Current Events in August 2006

America Online, the granddaddy of all Internet service providers is now free, according to Chairman Jonathan Miller. That's big news from a company that in recent years engaged in ruthless doubling billing and made it next to impossible for subscribers to cancel its service.

But as things turn out, "free" doesn't mean quite the same at AOL as it does almost everywhere else. Changing an existing account to a free account will probably generate a cloud of the same old AOL heifer dust laden with bullying and intimidation that so many consumers have encountered in the past.

AOL subscribers have dropped the service in enormous numbers in recent years. Once 35 million subscribers strong, the ISP currently has only 17.7 million subscribers in the U.S.

Now AOL is in the midst of transformation by making its software which bundles tools like email and instant-messaging service free as well as lowering the price of its dial-up costs.

But while the company wants to attract new members to the free service, it seems to be trying to hang on to the old paying customers at their current going rate of approximately $25.90 a month.

AOL prefers to call its subscriber "members." But there is not much family love in evidence as AOL, true to its reputation, has made it as difficult as possible for existing members to leave the fold.

AOL members trying to become non-members are finding the path to a free AOL hard to find, almost as hard as fiinding a living person on the other end of an AOL help line. If finally connected, there are repeated pitches for additional services and switching to the free account is not one of them.

AOL representatives push a promotional $4.95 monthly plan for customer service and some dial-up hours and a video lesson with a free video camera.

Paying subscribers who fail to run the gauntlet of sales pitches will remain on their current plan at the existing rate.

For the fortunate few who get through to AOL, consumers who have an alternative Internet connection can use AOL software and its virus and spyware protection without a monthly charge.

Members who still wish to use AOL to connect to the Internet can pay $9.95 a month for unlimited dial-up service and customer support.

An AOL package for $25.90 a month, the price of its current unlimited dial-up service, includes additional security features and 50 gigabytes of backup storage along with -- we're told -- customer support.

AOL defends the not-so-free policy by suggesting that it would have been unfair to those members comfortable with their existing service to switch them to a free service. AOL is quick to add that the company wants to inform people about all of their options.

AOL subscribers who use the service to access the Internet -- and AOL says that is nearly two-thirds of its subscribers -- were reminded that if they switch their plans they may find themselves cut off from the Internet.

Criminals are becoming more clever in their attempts to steal consumers' identities. In New York, the Suffolk County Police Department says it has recently investigated three new variations of the identity theft scam.

In one, the scammer uses technology to display a false message on the consumers' caller ID screen, indicating the call is from a legitimate financial institution. Unwary consumers who give the caller personal information have their identity stolen.

Consumers also report calls in which they are told to call an automated voice mail system to get details on a problem with their credit card account. The automated system instructs them to enter their account number using the touch tone key pad, allowing the scammer to steal their account number.

Scammers have also reportedly called consumers posing as security personnel investigating irregular activity on their credit card. They trick the victim into revealing the three digit security on the back of the card, which an increasing number of businesses are requiring as verification.

How do you protect yourself in these situations? Police say you should never reveal any sensitive data to anyone who calls you on the phone. If you think they might be legitimate, hang up and call the institution or agency back by looking up the number.

August 8, 2006
The latest 419 scam -- the email spam scams named for section 419 of the Nigerian penal code -- is designed to hook Kennedy assassination buffs. The email landing in inboxes around the world this week purports to be from a dying KGB agent, offering to pass on secrets of the 1963 assassination of President John F. Kennedy.

The email's author, who claims to be dying, says he has a cornucopia of documents that have never been made public. He offers them to the recipient, promising they will make that person rich and famous.

"There is a conspiracy at work here, but it's not about whether someone was lurking on a grassy knoll in Dallas on 22 November 1963," said Graham Cluley, senior technology consultant for Internet security firm Sophos.

Cluley says the criminals behind the email are conspiring to steal sensitive information and raid the bank accounts of victims who fall for the scam. Once a victim has been drawn in, requests are made from the scammer for private information, which may lead to requests for money, stolen identities, and financial theft.

The risks associated with using the Internet remain high according to Consumer Reports' latest "State of the Net" survey. CR projects that U.S. consumers lost more than $8 billion over the last two years to viruses, spyware, and phishing schemes.

Additionally, the "State of the Net" survey shows that consumers face a 1 in 3 chance of becoming a cybervictim, an incidence that hasn't abated in the past year.

Online consumers who fell prey to phishing schemes experienced a five-fold increase in financial losses since the 2005 survey. The median cost per phishing incident was $850 -- five times higher than the median cost of $165 in 2005. Consumer Reports projects that U.S. consumers lost $630 million over the past two years to fraudulent phishing e-mail scams.

The 2006 "State of the Net" survey was conducted by the Consumer Reports National Research Center among a nationally representative sample of more than 2,000 households with Internet access.

