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    Bank of America Loses Customer Data Again

    For the third time this year, Bank of America has lost confidential customer information. This time it's a laptop containing information about "Visa Buxx" users, missing since August 29. "Visa Buxx" is a prepaid debit card with adjustable spending limits, designed for teenagers.

    Users of the "Buxx" card were notified by Bank of America that their names, credit card numbers, and other banking information may have been compromised. Bank of America was discontinuing the "Visa Buxx" program at the time of the theft.

    The laptop was first stolen from a third-party "service provider" on August 29th, according to Bank of America spokesperson Diane Wagner. The bank was first notified of the theft on Sept. 9th, and sent warnings out to affected customers on the 23rd.

    Wagner could not be reached for comment.

    In previous interviews, she had declined to identify the number of users affected by the theft, whether the theft occurred in the United States, or who the "service provider" was.

    The story was first reported by the San Francisco Chronicle.

    Bank of America previously lost data tapes containing records of 145,000 cardholders, most of whom were government or military clients. It was also hit by a scam in which bank employees conspired to steal and later sell 60,000 customer records to collection agencies.

    For the third time this year, Bank of America has lost confidential customer information. This time it's a laptop containing information about "Visa Buxx"...
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      Pediatricians Revise SIDS Prevention Recommendations

      To reduce the risk of Sudden Infant Death Syndrome (SIDS), Pediatricians are warning parents against letting infants sleep on their sides or backs and cautioning parents not to share a bed with their infant. In a recommendation that surprised some, the academy also endorsed the use of pacifiers.

      Despite major decreases in the incidence of SIDS over the past decade, the syndrome is still responsible for more infant deaths beyond the newborn period in the United States than any other cause of death during infancy.

      In an updated policy statement, the AAP said it no longer recognizes side sleeping as a reasonable alternative to sleeping while fully supine (lying on back).

      Studies have found that the side sleep position is unstable and increases the chances of the infant rolling onto his or her stomach. Every caregiver should use the back sleep position during every sleep period, the academy said.

      Bed Sharing

      Bed sharing is not recommended during sleep. Infants may be brought into bed for nursing or comforting, but should be returned to their own crib or bassinet when the parent is ready to return to sleep.

      However, there is growing evidence that room sharing (with the infant sleeping in a crib in the parent's bedroom) is associated with a reduced risk of SIDS. The AAP therefore recommends a separate but proximate sleeping environment.

      Research now indicates an association between pacifier use and a reduced risk of SIDS, which is why the revised statement recommends the use of pacifiers at nap time and bedtime throughout the first year of life.

      The evidence that pacifier use inhibits breastfeeding or causes later dental complications is not compelling enough to discredit the recommendation.

      However, it is recommended that pacifier introduction for breastfed infants be delayed until one month of age to ensure that breastfeeding is firmly established. In addition, if the infant refuses the pacifier, it should not be forced.

      There is a slight increased risk of ear infections associated with pacifier use, but the incidence of ear infection is generally lower in the first year of life, especially the first six months, when the risk of SIDS is the highest.

      The following have been consistently identified as risk factors for SIDS:
      • prone (lying on stomach) sleep position,
      • sleeping on a soft surface,
      • maternal smoking during pregnancy,
      • overheating,
      • late or no prenatal care,
      • young maternal age,
      • preterm birth and/or low birth weight and
      • male gender.

      Consistently higher rates of SIDS are found in black and American Indian/Alaska Native children -- two to three times the national average.

      The policy recommendations include:

      • Back to sleep: Infants should be placed for sleep in a supine (wholly on back position) for every sleep.

      • Use a firm sleep surface: A firm crib mattress, covered by a sheet, is the recommended sleeping surface.

      • Keep soft objects and loose bedding out of the crib: Pillows, quilts, comforters, sheepskins, stuffed toys and other soft objects should be kept out of an infant's sleeping environment.

      • Do not smoke during pregnancy: Also avoiding an infant's exposure to second-hand smoke is advisable for numerous reasons in addition to SIDS risk.

      • A separate but proximate sleeping environment is recommended such as a separate crib in the parent's bedroom. Bed sharing during sleep is not recommended.

      • Consider offering a pacifier at nap time and bedtime: The pacifier should be used when placing infant down for sleep and not be reinserted once the infant falls asleep.

      • Avoid overheating: The infant should be lightly clothed for sleep, and the bedroom temperature should be kept comfortable for a lightly clothed adult.

      • Avoid commercial devices marketed to reduce the risk of SIDS: Although various devices have been developed to maintain sleep position or reduce the risk of rebreathing, none have been tested sufficiently to show efficacy or safety.

      • Do not use home monitors as a strategy to reduce the risk of SIDS: There is no evidence that use of such home monitors decreases the risk of SIDS.

      • Avoid development of positional plagiocephaly (flat back of head): Encourage "tummy time."

      • Avoid having the infant spend excessive time in car-seat carriers and "bouncers." Place the infant to sleep with the head to one side for a week and then changing to the other.

      • Assure that others caring for the infant (child care provider, relative, friend, babysitter) are aware of these recommendations.
      Pediatricians Revise SIDS Prevention Recommendations...
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      Best Treatment for Acne? Take Your Pick

      Lotions, pills, antibiotics, drying agents -- what works best for teen-age acne? The envelope please.

      According to an article published in Lancet, it's pick your poison. Believe it or not, they all work about the same.

      Doctors studied about 650 teenagers with facial acne. They divided them into five equal groups. Each group received a different treatment.

