Mastodawn

Cory Doctorow Sep 27, 2023

Today's key concept is #PredatoryInclusion: "a process wherein lenders and financial actors offer needed services to Black households but on exploitative terms that limit or eliminate their long-term benefits":

https://journals.sagepub.com/doi/10.1177/2329496516686620

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If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/09/27/predatory-inclusion/#equal-opportunity-scammers

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Cory Doctorow Sep 27, 2023

Perhaps you recall predatory inclusion from the #GreatFinancialCrisis, when predatory #SubprimeMortgages with deceptive teaser rates were foisted on Black homeowners (who were eligible for better mortgages), resulting in a wave of Black home theft in the #foreclosure crisis:

https://prospect.org/justice/staggering-loss-black-wealth-due-subprime-scandal-continues-unabated/

Before these loans blew up, they were styled as a means of creating Black intergenerational wealth through housing speculation.

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Staggering Loss of Black Wealth Due to Subprime Scandal Continues Unabated

Two years after we last investigated the the foreclosure crisis in the most affluent black county in America, things aren't exactly looking up—except, maybe, for the banks.

The American Prospect

Cory Doctorow Sep 27, 2023

They turned out to be a way to suck up Black families' savings before rendering them homeless and forcing them into houses owned by the Wall Street slumlords who bought all the housing stock the Great Financial Crisis put on the market:

https://pluralistic.net/2022/02/08/wall-street-landlords/#the-new-slumlords

That was just an update on an old con: the #HomeSaleContract, invented by loan-sharks who capitalized on #redlining to rip off Black families.

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Pluralistic: 08 Feb 2022 – Pluralistic: Daily links from Cory Doctorow

Cory Doctorow Sep 27, 2023

Back when banks and the US government colluded to deny mortgages to Black households, sleazy lenders created the "contract loan," which worked like a mortgage, but if you were late on a single payment, the lender could seize and sell your home and not pay you a dime - even if the house was 99% paid for:

https://socialequity.duke.edu/wp-content/uploads/2019/10/Plunder-of-Black-Wealth-in-Chicago.pdf

#Usurers and con-artists love to style themselves as anti-racists, seeking to "close the racial wealth gap."

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Cory Doctorow Sep 27, 2023

The #PaydayLending industry - whose triple-digit interest rates trap poor people in revolving debt that they can never pay off - styles itself as a force for racial justice:

https://pluralistic.net/2022/01/29/planned-obsolescence/#academic-fraud

Payday lenders prey on poor people, and in America, "poor" is often a euphemism for "Black." Payday lenders disproportionately harm Black families:

https://ung.edu/student-money-management-center/money-minute/racial-wealth-gap-payday-loans.php

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Pluralistic: 29 Jan 2022 – Pluralistic: Daily links from Cory Doctorow

Cory Doctorow Sep 27, 2023

Payday lenders are just unlicensed banks, who deploy a layer of bullshit to claim that they don't have to play by the rules that bind the rest of the finance sector. This scam is so juicy that it spawned the #FinTech industry, in which a bunch of unregulated banks sprung up to claim that they were too "innovative" to be regulated:

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

When you hear "Fintech," think "unlicensed bank."

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Pluralistic: When you hear “fintech,” think “unlicensed bank” (01 May 2023) – Pluralistic: Daily links from Cory Doctorow

Cory Doctorow Sep 27, 2023

Fintech turned predatory inclusion into a booming business, recruiting Black spokespeople to claim that being the sucker at the table in the #cryptocurrency casino was actually a form of racial justice:

https://www.nytimes.com/2021/07/07/business/media/cryptocurrency-seeks-the-spotlight-with-spike-lees-help.html

But not all predatory inclusion is financial. Take #FacebookBasics, #Meta's "poor internet for poor people" program. Facebook partnered with telcos in the #GlobalSouth to rig their internet access.

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Cryptocurrency Seeks the Spotlight, With Spike Lee’s Help

The filmmaker’s commercial for a crypto company is one of many recent marketing efforts to make digital cash palatable for newbies.

The New York Times

These "#ZeroRating" programs charged subscribers by the byte to reach any service *except* Facebook and its partners. Facebook claimed that this would "bridge the #DigitalDivide," by corralling "the next billion internet users" into using its services.

The fact that this would make "Facebook" synonymous with "the internet" was just an accidental, regrettable side-effect.

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Cory Doctorow Sep 27, 2023

Naturally, this was bullshit from top to bottom, and countries with zero-rating ended up having *more* expensive wireless broadband than the countries that banned it:

https://www.eff.org/deeplinks/2019/02/countries-zero-rating-have-more-expensive-wireless-broadband-countries-without-it

The predatory inclusion gambit is insultingly transparent, but that doesn't stop desperate scammers from trying it. The latest chancer is #Intuit, who claim that the end of its decade-long, wildly profitable "free tax prep" scam is bad for Black people:

https://www.propublica.org/article/turbotax-intuit-black-taxpayers-irs-free-file-marketing

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Countries With Zero Rating Have More Expensive Wireless Broadband Than Countries Without It

When an ISP decides to exempt certain applications or services from cutting into a user's data cap, that's zero rating. And the evidence is in that it conclusively makes broadband more expensive. A comprehensive multi-year study by the non-profit Epicenter.works, comparing the 30 member countries...

