News in March 2009

American Express has scored a big victory, turning aside a class action lawsuit by aggrieved cardholders who said they were scalped on travel insurance.

A California judge dismissed the case, ruling that the plaintiffs had failed to prove their case. The suit alleged that Amex cardholders who used their cards to buy airline tickets were overcharged for insurance, and that advertising about the program was misleading.

According to the suit, Amex tacked insurance costs onto any airline-related purchase in excess of $45, including things like baggage handling fees and seat upgrades. The plaintiffs argued that insurance should have been added only to ticket purchases. The plaintiffs also alleged that Amex failed to refund insurance to customers with airline tickets that were later cancelled, or to those who didnt quality for the insurance under its terms.

Amex countered that the contract explicitly disclosed the fees and the manner in which they were added to the bill.

According to Amex attorney David Shapiro, consumers could seek a refund of the fees by filling out a company-provided form or placing a phone call. In support of his claim, he cited data showing that about $140 million had been issued in refunds over the past 13 years.

After 11 weeks of testimony from the plaintiffs, California Superior Court judge George Hernandez ruled that the plaintiffs had not sustained their burden, and dismissed the case.

His decision was the second blow to the class; in February, he ruled that the contract outlining the insurance charges was unambiguous, thereby eliminating the plaintiffs claim for breach of contract. The judge noted that some class representatives had contacted Amex for refunds or credits, thus demonstrating their understanding that this term was a condition precedent to obtaining a refund. Last weeks ruling came at the end of the trials second phase, and turned aside the classs claims that the programs marketing campaign was deceptive.

The lawsuit was filed in 2001 on behalf of Amex cardholders who paid for the travel insurance between 1995 and 2008; the class consisted of about six million consumers. A related suit in the Eastern District of New York was stayed pending Judge Hernandezs ruling. The fate of that action remains unclear, although the courts decision likely doesnt give the consumer attorneys much reason to be optimistic.

Welcome respite

Judge Hernandezs ruling was surely a welcome respite for Amex, which has suffered a few adverse decisions in recent months.

In January, the Second Circuit ruled that the company couldnt necessarily enforce class action waivers against small merchants, if the vendors could prove that individual litigation would cost more than their potential recovery. Then a New Jersey court held that some class action waivers were unconscionable and thus unenforceable under New Jersey law.

The current case was unusual for two reasons. First, it was dismissed before Amex even presented its side of the story; the entire trial consisted of testimony from the plaintiffs. More significantly, very few class actions even go to trial in the first place; most settle out of court or are dismissed on summary judgment.

Indeed, a recent study found that less than one percent of class actions brought in California make it to trial. This suit was argued during a bench trial, or one decided solely by the judge; class actions can also be heard by juries, if the parties so choose.

By Lisa Wade McCormick
ConsumerAffairs.com

March 31, 2009
Internet crime and the financial havoc it plays on consumers' pocketbooks continued to rise in 2008, according to a new report from the Internet Crime Complaint Center (IC3).

The "2008 Internet Crime Report" revealed consumers lost more than $264 million last year to various Internet crimes. That represents a loss of $931 for each of the 274,284 complaints the IC3 received in 2008.

The latest figures also reflect a 33 percent increase in the number of complaints the IC3 received in 2007 — and $25 million jump in losses. In 2007, consumers filed 206,884 complaints with the IC3 and their losses totaled $239 million.

The latest IC3 reports shows scam artists used Web pages and e-mails as the two main vehicles to dupe consumers in Internet crimes.

"This report illustrates that sophisticated computer fraud schemes continue to flourish as financial data migrates to the Internet," said Shawn Henry, assistant director of the Federal Bureau of Investigation's (FBI) Cyber Division.

The IC3 is a partnership between the FBI and the nonprofit National White Collar Crime Center. The organization collects and analyzes data about computer crime and then refers complaints to law enforcement agencies nationwide. The IC3's annual reports are a snapshot of the most common Internet crimes, where they occur, and who is victimized in these schemes.

The report included a breakdown by percentages of the Internet scams that received the most complaints, and the average dollar loss per complaint:

• Non-delivery of merchandise/payment: $800 (32.9%);

• Auction fraud: $610 (25.5%);

• Credit/debit card fraud: $223 (9%);

• Confidence fraud: $2,000 (7.9%)

• Computer fraud: $1,000 (6.2%)

• Check fraud: $3,000 (5.4%)

• Nigerian letter fraud: $1,650 (2.8%)

Other highlights of the IC3's 2008 report reveal:

• 77.4 percent of the perpetrators identified in the IC3's complaints were male. Half of those perpetrators lived in California, New York, Florida, Texas, and the District of Columbia. The report, however, also cited a case involving a Virginia woman, Rachel Trent, who duped many consumers on the eBay auction site. According to authorities, Trent advertised rare baseball and football cards on eBay. Once a consumer paid her for the cards, she sent them a worthless card or nothing at all. The Cyber Task Force arrested Trent, who is now serving four years in prison;

• Worldwide, the perpetrators identified in the IC3's complaints lived in the U.S. (66.1%), the United Kingdom (10.5%), Nigeria (7.5%), and Canada (3.1%);

• 55.4 percent of the consumers who filed complaints with the IC3 were men. Nearly half of them were 30-50 years old. One-third of those complainants lived in California, Florida, Texas, and New York.

• 92.4 percent of the IC3's complaints came from the United States. The organization also received complaints from Canada, the United Kingdom, Australia, India, and France;

• Men lost more money in Internet crimes than women. The ratio is $1.69 lost per male to every $1.00 lost per female;

• 74 percent of the fraudulent Internet contact came by e-mail; 28.9 percent came from Web sites;

"Care must be taken to avoid drawing conclusions about the 'typical' victim or perpetrator of these types of crimes," the report states. "Anyone who utilizes the Internet is susceptible, and IC3 has received complaints from both males and females ranging in age from ten to one hundred years old. Complainants can be found in all fifty states, in dozens of countries worldwide, and have been affected by everything from work-at-home schemes to identity theft."

A copy of the report is now posted on The National White Collar Crime Center's Web site. The report includes tips on ways consumers can protect themselves from getting taken in these various Internet schemes.

By Truman Lewis
ConsumerAffairs.com

March 31, 2009
It's not being called a recall but Yamaha Corp. is offering a free repair program for three of its accident-prone Rhino off-road recreational vehicle models. The company has also halted sales of those models until the repairs are completed.