      The treatments included two different types of Tetracycline, an oral antibiotic, or three different topical treatments -- benzylperoxide, a drying agent, and an antimicrobial called Clearasil, a combo cream with benzyl peroxide and erythromycin mixed, or a regimen of erythromycin cream in the morning and benzyl peroxide in the evening.

      In summary, just about any combination you can imagine and you know what? After about 18 weeks, each of the groups had about 50 percent of the teenagers get better, especially in the first few weeks.

      While the studies did not look at acne on the body or severe acne, the conclusion seems clear: If you have acne, talk to a dermatologist about your potion, all of which will work about the same.

      Best Treatment for Acne? Take Your Pick...
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      Blockbuster Abandons Customer Data on NYC Street

      When video rental giant Blockbuster closed one of its stores on Lexington Avenue in New York City, it left a parting gift for enterprising identity thieves and scam artists -- boxes and boxes of customer membership applications, containing valuable personal information, all sitting on the sidewalk in plain sight.

      Several boxes of membership applications were found sitting outside the store, all intact, and containing personal data ranging from customer names and dates of birth to credit card numbers and Social Security numbers, the Daily News reported.

      Anyone who found thiedata could use it to wreak havoc in the customers' lives, from applying for credit in their name, to draining their bank accounts, to selling their addresses to collection agencies or data brokers. The Daily News called it a "fraud gold mine."

      Reporter Tracy Connor collected as many files as she could and alerted the store manager that there were still documents outside.

      "He didn't seem too interested," she recalled. "He got really belligerent and slammed the door in my face."

      The Daily News staff is in the process of destroying all the documents they collected from the store site, Connor said.

      The manager formerly in charge of the store blamed New York City's Sanitation Department for not picking up the boxes, but failed to account for why the data wasn't shredded or destroyed prior to disposal.

      The closed store's phone line was disconnected as of Tuesday, Oct. 11th, and no forwarding message or contact information was provided. Blockbuster media relations spokesperson Randy Hargrove stated that the assistant store manager in charge of the data was "terminated."

      In an interview with ConsumerAffairs.com, Hargrove called the data's sloppy disposal an "unfortunate and isolated incident."

      Blockbuster has taken several steps to ensure its customers records are kept private, including physically securing records under "lock and key" and discontinuing the practice of asking for applicants' Social Security numbers in late 2003, said Hargrove. The spokesman also claimed that new member applications were only retained for 90 days.

      When asked how it was that many of the applications from the Lexington store -- presumably received in the last 90 days or so -- contained customers' Social Security numbers, Hargrove said that "the store may have been using old or incorrect applications."

      "We're looking into that," he said.

      Proper disposal of customer data is essential to ensure the records are not stolen or sold by identity thieves and scammers. The abandonment of customer data by the Credit Bureau of Topeka and the Experian Credit Bureau provided a frightening look at how easily individual data records can exposed to misuse if they are not properly disposed of.

      When video rental giant Blockbuster closed one of its stores on Lexington Avenue in New York City, it left a parting gift for enterprising identity thieves...
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      U.S. Fears Devastating "Bird Flu" Pandemic

      The U.S. Government is concerned about a possible pandemic flu outbreak

      The U.S. Government is concerned about a possible pandemic flu outbreak and has drafted a report declaring that the country is completely unprepared for a devastating impact, according to a report in the New York Times, which said it has obtained a copy of the unreleased Bush Administration draft.

      Specifically, the report cites concerns about Avian, or so called bird flu, which has surfaced in parts of Asia. Bird flu was first identified in South Korea in December 2003. The most recent cases were found in Romania on Saturday.

      Bird flu is an infection caused by avian (bird) influenza viruses, according to the U.S. Centers For Disease Control and Prevention. These flu viruses occur naturally among birds, though wild birds usually do not get sick from them. However, bird flu is very contagious among birds and can make some domesticated birds, including chickens, ducks, and turkeys, very sick and often kills them.

      Humans normally dont get sick from bird flu, though there have been a few cases of human illness since 1997, according to the CDC. A total of 65 people in Asia have died from bird flu since 2003.

      The draft Bush Administration report expresses the worry that if the virus mutates and jumps to the human population in Asia, it could quickly spread to the United States because of international travel. If that happens, the report warns of what could be the worst disaster in the nations history.

      According to the Times report, the document suggests hospitals would be overwhelmed, riots would sweep vaccination clinics and more than a million Americans could die.

      The plan, which has been years in the making and may be released in the coming weeks, makes no specific mention of government of military responses, according to the newspaper. It mentions the use of quarantines and travel restrictions, but acknowledges they would likely be ineffective in stopping a pandemic.

      Serious Business

      A flu pandemic is a global outbreak of disease that occurs when a new influenza A virus appears or emerges in the human population, causes serious illness, and then spreads easily from person to person worldwide. Pandemics are different from seasonal outbreaks or epidemics of influenza.

      Seasonal outbreaks are caused by subtypes of influenza viruses that are already in existence among people, whereas pandemic outbreaks are caused by new subtypes or by subtypes that have never circulated among people or that have not circulated among people for a long time. Past influenza pandemics have led to high levels of illness, death, social disruption, and economic loss.

      Currently, the CDC assesses the risk of a bird flu pandemic as low, pointing out that the strain of virus found in Asia has not been found in the United States. However, the agency says it is working with domestic and international health agencies to develop and refine techniques to identify new viruses develop antiviral stockpiles.

      U.S. Fears Devastating ...
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      Errors Common In Cancer Diagnosis

      Its hard enough battling cancer, but a new report in the medical journal Cancer maintains that doctors make diagnosis errors in more than one in ten cases of the disease. The report says in many of these cases, the error resulted in patient harm.