Electronic Frontier Foundation

Cory Doctorow Sep 27, 2023

Some background. In nearly every rich country on Earth, the tax authorities send every taxpayer a pre-filled tax return, based on the information submitted by employers, banks, financial planners, etc. If that looks good to you, you just sign it and send it back. Otherwise, you can amend it, or just toss it in the trash and pay a tax-prep specialist to produce your own return.

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Cory Doctorow Sep 27, 2023

But in America, taxpayers spend *billions* every year to send forms to the #IRS that tell it things it already knows. To make this ripoff seem fair, the hyper-concentrated tax-prep industry, led by the Intuit, creators of #Turbotax, pretended to create a program to provide free tax-prep to working people.

This program was called #FreeFile, and it was a scam.

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Cory Doctorow Sep 27, 2023

The tax-prep cartel each took a different segment of Americans who were eligible for Freefile and then created an online house of mirrors that would trick those people into spending hours working on their tax-returns until they were hit with an error message falsely claiming they were ineligible for the free service and demanding hundreds of dollars to file their returns.

Intuit were world champions at this scam.

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Cory Doctorow Sep 27, 2023

They blocked their Freefile offering from search-engine crawlers and then bought ads that showed up when searchers typed "freefile" into the query box that led them to deceptively named programs that had "free" in their names but cost a fortune to use - more than you'd pay for a local CPA to file on your behalf.

The Attorneys General of nearly every US state and territory eventually sued Intuit over this, settling for $141m:

https://www.agturbotaxsettlement.com/Home/portalid/0

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Home

Welcome to the class action settlement. This site may include Frequently Asked Questions, Claim Form, Notice, Settlement Agreement, Complaint, Important Dates and Other Documents in regards to the settlement.

Cory Doctorow Sep 27, 2023

The #FTC is still suing them over it:

https://www.ftc.gov/legal-library/browse/cases-proceedings/192-3119-intuit-inc-matter-turbotax

We have to rely on state AGs and the FTC to bring Intuit to justice because every Intuit user clicks through an agreement in which we permanently surrender our right to sue the company, no matter how many laws it breaks. For corporate criminals, #BindingArbitrationWaivers are the gift that keeps on giving:

https://pluralistic.net/2022/02/24/uber-for-arbitration/#nibbled-to-death-by-ducks

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Cory Doctorow Sep 27, 2023

Even as the scam was running out, Intuit spent millions lobby-blitzing Congress, desperate for action that would let it continue to privately tax the nation for filling in forms that - once again - told the IRS things it already knew. They really love the idea of paying taxes on *paying your taxes*:

https://pluralistic.net/2023/02/20/turbotaxed/#counter-intuit

But they failed. The IRS has taken Freefile in-house, will send you a pre-completed tax return if you want it.

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Pluralistic: Turbotax is blitzing Congress for the right to tax YOU (20 Feb 2023) – Pluralistic: Daily links from Cory Doctorow

Cory Doctorow Sep 27, 2023

This should be the end of the line for Intuit and other tax-prep profiteers:

https://pluralistic.net/2023/05/17/free-as-in-freefile/#tell-me-something-i-dont-know

Now we're at the end of the line for the scam, Intuit is playing the predatory inclusion card. They're conning Black newspapers like the Chicago #Defender into running headlines like "IRS Free Tax Service Could Further Harm Blacks,"

https://defendernetwork.com/news/opinion/irs-free-tax-service-could-further-harm-blacks/

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Pluralistic: The IRS will do your taxes for you (if that’s what you prefer) (17 May 2023) – Pluralistic: Daily links from Cory Doctorow

Cory Doctorow Sep 27, 2023

The only named source in that article? Intuit spokesperson #DerrickPlummer. The article went out on the country's Black newswire #TriceEdney, whose editor-in-chief did not respond to @ProPublica's @paulkiel's questions.

Then #BlackEnterprise got in on the game, publishing "Critics Claim The IRS Free Tax Prep Service Could Hurt Black Americans."

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Cory Doctorow Sep 27, 2023

Once again, the only named source for the article was Plummer, who was "quoted at length." *Black Enterprise* declined to tell Kiel where that article came from:

https://www.blackenterprise.com/critics-claim-the-irs-free-tax-prep-service-could-hurt-black-americans/

For Intuit, placing op-eds is a tried-and-true tactic for laundering its ripoffs into respectability. Leaked internal Intuit memos detail the company's strategy of "pushing back through op-eds" to neutralize critics:

https://www.documentcloud.org/documents/6483061-Intuit-TurboTax-2014-15-Encroachment-Strategy.html

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Critics Claim The IRS Free Tax Prep Service Could Hurt Black Americans

According to critics, Blacks and low-income taxpayers may potentially be harmed if the IRS implements a planned free online tax-filing system.