Based on the survey, Consumer Reports projects that Americans spent at least $7.8 billion for computer repairs, parts, and replacement over the past two years to correct problems caused by viruses and spyware.

Among CR's key 2006 "State of the Net" findings:

Twenty-nine percent of survey respondents said a virus, spyware, or phishing scam caused serious computer problems and/or financial losses in the last two years. And based on survey projections, virus infections prompted an estimated 2.6 million households to replace their computers in the past two years.

Additionally, 35% of survey respondents didn't use software to block or remove spyware. And CR projects that 2.4 million US households with broadband remain unprotected by a firewall.

• Spam: The incidence of heavy spam remains as elevated as last year. Survey results indicate that about 795,000 households continued to buy products advertised through spam. Additionally, in 8% of the households surveyed that had children under 18, a child had inadvertently seen pornographic material as a result of spam.

• Viruses: The frequency of virus-induced problems is at the same high level as last year. In the latest survey, 39% of respondents reported a virus infection in the past 2 years. Of those, 34% had to reformat their hard drives; 16% permanently lost important data; and 8% had to replace hardware.

• Spyware: In the past six months spyware prompted nearly a million U.S. households to replace their computers. Among survey respondents, two of the biggest risk factors for spyware infection were using file-sharing software (like Kazaa) and having minors at home who go online. In homes where children under 18 used the Internet, there was a 28% greater incidence of spyware infection in the past six months than in other homes.

• Phishing: Only 8% of respondents submitted personal information in response to conventional phishing e-mails. But the median cost of a phishing incident is up substantially at $850 versus $165 in 2005. New variants on phishing have emerged. "Pharming" infects a computer so that even if you type in a legitimate Web address you're redirected to a fraudulent site. "Spear phishing" targets email addresses stolen from a company.

It isn't enough for software programs to eliminate familiar viruses and spyware. To provide superior protection, a program must be able to defend against threats it has never seen. To test antivirus software, the experts at Consumer Reports employed consumer tests in which viruses that CR created were unleashed under high security on antivirus programs.

CR notes that for staying safe online, software suites have several pluses. If the suite has a consistent user interface across the components, it eliminates the need for consumers to wrestle with three programs. Suites generally cost less than the sum of individual packages, and there is only one annual fee for licensing and updates.

Among the 10 popular suites that CR tested, only Zone Labs Zone Alarm Internet Security Suite ($70) did it all well. The suite's antivirus and antispam components did an Excellent job in CR's individual tests, and its antispyware was Very Good.

For an antivirus/antispam combination, Trend Micro PC-cillin Internet Security ($50) received a high score for both performance and features; its antivirus and antispam components rated Very Good in CR's individual tests (the suite's antispam and antispyware components are not the same as the ones available individually.)

For antispyware protection, CR's suggests adding Spybot's free Search and Destroy, which scored Very Good in CR's tests.

AOL's PR staff was working overtime this weekend, as the Internet Service Provider got some bad press in both old and new media for practices that are hardly news to those who've followed the company for years.

Forums and chat rooms were full of irate comments about AOL's release of search data on 20 million searches performed by its customers. The data reportedly appeared about ten days ago on the company's research site, but was not discovered until the weekend.

No one's identity was revealed in the data release, since user IDs were scrambled. But privacy advocates were still upset, saying it is unacceptable to show what individual users are searching for online.

AOL took the data down late Sunday evening, but critics maintain the damage had already been done. An AOL spokesman described the company as "angry and upset" by the breach.

Meanwhile, the St. Louis Post-Dispatch ran a 1,400-word article recounting the months-long ordeal of a St. Louis woman who spent seven months trying to close her dead father's AOL account.

Fifty-five year old Maxine Gauthier told the paper that AOL customer service representatives hung up on her, told her to "shut up and listen" and steadfastly refused to stop charging her deceased father's credit card to the tune of $29.95 a month for dial-up service.

Post-Dispatch "Tech-Talk" columnist David Sheets interceded on Gauthier's behalf, and contacted a customer service supervisor who agreed to close the account. However, Gauthier told Sheets that a few days ago she received a letter from AOL, addressed to her deceased father, Melvin Berkowitz.

"Dear Mr. Berkowitz," it said. "We hope you'll come back to AOL."

AOL has said it will lay off thousands of employees as it reduces or even eliminates its dial-up service and moves towards being a provider of advertising-supported content services.

Consumer groups are calling for warning labels on food packaging containing latex, saying the substance poses a potential threat to people with allergic sensitivities. They point to a recent British study revealing that one third of food packaging tested was contaminated with latex.

According to the study, the latex was transferred to food in some cases. In one unnamed chocolate biscuit, the amount of latex found was 20 times the level that instigates a reaction. A group of experts from the UK Latex Allergy Support Group Advisory Panel said that these results were significant.

"For a few people, natural rubber latex is a very potent allergen and for these individuals, there is no safe level of exposure," said LASG representative Graham Lowe.

