have required financial privacy security
breach notices to inform potential victims of identity theft about the
nature of the beach, and to include contact information for credit
reporting agencies.

AB 943 (Mendoza) – would have prohibited a prospective employer from
using consumer credit reports in the hiring process unless the report
is related to job duties.

AB 261 (Salas) – would have clarified that California students’
privacy rights allow limited access to student records by law
enforcement and election officials to further juvenile justice and
voter registration.

AB 811 (John Perez) – would have prohibited check-cashers from
manufacturing and selling false identification cards, or identification
cards that closely resemble a state drivers’ license card.

“Anti” Consumer Bills Signed by the Governor

AB 48 (Portantino) – will reinstate responsibility for oversight of
for-profit post-secondary educational institutions to an agency
unsuited for the task, and would establish standards that would permit
fraud on students.

AB 1200 (Hayashi) – weakens California’s “anti-steering” law by
allowing automobile insurance companies to persuade policy holders who
have chosen a repair shop to switch to a shop that may use inferior
parts or procedures.

SB 98 (Calderon) – Regulates life settlement industry, but requires
biased disclosures that do not inform insurance policy holders that
they may have better alternatives to surrendering a policy or allowing
a life insurance policy to lapse.

Schwarzenegger’s Talk Was Cheap

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Governor Schwarzenegger has talked about the need to act responsibly and pass a budget. 

So the legislature is trying to do just that.  According to the Sacramento Bee, “… the Legislature’s joint budget conference committee, on a party-line vote, adopted a plan that included about $2 billion in new oil production and cigarette taxes to help bridge a $24 billion budget gap.”

So what is the Governor’s response to a balanced approach to fixing the budget?

“Gov. Arnold Schwarzenegger said he wouldn’t sign a plan that was balanced with tax increases.”

He will shut down the state, close the schools, lay off thousands of workers, because the legislature balances the cuts with small tax increases on tobacco and oil companies.

This is known as “dancing with the ones who brung ya.”  The Republicans get elected with millions of dollars from big corporations, and that is who they answer to.  They will close schools, lay off police and firefighters, and keep elderly people from getting needed medical care or oxygen tanks delivered, just to protect the cash that is flowing to a few very large corporations.  From the referenced post,

If you look at the independent expenditure reports
for the 2008 California election you’ll see a massive amount of
last-minute money. …
you learn that this money came from corporations like Arkansas’
Wal-Mart, Blue Cross of Ohio (Ohio?), Reliant Energy, major real estate
companies, and from other PACs.

… huge amounts of money coming
from large corporations like Philip Morris, ATT, Chevron, Safeway,
Sempra Energy, Verizon, big insurance companies, big pharmaceutical
companies, big real estate companies … and other conduits like the Chamber of Commerce.

But think about this: it isn’t “corporations” who are doing this.  Corporations are just abstract concepts, really nothing more than a bundle of legal contracts and enabling laws. It is people — a few specific people.  When you hear that a corporations did something, it wasn’t Bob in Sales or Alice in Accounts Receivable who made decisions that affect your life like this, it was really a few people at the top who have control of the resources of that corporation.  The things they do are intended to benefit them personally, not to benefit the company.  This is why so many companies are destroyed while the executives get rich and then leave a mess behind.  Corporations are not the problem, it is the use of corporate resources to influence government that is the problem.

And this time, while we try to solve a budget problem that looks like it could shut down the state, it is a really big problem. 

Why Is ‘Pro-Corporate’ Called ‘Centrist’ And ‘Moderate’?

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A new block conservative Democrats in the Congress has formed what they call the Blue Dog Coalition.  Their objective is to block President Obama’s health care, energy and union organizing reforms.  This is pretty clearly an effort to attract corporate money; by announcing they have the power to stop Obama’s reform efforts, they can soak up millions from companies they would otherwise have to change their polluting or profiteering ways.

Robert Borosage of Campaign for America’s Future writes at Huffington Post,

“The new Senate Blue Dogs claim, of course, to be high minded
advocates of “fiscal responsibility.” But this is often a cover for
more parochial concerns. Nelson objects to the Obama budget because it
calls for moving to direct lending for student loans, saving billions
in subsidies to banks and using that money to pay for increased grant
aid. Nelnet, a leading student lender, will be hit badly by the change.
Its headquarters happen to be in Nebraska.

Kent Conrad argues piously that the deficits are too high, but that
doesn’t stop him for opposing Obama’s call to save billions by paring
the wasteful subsidies that go to agribusiness, leading contributors to
Conrad’s campaign coffers”

Meanwhile his organization has launched an effort to counter this, called Dog the (Blue) Dogs.

“It is time for progressives to “dog the dogs” — to call conservative Democrats in the House and Senate and tell them to not be lapdogs for the “Dr. No’s” on the right who want to obstruct the administration’s common-sense agenda.”

