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But NCAA's close ties to Anheuser-Busch may complicate the decision03/31/2005ConsumerAffairs
Coaches, Consumer Groups Urge NCAA to End Beer Ads on College Sports...
Mr. Heater Recalls Big Buddy, Tough Buddy Propane Heaters03/31/2005ConsumerAffairs
Mr. Heater Recalls Big Buddy, Tough Buddy Propane Heaters...
March 31, 2005
Mr. Heater is recalling the Big Buddyand Tough Buddy portable propane heaters. The valve on the propane heaters can leak, posing a fire hazard.
Mr. Heater has received 26 reports of propane leaks. No injuries have been reported.
Only model number MH18B Mr. Heater Big Buddy and Tough Buddy propane heaters are included in the recall. The model number is located on the rear panel of the unit. The heaters are either black with yellow accents around the burner tiles or light gray with red accents around the burner tiles. Mr. Heater is printed in the lower right hand corner of the heaters.
The heaters were sold at home centers, sporting goods, and hardware stores nationwide from September 2004 through December 2004 for between $120 and $149.
Contact Mr. Heater for instructions on receiving a replacement heater.
Consumer Contact: Contact Mr. Heater Inc. at www.regcen.com/heaterrecall or call (800) 385-2605 between 8 a.m. and 7 p.m. ET Monday through Friday.
The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).
Diet Patch Promoters Settle Federal Charges03/31/2005ConsumerAffairs
Diet Patch Promoters Settle Federal Charges...
March 31, 2005
Operators who sent millions of illegal e-mail messages to market their bogus diet patch have settled Federal Trade Commission charges that their operation violated federal laws, including anti-spamming regulations.
The settlement bars the defendants from making false or misleading claims for their products or services and bars unsubstantiated health, efficacy, or safety claims. It also provides for a suspended judgment of $230,000, the total amount of diet patch sales.
In April 2004, the FTC filed suit in U.S. District Court charging that Phoenix Avatar and its principals were violating the CAN-SPAM Act and the FTC Act by marketing their bogus diet patches using massive amounts of illegal spam. The court issued a temporary restraining order to halt the unsubstantiated claims and freeze the defendants assets pending trial.
The individuals challenged the suit claiming they could not be held liable under CAN-SPAM because the FTC could not prove that they sent the spam. The FTC argued that the defendants were responsible because they had either sent the messages or caused the message to be sent by affiliates.
In July, U.S. District Court Judge James Holderman issued an order finding that CAN-SPAM liability is not limited to those who physically cause spam to be transmitted, but also extends to those who procure the origination of offending spam. The court held that the FTC had amassed a persuasive chain of evidence connecting the defendants to violations of the CAN-SPAM Act and the FTC Act.
The settlement ends the litigation with a stipulated order for permanent injunction and final judgment as to defendants Daniel J. Lin, Mark M. Sadek, James Lin and Christopher M. Chung and a default judgment and order for permanent injunction and monetary relief as to defendants Phoenix Avatar, LLC and DJL, LLC.
The final orders bar the defendants from violating the CAN-SPAM Act, including by using false header information or by failing to provide a mechanism by which consumers can opt-out of further e-mail messages. The orders bar the defendants from making false or misleading statements in marketing any product or service. The orders further bar them from making any unsubstantiated health, performance, efficacy, or safety claims and bar misrepresentations that any diet patch causes weight loss, increases metabolism, decreases appetite, or reduces food craving.
Based on financial statements submitted by the defendants, the settlement with the individual defendants suspends a judgment of $230,000 the total amount of diet patch sales. Instead, the defendants will pay $20,000. Should the court find misrepresentations in the financial statements, the entire $230,000 will be due.
Energy Wars: GM, Toyota Follow Different Strategies
GM puts its faith in hyrogen, Toyota sticks with hybrids03/30/2005ConsumerAffairs
Energy Wars: GM, Toyota Follow Different Strategies...
General Motors has cut a deal with the Department of Energy to build hydrogen-powered cars while Toyota is planning for a big payday with its tried and tested hybrid technology.
The GM deal is worth $88 million and calls for a fleet of 40 hydrogen fuel cell vehicles along with further development of the technology.
Toyota, on the other hand, is planning to charge hefty premiums - about $5,000 to $8,000 - for its gasoline-electric hybrid SUVs compared with the gasoline-powered versions of the same vehicles.
Lexus dealers in the United States already are taking orders for the RX 400h hybrid, derived from the popular RX 330. The RX 400h goes on sale April 15. A hybrid version of the Toyota Highlander goes on sale in June.
Toyota can get away with the premiums because a growing number of people are willing to pay extra for fuel-efficient Toyota hybrids. The SUVs offer V-8 performance and four-cylinder fuel economy in a V-6 engine.
Back at GM and the Feds, the world's largest auto manufacturer will spend $44 million to deploy fuel cell demonstration vehicles in Washington D.C., New York, California and Michigan. The Department of Energy will contribute the other half of the program's investment under an agreement that expires in September 2009.
Toyota has set its sights on selling a million hybrid vehicles a year. The company expects to sell about 62,000 of the two hybrid SUVs globally this year.
Engineers estimate that the drive train in a Toyota hybrid SUV costs from $3,000 to $4,000 more to produce than a conventional power train.
A hybrid power train gets propulsion from an internal combustion engine and electric motor. The electric motor can be the sole source of propulsion at low speeds with the engine turned off and can give a short-term boost for acceleration.
Adding the electric motor enables an automaker to use a smaller internal combustion engine to reduce fuel consumption. Special brakes generate electricity to help recharge the onboard battery that powers the electric motor.
Three Debt Management Firms Settle Federal Charges
Scammed consumers out of more than $100 million03/30/2005ConsumerAffairs
Three Debt Management Firms Settle Federal Charges...
Three operations that scammed consumers out of more than $100 million by falsely promising easy debt relief have settled Federal Trade Commission charges that their business practices were illegal.
The companies are the National Consumer Council, Debt Management Foundation Services and Better Budget Financial Services.
According to the FTC, in some cases, consumers debt, interest rates, and penalties increased and some consumers were forced into bankruptcy. The companies and their principals will pay more than $6 million combined in consumer redress and are permanently barred from making deceptive claims about debt-related services.
Two of the operations and their principals also are barred from engaging in abusive telemarketing practices, following FTC charges that they repeatedly called consumers on the National Do Not Call Registry.
"Consumers who want to get out of debt are looking for services to help relieve their financial troubles, not make them worse," said Lydia Parnes, Acting Director of the FTCs Bureau of Consumer Protection. "The FTC is committed to ridding the debt services industry of companies who shatter consumer confidence and hurt legitimate businesses ability to help consumers."
National Consumer Council
In May 2004, the FTC filed a complaint against a group of companies and individual defendants, fronted by National Consumer Council (NCC), a purported nonprofit organization, that solicited customers through an aggressive telemarketing and direct mail advertising campaign that falsely promised free debt counseling.
In fact, NCCs role in the scheme was simply to generate leads for the other defendants, who then charged consumers thousands of dollars in fees to enroll in their debt negotiation programs. The defendants deceptively claimed these programs were an effective way to stop creditors collection efforts and eliminate their debts.
The FTC alleged that the defendants failed to disclose important information to consumers before they enrolled, including the fact that very few people were able to reduce their debts through the debt negotiation programs; consumers would suffer late fees, penalties, and other charges; and that participation in the program might hurt their credit rating. A court-appointed receiver determined that less than two percent of the consumers who enrolled in the defendants debt negotiation programs 638 out of 44,844 consumers actually completed them.
The FTCs complaint also alleged that the defendants violated the Telemarketing Sales Rule (TSR), including the National Do Not Call Registry provisions, by calling consumers who had placed their phone numbers on the Registry and claiming that NCC was a nonprofit organization exempt from the Do Not Call requirements.
The complaint further alleged that some of the defendants violated the Gramm-Leach-Bliley (GLB) Act by failing to inform consumers how their personal financial information would be used.
At the FTCs request, a federal district court appointed a receiver over defendants National Consumer Council and its related corporate entities.
The receiver has returned approximately $24 million in consumer funds held in defendants trust accounts. The receiver also is winding down the corporations business operations.
