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    Mortgage Bankers Fret About "Creative" Loans

    They're the ones making the loans, of course, but ...

    Add the Mortgage Bankers Association to those who are worried about homeowners taking out home loans that feature low initial payments that can rise dramatically over time.

    But wait. Aren't the mortgage bankers the very people selling such loans? The answer is yes, but the MBA says the primary responsibility for being prudent in taking on debt rests with the consumer.

    "Borrowers need to be vigilant to be sure that they are prudently measuring and managing" the added risks many accept by embracing loans that minimize monthly payments in the early years but can require much-higher payments later, the trade group said in a 30-page report.

    The report echoes warnings from Federal Reserve Chairman Alan Greenspan, bank regulators and the National Association of Realtors about the risks of non-traditional loans.

    The worrisome mortgages include interest-only loans with rates that follow prevailing interest rates. With these loans, borrowers pay only the interest during the first few years but then monthly payments rise sharply as the borrower begins paying off the principal.

    If interest rates rise sharply over the next few years, many homebuyers could be in trouble, as their monthly payment could rise dratically as they try to cover higher interest rates as they begin paying on the principal.

    Many buyers taking out such loans are counting on continued double-digit increases in housing values, perhaps thinking that they will be able to refinance or sell their home before the higher payments come due. That's not likely to be the case if the run-up in housing prices turns out to be a "bubble."

    However, it's not just over-extended consumers that has the mortgage bankers group wringing its hands. Its report warns that "investor activity," meaning speculation, has increased in the hottest U.S. housing markets, primarily those on the East and West Coasts.

    "Lenders need to prudently monitor the level of speculative activity in such markets," the MBA report cautioned. Speculation is a factor in driving up housing prices to unsustainable levels. Also, speculators are quicker to walk away from investments gone bad than owner-occupants.

    Mortgage Bankers Fret About Creative Loans...
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    New Home Sales Set Another Record In July

    Americans appetite for new homes showed no sign of letting up in July

    Americans appetite for new homes showed no sign of letting up in July, with sales posting another record. The Commerce Department reports new home sales surged 6.5 percent, to an annual rate of 1.14 million units, bolstered by low interest rates and a solid job market.

    Mortgage rates may have been a determining factor driving the record increase. Despite Federal Reserve policies of boosting short term rates and worries about possible inflation, mortgage rates have fallen to a point near their 40-year low.

    Its one thing to break a record for sales in a month. Its another thing to totally shatter it. That is what happened in July as new home sales skyrocketed. The level of demand is so out of whack with history that it is hard to even comprehend, said Joel Naroff, chief economist at Naroff Economic Advisors.

    Sales were 17% above the July 2004 level, which at the time was considered high. Sales surged 36% in the western U.S., while demand was up over 10% in the Northeast. In comparison, sales fell sharply in the Midwest and eased back in the South.

    So, what is going on?

    Naroff cautions that the robust sales figures are not necessarily good news. There is, he says, a whiff of panic in the air.

    People are getting in before prices hit levels that they cannot afford. But there is also an awful lot of speculation going on, Naroff said.

    At the same time, the median price fell for the third consecutive month but economists say its not clear what that means. More newly built condos and co-ops may be on the market, which would explain some of the drop.

    As for supply, it inched up and is not out of hand, but only if demand remains in the stratosphere, Naroff added.

    Still, builders dont seem to have gotten too far ahead of themselves yet. With this latest report, new home sales are on a pace for the year to set a fifth straight record. Based on the first seven months of 2005, homebuilders are projected to sell 1.304 million homes this year. Sales were 1.203 million last year.

    New Home Sales Set Another Record In July: Americans appetite for new homes showed no sign of letting up in July, with sales posting another record....
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    More Economists Worry About Housing Bubble

    Are home values floating merrily upward in a bubble that's about to burst?

    Are home values floating merrily upward in a bubble that's about to burst? Many of the economists who correctly predicted the bursting of the stock market bubble, including Yale University's Robert Shiller, think so.

    If the housing market should collapse as the stock market did, the impact could be even more painful, warns Bruce Bartlett, a senior fellow with the National Center for Policy Analysis.

    For one thing, Bartlett says, homeowners are much more leveraged than they used to be.

    According to the Federal Reserve, home equity has fallen to 56.3 percent of their real estate from 75 percent a generation ago. Another Federal Reserve study found that 16 percent of the money taken out in refinancings was simply consumed.

    According to Freddie Mac, people are taking more and more money out of their homes. Cash-out refinancings have risen to 18.1 percent of all refinancings from 7.2 percent in 2003. In the last four years, homeowners have taken $559 billion in equity out of their homes.

    More and more homeowners are buying and refinancing with unconventional loans, such as adjustable rate and interest-only mortgages, rather than traditional fixed mortgages.

    These loans offer low initial payments, but will rise automatically when interest rates rise, putting homeowners in a potential bind. The Federal Reserve says that 47 percent of all residential mortgages by dollar volume are now non-traditional.

    Economist John Makin of the American Enterprise Institute notes that housing has a powerful effect on economic growth through construction, employment, purchases of durable goods like refrigerators and in other ways.

    He estimates that if home prices simply level off and stop rising, it will cut 1 percent off the real gross domestic product growth rate.

    More Economists Worry About Housing Bubble...
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      Connecticut Blasts Sale Of Fake Air Bag Covers

      The state of Connecticut is attempting to stop an Alabama company from selling replacement air bag covers without the air bags

      The state of Connecticut is attempting to stop an Alabama company from selling replacement air bag covers without the air bags. Hicks Air Bag Covers markets its air bag covers nationwide as an inexpensive alternative to installing replacement air bags.

      "Selling fake air bag covers is likely illegal under state law and appallingly irresponsible under any standard," Attorney General Richard Blumenthal said.

      "The company's products pose a particular danger to passengers and second-hand car buyers unlikely or unable to know whether an air bag cover is fake. The result is vehicular Russian roulette, with losers facing possible death or severe injury. Devices so clearly sacrificing safety should be stopped, Blumenthal said.

      The attorney general, Sen. Leonard A. Fasano and the Auto Body Association of Connecticut (ABAC) also will push legislation imposing a total ban on the sale and installation of air bag covers without air bags. Florida, New York and other states have recently enacted similar laws.

      Federal law prohibits auto repairers or dealers from installing air bag covers without air bags in vehicles whose bags have deployed. Current law does not cover individual non-professionals.

      Once a cover is installed, a consumer many not know whether an air bag is underneath. One means of checking is to look for a manufacturer's logo, which is likely to be missing if the air bag cover is bogus.

