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    Pennsylvania Sues Hearing Aid Dealers

    Companies refused to make refunds

    Pennsylvania Attorney General Tom Corbett has filed a civil lawsuit against two hearing aid businesses and their operators accused of refusing to return thousands of dollars to mostly older consumers who were sold hearing aids that were defective, did not fit properly and failed to provide the hearing benefits that were promised during the in-home sales presentations.

    The lawsuit seeks nearly $125,000 in refunds and fines, plus an order barring the defendants from operating in the state until that amount is paid. The suit follows an investigation into complaints from consumers located in a half dozen Pennsylvania counties.

    Corbett identified the defendants as:

    • Joseph G. Pannette, 470 Treasure Lake, Dubois, Clearfield County, individually, and doing business as Bennett Hearing Aid Company and Advanced Hearing Associates Inc.

    • Ricky A. Pape, 1628 Treasure Lake, Dubois, Clearfield County, individually, and doing business as Bennett Hearing Aid Company and Advanced Hearing Associates Inc.,

    • Bennett Hearing Aid Company Inc., located at 1400 Northway Road, Williamsport, Lycoming County, and 1024 Washington Blvd., Williamsport, Lycoming County.

    • Advanced Hearing Associates Inc., 459 River Ave., Williamsport, Lycoming County, and a registered address of 101 North Main Street, DuBois, Clearfield County.

    Pannette and Pape operated the two businesses and are both licensed hearing aid fitters.

    The suit accuses the defendants of violating Pennsylvania's Unfair Trade Practices and Consumer Protection Law, and Hearing Aid Sales Registration Law.

    "Our lawsuit will show that the defendants were in the business of defrauding older Pennsylvanians out of thousands of dollars for hearing aid devices that did not improve their hearing or their quality of life as promised," Corbett said. "Even more egregious, is the defendants' conscious decision to completely dismiss consumers' repeated requests for refunds that the hearing aid law states they are entitled to receive."

    Bureau of Consumer Protection agents investigated complaints from 18 consumers who claimed that they entered into contracts with the defendants through 2005, for the purchase of one or more hearing aids. Consumers paid the defendants between $750 and $5,600 in deposits or full payments for their hearing aids.

    During the sales presentation, prospective buyers were told that the hearing aids came with a 30-day return policy if they were not satisfied with the products.

    The defendants also offered a two-year no-fee guarantee against product defects. If a consumer expressed dissatisfaction and requested a refund within the 30-day time period, the defendants typically offered to adjust, repair or replace the devices.

    According to the lawsuit, many consumers were unhappy with the hearing aids despite numerous adjustments or repairs. Others who were promised repaired or replacement hearing aids have yet to receive the products, months, even years later.

    Those who filed complaints claimed that they failed to receive any or all of the restitution that they were promised or entitled to receive under state law, despite repeated calls to the defendants.

    Investigators said the defendants used a number of stalling tactics and made numerous excuses to avoid or delay paying refunds to consumers.

    In some cases, the defendants extended the time period to return the products even though consumers complained that the devices didn't work properly or generated excessive noise, including a squealing sound.

    In other cases, the defendants claimed that the devices needed adjustments or repairs to work properly.

    One Lycoming County consumer was told that his hearing aids may have to be adjusted seven times before they would work properly. After months of adjustments, the consumer said his ability to hear grew worse with each adjustment.

    The suit states that in some cases the defendants returned only a portion of consumers' refunds despite promises that they would get their money back within 30 days. In addition, the suit includes consumers who the Commonwealth claims were falsely told that they were ineligible for refunds.

    In a separate count of the complaint, the defendants are also accused of charging excessive "cancellation fees" in violation of the Hearing Aid Sales Registration Law.

    According to the Hearing Aid Sales Registration Law, if a consumer returns the hearing aid, the seller is prohibited from charging fees that are more than 10 percent of the purchase price or $150, whichever is less.

    Several consumers claimed that they were required to sign a "disclosure agreement" that listed these alleged illegal fees for each hearing aid purchased. The fees were then deducted from their refund checks.

    "Our investigation found that some consumers who returned the hearing aids were illegally charged fees ranging from $250 to $500 above what the law allows," Corbett said. "In reality, the majority of consumers would have no way of knowing what the legal fees should be. Most rely on a seller's honesty to charge the legal amount. In this case, the defendants violated that trust and deceived consumers in their 'disclosure agreement' about the fees that they were obligated to pay."

    "Hearing aids are expensive for any consumer, but especially for retired or older adults living on tight budgets," Corbett said. "To aggressively overcharge and then deny these consumers refunds that they're guaranteed to receive under law is unfair and unconscionable."

    The complaint asks the court to require the defendants to:

    • Pay more than $50,000 in restitution to 18 consumers who filed complaints with the Bureau of Consumer Protection, plus pay full restitution to consumers who come forward with proof of similar harm.

    • Pay civil penalties of $74,000, plus additional penalties of $1,000 per violation or $3,000 for each violation involving a consumer age 60 or older who files a complaint with the Office of Attorney General.

    • Forfeit their right to conduct business in the Commonwealth until restitution and civil penalties are paid.

    • Pay the Commonwealth's investigation costs.

    The suit also asks the court to appoint a receiver if necessary to determine and collect the defendants' assets to satisfy the order.

    The suit accuses the defendants of violating Pennsylvania's Unfair Trade Practices and Consumer Protection Law, and Hearing Aid Sales Registration Law....
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    Wal-Mart Pushing Extended Warranties on Electronics

    Warranties Return Big Profits but Little Value to Consumers


    Wal-Mart is expanding its offering of extended warranties on electronics items, including the computer laptops, large-screen TVs and digital cameras it recently introduced to its stores.

    Extended warranties have long been a cash cow for electronics retailers like Circuit City and Best Buy, who earn profit margins of 40% to 80% on them.

    Computer retailers and direct marketers like Dell and Gateway have recently begun pushing consumers into buying expensive extended warranties by shortening the standard warranty to as little as 90 days.

    The November 2004 issue of Warranty Week reported that Dell's revenue from extended warranty sales was actually overtaking its spending on warranty claims, and Gateway increased its warranty revenue to $33 million while decreasing its warranty costs to $15 million.

    But the extended warranties are hardly a best buy for consumers, who usually find the warranties either duplicate the manufacturer's warranty and are thus an unnecessary expense or don't provide extra protection when customers need it. ConsumerAffairs.com has received more than 3,000 consumer complaints about extended warranties in the last year.

    In fact, according to the Consumers Union, the reason extended warranties are so profitable is precisely because they're not worth much to the consumer.

    "Many of these (products) are established, mature technologies; They usually don't break down," Lauren Hackett, a spokeswoman for Consumer Reports, told The Wall Street Journal. "And if they do, we find that it is generally within the manufacturer's warranty."

    Wal-Mart expanded its inventory of higher-priced electronics goods recently, hoping to make up for reduced sales on its lower-priced goods. The falling sales were attributed to lower-income consumers having less spending money because of higher gas prices, health care costs and other factors.

