[Plura-list] Fintech bullies stole your kid's lunch money

[Cory Doctorow]

Read today's issue online at: https://pluralistic.net/2024/07/26/taanstafl/

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I'm coming to Defcon! On Aug 9, I'm emceeing the EFF Poker Tournament (noon, Horseshoe Poker Room), and speaking on the Bricked and Abandoned panel (5PM, track 1). On Aug 10, I'm giving a keynote called "Disenshittify or die! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification" (noon, track 1).

https://defcon.org/html/defcon-32/dc-32-index.html

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Support me this summer on the Clarion Write-A-Thon and help raise money for the Clarion Science Fiction and Fantasy Writers' Workshop!

https://clarionwriteathon.com/members/profile.php?writerid=293388

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Today's links

* Fintech bullies stole your kid's lunch money: Taking 60 cents out of every reduced-lunch public school dollar.

* Hey look at this: Delights to delectate.

* This day in history: 2004, 2009, 2019, 2023

* Upcoming appearances: Where to find me.

* Recent appearances: Where I've been.

* Latest books: You keep readin' em, I'll keep writin' 'em.

* Upcoming books: Like I said, I'll keep writin' 'em.

* Colophon: All the rest.

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🥧 Fintech bullies stole your kid's lunch money

Three companies control the market for school lunch payments. They take as much as 60 cents out of every dollar poor kids' parents put into the system to the tune of $100m/year. They're literally stealing poor kids' lunch money.

In its latest report, the Consumer Finance Protection Bureau describes this scam in eye-watering, blood-boiling detail:

https://files.consumerfinance.gov/f/documents/cfpb_costs-of-electronic-payment-in-k-12-schools-issue-spotlight_2024-07.pdf

The report samples 16.7m K-12 students in 25k schools. It finds that schools are racing to go cashless, with 87% contracting with payment processors to handle cafeteria transactions. Three processors dominate the sector: Myschoolbucks, Schoolcafé, and Linq Connect.

These aren't credit card processors (most students don't have credit cards). Instead, they let kids set up an account, like a prison commissary account, that their families load up with cash. And, as with prison commissary accounts, every time a loved one adds cash to the account, the processor takes a giant whack out of them with junk fees:

https://pluralistic.net/2024/02/14/minnesota-nice/#shitty-technology-adoption-curve

If you're the parent of a kid who is eligible for a reduced-price lunch (that is, if you are poor), then about 60% of the money you put into your kid's account is gobbled up by these payment processors in service charges.

It's expensive to be poor, and this is no exception. If your kid *doesn't* qualify for the lunch subsidy, you're only paying about 8% in service charges (which is still *triple* the rate charged by credit card companies for payment processing).

The disparity is down to how these charges are calculated. The payment processors charge a flat fee for every top-up, and poor families can't afford to minimize these fees by making a single payment at the start of the year or semester. Instead, they pay small sums every payday, meaning they pay the fee twice per month (or even more frequently).

Not only is the sector concentrated into three companies, neither school districts nor parents have any meaningful way to shop around. For school districts, payment processing is usually bundled in with other school services, like student data management and HR data handling. For parents, there's no way to choose a different payment processor - you have to go with the one the school district has chosen.

This is all illegal. The USDA - which provides and regulates - the reduced cost lunch program, bans schools from charging fees to receive its meals. Under USDA regs, schools *must* allow kids to pay cash, or to top up their accounts with cash at the school, without any fees. The USDA has repeatedly (2014, 2017) published these rules.

Despite this, many schools refuse to handle cash, citing safety and security, and even when schools do accept cash or checks, they often fail to advertise this fact.

The USDA also requires schools to publish the fees charged by processors, but most of the districts in the study violate this requirement. Where schools *do* publish fees, we see a per-transaction charge of up to $3.25 for an ACH transfer that costs $0.26-0.50, or 4.58% for a debit/credit-card transaction that costs 1.5%. On top of this, many payment processors charge a one-time fee to enroll a student in the program and "convenience fees" to transfer funds between siblings' accounts. They also set maximum fees that make it hard to avoid paying multiple charges through the year.

These are classic junk fees. As Matt Stoller puts it: "'Convenience fees' that aren't convenient and 'service fees' without any service." Another way in which these fit the definition of junk fees: they are calculated at the end of the transaction, and not advertised up front.