      "My office will aggressively seek to determine whether legal action against Hicks Auto Body is warranted. I will also work with Sen. Fasano, other lawmakers and the ABAC to fully ban the sale and installation of phony air bag covers and to institute tough civil and criminal penalties against those who endanger the public with this deadly deception," Blumenthal said.

      "This is a major public safety concern, so I am hopeful that we can make Connecticut motorists aware of this dangerous practice. Right now, there may be citizens driving around who unknowingly purchased a used car whose airbag was not properly replaced," said Fasano.

      "It is unconscionable that any company would install fake airbag covers and put motorists at risk simply to earn a few extra dollars. I plan to aggressively pursue new legislation that specifically prohibits the sale of these 'fake' air bags so Connecticut drivers can rest assured that their air bags function properly."

      "I was shocked when I received an advertisement in the mail from this company," said ABAC representative Bill Denya, who owns a garage in Meriden. "As an auto repairer, my top priority is to fix vehicles so they are safe to drive. ABAC is always very concerned about safety issues. These fake air bag covers endanger public safety and should be outlawed.

      "When buying a used vehicle, motorists should check for the maker's logo on the bag cover. No logo is a good indication that the cover is a fake, and there's no air bag underneath."

      On its web site and in mailings to Connecticut auto body shops, Hicks Air Bags openly touts its product as a cheap substitute for new air bags in damaged vehicles. Its covers, which come in 50 colors and fit virtually every vehicle make and model, cost $75 to $85, compared with $600 to $700 for a new air bag.

      "Expensive air bags not for you? Here's an affordable alternative to restore your car's interior without them," reads a Hicks Air Bags mailer recently sent to a Connecticut auto body shop.

      Another piece of company promotional material reads, "Look good for less with our cosmetic, nonfunctional replacement covers."

      In 2003, Hicks owner Lawrence G. Hicks pled guilty in federal court to selling counterfeit General Motors air bag covers to individuals, auto body shops and used car dealerships for use in repairing damaged vehicles.

      Hicks admitted selling more 4,600 of the counterfeits in 1999 and 2000. The National Highway Traffic Safety Administration estimates that air bags saved about 2,500 lives in 2003, the most recent year for which figures are available.

      "Selling fake air bag covers is likely illegal under state law and appallingly irresponsible under any standard," Attorney General Richard Blumenthal said....
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      Study Casts Doubt on Soy's Health Benefits


      If you chow down daily on tofu and other sources of soy protein in search of a healthier lifestyle, a new study suggests you may be a bit disappointed.

      While daily soy consumption result in a small reduction in low-density lipoprotein and triglyceride levels, a new evidence review supported by HHS' Agency for Healthcare Research and Quality says there's little evidence of major health improvements.

      It found the available studies on the health impacts of soy are limited in number, of poor quality, or their duration was too short to lead to definite conclusions.

      Bad Cholesterol

      Overall, across the 68 studies that examined the impact of soy on cholesterol levels, consumption of soy products resulted in a three percent reduction in LDL, known as "bad cholesterol," and a six percent decrease in triglyceride levels in the populations studied.

      Among these studies, a large variety of soy products, doses of soy protein, and doses of soy isoflavones were tested. The average dose of soy protein in the studies was equivalent to about one pound of tofu or three soy shakes daily.

      There was some indication that soy consumption may be more effective at lowering LDL among people with higher LDL levels. Also, larger amounts of soy protein, but not soy isoflavones, are more effective in people with abnormally elevated LDL levels. Similarly, soy consumption may be more effective at lowering triglycerides among people with higher triglyceride levels; however, there was no evidence of how much soy protein or isoflavones would be needed to affect triglycerides.

      Good Cholesterol

      Reviews on the relationship between soy consumption and high-density lipoprotein, or good cholesterol, levels and between soy consumption and blood pressure did not find significant effects.

      Among 21 studies evaluating the consumption of soy isoflavones for menopause-related symptoms, there was a net reduction in hot flash frequency ranging from 7 percent to 40 percent, however, these trials were mostly rated as poor quality. Among studies with statistically significant improvements in symptoms, the dose of soy isoflavones ranged from 17.5 to 100 mg/day.

      The evidence review completed by AHRQ's Tufts-New England Medical Center Evidence-based Practice Center also found insufficient data among the 200 human studies examined as part of this analysis to suggest that soy had an effect on bone health, cancer, kidney disease, endocrine function, reproductive health, neurocognitive function, or glucose metabolism.

      A wide variety of soy products were studied, including foods such as soybeans, soy flour, soy milk, tofu, miso, tempeh, natto, and okara; isolated and textured soy protein that is added to foods; and soy-derived isoflavone supplements.

      No Adverse Effects

      Aside from minor gastrointestinal problems reported in some short-term studies, consumption of soy products by study participants was not associated with adverse events. However, long-term safety data are lacking.

      "This report shows us that there is a lot we don't know about soy, and that more research is needed to determine if soy has any impact on a number of health conditions," said AHRQ Director Carolyn M. Clancy, M.D. "An important role for AHRQ's Evidence-based Practice Centers is to identify gaps in evidence and knowledge that can be used to develop future research agendas."

      The researchers who conducted the evidence review, which was supported by the National Institute of Health's National Center for Complementary and Alternative Medicine and Office of Dietary Supplements, considered the type of soy product used, amount consumed, frequency of consumption, and safety issues in their review of health effects.

      "The AHRQ report provides valuable information about the studies that have been done on soy for a variety of health conditions," said Stephen E. Straus, M.D., NCCAM Director. "It also highlights research needs in this area and will help inform NIH's research agenda."

      The AHRQ report notes that future studies of the health effects of soy need to better address the complex relationship between health and food components, including how variations in the diets, lifestyles, and health of participants might affect the results.

      Such studies should also be of better quality, include larger numbers of participants, and be of longer duration, the researchers said. In particular, studies that substitute practical amounts of soy products into people's diets would better address the question of whether people should make the effort to include more soy in their diet.

      If you chow down daily on tofu and other sources of soy protein in search of a healthier lifestyle, a new study suggests you may be a bit disappointed....
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      Collection Agency Agrees to Write Off Cross Country Debts Owed by West Virginians

      It's the latest skirmish in a long-running feud involving West Virginia Attorney General Darrel McGraw and Cross Country

      A California collection agency has agreed to release West Virginia consumers from $3.5 million in credit card debt turned over to it by Cross Country Bank. It's the latest skirmish in a long-running feud involving West Virginia Attorney General Darrel McGraw and Cross Country.