Debt Management Foundation Services
In July 2004, the FTC charged Debt Management Foundation Services (DMFS), four related corporations, and the three individuals that control them with falsely representing that DMFS and its predecessors provided debt management services and that DMFS is a nonprofit corporation.
The FTC alleged that DMFS and its affiliates falsely represented that they could reduce consumers debts by 50 percent, reduce or eliminate interest on the debts, and provide assistance before consumers next credit card billing cycle.
The FTC charged that the defendants deceived consumers into paying up-front fees as high as $1,000 and monthly fees of $20 to $49. The FTC also alleged that the defendants violated the TSR by calling consumers whose phone numbers were registered on the National Do Not Call Registry.
The stipulated final order provides that the court-appointed receiver who took over DMFS and the four related corporations last summer will liquidate the companies.
Better Budget Financial Services
In November 2004, the FTC charged BBFS and its principals with falsely claiming they could reduce consumer debt by 50 to 70 percent and shorten the time period necessary to pay off the debt, in exchange for a monthly fee of $29.95 to $39.95 plus 25 percent of any money a consumer saved in a settlement with a creditor.
The stipulated final order requires Better Budget Financial Services, Inc., John Colon, Jr., and Julie Fabrizio-Colon to turn over assets totaling approximately $1.3 million to a court-appointed receiver.
They are barred from misrepresenting that they can reduce consumers debts; settle with consumers creditors once consumers accumulate a certain percentage of the total debt; and stop creditors from attempting to collect on overdue payments.
According to the FTCs complaint, the defendants advised consumers to stop paying their creditors and save their money in an ordinary bank account from which the defendants withdrew their monthly fee.
The defendants promised to settle consumers debts with their creditors once the consumers accrued a certain amount, such as one-half the debt, in their BBFS account. The defendants further claimed that they would contact consumers creditors and get them to stop collection attempts.
The FTC charged that few consumers had all of their debts settled by the defendants. In fact, consumers debts increased due to the imposition of late fees and penalties onto their accounts. Many consumers were sued by their creditors and many were forced to file for bankruptcy. Despite the defendants promises, collection efforts continued for consumers who followed BBFSs instructions and stopped communicating with their creditors.
The FTC also recently announced a settlement with AmeriDebt, Inc., a Maryland-based credit counseling firm that collected nearly $200 million in hidden fees from consumers across the country. AmeriDebt will shut down its operation and transfer all existing accounts to a reputable third party. For more information on the AmeriDebt case, see the press release dated March 21, 2005.
Groups Want Sodas With Benzene Out Of Schools03/29/2005ConsumerAffairs
Groups Want Sodas With Benzene Out Of Schools...
A group of public health advocates is appealing to public school officials to remove certain soft drinks from school vending machines. It has nothing to do with concerns about obesity. Rather, the groups cite Food and Drug Administration findings that some soft drinks contain benzene, a carcinogen.
The groups have signed letters sent to all U.S. chief state school officers, asking them to stop the sale and marketing of these soft drinks in public schools, until they can be proven safe and free from benzene contamination.
"Benzene is classified as a known human carcinogen by the U.S. Environmental Protection Agency. Chronic exposure to benzene is associated with leukemia, aplastic anemia and other blood diseases. Children may be especially sensitive to benzene because their bone marrow cells are highly active," the letter said.
Why would soft drink manufacturers add a known carcinogen like benzene to their products?
They don't. Instead, the benzene is formed by a reaction of ascorbic acid (vitamin C) and sodium or potassium benzoate (which are used as preservatives) -- especially in the presence of light or heat.
Soft drinks that contain ascorbic acid and sodium or potassium benzoate include Diet Pepsi Wild Cherry, Fanta Orange, Hawaiian Punch, Mug Root Beer, Pepsi Vanilla, Sierra Mist, Sunkist and Tropicana Lemonade, among others.
The evidence of benzene contamination of soft drinks is coming from many quarters, and it is mounting, the groups argue.
On February 15th, Beverage Daily reported that recent tests had shown that some soft drinks contain benzene at levels "above the legal limit for water set by the US and Europe." According to Beverage Daily, independent tests at a laboratory in New York found benzene levels in a couple of soft drinks contain two-and-a-half and five times the World Health Organization limit for drinking water, which is more permissive than is the U.S. standard.
In early March the Times of London reported that just 100 of the 230 soft drinks tested for benzene met the standard for British water, "with some containing up to eight times the legal limit."
In 1990, the National Soft Drink Association told the FDA about the problem of benzene contamination in soft drinks. The FDA did some testing of benzene levels, but did not make its findings public.
The U.S. Environmental Protection Agency has set its limit on benzene in drinking water at 5 parts per billion (ppb). In its "consumer factsheet" on benzene, the EPA states that "EPA has found benzene to potentially cause the following health effects when people are exposed to it at levels above the MCL [Maximum Contaminant Level for benzene, 5 ppb] for relatively short periods of time: temporary nervous system disorders, immune system depression, anemia."
Cingular Tops Cell Phone Complaint List
Cingular had the highest rate of complaints to the FCC03/29/2005ConsumerAffairs
Cingular Tops Cell Phone Complaint List...
Cingular Wireless, which acquired AT&T Wireless last October, had the highest rate of complaints filed with the Federal Communications Commission during the last quarter of 2004, The Wall Street Journal reported.
Cingular, which now serves more than 50 million customers, generated 4.6 complaints per 100,000 customers, followed by T-Mobile USA with 4.3 and Sprint with 3.6. Nextel, which plans to merge with Sprint, generated 2.3 complaints per customer and Verizon Wireless, the second-largest cellular carrier, had the lowest rate of complaints, 1.4 per 100,000 customers.
The Journal filed a Freedom of Information Act request to obtain the complaint figures from the FCC. The commission provided the total complaint figures; the Journal calculated the complaint rate.
|ConsumerAffairs.com Cell Phone Complaints|
|Complaints filed with ConsumerAffairs.com in the last 12 months -- raw numbers, not weighted to reflect market share.|
Payday Lenders Prey on African-American Neighborhoods
Lenders put more stores in African-American areas03/28/2005ConsumerAffairs
Payday Lenders Prey on African-American Neighborhoods...
Payday lenders who entrap consumers in triple-digit-interest loans locate their stores in African-American neighborhoods in higher concentrations, according to a report by the Center for Responsible Lending (CRL).
African-American neighborhoods in North Carolina have three times as many payday lenders per capita as white neighborhoods, even after controlling for variables associated with the industry's purported customer base such as income and homeownership, the report said.
"This study shows in the starkest terms that African-American neighborhoods bear the brunt of predatory payday loans -- loans that are not even legal in North Carolina," said Mark Pearce, CRL president.
"This confirms that the abusive loans made by payday lenders are not just an issue of fair and responsible lending, but are a civil rights issue as well."
Payday lending is illegal in North Carolina, but large national chains such as Advance America, Check 'n Go and Check Into Cash continue to operate openly by affiliating with out-of-state banks which contend they are exempt from state law.
Nearly 400 stores operate in North Carolina, even though state law hasn't permitted them since 2001. Currently, the North Carolina Commissioner of Banks and Attorney General are investigating payday lending activity.
Because CRL looked at stores owned by the national chains, the report has implications far beyond North Carolina's borders. Twelve states, in addition to North Carolina, are subject to rent-a-bank arrangements because payday lending is not authorized by their state legislatures (Michigan, Georgia, Pennsylvania, Maine, Arkansas, Massachusetts, West Virginia, New York, New Jersey, Connecticut, Vermont, and Maryland).
In fact, over 3,000 payday loans stores in the country are operating outside of the laws of their state.
At a typical payday shop, a person short on money before payday borrows $255 by writing a postdated check for $300. After two weeks the borrower often can't repay the principal and writes yet another postdated check.
Ninety-nine percent of payday loans are made to repeat borrowers, despite industry claims that the loans are for one-time, emergency use only. Advance America has reported that their average number of loans per borrower was 9 per year in 2003.
CRL has previously estimated that predatory payday lending costs American families $3.4 billion annually, a cost that is increasing rapidly as the size of the market explodes.
Colorado Mortgage Broker Barred from Making Deceptive Claims
Claimed they could refinance consumers mortgages03/28/2005ConsumerAffairs
Colorado Mortgage Broker Barred from Making Deceptive Claims...