"We would welcome an approach to the EU to consider this evidence and the issue of labeling," he said. Lowe added that latex transfer to food could account for some currently inexplicable reactions.

There is no agreement on a safe level of latex, but it has been reported that a billionth of a gram (1ng/ml) can be enough to cause a reaction. Currently manufacturers are not required to label food packaging as containing latex.

Scientists at Leatherhead Food International measured the presence of four major latex allergens in 21 types of food packaging for confectionary, fruit and vegetable produce, meat, pastry and dairy products. A third of the materials tested gave positive results for the presence of latex and in some cases, researchers say, this was transferred onto the food.

Alarmed by rising injuries and deaths, pediatricians are recommending that parents avoid placing their children in shopping carts until safer models are available.

In 2005, more than 24,000 children were treated in U.S. hospital emergency rooms for shopping cart-related injuries. Most of these injuries occurred when a child fell from a shopping cart, the cart tipped over, the child became entrapped in the cart, or the child fell while riding on the outside of the cart, according to the new policy statement issued by the American Academy of Pediatrics (AAP).

Injuries to the head and neck accounted for 74 percent of shopping cart-related injuries among children younger than 15. Of the 4 percent of children treated in an emergency room for a shopping cart injury, more than 93 percent were under age 5.

With the potential instability of some existing shopping cart designs, and because it is difficult for a parent to easily ascertain a cart's safety simply by looking at it, parents should carefully consider the potential for injury before placing a child in a shopping cart, according to the policy.

Instead of putting children in shopping carts, parents can try one of the following alternatives:
• Get another adult to come with them to watch the children while shopping.
• Put children in strollers, wagons, or frontpacks instead of in shopping carts.
• Ask older children to walk and praise them for behaving and staying nearby.
• Leave children at home with another adult.
• Shop online if local stores offer shopping on the Internet.

If a parent chooses to place a child in a shopping cart, he or she should ensure that the child is properly secured in an effective and age- and size-appropriate belt or harness.

Parents and caregivers should never:
• Leave a child alone in a shopping cart.
• Allow a child to stand up in a shopping cart.
• Place an infant carrier on top of the shopping cart.
• Allow a child to ride in the basket.
• Allow a child to ride on the outside of a cart.
• Allow an older child to climb on the cart or push the cart with another child inside.

To help parents, the AAP recommends that businesses adopt shopping cart safety strategies and offer other assistance to help prevent injury.

This may include providing a supervised in-store child-play area; a pick-up area or assistance in bringing purchases to a vehicle; cart modifications to improve child restraint and cart stability; strollers or wagons for in-store use; education and warnings about cart dangers; and/or customer incentives, such as stickers or other give-aways, to reward safe shopping cart behavior.

In addition, the AAP recommends that the current U.S. safety standards for shopping carts be revised to include "clear and effective performance criteria" for child-restraint systems and cart stability to prevent falls and injuries due to cart tip-overs.

The U.S. Consumer Product Safety Commission should monitor and enforce manufacturer compliance closely, and regularly review child shopping cart-related injuries, according to the new policy.

The AAP recommends that child health and advocacy professionals support revised manufacturer standards, and educate parents, families, the public, and the media on shopping cart risks.

When consumers think of class actions, they often picture a personal injury case involving serious injury or death, as in the cases being brought against Merck, the manufacturer of the painkiller Vioxx.

But you don't necessarily need a life-and-death-issue. Sometimes poor snacking habits will do. There's currently a guacamole class action being whipped up in California -- that's right, the avocado dip. A Los Angeles consumer attorney is assembling a class of plaintiffs commonly wronged by buying "guacamole" dips containing mostly lemon juice, tomatoes and spices.

If you're a qualified snacker who bought the right dip from household giants like Kraft or Marzetti's, you can dip a chip into this green fraud perpetrated on unsuspecting munchers.

Fortunately, most class actions fall somewhere between grievous injury and unsatisfying snacking. Typical class actions address many injustices: securities fraud, consumer fraud, human and civil rights violations, employee benefits disputes, and so-called "mass torts" -- highly-publicized cases involving oil spills or defective drugs/medical devices.

An ideal example of a consumer class action is the Martha Stewart glass-top patio tables case now working its way through the courts. There is a significant economic injury -- the tables cost hundreds fo dollars, but it's not really enough to justify a lengthy and expensive lawsuit by each individual consumer.

"In addition to the damage already done to thousands of consumers, there is an on-going risk of injury -- the tables are still being sold -- that mandates that something be done, and not on a small scale," said attorney Richard Doherty, who is representing purchasers of the tables.

Another "ideal" class action was last year's case in New Jersey that resulted in a settlement for consumers who bought or leased a new or used vehicle from one of more than 397 dealerships in the preceding eight years. They would eligible for a $100 discount on the purchase or lease of a new or used vehicle. Some class members could receive higher refunds and a discount on parts and service. Not all that dramatic, but not chicken feed either.

