Current Events in November 2006

Consumer advocates have long campaigned against financial companies offering payday loans, car title loans, and other loans targeted to low-income or poor-credit consumers. While these outfits were once limited to shabby storefronts, they've now moved into cyberspace, exploiting anyone who has access to a computer.

A number of states have passed laws trying to regulate payday lenders, who charge their customers exorbitant interest rates, by forbidding them from doing business in their states. The online lenders, however, seek out clever loopholes.

"All aspects and transactions on this site will be deemed to have taken place in our office in the State of Delaware, regardless of where you may be viewing or accessing this site," reads the disclosure language on APPLE Fast Cash Personal Loans' Web site. "Borrower is responsible for complying with any local statutory obligations that may exist in their state or area with respect to any transactions with APPLE Fast Cash Personal Loans."

Recently West Virginia Attorney General McGraw filed suit to enforce investigative subpoenas against 14 Internet payday lenders and to enjoin their usurious lending activities in his state.

McGraw also announced that his office has reached formal settlement agreements with 18 other Internet payday lenders in which they promised to permanently discontinue their payday loans here and to refund all unlawful fees and charges collected from West Virginia consumers. McGraw said the latter agreement will result in tens of thousands of refunds and canceled debts for hundreds of West Virginia consumers.

McGraw said the 14 Internet lenders made "payday loans" to consumers in their homes via interactive web sites and have claimed that states, including West Virginia, cannot regulate their lending activities. The state, he says, sees it differently. The defendants require payment of interest with Annual Percent Rates ("APR") ranging from 600 to 800 percent APR. The State of West Virginia has a maximum allowable rate of 18 percent APR for consumer loans.

The companies sued by McGraw's office include the following:

• Apple Fast Cash Personal Loans - Wilmington, DE
• Cash Advance Network, Inc. - Carson City, NV
• Cash Advance USA - Miami, FL
• Cash Advance Marketing d/b/a Cash Back Values - Carson City, NV
• Cash Net - Salt Lake City, UT
• American Interweb Marketing d/b/a CASHRebateOnLine.com Carson City, NV
• Leads Global, Inc. d/b/a Cash Today Limited and d/b/a Cash2day4you.com - Reno, NV
• GECC d/b/a Cashdirectnow.com - Rapid City, SD
• Americash Hotline d/b/a Direct CashExpress - Wilmington, DE
• Magnum Cash Advance, Inc. - Wilmington, DE
• Ambassador Financial Services d/b/a Nationwide Cash - Espanola, MN
• PayDay OK d/b/a PayDay Select - Ruidiso, NM
• Quik Payday.com Financial Solutions - Logan, UT
• USA Cash Center - Rapid City, SD

The companies that have signed formal settlement agreements with McGraw's office include:

• AnyDay Cash.com of Holiday, UT;
• Checkexpress.com d/b/a Paydayloantoday.com of Las Vegas, NV;
• CNC Funding of Euless, TX
• Elite Cash Advance of Salt Lake City, UT
• FSM Processing, Inc. of Las Vegas, NV
• Get Cash 911.com of San Diego, CA
• PayDay Advance Plus, Inc. of Los Angeles, CA
• Sordi, Inc. d/b/a Checks for Cash of Rockford, IL
• Star Light Financial of Del Ray Beach, FL
• VIP Cash of Las Vegas, NV

At least eight other companies have furnished written confirmation that they will sign similar formal agreements with the attorney general.

The nation's largest rent-to-own business, Rent-A-Center, Inc. (RAC), will pay more than $7 million in restitution to thousands of California customers under a settlement with Attorney General Bill Lockyer. The settlement, finalized today by the San Francisco County Superior Court, resolves a consumer protection lawsuit brought by Lockyer.

"Our economic system is not driven solely by the profit motive," said Lockyer. "To function properly, businesses must deal fairly and honestly with consumers. Rent-A-Center flouted this fundamental principle, violated state law and harmed consumers. This settlement not only will provide restitution to thousands of victims, but also ensure the company reforms its business practices to conform with the law."

The settlement resolves a lawsuit, filed simultaneously with the settlement, that alleged RAC failed to disclose the true cost of its rent-to-own program to California consumers. Additionally, RAC engaged in deceptive advertising in marketing and selling memberships in its "Preferred Customer Club," according to the complaint.

The settlement requires RAC to make full or partial refunds to thousands of California consumers who bought Club memberships, or who rented or purchased electronic merchandise, appliances, or computer systems from RAC on or after November 1, 2004. Lockyer's office estimated the restitution will total more than $7 million. RAC also will pay $750,000 in civil penalties.

San Francisco County Superior Judge Peter J. Busch on Thursday approved the settlement. The court today formally entered the judgment reflecting the settlement.

RAC rents and sells new and used household merchandise, including televisions, computers, furniture and appliances.

Customers typically sign a self-renewing weekly or monthly lease for the rented merchandise. The lease agreements include an option to purchase, either by continuing to pay rent for a specified period of time, or by early payment of some specified portion of the remaining lease payments.

