uSantander’s Auto Loan Business Under Federal Investigationr

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  (Mike Mozart)

  Each year, Santander writes or services billions of dollars worth of auto loans and leases in the U.S., making it one of the nation’s largest providers of automobile financing. Yesterday, the company revealed that the Consumer Financial Protection Bureau is looking into whether Santander violated federal fair-lending laws.

  The investigation was revealed in Santander Consumer USA’s quarterly report filing [PDF], in which the company discloses that its practices are under the microscope of several federal and state agencies, including the Justice Dept.

  Back in Oct. 2014, Santander received a DOJ subpoena requesting the production of documents and communications related to the underwriting and securitization of nonprime auto loans since 2007. The company was also told to preserve and produce documents and communications related to its auto loan business since the beginning of 2011.

  Some of the investigations are already resolved with Santander and the DOJ reaching a deal in Feb. 2015 to pay more than $9.3 million to settle claims the lender improperly repossessed military servicemembers’ vehicles.

  The latest investigation comes from the CFPB, which notified Santander on July 31 that its investigation into alleged violations of the Equal Credit Opportunity Act had been referred to the DOJ.

  The CFPB has been looking into whether the lender overcharged customers, or treated them differently during the underwriting process, based on factors that are not to be taken into account when issuing a loan — things like race, religion, gender.

  In the middle of all these federal and state probes into Santander’s auto loan operations, Uber recently ended its two-year relationship with the lender. Since 2013, Santander had been providing financing to Uber drivers who could not afford to buy a new car.

  [via WSJ.com]

  
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by Chris Morran via Consumerist

uFlorida Domino’s Shuts Down Because Live Roaches Shouldn’t Be Near Foodr

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  This cat did not eat pizza from the Domino’s in question. (brandylee)

  If the thought of bugs crawling around in a restaurant kitchen near food terrifies you, it’s best to stop reading now. A Florida Domino’s had to shut down temporarily after inspectors say they witnessed more than 20 lives roaches crawling on a table on the cook’s line and hanging out in a bin of onions.

  State documents from the Division of Hotels and Restaurants say inspectors not only saw live roaches bustling around the kitchen, but another 20 dead bugs under a table and under the pizza oven, reports WFTS Tampa Bay.

  Inspectors issued a stop sale on that bin of onions, because um, live roaches, and found other violations including a hole in the wall and the absence of paper towels or a mechanical hand drying device near the hand wash sink for employees.

  Domino’s corporate says the whole thing was just bad timing, as the store was in the process of exterminating its vermin when the health inspector happened to drop in. The company says all stores “typically have exterminator service once every 4-8 weeks,” and on that day, the “store was being serviced by an exterminator service when the health inspector came by. He saw the process, and evidence of roaches, and closed the store until the extermination process was complete. The health inspector came back and reopened the store.”

  The company says the store was only closed for two hours. It’s unclear if any customers were at the restaurant or had ordered onions on their pizzas that day.

  Live roaches crawling in the kitchen at Domino’s Pizza temporarily shuts it down [WFTS Tampa]

  
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by Mary Beth Quirk via Consumerist

uLawsuit Alleges Uber Is Spamming Consumers With Illegal Textsr

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• The concept of ride-sharing service Uber is built around consumers’ use of mobile phones: the company sends text messages confirming the creation of an account, users hail a cab through the company’s app, and the company routinely informs customers their ride is on the way via text. While this may be convenient for Uber customers, a new lawsuit claims Uber is violating federal law by sending unsolicited texts to people who want nothing to do with the service.

  The complaint [PDF] was filed in federal court in Chicago on Friday. The plaintiff, who seeks to represent a larger class of consumers affected by the same issue, alleges that Uber’s practice of contacting potential customers via text messages and phone calls violates the Telephone Consumer Protection Act because the company does not ensure the accuracy of the telephone numbers it’s provided, leading consumers to routinely receive unsolicited messages from the ride-sharing service.

  As an ordinary business practice, when enrolling new customers Uber collects phone numbers and informs those consumers they can expect to receive text messages to the number provided.

  However, the lawsuit claims that the ride-sharing company doesn’t employ procedures to confirm the accuracy of the telephone numbers submitted by potential customers before dispatching text messages.

  As a result, the plaintiff believes that many of the numbers in Uber’s possession are inaccurate, resulting in the company routinely sending unsolicited text messages to individuals who never provided consent to be contacted, according to the lawsuit.

  That was the case for the Illinois woman who filed the lawsuit, claiming to have received at least nine unsolicited text messages from Uber since June.

  According to the lawsuit, beginning on June 14, she received messages from an Uber-identified phone number that read: “Your Uber account verification number is: 9274. Enter this in our app to confirm your Uber account.”

  Several days, later the woman says she received a similar message. Then in early August, she received at least six more text messages from the ride-sharing company.

