March 28, 2016
Jeff Sovern
Professor Jeff Sovern was quoted by Bloomberg News in an article titled Ted Frank: Lightning Rod for Class Settlement Storms. According to the article:
Objectors bring advocacy into an inherently non-adversarial setting, Jeff Sovern, a professor at St. John’s University School of Law, in Jamaica, N.Y., told Bloomberg BNA.
“When parties settle, both sides have a stake in making arguments for approval of the settlement, which means that unless a class member or ‘watchdog’ criticizes a class action settlement, the court may not hear the arguments against it, and the adversary system may not function as it is normally does,” Sovern said in an e-mail.
Sovern was also quoted in a Law360 article, CFPB Pushes Bounds On Using Enforcement As Guidance. That article stated:
There is precedent for agencies using enforcement actions to help define what a statute means.
The FTC, for example, only formalized its guidance for what constituted unfair practices under its UDAP authority in 1980, decades after it was granted the authority to police firms for such actions.
Doing so gave the FTC flexibility to find unfair practices and get a more useful vision of how to prevent them, said Jeff Sovern, a professor at St. John’s University School of Law. And the CFPB is doing something similar, he said.
“When dealing with a relatively new legal standard, like the bureau’s powers to curb abusive acts, it helps to let the law develop for a while before freezing it in a rule like a fly in amber. That way, lawmakers can see how best to interpret the law,” Sovern said.
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February 8, 2016
Jeff Sovern
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.
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November 16, 2015
[C]ompanies can use class action waivers to block consumer protection laws unless consumer protection laws find a way to block class action waivers.
* * *
Last month, the bureau made public a proposal to block class action waivers in arbitration clauses. A leading advocate for arbitration in the financial industry, Alan Kaplinsky, responded with [a] forecast of how the industry would respond: “We firmly believe that, should the CFPB enact its proposal to ban class action waivers, most companies will abandon arbitration with the result that arbitration will no longer be available as a quick, efficient and inexpensive way of resolving disputes.”
But if the industry truly believes that arbitration is so much better than litigation at resolving disputes, shouldn’t it prefer arbitration to litigation for resolving individual disputes, where there is not a threat of a class action? Or should we be shocked, shocked, to discover the industry’s love of arbitration is about barring class actions?
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November 10, 2015
Jeff Sovern
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.
* * *
Is this arrangement fair to TiVo users? They apparently have no choice except to cancel their service. TiVo’s privacy policy states that the company “may work with third-party advertising companies that collect and use information to deliver more relevant advertising.”
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.
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October 27, 2015
Jeff Sovern
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.”
* * *
“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.”
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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?
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September 14, 2015
Jeff Sovern
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.
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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.
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March 23, 2015
Jeff Sovern
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.
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March 18, 2015
Jeff Sovern
The Los Angeles Times quoted Professor Jeff Sovern in an article, Credit-reporting firms’ accuracy push? Finally — but it’s still not enough. The article, discussing the settlement between the big three credit bureaus and New York’s Attorney General, states:
Last week’s settlement is a step in the right direction. But it doesn’t go far enough.
“These companies still have a lot of power,” said Jeff Sovern, a law professor at St. John’s University in New York. “The Fair Credit Reporting Act favors credit-reporting agencies and creditors over consumers.”
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