A federal district court has barred a Colorado-based mortgage broker from making false claims about home mortgage financing services and ordered him to pay consumer redress following Federal Trade Commission charges that he violated federal laws.
According to the FTC, the defendant and his company deceptively claimed they could refinance consumers mortgages at the lowest available rates at no cost to consumers.
In May 2004, the FTC filed a complaint against Phillip W. Ranney and a group of corporate defendants, operating as PWR Processing, Inc., charging that the defendants promised consumers no-fee, low-interest home mortgages following a process of multiple refinances.
According to the FTCs complaint, the defendants told consumers that if they applied for two loans, one at a competitive rate and one at a higher-than-market rate, lenders on the higher-than-market rate loans would pay a premium to the mortgage broker that in turn would be used to pay fees associated with the lower-interest loan.
The defendants allegedly claimed that the low-interest loan would then be used to pay the higher-interest loan, leaving the consumer with a low-interest, no-fee loan. The FTC charged that instead of receiving the promised loan, consumers were stuck with high-interest loans, often at rates higher than they wanted to refinance.
The FTC also alleged that the defendants did not pay appraisal fees, leaving many consumers with liens on their properties.
In August 2004, the court entered a default judgment against the corporate defendants, Armor Mortgage; Abacus Mortgage; Community Homebanc Mortgage Services, Inc.; Harbor Pacific Funding, Inc.; High Center, Inc.; Lending Strategies of Colorado, Inc.; Lite Realty Corp.; PWR Processing, Inc., dba First Source America Mortgage Corp. dba NexLoan; PWR Press, Inc.; and Source Funding Company, Colorado corporations; Kace, LLC dba Aristocrat Mortgage, a Colorado limited liability company; and Mortgage Watch, a California corporation.
The judgment barred the defendants from misrepresenting: (1) that they can provide home mortgage financing at competitive, low-interest rates; (2) that the fees associated with processing consumers loan applications will be paid at no cost to the consumers; (3) that consumers will not be required to make any payments on an interim loan because they will be funded by a lower-interest loan or paid by the lender; and (4) that they are a licensed mortgage broker. The judgment also prohibited the defendants from violating the Truth in Lending Act (TILA) or Regulation Z by advertising credit terms other than those that actually will be offered.
The terms of the litigated judgment announced today are similar to those in the default judgment against the corporate defendants. The judgment bars Phillip Ranney from making misrepresentations about home mortgage financing and violating TILA and Regulation Z and orders him to pay $128,300 in consumer redress.
Suit Accuses EBay of Shilling
The company says the lawsuit is "without merit"03/28/2005ConsumerAffairs
Suit Accuses EBay of Shilling...
A class-action lawsuit accuses eBay of enabling "shill bidding" -- artificially inflating bids placed by buyers on the site. The company says the lawsuit is "without merit."
The complaint was filed earlier this month in California's Santa Clara County Superior Court. It alleges violations of California's Auction Act, California's Consumer Remedies Act and unfair competition.
Basically, the suit argues that when a bidder increases his maximum bid limit, eBay sometimes illegally submits a bid on his behalf, even if he was already the highest bidder.
The suit was brought on behalf of Glenn Block and a class of bidders who purchased items on eBay during the past four years.
Block accuses eBay of raising a bid for an item he was trying to purchase from $111 to $112.50, after he responded to an e-mail warning that he had reached his maximum bid limit and was the highest bidder.
Block says he didnt need to pay the extra $1.50 in order to win the auction and his lawsuit accuses eBay of pitting buyers against themselves, and profiting from the increased bids.
Block is not alone. Other consumers have reported similar problems to ConsumerAffairs.com.
"I was high bidder on an auction for a math textbook. My $30 bid was matched by another. E-bay rules are that if two bids are matched then the first one is the winner. No other bidder bid higher. E-bay bid automatically UP to $31 -- bidding myself up to $31 against my own $30 bid," said Chris of Pocahontas, Arkansas.
Chris said he complained to numerous support personnel at eBay before one told him to contact the legal department.
"This is a common practice by ebay according to their explanation to me," Chris said. "A dollar here and there through millions of transactions surely brings in countless dollars. They are aware of the problem and refuse to fix it."
The automatic bidding up has been compared to shilling, the practice of bidding on an item with no intention of buying it, merely to raise the price. Shilling, or shill bidding, by users is forbidden by eBay and may result in suspension from the site.
But the lawsuit says that eBay's rules apparently don't apply to the site's automated processes: "If a user accepts eBays request to provide a higher maximum bid, eBay then acts as a shill bidder on behalf of the seller at the price level of the highest former competing bidder. As a result of eBays hidden shill bid, eBay automatically raises the hapless buyers bid so as to out-bid eBays shill."
eBay denies that. "...the plaintiff completely misunderstands the functionality of the eBay bidding system," a spokesman said.
Travel Scam Artist Gets 10-Year Prison Term
A Connecticut woman has been sentenced to 10 years in prison for scamming would-be travelers03/22/2005ConsumerAffairs
Travel Scam Artist Gets 10-Year Prison Term...
A Connecticut woman has been sentenced to 10 years in prison for scamming would-be travelers. Virginia McCollin, 55, was accused of swindling $144,000 from 114 people who had signed up with her for European vacations in 2002 and 2003. McCollin pleaded guilty to first-degree larceny in November.
"Ms. McCollin knowingly engaged more than one hundred people in fake group travel deals and made off with their money after telling them the trips were cancelled," Consumer Protection Commissioner Edwin R. Rodriguez said. "Many of her victims had encouraged friends to join the trips because McCollin promised them discounts, while others were told they'd get a discount if they paid the full amount in advance."
Consumer protection officials began getting complaints in late 2003 from people who had each lost between $300 and $3,000 on McCollin's schemes. The department followed up on 22 written complaints and collaborated with the Windsor, Conn., Police Department on a full investigation of McCollin's business practices.
Rodriguez said this case illustrates some very important do's and don'ts for anyone planning travel, Rodriguez said:
• Don't pay a travel agent with cash or a check. If possible use a credit card, since you can dispute the charges within 60 days if problems occur.
• Do consider purchasing travel insurance, but be cautious when buying. Review the proposed policy carefully to see exactly what you are buying. You may want to purchase travel insurance from a third party, and be sure it includes coverage for the travel company's possible bankruptcy or failure to deliver on a trip. Also, check to see if the tour operator will pay the claims themselves or if an insurance company underwrites the coverage. Before buying, review your existing homeowner's policy, and credit card and auto travel club policies - don't pay for duplicate coverage.
• Do shop carefully for a travel agent or tour operator. You should seek referrals from friends who have successfully booked trips with a travel professional. You might also want to search on TravelSense (www.travelsense.org) a consumer website developed by the American Society of Travel Agents.
"I am satisfied with the outcome of this case, knowing that Ms. McCollin will have time to reflect on the overall wisdom of her deceptive actions," Rodriguez said. "I commend the department's Trade Practices Division, the Windsor Police Department and the Chief State's Attorney's Office for bringing this case to justice."
Con artists try to convince consumers or businesses to help them forward a phone call03/21/2005ConsumerAffairs
If the consumer agrees to help, thinking they are being Good Samaritans, they will instead find expensive long-distance or collect-call charges on their ph...
FDIC Wants Banks to Notify Customers of Identity Theft03/20/2005ConsumerAffairs
FDIC Wants Banks to Notify Customers of Identity Theft...
March 20, 2005
The FDIC's five directors have voted to order banks to warn customers of suspected identity theft. The provision applies only to banks, not to data aggregators like ChoicePoint.
Under the FDIC's proposed new policy, banks would be required to notify customers when they detect unauthorized access to customer information and determine that there is a "reasonable possibility" that the information was or could be misused.
The changes have already been approved by the the Office of the Comptroller of the Currency and the Office of Thrift Supervision. They must still be approved by the Federal Reserve Board.