There have been at least 46 deaths attributed to the Rhino 450, 660 and 700 models, most of them involving rollover accidents, according to the U.S. Consumer Product Safety Commission (CPSC), which advised consumers to stop using the ATVs until the repair is completed.

The CPSC staff has investigated more than 50 incidents involving 46 driver and passenger deaths in the Rhino models. More than two-thirds of the cases involved rollovers and many involved unbelted occupants. Of the rollover-related deaths and hundreds of reported injuries, some of which were serious, many appear to involve turns at relatively low speeds and on level terrain.

About 120,000 of the 450 and 660 model Rhinos have been distributed nationwide since Fall 2003. Some units have been equipped by Yamaha with half doors and additional passenger handholds, either before or after sale.

Yamaha's repair includes the installation of a spacer on the rear wheels as well as the removal of the rear anti-sway bar to help reduce the chance of rollover and improve vehicle handling, and continued installation of half doors and additional passenger handholds where these features have not been previously installed to help keep occupants' arms and legs inside the vehicle during a rollover and reduce injuries.

Owners of the affected Rhinos should stop using them and call their dealer to schedule an appointment to have the repairs made and to take advantage of a free helmet offer.

Yamaha is also implementing the same repair program and suspension of sale for the Rhino 700 model. About 25,000 Rhino 700s are included.

Once the repairs have been made, Rhino users should always wear their helmet and seatbelt and follow the safety instructions and warnings in the on-product labels, owner's manuals and other safety materials. The Rhino is only recommended for operators 16 and older with a valid driver's license. All passengers must be tall enough to place both feet on the floorboard with their back against the seat back.

For additional information, contact Yamaha at 800-962-7926 anytime, or visit the firm's Web site at www.yamaha-motor.com

Lengthy record

The two-seat Rhino has long been a topic of concern for the CPSC as well as other consumer, safety and parent organizations. It resembles a cross between a golf cart and an all-terrain vehicle (ATV). It's a popular design that enthusiasts say makes the Rhino fun to drive but critics say the design increases the rollover danger.

Because of its unique design, the Rhino isn't subject to ATV safety standards, which aren't exactly five-star anyway. A report last year found that for the eighth year in a row, serious injuries caused by all-terrain vehicles (ATVs) increased in 2007, and children under age 16 continued to suffer a significant portion of those injuries.

Instead of classifying it as an ATV, the CPSC calls the Rhino a "utility terrain vehicle," or UTV. There are no official standards for UTVs, but that may change as the safety agency continues its probe.

The Rhino falls into what the CPSC calls the "emerging hazard" category -- a niche sometimes created by crafty manufacturers who find ways to work around existing safety regulations.

The Rhino, for example, has a steering wheel instead of the handlebars usually found on ATVs. That and other relatively minor differences leave it in category limbo -- neither car nor ATV -- and thus unregulated and unlicensed.

Since they're not regarded as cars, UTVs don't need licenses and can generally be operated by anyone, including children, which is a large part of the problem as regulators and consumer advocates see it.

"Every year, more and more families are devastated by deaths and injuries caused by ATVs. This tragic problem continues to be in dire need of an aggressive and immediate solution," said Rachel Weintraub, Director of Product Safety for the Consumer Federation of America.

Yamaha says the criticism is unwarranted and insists the Rhino is safe. Accidents are caused by careless operation and ill-advised modifcations, such as removing the roll cage and failing to use a helmet and seat belt.

Unlike ATVs, which are used almost entirely for recreational riding, the Rhino and other UTVs are often used for such utilitarian chores as hauling gardening and maintenance supplies. The first Rhino models were introduced in 2003, offering such new conveniences as bucket seats and a steering wheel. Some even have doors. A base model costs about $11,000.

ATV dangers

While the Rhino may not be an ordinary ATV, it's still no toy and parents should not let children or adolescents treat it like one, experts warn. Here's what consumers have told us about ATVs, in their own words:

tom of jackson, TN August 16, 2009

My 36 year old son was a victim of the Rhino. He was a passenger traveling at estimared speed of 12-15 mph. My 38 year old son in law was driving. They were making a gradual left turn on absolutely flat terrain. Suddenly the Rhino flipped for no apparent reason. Results; compound fracture to fibula, tibia and broken hand. Now after 2 years and 8 surgeries he is still unable to work. Lost his job; lost health insurance, lost new home, permanently disabled, permanently disfigured, hasn't worked since July of 2007. Now he has a Staph infection.

Sometimes the collateral damage caused by an accident is worse than the accident. Oh, by the way because of this incident his wife recently filed for divorce. The accident occured in the middle of a hot summer day. No drinking no drugs no horseplay. The rhino is a death trap.

Joyce of Mccurtain, OK April 13, 2009

first i want to say these small towns like the one i live in have fines and laws against atvs,they know nothing of rhinos. they town or police just tell the kids to go home and they do nothing. the kids naturally come back out and just try to avoid being caught. there should be stiffer fines and also include the parents in the fines. the parents are just as guilty as the children. how many more injuries or deaths does there have to be?

Cynthia of Fairview, NC March 1, 2009

Cynthia of Fairview NC (03/01/09)
My son, 15, was driving an ATV on someone else's property along with some other boys. He came aroud a corner and a 18 yr ld boy driving a dirt bike hit him head on and he died almost instantly. He was not wearing a helmet and we will always wonder if he would've, if he would stil be here for us. He had been driving for years and didn't realy know the dangers. He owned a helmet and my last words were Where's your Helmet

A piece of my hisband and my heart are gone along with his brothers and sisters

Stephanie of East Prairie, MO February 24, 2009

Stephanie of East Prairie MO (02/24/09)
I have 3 boy's. zach age 5/Andrew age 10/Christopher age 12.Drew and Chris are 17 months apart, one year differance in school.Drew was pitcher and Chris was catcher in baseball.They played all sports on the same team.

Feb.27th,2008 Andrew was killed instantly while riding a ATV.Christopher (Drew's brother)found him in a field with the 4-wheeler and his friend that was on the back.

Christopher got the 4-wheeler off of the boy's. He made sure Drew's friend was ok and told him to stay by the back of the ATV.Chris did not want him to see Drew. Christopher said his brother's lips were blue. He checked to see if Drew was breathing. He was not. Chris took off Drew's helmet and shirt because gas had been leaking on the shirt. He then road his motorcycle home,came in the house and said MOM DREW IS DEAD. THANK GOD uncle Paul had stopped by that day.I told Paul to go with Chris while I called 911 and AIR-VAC.