The Basics

To qualify as a class action, a lawsuit must affect a broad class of individuals, all similarly harmed by the defendant's action or inaction. This is important: it can't just be a bunch of consumers with a collection of grievances against a single company.

The court will appoint a "lead plaintiff" to represent the class. This person is basically the canary in a cage, someone who serves as an example to illustrate how all the class members were harmed.

Many cases are brought in Federal Court under Rule 23 of the Federal Rules of Civil Procedure. For this to happen, either

1) a claim must arise under federal law ("federal question") or
2) the plaintiff and defendant must be from different states ("diversity.")

They may also be brought in state courts. The conventional wisdom is that federal courts favor defendants and state courts plaintiffs, although there are exceptions.

Before a suit can go forward in either court, a judge must "certify" the class as having enough in common to proceed against a defendant. The defendant, naturally, will argue against certification. Class members get the chance to "opt out" of the class before litigation begins and pursue individual relief instead.

Some things the court looks at in deciding whether or not a class action is appropriate include

1) whether individual lawsuits are impractical due to the number of potential plaintiffs;
2) whether the plaintiffs have enough legal or factual claims in common to truly be a class;
3) whether the lawyers representing the plaintiffs are up to the task of a complex lawsuit requiring time and lots of paper.

The Ideal

What are some "ideal circumstances"in which a class action is a good fit?

• Individual claims are too small to justify a separate lawsuit. For example, say I buy a digital camera whose memory card continually fails. The camera cost $499 -- about 2 to 3 hours of a lawyer's time, unless I want to battle it out in small claims court myself. But if 250,000 -- plaintiffs have the same memory card problem, we're much more likely to get action from the camera company through the class action process. A similar case against Canon is now working its way through the courts.

• Class action lawsuits are a practical way to combine a lot of small wrongs into one more high-powered lawsuit -- like Girls Gone Wild voyeurs who claim they were overcharged for their role in exploiting young women. In essence, a class action allows the case to be tried once rather than numerous times. This is especially important because of time and money considerations -- expert witnesses, depositions, legal briefs, etc. This is one reason big companies usually prefer to fight it out one case at a time: they can outspend and outlast a ragtag band of individuals.

Types of Relief

The one thing a class action won't do is put anyone in jail. It's strictly a civil affair, which means the "relief" granted by the court is most likely to fall into one (or more) of three categories:

• Compensatory damages -- money, in other words. The amount is determined by the damages plaintiffs have suffered.

• Injunction -- a court order forcing the defendant to stop doing whatever it was that harmed the plaintiffs -- dumping chemicals into a nearby river, for example.

• Declaratory judgment -- the judge throws up his or her hands (often literally) and rules from the bench that one side or the other is so obviously right that there is no need to argue further.

Objection!

To put it mildly, there are those who think class actions are a despicable distortion of the legal process. Their objections include:

• Legal fees -- typically 20% of the award -- eat up a lot of the settlement.

• Small damage recovery for plaintiffs, "coupon settlements" for example. The Blockbuster case is a fairly notorious case in point, as is a recent Netflix settlement.

• Lawyers don't work too hard -- there's often little or no discovery involved.

• Lawyers settle for low-ball settlements.

To overcome some of these objections, and to keep its corporate sponsors fed and watered, Congress passed the Class Action Fairness Act of 2005, which is supposedly the "first step" in President Bush's promise to reform tort law. Of course, tort law has been evolving for centuries, so eight years may not be long enough to put much of a dent into it.

One goal was to remove class action lawsuits from jurisdictions historically known for granting large judgments for plaintiffs, such as Madison County, Illinois, the "judicial sinkhole" infamous for granting huge awards in cases that might generously be described as marginal. It does this by giving federal courts sole jurisdiction over class actions which involve amounts over $5 million, or actions in which any plaintiff is from a different state than any defendant.

In other words, if fewer than 66% of class members are residents of a foreign state and no significant defendants are citizens of the state in which the action was brought, there's sufficient "diversity" for removal to federal court. As a result, many cases now heard in state court will be transferred to federal.

Of course, plaintiff's attorneys are almost exclusively Democrats -- like, oh, John Edwards -- while corporate attorneys, like their masters, are almost exclusively Republican but Congress would never stoop to any such simplistic motive as impoverishing the wealthy trial lawyers who are big donors to Democratic candidates, now would it?

All this is potentially bad news for plaintiffs, as federal courts are known for being more reluctant to certify a class and more likely to reject class action settlements.

Theoretically, a group of plaintiffs could get through the preliminary stages of a trial and work their way to a proposed settlement, only to have a judge scuttle the deal. Also, transferring more cases to federal courts will likely clog already full dockets and cause longer trial delays.

It's also possible for the defendant to stage a last-minute end run around class action plaintiffs, as Ford did in 1999 when it derailed a class action suit over defective Windstar engines. The company issued extended warranties to some of the plaintiffs and convinced a judge to dismiss the suit, leaving other plaintiffs past and future out of luck.