Black Enterprise

Cory Doctorow Sep 27, 2023

Intuit spox Derrick Plummer *did* respond to Kiel's queries, denying that Intuit was paying for these op-eds, saying "with an idea as bad as the Direct File scheme we don’t have to pay anyone to talk about how terrible it is."

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Cory Doctorow Sep 27, 2023

Meanwhile, ex-#NAACP director (and #NoLabels co-chair) #BenjaminChavis has used his position atop the #NationalNewspaperPublishersAssociation to publish op-eds against the IRS #DirectFile program, citing the #ProgressivePolicyInstitute, a pro-business thinktank that Intuit's internal documents describe as part of its "coalition":

https://www.documentcloud.org/documents/6483061-Intuit-TurboTax-2014-15-Encroachment-Strategy.html

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DocumentCloud

Cory Doctorow Sep 27, 2023

Chavis's #ChicagoTribune editorial claimed that Direct File could cause Black filers to miss out on tax-credits they are entitled to. This is a particularly ironic claim given Intuit's prominent role in sabotaging the #ChildTaxCredit, a program that lifted more Americans out of poverty than any other in history:

https://pluralistic.net/2021/06/29/three-times-is-enemy-action/#ctc

It's also an argument that can be found in Intuit's own anti-Direct File blog posts:

https://www.intuit.com/blog/innovative-thinking/taxpayer-empowerment/intuit-reinforces-its-commitment-to-fighting-for-taxpayers-rights/

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Pluralistic: 29 Jun 2021 – Pluralistic: Daily links from Cory Doctorow

Cory Doctorow Sep 27, 2023

The claim is that because the IRS disproportionately audits Black filers (this is true), they will screw them over in other ways. But Evelyn Smith, co-author of the study that documented the bias in auditing says this is bullshit:

https://siepr.stanford.edu/publications/working-paper/measuring-and-mitigating-racial-disparities-tax-audits

That's because these audits of Black households are triggered by the IRS's focus on #EarnedIncomeTaxCredits, a needlessly complicated program available to low-income (and hence disproportionately Black) workers.

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Measuring and Mitigating Racial Disparities in Tax Audits

Stanford Institute for Economic Policy Research (SIEPR)

Cory Doctorow Sep 27, 2023

The paperwork burden that the IRS heaps on #EITC recipients means that their returns contain errors that trigger audits.

As Smith told *Propublica*, "With free, assisted filing, we might expect EITC claimants to make fewer mistakes and face less intense audit scrutiny, which could help reduce disparities in audit rates between Black and non-Black taxpayers."

Meanwhile, the predatory inclusion talking points continue to proliferate.

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Cory Doctorow Sep 27, 2023

Nevada accountants and the state's former controller somehow coincidentally managed to publish op-eds with nearly identical wording. Phillip Austin, vice-chair of Arizon's East Valley Hispanic Chamber of Commerce, claims that free IRS tax prep "would disproportionately hurt the Hispanic community." Austin declined to tell *Propublica* how he came to that conclusion.

Right-wing think-tanks are pumping out a torrent of anti-Direct File disinfo.

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Cory Doctorow Sep 27, 2023

This surely has nothing to do with the fact that, for example, #CenterForward has #HRBlock's chief lobbyist on its board:

https://thehill.com/opinion/finance/4125481-direct-e-file-wont-make-filing-taxes-any-easier-but-it-could-make-things-worse/

The whole thing reeks of bullshit and desperation. That doesn't mean that it won't succeed in killing Direct File. If there's one thing America loves, it's letting businesses charge us a tax just for dealing with our own government, from paying our taxes to camping in our national parks:

https://pluralistic.net/2022/11/30/military-industrial-park-service/#booz-allen

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Direct e-file won’t make filing taxes any easier — but it could make things worse

Fixing what isn’t broken here will likely make life more difficult for the taxpayer, the exact opposite of what direct e-file’s proponents have stated.

The Hill

Cory Doctorow Sep 27, 2023

Interestingly, there's a #MAGA version of predatory inclusion, in which corporations convince low-information right-wingers that efforts to protect them from ripoffs are "woke." These campaigns are, incredibly, even stupider than the predatory inclusion tale.

For example, there's a well-coordianted campaign to block the junk fees that the credit card cartel extracts from merchants, who then pass those charges onto us.

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Cory Doctorow Sep 27, 2023

This campaign claims that killing junk fees is woke:

https://pluralistic.net/2023/08/04/owning-the-libs/#swiper-no-swiping

How does that work? Here's the logic: Target sells Pride merch. That makes them woke. Target processes a lot of credit-card transactions, so anything that reduces card-processing fees will help Target. Therefore, paying junk fees is a way to own the libs.

No, seriously.

eof/

Pluralistic: Fighting junk fees is “woke” (04 August 2023) – Pluralistic: Daily links from Cory Doctorow

📎Sep 27, 2023

@pluralistic just out of curiosity, how much does it cost to an American taxpayer to send their report to IRS without using the Freeform program?

Cory Doctorow Sep 27, 2023

@sabrinaweb71 Either several hours of complex form filling and $0, or whatever your tax-prep specialist charges, anywhere from <$20 to >$200,000 (depending on complexity)