      Researchers at the University of Pittsburgh say, until now, not much has been written or studied on cancer misdiagnosis. In particular, doctors have not had a good grasp of how common the problem is and what impact it has had on patient health.

      When the research team looked at diagnosis mistakes among cancer patients at four hospitals, they found the frequency of errors ranged from 1.79 percent to 9.42 percent for gynecological cases and from 4.87 percent to 11.8 percent for other cases. They found that some errors were significantly linked to particular hospitals but did not name them.

      The report said nearly half the mistakes were caused by misinterpreting test results, while the rest were mostly attributable to poor sampling of tissue.

      The researchers said they found a significant number of the errors nearly half had traumatic consequences for the patient. Harm from the errors ranged from putting the patient through unnecessary tests, to losing a limb, to death.

      The authors of the study say they compiled the research in an effort to help those who want to standardize cancer diagnostic and treatment methods.

      Its hard enough battling cancer, but a new report in the medical journal Cancer maintains that doctors make diagnosis errors in more than one in ten cases ...
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      St. Louis Researchers Find Cell Phone Radiation Doesn't Promote Cancer

      Motorola-funded study finds cell phone radiation doesn't activate the stress response in mice

      Weighing in on the debate about whether cell phones have adverse health effects, researchers at Washington University School of Medicine in St. Louis have found in a study funded by Motorola that the electromagnetic radiation produced by cell phones does not activate the stress response in mouse, hamster or human cells growing in cultures.

      The stress response is a cellular protection mechanism set into motion by various adverse stimuli, including heat shock, heavy metals, and inflammation. High levels of the stress response in cells are thought to result in changes associated with malignancy.

      "We performed highly sensitive, extremely well-controlled tests on living cells irradiated with energy like that from mobile phones, but at levels 5 to 10 times higher than those set for the devices by regulatory agencies," says Andrei Laszlo, Ph.D., associate professor of radiation oncology and a researcher at the Siteman Cancer Center at Barnes-Jewish Hospital and Washington University School of Medicine.

      "We see no indication that factors involved in the stress response increase their activity as a result of such exposures," Laszlo said.

      Prior research into the effect of cell phones on the stress response has been fraught with contradictory results, which in part may be due to less-than-ideal experimental conditions. For example, in the past it has been difficult to prevent temperature changes caused by microwave exposure.

      Because heating of tissues has been shown unlikely to be a component of the effect of cell phone radiation on biological systems, Laszlo and his group sought to reduce as far as possible any heating of the cells in culture during the study. Using sensitive equipment that continuously monitored and adjusted temperature, they were able to keep temperature variations to plus or minus 0.3 degrees centigrade.

      The researchers tuned their room-sized irradiator to emit cell phone frequency microwaves for both FDMA (frequency domain multiple accessused for cell phone analog signals) and CDMA (code domain multiple accessused for digital signals) modulation at power outputs standard for mobile phones. The large size of the irradiator enabled them to expose a large number of living cells so that sufficient material could be collected for highly accurate measurements.

      "We were able to combine very good physics with very good biology as a consequence of the expertise of our research team," Laszlo says.

      To test whether the cell's stress response was activated by irradiation, the group looked for activation of a protein called heat shock factor (HSF). The activation of HSF is a necessary first step in the cascade of events that induce the stress response.

      Under both short-term exposures (5-60 minutes) and long-term exposures (1-7 days), all tests on the cells in culture showed that HSF was not activated by microwave radiation of either type, indicating the stress response was not initiated.

      "We've done extensive studies on the effect of cell phone radiation in our research group in the past as well," Laszlo says. "Dr. Joseph Roti Roti and his colleagues have examined the potential for DNA damage and cellular transformation, and the effect of microwave radiation on animals has been studied also. Now we've conducted this study of the molecular mechanisms of the stress response."

      "In every case we've looked at, our group saw no biological effects of cell phone radiation that could cause cancer."

      St. Louis Researchers Find Cell Phone Radiation Doesn't Promote Cancer...
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      Hard to Escape from Negative Option Marketing

      Simple Escapes Morphs into Vertrue

      Many a consumer has been perplexed by a charge on their bank or credit cards for something called "Simple Escapes." Usually it is for a small amount, but the consumers profess to have no recollection of ever hearing of it - much less agreeing to purchase it.

      The company behind Simple Escapes, the subject of consistent complaints to consumer Web sites and government agencies over a number of years, is Vertrue, based in Stamford, Connecticut. Until late 2004, it was known as MemberWorks.

      Vertrue is what is known as a member services marketing company. Similar to a buying club, it enrolls consumers in its membership programs that provide discounts on travel, health services, clothing and other consumer products and services.

      The company was founded in 1989 by a Gary Johnson, who launched his business career while still an engineering student at Harvard Business School in 1981. According to a company press release, Johnson helped start CUC International, a membership services business, in 1983. Johnson was the recipient of the Ernst & Young Entrepreneur Of The Year Award for Southwest Connecticut/New York Hudson Valley in 1999.

      By that time, MemberWorks had become a successful, fast-growing marketing firm with over $200 million in annual revenue. It was also about that time that MemberWorks began to run afoul of consumer authorities for its marketing practices. Specifically, its telemarketing practices.

      Minnesota Objects

      In June 1999 Minnesota Attorney General Mike Hatch sued US Bank, charging it had sold its customers' private financial information to MemberWorks for $4 million, plus a commission on sales to those customers. The state reached a settlement, under which the bank paid $3 million and agreed to stop sharing customers' financial information to marketers of non-financial products, to give customers notice and an opportunity to "opt out" of the sale of their financial information to market financial products, and to provide certain refunds to customers charged by telemarketers who bought their account numbers.

