Consumer Groups Urge Congress to Reject Trans-Pacific Partnership

Citing its potential to undermine important consumer protections, CFA and Consumers Union wrote to members of Congress earlier this month urging them to reject the Trans-Pacific Partnership if it comes up for a vote this year or in the future in its current form. “While we recognize the benefits that can flow to consumers from international commerce, we are concerned that the TPP as currently negotiated would unduly risk undermining important safety, health, and other interests of consumers,” they wrote.

The concern, they wrote, is that TPP goes far beyond traditional mechanisms for facilitating trade to address a wide range of so-called “non-tariff trade barriers,” which while they may be seen as imposing a cost on industry, provide benefits to consumers and the public. Using international agreements to reduce or remove these supposed “barriers” in the name of facilitating international trade makes them susceptible to undue influence from industry interests seeking to relax regulatory compliance requirements, they warned.

Examples include provisions that could allow international food shippers to challenge food safety inspection procedures at the border, enable pharmaceutical companies to challenge Medicare drug listing decisions and Medicaid reimbursements, and constrain future U.S. policy reforms aimed at reducing healthcare costs.

The risk that the TPP will become a vehicle for undermining important consumer protections is further exacerbated by the inclusion of the Investor-State Dispute Settlement procedure, or ISDS, the groups wrote. This procedure allows industry to bypass the established regulatory agencies and courts, and to demand compensation from governments in private arbitration tribunals based on claims that consumer protection rules are reducing foreign corporate profits.

“In the present-day era, it is simply not a realistic concern that one of the countries signing the TPP would move to arbitrarily nationalize the assets of a foreign corporation, or take other arbitrary action that amounts to expropriation, when they are trying to increase trade with us,” they wrote.  “The far more realistic concern is that corporations will use ISDS mechanisms to overwhelm the host government, by bypassing established legal and regulatory processes, or by threatening to do so as a means of intimidating the host government and extracting more lenient treatment, at the expense of public safety or other important consumer and public interests.”

“Trade agreements need to be sensitive to and protective of the interests of consumers, and not driven by, or predominantly shaped by, the interests of industry in overcoming, evading, or weakening legitimate regulatory requirements they face in the United States and around the world,” they concluded.

 

Action Needed to Reverse Increase in Off-Highway Vehicle Fatalities

With off-highway vehicle fatalities continuing to rise, CFA is calling on states to stop expanding on-road use of these vehicles. CFA and the Off-Highway Safety Coalition documented 335 off-highway vehicle (OHV) fatalities as of August 13, up 3 percent from the 324 fatalities documented as of August 13 last year.

“State and local decision makers need to stop expanding on road use of OHVs.  Permitting OHVs on roads signals to consumers that it is safe to do so—which manufacturers, the CPSC, and health and safety advocates all agree that it is not a safe riding practice,” stated CFA Legislative Director Rachel Weintraub in a press statement.  “Since more than half of all fatalities each year take place on roads, CFA urges lawmakers not to open up roads for OHV use. Reversing this trend will have a huge safety impact.”

“We hope that policy makers and reporters will make use of our data, which we are now compiling in easy-to-share infographics, to highlight the real world costs in lives of operating OHVs on roads,” noted CFA Senior Policy Advocate Michael Best.  “We also make reports from CFA and academics available on our OHV safety microsite which decision makers can use to inform themselves when considering a law or ordinance that will expand OHV on-road use.”

 

NAIC Stalls on Affordable Auto Insurance While FIO Acts

The National Association of Insurance Commissioners’ Auto Insurance Working Group, which is charged with studying “issues relating to low-income households and the auto insurance marketplace,” has failed to make any meaningful progress since it was established over four years ago, according to a letter sent to the Association today by CFA.

“Now, four years and many meetings later, this committee has almost nothing to show for its effort,” said CFA’s Director of Insurance Bob Hunter in a press statement.  “To say we are disappointed in the lack of progress deeply understates our view.  Our view is that your effort on behalf of the citizens whom you require to buy this insurance is shameful.  The failure of this Working Group to meaningfully focus on the real life challenges faced by lower-income working families who are forced to buy auto insurance but, in too many cases, are unable to afford it, brings us to the conclusion that the Working Group simply does not have the will to meet its original charge at all.”

CFA noted that the Federal Insurance Office (FIO) appears to be more committed to researching the issue of auto insurance affordability than the state-focused NAIC, despite the fact that states are the ostensible regulators of the insurance market. In July, FIO released a final definition of affordable personal automobile insurance, which 36 consumer, community and civil rights organizations have written to support.

“FIO has taken an important step, for the first time, by formally defining affordability for auto insurance,” the groups stated. “FIO has provided a well-reasoned and fully supported basis for its determination that auto insurance can be considered affordable in a community when the premium for the basic liability policy mandated by the state law is no more than two percent of the median household income for that community.”

CFA has been studying affordability in the auto insurance market for the past several years.  A summary of and links to CFA reports on auto insurance is available here.

 

Rising Number of Data Breaches Increases Threat of Identity Fraud

Data breaches are on the rise, with more than 630 in the United States between January 1 and August 31 of this year. That puts 2016 on track to exceed the 780 breaches reported by the Identity Theft Resource Center last year.

In light of the many serious issues raised by data breaches – both for consumers and the companies and government agencies who experience the breaches – CFA and its Identity Theft Service Best Practices Working Group have released a checklist, “My company’s had a data breach, now what? 7 questions to ask when considering identity theft services,” to help breached entities determine how best to respond.

“There are many issues to be addressed when a company or agency experiences a data breach. Should they offer identity theft services to breach victims? If so, how should they choose the provider and what features should they look for? The checklist covers these questions and more, explaining the range of services offered by identity theft service providers and how they can be customized to fit particular breach situations,” said CFA Director of Consumer Protection and Privacy Susan Grant.

The Working Group was formed to encourage identity theft service providers to follow good practices after CFA released a report in 2009 that identified problems with some companies’ claims and the lack of clear, accurate information about what they did, how they worked, and what they cost. With input from the Working Group, CFA has previously produced Best Practices for Identity Theft Services, which were updated last year, and a guide for consumers, Nine Things to Check When Shopping for Identity Theft Services.