Current Events in July 2007

Investors in two Bear Stearns hedge funds are having a bad day as the investment bank reported the funds are now worth nearly nothing following investments in subprime mortgages.

Bear Stearns reported to investors that the High-Grade Structured Credit Enhanced Leveraged Fund and the High-Grade Structured Credit Fund are both now nearly worthless.

The funds were heavily invested in subprime mortgages. The subprime industry virtually collapsed earlier this year as interest rates rose and home prices fell.

Subprime mortgages are loans made to high-risk borrowers.

The funds were managed by Bear Stearns Asset Management, which notified investors in a letter yesterday that the more conservative fund, the High-Grade Structured Credit Strategies Fund, was down 91 percent by the end of June and the High-Grade Structured Credit Strategies Enhanced Leverage Fund had lost all of its investor capital.

The funds were once valued as high as $16 billion.

While news that the Bear Stearns funds were in trouble has been around for the past few weeks, the announcement caused more jitters for companies that invested in the subprime market.

Bear Stearns halted redemptions of the fund ins May after estimates of the losses began to climb and investors scrambled to get out. In June, Bear Stearns offered a $1.5 billion loan to fortify the more conservative fund as other lenders began asking for more cash as collateral.

Cigarmakers and their customers are in a panic over a proposal to raise the federal tax on cigars -- now a nickel -- to as much as $10.

Congress -- meeting in smoke-free rooms -- is looking for an extra $35 billion to $50 billion for the state children's health insurance program and hopes to raise most of it through excise taxes on products like tobacco.

Cigarettes, which accounted for more than 95 percent of tobacco tax collections last year, are the main focus of the bill -- federal taxes on a pack would jump from 39 cents to $1.

But cigars would not escape.

There is currently 4.8 cents-per-cigar tax cap but under the proposed bill, taxes on "large cigars," a category that includes all but the tiny cigars sold in packs of 20 like cigarettes, would rise to 53 percent.

A version of the bill being considered by the Senate Finance Committee sets the maximum tax per cigar at $10.

"I'm not sure in the history of man, since our forefathers founded the country in 1776, that there's ever been a tax increase of 20,000 percent," said Eric Newman, who runs a Tampa cigar shop, according to the St. Petersburg Times. "They had the Boston Tea Party for less than this."

Others were equally befogged.

"I thought there was a typo. I thought they meant 10 cents per cigar, not $10 per cigar, said Norm Sharp, president of the Cigar Association of America, the Times reported.

Of course, cigar sales are just the merest wisp of the cigarette market. In 2006, Americans bought nearly 400 billion cigarettes and only 5.3 billion cigars.

By Lisa Wade McCormick
ConsumerAffairs.com

July 18, 2007
Professional dog breeder Lisa M. is ensnarled in a frightening mystery.

The case centers on her beloved Newfoundlands and why these gentle giants have experienced so many baffling reproductive problems in the past year.

Lisa has searched tirelessly for clues about whats caused her healthy dogs to suddenly stop getting pregnant or -- if they conceive -- to deliver deformed and dead puppies.

These are dogs that have all delivered healthy puppies before, says Lisa, owner of Lighthouse Newfoundlands in Grafton, Ohio. Ive been a full-time breeder since 1998 and Ive never experienced as many problems as I have in the past year. Its horrible.

The first signs of trouble surfaced last November.

Lisas dog, Vella, had a litter of four puppies.

Two were healthy. But two were mummified fetuses.

Thats like a miscarriage in the dog world, Lisa says. It looks like a mass of bone; the puppy is not alive. Breeders occasionally will have mummified fetuses. Ive never had it happen, though.

Twice in Two Months

But now its happened twice in just two months.

In January, 2007, Lisas dog, Juliet, had nine puppies.

Five were healthy. Three were mummified fetuses. And one was deformed.

That puppy had its elbow stuck to its side; it didnt live, Lisa says. And having three mummified fetuses in one litter was unbelievably horrible.

All this was just so unusual for me. It just wasnt right. Like I said, its never happened to me -- or my dogs -- before.

Her dogs never had trouble getting pregnant, either.

I bred four of my dogs and a friends dog in February. None of mine got pregnant. I usually get two or three, but never zero for four.

My friends dog had three puppies, but two died (two days after delivery). One of the puppies had a deformity a cleft palate.

Similar Problems Nationwide

A ConsumerAffairs.com investigation reveals Newfoundland breeders across the country have experienced similar problems with their dogs.

We talked to professional breeders in Idaho, Texas, and Pennsylvania whose dogs have encountered such puzzling reproductive issues as:

• Puppies that wouldnt grow and had to be euthanized. This same breeders dogs also had two mummified fetuses -- in two different litters -- and some of her females stopped getting pregnant;

• Having several misses -- or failed attempts -- at getting pregnant. This breeder also had a dog that delivered a deformed puppy, which had to be euthanized.

• Failing to get pregnant -- in the past two years. This breeders mom also raises Newfoundlands and one of those dogs delivered two dead puppies.

Likely Suspects

Whats causing these problems?

Lets consider some of the likely suspects:

• The Newfoundlands health The breeders say all their females are in excellent physical condition and have previously delivered healthy puppies. They also say theyre using the same sires and those males are in excellent health;

• The dogs ages -- Veterinarians say the prime age for dogs to deliver healthy litters is two to five. The breeders say all the dogs are in that age range;

• Genetic problems The breeders say none of the dogs are related, a factor that could pose genetic issues;

• Changes in breeding protocols The breeders say nothing in their breeding program has changed.

This whole thing is totally, horrendously insane, says Wendy C. of Blanchard, Idaho, who has bred Newfoundlands for seven years. Its just about ruined my breeding program.

Theres another suspect in this case. One any good sleuth would follow.

Its the dog food the only common denominator among these Newfoundlands.

All the breeders fed their dogs Purina Pro Plan and Purina One. And theyre convinced thats the culprit in this case.

Why am I certain its the food? Because nothing else has changed in my breeding program, says Lisa, who has 14 Newfoundlands. These are the same dames and the same sires. Theyve all had healthy litters before.

"I keep my kennels clean, I dont over-vaccinate, I dont add supplements, I dont use pesticides, I follow all the regular worming protocols ... nothing, absolutely nothing, has changed.

Wendy agrees.

The food is the only thing that makes sense. Its the only thing we all have in common.

At first I thought it was the water, but that cant be. There are too many us across the country having the same problems with our dogs. It just has to be the food.

The breeders say theyve fed their dogs Purina products for years and never had any problems. But Wendy and Lisa suspected something was wrong with the food last summer.

We both fed our puppies Purina One large breed puppy food, Wendy says. And all our puppies had horrible diarrhea. They were squirting water out of their bottoms. It was awful.

Anytime a puppy has diarrhea like that, theres something wrong. Its very dangerous. They can dehydrate and die.

The breeders suspicions about the food heightened in March. Thats when Menu Foods recalled 60 million containers of melamine-tainted pet food.

Melamine is a chemical used to make plastics and fertilizers; it is not approved for use in pet or human food. Thousands of dogs and cats nationwide suffered kidney disease or died after eating the melamine-tainted foods.

We panicked when we heard about the recall, Wendy says. The Purina we fed our dogs wasnt on the recall list, but we were still certain something was wrong with it. Maybe that melamine from China got into the food and Purina didnt know. Thats possible.

Lisa says news of the melamine-tainted food confirmed her worst fears about the reproductive problems with her dogs.

I read all about the effects melamine can have on pregnancies. And I learned that too much melamine can affect pregnancies.

I also belong to a chat room with 2,000 subscribers and did my own research with them. Thats when I found out that so many of us who were using Purina were having problems.

Mutant Puppies

At the Mountain Ridge Kennel in Blanchard, Idaho, Wendy fights back tears as she recalls the reproductive issues her Newfoundlands have faced in the past year and a half.

Its just been devastating. Ive been having beautiful litters for seven years. Ive always had huge, healthy puppies.

