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Minnesota Charges Capital One Ads Are Misleading
Barbarian ad is cute but untrue, state charges12/31/2004ConsumerAffairs
Minnesota Attorney General Mike Hatch filed suit against Capital One Bank and Capital One F.S.B. for using false, deceptive and misleading television adver...
Anyone who watches TV has seen the commercial where a couple is making a large credit card purchase. At the same time, a hoard of barbarians begins to descend on them. When one spouse cautions that putting the purchase on a credit card will cost a lot in interest, the other says "It's OK, we're using our Capital One card." The barbarians stop and walk away, in utter dejection.
Cute commercial, but the state of Minnesota contends that basically, it's a lie.
Minnesota Attorney General Mike Hatch filed suit against Capital One Bank and Capital One F.S.B. for using false, deceptive and misleading television advertisements, direct-mail solicitations, and customer service telephone scripts to market credit cards with allegedly "low" and "fixed" interest rates that, unlike its competitors' rates, will never increase.
In fact, the lawsuit alleges that Capital One increases the interest rate on such cards up to 400% for consumers who trigger a "penalty" rate by defaulting in any number of ways.
"Capital One aggressively markets its brand image as the credit card company with the nation's lowest fixed rates," Hatch said. "But that image is false. If you do something as simple as pay a day late, your rate with Capital One can sky-rocket overnight."
The State's suit alleges that Capital One uses "penalty rate" pricing to offer a supposedly "fixed" interest rate to consumers, but then increases that rate when an individual account holder defaults. Capital One also retains the right to unilaterally increase an account holder's interest rate -- for any reason or for no reason at all -- based upon a "change in terms" provision in its credit card agreement.
Specifically, the lawsuit faults Capital One's marketing practice as follows:
? Television Ads Capital One runs television ads with the same basic format, script, graphics and visual punch line designed to create the false and deceptive impression among consumers that its competitors' rates will increase, but Capital One's rates will not. In Capital One's "No-Hassle" ads, for instance, two people compete to pay for lunch, one with a competitors' card, the other with a Capital One card which has a "low and fixed" rate. When the man with a competitor's card asks what's going to happen to his rate, he is physically shot upward by a catapult operated by barbarians or a breaching whale. Capital One then orally and visually tells consumers that it offers the nation's lowest fixed rate at 4.99%.
? Written Solicitations Capital One bolsters its false television ads with deceptive direct mail solicitations. In one solicitation, for instance, Capital One describes its 4.99% interest rate as "low" thirteen times and as "fixed" seventeen times, including on both sides of the envelope, in the body of the text, in the application itself and elsewhere, including boxes comparing the interest rates and "savings" of Capital One's credit cards with consumers' other loans.
? Customer Service Scripts When consumers contact Capital One to apply for the card, Capital One scripts its customer service representatives to evade a direct response to the question "What does fixed mean?" Capital One answers: "Unlike most credit card companies, Capital One's fixed rate is not variable and will not go up and down as interest rates change." Only if a consumer "probes" another two times does Capital One concede that it cannot guarantee that its rates will stay the same forever.
The state's lawsuit alleges that Capital One's marketing practices violate Minnesota's laws prohibiting false advertising, consumer fraud, and deceptive trade practices. The suit seeks injunctive relief prohibiting Capital One's false, deceptive and misleading conduct and civil penalties.
The defendants are Capital One Bank and Capital One F.S.B. Both are Virginia-based entities that offer credit card products to prime and subprime consumers. Capital One is one of the top ten largest credit card issuers in the United States. According to Capital One Financial Corporation's most recent Form 10-Q filing with the U.S. Securities and Exchange Commission, Capital One's domestic credit card loans totaled $46.1 billion as of September 30, 2004. These loans generated net income of $414.4 million for July, August and September, 2004, a 50% increase from the same period in 2003.
Capital One's marketing expenses were $826.6 million from January through September, 2004. Capital One's solicitations claim that the company has 46 million customers.
Consumers who believe they were victimized by Capital One's practices may contact the Citizen Assistance Line of the Minnesota Attorney General's Office at 651-296-3353 or 1-800-657-3787.
Beware of Payday Loans
Lots of ads touting payday loans during the holiday season12/29/2004ConsumerAffairs
Beware of Payday Loans...
Illinois Attorney General Lisa Madigan is warning consumers to be wary of the many advertisements appearing in newspapers and on the radio touting low-cost payday loans during the holiday season and trying to lure in customers with items ranging from t-shirts to free turkeys.
Madigan said while these short-term loans may seem to be the answer to a cash crunch, they come at an incredibly high cost to the consumer.
Madigan noted the media is filled with advertisements and offers of extended hours during the holiday shopping season because they know this is the time of year when people need extra cash. However, what the payday lenders dont advertise about the loans are the enormous cost of taking out such loans, loan terms that enable the lenders to dodge regulations set by state law, and annual percentage rates (APR) that often are well above 250 percent.
During the holiday shopping season, consumers are flooded with a deluge of advertisements for payday loans appearing in the newspapers and on the radio, Madigan said. I recently saw a payday loan ad offering free turkeys and another shop is offering free t-shirts that say Its better than borrowing from your mother. The reality is that these loans will take the shirt right off of your back with costly fees and outrageous interest rates.
A payday loan is a short-term loan obtained when a borrower writes a check dated in the future. To get a loan, a borrower must show the payday lender a pay stub and then write the lender a check for the cash loan. The check is usually made out for a later date often one month and one day after the date of the loan. The lender gives the borrower cash in return, but for an amount less than the value of the check.
The difference between the amount for which the consumer writes the check and the amount the consumer is paid in cash is the lenders profit, or finance charge. Payday l enders often charge between $15 and $50 for every $90 borrowed, which only covers the few short weeks of the loan term. After that, the consumer must pay the lender back or pay the lender even more in finance charges.
Most of the time, a consumer doesnt have the funds in his or her checking account to cover the post-dated check when it is written, and may not have the funds when it comes time for the check to be cashed. When payment comes due, if consumers cant cover the check, they are often encouraged to roll the overdue loan into a new loan, incurring new fees and increasing the amount of the loan. This loan flipping easily can lead to the consumer using most or all of the money borrowed to pay the lenders costly fees.
Madigan said the Truth in Lending Act gives consumers the right to know the cost of any type of credit they apply for, including payday loans. Therefore, the lender is required to provide in writing both the APR and the dollar amount of all applicable finance charges.
While the Illinois Department of Financial and Professional Regulation regulates payday loans, payday lenders have found clever ways around the rules. For example, the industry dodges the rules by writing loans for 31 days or more, when the loans covered by state regulations have a 30-day limit on the loan term.
Madigan reminded consumers there are some community banks, credit unions and small loan companies that compete for consumer business by meeting their needs without making them pay exorbitant fees and interest rates. These banks will make short-term loans at comparatively low interest rates, and they require little more paperwork than the payday lenders to qualify the consumer for the loan. These lenders may prove to be far more affordable for the consumer when it comes to paying back the loan.
Cable giant Time Warner is said to be in talks with Sprint to provide cell phone service to its cable customers12/29/2004ConsumerAffairs
Telephone and cable companies have been in a race to provide a quadruple play -- telephone, television, wireless and high-speed Internet service....
Who's Watching the Food Safety Watchdogs?
Federal watchdogs snuggle up to their masters, consumer group charges12/29/2004ConsumerAffairs
Who's Watching the Food Safety Watchdogs?...
Providing consumers with timely information about food safety risks and giving them the tools to take action to effect change is the goal of a new Web site launched by Consumers Union.
"To an alarming degree, the federal agencies that are supposed to be our watchdogs bow to the pressures of the food industry, even when the end results clearly endanger public health," said Reggie James, director of www.NotInMyFood.org.
In light of a mad cow scare in November -- in which an animal tested positive for infection twice before being cleared in a third test -- and the confirmed case in December, 2003, in the state of Washington, James said it is urgent for the Food and Drug Administration to act to keep the disease agent out of animal feed and for the U.S. Department of Agriculture to test more cows annually.
As part of the new campaign, Consumer Reports is making an investigative report titled "You are what they eat," available in the free portion of its web site. The report raises concerns that the federal government isn't doing enough to protect the feed supply in the U.S. According to the article, regulatory loopholes are leaving consumers vulnerable to pathogens, drugs and contaminants consumed by the animals they eat.
Consumers Union is proposing a 4-point action plan to make beef safer for American consumers:
• Provide USDA and the FDA with the power to order mandatory recalls of contaminated food products, rather than voluntary recalls.
• End secrecy agreements between USDA and individual states that keep the public in the dark about recalled beef.
• Promptly enact rules prohibiting materials that may transmit mad cow disease.
• Increase the number of cows tested annually by USDA for mad cow disease.
Neither the USDA nor the FDA have the power to order mandatory recalls of contaminated food products other than infant formula, leaving it up to food producers instead to conduct voluntary recalls.
"While government agencies have the authority to recall faulty products ranging from toys to tires and impose penalties if products aren't pulled off the market, when it comes to our food supply, industry calls the shots," James said.
Consumers are also kept in the dark about food-borne health risks. Federal regulators refuse to tell state officials about the locations of stores and restaurants that have received potentially contaminated products unless they agree to keep that information secret from the public. Currently, 12 states are reported to have signed such secrecy agreements.
In the wake of the discovery of the first mad cow case in the U.S., the FDA promised in January to make changes in its animal feed rules. But FDA never followed through. FDA Commissioner Mark McClellan initially announced that the agency would ban cow blood and several other materials that pose risks in terms of transmission of mad cow disease in cattle feed. However, the agency never published the regulations in the Federal Register. In July, the FDA said it was considering broader restrictions, thereby postponing any action even further.