The ruling follows several highly publicized consumer privacy breaches that were disclosed over the last few weeks, including the loss of backup tapes containing the credit card information of 1.2 million federal workers by Bank of America; the loss of 145,000 customers' personal information to identity thieves at ChoicePoint, an aggregator and reseller of personal information; the loss and possible theft of customer credit card information from over 100 DSW Stores, a nationwide shoe retailer; and the disclosure from Lexis-Nexis, a compiler of legal and consumer information, that the Social Security numbers, names and addresses of 30,000 people may have been stolen by identity thieves.
Congress is mulling legislation that could extend the disclosure requirement to data aggregators like ChoicePoint.
The FDIC's proposal is similar to a California law that requires companies to notify consumers when their private data is inadvertently exposed to unauthorized users, although the FDIC's rule would apply only to banks.
Under the FDIC proposa, the notices would have to describe the incidents, detail measures taken to protect customers, provide phone numbers for further information, remind customers to be vigilant and describe how customers may put fraud alerts in their credit reports.
"The FDIC ruling, if approved by the Federal Reserve, could cause a significant increase in identity theft disclosures," said Jim Stickley, an internationally recognized banking security expert and the Chief Technology Officer for TraceSecurity, a security compliance software and services firm.
"Today, most large-scale identity thefts go unreported, either because the bank wants to avoid tarnishing their reputation or because they are simply unaware of the breaches," Stickley said. "Many banks employ archaic data privacy practices that haven't kept pace with the evolving threats. The exploits of identity thieves, however, which are often coordinated by international crime syndicates, have become increasingly creative and sophisticated."
"Many banks are caught in a catch-22 situation: Their customers are demanding greater online access to a broader range of financial services, yet as banks make their services available online to customers, they're also making them available to thieves," Stickley said.
Diploma Mill Operators Hit With Court Judgments
Trinity Southern University issued fraudulent degrees, suit charges03/18/2005ConsumerAffairs
Texas Attorney General Greg Abbott has obtained judgments against two brothers who operated Trinity Southern University, a for-profit Dallas-based "univers...
Texas Attorney General Greg Abbott has obtained judgments against two brothers who operated Trinity Southern University, a for-profit Dallas-based "university" that issued fraudulent degrees.
Craig B. Poe agreed to a $10,000 up-front civil penalty for offering deceptive degree programs and will pay another $10,000 in several installments. Alton S. Poe, who failed to respond to Abbott's December lawsuit, was assessed a default judgment ordering him to pay a $100,000 penalty, plus more than $15,000 in state attorneys' fees.
"These judgments send a message that Texas will not tolerate scam artists who charge consumers hundreds of dollars for worthless 'diplomas,'" said Attorney General Abbott. "Texans seeking an education deserve to receive proper credentials, and I will continue to fight this fraudulent practice."
The Poe brothers had been fraudulently promoting the for-profit "diploma mill" university as an accredited institution offering bachelor's, master's and doctorate "degrees" via advertisements on the university's Web site.
These "degrees" were being issued solely on the basis of a "student's" testimony about skills and experience. Other university names affiliated with the Poes are Wesleyan International University and Prixo Southern University.
According to the final order, the defendants may no longer market or promote fraudulent, substandard degree programs or represent their university as being accredited or affiliated with legitimate universities.
The defendants have never been accredited by the Texas Higher Education Coordinating Board, which referred this matter to the Attorney General for legal action under the Texas Deceptive Trade Practices Act.
Trinity Southern's Web site claimed that a prospective student had "no classes to attend, no tests to take!" Despite having no classroom instruction, the university assured students that, once "qualified" based on their experience, they could receive a bachelor's degree comprised of 115-120 credit hours. Those pursuing master's and Ph.D. degrees were promised transcripts reflecting 36-48 hours of course credit.
Consumers will begin seeing numerous public service announcements and advertisements03/18/2005ConsumerAffairs
Remeron Refund Procedure Announced: Consumers will begin seeing numerous public service announcements and advertisements this week in publications....
Instant Tax Refunds: Fast But Expensive
E-filing: Free and Fast03/17/2005ConsumerAffairs
Instant Tax Refunds: Fast But Expensive...
With less than a month to go before the April 15 tax filing deadline, Illinois Attorney General Lisa Madigan reminded consumers about the high cost of Refund Anticipation Loans (RALs) and urged those consumers who still need to file their tax returns to consider other refund options instead of obtaining a RAL.
Madigan said what most consumers may not realize is that by filing their taxes electronically and opting for direct deposit into their bank accounts, their refunds will arrive very quickly - usually in just eight to 15 days. If consumers choose a RAL, they must first pay the tax preparer to help fill out their tax forms and then pay additional fees and costs to obtain their refund check just a few weeks earlier.
The message may be getting through. IRS officials say that, based on trends so far, they expect more than half of all tax returns this year to be filed over the Internet.
Calling it a "phenomenal penetration," IRS Commissioner Mark Everson says he expects the number of electronic filings to spike in the final days, as more taxpayers race against the deadline and become aware of how easy it is to file online.
Refund anticipation loans, also known as "instant tax refund loans," are loans consumers can obtain based upon their expected tax return. The RALs are provided by tax preparers and result in extremely high costs and fees, which include loan fees, electronic filing fees, document preparation fees and tax preparation fees. These fees are deducted from the consumers' tax refund checks before the checks are even issued.
"While many consumers may view a RAL as simply an advance on their expected tax return, what they are actually signing up for is a high-cost, short-term loan that will deprive them of a large chunk of the money they should be receiving as part of their tax returns," Madigan said. "These loans are especially costly to those who need the money the most, and should be avoided whenever possible."
According to a report released in January 2005 by the Consumer Federation of America (CFA) and the National Consumer Law Center (NCLC), consumers paid more than $1.4 billion in loan charges and fees in 2003 associated with RALs. These short-term loan terms reportedly had annual interest rates of 70 percent to more than 1,700 percent.
The average RAL recipient in 2003 paid an average of $250 in costs and fees on a RAL, when their refunds amounted to an average of $2,050. That amounts to more than 12 percent of their refunds going directly into the hands of their tax preparer and loan provider.
The same study showed that low-income families most often paid the high price for a fast return on their tax refunds.In 2003, the IRS reported that 79 percent of RAL recipients had adjusted gross incomes of $35,000 or less.
In Illinois, the Truth in Lending Act governs the requirements for RAL providers, but does not require advance disclosure of fees and interest rates connected with RALs. Thus, consumers must know to ask about fees and interest rates before applying for a RAL to make an informed decision about their money.
Everson said most people filing online are motivated because they are due a refund, and e-filing helps them get their money faster. He said most e-filed refunds take less than three weeks. That, he adds, makes consumers less likely to take out refund anticipation loans.
Everson said other advantages include accuracy. On paper returns, it's easy to make a math mistake. Filing online performs math chores automatically. He points out that a mistake on a paper form requires correspondence to resolve the issue, delaying any refund check.
Online returns also IRS save money for taxpayers. Everson says an electronic return is $2 per return cheaper to process than paper. In addition, the increase in electronic filings has allowed the IRS to consolidate functions and reduce staff in some offices on the East Coast.
Pennsylvania Tackles Predatory Lending
Report finds "subprime" mortgages represent the majority of loans that result in foreclosure action03/17/2005ConsumerAffairs
A report released by the Pennsylvania Department of Banking finds that "subprime" mortgages represent the majority of loans that result in foreclosure acti...
A report released by the Pennsylvania Department of Banking finds that "subprime" mortgages represent the majority of loans that result in foreclosure action.
The subprime loan market is designed to serve people who do not qualify for "prime" loans, primarily due to impaired or limited credit histories. Eight states have rates higher than Pennsylvania's 2003 prime foreclosure rate of 0.85 percent.
However, only three states have higher subprime foreclosure rates, with Pennsylvania's standing at 11.9 percent, according to figures reported by the Mortgage Bankers Association. A statewide study of foreclosures by The Reinvestment Fund (TRF), also released today, found that Pennsylvania experienced an estimated 14 percent increase in sheriff sales, or approximately 55,000 homes, between 2000 and 2003.
"Our study revealed reasons for much concern in the Commonwealth - abusive lending practices happen every day and we have one of the highest foreclosure rates in the nation," said Pennsylvania Banking Secretary Bill Schenck. "But our investigation also revealed reasons for hope. Policymakers, financial industry leaders and consumer advocates recognize the problem and are united in their commitment to protecting vulnerable consumers."