But that changed last summer.

I had two back-to-back litters and had to destroy 14 of those puppies, Wendy says. They wouldnt grow. They looked like mutants; it was hideous. They only weighed six to 10 pounds instead of 25 to 30 pounds at eight weeks. They were so thin. They looked like skeletons with fur.

The gruesome problems didnt stop there.

Wendys dogs also had two mummified fetuses in two different litters.

Plus Ive had females who have had four narrow puppies. Those are puppies that die. Somewhere along the way (during gestation) they were depleted. They werent what they should be at full-term. I believe its because of the poisonous food I unknowingly fed them.

Some of Wendys other dogs also stopped getting pregnant.

I bred three of my dogs (to deliver) at the end of February. I didnt have one litter. How unusual is that for me? Ive always gotten everything Ive bred. Im a full-time breeder. This is what I do.

Wendys not only grappled with the emotional toll these problems have taken on her dogs. And her family.

She also struggled with the financial repercussions theyve created.

Ive only had four healthy puppies since December 2005. Normally, I have 40 healthy puppies a year. This has just about bankrupted me.

Her voice cracks and tears fill her eyes.

Ive buried at least 20 dogs in the past year, says Wendy, whose puppies sell for $1,200 to $1,500 each. This has cost me more than $25,000. I couldnt sleep because there was no money to pay the bills. My long distance has been cut. Ive lost my insurance. Im facing foreclosure and will probably lose my house.

This just about killed me. Purina doesnt understand how much all this has devastated fulltime breeders like me.

Puppy Born Without Tail or Rectum

In Texas, another Newfoundland breeder wonders why her dogs have experienced so many unusual medical problems.

Ive had several missed breedings in last few years, says Brenda M. of Blanco, Texas, These are all females that should not have missed.

Brenda has raised Newfoundlands since 1995. And for the first time in her career, she had a dog deliver a deformed puppy.

It happened 18 months ago to her dog, Ramona.

The puppy was born without a tail or rectum. It was awful. It was alive when it was born, but I had to euthanize it.

Ive had litters before with stillborn puppies. But in all the years Ive done this that was my first deformed puppy. It was freaky and unpleasant.

Ramona also faced another inexplicable medical problem one not related to her reproductive system.

She unexpectedly died last month of cirrhosis of the liver.

Our vet could not find any reason for her to have such a severe case of cirrhosis of the liver. She was only five. She was too young to die from liver disease.

I dont know if her death was related to the food, Brenda says, referring to Purina One shed fed Ramona for years. But I dont trust dog food companies. Theres a huge doubt in my mind about the safety of pet food and that it might have contributed to Ramonas death.

Could it also have caused her dogs reproductive problems?

I am very suspicious of Purina. Everything thats happened is suspicious.

No Litters in Two Years

Across the country, two Newfoundland breeders in Pennsylvania say their dogs have also experienced bizarre reproductive problems.

I havent had a litter in two years, says one of the breeders, who didnt want to be identified because she was afraid of legal action by Purina. Thats real uncommon for me. These are proven breeders.

Her mom also raises Newfoundlands.

And one of her dogs recently had a litter with two dead puppies, the daughter says. They were stillborns; they didnt have fur on them and had been dead a while.

That dog was a repeat breeder who had two healthy litters before. I took her in for a culture two days after delivery (of the deceased puppies) and everything was negative. The dog was absolutely clean.

These breeders fed their dogs Purina One wet and dry food for more than 20 years.

And weve had excellent results up until last year. But now, we really think theres problem with the food. Otherwise, wed still be feeding it to our dogs.

Missing Evidence

To solve any mystery, though, a good sleuth needs solid evidence. A smoking gun memo. Or scientific data that proves the case.

But thats missing in this whodunit.

They breeders dont have any clinical analysis to support their convictions.

They didnt test the Purina they fed their dogs. They didnt have autopsies performed on the deceased puppies. And they didnt have lab work or ultrasounds done on the females that failed to get pregnant or delivered deformed or deceased puppies.

Why?

If all of us knew then what we know now, we would have done all sorts of things to prove our case, Wendy says. But along the way, we went through so much devastation and heartbreak that we didnt think of it.

Lisa concurs.

I didnt relate the problems to the food until I started reading about the effects melamine has on pregnancies.

Why didnt she have autopsies performed on the deceased puppies?

If I had known about melamine and the effects it has on humans and dogs, I would have, Lisa says. But these dogs were born in January three months before Menu announced the recall.

I know what happened to my dogs, though. Ive been a breeder a long time. I know something is going on with the food. Nothing else has changed in my breeding program. The only common denominator is the Purina.

Interesting Case But Premature to Blame Purina

Veterinarians we interviewed agree the cases are interesting. And warrant further investigation.

But they warn its premature to blame Purina for the Newfoundlands reproductive problems.

They say more testing is needed before any allegations can -- or should -- be made about the dog food.

I believe these cases are too poorly defined to try to make any sort of statement regarding the likelihood of diet as the cause of the the problem, said Dr. Margaret Root Kustritz of the University of Minnesotas College of Veterinary Medicine. She is a nationally recognized expert in theriogenology, which is animal reproduction.

I know of no such problem specific to Newfoundlands. I know of no data in the veterinary literature documenting loss of pups from dietary causes in apparently healthy (female).

Dr. Root Kustritz asked other animal reproduction specialists about the Newfoundlands problems.

I have gotten two responses, neither of which noted any increase in such problems in Newfies in their areas. That means eastern Canada, the upper Midwest, and the Pacific Northwest are not seeing a problem recognized by theriogenologists or their clients.

She added: I believe this mystery is suffering from a lack of diagnostic testing. Breeders will tell you all these tests cost money. They do. So does repeated loss of pups.

Dr. Jennifer Larsen, a veterinarian and trained nutritionist with Davis Veterinary Medical Consulting group in California, said there are a number of reasons why dogs fail to get pregnant. Or have reproductive success.

Those factors include timing, semen samples, genetics, viruses, and the environment.

Nutrition also plays a key role.

Reproduction is a demanding physical state and you have to be careful about the diet you feed, said Dr. Larsen, who owns Newfoundlands. But to find out whats going on nutritionally (in these cases) would take some scientific investigation. If they (the breeders) were unable to participate in that, than were just speculating.

Dr. Larsen also said previous reproductive success doesnt guarantee the same results in the future.

The way genes are resorted can result in a bunch of different effects. Its like people who five or six children and not all of them look the same.

Past success or good luck has nothing to do with future good luck or success.

Dr. Larsen, however, said these cases should be more thoroughly examined.

Its unfortunate whats gone on. And there are a lot of pieces to the puzzle that need to be put in place.

At this point, its premature to say its the food. But I hope these breeders work with their veterinarians to try and figure out whats going on. That could help advance knowledge in this field.

Lisa consulted her veterinarian, Dr. Lori Hunt at the Center West Animal Hospital in Westlake, Ohio.

One of things I do with my breeding clients is when we have a dog thats missing, the first thing we look into is what theyre eating, said Dr. Hunt, who devotes much of her practice to canine reproduction. Nutrition can absolutely effect conception. And its certainly possible that something could be out of whack nutritionally ... maybe the manufacturer changed the formula.

But I cant say its the food. There are other people who feed that same food and they havent had this trouble.

Dr. Hunt said animals -- like humans -- sometimes develop problems that simply cant be explained.

I know the science of things and bad things sometimes happen for no reason.

Nonetheless, the Newfoundlands problems piqued her professional interest.

It certainly makes you think ... anything is possible.

Newfoundland Club of America To Explore Problem

The Newfoundlands reproductive issues also captured the attention of the Newfoundland Club of America (NCA).

I find this very odd, said Pam Rubio, head of NCAs Health and Longevity Committee. I have not heard of this before. But there are lots of things that have never happened before that crop up.

Does she suspect the food?

