Consumer Protection Law Commons^™

Consumers, Seller-Advisors, And The Psychology Of Trust, Justin Sevier, Kelli Alces Williams

Boston College Law Review

Every day, consumers ask sellers for advice. Because they do not or cannot know better, consumers rely on that advice in making financial decisions of varying significance. Sellers, motivated by strong and often conflicting self-interests, are well-positioned to lead consumers to make decisions that are profitable for sellers and may be harmful to the consumers themselves. Short of imposing fraud liability in extreme situations, the law neither protects the trust consumers place in “seller-advisors,” nor alerts them to the incentives motivating the advice that sellers give. This Article makes several contributions to the literature. First, it identifies and defines the ...

Computer As Confidant: Digital Investment Advice And The Fiduciary Standard, Nicole G. Iannarone

Chicago-Kent Law Review

Digital investment advisers are the fastest growing segment of financial technology (fintech) and are disrupting traditional investment advisory delivery models. The computer-led investment advisory service model may be growing particularly quickly due to a confluence of social and political factors. Politicians and regulators have increasingly focused on the standards of care applicable to investment advice providers. Fewer Americans are ready for retirement and many lack access to affordable investment advice. At the same time, comfort with digital platforms have increased, with some preferring electronic interaction over human interaction. Claiming that they can democratize retirement service by pro- viding advice meeting ...

The Rise Of Automated Investment Advice: Can Robo-Advisors Rescue The Retail Market?, Benjamin P. Edwards

Chicago-Kent Law Review

Different types of financial advisers serve the massive and widely dispersed retail investment market. In a market riddled with conflicts of interests, many advisers exploit retail customers by pitching suboptimal products, leading to lower investment returns and lower overall growth—but also to greater profits for the financial advisers collecting kickback-style commissions. New financial technology firms, commonly known as Robo-Advisers, may disrupt this market and these exploitative practices. Still, these potentially disruptive automated investment advice firms face significant regulatory risks.

Fintech: Antidote To Rent-Seeking?, Jeremy Kidd J.D., Ph.D

Chicago-Kent Law Review

Innovations in financial technology, or Fintech, has been ongoing for decades but has recently begun to accelerate. Some observers have argued that it will soon begin to outstrip the ability of regulators to keep pace. If those predictions are accurate, what would the world look like with a financial sector that cannot be effectively regulated? One possibility—drawn from public choice economics—is that rent-seeking will be inhibited or eliminated. Rent-seeking is the distortion of law and regulation for the benefit of special interests, who expend resources to guarantee those distortions in their favor. Rent-seeking is inefficient and inhibits growth ...

Regtech, Compliance And Technology Judgement Rule, Nizan Geslevich Packin

Chicago-Kent Law Review

This Article focuses on the rise of Financial Technology, which revolutionized consumer financial service products, and challenged policymakers with regulating the rapidly evolving financial industry. In particular, it explores Regulatory Technology, also known as RegTech, which is the finance industry’s use of technology, especially information technology, in the context of regulatory monitoring, reporting and compliance. RegTech is designed to solve industry needs for a more effective and efficient way to automate corporate governance and compliance processes. Not only has FinTech proven to be a vital revenue source, especially in connection with lending or money transmission services, but it also ...

New Art For The People: Art Funds & Financial Technology, Brian L. Frye

Chicago-Kent Law Review

Fine art sales have reached record levels, with the global art market achieving annual sales of over $60 billion. However, the art market is extremely risky and the most lucrative investment opportunities are typically at the high end of the market. In recent years, financial industry professionals with an interest in the art world have increasingly formed art investment funds, intended to enable smaller investors to take advantage of the opportunity to invest in the art world and diversify their portfolios. Some art funds also allow art investors to borrow against certain assets. About 45 art investment funds currently exist ...

Fintech's Double Edges, Christopher G. Bradley

Chicago-Kent Law Review

This symposium essay examines the double-edged nature of financial technologies in financial transactions, especially transactions involving consumers. There are both benefits and risks—often undiscovered or hidden at first—in each new round of financial technologies. A FinTech tool may benefit consumers and then, applied later or in a different context, threaten consumer interests; a tool that harms consumer interests may then lead to development of a tool that favors them. This double-edged nature is an important but unappreciated structural feature of financial technologies. From the perspective of consumer protection, then, FinTech can neither be fully embraced as friend nor ...

