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[DRAFT] Default Payment Allocation

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Imperium Anglorum
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[DRAFT] Default Payment Allocation

Postby Imperium Anglorum » Sat Dec 04, 2021 3:05 am

Regulation: Consumer Protection

The World Assembly,

Believing that it would be best to prohibit the specific practice of allocating payments to the balances with the lowest interest rates first, leaving higher interest rate balances to accrue, imposing costs on unsophisticated borrowers,

Considering that such action would help improve consumer rights and that further action is herein taken to expand legal recourse against violators of those rights, hereby enacts as follows:

1. If a credit account has balances with different annual percentage rates (APR), every payment to that account in excess of minimum payments needed to avoid penalties must be applied to the balances with the highest APRs first, unless the payer directs otherwise in that instance.

2. Section 1 requirements may not be waived by contract. Payees non-compliant with section 1 shall be liable for no less than three times actual damages.
Last edited by Imperium Anglorum on Wed Dec 08, 2021 10:10 am, edited 6 times in total.

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Imperium Anglorum
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Postby Imperium Anglorum » Sat Dec 04, 2021 3:06 am

R.

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Untecna
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Postby Untecna » Sat Dec 04, 2021 8:18 am

OOC: Well, I don't have any specialties in this sort of area, so I suppose...

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Xernon
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Postby Xernon » Sat Dec 04, 2021 8:53 am

"Companies should not be able to take advantage of or manipulate their patrons' payments to generate further profit. The Xernonian Delegation wishes to express its full support for this proposal."
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Desmosthenes and Burke
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Postby Desmosthenes and Burke » Sat Dec 04, 2021 9:25 am

OOC:
Various Suggestions:

Clause 1: change "an" to "a"

Clause 2: Replace "treble damages" with "three times the actual damages" or something similar

Speaking of damages, perhaps instead of or in addition to the triple actual damages, perhaps some mandatory punitive sanctions or a minimum level of statutory damages and/or a provision on costs perhaps. I suggest this based on the real possibility that even tripled, the damages suffered by any individual plaintiff are still likely to be relatively small, especially compared to the costs of litigation or arbitration, and especially so in jurisdictions that do not permit collective litigation.
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Hulldom
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Postby Hulldom » Sat Dec 04, 2021 10:36 am

Desmosthenes and Burke wrote:OOC:
Various Suggestions:

Clause 1: change "an" to "a"

Clause 2: Replace "treble damages" with "three times the actual damages" or something similar

Speaking of damages, perhaps instead of or in addition to the triple actual damages, perhaps some mandatory punitive sanctions or a minimum level of statutory damages and/or a provision on costs perhaps. I suggest this based on the real possibility that even tripled, the damages suffered by any individual plaintiff are still likely to be relatively small, especially compared to the costs of litigation or arbitration, and especially so in jurisdictions that do not permit collective litigation.

Would specifying a minimum level of statutory damages actually be allowed? [I know next to nothing about the topic, I mean this purely in a rules sense.]
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Desmosthenes and Burke
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Postby Desmosthenes and Burke » Sat Dec 04, 2021 1:15 pm

Hulldom wrote:
Desmosthenes and Burke wrote:OOC:
Various Suggestions:

Clause 1: change "an" to "a"

Clause 2: Replace "treble damages" with "three times the actual damages" or something similar

Speaking of damages, perhaps instead of or in addition to the triple actual damages, perhaps some mandatory punitive sanctions or a minimum level of statutory damages and/or a provision on costs perhaps. I suggest this based on the real possibility that even tripled, the damages suffered by any individual plaintiff are still likely to be relatively small, especially compared to the costs of litigation or arbitration, and especially so in jurisdictions that do not permit collective litigation.

Would specifying a minimum level of statutory damages actually be allowed? [I know next to nothing about the topic, I mean this purely in a rules sense.]


There are a myriad of ways to phrase such a thing, all of which I have confidence IA is skilled enough to use. Technically, as far as I recall, there is no specific rule against using a specific figure (usually expressed in NSD) either, but more of a convention that doing so is bad, but there is an entire world of other ways of defining an amount (percentages of something else, set multiples of some benchmark [which you may not is what treble damages are], 'an amount calculated to induce compliance' , etc...). Of course, there are also alternatives as hinted, like punitive damages and mandatory cost recovery that could be tacked on as well. My main thrust was to pull more out of the toolbox to make sure it is financially workable for individual consumers to press claims so as to avoid the situation where the company finds it more profitable to continuously violate the resolution and payoff the rare case when someone has money to waste or enough debt for damages to outweigh the costs of the claim.
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Imperium Anglorum
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Postby Imperium Anglorum » Sat Dec 04, 2021 2:29 pm

Desmosthenes and Burke wrote:
Hulldom wrote:Would specifying a minimum level of statutory damages actually be allowed? [I know next to nothing about the topic, I mean this purely in a rules sense.]


