Current Events in March 2005

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).

When it reviews its alcohol policies later this month the NCAA should vote to end beer ads on televised college sports programming, according to the Campaign for Alcohol-Free Sports TV -- a coalition of health advocacy groups and coaches organized by the Center for Science in the Public Interest (CSPI).

The campaign is calling on the 18 college presidents that make up the NCAA's Division I board of directors not to let the close financial ties between the NCAA and mega-brewer Anheuser-Busch influence their decisions.

CSPI says that an example of those ties is an internal briefing paper recently prepared by NCAA staff which pointedly reminded the 18 college presidents of Anheuser-Busch's financial generosity to the NCAA.

"We call on the college presidents who govern the NCAA to personally take control of the alcohol-policy review from the NCAA staff," said George A. Hacker, director of CSPI's Alcohol Policies Project. "College presidents should recognize that Anheuser-Busch is motivated not by philanthropy, but by a desire to sell beer to college sports fans, and to have a seat at the table when decisions like these are being made."

Anheuser-Busch paid the NCAA $2 million in 1990 -- less than a year after the NCAA rejected a proposed ban on beer ads in favor of a policy that allows beer ads to the exclusion of ads for other alcoholic beverages. That money and subsequent payments fund the NCAAs alcohol-education programs. In 1996, the NCAA installed a former Anheuser-Busch marketing executive, Ronald J. Stratten, to administer them.

In 2004, Stratten helped publicize an Anheuser-Busch-funded survey designed to downplay the problem of alcohol-fueled fan misbehavior at college sports events.

That survey maintained that findings such as "93 percent of students do not throw beverages," at games and "92 percent of students do not fight with other fans," were evidence of safe celebratory behavior at college sports events, in contrast to "widespread myths" to the contrary.

"Regrettably, Mr. Stratten's track record at the NCAA suggests that he's more interested in playing defense for brewers, than going on offense against underage or excessive drinking," says Hacker.

"The Division I board of directors can produce a credible review of NCAA alcohol policy only if Mr. Stratten or any other former beer-industry employee is not staffing or participating in any way."

Donations from Anheuser-Busch to the NCAA are dwarfed by the millions of dollars they and other brewers spend on ads on college sports. Much of that revenue is kept by broadcasters, but some is eventually divided among the coffers of the NCAA, dozens of athletic conferences, and hundreds of individual colleges.

In 2003, the industry spent more than $52 million to place 4,747 ads on college sports, including $21.1 million for 395 ads on the NCAA men's basketball tournament alone. In 2002, there were more beer ads on the NCAA men's basketball tournament than there were on the Super Bowl, all college football bowl games, the World Series, and the NFL Monday Night Football series combined.

Many coaches, college presidents, and athletic directors increasingly see advertising beer on college sports as inconsistent with their efforts to reduce underage and binge drinking on their campuses.

227 colleges and universities have signed the campaign's College Commitment -- a pledge to prohibit alcohol advertising on locally produced college sports telecasts and to work within their athletic conferences and the NCAA to end all alcohol advertising on college sports.

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.

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.

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.

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 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.

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.

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.

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.

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."

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.

Consumers may get money back for purchasing the drug Remeron or its generic equivalent, Mirtazapine, between June 15, 2001, and Jan. 25, 2005, as a result of a $36 million nationwide settlement with drug maker Organon USA Inc. and its parent company, Akzo Nobel N.V., for improperly monopolizing the U.S. market for the drugs.

Consumers will begin seeing numerous public service announcements and advertisements this week in publications such as Reader's Digest, Parade, USA Today and many others. The settlement is subject to court approval before it can become final.

"Investigations into Organon exposed that it used business tactics to prevent competition, resulting in consumers paying higher prices for the drugs because they did not have access to a low-cost, generic equivalent," Ohio Attorney General Jim Petro said.

The lawsuit alleged Organon unlawfully extended its monopoly by improperly listing a new "combination therapy" patent with the U.S. Food and Drug Administration. In addition, the suit alleged that Organon delayed listing the patent with the FDA to delay the availability of lower-cost generic substitutes. This resulted in higher prices to those who paid for the drug. Remeron, at its peak, was Organon's top-selling drug with annual sales in excess of $400 million.

Consumers can obtain a claim form and more information about the settlement by calling the toll-free number, 866-401-6807, or by visiting www.RemeronSettlement.com. Eligible consumers must file claim forms with the administrator no later than June 13, 2005, in order to be eligible for a possible refund.

The address to mail in the form is Remeron Antitrust Settlement, c/o Complete Claim Solutions, Inc., P.O. Box 24769, West Palm Beach, Fla. 33416.

Affected consumers who do not wish to remain part of the settlement class must exclude themselves in writing on or before April 27, 2005. Information on opting out of the settlement also is available at the settlement Web site or by calling the toll-free number.

The settlement, if ultimately approved by the court, will resolve both claims brought by state attorneys general, as well as a private class-action suit. Complete Claim Solutions, Inc., of West Palm Beach, Fla., is assisting the states as the claims administrator for the settlement.

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.

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."

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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.

Consumer complaints about Toys R Us

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 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.

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.

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.