The Promise And Perils Of Algorithmic Lenders’ Use Of Big Data, Matthew Adam Bruckner

Chicago-Kent Law Review

Tens of millions of Americans lack access to traditional forms of credit and must rely on payday and pawn loans instead. “Algorithmic lending 2.0” promises to enable fintech companies to lend to those excluded from traditional forms of credit. Version 2.0 algorithmic lenders claim to use Big Data and machine learning to increase credit access by making better predictions about prospective borrowers’ creditworthiness and decreasing the cost of credit. Supporters also claim that algorithmic lending 2.0 removes human bias from the financial services sector. Detractors have cast doubt on both claims, arguing that there is scant evidence ...

Time Bandits: The Seventh Circuit Gets It Wrong By Allowing Debt Purchasers To Escape Fdcpa Liability For Filing Time-Barred Proofs Of Claim In Chapter 13 Bankruptcies, Jeffrey Michalik

Chicago-Kent Law Review

Debt purchasers can use debtors’ bankruptcies to profit from stale, otherwise unenforceable debt. Although state statutes of limitations bar legal enforcement of this debt, predictable breakdowns of the bankruptcy process mean that the debtor might be forced to pay anyway. Courts have determined that this scheme does not violate the Fair Debt Collection Practices Act, allowing debt purchasers to continue this scheme without repercussion.

The Growing Consumer Exposure To Nanotechnology In Everyday Products: Regulating Innovative Technologies In Light Of Lessons From The Past, Katharine Van Tassel

Katharine Van Tassel

This Article discusses the public health, regulatory, legal, and ethical issues raised by the developing appreciation of the negative physical effects and potential health risks associated with nanotech products, and is arranged as follows. After this Introduction, this Article describes the present scientific understanding of the health risks associated with the consumption of nanoparticles. Next, a summary of the existing FDA regulatory structure that governs food, dietary supplements, cosmetics, and sunscreens is provided along with an explanation of why these regulations fail to protect public health when applied to regulate the nanotech versions of these products. The Article goes on ...

Genetically Modified Plants Used For Food, Risk Assessment And Uncertainty Principles: Does The Transition From Ignorance To Indeterminacy Trigger The Need For Post-Market Surveillance?, Katharine Van Tassel

Katharine Van Tassel

In the context of GM foods, a genetic modification changes the biochemical cross-talk between genes, creating genetic material that has never existed before in nature. This novel genetic material can create unintended health risks, as seen with the case of the GM peas that contained a novel and unexpected allergenic protein and primed test mice to react to other allergens.6 The bottom line is that the scientific acceptance of the existence of the networked gene establishes that the FDA’s presumption that GM plant food is bioequivalent to traditional plant food is no longer scientifically supportable and that a ...

Blacklisted: The Constitutionality Of The Federal System For Publishing Reports Of "Bad" Doctors In The National Practitioner Data Bank, Katharine Van Tassel

Katharine Van Tassel

In order to highlight the problems with the NPDB [National Practitioner Data Bank], this Article compares physician blacklisting with other forms of blacklisting. For example, both physician and sexual predator blacklisting programs have the same goals: allowing the public to engage in self-protection by preventing “predators” from traveling to new locations to prey on a new group of unsuspecting victims. And both sexual predators and physicians suffer similar stigmatization as the result of the “badge of infamy” that comes with being blacklisted. But this is where the similarities end. Accused sex offenders get all of the trappings of due process ...

Hospital Peer Review Standards And Due Process: Moving From Tort Doctrine Toward Contract Principles Based On Clinical Practice Guidelines, Katharine A. Van Tassel

Katharine Van Tassel

This Article proposes a solution to the problems associated with the current use of vague standards in peer review. This Article will examine the proposal that medical staffs switch from ad hoc judicial decision-making to rule-making. This switch will allow medical staffs to abandon the troublesome practice of applying vague 'standard of care' measures ex post facto. In its stead, express contractual terminology could be adopted, such as 'expectations of performance,' which incorporates specifically chosen and uniquely tailored clinical practice guidelines ('CPGs') directly into the medical staff by-laws. Describing the expectations of physician performance in express contractual terms enables physicians ...

