Current Events in July 2006

With the first 'Baby Boomers' turning 60 this year, state securities regulators warn that investment fraud among seniors, which already accounts for nearly half of all investor complaints received by state securities regulators, could grow significantly.

"The current landscape facing senior investors is littered with slick schemes and broken dreams," said Patricia D. Struck, Wisconsin Securities Administrator and President of the North American Securities Administrators Association (NASAA).

"While our cases of senior investment fraud may not make national headlines, they are devastating in their impact to the victims and their families," Struck told the Seniors Summit hosted by the U.S. Securities and Exchange Commission.

Struck released a survey which found that an estimated 44 percent of all investor complaints received by state securities regulators are made by seniors. In addition, the survey found that 31 percent of all enforcement actions taken by state securities regulators involve senior investment fraud.

In Florida, for example, an estimated 75 percent of all investor complaints are made by seniors. The survey also shows that in North Carolina an estimated 50 percent of all enforcement actions involve cases of senior investment fraud.

"These early results show that senior investment fraud is a serious ongoing problem and we fear that it will only grow without targeted enforcement and enhanced investor education," said Struck.

"We will not tolerate the victimization of senior investors by con artists. The most effective weapon against senior investment fraud is a one-two punch of aggressive enforcement efforts combined with financial education to protect investors from unscrupulous individuals," she added.

The NASAA survey also found that unregistered securities, variable annuities, and equity-indexed annuities are the financial products most commonly involved in senior investment fraud.

In Tennessee, an estimated 80 percent of the state's senior investment fraud cases involve unregistered securities, while California and Maryland estimated these cases make up 75 percent of its senior investment fraud caseload. Cases involving variable or equity-indexed annuities represented an estimated 65 percent of the caseload in Massachusetts, and 60 percent of the caseload in Hawaii and Mississippi.

"While my colleagues and I currently see a proliferation of troubling schemes involving unlicensed individuals promoting and selling unregistered securities to seniors, we are also concerned about the way in which variable and equity-indexed annuities are marketed and sold to seniors," said Struck.

"Variable and equity-indexed annuities are legitimate and suitable investments for some, but we believe these products are unsuitable for many retirees and are being aggressively pitched to seniors through investment seminars nationwide."

The sound of shattering glass is one of the most piercing, frightening and recognizable sounds on Earth. For owners of Martha Stewart outdoor patio tables from Kmart, that sound is pretty common.

ConsumerAffairs.com has received hundreds of complaints about the glass tops of these tables spontaneously shattering, launching shards as far as 12 feet from the table. Almost every day at least one person files a new complaint and the complaints are strikingly similar:

"I was sitting at my computer when I heard this tremendous crash," said David Potts of Marietta, Ga. "I went outside to see what it was and it looked like my patio was covered in ice. It was the glass from the table top.

"I got a couple of slivers of glass in my fingers while I was cleaning it and here I am a year later and I can still feel pain in the tips of my fingers," Potts said.

Federal and state agencies and the various manufacturers and retailers involved either know about the problem and refuse to discuss it, or deny knowing about it.

Almost all of these spontaneous explosions of glass take place in the summer. Within the summer months however, there is no telling when or if your Martha Stewart table is the next to blow. Sometimes the table shatters two weeks after it is purchased. Sometimes it takes two years.

Since it appears to be completely spontaneous, luckily, most people do not happen to be sitting at the table when it shatters. However, occasionally someone is unlucky enough to be nearby, and for those consumers, it's exponentially frightening:

"We had family visiting and we were just sitting there when it happened," said Trina Harris of Yakima, Wash. "I couldn't believe it just exploded right before our eyes!" Luckily, members of the Harris family only suffered minor scrapes and cuts.

Bob of Manchester, Conn. was putting his table away for the season when the glass top shattered in his hands. Fortunately he, too, only suffered minor cuts.

Many consumers complain that since the glass goes flying so far and is in such small shards, people are still stepping on and carrying pieces of glass in their feet years after the initial explosion.

Experts Baffled

When ConsumerAffairs.com contacted glass experts, they were baffled.

"I have no idea what would cause that," said Ken Toney from Custom Glass Corporation in Kittanning, Pa.

Toney said the glass for these tables is tempered which means it is essentially baked a second time which not only makes it harder, but makes it somewhat safer if it does shatter.

Instead of breaking into large, dangerous shards, tempered glass breaks down into smaller pieces, that although sharp, probably will not cause as much physical damage.

Toney later hypothesized that maybe the molecular components of the glass are causing it to shatter.

"Other countries are notorious for having lower glassmaking standards. If the glass is made overseas, there could be something wrong with the molecular structure of the glass."

In fact, the glass is made overseas. Actually, the whole table and all the parts are made in various countries in Asia. The Martha Stewart tables are designed by JRA Furniture in Cerritos, Calif. The JRA website proudly boasts that their furniture is made in "factories throughout Asia."

Although glass experts were rather baffled by the circumstances surrounding these JRA tables, ConsumerAffairs.com did find one possible explanation that would explain why, for the most part the tempered glass only shatters in the summer.

According to GlassResource.com, tempered glass contains more than 50 chemicals. If there are too many nickel-rich contaminants such as steel, even at microscopic levels, in the glass, they can combine with sulfur to create nickel sulfide inclusions.

"When glass is heat-treated, the nickel sulfide inclusions are modified into a form that grows or transforms with time and temperature," according to the website. "Once glass is installed and the nickel sulfide inclusions are solar heated, small cracks may develop from the inclusion. If these cracks penetrate the tension layer of fully tempered glass, the resulting release of energy will cause the glass to spontaneously break."

Not "If" But "When"

This supports Tony's hypothesis that the cause could lie in the molecular structure of the glass. If this is correct, it's not a matter of if the glass will explode, but when.

Unfortunately, although that hypothesis makes sense, the companies involved would not speculate. Kmart, Martha Stewart's company, OmniMedia, and JRA Furniture all refused to comment.

JRA Furniture refused to comment because there is a pending class action lawsuit over these tables. Attorney Richard Doherty of Horwitz, Horwitz and Associates in Chicago, is lead counsel in the suit.

Doherty originally filed the class action against Kmart and OmniMedia on July 27, 2005. However, he recently filed an amended complaint to include JRA, which he said will delay a final verdict until "late next year barring any further setbacks."

Doherty said he is performing tests to find out for certain why the glass is spontaneously shattering. Doherty said regardless of the results of the tests, "If it's manufactured and designed properly, it shouldn't spontaneously shatter and explode. ... No one would buy it if I said, 'By the way, these might blow up.'"

Doherty believes the defendants know these tables are dangerous, but continue to sell them to unknowing customers.

It appears from consumer complaints that Kmart has been selling these patio tables as far back as the summer of 2000 and possibly longer. ConsumerAffairs.com did not log its first complaint about the exploding glass until September 2003, but some of the complaints are about tabletops that blew up a year or two earlier.