      McGraw said that Midland Credit Management, Inc. of San Diego purchased about 3,500 charged-off accounts from Cross Country Bank, based in Wilmington, Delaware.

      Attorney General McGraws office began investigating Midland in 2004 after receiving complaints from West Virginia consumers who had been sued or contacted by Midland to collect debts originally owed to Cross Country Bank.

      Cross Country Bank is a credit card bank that markets high interest credit cards to consumers with bad credit histories. McGraws office settled its lawsuit against Cross County Bank on June 21, 2005.

      McGraws office questioned the propriety of collecting the accounts based upon the same concerns that led to his lawsuit against Cross Country Bank.

      As a result of these concerns, the Attorney General requested that Midland close all of the accounts with a zero balance and notify credit bureaus to delete all references to the account from consumers credit records. Midland agreed to do so in the settlement announced by McGraws office.

      "I commend Midland for promptly doing the right thing after we brought our concerns about these accounts to its attention," McGraw said. "As a result of our agreement with Midland, approximately 3,536 West Virginia consumers have been relieved of all further obligations to pay $3,548,539.80 in credit card debt. Because the accounts have also been deleted from credit records, consumers will no longer be denied access to new credit as a result of these accounts.

      Collection Agency Agress to Write Off Cross Country Debts Owed by West Virginians...
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      Bally's Customers Hope To Exercise Their Rights

      Trial period turns into three-year contract

      In April 1994, Ballys Total Fitness, a chain of exercise gyms, paid $120,000 to settle Federal Trade Commission charges of illegal billing, cancellation, refund, and debt-collection practices. But consumers writing to ConsumerAffairs.com complain that little has changed in eleven years.

      In a consistent refrain, consumers from New York to California say they thought they were signing up for a trial period of 14 to 30 days, only to discover the trial had turned into an iron-clad, three year contract.

      Keith, of North Richland, Texas, signed up for what he thought was a one-month guest membership for a visiting friend. He says he was told his cost would be $5.00, which he paid on the spot with his debit card. But at the end of the month, he got a bill from Ballys. And the bills kept coming.

      I have been charged $55.17 every month, for a membership that I was told would only total $5.00, he told ConsumerAffairs.com.

      I called the Ballys customer service number and spoke to an operator about this and she said I was tied to a three-year contract and that I needed to write a letter to the Ballys main office in California about this. I wrote the letter and their response was that I needed to either pay $1,457.33 in full or continue on with my $55.17 a month payments.

      Heather, of Martinez, California, tells us she went to the Ballys Web site and enrolled in the two-week free trial membership so she could give the club a try. She said she was told she could cancel anytime during the two-week trial, or anytime within 30 days.

      When I realized that my schedule and the gyms times were not going to work I attempted to cancel the membership. That was when I was told that I could not cancel until I had gone to the gym 12 times, or if I moved to a location with no Bally's gym within a 25-mile radius, she told ConsumerAffairs.com

      Several consumers who contacted ConsumerAffairs.com mentioned they were specifically told to attend the gym 12 times during their trial period, though some said it was never presented as a requirement.

      The terms of that settlement mandate that the defendants (Ballys) more clearly inform both current and future members about their cancellation rights, in part, by replacing current membership contracts with contracts that contain clear explanations about how to exercise the right to cancel, and how refunds will be calculated. The agreement also:

      • prohibits the defendants from improperly charging consumers' credit-card accounts or debiting their bank accounts for health-club memberships;
      • prohibits them from using harassment or deceptive means to collect membership fees, and from collecting amounts not expressly authorized in contracts with members;
      • requires the defendants in the future to acknowledge cancellation requests within 10 days, and to cancel the contracts and mail appropriate fee refunds on properly-cancelled memberships within 20 days after that; and
      • requires them to inform credit reporting bureaus in writing about any erroneous delinquent-account information Bally's provided the bureau about any club member or former member who submits a claim form pursuant to the FTC settlement.

      At the time of the settlement, Ballys and its two subsidiaries agreed to refund membership or other fees to what the government estimated to be thousands of customers.

      Bally's Customers Hope To Exercise Their Rights: Trial period turns into three-year contract. Consumers writing to ConsumerAffairs.com complain that little...
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      Critics Say Proposed Roof Strength Standard Doesn't Go Far Enough

      Nearly 25% of Traffic Deaths Occur in Rollovers

      Critics say the National Highway Traffic Safety Administration (NHTSA) didn't go far enough with its proposal to toughen its roof crush standards. "NHTSA is merely rolling over when people need its help the most," said Public Citizen President Joan Claybrook.

      Safety advocates have repeatedly pressured NHTSA to toughen the roof strength standard to reduce deaths and injuries in rollover crashes. They also argue for testing standards that more closely reflect events that occur during an actual rollover.

      The proposed new government standard would extend roof strength requirements to all vehicles weighing up to 10,000 pounds, thus covering SUVs and other light trucks for the first time. The current standard only applies to vehicles up to 6,000 pounds.

      Critics immediately said the rule, under consideration since 1991, does not require enough testing and roof strengthening to prevent injuries and fatalities. Public Citizen's Claybrook, a former administrator of NHTSA, called the proposed rules "very insufficient" and said they don't do nearly enough to protect drivers and passengers.

      "It's really not going to protect people as they could and should," she said.

      "The long-delayed roof crush rule proposed today by NHTSA fails to comply with new safety mandates issued by Congress just last month. The highway funding bill requires roof strength be tested both on the driver and passenger sides of a vehicle. However, the proposed rule tests roof strength only on one side," she said.

      NHTSA is seeking comment on other aspects of its rollover protection strategy, including the possible use of improved safety belt technology to better hold a belted occupant in place during a rollover.

      The proposed new standard would require that a roof withstand an applied force equal to 2.5 times the vehicle weight while maintaining sufficient headroom for an average-sized adult male. The current requirement is that the roof be able to withstand an applied force equal to 1.5 times the vehicle weight, with a limit of 5,000 pounds for cars.

      "It will take a comprehensive strategy to reduce the staggering number of rollover deaths on the nations highways", said NHTSA Administrator Jeffrey Runge, M.D. "Improving roof strength is an integral part of that plan."

      Defending the proposal was Adrian K. Lund, chief operating officer of the Insurance Institute for Highway Safety, who said regulators had done a good job in crafting a rule.

      The agency estimates that, among belted occupants, about 807 serious injuries and 596 fatalities annually are caused by contact with a collapsed roof during a rollover crash. About 10,000 people die annually in rollover crashes; approximately 60 percent are unbelted.