Lockyer's complaint alleged RAC, in violation of state law, engaged in unfair competition and illegally misrepresented the cash price of certain merchandise.

The complaint also alleged RAC misrepresented the benefits and terms of its Club membership in numerous ways. The misrepresentations included: falsely claiming to provide an extended warranty, insurance, or service contract for rental merchandise; and telling consumers they would receive up to $500 in grocery discounts, without adequately disclosing that to obtain the maximum discounts consumers had to pay RAC more than $100 in additional fees.

Aside from the monetary payments, the settlement imposes reforms of RAC's business practices. These "injunctive relief" provisions include:

• requiring RAC to comply with California's Karnette Rental-Purchase Act in all rent-to-own transactions;

• prohibiting RAC from charging prices that exceed the maximum amount allowed by law; and

• requiring RAC to clearly disclose all terms of its Club membership, including any costs, benefits, services, features, discounts and cancellation rights.

In addition to the $7 million in restitution, RAC will deposit more than $7 million into a special consumer protection trust fund. The additional $7 million comes from a prior, private lawsuit brought against RAC, and represents restitution funds left undistributed to consumers in that case.

The $7 million deposited into the special fund will be used solely to enforce consumer protection laws, and to protect California consumers in the areas of consumer lending and finance, debt collection, and the sale and lease of consumer goods or services.

RAC is based in Plano, Texas and operates 2,880 stores in all 50 states. In 2005, the company's revenues totaled $2.34 billion.

New York Attorney General Eliot Spitzer has filed a lawsuit against a leading hedge fund and others for engaging in a fraudulent mutual fund market-timing scheme that damaged long-term investors.

The defendants -- Samaritan Asset Management Services, Inc., Johnson Capital Management, Inc., and their principals, Edward T. Owens and Michael A. Johnson are accused of engaging in a deceptive practice known in the industry as "flying under the radar" of monitoring systems established by mutual funds to detect market timing.

Most egregiously, the defendants allegedly disguised their timing activities from the various targeted mutual fund families by attaching or "piggybacking" their trades on the investment accounts of retirement plans that were customers of Security Trust Company (STC), a trust company and national banking association located in Arizona.

One way that STC and Johnson Capital evaded the scrutiny of mutual funds was to purposely vary the amounts of the trades. On Oct. 22, 2001, for example, an STC employee sent an e-mail advising Johnson Capital to employ this device as means to conceal its market timing activity.

"When trading the piggy back accounts, try to adjust the buy and sell amounts. Meaning, do not complete the sell trades for the same amount as the buy trade from the previous day. Same with [exchanges], do not use the same amount--vary each in and out trade. ... This will assist us in trying not to bring attention to the trading."

The lawsuit seeks to enjoin the defendants from conducting deceptive timing in mutual funds and restitution of monies obtained by their fraudulent acts.

As a result of a related investigation, Grant Seeger, the CEO of STC pleaded guilty in 2005 in New York County Supreme Court to second degree grand larceny, a class C felony, and to a violation of the Martin Act, a class E felony.

STC President William Kenyon pleaded guilty to a felony violation of the Martin Act.

Northwest Nevada Telco is one of the smaller players in the major leagues of cramming, the shady means by which questionable charges are "crammed" onto consumers' phone bills. Congress created the problem -- presumably inadvertently -- through a provision of the Telecommunications Act of 1996. It has since shown no interest in correcting it.

When cramming charges appear on a customer's bill, they are usually accompanied by a company name and phone number. When the customer calls that number they are taken to a company such as Northwest Nevada Telco (NWNT). Basically, NWNT and similar companies work on behalf of their client, the crammer, to convince the consumer that the charge is legitimate.

NWNT also offers other services for cramming companies such as adult chat lines, billing services and, until recently, computer auto-dialers.

An auto-dialer, sometimes called a stealth dialer, is a computer program that uses an individual's phone-connected modem to call an Internet service provider (ISP). With the connection provided by the program, the user could access specific Internet sites, usually pornographic, and then have per-minute charges placed on their phone bills.

Although there is nothing illegal about offering services through an auto-dialer, it becomes illegal when the device dials the ISP without the consumer's consent and then starts racking up charges. In one case, notorious crammer One Call programmed the dialer to call on its own, possibly while the user was asleep or away from the computer.

Clean Hands

In an interview, Jack Lawless, the owner of NWNT, insisted that his company has not done anything illegal. That's what everyone else in the long line of cram artists claims.

In all the cases against cramming companies, the local exchange carriers (LEC), such as Verizon and Bellsouth are rarely called to the stand. Neither are the companies that provide the so-called services (the company who designed and sold the auto dialer), the third-party billing companies such as ZPDI and ILD (the companies who place the charges) and the companies that provide the customer service (where the 800 number associated with the charge is answered).

What makes NWNT an interesting case is that it is several of those "other" companies rolled into one humble office building in Reno, Nevada.