What's A Consumer To Do?

Consumers are constantly writing to ConsumerAffairs.com, wanting us to put them in touch with others who bought a bum lawn mower, lousy lipstick or rotten cheeseburger. "Then we can all get together and file a class action lawsuit," they exclaim.

Well, maybe, but in practice it doesn't work that way. Rather than searching for other plaintiffs, an aggrieved party who has reason to think his or her slight is a common one is better off contacting an experienced, successful plaintiff's attorney whose practice consists largely of class actions.

The attorney will evaluate the case -- and the plaintiff -- and decide whether or not to go forward. Something plaintiffs often don't realize is that the attorney is the one taking the risk, since if the case is not successful the lawyer doesn't get paid.

Prosecuting a major case can take years and literally cost a firm millions of dollars. The big fees are the ones you hear about; you don't hear about the law firms that have gone into bankruptcy or simply dissolved after a few unsuccessful cases.

So what's the best way for you to settle your grievance?

The first question is whether there was grievous personal injury or death resulting from the defective product or the actions of others. If the answer is yes, then you should consult the best-known, most ambitious and most highly regarded trial attorney in your area. If you find the right attorney, she or he will take your case on contingency (the lawyer gets a percentage of the settlement but you pay nothing if the case fails).

If no one was killed or injured (we don't mean to sound crass but this is a real-world discussion we're having) and the damages were in the few-thousand-dollar range, you are almost always better off going to small claims court. You do not need a lawyer, the company you are suing will very possibly not even appear to defend themselves and you have a good chance of winning, assuming you have a good case. See our state-by-state guide for more information.

Before rushing off to court, ask yourself if your loss might be covered by insurance. If your microwave oven started a small fire in your kitchen, your homeowner's policy will probably cover most of it. Yes, of course, you want "justice." We all do, but filing an insurance claim is a lot easier than fighting it out in court. Remember, if you have a loss that is not covered by insurance, including any deductible, you can probably take a "casualty loss" deduction on your next income tax return. Ask your accountant.

If none of these options will work, a class action may be for you. The simplest first step is to file a review with ConsumerAffairs.com. Experienced class action attorneys review every issue and hundreds of cases have been filed as a result. This costs you nothing and exposes your potential claim to attorneys who are looking for a good fight.

What else can you do? Possibilities include:

• Consult local attorneys with class action experience. The truth, however, is that most successful class actions are filed by a handful of big firms with vast experience. It is difficult for a local firm to effectively take on major corporations.

• Scour the Web for news stories about successful class actions. Contact the David who slew Goliath.

• Nobody likes advertisements but they can sometimes be helpful. Most consumer sites, including this one, are crawling with ads placed by class action lawyers looking for business. It can't hurt to check them out but don't do business with anyone who wants money upfront or wants you to divulge personal information (like checking account numbers) on the first call.

But remember -- in a class action, you are just another plaintiff, most likely one of thousands. You won't get any special payoffs for your trouble. You're potentially doing a big favor for your fellow plaintiffs but it would be, ahem, unethical and illegal for anyone to cross your palm with any special payments for so doing. The term for this is "kickback," not a pretty sight.

"Joining" a Class Action

Consumers often ask how they can "join" a class action. As explained above, the first thing that needs to happen before a class action can proceed is that a court has to "certify" the class after determining that the case has too many plaintiffs to be named individually.

After certification, notices are sent to potential class members, whose names are gathered from whatever source is appropriate in a particular case: product registration information, pharmacy patient information, records of car sales, reviews filed with ConsumerAffairs.com, etc.

If a class member is notified and wants to join the case, he or she just returns the notice. So you don't really "join" a class action lawsuit; if you qualify as a plaintiff, you are automatically included, assuming you have been identified through one of the methods mentioned above, unless you "opt out."

Some people don't want to be included in class actions. If you decide that you'd rather pursue justice on your own or if you think -- as many apparently do -- that consumers should not defend their rights, you simply opt out of the class, removing your name from the list of plaintiffs. If you fail to opt out, you could be bound by the results of the class action suit -- meaning that you would not be able to pursue an individual action against the company.

So, are consumer class actions guaranteed to deliver the pound of flesh you want and deserve? Obviously not, but in an era when individual rights are being extinguished by a lobbyist-driven Congress and White House, they're one of the few arrows in the quiver. Breathe deeply, aim straight and you may just hit the target.

Learn More

On the Web ...

• law.freeadvice.com

• classaction.findlaw.com

In print ...

• "A Civil Action" by Jonathan Harr (Vintage, 1996) -- $14.95. A classic, it showcases the lawsuit and discovery abuses of large corporations that place economic interests above those of individuals, and shows what is oftentimes the futility of litigating against deeply entrenched, well-financed corporations that can afford to wage a war of attrition.