I would doubt it because so many of us feed Pro Plan without any problems. If its the food -- and Im still doubtful of that -- then it would have to be a change in the formula, the protein source, or an ingredient.

Rubio, however, said she would discuss this issue with members of her committee.

Ill put it out there for us to explore. If there are more cases out there, we definitely want to know and see if we can find a common cause.

The NCA cant offer breeders any financial assistance, Rubio said.

But the organization can recommend -- and help fund -- research about specific issues facing the breed.

If researchers want to do a study on this, we do have the Newfoundland Health Challenge and the Research Advisory Committee that decides who gets funding for studies.

Purina Investigates Breeders Concerns

ConsumerAffairs.com also contacted Purina about the Newfoundlands problems. Spokesman Keith Schopp told us his company had never heard of these problems until our call.

He also said the pet food giant has not changed the formulas for Purina One or Purina Pro Plan in recent years.

But we would like to talk to these breeders and get more information, Schopp told us.

After our calls to Purina, a company representative contacted the breeders and promised to investigate their concerns.

New Evidence

Meanwhile, new evidence has surfaced in this mystery evidence that might confirm the breeders' suspicions.

Lisa and Wendy contacted ConsumerAffairs.com on Tuesday and said they discovered some of the Purina food theyd fed their dogs when the problems first started.

Im in the process of revamping my kennel and when I got into one of the feed bins, I found some of the Purina at the bottom, Lisa says. I took back every bag of Purina I had after the recall, but I guess I didnt take back the food I dumped into the bin. With everything that has happened, I forgot the food was in there.

Lisa plans to immediately test the food.

So does Wendy, who also found some Purina in the bottom of one of her feed bins.

The breeders, however, says they dont need scientific data to convince them the food caused their dogs problems. Their dogs -- and the awful experiences theyve endured -- are all the proof they need.

We know what we saw and we know what happened, Lisa says.

Dogs Doing Better Off Purina

They also know their dogs conditions have improved since they took them off Purina products months ago.

The difference is unbelievable, says Wendy, who makes her own dog food and supplements it with a brand called Bil-Jac. That Ohio pet food maker uses locally produced ingredients. My dogs are looking so good. My younger ones are slowly starting to gain weight now that theyre off that poisonous food. I cant see their ribs anymore. And theyre a lot more active.

Lisa makes her own dog food.

And she says her Newfoundlands are much healthier now that theyre off Purina.

Their coats are a lot shinier, theyre more active, and their skin problems have cleared up.

Twelve Happy Endings

This mystery has an even happier ending. Make that 12 happy endings.

Earlier this month, one of Wendys dogs delivered five healthy puppies.

Everyone is OK, Wendy says. Im sure its because I took (my female) off Purina. Ill never feed Purina again.

And Lisas dog, Juliet -- who had three mummified fetuses in her previous litter -- delivered seven healthy puppies over the Fourth Of July holiday.

My biggest fear has always been the lasting effect this will have on my dogs reproductive systems, Lisa says. Theres no doubt in my mind why this was a healthy litter ... Juliet was not on Purina.

Miller launched the probe after the state's chief insurance regulator said he had insufficient authority to handle the investigation.

The attorney general's office can use the state's tough Consumer Fraud Act to subpoena witnesses and prosecute offenders.

Miller has long taken an aggressive stance towards fraud aimed at seniors. The state ranks second in the nation in the percentage of residents age 85 and over and is often seen as a primary target of elder scams.

Besides denied claims, elderly consumers say their long-term-care premiums have risen faster than they anticipated.

A recent New York Times series documented problems and abuses nationwide, sparking a Congressional investigaiton into two of the leading LTC issuers, Conseco and Penn Treaty.

Long-term care insurance is sold with the promise that it will help pay for in-home health care, assisted living or other types of elder care. Seniors are told the policy will help them remain in their homes or, if they must be in a nursing home, will pay a major portion of the cost.

Seniors often fear that if they become unable to care for themselves, they will have to spend down their assets before Medicaid will help with nursing home costs.

Gas prices are continuing to take a big bite out of consumer spending.

Nearly two in five (39.3%) American consumers said they reduced spending in June due to higher gas prices, according to a new Consumer Mind Reader national survey released by America's Research Group (ARG).

During the month, 21.7% of shoppers postponed a purchase of $599 or more compared with only 13.7% who said they delayed buying a big-ticket item in June 2006.

"The impact of gas prices on the American consumer's psyche is not going away," said C. Britt Beemer, Chairman of ARG. "The data reveal that retailers will experience difficult times and reluctant consumers for the important back-to-school and fall shopping periods."

The national average for regular self-serve gasoline is above $3 a gallon this week. Prices jumped almost a nickel in just two days, according to the latest ConsumerAffairs.com Gas Price Round-Up.

Prices are rising fastest in the Midwest because of outages at two major refineries in the region. Indications that one of the refineries will soon recover lost capacity are leading to a decline in gasoline futures, suggesting the price spike may be short-lived.

Higher gas prices have also had an impact on summer travel plans.

Some 28.3% of Americans say that they will not go on vacation this summer. Even though fewer people traveled during the week of Independence Day, only 36.9% shopped over July 4th, down from 40.5% last year.

Consumers also are noticing the pinch of higher prices at their supermarkets. Over 65% of shoppers say they have noticed significant price increases, up from only 53% earlier this spring.

"Other factors, such as consumer dissatisfaction with spring fashions and location of stores, help reduce shopping levels for the retail industry," Beemer said.

ARG data indicate that women have largely rejected the retro look even though retailers are discounting spring merchandise at 60% to 70% off, according to Beemer, and mall-based apparel retailers are struggling to attract female shoppers as malls continue to decline in popularity.

Only 16.6% of consumers shopped at mall stores this June, compared with 19.6% last year.

The company, which developed the equally controversial Grand Theft Auto series, appears determined to release the game in the U.S.

The company announced in June that it would temporarily suspend the U.S. release of Manhunt 2 amid a storm of protests from parents groups, which are pressuring the Entertainment Software Rating Board to give the game an Adults Only rating, limiting sales to those 18 and older.

The company initially reacted to the British and Irish bans by saying it would suspend U.S. publication while it reviewed its options. Later, it hardened its position in a statement, saying, we believe in freedom of creative expression, as well as responsible marketing, both of which are essential to our business of making great entertainment.

U.S. Release

While Take Two Interactives Web site doesnt mention the controversial title on its front page, elsewhere on the site Manhunt 2 is promoted as being available this summer. Rockstar Games Web site does in fact promote Manhunt 2 on its front page as coming soon. However, to view the games promotional page, Web surfers must verify their age to enter.

With Manhunt 2 we have tried to create a game that stays close to the original concept of chilling suspense and stealth, whilst pushing the game design and storytelling forward, said Sam Houser, founder and executive producer of Rockstar Games, in a statement on the site.

Critics say the game goes over the line. In banning the game, the British Board of Film Classification said Manhunt 2 constantly encourages visceral killing with exceptionally little alleviation or distancing.

U.S. critics have now expressed an additional concern the fact that the violent game is also being produced for Nintendos wildly popular Wii game system, which features motion sensitive controllers.

Wii Version

The same system that allows users to control a tennis racquet by swinging a controller also allows Manhunt 2 players to actually wield an ax or blunt object within the games story.

In a letter to the Entertainment Software Ratings Board, the child advocacy group Campaign for a Commercial Free Childhood said Wiis motion sensitive controller makes the video mayhem all too real.

In Manhunt 2, players can mutilate their enemies with an axe; saw their skulls in half castrate them with a pair of pliers; or kill them by bashing their head into an electrical box, where a power surges eventually blows their head apart, the letter charges. On the Nintendo Wii, players will actually act out the violence. One review of the game describes using a saw blade to "cut upward into a foe's groin and buttocks, motioning forward and backward with the Wii remote as you go.

The group says rating the game anything less than Adults Only will signal an endorsement of marketing Manhunt2 to children.