    Last week, Wal-Mart began selling two-year product warranties on TVs and computers priced higher than $300 in most of its stores. The warranties cost $28.88 to $98.99, and cover maintenance and repairs after the manufacturers' warranties expire.

    Wal-Mart's warranties are being sold in partnership with warranty-provider N.E.W. Customer Service Cos.

    Wal-Mart Pushing Extended Warranties on Electronics...
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    Beware the Pitfalls of Creative Mortgages

    Or, How I Might Lose My Home


    This is a story about how easy it is to get into serious trouble ... even when you know better. Last year, I sold my mobile home in California and headed east to North Carolina, where the housing prices were so much lower. My dream was to not die without ever owning a real home. I was single, 51, and really wanted my own home - self-employed or not.

    I had gotten some information from a family friend (ironically a mortgage broker) who told me about "Stated Income" or "Low-Doc" loans, and that I could qualify for one easily because of my good credit score.

    I drove across country, cats in tow, and stayed in a hotel for 7 weeks looking for my "Dream Home." And, when I found it, even though it wasn't in my price range, I knew I would do anything I could to get it. I was vulnerable, emotional and became a victim.

    Actually, that is not quite accurate - I made myself a victim.

    Being self-employed, (actually at the time, I was on disability from hand surgery), the only loan I could qualify for was a Stated Income Loan. That's where you just tell them what you make, and it is not verified except through two years od tax records and your FICO score.

    I fudged my anticipated income and qualified for a stated-income variable-rate interest-only loan. In just three weeks, I had moved into my new home and was busy making the changes it needed. I didn't watch my budget, nor did I pursue building my business as I was so obsessed with my Dream Home.

    Interest Rises, Income Falls

    Then, six months later, when the interest rate changed, my payment went up. But I still had some disability money, so I didn't think about it - I just knew work would come. It didn't.

    I did some writing, but my usual business sank like the Titanic. I started sending out resumes. Nothing happened - no calls, no form letter rejections. Just the sound of dead air. Then, the interest rates went up again - and so did my payments.

    When my disability ran out, I applied for unemployment, which held me over until March or May of this year, I can't remember. Still, no work came in. Oh, I'd do some carpet binding here and there, but it just didn't cover the bills.

    I didn't just sit on my fanny. I got out and showed my samples, sent out cards, got some local publicity, and even put out road signs. For a few weeks, it generated a bit of work, but nothing like I made back home in California.

    Then, my hands began to hurt to the point where I was declared permanently disabled (Carpal Tunnel Syndrome) and started applying for Social Security in July. To pay my mortgage, I broke the cardinal rule of credit card debt - I started taking out cash advances, until I had maxed out my cards.

    I applied for more, and of course, being a "homeowner" got them - then I maxed them out as well. I took my over-limit line of credit from my bank and used that to pay bills, and then I cashed in the Roth IRA I had just started. This paid my bills through August. I was so poor, I had to apply for food stamps and Medicaid.

    I got emergency food stamps, and thank God I did, or I would have lost 20 pounds between then and now and I only weigh 110 to begin with. It's very humiliating and humbling to put yourself into that situation. But I did what I had to do to survive the effects of my lie.

    Then I ran out of money. I couldn't even afford my cat's chemotherapy medicine, and had to borrow from a neighbor the money to pay for it. This minute, I sit here with $3 to my name.

    I became so depressed, I was nearly hospitalized two months ago - about three different times - and I have no one to blame but myself. I lied about my income, thinking I'd make it easily here.

    I am ashamed about it, but have learned a hard lesson. I maxed my paid-off credit cards and ruined my hard-won excellent FICO score - taking it from the mid 700's to the mid-to low-600s. That is devastating - it took me 7 years to build that up after an old bankruptcy. Yes, from credit cards.

    Enough Blame to Go Around

    But I also have to lay some of the blame at the feet of these lenders - I was not told how quickly my loan could adjust, or what the cap was. I was too obsessed with getting this home, I did not do for myself what I do for everyone else - I did not follow my own advice and am paying the price.

    Stupidly, I:

    • Did not shop lenders (I felt I wasn't in a position to).

    • Did not tell the truth about my income.

    • Took the first loan they offered me.

    • Didn't read the fine print.

    • Did not fix a budget and stick to it.

    • Bought way too much house.

    • Ignored my business and employment opportunities far too long.

    Stated Income Loans area the proverbial two-edged swords and should be considered predatory. The story they tell you is that they allow you to get into "more house" at a lower rate - and they do. What they don't tell you, especially to first-time homeowners that don't know the jargon is that you will pay the price eventually.

    If you don't put down 20% you have to pay Private Mortgage Insurance, or take out a second. I didn't have 20%, so now I have a second mortgage, too - that has risen from $135 per month to $201.47 per month. I used to live on what my mortgage payment is now.

    Today, I had to ask friends for money to catch up my payments or lose it all. They have come through, and I know I am blessed by their generosity. But how humbling is it when they consider you one of the brightest, most resourceful and talented people they know, and you are on food stamps and can't pay your bills?

    A Renter Next Time

    I can tell you, in my next life, if I cannot qualify for a fixed rate mortgage, I'll go back to renting. It's just not worth the scare you get every six months when the rates change. And I haven't even talked about what happens when your adjustable period runs out - I don't want to know.

    Sadly, I am at the point where I had to get honest that I messed up by lying and put my house on the market. Normally, with the improvements I've made, I could have asked close to $269,900. Now, because I'm backed up against the foreclosure wall, I have to drop my price $20k in order to sell it before foreclosure. It breaks my heart, but I am pragmatic - much better to walk away with less money in your pocket than with NO money in your pocket.

    As a consumer advocate, I am embarrassed that I failed to follow all the research I had done - my heart led and my brain stayed behind.

    I hope you learn from my mistake - there are predatory lenders out there who prey on first-time buyers, seniors and single women. Too bad they aren't made to wear signs.

    A story about how easy it is to get into serious trouble even when you know better. There are predatory lenders out there who prey on first-time buyers, se...
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      Survey Sees Trouble Ahead for Many 2006 Model Cars, SUVs

      European automakers did not have even one entry on CR's list of models with the best-predicted reliability ratings

      Consumer Reports' latest annual reliability survey predicts widely disparate records for some Asian automakers including Nissan and Hyundai. The survey also finds continued troubles for European and domestic automakers with some 2006 vehicles.

      For the second year in a row, European automakers did not have even one entry on CR's list of models with the best-predicted reliability ratings.

      Four models from Nissan -- the Quest, Armada, Titan and the Infiniti QX56 -- are on Consumer Reports' list of 2006 models with the worst predicted reliability. But the new Infiniti M35 and M45 are among the most reliable models.

      Other Nissan models, such as the Murano and Sentra, have above-average predicted reliability. Historically, Nissan and Infiniti have done well in CR reliability surveys; many vehicles from the automaker have had above-average reliability over the years.

      CR predicts that reliability for 2006 models from Hyundai is likely to be spotty. For example, the Hyundai Tucson is predicted to have poor reliability while the Santa Fe and Elantra are predicted to have average reliability. Reliability for the new-for-2006 Sonata remains unknown.