Like all junk fee companies, school payment processors make it extremely hard to cancel an automatic recurring payment, and have innumerable hurdles to getting a refund, which takes an age to arrive.

Now, there are many agencies that *could* have compiled this report (the USDA, for one), and it could just as easily have come from an academic or a journalist. But it didn't - it came from the CFPB, and that matters, because the CFPB has the means, motive and opportunity to *do something* about this.

The CFPB has emerged as a powerhouse of a regulator, doing things that materially and profoundly benefit average Americans. During the lockdowns, they were the ones who took on scumbag landlords who violated the ban on evictions:

https://pluralistic.net/2021/04/20/euthanize-rentier-enablers/#cfpb

They went after "Earned Wage Access" programs where your boss colludes with payday lenders to trap you in debt at 300% APR:

https://pluralistic.net/2023/05/01/usury/#tech-exceptionalism

They are forcing the banks to let you move your account (along with all your payment history, stored payees, automatic payments, etc) with one click - and they're standing up a site that will analyze your account data and tell you which bank will give you the best deal:

https://pluralistic.net/2023/10/21/let-my-dollars-go/#personal-financial-data-rights

They're going after "buy now, pay later" companies that flout borrower protection rules, making a rogues' gallery of repeat corporate criminals, banning fine-print gotcha clauses, and they're doing it all in the wake of a 7-2 Supreme Court decision that affirmed their power to do so:

https://pluralistic.net/2024/06/10/getting-things-done/#deliverism

The CFPB can - and will - do something to protect America's poorest parents from having $100m of their kids' lunch money stolen by three giant fintech companies. But whether they'll continue to do so under a Kamala Harris administration is an open question. While Harris has repeatedlly talked up the ways that Biden's CFPB, the DOJ Antitrust Division, and FTC have gone after corporate abuses, some of her largest donors are demanding that her administration fire the heads of these agencies and crush their agenda:

https://prospect.org/power/2024-07-26-corporate-wishcasting-attack-lina-khan/

Tens of millions of dollars have been donated to Harris' campaign and PACs that support her by billionaires like Reid Hoffman, who says that FTC Chair Lina Khan is "waging war on American business":

https://prospect.org/power/2024-07-26-corporate-wishcasting-attack-lina-khan/

Some of the richest Democrat donors told the *Financial Times* that their donations were contingent on Harris firing Khan and that they'd been assured this would happen:

https://archive.is/k7tUY

This would be a disaster - for America, and for Harris's election prospects - and one hopes that Harris and her advisors know it. Writing in his "How Things Work" newsletter today, Hamilton Nolan makes the case that labor unions should publicly declare that they support the FTC, the CFPB and the DOJ's antitrust efforts:

https://www.hamiltonnolan.com/p/unions-and-antitrust-are-peanut-butter

> Don’t want huge companies and their idiot billionaire bosses to run the world? Break them up, and unionize them. It’s the best program we have.

Perhaps you've heard that antitrust is anti-worker. It's true that antitrust law has been used to attack labor organizing, but that has *always* been *in spite* of the letter of the law. Indeed, the legislative history of US antitrust law is Congress repeatedly passing law after law explaining that antitrust "aims at dollars, not men":

https://pluralistic.net/2023/04/14/aiming-at-dollars/#not-men

The Democrats need to be more than The Party of Not Trump. To succeed - as a party and as a force for a future for Americans - they have to be the party that defends us - workers, parents, kids and retirees alike - from corporate predation.


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🥧 Hey look at this

* Secure Boot is completely broken on 200+ models from 5 big device makers https://arstechnica.com/security/2024/07/secure-boot-is-completely-compromised-on-200-models-from-5-big-device-makers/

*  Electronic Frontier Foundation to Present Annual EFF Awards to Carolina Botero, Connecting Humanity, and 404 Media https://www.eff.org/press/releases/electronic-frontier-foundation-present-annual-eff-awards-carolina-botero-connecting

* Bad Trades Are Also Valuable https://archive.is/VH0V0 (h/t DSHR)

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🥧 This day in history

#20yrsago Woody Guthrie’s copyright used to defile his memory in lawsuit threat https://www.eff.org/deeplinks/2004/07/land-isnt-your-land

#15yrsago New Adrian Mole diary is dark, hopeless and hilarious https://memex.craphound.com/2009/07/26/new-adrian-mole-diary-is-dark-hopeless-and-hilarious/