      Hatch also sued MemberWorks, charging it used a deceptive and misleading telemarketing sales pitch to solicit these consumers to join a variety of membership clubs allegedly offering discounts on health products, entertainment and travel.

      The resulting settlement required the company to change its telemarketing sales scripts, to provide advance notice of any upcoming membership renewal charges, and to give double refunds to consumers whom the company failed to tape-record accepting the membership. The company paid $75,000 in costs but admitted no liability.

      In the Minnesota case, consumers were found to be at a distinct disadvantage. When engaging a telemarketer, they had no idea that the person on the other end of the line - thanks to the deal with US Bank - already had access to their credit card or bank account information. As a result, many consumers were billed for services they say they did not intend to buy.

      New York Is Next

      In September 2000 MemberWorks reached agreement with the State of New York, settling charges of telemarketing abuses in connection with its sales of lifestyle club memberships which offered consumers alleged savings on a variety of products and services involving entertainment, shopping, home improvement, and health care.

      The settlement, according to New York Attorney General Eliott Spitzer, arose from his office's continuing investigation of banks and credit card issuers that violated their cardholders' privacy rights by selling their personal account information to telemarketers in return for a substantial commission.

      In conjunction with the New York settlement, MemberWorks announced it would implement "industry leading marketing practices" in New York.

      "The agreement with the New York Attorney General's office was not based upon any specifically identified consumer complaints, but rather the general concern that some consumers may be confused by disclosures made while marketing the programs," the company said in a release.


      In February 2001 MemberWorks reached a settlement with the Nebraska Attorney General's Office over its marketing practices. Again, MemberWorks, in a press release, attributed the problem to confused consumers, and pledged to make its policies clearer. It also announced it was implementing its "industry leading marketing practices" nationwide.

      "MemberWorks has agreed to put specific disclosure language within its telemarketing call scripts, clarifying to consumers when charges will occur and will also notify consumers by mail prior to placing a membership renewal charge on a consumer's account," the company said in a press release.

      California & the Negative Option

      Three months later, MemberWorks settled similar consumer complaints with the State of California. This time, MemberWorks and its marketing partner Sears were called to account for the manner in which MemberWorks club memberships were sold. California Attorney General Bill Lockyear found that consumers were confused when they were enrolled in the clubs as part of their transaction at a Sears store.

      "Specifically, the complaint alleges that consumers were not informed that defendants had the ability to charge their credit cards without the consumers providing their credit card numbers or ever signing anything," the Attorney General's Office said.

      "After purportedly agreeing to a trial period, consumers received a membership packet in the mail, which disclosed the negative option feature and the other terms of membership in tiny 6 to 7 point type."

      The so-called "negative option" is a provision in which consumers are charged for something unless they take some type of action to inform the company they do not want it. By no means limited to MemberWorks, the negative option is a growing tool used by marketers that often catches consumers unaware.

      While not admitting liability in the case, MemberWorks paid the State of California $1.5 million in civil penalties and costs while Sears was fined $500,000.

      Why Stop Now?

      Despite the litigation with Minnesota, New York, Nebraska and California, MemberWorks was a company on the fast track. In June 2001 it reported annual revenue of $474.7 million, up 44% from the previous year. Its membership base was up 14% to nearly eight million.

      In late 2002 MemberWorks announced a major marketing agreement with America Online, the once dominate Internet Service Provider, at that point struggling amidst the dot-com implosion. The agreement gave MemberWorks the opportunity to market its membership clubs to millions of AOL subscribers.

      "Under the agreement, MemberWorks will market nine of its membership programs across the AOL service, providing AOL members access to merchandise offers and savings on a comprehensive mix of top-tier, brand-name benefits. A wide variety of promotional offers designed especially for AOL members will be made available across the entire AOL service," MemberWords said in a press release.

      ClickZ News, an online marketing trade publication, reported that the deal called for MemberWorks to pay AOL $1 million in December 2002 and at least $3 million the following year. The report noted that it was MemberWorks' second major deal that month. Two weeks earlier it had signed a deal with Victoria's Secret to market to its customers.

      It wasn't long before ConsumerAffairs.com began to get complaints, like this one from Dwight, of Salem, West Virginia, received in February 2003:

      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."

      Florida Cries Fraud

      In October 2003, following a three year investigation, Florida Attorney General Charlie Crist sued MemberWorks for violations of state consumer protection laws. The company objected, saying the complaint was based on past policies that had been rectified since the litigation of 2000 and 2001.

      "The company believes that the allegations of the complaint are unfounded and the company intends to vigorously defend its interests in this matter," MemberWorks said in a statement.

      Crist disagreed. His complaint alleged that MemberWorks violated Florida's Unfair and Deceptive Trade Practices Act by engaging in "various deceptive practices," including:
      • charging consumers credit card accounts without authorization, a practice referred to as cramming;
      • offering free gifts without disclosing financial requirements;
      • resisting consumer requests to cancel memberships or to obtain refunds; and
      • other abusive telemarketing practices.

      "Charging customers for products without their knowledge is fraud," said Crist. "These citizens were unknowingly victimized and deserve to be reimbursed."

      Noting that the company reported annual revenue of $400 million, the Florida Attorney General's Office said its investigation estimated that 50 percent of all sales were reported as "unauthorized," an astounding figure and a charge the company hotly denied.