  “At no time did Plaintiff attempt to acquire the Uber application, become a customer of Uber or otherwise use Uber,” the lawsuit states. “Moreover, at no time did Defendant confirm the ownership of the phone number to which Defendant was transmitting text messages or otherwise confirm that Defendant had obtained Plaintiff’s consent to send any such text messages.”

  The woman claims that Uber’s practice of sending unsolicited text messages violated consumers’ privacy and resulted in monetary losses, because individuals frequently had to pay for text messages and calls they did not authorize.

  The lawsuit seeks to obtain damages of $500 for each violation of TCPA for the all affected consumers and an injunction to prevent Uber from continuing all “wireless spam” activities in the future.

  [via Chicago Tribune]

  
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by Ashlee Kieler via Consumerist

uPhiladelphia Asks Comcast Why It’s Not Treating Its Hometown As Well As Other Cities?r

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  (knittinandnoodlin)

  Philadelphia is Comcast’s hometown. Its current skyscraper looms like a giant thumb drive over the city’s skyline and its second tower will only establish Comcast as the dominating corporate presence in Philly. And yet, when Comcast announced its first (and second, and third) markets for a new super-high-speed fiber network, it looked elsewhere. And in spite of the fact that Philadelphia is one of the poorest urban markets in the country, Comcast chose to test an expansion of its low-cost Internet Essentials program more than 1,000 miles away in Florida. With Comcast’s Philly franchise up for renewal, the city is finally asking why its supposed hometown hero is helping everyone else first.

  According to the Philadelphia Inquirer, the Philly City Council has drafted a pair of letters to Comcast addressing the shortcomings of service in the city and what the company plans to do if it wants to keep operating here.

  In April, the city released the results of a long-delayed customer service survey undertaken as part of the franchise-renewal process. For the most part, the results were not flattering for Comcast.

  Not only did customers complaint about bad service, long wait times, and questionable billing practices, but the report found that Philadelphians were paying more for their service than customers in other markets.

  So one of the letters from the City Council calls on Comcast to compare Comcast’s pricing in Philadelphia with that in other markets.

  And since Comcast is being generous with Internet Essentials expansion for the people of Palm Beach County, FL, which can’t possibly give the company the same tax breaks as Philadelphia, the city is also calling on the company to show that it has some hometown pride by providing free or low-cost broadband service to places like recreation centers, homeless shelters, women’s shelters, police and fire stations, prisons, and public parks.

  Perhaps most importantly, the city wants to know how Comcast can help Philadelphia school students bridge the digital divide, asking the company to make new investments in “hardware, software, service connections, staffing, and/or apprenticeship programs.”

  “City Council is treating this negotiation with great importance, and is hearing the voices of many stakeholders, including workers, teachers, seniors, people with disabilities, students, families, and everyday Philadelphians,” says Bryan Mercer, executive director of West Philadelphia’s Media Mobilizing Project, which has been highly critical of Comcast’s apparent negligence of its home city.

  “Comcast has benefited from many tax breaks in Philadelphia, the poorest big city in the United States,” continues Mercer. “If they want to be a part of our city thriving for another generation, Comcast needs to expand affordable Internet and cable to low-income communities and everyone who needs it; to protect workers and consumers, and to pay its fair share to public education in Philly – so our next generation of Comcast workers and tech leaders come from Philly and our schools – not Silicon Valley.”

  
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by Chris Morran via Consumerist

uBurger King Says Testers Found Its New Fiery Chicken Fries To Be “Spicy As $#*!”r

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• If there’s one thing big companies have learned, it’s that if you’ve got a good thing going, it’s best to just cling to that, and repeat it as many times as possible to achieve ultimate success. So not only is Burger King hoping to draft off its success with its chicken fries, it’s now jumping on the trend bandwagon and make them super spicy with new “Fiery Chicken Fries.”

  The fast food chain added chicken fries to its permanent menu in March, after they proved a successful temporary addition to the lineup. McDonald’s doesn’t have chicken fries, other chains have chicken, people like chicken — it makes sense for Burger King. It also gave the chain a 6.7% boost in same-store sales in the second quarter, notes Bloomberg.

  Another thing some people like is the experience of eating something incredibly hot and spicy, searing off your tastebuds and ravaging your mouth like wildfire. And when a menu item is described as something so spicy “it might actually offend you,” we can only imagine there will be mouth ravaging.

  The new menu item features fried chicken strips seasoned with cayenne and black pepper, and were designed to attract “spice seekers,” Eric Hirschorn, the burger chain’s chief marketing officer said in a press release.

  “More than a quarter of taste testers even told us Fiery Chicken Fries were “spicy as $#*!”, so when we heard that reaction we knew we had found the perfect level of heat,” Hirschorn says.

  Such language! That’s part of the whole thing, see? Burger King is quoting naughty language on purpose.

  “We wanted to make sure it delivered for people who like spicy food,” Hirschorn explains. “The idea is that it’s so spicy it might actually offend you.”

  The new fiery chicken fries come in boxes of nine for $2.89 and will be available for at least a month.

