uCFPB Reminds Retailers They Can’t Accept Military Allotments For Certain Purchasesr

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  (Hammerin Man)

  Allotments allow military servicemembers to automatically direct some of their paycheck to parties of their choosing, ideally for savings, insurance premiums, housing payments, and support of dependents. Until recently, allotments could also be used to make retail purchases, but such transactions weren’t covered by many of the legal protections that come with traditional payment methods like electronic checks and debit cards. Recently enacted rules now prohibit the use of allotments for buying personal property, and federal regulators are reminding retailers they have to follow the law.

  The Consumer Financial Protection Bureau sent letters to several companies that sell retail goods to military servicembmers to ensure that their website, ads, and marketing materials don’t violate the new rules.

  The new protections from the Department of Defense are intended to eliminate the aspect of the allotment system most prone to abuse by unscrupulous lenders that prey on servicemembers.

  Consumerist reported on one such company last year, when the Consumer Financial Protection Bureau took action to stop USA Discounters from taking advantage of underpaid soldiers by charging exorbitant fees, suing them when they fell behind on payments and skirting the Servicemembers Civil Relief Act (SCRA), which gives active duty servicemembers the right to defend themselves but does not specify where lawsuits must be filed.

  The retailer, which has locations near 11 military bases, advertised its always-approved credit offers to members of the military with bad credit or no credit history as a way to entice them to purchase items such as computers and televisions.

  While the Bureau didn’t specify which retailers received the recent reminders, a sample letter [PDF] provided by the CFPB shows that some companies allegedly continue to make marketing claims that suggest they engages in unfair, deceptive, or abusive acts or practices.

  “According to your website,[redacted] seems to be offering active-duty servicemembers the option to repay loans by military allotment even after January 1, 2015, when the Department of Defense prohibited servicemembers from allotting their pay to buy, lease, or rent personal property. We have not determined whether your conduct violates the CFPA, but we urge you to review your practices to ensure that you comply with all relevant laws,” the sample letter states.

  The Bureau says in a statement that the letters are not a finding or a ruling that the recipients have violated the law.

  However, it did reiterate that providing any misleading information given to servicemembers about payment options and allowing servicemembers to pay by allotment when prohibited by the Department of Defense also constitutes unfair, deceptive, or abusive acts or practices in consumer financial products or services under the Dodd-Frank Wall Street Reform and Consumer Protection Act, for which the Bureau can take action.

  “Companies that are still advertising repayment via military allotment may be violating the law,” CFPB Director Richard Cordray said in a statement. “Companies should give consumers accurate and reliable information so they can make the best decisions for their own financial situations. We will continue our work protecting servicemembers and promoting a fair and transparent marketplace for all consumers.”

  In the past, the CFPB has gone after operations that receive payments from servicemembers, largely through the military allotment system.

  Last December, the Bureau ordered three companies – Freedom Stores, Inc., Freedom Acceptance Corporation, and Military Credit Services LLC – to provide over $2.5 million in consumer redress and to pay a $100,000 civil penalty for allegedly using illegal tactics to collect debts, including filing illegal lawsuits, debiting consumers’ accounts without authorization, and contacting servicemembers’ commanding officers.

  Virginia-based furniture and electronics store, Freedom Stores (also known as Freedom Furniture and Electronics) operated a number of retail locations near military bases across the nation.The company offers credit to buyers but then transfers those contracts to an affiliated company, Freedom Acceptance Corporation.

  CFPB Cautions Military Lenders Against Illegal Military Allotment Practices [CFPB]

  
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by Ashlee Kieler via Consumerist

uEx-Lottery Worker Convicted Of Rigging The System So He’d Win $14M Jackpotr

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  (Lisa Brewster)

  There’s a very obvious reason why lottery employees aren’t allowed to play for prizes like the rest of the country in many states, as they could have an obvious advantage when it comes to figuring out how to reap big rewards. As such, one ex-lottery worker from Iowa (where it’s illegal for lotto employees to play) has been convicted of rigging the system, fixing it so he could buy the right numbers and win a $14 million jackpot.

  Those ill-gotten gains were never actually gotten, reports the Associated Press, as prosecutors said the man tried and failed to have others collect his winnings to avoid detection in the scheme.