JRA's tables are also sold at The Home Depot, Safeway, Target and Sam's Club. It is unclear how long JRA has been supplying tables to Safeway, Target and Sam's Club, since they refuse to talk.

However, Home Depot spokeswoman Connie Bryant said Home Depot began selling JRA tables in January 2004 under the trade name Hampton Bay.

Sure enough, on Jan. 16, 2006, ConsumerAffairs.com received a similar complaint about the Hampton Bay patio table.

"I have a Hampton Bay patio set that I purchased this summer," wrote Scott of Nottingham, Pa. "The glass table top shattered into thousands of little pieces. I am not sure why this happened. I just heard a loud sound of glass hitting the concrete. This should have not happened even if it is left outside. This table sets under a covered porch."

Not Just the Glass

Almost every story of spontaneous glass breakage is coupled with complaints about the overall terrible longevity of the patio furniture.

"I purchased the Victoria outdoor sofa, table and two rocking chairs a few years ago along with a bar table, four chairs and umbrella from the Martha Stewart outdoor collection," wrote Mikki of Aurora, Colorado.

"After the first year, we saw the horrific problems with all of the furniture. The bar table glass top completely shattered for no reason. The fabric on the bar stools is discolored and ripped. The supposed "weather resistant" coating on the sofa set was peeling and chipping off and the cushions faded and ripped."

What To Do?

Most consumers are at a loss when it comes to trying to find a way to replace the glass and tattered furniture. The dilapidation usually occurs soon after the one year warranty expires and as far as replacing the glass, Kmart and OmniMedia seem to be telling consumers either, 'tough luck' or, 'ask JRA for a replacement piece.'

Of course, a replacement piece from JRA will run the risk of exploding again, which has happened already to a few consumers.

Salespeople at Swift Glass in Elmira, N.Y. suggested buying a whole new table, somewhere else of course, because making a custom piece of tempered glass would probably cost more than $225.

Doherty said customers whose tables shatter should:
• File a complaint with ConsumerAffairs.com;
• Save at least some of the glass for proof; and
• Contact Kmart and JRA to make sure they know these tables are unsafe.

ConsumerAffairs.com president James R. Hood said consumers should be aware of the dangers of glass-top tables and avoid them, especially if they have small children in their family.

"Talk to any E.R. physician and they will tell you of the hours they've spent plucking bits of glass out of infants' faces, hands and, worst of all, eyes," Hood said. "Glass is just too dangerous."

Hood said consumers with glass-top patio table and coffee tables should find a local store that will make a plastic top that they can use as a replacement. It's cheap, durable and safe, he said.

Most of all, customers need to be patient for the result of the class action lawsuit which Doherty believes will cost the defendants millions of dollars due to the massive numbers of Martha Stewart patio tables sold. It typically takes years for such suits to move through the courts.

ConsumerAffairs.com called many state attorneys general who had received few if any consumer complaints about the tables and seemed generally unaware of the problem.

Nor was the U.S. Consumer Product Safety Commission quick to warn consumers of hte danger.

The CPSC has issued no recalls or warnings and press spokesman Scott Wolfson would say only, "We are aware of reports regarding this product." He would not say if a recall might occur. His only suggestion for consumers was to contact the CPSC with their complaints.

Stephanie Green of Van Nuys, Calif. purchased Martha Stewart table with a "Lazy Suzan" glass top that exploded after less than two years of ownership.

"My ass Martha Stewart and K-Mart didn't know anything about it," Green wrote in an e-mail. "How dare they willfully choose to continue to steal and endanger people in the name of greed. She (Stewart) should have gone to jail for more than just insider trading."

The Prius is easy to like when you pull up to the gas pump but the little car takes forever to get to the filling station so it will help if you like the hybrid in between fill-ups.

At first glance, the Toyota appears a lot like any other little car but there is one big difference: With the Prius, it helps to read the owner's manual before attempting to start the thing.

None of the computer-savvy members of the ConsumerAffairs.com staff were able to start the car without consulting the owner's manual or asking for help. The starting procedure is not complicated but it's certainly not intuitive.

The futuristic look of the Prius comes with some futuristic features. There is a rear-view camera to show the way in reverse, a laser "smart key" and a very space-age-looking dashboard.

So before we get to the important part -- gasoline mileage -- let's talk about the "smart key" and other electronic baubles on the Prius.

Toyota describes the "smart key" as part of its theft prevention and immobilizer system.

When you "press the power switch, the electronic code in the key is automatically checked to determine whether it corresponds to the registered ID code for the vehicle," according the Prius Owner's Manual. "If the ID code is verified, you can start the system."

With your foot on the brake, you simply press the power button. That's right, the power button. The Prius is now ready to drive. Just to make sure you know that, the "ready" light in the dashboard console comes on to tell you so.

You don't feel the electric motor turn on and the gasoline engine may not fire up right away. When the Prius tells you the car is ready you can believe your eyes and forget about your ears as you quietly start to slip out of your driveway or parking space.

The engineering magic of a full hybrid powertrain that can propel a vehicle using gasoline, electricity or both is in the control system and its software. A computer manages the blend of power from the electric motor and gasoline engine. The computer also controls the hybrid's regenerative braking system that captures the vehicle's kinetic energy and turns it into electricity.

Good to Go?

While the process is seamless, the moving-on-down-the-road part is where people begin to differ in their view of the Japanese hybrid.

The Prius is not a powerful car. There is the rub.

Depending on your perspective, the hybrid accelerates smoothly to highway speed and beyond, or the little car just takes forever to get up to speed and into traffic. Jim Hood ran out of patience trying to clock its 0-60 performance and Joe Enoch just about ran out of pavement as he hot-footed onto an off-ramp.

The Prius comes with a full slate of standard equipment that includes full-time traction control and ABS braking. Nevertheless, at Beltway speeds around Washington the Prius is a little short of confidence-inspiring and the thin tires do not provide a lot of grip.

But while the Prius is at or near the bottom end of the acceleration curve, I found plenty of power to comfortably move into high-speed traffic as I engaged both the electic motor and gasoline engine.

Buying a Prius can take longer these days than jumping into freeway traffic. The waiting lists are back, along with $3 a gallon gasoline.

Two months ago there were Prius models that sat on the showroom floor. This month most Toyota dealers are out of cars as demand again outstrips supply.

The wait is currently about four weeks.

After you stand in line for your opportunity to buy a Prius you will still be in a minority on the great American highway. Though hybrid sales more than doubled in 2005, they still make up only about 1 percent of overall vehicles sales nationwide.

Gadgets Galore

Once you are in the car, the Prius certainly seems to have every electronic gadget available these days. It's a hoot to drive. As an economical and environmentally friendly people mover, I give the car top marks. But try to drive the Prius like a Porsche and you will be disappointed.

Oh yes, you have to contend with the reaction of other motorists when driving a Prius too. No kidding, a lot of people just don't seem to like the car.