I grabbed Zach put him in truck.When I got there all I could see was my dead baby lying there and he was purple.I ask Drew's friend how he was ,his leg was hurting and that was all.I told the boy's to get into the truck with Zach and PRAY for DREW. We tried CPR even though I knew my baby was dead. The result of all this is my family and my self totally heart broken,there are no words to explain.A person would have to go through this tragedy to understand.Christopher can not sleep at night he is very depressed and lost without his brother.Zach lays on Drew's bed yelling I WANT MY OLD LIFE BACK!I WANT MY BROTHER BACK.

The payday loan industry has been fairly successful in turning back attempts on the state level to impose tight restrictions on payday loans. But some members of Congress are pushing legislation that would impose a nationwide limit on what these businesses can charge.

Such a cap has been introduced in both the U.S. Senate and House as one strategy for helping to restore the health of the U.S. economy and financial systems. Senator Dick Durbin, (D-IL) introduced S500 in late February and Representative Jackie Speier (D-CA) followed suit in the House last week, introducing H.R. 1608.

The measures are strongly backed by industry critics, who have long complained that these short-term loans trap low-income consumers in a downward spiral of debt. One of these critics, the Center for Responsible Lending (CRL), commissioned a poll that it says shows wide spread support for capping loan rates at 36 percent. According to the poll, 72 percent of those questioned favor the cap.

A 36 percent cap on annual interest for consumer credit is a quick, common-sense way to restore protections that have been severely compromised in the consumer credit market, said CRL president Michael Calhoun. It would cost taxpayers nothing and plug a $5 billion hole in the wallets of working families.

Congress passed a 36 percent cap in 2006 to protect active members of the military after the Pentagon testified that payday loans were affecting military readiness.

Ohio, Arkansas, New Hampshire, and Arizona are among states that recently revoked exemptions from usury caps their lawmakers had given payday lenders.

The industry defends itself by arguing that it serves a group of borrowers who don't have access to bank loans or credit cards. Generally, their customers have little or no established credit. Their loans are secured by an advance dated check, to be cashed after their next payday hence the term payday loans.

However, fees charged on these typically short-term loans can amount to 400 percent or greater on an annual percentage rate basis. Capping the rate at 36 percent would make the payday loan industry much less profitable.

The federal measure would give all consumers an equal measure of protection from what critics like CRL describe as legal loan-sharking, and also would allow state lawmakers to set even stronger protections if they deemed it necessary.

Arkansas limits interest to 17 percent within its state constitution, New York makes interest above 25 percent a criminal offense, and Ohio passed a 28 percent cap last year, which was affirmed by voters in a ballot measure in November.

A federal cap would not alter these state protections.

CRL and other critics contend the terms of these small payday loans keep borrowers paying high interest payments over long periods of time without paying off the loan or even paying down the principal.

Recent research links predatory products like payday lending to bankruptcy, closed bank accounts, credit card delinquency and a long list of other financial hardships, Calhoun said. There is really no excuse for failing to stop these abuses now, for the sake of working families across the nation, and for the sake of our economic stability. We see where lax consumer protections led us in the mortgage market. We should learn from that hard-taught lesson.

Computer security experts say they expect a troublesome worm to become even harder to deal with on April Fools Day. That's when the DownAD worm, also known as Conflicker, is set to morph into an even harder-to-detect virus.

Much has been said about the DownAD worm and its enigmatic payload that will supposedly be unleashed on April 1st, Trend Micro said in a statement on its Web site. But online threat history tells us that trigger/activation dates of equally hyped malware have come and gone without much fanfare. Whether or not April 1 will play out to be D-Day indeed, the security industry will be keeping an eye out for any malicious activity — like it should.

Don't look for an explosive growth of the worm on April 1. In fact, the program is already lodged on millions of computers and networks worldwide. As security experts have worked to improve ways to detect and eradicate it, DownAD's creators have come up with more clever ways to avoid detection. On April 1, that plan goes into effect.

Based on our collective technical analysis, weve determined that systems infected with the latest version of Conficker will begin to use a new algorithm to determine what domains to contact, Trend Micro said. We have not identified any other actions scheduled to take place on April 1, 2009.

The latest variant, which was detected as worm DownAD.KK, first detected on March 4, 2009, includes an algorithm to generate a list of 50,000 different domains. Five hundred of these will be randomly selected to be contacted by infected PCs beginning April 1, 2009 to receive updated copies, new malware components, or additional functional instructions.

Infected computers can download malware that can steal data or turn control of the infected computers over to hackers, who operate them remotely as a vast zombie computer army.

Some security experts say DownAD's real threat is its potential ability to harness computing power of a botnet to crack passwords. Microsoft has modified its free Malicious Software Removal Tool to deal with DownAD and the software company has offered a $250,000 to reward for information leading to the conviction of those responsible for it.

Not only is the worm hard to detect, it's also hard to get rid of. Most victims are never aware their computer is infected. One way to tell if you computer has the worm is that it will prevent you from connecting with security firm Websites like Symantec or Trend Micro, which have online tools capable of detecting and removing the virus.

"The FBI is aware of the potential threat posed by the Conficker worm. We are working closely with a broad range of partners, including DHS and other agencies in the U.S. government, as well as throughout the private sector, to fully identify and mitigate the threat," said Shawn Henry, assistant director of the FBI's Cyber Divison.

West Virginia Attorney General Darrell McGraw has filed two lawsuits against 12 Internet payday lenders and their collection agencies, with the aim of preventing them from doing business in the state.

Both suits ask the court to order compliance with McGraws investigative subpoenas and to enjoin the companies from the continued making or collection of payday loans in West Virginia.

Payday loans, which have never been legal in West Virginia, are short-term loans or cash advances, typically for 14 days, secured by a post-dated check or, when offered over the Internet, secured by an agreement authorizing an electronic debit for the full loan amount plus interest from the consumers account.

Internet payday loans are electronically deposited into consumers accounts and typically require payment of interest with annual percentage rates ("APR") ranging from 600 to 800 APR, more than 45 times greater than the maximum allowable rate — 18 percent APR — for such loans in West Virginia.

"Internet payday loan providers are the loan sharks of today," said McGraw.