      A year later, MemberWorks settled the Florida case by paying $950,000 and agreeing to double refunds to Florida consumers charged for MemberWorks clubs without proof they consented to the charge. However, it was made under protest, as the company made clear it expressly denied the charges.

      Today, Vertrue markets a number of membership products in partnership with some of the nation's best known retailers and Web sites, including Classmates.com and AOL. It staunchly defends its business practices, insisting it is abiding by all consumer protection laws. Yet, the consumer complaints haven't stopped. In fact, they are not substantially different from those consumers have leveled in earlier years.

      "My daughter was on Textbooks.com last January. According to Simple Escapes she signed up for their service on a pop-up window in Textbooks.com. She claims she did not sign up for anything," said Matt, of Three Rivers, Michigan.

      "I am being billed for something called Simple Escapes that I never signed up for and I can't find anyway for this to stop happening," said Johnnie, of Toms River, New Jersey.

      "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. I looked this up on the internet and found this site here with all the other complaints. I can't believe this," said Allison, of Pleasant Hill, California.

      The above three complaints were received at ConsumerAffairs.com since June 30, 2005. Textbooks.com says that at its insistence, MemberWorks has made its charges more obvious to consumers coming from Textbooks.com's Web site.

      In January of this year, we received a complaint from Michelle, of Reston, Virginia, who, with the help of Wachovia Bank, was able to receive a full refund after being charged for two Vertrue memberships she says she never enrolled in. In a follow-up interview with ConsumerAffairs.com, Michelle said she believes the company got her credit card information when she purchased an item from a TV shopping channel in November 2004.

      "The following month a telemarketer called me and offered a $50 gift card at Target. He said I just had to listen to some of his offers, and that even if I declined all of them I would still get the gift card," she said.

      Michelle said she clearly declined all the offers but the following month she received her debit card statement with a $19.95 charge to Simple Escapes. She called Wachovia Bank, and a customer service representative conferenced her on a call to Simple Escapes.

      "They said that I had verbally agreed to enroll in the programs, but when I ask them to play the tape of the conversation, they couldn't do it. They ended up refunding the money," Michelle said.

      Fair Credit Billing Act

      Michelle, who said she never did receive the promised $50 Target gift card, was apparently able to extricate herself from the programs by demanding a "proof of purchase."

      The Fair Credit Billing Act requires banks and credit card companies to allow consumers to dispute a charge by demanding a proof of purchase. If a company cannot provide the bank or credit card company with proof that the product or service was actually ordered by the consumer, the bank or credit card company does not have to charge the consumer's account.

      Consumers who find themselves enrolled in Simple Escapes or any other membership program against their will should demand a proof of purchase from their credit card company, who will then be obliged to demand it from the marketing company. Sending this terse letter should also result in a speedy cancellation.

      How do you avoid getting signed up for something like Simple Escapes in the first place? Consumer experts suggest the following:

      • never talk to telemarketers;
      • avoid "free" or "trial" offers of anything;
      • don't fill out online surveys; and
      • carefully read the privacy policies of any e-commerce Web sites you patronize.

      If any Web site says it may share your financial information with third parties, it's a definite red flag.

      Similar to a buying club, it enrolls consumers in its membership programs that provide discounts on travel, health services, clothing and other consumer pr...
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      Credit Cards "Treacherous" For Consumers

      More Americans are carrying increasingly large credit card balances

      More Americans are carrying increasingly large credit card balances, and a leading consumer journal says it's become much harder to get out of the jaws of credit card debt.

      An investigation by Consumer Reports, appearing in the November 2005 issue of the magazine, says "cozy relationships" among lawmakers, federal regulators, and credit card issuers have made credit cards "more treacherous" for consumers.

      The investigation reveals that credit card issuers have imposed interest rates in excess of 30 percent on consumers whose only offense might be a late payment to another creditor. The report also exposes other practices by issuers of credit cards that pose hazards for consumers, including:

      • Battered card holders with fees and penalties that now often hit $39.
      • Reduced grace periods when new purchases are free of interest.
      • Lobbied successfully to weaken protections for cardholders.
      • Increased fees for tardiness and for going over the credit limit.
      • Reduced minimum payments, thereby increasing the debt.

      Unfortunately for consumers, there have been no limits on interest rates for years, so a temptingly low 1.9 percent APR can morph into double-digit territory at the whim of the credit card company. Or worse, it can climb beyond 30 percent when a consumer does nothing more than sign up for a new credit card, inquire about a car loan, or make a single late payment to any creditor.

      "Consumers are sometimes offered a 0 percent introductory rate, but they may not realize that it only applies to transferred balances," says Marlys Harris, finance editor at Consumer Reports. "Then they pile up purchases which accrue interest at, say, 18 percent a year."

      Even consumers among the 45 percent of cardholders who pay balances in full each month are not off the hook either. As interest rates rise, issuers of credit cards are seeking ways to eke out income from them by charging additional fees for services or penalties for dormancy -- in other words, a few for not using the card.

      Unfortunately, there is little help for consumers. About 45 percent of credit card issuers force customers to submit disputes to arbitration. Regulators aren't likely to be of much help either. The majority of credit card issuers are overseen by a government agency funded by the industry.

      What to Do

      For now, the report says, the greatest power that consumers have is their own hands. In addition to supporting consumer-friendly issuers, Consumer Reports suggests the following:

      • Choose carefully. Start by reading the table of the 10 most consumer-friendly credit cards in the November 2005 issue of Consumer Reports.
      • Examine the offers. Scan the Schumer box, named for Sen. Charles Schumer, D-NY, who sponsored a law mandating disclosure of all rates in a type size that consumers can read.
      • Negotiate better terms. If the credit card imposes a late fee or a rate hike, ask for a waiver.
      • Pay on time. Mail payments as soon as the bill arrives.
      • Complain. Register a complaint with your state attorney general.