  
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by Mary Beth Quirk via Consumerist

uFrontier Airlines Claims To Save $1.9M By Eliminating Toll-Free Customer Service Callsr

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  (So Cal Metro)

  If you’ve ever run into an issue with your airline of choice, then you probably know one of the preferred ways to reach out to the carrier is through their toll-free customer service phone number. But that’s not the case anymore for Frontier Airlines, which has ditched its 800 number in order to cut costs. 

  The Denver Post reports that the airline recently eliminated its toll-free number in favor of a Salt Lake City phone number; a move the company claims will save an estimated $160,000 per month – or $1.9 million per year.

  So what exactly does the change mean for customers? Well, if you have a cell phone you’ll need to make sure you have enough available minutes before placing the call. And if you’re a landline user, you’ll be calling long-distance, which in some cases could cost more.

  Despite putting more of those costs on consumers, the airline say it plans to pass on its $1.9 million saving to passengers, but didn’t specify how that would happen.

  Some analysts say the move makes sense for the low-cost carrier, as many people have moved away from using traditional landlines in favor of wireless or VOiP calling plans that include long-distance calls at no extra charge.

  “This is the airline saying: ‘Why should we pay for something a lot of people don’t care about anyway anymore?’ Of course, some people will care,” Seth Kaplan, Airline Weekly analyst tells the Post. “But the ultra-low-cost model, which they’re mostly adopting, is all about not accepting any costs unless those costs clearly drive revenue, and this is one where they probably had a hard time figuring out where it was translating to meaningful revenue.”

  Still, others say eliminating the toll-free line could alienate some of the customers Frontier has courted in the past.

  “If you’re trying to attract people who are budget conscious or on a limited income — they could be college students, lower income working people and elderly people — it’s sending a conflicting message that ‘we are the airline for you, but we’re not here for you when you need us’,” Stephanie Brooks, director of marketing of communications at University of Denver’s Daniels College of Business, tells the Post. “It’s a cost savings that on its face seems like a good idea, but it’s really going to hurt customers in the end.”

  Frontier, of course, isn’t the first airline to do away with toll-free lines, other ultra low-cost carriers Spirit and Allegiant have previously ditched their 800 numbers.

  Frontier Airlines eliminates toll-free customer service calls [The Denver Post]

  
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by Ashlee Kieler via Consumerist

uColumbia House Improbably Still Exists, Files For Bankruptcy Protectionr

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  (Ed and Eddie)

  You might have the same reaction that we did to news that the company that owns Columbia House filed for Chapter 11 bankruptcy today: astonishment that it’s still in business at all. Our younger readers are probably just wondering what a “Columbia House” is. Yet the company still exists, and business isn’t quite where it was at the company’s peak in 1996.

  Here is how music and movie clubs worked in their heyday: to entice new members, they would promise an armful of albums or movies as a promotion to sign up new members, which were the “8 CDs for 1¢!” ads that readers over 30 or so may remember. Every month, you would receive an order form with the club’s selection for your favorite genre of music, which you could decline if it didn’t interest you, and a curated catalog of media that you could buy if they did interest you.

  Members were obligated to buy a certain number of albums at full price. Columbia House licensed albums and manufactured LPs, 8-tracks, tapes, and CDs itself instead of buying them from normal distribution channels. Their video business worked the same way.

  The current owner’s name is Filmed Entertainment Inc., which makes sense when you remember that the DVD club is the only surviving part of the business. However, the Wall Street Journal reports that business isn’t that great anymore: FEI says in its bankruptcy filing that it took in only $17 million last year.

  In the understatement of the decade, the company’s director explains:

  This decline is directly attributable to a confluence of market factors that substantially altered the manner in which consumers purchase and listen to music, as well as the way consumers purchase and watch movies and television series at home.

  Yep. Columbia House ditched their CD business back in 2010, and actually had no more employees in their DVD distribution business. The manufacture and shipping of DVDs is all outsourced.

  The company has about $63 million in debt, almost half of which is pension liabilities. The company is looking for a buyer for its core business, since $17 million is a respectable income and there are clearly people who still enjoy owning DVDs. The business has been sold three times in the last ten years, and they report having a few interested potential buyers already.

  If you’ve ever wondered about the inner workings of Columbia House, you should check out the documentary The Target Shoots First, Chris Wilcha’s chronicle of his time working at Columbia House in the ’90s, released shortly before the CD business model imploded. He’s made it available to view for free on Vimeo, and we’ve embedded it below in case you have the next hour and a half or so free. He worked there at a key time in music industry history: marketing CDs to young adults right before young adults began downloading MP3s in massive quantities.

  Fat Lady Sings for Columbia House [Wall Street Journal]

  FURTHER READING AND VIEWING:
  Four Columbia House insiders explain the shady math behind “8 CDs for a penny” [The A.V. Club]

  The Target Shoots First from Chris Wilcha on Vimeo.

  
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by Laura Northrup via Consumerist