      NHTSA estimates the new roof crush standard will annually prevent between 13 and 44 deaths and 500-800 injuries when fully implemented. The estimated cost per vehicle would be $11.81. The total average cost per year would be $88-$95 million.

      Almost 25 percent of all U.S. traffic deaths occur in rollover crashes. There were more than 42,000 people killed on U.S. roads in 2004.

      The auto safety agency will decide on a final regulation after a 90-day comment period.

      Critics Say Proposed Roof Strength Standard Doesn't Go Far Enough...
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      Study Ties Fries To Breast Cancer Risk

      The study involved more than 2,000 female registered nurses

      Girls who eat lots of French fries during their pre-school years grow up to have a higher risk of developing breast cancer, according to researchers at Brigham and Women's Hospital. Their study, published in the International Journal of Cancer, categorizes the increased risk as "significant."

      The study involved more than 2,000 female registered nurses, and found that those who regularly consumed French fries when they were young had a higher incidence of breast cancer than those who did not.

      The authors said the study provides additional credence to the belief that early eating habits impact a womans health later in life.

      The study examined the diets of the women when they were between the ages of three and five. Mothers of the subjects were questioned about the frequency of consumption of about 30 specific food items.

      Upon reviewing the data, researchers say they found that for each additional serving of French fries per week when they were preschoolers women had a 27 percent increased risk of breast cancer later in life.

      Whats the connection? Researchers say more study is needed, but that its unlikely potatoes are the culprit. Instead, they suggest that frying the potatoes in fat and trans-fatty acids might play a role.

      Study Ties Fries To Breast Cancer Risk...
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      Texas Jury Convicts Merck in Vioxx Death

      Jurors Award $253 Million to Family of 59-Year-Old Triathlete

      Merck & Co. has lost its first Vioxx personal injury case. A Texas jury found the company negligent in the death of Robert Ernst, a 59-year-old triathlete who used Vioxx, awarding the man's widow $24 million in actual damages, plus $229 million in punitive damages, for a total of about $253 million.

      The jury of seven men and five women in Brazoria County, Texas, ruled that Merck failed to warn doctors of the Vioxx's danger, that the drug was improperly designed, and that Merck's negligence caused Ernst's death.

      Vioxx is the popular prescription painkiller used by more than 20 million Americans before it was withdrawn from the market after being linked to heart attacks. The case was the first of more than 4,000 to go to trial.

      Merck said it plans to appeal.

      "We believe that the plaintiff did not meet the standard set by Texas law to prove VIOXX caused Mr. Ernst's death," said Jonathan Skidmore of Fulbright & Jaworski, a member of Merck's defense team. "There is no reliable scientific evidence that shows Vioxx causes cardiac arrhythmias, which an autopsy showed was the cause of Mr. Ernst's death, along with coronary atherosclerosis."

      "This case did not call for punitive damages," added Skidmore. "Merck acted responsibly -- from researching Vioxx prior to approval in clinical trials involving almost 10,000 patients -- to monitoring the medicine while it was on the market -- to voluntarily withdrawing the medicine when it did."

      Texas Attorney General Greg Abbott, who has sued Merck on behalf of the state's Medicaid program, said the verdict "validates why my office brought suit against this company in the first place."

      "The jury concluded that the untimely death of Mr. Robert Ernst was the direct result of his taking Vioxx."

      "The verdict also shows why Texas deserves to get its money back from Merck; the company purposely peddled a drug on the open market that it knew could harm people. Merck compounded this problem by giving false information to the states Medicaid program about the drugs safety," Abbott said. "I will continue to aggressively pursue this company in court and get justice for Texas."

      Texas Jury Convicts Merck in Vioxx Death...
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      FDA Refuses to Ban Weight-Loss Drug Meridia


      The Food and Drug Administration has refused to ban the weight loss drug Meridia. The agency rejected a petition filed by Public Citizen, asking that the Abbott Labs drug be banned because of concerns that it caused heart attacks and strokes in some patients.

      In a letter to Public Citizen, the FDA said it believes that the drug's "overall risk-benefit profile supports it remaining available as a prescription drug for the treatment of appropriately selected obese patients."

      "Once again, the FDA is siding with a large drug company, much as the agency did several years ago with Merck concerning Vioxx, when it failed to demand a black box warning on that drug," said Sidney M. Wolfe, MD, Director of Public Citizens Health Research Group.

      "For a drug such as Meridia to be approved or for it to stay on the market, there must be evidence that its benefits outweigh its risks. Evidence prior to its approval and more than 50 cardiovascular deaths, many in young people, since its approval confirm that its benefits do not outweigh its risks and that it should be removed from the market despite efforts by the FDA/Abbott duo to keep the drug alive," Wolfe said.

      The FDA said it was continuing to monitor the drug's safety profile.

      The FDA said it couldn't conclude that the reports of heart attacks and strokes were caused by Meridia and noted that such events "are very common in patients with obesity." However, the agency said it is "plausible" that Meridia could raise the risk for some cardiac events.

      But in a prepared statement Wolfe questioned whether all of the deaths caused by the drug had been reported: "A 3/21/02-4/03/02 FDA inspection report of the Abbott Laboratories plant in Abbott Park, Ill., found that '[one] death associated with Meridia was not reported and several records [involving seven other deaths] reviewed showed that the adverse drug information reported to FDA was either not accurate, not supported by source data, or was missing additional information found in the source data.'"

      The FDA said it received 224 reports of nonfatal heart attacks and strokes from November 1997 through August 2003 among Meridia users. It received 54 reports of deaths, including 30 that were cardiovascular-related.

      Last year FDA scientist David Graham questioned whether Meridia was effective enough to stay on the market during congressional testimony about how the agency handled safety questions surrounding Merck & Co's Vioxx, taken off the market in September.

      Wolfe also questioned the drug's effectiveness, particularly when weight against its risks.

      "In one of the only independent reviews of this drug by researchers from the University of Washington, published a year ago but predictably not mentioned by either the FDA or by Abbott in their responses to our petition, the authors concluded that: 'Weight loss with sibutramine was associated with modest increases in heart rate and blood pressure. There was no direct evidence that sibutramine reduces obesity-associated morbidity or mortality. Thus, we conclude that there is insufficient evidence to accurately determine the risk-benefit profile for sibutramine,'" Wolfe said.

      Clinical studies have shown the drug can help people lose 5% to 10% of their body weight when used in conjunction with a program of diet and exercise.