      Credit Cards Treacherous For Consumers...
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      SUV Era May Be Ending

      Consumers Shunning New and Used SUVs, Trade In Value Drops

      The era of $3 gas is displacing the era of the SUV. Consumers are lining up to try to unload their big SUVs for fuel efficient vehicles. Trouble is no one is buying, at least not now.

      The resale value of used SUVs has dropped ten percent and dealers are offering as much as 30 percent less than blue book value for proposed trades. The sales of new SUVs are off as well, tumbling 50 percent in September.

      The Big Three summer sales extravaganza had already driven down the resale value of most used vehicles while the gas price run-up is hitting large SUV very hard.

      As a telling sign of the times the Toyota Prius Hybrid outsold every large SUV on the market except the Chevy Tahoe in September.

      AutoPacific, a California consumer research firm found that 28 percent of SUV owners said they will shift to another type of vehicle for their next purchase. Forty-four percent for the people responding said they would switch to small cars.

      Low trade-in values will mean higher car payments. A fuel efficient hybrid can turn out to be more expensive to operate even in an environment of rising gasoline price if one pays too much for it.

      Many SUV drivers are not alone in their desire to unload their vehicle. Ford, the second-largest US automaker, is offering rebates of as much as $3,000 on its sports-utility vehicles as the company seeks to revive sales.

      The shift in consumer preferences presents a huge marketing challenge for GM, which is still counting on large SUVs to help spark a turnaround for the company.

      Both Ford and GM rely on SUVs to make up for money-losing passenger car operations. The two automakers are already dealing with losses in North American automotive operations caused in part by years of sliding market share.

      For the most part, that market share has shifted to Asia and Japan where Toyota and Honda or the leaders in hybrid technology and production.

      Ford is preparing a major financial restructuring that is likely to be announced later this month and includes several plant closings and thousands of job cuts.

      GM is negotiating with the United Auto Workers in an effort to cut health-care costs.

      SUV Era May Be Ending...
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      Bank of America Tells Customers to "Keep the Change"

      Higher Debit Charges to Merchants May Offset Savings

      At a time when the rate of personal money saving has reached record lows, how does a bank convince its customers to put money aside? In Bank of America's case, it tells them to "keep the change."

      The Charlotte, NC-based financial giant's new "Keep the Change" program enables Bank of America's debit card holders to automatically deduct a small portion of a purchase into a linked savings account.

      Under the terms of the program, if a shopper pays $3.25 for an item, the total cost of the item is rounded up to the nearest whole dollar -- $4.00 in this case - and the 75-cent difference is automatically transferred to their savings account at the end of the day.

      Bank of America said it will match 100 percent of each transfer for the first three months, and will contribute five percent a year thereafter.

      The new system is being touted as a way for customers to save money in a simple fashion. Bank of America executive Diane Morais calls it "an electronic change jar. People can now turn those everyday purchases for groceries, gas and meals into a simple way to save."

      It also encourages customers to use their debit card.

      Banks earn a fee for every use of a debit or credit card in a transaction. These fees, called "point of sale fees" (POS) range from 25 cents to $2 per transaction. The cost of processing the transaction is borne by the retailer, who may in turn charge the customer more for goods they purchase.

      Mitch Goldstone, owner of online photo store 30 Minute Photo and an advocate of lower fees for card transactions, calls the new program "an underhanded scheme."

      "This is going to lead to higher charges and more costs that will be on the backs of consumers and merchants," he said.

      Goldstone said that a substantial number of debit card transactions, no matter their size, are processed as credit card transactions, which have even higher fees and end up costing consumers more in the long run.

      Goldstone is one of several plaintiffs in a series of lawsuits against Visa, MasterCard, and several major banks, including Bank of America, that are out to reduce or remove the "interchange fee" from credit card transactions.

      Ed Mierzwinski, consumer advocate and program director for the U.S. Public Interest Research Group (PIRG), expressed similar sentiments about the new program.

      "The savings are diminished compared to how much more the bank will make in these transactions. They are trying to increase the use of debit cards to increase their profits," Mierzwinski said.

      The new system is being touted as a way for customers to save money in a simple fashion. Bank of America executive Diane Morais calls it "an electronic cha...
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      Pure Farms Chicken Sausage, Beef Wieners Recalled

      October 4, 2005
      New Packing Co, Inc., a Chicago, firm, is voluntarily recalling approximately 1,076 pounds of chicken sausage products and beef wieners that may be contaminated with Listeria monocytogenes, the U.S. Department of Agriculture's Food Safety and Inspection Service announced.

      The products subject to recall are:

      • 12 ounce packages of "PURE FARMS ALL NATURAL COOKED SKINLESS SMOKED CHICKEN ANDOULLE SAUSAGE." Each package bears the establishment number "P-21280" inside the USDA seal of inspection and the sell by date "11.07.05."

      • 12 ounce packages of "PURE FARMS ALL NATURAL COOKED SKINLESS CHICKEN BRATWURST." Each package bears the establishment number "P-21280" inside the USDA seal of inspection and the sell by date "11.07.05."

      • 12 ounce packages of "PURE FARMS ALL NATURAL COOKED SKINLESS CHICKEN BREAKFAST LINKS." Each package bears the establishment number "P-21280" inside the USDA seal of inspection and the sell by date "11.07.05."