      "The message to consumers is clear: You can't gauge reliability based only on a nameplate. Some automakers do have a better track record but individual models -- especially newer ones -- can have problems," said David Champion, senior director of Consumer Reports' Auto Test Center in Connecticut. "New-car buyers should always check our reliability rating for the model they're buying."

      Champion noted that the difference between models with the best and worst predicted reliability in the survey is striking. For example, among large SUVs, the least reliable model, Infiniti's QX56, is likely to have about eight times as many problems as the most reliable model, the Toyota Land Cruiser.

      Findings are based on Consumer Reports' 2005 survey of subscribers to both its magazine and web site, www.ConsumerReports.org. This year, the survey reached a milestone as CR gathered reliability information on more than one million vehicles in total-the most ever received.

      The survey was conducted in the spring of 2005 and covered 1998 to 2005 models. The total number of vehicles included is up from 810,000 in 2004 and 675,000 in 2003.

      Among the other findings in New Car Preview 2006:

      • Of the 31 cars that earned Consumer Reports top rating for predicted reliability, 29 were Japanese and two were domestic models. There are no European models on that list. Of the 29 vehicles from Japanese manufacturers, about half -- 15 -- are from Toyota and its Lexus division and eight are from Honda. The two domestic models making the list are the previous generation Chevrolet Monte Carlo (redesigned for 2006) and the new-for-2005 Mercury Mariner.

      • Of the 48 cars that are on Consumer Reports list of vehicles predicted to have the worst reliability, 22 carry domestic nameplates, 20 are European, four are from Japan, and two are from South Korea. The Japanese models are all from Nissan and its Infiniti division, specifically, Nissan's Quest, Armada, and Titan, and the Infiniti QX56. The two South Korean models on the list are the Hyundai Tucson and the Kia Sportage.

      • CR's list of sedans with the worst predicted reliability includes some of Europe's most expensive nameplates such as the Audi A8, BMW 7 Series, and the Mercedes-Benz S-Class. Other sedans making the list of "Least Reliable" cars include the Jaguar S-Type, Mercedes-Benz E-Class, Saab 9-3, and the V8- powered BMW 5 Series. The rest of the bottom-rated small cars and sedans were from domestic manufacturers and included the Chevrolet Cobalt, the V8-powered Chrysler 300 and the Lincoln LS.

      • Despite their complex mechanical drivetrains, hybrids from both domestic and Japanese manufacturers continue to have above-average reliability. Those hybrids include the Honda Accord and Civic Hybrids, the Toyota Prius, and the Lexus RX400h -- all of which received top scores. The Ford Escape Hybrid had above-average reliability.

      Toyota, along with its Lexus division, makes more than half of the sedans and small cars that earned Consumer Reports highest reliability rating. All the others that earned this rating were also Japanese, including the Honda Accord and previous-generation Civic; the 2006 Infiniti M35/45; and nonturbo models of the Subaru Impreza.

      SUVs from Asian manufacturers were the most reliable overall, with a few notable exceptions. Large SUVs with the worst reliability were the Infiniti QX56, Nissan Armada, Hummer H2, and Lincoln Navigator, in that order.

      Two small SUVs from South Korea, the Hyundai Tucson and Kia Sportage, also rate among the worst. European brands anchored the least reliable list in midsized SUVs.

      Unreliable models include the V8 BMW X5, Land Rover Range Rover, Land Rover LR3, Porsche Cayenne, Volkswagen Touareg, and Volvo XC90. Notable exceptions were the BMW X3 and the six- cylinder X5, which improved to average.

      American SUVs continue to produce mixed results. While the Mercury Mariner was the best of the domestic group of SUVs, the Ford Explorer, Mercury Mountaineer, and Jeep Grand Cherokee were among the least reliable.

      With the exception of the Chevrolet Tahoe and Suburban; the GMC Yukon and Yukon XL; and the Cadillac Escalade, large American SUVs have subpar reliability.

      Among minivans, the Chrysler Town & Country and Dodge Grand Caravan dropped to below average in reliability. The Toyota Sienna is the only minivan that rates better than average. GM's minivans-the Buick Terraza, Chevrolet Uplander, Pontiac Montana SV6, and Saturn Relay-joined the Nissan Quest at the bottom of CR's list.

      Looking at pickups, the Toyota Tundra and the new Honda Ridgeline earned the top ratings. The redesigned 2005 Toyota Tacoma V6 rated just average, but the four-cylinder Tacoma was above average. The Nissan Titan dropped from average and is now on the worst list. The Ford F-150 continued to score below average.

      Survey Sees Trouble Ahead for Many 2006 Model Cars, SUVs...
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      State Farm's Wrecked Car Owners Feeling Slighted

      Company and State Attorneys General Brokered a Cozy Deal


      Motorists across the country are getting some surprising letters from State Farm Insurance and their state attorney general's office. The letters inform them that their car is a total wreck.

      About 32,000 letters have gone out this month to policyholders, telling them that State Farm had declared their vehicle a total wreck before they bought it, thinking -- in many cases -- that they were getting a great deal on a late-model car or truck in exceptionally good condition.

      After declaring the vehicles totaled, State Farm then resold them as junk, but without getting the salvage title required by law. A salvage title is intended to warn buyers that a vehicle has been rebuilt after a major accident and that it may be unsafe.

      That's what happened to Missouri motorist Sarah Smith, whose experience was profiled in a St. Louis Post-Dispatch story by Michael D. Sorkin.

      "I'm getting a great vehicle," she thought. It was a used black Jeep Grand Cherokee that the salesman had described as a trade-in on a new model. The car looked solid and, most importantly for Smith, appeared safe to drive with her baby, now 18 months old.

      But then Smith opened a letter signed by Missouri Attorney General Jay Nixon, disclosing that her Jeep had in fact been wrecked before she bought it.

      Nixon has set up a database on his Web site, identifying about 265 previously damaged vehicles that were improperly titled in Missouri and that are covered by a settlement with State Farm and 49 states.

      The information includes the vehicle identification number (VIN), make, model and year of each of the vehicles. Nixon and 48 other state attorneys general reached an agreement with State Farm earlier this year over the companys failure to make certain the vehicles were properly titled.

      State Farm is paying $40 million to the consumers who currently own the vehicles. The final amounts received by consumers will depend on the current value of their vehicle and how many consumers elect to participate in the payment program.

      Nixon said the settlement does not preclude those consumers from rejecting the State Farm offer and seeking their own legal recourse, nor does it affect the legal rights of previous owners of the vehicles.

      The letters say State Farm will pay a sum to each vehicle owner who signs a settlement offer agreeing not to sue the insurer. The amounts range from $400 to $20,000 and are based on the current value of the vehicles.

      Smith hasn't driven her Jeep since the letter arrived Sept. 17, Sorkin reported. She said she was horrified and outraged that State Farm had seemingly put her family at risk. She had the same thoughts about the attorneys general, who brokered the deal with State Farm in private.

      Smith called State Farm to ask what kind of damage her car had sustained and was floored when the company said it wouldn't release any information about her car's damage, saying it had to protect the "privacy" of the car's previous owner.

