Current Events in June 2005

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2005

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    WaMu Buys Providian

    Both Companies Have Long Histories of Customer Dissatisfaction

    The nation's largest savings and loan, Washington Mutual, is buying credit-card issuer Providian Financial for about $6.45 billion. The deal gives WaMu a credit card business, which it now lacks, and gives it access to Providian's 9.4 million customers.

    Providian, which targets lower-income consumers and those with subpar credit ratings, is the frequent target of consumer complaints alleging advance fees, late posting of payments, unauthorized transfers and other unseemly pratices.

    In 2000, Providian agreed to reimburse its customers about $300 million in a settlement with the U.S. Office of the Comptroller of the Currency (OCC) and the San Francisco District Attorney's Office. Later that year, it agreed to pay $105 million to settle a series of class-action consumer lawsuits.

    What about Washington Mutual? Check out its Web site and you'll find endless testimonials to its "civic responsibility" and "community involvement," their legions of employees ("WaMulians") who love their work, and perform it to the highest standards of customer satisfaction. With assets totaling $319 billion and 2,400 offices providing a wide range of products across America, the Seattle-based firm portrays itself as the pinnacle of banking success stories.

    But the complaints of ConsumerAffairs.com's readers tell a very different story. Washington Mutual customers complain of "bait and switch" lending, failures to process mortgages or close sales, and substandard customer service.

    "These giant companies are eating up the American Dream and owning it while kicking people out on the streets!" exclaimed one exasperated customer.

    Housing Hardships

    Owning one's own home has never been easier or more advantageous, thanks to incredibly low interest rates. However, as many dismayed customers found when dealing with Washington Mutual, even the most attractive offers can turn to ruin if the company fails to fulfill its end of the bargain.

    Daryl M., of Mineral Wells, Texas, purchased his mortgage through Fleet before the company was bought by Washington Mutual. He was shocked to find that Washington Mutual had overpaid his property taxes for 2002. Rather than notify him of the error, it increased his monthly payments from $850 to $1450 a month.

    Even after returning his $2,200 tax refund to WaMu and asking that it be placed in escrow, the company continued to charge him late fees and turned a deaf ear to his concerns. "[R]ight now I am facing bankruptcy because I have other debts that I can no longer pay because of their screw-up. To this day they will not admit their mistake or offer an apology."

    Celeste H., of Lithonia, GA, was another former Fleet customer who found herself at the mercy of WaMu's "shell game" financing. WaMu claimed she was putting too much into escrow, and refunded her money, then proceeded to raise her monthly payments to $1,000.

    "Because I knew I was not going to be able to afford that amount every month, I did my own investigation; I saw they overpaid my property taxes. I spoke with my county and they informed me they had sent them a refund for the overpayment a month ago. I inquired about this to WAMU and they claimed they did not receive a refund. I had to call and get a check number and provide it to them."

    Celeste has since made her full payment and wants to find another loan service to refinance with, but cannot because she fell behind on other payments while straightening out the WaMu mess.

    A frequent consumer complaint centers on WaMu's inability to process documents or provide information in a timely fashion for mortgages and loans. Roger S. of Fort Washington, MD, a disabled Air Force veteran, pleaded with WaMu to amortize his loan in order to reduce the monthly payment and save money for medical bills.

    "Now as of January 21, 2005 I have been trying to pay in-full my mortgage to Washington Mutual Home Loan [They have] been receiving my payments for over 23 months. After several phone calls and no consistent Washington Mutual Home Loan personnel or managers to speak with, the Washington Mutual Home loan phone representative could not validate my payment."

    When Roger tried to make his payments in full and receive the lien, Washington Mutual continually returned his money and could not verify if the checks had been cashed or not.

    "I submitted my payoff letter and payment for the 3rd time. After being promised my January 07, 2005 payoff date and amount would be honored, it has now been reversed and now I have to pay an additional $5K."

    This is but one of a torrent of complaints regarding Washington Mutual's apparent inability to process even the most routine mortgage paperwork.