The Prius attracted some mildly hostile attention from other motorists as we drove around Northern Virginia. The staff wrote this off as politics as usual in the greater Washington area. More than most areas, Washington, D.C., drivers see your choice of car as a political statement.

Nevertheless, driving the Prius makes it easy to understand why some people feel they are making a contribution to the environment and their fellow man. The little car moves lightly on the earth.

At the neighborhood grocery store, I parked near former Secretary of State Colin Powell as the general sat in his powerful C6 Corvette. I could not resist exuding a slight environmentally conscious smirk as I walked by the high-powered combo on the way to buy a handful of groceries. (Editors Note: We are available to test drive a Corvette C6 ZO6 anytime).

Politics aside, the Prius passed the all-important grocery run test with high marks. Everything fit nicely into the trunk space without overflowing into the passenger compartment.

As we mentioned earlier, the Prius dashboard is an electronic dream. Speed, miles driven and other important information are available as digital readouts where the dashboard meets the windshield.

The center console of the Prius houses a computer screen that provides constant mileage and energy consumption data as well climate and stereo controls.

The Big Question

So now we move on to the important question -- gasoline mileage in the Prius.

We will have to be upfront and offer a couple of disclosures here. Toyota delivered the Prius with 87 highway miles on the car and the gasoline mileage indicator built into the center console recorded 48.6 miles per gallon from the delivery trip.

The window sticker that came with the Prius says that the hybrid gets 60 miles per gallon in the city and 51 on the highway. The mileage claims have been the subject of heated debate and complaints among readers of ConsumerAffairs.com.

We were unable to divide our Prius driving equally between city and highway driving since, unfortunately, highways around here are about as crowded and slow-moving as city streets. So the ConsumerAffairs.com staff simply did the best we could: we pounded the Prius over 7 days in Washington and Northern Virginia traffic.

We spent a number of miles on the Beltway and I-66 and on such urban thoroughfares as the Fairfax Country Parkway and Route 28 around Dulles Airport. We drove the car hard and heavy, trying to see just what sort of mileage this little gas saver would or would not produce.

At the end of seven days we filled the tank. We had driven 298.71 miles. The Prius took 6.59 gallons. That works out to 45.2 miles per gallon. The onboard computer showed the Prius delivering 43 miles per gallon, suggesting the car had been filled to the brim before delivery to us.

Split the difference and you have 44 miles per gallon in a car driven by three lead-footed reviewers who broke every rule of fuel-efficient driving they could think of.

No, the Prius didn't get 60 miles per gallon but, being driven hard through some of the worst traffic in the country, we'd have to say it did pretty well.

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The sticker price on the 2006 Prius Toyota provided for our test drive is $23,966.

The manufacturers suggested retail price for the base Prius is $21,725 and the car carries option package number 3 costing $1,475.

Option package 3 includes Rear Backup Camera, Smart Key System, AM/FM CD with 6 speakers, Auxiliary Audio Input Miniplug and MP3/WMA Playback Capability, Driver and Front Seat-Mounted Side Airbags, Front and Rear Side Curtain Airbags. The carpet, floor mats and cargo mat in the Prius cost an additional $186.

Toyota provided ConsumerAffairs.com with the Prius for a one-week test drive.

Cable companies that are aggressively enticing telephone customers with attractively priced service bundles are also outperforming traditional phone companies in satisfying customers, according to the J.D. Power and Associates 2006 Residential All-Distance Telephone Customer Satisfaction Study.

The study, which measures customer satisfaction with both local and long-distance telephone service, finds that cable companies rank highest in customer satisfaction in five of six U.S. regions.

In 2005, just one cable company -- Cox Communications -- led any of the regional customer satisfaction rankings. It now ranks highest in three regions, while newcomers Bright House Networks and Time Warner Cable each rank highest in one region. Verizon is the sole traditional phone company ranking highest in a region.

"While telephone service offered by cable companies is relatively new to the market, large numbers of customers are being lured to switch with enticing cost savings and highly attractive bundles of video, voice and data service," said Steve Kirkeby, executive director of telecommunications and technology research at J.D. Power and Associates.

"The importance of pricing as a reason to bundle service with a single provider has increased dramatically this year, no doubt a result of significant price competition introduced when cable companies began offering local and long distance telephone service to new markets," he added.

Although price competition plays a significant role in the industry today, customer-reported spending on local and long distance service has increased 3.4 percent from 2005.

On average, customers report paying $52.40 per month for local and long distance service -- up from $50.70 in 2005. Customers of cable providers report paying an average of just $42.40 per month, while reported spending with traditional telephone companies averages $53.59.

"We're seeing that for the first time customers are most often contacting their all-distance carrier about rates, pricing and features while questions about billing have dropped dramatically, spotlighting how intense competition and simplified rates are changing customer focus," said Kirkeby. "However, the study findings consistently indicate that price alone will not satisfy or retain customers."

The study finds customer satisfaction in the telephone industry continues to decline. Overall, satisfaction index scores have dropped from 692 (on a 1,000-point scale) in 2005 to 670 in 2006. Satisfaction has fallen in all six factor areas measured in the study, dropping most significantly in the areas of customer service, image and billing. The other areas measured are performance and reliability, cost of service, and offerings and promotions.

"Although cable companies entering new markets average satisfaction scores that are more than 30 index points higher than the industry as a whole, and despite nearly doubling their share to just under 10 percent of the telephone service market, cable companies are not yet a large enough force to propel overall satisfaction higher," said Kirkeby.

"Overall satisfaction drops as the industry continues to struggle with consumer uncertainty caused by several large, well-publicized mergers and divestitures among the traditional phone companies. Changes such as these always take their toll on customer satisfaction," he noted.

The study results by region are:

• Northeast Region: Cox Communications ranks highest, receiving the highest ratings in the region in performance and reliability, billing, image, customer service, and offering and promotions.

• Mid-Atlantic Region: Verizon ranks highest, outperforming other carriers in billing, image, cost of service, and offerings and promotions.

• Southeast Region: Bright House Networks ranks highest, with top ratings in the region in customer service, billing and image.

• North Central Region: Time Warner Cable ranks highest, with the highest ratings in the billing and cost of service factors.

• Southwest Region: Cox Communications ranks highest, with particularly high ratings in customer service, billing and image.

• West Region: Cox Communications ranks highest in the region for a fourth consecutive year, receiving top ratings in all six factors.

Cell phone customers are frequently shocked when their first bill arrives and it is tens, sometime hundreds, of dollars more than expected.

It is frequently parents who include their Internet and text messaging-addicted children in their plans, who suffer the most.

ConsumerAffairs.com examined all the fine print, pored over contracts, called the companies and compared the rates of four major U.S. cell phone carriers: Cingular, Sprint/Nextel, Verizon and T-Mobile (see table below).

Don't Want It? You Got It

The upshot: Just because you're not buying it doesn't mean you won't pay for it.