Their list includes the following California members:  Joe Baca (43), Dennis Cardoza (18), Jim Costa (20), Jane Harman (36), Loretta Sanchez (47), Adam Schiff (29), Mike Thompson (1).

Note that in the California legislature we have the same problem in the Senate (in
particular), with the self-identified “business Dems.” At the blog Down With Tyranny! Joshua Grossman wrote a while back,

“Meanwhile, the so-called “Business Dems” number almost half the
Democrats in the state legislature and constantly force the watering
down of progressive legislation if not ensuring its outright defeat.”

Here is my question.  Articles about the Blue Dogs seem to unfailingly label call these legislators ‘centerists’ and ‘moderates.’  A couple of examples: Centrists Flex Power of Veto and Moderate Democrats balking at Obama’s spending plans.  Why is this?  What is ‘centrist’ or ‘moderate’ about going against the will of the people and the results of the last election or two?  What is ‘centrist’ or ‘moderate’ about taking corporate cash and then voting for an agenda that enriches a very few at the expense of the rest of us?

 

California Government Is Good People But The System Is Designed To Fail

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I was in Sacramento for some meetings this week, and have a few thoughts and observations.

The first is the most important. The people in and around our government are good, dedicated people who are doing those jobs because they care and want to do the right thing.  You don’t make big money in public service.  In the last few decades a government job meant less pay than a comparable “private” sector job and a number of working-environment hassles, like the extra procedures (paperwork and bureaucracy) that are required in public positions to involve transparency and accountability.  And, of course, they have to put up with the Republican-inspired abuse of people who work for the government.  So give these people a break and assume good faith.

After decades of budget cutting our government is universally strapped
for resources and it makes for a difficult workday.  The things people
went into public service to accomplish are being stripped out from
under them by the state’s structured-to-fail system (see below).  I
hope the Bush years trigger some serious thinking about what things
would be like without a government, because we are getting close to
that possibility.

The state government is now structurally designed to fail — and this latest budget deal compounds the problem.  This situation was created on purpose by anti-government ideologues, usually corporate-funded.  Thus really is a choice between government by the people or government by a wealthy few who happen to be in control of large corporations.  To them government is “in the way” of making money.  Government means food and safety inspectors so people don’t get sick and workers don’t get hurt, and protecting workers and the public costs them profits.  Government means regulations stopping them from dumping stuff in the water or air and properly disposing of waste costs them money.  Government means regulations that make them pay back customers who are overcharges.  Government means regulations requiring delivering goods and services that were promised.  SO you can see why the hate government and regulation — they keep them from just taking your money and giving nothing back! 

So they have used the power that comes from their access to corporate resources to set up a state system that is giving them what they want.  They pay petition-gatherers to get anti-government initiatives on the ballot, and then they flood the TV and radio with lying ads that trick people into voting against their own interests — and here we are.

Here are just a few of our designed-to-fail structural problems: 

  • Term limits mean that thinking must be short term, and encourages passing problems along instead of solving them, because then the problems will be “not on my watch.” People who are effective in their jobs are forced out, and voters who want to keep them there are prevented from doing so.
  • The campaign-finance system puts corporate-backed candidates in office by necessitating big money to win elections.  And corporations, designed to amass resources, are perfect vehicles for pushing the interests of the few who control them. 
  • The two-thirds budget requirement means that a few anti-government extremists are able to sabotage the process, keeping any budget from passing and shutting down the state.
  • The disappearance of political reporting in California media means the state’s citizens are uninformed about what is going on.  The corporate-owned media concentrates on sitcoms and what Britney is wearing, and does not let the people find out what government is about.

These are just some of the structural problems, and the system is. of course, structurally designed to keep us from fixing them.  The only way we are going to address this is to get lots and lots of people involved.  The election of Barack Obama tells us this is possible but I despair at amount of work that will have to be done to accomplish it.   

Speak Out California Is Back Up And Running!

