Multinational Monitor

OCT 2001
VOL 22 No. 10


Payday Profiteers: Payday Lenders Target the Working Poor
by Kari Lydersen

Renting to Owe: Rent-to-Own Companies Prey on Low-Income Consumers
by Jake Lewis


The View from Below
How the U.S. Working Poor Don’t Get By
an interview with
Barbara Ehrenreich

Migrating from
Exploitation to Dignity
Immigrant Women Workers and the Struggle for Justice
an interview with
Miriam Ching Yoon Louie

The Community Development Credit Union Alternative
an interview with
Clifford Rosenthal


Behind the Lines

Wartime Opportunism

The Front
Easy on Sunday Morning - Poverty and Mental Health

The Lawrence Summers Memorial Award

Names In the News


Names In the News

Dial’s Dirty Secret

A massive sexual harassment case against the maker of Dial soap was given the go ahead by a U.S. federal judge in August. The federal court denied Dial Corporation’s motion for summary judgment in the class action case brought by the U.S. Equal Employment Opportunity Commission.

In the case, the EEOC alleges a widespread pattern or practice of sexual harassment of women at Dial’s Aurora, Illinois facility stretching back to 1988.

According to EEOC, one of the most significant aspects of the decision was the determination that the case against Dial would go forward as a class “pattern or practice” case, similar to its class sexual harassment case against Mitsubishi Motors Manufacturing of America which was resolved three years ago for $34 million.

In holding that EEOC had produced enough evidence to thwart Dial’s effort to avoid a trial on the merits in the case, Judge Urbom wrote:

“Taking the EEOC’s version of the facts as true, it appears that the work environment at Dial was sexually charged in a way that was offensive and demeaning to women. Several women testified that they were subjected to physically invasive behavior by male employees. This alleged behavior ranged in severity from men touching women’s breasts and buttocks to an incident where a male co-worker grabbed a class member by the crotch and jerked upward. In addition, male employees allegedly exposed themselves to their female co-workers or touched their genitals while making suggestive or threatening remarks. Dozens of women also indicated that they were the targets of repeated comments and conduct of a sexual nature. Finally, many women testified as to open displays of sexually offensive materials in the workplace, including pornographic magazines, pornographic calendars, pictures of nude women, pictures of scantily clad women and sexual cartoons.”

On the issue of Dial’s responsibility, the judge stated, “I have already concluded that the EEOC has presented sufficient evidence for a reasonable jury to find that Dial either knew or should have known of a plant-wide sexual harassment problem. I have also determined that there is little, if any, evidence demonstrating that Dial took steps to determine whether individual incidents, which occurred frequently and continuously, were indicative of a larger problem requiring a company wide response. In light of these conclusions, I am not persuaded that Dial’s efforts to prevent harassment on a plant-wide basis were reasonable as a matter of law.”

Citi’s Mortgage Payment

Citigroup will pay as much as $20 million to North Carolina mortgage holders to settle allegations that its subprime lending unit, The Associates First Capital Corp., deceived customers.

The settlement involves a practice that is now illegal in North Carolina — “packing” single premium credit insurance into mortgage loans.

North Carolina Attorney General Roy Cooper charged that The Associates added expensive prepaid premiums to the loans without homeowners’ knowledge or understanding, and then financed those premiums at high interest rates over the life of the loan.

“These customers deserve refunds because many were duped into buying unnecessary and expensive insurance products,” says Cooper.

Consumers often purchased the credit insurance without asking for it and without understanding its terms or cost, Cooper said.

The refunds could benefit an estimated 9,000 Associates borrowers in North Carolina who bought credit insurance at an average premium of $4,000.

Earlier this year, the Federal Trade Commission filed a lawsuit on grounds similar to those in the North Carolina lawsuit.

Citigroup, which acquired The Associates last year, recently announced that it will discontinue the practice of offering single premium credit insurance.

Identifying Deception

The California Public Utilities Commission (PUC) in September fined Pacific Bell $25.55 million for violations of marketing and caller ID regulations.

The PUC found that Pacific Bell had engaged in deceptive marketing practices by only informing customers of the most expensive option and failing to disclose less expensive alternatives.

Pacific Bell was also found to have violated Commission rules requiring full disclosure of the privacy consequences of changing caller ID blocking options.

To ensure that Pacific Bell makes customer service a priority, the decision directs Pacific Bell to resolve customers’ requests first. In describing service options to meet a customer’s need, the decision requires Pacific Bell to begin with the least-expensive choice, as opposed to pitching higher-priced services first. Once the customer’s request has been addressed, Pacific Bell may ask the customer’s permission to discuss other services but is not permitted to continue to try and sell services if the customer declines.

The decision also requires that Pacific Bell disclose to tenants that the landlord is responsible for inside wire maintenance, and the tenant need not purchase this service from Pacific Bell.

This decision resulted from complaints about Pacific Bell’s marketing practices filed by one union and the consumer advocacy groups Utility Consumers’ Action Network and the Greenlining Institute/Latino Issues Forum.

— Russell Mokhiber



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