      FDA Refuses to Ban Weight-Loss Drug Meridia...
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      Satellite TV Penetration Up Significantly

      The number of households subscribing to satellite TV service has increased dramatically over the past year

      The number of households subscribing to satellite TV service has increased dramatically over the past year, even as cable narrows the gap in customer satisfaction ratings, according to the J.D. Power and Associates 2005 Residential Cable/Satellite TV Satisfaction Study.

      The study finds that satellite TV service continues to erode cables market share, increasing every year for the past 10 years and making its most significant leap this year.

      Currently, 27 percent of U.S. households subscribe only to satellite service -- up from 19 percent in 2004 and 12 percent in 2000.1 Sixty percent of households subscribe only to cable service -- down from 62 percent in 2004 and 66 percent in 2000.

      "Although satellite providers continue to gain market share, overall customer satisfaction among satellite subscribers has declined while satisfaction among cable subscribers is up," said Steve Kirkeby, senior director of telecommunication research for J.D. Power and Associates.

      "Overall, satellite customers are still more satisfied with their service than cable subscribers, but if satellite providers want to continue to attract subscribers away from cable, customer satisfaction is a critical area where they cant afford to lose ground."

      For the first time since 2001, a cable service provider -- WOW! (WideOpenWest) -- holds the top carrier position in the customer satisfaction rankings. WOW!, which operates in major markets in Michigan, Illinois and Ohio, ranks highest among 14 of the nations largest cable/satellite companies with an index score of 717 (on a 1,000-point scale).

      A predecessor company of WOW!, Ameritech New Media, was also highest ranked in 2001, which was the last cable company to do so since Cox held the top spot in 1996. The cable provider receives the highest ratings from customers in three of the six factors driving customer satisfaction: customer service, performance and reliability, and billing.

      Following WOW! in the ranking are DirecTV and Cox Communications, respectively. DirecTV leads the industry in cost of service, while Cox leads in offerings and promotions.

      The average amount consumers spend monthly on satellite TV service continues to be less than cable service. Satellite subscribers report paying an average of $57.72 per month for service, while cable subscribers pay an average of $58.51 a month.2

      Although both satellite and cable service providers have been actively promoting digital video recorders (DVR), which allow viewers to freeze and record live TV, only 12 percent of customers currently own a DVR system.

      However, despite low current usage rates of DVRs, 41 percent of consumers indicate that they are likely to use a DVR system in the future. Current usage of DVRs through cable companies (35% of DVR owners) outpaces usage through satellite companies (23%). Another 22 percent of DVR owners use systems by TiVo.

      "Both cable and satellite TV providers are beginning to see the benefits of bundling DVRs with their voice, video and Internet services," said Kirkeby. "Both cable and satellite can meet this anticipated customer demand, while improving customer satisfaction and increasing average revenue per unit (ARPU), by offering their subscribers efficient and convenient packages. All our research shows that customers prefer bundles from single providers for convenience, simplicity and a better price for their combined purchases."

      The study also finds that 21 percent of consumer report ordering a video on demand (VOD) program -- a decline of 1 percent compared to the prior year.

      "Clearly the industry needs to continue to educate subscribers about VOD," said Kirkeby. "One of the most compelling findings in the study is the significant increase in overall satisfaction exhibited by users of VOD services compared to non-usersnearly 30 index points. Service providers must do whatever it takes to ensure consumers know the ordering process and charges, if any, associated with VOD. In some instances, cable companies are offering free VOD programming that their customers are apparently unaware of."

      The 2005 Residential Cable/Satellite TV Customer Satisfaction Study is based on responses from 11,586 U.S. households who evaluated their satellite or cable service.

      The number of households subscribing to satellite TV service has increased dramatically over the past year, even as cable narrows the gap in customer satis...
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      Jamster Can Jam Up Your Cell Phone Bill


      The next time you feel like downloading the latest hot single as a cell phone ring tone, listen carefully. That sound you hear may be your wallet deflating, thanks to charges on your bill from services you didn't even know you were buying.

      Jamster, a subsidiary of Internet infrastructure provider VeriSign that specializes in custom content for mobile devices, has been accused of defrauding customers into paying for ring tones they didn't authorize, and using deceptive marketing to lure consumers into purchasing its products.

      One irate customer filed a lawsuit in San Diego alleging that applying for Jamster's "free ring tones" actually result in receiving "junk text" messages that subscribers get charged for.

      The lawsuit alleges that Jamster would promote free downloadable ring tones to any subscriber who registered with its site or responded to the advertisement by sending a text message with a special code.

      The subscriber would then receive multiple messages from Jamster stating that its content was available for download. However, the subscriber would be charged for every text message sent from Jamster, at a rate of $1.99 per message plus fees from their wireless carrier.

      The lawsuit also names wireless providers AT&T Wireless, Cingular and T-Mobile as defendants. SBC Communications, which owns Cingular jointly with BellSouth, is a Verisign client, as was AT&T Wireless prior to its buyout by Cingular.

      "What we're seeing is a lot of people seeing these ads and thinking they can download a ring tone or wall paper for their phone, and suddenly they're signed up for a subscription," said Kate Hartman, one of the attorneys on the case.

      Hartman sees Jamster and wireless providers as "using your phone bill like a credit card," automatically charging customers for service without explaining or even identifying what the charges are.

      Another problem Hartman identified is that many frustrated customers cancel their plans in order to be rid of Jamster, thus incurring heavy "early termination" fees. Not only that, but phone numbers from canceled contracts are recycled and given to new customers, who suddenly have to contend with charges from Jamster without ever having used or encountered the service.

      Consumer Affairs.Com has received several complaints from cell phone subscribers wondering how they ended up with charges from Jamster on their bills.

      Leslie C., from Oakland, CA, signed herself and her husband for T-Mobile's Family Share plan, only to find that she received unauthorized charges from Jamster for the first two months.

      "It outrages me that a ring tone company can send him ring tones and charge [us] without some action required on his part to accept these charges. These charges were never permitted by myself or my husband and seem completely illegal."

      Steve from Cleveland, OH receives multiple text messages from Jamster on his phone each week. "I have tried e-mailing them through their web site but the spamming does not stop. [There is] no tangible damage, just severe annoyance and frustration over the fact that I have no way to stop getting spammed over and over by the same company."

      Jamster's terms of service specify that if a user downloads content from the company onto their phone, "yourepresent that you are at least 13 years of age and have the consent of the subscriber of a participating mobile communications carrier to sign-up for and use the Jamster service on behalf of the subscriber," and that the download constitutes an agreement to use its services.

