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Consumer News & Alerts

January 10, 2005

AIR WAR!
The airlines aren't firing at each other but they might as well be. With US Air, United, ATA and other weakened players lingering in bankruptcy court, the stronger carriers are moving in for the kill. When it's all over, there will be two or three fewer big airlines. This will solve the overcapacity problem and enable carriers to return to profitability while -- we can hope -- providing better service and more rational pricing.

Here's the scorecard, as we see it:

• US Airways, which for years catered to government employees and contractors who don't care what the fare is, is likely to expire this month, Southwest having already taken over a large chunk of its traffic.
• American wrapped itself in sheep's clothing and matched most -- but not all -- of Delta's fare cuts. AA's CEO boasted in an odd Wall Street Journal interview that he was saving "hundreds of thousands" a day by doing away with pillows.
• United, Continental and Northwest are trapped by high fuel costs, weak demand and competitors who, we would suggest, are faster and smarter. United is still trying to find its way out of bankruptcy court, which could yet turn out to be every pilot's nightmare, a box canyon.
• Hawaiian and Aloha are marooned in bankruptcy court while Southwest's new flight-sharing deal with ATA and its new airport slots at New York's La Guardia, Washington's Reagan National and other major airports gives it prime access to Hawaii for the first time.

The legacy carriers -- proud of eliminating pillows and meals -- still don't get it. The low-fare carriers understand that demand for air travel is elastic: if air travel is fairly priced, convenient and reasonably pleasant, more people will take more trips. Throwing out the pillows isn't the way to attract more customers. Southwest is friendly and affordable, JetBlue has leather seats and free TV. What does United offer? Huh?

What's a Consumer To Do?
If you're holding award miles on any carrier other than Southwest, JetBlue or American, it's probably prudent to use them as soon as possible. Planning to travel? Avoid booking flights far in advance on US Airways, United or any of the other weakened carriers. Stick with Southwest, JetBlue, American and, maybe, Delta.

TABLEGATE
You wouldn't think a career would end in ruination because of tableware but that's what has happened to James Zimmerman, former chairman and CEO of Federated Department Stores of Macy's and Bloomingdale's fame. New York Attorney General Eliot Spitzer has charged Zimmerman with perjury for allegedly trying to cover up his knowledge of an alleged scheme by which Federated tried to block Bed, Bath & Beyond from getting access to Waterford Wedgwood tableware. If convicted, Zimmerman could serve up to seven years in state prison.

Spitzer Eyes Berkshire Hathaway Unit Spitzer's latest target is none other than General Re Corporation, a subsidiary of Warren Buffett's Berkshire Hathaway Inc. Meanwhile, Spitzer collected another scalp when a senior executive of Marsh, Inc. pleaded guilty to criminal charges in connection with Spitzer's investigation of fraud and bid rigging in the insurance industry.

FULLY INVOLVED
Firefighters hate to hear the words "fully involved" when answering a residential alarm. It means someone's home is engulfed in flames. The very best outcome is that a family loses all its worldly goods. This is a searing experience that marks the survivors for life. Sadly, even though Ford denies knowing of any problem, Ford owners are at greater risk than the rest of us.

Hardly a day goes by that we do not receive at least one report from consumers whose Ford vehicles have caught fire and burned, usually while parked. Most of those we hear from had parked their vehicles outside. We fear, but obviously can't document, that those who parked them in an attached garage are no longer able to complain to us or anyone else.

The most notorious flaming Fords are the F-150 and the Expedition but as our growing list of fire-prone Fords demonstrates, there are many others it's not safe to turn your back on.

Of course, it's not just Fords that can go up in flames. It can happen to any car but the non-Fords we hear about most often include Volkswagen, Volvo, Mercedes G55 AMG, Chevrolet Silverado, Dodge Stratus and Hyundai.

CASE CLOSED?
Then there are those pesky Honda CR-V fires. Honda has blamed them on a problem with the oil filter, which could cause oil to leak onto a hot exhaust system and most everyone, the feds included, has accepted that explanation. But an alert reader and car buff, Matt of Columbus, isn't so sure. Under normal circumstances, the exhaust manifold shouldn't get hot enough to ignite leaking oil, he observes.

We think Matt raises some very significant questions. We'd like to hear about any Honda fires our readers may experience.

