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Retailers are losing $100bn annually to "friendly fraud" - such as abusing returns policies and using fake email addresses for promo codes - according to a new survey of 300 global companies. Anti-fraud company Riskified found that around 90% of the companies questioned said offering generous refunds, return policies and promotions to drive sales and increase customer loyalty are important to their overall business strategies. However, the misuse of such policies is proving to be a major drain on profits, forcing some to think twice about offering such freebies as retailers look to protect their margins. In one example analysed by Riskified, a company identified 137,000 fake accounts created by just 4,000 abusive customers looking to take advantage of a steep 35% discount promotion for first-time customers. It cost the company more than $14m annually. In other cases, fraudsters claim they never received an order when they actually did, so they can receive a refund and get the items for free. Riskified chief executive Eido Gal said the “smartest” companies are starting to be more selective about who should receive freebies: “Let me give my best customers free returns always because that’s the convenient thing and that’s what I want to do to be competitive and let me work through and understand the identities of who’s not my best customer, and they would still have that restocking fee

 

CNBC

The United Auto Workers (UAW) strike against the Detroit Three automakers is set to entered its third day on Sunday with no immediate resolution. Negotiators for the UAW and Ford Motor had "reasonably productive discussions" toward a new contract, while Chrysler-parent Stellantis said it had boosted its contract offer. About 12,700 UAW workers remain on strike as part of a coordinated labor action targeting three U.S. assembly plants. Union negotiators and representatives of General Motors, Ford, and Stellantis resumed talks on Saturday. Stellantis said it hiked its offer, proposing raises of 20% over a four-and-a-half-year contract term. The UAW is demanding a 40% wage hike through 2027. The strikes have halted production at three plants in Michigan, Ohio, and Missouri. Ford and GM have already announced layoffs and potential factory shutdowns due to the strike. The UAW is also demanding shorter work weeks, restoration of defined benefit pensions, and stronger job security as automakers make the EV shift. The Wall Street Journal looks at how UAW leader Shawn Fain launched a targeted approach that hits GM, Ford and Stellantis simultaneously and how the tactic will require more discipline among workers in order for it to succeed.

 

Reuters

U.S. News

Wall Street Journal

California state lawmakers have passed a bill mandating a $20 minimum hourly wage for all fast-food workers at chains with more than 60 locations nationwide. The legislation, which awaits Gov. Gavin Newsom's signature, will also establish a council charged with setting pay and workplace standards for the entire industry. It will consist of two representatives of the fast-food industry, two franchisees or restaurant owners, two employees, two advocates for employees and one neutral member of the public, who will serve as chair. “The $20/hr wage and council workers are about to win has the power to lift up more than half a million cooks and cashiers in the state, the majority of whom are women of color,” said Joseph Bryant, executive vice president of the Service Employees International Union. “California fast-food workers are inspiring workers everywhere by challenging corporate power and rewriting the rules of systems designed to work against them.” The National Owners Association, an independent advocacy group of more than 1,000 McDonald’s owners, has pushed back against the bill, claiming that the costs “simply cannot be absorbed by the business model.” 

 

CNBC	The Sacramento Bee

Help-wanted advertisements in New York will have to disclose proposed pay rates under a new salary transparency law. The law, signed by Gov. Kathy Hochul in 2022, applies to employers with at least four workers and requires them to disclose salary ranges for any job advertised externally or internally. The aim is to prevent discrimination based on age, gender, race, or other factors unrelated to skills. Similar laws are already in effect in New York City, California, and Colorado. Compliance may be challenging for some employers, and there are concerns about the administrative burden. However, State Senator Jessica Ramos sees the law as a win for labor rights groups, stating that workers are demanding transparency in pay. The law also covers remote employees reporting to a supervisor or worksite in New York. The National Women's Law Center supports the law, emphasizing the importance of pay transparency for achieving equal pay for equal work.

 

U.S. News

U.S. industrial production kept expanding in August, the Federal Reserve said Friday, beating expectations even though the pace of the increase slowed due to sluggish manufacturing growth. Overall industrial production rose by 0.4%, up from a revised 0.7% a month earlier, the Federal Reserve announced in a statement. The gain beat the 0.2% rise expected by economists polled by the Wall Street Journal.  Manufacturing inched up 0.1%, and was 0.6% up excluding automobiles. Mining output rose 1.4%, and utilities output grew 0.9%. Capacity utilization rose to 79.7% in August from 79.5% inJuly. 