How It Works

To help put this in perspective, we will continue with the One Call example. Until recently, NWNT sold auto dialers. Since the contract that exists between One Call and NWNT is not a public document, we'll say for the sake of simplicity that One Call purchased and used NWNT's dialer program.

The next step, according to a recent settlement against One Call and the Pennsylvania Office of Consumer Advocate, is that the consumer would accidentally download the dialer after clicking on a popup on the Internet. Then, without the consumer's consent or knowledge, the dialer would "hijack" the user's phone line-connected modem and start making long distance phone calls that usually carried a hefty per-minute charge.

One Call then sends its monthly charges to NWNT or another third-party billing company such as ILD or ZPDI.

The third-party billing companies, such as NWNT, have contracts with the LECs, such as Verizon, in which NWNT pays Verizon for the right to charge on Verizon's monthly bills. So then NWNT tells Verizon how much money to charge to a certain phone number according to what One Call tells NWNT.

It also normally takes a couple of months for the charge to appear on the consumer's bill, Lawless said. So an individual's computer could be making expensive phone calls for months before he or she would discover it.

Lawless said it takes months for the charges to appear because of the LEC's long billing periods and the long line of companies involved.

Once the cramming charges, such as those made by One Call, finally appear on the consumer's bill, they are often labeled as something innocuous such as, "Voicemail" or "Internet Access." There is also an 800 number. Many consumers, presumably, ignore the charge, which is usually small to begin with.

But oftentimes, the cramming company, according to NWNT ex-employees, would start multiplying the amount of the charge should a user ignore it or not notice it the first time around.

The Trail Leads to NWNT

So eventually, the user would call the accompanying 800 number. In that case, a company, sometimes NWNT, would answer the phone. According to the scripts customer service representatives (CSRs) at NWNT had to follow, they would then try to convince the consumer the charges were legitimate and try to retain the charge.

If the CSR is successful, the retained charge goes straight into One Call's account after the bill is paid.

However, according to the scripts, if a customer threatens to inform authorities, the CSR is to issue a credit. In that case, the customer is informed to pay the charge so they don't damage their credit and wait a few months for the credit to arrive.

Meanwhile, in those few months, One Call has had the use of the funds from consumers who many months before accidentally clicked on the wrong link. Even if One Call is brought into court and forced to give all the money back that it stole, it would get to keep the interest.

Everybody's Legal

Thus, there are many companies involved, each of them claiming to be operating legally, each aiding and abetting the process of cramming.

Selling an auto-dialer is not illegal, nor is signing contracts with third-party billing companies. But almost everyone in the landline phone industry appears to make a lot of money off the whole tawdry scam of illegal phone bill charges.

Since many Internet users have done away with modems in favor of other broadband connectors, auto-dialers have almost become obsolete. But cramming is still a huge industry.

ConsumerAffairs.com receives numerous complaints every day from consumers who have been "crammed." But because of the complex chain of companies and the relatively small amount of each individual transaction, prosecutors are slow to pick up the scent.

Even when companies are caught by state and federal authorities, they are not sent to prison or forced into bankruptcy. Usually, they are required to refund some of their ill-gotten gains and made to promise to play nicely in the future.

NWNT's Lawless, like others in the cramming business, insists he is a legitimate businessman, even though his company has held contracts with some of the most infamous cramming companies in the industry's 10-year history.

Lawless claimed he has canceled contracts with companies he thought were crammers but, in an interview with ConsumerAffairs.com, would not share their names. He did share an e-mail he sent to one company, Opticom, expressing his disapproval of the scripts Opticom wanted NWNT's CSRs to follow.

Either way, Lawless insisted he and his company have done nothing illegal. It's not his job to police what his clients do, he said.

A Slothful Congress

While it may not be Lawless' job to police his clients' activities, it is the government's job to protect consumers from crammers, something it has seldom done. It was Congress that created the cramming industry through a clause in the Telecommunications Act of 1996. The measure was supposed to increase competition but instead it opened the floodgates for millions of dollars in shameful scams against hard-working Americans.

Terry Lane, outgoing spokesman for the Republican-controlled House Committee on Energy and Commerce suggested that cramming is not that big a problem and that Republicans have been fighting hard for other consumer telecom issues.

"I'm not aware of any hearings in the future and we didn't have any hearings in the past year or two," Lane said.

In a previous ConsumerAffairs.com article on cramming, published in June 2006, many of the House members -- both Republican and Democrat -- who created the problem simply refused to discuss it.

Reps. Ed Markey (D-Mass.), Rick Boucher (D-Va.) and Joe Barton (R-Texas) all failed to return repeated phone calls. All three sit on the Subcommittee on Telecommunications and the Internet.

The new Democratic Congress which will take over in January may be more willing to face the problem and possibly do something about it, though that is far from certain. The telecom industry plays Congress like a harp, and both Democrats and Republicans sing along lustily.

