1. News
  2. 2001
  3. June

Current Events in June 2001

Browse Current Events by year


Browse Current Events by month

Get trending consumer news and recalls

    By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

    Thank you, you have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

    Government Study Finds Fraud in Online Auctions

    Government Report

    June 28, 2001
    A recent government report uncovered the hardly shocking news that there is quite a bit of fraud in online auctions. The Internet Fraud Complaint Center reported that complaints about auctions amounted to 64% of the 30,000 complaints it has received since it began taking reports last year. It estimated that consumers lost $4 million in bogus auction transactions in 2000.

    Key Findings

    • Most complaints are against individuals (84%) rather than businesses.
    • About 1% of the 1.3 million daily transactions involve fraud.
    • Victims know little about the perpetrator. 25% do not know the perpetrator's physical address. 14% have only a P.O. box.
    • Money orders or personal checks are the form of payment used by 80% of complainants.

    Common Categories

    Most complaints fall into six major merchandise categories

    • Small stuffed animals (27%);
    • Video consoles, games and tapes (25%);
    • Laptop computers (18%);
    • Cameras and camcorders (14%);
    • Desktop computers (9%);
    • Jewelry (8%).

    Common Scams

    • Non-delivery The buyer never receives the merchandise. Additionally, if the buyer used a credit card, the perpetrator now has the buyer's name and credit card number.
    • Misrepresentation The seller misleads the buyer about the value of an item, often using bogus or doctored pictures.
    • Triangulation The perpetrator buys merchandise from an online merchant using stolen identities and credit card numbers, then sells it through an online auction. The buyer wires the money to the perpetrator, who ships the stolen merchandise to the buyer. Later, the police show up and seize the merchandise. The buyer may fall under a cloud of suspicion. Both the buyer and the merchant are victims.
    • Fee stacking The seller adds hidden charges after the auction is over, including previously undisclosed charges for shipping, handling and containers.
    • Sale of black-market goods These often include illegally pirated software, CDs, videos, etc. Tip-off: no box, warranty or instructions.
    • Shill bidding The seller uses false identities to drive up the bidding on items he has for sale.
    • Multiple bidding In this case, the buyer is the perpetrator. The buyer places multiple bids on the same item using different identities, driving up the bidding and scaring off other buyers. In the last minutes of the auction, the buyer withdraws the high bids, leaving the seller stuck with an artifically low bid.

    Questions to Ask

    Before you even think of bidding on an Internet auction, here are some questions to ask:

    • Do you understand it? Be sure you know the rules, the risks and the safeguards (such as they are).
    • Will the auction site assist you? Read the site carefully to find out what the site will do to help you if you have a problem. The answer is usually: not much. However, most sites do offer insurance, which may be worthwhile, depending on the price.
    • Do you know who the seller is? Insist that the seller furnish you with name, street address, city, state and phone number, not just an email address. Verify the information.
    • Check the seller's feedback But don't put much credence into this. Scam artists have no problem creating positive feedback about themselves.
    • What method of payment does the seller want? Find this out before you bid. If the seller wants cash, money order or certified check or if payment is to go to a P.O. box, be very, very skeptical. Remember, paying by credit card gives you a chance to dispute the charge.
    • Is there a warranty? When will the merchandise be shipped? Find out before you bid.
    • Does the price including shipping? Find out before you bid.
    • Is the seller asking for personal information? You should never give your Social Security number or driver's license number to an auction seller. Some auction sellers are really in the identity-theft business.

    The report was issued by the Internet Fraud Complaint Center (IFCC), a partnership between the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C).

    The Internet Fraud Complaint Center reported that complaints about auctions amounted to 64% of the 30,000 complaints it has received since it began taking ...
    Read lessRead more

    Hundreds Fall for New York Housing Scam

    June 24, 2001
    Authorities say nearly 400 New York families, most of them inner-city minorities, fell victim to a housing scam orchestrated by Isaac Toussie, one of Long Island's largest developers. Toussie recently pleaded guilty to making false statements and faces up to five years in prison when he is sentenced in September. Thirteen others have pleaded guilty to various charges.

    Most of the victims answered ads appearing in New York City newspapers, offering affordable housing, good schools and easy access to financing, even for those with bad credit and those who lacked cash for a down payments.

    Those who fell into the trap wound up buying substandard houses at inflated prices, many of them in crime-ridden neighborhoods. Investigators from the U.S. Department of Housing and Urban Development (HUD) say Toussie worked in concert with real estate attorneys, mortgage bankers and appraisers to get low-income buyers mortgages they didn't qualify for so they could buy houses they couldn't afford.

    Toussie's attorney says the 29-year-old developer and his father, Robert, also a developer, netted more than $20 million from their real estate ventures in the late 1990s and were often seen driving Rolls Royces and Bentleys. The father has not been implicated in the alleged scam.