  The former lottery security official with the Des-Moines based Multi-State Lottery Association was found guilty of rigging a computerized Hot Lotto game, after prosecutors said he installed a program into the computer in 2010 that randomly chooses winning numbers and then deleted it to cover his tracks.

  Prosecutors alleged that he then bought the same numbers that he’d programmed into the lottery computer a month before, and gave the ticket to a friend in Texas. That friend got in touch with attorneys in Canada and Texas in an attempt to cash the ticket without revealing the identity of the original ticket buyer, but because Iowa law requires jackpot winners to be identified, he never got the money.

  He was charged with two counts of fraud, and was found guilty today after a jury deliberated for five hours. He’s now facing a maximum of five years in prison on each count, but his lawyer says he will appeal, based on a lack of sufficient evidence.

  Ex-lottery worker convicted of rigging system to win $14M [Associated Press]

  
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by Mary Beth Quirk via Consumerist

uWalmart’s Getting Really Sassy About Amazon Prime Dayr

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  (Ben Schumin)

  While the Internet mocked Amazon’s new shopping holiday, Prime Day, and waited for a cheap large TV that they had no chance to buy, competing mega-retailer Walmart declared their own day of deals. Now that Prime Day has passed, Walmart is still making fun of the weaknesses of Amazon’s event.

  At first, Walmart mocked one basic difference between their own business model and Amazon: customers don’t have to pay $100 for a Prime subscription (or sign up for a “free trial” that they might forget to cancel) to gain access to Wally World’s deals.

  Now that the event is over, Amazon says that in spite of public derision and complaints, they sold a lot of stuff. That’s great. Walmart is still making fun of the perceived weaknesses of Prime Day, though. Reader Chris sent over this screen grab from the front page of Walmart’s mobile site this morning.

  

  Very funny, Walmart, but if anyone knows how to haul junk out of the warehouse and call it a “deal,” it’s you.

  
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by Laura Northrup via Consumerist

uEveryone Likes Free Office Food Because We’re All Basically Cave Peopler

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  It’s Marlene’s birthday. You know, Marlene from accounting? (Faded Photograph)

  All it takes is a single email with the words “free food” in it and an entire office can be brought to its feet, sending workers scurrying toward the communal area and a chance at a handout. From cupcakes to pizza, the thought of getting something for nothing is a tempting one — even if you don’t know whose birthday it is or why there are free subs in the conference room. This, because we’re all just trying to survive, just like we did when we lived in caves.

  Though cave people didn’t have offices or email, they sure knew how to appreciate food when it was available for the taking, in order to survive. That instinct could be one reason we all go running when there’s grub up for grabs, reports the Huffington Post.

  “It’s reminiscent of survival kicking in,” Dr. Steve Terracciano, a board-certified cognitive and behavioral psychologist told HuffPo. “Food can bring out something primal in people.”

  Obviously, if an email went out notifying workers that leftovers or samples would cost something, it’s likely that not many people would run quite so fast as when free food is literally on the table.

  Some of this behavior is also learned — think piñatas at birthday parties, or Halloween traditions that have kids scrambling for candy to make sure they can get as much as they can.

  “Part of all of this is how you’ve learned to participate with groups of people,” Terracciano said.

  It’s not all greed, however, as HuffPo cites a clinical psychologist who notes that eating together is a communal experience, one that extends to the office environment.

  “Breaking bread together is a sign of trust,” Dr. Chloe Carmichael explains. “Sharing a meal together does help people to bond. It facilitates communication, trust and a shared sensory experience.”

  Until there’s only one piece of free pizza left. Then everyone finds out how strong that workplace bond truly is.

  Why You And Your Co-Workers Go Absolutely Nuts For Free Office Food [Huffington Post]

  
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by Mary Beth Quirk via Consumerist

uInstagram Is Sorry For Taking Account Away From User, Giving It To Famous Soccer Starr

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  (anekphoto)

  Though it’s not uncommon to find squatters camped out on the accounts of famous people social media sites like Instagram and Twitter, what happens if you’re a real person with a real social media presence, and you just happen to share a name with a celebrity? You might just get the boot, at least until you can plead your case.