"Democratic leadership in the telecommunications policy will undoubtedly bring a renewed focus to consumer protection in choice and empowerment, all of which cramming would certainly be a part," said Markey's spokesman, Israel Klein.

For the time being though, companies can still make big profits by providing non-existent and unrequested "services" to the everyday consumer, usually without much or any federal or state interference.

Even if Congress bestirs itself to plug the cramming loophole, the criminal mind will find new ways to steal consumers' money.

One of NWNT's newer clients is www.powerpluscard.com, a Web site that claims to give anyone, regardless of employment status, a credit card with a "guaranteed $10,500 credit line.

One currently-employed NWNT CSR told ConsumerAffairs.com that people call all the time and scream at her about how they have been ripped off by Powerpluscard.com. She said she believes the Web site advertises something other than what is disclosed in the fine print.

It might not be cramming, but good luck to anyone who chooses to apply. You may want to keep NWNT's phone number handy.

Next: You've Been Crammed -- Now What?

Wal-Mart is welcoming "Christmas" back to its stores this year after being blasted by its customers last year for its avoidance of the word.

"This year, more than ever, our shoppers will see and hear more about Christmas," said John Fleming, executive vice president of marketing.

The world's largest retailer said it has produced a Christmas-specific television advertisement scheduled to break next week. Also, Wal-Mart will feature a series of television advertisements with a key charitable partner, the Salvation Army, that mention Christmas.

In stores, Wal-Mart's specific references to Christmas include:

• "The Christmas Shop", previously known as "The Holiday Shop" -- the location for shoppers' Christmas decorating needs.

• "Days 'til Christmas" signing will provide a countdown for customers.

• Gift card designs -- Customers will see Santa and "Merry Christmas" gift cards

• A number of seasonal merchandise selections renamed from 'Holiday' and labeled with 'Christmas' -- at an increase of over 60% from last year.

• Christmas carols ringing out in stores throughout the holiday season.

• Encouraging employees at Wal-Mart and Sam's Club to greet customers utilizing various glad tidings inclusive of, but not limited to, Merry Christmas, Happy Holidays, Happy Kwanzaa, Happy Hanukkah and Feliz Navidad, to name a few.

• The company's Website, Walmart.com, will include dedicated pages for Christmas and other holidays, including Hanukkah and Kwanza.

• SAM'S CLUB membership magazines, including the upcoming December/January 06 Source Magazine, reference specific holidays, Christmas and others.

The elections are over for two more years and gasoline prices seem to be headed back up again.

Conspiracy theorists will say, "I told you so."

Gas prices had fallen roughly $1 a gallon since toying with a new record high in late spring but now the average price is of a gallon of regular is edging back up.

Almost 42 percent of American consumers are convinced the Bush administration used its influence to drive gas prices down in advance of the elections, according to a recent Gallup Poll. The poll also reported that Democrats were far more likely to believe the gas price conspiracy theory than Republicans.

Oil industry executives ridiculed the story as rubbish, adding more weight to the conspiracy in many consumers' minds. The oilmen pointed instead to supply and demand theory as the primary explanation for the price declines.

Theories aside, gasoline prices are inching higher and the average price for a gallon of regular unleaded now stands at $2.22, up 2 cents this week according to AAA of Heathrow, Florida.

The average prices for midgrade and premium unleaded gasoline are also up 2 cents a gallon. Midgrade sells for an average of $2.35 a gallon and premium sells for an average of $2.44 a gallon.

The most expensive gallon of regular is on sale in Las Vegas for $3.35. The cheapest gallon of regular is found in Verona, Virginia as $1.89.

Here is a look at some gasoline prices from around the country in the ConsumerAffairs.com Gas Price Round Up.

California: Gas prices were up in most local areas this week, ending a record-breaking 11 weeks of price drops that averaged more than a penny a day and took prices 30 percent below their all-time high, according to the Automobile club of Southern California.

The average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $2.42, which is 1.5 cents higher than last week, 22 cents lower than last month, and 27 cents lower than last year.

On the Central Coast, the average price is $2.67, down 2.3 cents from last week, 23 cents below last month, and 12 cents lower than last year.

In the Inland Empire, the average price is $2.42, up 2.8 cents from last week, 17 cents below last month, and 28 cents lower than last year.

This is the second straight week that the national gas price average has risen, and oil industry analysts expected the increase sometime in November because of OPEC's decision to cut back on crude oil production, the Auto Club said.

Texas: Gasoline prices in the state showed a mixed bag of results as averages in some Texas cities moved slightly higher and others moved slightly lower, according to the AAA Texas Weekend Gas Watch.

The current Texas statewide average price for self-serve regular gasoline is $2.08 a gallon, about a penny less than last week.

Motorists in Corpus Christi are seeing some of the lowest averages in the state at $2.00 a gallon -- up a penny since the week before. The highest prices this week can be found in the Austin-San Marcos area at $2.15 a gallon -- down a penny.