• "Class Action: The Story of Lois Jenson and the Landmark Case that Changed Sexual Harassment Law" by Clara Bingham & Laura Leedy Lansler (Anchor, 2003) -- $15.00

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Joan E. Lisante is an attorney who writes frequently on consumer issues.

The Securities and Exchange Commission has filed suit against a Waco, Texas, insurance company and its affiliates for targeting American military personnel with a deceptive sales program that misleadingly suggested that investing in the company's product would make one a millionaire.

Since 2000, approximately 57,000 members of the United States military services purchased the product. The vast majority earned little or nothing on their investment.

The complaint, filed in the United States District Court for the Southern District of California, charged affiliated entities American-Amicable Life Insurance Company of Texas, Pioneer American Insurance Company, and Pioneer Security Life Insurance Company (together, American-Amicable), all based in Waco, Texas, with securities law violations.

American-Amicable has agreed to settle the action by paying $10 million to the approximately 57,000 military personnel who invested in the product sold as an investment known as "Horizon Life."

The settlement is part of a global settlement of claims brought by the Commission, state insurance regulators led by the Georgia Department of Insurance and the Texas Department of Insurance, and the United States Attorney's Office for the Eastern District of Pennsylvania.

The settlement with the other regulators will provide additional relief, which the other regulators value at approximately $60 million. In the agreed settlement, the company has neither admitted nor denied the Commission's allegations.

Under the settlement, American-Amicable will discontinue sales of Horizon Life and will terminate the deceptive sales program, which it called the "Building Success" system.

Unlike insurance products legitimately offered to a wide range of potential buyers with a potential interest in the insurance features of those products, Horizon Life was targeted at military personnel who had little or no interest in insurance because they already were provided access to low-cost insurance sponsored by the government. Instead, American-Amicable represented Horizon Life to military personnel as a security and a wealth-creating investment.

As a material element of its marketing, American-Amicable senior staff trained its sales agents to hold themselves out as "financial advisers" or "financial coaches." Purporting to play that role, the sales agents then misled military personnel to believe they could become millionaires if they invested in Horizon Life.

At the same time, the agents denigrated other investment alternatives, claiming that mutual funds, bank savings accounts and government bonds were not sensible investments compared to Horizon Life.

Although the written materials ultimately provided to investors apparently accurately described the Horizon Life product, the company's deceptive sales pitch did not. Contrary to the representations, the overwhelming majority of military personnel who purchased Horizon Life earned little or nothing from their investment.

Linda Chatman Thomsen, Director of the Commission's Enforcement Division, said, "These defendants targeted their sales efforts at the young men and women who are putting their lives at risk serving our country. These investors deserved the honest and forthright disclosures mandated by the federal securities laws, not the deceptive sales pitch that was designed specifically for them."

The Commission's complaint charges American-Amicable with violating Sections 17(a)(2) and (3) of the Securities Act of 1933, an antifraud statute. Without admitting or denying the allegations, American-Amicable has agreed to be enjoined from further violations of these provisions, and to pay disgorgement of $10 million, which will be distributed to the affected investors.

In related matters, Georgia Insurance Commissioner John W. Oxendine and Texas Insurance Commissioner Mike Geeslin announced a multi-state settlement with American-Amicable alleging violations of state insurance and consumer protection laws, and U.S. Attorney Patrick L. Meehan of the Eastern District of Pennsylvania announced the filing of a complaint, settlement and proposed consent decree with American-Amicable alleging civil claims of wire and mail fraud.

The letter says the recipient has won $35,000 in an international promotion program. It indicates that a check will be mailed to the winner from a North American Payment Center upon payment of a "release fee" and applicable taxes.

A contact name and phone number is provided to assist with verification, processing and payment.

"Phone numbers often go back to people involved with the scam, and they will indicate that your winning notification is legitimate," the company said in a fraud alert posted on its Website.

Atlantic Lottery says that to win any of its cash prizes, you must have purchased a ticket from an authorized retailer in New Brunswick, Nova Scotia, Prince Edward Island or Newfoundland and Labrador, or on their PlaySphere website. The company said it is not authorized to operate lotteries or games of chance outside of Canada.

Car thieves are little bothered by soaring gasoline prices as they continue to steal hot, high-priced little sports cars along with blinged-out gas-guzzling SUVs.

The 2001 BMW M Roadster is at the top of the most stolen list. One of every 200 on the road was stolen last year, according to the CCC Information Services Inc. of Chicago, an industry group that tracks theft and vehicle damage.

The vehicle with the highest theft percentage is deemed the years most stolen vehicle.

In raw numbers, the GM Hummer takes most-stolen-make honors, followed by Acura, Land Rover, Honda and Suzuki, according to CCC.

Perhaps most surprising is that in spite of escalating fuel costs, the full-size sport utility vehicle segment, including the Cadillac Escalade and Land Rover, remained the most stolen vehicle segment. Maybe crooks don't keep the cars long enough to gas them up?