      • 12 ounce packages of "PURE FARMS ALL NATURAL COOKED SKINLESS CHICKEN ITALIAN SAUSAGE." Each package bears the establishment number "P-21280" inside the USDA seal of inspection and the sell by date "11.07.05."

      • 12 ounce packages of "PURE FARMS ALL NATURAL COOKED SKINLESS CHICKEN POLISH SAUSAGE." Each package bears the establishment number "P-21280" inside the USDA seal of inspection and the sell by date "11.07.05."

      • 12 ounce packages of "PURE FARMS ALL NATURAL COOKED SKINLESS UNCURED CHICKEN WIENER." Each package bears the establishment number "P-21280" inside the USDA seal of inspection and the sell by date "11.07.05."

      • 16 ounce packages of "PURE FARMS ALL NATURAL COOKED UNCURED BEEF WIENER." Each package bears the establishment number "EST. 21280" inside the USDA seal of inspection and the sell by date "11.05.05."

      The chicken sausage products and beef wieners were packaged on September 22 and were distributed to retail establishments in California, Florida, Illinois, Maine, Massachusetts, New Jersey, New York and Washington. All cases bear the lot code &quot265."

      The problem was discovered through FSIS microbiological sampling. FSIS has received no reports of illnesses associated with consumption of the product.

      Consumption of food contaminated with Listeria monocytogenes can cause listeriosis, an uncommon but potentially fatal disease. Healthy people rarely contract listeriosis. However, listeriosis can cause high fever, severe headache, neck stiffness and nausea. Listeriosis can also cause miscarriages and stillbirths, as well as serious and sometimes fatal infections in those with weakened immune systems, such as infants, the elderly and persons with HIV infection or undergoing chemotherapy.

      Chicken Sausage, Beef Wieners Recalled...
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      Texas Shuts Down Debt Elimination Scheme Targeting Hurricane Evacuees

      Texas has shut down a planned seminar scheduled last Saturday at an Austin hotel that promised hurricane victims and others the complete elimination of debt in exchange for a $5,000 up-front deposit.

      The company, through a Web site known as Bankopp.com, required the wiring of the one-time deposit to initiate the process that would allow the consumer to become debt-free by December. Those interested were to have been given details at the Austin seminar, which was never held.

      This is an example of the kind of outlandish fraud targeting hurricane victims and others in debt that I am eager to pursue in court, said Texas Attorney General Greg Abbott. Those unfortunate Texans who are beset with indebtedness due to recent disasters have legitimate channels in place that can help them. These bogus operators have nothing to offer but more misfortune and heartache.

      Bankopp.com and operators David J. West, Roxana Suadi West and Carlos M. Suadi were ordered by a Travis County District Court to immediately cease a planned seminar scheduled for Saturday.

      The operators canceled the event and fled the scene when they were informed by hotel security that the Attorney General had filed this action. The temporary restraining order will remain in effect until Oct. 12, when a temporary injunction hearing is set.

      The Bankopp.com operation, using the corporate name Pydia, Inc., promised the elimination of debt by December with the help of an unidentified national bank specializing in debt forgiveness. The defendants claimed the scheme was possible because the bank would profit from the venture through fractional banking or debt forgiveness banking practices.

      However, to become enrolled, consumers would be required to wire a one-time $5,000 fee to an account in the name of Del Sur International Holdings, which the Attorney Generals investigators traced to Panama.

      Bankopp.com referred to the deposit as a placeholder, giving the consumer an opportunity to retain his or her place in line to ensure debt erasure by the bank. The bank would then use the deposit to defray the costs of the entire process of eliminating debt.

      Once the cumulative debt of applicants reached $100 million, then the bank would begin making loans to pay off individual debts. Once a consumer paid off his debt, the loan would be forgiven.

      The defendants supposedly hatched the plan in late September, using various media to publicize a toll-free number to the Bank Opportunity Information Line and urging consumers to call the number and attend the free open seminars.

      The defendants ramped up their campaign via radio commercials in southern states after hurricanes Katrina and Rita. The Attorney General sent a warning to the states of Louisiana and Tennessee about the company and its practices.

      The lawsuit seeks restitution to consumers who paid this deposit via wire transfer, as well as civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act, attorneys fees and investigative costs.

      Texas Shuts Down Debt Elimination Scheme Targeting Hurricane Evacuees...
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      Florida Accuses Island Food Stores of Gas Price Gouging

      Says company improperly raised prices after Katrina

      Florida Attorney General Charlie Crist has filed the states second lawsuit over price gouging from Hurricane Katrina, accusing a Tallahassee gas station of unconscionably raising its gasoline prices 72 cents per gallon during the state of emergency.

      Crists complaint alleges that Island Food Stores, Ltd., the Jacksonville-based fuel retailer that owns the Tallahassee station, improperly raised its prices even though the increases were not forced by market conditions at the time.

      Island Food Stores owns and supplies BP/Amoco fuel to the station at 3436 Thomasville Road in Tallahassee. Island sets prices at its stations pumps.

      Because of the stations convenient location adjacent to a major interstate leading to and from the hurricane-impacted area, both Hurricane Katrina victims fleeing the storm and emergency personnel trying to reach the affected areas were potential victims of the gouged prices.

      Shortly following Katrinas devastation, the Attorney Generals Office received more than 1800 complaints about the skyrocketing prices of fuel. These complaints prompted Attorney General Crist to launch a statewide investigation, sending teams of investigators and sworn law enforcement personnel to locations throughout Florida to determine whether the rapid rise in gas prices met the legal definition of gouging.