"FDA must immediately close loopholes in its rules on animal feed that could allow the disease to spread," said Michael Hansen, Ph.D., a research biologist at Consumers Union and advisor to the www.NotinMyFood.org project.
"The agency has known for a while that cow blood and chicken coop floor waste could be vehicles for transmission of mad cow disease. It should act immediately to prohibit these substances as well as restaurant waste and pig and poultry slaughterhouse waste, in ruminant feed."
USDA, Hansen noted, is testing less than 1% of the cows slaughtered each year, far less than the percentage tested in Japan and most of Europe. The USDA has tested 113,000 cows since it began a broader test program earlier this year, but more than 35 million cattle are slaughtered for food in the U.S. annually.
Hansen said that while the risk of buying infected meat may be low for any given piece of steak, consumers who want to minimize their risk can:
• buy organic beef, which is not fed any of the animal byproducts that can carry the infectious prions, and
• stay away from organ meats -- especially brains - as well as beef sausage, hot dogs, and pre-packaged hamburgers, which may combine meat from many cows.
"While testing alone will not fully protect the public, we should be testing all animals over 20 months, said Hansen. "Even animals that test negative can be silent carriers of this infection."
Study Finds Convenience Drives Online Banking
Study: reasons for online adoption are heavily influenced by generation12/29/2004ConsumerAffairs
Research revealed that reasons for online adoption are heavily influenced by generation. Gen X and Gen Y customers view online banking as a routine part of...
Convenience, time savings and around-the-clock access to account information are the top three reasons why more consumers are turning to online banking, according to a study by Bank of America.
The new research revealed that reasons for online adoption are heavily influenced by generation. Gen X and Gen Y customers view online banking as a routine part of their daily lives. These consumers value ease of use and educational features that enhance the online experience.
However, baby boomers -- often with more complex banking needs -- view security as the primary factor in adopting online banking. They want a full range of features, but presented in an easily understood format. The survey also revealed that the No. 1 impediment for consumers to online banking is security.
Customers can help reduce the chance of fraud by using online access to account information and eliminating paper statements and bills that go through the mail, said Sanjay Gupta, e-Commerce executive at Bank of America.
Overall, when consumers were asked, "What prompted you to start banking online?" 64% cited 24-hour access to their accounts, 54% noted convenience and 48% answered that online banking saved time.
"For most consumers, the primary impetus for banking online is the inherent value in time savings and convenience," Gupta said. "Our goal is to use a variety of methods to understand what we call 'Voice of the Customer,' then introduce new products and services that make it easier for customers to bank online."
Illinois Charges Storm Chaser with Home Repair Fraud
Door-to-door salesmen misled homeowners, state charges12/28/2004ConsumerAffairs
Illinois Charges Storm Chaser with Home Repair Fraud...
Illinois Attorney General Lisa Madigan charges a door-to-door home repairman soliciting storm-related roofing repair jobs in the Chicago area, accepted down payments for repair work and then either never began or never completed the projects or, in some cases, actually made the damage worse.
Since February, Madigans office has received 52 consumer complaints alleging Robert K. Olson and his company, Hail Restoration, Inc., accepted more than $225,000 in down payments from Illinois residents and then failed to repair damages to the consumers roofs. Sixteen of the 44 complaints have been filed by senior citizens.
Hail Restoration, an Illinois corporation registered in the state since December 2003, either has or has had offices in Elgin, Joliet, Naperville, Berwyn and Chicago. Currently, Hail Restorations main office is located at 75 Market St. in Elgin. Madigans case was filed in Cook County Circuit Court.
Madigans lawsuit alleges Olson travels the Chicago area going door-to-door to solicit work by claiming consumers homes have sustained roof damage during storms. Olson allegedly tells customers his company will repair damaged roofs and negotiate with insurance companies for a settlement. Many of the consumers allege they signed contracts with Olson during his first visit to their homes.
Our case alleges that Robert Olson walks up to consumers doors with claims that he will fix damaged roofs, Madigan said. The fact that weve received so many complaints indicates that his real plans may have more to do with fraud and deception than actually providing repair services.
According to the complaint, on one occasion in June 2004, the defendants informed an elderly Maywood resident that she was entitled to have the hail storm damage to her home repaired at no cost. The elderly woman signed a contract with the defendants and signed over a $7,843 insurance check to the defendants. Following that, the defendants never showed up at her home to begin the repair work.
The defendants have been charged with multiple violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Home Repair and Remodeling Act for failing to complete the work for which they contracted and, in many cases where work was begun, for performing substandard work. Madigans complaint also alleges the defendants violated the law because they have never been obtained either a roofing license or a public adjusters license in Illinois and failed to inform customers of this. Finally, the complaint charges that consumers were not provided with the legally-required Home Repair: Know Your Consumer Rights pamphlet.
Madigans lawsuit asks the court to prohibit the defendants from engaging in the business of home repair and remodeling and from further violating Illinois consumer protection laws. The lawsuit also seeks a civil penalty of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud. Additionally, the suit seeks $10,000 per violation committed against a person 65 or older. Finally, Madigans lawsuit asks the court to order the defendants to pay restitution to consumers.
Consumers who believe they have been the victim of Hail Restoration or another consumer fraud scam can file a complaint on the Web at www.IllinoisAttorneyGeneral.gov/consumers or call the Attorney Generals Consumer Fraud Hotline at the following numbers:
- Chicago 1-800-386-5438 TTY 1-800-964-3013
- Springfield 1-800-243-0618 TTY 1-877-844-5461
- Carbondale 1-800-243-0607 TTY 1-877-675-9339
R.J. Reynolds To Cut Ads Aimed at California Teens12/28/2004ConsumerAffairs
R.J. Reynolds To Cut Ads Aimed at California Teens...
R.J. Reynolds Tobacco Co. will cut back advertising aimed at teens and pay more than $17 million to settle a lawsuit brought by California Attorney General Bill Lockyer.
"This settlement is an important victory in the ongoing effort to end tobacco advertising that targets our children and helps get them hooked on a deadly product," said Lockyer. "After almost four years of hard- fought litigation and appeals, R.J. Reynolds finally has agreed to adopt serious, effective limits for advertising in magazines that have disproportionately large numbers of young readers."
The settlement approved by San Diego County Superior Court Judge Ronald S. Prager ends a lawsuit Lockyer filed against RJR in March 2001. The complaint alleged the firm's placement of cigarette ads in magazines with large numbers of underage readers violated the Master Settlement Agreement (MSA) reached in 1998 between state attorneys general and RJR and other tobacco companies. The MSA banned marketing of tobacco products to youths.
Under the settlement's terms, if a publication's teen audience comprises 15 percent or more of its total readership, RJR will be prohibited from advertising in the publication, except under limited circumstances.
Additionally, the total number of teens exposed to RJR tobacco ads must always stay at least 30 percent below the adult exposure level. The settlement also prohibits RJR from skewing the advertising for any of its brands to appeal to youths. RJR will pay the state more than $11.4 million in civil penalties under the settlement, and about $5.85 million to cover costs.
The settlement applies to all RJR cigarette brands, including Camel, Winston, Salem and Doral. It also covers Kool, Lucky Strike, Pall Mall and the other brands RJR acquired in July 2004 when it merged with Brown & Williamson Tobacco Co.
Following a four-week trial, Prager in June 2002 ruled RJR had targeted minors by exposing millions of California youths on multiple occasions to thousands of ads for Camel, Winston, Salem and Doral cigarettes. RJR placed these ads in magazines popular with teens, such as Sports Illustrated, Spin, Vibe, Rolling Stone, Hot Rod and Car and Driver.
Prager issued a permanent injunction requiring RJR to take reasonable measures to reduce teens' exposure to its advertising, relative to adults' exposure. Prager also ruled RJR had to pay a $20 million civil penalty.
RJR appealed Prager's ruling, but in February 2004 lost a unanimous decision from the 4th District Court of Appeal. In upholding Prager, the appeals court found that the fact youths were exposed to RJR magazine ads at substantially similar levels as adults showed Reynolds intended to target teens. The appeals court did, however, order Prager to recalculate the fine and tie it more specifically to the effect the targeted advertising had on California teens. RJR asked the California Supreme Court to review the 4th DCA ruling, but the high court declined.
Protecting children from tobacco use has been one of Lockyer's top priorities. Aside from enforcing the MSA prohibition on marketing to youths, he also has focused on reducing tobacco-product sales to minors. Lockyer helped lead a multi-state enforcement effort focused on retailers with poor records of such sales to minors.
Launched in 2000, the initiative by a group of 30 Attorneys General has produced six voluntary compliance agreements with major retailers to reduce tobacco-product sales to minors at more than 40,000 retail outlets across the country.
These "Assurances of Voluntary Compliance" cover the nation's top retail chain (Wal-Mart), number one drug store chain (Walgreens) and largest oil company (ExxonMobil). The other agreements cover stores and gas stations operated by Rite Aid, BP, ARCO and Amoco.
In addition, Lockyer on December 2, 2004 announced a lawsuit settlement with Safeway, Inc. which requires California's second-largest grocery chain to implement policies to reduce tobacco-product sales to minors at its 538 Safeway, Vons, Pavilions and Pak N' Save stores in the state.
Inside Ross Dress for Less12/28/2004ConsumerAffairs
If it looks too good to be true, then it probably is. Ask an employee if the price is right. We have so much theft in Ross that we have to make strict rule...
A Ross employee (12/28/04):
I'm tired of rude customers -- people who think we have to bend over backwards and break all the rules for them. Yes, customer service is important but the customer is not always right! Yes items do go down to as little as 49 cents. If you don't have your reciept too bad! Learn to hold on to your receipts. And yes there are customers that change the tags on items. Unfortunatly you might pick one up that they left behind.