Fast and furious little cars that can be sold for parts by street racers dominated the most-stolen list along with some high-priced cars.

Proving that thieves do like fast cars and powerful engines, 6 of the top 10 most-stolen specific models were versions of the Acura Integra. The Integra engine can easily be swapped into a lighter Honda Civic, making the Honda an agile and quick little street racer.

Here is the list of the car-thieves' top 25:

1. 2001 BMW M Roadster
2. 1998 Acura Integra
3. 2004 Mercury Marauder
4. 1999 Acura Integra
5. 1995 Acura Integra
6. 2002 Audi S4
7. 1996 Acura Integra
8. 1997 Acura Integra
9. 2001 Acura Ingegra
10. 2000 Jaguar XJR
11. 1994 Acura Integra
12. 2005 Suzuki Aerio
13. 2004 Suzuki Aerio
14. 1998 Land Rover Range Rover
15. 1998 Jaguar XJR
16. 2003 Mercury Marauder
17. 2000 Acura Integra
18. 2002 Cadillac Escalade
19. 2000 Audi A8
20. 2000 Audi S4
21. 1993 Mercedes-Benz 600
22. 1995 Land Rover Range Rover
23. 2005 Cadillac Escalade
24. 2000 Honda Civic
25. 2001 Audi S4

The attempts by Senate Commerce Committee chairman Ted Stevens (R-AK) to push his telecommunications law update to final passage may be stalling out, due to Congress' switching focus to the elections, and continued debate from all fronts on the issue of net neutrality.

Stevens told Roll Call that he was racing to get 60 votes in the Senate to pass the bill after Senate Majority Leader Bill Frist (R-TN) told Stevens not to bring the bill to the floor unless he was certain he had enough votes to ensure passage.

However, many Senators on both sides of the aisle expressed unease about voting on the bill prior to the November elections. Some stated that they were receiving heavy feedback from constituents demanding that net neutrality protections be placed in the telecom update.

A rumor that Stevens was attempting to secure a majority of votes for "cloture" on the bill, in order to shut off debate and move it to an immediate vote, was met with a furious response from bloggers who have been chronicling the net neutrality issue.

Although Stevens has not expressed outright opposition to net neutrality, he voted against an amendment to the telecom bill that would have inserted basic protections for content access into the law.

Stevens' comments that the Internet was "a series of tubes" and that net neutrality interfered with his staff's ability to "send him an Internet" were roundly mocked on the Web and in mainstream media both.

In addition to the net neutrality issue, the telecom bill contains many issues that legislators might be afraid to face before elections, including the controversial "broadcast flag," a measure favored by the motion picture and recording industries that would prevent copying of certain content by users, even if only for personal use.

Frist had gone on record as saying that he would not support passage of the bill unless the "broadcast flag" option was included. Frist's former chief of staff, Mitch Bainwol, works for the Recording Industry Association of America (RIAA), the chief lobby group for record companies.

"No Free Lunch"

Meanwhile, the telecommunications industry is pushing hard to ensure that the bill passes without any language or provisions favoring net neutrality.

GigaOM's Katie Fehrenbacher reported that AT&T head Ed Whitacre reiterated his opposition to net neutrality in no uncertain terms during a recent speech to the National Association of Regulatory Utility Commissioners.

"No one gets a free ride," Whitacre said. The American economy doesn't work that way. . . .We are not going to build this with no chance for a return. Those that want to use this will pay."

Both AT&T and Verizon are pushing hard to roll out their new high-speed broadband and TV-over-Internet services in order to shore up losses from their dwindling telephone business. Verizon reported 440,000 new broadband subscribers during its second-quarter earnings call, 25 percent of which came from its new FiOS high-speed service.

But Verizon also reported a loss of 553,000 traditional telephone line customers, as more and more users switched to only using cellphones for communication, or to Voice over Internet Protocol (VoIP) services such as Vonage.

The telecom and cable industries strongly oppose equal access to Internet content, in order to push "tiered pricing" models to customers, where people willing to pay more can receive faster connection speeds, better service, and so on.

Supporters of net neutrality believe that unless the principle of equal access to Internet content is enshrined into law, those who don't want to pay extra, or can't afford to, will be relegated to the "slow lane" of bandwith access.

The battle has taken over mainstream media, with telecom company lobbyists taking out full-page ads in newspapers and penning editorials claiming that net neutrality will stifle competition.

One column, written by Hands Off The Internet's Mike McCurry, claimed that "The 'neutral' proposal that companies like Google are touting will ensure that they never have to pay a dime no matter how much bandwidth they use, and consumers who may only use their computers to send e-mail and play Solitaire get to foot the bill."

McCurry was criticized for not disclosing that Google, like all Internet-based companies, already pays millions of dollars per year for the bandwidth it uses, and that his lobby group was funded by major telecom and cable companies.