 

Barron's

Market Watch

The Federal Reserve Bank of New York's Empire State business conditions index, a measure of manufacturing activity in the state, increased 21 points in September to 1.9, well above the negative-10 reading expected by economists surveyed by the Wall Street Journal.  The index for new orders jumped 25 points to 5.1, while the shipments index increased 24.7 points to 12.4. Expectations for business conditions six months ahead rose 6.4 points to 26.3, the highest level in more than a year.

 

Market Watch

A growing number of U.S. workers, particularly those with college degrees, are expressing concerns about the potential obsolescence of their jobs due to automation. According to a survey by Gallup, 22% of U.S. workers fear being sidelined by technology, up from 15% two years ago. While the share of non-college-educated workers expressing concern has remained steady, the proportion of college-educated workers worried about job automation has more than doubled. The release of OpenAI's ChatGPT and McKinsey's estimate that 70% of worker hours could be automated have contributed to such fears. However, fewer than one in four workers believe the threat is imminent. Lydia Saad, Gallup's director of U.S. social research, predicts that concerns will continue to mount as technology improves. Another Gallup survey found that 72% of Fortune 500 HR leaders see AI sidelining workers over the next three years.

 

Bloomberg

California Gov. Gavin Newsom has been presented with a bill that would require pharmacies to report every prescription error. It is estimated that pharmacies, including chains such as CVS and Walgreens, make around 5m errors annually, and a survey of California licensed pharmacists in 2021, found that 91% of those working at the chains said staffing wasn’t high enough to provide patients adequate care. As many as 9,000 Americans die each year from prescription errors, according to a study published by the National Library of Medicine. Under the bill, the error reports would not be made public. Instead the pharmacies would send them to a third party, which would provide de-identified information to the pharmacy board.

 

Los Angeles Times

Burford Capital could potentially make a more than 37,000% return on its initial investment in the $16bn lawsuit against Argentina over the 2012 seizure of oil company YPF SA. However, Argentina plans to appeal the US judge's order, which could delay or prevent payment. If the award is upheld, Burford's results could surpass the $2.4bn made by Elliott Management in a similar lawsuit against Argentina. Burford Capital's CEO, Christopher Bogart, called the award a "milestone" and stated that the company's model is delivering value to corporate clients. Burford evaluates numerous court claims worth $1bn or more, but faces risks such as bankruptcies and difficulty collecting assets. The YPF case was particularly risky due to the possibility of Argentina being immune from suit as a sovereign nation. The judge rejected Argentina's argument that awarding $16bn would be an undeserved windfall for Burford. The final amount of the award is yet to be determined.

 

Bloomberg Law

Korean automakers Hyundai Motor and Kia Corp have asked a U.S. judge to reject lawsuits filed by 17 cities accusing them of failing to install anti-theft technology in their vehicles. The automakers argue that they should not be held liable for thefts resulting from a criminal social media phenomenon and that the cities' lax policing and budgetary decisions are more relevant. In February, Hyundai and Kia announced software upgrades for 8.3m U.S. vehicles to help curb thefts. TikTok and other social media platforms have popularized methods to steal Kia and Hyundai cars without anti-theft devices, leading to car thefts and accidents. The National Highway Traffic Safety Administration reported at least 14 crashes and eight fatalities in the automakers' vehicles. Immobilizers were standard on only 26% of 2015 model year Hyundai and Kia vehicles, compared to 96% of all U.S. vehicles. Kia and Hyundai vehicles represent a significant share of stolen cars in many U.S. cities. The automakers recently agreed to a $200m settlement over car thefts, which is currently under review.

 

Reuters

Sebastian Karl Greenwood, a co-founder of the fraudulent OneCoin cryptocurrency, has been sentenced to 20 years in prison. Mr Greenwood colluded with others, including the so-called "Cryptoqueen" Dr Ruja Ignatova, who is now on the FBI's top 10 Most Wanted list, officials say. They are accused of scamming more than $4bn from investors, with OneCoin deemed to have functioned as a global pyramid scheme. Mr Greenwood pleaded guilty to wire fraud and money laundering in December. Former McKinsey consultant Dr Ignatova has not been seen since around October 2017 and the FBI has offered up to $250,000 for information leading to her arrest.

 

BBC News

A man in China has been detained by police for attempting to stage a fake gold rush in order to boost his social media profile. The 26-year-old man spread granules of yellow brass and announced online that gold had been found in a dried-up river bed. Hundreds of people were caught up in the gold rush fever and flocked to the location. Some even shared videos of their searches for gold on social media platforms. The man's scam involved buying irregular shaped brass granules to make his story look authentic. Increasing numbers of people in China are turning to gold as a method of saving. Some buy golden "beans" that weigh just one gram.

 

South China Morning Post