McGraw says Internet payday loans are the industrys most recent attempt to skirt consumer protection laws. He complains that the payday lending industry has historically sought to evade state usury laws through a number of ruses, such as partnering with national and state-chartered banks and by offering the loans over the Internet.

McGraws office began its investigation of the Internet payday lending industry in earnest in 2005. As of this date McGraws office has successfully concluded 75 investigations of Internet payday lenders and their collection agencies, which have netted a total of $1,784,772.82 in cash refunds and cancelled debts for 6,612 West Virginia consumers.

The payday lenders named in the latest filings include the following:

• Cash Advance Now d/b/a PeoplesPayday.com of Miami, FL
• Debt Doctor, LLC d/b/a Magnum Z, LLC of Wentzville, MO
• Direct ROI d/b/a Cashwest Payday Loans of Mesa, AZ
• E Smart Credit Network d/b/a www.YourLoanServices.com of Miami, FL
• Island Payday, LLC d/b/a www.islandpayday.com of Ogden, UT
• Platinum Finance Company, LLC d/b/a www.PaycheckNow.com of Wilmington, DE
• Sonic Cash, LLC d/b/a Sonic Cash Online Payday of Boise, ID

Collection agencies named in the suits are:

• A.C.A Recovery, Inc. of Ridgewood, NJ
• Capital Collections, LLC of Miami, FL
• Covenant Management Group, LLC of Gainesville, GA
• Oasis Financial Solutions, LLC of Orange Park, FL
• Westbury Ventures of Wilmington, DE

March 30, 2009
Scammers have learned that using the name of a legitimate business or organization often helps deceive victims. The National Association of Realtors (NAR) is now warning that its name is being used as part of a property rental scam in which rental property is offered to consumers.

Victims targeted by scammers are led to believe that NAR is functioning as an intermediary to receive rental deposits from prospective tenants. NAR says nothing could be further from the truth.

NAR is not involved in this business and has contacted law enforcement officials to request that the matter be investigated. We encourage any consumers who may be affected to file a complaint, said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

The scam claims that on receipt of a deposit, NAR will deliver the keys to the property to the tenant. Prospective tenants are instructed to send money via Western Union to NARs purported agent in the United Kingdom.

Some of the listings have been posted on Craigslist, which reportedly has had difficulty in tracing the original listings. NAR does not have an escrow service, or function as an intermediary to receive rental deposits.

Some of the scam listings also refer to or propose using a Residential Lease Package that includes a form lease that purports to be a document prepared by or otherwise associated with NAR. NAR was not involved in creating or producing the Residential Lease Package or other lease form, and does not recommend, support, or encourage use of those documents.

Consumers who have encountered this scam may file a complaint with the Internet Crime Complaint Center, sponsored by the Federal Bureau of Investigation and the National White Collar Crime Center.

Our mission is not only to protect consumers in the real estate transaction, but also guard them against fraud, McMillan said.

The federal government is underwriting GM and Chrysler warranties, effective immediately. President Obama made the unprecedented announcement hours after his automotive task force demanded — and got — the head of GM CEO Rick Wagoner. Chrysler, meanwhile, said it has reached agreement on an alliance with Italian automaker Fiat.

Obama pledged to work with Congress to offer consumers tax credits if they turn in their old cars and buy new, cleaner, more fuel-efficient vehicles.

"Let me say this as plainly as I can," Obama said in a speech today. "If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always. Your warranty will be safe. In fact, it will be safer than it has ever been. Because starting today, the United States will stand behind your warranty."

The move is intended to erase any doubts consumers might have about whether their warranties will be honored if either of the automakers winds up in bankruptcy court, as seems increasingly likely.

Funds for the warranty program will come from the $700 billion Troubled Asset Relief Program (TARP) provided by Congress, the White House said earlier.

At a news conference, Obama outlined these additional measures the administration hopes will spur U.S. auto sales, presently at their lowest point in 27 years:

• Federal purchases. Obama said federal agencies will step up their purchase of new vehicles;
• More credit. The administration will work to increase the flow of credit to car purchasers and dealers;
• Tax benefits. The Internal Revenue Service will start a campaign to educate consumers about the tax breaks available for those who buy new U.S. vehicles between Feb. 16 and the end of the year.

Over the weekend, the Obama automotive task force demanded Wagoner's resignation as the price of further federal aid, a stark reminder that one should be careful what one wishes for. The feds also delivered a stiff warning to Chrysler that it needs to accelerate its talks with Italian automaker Fiat if it hopes to avoid driving off a cliff.

Chrysler-Fiat

By midday Monday, Chrysler LLC said it had reached a formal agreement with Fiat and said the U.S. Treasury Department had given its blessing to the deal. Obama had given Chrysler 30 days to conclude the deal or forfeit as much as $6 billion in additional U.S. aid.

The Fiat-Chrysler deal is expected to bring to U.S. highways a fleet of fast, fun and stylish little cars built by Fiat, the Italian giant that also owns the Ferrari, Maserati and Alfa Romeo lines. The sudden explosion in models should also be a blessing to struggling Chrysler dealerships.

The task force said in no uncertain terms that neither company has yet done enough to map a road to survival and may need a quick scrub in bankruptcy court. Though unpleasant — and very expensive to stockholders, suppliers, creditors, employees and retirees — a pre-planned "quick rinse" bankruptcy could remove enough rust to give the companies a fighting chance of turning a profit before the next millenium.

Obama is still dangling the $21.6 billion in new loans the companies have requested — but he's not expected to deliver the money until all parties, including labor, shareholders and dealers, agree to make the sacrifices necessary to get the companies back on track.

"We think we can have a successful U.S. auto industry, Obama said Sunday on CBSs Face The Nation. But it's got to be one that's realistically designed to weather this storm and to emerge at the other end much more lean, mean and competitive than it currently is.

So why not just leave?

When I hit the road at the age of 18 and announced my intention to travel forever, my friends and family just laughed: "How do you expect to make a living?" they asked.

I had no idea but I reasoned there were a million jobs out there waiting for me. Since then I've taught English, run a jewelery stall in the street, exported incense, been a tour guide, translated documents, sold hammocks on the market, taught guitar, worked on festivals and currently run niche websites and write freelance articles.

Working abroad allows you to live somewhere exotic, get to grips with another culture in a more meaningful way than a vacation could ever allow and generally help you expand your horizons. You can make good money while living cheaply and when you come home your resume will look just that much more interesting than the rest.