There are a myriad of ways to phrase such a thing, all of which I have confidence IA is skilled enough to use. Technically, as far as I recall, there is no specific rule against using a specific figure (usually expressed in NSD) either, but more of a convention that doing so is bad, but there is an entire world of other ways of defining an amount (percentages of something else, set multiples of some benchmark [which you may not is what treble damages are], 'an amount calculated to induce compliance' , etc...). Of course, there are also alternatives as hinted, like punitive damages and mandatory cost recovery that could be tacked on as well. My main thrust was to pull more out of the toolbox to make sure it is financially workable for individual consumers to press claims so as to avoid the situation where the company finds it more profitable to continuously violate the resolution and payoff the rare case when someone has money to waste or enough debt for damages to outweigh the costs of the claim.

That's a good point. I've affected both of the recommendations from earlier.

That said, perhaps this is the perspective of a regulator especially, but I'm unconvinced that almost any level of civil enforcement like this would be sufficient. It would have to be government action that would most efficiently coerce compliance, either by sending someone into the creditor directly to make it happen, sending non-compliant business officers to prison, or hanging the sword of Damocles dissolution.

The main reason why I have the damages clause is to fit into the category, which requires something something like damages, tort reform (in the open way), etc.

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Nationalist Northumbria
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Postby Nationalist Northumbria » Sat Dec 04, 2021 4:08 pm

We are opposed on principle to anything which would interfere with companies.
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Separatist Peoples
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Postby Separatist Peoples » Sun Dec 05, 2021 6:16 am

Imperium Anglorum wrote:
Desmosthenes and Burke wrote:
There are a myriad of ways to phrase such a thing, all of which I have confidence IA is skilled enough to use. Technically, as far as I recall, there is no specific rule against using a specific figure (usually expressed in NSD) either, but more of a convention that doing so is bad, but there is an entire world of other ways of defining an amount (percentages of something else, set multiples of some benchmark [which you may not is what treble damages are], 'an amount calculated to induce compliance' , etc...). Of course, there are also alternatives as hinted, like punitive damages and mandatory cost recovery that could be tacked on as well. My main thrust was to pull more out of the toolbox to make sure it is financially workable for individual consumers to press claims so as to avoid the situation where the company finds it more profitable to continuously violate the resolution and payoff the rare case when someone has money to waste or enough debt for damages to outweigh the costs of the claim.

That's a good point. I've affected both of the recommendations from earlier.

That said, perhaps this is the perspective of a regulator especially, but I'm unconvinced that almost any level of civil enforcement like this would be sufficient. It would have to be government action that would most efficiently coerce compliance, either by sending someone into the creditor directly to make it happen, sending non-compliant business officers to prison, or hanging the sword of Damocles dissolution.

The main reason why I have the damages clause is to fit into the category, which requires something something like damages, tort reform (in the open way), etc.

Ooc: on the real world, we split the baby with administrative proceedings that involve lessened burdens compared to civil cases and the same cost shifting provisions. Alas, I am just not convinced the WA could make a useful analog.

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Bears Armed
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Postby Bears Armed » Wed Dec 08, 2021 9:57 am

Desmosthenes and Burke wrote:Technically, as far as I recall, there is no specific rule against using a specific figure (usually expressed in NSD) either,

OOC: Using NSD in proposals has always been counted as illegal under the "forced roleplay" aspect of the Metagaming rule, because it would require every player with a member nation to accept the existence of that currency -- which was only invented somewhere in the [other] RP sections of these forums -- as canonical.
You would have to define the figure in terms of a currency actually defined in an earlier resolution, but no such currency has been introduced successfully so far... Several drafts have been started, at different dates, but the problems implicit in defining the new currency's value and determining how much of it should exist have led to the idea being dropped in all of those cases.
Last edited by Bears Armed on Wed Dec 08, 2021 10:03 am, edited 1 time in total.
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Imperium Anglorum
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Postby Imperium Anglorum » Wed Dec 08, 2021 10:11 am

I've made a change to apply the payments only to those which reduce balances rather than those which meet minimum payments. I'm also considering adding a clause to require minimum payments to exceed interest charges on revolving credit accounts offered to the general public. That said, such a clause may be better suited for a separate resolution.
Last edited by Imperium Anglorum on Wed Dec 08, 2021 10:13 am, edited 2 times in total.

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