An Adults Only rating, however, could be a death blow to the game, since Nintendo and Sony, maker of the PlayStation platform, currently have policies that bar AO-rated games for their systems. That would limit sales for use only on personal computers.

Oregon Attorney General Hardy Myers has filed suit against LA Weight Loss and an Oregon franchisee, accusing them of making false and misleading representations about the costs, fees, products, and benefits associated with the program.

The lawsuit contends that LA Weight Loss and its franchisee violated Oregons Unlawful Trade Practices Act (UTPA) by advertising that the program could be purchased for only $9 a week when, in fact, consumers were required to pay hundreds of dollars for the entire program at the time of enrollment.

In addition, the lawsuit alleges that customers were presented with the actual cost of "LA Lites", so-called nutritional bars that are in reality similar to candy bars, three to four days after enrollment.

Customers were then told that to take advantage of the "guarantee" and "rebate' of half the program costs, they must eat these bars throughout the program.

A box of seven bars costs $16 or, if purchased in bulk at the beginning of the plan, $10.50. The LA Weight Loss program includes eating two bars a day for the initial "weight-loss weeks" plus during an additional six weeks of "stabilization". Consumers also must eat one bar per day for the following "maintenance" year.

The lawsuit also claims that advertised one-on-one counseling with an "individualized" menu plan was, in fact, one of eight menu plans based on general factors such as amount of weight to lose, age and gender.

The lawsuit further states that LA Weight Loss and its franchisee have no competent and reliable scientific evidence to substantiate effectiveness claims about their "dietary supplements" such as asserting that one of their supplements "FB 500" normalizes blood pressure.

Advertising

During the investigation of consumer complaints, the state found the company's advertising to be misleading in many aspects, including use of the word "guarantee".

The so-called "guarantee" had nothing to do with guaranteeing weight loss but was instead a "guarantee" that customers can stay on the weight loss program until they reach their target weight. In order to maintain the "guarantee", customers must strictly adhere to the plan and use the required amount of "LA Lites".

Investigators also found that so-called "counselors" available for one-on-one counseling were in reality staff (many of them former customers) who had no health or nutritional training or experience; however, they wore white lab coats and took customers' medical history and blood pressure.

In addition, the "counselors" pushed customers to buy the "LA Lites", supplements and other products to meet weekly sales quotas.

"Although the LA Weight Loss franchisee was quick to give refunds to Oregonians who complained to our office, the misleading marketing continued," Myers said. "It's always good to offer disgruntled consumers their money back but if the company continues to operate in the same misleading manner, the refunds are just 'smoke screens' devised to hide the intentional violation of law."

The state began its investigation into LA Weight Loss in September 2005 and attempted to negotiate a settlement agreement with the companies at the beginning of 2006. After months of stalling by the companies, the government issued a deadline for agreement and filed suit when the deadline was not met.

The lawsuit seeks restitution for Oregon consumers covering most costs and fees connected with joining the weight loss program, including payments for "LA Lites" and any "dietary supplement". The lawsuit also asks for civil penalties of $25,000 for each UTPA violation and for attorney fees and investigative costs.

In addition, the lawsuit seeks permanent changes in the way the companies market their products and to require that they only use competent and reliable scientific evidence to substantiate their claims.

"Oregonians of all ages should be generally cautious when choosing the right weight loss program," Myers explained. "Consumers should first consult with their doctor or nutritionist before obligating themselves to an expensive program that may or may not work for them."

Named in a complaint filed in Marion County Circuit Court is LA Weight Loss Franchise Company, a Delaware corporation operating out of Horsham, Pennsylvania, and an Oregon franchisee, NWM, Inc., of Lake Oswego. NWM, Inc., currently has locations in Clackamas, Corvallis, Eugene, Gresham, Lloyd (Portland), McMinnville, South Salem, Sherwood, Tanasbourne (Portland), Washington Square (Tigard), and Wilsonville. It also operated locations in Bend and North Salem.

A grieving Washington pet owner on Friday filed a $72,000 lawsuit against Menu Foods and Kroger for emotional and financial damages suffered in the wake of his cats death.

But the lawsuit Don Earl filed in Washingtons Superior Court doesnt allege his cat died from eating melamine-tainted food.

Earl claims his cat, Chuckles, died in January because her food -- Menu Foods Pet Pride Turkey and Giblets and Mixed Grill cat food -- contained the pain killer, acetaminophen.

According to documents and studies published by the (American Society for the Prevention of Cruelty to Animals) ASPCA, due to their body chemistries, cats are unable to tolerate acetaminophen and no amount of acetaminophen is safe for cats, Earl writes in his lawsuit. The Port Townsend consumer is representing himself in the case.

As ConsumerAffairs.com reported in June, Earl hired a Texas laboratory to test the food hed given Chuckles shortly before she died.

He sent samples of the same lots and styles of Pet Prides Turkey and Giblets and Mixed Grill cat food to ExperTox, Inc. of Deer Park, Texas, for analysis.

Those tests detected acetaminophen in the food, ConsumerAffairs.com confirmed. They also discovered the chemical cyanuric acid -- commonly used in pool chlorination -- in the samples.

ExperToxs tests, however, did not find the chemical the triggered the March recall of millions of containers of pet food: melamine.

The Food and Drug Administration (FDA) discovered melamine in the wheat gluten and rice protein concentrate imported from China and used in the more than 5,600 products that pet food makers have recalled in the past four months.

That chemical -- used to make plastics and fertilizer -- is blamed for the illnesses and deaths of thousands of pets nationwide.

Melamine is not approved for use in pet or human food.

Red Herring

Earl told us he wasnt surprised that ExperToxs scientists didnt find melamine in the Pet Pride food he had tested. Those brands are not included in the nationwide recall.

Melamine has impressed me as being a red herring since day one, he said. The substance has been the subject of credible scientific tests and studies for decades. Nothing supports the theory it could be lethal even in amounts 10 times the highest reported to be present in the food.

In his lawsuit, Earl alleges that Menu Foods failed to look for other contaminants in the adulterated foods -- ones that could cause the observed toxic effects on pets.

The Plaintiffs cat 'Chuckles' exhibited symptoms known, from numerous scientific studies, to be consistent with acetaminophen poisoning after consuming pet food shown to have been contaminated with acetaminophen, which was sold, marketed or manufactured by the Defendants, the lawsuit states.

The unknown toxin scan used by ExperTox to identify the presence of acetaminophen in pet food is frequently used by pet food companies, is a relatively low cost procedure, and is readily available to both businesses and private parties.

The lawsuit adds: No studies conducted since the recall was announced have shown melamine to be the proximate cause of illness or death as a result of dogs or cats consuming the adulterated pet food.

In his court filing, Earl states he bought the allegedly-tainted Pet Pride cat food on December 28, 2006 at a Kroger store in Silverdale, Washington.

At that time, he states, Chuckles was in good health.

She was also an indoor cat and never exposed household items like cleaning products, medications or plants that are potentially harmful to pets, he said.

According to the lawsuit, Chuckles lost her appetite, became lethargic, was vomiting and drinking excessive amounts of water five days after she started eating the Pet Pride food.

Thats when Earl took her to a veterinarian.

The veterinarian was unable to positively diagnose the cause of illness, but suspected an infection and prescribed antibiotics, his lawsuit states. On January 5, 2007, in addition to earlier symptoms, Chuckles appeared to be having trouble breathing, had lost considerable weight, felt chilled to the touch and appeared to be in a considerable amount of suffering.

Earl states he then took Chuckles to a second veterinarian.

After running blood and urine tests on Chuckles, the veterinarian determined Chuckles had lost over 95% of her kidney function and was not expected to live for more than two days. Chuckles died the following day, on January 6, 2007, 10 days after she began eating the above named cat food.

Misrepresentation

Earls lawsuit alleges Menu Foods and Kroger fraudulent misrepresented the products were safe and healthy for pets and concealed information about the food.