"Gasoline prices in Dallas, Fort Worth and Houston headed downward this week after adding a penny or two to their averages last week," said AAA Texas spokesperson Rose Rougeau. "It appears gasoline prices may be leveling off since there have not been any major price gains or losses in the past couple of weeks."

The national average for regular self-serve gasoline is about the same as last week's average $2.21 a gallon. AAA Texas Weekend Gas Watch monitors the average price of gasoline in Texas.

Florida: Gasoline prices around Tallahassee have crept upward recently. AAA's Daily Fuel Gauge Report noted that the average price for a gallon of regular unleaded gas is $2.18 in the Tallahassee area.

The average price for regular unleaded gasoline throughout Florida is $2.23. The most expensive gallon sells in West Palm Beach for $2.32 and cheapest gallon is found in Tampa for $2.16.

The demand for heating fuel could cause prices to rise again in the coming winter months, said Gregg Laskoski, a spokesman for AAA Auto Club South in Tampa. "One of the key factors here is still the weather. Weather forecasters are predicting colder-than-usual weather in the Northeast."

Last week, U.S. crude inventories increased by 400,000 barrels to 334.7 million barrels, but gasoline inventories dropped by 600,000 barrels to 204 million barrels, the U.S. Energy Information Administration said.

There are still ample U.S. oil supplies -- above the average for this time of year. However, oil prices remain buoyed by some OPEC ministers saying another production cut may be in order, strong demand and weather forecasters predicting a colder-than-normal winter in some parts of the U.S.

The long-term safety of high-carb diets has been debated for years, particularly because they encourage the consumption of animal products, which are high in saturated fats and cholesterol and could potentially increase the risk of heart disease.

Prevailing dietary recommendations have advocated the opposite approach -- recommending diets that are low in fat and high in carbohydrates as the best way to manage weight and reduce the risk of cardiovascular disease.

In the first study to look at the long-term effects of low-carbohydrate diets, researchers from the Harvard School of Public Health found no evidence of an association between low-carb diets and an increased risk of heart disease in women.

Their findings did suggest, however, an association between low-carb diets high in vegetable sources of fat and protein and a low risk of heart disease.

"This study suggests that neither a low-fat dietary pattern nor a typical low-carbohydrate dietary pattern is ideal with regards to risk of heart disease; both have similar risks. However, if a diet moderately lower in carbohydrates is followed, with a focus on vegetable sources of fat and protein, there may be a benefit for heart disease," said Tom Halton, a former doctoral student in the Department of Nutrition at HSPH.

The study appears in the November 9, 2006, issue of The New England Journal of Medicine.

The researchers looked at data collected over a 20-year period from 82,802 women in the Nurses' Health Study, a long-term study that began in 1976. Study participants were divided into 10 categories according to their overall diet score, which was measured by calculating fat, protein and carbohydrate intake as a percentage of energy.

The scores ranged from 0 (the lowest fat and protein intake and highest carbohydrate intake) to 30 (the highest fat and protein intake and lowest carbohydrate intake). A higher score meant a person followed a low-carbohydrate diet more closely; that score was called the "low-carbohydrate-diet score."

Halton and his colleagues also created two additional low-carbohydrate-diet scores. The first calculated percentages of energy from carbohydrate, animal protein and animal fat. The second calculated percentages of energy from carbohydrate, vegetable protein and vegetable fat.

The researchers documented 1,994 cases of coronary heart disease over the study period.

The results showed that a low-carbohydrate score was not associated with risk of heart disease in women. There was no evidence that the relationship was modified as a result of physical activity levels, body-mass index, or the presence or absence of hypertension, diabetes, or hypercholesterolemia.

Total amounts of fat or carbohydrate did not appear to have an appreciable relationship with risk of heart disease. However, types of fat and carbohydrates do make a difference. Vegetable fat was associated a lower risk of risk of heart disease, whereas higher dietary glycemic load (reflecting the amount of refined carbohydrates that can rapidly elevate blood sugar levels) -- typical of a high-carb diet -- was strongly associated with increased risk. The authors found that, when vegetable sources of fat and protein were chosen instead of animal sources, the low-carbohydrate-diet score was associated with a 30% lower risk of heart disease.

"This study doesn't mean that you should load your plate with steak and bacon," said Hu. "One likely explanation that we did not see increased risk of heart disease with low-carbohydrate diets is that the adverse effects of animal products might be counterbalanced by reducing refined carbohydrates. The quality of fat and carbohydrate is more important than quantity. A heart-healthy diet should embrace healthy types of fat and carbohydrates."

The study was supported by grants from the National Institutes of Health.

In a hidden camera investigation airing today, syndicated TV news show "Inside Edition" finds dozens of New Orleans residents who say they have been victimized twice -- once by the ravages of Hurricane Katrina, and again by a contractor who took thousands of dollars up front to repair their homes and never finished, or in some cases, even started the work.

Newlyweds Felicia and Robert Lombard paid more than $48,000 to a construction company called Dynasty Distributors to totally rebuild their Katrina-ravaged home, money they planned on using for their wedding.