If it looks too good to be true, then it probably is. Ask an employee if the price is right. We have so much theft in Ross that we have to make strict rules and keep an eye out.
We get paid lousy money! But some of us really love our jobs, that's why we stick around. So please stop complaining. And one other thing -- CLEAN UP AFTER YOURSELVES! We spend hours picking up clothes off the floors. If people would pick up after themselves we could have more time to be at the registers (always a problem at Ross, never enough cashiers open causing long lines) or walking around greeting and helping customers and preventing theft!
VW Recalls Golf, GTI, Jetta Models12/24/2004ConsumerAffairs
VW Recalls Golf, GTI, Jetta Models...
December 24, 2004
Volkswagen is recalling 369,284 cars for various defects, including leaking fuel pumps and defective hazard light switches, the National Highway Transportation Agency (NHTSA) said.
VW is recalling 300,000 Golf, GTI and Jetta cars from 2000-2002 model years because the hazard switch and flasher system function may degrade over time due to high electrical current load from turn-signal bulbs, according ot NhTSA.
VW, Europe's biggest automaker, is also recalling 19,284 Golf, Jetta, Beetle and Passat cars from 2004-2005 model years because a leaking diesel fuel pump could lead to a fire. The high pressure diesel pumps were produced with an improper fastener, which could allow diesel fuel to escape from the pump.
Also, Volkswagen said it is checking as many as 447,000 cars made between 2001 and 2003, including the Golf, GTI and Jetta models, for possible airbag problems after officials came up with 107 cases in which side-door airbags may have deployed improperly.
Stores swipe the shopper's driver's license each time a return is being made, and if the store-set return limit is exceeded, the customer's tendered return...
More States Sue Friedman's Jewelers12/23/2004ConsumerAffairs
The states of Florida and Tennessee have joined Texas in filing lawsuits against Friedman's Jewelers for using deceptive tactics in the way jeweler charged...
The states of Florida and Tennessee have joined Texas in filing lawsuits against Friedman's Jewelers. for using deceptive tactics in the way the jeweler charged customers for insurance.
Texas sued the retailer earlier this week, charging that it duped customers into paying for life, property, and other insurance while they thought they were insuring their financing of jewelry purchases.
Florida Attorney General Charlie Crist said some 19 states are expected to join the litigation against Friedman's, which has 650 stores nationwide. Crist estimates that Friedman's allegedly sold $46.7 million of the insurance in 19 states, but failed to adequately disclose the costs to customers.
According to the Florida complaint, between 1998 and 2002 Friedman's added charges to retail contracts for life, credit disability and property insurance. Friedman's allegedly collected approximately $46,709,000 from the 19 states combined. In Florida alone, it is estimated that the company collected more than $2,265,000.
The company allegedly did not provide full disclosure about the purpose and price of the insurance charges to its customers. Instead, it allegedly added the amount to the total price of retail installment contracts without obtaining consumers' signatures to authorize the transactions. These contracts included an application for insurance that includes a designated spot for the consumer's signature, but the majority of applications for insurance were not signed by consumers, Crist said.
"This wrongful conduct ranged from duping consumers into purchasing products they did not ask for to charging them for something that may have had no value," said Crist. "During this time of year we like to think of sharing gifts and good will, but this week we join with other states to take action on behalf of consumers who were treated poorly."
Based on his investigation, Frist estimated that Floridians purchased insurance on 80 percent of the contracts they signed for Friedman's jewelry merchandise. At a sampling of six Friedman's stores in Florida, investigators found that between 10 percent and 40 percent of the contracts offered to consumers did not have signatures on the appropriate insurance paperwork.
Friedman's said in a statement that it does not condone any improper practices. "The company believes that the transactions challenged primarily arose years ago and stated that the company has in place measures designed to monitor and assure compliance with company policy concerning credit insurance sales practices."
Businesses were nailed in a sting operation12/22/2004ConsumerAffairs
Attorney General Tom Reilly says the three firms have agreed no longer accept illegal orders from Massachusetts consumers, including minors....
Report: Importing Drugs Wouldn't Save Money
A just-released federal report is likely to increase the debate over the importation of prescription drugs12/22/2004ConsumerAffairs
Report: Importing Drugs Wouldn't Save Money...
A just-released federal report is likely to increase the debate over the importation of prescription drugs. The report, authored by 13 federal officials, said any small savings consumers might realize would be eaten up by the government's regulatory costs of ensuring the imported drugs' safety.
The panel, appointed by the Bush administration, also suggested that legalizing the importation of medicines would probably have an adverse effect on the future development of new drugs for American consumers. That's roughly the same view expressed in previous studies of the subject by the Food and Drug Administration and the Congressional Budget Office.
But the report runs counter to growing political demands from elected officials of both parties and consumer groups, who want Americans to be free to purchase prescription drugs from Canada, where drug prices are regulated by the government, and therefore are lower. Lawmakers in the House and Senate who are pushing for drug import legalization said the report does nothing to change their minds, and that they'll continue to push for legislation to set up commercial imports of prescription drugs.
Lobbying groups like AARP argue that allowing commercial drug imports - and regulating them - would be much safer that having Americans buying imported drugs illegally, which many are now doing. But the report flatly rules that out, saying it's unworkable. Instead, it urged American consumers to purchase generic drugs, which are cheaper than name brands.
"A commercial importation scheme could be feasible with adequate resources and authorities, however, it would be extraordinarily difficult to achieve this result if personal importation were legalized," the report said, adding "safety should not be sacrificed for affordability."
Aleve Ingredient Seen as Health Risk
Life not getting easier for pain sufferers12/21/2004ConsumerAffairs
Pharmaceutical giant Merck & Co. has agreed to a massive $950 million settlement with the U.S. government and 43 states over the way it marketed the painki...
The news for pain sufferers isn't getting any better. After one prescription pain reliever has been pulled from the market and questions raised about two others, the Food and Drug Administration has stopped a study involving naproxen, an over-the-counter remedy used by millions. It's the active ingredient in Aleve and Naprosyn.
Researchers discovered the problem last week during a review of data from a large three-year-old study of whether anti-inflammatory drugs can delay the onset of Alzheimer's disease. The National Institutes of Health stopped the study when the data showed a 50 percent increase in heart attacks and strokes among study participants taking naproxen compared with those taking placebos.
A Food and Drug Administration (FDA) official said it was the "first evidence" suggesting a risk since the drug was introduced in 1976. But she acknowledged that there have been no long-term studies of the safety of naproxen or any of the other popular nonsteroidal anti-inflammatory drugs (NSAIDs).
Until now, the NSAID safety issue had been limited to the so-called COX-2 inhibitors, Vioxx, Celebrex and Bextra.
The FDA has not issued a warning about Aleve or any other naproxen product, but has advised consumers who are taking it to carefully follow the instructions on the label. Patients should not exceed the recommended doses for naproxen (220 milligrams twice daily) and should not take naproxen for longer than ten days unless a physician directs otherwise.
Patients with questions about naproxen should consult their physician.
Non-steroidal anti-inflammatory drugs like naproxen are used for the management of mild to moderate pain, fever, and inflammation. They work by reducing the levels of prostaglandins, chemicals that are responsible for pain, fever and inflammation. Naproxen blocks the enzyme that makes prostaglandins. Naproxen was first sold as a prescription drug under the trade name Naprosyn in 1976. FDA approved its use as an over-the-counter drug in 1994.
Vioxx was withdrawn from the market in September after its maker, Merck, said studies indicated use of the drug, most often prescribed for arthritis pain, might increase the risk of heart attack and strokes in people taking it for long periods of time. More recently, questions have been raised about Bextra and Celebrex, with the latter's advertising suspended this week.
While the drug's manufacturer, Pfizer, continues to express confidence in Celebrex, concerns about its possible health risks were enough to prompt the National Cancer Institute to suspend clinical trials in which patients were taking Celebrex.
The NSAID class also includes ibuprofen (often sold as Motrin and Advil) and, for that matter, aspirin.
Researchers warned the association between naproxen and heart attacks and strokes among study participants may be a fluke. More research will be needed to answer that question.
Patients taking over-the-counter naproxen should carefully follow the label instructions and should not take naproxen for longer than 10 days, the FDA warned.
Aleve is manufactured by Bayer, which recently has been advertising the product as an alternative to Vioxx and other COX-2 inhibitors.
Lots of government grant money out there for the taking? Think again12/21/2004ConsumerAffairs
Multi-million-dollar advertising and a new book by author Matthew Lesko are peppered with exaggerations and half-truths about government grants. ...
California Files Major Securities Fraud Lawsuit Against Edward Jones
Documents Detail How Secret Mutual Fund Payments Conflicted With Investors' Interests12/21/2004ConsumerAffairs
California Files Major Securities Fraud Lawsuit Against Edward Jones...
California Attorney General Bill Lockyer has filed a securities fraud lawsuit against Edward D. Jones & Co., alleging the St. Louis, Missouri-based broker dealer failed to tell investors about so-called "shelf space" payments it received from seven mutual funds to recommend and sell those funds.
"Edward Jones broke the law, and broke faith with the working families of California who placed their trust in the company's investment recommendations," said Lockyer.
"The documents we have obtained show Jones blatantly disregarded investors' interests as it collected some $300 million in secret payments from mutual funds. California law requires full disclosure of information that raises questions about whether broker-dealers' recommendations serve clients' best interests. Investors deserve nothing less. I will settle for nothing less from Edward Jones."
The lawsuit filed in Sacramento County Superior Court seeks disgorgement of all profits Jones gained as a result of violating anti-fraud provisions of the state Corporate Securities Law (CSL). It also seeks restitution and damages for investors who bought mutual fund shares from Jones. Additionally, the complaint asks the court to impose civil penalties for each violation of the CSL. The maximum civil penalty for each violation is $25,000.