    Banking Belabored

    Nor are WaMu's banking services free of risk. Customers report tales of checks not being cleared, refusing to honor payments, and constant failure to process paperwork for any sort of transaction.

    Melanie B., of Fort Wayne, Indiana, was unable to receive her new checks from her Washington Mutual Account when she moved from California, so she asked the bank to put stops on the checks until she received them. Washington Mutual instead placed stops on checks she had previously written to pay her bills, causing them to be returned and billing her for surcharges and late fees.

    Renae of Pompano Beach, Florida, started noticing constant fees and charges on her statement for "anything and everything", despite making regular deposits to the account. "At one point, we had been charged almost $400.00 in over draft fees, when there was money in the checking account and we also had overdraft protection for any needed funds to be withdrawn from our savings."

    Jennifer H. of Winnetka, Calif., opened her bank statement from Washington Mutual in September of 2004, only to find that a check she had written had returned and a $22 overdraft fee assigned to it, despite her having ample funds in her account to pay for the transaction. She called Washington Mutual's customer service, who promised they would look into the matter within 5 business days.

    "My paycheck was direct deposit on September 17. I checked my account on September 18, and there were 3 more charges on there. I called the 800# again and was told a total of 4 checks were returned and two transactions were put through for a total of 6 $22.00 charges."

    After repeated attempts to get an explanation, Jennifer ended up owing $132 in overdraft fees, for no reason and with no attempt by WaMu to correct the problem or pay her money back.

    Apparent Disorganization

    A common thread running through most WaMu complaints is the inability to contact anyone who can solve a customer's problem, or to verify that documents have been received or sent.

    In June of 2004, James V. of Richmond, TX found himself in foreclosure from Washington Mutual, despite making a substantial payment to his account, simply because they did not process the check. Leslie of Boca Raton, Florida, deposited several checks into her new WaMu bank account, only to find the bank branch manager was choosing to hold her paychecks from clearance for "9 to 11 daysthey are making my account seem as if it have a negative balance, when it does not."

    Customers like Jack A., of Spring Hill, Florida, often encounter Washington Mutual's unwillingness to modify any of their payment plans, until they are more than 30 days late -- thus putting them into collections, adding late fees, etc.

    "I will fall behind on my mortgage payments and have this on my credit rating as well as all extra fees to get my loan caught up. This could have been avoided if the greed of this company was not so great."

    A similar circumstance befell Barry K. of Saline, Michigan. Himself a professional realtor, Barry has repeatedly lost business when dealing with WaMu due to their requested payoff dates of "7 to 10 business daysmost other banks [take] 1 hour. In the latest fiasco, we have waited 3 weeks for a mortgage payoffstill no luck."

    It is no exaggeration to say that this is but a small sampling of the complaints received about Washington Mutual. Their consistent record of abusive business practices, financial mismanagement, and poor customer service has literally left many consumers quaking in fear at the prospect of dealing with them.

    In the words of one distressed customer, "Economically, they are burying me with late fees and related expenses, not to mention I cannot get any products or services on credit because Washington Mutual has ruined my credit rating. I have been through three years of hell trying to communicate with these people. I go to bed worrying if they will attempt foreclosure on me again."


    "These giant companies are eating up the American Dream and owning it while kicking people out on the streets!" exclaimed one exasperated customer....

    Front Airbags Risky for Teens


    A new study suggests teens are better off staying out of the front seat of airbag-equipped cars until they're almost old enough to get behind the wheel.

    While current federally mandated warning labels in cars flag a risk for airbag injuries for children 12 and under, researchers at Oregon Health Sciences University found that the injury risk from passenger air bags remains high through age 14.

    "Eight years ago, when the National Highway Traffic Safety Administration issued its recommendations, they were based on the best information (about air-bag safety) available at the time," said the author of the new study, Dr. Craig Newgard, an assistant professor of emergency medicine at the university's Center for Policy and Research in Emergency Medicine.