"They haven't done anything in here ... It's just excuse after excuse after excuse, and never once did they even try to attempt to call us," Felicia Lombard told Senior Investigative Correspondent Matt Meagher.

The Lombards say Dynasty did a small amount of work and never returned. In the Inside Edition report, they showed piles of termite-infested debris they say the company buried under their house, which remains uninhabitable.

"It's disgusting ... it's mind boggling that someone can be that low," says Cynthia Albert, an official with the New Orleans Better Business Bureau. She says contracting complaints have skyrocketed since Hurricane Katrina and that many companies are preying on homeowners.

"There are a lot of bad companies out there and they just want to separate you from your money," Albert says.

More Victims

Inside Edition also spoke with dozens of other people who say Dynasty Distributors victimized them, too.

Ron Evans says he paid Dynasty nearly $15,000 of his insurance money to raise his house and repair his floor. The company never returned to do the work, and Evans' insurance money is now gone. He and his family are forced to live in a cramped trailer on the front lawn of his ruined home.

Dr. George Gilmore says he paid Dynasty $135,000 to totally renovate his washed-out chiropractic offices. But, Gilmore tells Meagher, after completing only half the work, the company stopped showing up.

"We've been ripped off," says Gilmore.

Another local resident, Paul Blanchard, says he paid Dynasty $19,000 to make his home level after Hurricane Katrina. The work was so bad, Blanchard says, the house is now leaning severely. Doors don't shut, floors are slanted, and guests feel queasy inside. Blanchard tells Meagher he "wasted" his money.

All of the customers Inside Edition spoke with said they have tried unsuccessfully for months to get Dynasty Distributors to show up and finish their projects or even to return their repeated phone calls.

For the report, Inside Edition rigged a house with hidden cameras and Meagher, posing as a homeowner looking to rebuild a Katrina-ravaged house, made an appointment with a Dynasty representative to get an estimate.

Dynasty Vice President George Vincent, shown in the report surveying the house and making calculations, seemed ready to take on this big job, despite all the customers who claim the company left them hanging. Inside Edition also learned that Dynasty had no license to bid on or perform such a large job. When Meagher revealed himself as a reporter to Vincent, Vincent left the house and drove off without a word.

Vincent also didn't want to talk to the group of angry Dynasty customers Inside Edition had gathered at the house to confront Vincent.

Meagher also tracked down Dynasty Distributors owner Joe Martino. Martino, who lives in a pricey gated community and drives a $65,000 Lexus, told Meagher he was too sick for an interview and would be at doctors' appointments all day. But instead, Meagher found him at a local topless bar, where he refused to answer any questions.

Late last week, the Louisiana Attorney General issued a temporary restraining order against Dynasty Distributors and Joe Martino, calling their actions unethical and unscrupulous. Officials are hoping they can recover some of the hundreds of thousands of dollars these homeowners have lost.

According to Cynthia Albert of the BBB, Dynasty Distributor's practices are adding insult to injury for an already-downtrodden population.

"Our people here can't be victimized anymore but they are," she says. "This is going to go on for a very long time."

Hamburgers, apple cider, petting zoos and even spinach have been blamed for E. coli outbreaks in recent years. It doesn't have to be that way, says Dennis G. Maki, M.D., writing in the New England Journal of Medicine.

Irradiation of high-risk foods after processing could greatly reduce the incidence of all bacterial foodborne disease and save hundreds of lives each year, Maki argues.

"Irradiation kills or markedly reduces counts of food pathogens without impairing the nutritional value of the food or making it toxic, carcinogenic, or radioactive," according to Maki, a professor of medicine at the University of Wisconsin.

In the latest major E. coli outbreak, 199 persons in 26 states were sickened by fresh spinach or spinach-containing products from commercial brands processed by Natural Selection Foods of San Juan Bautista, California. At least 103 of them developed acute renal failure and three died.

It was, said Maki, at least the 26th reported outbreak of E. coli infection traced to contaminated leafy green vegetables since 1993.

But the problem of food-borne illness extends beyond the widely publicized mass outbreaks. Magi said that during each day of the spinach E. coli outbreak, "there were at least 5 to 10 times as many cases of endemic Shiga toxinproducing E. coli infection throughout the country as there were outbreak cases."

Agencies charged with food safety -- the Food and Drug Administration (FDA), the U.S. Department of Agriculture (USDA), and the Centers for Disease Control and Prevention (CDC) -- have ratcheted up their surveillance efforts. But after some initial success, the rate of decline in food-borne illness has leveled off over the last decade, according to Maki.

The use of industrial farming techniques make it much harder to ensure the safety of meat and produce, Maki said.

"During my childhood in 1950s rural Wisconsin, when I ate a hamburger at home, the ground beef had been produced locally from cuts taken from several sides of beef purchased by the neighborhood grocer from a local farmer, who probably raised no more than 25 pasture-fed cows on a 150-acre farm," he recalled.

