Spirit of Giving Gone too Far? In the season of giving, MasterCard was served with a consumer fraud class action lawsuit this week, and it’s all about giving baby! Yeah—charitable donations. Filed by a New Jersey man, the lawsuit claims the company continued to advertise a donation promotion after its donation goal had been met. Hmm.
Filed by plaintiff Robert Doyle, individually and for all others similarly situated, the MasterCard lawsuit alleges breach of contract, breach of good faith and fair dealing, and violations of the District of Columbia Consumer Protection Procedures Act.
According to the lawsuit, every year since 2011 MasterCard has run a marketing promotion related to Entertainment Industry Foundation’s Stand Up To Cancer program, in which MasterCard advertises it will give one cent to the program for each credit or debit transaction made by a MasterCard cardholder.
Under the terms of the program, a donation can only be made if the cardholders use a consumer or small-business card issued by a US financial institution, and the transaction is for a minimum of $10. Further, it must be made at a qualifying restaurant in the US. MasterCard advertised that it had a goal of reaching $4 million to be donated to the program.
However, according to the suit, in 2012, 2013, 2014 and 2015, MasterCard continued to advertise the marketing promotion after it had reached and knowing it had reached its maximum donation goal. MasterCard would only announce it had reached its goal once it reached a scheduled end date, even though it knew it would meet its donation goal before that date, according to the complaint.
Doyle and others in the class seek damages of more than $5 million, including punitive damages, injunctive relief, attorney fees, and costs of the lawsuit. The case number is 1:15-CV-09360-LTS, Southern District of New York.
Covert Ops Barbie? This is creepy—no matter how you dice it. Barbie is violating children’s privacy—well actually—that would be Mattel. The toy maker got hit with a proposed privacy violations class action alleging its new interactive doll, “Hello Barbie”, violates children’s privacy laws by recording their conversations with the doll without proper consent. OMG. Where do you start? Or perhaps—where does it stop?
According to the Hello Barbie lawsuit, named plaintiffs Ashley Archer-Hayes and Charity Johnson claim Mattel Inc. and interactive toy technology maker ToyTalk Inc. violate Children’s Online Privacy Protection Act by recording children’s voices during their conversations with the doll and storing them online without obtaining sufficient consent. The women also filed suit against kidSAFE, a seal-of-approval program that certified the doll as COPPA-compliant.
According to court documents, in December of this year Archer-Hayes bought “Hello Barbie” for her daughter. She registered it online and downloaded a smartphone app that would allow her to listen to, review and delete recordings the Barbie doll transmits to ToyTalk’s servers. However, several days later her daughter and her friends, one of whom is Johnson’s daughter, played with the toy at a Barbie-themed party, which recorded the voices of other children whose parents hadn’t consented to its use.
“Defendants knew or should have known that the ‘Hello Barbie’ doll, a toy directed at children six-years-old and over, would be used in the presence of and by children under thirteen, other than the child-owner of the doll,” the complaint states, “[and that] there was a great likelihood, if not a certainty, that in sharing and playing with the ‘Hello Barbie’ doll, children under the age of thirteen, other than the child-owner, would be recorded and such recording would be transmitted to ToyTalk’s cloud database for collection, maintenance, and use.”
According to the proposed suit, four classes of plaintiffs are proposed, specifically: Californians who have purchased the dolls for their children; Californians whose children’s voices were recorded without their consent; and nationwide classes in similar circumstances.
According to information on Mattel’s website, “Hello Barbie” is programmed with about 8,000 lines of kid-friendly dialogue, plays 20 games. The doll costs about $75. The doll records voices when kids press on its belt buckle and transmits them over Wi-Fi, the website says.
Wonder if Hello Barbie has a Twitter account…
The lawsuit suit alleges negligence, unjust enrichment, invasion of privacy and violations of California’s Unfair Competition Law, and it seeks unspecified damages. The case is Ashley Archer-Hayes et al. v. Toytalk Inc. et al., case number BC603467, in the Superior Court of the State of California, County of Los Angeles.