The standard cell phone plan consists of a few hundred "anytime minutes" and free night and weekend minutes. This standard plan usually runs between $30 and $60 per month and does not include text messaging or Internet packages which together will normally run about another $30 per month.

Chances are the salesperson won't push you into buying those services because whether you asked for them or not, you already have them.

All cell phone companies include these services and then charge per-use fees which may be impossible to avoid.

For example, if you decide not to get a text messaging package, no matter what the carrier, you will still be charged 10 cents for each text message. That includes messages sent and received -- even if you choose not to read the messages sent to you.

This is particularly bad for T-Mobile customers. T-Mobile frequently sends "company alert" text messages to all its customers. And unlike most other services, T-Mobile will refuse to cancel text messaging on your account.

"T-Mobile keeps billing me for incoming text messages," William of Mt. Morris, Mich. wrote. "I have no control over these and shouldn't be billed for them. One message was from a third party selling something. Another was from T-Mobile. I called, but they won't take the charges off. Furthermore, they refused to block text messaging on my account."

The great majority of ConsumerAffairs.com complaints are from parents whose children decided to use text messaging or scour the Internet from their cell phone.

"We purchased a plan for our daughter who was entering college," Charlene of Greenville, Miss. wrote. "When the first bill came it was for over $600. The text messaging option is the main means of communication for my daughter. We had been charged for each incoming and outgoing text message -- 10 cents per message."

Belkis of New York is a single mother with two children. In April her children browsed the Internet and downloaded a ringtone with her cell phone. Her bill was $80 higher than normal that month.

Where'd It Say That?

Many of the explanations of these charges are buried somewhere in a stack of fine-print pages your carrier will dump on you when you sign your contract.

When you sign up with Verizon, they will hand you a fat folder filled with brochures that hardly go out of their way to warn you about your potentially high extra charges.

Verizon includes a whole brochure about their "Get it NOW" Internet service available on all their phones. However, nowhere in that brochure, in any of the documents in the fat folder, on the contract, or on Verizon's website does it say how much this service costs for customers who do not pay a monthly access fee.

It wasn't until ConsumerAffairs.com called Verizon's customer service that we discovered they charge $.005 per kilobyte.

It's not poring over the fine print that Verizon's, T-Mobile's and Sprint's customers discover the 10-cents-per-text fee and the varying internet charges -- it's when they open the bill.

Cingular on the other hand, makes it clear in large print in their terms and services brochure.

Cheapest Isn't Always Best

At 10 cents per text message or up to 2 cents per kilobyte, charges can mount exponentially and it often is far cheaper for customers to buy the Internet or text messaging packages with their phone plan if they plan to use any of those per-use services. This is especially true with text messaging since you sometimes will receive unsolicited messages.

Another factor is the number of anytime minutes in your plan. For each minute you use over your allotted plan, your carrier will charge you a per-minute rate. The cheaper your plan, the higher the rate.

For example, Cingular's 450 minute/$40 plan will charge you $.45 for each minute you go over your allotted 450. Cingular's 6000 minute, $200 plan charges $.20.

Let's continue with Cingular as the example. If a single customer with the basic plan sends and receives 50 text messages ($5), browses 5 megabytes worth of internet ($50) and talks 100 minutes over their 450 ($45), this customer will have a total bill of $140.

If this same individual were to upgrade to the next plan, get the minimal text messaging option and pre-order 5 megabytes worth of internet usage, the same $140 bill described above would be cut nearly in half to $73.

July 11, 2006
Husqvarna is recalling about 174,000 lawn tractors because of a fire hazard. The tractors were sold under the Husqvarna, Craftsman, Poulan Pro, Poulan, Weed Eater, Southern States and Murray brand names.

The fuel line on these lawn tractors can separate from the fuel tank outlet. If this occurs, fuel will spill out, posing a fire hazard.

Husqvarna Outdoor Products Inc. received 886 reports of fuel lines that separated from the fuel tank outlet and 16 reports of fires related to this issue. There are three reports of minor personal injury.

Recalled tractors' product, model and serial numbers are listed in the chart below. To determine if a tractor is included in the recall, check the lawn tractors' product, model and serial numbers, located on a label under the seat of the tractor.

The tractors were sold at home centers, retailers, hardware stores and dealers nationwide from September 2005 through June 2006 for between $820 and $1,500.

Consumers with recalled tractors should immediately stop using the tractor and contact the applicable firm listed below to schedule a free repair.

Consumer Contact: For more information, call Husqvarna Outdoor Products Inc. toll-free at (866) 284-8872 or visit their Web site at www.husqvarna.com. Consumers with Craftsman-brand tractors should call (800) 659-5917. Consumers with Poulan Pro, Poulan, Weed Eater, Southern States or Murray brand tractors should call toll-free at (866) 284-8872.

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

When it comes to understanding the government's advice on mercury in seafood, most Americans are hopelessly -- and justifiably -- lost at sea, according to new survey commissioned by the nonprofit Center for Science in the Public Interest (CSPI).

Two years after the government advisory was first released, only one in five consumers correctly identified swordfish, shark, or king mackerel as the fish highest in mercury.

Confusion over low-mercury containing species was equally evident. While 21 percent of consumers identified salmon as having high mercury levels, another 21 percent believed it has low mercury levels. Salmon, as well as shrimp, catfish, and pollock, contains low levels of mercury.

"The FDA/EPA advisory is neither keeping high-risk consumers away from contaminated fish nor is it helping low-risk consumers to secure the health benefits only available at the fish counter," CSPI wrote in a letter to Food and Drug Administration (FDA) acting commissioner Andrew von Eschenbach. CSPI urged FDA to remedy the confusion by requiring high-mercury advisories at fish counters or right on fish packages.

Mercury is an environmental pollutant that bioaccumulates in large ocean-dwelling fish, such as swordfish, shark, some types of tuna, and king mackerel. Seafood is the leading cause of exposure to methylmercury, which can cause neurological damage to the developing fetus and young children.

Women can easily avoid this risk by steering clear of fish containing high levels of mercury for 12 months before becoming pregnant and while pregnant or breastfeeding.

In 2004, FDA and the Environmental Protection Agency (EPA) issued a joint advisory on mercury in fish, urging pregnant women, nursing mothers, young children, and those planning to become pregnant not to eat shark, swordfish, king mackerel, or tilefish. But the new survey shows that the advisory has not trickled down to the people who need it the most.

In fact, 31 percent of pregnant women, women planning on becoming pregnant, and nursing mothers did not know that seafood with high mercury levels could be harmful. Meanwhile, 18 percent of low-risk consumers may have unnecessarily reduced fish intake for reasons related to mercury.

"Relying on consumers to remember which fish contain high mercury levels is just not working," said CSPI food safety director Caroline Smith DeWaal. "It is time for FDA to do more. Labeling, both through notices at the seafood counter and directly on packages of fish, could easily help at-risk consumers avoid fish high in mercury and might bring others back to the fish counter."