"Today, virtually all beef consumed in North America is produced on a vast industrial scale, starting with a herd of tens of thousands of grain-fed cattle, raised in the final months before slaughter in the constrained environment of a feedlot, with the beef cuts from hundreds of cows to several thousand contributing to a single lot of more than 100,000 pounds of ground beef, shipped to many hundreds of supermarkets in multiple states."

There has been a decline in E. coli contamination of ground beef but produce is another matter.

"Although most reported infections with Shiga toxinproducing E. coli are linked to undercooked ground beef, nearly 25% of outbreaks stem from contamination of commercial produce that is eaten uncooked lettuce, spinach, cabbage, sprouts, or tomatoes," Maki said.

Irradiation Already Approved

Irradiation of food is already approved in the United States for most perishable foods and has been endorsed by the World Health Organization, CDC, FDA, USDA, American Medical Association, and European Commission Scientific Committee on Food.

But, says Maki, intense opposition from antinuclear activitists has blocked widespread use of the technology.

"A number of food products are already commonly irradiated, with no evidence of harmful effects, and for decades, we have sterilized hundreds of millions of implanted medical devices through irradiation each year," Maki said.

The CDC has estimated that irradiation of high-risk foods could prevent up to a million cases of bacterial foodborne disease that result in the hospitalization of more than 50,000 persons and kill many hundreds each year in North America.

"I believe it is time to overcome our irrational fears and act to ensure the safety of our food," Maki concluded.

To hear employees and consultants tell it, the takeover of MBNA by Bank of America went so smoothly and beautifully that many were forced to break into song. But a closer look indicates that there are many problems bubbling under the surface, and dragging customers down with them.

Tom from Santa Clara, Calif., wrote to ConsumerAffairs.com to tell us that his MBNA credit card suddenly stopped working after his account was picked up by Bank of America.

"I have been embarrassed by having my credit card denied in a restaurant and a doctor's office," he said. "Luckily they accepted American Express or I would be washing dishes now."

Tom called Bank of America, and they confirmed his card was good and he had available credit. "There is a system-wide problem with their credit card process and they have no idea when it will be fixed," he said.

Another irate customer lost both his Bank of America debit card and several checks to hungry new ATMs put in place since the merger.

"I put my debit card in a BofA ATM machine and it promptly ate it, refusing to regurgitate either card or money," they wrote. "It was one of BofA's new ATM machines, the ones that supposedly take check deposits. I have tried to deposit numerous checks using the new machines but with zero success."

Bank Of America's even having problems in its home base of Charlotte, North Carolina.

One frustrated customer told the Charlotte Observer that two weeks after the merger, she can't print statements from her online account.

The glitches come as Bank of America merges its massive credit card operation with MBNA's own system, a transfer the company has called a "rousing success."

Part of the process involves issuing new Bank of America-brand cards to MBNA customers as their cards expire, a process that may account for the failure of some MBNA cards to process.

Bank of America has chosen to use MBNA's own account managing system, and take the process in-house, rather than outsource account management to third party companies as it has done in the past.

The buyout of MBNA has filled Bank of America's coffers considerably, with the bank reporting increased earnings of 41 percent for the third quarter, due chiefly to increased lending and higher credit card fee collections from MBNA customers.

Fees Fly High

Bank of America was one of the six major banks cited in a Government Accountability Office (GAO) study that found credit card late fees and penalties were increasing at a fast clip, and disclosures explaining credit terms were increasingly hard to interpret.

The bank is looking at increased adoption of "contactless" payment cards, which don't require signatures or swipes through card readers. Like many of its competitors, Bank of America is hoping that contactless cards will encourage customers to use plastic for small transactions, such as buying gas or food.

Merchants generally oppose the promotion of "micropayments," claiming that the high interchange fees they pay to process credit transactions wipes out any profit they make, forcing them to raise prices in order to recoup costs.

Privacy advocates and researchers have found numerous flaws in contactless credit cards, such as the ability of identity thieves to build readers that could hack the data contained in the RFID chip embedded in the card.

And yet, despite all the perils, Bank of America is pressing on, just as it did with its consumption of MBNA. Let's hope that, at least, the next series of glitches doesn't inspire another round of song.

Everyone knows that non-sterile tattoo needles can lead to AIDS and hepatitis. However, according to research by Ronald Petruso, lecturer of chemistry at Delaware Valley College in Doylestown, PA, there are other, overlooked, risks of getting a tattoo.

For the past year and a half, Petruso has been collaborating with Jani Ingram of Northern Arizona University in studying the toxicology of tattoo pigments. As television shows such as "Miami Ink" and "Inked" gain in popularity, Petruso and Ingram wanted to delve into a topic that doesn't get that much press in an industry that that the government doesn't control.

"It's not federally regulated and you don't need a license in order to practice. But it should be because since these pigments are going under the skin, they're being used as drugs," Petruso said.

"The number of people with tattoos is growing and still we don't see much aired in newspapers, broadcast news, or the rest of the media about possible dangers outside of AIDS and hepatitis. We just wanted to look into the situation and see where the research takes us and see if we can make people more vigilant about the risks."