      Smith asked State Farm to pay the cost of having her car inspected. It refused.

      "We feel the compensation we're offering should cover that," State Farm spokesman Phil Supple told the Post-Dispatch.

      State Farm's letter offers Smith $2,700. She can't accept even if she wanted to, she said. That would leave her with a car she is afraid to drive and $11,000 she still owes in car payments. For now, she's driving a relative's car - and paying off that car loan along with her own.

      "They're trying to pay me pennies on the dollar, and they're not even talking about safety," Smith said.

      Nixon has said that he had no part in crafting the agreement between State Farm and 49 state attorneys general, which was primarily brokered by an assistant to Attorney General Tom Miller of Iowa. Miller's office has defended the settlement because consumers won't have to sue.

      In an interview with the Post-Dispatch, Nixon said he plans to write a follow-up letter to each of the 265 Missourians. He said he will "clarify that they have a choice" not to sign. Not signing, Nixon added, means consumers have other "legitimate legal options to get adequate and appropriate compensation for this now obvious problem."

      "It is important for these folks to understand that this (settlement) is an option," Nixon added, "and they should be careful because it can and will limit their compensation." State Farm is giving consumers until Nov. 18 to sign the settlement. The insurer says those who sign will get checks early in January.

      In Illinois, where State Farm is headquartered, a spokeswoman for Attorney General Lisa Madigan said, "We believe the settlement will benefit consumers." Spokeswoman Melissa Merz added: "We urge them to consider it and consult with a private attorney."

      Consumer groups are upset over how long State Farm and the attorneys general have taken to notify motorists that they are driving cars the insurer had sold as total wrecks. State Farm has said it told the Iowa attorney general's office nearly two years ago - in November 2003.

      Only current owners are included in the reimbursements. Anyone who bought the vehicles, had trouble with them and resold or junked them is not eligible for the settlement, according to the company.

      In their statement in January, the attorneys general praised State Farm for coming forward and acknowledging it had been reselling rebuilt vehicles. The officials also praised the company for agreeing to pay the vehicle owners.

      State Farm agreed to pay the attorneys general a total of $1 million for the time they spent on the case. The attorneys general agreed not to take any legal action against State Farm. The matter never went to court.

      State Farm says its offer of compensation is "fair and reasonable." In its settlement offer, State Farm acknowledges reselling total wrecks from 1997 through 2002. Although selling wrecks without salvage titles violates the law in all states but one, the letter to vehicle owners avoids saying that State Farm did anything wrong.

      Perhaps most telling, the letters sent to owners of the wrecked vehicles caution them not to resell their vehicles without telling new owners about the damage, warning: "Any attempt to resell such a vehicle without disclosing this information could be a violation of law."

      Although selling wrecks without salvage titles violates the law in all states but one, the letter to vehicle owners avoids saying that State Farm did anyth...
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      Senator Proposes Hybrid Quota

      October 25, 2005
      Connecticut Senator Joseph Lieberman thinks 10 percent of all the new cars sold in the U.S. ought to be hybrids within two years, no matter how much they cost and says he will introduce a bill that would the make the hybrid quota the law, in part to reduce global warming.

      Lieberman told a global climate change conference at Yale University that after a century of debate, evidence of manmade global warming is overwhelming.

      "If the leadership of the United States does not come to grips with the fact that we need a new energy policy then we are not only putting this nations security, economy and public health at risk, but the worlds as well," Lieberman told the conference.

      Lieberman predicts that plug-in hybrids could use alcohol-enhanced fuel to achieve up to 500 miles per gallon and contribute to the reduction in hydrocarbon pollution.

      The batteries in hybrid plug-ins can be charged when the engine is off. A growing number of hybrid owners are experimenting with plug-ins in an effort to radically increase mileage.

      Lieberman told the conference that he plans to introduce legislation soon to establish a federal mandate requiring 10 percent of new cars to be hybrid electric plug-in or alternative fuel vehicles by 2007.

      By 2014 Lieberman would require 50 percent of the new cars sold in America to be hybrid electric or based on some other gasoline-saving technology.

      Lieberman and Sen. John McCain, a Republican from Arizona introduced a similar bill last year but it was defeated 60-38.

      Senator Proposes Hybrid Quota: Connecticut Senator Joseph Lieberman thinks 10 percent of all the new cars sold in the U.S. ought to be hybrids within two y...
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      Promoters of "Inflatable Motorcycle Vests" Sentenced

      They allegedly defrauded investors of more than $5 million

      The promoters of a supposedly inflatable motorcycle vest have been sentenced on 30 felony counts of securities fraud and grand theft, as well as five counts of tax evasion, California Attorney General Bill Lockyer announced.

      John Duhamell and Toni Duhamell were formally sentenced in San Bernardino County Superior Court. The Duhamells were prosecuted by the Attorney Generals Special Crimes Unit resulting from an investigation conducted by the Inland Empire Financial Crimes Task Force.

      After they entered guilty pleas on all counts, a San Bernardino Superior Court judge sentenced John Duhamell to seven years in state prison and Toni Duhamell to four years and four months in state prison. In addition, the Duhamells were ordered to repay their more than 200 victims $5.6 million in restitution, and they were also ordered to pay $816,718 each to the Franchise Tax Board on the tax evasion charges.

      The Attorney General filed a criminal complaint in September, 2005 alleging that the Duhamells stole more than $5 million from investors over the course of three years on the pretense of financing a product known as the AirVest - a vest worn by motorcyclists that is designed to automatically inflate when they are thrown from their bikes.

      The Duhamells falsely told potential investors that Harley-Davidson, Inc. had invested heavily in the company. John Duhamell also falsely told potential investors that he was the independently wealthy son of billionaire Kirk Kerkorian.

      These false representations led more than 200 victims to believe their investment was secure due to the backing of Harley-Davidson and Kerkorian. Although the Duhamells victims hail from across the globe, the majority of the defrauded investors are from San Bernardino County.

      Instead of putting the money into the company, the Duhamells used the investors' cash to live an extravagant lifestyle that included trips to Europe as well as the purchase of luxury homes and automobiles.

      Promoters of Inflatable Motorcycle Vests Sentenced...
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      Royal Prestige Resolved Complaints ... Or Did It?

      Consumers not so happy with the "resolutions"

      The Hy Cite Corp. says it resolved the 27 consumer complaints ConsumerAffairs.com sent the company in 2001.

      "We took care of every consumer," company president Erik Johnson said in a recent interview. "We exchanged products, we showed them how to use the cookware, and we did whatever was necessary to make them happy."

      Or did it?

      We've learned some consumers aren't satisfied with the resolution the company offered.

      Consumers like Cuauhtmoc O. of Los Angeles. He bought $1400 worth of Royal Prestige cookware, but cancelled his order before the products arrived.

      He never received the cookware and believed the matter was settled.

      But then it showed up on my credit report a few years later as an unpaid debt, he says. When I bought my house, the escrow company withdrew $1425 from my deposit and wrote a check to Royal Prestige.

      Cuauhtemoc says Royal Prestige contacted him shortly after he filed a complaint with ConsumersAffairs.com.