    "Those warnings worked in reducing injuries to children, but as a parent and emergency physician, I felt it was time to study whether more children could be at risk and assess whether age or body size were good measurement guidelines," he added.

    Motor-vehicle crashes overall remain the leading cause of death for Americans aged 3 to 33, but research on restraint systems and safety for older children has been limited.

    In research published Monday in the journal Pediatrics, Newgard looked at what happened to 3,790 children aged 1 month to 18 years who were seated in the right front seat of a vehicle and involved in a crash.

    The information came from a nationally representative database of police reports on crashes over an eight-year period maintained by the National Highway Traffic Safety Administration. The agency reports that more than 150 children through age 11 have died from air-bag injuries as of mid-2004, but information on teens has been sparse.

    The study found that children 14 and younger were at high risk for serious injury from air bags when they sat in the front passenger seat during car crashes.

    In contrast, air bags had a protective effect for teens aged 15-18. And the study showed that age may be a better indicator of risk from air-bag injury than height or weight.

    Newgard and co-author Dr. Roger Lewis, an emergency-medicine researcher at the University of California-Los Angeles, said several body changes that take place during puberty, including muscle mass, bone density and bone-mineral content, may help explain why body size alone isn't a good measurement of risk from the air bags in children.

    "Anyone who drives needs to be empowered with this information," said Newgard. "When my 13-year-old nephew wants to sit in the front seat now, I won't let him."

    A new study suggests teens are better off staying out of the front seat of airbag-equipped cars until they're almost old enough to get behind the wheel....

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      Study: Living Near Power Lines May Increase Cancer Risk In Children


      British medical researchers say their studies suggest that children who live in close proximity to high-voltage power cables at birth are much more likely to develop leukemia. The Oxford University scientists say they found that children who lived within approximately 200 feet of the power lines had a 70 percent higher chance of developing the disease than children who lived more than 600 feet away.

      The researchers were quick to say that the results of their study could merely be coincidence, or that the cancer incidence among children might be related to other factors.

      But their study found that when they measured the cancer rate among children who lived more than 200 feet from power cables but less than 600 feet, there was still an increased risk, but not as high as for those living inside the 200 foot line.

      The research, published in the British Medical Journal, involved 29,000 children suffering from cancer. The Oxford research team said it plans to study the issue further.

      There have long been concerns about the possible connection between exposure to high voltage electricity and the risk of cancer. John E. Moulder, Professor of Radiation Oncology at the Medical College of Wisconsin, says there have been several studies of people working in "electrical" occupations.

      "Some of these studies appear to show a weak association between exposure to power-frequency magnetic fields and the incidence of some cancers. However, laboratory studies have shown little evidence of a link between power-frequency fields and cancer," he wrote in a posting on his Web site.

      The Web site "QuackWatch" also throws cold water on the notion of a power line-cancer link.

      "The notion that electric power lines can cause cancer arose in 1979 with a single flawed epidemiological study that created a stir. Subsequent epidemiologic and animal studies have failed to find a consistent and significant effect. No plausible mechanism linking power lines and cancer has been found. In recent years, the verdict from large-scale scientific studies has been conclusively negative, and scientific and medical societies have issued official statements that power lines are not a significant health risk. In short, there is nothing to worry about," writes John W. Farley, Professor of Physics at the University of Nevada, Las Vegas.

      Leukemia is the most common cancer of childhood. The body produces lymphocytes to protect the body from infection; in leukemia these cells do not mature properly and become too numerous in the blood and bone marrow. Leukemia researchers say it's not clear what causes the disease.



      Study: Living Near Power Lines May Increase Cancer Risk In Children...

      Michigan Finds Hundreds of Criminals Working in Nursing Homes


      Two studies conducted by the office of Attorney General Mike Cox reveal almost 10 percent of the employees caring for the state's vulnerable adults have criminal backgrounds that include homicide, criminal sexual conduct, weapon charges, and drug offenses.

      The findings come three years after Michigan's first law requiring criminal background checks of prospective residential care facility employees went into effect.