At Northern Arizona, Ingram has found traces of lead in tattoo pigments. Meanwhile, at Delaware Valley, Petruso with the help of two students found carcinogenic substances in a common tattoo pigment.

The shocking detail about this finding was that the carcinogenic pigment was manufactured at Sun Chemical in Cincinnati, with no intended use for tattoos.

"When we told Sun Chemical about our findings they were very concerned about this because this is not what they design their products for. The pigments they make are used by auto manufacturers for making paint," he said.

"The real implication of this finding is that some tattoo pigments are being exchanged under the table. Sun Chemical said that if they found out the source of who's misusing their products, they would go after them and sue them."

"There are so many tattoo parlors out there that you don't have any idea where they're buying their supplies. People come in knowing about hepatitis and AIDS and these days tattoo artists are careful about ensuring that the needles are sterile. But they don't expect to see other problems. They have no idea of the chemicals present in those pigments, and that's the situation that needs to be addressed," Petruso said.

Hotel check-in desks are following the buffalo nickel and Sunday doubleheader into the dustbin of history.

In an effort to appear more customer-friendly -- especially to the rising base of young Generation X and Generation Y travelers -- hotels are trying to give the often-tedious check-in process a more personal touch.

The result is properties with check-in "stations," often individual pods staffed by an agent with a computer, plus expanded job descriptions that allow employees to provide not only check-in services but such concierge-type duties as restaurant recommendations.

By removing long desks that some guests considered imposing, hotels are not only saving space but saving face -- or at least putting on a friendlier one that they had previously.

Already, there are more pods and more concierge-type services at many Hyatts. Westin, an upscale property that switched to pods, even has a 5-and-10 rule that encourages employees to spend at least five minutes with guests and walk 10 steps with them -- perhaps pointing them in the direction of an elevator.

InterContinental's Indigo brand, designed for the boutique market, has staffers greet guests, provide directions, or find waiting spaces in hotel lobbies. Like the Holiday Inn, which has initiated the change at more than a half-dozen properties, the check-in desk is semicircular -- as opposed to the rectangular models guests considered to be barriers.

Embassy Suites tries to have one pod per 50 rooms and has increased lobby space (often up to 40%) by removing the old-style front desk. Wyndham will do the same thing late next year.

Coming soon are an open-air desk from Marriott, which plans to introduce it in New York by 2008, and employees trained to read guest body language -- and do whatever it takes to make them feel more relaxed and comfortable.

Underlying the industry-wide change is a desire to sell more food and drink -- possibly by expanding lobby bars and cajoling guests into lingering in lobbies longer.

Switching to pods doesn't always speed the check-in process but often makes it more personal and more inviting, according to both hotel executives and guests. Both agree that happy guests often become repeat guests.

Starbucks sees itself as pretty clever. After all, it has seduced an entire generation of Americans into paying ten times more than the previously prevailing price of a cup of coffee. Now it's trying to laugh off the loss of confidential data on 60,000 employees.

The company recently reported the theft of four laptop computers but pooh-poohed the notion that anyone would, you know, do anything with the stolen data.

The disappearance, which was first noticed on Sept. 6th, was not reported to the public until Nov. 4th.

Company spokesperson Valerie O'Neil made light of the incident, telling Associated Press she didn't know of any secret coffee recipes stored on the computers.

According to the company, the four "retired" laptops contained personal information on 60,000 American "partners" (employees), and 80 Canadian partners of the Seattle-based coffee chain.

The laptops' information dated prior to December 2003, before the company claimed to have changed its procedures for storing personal data and strengthened its privacy requirements.

The data contained on the laptops included names and Social Security numbers.

The company is sending letters to all potentially affected employees, and has set up a toll-free 1-800 number to answer any questions. Starbucks has also said it is offering free credit monitoring from Equifax for anyone affected.

No Laughing Matter

The threat is no joke to anyone affected by the data breach, however. If the information stored on the missing laptop is ever accessed, smart thieves will wait weeks or months before attempting to use it themselves.

Many criminal rings don't even bother attempting to steal money from identity theft victims anymore. Instead, they may take the identity data and encode it in "clone" cards, which they then use for small purchases that don't trigger fraud alerts.

Hotel key cards, for instance, have increasingly been the target of choice for criminals wanting to use stolen data without being detected.

The mass cancellation of debit cards from numerous chains in early 2006, starting with Citibank, was attributed to identity thieves stealing information, encoding it on blank cards, then making withdrawals from customers' accounts that triggered fraud alerts.

The prevalence of exposed data due to laptop theft and disappearance continues to be one of the major contributors to identity theft. Thousands of Americans are at risk every time a computer or storage device disappears or gets stolen.

The risk is often compounded by the devices having little or no security protection, or storing information that violates company policy.

Most recently, an employee of General Electric had a laptop containing data on 50,000 current and former employees stolen from a locked hotel room. The theft is as yet unsolved.