It may just be cheaper to keep your promises…Blue Buffalo Pet Products has agreed to pony up $32 million as settlement of a consumer fraud class action litigation pending against it and its subsidiary Blue Buffalo Company, Ltd. The lawsuit alleges, among other things, that certain Blue Buffalo products were not consistent with the “True Blue Promise.” The class action lawsuits brought on behalf of consumers and consolidated in the Multi-District Litigation pending in the United States District Court for the Eastern District of Missouri.
Under the terms of the Blue Buffalo agreement, Blue Buffalo will pay $32 million into a settlement fund to settle the claims of the plaintiff class. Any attorneys’ fees awarded by the court and all costs of notice and claims administration will be paid from the settlement fund. The amount that each class member who submits a claim for reimbursement will receive will depend on the total amount of Blue Buffalo products purchased by the claimant during the class period and certain other conditions.
Blue Buffalo denies any wrongdoing, (naturally) and has agreed to this settlement to eliminate the uncertainties, burden and expense of further litigation. The settlement agreement is subject to preliminary and final approval by the court.
Ok—that’s it for this week folks—see you at the bar!
Is Snooki snookered? And maybe those of us using Zantrex? Christmas is not a good time to get the news that your diet pills may be snake oil. But, really, it shouldn’t come as a surprise. Snooki, of “Jersey Shore” fame, is facing a federal consumer fraud class action lawsuit over allegations she promoted the diet pill Zantrex knowing that the pills don’t work. http://www.bigclassaction.com/lawsuit/snooki-zantrex-diet-pills-consumer-fraud-class.php
Basic Research LLC, Zoller Laboratories, three of their officers, and Nicole Polizzi aka Snooki are named as defendants by lead plaintiff Ashley Brady, who claims Zantrex combines caffeine with herbs that are “unsafe and ineffective for weight control or appetite suppression.” Brady further alleges that the three officers have been ordered to cease and desist selling fraudulent weight-loss products.
So re: the Snooki Zantrex lawsuit, here’s the skinny—(couldn’t resist that one) Brady alleges she bought a bottle of Zantrex-3 in 2010 after reading the label’s claims stating the drug would provide “546% More Weight Loss Than America’s #1 Selling Ephedra-Based Diet Pill,” and that it would make her lose weight “without diet and exercise.” (OK, what’s your first clue.)
According to the lawsuit, “Snooki represents … that Zantrex is safe and effective for weight loss and fat loss,” the lawsuit states. “These representations are false, misleading and deceptive because … Zantrex is neither effective nor safe for weight loss nor fat loss.” The complaint states that Snooki is the face of the Zantrex brand, promoting it on her websites, on YouTube, Twitter and Facebook, and in celebrity gossip magazines.
Basic Research bills itself as “one of the largest ‘nutraceutical’ companies in the United States, with annual sales revenues in excess of $50 million,” the lawsuit states. Further, all three officers have come under fire for similar fraudulent schemes in the past. Defendant Dennis W. Gay is a principal and director of both Basic Research and Zoller; the FTC enjoined him in a similar case weight-loss fraud in 2006, according to the lawsuit. Additionally, defendant Daniel B. Mowrey was also enjoined from this conduct by the FTC’s 2006 injunction, and defendant Mitchell K. Friedlander, with Basic Research received a cease-and-desist order from the US Postal Service in 1985, also involving allegedly fraudulent weight-loss products, and a second USPS order involving bogus breast enlargement products, according to the lawsuit.
What’s that expression—“it’s the company you keep.”
Ho Ho Ho Baby!
What is this? Instant Replay? Almost. Following on the heels of a huge settlement by Visa and Mastercard in an antitrust lawsuit brought by thousands of small businesses across the US, (see below), a consumer banking class action lawsuit has just been filed against four major banks alleging they conspired to fix “interchange fees,” attached to the use of those same banks’ credit cards.