Such misrepresentations, omissions, and concealments of facts includefailing to disclose, and/or intentionally concealing the results of tests showing the potential health risks to companion pets associated with the use of Defendants commercial pet foods; failing to adequately test ingredients in the Defendants commercial pet foods to ensure that the ingredients live up to the Defendants advertisements; and failing to include adequate warnings ... about the potential actual risks ... and duration of serious adverse effects of the ingredients in the Defendants pet foods.

The lawsuit also alleges Menu Foods and Kroger were grossly negligent, sold defective products, breeched their implied warranties, and engaged in wrongful conduct.

The lawsuit seeks $72,042 in damages -- $517 for veterinary bills, $1523 for laboratory testing, $30,000 for loss of property, and $40,000 in punitive damages, outrage, and pain and suffering.

Why is Earl single-handedly taking this action?

I want those responsible to look me in the eye and know what they did was unthinkably evil, he says. I want justice terrible enough that to the end of their days, they will never poison another Chuckles cat. I want my day in court, in front of a jury of my peers.

Earl says no amount of money will replace his beloved Chuckles.

But he says filing this lawsuit and seeking thousands of dollars in damages is the only way to get a giant corporations attention, and hopefully prevent someone else from losing a treasured pet..

If money is the only tool of justice available to me, then by all I hold dear, I am going to make those responsible for murdering Chuckles pay for their criminal acts, he says. The way I feel about the situation, a million dollars would be fair. The situation couldnt have been worse than if someone had kicked in my front door and shot Chuckles dead while we were sitting together watching a movie. How do you put a price on something like that? The obvious answer is you cant. There is no practical way to quantify the bond between pets and their owners. It should be, however, possible to quantify justice.

No Comment

Menu Foods and Kroger could not be reached for comment.

Menu Foods, however, previously declined to comment on ExperToxs findings of acetaminophen in its food.

The company referred calls to The Pet Food Institute (PFI), which represents the makers of 98 percent of all dog and cat food produced in the United States and calls itself the voice of U.S. pet food manufacturers.

I can assure you that this industry takes the issue of the safety of pet food products with the utmost seriousness, PFIs spokesman Kurt Gallagher told us.

He also cast doubts about ExperTox and its test results.

Through our contacts in Texas, which is where the lab is located that conducted the analysis, we have learned there is genuine concern among key toxicological and analytical experts about the lab and the actual test results, Gallagher said.

But the Lab Manager for ExperTox told us her company stood by its finding.

ExperToxs Donna Coneley also said she didnt have any idea what Texas experts Gallagher and PFI were talking about.

They never name the experts theyre working with, she said. When someone says people I know say this, it sounds to me like theyre trying to say there are experts who have looked into this and dont agree with the findings. But I dont believe there are. To me, it sounds like theyre talking about imaginary experts.

Coneley said her lab only worked with FDA scientists.

The pet food manufacturing companies have had ten-minute discussions with us about how we did our tests, she said. But theyre not experts.

The (scientists at the) FDA are the only people weve been talking to about our findings.

The day after that interview, the FDA announced it didnt find acetaminophen in a handful of dog and cat food samples it tested.

But ConsumerAffairs.com learned the FDA couldnt confirm it tested the same lots and brands in which ExperTox found the pain medication.

This case is not closed, Coneley told us. Theyre (FDA) still requesting samples and data from us. I dont see by any means that this is over. If it was over and done with, why would they bother spending so much time with us on the phone and arranging for samples to be released?

When asked why the FDA disputed its findings, Coneley said: I dont know their reasoning. What I do know is that when they told me they tested a few samples of cat and dog food, I asked them if they were the same lots and brands that we tested. And they couldnt confirm that any of them were the same ones we tested.

Were using two completely different testing instruments to detect those chemical, and the difference comes into play with the instruments and the instrumentation (used) to detect those chemical.

Coneley said her lab tested 100 to 150 samples of pet food -- and detected acetaminophen in five of those samples.

The FDA, she said, tested just a few samples of pet food for the pain killer.

Its easier to say that we cant confirm something by looking at a few samples than to really investigate and continue investigating until you know something for sure. I think this might have been a quick way to get everyone off their (FDA) backs.

Could those everyones be the Pet Food Institute?

Maybe there was pressure from them, Coneley told us.

Coneley said her lab will continue working with the FDA and hopes to foster its relationship with that federal agency.

We dont want to build any animosity with the FDA. Its in our best interest to help them see what were seeing.

Coneley also confirmed her lab didnt detect melamine in the samples of Pet Pride cat food it tested for Earl.

But it did find that chemical -- and cyanuric acid -- in other samples.

Her lab, however, did not find the rat poison and cancer drug, Aminopterin, in any of the pet food it tested, she said.

Scientists at the New York State Department of Agriculture discovered that toxin in some samples of pet food it tested shortly after Menu Foods announced its recall in March.

Today was supposed to be "Black Sunday" for Internet radio -- the day that royalty rate increases were scheduled to go into effect, forcing Webcasters like Pandora to pay sharply higher fees or go out of business.

But today won't be the day the music died after all. An eleventh-hour agreement between music labels, traditional radio networks and Webcasters put off today scheduled implementation of the new royalty schedule.

The new fees were ordered by the Copyright Royalty Board in March. Subsequent court rulings upheld the new fee schedule, which charges Internet stations for each listener that listens to each song. The fees would be so much higher that Webcasters complained there was no way they could stay in business.

Late this week Rep. Ed Markey (D-MA) organized a private roundtable discussion between webcasters and SoundExchange, the entity set up to collect and distribute digital music royalties. It was that session that led to an agreement to put off the new fees, at least for a while.

SoundExchange executive chairman John Simson said didn't want small Webcasters and Internet radio stations to stop broadcasting, only that they needed to be up to date with the royalties they paid for streaming artists' works.

Simson told Radio And Internet Newsletter (RAIN) head Kurt Hanson that, "For the people who want to comply with the law and are in bona fide negotiations with us, we don't want those people to be intimidated."

Under the new royalty structure, Internet radio broadcasters would face increases in royalty payments retroactive to the beginning of 2006, and continuing to increase through 2010. Webcasters would also have to pay "administrative fees" for each channel they stream, which could lead to billions in royalties owed from the many channels broadcast.

Simson said he was willing to cap the administrative fee at $500 per channel up to a maximum of 100 channels, but only if Internet radio stations demonstrated much more compliance with the current royalty system.

Simson also mentioned a "small Webcaster license" that might exempt individual Internet radio broadcasters from the fee requirements.

Those stations that choose to ignore the new royalty payments and don't "go dark" today may face collection action from SoundExchange, Simson said, but "It's going to be business as usual at SoundExchange trying to process data, trying to get deals done. We're not gonna be filing lawsuits."

With the momentary reprieve granted by the meeting, Pandora's Tim Westergren exhorted readers of his blog to "keep the legislative pressure on."

"Key congressional reps including Jay Inslee (D-WA, lead sponsor of the Internet Radio Equality Act which now has 130 sponsors) and Ed Markey (D-MA) convened a meeting and brought very serious pressure to bear on everyone to reach a solution," he wrote. "This is grassroots democracy in action. We're far from out of the weeds, but we won't be shutting down on Monday."

Congress May Act

Meanwhile, a bipartisan bill that would vacate the Copyright Royalty Board's new rates -- the Internet Radio Equality Act -- is making its way through Congress, but is not likely to win final passage until later this year.

More than 2,000 students rallied earlier this week in support of the Congressional measure and petitions were delivered to Congress by a coalition of media public interest groups, including U.S. Public Interest Research Group (U.S. PIRG), Free Press, and SaveNetRadio.

"The Internet Radio Equality Act compensates rights holders but also encourages growth in Internet Radio and the greater media marketplace," said U.S. PIRG Staff Attorney Amina Fazlullah.

"The Copyright Royalty Board rates are a clear example of unfair and shortsighted regulation. These new rates will destroy this young and innovative industry if they are allowed to take effect," she said.