Regulating In Uncertainty: Animating The Public Health Product Safety Net To Capture Consumer Products Regulated By The Fda That Use Innovative Technologies, Including Nanotechnologies, Genetic Modification, Cloning, And Lab Grown Meat, Katharine A. Van Tassel

Katharine Van Tassel

This Article will use nanotechnology as an example that highlights how regulation based on novelty rather than hazard achieves the proper balance between protecting public health while encouraging innovation through the animation of the public health product safety net. In Part II, this Article starts by explaining what nanotechnology is and the remarkable growth of its use in everyday consumer products. It then summarizes the steadily increasing number of studies that suggest that there are likely to be serious health risks associated with the use of nanotech consumer products. Next, it explains how the FDA [Food and Drug Administration] is ...

The Introduction Of Biotech Foods To The Tort System: Creating A New Duty To Identify, Katharine Van Tassel

Katharine Van Tassel

This Article examines the question of whether an unsuspecting consumer who dies from an allergic or toxic reaction to an undisclosed biotech ingredient in food can recover damages through the tort system. The surprising answer is that recovery is very unlikely. This Article outlines why this is the case, then evaluates the merits of several potential solutions to this problem including the possible creation of a common law 'duty to identify' biotech ingredients in food.

This Article is arranged as follows. First, a brief primer on the nature of biotech foods is provided. For the reader unfamiliar with the regulatory ...

Assumption Of Risk As A Defense To Negligence, Gregory S. Sergienko

Greg Sergienko

This article will revisit the history of assumption of risk in California and elsewhere and suggest that the traditional doctrine should be modified and revived, despite the contrary approach of the Restatement (Third) of Torts. In the first part of the article, I will describe the ambiguities in the statements of assumption of risk that existed before the adoption of comparative negligence. I will show that Knight v. Jewett, which rejected assumption of risk, misinterpreted Li v. Yellow Cab Co., in which the California Supreme Court adopted a comparative negligence rule. Moreover, even if the Knight case was defensible on ...

The Admissibility Of Sampling Evidence To Prove Individual Damages In Class Actions, Hillel J. Bavli, John Kenneth Felter

Boston College Law Review

The 2016 Supreme Court decision in Tyson Foods, Inc. v. Bouaphakeo revived the use of “representative” or sampling evidence in class actions. Federal courts are now more receptive to class plaintiffs’ efforts to prove classwide liability and, occasionally, aggregate damages, with sampling evidence. However, federal courts still routinely deny motions for class certification because they find that calculations of class members’ individual damages defeat the predominance prerequisite of Rule 23(b)(3). As a result, meritorious classwide claims founder. In this paper, we combine legal and statistical analyses and propose a novel solution to this dilemma that adheres to the ...

Commodifying Consumer Data In The Era Of The Internet Of Things, Stacy-Ann Elvy

Boston College Law Review

Internet of Things (“IoT”) products generate a wealth of data about consumers that was never before widely and easily accessible to companies. Examples include biometric and health-related data, such as fingerprint patterns, heart rates, and calories burned. This Article explores the connection between the types of data generated by the IoT and the financial frameworks of Article 9 of the Uniform Commercial Code and the Bankruptcy Code. It critiques these regimes, which enable the commodification of consumer data, as well as laws aimed at protecting consumer data, such as the Bankruptcy Abuse Prevention and Consumer Protection Act, various state biometric ...

By Reading This Title, You Have Agreed To Our Terms Of Service, Brian Larson

Brian Larson

How Commonsense Consumption Acts Are Preventing “Big Food” Litigation, Grace Thompson

Seattle University Law Review

This Note takes a critical look at Commonsense Consumption Acts and how they are detrimental to the possibility of “Big Food” litigation. The tobacco industry was held accountable through the effective use of tort litigation (commonly referred to as “Big Tobacco” litigation), and the food industry could theoretically be held similarly accountable, but CCAs are preventing the possibility of similar reform. Therefore, in order for health reform to be as effective as tobacco reform, CCAs must be repealed in the states where they exist. Part I of this Note discusses why the food industry needs tort reform. Specifically, it argues ...