      They said they cant refund my money, but they sent me a 22-piece set of cookware. They made me sign a letter stating that I was now satisfied and consider my complaint resolved.

      I signed the letter because I felt like I didnt have choice, he says. At least this way, Id get something back. But I have to be honest, Im not satisfied. If I didnt want the pans in the first place, why would I want them now? I would have preferred to have my money back.

      So would Sarah B. of Madison, Wisconsin, who says a Royal Prestige salesman bilked her out of $500 for an electric skillet.

      Hy Cite gave her a three-piece set of cookware to resolve her complaint.

      I thought it would be great, Sarah says. But everything sticks to the pans. Im not satisfied. I think a better resolution would have been to refund my money.

      Veronica W. of Waterford, Wisconsin says the company resolved her dispute over a free cruise offer.

      But she refused to discuss the details of that resolution, saying They have given me a large portion of my money back. I have signed a waiver to not exploit them from the date of the agreement. And I am unable to disclose any other information.

      Hy Cites president confirmed his company had consumers sign a confidential agreement stating their complaints were now resolved and they wouldnt disclose any further information.

      We also asked them to stop putting negative things about us on the Internet.

      They said they cant refund my money, but they sent me a 22-piece set of cookware. They made me sign a letter stating that I was now satisfied and consider...
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      Plum Organics Recalls Baby Food Due To Bacteria

      Contamination may cause botulism

      Plum Organics announced today that it is recalling one batch of its baby food because the products may be tainted with a bacteria that causes botulism.

      The Emeryville, California, company voluntarily pulled off the market all its Apple & Carrot Baby Food in Portable Pouches with the best by date of May 21, 2010 and universal product code (UPC) of #890180001221.

      The company sold the baby food nationwide at Toys-R-Us and Babies-R-Us stores.

      "The product did not meet the FDA guidelines for proper acidity level," Dr. Paul Gerhardt, a Food Science Ph.D. and member of the Plum Organics action team, said in a statement released today. "Though the risk of illness from this one batch is minimal, Plum Organics is taking the extraordinary step of recalling all Apple & Carrot Baby Food Pouches with 'Best by date May 21, 2010.'"

      The company's founder, Gigi Lee Chang, blamed the problem on a mixing error during production.

      "I wanted to let you know that, today, Plum Organics voluntarily recalled a small portion of our Apple & Carrot Baby Food in Portable Pouches after a routine test determined the formulation was incorrect," Chang wrote in a statement on the company's Web site. "Plum Organics immediately investigated the matter and confirmed that a mixing error was to blame which resulted in an improper blend of carrots and apples, which caused the baby food to be improperly blended."

      "Please accept my deepest apologies for this inconvenience," Chang added.

      Plum Organics said it has not received any reports of illnesses linked to the recalled baby food.

      "We conducted extensive testing of samples of every Plum Organic product manufactured before and after this batch and all samples were found to be within the standard guidelines," Chang said.

      Plum Organics called the recall a "precaution" and said it took this action because of the possible risk of botulism, a serious and sometimes life-threatening condition. Symptoms of botulism poisoning include general weakness, dizziness, double-vision, and trouble speaking or swallowing. People with those problems should immediately contact their doctor.

      Consumers should not to use the recalled products because of the possible health risks, the company said.

      Customers can the returned the recalled baby food for a full refund at any Toys-R-Us or Babies R Us store.

      For more information, contact Plum Organics at 888-974-3555 or email the company at info@plumorganics.com.

      Plum Organics announced today that it is recalling one batch of its baby food because the products may be tainted with a bacteria that causes botulism....
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      CardSystems Sells Out After Massive Data Breach


      The bumbling saga of credit-card processing company CardSystems has ended. The Arizona-based company is being purchased by Pay By Touch, a payment processor that specializes in biometric verification of purchases, such as fingerprint reading at checkout counters.

      CardSystems' assets were put on the chopping block after it admitted responsibility for allowing the accounts of 40 million Visa and MasterCard holders to be exposed to a ring of hackers.

      The company had been holding the users' data for "research purposes," in violation of agreements it had struck with the credit card associations and their affiliated banks.

      Pay By Touch specializes in using fingerprint readouts as "data points" for verifying a customer's identity. The "data points" link the customer's fingerprint to an "e-wallet" which connects to their checking account, as well as to any available information about "loyalty card" memberships the customer may have.

      Theoretically, this could lead to a reduced possibility of credit card fraud and identity theft, but it also leads to an increase of information collected by stores, which they can use for targeted marketing.

      Pay By Touch already has an in-house credit card payment system, but the company wanted access to CardSystems' files on 120,000 merchants that used CardSystems to process credit card transactions.

      CardSystems had originally been eyed for purchase by CyberSource, a California-based rival payment-processing company. The New York Times reported that talks between the companies broke down for undisclosed reasons. According to the Red Herring online business journal, CyberSource simply got outbid by Pay By Touch.

      Pay By Touch recently secured $130 million in financing for its next round of investments in biometric identification.

      Visa had agreed to extend its deadline for terminating business with CardSystems from October 2005 until January 21st, 2006, in order for CyberSource to complete its purchase. That deal will now be transferred to Pay By Touch.

      The CardSystems data breach is the single largest case of its kind in history -- the culmination of a year full of data losses, misplaced tapes, database hacks, and scams. The breach has prompted state and federal officials to push for stronger laws regarding identity theft protection, disclosure of company data breaches, and consumer protection.

      The breach also prompted a class action lawsuit against CardSystems, Visa, and MasterCard for failing to protect cardholders' information.

      The lawsuit encountered a setback in September 2005, when a federal judge ruled that it was not the responsibility of credit card companies to notify customers of data breaches.

      CardSystems' assets were put on the chopping block after it admitted responsibility for allowing the accounts of 40 million Visa and MasterCard holders to...
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      "Spam Charges" Hit Thousands of Credit Cards


      Consumers around the country are abuzz over a rash of incidents involving unauthorized charges to Visa and MasterCard accounts within the last thirty days, many appearing on statements for cards that haven't been used in months.

      Cardholders have been flooding online forums with news of a $24.99 charge from a company called "Digital Age Cyprus" appearing on their account statements. Other mysterious charges include "Trouble Bubble LLC" and "Burdett Inc.", at $7.95 or $9.95.

      Such charges are often referred to as "spam charges," based on the idea that the sheer number of charges, even in small amounts, can generate a profit for fraudsters and hackers. The amounts are small enough that many cardholders will pay them without thinking about it.

      Criminal rings will often use names of legal businesses that don't accept credit card transactions as a front, and set up a fake 1-800 phone number in case customers call to verify or dispute the charges.

      Brian Morris, a computer and networking consultant, first became aware of the scam when he noticed a charge for Digital Age Cyprus on his MBNA MasterCard on Sept. 28th.

      "I keep a very close watch on my credit card activity and knew that I did not authorize that charge," said Morris, "so I used Google to find the forum on Broadbandreports.com where many others reported of being hit with this charge."

      Morris believes victims of the fraud are at a disadvantage because of the lack of coverage the incidents are receiving in major media outlets.