You might think you lack the skills to get a job abroad but the chances are that if you're reading this you're already qualified — become an English teacher! All across the world there's a huge and growing demand for native English speakers to come and teach in schools and kindergartens. Globalization means that the ability to speak English is increasingly considered essential for anyone in places like Asia and Latin America who wants to get ahead.

The big money teaching English is in South Korea and Japan, the former being so desperate for English speakers to come and conjugate verbs that they'll even pay for your flight and sometimes provide an apartment. Both countries require that you have a college degree but it could be in industrial design for all they really care. At the end of the day all they really want is a certified American, Canadian or Brit to convince the students it's worth handing over the course fees.

Teaching certificate

Having said that, there's no harm doing an English teaching course before you go and you might even get a better job as a result. Most TEFL (Teaching English as a Foreign Language) certificates aren't worth the paper they're printed on, however, and only a Cambridge/RSA CELTA or Trinity TESOL qualification will open doors to high-paid positions in universities and the like.

Most English teaching in East Asia, though, is based around crowd control — the chances are you'll be teaching kids. The work ethic in places like Korea, Japan and Taiwan is so intense that parents fret about their children falling behind at the age of 5. To make sure they stand every chance of winning the rat race they send their kids off to "cram schools" after regular school hours to be terrorized by hairy white foreigners in cheap suits.

I lasted 3 days in the Taiwanese kindergarten that hired me on a trial basis. There were 30 infants in the class, half of whom cowered at the back with one eye on the door, others still ignored everything I said and gazed out the window with one finger up their nose while another 3 or 4 brats screeched out the answers before I finished each question.

My colleague, Matt from Ohio, had a class full of adolescents to deal with. When I asked him how he managed to keep order he just grinned.

"If they give me any trouble I just make 'em do push ups."

English teachers can find work pretty easily also in Thailand, Cambodia and, closer to home, Mexico and Costa Rica. You can check out job postings and advice on the spectacularly useful www.daveseslcafe.com.

Tour guide

If managing classes of screaming Asian kids isn't exactly your dream job, you can always make the most of your new expatriate status to run your own tour company. Sure, you might not know much about your new country but if you can pick up enough of the language and make some local friends to actually do the work for you then there's a living to be made looking after folks on vacation.

When living in Rio de Janeiro a few years ago, I set up www.anythinginrio.com, where I pretended to have an established package tour company. I offered to meet clients at the airport, find them apartments, take them around town to see the sights and then show them the best of the Rio nightlife. The beauty of having a website is that the clients imagined I ran a busy office with secretaries and fax machines rather than just being a scruffy expatriate who checked in a couple of times a day at an internet cafe.

As it happened, by the time the site began to really pick up traffic I had already left Brazil but my Brazilian ex-girlfriend was happy to play the role of tour guide. She had a car and knew the city like the back of her hand and ran all the tours for me. I asked her how much she wanted for each custom package and then added 25% on for myself, making my cut through a few emails.

Import-export

If you have some business savvy but can't be bothered setting up a website and dealing with tourists, then there's always the import/export route. Head somewhere like India or Indonesia and it's jaw-dropping how little things cost. Labor is so cheap that it's almost free and you can get your own range of clothing designed, package your own brand of incense or, if you know what you're doing, buy quantities of merchandise to supply the shops back home. Just remember that it's far easier to buy than sell.

On my first trip to India I had a few hundred bucks set aside to invest in an export enterprise and my eye settled on a handicrafts shop with the words Professional Exporters written above the door.

"Aha," I thought, "This is the place for me!"

I walked in, bought 30 pounds of beautiful clay pots, ashtrays and pipes, instructing them to sculpt marijuana leaves on each to increase their market value back home. Although eager to please, the Indian craftsmen didn't seem to know the difference between a cannabis leaf and a branch of sage but time was running out and so off to the post office we went.

This is the first time I've done this! the owner merrily confided in me as we attached over a couple hundred 10 rupee stamps to the parcel, making sure each one was rubber-stamped so they wouldn't get stolen en route. The seeds of foreboding sewn then were confirmed 2 months later when the postman arrived at my doorstep back home with a box full of shattered clay. While the professional exporters had thoughtfully included a sheet of newspaper between the pots as a protective measure, it might have been better had I packed my investment myself.

I could fill an article with the disasters of my successive export plans over the years but I hung around enough with successful merchants to learn the basics: either you buy lots of something cheap or, if you know what you're doing, a few specialty items at a high price— get stuck in the middle and you'll fill your parents' garage with your unsold stock for years to come. And whatever you do, don't buy gems — the 'sell a tourist an emerald' scam is the oldest in the book.

Fruit picking

For those looking for a little more adventure with their travels there's always a steady demand for fruit picking. While in America it might be considered the domain of Latin immigrants without papers, in Europe and Australia itinerant workers can make good money by working 12 hours days for the fortnight or so it takes to pick the crop. There's nowhere to spend the money you earn and you should make enough to pay for the physiotherapy sessions you'll need afterwards.

While farmers couldn't generally care less about whether you're legally entitled to pick fruit in their country, there are other risks; friends in Australia told me that the tedium of picking plums was fortunately offset by the constant paranoia of encountering a poisonous red-back spider. Fruit-picking is also pretty hard work which is why the closest I've ever come was clipping marijuana in California — but the less said about that the better.

If you prefer not to get your hands dirty you might prefer a glamorous job like being a trip leader, visiting the most beautiful sites in the world with a group of colorful travelers in tow as you astonish them with your vast repertoire of anecdotes from the road. Or so you might think.

Ha, being a trip leader is an uncertain cross between guide, organizer, baby sitter, nurse and entertainer, a friend in the profession laughed at me. Yes, he was paid to run trips to Peru, Tibet and Paris but he also had to wake up at 2 a.m. when his clients needed to know how to make a long-distance telephone call home or plug in an adapter for their digital camera.

A tour leader needs to be an efficient person capable of getting 20 retired holiday makers into buses, restaurants, hotels and around tourist sites without anyone getting lost, having a nervous breakdown or getting ripped off. The pay would seem to be miserable (averages at $30 a day) but all your expenses are taken care of and there's always the chance to make commission on the restaurants, theaters and hotels where you steer your clients.