Those additional fees have cost consumers billions, according to the allegations. But I’m getting ahead of myself…
Not to sound cynical, but the list of defendants shouldn’t’ come as a surprise. They are JPMorgan Chase & Co., Bank of America Corp., Capital One FSB and HSBC Bank USA NA. The allegations are that they conspired with credit card companies to arrange or ‘fix’ the swipe fees charged to customers when they use their credit cards. The credit care fee lawsuit contends this has cost cardholders (you and me)—are you ready for this—over $54 billion in illegal credit card and bank fees annually. That would fund a few retirement but not ours apparently. No surprise, the class action claims this “price fixing” is in violation of the Sherman Act and the California Business and Professions Code.
Filed by Melvin Salveson, Edward Lawrence, Dianna Lawrence and Wendy M. Adams, the potential class action seeks to represent a nationwide class of Visa and MasterCard holders.
The plaintiffs claim that they each purchased “thousands of dollars’ worth of goods and services and paid related Interchange Fees on Visa and MasterCard transactions at prices inflated by the Defendants’ price-fixing conspiracy over many years.” Further, because of these fees, the plaintiffs contend, they have purchased products at artificially inflated prices. According to the lawsuit, “This price-fixing conspiracy is ongoing and additional overcharge dollars are being extracted from Cardholders pursuant to the conspiracy every time they swipe their Visa and MasterCard payment cards.”
And—yes—there’s more—all this collusion has also resulted in a loss of competition from other cards, in that merchants were prevented, allegedly, from telling their customers that there were cheaper options when making a purchase
Entitled Salveson, et al. v. JPMorgan Chase & Co., et al., Case No. 13-cv-05816, in the U.S. District Court for the Northern District of California, the lawsuit claims “In furtherance of the conspiracy, Defendants and their co-conspirators also agreed to and have collectively imposed restraints on competition, such as so-called ‘Exclusionary Rules,’ ‘No Discount Rules,’ ‘No Surcharge Rules,’ and ‘Honor All Cards Rules,’ as well as Anti-Steering and other restrictions imposed upon merchants to the detriment of Cardholders,” the lawsuit states. The effect of these rules is such that merchants are prevented or prohibited from informing customers about the true costs associated with different forms of payments and from offering consumers an option to use a credit card with lower fees.
Specifically, “Through their common control of both Visa and MasterCard, Defendants and their co-conspirators have stifled competition between Visa and MasterCard and have thwarted competition from smaller competitor networks such as American Express and Discover,” the class action lawsuit states. “This reduction in competition among general purpose payment card networks has resulted in higher Interchange Fees, hindered and delayed the development and implementation of improved network products and services, and has lessened consumer choice.”
So these allegations, if proved true, would go along way to explaining how Visa and Mastercard can afford to pony up $5.7 Billion to settle an antitrust class action…but not everyone is happy with this settlement…
Visa & MasterCard Pay Up… A settlement has been approved in a credit card fees class action lawsuit, by a United States federal judge. The settlement is for an estimated $5.7B, between Visa Inc (NYSE:V) and MasterCard Inc . The lawsuit was brought by thousands of retailers who alleged the credit card companies fixed fees that are charged to merchants every time their customers made use of their debit or credit cards. Additionally, the lawsuit claimed that Visa and Mastercard prevented merchants from informing customers about other forms of payments that were considerably cheaper.
The judge’s approval came amidst objections from literally thousands of retailers who were complaining that this amount was inadequate. It is believed that this settlement is the largest in any United States antitrust class action.
The class action was initially brought against Visa, then Mastercard in 2005, with both companies accused of fee fixing. A fairness hearing was held in September. The original settlement amount was $7.2B but was reduced to $5.7B after thousands of merchants dropped out of the settlement deal. The updated Visa and MasterCard settlement provides for cash payments to merchants across the country and also permits then to start charging customers and additional fee whenever a Master or a Visa card is used.
The National Retail Federation’s general counsel, Mallory Duncan said in a statement that his organization which had opposed this deal was now reviewing the ruling that they are expecting to file an appeal.
Ok Folks, That’s all for this week. Happy Holidays, be safe, and we’ll see you at the bar in time for a toast to 2014!
How Greek is your Yogurt? In fact, is your yogurt even yogurt? If you’ve been buying Yoplait Greek yogurt from General Mills, there’s a consumer fraud class action lawsuit that alleges the giant food processor has been misrepresenting the product as being Greek and yogurt.