CSPI's survey demonstrated that high-risk consumers preferred by a 12-to-one margin the use of labels on or near the fresh fish with high mercury content over the current practice of informing consumers through industry or government websites. Among all consumers surveyed, support for such labeling was equally strong, with a margin of 14-to-one.

While the state of California uses point-of-purchase displays to remind consumers about the government's advice, and some grocery chains voluntarily use signage of their own design, CSPI says that a standardized label for high mercury-containing fish would be the most effective system.

In 2003, then-FDA commissioner Mark McClellan told CSPI that printed materials at the point of purchase could be one of many ways advice about mercury could be communicated, but since then the FDA has done very little to advance that idea, according to CSPI.

Opinion Research Corporation conducted the random digit-dial nationally projectable survey of 1,018 adults from June 22 to June 25, 2006.

Most widespread Internet scams are based offshore, out of reach of U.S. authorities but Arkansas Attorney General Mike Beebe says a jobs scam may be operating in his state, targeting consumers nationwide.

The offers are designed to trick individuals who are looking for work into wiring money out of the country.

Investigators from Beebes office are working to track down the people behind the bogus business to determine if they are, in fact, running the scam from Arkansas. The end result for victims will be the same regardless of the location: they will lose money and/or personal information to the scam artists if they accept the phony offers for employment.

The scam involves a fake company called L Finders, which claims to be a concierge-and courier service. Job postings for the company have appeared online and in at least one newspaper in Texas.

A woman in Houston who contacted L Finders received an e-mail and a phone call encouraging her to apply for an office-assistant job by filling out an application online and faxing it to a phone number in Little Rock. She was asked to include her Social Security Number, copies of two forms of identification, bank-account details and a cancelled check.

"Any employment offered online without a formal interview, no matter where it originates, should be treated with skepticism," Beebe said. "Terms that seem too good to be true will prove to be just that and may cost you in stolen personal information or money lost."

Scams appearing to be operated by the same con artists have also appeared in Colorado.

According to the Better Business Bureau, job seekers who applied for the jobs received counterfeit cashiers checks and were asked to deposit them, and then wire money from their accounts to an address in Mexico. At least one of the Colorado scams used the name of a legitimate company as a front.

Multiple scams, including the one claiming to operate from Little Rock, have used an identical e-mail address for job seekers to use: speedy@clerk.com. Any job offer utilizing that e-mail address should be reported to the Attorney Generals Office or the Better Business Bureau.

Many Internet job scams eventually involve requests to wire money overseas. Beebe says any such request should be an immediate red flag indicating a scam.

While staying with friends last year in San Francisco, I was asked by their son to help him with his homework. It seemed like a good way to show my appreciation of their hospitality and I tried not to wince when he handed me a math book with a Frosted Flakes cover.

"They were giving them out free," I was told by an impressed 11-year-old. "It was either this one or Lay's Potato Chips." I smiled and told myself not to be too cynical -- after all, what was a bit of extra color on a textbook. It was only when we looked at the first problem that I really lost it.

"Will is saving his allowance to buy a pair of Nike shoes that cost $68.25. If Will earns $3.25 per week, how many weeks will Will need to save?"

As Danny, a bright kid, pencilled in 21 weeks, I flicked through the pages of the book in horror. Subsequent questions invited us to calculate the grams of fat in a Burger King Whopper, followed by some geometry questions involving an Oreo cookie, at which point the textbook helpfully reminded us that "the best-selling packaged cookie in the world is the Oreo cookie."

Marketing targeted at kids in the U.S. is nothing new but -- did you know? -- it's the fastest growing area of advertising in the country today. In 1990 around $100 million was spent on advertising targeted at kids on television and just a decade later that number was up more than twenty times to over $2 billion.

It's Not Just TV Ads

In addition to the carefully crafted TV commercials, companies are hiring ad space on school bus radios, screensavers on school computers (Pepsi has one that encourages "a thirst for knowledge!") and are tying in products for cross-promotion more than ever -- witness the Barbie accessories that include cans of Coke or the Teletubbies merchandise licensed to McDonalds.

But why would companies bother seducing a section of the population that doesn't even work for a living?

The answer, according to the marketing industry book, Kidfluence, is "persistence pestering" and "importance pestering". The former is all about kids whining until they get what they want ("pester power"); the latter is about parents feeling guilty that they rely upon the television to bring up their children to alleviate their guilt they satisfy whatever material craving their kids want.

Disposable Income

Plus, let's not forget, American kids today have their own spending power.

Studies conducted a few years ago showed that kids 4-12 were spending around $40 billion a year, while those from 12-18 plow through $170 billion a year. Whether that money is spent on toys, breakfast cereals, clothes or cigarettes (check out the new range of watermelon and cherry flavors introduced by Reynolds Tobacco), no big company is going to pass up that share of the market.

And when you consider that an estimated $600 billion of household spending is influenced by children, then it's clear why the big companies aren't shy about getting the corporate message across to children who aren't yet able to walk, never mind think for themselves.

And therein lies the second part of the plan. Research by child psychologists such as Dr. Allen Kanner of Berkeley has suggested that by the time a child is 3 years old he's able to recognize around 100 brand logos. Kids are getting smarter all the time but it's a bit much to ask an infant to make an informed decision about products he's not even aware exist yet.

My friends limit Danny from watching TV unsupervised, preferring to make their favorite shows a family event but the average American child is thought to see around 40,000 television commercials a year. Products tie in with popular cartoons and television characters, establishing an insidious brand loyalty in children before they're able to distinguish between a plotline and a sales pitch.

The Jesuit saying might well these days be, "Give me a child until he is 7 and I will show you the consumer."

Shaping Young Minds

I took Danny out one Saturday to teach him how to play soccer (I look good playing against an 11-year-old) and afterwards I proposed that we grab a bite to eat. I don't think I quite managed to hide my frown when Danny pulled out some McDonald's tokens. He looked down at the coupons and murmured:

"I got them at school for doing well in my reading program."

This was news to me -- apparently, McDonald's, Burger King and Domino's pizza were sponsoring reading projects in school with free meals. I thought back to when I was Danny's age and the excitement I'd had at a friend's birthday party at McDonald's how was I supposed to communicate things like an unhealthy diet, non-biodegradable packaging and abuse of the rainforest to an 11-year-old who was proud of his reading skills?

Across America, schools struggling with their budgets are accepting outside help from companies like Nike who sponsor open days and sports training. The kids are taken out on coach buses, handed cans of soda and entertained for hours by enthusiastic sports teachers, all decked out in Nike gear from head to foot.

What's the catch?

Apart from watching some prospective Nike ads and giving their feedback there is none -- but how many of those kids will resist thinking of Nike with special affection thereafter for taking them out of the school for the day?

The fastest-growing area of marketing for kids is, of course, the Internet. Parents often lag behind their children in understanding the function of new technology and fail to appreciate how saturated kids' sites can be with advertising.