      Victims of the fraud have flooded bulletin boards and blogs with news of each incident, advice, and suggestions. Information regarding the source of the spam charges is still unclear, but speculation centers around a connection to the CardSystems data breach in June 2005.

      Forty million cardholders' accounts were exposed to identity thieves, and of those cardholders, 263,000 actually had their information stolen.

      Although it would seem like common sense for card companies to notify cardholders in the event of a crisis such as the CardSystems breach, a federal judge disagreed, ruling that it was the responsibility of the issuing bank to offer warnings. The ruling came as a setback to a class action lawsuit filed against Visa, MasterCard, and CardSystems for the potential damage from the theft.

      Many of the affected cardholders expressed displeasure at how their banks have handled -- or not handled -- the incidents.

      Cybersecurity expert Bruce Schneier recently penned a column for Wired magazine taking financial services companies to task for not shouldering the burden in cases of fraud or identity theft.

      "Making financial institutions responsible for losses due to phishing and identity theft is the only way to deal with the problem. And not just the direct financial losses -- they need to make it less painful to resolve identity theft issues, enabling people to truly clear their names and credit histories," he wrote.

      What You Can Do

      If you've found your credit card bill contains these mysterious transactions, or others like them, the following steps can help minimize the damage:

      Contact your bank immediately: Let them know you are a victim of fraud, and tell the bank to cancel the card and issue you another one. Keeping the card active, even if the charges are reversed, still leaves you open to more fraudulent transactions in the future.

      Update your information with the credit bureaus: Make sure to send letters in writing to each of the three major bureaus if you have fraudulent charges on a card, or choose to cancel it. Otherwise, you may end up paying for bills that aren't yours, or having your credit score sink because of unpaid bills you never charged in the first place.

      Be smart when shopping online: Don't save your credit card information on any Web site. Don't offer any more information than what is absolutely required for a purchase. Avoid using a debit card to make online transactions, as credit cards have liability limits of $50 for unauthorized charges, whereas debit card fraud can potentially drain your checking account.

      Such charges are often referred to as "spam charges," based on the idea that the sheer number of charges, even in small amounts, can generate a profit for...
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      More than Half of U.S. Consumers See a Hybrid in their Future

      Most are driven by the price of gas rather than environmental concerns

      More than half of Americans say they are considering the purchase of a hybrid for their next vehicle. Most are driven by the price of gas rather than environmental concerns.

      Recently, J.D. Power estimated that hybrids would account for only 4 percent of total vehicle sales by the end of the decade. But according to the polling firm TechnoMetrica, 55 percent of Americans are considering buying a hybrid, with the most likely buyers being those with incomes above $75,000 (68 percent).

      Some 57 percent of respondents are attracted to hybrids for their fuel efficiency, compared to only 23 percent for their environmental friendliness, according to an account of the study in Investor's Business Daily.

      Over half of those surveyed said that dependence on foreign oil is the number one threat to the economy. More than 70 percent favored government incentives like tax rebates and energy credits to spur hybrid purchases.

      Americans surveyed had a generally dim view of U.S. automakers' efforts. Viewed most favorably for their hybrid plans were Toyota, with 41 percent of respondents, and Honda, with 40 percent.

      Ford's hybrid efforts got the nod of only 14 percent, GM's only 13 percent and Chrysler was last at 8 percent.

      Sales of the Toyota Prius hybrid grew 90 percent in September.

      More than Half of U.S. Consumers See a Hybrid in their Future...
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      Massachusetts Stops Internet Weapon Sales


      The State of Massachusetts says it has barred three out-of-state online weapons sellers from shipping illegal weapons to Massachusetts consumers and levied thousands of dollars in fines and civil penalties against the companies.

      The court orders, granted by Suffolk Superior Court Judge Frank M. Gaziano, stem from several suits Attorney General Tom Reilly filed last summer as part of an ongoing effort to combat the sale of illegal products to Massachusetts citizens over the Internet.

      The online retailers named in these judgments are C & M Enterprises of Fort Gaines, GA; Copgear.net of Killeen, TX; and Martial Arts Gear, Inc. of Lafayette, LA.

      The three defendants named in these court orders are among seven sued by Reilly following an undercover sting into Internet weapons sellers accused of selling and shipping stun guns, switch-blade knives, swords, nunchaku (a/k/a numchucks), throwing stars, sling shots and dirk knives to an undercover investigator in violation of state law banning the sale of such items.

      Soon after the initial lawsuits were filed, four of the companies agreed to orders with the state banning all future sales of illegal weapons into Massachusetts, and paid $5,000 each in penalties. Those companies include Talley Security Products of Flagstaff, AZ, Lifestyle Fascinations of Lakewood, NJ, Bynoon.com of Dunlap,TN, and Discount Martial Arts Supply of Winnetka, CA.

      In addition to permanently banning sales in Massachusetts, the court orders require these online retailers to place postings on their websites stating that they do not ship weapons into Massachusetts. They must also incorporate software that blocks orders to Massachusetts addresses.

      The orders also require the online retailers to pay penalties to the Commonwealth for their illegal sales into Massachusetts. C & M Enterprises and Copgear.net must pay penalties of $35,000 each, and Martial Arts Gear, Inc. must pay $30,000.

      Under Massachusetts law, the sale or possession of various weapons, such as switch blade knives, dirk knives, sling shots, throwing stars, numchucks, sword canes, and black jacks, is illegal. There is a separate statute that prohibits the sale or possession of electrical weapons, including stun guns. Anyone with questions about whether or not weapons they have are prohibited by Massachusetts law should check with their local police department.

      These cases are part of an overall initiative by Reilly's Office targeting the sale of illegal or age-prohibited products in Massachusetts, such as alcohol, cigarettes, ammunition and fireworks.

      Massachusetts barred three out-of-state online weapons sellers from shipping illegal weapons to Massachusetts consumers and levied fines and civil penaltie...
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      Fish is Brain Food

      Eating fish is good for the brain and can slow age related mental decline by 3 to 4 years

      Eating fish is good for the brain and can slow age related mental decline by 3 to 4 years. That's according to an article published in the Archives of Neurology.

      Researchers studied 3,700 Chicago residents who were 65 and older. The Windy City residents took some simple tests of mental acuity three times in 6 years. The also filled out a questionnaire about the food they ate.

      Folks who ate one fish meal a week had a 10% slower annual decline in thinking. Folks who ate 2 fish meals a week had a 13% slower decline.

      Researchers didn't measure the subjects' blood levels for healthy omega-3 fatty acids, the kind you get from fish so they couldn't prove why fish helped.

      While pregnant and nursing women and kids should limit fish with high mercury levels, this study and a number of other show that fish is good for the heart and brain.

      Fish is Brain Food, Dr. Henry Fishman on Health and Medicine...
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      "Cramming" Hits Consumers When They Least Expect It

      Consumers complain about mysterious, unauthorized charges appearing on their telephone bills

      "Cramming" used to be what you did the night before a big test. Now the word has a more sinister meaning like placing unauthorized charges on your telephone bill.