Less lucrative but more rewarding are jobs working on yachts. In harbors across the world there are rich people with yachts who need help sailing around the world or who need their boats delivered across oceans while they take the plane. Naturally, it would help if you knew something about sailing but that didn't stop a friend of mine from New Jersey who landed in Sydney, Australia and just started chatting up yacht owners at the harbor.

It was only once we were out at sea that I had to ask how to tie knots, my friend grinned, Then they'd swear at me a bit and show me what to do. I learned in no time.

For the next 6 months he worked taking out tourists on yachts to see the whales that were mating not far off the coast.

No limits

There's no real limit to the jobs you can find abroad. If you've got some initiative and a positive attitude you can always find a way. Like a girl I knew who made a fortune in London going from office to office giving shoulder massage. Or a guy I met in Mexico who bought silver rings and necklaces in Tasco and then sold them on the beaches of Cancun making $100 a day.

And if you're not in it for the money, there are a million places where a little enthusiasm and good will can make a huge difference. From kids in orphanages who need someone to organize activities, to families in refugee camps who need to learn English, volunteering abroad can be one of the most fulfilling things you could ever do. And you really will be saving the world — one world at a time.

Idealist.org is a good place to start.

And if you do manage to make some money abroad in whatever job you eventually find, the profits can pay for months of lying on the beach living on $8 a day somewhere in the tropics. At least that's pretty much been my strategy for the last 14 years and I've only had to work jobs 13 months in that time as a result.

Which means that the next time I do find myself in need of employment I'm going to have to get really creative with my resume.

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Tom Glaister writes more about work abroad and hopes to never work again if www.twitterists.com takes off.

As part of a nationwide crackdown on fraudulent charities, Attorney General Edmund G. Brown Jr. is filing today eight lawsuits against 53 individuals, 17 telemarketers and 12 charities that "shamelessly exploited" people's generosity and squandered millions of dollars of donations intended to help police, firefighters and veterans.

Brown's suits are intended to permanently stop the charities' deceptive practices and require the repayment of all funds raised under false pretenses. Brown is seeking involuntary dissolution of eight of the charities.

"These individuals shamelessly exploited the goodwill of decent citizens trying to help police, firefighters and veterans," Brown said. "In point of fact, a shockingly small portion of donations went to those in need, while millions went to pay for aggressive telemarketing and bloated overhead — and in one case — to purchase a 30-foot sailboat."

Brown filed these suits in conjunction with the Federal Trade Commission and 48 other states as part of a nationwide sweep called "Operation False Charity."

In California, just as in the other participating states, the so-called charities raised millions of dollars based on false claims that donors' contributions would benefit police, firefighters and veterans organizations. But in reality, these charities rarely benefit public safety personnel. And, in most cases, 85 percent to 90 percent of donations are used to pay the fees of for-profit telemarketing firms.

Last year, Brown launched an investigation into 12 of the worst offenders, resulting in the eight cases filed today in Los Angeles, Orange, San Bernardino, and San Mateo counties. It is estimated that since 2005, hundreds of thousands of Californians have been deceived by the solicitation campaigns these charities and their fundraisers have conducted.

Law Enforcement Apprenticeship Program

Brown today sued Los Angeles-based Law Enforcement Apprenticeship Program, its directors and its for-profit fundraiser, Rambret, Inc., for falsely promising contributors that their donations would be used to operate an apprenticeship program for at-risk youth. The program was never operated and no students were ever enrolled in it.

Instead, donations were used to pay for fundraising expenses, the personal expenses of the charity's directors and the purchase of a 30-foot sailboat.

In 2003, Law Enforcement Apprenticeship Program raised $529,863, but only $31,501 — just 6 percent — was spent on its program services. In 2004, the charity raised $372,623, but spent only $5,615 — 1.5 percent — on program services.

Brown seeks to dissolve the charity, to prevent the directors from operating a charity in California again, and to prevent the fundraiser from soliciting funds for a charity in California until it complies with state law.

Brown also seeks a court order requiring the charity to file a report of its receipts and expenses, to recover the funds misappropriated by the directors and civil penalties in excess of $150,000.

California Police Youth Charities

Brown today sued Sacramento-based California Police Youth Charities, its executive director and its for-profit fundraisers — National Consultants, Inc. and Public Appeals, Inc. — for falsely promising contributors that 100 percent of donations would go to support the charity's programs to help at-risk youth. In reality, less than 20 percent of the $9 million raised in 2006 and 2007 was spent on charitable programs.

The charity also filed false documents with the IRS and the Attorney General's Office. In 2006, the charity reported that it made almost $1 million in grants, when it actually made grants totaling only $110,000.

Brown seeks a permanent injunction to end these deceptive solicitation practices. He also seeks to recover misappropriated charitable funds and civil penalties in excess of $100,000 from the charity and its for-profit fundraisers.

American Association of Police Officers, Police Protective Fund, and Junior Police Academy

Brown today sued Los Angeles-based American Association of Police Officers, Police Protective Fund, and Junior Police Academy, their officers David Dierks and Philip LeConte, and their for-profit fundraisers for misleading donors into thinking that their solicitors were volunteer police officers and that contributions would benefit donors' local police departments.

The for-profit fundraisers include: West Coast Advertising (known as Professional Communications Network) and Mark Christiansen (doing business as Charitable Fundraising Services).

Additionally, the charities violated both state and federal law when they filed reports with the IRS and the Attorney General's Office that under-reported fundraising and administrative expenses and over-reported the amount spent on charitable programs.

In 2007, for example, Police Protective Fund raised $6.8 million and claimed in its tax returns that it spent $1.7 million on its charitable program. However, that $1.7 million improperly included fundraising expenses, a $350,000 judgment paid to the State of Missouri and other administrative expenses.

Likewise, in 2007, American Association of Police Officers reported in its tax returns that it spent $493,798 on its charitable program. However, out of that amount, $425,000 was paid to the charities' officers and other administrative and fundraising personnel. David Dierks and Philip LeConte were each paid $168,000 in salary, and were also provided with vehicles such as a $45,000 Range Rover and a $25,000 Jeep Cherokee.

Brown seeks injunctive relief to prevent defendants from operating any charities in California and to stop future fraudulent solicitation and reporting practices. Brown also seeks to recover misappropriated funds and civil penalties in excess of $150,000.