Lockyer also seeks "injunctive relief" requiring Jones to fully disclose to investors, at the point of sale, the incentive payments it receives from mutual funds. Stressing the disclosure requirements will be stringent, Lockyer said, "California will demand full honesty from Edward Jones in its dealings with this state's investors."
Under the "shelf-space" agreements at issue in the case, seven mutual funds paid Jones either cash or "directed brokerage" commissions (on portfolio transactions) to sell those funds, place them on lists of recommended buys or obtain other preferential treatment.
From January 2000 through the present, Jones extracted approximately $300 million in shelf space payments, according to the complaint, with cash comprising the bulk.
The complaint alleges the seven mutual funds (called "preferred funds" by Jones) that maintained shelf space arrangements with Jones include: American Funds, Federated Investors, Goldman Sachs, Hartford, Lord Abbett, Putnam Funds, and Van Kampen Investments.
The sale of these preferred funds comprised about 98 percent of all Jones' mutual fund sales from January 2000 through the present, according to the complaint. Sales of just one preferred fund - American Funds - accounted for 50 percent of all Jones' sales during the same period, the complaint alleges. In California, Jones' sale of the preferred funds totaled an estimated $5.8 billion from January 2000 through October 2004, said Lockyer. As of October 2004, he added, Jones had about 294,000 California customers, representing more than 177,000 households.
Evidence obtained by Lockyer's office to support the complaint includes internal emails and other documents that show: Jones maintained policies and procedures, including incentives, to ensure its "investment representatives" sold only the seven preferred funds; and Jones sold the preferred funds to investors despite knowing the funds underperformed.
"'Who pays us the most - who helps us the most' seems to be all I ever hear about funds and their wholesalers," one email states. "What about 'Who makes our clients the best returns with the least risk?' Maybe it's time the SEC shook up the fund business. When everyone except the client wins-there's something wrong."
In a March 27, 2001 letter to its preferred fund partners, Jones attached a spreadsheet detailing their poor performance during the prior year. "We at Edward Jones do not want to be in the business of explaining to our customers that one of their funds has lost one-half or three-quarters of its value," the letter states. Yet, despite the poor performance, Jones continued to sell the preferred funds to investors while collecting shelf space payments.
Jones violated the CSL's anti-fraud provisions, the complaint alleges, by failing to tell investors about the existence of the shelf space arrangements, and failing to disclose the potential conflict of interest created by the arrangements. The CSL requires broker-dealers to disclose all material facts that investors need to make informed decisions.
Regarding conflict of interest, the complaint states, "Shelf space payments create an incentive for a broker-dealer to highlight, feature or recommend funds that best compensate the broker-dealer or to meet other secret promises rather than to recommend the best performing investments and/or investments that meet the customer's personal investment needs."
Can Pfizer Prevent Celebrex Ban?
Study: it may pose a risk of heart attack and strokes12/20/2004ConsumerAffairsBy Mark Huffman
Can Pfizer Prevent Celebrex Ban?...
Pressure is building on pharmaceutical maker Pfizer, Inc. to withdraw its pain-relieving drug, Celebrex, from the market in the wake of a study indicating it too may pose a risk of heart attack and strokes. The pain reliever Vioxx, made by Merck, was withdrawn in September because of similar health risks. Both drugs are so-called Cox-2 inhibitors.
Pfizer announced last week that clinical trials conducted by the National Cancer Institute had shown an increased risk of heart attack and strokes for those taking Celebrex. The trials were suspended, and the drug maker said it would push for further study.
While some consumer groups began calling for a Celebrex ban, company officials went on the defensive. In press interviews, the company's CEO, Dr. Henry McKinnell Jr., stood firm on the position Pfizer took last week, when it disclosed the new data.
But you won't see any ads for Celebrex for a while. Pfizer has suspended its marketing campaign for Celebrex, withdrawing all radio, newspaper and magazine advertising. According to Medical News Today, Pfizer has spent $71 million so far this year advertising the drug.
Pfizer not only faces the prospect of losing the revenue from its profitable drug, it could share the expensive fate of Merck, which now faces mounting lawsuits in connection with Vioxx. So far, the Food and Drug Administration has not taken a position on a mandatory recall.
"Although these are important findings, at this point FDA has seen only the preliminary results of the studies. FDA will obtain all available data on these and other ongoing Celebrex trials as soon as possible and will determine the appropriate regulatory action," the agency said in a statement.
"While we have not seen all available data on Celebrex, these findings are similar to recent results from a study of Vioxx (rofecoxib), another drug in the same class as Celebrex. Vioxx was recently voluntarily withdrawn by Merck. Another drug in this class, Bextra (valdecoxib) has shown an increased risk for CV events in patients after heart surgery. Bextra and Celebrex are the only two selective COX-2 agents currently on the U.S. market," the statement added.
The FDA said physicians should consider "this evolving information" in evaluating the risks and benefits of Celebrex in individual patients. The agency says patients who are currently taking Celebrex and have questions or concerns about the drug should discuss them with their physicians.
Celebrex was approved in 1998 for the treatment of osteoarthritis and rheumatoid arthritis. Along with Vioxx and Bextra, also Cox-2 inhibitors, it has come to be widely used by those with chronic pain, largely because it avoids the risk of gastric irritation that accompanies older, cheaper pain relievers like aspirin and ibuprofen.
Spitzer: Drop That Gun12/20/2004ConsumerAffairs
New York Attorney General Elliott Spitzer says the agreements are part of an effort to keep unsafe toys off the shelves of New York stores. ...
Two wholesalers have agreed to stop distributing toy guns that violate New York State law. New York Attorney General Elliott Spitzer says the agreements are part of an effort to keep unsafe toys off the shelves of New York stores.
"Realistic-looking toy guns pose a threat to the law enforcement community and to the general public," Spitzer said. "My office's agreements with these two wholesalers will help keep unsafe toys off the shelves of scores of retail stores across the state and possibly prevent tragic incidents."
The two New York City-based wholesalers - Rubie's Costumes Company, Inc. and Franco American Novelty Co., Inc. which distribute costumes and accessories, including toy guns, to approximately 160 retailers throughout the state - entered into settlement agreements with Spitzer's office and agreed to pay civil penalties and costs of $27,000 and $10,000 respectively.
It is estimated that since early 2001 Rubie's and Franco American have distributed over 12,000 toy guns in violation of state law to retailers.
As a result of Spitzer's investigation, retailers have pulled thousands of unlawful toy guns from store shelves, and the two wholesalers have replaced them with toys that meet state law requirements.
New York state law prohibits the sale of any imitation toy gun in realistic colors such as black, blue, silver or aluminum unless it has a non-removable orange stripe running down both sides of the barrel. The stripe must be one inch wide if the barrel is at least one inch wide.
As part of a continuing effort by Spitzer's office to enforce public safety laws, several other retailers across the state also have stopped selling realistic-looking toy guns in violation of state law, including Wal-Mart Stores, Inc., Rite-Aid Pharmacies, four "dollar stores" in Westchester County, eight retailers in Manhattan and a popular costume store in Monroe County.
Realistic toy guns have been prohibited in New York State for the past 15 years. Improperly marked guns have led to tragic consequences. In four separate incidents in New York State alone since 1997, four individuals were killed and one child was seriously wounded when law enforcement officers mistook toy guns for real ones. More recently, a Rochester man holding a "B-B" gun was shot by a city police officer.
"Imitation weapons have the potential to be extremely dangerous to anyone who possesses one and the people in the area. Therefore, we need to continue these efforts to remove items from the streets," said Mike Green, District Attorney of New York's Monroe County.
Pfizer Finds Health Risk With Celebrex
Study finds increased risk of heart problems with patients taking its painkiller Celebrex12/17/2004ConsumerAffairs
Pfizer Finds Health Risk With Celebrex...
Pharmaceutical giant Pfizer Inc. says new research has found an increased risk of heart problems with patients taking its painkiller Celebrex, a Cox-2 inhibitor similar to Vioxx, which was removed from the market in September because of concerns about increased risk of heart attack and strokes.
Pfizer said it received new information about the cardiovascular safety of Celebrex based on an analysis of two long-term cancer trials. As reported to Pfizer by the Data Safety and Monitoring Board, one of the studies (the APC cancer trial) demonstrated an increased cardiovascular risk over placebo, while the other trial (the PreSAP cancer trial) revealed no greater cardiovascular risk than placebo.
"These clinical trial results are new. The cardiovascular findings in one of the studies (APC) are unexpected and not consistent with the reported findings in the second study (PreSAP). Pfizer is taking immediate steps to fully understand the results and rapidly communicate new information to regulators, physicians and patients around the world," said Hank McKinnell, Pfizer chairman and chief executive officer.
Celebrex is approved for use in the United States for the treatment of arthritis and pain, at recommended doses of 100mg to 200mg daily for osteoarthritis and 200mg to 400mg a day for rheumatoid arthritis. It is also approved for a rare condition called familial adenomatous polyposis in doses up to 800mg per day. The APC cancer trial studied Celebrex at doses of 400mg to 800mg per day. In the PreSAP cancer trial the dose was 400mg per day.
"In placing this new information in context, it is important to understand that the APC trial results differ from both the PreSAP cardiovascular results as well as the large body of data that we and others have accumulated over time, in which an increased risk of serious cardiovascular events in arthritis patients, even at higher-than-recommended doses, had not been seen," said Dr. Joseph Feczko, president of worldwide development for Pfizer.
A third long-term study involving Celebrex in patients at high-risk for Alzheimer's disease is also under way with about 2,000 patients enrolled, about 750 of whom are on 400mg per day of Celebrex. As with the cancer studies, this study is monitored by independent safety experts who meet regularly to assess adverse events. The company said a review by this board as recent as December 10 did not result in any recommendations to change the conduct of this study.