Cult toy and collectible sites draw millions of children every day and many use deceptive navigation and tricks to steer the juvenile surfers into a never-ending barrage of ads -- hit the "back" button or even the small "x" in the corner and you're less likely to leave the site than trigger another pop-up window.

As a fledgling industry, there doesn't yet exist the same kind of restrictions or code of decency for advertisers on the Internet as in other media. Through sign-up forms and tracking cookies, many take advantage of children's surfing behavior to collect consumer information and target kids with personalised advertising.

Europeans Are Stricter

Some countries in Europe take marketing aimed at kids very seriously and have laws in place to limit this kind of ruthless advertising. Sweden and Greece have banned television commercials aimed at kids, at least during daylight hours.

In the U.S., however, such laws are perceived to be a breach of that all-important First Amendment. The likes of Nike, McDonald's and Toys'R'Us clearly have only their profits in mind though when it comes to marketing and will make the most of every possible avenue available to them, the ethics be damned.

On the other hand, in the true American spirit of independence and freedom it's worth remembering that the responsibility is also in our hands. The corporations cannot beat down our doors and stuff promotional pamphlets in our hands -- our children are only exposed to commercials if we allow them to watch television. And if we allow material compensation to replace genuine love and care then we only have ourselves to blame.

Likewise, however strapped for cash a school might be, it doesn't have to allow the multi-nationals in through the gates. Education doesn't depend upon Nike-sponsored field trips and there are other ways of raising cash than selling ad space on school radios.

If schools are reluctant to acknowledge that then who other than the parents and children themselves can get the message through?

It took quite a while for me explain all this to Danny but, as I said, he's a bright kid so we went home and sat in front of the television with a notepad and pen and started analysing all the different hooks used by the commercials to pull us in. Whether it was catchy music, beautiful women or people looking cool while using the products, Danny quickly got the idea and grinned as he'd outsmarted the marketing.

But I had a feeling he'd be the only one at school the next day who did.
---

Tom Glaister is the founder and editor of www.roadjunky.com - The Online Travel Guide for the Free and Funky Traveller.

The civil complaint contends that Liberty Mutual Insurance Company and seven affiliates violated the Illinois Consumer Fraud and Deceptive Business Practices Act by paying undisclosed contingent commissions to insurance brokers and agents to induce them to steer business to Liberty Mutual. Contingent commissions are payments that insurers pay to brokers and agents in addition to the base commissions.

Contingent commission amounts generally are based on the volume and profitability of the business a broker or agent produces for an insurance company. The investigation found that, because contingent commissions are based on volume and profitability, they encourage brokers and agents to steer their clients improperly to particular insurers in violation of the fiduciary duty they owe their clients.

The complaint also states that a Liberty Mutual affiliate company also participated along with several other insurers in a scheme led by Marsh & McLennan Companies, Inc. (Marsh), to rig bids for excess casualty insurance. According to the lawsuit, Liberty Mutual also failed to disclose its affiliate's role in the bid-rigging scheme.

"It is of great concern that one of the country's largest insurance companies would rig bids and induce brokers and agents to breach their duties to their clients in the ways we have alleged in this lawsuit," Madigan said.

As an example of the conduct at issue in the lawsuit, the complaint alleges that, from 2001 through 2004, Marsh repeatedly solicited from Liberty Mutual's affiliate and other insurers fake insurance bids -- called "B quotes" -- that were intentionally higher or otherwise less favorable to the customer in an effort to "support" or "protect" the bid of a favored insurer.

Through this scheme, Marsh was able to deceive its clients into thinking that the insurance policies and premiums it offered were the result of true competition among insurers.

In August 2005, a former Liberty International Underwriters executive, Kevin Bott, pleaded guilty to criminal charges in New York in connection with his bid-rigging conduct while employed at LIU, stating that "[i]n many instances during this time period, brokers at Marsh instructed me to submit protect[ive] quotes on certain pieces of business where Marsh had predetermined which insurance carrier would win the bid. I understood that such quotes were intended to allow Marsh to maintain control of the market and to protect the incumbent [insurer]."

Bott understood that such quotes "had the effect of allowing Marsh to obtain property in the form of millions of dollars in commissions and fees from each of numerous policyholders and insurance companies." In exchange, LIU received favorable treatment from Marsh in placing and renewing its excess casualty policies.

In one example of bid rigging cited in the complaint, two Marsh executives discussed the bidding on a client's account in an internal e-mail: "I need a B quote from Liberty. I finally had AIG agree to write this thing [i.e., an insurance policy for a client] at $140,000. Have Liberty come in around $175,000."

This e-mail was then forwarded to Liberty with the message, "see below and I will talk to you later." Ultimately, Liberty provided a bid of just over $200,000 and AIG got the business.

Earlier this year, the New York and Connecticut Attorney General's offices filed similar complaints against Liberty Mutual based on their investigations of bid rigging and steering. Madigan has been working cooperatively with the Attorneys General of New York and Connecticut.

In its lawsuit, the state seeks restitution for injured policyholders, civil penalties under the Consumer Fraud Act and an injunction that would bar Liberty Mutual from engaging in the alleged conduct in the future.

Arizona's Attorney General has filed consumer fraud lawsuits against AutoZone and Wal-Mart for their continued failure to correct pricing violations at their stores across Arizona.

Both retailers have been consistently cited by the Arizona Department of Weights and Measures (DWM) during the past five years for discrepancies between posted prices and checkout prices and for failing to post shelf prices on many products, Attorney General Terry Goddard said.

The companies have not contested the violations and have paid substantial fines, but both have yet to eliminate the pricing problems.

"Price accuracy is a fundamental consumer right which these companies have repeatedly abused," Goddard said.

"The state has made every effort to work with both of these retailers to no avail. When retailers fail to post and scan correct prices, there is no reasonable way for Arizona consumers to comparison shop. Shopping should not be a game of chance."

Each year the Department of Weights and Measures sends inspectors to retailers throughout Arizona to verify that prices are posted and that shelf prices match checkout prices. Violations occur when a store exceeds a 2 percent error rate.

Over the past five years, both AutoZone and Wal-Mart failed more than half of the inspections and continue to violate the state Consumer Fraud Act.

The lawsuits allege that the violations of both companies involve more than scanning overcharges at the cash register. They also include the failure to post prices for many products. When prices are not posted on the shelf, consumers are unable to compare prices or to know if they are accurately charged when they check out.

"AutoZone and Wal-Mart evidently see paying fines as the cost of doing business rather than making the effort to correct the problem," Goddard said. "Consumers have a legal right to know the accurate price of a product when they shop. These companies have consistently failed to comply with the law."

Since 2001, DWM has conducted 846 inspections of AutoZone stores throughout Arizona and failed 426. The violations included 190 for not posting prices and 236 for scanning overcharges. The repeated violations were not limited to one store, one city or one region in Arizona. DWM inspectors provided store managers with written inspection reports outlining the violations.