      AARP of Michigan's Associate State Director of Government Affairs Bill Knox joined Cox in unveiling a new initiative to address the problems raised in the Attorney General's report.

      "Many of us have had to face the difficult decision of whether or not to place a loved one in a nursing home," said Cox. "In three years, as the first group of 78 million baby boomers begins to retire, the safety of Michigan's nursing homes should be on all of our minds. When we place our loved ones in these facilities, we expect that our family members will receive the highest standard of care."

      "A system that fails to meet those expectations by allowing hundreds of criminals daily contact with residents must be changed and I am committed to changing it," he said.

      "AARP has 1.5 million members in Michigan, many of whom are among the state's vulnerable adults living in residential facilities," said Knox. "The Attorney General's report exposes major flaws in Michigan's current laws and we agree they need to be strengthened to provide our members with the protection they deserve."

      Cox commissioned the studies to evaluate the effectiveness of Michigan's statutes in response to a disturbing series of cases uncovered by his Health Care Fraud Division. The division, which investigates and prosecutes Medicaid provider fraud and residential care facility abuse and neglect, uncovered that 43% of individuals and 25% of employees charged for crimes against residents in the past three years had past criminal convictions.

      The results of the two studies completed in 2005 were equally disturbing. The first reviewed the criminal backgrounds of a statewide sample of Michigan's 40,000 Certified Nurse's Aides (CNAs), the single-largest group of certified workers providing direct care to residents. Of the more than 5,500 CNAs studied, 9% had a total of 836 outstanding criminal warrants and 3%, or 170, had past criminal convictions.

      The second study checked the backgrounds of entire employee populations -- from CNAs to administrators -- at four nursing homes in different regions across Michigan. A total of 618 employees were checked and 58, or more than 9%, had 101 outstanding warrants; 68, or 11%, of the staff had past criminal convictions.

      In both studies, the criminal histories included homicides, armed robberies, criminal sexual conduct, weapons violations, drug charges, and retail fraud.

      "The owners, operators, and employees of Michigan's almost 5,000 residential care facilities are the people we entrust to care for Michigan's most vulnerable citizens," said Cox. "When one out of ten of these employees have serious criminal histories, it is clear that we need to do more to protect Michigan seniors."

      Cox has notified each of the State's approximately 5,000 residential care facilities of the report's findings and submitted a comprehensive proposal to the Legislature that would enhance Michigan's criminal background statutes. In addition, the Health Care Fraud Division has requested information from facilities regarding employees with criminal histories.

      "It is only through our combined efforts that we can reform the system and effectively achieve the level of protection Michigan's most vulnerable citizens deserve and that we all expect," said Cox.



      Michigan Finds Hundreds of Criminals Working in Nursing Homes...

      Thinking of Buying a Hybrid? Do the Math!


      The very best and brightest brains in the automobile business have clearly focused on the hybrid as a big part of their companies' futures. Everyone from Toyota to Porsche either is producing hybrids, or says it soon will be.

      Consumers, who only a few months ago just couldn't get enough of the hulking, gas-guzzling SUVs that have stolen America's heart, are now turning in droves to diminutive, energy-sipping hybrids, waiting months and paying premiums of a thousand dollars or more, all in a sudden quest to save fuel and money.

      Not long ago, someone paid $500 on eBay to be first in line for a new hybrid.

      All this sudden fuel-saving fervor is admirable. But the question many consumers may not ask is whether hybrid cars and SUVs really will save them money. There's no question they achieve superior gas mileage but they don't cost less to operate, at least not yet.

      ConsumerAffairs.com compared three hybrid vehicles with three top-of-the-line vehicles in the same class by the same automaker. We calculated gasoline costs at $3 a gallon over 120,000 miles and 80,000 miles to arrive at the likely operating costs.

      The results would seem to demonstrate that people are buying hybrids for reasons other than saving money.