Pfizer said it will continue to work with the FDA on the company's plans to sponsor a major clinical study to further assess Celebrex in osteoarthritis patients at high-risk for cardiovascular disease.
Settlement Reached in NY Pay Phone Scam
A New York firm will pay $1.65 million to victims of a pay phone pyramid scheme12/16/2004ConsumerAffairs
A New York firm will pay $1.65 million to victims of a pay phone pyramid scheme, under an agreement with New York Attorney General Eliot Spitzer....
A New York firm will pay $1.65 million to victims of a pay phone pyramid scheme, under an agreement with New York Attorney General Eliot Spitzer.
Financial Network Investment Corp. (FNIC) is one of the defendants in a lawsuit that was filed by Spitzer in June 2002. The scheme also involved Goldome Capital Management (GCM) of Depew, which targeted senior citizens with the sale of pay phones for $7,000 each.
"The cooperation of this financial services firm will provide much needed relief for dozens of senior citizens - many of whom had liquidated their retirement savings," Spitzer said. "This case demonstrates the need for investors to be wary of guaranteed' returns on investments that sound too good to be true, even if the sales pitch is made by an established company."
State Supreme Court Justice Joseph G. Makowski of Erie County approved a consent order whereby FNIC will pay $1.65 million to 80 investors. The settlement represents an average recovery of over $20,000 per victim.
ETS Payphones, a Georgia company that manufactured the phones and orchestrated the scheme, paid GCM and its salespeople a commission to sell the phones. These same salespeople were also registered to sell securities for FNIC, a Torrance, California-based financial services company.
Victims were told that they could buy the phones, lease them back to ETS to operate, and receive a "guaranteed" 14 percent return on their investment. Furthermore, the investors were told that they could sell the phones back to the ETS for the original purchase price at any time after six months. Typically, investors were persuaded by the brokers to liquidate conservative investments, such as retirement annuities, to fund their purchases.
A federal investigation revealed the scheme to be a Ponzi scheme in which investors' monthly checks from ETS were coming out of new investors' principal payments and not ETS' profits. The scam began in November 1998 and came to an end when ETS declared bankruptcy in September 2000.
Spitzer acknowledged that FNIC's efforts will greatly benefit the victimized investors, most of whom are senior citizens, and noted that the company itself received no monies from its brokers' unauthorized sales of the ETS phones.
FNIC had no relationship with GCM or ETS, and the payphones were not FNIC products. Moreover, FNIC had told its brokers not to sell the ETS contracts, yet Spitzer alleged in legal papers that FNIC could have halted the scam if it had adequately supervised its brokers.
In December 2001, Spitzer obtained over $5 million for over 300 other ETS victims from National Planning Corp., FNIC's successor as the company through which the brokers who sold the phones were registered. Spitzer also noted that a number of defendants have settled the charges against them by agreeing to be barred them from the securities industry and by either paying cash towards restitution or agreeing to money judgments. The lawsuit is still going forward against the remaining defendants who sold ETS phones.
California Slays Energy Vampires12/16/2004ConsumerAffairs
California energy regulators call those common products "energy vampires," because even when they're turned off they're sucking up valuable power....
December 16, 2004
The modern home is full of electric appliances like TVs, CD players, VCRs, phone chargers and lots of other things you just plug into the wall and forget about. But California energy regulators call those common products "energy vampires," because even when they're turned off they're sucking up valuable power.
In a move that it hopes will set new standards nationwide, the California Energy Commission has adopted new standards for electric appliances' power usage. The new standards will be phased in starting in 2006.
Presently, televisions and other electronic components can use two to 10 watts of electricity, even when they're turned off. California will be require them to use one to three watts.
"The result of today's 5-0 vote will be to slow electricity demand in the state and save approximately 100 megawatts of generating capacity every year," said Energy Commissioner Jackalyne Pfannenstiel, presiding member of the Commission's Efficiency Committee. "The energy savings are cumulative, so that in 10 years, because of today's new appliance regulations, we can avoid building three large power plants that would have to generate as much as 1, 000 megawatts."
The new energy standards regulate appliances such as incandescent lamps; audio and video equipment; residential pool pumps and portable electric spas; evaporative coolers; ceiling fans, exhaust fans and whole house fans; commercial ice makers, refrigerators and freezers; vending machines; commercial hot food holding cabinets and water dispensers, among others.
The new regulations also cover external power supplies, the small transformers that are used to power answering machines, cell and cordless phones, and a host of other small consumer products and small appliances. These devices draw electricity whenever they are plugged in to an electrical socket, even if the product they are powering is not in use.
"Power supplies can waste surprisingly large amounts of electricity around the house," said Energy Commissioner Arthur Rosenfeld. "Informally known as 'energy vampires,' their efficiency varies greatly. Some models draw only one-fifth of a watt to do the same job other models use three watts to do. These new regulations will prevent that sort of needless waste."
The Energy Commission estimates that the average California household has between 10 and 20 external power supplies that cost the homeowner as much as $75 in wasted electricity each year.
Several consumer and environmental organizations spoke in support of the new regulations. Noah Horowitz, Senior Scientist for the National Resources Defense Council, noted that "these standards will cut consumer and business electricity bills and reduce the amount of pollution emitted from our power plants. Once fully implemented, the standards will reduce power plant emissions of the global warming pollutant carbon dioxide by two million metric tons per year. This is the equivalent of removing 320,000 cars from California roads each year."
Citing utility industry support for the appliance regulations, Roland Risser, Director of Customer Energy Efficiency for Pacific Gas & Electric, said, "These standards will continue to help improve the environment and grid stability, as they reduce customer costs in the future. PG&E; believes strongly in these standards and is committed to assisting in increasing them."
States are allowed to regulate appliances not covered by national standards. The federal government has already adopted energy efficiency standards for residential refrigerators, clothes washers, dishwashers and other appliances once covered by state regulation. None of the appliances in today's ruling are federally regulated.
Sprint and Nextel Make It Official12/15/2004ConsumerAffairs
Sprint and Nextel Make It Official...
Sprint and Nextel have announced approval by both company's directors to join forces in what they call "a merger of equals." The combination will create America's third largest wireless company, augmented by a global IP network that will offer consumer, business and government customers new broadband wireless and integrated communications services.
The new company, which will be called Sprint Nextel, also intends to spin off to its shareholders Sprint's local telecommunications business following the merger.
For customers, the merger combination will allow Sprint Nextel to:
• Offer digital wireless service in all 50 states, Puerto Rico and the U.S. Virgin Islands. Sprint Nextel and its affiliates and partners cover a total domestic population of 262 million.
• Provide consumers more choice through investments in wireless multi-media, web browsing, messaging, gaming and music on the go.
• Provide integrated wireless and IP-based wireline solutions to business.
• Improve customer service and sales performance through joint capabilities.
• Invest to deploy next-generation wireless data services.
• Improve wireless network quality and coverage.
The consolidation may not be over just yet. Published reports this week suggest Sprint itself is in play, with Verizon Communications Inc., the major stockholder in Verizon Wireless, interested in acquiring Sprint.
Sprint and Nextel currently have a combined total equity value of approximately $70 billion and serve more than 35 million wireless subscribers on their networks and 5 million additional subscribers through affiliates and partners. The two companies, along with their affiliates and partners, operate networks that directly cover nearly 262 million people, more of the U.S. population than any other carrier, the companies said in a statement.
Cell Phone Sales Calls Not a Threat (Yet)
Bogus emails raising consumer fears of sales calls to cell phones12/14/2004ConsumerAffairs
Cell Phone Sales Calls Not a Threat (Yet)...
A bogus e-mail has been raising cell phone users' anxiety level. The e-mail warns that cell phone directories are about to be provided to telemarketers, when in fact no such directory yet exists and it is illegal to make telemarketing calls to cell phones. And regulators are reminding cell phone users they can sign up for the Do Not Call Registry.
There is an effort underway by some cell phone companies to compile directories but they don't yet exist and even if they did, the 1991 Telemarketing Consumer Protection Act (TCPA) makes it illegal for solicitation calls to be made to wireless phone numbers without clear permission from the individual to whom a number has been assigned.
The Direct Marketing Association, which represents telemarketers, says that it continues to support vigorous enforcement of the absolute restriction on unsolicited calls to cell phone numbers for marketing purposes and urge federal and state authorities to prosecute those who may engage in this illegal activity.
The Federal Trade Commission reminds consumers that the National Do Not Call Registry has accepted personal cell phone and home phone number registrations since it opened for consumer registrations in June 2003. There is no deadline to register a home or cell phone number on the Registry.
To register a telephone number on the National Do Not Call Registry, or to file a complaint, consumers should visit www.donotcall.gov or call 1-888-382-1222 (TTY: 1-866-290-4236).
Consumers registering a phone number online will be asked to provide a valid e-mail address to which a confirmation of the registration will be sent. A registration is not complete until the consumer clicks on the link in this e-mail. Consumers registering by phone must call from the phone number they wish to register.
Blockbuster Eliminates Late Fees
Well, sort of ...12/14/2004ConsumerAffairsBy Truman Lewis
Blockbuster Eliminates Late Fees...
Blockbuster says it is eliminating late fees on games and movies as of Jan. 1. The giant movie-rental company portrays it as its gift to the American consumer but skeptics note the change is not without its fine print.
Instead of charging late fees, Blockbuster says that from now on, if customers don't bring a game or movie back on time, they'll be charged the purchase price less any rental fees they've already paid. Or they can return it within 30 days and pay only a "restocking" fee.
"Doing away with late fees is the biggest and most important customer benefit we've ever offered in our company's history," John Antioco, Blockbuster chairman and chief executive, said. "So as of the first of the year, if our customers need an extra day or two with their movies and games, they can take it."