DWM also sent 220 Notice of Violation letters to AutoZone's corporate offices in Memphis identifying the violations, store locations and dates of inspection. During this time, AutoZone was fined more than $170,000 and continues to violate the law.

Since 2001, DWM has conducted 976 inspections of Wal-Mart stores throughout Arizona to determine compliance with Arizona law. The retailer failed a total of 526 DWM inspections, which included 366 price-posting violations and 160 price-scanning overcharges. The repeated violations were not limited to one store, one city or one region in Arizona.

DWM inspectors provided store managers with written inspection reports outlining the violations. DWM also has sent 260 letters to Wal-Mart at its corporate offices in Arkansas identifying the violations, store locations and dates of inspection.

During this time, Wal-Mart has paid more than $450,000 in fines and continues to violate the law. After being notified of these violations, both Wal-Mart and AutoZone were given opportunities to fix the problems. Both retailers, however, failed multiple re-inspections which led to additional fines.

AutoZone has been listed as one of the top 10 "Needs Most Improvement" companies on the annual DWM Price Verification Survey released to the public in 2003, 2004 and 2005.

Wal-Mart, the largest retailer in Arizona, has the highest number of price-posting violations in the state. The $450,000 in civil fines is also the most assessed against any retailer for pricing violations.

"Wal-Mart has tried to defend its inaccurate pricing by saying that while some customers are overcharged, others are undercharged," Goddard said. "It is not a defense to say we only defraud some of our customers some of the time."

Arizona is not the only state where Wal-Mart's pricing has come under legal scrutiny.

Earlier this year in Michigan, the company agreed to a record $1.5 million settlement to resolve claims that it committed repeated pricing violations. In Connecticut, the state Attorney General announced last November an investigation based on a national study that showed discrepancies between Wal-Mart's posted prices and scanned prices that far exceeded the 2 percent error rate.

Many consumers who purchased cameras at incredibly discounted rates from WawaDigital.com or StargatePhoto.com discovered that the prices really were too good to be true and that in some cases, they were buying not just a camera but also a threat.

According to hundreds of consumer complaints filed with ConsumerAffairs.com, the Better Business Bureau (BBB) and technology forums such as Epinions.com and Cnet, this company, which has multiple aliases, uses a practice known as "bait and hook."

Bait and hook means they lure consumers in with fantastic deals, then trick or threaten the consumer into buying more.

For all these complaints, the story is usually the same:

"They list cameras for the lowest prices out there and then after you give them all your credit card information will not sell you the camera unless you purchase inflated and unnecessary accessories to go with it," wrote Kristin of Troy, Mich.

"When I told them I didn't want to purchase anything else, just the camera that they advertised, the representative yelled at me, spoke belligerently and told me that if I didn't buy the extra accessories he would cancel my order and charge my credit card a 20% restocking fee," Kristin said.

One blogger recounted the frightening experience one of his coworkers had. After refusing to purchase accessories, a representative left this message on the coworker's answering machine:

"You better not pick up, b****. I'm gonna to come down there and break your god**** neck. You heard me, alright? Kid, you better hear me, b****. Do you hear me, b****? Yes, you'd better believe it. You're in big trouble, my friend."

When ConsumerAffairs.com called the toll-free number on www.StargatePhoto.com, we discovered the same uncouth and threatening service.

Phillip Brown, manager, said his company does not bait and hook customers.

"They're all liars." Brown said of customers who have complained. "They're bullshit artists. Have them come and complain to my face."

Finding an actual building to go and complain may be difficult. Brown said they are located at 425 Northwood Ave., Linden, N.J. However, there isn't a Northwood Ave. in Linden.

According to a BBB report updated today, this company works out of 295 Avenue O, Brooklyn, N.Y.

Brown said StargatePhoto and WawaDigital are not the same company. However, www.stargatephoto.com and www.wawadigital.com are nearly identical and the phone numbers listed on each site take you to the same place.

ConsumerAffairs.com called the phone number two times. The second time we called and asked for Brown the man who answered the phone acted like he didn't know the name. We were then put on hold a number of times before the familiar Brooklyn accent, who identified himself as Brown, answered more questions.

Brown said he sells thousands of cameras and that he's bound to have some unhappy customers.

Many consumers say representatives from this company often get belligerent and hang up on the customer.

Brown admitted that they do hang up on customers because, "These customers call us and they don't shut up about their problems."

According to the BBB report, "Consumers report that cameras purchased from this firm are represented as U.S. models under warranty, but are in fact foreign models not covered by manufacturer warranties."

"I purchased what I believed to be a new Canon camera from WawaDigital over the Internet," wrote Diane of Bridgeport, Wash.

"When I received the camera, it did not appear to be in the original factory packaging and did not come with warranty information. I suspected at that point that the camera was refurbished. After just a few shots, the lens began sticking causing the photos to appear as if they were taken through a slot. ... I called the customer service number to return the camera and found the customer service to be rude, argumentative and short but was told I could return the camera for an exchange. I did so and an exchange camera was sent. It took a long time. I e-mailed inquiries but never got an answer and when I called to inquire about when I would receive my exchange, I was told it wasn't customer service day, call back tomorrow.

"When the camera finally arrived, I suspected the camera I had returned was returned to me. It came with the same packaging I had sent it back in and the exact same problem with the camera," Diane said.

Brown said that because he sells thousands of cameras, it is hard to keep the website updated. "Sometimes new means it's new in stock, not necessarily new," he said.

The BBB report said this company has done business under at least the following names and possibly more: Accessories Land, I.N.S. Digital World and The Camera Whiz.

New York Attorney General Elliot Spitzer's office would not share any information regarding the number of complaints they have received and would not discuss the status of any investigation without a Freedom of Information Act request.

ConsumerAffairs.com has filed the request but has not received a response.

When ConsumerAffairs.com asked Brown if his company baits and hooks he gave a number of irrelevant examples before becoming belligerent and finally, you guessed it, hanging up the phone.

(photo I found of 295 Ave. 0 on a blog. The guy who took the photo was supposedly chased away by one of the company's clerks)

An outside contractor hired by the Federal Bureau of Investigations (FBI) breached the agency's computer network and gained access to the passwords of 38,000 employees, the Washington Post reported.

The consultant, Joseph Colon, was an employee of defense contractor BAE Systems with a top-secret security clearance.

According to Colon's lawyers, he was granted permission to hack the network on several occasions by agents at the Springfield, Illinois, field office where he worked.

Colon claimed that frustration with the slow pace of approval for routine assignments drove him to hack the network and gain access to the employee records, using "run-of-the-mill" hacker tricks and scripts that are freely available on the Internet.

The resultant hacks gave Colon access to high-risk information areas, such as the Witness Protection Program. Both the FBI and Colon's lawyers declined to provide more specifics regarding the case.

The FBI has suffered repeated embarrassments over its outdated computer systems and its expenditure of millions of dollars on a potential upgrade that was abandoned.

