Jeff Gelles: Probing market mysteries

Richard Cordray, President Obama's choice to head the U.S. Consumer Financial Protection Bureau, testifying before a Senate panel. Republican senators seeking to weaken the agency have blocked his confirmation.
Richard Cordray, President Obama's choice to head the U.S. Consumer Financial Protection Bureau, testifying before a Senate panel. Republican senators seeking to weaken the agency have blocked his confirmation. (JOSHUA ROBERTS / Bloomberg News)

An update on U.S. consumer action - and inaction.

Posted: November 13, 2011

Robb Topolski wanted to know why his Internet connection wasn't working right. Bernice Keebler wanted to trace mystery charges on her Verizon bill. Restaurant diners and home cooks want to know whether the fish they're eating is the kind they think they bought. Mike Frank wants to know why the Consumer Financial Protection Bureau doesn't yet have a director.

Market mysteries abound, especially when you factor in the role government plays - or shies from - in guiding Adam Smith's invisible hand. Today's column is an update on a few topics important to consumers where your government has helped or punted - or done both at the same time.

Let's start with the question from Frank, of Doylestown, who wants to know why the new consumer agency - a key element of last year's Dodd-Frank financial legislation - still lacks a director four months after its launch, even though former Ohio Attorney General Richard Cordray has been nominated and approved by a Senate committee.

Frank (no relation to Rep. Barney Frank, whose name is on the legislation) is right to be frustrated. Until a director is confirmed, the CFPB cannot fulfill some of its new duties, such as overseeing mortgage brokers, student lenders, and other nonbank financial players.

Like others who wanted the new agency, Frank hoped it would be run by the person who first proposed it: Elizabeth Warren, the Harvard scholar and outspoken voice for the beleaguered middle and working classes - also known lately as "the 99 percent."

But even before Warren returned to Massachusetts to challenge Republican U.S. Sen. Scott Brown, and before President Obama nominated Cordray, 44 GOP senators had taken the fight a step further: They vowed to block any nominee as the CFPB's director. Instead, they insist that the agency be weakened in several ways, including by putting a bipartisan commission in charge.

To Frank, that's the last thing Congress should want to do, especially since it helped set the stage for today's deep economic slump.

Frank was on the verge of retirement when the housing bubble burst and the financial crisis hit. He watched his 401(k) plummet just when he needed it. "A whistle could have been blown, or something could have been headed off, if we'd had an agency that was keeping an eye on these products," he says.

It's unclear why nearly every Republican senator wants to hobble an agency that is already showing its value. If you haven't yet, check out its website, It's a source of authoritative tips on things such as student-loan repayment options and the break that active-duty soldiers, sailors, and reservists are entitled to on credit card interest - if they know enough to ask.

Verizon mystery charges. Willow Grove's Bernice Keebler wanted to know where she'd called to generate $4.19 in charges. But since the six calls weren't "toll" calls, Verizon said she'd need a lawyer and a subpoena to find out. To get itemized bills in the future for "measured local usage," she'd have to pay $40 plus 2 cents per call.

Keebler thought those positions were unreasonable, especially in an era when wireless carriers routinely itemize every call, and took her case to Pennsylvania's Public Utility Commission. After reading about it, state Consumer Advocate Sonny Popowsky intervened on her behalf.

With his assistance, Keebler recently won a concession from Verizon for herself and others. If the PUC approves it, Verizon customers will be entitled to ask once a year for details on a month's worth of measured local charges.

"She raised a great point," Popowsky says. "I'm glad we were able to help her negotiate."

Fishy fish IDs. Two recent sets of outside lab tests, one by the Boston Globe and another by Consumer Reports, have confirmed what critics of loose fisheries regulation have long contended: You often aren't getting the fish species you thought you were - about one out of five times, according to Consumer Reports' tests.

The Food and Drug Administration is reportedly stepping up its oversight of the industry, which faces special challenges because of the role of wild-caught fish. But the issue isn't just a matter of taste and aesthetics. One test found, for instance, tilefish labeled as grouper - exposing unwitting consumers to a species that is likely to contain three times as much mercury as grouper, and that the FDA has advised children and younger women to avoid.

You can find the Globe's report online at; the Consumer Reports study is in the December issue or online at

Internet oversight. The push to guarantee network neutrality might have gone nowhere if engineer Robb Topolski hadn't discovered that his Comcast connection was mysteriously malfunctioning in 2006 as he tried to use a file-sharing program, BitTorrent.

Last week, the Senate voted, 52-46, to defeat a GOP resolution that would have reversed modest net-neutrality rules adopted last year by the Federal Communications Commission and set to take effect next Sunday. The rules are intended to stop network owners from blocking or manipulating data flows based, say, on secret side deals with Internet businesses.

Topolski says he rues that the issue has become so politicized, lately by Republican assertions that ensuring neutrality is "regulating the Internet." As an engineer, he knows the new rules are a return to standards that governed the Internet for most of its existence. His biggest concern is that by largely exempting wireless networks from the new rules, the FCC's "light touch" approach may be more like "hands off" where it matters most.

"I'm kind of thinking we did a good job of protecting yesterday's Internet," he says, "but we left it wide open for abuse in the most popular area today."

Contact columnist Jeff Gelles at 215-854-2776 or


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