There are an estimated 72 million net radio listeners that support college and other independent stations streaming over the Internet as well as the airwaves along with new and innovative Internet-only outlets.

In the wake of massive consolidation of ownership of over-the-air radio, Internet Radio has stood alone as an outlet for diverse and independent musicians playing in formats from jazz and freeform to bluegrass and classical music that have been squeezed off the traditional radio dial, the coalition members said said.

"Internet radio offers an unprecedented and unparalleled level of accessibility and diversity to music lovers of every age, from every walk of life, in every region of the country," said SaveNetRadio coalition spokesperson, Jake Ward.

The rate increase would increase royalty payments between 300 and 1200 percent. The action could bankrupt Internet radio stations like Pandora, Live365, Rhapsody, MTVradio, and hundreds of smaller, regional, and local stations. Internet radio industry representatives estimate the new fees will cost companies $1 billion- a gigantic leap from the $200 million paid last year, noted Fazlullah.

"Students and young people have always supported independent musicians playing a variety of formats," added PIRG student volunteer Lauren Linville, "The Internet should make it easier for independent musicians to compete with big radio and big media, not harder."

Hello. This is the Washington DC Office of Consumer Affairs calling to inform you that youve won the second place prize in the Publishers Clearing House sweepstakes! Call us toll free at 1-877-271-XXXX to find out how to claim your $450,000 prize.

So began the phone message received by Mr. L.M. Kent, of Ohio. Mr. Kent listened as Stacy Phillips calmly explained that Mr. Kent would need to pay only $850.00 for insurance on his winnings.

They sounded very professional, said Kent. I wasnt sure what to believe, but they took the time to answer my questions and return my calls. They even said that the $850.00 insurance payment would be refunded by Publishers Clearing House.

After Mr. Kent contacted ConsumerAffairs.com, I called the toll-free number and posed as a relative of Mr. Kent.

Consumer Affairs, may I help you? responded the voice on the other end of the line. I was transferred to Stacy and she assured me that, Mr. Kent was sent three notices directly from Publishers Clearing House. When he didnt respond, PCH hired us to award the prize.

I was informed that the offer was only good for another 48 hours. To claim the prize, the check would be hand-delivered by a "federal agent." But Mr. Kent would first have to pay the $850.00 before receiving the check.

PCH Responds

PCH is not a darling of consumer activists and has its own string of run-ins with the law, most recently a warning from the Iowa attorney general who accused the company of targeting seniors with misleading sweepstakes promotions.

But the company responded quickly to the news that someone was turning the tables and using the PCH name to scam consumers.

If you are contacted by anyone claiming to represent Publishers Clearing House and they request payment of any amount to collect a prize, do not send any money, said Christopher L. Irving, the Senior Director of Consumer Affairs for Publishers Clearing House. You have not heard from the real Publishers Clearing House.

Furthermore, the District of Columbia Department of Consumer and Regulatory Affairs commented, "These crooks attempt to add legitimacy to their sweepstakes con by using the names, telephone numbers, and addresses of real government agencies," said Bob Harris, Manager of the D.C. Office of Consumer Protection.

"They ask consumers to cover the taxes, surcharges or service fees for 'sweepstakes winnings' and trick consumers into believing that the prize is being supervised by a government agency," Harris cautioned.

Toll-Free Numbers

As is common with swindles, this one used a toll-free number to assure Mr. Kent that returning a call would cost him nothing.

Bill Quimby, who operates an informative site called TollFreeNumbers.com, said that many crooks hide behind a toll-free number.

To find the people behind this, you have to find out where that toll-free number is ringing. It could ring to any type of phone, and it doesnt even have to be in the U.S., said Quimby.

Rules of the Game

There are simple rules to follow if you receive a call or a letter announcing you are a winner of any sweepstakes:

1. Dont pay a cent to collect your "prize." A legitimate sweepstakes wont ask you to pay taxes, shipping or insurance or any other kind of fee before receiving your prize.

2. Did you enter? You can't win a contest you didn't enter. If the caller tells you your credit card issuer or bank entered you in the competition, that's your cue to hang up.

3. A U.S. number means nothing. Many scams are based out of Canada and other countries. With the advent of the Internet, a crook can be located anywhere in the world and still have a U.S. phone number. Recovering your money from a U.S. scammer is next to impossible. Recovering it from a foreign scammer is impossible.

4. Turn off your emotions and use logic. A con artist will hope that the logical part of your brain wont kick in until after your money is lost.

More Scam Alerts ...

Youve seen the ads promising well buy your house for cash! In North Carolina, state officials say one such company making that promise to homeowners was nothing more than a scam.

A North Carolina court has ordered Charlotte Home Solutions to stop its operation that purported to buy homes and then resell them to buyers with poor credit.

Attorney General Roy Cooper said the company promised to buy homes from people who needed to sell quickly but instead left them vulnerable to foreclosure.

This scam hurt both homeowners and people who hoped to become homeowners, said Cooper. Weve put a stop to their phony We Buy Homes promises so no more consumers will be caught up in this scheme.

As alleged in Coopers complaint, three local businessmen began doing business as Charlotte Home Solutions in September 2002. The partners advertised their business through signs, mass mailings to targeted neighborhoods and a website that promised to buy consumers homes.

However, rather than purchasing houses outright, Charlotte Home Solutions convinced homeowners to sign title to their homes to a trust controlled by the partners. Because Charlotte Home Solutions didnt assume the mortgage on the property, the original homeowner unknowingly remained responsible for mortgage payments on the house.

Cooper contends that Charlotte Home Solutions then advertised these homes for sale to consumers with bad credit, offering them an option contract to rent a home until they could qualify for financing. Purchasers had to pay a substantial deposit that was non-refundable in addition to monthly rent payments.

However, many of these tenants were never able to get a loan to buy a home.

Despite the fact that Charlotte Home Solutions collected rent money, they failed to make mortgage, tax and homeowners association payments on the homes, leading in some cases to foreclosure proceedings against the original owners. When the homes were foreclosed on, the tenants were also forced to leave and lost their deposit and their option to purchase a home.

The North Carolina Real Estate Commission also joined in the complaint and consent judgment against one of the partners, William Keaton, who was allegedly practicing real estate without being properly licensed.

Legislation backed by Cooper that is currently pending in the North Carolina General Assembly would put controls on similar We Buy Homes operations to help protect homeowners and homebuyers from falling prey to these types of schemes.

More Scam Alerts ...

Members of the House Telecommunications Subcommittee criticized AT&T for locking iPhone buyers into an exclusive contract and for imposing steep termination fees to break the contract.

Committee chair Ed Markey (D-MA) complained that provider exclusivity and high fees are "stultifying innovation and unquestionably [diminishing] consumer choice."

In his opening statement at what was dubbed the "iPhone hearing," Markey held up a new iPhone and praised its technological innovation while criticizing AT&T for charging a $175 termination fee on top of the $500-$600 the buyer paid for the device.

"This highlights problems with the current marketplace structure, where devices are provided by carriers, portability of devices to other carriers is limited or non-existent, and many consumers feel trapped having bought an expensive device or having been locked into a long-term contract with significant penalties for switching," Markey said.

Termination fees and exclusive "locked-in" contracts are an unfortunately common feature of the wireless market, but AT&T's fees are relatively unique in that the telecom giant did not pay to create the iPhone -- Apple did.

Thus, AT&T profits from selling the phone at full retail price and charging a termination fee while paying no costs for production. And canceling your contract turns the iPhone into what Columbia University professor Tim Wu called an "expensive paperweight."

Market Dominance

Wu, a supporter of net neutrality and open wireless standards, testified that the current wireless market in America is a "spectrum-based oligopoly," where a few large companies have so thoroughly dominated the market that they can set punitive conditions on consumer purchases without little fear of reprisal or challenge from new competitors.