      Prius vs. Corolla

      Toyota Prius sales have tripled as gasoline prices shot up this year. Toyota sold 22,880 Prius cars in the first three months of the year, more than double the number it sold in the first three months of 2004.

      Corolla vs. Prius
      Difference: $4,817
      Gallons bought for Corolla at $3: 1,606
      "Free" Corolla miles in the city: 41,747 ...or
      "Free" Corolla miles on the highway: 54,604

      But what if, instead of buying a Prius you were bold enough to buy a top-of-the-line Toyota Corolla XRS, you would be able to drive the Corolla 41,474 miles in the city or 54,604 miles on the highway paying $3.00 a gallon for gasoline before you had spent as much money as you would have to fork over for a 2005 Prius. That price is not even for the top-of-the-line Prius.

      The Corolla sells for a Blue Book reduced price of $17,083. The car, according to the EPA, gets 26 miles to a gallon in the city and 34 on the highway.

      With the Prius we find a new car Blue Book price of $21,900 for the base model. The EPA gas mileage estimate for the vehicle is 60 mpg in the city and 51 on the highway.

      But wait, there's more. An additional $800 buyer incentive is tacked onto the Corolla. Only "market adjustments" (read dealer mark-ups) are added to the Prius.

      So let's look at the cost of owning a hybrid from another perspective. Let's drive a Prius for 120,000 miles. Once again we will pay an average of $3 a gallon for gasoline. Half of the miles will be driven in the city, and half on the highway. No other maintenance costs will be considered, despite the possibility that the hybrid costs might be higher.

      The Prius produces 60 miles to a gallon in the city and 51 on the highway according to the EPA tests. The means we consume 2,178 gallons of gasoline or $6,528.

      Over the same distance, the Corolla consumes 4,071 gallons of gasoline costing $12,213. So we would spend $5,685 more over 120,000 miles driving the Corolla than driving the Prius. But we paid $5,617 more for the Prius after the Toyota incentive for the Corolla.

      So the additional cost of driving a Corolla instead of a Prius for 120,000 miles is $68 and you don't have to stand in line to buy one.

      Cutting the driving distance 80,000 miles -- 40,000 in the city and 40,000 on the highway -- increases the Corolla advantage to just more than $1,000.

      Accord Hybrid vs. Accord EX

      Honda Motor Co., with sales of just over 100,000 hybrid vehicles worldwide since 1999, might be just a little smarter than Toyota when it comes to marketing gasoline-electric hybrids. Honda's new Accord hybrid is priced so high that most people won't be able to afford it. So Honda avoids the Prius problem of too many customers and too few cars.

      The Honda Accord Hybrid Sedan sells for $31,575. The price includes roughly a $1,000 markup. The EPA mileage estimate for the Honda is 30 MPG in the city and 37 on the highway.

      The top of the line Honda Accord EX sells for $25,176 which includes roughly $2,000 in price reductions. The EX gets an EPA estimated 21 mpg in the city and 30 on the highway.

      Accord vs. Accord EX
      Difference: $6,399
      Gallons bought for Honda EX at $3.00: 2,133

      "Free" Honda EX miles in the city: 44,793 ... or
      "Free" Honda EX miles on the highway: 63,990

      The top of the line conventional Accord goes 63,990 miles on the highway or 44,793 miles in the city after pouring the price differential into the gas tank at $3 a gallon.

      Over 120,000 miles the hybrid Honda uses $3,707 less gasoline. However, because of the increased purchase price, the hybrid is $2,692 more to operate. Over 80,000 miles the hybrid burns $2,470 less gasoline but is $3,929 more expensive to operate, again because of the high purchase price.

      Escape Hybrid vs. Escape Gas

      The Ford Escape follows the same pattern as the Toyota and Honda, but the operating cost is much higher for the hybrid when compared to a top-of-the-line Escape XLTS.

