Tobacco, Insurer, Other Big Business Interests File Initiative To Gut California Consumer Protection Law

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Consumer Group Vows To Fight Back

Santa Monica, CA. — An organization representing big business including tobacco, insurance, and oil companies announced today it had filed a ballot initiative to gut California’s landmark consumer protection law, the Unfair Competition Law. Consumer advocates with the Foundation for Taxpayer and Consumer Rights (FTCR) vowed to fight the measure which would eviscerate the ability of public interest organizations to stop bad corporate practices.

“Big business wants to strip the public’s right to go to court and hold accountable companies that mislead, abuse and cheat consumers. This move is an unveiled attempt by defendants to throw out the laws that prosecute them,” said Carmen Balber, consumer advocate with FTCR which has frequently used the statute in question to stop unfair business practices. “In the age of Enron, the real focus should be to make it easier to stop corporate abuses, not make it harder. We will fight back to protect consumer rights to bring corporations to justice.”

The board of the group announcing the initiative, the Civil Justice Association of California, consists largely of organizations subject to prosecution under the unfair competition law, including: Altria Cooperate Services (Phillip Morris), British Petroleum, Farmers Insurance Company, General Motors Corporation, Intel Corporation, Kaiser Foundation Health Plan, and Southern California Edison.

“California’s landmark consumer protection law is the last line of defense for people injured by HMOs, big tobacco, insurers and other corporate miscreants,” said Balber. “The public’s only recourse against corporate rip-offs in many cases is through the courts. Now big business wants to hoodwink the public into removing that right, and leave companies free to cheat us with impunity. Consumer rights in California depend upon the ability to take corporate crooks to court, and we will protect that right.”

Specifically, the measure would restrict the right of public interest organizations to file cases against companies on behalf of the public to enjoin unfair business practices.

“Unfair competition cases aren’t about big payouts, they’re about stopping unfair and unsafe practices. If a company kills somebody, you shouldn’t have to find the next of kin to file suit and stop it from happening again,” said Balber.

Yesterday, FTCR announced it has filed lawsuits under the unfair competition law against two of the nation’s largest cell phone companies, Nextel and Cingular, which charge the companies with billing and service rip-offs, demand that the companies cease the illegal practices, and refund overcharges. Nextel quit itemizing consumer bills, then charged every California customer when they received four phony text messages. Nextel refuses to disclose or refund these charges, though it is aware the messages were false, unless consumers demand credit. The Cingular suits charge that the company falsely advertised the quality of coverage the company provides. Consumers that signed up for Cingular services were faced with dropped calls, static, inadequate customer service and other difficulties when an influx of responses to the ad campaign was greater than the company could handle.

The initiative is also a response to successful suits brought by FTCR under the law against HMOs that put profit over patients and insurance companies that low-balled claims in the wake of the Northridge earthquake.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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