"[W]hen the criteria for market entry is 'fit' with the plans of the major carriers, innovation is inevitably distorted," Wu said. "And since innovation and economic growth are so closely linked, this affects us all."

Steven Zipperstein, general counsel for Verizon Wireless, challenged Wu's market assessment.

"Carriers are constantly expanding services and benefits to customers because they know they must fight fiercely to attract and retain those customers," he said.

Open access for wireless markets would reduce companies' incentive to innovate, Zipperstein argued. "In this model, wireless network operators would have a decreased incentive to develop new products or services, because they would simply be in the business of providing airtime access for products chosen by the consumer, deterring investment away from network upgrades," he said.

As evidence, Zipperstein pointed to the development of Verizon's own EV-DO wireless broadband network, for which he claimed Verizon spent upwards of $5 billion annually to maintain.

But as ConsumerAffairs.com reporter Joseph Enoch documented last year, Verizon terminates the accounts of subscribers who utilize the network for any activity more substantial than checking e-mail or surfing the Web, despite advertising the network as "unlimited."

Open Standards

The hearing also discussed the FCC's upcoming auction of portions of the available wireless spectrum, formerly used for analog television broadcasts. Net neutrality supporters and consumer advocates have pushed for opening the spectrum for creating a nationwide wireless broadband network, which Consumers' Union's Chris Murray called a "positive development."

Murray, the nonprofit organization's senior counsel, testified that "[w]ithout open access to the full range of wireless services and devices, consumers will continue to face unfair charges for service modification or termination, inability to use innovative applications, devices that have been hobbled to minimize competition, and other troublesome practices currently used by the dominant cell phone and broadband providers."

The open access standard has won a surprising ally in the government -- FCC chair Kevin Martin. Normally a staunch supporter of telecom-friendly legislation,, it is rumored that Martin would support setting aside a portion of the spectrum for open-access usage by all devices, and that he is circulating the proposal among the other commissioners of the FCC.

Verizon is the latest telephone company to sign an anti-cramming settlement with the state of Florida.

The company agreed to develop an early warning system designed to identify third-party companies that may attempt to place unauthorized charges on consumers phone bills.

Embarq, once part of Sprint, signed a similar agreement with Florida last month and AT&T; agreed to similar terms earlier. Verizon has more than 40 million access lines inside the coverage region affected by the agreement.

The practice known as cramming occurs when unauthorized charges are added to phone service bills without the consumers knowledge or consent.

Unfortunately, victims of cramming often dont realize they are being improperly billed until they have been paying the charges for a significant length of time, said Florida Attorney General Bill McCollum. Todays agreement is the third reached with major telephone companies serving our state, offering much needed protection to Floridas consumers.

As part of the agreement, Verizon will require merchants and billing and collection clearinghouses to forward all consumer complaints referencing cramming to the phone company.

If at least 220 complaints within the 28-state Verizon region reference the same company over a month-long period -- an average of eight complaints per state -- Verizon will take action against the company to protect telephone consumers.

These actions may include the requirement that the company accused of cramming send out written notices to all new Florida subscribers notifying them of the following:

• their service subscription;
• the date the charges will begin to appear on their Verizon bill;
• the amount of the charges, and
• how the consumer may cancel the service subscription.

If cramming continues, Verizon may cease doing business with the merchant.

The agreement follows similar settlements with Embarq and AT&T; and a nationwide settlement with Email Discount Network (EDN). The company had allegedly failed to clearly disclose that offers for Internet savings were not free and that customers who submitted personal information to the company would be charged unless they contacted EDN to cancel the charges.

More than 250,000 consumers nationwide were charged a monthly fee for the coupons. EDN agreed to make restitution to every consumer who was adversely affected by the companys business practices and who submits a claims form, with restitution expected to exceed $1 million.

The case involving Verizon was initiated last September when the Attorney General's Office initially sued EDN for cramming.

In conjunction with the lawsuit, the Attorney Generals Office and the Office of Public Counsel filed a joint petition before the Florida Public Service Commission against Verizon, Embarq and BellSouth seeking to protect Florida consumers from the deceptive practices.

The latest agreement is the final step in resolving the issue of how telephone companies with Florida customers will address cramming and what steps will be taken to proactively protect telephone consumers from the illegal practice, which occurs when unauthorized charges from third parties appear on phone bills, McCollum said.

More Scam Alerts ...

The companies, all employing similar tactics, are significantly overcharging consumers, charging consumers for unnecessary services, using intimidation tactics, and failing to give refunds or respond to consumer complaints, according to the Better Business Bureau.

Ironically, these companies operate under names like Dependable Locksmith but in reality they exploit the vulnerable situation of consumers who are locked out of their house or car, said Steve Cox spokesperson for the BBB System. Weve found that some locksmiths have made taking advantage of consumers misfortune part of their business model.

Complaints about locksmith services to the 114 BBBs serving the U.S. increased almost 75 percent from 2005 to 2006, and have continued to come in steadily during the first half of this year.

The BBB has singled out Dependable Locksmith which operates under more than a dozen different names for harsh criticism, calling it particularly disreputable.

The group says the company poses as a local locksmith in cities across the country and advertises in the yellow pages using local phone numbers and fake local addresses. A consumer might think theyre dealing with a local locksmith but their phone call is actually connected to a call center located in the Bronx borough of New York City.

Consumers are quoted a reasonable price over the phone but when the locksmith arrives typically in an unmarked vehicle he demands significantly more money than originally quoted, often only accepting cash.

A complaint from Cleveland, OH, where Dependable Locksmith was operating under the name Superb Solutions, alleges the company quoted fees of $39 and $84 for separate jobs, but the bill ended up at $471, which included add-on fees such as a $65 breaking in fee and a $58 fee to uninstall old locks.

Another complainant reported that the locksmith sent to let her into her car demanded she pay twice the price quoted over the phone. The locksmith offered to drive her to an ATM to get cash. Feeling unsafe the victim refused.

The victim said she was ultimately forced to write a check made out personally to the locksmith, claiming he would not let her into her car until she did so. She cancelled payment on the check the next morning, but eventually filed a police report after the locksmith harassed her with continuous phone calls about payment.

The BBB also reports complaints from victims who say they were charged for unnecessary services. For example, complainants suspect locksmiths sent over by Dependable Locksmiths of pretending they couldnt simply pick the lock so that they could charge more and install all new locks in homes.

Some of Dependable Locksmiths aliases include, Superb Solutions, Locksmith 24 Hour, Inc., USA Total Security, Priceline Locksmith, and S.O.S. Locksmith, according to the BBB.

More Scam Alerts ...

Ameriquest and other mortgage companies are paying $325 million to homeowners who were victimized by predatory home mortgage sales schemes. Other companies involved in the settlement are Town and County Credit Corporation and AMC Mortgage Services, Inc., formerly known as Bedford Home Loans.

The settlement resolves allegations that Ameriquest and its affiliates failed to adequately disclose home loan terms, failed to disclose whether loans carried fixed or adjustable rates, refinanced borrowers into inappropriate loans, inflated the appraisals used to qualify borrowers for loans, and charged excessive loan origination fees and prepayment penalties.

The company engaged in these unlawful mortgage lending practices from 1999 through 2005.

"Hard-working families trying to buy a home wound up as targets of improper sales practice," said California Attorney General Edmund G. Brown Jr. "This settlement provides homebuyers with at least some of the restitution they deserve."

Attorneys general from the District of Columbia and every state except Virginia, where Ameriquest did not conduct business, are also parties to the settlement.

Forms being mailed to consumers today indicate the minimum payment that customers can expect to receive. The average restitution payment is $812.15 but the amount could be larger depending upon how many customers choose to participate in the settlement.

Consumers who want the restitution payment should mail completed and signed forms to the settlement administrator by September 10, 2007.

Consumers who accept the restitution payment will relinquish their right to file lawsuits against Ameriquest unless their home goes into foreclosure. If a consumer's home goes into foreclosure, the consumer may still file a lawsuit against Ameriquest even if the restitution payment was accepted.