IT TAKES MORE THAN A COW
Airbags are like insurance -- all too often, they're not there when you need them. The explanation usually is that the impact has to be sufficient to activate the sensors that are buried in supposedly strategic locations. That's fine but Sherri of Holland, Texas, rammed her Ford F350 into a cow, doing a pretty good number on truck and cow alike but not disturbing the blissfully slumbering airbag sensors.

"What the hell do you need to hit, a train?" asks Sherri. Good question. We'll be looking at other airbag failures in the weeks ahead.

AT&T's BILL IS PAST DUE
AT&T's willingness to recast reality knows no limits. For years the fading giant has failed to pay fees on calls made by purchasers of its prepaid calling cards. Reason? Since AT&T makes card users listen to a short ad before their call is completed, it's no longer providing a telecommunications service but rather an "information service" and -- hey -- information services aren't required to pay the fees, its lawyers have the nerve to claim.

Last spring, AT&T exploited troops serving in Iraq, enlisting them in a campaign to get the Federal Communications Commission to back off. It did but now that the election's over, AT&T has more lead in its pencil and is expected to make AT&T pay up.

More AT&T "Billing Errors" Gee, AT&T just can't stop sending out bills to people who aren't its customers. In the latest case, the convicted monopolist will pay the state of Missouri $50,000 for billing non-customers a monthly "basic use" fee.

FRAUDS AND OUTRAGES

• Ohio Sues GMAC If you can believe this, GMAC and an Ohio dealer allegedly conspired to roll back the odometers on cars that had been leased to fleet operators, then sold them to unsuspecting consumers.

• Arizona Cracks Down on Car Ads Fast-talking car commercials and newspaper ads with fine print are a pet peeve of Attorney General Terry Goddard. Tucson's Precision Toyota is the first to feel his wrath.

• Gasoline Coupons Were Just Fumes Consumers in Ohio paid $1.95 for coupons that supposedly could be redeemed for $200 worth of gas. Most not only didn't get the coupons, additional money was siphoned out of their bank accounts, Attorney General Jim Petro charged.

• Minnesota Sues Law Firm Twin Cities firm uses unlawful and bad faith tactics to collect debts, the state charges.

• Washington Flattens Body Enhancement Claims Small Breast Solutions products are ineffective, Washington's attorney general charges. The company will stop selling products in Washington State but consumers elsewhere are still fair game.

• Scams Interfere with Tsunami Charitable Efforts Wherever there's disaster there are scam artists and the tsunami tragedy is bringing them out in droves.

• Wal-Mart's Armory The giant retailer will pay $14.5 million for violating California's gun laws. Among other things, it sold ammunition to minors and guns to felons.

"PURITY" DOESN'T REALLY DESCRIBE IT
An Ohio food plant, Purity Foods, was raided by federal agents, who reported finding insect infestations in cereal, cake mixes and other dried foods. The stuff is sold under the Purity name and also under numerous store brands.

Vioxx Report It's painful for Merck but a leading Vioxx critic is preparing to publish a paper about the withdrawn pain killer. FDA safety expert David Graham is putting on paper many of the things he said in person to a Senate committee in November, when he charged that as many as 138,000 people have suffered heart attacks or strokes because they had been taking Vioxx.

Medicare To Pay For Some Flu Drugs Because of the shortage of flu vaccine, Medicare will pay for antiviral drugs used to treat older Americans who come down with the flu, the agency announced.

RECALLS

• Orbelle Cribs Sold in NY/NJ Area Infants can strangle.
• Step 2 Toddler Swings They can fall apart.
• Adams Trail-a-Bike Attachment It can come loose.
• Dirt Devil Sweeper Vac It can overheat.
• BMW Front Seat Heaters These bun warmers work a little too well.

WORDS TO LIVE BY
We get lots of whining e-mails saying we're too tough on companies criticized in our pages. Well, there's only one way those complaints get posted -- consumers send them to us. This is what we told Shannon of Home Depot, a company that on numerous occasions has bent our ear with bromides, then done nothing.

We once worked for a crusty old editor who would excoriate readers calling to complain about "bad news" in the paper. "Well, if you don't want to read about it, don't let it happen," he advised them. Sounds good to us.

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