      While responding to complaints in Tallahassee, investigators noticed the Island stores exceptionally high prices and discovered that the station allegedly had hiked prices more than 70 cents per gallon for regular unleaded gasoline over a three-day period.

      "Hurricane Katrina was one of the worst natural disasters our country has ever faced. People fled for their lives, many of them seeking refuge in Florida," said Crist.

      "In addition, Florida served as a staging area for relief efforts going out toward the afflicted area. While I am proud of our state for providing a haven to those in need and sending help where required, it infuriates me that price gougers would target victims under such desperate circumstances. We will not let this stand."

      Between August 31 and September 1, the price of regular unleaded gas sold at the Island station increased a total of 62 cents per gallon, even though the station had received no delivery of regular unleaded gas and encountered no increase in total costs. Midgrade gasoline increased 72 cents per gallon between August 31 and September 2, with no delivery or increase in cost to the station.

      The stations profit margins tripled for regular unleaded gas from August 30 to September 1, and more than doubled for premium gas and tripled for midgrade gas from August 30 to September 2.

      Island is charged with violating Florida's price gouging statute, which carries a maximum fine of $1,000 for each occurrence up to a total of $25,000 for multiple violations committed in a single 24-hour period.

      Additionally, the business is charged with violating Florida's Unfair and Deceptive Trade Practices Act, which carries a penalty of $10,000 or $15,000 for any victims over the age of 60.

      As of today, the Attorney General's Office had received close to 4,000 complaints about skyrocketing gas prices through its toll-free consumer hotline (1-866-9-NO-SCAM, or 1-866-966-7226) and email correspondence.

      On September 9, Attorney General Crist filed a lawsuit against a Swifty Stars retail gas station in Tallahassee, with allegations similar to those against Island Food Stores. As part of his ongoing investigation into the rising price of gasoline, Crist has also subpoenaed four gasoline distributors seeking records of their deliveries into Florida. Those companies are Colonial Oil Industries, Murphy Oil USA, Motiva Enterprises (a subsidiary of Royal Dutch Shell) and Tate Oil Company.

      During the record-setting 2004 hurricane season, the Attorney General's price gouging hotline received 8,911 complaints. After receiving those complaints, the office initiated 58 formal investigations and filed 13 price gouging lawsuits against hotels, generator businesses, tree removal companies and other businesses. To date, the Attorney General's Office has recovered approximately $725,000 in restitution for Florida consumers.

      Florida Accuses Island Food Stores of Gas Price Gouging...
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      New Jersey Charges Stations, Oil Companies with Gas Price Gouging

      New Jersey has filed lawsuits against oil companies and independent gas-station operators for price violations during the Hurricane Katrina crisis

      New Jersey has filed lawsuits against oil companies and independent gas-station operators for price violations during the Hurricane Katrina crisis.

      Companies that prey on hard-working families through fraudulent practices should feel the full force of the law, said Acting Governor Richard J. Codey. Katrina was a devastating hurricane not a financial windfall for the shameless.

      Oil companies Hess, Motiva Shell, Sunoco and various independent gas-station operators are charged with violating the State Motor Fuels Act and Consumer Fraud Act through their pricing practices.

      The violations found at both company-owned and -operated and independently-owned gas stations include multiple price changes occurring during a 24-hour period. Fueled by motorists inquiries and Governor Codeys direction, the State Office of Weights and Measures, as well as county and municipal inspectors, increased station inspections and monitored the sharp increase in gasoline prices in the days before the Labor Day weekend and Hurricane Katrinas landfall.

      The States four lawsuits, filed in State Superior Court in Mercer County, charge that the defendants violated New Jerseys laws by:

      • revising gas prices at the pump more than once every 24 hours;

      • failing to display signs for motor fuel prices;

      • failing to maintain books and records;

      • failing to provide access to books and records;

      • engaging in Unconscionable Commercial Practices; and

      • violating advertising regulations.

      We're going after these oil companies and gas station owners to the fullest extent of the law, Attorney General Peter C. Harvey said. Consumers are at the mercy of gasoline suppliers and retailers, because most people need gas to drive to work and run essential errands on a daily basis. We will not allow businesses to exploit natural disasters such as Hurricane Katrina by inflating prices at the pump in violation of New Jersey's laws.

      The independent station owners named in the lawsuits sell Citgo, Hess, Shell and Sunoco brand gasoline.

      Also under the direction of Governor Codey, state, county and municipal Weights and Measures inspectors have been proactively monitoring operations at gas stations, as well as investigating complaints filed by motorists, Consumer Affairs Director Kimberly Ricketts noted.

      Investigators from the State Office of Consumer Protection also are working with Office of Weights and Measures inspectors. I want to commend the motorists who contacted their local office or the State Office of Weights and Measures and filed complaints, Director Ricketts said. Their attention to multiple prices increases occurring during a single day, of roadside price signs not matching the price set on the pump and other violations led inspectors to problem locations.

      Consumers want to know why gas prices skyrocketed overnight as Hurricane Katrina made landfall but then only slowly inched downward as oil prices fell several dollars a barrel in the following days, Ricketts added. There seems to be a speed aberration that even Einstein would have difficulty understanding.

      Violations of the Motor Fuels Act carry a $50 to $200 penalty. Violations of the Consumer Fraud Act, which include unconscionable commercial practices and false or misleading advertising, carry a penalty of up to $10,000 for a first offense and up to $20,000 for subsequent offenses. Deputy Attorneys General Brian Brennan and Jeffrey Koziar are representing the State in these matters.

      New Jersey Charges Stations, Oil Companies with Gas Price Gouging...
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