"Blockbuster is a 20th Century business trying to survive for another few minutes while Amazon, TiVo and who knows what else corner the market on home entertainment," said James R. Hood, ConsumerAffairs.com president. "Every Blockbuster store I've been in lately has been deserted."
Meanwhile, Antioco assured Wall Street investors the company has tested the program and found that "increased retail sales" -- including the purchase of overdue movies -- more than make up for the loss of late fees.
Blockbuster has been estimated to make $250 million to $300 million on late fees annually.
The company has more than 4,500 company-operated and participating franchised stores in the U.S.
Continental To Begin Direct Flights To Africa
Carrier plans non-stop flights between New York and Lagos12/13/2004ConsumerAffairs
Continental Airlines, the world's sixth-largest airline, has announced its approval to begin non-stop flights between New York and Lagos, Nigeria. ...
Continental Airlines has announced it has received approval from the governments of the United States and Nigeria to begin non-stop flights between New York and Lagos.
Continental expects to launch the service in the second quarter of 2005. It will be the only scheduled non-stop trans-Atlantic service to Nigeria and the only scheduled service to Africa by a U.S. carrier. With the start of the Lagos route, Continental will become the only U.S. airline to offer scheduled passenger service to six continents of the world.
Further details of the new service, including the flight schedule and launch date, will be announced later.
"We're proud to extend our network to Africa and to provide a unique link between Nigeria, Africa's most populous country, and the United States, its second-largest trading partner," said Continental's President and Chief Operating Officer Larry Kellner, who becomes chairman and chief executive officer at the end of this year.
"Our Lagos service will be highly attractive to Nigerian and American trans-Atlantic travelers, particularly executives in energy-related industries. They will be able to fly more quickly and easily between Nigeria and not only New York, but cities throughout North America, via our hub at Newark Liberty International Airport."
Continental Airlines is the world's sixth-largest airline with more than 3,000 daily departures throughout the Americas, Europe and Asia. Continental serves 151 domestic and 120 international destinations and nearly 400 additional points are served via SkyTeam alliance airlines.
Court Rules Against General Steel In Consumer Fraud Case
Fabricated steel buildings didn't match the company's claims, court finds12/13/2004ConsumerAffairs
Court Rules Against General Steel In Consumer Fraud Case...
A Colorado company that sells fabricated steel buildings has lost a consumer fraud case. In a 41-page ruling, Jefferson County, Colo., Chief District Court Judge Brooke Jackson found that General Steel violated the state's Consumer Protection Act.
"Beyond any legitimate question, General Steel for years engaged in sales practices that were riddled with misrepresentations and omissions," the judge wrote.
"The Court's clear and decisive ruling in this case sends a strong message about the consequences of deceptive sales practices in Colorado," Colorado Attorney General Ken Salazar said. "These defendants disregarded good business ethics and notions of fair and truthful advertising to line their pockets at the expense of consumers throughout the country. These practices will not be tolerated."
The state alleged during an eight-day trial in October that General Steel carried out a deceptive marketing and sales program designed to create the false impression that it was a manufacturer of steel buildings that had an inventory of buildings available to consumers at factory-direct sale or "clearance" prices.
The state also alleged that consumers, responding to national radio, television and other advertising, were falsely led to believe that only a limited number of such clearance buildings were available and that they had to act quickly to submit a substantial deposit to claim a building.
In his ruling, Chief Judge Jackson found that General Steel engaged in numerous false and deceptive sales practices, including:
• Misrepresentations that General Steel was a manufacturer;
• Misrepresentations that General Steel was selling existing buildings, when in fact it merely ordered buildings from suppliers only after consumers placed an order;
• Misleading use of the term "clearance buildings;"
• Falsely implying that its buildings were available at 50 percent off the normal price;
• Failing to disclose that the building being sold were simply "shells" and did not include doors, windows, or even opening for the placement of doors and windows;
• Misrepresentations regarding the non-refundable nature of the deposits; and
• Misrepresentations in the process of selling windows, doors and other components.
In its ruling, the court imposed the maximum allowable fine of $200,000 against General Steel's president, Jeffrey Knight. Four additional company employees were also fined by the Court $20,000 each. General Steel was also ordered to pay restitution to consumer victims who testified at trial in amounts ranging from $3,000 to $10,000 per victim. The Court also ordered General Steel to pay the state's costs and attorney fees for its investigation and prosecution.
The court entered a permanent injunction against all of the defendants prohibiting a continuation of the deceptive practices. General Steel also will remain subject to third-party monitoring of its sales practices. Finally, the court directed the parties to establish a proposal for resolving the state's restitution claims for other General Steel consumers injured by the company's deceptive practices.
Sprint, Nextel Merger May Be Next
Consolidation appears to be the buzzword in the mobile telephone industry12/10/2004ConsumerAffairs
Sprint, Nextel Merger May Be Next...
Consolidation appears to be the buzzword in the mobile telephone industry. On the heels of Cingular's acquisition of AT&T Wireless comes word that Sprint and Nextel may be about to join forces.
A merger would create an entity of more than 38 million wireless subscribers, but it's not clear how that would affect customers of the individual companies.
Sprint is currently the number three U.S. wireless phone company and has recently invested heavily in infrastructure. The company has announced it will spend $3 billion over the next three years to upgrade its mobile network and develop high-speed Internet services.
Sprint has over 26 million subscribers and produces more than $26 billion in operating revenue.
Nextel boasts the largest all-digital wireless network in the country. It has just over 15 million subscribers, most of them businesses, which like Nextel's walkie-talkie "push to talk" instant connection feature. Sprint has also begun development of a walkie-talkie feature.
Sprint, on the other hand, has a nationwide wireless data system, something Nextel would have to spend billions to develop.
Nextel's management team is highly regarded, something that's never been said about Sprint's.
Craftsman tools use parts from many countries, suit charges12/08/2004ConsumerAffairs
Class action lawsuit against Sears, Roebuck & Co alleges that Sears conducted false advertising and consumer fraud by advertising that its Craftsman tool l...
Lenovo Buys IBM PC Business12/08/2004ConsumerAffairs
It's official -- China's largest personal computer maker, Lenovo Group Ltd, is buying control of IBM's PC-making business for $1.25 billion....
It's official -- China's largest personal computer maker, Lenovo Group Ltd, is buying control of IBM's PC-making business for $1.25 billion, completing IBM's retreat from the business it created in 1981.
Lenovo will become the world's third largest PC manufacturer, after Dell and Hewlett-Packard/Compaq. IBM will hold an 18.9% stake in Lenovo. Stephen M. Ward Jr from IBM will take over as the new Lenovo CEO.
The sale of IBM's PC desktop and notebook computer lines frees the company to focus on higher-margin businesses such as computer services, software, more powerful server computers, and storage as well as computer chips, analysts say.
Lenovo, formerly known as Legend, will take ownership of the IBM "Think" trademark family, including its ThinkPad notebook brand and its ThinkCenter desktop line. Lenovo will hire 10,000 IBM PC employees - including about 2,300 in the United States.
Founded in 1984, Lenovo was the first company to introduce the home computer concept in China, and since 1997 has been the leading PC brand in China.
Lenovo is entering treacherous waters. Dell's emphasis on cost control and aggressive direct marketing have swamped nearly every other major manufacturer in the U.S. Gateway has suffered major erosion in the last few years and many analysts expect Hewlett-Packard will exit the PC business within the next few years.
Expedia Adds Review Features
Consumers can say what they thought of hotels and other destinations12/08/2004ConsumerAffairs
Expedia Adds Review Features...
Online travel site Expedia has introduced three new online resources it says can help consumers research, evaluate, and choose their next hotel or destination activity by considering the amenities hotels offer.
Travelers will also have the ability to review new online "traveler opinions" that provide additional insight from customers who have stayed at that hotel. Expedia says it is also making it easier to book destination activities, attractions, and services by introducing a separate "activities" tab.
"Our focus remains on making it easier for customers to research, evaluate, and book travel," said Bill Bliss, senior vice president, product and customer experience. "With these new features, Expedia is giving customers additional ways to help them find the perfect hotel and destination activity for their trip. Also, our hotel and activity partners are given additional avenues to differentiate their products. It's a win-win situation."
The new resources include tools to help evaluate and select the right hotel for a trip -- including photos, virtual tours, maps, flexible rate calendars, and room layout views. The new hotel amenities filter allows customers to narrow down search results to show only those hotels with the chosen amenities.
Travelers can search for hotels in the chosen destination and then click on the "narrow search by choosing amenities" icon found at the top of the search results page. Travelers can select from a list of 13 hotel services and amenities, including high-speed Internet access, swimming pools, free parking, pets accepted, and more - and the resulting amenity -- filtered search results will make the decision of where to stay that much easier.
According to a recent Forrester Research survey, more than 56 percent of U.S. leisure travelers say that they typically seek out advice from friends or family when it's time to research a trip.
The Web site's new traveler opinions tab connects Expedia customers with reviews containing first-hand knowledge and insight from other travelers who have already experienced that particular hotel -- providing useful feedback during the hotel selection process.
The company says it has set up rigorous standards to ensure that traveler opinions posted on the site offer a legitimate and relevant viewpoint. As such, only travelers who have booked a stay at that particular hotel within the past six months can submit a review -- and all reviews expire after 12 months of being posted.
Expedia's hotel partners are also invited to respond to traveler opinions on the site, ensuring a blend of perspectives for the traveler to consider.
To read or submit traveler opinions, Expedia customers can simply click on the "traveler opinions" tab on the left-hand side of each hotel's information page. Initial trials of the Expedia traveler opinions have rolled out to every Expedia Special Rate hotel in San Diego, San Francisco, and Seattle, with additional markets being added in the coming weeks.