Consumers are encouraged to consult a private attorney or legal services attorney before deciding whether to participate in the settlement.

A "Frequently Asked Questions" pamphlet was mailed with the claim forms to provide additional information about the restitution process for eligible consumers. Consumers can also obtain detailed information about the settlement by contacting the Ameriquest Settlement Administrator by calling 1-800-420-5875 (1-866-494-8274 for deaf or hard of hearing consumers).

"Texans will not tolerate predatory lending schemes that lock would-be homeowners into a seemingly endless cycle of debt," said Texas Attorney General Greg Abbott. "We are pleased that Texas homeowners who were harmed by this lending giant will share nearly $21 million in refunds. The Office of the Attorney General will continue protecting homeowners from deceptive lenders."

The Department of Justice has released a report detailing its use of multiple databases and information provided by data brokers to identify identity thieves and patterns of fraud, as well as its plans to build a new database to hunt terrorists.

The data mining programs, which use advanced technologies and concepts such as risk scoring, drew criticism from civil rights advocates for relying on bad data and potentially identifying innocent Americans as criminals.

Sen. Patrick Leahy (D-VT), chairman of the Judiciary Committee, criticized the system as "ripe for abuse," while the ACLU and EFF derided the system's reliance on potentially inaccurate data for making judgments.

The FBI's proposed "System To Assess Risk," or STAR, would measure suspects against data gleaned from a wide variety of sources, including private data resellers such as ChoicePoint.

STAR would then assign a risk score to the suspect based on the data analysis. Much as credit scores are used to determine a borrower's ability to pay a loan or receive new credit, the risk score would be used to determine the likelihood that the suspect is a terrorist or accomplice.

Unlike credit scores, risk scores are built from far larger sources of data, including names, addresses, buying habits, financial records, and in the FBI's case, other "watch lists" and databases of suspects. STAR would measure suspects against names found on terrorist watch lists like those held by the TSA, which has been criticized for containing inaccurate information and penalizing innocent travelers.

The TSA was also criticized for using private contractors to collect information on hundreds of millions of Americans as part of its own proposed antiterrorist verification system, variously called "CAPPS II" and "Secure Flight."

The Secure Flight program was scuttled due to criticism of its vulnerabilities and violation of privacy.

The Department of Homeland Security already has its own terrorism risk score, which it assigns to travelers entering and exiting the United States. The score, which is held for up to forty years, can be shared with other Federal agencies and foreign governments, but Americans are barred from seeing their own scores.

Individuals who score high on a terrorism risk score list can be subjected to heavier scrutiny when traveling, or be added to a "no-fly" list that may bar them from entering or leaving the country.

Risk scores, sometimes called "identity scores," are chiefly used by the financial industry to measure and prevent account fraud.

Individuals opening new bank or credit accounts have their information measured against patterns of fraud and risk, such as opening many new accounts at once or suddenly charging huge balances on a credit card. If the person opening the account has a high risk score, they may be flagged for committing fraud.

Avivah Litan, research analyst for the Gartner group, advocated identity scoring as a stronger tool to combat fraud than credit monitoring, as it drew information from a larger number of sources, but warned that it was also not infallible and was still too new a concept to really take hold in the marketplace.

Risk scoring, like credit scoring, relies on measuring information based on the data provided. Just as credit bureaus are criticized for relying on inaccurate or outdated information to generate credit scores, data brokers generally refuse to be held liable for the accuracy -- or inaccuracy -- of the information they gather and sell.

The Justice Department report, which had been requested several months earlier, came on the heels from statements by Attorney General Alberto Gonzales that he had been unaware of the FBI's abuse of "national security letters," which can be used to access Americans' financial records as part of criminal investigations.

The use of the letters for criminal investigations spurred similar requests by the Pentagon and the CIA. Gonzales claimed he was ignorant of the abuses until he had read about them in a report issued by the FBI's Inspector General, but investigations by the Electronic Frontier Foundation found that he had been briefed months earlier about the use of national security letters and the resultant abuses.

America Online (AOL) will pay $3 million to settle complaints that it has made it extremely difficult for consumers to cancel the service.

As it has done so many times before, AOL promised to make it easier for customers to cancel.

In the agreement with 48 states and the District of Columbia, AOL promised to make a number of improvements including: easier cancellation procedures, improved billing disclosures and commitment to refunding unauthorized charges.

Consumers have been bedeviled by AOL's business practices for years and occasional lawsuits and prosecutions have done little to stem the tide of complaints.

In January of 2002, Joel of Arnold, Calif., told ConsumerAffairs.com: "I was unable to quit my AOL account. I called on numerous occasions trying to stop charges to my bank card."

Five years and thousands of complaints later, Gwen of Fort Washington, MD, said in a June 20, 2007, complaint to ConsumerAffairs.com: "AOL refuses to cancel my account and stop charging my credit card. I canceled my AOL account Nov 2006,"

The settlement seeks to resolve complaints that AOL failed to disclose terms and conditions of paid service and made it extremely difficult for consumers to cancel their AOL pay services. Under todays agreement AOL will make a number of improvements including: easier cancellation procedures, improved billing disclosures and commitment to refunding unauthorized charges.

Historically, AOLs primary service has been dial-up Internet access, typically offered through a free trial offer that requires consumers to cancel their accounts to avoid a monthly membership fee. AOL announced in August 2006, that it would begin limiting its role as an Internet access provider and start allowing customers to convert to free e-mail accounts.

Todays agreement will minimize the potential for consumer confusion during the transition to free e-mail accounts, said California Attorney General Edmund G. Brown Jr.

Rewards for "Saves"

Prior to this settlement, AOL only allowed customers to cancel their service by fax, mail or telephone.

The majority of consumers called AOL directly and wound up speaking with service representatives who earned rewards, in some cases up to $3000 per month, for persuading customers not to terminate service. Consumers complained that this practice of trying to save customers made cancellation extremely difficult if not impossible.

Todays settlement puts strict limitations on the practice of saving customers and requires recording and verification of these telephone calls. In addition, consumers are now able to easily cancel service online at: http://cancel.aol.com.

Billing Practices

Todays settlement also requires AOL to change confusing billing practices. AOL will clearly disclose how terminated accounts are reactivated and the customer must now resubmit any payment information before AOL can reactivate a paid service.

The company will also clearly disclose the exact charge that will be placed directly on a customers monthly telephone bill.

AOL will also revise its practice of allowing consumers to create spin off accounts, which are additional paid accounts for AOL service that stem from one original membership. Under the settlement, these accounts can now only be created over the telephone and customer service agents must completely disclose the exact additional cost of creating a spin off account.

"I am being double billed by AOL and I only have one account," said Josephine of Trenton, N.J., on June 19, 2007. "I am the only person living here."

"AOL billed my credit card for the monthly fee of April for 25.90. THey also billed on the same day my debit card for 25.90 five times (129.50), I have made countless phone calls to their customer service dept. and to their Fraud dept with no luck," said Eduardo of Kennesaw, Ga., in April 2007.

The agreement also requires AOL to give refunds to consumers who complained of unauthorized charges for AOL service. If a consumer can show AOL billing after a cancellation attempt, AOL will refund those charges. The company will continue cooperating with the states to resolve outstanding complaints and continue refunding consumers for unauthorized charges.

That may be helpful to consumers like Phyllis, of Tuttle, Okla., who said: "AOL put an unauthorized internet access charges on my phone bill. I called and explained that I used OEC and do not use AOL at all for a provider.

"The woman looked up my account and agreed there was no activity and said she will credit the account and close it out. Next month I get another bill on my phone bill and the previous charges that they did not credit."

Under the settlement, AOL must provide a proper mailing address, fax number, and e-mail address where consumer complaints may be forwarded.

States participating in the settlement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia Wisconsin, and Wyoming, the Commonwealths of Kentucky, Massachusetts, Pennsylvania and Virginia, and the District of Columbia.