California Attorney General Bill Lockyer has filed a $2 million-plus lawsuit against Los Angeles County-based Fast Cash for violating a state law that prohibits payday loan businesses from suing for triple the amount of the check when customers' bank accounts do not hold sufficient funds to honor post-dated checks written to secure the loan.

"Fast Cash extorted outrageous amounts of money from its customers," said Lockyer. "They threatened lawsuits, tried to squeeze settlements, and, when that did not work, they deceived the court into a rendering a judgment. Fast Cash could have made a lawful living. Instead, they chose fear and deceit. We will continue ridding this industry of similar frauds."

The complaint, filed in Los Angeles County Superior Court, asks the court to permanently enjoin the business from further violating the law, void improperly obtained judgments, order full restitution to victims, and assess a civil penalty of not less than $2 million for unlawful business practices. Fast Cash may have accumulated improper judgments in excess of $350,000.

In most cases, state law authorizes a plaintiff to seek a penalty of treble damages, or three times the amount, against a person who writes a bad check. However, California law prohibits payday loan operations from collecting such damages, instead limiting them to the amount of the check and a single $15 fee. Further damages and fees are not allowed.

payday lenders are not entitled to treble damages because, unlike checks for goods or services, at the time a payday loan is written both parties understand the borrower's bank account often will not contain sufficient funds to honor the check. Therefore, the law only allows lenders a single late fee of $15 rather than the punitive treble damages award.

The complaint contends that Fast Cash, run by defendant Christoph Hoppe, illegally sued more than 400 individuals from the Los Angeles area in Los Angeles County Small Claims Court for treble damages for checks passed on insufficient funds.

Defendants threatened borrowers with a suit in order to obtain their agreement to pay back the loan plus treble damages, according to the complaint. When the defendants could not secure an agreement, Hoppe pursued the action in court but would not reveal that each of these checks was written pursuant to a payday loan transaction, the complaint states.

The vast majority of borrowers, the complaint claims, did not attend the small claims court hearings to inform the court of the nature of the transaction. Without complete information, the court ordered borrowers to pay treble damages, according to court records.

The complaint states that Hoppe used "unfair, fraudulent, unconscionable and unlawful means to collect or attempt to collect consumer debts."

Since being investigated the company appears to have stopped making payday loans.

U.S. Surgeon General Richard Carmona, who highlighted the dangers of obesity and second-hand smoke, has quit, effective July 31, just a month after he released a comprehensive report on the dangers of secondhand smoke. A letter circulated on Capitol Hill informed Hill staffers of his resignation.

It's unclear who decided it was time for Carmona to go. The former trauma surgeon reportedly plans to return to his home in Tucson, Arizona. Although public health advocates were pleased with his report on secondhand smoking, they were often critical of Carmona for failing to act more forcefully.

"Went out with a whimper, didn't he?" Arizona heath department spokesman Michael Murphy quippted, according the Arizona Daily Star.

"The surgeon general job is one with enormous potential to improve the public health of the entire nation, and several have done just that," said Dr. Sidney Wolfe of Public Citizen. "But Carmona's reign has been a relatively inactive one. It's hard to remember another surgeon general who was so largely invisible as he has been, and that's a tragedy."

Others defended Carmona for doing the best he could in a pro-business administration.

"I think that report is going to turn out to be the nail in the coffin to the tobacco industry," Dr. Georges C. Benjamin, executive director of the American Public Health Association, predicting it will eventually lead to a ban on all smoking in public. He said Carmona served during a "tough time."

Carmona conceded in an Arizona Daily Star interview that he was frustrated by the political pressures that came with the job.

"There were many days ... when science gave way to politics," he said. "What was done was not always my decision."

Carmona spoke too bluntly early in his reign, telling a Congressional committee that all tobacco products should be banned. Observers said he was kept on a tight leash thereafter.

The Bush Administration has lost several of its more outspoken public health and safety appointees. Health and Human Services Secretary Tommy G. Thompson, who campaigned for more healthful eating, was let go after Bush won re-election. Highway safety chief Dr. Jeffrey Runge, who was openly critical of top-heavy SUVs, was moved to a post in the Department of Homeland Security and Consumer Product Safety Commission chair Hal Stratton quit abruptly last month to become a lobbyist.

Carmona's blunt and extensively researched report found that there is no risk-free level of exposure to secondhand smoke and said the the only way to protect nonsmokers from the dangerous chemicals in secondhand smoke is to eliminate smoking indoors.

Secondhand smoke exposure can cause heart disease and lung cancer in nonsmoking adults and is a known cause of sudden infant death syndrome (SIDS), respiratory problems, ear infections, and asthma attacks in infants and children, the report found.

Carmona's four-year term quietly expired Saturday at midnight. His deputy has been named acting surgeon general, leaving the next move to President Bush, who may wait until after the fall elections to name a successor.