It also came under heavy scrutiny for extending a five-year, multimillion-dollar deal for technology services to ChoicePoint, the data broker most famous for being hacked by a ring of Nigerian identity thieves.

Government agencies have been dealing with issues of third-party security and improving data protection in wildly different ways, often depending on the agency's internal culture and its views on technology.

Many federal agencies -- including the FBI -- do not maintain proper oversight of the contractors who have access to Social Security numbers, according to a Government Accountability Office (GAO) report.

Another GAO report found that the IRS had "significant weaknesses" in collecting and protecting taxpayer data. That report also mentioned lack of oversight and training for contractors as a potential security risk.

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Government and business leaders have each admonished the other side to do more about protecting the data they collect.

The Federal Trade Commission (FTC) testified before Congress that data brokerage businesses like ChoicePoint should be more vigilant in protecting Social Security numbers, but that such collections were necessary to ensure the continuation of business that relies on customer information.

A survey conducted by the National Association for Information Destruction (NAID) found that the requirements for "shredding" enacted as part of the Fair and Accurate Credit Transaction Act (FACTA) does not go nearly far enough to ensure businesses destroy their paper data records, and that government should push for stronger data protection laws.

Not too long ago, AOL was at the top of the Internet heap with tens of millions of customers, more advertisers than it could handle and big companies lusting to acquire it. Consumers had gripes but were largely ignored.

Today, the tables have turned. AOL lost an estimated 800,000 customers in the last quarter alone and is thought to be signing next to no customers for its struggling broadband service.

As dial-up users convert to broadband, cable companies are grabbing many of them snd telephone companies offering low-priced DSL connections are getting the rest.

AOL's response isn't doing much to improve its image. Rather than find ways to make customers want to stay on board, AOL simply makes it difficult bordering on impossible for customers to quit.

The company was embarrassed last month when a consumer tape-recorded his efforts to cancel his AOL account and later supplied the tape to CNBC. It issued profuse apologies but whether it made any changes in its procedures is another matter.

The New York Times reported that an internal memo reminded AOL's customer service reps, whose actual title is "retention consultant," to try at least twice to get customers not to cancel -- and that was after the CNBC report.

Consumers also complain bitterly of alleged double-billing practices and a dubious "free trial" offer.

Just listen to John of Phoenix: "AOL continued to bill me, even using a cancelled debit card and then a debit card I had not given them after I cancelled the service." "I suspect they got the second card from my Time subscription. The bank credited me for the disputed charges."

"Now AOL is threatening to send me to a credit collection agency over $47. They refuse to answer my questions over the unauthorized debit card charges and when my wife called them the person was loud and abusive and then hung up."

John joins a growing number of people complaining to ConsumerAffairs.com about AOL's business practices.

Kimberly of Porter, Indiana, tells us that AOL continues to double-bill her.

"One of my accounts has been cancelled, yet another screen name with the company is being automatically debited from my checking account every month," she wrote. "I have persistently tried to call AOL, but to no avail. I am put on hold for what seems like an eternity and nobody from AOL ever answers me."

According to many complaints, AOL could be giving thousands of consumers who signed up for the "free trial" the silent treatment.

Still others trying to rid themselves of AOL are routinely threatened by an employee of the ISP warning the company will turn their account over to a collection agency if prompt payment by credit card is not forthcoming.

"They wanted the money immediately and would turn the matter over to a credit bureau if I did not agree. After arguing with her for 45 minutes, I finally gave up and said okay," John wrote from Bates City, Missouri.

"I will pay the $23.90 so I don't have to deal with you folks again. Well, I should not have done that. I gave her my credit card number and expiration date. I have still received daily phone calls from the robotic voice" at AOL, John said.

Shareholders Restless

The growing customer relations nightmare involving AOL comes as the company is under scrutiny for overstating earnings six years ago when then-Chairman Steve Case orchestrated AOL's takeover of Time Warner, Inc.

Five California pension funds, including the California Public Employees' Retirement Fund and California State Teachers Retirement System, are suing AOL Time Warner, Case and others alleging losses of $1 billion due to AOL's financial misrepresentations.

The lawsuit contends that Case and other AOL executives knew the company's Business Affairs Unit was making deals with vendors that required them to buy advertising with AOL, sometimes using AOL's own money.

The company faces at least 39 shareholder lawsuits over the nearly $200 billion in shareholder value it lost since it purchased Time Warner in 2002.

It has put $2.4 billion into a class action settlement fund and has paid out $358 million from a $600 million fund for shareholders who opted out of the major shareholder suits in California, New York and Ohio, according to company filings.

A spokesman for AOL had no comment on the lawsuit or the company's customer relations practices.

Verizon Wireless says it is lightening up on the termination charges it slaps on customers who cancel their contracts early.

Starting this fall, customers who cancel early will pay a pro rate cancellation penalty based on how many months remain on their contract instead of a fixed fee of several hundred dollars.

Verizon Wireless is the first major U.S. carrier to commit to a national policy of pro rating early termination fees. The change will take effect this fall for new customers. Existing customers will have to -- you guessed it -- renew their agreement to take advantage of the change.

Denny Strigl, president and chief executive officer of Verizon Wireless said the change is being made to adapt policies to customers' needs.

"We believe dissatisfaction with flat early termination fees is tarnishing the entire industry," he said.

Speaking at an industry conference, Strigl said the wireless industry has the ability to transform itself in the years ahead by continuing to add value for customers through technology and responsiveness.

He said Verizon Wireless has the most loyal customer base, as well as the highest ratio of local number portability (LNP) port-ins. Strigl said Verizon Wireless has a track record of listening to its customers and making policy decisions based on customer needs.

Verizon Wireless parted with the industry by refusing to participate in a wireless directory when customers said they didn't want one. The company also broke from other wireless companies to support local number portability because customers wanted the freedom to take their numbers with them if they switched service providers.

Strigl said Verizon Wireless is taking similar action with early termination fees, as it is an issue that increasingly is irking customers industry-wide.

Verizon Builds Market Share

Meanwhile, analysts at Merrill Lynch say Verizon Wireless continues to take market share across the board. Cingular is executing well. Alltel appears to have gained momentum. However, the analysts said T-Mobile is likely to come up short on net additions during the quarter.

Merrill Lynch found that Verizon still has an edge with regard to customer perception of network quality, and it is using that advantage to gain market share.

Verizon stores are extremely busy, particularly in markets where a competitor's service is not up to par. Indeed, so busy are the stores, that it was commented that a number of stores the analysts visited could use additional sales reps in order to help meet the customer demand.

The analysts report that Sprint continues to struggle with its marketing message and many customers and some sales reps still do not understand the supposed benefits of the Sprint-Nextel merger.

Cingular's record has improved, the analysts said. There are still some areas where customers remain unhappy with Cingular's network coverage, but in general customers are seeing an improvement.

T-Mobile USA moved primarily to 2-year contracts in April, becoming the last national carrier to switch to two-year service plans.