      "I have a phone bill that says Voicemail Monthly fee $12.95. I want to know what that is for and if it's not suppose to be on there, I want it off my phone bill," said Deborah of Johnson City, Tennessee, one of hundreds of consumers who have written to ConsumerAffairs.com to complain about mysterious, unauthorized charges appearing on their telephone bills.

      "I got my phone bill and ILD charged me $30.88 for some kind of internet service that I never authorized," said Christie, of Connel, Washington. "When I called them, I was kept on hold for over 30 minutes and have not been able to dispute these charges."

      Of all the cramming complaints received at ConsumerAffairs.com, nearly 800 are about ILD TeleServices, whose name and telephone number appear next to the unauthorized charge on their phone bills -- and the number of complaints is steadily rising, with 80 filed in just the last three months.

      ILD TeleServices claims that it is merely a billing "clearinghouse," meaning it is collecting the money on behalf of other companies some legitimate and some, perhaps, not who deliver their services through your local phone company.

      If it all sounds confusing, you can blame the Telecommunications Act of 1996. That piece of landmark (others might suggest a different adjective) legislation changed the telecommunications landscape not entirely for the better, at least not for consumers. Fortunately, there are some little-publicized provisions that give consumers an effective way to fight back.

      In deregulating the local telephone markets, the new law required big telephone companies like SBC Communications and Verizon to lease their lines to smaller companies and to bill their customers on behalf of companies providing such deregulated services as pay phones, collect calls and long-distance calls from public places, like hotels, hospitals, airports and prisons.

      The purpose was to open local phone markets to competition and create more services at less cost to the consumer. But an unintended consequence has been an outbreak of profiteering by companies eager to fleece captive or unsuspected consumers.

      Many of the new entrants are companies that attempt to bill unsuspecting consumers for things they never asked for -- like voice mail -- hoping they will not look that closely at their monthly phone bill and just pay it.

      Other shameless profiteers are the hotels, hospitals, universities and prisons that add outrageously expensive charges for the use of their telephone equipment.

      With so many layers in the billing process, the system has been open to abuse from the start. The company placing the charge does not bill the consumer directly. Instead, the charge is billed by a "clearinghouse," like ILD, which in turn contracts with your local phone company to place the charge on your bill.

      The local telephone company makes nothing but a small administrative fee and has little choice in the matter; it is required to provide billing for these supposedly "competitive" entities.

      In the case of ILD, the company says it executes hundreds of thousands of bills each month for a wide variety of companies, and that only a tiny fraction of the charges produce complaints. Company officials say they work with complaining consumers to resolve disputes, and that if one of its clients produces a large number of complaints, it is dropped.

      Your Service Cant Be Terminated

      Consumers writing to ConsumerAffairs.com have expressed the concern that their local telephone service would be cut off if they refused to pay an unauthorized third-party charge. It cant be.

      "The Federal Communications Commissions, through the Truth-In-Billing Act, requires telephone companies to clearly show on their bills which charges are 'miscellaneous,' and to cooperate with consumers who dispute them," said Kurt DeSoto, a communications attorney with Wiley, Rein & Fielding, a powerhouse Washington, D.C., firm that includes at least one former FCC commissioner among its partners.

      Failure to pay a disputed "miscellaneous" change on a phone bill cannot, under the Truth In Billing Act, be grounds for termination of service, as long as all other legitimate charges are paid. The first step a consumer should take is to call the local telephone business office and speak to a customer service representative.

      "Verizon has a first call resolution policy for our customers who call us with a cramming issue," Ells Edwards, a spokesman for Verizon, told ConsumerAffairs.com. "If the customer tells us that the charge is unauthorized, Verizon will remove it from their bill, no questions asked."

      Edwards says the only exception is if the disputed charge is for a phone call charged by another carrier. In those cases he says Verizon requests the customer first contact the third-party carrier to dispute the charge. If the customer fails to get satisfaction, at that point Verizon will eliminate the charge.

      Preventing Cramming In The First Place

      Consumers can take action to block miscellaneous, third party charges of any kind from appearing on their telephone bills.

      "For Verizon customers, its as simple as calling the business office and asking a customer service representative to place a block of third party billing on their account," Edwards said. Once a block is in place, Edwards said the only charges appearing on a consumers phone bill should be for local and long distance telephone services.

      How do consumers become targets of cramming scams in the first place? The Federal Trade Commission says it can happen when someone uses your phone to call an 800 number.

      "With the right technology, companies can get your phone number when you call them, using a process similar to caller ID. Once they have your number, an unscrupulous company can cram charges onto your phone bill," the FTC said in a release.

      "What's more, since this technology can automatically bill the phone number that is called from, other people using your phone can cause charges to be billed to your phone."

      The agency also says consumers should carefully read the fine print before they fill out contest forms, especially if they ask for your phone number. Likewise, read the fine print before you place a call in response to a sweepstakes promotion.

      Also, avoid placing calls to costly 900 numbers. The FTC says consumers should consider a 900 number block; it stops calls from going through to 900 number services. Blocks also are available for international, long distance, and local toll calls.

      Never accept collect calls. If you have a friend of family member who will be traveling, get them a prepaid calling card.

      Its highly unlikely Congress will revisit the Telecommunications Act of 1996 to fix the loopholes that have caused consumers so much grief. Instead, it appears consumers have to educate themselves about their rights and never hesitate to exercise them against those who would manipulate the system for fraud.

      Cramming Hits Consumers When They Least Expect It...
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      HP, Compaq Notebook Computer Batteries Recalled

      October 14, 2005
      Hewlett-Packard is recalling about 135,000 HP and Compaq Notebook Computer Battery Packs. An internal short can cause the battery cells to overheat and melt or char the plastic case, posing a burn and fire hazard.

      HP has received 16 reports of batteries overheating, including four in the U.S. No injuries have been reported. Four cases of minor property damage were reported, including one in the U.S.

      The recalled lithium ion rechargeable battery packs are used with various HP and Compaq notebook computers (see list below). The recalled battery packs are a subset of those manufactured March 2004 through September 2004, and will have a bar code label starting with GC, IA, L0 or L1.

      Hewlett-Packard and Compaq Notebook Models that may contain a recalled battery pack:

      HP PavilionHP CompaqCompaq PresarioCompaq Evo
      dx4000
      dx5000
      zd8100
      ze4100
      ze4100/xt1xx
      4200
      ze4200
      ze4300
      ze4400
      ze4500
      ze4600
      ze4700
      ze4800
      ze5155
      ze5200
      ze5300
      ze5400
      ze5500
      ze5600
      zv5000
      zv5200
      zx5000
      zx5200
      nc6000
      nc8000
      nw8000
      nx5000
      nx6130
      nx9005
      nx9008
      nx9010
      nx9100
      nx9105
      9000
      9005
      1100
      2100
      2500
      R3000
      R3200
      X1000
      X4000
      X5000
      X6100
      n1010v
      n1050v

      The computers were sold by national and regional computer and electronics stores, online stores, hp.com and hpshopping.com from March 2004 through May 2005 for between $1,000 and $3,000. The battery packs also were sold separately for between $100 and $130.