Abusive lending practices usually involve some form of deception, fraud or manipulation of borrowers and may include but are not limited to: making a loan without regard to a borrower's ability to repay; charging excessive fees; using aggressive and deceptive marketing; and operating home improvement scams.
"The Department of Banking has several recommendations - some already underway - to address abusive lending practices and bring down the number of foreclosures," said Schenck. "Our report offers significant administrative and legislative changes as well as several topics for ongoing study."
The Banking Department will issue new policies to define dishonest, fraudulent, unfair, unethical and illegal mortgage lending practices, Schenck said. The department will institute a "best practices" program for mortgage brokers, lenders and servicers.
In addition, the department has identified several ways in which the General Assembly can strengthen laws to protect consumers, including creating a new licensing category for individual mortgage loan solicitors.
However, legislation pending in Congress would supersede state laws, barring Pennsylvania and other states from enacting laws stricter than those dictated by Congress.
Chex Imbalances - ChexSystems and the War of Banking Rights
ChexSystems and the War of Banking Rights03/17/2005ConsumerAffairs
Chex Imbalances - ChexSystems and the War of Banking Rights...
Information-seller ChoicePoint's embarrassing hijack by identity thieves and Bank of America's loss of thousands of data tapes containing customers' private information, have shocked Americans into taking a closer look at the dangers of data mining and wholesale sales of personal data. It's a watershed moment for any frustrated citizen who's tired of faceless, anonymous companies controlling one's personal life.
But one of the most infamous and entrenched organizations in the business is still operating generally free of public oversight. Even though its practices have spawned a Web-based subculture of horror stories, tell-all websites, and vocal opponents, the average American still doesn't know anything about it, or how severely it can affect your life. This is the mysterious "banking clearinghouse" known as ChexSystems.
To be placed in ChexSystems' records can deprive you of any opportunity to open a checking account, write checks, use an ATM card -- all the basics of personal finance we take for granted. Anyone on ChexSystems' list becomes an "unperson" -- locked out of the opportunities for financial well-being we all strive for.
Such a powerful organization demands more independent monitoring ... and yet, the mainstream media is only now waking up to what kind of threat companies like this pose. As a former Chex victim says, "There's no place to hide these days -- you can sit on the computer and find info about anyone in a matter of minutes."
Toys "R" Us Sold03/17/2005ConsumerAffairs
The company had been trying to sell its toy division but agreed to an offer for the entire firm from Bain Capital, Kohlberg Kravis Roberts & Co. and Vornad...
Troubled retailer Toys "R" Us has been sold to a consortium of private investors for about $6.6 billion, The Wall Street Journal reported. The company had been trying to sell its toy division but agreed to an offer for the entire firm from Bain Capital, Kohlberg Kravis Roberts & Co. and Vornado Realty Trust.
The consortium is expected to reduce the number of stores but intends to continue operating the company in its present form. Toys "R" Us, like other specialty retailers, has been losing ground in recent years to Wal-Mart and other superstore discount outlets.
Bain Capital is a principal owner of KB Toys, another specialty reatiler now trying to emerge from Chapter 11 bankruptcy protection.
Vornado's expertise in the commercial real estate business is expected to help Toys "R" Us get the most value from its existing store leases.
Bill would preempt stronger state laws03/16/2005ConsumerAffairs
Predatory Lending Bill A Ruse, Consumer Groups Charge...
FDA Warns About Soft Cheese Health Risk
Cheeses that are made with raw milk present a health risk, especially to high-risk groups03/16/2005ConsumerAffairs
FDA Warns About Soft Cheese Health Risk...
Gourmets are fond of soft cheeses, but the Food and Drug Administration says some cheeses that are made with raw milk present a health risk, especially to high-risk groups such as pregnant women, newborns, older adults, and people with weakened immune systems.
The agency says raw milk soft cheeses can cause several serious infectious diseases including listeriosis, brucellosis, salmonellosis and tuberculosis. Recently, cases of tuberculosis in New York City have been linked to consumption of queso fresco style cheeses, either imported from Mexico or consumed in Mexico, contaminated with Mycobacterium bovis, the causative agent.
The raw milk soft cheeses of most concern can originate from Mexico and Central American countries. Queso fresco style cheese, which is soft and white, has been found to be the most popular kind of cheese among the Hispanic community and can include Queso Panela, Asadero and Blanco and Ranchero, among other styles and may be imported or produced in the U.S.
However, the agency said later that its warning did not include Ranchero® brand cheese.
FDA recommends that consumers do not eat any unripened raw milk soft cheeses from Mexico, Nicaragua, or Honduras. Data show that they are often contaminated with pathogens. FDA further recommends that consumers not purchase or consume raw milk soft cheeses from sources such as flea markets, sellers operating door-to-door or out of their trucks or shipped or carried in luggage to them from Mexico, Nicaragua, or Honduras. This includes cheeses made at home by individuals.
FDA further advises that there is some risk of infection from a number of pathogenic bacteria for anyone who eats raw milk soft cheese from any source.
Mercedes E-Class sedan is the safest03/15/2005ConsumerAffairs
Blazer Most Dangerous Vehicle, Insurance Study Finds...
Bill is a victory for banks, a disaster for consumers03/11/2005ConsumerAffairsBy Truman Lewis
Credit card issuers, banks and even home builders are applauding the Senate's passage of a bankruptcy bill that would make it more difficult for Americans ...
Soaring Gas Prices Hurt SUV and Pickup Sales
The rising price of gasoline appears to be stifling sales of large U.S. SUVs and pickups03/10/2005ConsumerAffairs
Soaring Gas Prices Hurt SUV and Pickup Sales...
The rising price of gasoline appears to be stifling sales of large U.S. SUVs and pickups. If the trend continues, automaker profits are certain to suffer. Full-sized SUV and large pickup sales were both down last month. The sale of fuel-efficient cars gained more than two percent.
Large SUVs and full-sized pickups account for close to 80 percent of North American automotive profits at Ford and General Motors.
The average price U.S. drivers pay for a gallon of regular gasoline barely exceeds $2, according to the AAA motor club. The price is expected to shoot to a record high of $2.15 a gallon this spring, according to the U.S. Energy Information Administration.
The higher prices already have hit GM's mix of vehicles in the market, punishing it by $1 a share due to fewer sales of large trucks and SUVs. Ford Motor has lost 15 cents a share due to a similar decline in the segment.
GM's U.S. sales of light trucks declined 9 percent last month, while Ford's sales in the same segment slipped 8 percent. Overall, both the automakers lost U.S. market share again in February.
While sales of GM and Ford Motor trucks slipped in February, Toyota and other Asian automakers reported increased sales in the segment.
U.S. sales of the full-sized Toyota Tundra pickup, which has a V-8 engine, rose nearly 49 percent last month, while Nissan reported a similar rise in sales of its Titan pickup.
In addition to higher cash discounts, Ford extended its offer of interest-free financing for terms of as long as 60 months on the Explorer SUV, which suffered a sales decline of 19.1 percent, and the Expedition SUV, which dropped 13.8 percent last month.
GM, meanwhile, says it will offer extended warranties on its 2006 model Hummer SUVs, which on average have a fuel economy in the teens and whose sales have declined 8.3 percent this year.
A Cell Phone for Kids03/10/2005ConsumerAffairs
Firefly Mobile has launched the "Firefly" phone, a cell phone explicitly designed for the pre-teens. It is about the size of a small pocket calculator and ...
Despite the health concerns about children using cell phones, Firefly Mobile has launched the "Firefly" phone, a cell phone explicitly designed for the pre-teens.
British researchers recently reported finding that cell phone use can produce brain tumors, and warned parents that children under age eight should not use mobile phones. Their report says heavy use can lead to tumors in the brain and ears, and further states that up until now, the risk has largely been understated by most scientists.
The Firefly phone is a voice-only phone designed for the smaller hands of kids aged eight to 12 years old. With just five keys instead of a regular dial pad, parents use a PIN to program up to 22 outgoing numbers into the phone, including speed-dial keys for Mom and Dad. The patented phone lights up like a firefly when in use and intermittently when in standby mode. It is about the size of a small pocket calculator and weighs two ounces.