      Critics of Jamster contend that the service advertises on teen-oriented television shows and channels such as Nickelodeon and MTV in order to convince young cell phone users to get the "free ring tone."

      An online petition entitled Stop Jamster.com is filled with tales of woe from defrauded customers, as well as vitriolic sentiment for the company's ubiquitous "Crazy Frog" ad and ring tone.

      "I'm tired of seeing commercials for stupid, useless add-ons for my phone that no one could possibly ever needand I want to kill that stupid frog," fumes one signer.

      Not only are Jamster clients irate. Cell phone content provider Jamdat Mobile has filed suit against VeriSign alleging infringement on its trademark.
      Jamster has been accused of defrauding customers into paying for ring tones they didn't authorize, and using deceptive marketing to lure consumers into pur...
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      There's No Escaping Simple Escapes

      If you do a Google search for Simple Escapes, you dont readily find the companys Web site. Instead, you get page after page of complaints from irate and baffled consumers who claim the company has billed them for services they never wanted, never asked for, and never received.

      Allison, of Pleasant Hill, California, tells ConsumerAffairs.com: I just received my credit card statement and found a charge for $9.95 from Simple Escapes. I have no idea what this is, nor have I ever used any service like this.

      Allison actually got off lightly. Other complaints to ConsumerAffairs.com have told of $100 or more being deducted from bank accounts or showing up on credit card bills. Many are mystified as to how this company, about which they know nothing, got access to their credit card and bank accounts.

      Simple Escapes is a membership service company, operated by MemberWorks, a Stamford, Connecticut, direct marketing firm, that provides discounts on travel and entertainment.

      For example, after booking a trip on Orbitz, you might be offered an instant $10 discount on your purchase if you enroll in Simple Escapes. Other incentives, like a free Kmart gift card, might also be offered. Once enrolled, members are billed monthly, whether they get discounts or not.

      Others apparently find themselves enrolled in Simple Escapes without knowing it.

      Angela, of Baytown, Texas, tells us Simple Escapes has charged my bank statement $19.95 for the last four months. I don't know who or what this is. I looked on AOL since that appears with the charge, but I can't find a phone number to call to cancel this service. I can't keep throwing $20 bucks a month out the window for something I did not order.

      In fact, many AOL subscribers, going back to 2003, have complained about being blindsided with a Simple Escapes membership charge on their credit card bill.

      Dwight, of Salem, West Virginia reported to ConsumerAffairs.com, I received my bank statement and it had a debit charge of $134.95 on it from Simple Escapes. I had never heard of them. When I called the 1-888 number they told me that I had ordered this by a pop-up on AOL. I said I had never done that and besides how did they get my checking account number to which they replied through AOL.

      Consumers are often taken by surprise by these charges because they never sent any information to the company directly. Their credit card number is often shared by other businesses with which they had a different transaction.

      Simple Escapes, in many cases, received the consumers credit card information from AOL, which had it on file for the consumers Internet accounts. AOL says it no longer shares customers credit card information with other firms because of a change in policy.

      States Cracking Down

      Meanwhile, states are beginning to crack down on this practice. In April 2000 the State of Minnesota settled a consumer fraud suit with MemberWorks, Simple Escapes parent company. The settlement followed numerous complaints from consumers that they did not believe they had authorized membership charges to their checking or credit card accounts.

      The settlement required MemberWorks to substantially change its business practices and provide refunds to consumers who did not fully consent to the MemberWorks charge.

      Last year the State of Florida reached a similar agreement. Yet most of the complaints ConsumerAffairs.com has received about Simple Escapes have been since 2003, and they continue today; 180 were filed in the last 12 months.

      I have been billed $152.55 in unauthorized charges by Simple Escapes. I called the number listed for them from my bank statement. The rep stated that when I clicked on the ad I agreed to their services. I have no idea what Simple Escapes is, Patricia of Tarboro, North Carolina tells ConsumerAffairs.com.

      Simple Escapes is a membership service company, operated by MemberWorks, a Stamford, Connecticut, direct marketing firm, that provides discounts on travel ...
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      Marketer of "Free Credit Reports" Settles FTC Charges

      Consumerinfo.com Must Refund Consumer Payments for "Free" Reports

      Consumerinfo.com, Inc., doing business as Experian Consumer Direct, has settled Federal Trade Commission charges that it deceptively marketed 'free credit reports' by not adequately disclosing that consumers automatically would be signed up for a credit report monitoring service and charged $79.95 if they didn't cancel within 30 days, in violation of federal law.

      The settlement requires Consumerinfo to pay redress to deceived consumers, bars deceptive and misleading claims about 'free' offers, requires disclosure of terms and conditions of any 'free' offers, and requires the defendant to give up $950,000 in ill-gotten gains.

      'Consumers paid the price for ordering free credit reports from freecreditreport.com,' said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. 'It's unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn't want in the first place.'

      According to the FTC complaint, the defendant drove consumers to their www.freecreditreport.com and www.consumerinfo.com Web sites with radio, television, e-mail and Internet ads that promised free credit reports and a bonus ' free trials of a credit-monitoring service. Ads made claims such as:

      FREE! FREE! FREE! Get Your FREE Credit Report Online in Seconds!!!! Click here to get a FREE copy of your online Credit Report Instantly! And that's not all. . . along with your INSTANT credit report, we'll give you 30 FREE days of the Credit Check Monitoring Service at no obligation.

      Consumers were required to provide detailed personal information and a valid credit card account number to get their credit report. They were assured that, 'Your card will not be charged during the free trial period. However, valid credit card information is required to establish your account.'

      According to the FTC's complaint, Consumerinfo's advertising and Web sites failed to explain adequately that after the free trial period for the credit monitoring service expired, consumers automatically would be charged a $79.95 annual membership, unless they notified the defendant within 30 days to cancel the service.

      Consumerinfo billed the credit cards that it had told consumers were 'required only to establish your account,' and, in some cases, automatically renewed memberships by re-billing consumers without notice. The FTC charged that the defendant's failure to adequately disclose the automatic billing and to get consumers' consent to bill their accounts violated federal law.

      The complaint also alleges that Consumerinfo misled consumers about their association with the annual free credit report program for which U.S. consumers are eligible by federal law.

      A federal law enacted in December 2003, gives consumers the right to get one free credit report every 12 months from each of the three national consumer reporting companies. This program began in western states on December 1, 2004, and will cover all U.S. consumers by September 1, 2005. Consumers can get their free reports by phone, mail, or at one authorized Web site, www.annualcreditreport.com.

