FTC Issues Staff Report on Phishing
Published: August 8, 2008
Commission report follows roundtable discussion on deceptive e-mails.

On July 14, 2008, the Federal Trade Commission (FTC) released a staff report regarding a recent roundtable discussion on phishing. Phishing is an illegal tactic used by identity thieves that has become increasingly common in recent years. The practice typically uses deceptive
e-mails that appear to be coming from legitimate, well-known sources. The intent of the these “spam” e-mails is to trick consumers into divulging sensitive or personal information, such as credit card numbers, passwords or other financial data, either through a reply
e-mail or a link to a copycat of the purported source's Web site.

The purpose of the roundtable discussion was to learn about how organizations are responding to phishing attacks and the methods used by companies to inform their customers about the attacks. The roundtable discussion also focused on how companies can use phishing attacks as opportunities to teach consumers about phishing, and to mobilize key players to seize these “teachable moments” to educate consumers about the risks of certain online behaviors. The participants also discussed possible action plans to raise consumer awareness about phishing and change consumers' risky online practices.

The workshop featured two guided roundtable discussions, followed by a break-out session to discuss the next steps for the industry. The roundtable discussion revealed that phishers' practices are dynamic and evolving and phishing education requires collaboration among members of the anti-phishing community. Participants agreed there are untapped opportunities for teaching consumers and businesses about how to avoid phishing.

The FTC used the roundtable discussion to introduce new videos on phishing which can be viewed at http://www.onguardonline.gov For more details on what participants learned and shared during the roundtable discussion, readers can review the FTC's report.

Salary Increase Budgets Average Below 4 Percent
for 2008 and 2009
Published: September 4, 2008
The median budget for salary increases is projected at 3.75 for nonexempt salaried and hourly employees for 2009 is 3.75 percent. Exempt and executive employee increases are projected at 3.80 percent and 3.90 percent, respectively.

Salary increase budgets average 3.80 percent in 2008 across nonexempt, exempt and executive employee categories, while salary increase budgets for nonexempt hourly employees come in lower at 3.70 percent, The Conference Board has reported.

For 2009, the median budget for salary increases is projected to be 3.75 percent for both nonexempt salaried and hourly employees. The median salary increase budget projections for exempt and executive employees are higher at 3.80 percent for exempt and 3.90 percent for executives.

Across industry categories, Diversified Financial Services reported the highest increases in 2008 for all employee categories, while Trade reported the lowest. The highest projected increase for 2009 was reported by Consulting Services, while Trade was again the lowest.

The information for this report was gathered from over 350 companies surveyed in April and May of 2008. Among the 250 companies that responded both last year and this year, some 35 percent report lower actual 2008 salary increase budgets than they projected last year for executives and exempt employees.

Salary increase budgets refer specifically to the pool of money that an organization dedicates to salary increases for the coming year. It is represented as a percentage of current payroll generally; the salary increase budget is calculated using a predetermined total percentage of base pay (excluding overtime, bonuses, etc.). The budget is used for awarding merit or performance increases to individual employees, as well as for pay adjustments such as promotional increases. Salary increase budgets can also include scheduled "step" increases or salary increases that have been pre-determined via individual contracts or collective bargaining agreements.

Congress Passes Student Loan Legislation
Published: August 13, 2008
The Higher Education Opportunity Act addresses widespread conflicts of interest in the student loan industry by requiring colleges and universities to develop a code of conduct with respect to federally guaranteed loans.

On July 31, 2008, Congress passed the Higher Education Opportunity Act of 2008, a new law that addresses conflicts of interest and deceptive practices in the student loan industry. The Act codifies the Code of Conduct that New York Attorney General Andrew M. Cuomo developed after his nationwide investigation of the student loan industry exposed widespread conflicted relationships between schools and lenders. This new legislation prohibits these conflicted relationships and extends the code's protections to students and families across the United States.