      Hybrid Escape vs. Escape XLT Sport
      Difference: $4,630
      Gallons bought for XLTS at $3.00: 1,543
      "Free" XLTS miles in city: 27,774 ... or
      "Free" XLTS miles on highway: 33,946

      The Escape Hybrid costs $29,140 and gets 33 mpg in the city and 29 on the highway. The top of the line Ford Escape XLT Sport goes for $24,510 and an EPA estimated 18 mpg in the city and 22 on the highway.

      But wait there's more here. The XLTS carries an additional $3,500 in incentives that could add 21,000 more miles in the city or 25,666 on the highway.

      Driving the hybrid 120,000 miles will cost 11,658 at $3 a gallon. The XLTS burns $18,181 or $6523 more. The conventional Escape is $1,893 more to operate considering the price differential. But when the $3,500 in price incentives is figured into the comparison, the XLTS costs $1,607 less to drive over 120,000 miles than the hybrid.

      Over an 80,000 mile distance the XLTS is $283 less to operate before incentives and $3,783 less to operate after incentives.

      There is plenty of guesswork in this comparison. No one knows where gas prices will be over a 120,000-mile period. The repair costs for hybrids are still uncertain. Will they cost more to maintain? Or less? While there are no automotive horror stories about hybrids to date neither is there any record on which to estimate repair costs.

      What's the Answer?

      So does this answer the question of whether your next car or SUV should be a hybrid? It depends. If you base your buying decisions strictly on economics, the likely answer is that a modest, gas-powered car with a stick shift and with minimal use of air conditioning is probably going to be considerably cheaper to buy and operate than a hybrid.

      If you are basing your decision on what's best for the environment, there's more than gasoline consumption to factor into the equation. A big part of what's wrong with our environmental situation, not to mention our health, is the excessive amount of time we spend in motorized vehicles.

      Whether they're powered by gasoline, hydrogen or fermented seaweed, cars need roads to run on. Roadways are very damaging to the environment, not least because of the effect they have on water runoff. A big reason houses tend to slide down hills in Southern California is that there is so much asphalt that storm runoff is funneled into unnatural -- and dangerous -- escape routes.

      Highways also contribute to global warming, even when there are no cars on them. They displace cooling vegetation and their harsh asphalt surface reflects heat back into the environment, which in itself contributes to smog, regardless of what kind of fuel the vehicles on that highway are using.

      The real answer to our fuel-cost woes, sedentary lifestyle and dire environmental problems is not a new kind of car. It's a new kind of city -- one that lets us walk, bike or ride transit to where we're going.

      But we digress.

      What's the Question?

      If the question is, will you save money buying a hybrid, we'd have to say it's not likely. On the other hand if the question is, will buying a hybrid make you feel good, we can't answer that. It might, at least for a little while.

      If the question is, will your hybrid help save the earth, we'd suggest the answer to that is, the earth will save itself. It was here long before we were and will be here long after we're gone. (It's the date and method of our departure that hangs in the balance).

      Ah, but here's another factor. In many major metro areas, hybrids are allowed in car-pool (or HOV) lanes. Thus, by buying a hybrid, you may be able to continue driving alone to work, squeezing into the already congested HOV lanes that were created to reduce congestion by reducing the number of cars on the road.

      In that scenario, hybrids are a threat to the environment because they contribute to increased congestion. We know from reading our mail that this is not a popular thing to say but, as our editor constantly reminds us, we're not running a popularity contest.



      Hybrids May Not Be the Most Economical choice...

      Illinois Sues Envelope-Stuffing Promoter

      Get paid to stuff envelopes? Not likely

      Illinois Attorney General Lisa Madigan has filed a lawsuit in Cook County Circuit Court alleging that an out-of-state company and its Illinois-based owner cashed in on consumers' desire to work from home by advertising and operating a fraudulent envelope stuffing business.

      More than 20 consumer complaints about this business have been filed with Madigan's Consumer Protection Division and the Better Business Bureaus in Illinois and Nevada. The complaints allege the work-at-home company lured consumers with promises of large profits. But after sending in cash to receive their supplies and completing the assigned work, the consumers allegedly never received the advertised compensation.