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One day your website is yours, and the next day it is someone else’s. Organizations, businesses and regular people are at the mercy of a confusing deregulated system.
A little over a week ago the Speak Out California website suddenly disappeared, and viewers instead saw a website full of advertisements.
We had no way of even knowing what had happened. It was just a surprise. One day typing “speakoutca.org” into a web browser took viewers to our website, the next day it took viewers to an ad site that someone else managed.
Some of us are more sophisticated and internet-savvy than most citizens so we were eventually able to track down some information. I’m not going into details here, except to say that no one at Speak Out California received any notice that this was going to happen. It took several days to even track down where the domain name (this is what internet addresses like speakoutca.org are called) had been registered, who had registered it, and contact info for the registrar. Then it took several more days to restore the domain name to us and get it working again.
Here’s the thing: the only way we were able to get this name back and get the site operating again is because some of us are much more internet-connected than most people. Most people would have no idea where to even start to look for information and help solving a problem like this.
This is certainly not an uncommon problem. My wife had a business named Dancing Woman Designs with a website at dancingwomandesigns.com, and then one day she didn’t. She received no notice, nothing. It was just there one day and gone the next and if she wanted it back it was going to cost her. It was going to cost her a lot. And so she doesn’t have dancingwomandesigns.com anymore and that address takes you to an ad site. A whole business that took years to get going and build is history now. It was wiped out in a minute because someone was able to get the web name.
A larger business is more likely to have the resources to hire the necessary experts to fight something like this. But it can be an expensive proposition and it can take time.
This is the difference between regulation and deregulation. Regulations protect regular people. Deregulation enables and protects scammers, schemers, and cons. The Internet is largely unregulated and is full of scammers, schemers and cons. Most of the businesses and organizations on the internet are good, honest, credible and legitimate but regular people are also left completely at the mercy of numerous cons, scams, schemes and rip-offs and the burden is on us to find a way to tell the difference.
We got Speak Out California back up and running. It only took us a week and a little money. But we are sophisticated, internet-savvy and connected — and lucky. Hmm … maybe some new legislation is warranted.

Does Arbitration Work For Citizens?

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Does your credit card or bank loan agreement have an “arbitration clause?” More and more consumer-oriented contracts and “agreements” have clauses specifying that disputes must go to arbitration rather than our civil justice system. The justification for this is that arbitration saves the time and expense of working within our legal system. But here’s the thing: the corporations choose the arbitrators and every arbitrator knows they will never, ever, ever, ever (ever) get another job if they rule against the corporations. Never.
And guess what: 98.8% of arbitrations end up in favor of the corporations. This is not a surprise.
The Progressive States Network’s newsletter has a story about this today, Arbitration: “Set up to squeeze small sums of money out of desperately poor people”,

The headline above is a quote from former West Virginia Supreme Court Justice Richard Neely, describing what his role was as an arbitrator at the National Arbitration Forum (NAF), a for-profit company hired to enforce mandatory arbitration clauses for credit card consumer loans. “NAF is nothing more than an arm of the collection industry hiding behind a veneer of impartiality,” says Richard Neely.
In a devastating expose by BusinessWeek, Neely and other former arbitrators describe an arbitration system stacked completely against consumers– a system where creditors win 99.8% of all disputes involving companies ranging from Bank of America to Sears to Citgroup. Arbitration clauses buried in the fine print of credit card offers means consumers lose the right to have disputes decided in an independent court and instead are forced into corporation-selected arbitration firms.

The BusinessWeek story mentioned in the Progressive States Network story is titled, Banks vs. Consumers (Guess Who Wins)
This story about credit card companies taking unfair advantage of consumers is one more attack on citizen rights to access our own legal system (one more of so many attacks). Think about what is happening here. First the big corporations fought against “regulations” which are the rules that We, the People set up requiring safe workplaces or environmental standards, or products that do not injure people, etc. Then when fewer regulations of course resulted in worker or consumer injuries or toxic spills or other harms the inured parties filed more lawsuits asking the companies to make good. So in response to these lawsuits the corporate-financed “tort reform” movement came along, working to limit the ability of citizens to be compensated for the results of corporate bad behavior. The result has been fewer regulations preventing harms and more restrictions on citizen access to courts where we can seek damages after we are harmed.
I didn’t even bring up the corporate-conservative movement to install their own business-friendly judges in the courts.
But even those erosions of our access to justice has not been enough for the greedy corporations. Now there is arbitration: clauses that show up in contracts and agreements that remove your ability to take a dispute to the courts at all! And the judges in these courts are dependent on the corporations for their livlihood!
Deregulation, tort reform and now arbitration that is rigged against the consumer. Drip, drip, drip. One after another the big corporations are eroding the rights of citizens.

Republicans Pretending To Govern

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A good op-ed appeared Saturday in the Boston Globe, America’s faux government. The writer discusses how many parts of our federal government seem to no longer be functioning.

They sent everybody home a long time ago, set timers to make the lights go on, and locked the doors. Government is so much more cost efficient if nobody actually does anything.

We read about drugs harming people while drug companies make huge profits — where was the Food and Drug Administration? We read about the Federal Aviation Administration asking the airlines to inspect themselves, and the airlines having to cancel so many flights because they didn’t,

Whoever is still pretending to work there must have made Employee of the Month.

Why is this happening?