“Yoplait Greek does not comply with the standard of identity of yogurt,” the lawsuit states. “Indeed, Yoplait Greek contains Milk Protein Concentrate (“MPC”) which is not among the permissible ingredients of yogurt, non-fat yogurt, and low-fat yogurt (collectively “yogurt”) as set forth under the Food, Drug, and Cosmetic Act.”
The Yoplait Greek yogurt class action lawsuit also states “The use of MPC is financially advantageous to defendants.” It allows General Mills to manufacture more product at lower cost, and that’s why they use it in the production of the yogurt.”
If this leaves you stuck for breakfast options—may I recommend last night’s leftovers…
Card Sharks Caught. This is one for all you conspiracy theorists out there—it’s pay day! A preliminary $7.2 billion settlement has been agreed by credit card giants MasterCard Inc, and Visa Inc, making it the largest antitrust settlement in US history.
The MasterCard Visa settlement, if approved, would resolve lawsuits brought as far back as 2005 by retailers who allege the credit card companies fixed debit and credit card swipe fees. Swipe fees are a small percentage of the purchase price and are taken by the credit card companies on every transaction made using their cards.
According to the terms of the settlement, filed in federal court in New York, Visa will pay $4.03 billion and MasterCard will pay $2.02 billion to a class of merchants, including small businesses and stores.
Additionally, both Visa and MasterCard will also agree to cut swipe fees by 10 basis points (0.1 percent) for eight months, which amounts to an additional $1.2 billion in relief for merchants.
The settlement also allows merchants and stores to impose a “checkout fee” to pass onto consumers, which is limited by a cap. It’s your lucky day!
Also included in the proposed settlement are credit card issuers such as JPMorgan Chase, Capital One, and Bank of America. Time to switch to the dark side…
Sachs Sacked. Remember 2008—(how could you forget, right?) The collapse of the financial world as we knew it—and the institutions such as Goldman Sachs who were in part responsible? Well, in 2009 The Public Employees’ Retirement System of Mississippi filed a securities class action against the financial institution, alleging New Century Financial Corp, which originated a Goldman Sachs $698 million mortgage-backed securities offering, failed to adhere to its underwriting standards and overstated the value of the collateral backing the loans.
The fund claimed Goldman Sachs didn’t conduct proper due diligence when it bought the loans in 2005. If I’m not mistaken, that was the crux of the entire meltdown—lack of due diligence—on everyone’s part.
This week, a preliminary Goldman Sachs securities class action settlement was announced.
The lawyer representing the retirement fund told U.S. District Judge Harold Baer in a letter made public that both sides had accepted a settlement proposed by a mediator. Details of the agreement weren’t disclosed, according to a report by Bloomberg Businessweek.
The case is Public Employees Retirement System of Mississippi v. Goldman Sachs Group Inc., 09-cv-01110, U.S. District Court, Southern District of New York (Manhattan).
Ok—That’s a wrap. Happy Friday! See you at the bar!
Wynn Gambling with Employees Health? After all the noise about second hand smoke being a known risk factor for cancer, you would think the last thing an employer would want to do is wilfully expose its employees to the carcinogen. At the very least, why risk the lawsuit, right?
Wrong. The employees at Wynn Las Vegas Hotel and Casino filed a class action lawsuit this week, alleging that Wynn failed to provide a safe work environment for its employees and failed to protect them from the effects of second-hand smoke.
According to the suit, the risks are exacerbated for employees because not only is smoking permitted 24 hours a day, 7 days a week, but it is also encouraged. In some cases the casino gives cigarettes away to gamblers on the casino floor. What? That’s bad judgement no matter how you look at it.
The suit further claims employees that complain about the smoke risk losing their jobs. So, let’s see, you have to choose between risking your health or your livelihood. Or sue. Well—I’d choose the last option as well.
New Math on Big Bank Fees: Big Banks = Big Fees = Big Lawsuits = Big Settlements. At Read the rest of this entry »