      Madigan's lawsuit names as defendants Income Solutions, Inc., a Nevada corporation, and its owner, Joseph A. Munizzi, of Lemont. The corporation was involuntarily dissolved in Nevada in 2004 and, after failing to file proper documentation in Illinois, lost its authorization to transact business in this state.

      Madiganr's lawsuit alleges that since at least April 2004, Munizzi and his company have used newspaper and direct mail advertisements to solicit consumers to participate in their work-at-home scheme. The bold advertisements claimed, 'YOU COULD BE EARNING BIG PAYCHECKS WITHIN TWO WEEKS . . . IF YOU ACT NOW!!'

      'Work at home schemes are often common scams, and I urge consumers tempted by an envelope stuffing advertisement to carefully consider the offer before sending in any money,' Madigan said

      The defendants stated in their advertisements that consumers could earn between $442.20 and $2,948 per week by stuffing envelopes. The consumers were required to pay fees ranging from $59 to $149, and they mailed their checks to the company's post office box in Las Vegas, Nevada. Madigan alleges that the mail received at the Las Vegas post office box was forwarded to another post office box in Willowbrook, Illinios.

      While Income Solutions represented in its advertisements that consumers would earn $7.37 per envelope, they allegedly failed to disclose that consumers would earn this money only if the recipient of the mailing ordered the nutritional product being offered for sale by the defendants.

      According to consumer complaints, once the checks were sent to Income Solutions, consumers either never received the envelope stuffing materials or were not paid the compensation promised in the advertisements. In some instances, consumers who ordered envelope stuffing materials were sent information on a different program, which costs an additional $299, about making money from home by processing tax liens.

      Madigan's lawsuit charges the defendants with violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Uniform Deceptive Trade Practices Act.

      Madigan's lawsuit asks the court to prohibit the defendants from engaging in the business of advertising, offering for sale, or selling envelope stuffing work-at-home schemes and from further violating Illinois' consumer protection laws. The lawsuit also seeks a civil penalty of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud. Finally, Madigan's lawsuit asks the court to order the defendants to pay restitution to consumers.



      Illinois Sues Envelope-Stuffing Promoter...

      Ford Urges Replacing Tires After Six Years

      Feds Still Considering Petition Seeking Tire Dating

      Ford, which has had its share of about tire safety problems, is urging consumers to replace their tires after six years. Tires degrade even when they're not in use, the company says, echoing the claims of safety advocates who have been pressing federal regulators to take action on the issue.

      The tire industry disagrees and says that tires are safe as long as the tread depth is a minimum of 1/16th of an inch, no matter what the age, and as long as there are no visible cuts, signs of uneven wear, bulges or excessive cracking. Other trouble signs are if tires create vibration or excessive noise.

      SRS Inc., an auto safety research firm, last year petitioned the National Highway Traffic Safety Administration (NHTSA) to require easily readable creation dates on car and truck tires.

      SRS President Sean Kane said that as of November of 2004, his group has documented 37 fatalities and 35 serious injuries associated with age-related tire tread separations. In many of these cases, the tires were unused spares and showed no signs of degradation.

      Aged tires are often unsuspectingly put into service after having served as a spare, being stored in garages or warehouses, or simply used on a vehicle that is infrequently driven. In many instances these tires show no visible sign of deterioration, and absent any visible indicators, tires with adequate tread depth are likely to be put into service regardless of age, SRS said in its petition.

      Kane's petition noted that environmental conditions like exposure to sunlight and coastal climates, as well as poor storage and infrequent use accelerate the aging process.

      The British Rubber Manufacturers recommends that used tires should not be put into service if they are over six years old and that all tires should be replaced 10 years from their date of their manufacture but the U.S. Rubber Manufacturers Association derides the notion.

      "Tires are not milk," Rubber Manufacturers spokesman Daniel Zielinski told the Wall Street Journal. But Zielinski's quip notwithstanding, many European car makers as well as Japan's Toyota Motor Corp. have long warned drivers that tires are perishable and many use six years as the cut-off point.