Texas Puts Freeze On Tax Scam Aimed At Seniors
Company advertised fee-based filings for senior homestead tax exemptions12/08/2004ConsumerAffairs
Texas Puts Freeze On Tax Scam Aimed At Seniors...
Texas has put the freeze on a "tax freeze" scam aimed at seniors. Penalties and fees totaling $23,838 were assessed against State and County Tax Reduction, which advertised fee-based filings for senior homestead tax exemptions.
Attorney General Greg Abbott said the company misled senior property owners last December by mailing misleading correspondence that appeared to be official government business alerting them about an available property tax freeze.
The correspondence urged seniors to take advantage of the services offered, but required a fee, a concealment scheme prohibited under the Texas Deceptive Trade Practices Act. Such filings are free at local tax offices, and such correspondence, by law, must clearly state that the offer is not official government business, but advertising for services.
Morgan and his business mailed thousands of solicitation letters to residents over age 65 under the guise of official government business. Last December the attorney general obtained a restraining order that stopped this practice, forcing Morgan's company to make refunds to any seniors who had mailed money as fees for services.
"I am pleased the court saw this business for the fraud that it was and applied the appropriate penalties for conduct wrongfully waged against senior citizens," Abbott said. "Property owners can rest assured my office will be on the watch for any similar schemes to bilk them of money they could just as well keep in their pockets this holiday season."
Iowa Gas Station Owner Caught In Shell Game
Regular gas in all three pumps12/08/2004ConsumerAffairs
Ranbir Thakur must pay a $20,000 civil penalty to the State of Iowa as a result of a lawsuit alleging Thakur's Citgo gas station business placed lower-grad...
Ever wondered whether the hi-test gas you were putting in your high-performance car was really hi-test? A gas station owner in Davenport, Iowa thought no one would notice if he put regular in all three pumps. He was wrong.
Station owner Ranbir Thakur must pay a $20,000 civil penalty to the State of Iowa as a result of a lawsuit alleging Thakur's Citgo gas station business placed lower-grade regular gas in tanks supplying pumps that sold mid-grade and super-premium gasoline.
The consumer fraud lawsuit filed by Attorney General Tom Miller's Office was based on an investigation by the Weights & Measures Bureau of the Iowa Dept. of Agriculture & Land Stewardship. The investigation determined that several gasoline tanker-truck drivers had been asked by Thakur to put 89-octane gas in tanks meant to hold 91- and 93-octane gasoline at the Citgo #578 gas station in Davenport.
Thakur and his business, Diwan, LLC, admitted the violation in a consent judgment and order entered recently by District Court Judge Gary D. McKenrick. Under terms of the order. In addition to the $20,000 fine, the station faces more frequent inspections by the Weights & Measures Bureau and will lose its license to sell gasoline in Iowa if there are similar violations in the future.
"This sends a clear message that gas retailers will be penalized sharply if they violate the law. Our Department's Weights & Measures Bureau inspects and licenses all commercial weighing and measuring devices, including gas pumps, and gas pump inspections are conducted unannounced annually throughout the year in order to protect consumers," said Agriculture Secretary Patty.
Medicare Help Line Falls Short, GAO Finds12/08/2004ConsumerAffairs
A study by the Government Accountability Office finds that the 1-800-MEDICARE help line falls far short of meeting older Americans' needs. The line lacks a...
December 8, 2004
A study by the Government Accountability Office (GAO) finds that the 1-800-MEDICARE help line falls far short of meeting older Americans' needs. GAO said the line provided accurate answers to 61 percent of the 420 calls it made and inaccurate answers to 29 percent.
No answers were available for the remaining 10 percent of the calls GAO's investigators made. Most of these calls were not answered because they were transferred to other contractors responsible for processing Medicare claims that were not open for business at the time or the calls were inadvertently disconnected.
"There is a lesson for the Congress and the Administration in todays GAO report that less than two-thirds of people calling the governments Medicare information line received accurate answers," said Robert M. Hayes, president of the Medicare Rights Center, a not-for-profit advocacy organization.
"People with Medicare have been shunning the prescription drug discount card program in droves. Centers for Medicare and Medicaid Services trained counselors cannot provide useful information to millions of people confused by the new Medicare law. The drug benefit slated to begin in January 2006 will be even more confusing for older and disabled Americans," Hayes warned.
The 1-800-MEDICARE help line provides customer service reps (CSRs) with written answers - so-called scripts - that CSRs use during a call. When CSRs provided inaccurate information, it was largely because they did not seem to access and effectively use a script that answered GAO's questions, the report said.
CMS and its contractor do not routinely pretest the scripts to ensure that they are understandable to CSRs or potential callers, GAO found.
To improve the accuracy of the information the help line provides,
GAO recommends that CMS:
(1) revise procedures so that calls are not transferred to other contractors that are closed,
(2) assess current scripts and pretest new and revised scripts to ensure that they are understandable,
(3) provide more testing of customer service reps' ability to accurately answer questions and use the results to target training efforts as needed, and
(4) monitor the accuracy rate for each frequently asked question and use the results to modify scripts or provide training, if necessary.
GAO said that the training for CSRs meets CMSs requirements, but it is not sufficient to ensure that CSRs are able to answer questions accurately on the help line. Before handling calls, CSRs must complete about 2 weeks of classroom training; accurately answer two simulated calls consecutively out of six; and score at least 90 percent on a written exam. In addition, all CSRs receive ongoing training.
However, GAO said the results of its study indicate that the testing and simulated call answering did not sufficiently measure whether CSRs were prepared to answer questions accurately.
Dallas-based online university Trinity Southern faces a consumer fraud lawsuit12/07/2004ConsumerAffairs
Pennsylvania Attorney General Jerry Pappert's lawsuit names four defendants of engaging in an elaborate scheme to promote and sell bogus academic degrees. ...
Husqvarna Lawn Tractors12/06/2004ConsumerAffairs
Husqvarna Lawn Tractors...
December 6, 2004
About 5,000 Husqvarna Lawn Tractors are being recalled. The tractors can develop abrasions on the fuel tank because of the fuel line clamps location, possibly resulting in a fuel tank leak, which could pose a fire hazard.
Husqvarna has received four reports of fuel tanks leaking. There have been no reports of fire or property damage.
These Husqvarna 18.5 horsepower, hydrostatic transmission, 42-inch cutting deck, lawn tractors are gasoline-powered and are designed for residential use. The recall involves models LTH18542A and LTH18542B and includes all serial numbers. The model plate with the model number information is found under the seat.
The tractors were sold at Husqvarna dealers and distributors nationwide from November 2003 through July 2004 for about $1,500.
Consumers who have one of the recalled lawn tractors should contact an authorized Husqvarna service provider in your area, which will provide a free repair.
For more information or to locate a Husqvarna dealer, call Husqvarna at (800) 448-7543 between 9 a.m. and 5 p.m. ET Monday through Friday, or visit the firms Web site at www.usa.husqvarna.com
The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).
Scag Tiger Cub Riding Lawn Tractors12/06/2004ConsumerAffairs
Scag Tiger Cub Riding Lawn Tractors...
December 6, 2004
Scag Power Equipment is recalling about 16,000 Tiger Cub Lawn Tractors. Fuel can leak out of the carburetor, posing a risk of fire and burn injuries.
Scag is aware of 20 incidents, all of which involved fires and damage to tractors. Two consumers received minor burn injuries to their hands as a result of trying to put out the fires.
The recalled zero-turn-radius riding lawn tractors are Cats Eye Gold with black trim, and have a vinyl seat. The body of the tractor has Scag Tiger Cub written in red on the side and front of the tractor. The following model and serial numbers can be found under the seat, next to the hydraulic pump on the right hand side.
|Model Numbers||Serial Numbers|
|STC40-17KA||4910001-4910004; 5810001-5810310; 6570001-6570250|
|STC48A-19KA||5880001-5880511; 6580001-6580550; 7630001-7630875; 8400001-8404750|
|STC48A-21KA||4920001-4920002; 5890001-5890561; 6600001-6601150; 7650001-7650975; 8420001-8420342|
|STC52A-23KA||5910001-5910571; 6620001-6620900; 7670001-7671298; 8430001-8430600|
Authorized Scag Power equipment dealers nationwide sold the tractors from November 1999 through July 2003 for between $5,000 and $8,000.
Consumers should stop using these tractors immediately and contact a Scag Equipment dealer for a free repair. The company is directly notifying those consumers who completed and returned warranty cards.
Consumer Contact: For information on locating a dealer near you, contact Scag Equipment Customer Service toll-free at (866) 821-9208 between 8 a.m. and 7 p.m. ET, Monday through Friday and 9 a.m. and 5:30 p.m. ET Saturday.
The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).
Exmark Lazer Z Zero Turn Radius Riding Lawn Mowers12/06/2004ConsumerAffairs
Exmark Lazer Z Zero Turn Radius Riding Lawn Mowers...
December 6, 2004
Exmark is recalling the Lazer Z EFI zero turn radius riding lawn mowers. A hole can develop in the fuel line, resulting in a leak that could present a fire hazard.
The 2004 Model Lazer Z zero-turn (ZRT) riding mowers with 60-inch and 72-inch decks are equipped with electric fuel injection engines as follows:
|Model||Serial Range||Description||Suggested |
|LZ28KC604||440000-500539||28HP ZRT w/60 deck||$11,099|
|LZ28KC724||440000-500612||28HP ZRT w/72 deck||$11,432|
All products are equipped with a foldable roll-over protection bar. The model and serial number decal can be found on the frame below the seat.
Authorized Exmark dealers sold these riding lawn mowers nationwide from July 2003 to September 2004.