Association for Firefighters and Paramedics

Brown filed suit today against Santa Ana-based Association for Firefighters and Paramedics, its president, Michael F. Gamboa and its for-profit fundraisers — Public Awareness, L.L.C., Community Support, Inc., and Courtesy Call, Inc — for falsely claiming that it used donations to assist local firefighters, paramedics, and burn victims.

Brown's office discovered that from 2005-2008, only 3 percent of approximately $10 million dollars was spent on assistance to burn victims. No funds were ever used to assist firefighters and paramedics.

The remainder — some $9.7 million — went to pay for the charity's fundraising expenses and overhead.

In addition, the charity sent fraudulent invoices to people who had not made a pledge and sent letters to donors who had never given, asking them to mail in their "usual" annual donation.

Brown is seeking to dissolve the charity. He also seeks a permanent injunction against the charity's president to prohibit him from any future involvement with a California charity, and civil penalties in excess of $150,000.

Association for Police and Sheriffs, Inc.

Brown today sued Fullerton-based Association for Police and Sheriffs, Inc., its directors and its for-profit fundraisers, Public Awareness, LLC, and Courtesy Call, Inc., for falsely claiming that the majority of donations would be used to help the victims of domestic violence.

Brown's investigation revealed that of the $2.6 million raised in 2005 and 2006, 90 percent of the donations went to pay the for-profit fundraisers. Most of the remaining donations were used to pay salary and other personal benefits for its president, Lloyd Jones, and others.

In violation of federal law, the fundraisers blocked donors' Caller ID. Once on the phone, the fundraisers engaged in aggressive and abusive conduct.

The investigation also found that the charity and its for-profit fundraisers sent pledge confirmation cards to people who never agreed to donate and that some of the charity's fundraisers represented that they were police officers, when they were not.

Brown seeks to dissolve the charity, recover improperly diverted funds, recover civil penalties in excess of $150,000, and to obtain a permanent injunction preventing all defendants from any involvement with a California charity until they comply with California law.

Coalition of Police and Sheriffs, Disabled Firefighters Fund, American Veterans Relief Foundation, et al.

Brown today filed a lawsuit against Santa Ana-based Coalition of Police and Sheriffs, Disabled Firefighters Fund, and American Veterans Relief Foundation, their directors and for-profit fundraisers for falsely claiming that donations would be used for programs to help injured police and firefighters, and homeless veterans.

The for-profit fundraisers include Campaign Center, Inc., KWS Productions, Inc., Tel-Mar Productions, Inc, Community Publications, Inc., and Roman Promotions, Inc. Through 2005, the charities raised $17 million, but only $351,000 — approximately 2 percent — was spent on programs for cops, firefighters, and veterans. The vast majority of donations went to paid telemarketers.

The President, Jeffrey Duncan, used charitable funds for his personal expenses, including trips to Hawaii and to Las Vegas, and for meals, including one for $1,200 at Medieval Times.

Joseph Shambaugh, who founded all three of these charities, was indicted by federal authorities on charges of mail fraud and money laundering. He is currently at large.

Brown seeks to dissolve the charity, to prevent the directors from operating a charity or being involved in charitable fundraising in the future, and to prevent the fundraisers from soliciting on behalf of a charity in California until they comply with state law.

He also seeks to recover misappropriated charitable funds and civil penalties in excess of $100,000 from the charities, their directors and for-profit fundraisers.

Homeless and Disabled Veterans

Brown today sued Washington, D.C.-based Homeless and Disabled Veterans, and its for- profit fundraiser, Atmost, Inc. for falsely representing to donors that their charitable contributions would be used to assist homeless and disabled veterans in California with food, shelter, and self-help programs. Yet no donations were used for these purposes.

Instead, the vast majority of the donations — over 70 percent — were used for fundraising expenses, and the rest went for administrative expenses at its headquarters in Washington, D.C.

Brown seeks to dissolve the charity, to prevent the directors from operating a charity in California again, and to prevent the fundraiser from soliciting on behalf of a charity in California until it complies with state law.

He also seeks to recover misappropriated charitable funds and civil penalties in excess of $150,000 from the charity, its directors and its for-profit fundraiser.

Organization of Police and Sheriffs

Brown today sued San Bernardino-based California Organization of Police and Sheriffs, its directors, officers and its for-profit fundraisers — Civic Development Group, LLC and Rambret, Inc. — for falsely representing that donations would be used to benefit law enforcement officers and that 100 percent of each donation would be received by the charity.

Donors were told that their contributions would be used to purchase bullet-proof vests, make grants to families of officers killed or injured in the line of duty, provide veterinary treatment for service animals injured in the line of duty and mentoring of at-risk youths.

Out of the $30 million raised from 2005 to 2007, over $25 million was spent on fundraising.

No money was spent on bullet-proof vests, no grants were made to families of officers, $6,600 was spent on veterinary treatment for service animals, and $16,500 was spent on mentoring.

Brown seeks to dissolve the charity, to prevent the directors from operating a charity in California again, and to prevent the fundraisers from soliciting on behalf of a charity in California until they comply with state law.

He also seeks to recover misappropriated charitable funds and civil penalties in excess of $150,000 from the charity, its directors and its for-profit fundraisers.

The Attorney General's Office offers the following tips to potential donors to help them avoid being the victims of charity fraud:

• If you receive an unsolicited call asking for a donation, it is most likely from a paid telemarketer who may keep a substantial part of your donation as payment of fundraising fees.

• Recognize that the words 'veterans' or 'military families' in an organization's name don't necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.

• Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.

• If you have any doubt about whether you have made a pledge or a contribution, check your records. If you don't remember making the donation or pledge, resist the pressure to give.

• Check out an organization before donating. Some phony charities use names, seals and logos that look or sound like those of respected, well-established organizations.

• Ask the soliciting charity or the paid fundraiser what percentage of your donation will go towards fundraising expenses and what percentage will go towards the charity's charitable purpose.

• Do not send or give cash donations. For security and tax record purposes, it is best to pay by check made payable to the charity.

• Ask for a receipt showing the amount of your contribution.

• Be wary of promises of guaranteed sweepstakes winnings in exchange for a contribution. You never have to give a donation to be eligible to win a sweepstakes.

March 27, 2009
Attorney General Edmund G. Brown Jr. announced that special agents from the California Department of Justice today arrested Abel Moses Somilleda, the owner of a vacation travel agency, who "ripped off" $55,000 from high school and college students whose 2006 trip to Cancun, Mexico was cancelled.