      DaimlerChrysler's Mercedes division also tells drivers that tires last only six years and Chrysler now includes a similar warning in its owners manuals.

      General Motors so far is a hold-out. A company spokesman says it hasn't found any research that supports six years as the deadline for replacing tires.

      Ford's new position reflects its increased emphasis on tire safety following the disastrous series of rollover accidents afflicting its Ford Explorer SUV and other vehicles. Ford blamed the problem on Firestone tires and is still fighting hundreds of wrongful death and personal injury lawsuits arising from the series of deadly accidents that led to a massive recall.

      The age of a tire already appesrs on the widewall but it's part of a lengthy code that can be hard to decipher. To find the age of your tires, look for the letters DOT on the widewall. That's followed by a 12-character serial number made up of numbers and letters, followed by four digits that identify the week and year the tire was made. For example, 2403 would be the 24th week of 2003.

      Ford Urges Replacing Tires After Six Years...

      Brake Problems Plague Silverado Owners

      A lot of Chevrolet Silveradopickup owners have become very cautious drivers

      A lot of Chevrolet Silverado pickup owners have become very cautious drivers. The brakes take so long to stop the truck that consumers complain of nearly hitting the car in front or rolling into the intersection.

      Nearly 1.3 million trucks could be recalled to fix the brake problem, pending a government defect investigation. General Motors has recalled thousands of trucks in Canada for a similar problem, saying road salt could corrode bearings, lead to false readings in a sensor and prematurely activate antilock brakes.

      But so far the company says it has received too few complaints to take action in the U.S. Well, General Motors ought to start reading ConsumerAffairs.com.

      "I have had my 2000 Silverado pickup in the shop three times for the brakes. The brake pedal goes right to the floor whenever it wants and I can't stop," said Chuck of Conestoga, NY.

      "They keep telling me there is nothing wrong. Tonight when I came home, I almost hit my house. I have been lucky so far because I crawl up to stop signs and red lights waiting for the brakes to fail. You never know when they won't stop you."

      "The truck is under warranty so I don't understand what the problem is. I would just like to have my brakes fixed so I don't kill myself or someone else," Chuck said.

      Lawrence of Mountain Home, Arkansas, has the same problem.

      "With 12,885 miles on my 2003 Silverado the brakes have had a soft pedal from day one. It goes to floor at times when making a hard stop. I rolled out into an intersection on a downhill road with the pedal on the floor more than once. I will not tow a boat with the truck," Lawrence said in his complaint to ConsumerAffairs.com.

      "Two dealers say it's normal and can't find anything wrong. That is until the warranty runs out I bet. It's very unnerving. My wife will not drive it. There is too much pedal travel."

      NHTSA says it is still in the "early stages" of its investigation, although the problem has existed for several years. While the federal government investigates whether a defect exists in antilock brakes on 1.3 million 1999-2002 Chevrolet Silverado and GMC Sierra pickups, the complaints continue rolling in.

      NHTSA has received 120 complaints that included 22 crashes and four injuries. The ConsumerAffairs.com Silverado file is up to 146, although not all of those complaints deal exclusively with brakes.

      NHTSA is operating on the assumption that the problem is linked to road salt and so its investigation is focusing on trucks in 20 states in the Northeast and the Midwest, stretching from Maine to Virginia in the East and to Minnesota in the Midwest, including Michigan.

      But George in New Port Richey, Florida, might not agree with NHTSA's decision to limit its probe to cold-weather states.

      "I bought A Chevy Silverado 2004 truck in January 2004. I have complained to the dealer about the poor brakes on the truck because they are very weak. This is the eighth Chevy truck I have owned and it has the worst brakes of all," George said. I am afraid to tow anything with this truck. I have trouble stopping with it empty in normal driving. I am afraid I will rear-end someone!"

      More complaints are in our Automotive Section.

      A lot of Chevrolet Silverado pickup owners have become very cautious drivers. The brakes take so long to stop the truck that consumers complain of nearly h...