Firefly Mobile says that it conducted extensive market research with parents and children across the USA, and validated their belief that families need a mobile phone for eight to 12 year olds that performs basic functions, helps parents maintain financial control and connects kids with the most important people in their lives.
"Firefly Mobile is responding to the needs of the marketplace and dedicating our efforts to satisfying both parents' and kids' needs for a functional, controllable and fun mobile phone," said Robin Abrams, CEO, Firefly Mobile.
"Kids feel greater self confidence when they are able to communicate, whenever they need to, with important people in their lives," said Laura Davies, M.D., in a statement released by Firefly. "For a parent running a full life, it is reassuring to know that whenever there is a need, they can make direct contact with their child."
A study in the international journal Epidemiology in October last year found that people who have used cell phones for at least 10 years may have an increased risk of developing a rare brain tumor.
To Dell & Back03/08/2005ConsumerAffairsBy James R. Hood
To Dell & Back - A Day With Dell's Tech Support...
Thursday, March 3, started off as a routine day but it quickly spun downhill as my Dell laptop crashed and burned, bringing activities in my corner of ConsumerAffairs.com to a standstill.
The first sign of trouble came as the Inspiron XPS began showing uncharacteristic signs of hesitation. Purchased just a few months before from the Dell Outlet, from whence come all our office computers, the XPS is to laptops what a Porsche 911 is to lesser sports cars -- a blazing fast speed demon.
Hoping to clear up whatever was amiss, I rebooted and was promptly blitzed with arcane error messages warning of problems at hitherto unknown sectors, culminating in a sickening descent into what is known throughout geekdom as the Blue Screen of Death.
My machine, barely three months old, was toast. I tried to ignore the odd alignment of the stars: Just the day before, I had tallied the number of computer complaints in our database, correlating them with market ranking, finding that while Dell had about 18 percent of the worldwide market, it accounted for 58 percent of the complaints we'd received in the previous 12 months.
I met my first computer terminal back in 1974 or so, when technicians at The Associated Press bureau in Denver wheeled in a thing the size of a refrigerator and announced -- skeptically -- that these ungainly devices would soon replace not only our "telegraphers" (as they were quaintly called) but also our trusted typewriters.
In the intervening 30 years, I have been through just about every kind of computer catastrophe imaginable, probably two per year, on average. The initial human response to a computer crisis is universal -- panic. This nearly always leads to trouble.
I have learned the hard way that like hopeless freeway congestion, computer meltdowns are inevitable and should be dealt with calmly. Panic solves nothing and hasty action nearly always makes the situation worse. I thus went into my Zen mode, telling my associates I would be out of action the rest of the day and mentally dismissing any tasks that a few minutes earlier had been regarded as essential.
I ran through all the routine disaster drills -- trying to boot in Safe Mode and running a couple of simple tests. My initial diagnosis: hard drive failure. The XPS came with a 100-gb hard drive, much more than I need and, in fact, bigger than I wanted. A drive that large is highly compressed and more prone to failure but, other than the drive, the machine was set up the way I wanted it. (Buying from the Dell Outlet is like buying a used car: you don't get to pick the options).
I pondered the hundreds of complaints I had read about Dell's tech support. I considered getting into another line of work.
In any hard-drive failure, there is the potential of data loss. In my case, this would include the March 7 edition of Consumer News & Alerts, the weekly newsletter that may not look like much but involves quite a bit of writing and proofreading and a pretty substantial dose of link-building and checking. Then there was the strategic plan I had just about finished for a consulting client (no, the consulting's not a conflict of interest and it helps pay the rent and bandwidth bills). It, like the newsletter, was due Monday.
Just about everything else on my machine was backed up, either on our Web servers or on an external hard drive that exists to make daily backups easy. Unfortunately, that doesn't mean I do them daily, now does it?
Able to put it off no longer, I copied my Service Tag and Service Code numbers from the bottom of the XPS, swallowed, took a deep breath and called Dell Tech Support. Navigating the voice-mail maze wasn't all that bad and in less than five minutes I was on the phone with Zach, #0172679.
Like all the Dell techs I have encountered, Zach spoke fluent Texan and exuded the same confidence as old-style airline captains explaining the "little problem" involving the landing gear or engine flame-out. We went down the same road I'd already traveled and reached the same destination -- trashed hard drive.
By this time, it was after 5 p.m. for me -- Eastern time. Sorry, Zach said, but that meant my replacement hard drive probably wouldn't reach me til Monday (even though it was still only 4-something in Texas). I had by now fired up another machine that had most of the programs and data I needed and resigned myself to several days of being in-between computers.
That evening, not quite ready to abandon hope, I recruited a neighbor who is an IT consultant to see if we couldn't salvage my data -- specifically, the newsletter and the strategic plan. Anyone who writes for a living will do anything to avoid having to re-lasso words that have previously been corralled. We're only born with so many words in us, you know, and I am already pushing the envelope.
Our resident barrister having left for the day, we invaded her office and swiped her new (from the outlet, that is) Dell Optiplex slim desktop machine, yanked the cover off and ripped the ribbon cable from the CD drive. Using a handy adapter the IT consultant fished out of his kit bag, we took the damaged hard drive from my laptop and convinced the Optiplex to regard it as its new D:/ drive.
Like all those 1950s TV shows that went out into space, data on a hard drive is still there, even after the drive self-destructs. You just can't get to it because the drive won't boot up. But by using the damaged drive as a secondary drive, booting up the Optiplex with its own C:/ drive, we were able to get a look at my Documents and Webs folders.
Sure enough, everything was there. We copied it all to a new folder on the Optiplex and, when that was finished, jammed the lid back on and put the machine back in the lawyer's office. She was blissfully unaware that her desktop would be, in effect, eating for two for a day or two.
The next day, as I prepared to head for the office I was irate to see a box resting on the flank of my Alfa Romeo. Despite my constant hectoring, my family insists on treating my priceless heirloom as a table. Irritation waned, however, as I realized this was my replacement hard drive -- dropped off by AirBorne Express barely 16 hours after I hung up my call to Zach.
A New Beginning
Installing the replacement hard drive was a snap, consisting of removing one screw, unplugging the connector and inserting the new drive. Then, of course, there is the all-day project of reloading all the programs and trying to remember all the passwords for all those Web sites.
Several hours into it, a glitch developed. My dual-band wireless card was not working, meaning I was chained to my desk -- unable to lug the laptop to Starbucks, roam around the office or retreat to the family room to sit by the fireplace. I reloaded the drivers and ran the diagnostics. Verdict: bad memory on the wireless card.
I frankly didn't buy this and suspected that Microsoft was up to its old tricks -- loading its drivers on top of the manufacturer's. Zach had sent me an e-mail confirming the hard-drive shipment and his e-mail invited me to call or e-mail him if I had any further problems.
I did so Sunday afternoon and, by mid-morning Monday, had a reply from Zach directing me to the spot on the Dell site where I could find an updated driver. Five minutes later, I had again slipped the surly bonds of my desk and was free to roam anywhere I was able to lug the 12-pound XPS and its brick-like power supply.
Verdict: Any hard drive crash you can walk away from is a good one. Zach was knowledgeable, patient and responsive, my IT consultant neighbor had just the right IDE connector and other than a little time and trouble, I was none the worse for wear.
Don't Try This At Home
However -- and it is a big however -- most consumers would not have had such a good outcome. They would most probably have lost all the data on their hard drive and, in many cases, been frustrated and annoyed at having to take screwdriver in hand and spend time on the phone.
Despite a lackluster college experience that left me branded an English major, I am quite comfortable being up to my elbows inside a computer. Those who aren't -- which is most normal people -- should avoid frustration and needless data loss by doing a few of of the following:
• Separate task from technology. Sure, you paid $3,000 for the machine and yes, you need to finish that report -- you know, the one you told your client you mailed her yesterday. But like a blown hose on your BMW, the price you paid and the urgency of your daily chores has nothing to do with the snafus that complicated machines encounter. And make no mistake -- your computer is very complicated. It is more powerful that the entire computing capacity of the United States government just a few decades ago; you can't expect it to work perfectly 24/7 and 365.
