February 8, 2016
Bloomberg BNA’s Banking Daily quoted Professor Jeff Sovern in an article, Financial Firms Watch, Wait on CFPB Move to Limit Arbitration. According to the article:
“I think they are very troublesome,” Jeffrey Sovern, a law professor at St. John’s University, in New York, said of the arbitration clauses. “Class action lawsuits are a mechanism to deter businesses from taking advantage of consumers in small amounts,” he told Bloomberg BNA, echoing a point made by Cordray in his speech.
A customer who is mistakenly charged $30 on his mobile phone bill is unlikely to file a claim in court or arbitration to get the money back, and such a case is too small to justify hiring an attorney, Sovern said. If that customer files a class action on behalf of a million customers hit with similar charges, that’s a $30 million lawsuit, and the dynamics have changed.
January 12, 2016
The New York Times published a letter from Professor Jeff Sovern on December 30 on debt collection and arbitration. Sovern wrote in part:
You show that debt collectors sue consumers in court when it suits them but bar consumers from bringing court actions by invoking obscure arbitration clauses in consumer contracts.
Businesses defend their right to do so because, they claim, arbitration is better than court for resolving disputes. But if arbitration is superior, why do businesses want to sue in court, rather than arbitrate, as your article shows and an empirical study confirms?
The answer is that businesses value arbitration chiefly when it enables them to block class actions so they may take advantage of consumers for small amounts without worrying about consumers suing them.
November 10, 2015
The Los Angeles Times quoted Professor Jeff Sovern in an article titled Using TiVo? Your personal choices may be going straight to advertisers. Consumer columnist David Lazarus explains:
If you’re a TiVo user, your digital video recorder may be ratting you out to advertisers.
In the latest example of consumer privacy being threatened by Big Data, TiVo’s number-crunching subsidiary this week announced a partnership with media heavyweight Viacom that helps advertisers target TV viewers with specific commercials.
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Jeff Sovern, a professor at St. John’s University School of Law in New York, called this an “unfortunate” way of getting subscribers to agree to having their personal information exploited for marketing purposes.
“Unless TiVo actually makes an additional effort to tell its customers what it is doing, probably many will think that information about their viewing choices is not being given to others, when it is,” he said.
October 27, 2015
LegalNewsline.com, a newswire covering state courts and attorneys general, quoted Professor Jeff Sovern in an article headlined Future of case against Best Buy could depend on if consumers are seen as gullible
. The story, which reported on a suit against Best Buy for refusing to honor an offer to sell $200 gift cards for only $14, stated:
Jeff Sovern, a consumer rights expert and law professor at St. John’s University, spoke with Legal Newsline about this case. He said the verdict will likely be determined by what is expected of consumers.
“It sounds like the Best Buy offer was a typo. Courts have sometimes held advertisers liable for not living up to a price printed in error,” Sovern told Legal Newsline. “False advertising laws generally focus on whether a consumer would have been deceived by the ad.”
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“My own guess is that a reasonable consumer would recognize that was a typo,” Sovern said. “But other laws ask whether the ad would fool the credulous consumer. Maybe a credulous consumer would have been deceived.”
October 15, 2015
West Academic Publishing has published the 2015 edition of Selected Consumer Statutes, co-edited by Professor Jeff Sovern, along with Professors Dee Pridgen and Christopher L. Peterson. The volume spans 1200 pages and is the most up-to-date collection of statutes, regulations, and other consumer law materials available for use in a consumer protection course or for practicing attorneys.
October 9, 2015
NBC.com’s “Consumer Man,” Herb Weisbaum, quoted Professor Jeff Sovern in the story FTC Sues Diet Pill Maker For Trying To Silence Unhappy Customers. Weisbaum wrote:
With the Internet, companies risk the possibility of getting a bad review that isn’t justified. But the solution isn’t to limit speech, rather to encourage more speech, said Jeff Sovern, a professor at St. John’s University School of Law in New York City.
“I think consumers are smart enough to realize that just because one or two people say they’re unhappy doesn’t mean the company is a bad company or selling a bad product,” he said. “And if the company is selling good products, presumably other consumers will say so on these sites and that will outweigh the ones who are unfairly maligning the company.”
Professor Sovern noted that for the free market to work as intended, people need to be able to warn others about bad products or services. Otherwise, how will other consumers know which products to avoid?
September 14, 2015
The National Conference of Bankruptcy Judges Endowment for Education has awarded Professor Jeff Sovern, along with St. John’s University Psychology Associate Professor Kate Walton, a grant to study consumer awareness of debt collection validation notices. The federal Fair Debt Collection Practices Act obliges certain debt collectors to notify consumers of their right to seek verification of debts. The grant will enable Professors Sovern and Walton to survey consumers to determine how well consumers understand various versions of the validation notice and how effective the notices are in communicating to consumers their rights. The two professors will collaborate on a law review article reporting the research.
April 3, 2015
The Pittsburgh Post-Gazette has published Professor Jeff Sovern’s op-ed, Consumers often sign contracts they don’t read or understand. The op-ed, which drew on research reported in the the article Professor Sovern wrote with Professors Elayne Greenberg and Paul Kirgis, as well as the University’s Director of Institutional Assessment, Yuxiang Liu, ‘Whimsy Little Contracts’ with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements, opens as follows:
Consumers often sign form contracts without reading them — if you don’t believe me, just drop by a car rental agency and watch what happens.
Consumers may have many reasons for not reading contracts, including that they are too long (the iTunes contract is 32 feet long when printed); that the contracts are incomprehensible (all that legalese); or that they can’t negotiate better terms.
March 23, 2015
Professor Jeff Sovern’s article, Can Cost-Benefit Analysis Produce Better Consumer Protection? Or at Least Benefit Analysis? has been published at 4 UC Irvine Law Review 1241 (2014), as part of a symposium on cost-benefit analysis. Irvine, a relatively new law school, is ranked for the first time this year in the US News rankings, and came in at 30th. Here is the article’s abstract:
Cost-benefit analysis is often troubling to consumer advocates. But this article argues that in some circumstances it may help consumers. The article gives several examples of supposed consumer protections that have protected consumers poorly, if at all. It also argues that before adopting consumer protections, lawmakers should first attempt to determine whether the protections will work. The article suggests that because lawmakers are unlikely to adopt multiple solutions to the same problem, one cost of ineffective consumer protections is a kind of opportunity cost, in that ineffective consumer protections might appear to make unnecessary adoption of effective ones. Ironically, such an opportunity cost is unlikely to be taken account of in cost-benefit analysis. Among the protections that especially risk failing to benefit consumers are laws that require consumers to perform certain tasks, such as disclosure laws that presuppose consumers will pay attention to and act on the disclosures; if consumers instead generally ignore the disclosures, the consumer protection will be largely illusory. Accordingly, before adopting measures that depend on consumers to do something, lawmakers should try to verify that consumers will in fact undertake those actions. The article also makes some suggestions for ascertaining whether consumer protections will work — i.e., benefit consumers — and concludes with a brief critique of the proposed Independent Agency Regulatory Analysis Act.