#5yrsago Claiming your $125 from Equifax is a “moral duty” https://slate.com/technology/2019/07/equifax-settlement-money-how-to-claim.html

#5yrsago Make the internet better by empowering users, not by demanding that platforms implement automated filters https://www.eff.org/deeplinks/2019/07/key-safety-online-user-empowerment-not-censorship

#5yrsago The Airbus 350 needs a hard reboot every 149 hours https://www.theregister.com/2019/07/25/a350_power_cycle_software_bug_149_hours/

#5yrsago Amazon struck secret deals with local cops to get them to push surveillance-camera doorbells https://www.vice.com/en/article/mb88za/amazon-requires-police-to-shill-surveillance-cameras-in-secret-agreement

#5yrsago Siemens contractor hid “logic bomb” in complicated spreadsheet, guaranteeing future maintenance work https://www.zdnet.com/article/siemens-contractor-pleads-guilty-to-planting-logic-bomb-in-company-spreadsheets/

#5yrsago Activist blacksmith teaches gun violence survivors to melt down guns and turn them into farm implements https://billypenn.com/2019/07/25/using-fire-and-force-this-philly-author-turns-guns-into-garden-tools/

#5yrsago Grifty conservative PACs raised millions pushing racist Obama conspiracies to elderly, low-income supporters, then kept almost all of it https://www.propublica.org/article/conservative-majority-fund-political-fundraising-pac-kelley-rogers

#1yrago The surprising truth about data-driven dictatorships https://pluralistic.net/2023/07/26/dictators-dilemma/#garbage-in-garbage-out-garbage-back-in

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🥧 Upcoming appearances

* EFF Charity Poker Tournament (Defcon, Las Vegas, Horseshoe Poker Room), Aug 9 12h
https://www.eff.org/deeplinks/2024/06/betting-your-digital-rights-eff-benefit-poker-tournament-def-con-32

* Bricked & Abandoned: How To Keep The IoT From Becoming An Internet of Trash (Defcon, Las Vegas, Track 1), Aug 9 17h
https://info.defcon.org/event/?id=54844

* Disenshittify or die! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification (Defcon, Las Vegas, Track 1), Aug 10 12h
https://info.defcon.org/event/?id=54861

* Disenshittify or die! (Burning Man, Palenque Norte, 7&E), Aug 27, 13h

* Talking caterpillar Q&A (Burning Man, Liminal Labs, 830&C), Aug 28, 12h

* Albacon (Albany/remote), Sep 13-15
https://albacon.org/2024/

* TusCon (Tucson), Nov 8-10
https://tusconscificon.com/

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🥧 Recent appearances

* The Paradigm Shift
https://paradigm-shift-on-4zzz.pinecast.co/episode/dbf12eaf/tech-criticism-with-cory-doctorow

* How To Fix The Internet (EFF)
https://www.eff.org/deeplinks/2024/06/podcast-episode-fighting-enshittification

* Big Tech and the News (Tech Policy Press)
https://www.techpolicy.press/big-tech-and-the-news/

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🥧 Latest books

* The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books (US), Head of Zeus (UK), February 2024 (the-bezzle.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3062/Available_Feb_20th%3A_The_Bezzle_HB.html#/).

* "The Lost Cause:" a solarpunk novel of hope in the climate emergency, Tor Books (US), Head of Zeus (UK), November 2023 (http://lost-cause.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3007/Pre-Order_Signed_Copies%3A_The_Lost_Cause_HB.html#/)

* "The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).

* "Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.

* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59?sk=f6cd10e54e20a07d4c6d0f3ac011af6b) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.

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🥧 Upcoming books

* Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025

* Unauthorized Bread: a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025

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🥧 Colophon

Today's top sources: David Dayen (https://prospect.org/).

Currently writing:

* Enshittification: a nonfiction book about platform decay. Today's progress: 764 words (27508 words total).

* A Little Brother short story about DIY insulin PLANNING

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025

* Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM

* Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM

Latest podcast:
  The reason you can't buy a car is the same reason that your health insurer let hackers dox you https://craphound.com/news/2024/06/30/the-reason-you-cant-buy-a-car-is-the-same-reason-that-your-health-insurer-let-hackers-dox-you/

This work - excluding any serialized fiction - is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

https://creativecommons.org/licenses/by/4.0/

Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution.

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"*When life gives you SARS, you make sarsaparilla*" -Joey "Accordion Guy" DeVilla
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