• Back up your stuff. There is no substitute for making back-ups. Whether you use an external hard drive, a tape drive or another machine on your network, make copies of all your important stuff. And keep track of passwords and activation codes for essential Web sites and programs.
• Buy the on-site warranty. Don't want to get your hands dirty? Spend a little upfront and Dell will send someone to your home or office to solve your problem.
• Buy your computer from a local geek-owned computer store. Sure, you'll probably pay more for the machine but you'll be able to take it back to the store when problems arise -- and, count on it, problems will arise.
• Adopt a geek. The world is full of people who understand computers and like fiddling with them. Get to know one of these people. Call them when you have problems and reward them very handsomely when they bail you out. A few hundred dollars is not too much to pay a friend who pulls you back from the brink.
Finally, learn to chill. Yes, a computer problem is bad but it's far from the worst thing that can happen to you or someone near and dear. The right degree of detachment will go a long way towards helping you solve the present problem without creating new ones.
Toyota Prius Tops Consumer Satisfaction Survey
94% of Prius owners said they'd buy another one03/07/2005ConsumerAffairs
The Toyota Prius won near-unanimous praise with 94 per cent of respondents saying that they would definitely get one again. The Lexus LS430 scored almost a...
Asian vehicles continue their domination over domestic and European brands in the latest Consumer Reports owner satisfaction survey.
The Toyota Prius won near-unanimous praise with 94 per cent of respondents saying that they would definitely get one again. The Lexus LS430 scored almost as high with 92 per cent of owners and lessees affirming their loyalty.
Asian and European brands fill all but 1 of the 32 slots within CR's list of Most Satisfying vehicles. Asian manufacturers lead with 25 of their vehicles in the list, followed by European brands with six. The only domestic car in the list is the Chevrolet Corvette.
The owner satisfaction survey is part of the Consumer Reports annual survey, which asked its subscribers if they would buy the car or truck they own again, considering its price, performance, comfort, and reliability.
This year CR received more than 250,000 responses to this question for 2002 to 2004 models, which were used to determine owner-satisfaction ratings and lists of Most and Least Satisfying vehicles.
Among other survey findings:
• The second-generation Toyota Prius becomes the first hybrid to top the list, sending the Lexus LS430 luxury sedan down to second place. The sporty Honda S2000 was in third place.
• Satisfaction doesn't always track with reliability. The Mini Cooper and Mercedes-Benz SL are among the most satisfying, even though their reliability records are below average.
• Among the cars that were least satisfying, domestic vehicles accounted for 12 of the 20 in the lineup; Japanese nameplates accounted for 7. The Land Rover Freelander SUV was the sole European vehicle in the least-liked lineup.
Here are Consumer Reports' lists of Most Satisfying and Least Satisfying vehicles. Most Satisfying vehicles are those with scores of 80 percent or higher. Least Satisfying vehicles are those with scores of 50 percent or lower. Models are listed within categories in order of percentage of owners who said they would definitely get them again:
Toyota Prius, Scion xB, Honda Civic Hybrid, Mazda3
Saturn Ion, Mitsubishi Lancer, Dodge Neon, Chevrolet Cavalier (sedan), Nissan Sentra
Toyota Avalon, Honda Accord
Chrysler Sebring, Dodge Stratus
Lexus LS430, Acura TL, Acura TSX, Jaguar XJ Series
Honda S2000, Chevrolet Corvette, Mini Cooper, BMW Z4, Porsche Boxster, BMW M3, Subaru Impreza WRX, Mazda WX-5 Miata
Lexus SC430, Mercedes-Benz SL
Chevrolet Cavalier, Pontiac Sunfire, Mitsubishi Eclipse
Dodge Caravan (4-cyl)
Honda Element, Subaru Forester
Mitsubishi Outlander, Suzuki Grand Vitara, Suzuki XL-7, Land Rover Freelander
Lexus RX330, Honda Pilot, Toyota Highlander, Lexus GX470, Toyota 4Runner
Chevrolet TrailBlazer, Lincoln Aviator (2WD), Chevrolet TrailBlazer EXT
Toyota Land Cruiser, Lexus LX470
Toyota Tundra, Nissan Titan
Ford Ranger, Mazda B-Series
Even for the least satisfactory cars, a majority of owners were positive.
Colonic irrigation without physician oversight poses potential dangers03/04/2005ConsumerAffairs
Texas Gets Judgment Against Colonic Therapy Promoters...
North Carolina Court Strikes Down CitiFinancial's Mandatory Arbitration
The lawsuit was filed as a class action, so the ruling affects thousands of consumers across North Carolina03/04/2005ConsumerAffairs
North Carolina Court Strikes Down CitiFinancial's Mandatory Arbitration...
A North Carolina judge struck down a mandatory arbitration clause, which had been placed in consumer contracts by CitiFinancial Services, a division of Citigroup, Inc. Judge Ronald Stephens ruled that two North Carolina women have the right to bring a lawsuit against CitiFinancial for predatory lending practices in state civil court and will not be forced into arbitration as requested by CitiFinancial.
The lawsuit was filed as a class action, so the ruling affects thousands of consumers across North Carolina.
In June 2002, Raleigh attorneys John Alan Jones and G. Christopher Olson filed a class action on behalf of Fannie Lee Tillman and Shirley Richardson. Tillman and Richardson contended that they were victims of predatory lending practices by CitiFinancial. Their lawsuit sought compensation for thousands of North Carolina borrowers who were sold a now-outlawed type of credit insurance known as single-premium credit insurance (SPCI).
Consumer groups have complained about SPCI for years.
The beneficiary of the insurance policy is the bank, not the borrower. Jones explained. With SPCI, the entire insurance premium is paid in a lump sum when the loan is made. SPCI is an extremely expensive type of insurance. The bank pressured customers to buy the insurance and then financed the premium and added it to their loan."
"Folks like Ms. Richardson and Ms. Tillman ended up borrowing more money than they needed or wanted and were then forced to pay interest on the premium over the life of the loan," Jones said. "This lending practice also led to an increase in closing costs such as points and origination fees. So the bank is the beneficiary of the insurance. The bank gets to loan more money. The bank earns more on closing costs. And by the way, usually the bank also earned a big commission on the insurance premium, sometimes approaching 50 percent.
The suit, which was filed in Superior Court in Henderson, North Carolina, alleges that Tillman and Richardson were never told that the SPCI had been added to their loans or that they could be forced into arbitration. Both women testified that they were rushed through their loan closings and simply told where to sign their names or place their initials on the loan documents.
After Tillman and Richardson filed their lawsuit in civil court against CitiFinancial, the bank, which had included an arbitration clause in their closing documents, tried to force Tillman and Richardson into arbitration. Judge Stephens held that the CitiFinancial arbitration clause should be struck down because it was so one-sided and unfair to CitiFinancial borrowers.
In theory, arbitration clauses are intended to provide an efficient and inexpensive way to resolve disputes, without going into the courts, explained Jones. Unfortunately, CitiFinancials arbitration clause was so one-sided and expensive that few, if any, North Carolina consumers could afford it. CitiFinancial drafted an arbitration clause which essentially immunized it from the victims of its predatory lending practices. Thanks to Judge Stephens, North Carolina borrowers victimized by CitiFinancials predatory lending practices will have their day in court.
CitiFinancial, formerly known as Commercial Credit Loans, Inc., began including the mandatory arbitration clause in its loan agreements in 1996. CitiFinancials customers were in the subprime lending market, meaning that their credit ratings were below average and the interest rates charged were very high. Both Tillman and Richardson were charged rates of 15-20 percent by CitiFinancial.
CitiFinancials arbitration clause prevented them from bringing a lawsuit in civil court, but included exceptions which allowed CitiFinancial to continue to sue borrowers in civil court. To illustrate how one-sided CitiFinancials arbitration clause was, Olson cited evidence indicating that CitiFinancial had brought 3,700 lawsuits against North Carolina borrowers in civil court since the arbitration clause was adopted in 1996, but no borrower had gone into arbitration.
Jones and Olson told the Court that the arbitration clause was so expensive it would prevent Richardson, Tillman, or any other CitiFinancial borrower from going into arbitration. In his ruling, Judge Ronald L. Stephens cited evidence that CitiFinancial arbitration process could cost the borrower more than $10,000 if they lost, plus costs and attorneys fees.