The Higher Education Opportunity Act addresses widespread conflicts of interest in the student loan industry by requiring colleges and universities to develop a code of conduct with respect to federally guaranteed loans that:

The Act also includes requirements related to private loans, such as:

• Prohibiting private lenders from offering gifts or other items of value to colleges or financial aid officers in exchange for advantages related to the lenders' loan activities.
• Prohibiting private lenders from charging prepayment or repayment penalties; prohibiting misleading co-branded marketing, where a lender or marketer uses a school's name, emblem, mascot, and/or logo to create the false impression that the school has endorsed the lender.
• Requiring private loan providers to inform borrowers of the availability of federal aid and the interest rates available in connection with federal loans.
• Requiring private loan providers to provide uniform, detailed and timely disclosures to borrowers regarding the interest rate and other terms of offered loans, enabling borrowers to better understand the cost of their loan and to comparison shop for the best deals.

This article is provided as a service of ACA International's Government Services Program.

Economic Growth vs. The Environment
Published: August 13, 2008
More than three in five Americans say economic growth and development is more important to their region while one-quarter believe protecting the environment is more important.

As economic conditions worsen, people who are asked to make a decision between protecting the environment or economic growth and development have moved even more strongly into the economic growth column. Specifically, a Harris Poll conducted online among 2,454 adults aged 18 and over found:

• U.S. adults are divided on how they perceive things in their own community as 38 percent say it is going in the right direction while 37 percent believe things have “pretty seriously gotten off on the wrong track.” This perception has gotten better in the past few months. In November, almost half (47 percent) of adults felt things were going off on the wrong track in their community and one-third (32 percent) felt they were going in the right direction.
• More than three in five Americans (63 percent) say economic growth and development is more important to their region while one-quarter (27 percent) believe protecting the environment is more important. Just over three in 10 Easterners (31 percent) believe protecting the environment is more important while seven in 10 Midwesterners (69 percent) believe economic growth is more important.
• The focus on economic growth has grown over the last year. In June of 2007, Americans were more divided as 48 percent thought economic growth was more important and 43 percent believed protecting the environment was more important. In November, a small 51 percent to 37 percent majority believed economic growth was more important.
• Looking ahead to the future, just over half of U.S. adults (56 percent) believe that the quality of life in the area they live in will decrease for their children and grandchildren while 44 percent believe it will increase. Younger generations are more optimistic on this – over half (56 percent) of Echo Boomers (those aged 18-31) believe the quality of life will increase compared to 38 percent of Baby Boomers (those aged 44-62) and one-third (32%) of Matures (those aged 63 and older).

In Canada, there are different opinions on some of these topics:

• Canadians are much more positive about the direction of their community as over three in five (63 percent) believe things in their community are going in the right direction and 37 percent say they are going off on the wrong track.
• Canadians are more evenly split on which is more important, economics or environment as 45 percent say it is economic growth and development and 44 percent believe it is protecting the environment.
• One area Canadians agree with Americans on is the quality of life in their region for children and grandchildren as 56 percent of Canadians say it will decrease and 44 percent believe it will increase.
  

California State Court Finds Early Termination Fee for Cellular Phone Contract Illegal
Published: August 22, 2008
Wireless service provider required to reimburse consumers for paid fees and credit consumers for unpaid fees.

A California state court recently issued a preliminary ruling concluding early termination fees included in consumer cellular phone contracts issued by Sprint Nextel (Sprint) are illegal under California law. The proposed statement of decision found Sprint must pay $18.25 million to members of the class action lawsuit who paid early termination fees and credit $54.75 million to class members for charged, but unpaid, early termination fees.

The class action lawsuit alleged, among other things, that the early termination fee as part of Sprint Nextel's consumer cellular telephone service contract constituted an unlawful business practice under California law because the fee is an invalid liquidated damage provision. The complaint alleged the fee is also unconscionable.

After a two-week trial in June, Alameda County Superior Court judge Bonnie Sabraw concluded the early termination fee is indeed a liquidated damage provision in the service contract, and found the provision is unlawful under California law. Although the defendant company argued regulation of cellular service contract terms is left only to federal regulators, the court dismissed the argument, concluding the matter could be adjudicated by a state court.

As a result, the court ordered the defendant company pay $18.25 million to those class members who paid early termination fees and reverse charge (or credit) $54.75 million to class members on charged but unpaid early termination fees.

The ruling issued by the court is tentative, and a reconsideration hearing took place on Aug. 14, 2008.

This article is provided as a service of ACA International's Legal and Government Affairs Department.