      Consumers should stop using the recalled batteries immediately and contact HP to arrange for a free replacement battery by visiting the Battery Replacement program Web site or by calling HP. After removing the recalled battery for their notebook computer, consumers should plug in the AC adapter to power the notebook until a replacement battery arrives.

      Consumer Contact: For additional information, visit the HP Battery Replacement program Web site at www.hp.com/support/BatteryReplacement or contact HP at (888) 404-7398 between 7 a.m. and 7 p.m. CT Monday through Friday.

      The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).



      HP, Compaq Notebook Computer Batteries Recalled...
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      New Bankruptcy Law Tightens Rules, Adds Paperwork

      It's Now Much Tougher to Get a Fresh Start

      If you're a consumer in financial trouble, your theme song might be "I Got Plenty of Nothin'" from Gershwin's Porgy & Bess. But if you think you've got plenty of nothing now, the new "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" could shrink even that.

      Effective October 17th, the Act is a coup for banks, credit card issuers and stores -- otherwise known as "unsecured" creditors (those owed money that isn't backed by an asset, such as a car or home.) It overhauls laws last modified in 1978, tightening requirements for filers and for bankruptcy lawyers who handle their cases.

      A major goal: to shift filers from Chapter 7 ("straight") bankruptcy, in which consumer debt is typically liquidated, to Chapter 13 ("reorganization") bankruptcy, which requires that you repay secured and much unsecured debt within five years. No "clean start" in this case.

      Here are some of the major changes under the new law:

      The "Means Test" This is a new wrinkle that challenges the assumption that a debtor is filing in good faith. Now the burden is on you to show that your use of bankruptcy relief isn't "abusive." The means test calculates your monthly income minus certain allowable expenses. Each state uses its "median income" as a guide. If the balance left is more than about $100 a month, the filing is considered abusive, unless you can show "special circumstances." If you flunk the "means test," it's Chapter 13 for you.

      Stringent expense allowances Guidelines for allowable expenses are set by the IRS and are stingy. For example, the food allowance is around $200 per month and housing allowance about $800. Too bad if your actual costs are much higher.

      Residency requirements There are both federal and state bankruptcy laws and some state laws are more favorable than others. For example, both Florida and Texas have generous "homestead allowances," which permit debtors to shield assets under the umbrella of homeownership. But the new law aims to discourage "shopping around" for the best deal, so you can't file in a more favorable state unless you've lived there for at least two years.

      Mandatory credit counseling You must take an approved credit counseling course within 180 days (six months) of filing a petition. This isn't free -- average cost is estimated at $75.00.

      More paperwork In the new "get tough" environment, consumers will have to provide a lot more documentation to show that bankruptcy is warranted. The American Bankruptcy Institute lists some of the proof debtors must provide: a list of secured and unsecured creditors; documentation of credit counseling; monthly income and expenses; assets and liabilities; most recent tax return and any earlier returns that were not filed; pay stubs and photo ID.

      Heftier legal fees The burden on bankruptcy lawyers is at least doubled under the new statute. Besides merely gathering the facts from a client, an attorney must now "certify" that a client's numbers are accurate. If they aren't, both lawyer and client could face sanctions. So, in effect, your lawyer must do more fact-checking and investigation to assure that both your information and his/her own certification are above-board. This takes time, which translates into money. Many lawyers are getting out of bankruptcy practice, not wanting to put their careers on the line for filing cases that don't pay very well anyway.

      Filing fee changes Charges vary from state to state, but in general, you'll pay more for filing under Chapter 7 and slightly less under Chapter 13.

      Valuation increases The law provides that "collateral," which includes your furniture, clothes, autos and electronics, be assessed at a higher value than under the previous law. The new benchmark: replacement value. Chances are, by the time you add up the total value of your possessions using this formula, it will be pretty high.

      You'll wait longer to file again If your situation requires another bankruptcy filing, you'll wait longer to do so. The new law provides that, under Chapter 7, eight years must elapse before you can re-file. If you go for Chapter 13 after a Chapter 7, you must wait four years. Going from one Chapter 13 to another, two years must elapse.

      No loading up on last minute luxuries The new law requires that any luxury items purchased within 60 days of filing for bankruptcy be repaid in full. Likewise for cash advances and services worth more than $500.

      Beware those student loans Under the old law, you couldn't get rid of student loans backed by the government or a non-profit. This protection has been extended to private lenders as well.

      Scant Comfort

      Despite all this bad news, there are a few pluses. Your house, retirement plans and college savings are exempt, and you can continue to fund the last two (a laughable notion for someone filing in the first place.)

      If an unsecured creditor (say, MasterCard) refuses to accept your repayment offer, the court can reduce your principal debt by up to 20%. This is to encourage creditors to cooperate with credit counseling agencies, which often mediate settlements between debtor and creditor.

      For those owed child support, this obligation jumps ahead of any other unsecured claim except administrative or legal fees. Also, there are special provisions for a few groups: military personnel on active duty, low-income veterans and people with severe medical disabilities.

      So if you're hoping to change your theme song to "For the Love of Money," take note of these changes and get expert advice before you discover that financial "freedom" costs more than you bargained for.

      For more information:

      American Bankruptcy Institute

      U.S. Department of Justice Trustee Program

      www.BankruptcyAction.com, which provides comprehensive information on the new Act as well as a state-by-state list of bankruptcy attorneys.

      ---

      Joan E. Lisante is an attorney in Fairfax County, Va.

      New Bankruptcy Law Tightens Rules, Adds Paperwork...
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      Doctors, Patients Rush to Stockpile Tamiflu

      Fear of Avian Flu Sparks Run on Antiviral Medications

      Tamiflu is surpassing oil as the world's most sought-after substance. The prescription drug made by Roche is one of the few drugs currently in production that is known to help fight viral flu-type infections.

      Governments worldwide are stockpiling Tamiflu as they brace for the annual flu season and the prospect that the virus responsible for avian flu mutates and jumps to humans. Roche has reported that demand for the drug has jumped sevenfold in the past two months.

      Drug stores in the U.S. filled almost 87,000 prescriptions for Tamiflu during the eight weeks ended Oct. 7, up from about 13,000 a year earlier, according to data released today by market researcher Verispan LLC.

      Patients take Tamiflu within a day or two of getting flu symptoms to reduce the severity and spread of the virus and to help reduce the chance of getting influenza.

      In many cases, patients who know about the drug are asking their physicians for prescriptions now, hoping to have a stockpile on hand if a pandemic breaks out. Most physicians seem willing to write the prescriptions.

      Swiss-based Roche says it is working with other manufacturers to begin producing massive quantities of the drug. It is made from an acid produced from the Chinese star anise plant, which is in limited supply because it is grown in only four provinces in China and is harvested between March and May.

      However, Roche says that is has recently developed a way to make the acid, called Shikimic acid, without the plant.

      The World Health Organization last year recommended governments stockpile the Tamiflu capsule or Relenza, an inhalable antiviral drug made by GlaxoSmithKline.

      Doctors, Patients Rush to Stockpile Tamiflu...
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