Consumers should stop using these Exmark riding mowers and contact their local Authorized Exmark Service Dealer to schedule a time to install a free replacement fuel line. For more information, contact Exmark at (800) 479-8379 between 8 a.m. and 5 p.m. CT Monday through Friday. Consumers can also visit the firm's web site at www.Exmark.com.
Exmark has notified registered owners directly.
The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).
Home Depot, Lowe's Settle Credit Card Suit12/03/2004ConsumerAffairs
More than two million credit-card customers of Home Depot and Lowe's could be eligible for $5 rebates under the terms of a $4 million class-action settleme...
More than two million credit-card customers of Home Depot and Lowe's could be eligible for $5 rebates under the terms of a $4 million class-action settlement regarding over interest charges on what were supposed to be interest-free purchases.
Lowe's and Home Depot were sued after customers discovered their monthly payments were applied to interest-free balances before regular purchases, which accrued interest charges.
The issuer of the credit cards, Monogram Credit Card Bank of Georgia, a unit of General Electric Corp. was also named in the suit.
Los Angeles Superior Court Judge Charles McCoy gave preliminary approval to the $4 million settlement and scheduled a final approval hearing for June 6, 2005.
The companies must notify their customers of the terms of the settlement, which gives every class member who lost money as a result of the payment allocations a $5 rebate on a purchase of $15 or more.
The lawsuit contended that customers were told they could defer interest charges for six months on certain store credit card purchases of more than $200. But they soon learned that payments were being applied toward the interest-free balance, while their regular purchases continued to rack up interest charges.
The companies also agreed to more fully explain to customers how their credit card payments are applied and to automatically apply payments against the interest-bearing balances first, unless customers choose otherwise.
Wal-Mart Agrees To Tobacco Sales Reforms
Wal-Mart will implement new policies and procedures to reduce tobacco sales to minors12/02/2004ConsumerAffairs
Wal-Mart Agrees To Tobacco Sales Reforms...
Wal-Mart will implement new policies and procedures to reduce tobacco sales to minors in Wal-Mart stores throughout the nation, including all 46 Wal-Mart and Sam's Club stores in Massachusetts, under the terms of a multi-state agreement announced by Attorney General Tom Reilly and Attorneys General from 42 other states.
The assurance of voluntary compliance is the third of its kind to be reached as part of an ongoing, multi-state enforcement effort to keep cigarettes away from teenagers. Similar agreements are in place with the Walgreens drugstore chain and the Exxon Mobil Corporation, which operates a nationwide chain of gas stations and convenience stores.
"Every day more than 2,000 minors pick up a cigarette for the very first time and end up getting hooked for life," Reilly said. "It's important that retailers do what they can to keep kids away from tobacco and adopt policies and practices similar to the ones outlined in today's agreement with Wal-Mart."
The multistate agreement requires Wal-Mart to take the following steps:
• Train employees on state and local laws and company policies regarding tobacco sales to minors, including explaining the health-related reasons for laws that restrict youth access to tobacco. • Check the ID of any person purchasing tobacco products when the person appears to be under age 27, and accept only currently valid government-issued photo identification as proof of age. • Use cash registers programmed to prompt ID checks on all tobacco sales. • Hire an independent entity to conduct random compliance checks of approximately 10% of all Wal-Mart stores every six months. • Prohibit self-service displays of tobacco products, the use of vending machines to sell tobacco products, and the distribution of free samples on store property. • Prohibit the sale of smoking paraphernalia to minors.
Under the terms of the agreement, Massachusetts will receive approximately $9,000 for the Attorney General's Local Consumer Aid Fund. The attorneys general will monitor compliance with the agreement and have reserved the right to enforce future violations of the agreement as well as the laws governing sale of tobacco to minors.
The agreement is part of Reilly's ongoing effort to protect children from the health risks of smoking. Earlier this month, Reilly's Consumer Protection and Antitrust Division (CPAD) filed lawsuits against three out-of-state online cigarette vendors accused of selling cigarettes to Massachusetts teenagers without first verifying that they were at least 18 years old.
Studies have shown that the great majority of adult smokers started smoking before age 18, the legal age to purchase cigarettes in Massachusetts. A survey of Massachusetts high school students found that 74 percent of teen smokers had tried to quit but were unable to do so.
Tobacco is estimated to result in more deaths each year in Massachusetts than alcohol, cocaine, heroin, homicide, suicide, car accidents, fires, and AIDS combined. The agreement is considered a model for all drugstores and retailers committed to reducing the rate of sale of tobacco products to minors.
ESPN Suits Up for Cell Service
ESPN is getting into the cell phone business12/02/2004ConsumerAffairs
ESPN Suits Up for Cell Service...
ESPN is getting into the cell phone business. The all-sports cable channel's ESPN Mobile will make offer sports junkies instant access to scores and sports news. ESPN is mostly owned by Walt Disney Co., which is also planning a Disney-branded cell phone service.
ESPN Mobile will operated over Sprint's network. Sprint, the nation's third largest cellular carrier, also provides the underlying communications service for a number of other companies, including Qwest, AT&T (not AT&T Wireless, which has merged with Cingular) and Virgin.
ESPN's cable channel reaches nearly 90 million U.S. homes and the company's executives are betting many of them will want to switch to a cell phone service that puts them just a click away from scores and headlines.
Tightly-targeted cell brands may be the next big thing in wireless communications. Virgin Mobile is aimed at younger users, as is Nextel's Boost Mobile.
Although details of the Disney cell service aren't yet known, it will presumably be targeted to
Supreme Court Weakens Consumer Protection in Car Financing
Case involved spot delivery allegations12/01/2004ConsumerAffairs
Supreme Court Weakens Consumer Protection in Car Financing...
A Virginia car dealer won a U.S. Supreme Court victory that weakens consumers' protection against lending law violations common in spot delivery cases.
In an 8-1 decision, the court said that disgruntled used-car buyer Bradley Nigh was entitled to no more than $1,000 in damages for a violation of the Truth in Lending Act by Koons Buick-Pontiac-GMC of Alexandria, Va. Lower courts had awarded Nigh $24,000.
Nigh argued that the dealer had violated the law by falsely listing a charge of $965 for a car alarm he did not order or receive. The jury awarded him about $24,000, which represented double the amount of the finance charges.
But Mike Field, president of the dealership, now known as Field Auto City, argued that the lending law had been obscured by various amendments over the years and that Congress never intended to remove the $1,000 cap on damages for wronged car buyers and other consumer borrowers.
Field was backed by the National Automobile Dealers Association, the American Bankers Association and other business groups, who argued that a ruling the other way would have opened the door to more than $1 billion in annual damages nationwide.
Consumer groups argued that $1,000 is not enough to deter shady dealers.
The 1968 Truth in Lending Act was intended to force details of loans into the open and allow consumers to better evaluate the cost of credit. But Justice Ruth Bader Ginsburg, author of the opinion, said from the bench that "less-than-meticulous drafting" of an amendment to the law had caused confusion.
She said that rejecting Field's argument would have led to an absurd result -- caps on damages for bigger loans, such as mortgages, but nearly unlimited damages for car loans.
Nigh was 22 when he made a down payment on a 1997 Chevrolet Blazer. He signed a sales contract and drove the car home, thinking the deal was final. But then Nigh, of Fairfax, was told he would have to put down an additional $2,000 to get a loan.
Nigh tried to back out of the deal when the dealer called him back a third time and, according to Nigh, threatened to have him arrested for auto theft if he did not sign a different contract.
Travel Industry Courting Four-Legged Tourists
Traveling with animals is getting a lot easier.12/01/2004ConsumerAffairs
As consumers head into the heaviest travel time of the year more and more pet owners are choosing to travel with their pets due to a variety of easy option...
As consumers head into the heaviest travel time of the year, those with pets are faced with a choice: place your furry one in a boarding facility or bring it along. Increasingly, pet owners are opting for the latter because traveling with animals is getting a lot easier.
A Web site, www.petswelcome.com is devoted to helping pet owners take their pets on the road. It features a database of over 25,000 hotels, B&Bs, ski resorts, campgrounds, and beaches that are pet-friendly.
A growing number of hotel chains, such as Red Roof Inn, have a policy of allowing small pets in their rooms. Petswelcome.com says it continues to discover more and more pet friendly establishments all over the world. As a matter of fact, the editors says, they're currently researching community colleges that accept pets.
Another site, www.takeyourpet.com also has a database of pet friendly hotels but goes a step farther by providing listings of thousands of animal hospitals, shelters, groomers, kennels & boarding facilities, exercise & sitting services, pet food & supply stores and veterinarians all over the United States. Some pet-friendly hotels offer discounts through the site.
Sally Smith, who owns and operates a pet transportation company called Airborne Animals, in Blairstown, NJ says most pets will travel well if they are acclimated to the car but many, especially cats, do not.
That's why more and more consumers and their pets are traveling by air. Smith says it's still stressful for the pet, but is of shorter duration.
"Many people worry about the safety of air travel. Over a million pets a year are shipped, according to airline estimates. Each year one or two well-publicized accidents detract from that fact. Actual airline industry statistics report less than 30 animal injuries or deaths per year," Smith said.
Like hotels, some airlines are more pet friendly than others. Some go out of their way to attract people with pets, even offering frequent flyer programs for animals.
Israel's El Al Airlines introduced the concept of pets' frequent flyer programs with its Points for Pets Program in 2001. Three round-trip ticket purchases from New York to Tel Aviv in a three-year period and the pet earns a free ticket.
Virgin Atlantic's program offers pets free gifts, such as t-shirts and special collar tags for dogs and a Virgin baseball cap and scarf for ferrets.
While international airlines are becoming more pet-friendly, not all travel destinations are. Many countries require strict documentation of all animals entering the country, ensuring the pet meets all vaccination requirements. Even so, travel analysts say the number of people traveling with their pets, both domestically and internationally, increases more than ten percent each month.