      The FTC complaint alleges that Consumerinfo deceptively advertised and promoted its 'free reports' at its 'freecreditreport.com' Web site, without disclosing that it was not associated with the official annual free credit report program.

      'Consumers also need to be alert about impostor sites ' sites that misspell annualcreditreport.com or use sound alike names, but don't link to the authorized site. We are sending letters to operators of more than 130 impostor sites to inform them that we know they are out there and that attempts to mislead consumers are illegal,' the FTC's Parnes said.

      The settlement is designed to assure that the defendant's negative-option or 'free' offers do not contain misrepresentations, and that they disclose all terms and conditions of the offers.

      The settlement establishes specific disclosure requirements in promotions for the defendant's 'free credit report' offer. Among other things, the defendant must clearly tell consumers that they will be charged unless they cancel within the trial period, and that the offer is not related to the free credit report program mandated by Congress.

      Consumer Refunds

      The settlement requires redress for consumers who enrolled in Consumerinfo's credit monitoring program between 2000 and 2003, canceled the monitoring service and received a partial refund or filed a complaint about the charges for the service.

      Consumers who qualify for a refund should receive a notice from Consumerinfo by email or first class mail within the next few months. The FTC staff has released answers to frequently asked questions at www.ftc.gov/freereports to help Consumerinfo customers determine if they're eligible for a refund. It also has established an information hotline for consumers to call for information on refunds. The phone number is (202) 326-3457.

      In addition to the redress program, the settlement requires the defendant to pay $950,000 in ill-gotten gains to the Commission. The money may be used to provide consumer education.

      The settlement also contains record-keeping and bookkeeping provisions to allow the FTC to monitor compliance with the order.

      The FTC has published two consumer brochures: 'Want a Free Annual Credit Report? The Only Official Website is annualcreditreport.com' warns consumers about imposter sites; 'Your Access to Free Credit Reports,' educates consumers about their right to a free copy of their credit reports, and discusses other consumer rights under the Fair Credit Reporting Act and the FACT Act. Both publications are available in English and Spanish at www.ftc.gov/freereports.

      The complaint named Consumerinfo.com., Inc., doing business as Experian Consumer Direct, Qspace, Inc., and Iplace Inc. Consumerinfo.com is a wholly-owned subsidiary of Experian North America, which is also the parent company of Experian Information Services, one of the three national credit reporting companies.

      This case was brought with the assistance of the office of California Attorney General, Bill Lockyer.

      Marketer of 'Free Credit Reports' Settles FTC Charges...
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      More Banks Using Universal Default to Hike Interest Rates


      In its new credit card study, Consumer Action (CA) uncovers the top reasons that lead banks to impose high universal default and penalty rates. It found that virtually everyone is vulnerable.

      "The factors cited by card issuers are very broad. It appears that anyone -- not just people in financial difficulties -- could be subjected to a much higher rate for very insignificant reasons," said CA's Linda Sherry, who coordinated the survey.

      Universal default

      Credit card companies impose "universal default" rate hikes based on the way customers handle other credit accounts. This year, 45% of banks surveyed by CA said they have universal default policies - a slight increase from last year's survey. According to customer service representatives, the following circumstances, in descending order of importance, can trigger a universal default rate hike:

      • Credit score gets worse: 90%
      • Paying mortgage, car loan or other credit obligations late: 86%
      • Going over credit limit: 57%
      • Bouncing a payment check: 52%
      • Too much debt: 43%
      • Too much available credit: 33%
      • Getting a new credit card: 33%
      • Inquiring about a car loan or mortgage: 24%

      CA found default rates as high as 35% (Merrick Bank). Runners-up for the highest default rates are Citibank and Providian at 29.99%.

      Eleven of the 21 banks with universal default policies are willing to reduce the higher rates if cardholders' credit histories improve. Three more banks said it was "possible." Twelve of them said that after six months of improved credit, the rate might be adjusted downward although not always to the original rate.

      Penalty rates

      Penalty rates are much higher interest rates triggered when you pay your credit card bill late - even once. Late payments are not the only reason issuers impose higher penalty interest rates. Going over your credit limit or bouncing a payment check can trigger a rate increase, too, in addition to hefty fees.

      The average penalty rate this year is 24.23%, up from the 2004 average of 21.91%. This increase may be attributable to the fact that many penalty rates vary with the Prime Rate, and from last year's survey to this year's the Prime Rate increased two percentage points (from 4% to 6%).

      Late payments result in higher penalty rates with 79% of the issuers - a drop from 85% of the issuers last year. But of the issuers who assess penalty rates, 43% said a penalty rate could be triggered by just one late payment. Last year just 31% assessed a higher rate after one late payment.

      More findings

      CA's yearly snapshot of credit card industry practices, conducted between April 1 and June 21, examines 146 credit cards from 47 banks. The average interest rate for all cards is 12.61%, ranging from 6% (Ranier Pacific, Town Bank and Wells Fargo) to 24.94% (Merrick Bank). Of the total, 118 cards have variable rates, with an average interest rate of 12.96%, and 28 cards have fixed rates, with an average rate of 11.15%.

      • Bounced check fees. If your payment check to your credit card company bounces, 42 (89%) of the surveyed banks will charge you a fee. The average bounced check fee at these banks is $28.61. The fees range from $15 (First Internet Bank of Indiana) to $38 (American Express).

      • Late payments. Of 146 surveyed cards, 138 (95%) carry late payment fees. The average late fee this year is $27.46, only a penny off the 2004 average. Thirty-two issuers (68%) assess a late fee immediately if the payment is not received by the due date.

      • Over-limit fees. Of the 138 cards (95%) with over-limit fees, the average fee is $30.18. The fee can be as high as $39 at Citibank and MBNA.

      • Cut-off times. CA found that 34% of banks set a cut-off time on the due date. Payment deadlines on the due date ranged from noon local time to 9 p.m. Eastern time.

      • Credit limits. Twenty-five (53%) surveyed banks said that they reduce cardholders' credit limits under certain circumstances, including late payments, going over limit or when your credit score declines.

      • Annual fees. Cards without annual fees are the majority at 68% (99 cards). Of the 47 cards with annual fees, the average fee is $43.27 - an increase of 16% from last year's $37.33.

      • Cash APRs. Of the 146 cards surveyed, 75% have a higher APR for cash advances taken with the card. The average cash advance rate on these 110 cards is 20.23%. On cash advances, the interest begins to accrue immediately, even if you do not carry a balance.