    Meanwhile, many of Toussie's home buyers are now deeply in debt after signing mortgages they are unable to pay on houses that are worth less than the amount of the loan. At least 40 homeowners are already in foreclosure proceedings and another 40 are likely to wind up there, according to Michael Stolworthy, the lead HUD investigator on the case.

    Besides advertising in the New York Daily News and the New York Post, investigators say Toussie advertising in such publications as The Chief, a weekly newspaper for New York City civil servants. In some of the ads, Toussie claimed to be the largest builder for New York City police, correction officers and transit workers.

    Predatory lending and real estate scams are not unusual but what makes Tussie's case interesting is that it involved a wide-ranging conspiracy of bankers, lawyers, appraisers and others, investigators said.

    In one case cited by Newsday, Maxine Wilson paid $146,000 for a Toussie house on Long Island, the value set by an appraised recommended by Toussie. But when neighbors told her she had paid too much, she called in her own appraiser, who valued the house at $125,000. One appraiser has pleaded guilty to filing false statements and others are under investigation.

    Several attorneys and loan officers have also been arrested on felony false statement charges.

    Besides the inflated sales prices and financing irregularities, many of the 400 home buyers have complained that their houses are shoddily built. Many have encountered problems with the boiler, windows and drainage. One homeowner said her Toussie home had a crack in the foundation, electrical problems, a crack in the living room roof beam and a leaking bath tub.

    Authorities say nearly 400 New York families, most of them inner-city minorities, fell victim to a housing scam orchestrated by Isaac Toussie, one of Long ...
    Read lessRead more

    Dramatic Increase in Fires Caused by Candles

    There has been a dramatic increase in fires caused by candles.

    WASHINGTON, June 21, 2001 -- Deaths from fires caused by candles have increased more than 700 percent, the Consumer Product Safety Commission (CPSC) reported.

    The Commmission report said that while deaths from residential fires have been nearly cut in half from 4,500 in 1980 to 2,660 in 1998, those caused by candles have increased 750 percent from 1980 (20 deaths) to 1998 (170 deaths).

    In most cases, candles caused house fires when they were left unattended, tipped over and ignited nearby combustibles. Almost half of home candle fires start in the bedroom. Mattresses or bedding are the most common items that ignite, followed by furniture (dressers, desks, and tables) and then curtains. Tealights and tapers are common culprits in candle fires.

    A child playing with the candle itself or near the candle is one of the biggest contributors to candle fires. Faced with fire, many children hide in a closet or under a bed, leading to tragic fatalities. In fact, children under age 5 have a fire death rate more than twice the national average.

    "Candles are no longer used for the occasional dinner party. In fact, only a small percent of candle fires start in dining rooms," said CPSC Chairman Ann Brown. "Candle sales are booming and families are lighting candles in their living rooms, family rooms, dens and bathrooms."

    The CPSC issued these safety tips:

    • Keep matches, lighters and candles away from children.
    • Never leave burning candles unattended.
    • Keep combustible materials away from candles.
    • Don't put candles in a location where children or pets could knock them down.
    • Use only non-flammable candle holders.
    • Always trim the wicks before lighting.

    The new report shows that house fires have been dropped from 655,000 in 1980 to 332,300 in 1998, the latest year for which data is available. In contrast, house fires caused by candles have increased, from 8,500 in 1980 to 12,900 in 1998.

    CPSC standards and compliance activities have contributed to the overall decline in fires and deaths. For example, CPSC's standard for child- resistant lighters has helped reduce fire deaths from children playing with lighters by 43 percent since 1994. Other CPSC standards include general wearing apparel, children's sleepwear, mattresses, and carpets and rugs. CPSC staff is working on standard proposals for upholstered furniture and for heating and cooking equipment. CPSC staff is also working with the candle industry to develop safety standards for candles to help reduce fires.

    Mattresses or bedding are the most common items that ignite, followed by furniture and then curtains. Tealights and tapers are common culprits in candle fi...
    Read lessRead more

    Get trending consumer news and recalls

      By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

      Thank you, you have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

      Fisher Price Pays $1.1 Million Fine for Failing to Report Safety Defects in Power Wheels

      The U.S. Consumer Product Safety Commission (CPSC) has fined the Fisher-Price division of Mattel $1.1 million for failing to report serious safety defects with Power Wheels toy vehicles. It's the largest fine against a toy firm in CPSC's history.

      Fisher-Price allegedly failed to report 116 fires involving the vehicles and more than 1,800 incidents of the vehicles' electrical components overheating, short-circuiting, melting or failing. These incidents resulted in at least nine minor burn injuries to children, and up to $300,000 in property damage to 22 houses and garages. Additionally, Fisher-Price was aware of at least 71 incidents involving the products' failure to stop, resulting in six minor injuries.