So we’re now living in a Libertarian country, where the government doesn’t actually provide any services except defense. The problem? We’re paying taxes as if we live in a social democracy where the government provides all services except defense. They don’t need defense because they have found that if you stop teaching history in schools, people forget that you actually need it sometimes.
How can you tell that we are Libertarians now? Because business is not complaining all the time. When the government is actually showing up for work, business groups say that they are being Crushed By Overregulation. Choked by Bureaucracy. I haven’t heard a word of that in a long time, but it used to be the anthem of American business. OSHA, the Occupational Safety and Health Administration, was on the news every night – truly, every night. When was the last time you heard of OSHA showing up for a surprise inspection?

Please go read the rest.
The column is written partially as humor, but the reality is there. We elected people who hate government to run our government, and look what has happened. They said regulations are bad, inspectors are intrusive and oversight should be “voluntary.” The have stopped the regulators and inspectors and overseers from regulating and inspecting and overseeing.
The last several years saw the libertarian dream realized. Government was largely shut down. And what happened? Did this experiment bring “liberty?” Did the working person prosper in an “ownership society?”
No, what happened was what all the reality-based, experienced, practical people said would happen if we implement a libertarian system: the corporations immediately filled the vacuum and began to enrich themselves at the public’s expense. And when Katrina came around, people were left on their own.
So what do we learn from this? I think it is important to remember that “the government” is not some “they” that just showed up from nowhere and “tells us what to do.” The government is US, you and me and the rest of us, organized together to help each other. And it is up to US to keep an eye on things, for each other. When we listen to smiling hucksters who offer easy answers using nice-sounding words we ought to be extra careful. Tax cuts have brought us mountains of debt. Government cutbacks have brought us bad roads, bad schools and really, really bad disaster relief. And deregulation has brought us a corporate state.
Taxes, services, regulation and oversight have all become bad words. But now that we have performed the libertarian experiment we can see the consequences of this kind of thinking. It turns out that taxes are an investment in our future. It turns out that government services are us taking care of each other. It turns out that regulations keep the marketplace playing field level, which allows to enjoy the benefits of innovating businesses. It turns out that oversight keeps our government honest. And it turns out that conservative disdain for all of these didn’t make government better, it made government worse.

Private Greed vs. Public Good

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As I wrote the other day, the California Chamber of Commerce has come out with their annual list of “job-killer” bills. The list only targets bills by Democrats, and the bills are all acts that would help the people of California by improving the environment, worker wage and safety, public health, etc.
The California Chamber of Commerce is a lobbying association. They represent their members: businesses, many of which are large corporations. This is about private greed vs. the public good. The Chamber’s job is to convince the legislature to pass laws that enrich the owners of the corporations that fund them. Nothing more, nothing less.
If that involves convincing the public of something, then they do that. Hence the label “job killer.”
But the companies represented by the Chamber are the real job killers. They outsource jobs to other countries. They lay people off when they calculate it will maximize their profits. They employ as many people as needed to maximize the income to and wealth of their owners. Nothing more, nothing less.
The very idea that the Chamber of Commerce would care if something is a “job killer” is ludicrous when you understand their function. They are a lobbying association that represents the interests of companies that eliminate as many jobs as they want to, at their discretion, and then use some of the money that would have been paid in salaries to pay the Chamber to convince us to support their interests — and the rest of it to enrich themselves, which is their primary interest.
That is how corporations work in the modern, “free-market” world that we find ourselves in since the Reagan era. Not for the public benefit, not necessarily even for the company’s benefit, but for the financial benefit of the executives and (some of) the owners of the company.
Private greed vs. public good. Nothing more, nothing less.
So there isn’t really an argument about whether the “job-killer” bills on this year’s list really do or do not “kill jobs.” That is not the point of the label. Instead it is up to us to understand who we are hearing from. If we get caught up in arguing about whether these bills create more jobs than they might cost, we’re missing the point. Their arguments are propaganda with no basis in reality, designed to do nothing more than sway opinion. The point of the “job-killer” label is to make people afraid for their jobs, not to actually argue that these bills will or will not actually “kill” any jobs.
For example, a bill to require energy efficiency in new housing construction obviously creates many new jobs in the new, innovative “green” industries. But such a bill might lower the profits that go into the pockets of the executives and owners of some of the companies that the California Chamber of Commerce represents. (The LA Times on Wednesday said the Chamber’s agenda “seems dominated by development and energy interests”.) And, again, it is irrelevant whether the bill might or might not really cost jobs in some of those companies. The Chamber doesn’t care. That is not their function.
The use of the label “job killers” is about scaring the public. Nothing more, nothing less. It is about fear. It is about creating a climate in which people who are afraid for their jobs will go along with measures designed to enrich the owners of the companies that the Chamber — a lobbying association — represents.
So please don’t be fooled. Don’t be swayed by propaganda designed to make you afraid. As I wrote above, it is up to us to understand who we are hearing from.