Jones emphasized, This is not some coupon class action. We believe that as many as 25,000 North Carolina borrowers are entitled to a refund of their insurance premiums, as well as the closing costs and interests caused by those premiums. If we prevail, CitiFinancial will be required to pay back many North Carolinians the thousands of dollars which was wrongly taken from them.
CitiFinancial is appealing the ruling.
FDA Issues Crestor Advisory
Critics say the agency didn't go far enough03/03/2005ConsumerAffairs
FDA Issues Crestor Advisory...
The Food and Drug Administration (FDA) has issued a public health advisory outlining the identified risks and benefits of Crestor, a cholesterol-lowering drug. But critics say the agency didn't go far enough.
The Astra-Zeneca product has been plagued by claims that it can cause rhabdomyolysis, a breakdown of muscle fibers that can lead to kidney damage. This is a well-known, rare adverse effect of all statins.
The FDA's advisory says an extensive review of the data indicates that patients taking recommended doses of Crestor have a risk similar to patients on other statin cholesterol treatments.
David Graham, a safety researcher at the FDA, had singled out the drug as deserving closer safety scrutiny during congressional hearings last fall. The advocacy group Public Citizen has also targeted Crestor and issued a blistering denunciation of the FDA's action, calling "another example of the agencys dangerous cowardice in failing to adequately protect people in this country from uniquely dangerous prescription drugs."
"Like statements from AstraZeneca, the FDAs statement is replete with false and misleading information," said Sidney M. Wolfe, MD, Director, Public Citizens Health Research Group.
"Rather than responding in a public health-positive manner to our March 2004 petition and banning this drug, the FDA has done exactly what AstraZeneca wanted with minimal labeling changes and surely has pleased one of the drug companies contributing to the $150 million in drug industry funding that the FDA is receiving this year for drug review." Wolfe said.
Besides the FDA advisory, Crestor's manufacturer Astra-Zeneca Pharmaceuticals has revised the package insert for Crestor, based on discussions with the FDA. These changes re-emphasize recommendations made in the original label about the need for physicians to consider using lower starting doses of the drug in some individuals as a means of reducing the risk of rhabdomyolysis.
"The FDA is committed to providing Americans with the latest and most comprehensive information on the medicines they use," said Dr. Steven Galson, Acting Director, Center for Drug Evaluation and Research (CDER).
Galson says the advisory "is part of an ongoing effort to notify the public of potentially significant emerging safety data so that they can make more informed choices about their medical care."
The revised labeling notes that this may be particularly important for treating Asian American patients, since clinical trial data suggest that they (along with patients on cyclosporine or patients with severe renal insufficiency) may have higher drug levels and therefore be at greater risk for muscle injury due to Crestor than the general population.
But Public Citizen said that since October 2004, when it petitioned FDA to clamp down on Crestor, there have been an additional 52 U.S. cases of life-threatening muscle damage (rhabdomyolysis) reported to the FDA and an additional 12 U.S. cases of kidney failure or impairment in people not having rhabdomyolysis reported to the agency up to the end of January of this year.
"The total of such U.S. cases reported since the drug was first marketed in September 2003 is now 117 cases of rhabdomyolysis and 41 cases of kidney failure, both higher than seen with the other currently marketed statins," Wolfe said. "Because of concerns about the safety of Crestor, several countries, including Germany, Norway and Spain, have not approved the drug."
Overall, FDA said it believes that potential benefits of statin drugs (including Crestor) when used as labeled and indicated for the treatment of elevated cholesterol (hypercholesterolemia) outweigh their potential risks and provide an important treatment option for millions of Americans at risk of heart disease.
Dell Tops All Other Manufacturers Combined in Consumer Complaints
Dell Tops All Others Combined in Consumer Complaints03/02/2005ConsumerAffairs
Dell Tops All Other Manufacturers Combined in Consumer Complaints...
We frequently hear from readers who aren't satisfied with the real-life stories they read in our pages. They want to see some hard numbers. One such skeptic is Rachel of Lexington MA, who wrote:
I am concerned that there appears to be no attempt to adjust for size of firm. Very large firms (e.g., Dell) with many customers may generate many complaints but still have only a small percentage of dissatisfied customers. It's the percentage that really matters, since that's the best predictor of the experience a reader may have. Readers may not be aware of this bias and just look at the number or frequency of complaints. Even if aware of the bias, they have no "overall size" number to use in judging whether the number of complaints is high or low.
OK, but we'd say the fallacy here is in assuming that those who complain to us and to similar sites are a representative sample. They very obviously are not and therefore anything numerical is of no more value than the anecdotal consumer complaints that we publish.
Obviously, not everyone will encounter the same problems as those who write to us, but it's worthwhile for consumers to see what could happen so that they can plan accordingly.
Last we heard, Dell was #1, with 17.9 percent of the world P.C. market in 2004 according to market-research firm IDC. It did considerably better in piling up complaints from our readers -- a whopping 633, or 58 percent of 1,087 computer complaints -- in the last 12 months.
Dell, up a full percentage point from the year before, is obviously doing something right. On the other hand, with 55% of the complaints it must also be doing something wrong.
However, the downside of direct marketing and low prices is minimal service. We'd suggest those who require hand-holding buy an Apple or an IBM from a local computer shop that provides personal support. Apple complaints have been rising but their machines are still the simplest for those who could care less about what goes on inside the box. IBM machines are targeted to business clients and priced accordingly.
There are so many different kinds of consumers using computers for so many different things that, interesting though these numbers may be, we don't think they're all that useful. We recommend browsing sites like ours, finding consumers who seem to mirror your general state of geekiness and taking their experiences to heart. If they had trouble with Dell or eMachine, maybe you will too.
Simon Mall Group Settles Gift Card Lawsuit03/02/2005ConsumerAffairs
Simon Mall Group Settles Gift Card Lawsuit...
New York Attorney General Eliot Spitzer announced that Simon Property Group Inc. has settled a lawsuit by agreeing to comply with New Yorks gift card law.
"This settlement recognizes that consumers are entitled to receive the full protection of the law with regard to monthly fees and important disclosures about gift card terms and conditions," Spitzer said. "I am pleased that Simon has recognized the importance of complying with New Yorks gift card law."
Simon Property Group Inc. - the nations largest shopping mall chain - operates ten retail shopping malls and outlet centers on Long Island, and in the Hudson Valley, Central New York and Western New York.
Simon had been issuing cards that would impose a $2.50 monthly "administrative fee" on all gift cards beginning in the seventh month after purchase.
In a lawsuit filed in Manhattan State Supreme Court four weeks ago, Spitzer alleged that Simons assessment of a monthly fee on gift cards violated a recently enacted state law that bans monthly service fees on gift cards until the card has been unused for twelve consecutive months.
New York States gift card law took effect on October 18, 2004 and applies to all cards purchased after that date.
In settling the Attorney Generals lawsuit, Simon has agreed to comply with New Yorks gift card law and not to assess a service fee on any card unless it has been unused for twelve consecutive months.
Simon also has agreed to comply with New Yorks law that requires it to disclose on its gift card the five dollar fee it charges to replace a lost or stolen card, and the $7.50 fee it charges to reissue an expired card. These fees are not prohibited by law, but must be conspicuously disclosed on the card itself.
As part of the settlement, Simon has agreed to pay the state $100,000 in penalties and $25,000 in costs.
"As a sponsor of New York States gift card laws, I applaud the settlement that Attorney General Spitzer has negotiated. This is a great victory for our consumers and will show all gift card providers that they must abide by the laws of this state if they wish to do business here," said State Senator Charles J. Fuschillo.
The retail shopping centers owned and operated in New York State by Simon include: Roosevelt Field in Garden City (Nassau County); Mall at The Source in Westbury (Nassau County); Walt Whitman Mall in Huntington Station (Suffolk County); Smith Haven Mall in Lake Grove (Suffolk County); The Westchester in White Plains (Westchester County); Jefferson Valley Mall in Yorktown Heights (Westchester County); Nanuet Mall (Rockland County); Woodbury Common Premium Outlets in Central Valley (Orange County); Waterloo Premium Outlets in Waterloo (Seneca County); and Chautauqua Mall in Lakewood (Chautauqua County).