      • Cash advance fees. Among surveyed cards, 137 (94%) have cash advance fees that average 3.01%. The cash advance fee is limited to a maximum charge on 35 of the cards. Maximums range from $10-$75 and average $41.28. A minimum charge applies on 132 of the cards. The minimums range from $2-$15 and average $6.98.

      • Balance calculation. Five surveyed banks (11%) use two-cycle billing. Cards issued by Chase, Discover, National City Bank, Providian and First National Bank of Omaha employ two-cycle billing.

      • Arbitration. Twenty-one (45%) of the surveyed banks confirmed that they require consumers to settle disputes using arbitration. Of those banks, 15 (71%) insist on "binding" arbitration decisions, which prevent cardholders from appealing the decision.

      • Introductory rates. 70 cards (48%) offer teasers on new purchases, 91 (62%) on balance transfers and 22 (15%) on cash advances or credit card "convenience check" transactions.

      • Reward cards. Among the surveyed cards, 52 (36%) offer rewards such as cash, miles, auto purchase points, merchandise points and gasoline. The overall percentage of credit card offers from surveyed banks with rewards has increased sharply since last year's 23%.

      "We see a shift in the industry toward cards that give something back, because industry research shows that reward cardholders make more purchases, tend to use their rewards cards exclusively and are less likely to jump ship for lower-rate cards," said Sherry.

      Consumer Action, founded in 1971, is a non-profit education and advocacy organization based in San Francisco, CA, with offices in Washington, DC, and Los Angeles, CA.

      More Banks Using Universal Default to Hike Interest Rates...
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      Payday Loans Affecting Military Readiness, DOD Decrees

      Military Organizations Providing Zero-Interest Loans in Some Areas

      Military organizations and Florida Attorney General Charlie Crist have organized a program of low-cost loans to servicemen and women, as an alternative to the ruinously expensive payday loans increasingly used by hard-pressed military families.

      The problem has become so widespread that the U.S. Department of Defense has determined that the astronomical rates have an impact on military readiness. The debt resulting from these loans places a service member at risk of losing their security clearance, or worst case, being discharged from the military.

      In an effort to address the problem, the Navy/Marine Corps Relief Society and counterparts serving the other branches are providing zero percent interest loans to assist servicemen and women trying to get out of debt and to those with emergency financial needs.

      Each week, servicemen and women and their families trying to make ends meet are victimized by payday loans with exorbitant fees that make it difficult, and sometimes impossible, to get out of debt.

      These loans, carrying actual interest rates of at least 100 percent, keep military members literally living from paycheck to paycheck while going ever deeper into debt.

      The practice of payday loans centers on advancing a serviceman or woman a portion or all of the amount of their upcoming salary. These loans normally require repayment at high rates within a short period of time. It is often impossible to repay the loan within a few days because most military installations pay on a twice-monthly basis.

      Despite this, the interest continues to effectively increase and the serviceman or woman is farther behind by the next payday than they were prior to obtaining the loan.

      Zero interest loans are a godsend and a financial lifeline for military families, said Crist. Thankfully there are organizations who care about the well-being of those who give so much to our country.

      Attorney General Crist urged the Florida Legislature to take a close look at the statutes to ensure that the men and women in uniform are being protected. Current Florida law allows an effective annual percentage rate of 390 percent. Some states have no statutory limits on payday loans.

      On June 30, the Attorney General issued a consumer alert to military families advising them to avoid predatory lenders and offered tips on how to avoid becoming involved with them. The alert also revealed another option for military families the Servicemembers Civil Relief Act which entitles personnel on active duty to more favorable loan repayment requirements.

      However, these protections are available only for loans received by personnel prior to the time they are called to active duty. The zero percent interest loans expands coverage to more members of the military.

      The June 30 alert also stated that certain payday loan providers were under investigation for possible illegal activity. The investigation is ongoing.

      Payday Loans Affecting Military Readiness, DOD Decrees...
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      North Carolina Stops Cash Grant Scam

      This company used enticing ads and claims of immediate grants to lure in customers

      A Raleigh company that took North Carolinians money but failed to help them win grants as promised has been stopped, Attorney General Roy Cooper said. 

      This company used enticing ads and claims of immediate grants to lure in customers, said Cooper. But once consumers paid their money, the grant offers disappeared and the promises proved hollow.

      Cooper filed suit last momth against Grant Quest, Inc. of Raleigh and its owner Aron Andrew Willis charging that they deceived North Carolina consumers into paying an upfront fee and then failed to help them secure cash grants as promised.

      Wake County Superior Court Judge Wade Barber last week granted Coopers request to temporarily stop Grant Quest and Willis from doing business pending a preliminary injunction hearing scheduled for today. Cooper is also asking the court to shut down Grant Quest permanently and to make the company pay refunds to consumers and civil penalties.

      As alleged in the suit, Grant Quest began placing advertisements in North Carolina newspapers in March of 2004 that claimed, Cash grants available immediately! The ads stated that as much as 30 million dollars in grants from private foundations and the government was available and that Grant Quest would show customers exactly how and where to win these grants.

      According to the ads, grants could be used for a variety of needs such as paying credit card bills and college tuition, starting a new business, and covering medical or housing costs. Grant Quest claimed that these grants were available without a credit check, co-signers or collateral and did not have to be paid back.

      According to Coopers complaint, more than 60 people responded to the ads. These consumers each paid Grant Quest $139 for help receiving grants. However, the suit alleges that Grant Quest and Willis failed to win grants for any of their customers. Some people received nothing in exchange for their payment, while others got some sketchy information downloaded from the Internet about how to apply for grants and loans. Despite offers of a full refund in the companys ads, Grant Quest refused to pay refunds when asked.

      Based on complaints from consumers, Coopers Consumer Protection Division repeatedly asked Willis to refund money to his dissatisfied customers. On July 6, Willis informed Coopers office that he had not paid any refunds and that he was continuing to take money from new customers.

      Willis is currently on probation on unrelated charges. He pled guilty in Wake County Superior Court on December, 17, 2004 to charges of obtaining money by false pretenses for taking money on behalf of The Children's Foundation and then cashing the check for himself.

      Con artists are always coming up with new ways to try to trick you out of your hard-earned money, said Cooper.

      If you see an ad that promises easy money, remember that anything that sounds too good to be true probably is. Before you pay money to someone who claims they can help you get a grant or a loan, check out the company.

      A Raleigh company that took North Carolinians money but failed to help them win grants as promised has been stopped, Attorney General Roy Cooper said....
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