  One average guy found himself booted from Instagram recently, despite the fact that he hadn’t done anything wrong — he wrote on Medium recently that his photos are all of his kids and other ordinary shots — so he was confused when Instagram told him he’d been blocked from his account for violating its Terms of Use.

  The thing is? He shares a name with a famous Spanish soccer star named Andres Iniesta, the captain of FC Barcelona and a player on the national team. Non-soccer star Andres Iniesta soon found that after he lost access his @ainiesta account, it began to populate with photos of the soccer player.

  Did that mean Instagram hadn’t bothered to verify whether he was a real person or a squatter, and just assumed it should belong to a famous person? It seemed so, non-soccer Iniesta thought.

  After he tried contacting the company to reinstate his ownership of the account and got no response, he wrote about his experience on Medium and subsequently got a happy ending to his tale of appropriated identity.

  “We made a mistake here and restored the account as soon as we learned about it,” Instagram said in a statement to Gizmodo. “Our apologies go out to Mr. Iniesta for the trouble we caused him.”

  Soccer star Iniesta’s team also reached out during the ordeal and assured him the player wasn’t behind the seemingly shady move. His account has been relocated to @andresiniesta8, and has already racked up more than five million followers.

  How Instagram closed my account and gave it to a football celebrity. [Medium]

  
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by Mary Beth Quirk via Consumerist

uAirbnb To Get Serious About Attracting Business Travelersr

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• In some cities, it’s much less expensive to find a room on Airbnb than it would be to rent out a hotel room. Yet most business travelers still choose to stay in traditional hotels, partly because their employer won’t allow them to or because they think they will have difficulty expensing the rental. After a year of seeing growth in this area, Airbnb is launching an improved experience for business travelers in the hopes of getting some of that sweet expense account money.

  Just this year alone, more than $300 billion is expected to be spent on business travel in the U.S., so even a sliver of that pie is a substantial amount of money.

  Since launching its Airbnb for Business program a year ago, a number of companies — especially Silicon Valley tech companies that need to house visiting employees or consultants for weeks or months at a time — has seen increased demand. The current system, which involves travelers entering unique coupon codes for participating businesses, and then manual invoices being sent out by Airbnb each month, is not sufficient, especially if Airbnb wants to attract more people.

  Thus Bloomberg reports that the new business travel system will include a centralized billing system and a dashboard for managers at travelers’ employers to track employee spending.

  The hope is that the more streamlined experience and interface will convince more employers to give Airbnb a shot.

  “Corporate travel is a big part of the travel pie; it’s worth a lot of money,” co-founder and chief technology officer Nathan Blecharczyk tells Bloomberg. “We’re further along there on our leisure side than our business side.”

  Many frequent business travelers will still want the known comforts and amenities of hotel rooms, but Airbnb believes there’s a demand for non-traditional lodging, especially for longer-term rentals.

  
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by Chris Morran via Consumerist

uAmazon’s Apparel Sales Could Surpass Macy’s By 2017r

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  (m01229)

  While Amazon used to be the site where you bought affordable books, CDs, DVDs, and electronics, the online retailer is quickly gaining ground as a seller of designer apparel and accessories.

  In fact, analysts estimate that Amazon’s now booming apparel business could lead it to surpass Macy’s as the top retailer of such goods in just two years, Business Insider reports.

  Analysts from Cowen Group say that the e-retailer’s thriving foray into apparel – especially when it comes to handbags and jewelry – could soon make it the top apparel retailer, despite the fact it has no physical stores.

  Amazon’s rise to the top of the retail ranks has been made possible, in part, because the company doesn’t have to pay costs associated with bricks-and-mortar locations, something other retailers spend a significant amount of money on. As a result of skirting those costs, Business Insider reports, the company can often lower prices for apparel items, creating a more appealing environment for shoppers.

  Making matters worse for traditional department stores is the fact that consumers are spending about 1.5% less on clothing and accessories than they have in previous years, according to analysts from Seeking Alpha.

  Business Insider reports that the decrease in spending has been linked to consumers’ changing habits, including increased expenses in other areas such as rent, cellphones and other personal services – a trend that could continue to hurt department stores in the future.

  Amazon is becoming Macy’s biggest threat [Business Insider]

  
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by Ashlee Kieler via Consumerist