      Fisher-Price recalled up to 10 million Power Wheels ride-on vehicles on October 22, 1998. The recalled cars and trucks were sold under nearly 100 model names. Power Wheels cars and trucks are intended for children 2 to 7 years old. Toy and mass merchandise stores nationwide sold the recalled vehicles from 1984 through October 1998 for $70 to $300. For more information about the recall, consumers should call Fisher-Price at (800) 977-7800 anytime.

      Under federal law, companies are required to report to CPSC if they obtain information that reasonably suggests that their products could present a substantial risk of injury to consumers, or creates an unreasonable risk of serious injury or death. CPSC charges Fisher-Price failed to report to CPSC in a timely manner, as required by the Consumer Product Safety Act, that its "Power Wheels" ride-on toy vehicles presented fire hazards and failed to stop.

      "Firms are required by law to report safety hazards to CPSC so products can be recalled to prevent serious injuries from occurring," said CPSC Chairman Ann Brown. "Fisher-Price knew about hundreds of problems with Power Wheels, yet did nothing for years. This fine is a loud-and-clear message to all firms that failing to report product defects will not be tolerated."

      Fisher-Price denied the allegations and denied it knowingly violated the Consumer Product Safety Act.

      Fisher Price Pays $1.1 Million Fine for Failing to Report Safety Defects in Power Wheels...
      Read lessRead more

      Backyard Products Star Cruiser and Rocket Rider Swing Sets

      WASHINGTON, June 5, 2001 -- Hedstrom Corp. and its subsidiary Backyard Products are recalling to repair about 190,000 Star Cruiser and Rocket Rider swings on backyard gym sets. Screws that hold the swing together can fall out, causing the seat to fall to the ground, posing an injury risk to children.

      Hedstrom has received 291 reports of seats separating, including 19 children who suffered lacerations, scrapes and bruises. The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

      The recalled swings, which come with separate pieces for the seat and handle bars/leg rest, were sold with Hedstrom metal and wood gym sets, wood kits, and as accessories. The Star Cruiser has a one-piece seat, with a white plastic circle and the words, "Star Cruiser" and "Hedstrom" on the front of the handle bars/leg rest. A mesh backing, called a Safe-T TM Backrest, can be connected to back of the seat. The Rocket Rider is a 'see-saw' swing, with a white seat on which two children can sit back-to-back. The words, "Rocket Rider" are printed on the front of each of the two handle bars/leg rests.

      Department, toy, discount, lumber, and hardware stores nationwide, including Toys "R" Us, Wal-Mart and Kmart, sold the gyms from September 2000 through April 2001 for $150 to $400.

      Consumers should stop using the swings immediately and detach them from the gym set. Consumers should call Hedstrom toll-free at (800) 642- 9193 anytime to order a free repair. Consumers also can log on to the company's website at www.hedstrom.com or write to the company at Hedstrom Corp., Free Repair Kit, P.O. Box 432, Bedford, PA 15522.

      Backyard Products Star Cruiser and Rocket Rider Swing Sets...
      Read lessRead more

      Suit Seeks Recall of All Ford Explorers

      June 3, 2001
      A federal judge is being asked to order the recall of all four million Ford Explorers manufactured from 1990 through 2001. The filing in Indianapolis U.S. District Court contends the popular sports utility vehicle is unsafe and cannot be fixed. It asks that Ford either give owners a refund or a replacement vehicle.

      A few days earlier, Bridgestone/Firestone formally asked the National Highway Traffic Safety Administration (NHTSA) to investigate the Explorer. The company cited a study by an Ohio State University professor who found that the Explorer tends to "oversteer" after a tire tread separation.

      There have been at least 174 U.S. traffic deaths and 700 injuries involving rollovers on Explorers equipped with Firestone ATX, ATX II and Wilderness AT tires. Ford and Firestone have become increasingly aggressive in blaming each other for the series of accidents.

      In the Indianapolis filing before U.S. District Judge Sarah Evans Barker, attorney Irwin Levin said the Explorers are "inherently unsafe and present an immediate and continuing danger to their owners, their occupants and to the American motoring public."

      "No engineering solution exists which would render the Explorers reasonably safe for operation in the manner in which Ford markets its Explorers to the public, that is, as family passenger vehicles," Levin said.

      A Ford spokesman called the filing "frivolous." Levin said the litigation involves more than 200 cases of people who were either killed or injured in Explorers equipped with Firestone tires.

      "We filed this because we're very concerned about the safety of these vehicles," Levin told the Detroit Free Press. "Ford and Firestone have chosen to point their guns at each other, and now they're confirming what we thought all along -- that there are problems with both the tires and the Explorer."

      Last week Ford announced it would replace all 13 million Firestone Wilderness AT tires on its vehicles and Firestone announced it was severing its business relationship with Ford.

      Congressional hearings are scheduled for the week of June 18 before the House Energy and Commerce Committee.

      Suit Seeks Recall of All Ford Explorers...
      Read lessRead more