Business briefs
By NewsPress Now
FTC sends $5.6M in refunds to Ring customers
NEW YORK | The Federal Trade Commission is sending more than $5.6 million in refunds to consumers as part of a settlement with Amazon-owned Ring, which was charged with failing to protect private video footage from outside access.
In a 2023 complaint, the FTC accused the doorbell camera and home security provider of allowing its employees and contractors to access customers’ private videos. Ring allegedly used such footage to train algorithms without consent, among other purposes.
Ring was also charged with failing to implement key security protections, which enabled hackers to take control of customers’ accounts, cameras and videos. This led to “egregious violations of users’ privacy,” the FTC noted.
The resulting settlement required Ring to delete content that was found to be unlawfully obtained, establish stronger security protections and pay a hefty fine. The FTC says that it’s now using much of that money to refund eligible Ring customers.
According to a Tuesday notice, the FTC is sending 117,044 PayPal payments to impacted consumers who had certain types of Ring devices — including indoor cameras — during the timeframes that the regulators allege unauthorized access took place.
Eligible customers will need to redeem these payments within 30 days, according to the FTC — which added that consumers can contact this case’s refund administrator, Rust Consulting, or visit the FTC’s FAQ page on refunds for more information about the process.
In a statement sent to The Associated Press, Ring said that bad actors took emails and passwords that were “stolen from other companies to unlawfully log into Ring accounts of certain customers” who used the same credentials on multiple sites back in 2019 — adding that the company promptly addressed this by notifying those it discovered to be “exposed in a third-party, non-Ring incident” and taking action to protect impacted accounts.
Ring did not immediately address the FTC’s allegations of employees and contractors unlawfully accessing footage.
Earlier this year, the California-based company separately announced that it would stop allowing police departments to request doorbell camera footage from users, marking an end to a feature that had drawn criticism from privacy advocates.
Net neutrality restored as FCC votes to regulate internet providers
SAN FRANCISCO | The FCC on Thursday restored “net neutrality” rules that prevent broadband internet providers such as Comcast and AT&T from favoring some sites and apps over others.
The move effectively reinstates a net neutrality order the commission first issued in 2015 during the Obama administration; under then-President Donald Trump, the FCC subsequently repealed those rules in 2017.
Net neutrality is the principle that providers of internet service should treat all traffic equally. The rules, for instance, ban practices that throttle or block certain sites or apps, or that offer higher speeds to customers willing to pay extra.
“In our post-pandemic world, we know that broadband is a necessity, not a luxury,” FCC Chairwoman Jessica Rosenworcel said in a statement ahead of the vote.
The telecommunications industry opposed the reintroduction of the rules, as it has before, declaring it an example of unnecessary government interference in business decisions.
The measure passed on a 3-2 vote split by party lines, with Democratic commissioners in favor and Republicans opposed.
Average long-term U.S. mortgage rate climbs for fourth straight week
LOS ANGELES | The average long-term U.S. mortgage rate climbed this week to its highest level since late November, another setback for home shoppers in what’s traditionally the housing market’s busiest time of the year.
The average rate on a 30-year mortgage rose to 7.17% from 7.1% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.43%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, lifting the average rate to 6.44% from 6.39% last week. A year ago, it averaged 5.71%, Freddie Mac said.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices.
The average rate on a 30-year mortgage has now increased four weeks in a row. The latest uptick brings it to its highest level since November 30, when it was 7.22%.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage had remained below 7% since early December amid expectations that inflation would ease enough this year for the Federal Reserve to begin cutting its short-term interest rate.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Fed’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Home loan rates have been mostly drifting higher after a string of reports this year showing inflation remaining hotter than forecast, which has stoked doubts over how soon the Fed might decide to start lowering its benchmark interest rate. The uncertainty has pushed up bond yields.
Top Fed officials themselves have said recently they could hold interest rates high for a while before getting full confidence inflation is heading down toward their target of 2%.
The rise in mortgage rates in recent weeks is an unwelcome trend for home shoppers this spring homebuying season. Sales of previously occupied U.S. homes fell last month as homebuyers contended with elevated mortgage rates and rising prices.
While easing mortgage rates helped push home sales higher in January and February, the average rate on a 30-year mortgage remains well above 5.1%, where was just two years ago.
That large gap between rates now and then has helped limit the number of previously occupied homes on the market because many homeowners who bought or refinanced more than two years ago are reluctant to sell and give up their fixed-rate mortgages below 3% or 4% — a trend real estate experts refer to as the “lock-in” effect.
“The jump in mortgage rates has taken the wind out of the sails of the mortgage market,” said Bob Broeksmit, CEO of the Mortgage Bankers Association. “Along with weaker affordability conditions, the lock-in effect continues to suppress existing inventory levels as many homeowners remain unwilling to sell their home to buy a new one at a higher price and mortgage rate.”
Homebuilders have been able to mitigate the impact of elevated home loan borrowing costs this year by offering incentives, such as covering the cost to lower the mortgage rate homebuyers take on. That’s helped spur sales of newly built single-family homes, which jumped 8.8% in March from a year earlier, according to the Commerce Department.
“With rates staying higher for longer, many homebuyers are adjusting, as evidenced by this week’s report that sales of newly built homes saw the biggest increase since December 2022,” said Sam Khater, Freddie Mac’s chief economist.
U.S. applications
for jobless claims fall to lowest level in nine weeks
Fewer Americans applied for unemployment benefits last week as the labor market continues to hold up despite higher interest rates imposed by the Federal Reserve in its bid to curb inflation.
The Labor Department reported Thursday that unemployment claims for the week ending April 20 fell by 5,000 to 207,000 from 212,000 the previous week. That’s the fewest since mid-February.
The four-week average of claims, which smooths out some of the weekly up-and-downs, ticked down by 1,250 to 213,250.
Weekly unemployment claims are considered a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since the pandemic purge of millions of jobs in the spring of 2020.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in a bid to stifle the four-decade high inflation that took hold after the economy rebounded from the COVID-19 recession four years ago. The Fed’s intention was to loosen the labor market and slow wage growth, which it said contributed to persistently high inflation.
Many economists thought there was a chance the rapid rate hikes could cause a recession, but jobs have remained plentiful and the economy surged on strong consumer spending.
Last month, U.S. employers added a surprising 303,000 jobs, yet another example of the U.S. economy’s resilience in the face of high interest rates. The unemployment rate dipped from 3.9% to 3.8% and has now remained below 4% for 26 straight months, the longest such streak since the 1960s.
Though layoffs remain at low levels, companies have been announcing more job cuts recently, mostly across technology and media. Google parent company Alphabet, Apple, eBay, TikTok, Snap, Amazon, Cisco Systems and the Los Angeles Times have all recently announced layoffs.
Outside of tech and media, UPS, Macy’s, Tesla and Levi Strauss also have recently cut jobs.
In total, 1.78 million Americans were collecting jobless benefits during the week that ended April 13. That’s 15,000 fewer than the previous week.
—From AP reports