"Dozens of high school and college students paid hundreds of dollars for a spring break trip to Cancun, but instead of a week of vacation, these students were ripped off by the owner of Big Bad Student Travel," Brown said. "Abel Moses Somilleda promised a vacation to Mexico, but when the trip was cancelled, he pocketed the students' money instead of providing refunds."

Abel Moses Somilleda, 35, of Hawthorne, Calif., was arrested in Hawthorne by California Department of Justice Special Agents. He is charged with:

• Nine counts of grand theft in violation of Penal Code section 487(a);

• One count of failure to return moneys in violation of Business and Professions Code section 17550.14; and

• Nine counts of failure to deliver on ticket or voucher in violation of Business and Professions Code section 17550.17(b).

Somilleda opened Big Bad Student Travel in 2004 after working for ten years in the student travel business and coordinating several trips of his own.

In 2006, Somilleda organized a spring break trip to Cancun, Mexico, for dozens of high school and college students. Students paid approximately $700 for the flight, hotel room, and expenses.

Three months before the trip, however, Somilleda learned that it would be cancelled. But instead of immediately informing those who had signed up, Somilleda continued to accept payment for the trip. It was only two or three days before the trip was scheduled to take place when Somilleda notified students that it had been cancelled.

Somilleda promised the students that they would receive a refund within several days. The students, however, never received refunds.

In total, Somilleda pocketed some $55,000. A search warrant uncovered that Somilleda had spent most of the money on his own personal expenses — including rent, dinners, groceries, and utilities.

If convicted of all charges, Somilleda faces eight years in prison.

California requires all sellers of travel to register with the California Attorney General's Office and display their registration number on all advertising. To check the registration of a Seller of Travel visit the Attorney General's website at http://www.ag.ca.gov/travel/.

To help prevent becoming a victim of travel fraud, the Attorney General's Office has offered a few tips and warning signs:

• Before you pay any money, read all the terms and conditions relating to your travel services including cancellation conditions, fees and other restrictions.

• You have a right in certain circumstances to have credit card charges reversed if you do not receive what you paid for. Check with your credit card company for details. This protection is not available when you make a payment with a check, money order, or cash.

• Check beforehand with your local Better Business Bureau or California Department of Consumer Affairs, which may tell you how long the seller of travel has been in business, whether there have been any law enforcement actions brought against it in the past, and the nature of consumer complaints it has received, if any.

• It is a good practice to confirm all of your travel arrangements directly with the businesses providing the transportation, hotel, or car rental.

• While there are legitimate businesses that offer free trips, there are others that offer "free" trips to entice consumers into buying their products or services, which include hidden costs.

There are many legitimate sellers of travel that provide great deals on the Internet, but if an offer seems too good to be true, it probably is.

• Sellers of travel must register every year with the Attorney General's office in order to do business or market in California. They must clearly display their registration number in all advertising materials. Do not deal with unregistered travel companies. While registration does not mean that the seller is reputable, you should avoid any seller who has not adopted the safeguards required by law to protect your payments.

Taking money without delivering goods or services that are promised can be a crime. If you believe you have been a victim of a crime, call your local police agency. If your travel seller's main place of business is in California, and under certain other circumstances, you may be entitled to make a claim for restitution from the Travel Consumer Restitution Fund. For more information about how to file a claim, please go to http://ag.ca.gov/travel/consumer.php.

March 27, 2009

A car dealership in Orange, New Jersey has settled charges with the state that it falsified consumer credit ratings on loan applications. The dealer, Compass Dodge, Inc., has agreed not to do it in the future.

Compass Dodge will pay $50,000 in civil penalties and as reimbursement for the state's investigative and legal costs, under terms of the Consent Order between the parties. An additional $92,500 in civil penalties is suspended but will become due and immediately payable if Compass Dodge violates terms of the Consent Order during the next year.

The dealership's future business practices must conform to state laws and regulations related to used motor vehicle sales and advertising.

"We expect dealerships to adhere to our Consumer Fraud Act, Motor Vehicle Advertising regulations and Used Car Lemon Law and regulations when offering used vehicles for sale," New Jersey Attorney General Anne Milgram said. "We remain vigilant and ready to act against those who attempt to take advantage of consumers."

Under the Consent Order, Compass Dodge agreed not to misrepresent consumer credit information when submitting such information to lending institutions for the purpose of securing financing for motor vehicle purchases. Compass Dodge also agreed to modify its advertising practices to ensure compliance with all disclosure requirements.

Falsified mortgage applications led to many home loans that should never have been made, helping set up the recent mortgage meltdown. Some auto industry insiders have warned that similar practices in the auto industry could result in similar problems.

"Purchasing a used car is a major expense for consumers, especially in these difficult financial times. Accurate consumer credit information ensures that buyers don't get in over their heads and obtain loans that they cannot afford," said David Szuchman, Consumer Affairs Director.

During the next three years, the Division will forward any consumer complaints received about Compass Dodge to the dealership for its handling. The Division must be informed of how each complaint is resolved. Compass Dodge agreed to submit consumer complaints that it cannot resolve to binding arbitration.

In the wake of a massive recall of food products containing peanuts, the Georgia Nut Company says its recalling certain bulk wholesale and retail products containing shelled pistachio nuts for the same reason as the peanut recall — they have the potential to be contaminated with the Salmonella organism.

The company said it identified the potential as a result of a rigorous sampling and testing regimen it conducted with respect to shelled pistachios provided by a third-party supplier. The company did not name that supplier, but did note that the recall is "not in any way related to the recent recall of peanut and peanut butter products."

The salmonella outbreak linked to peanuts has killed at least nine people and sickened more than 600 others. The outbreak was linked to Peanut Corporation of America's Georgia processing plant.

The voluntary pistachio recall includes the following products:

Bulk Deluxe Mixed Nuts with shelled pistachios purchased at the Not Just Nuts store in Wauwatosa, WI from Dec. 5, 2008 through March 24, 2009;

Bulk or custom packaged Deluxe Mixed Nuts with shelled pistachios purchased at Georgia Nut retail stores in Skokie and Glenview, IL, Georgia Nut's Chocolate House location in Greenfield, WI, and through the Company's website from Dec 11, 2008 through March 23, 2009;

Bulk or custom packaged Dry Roasted Shelled Pistachios purchased at Georgia Nut retail stores in Skokie and Glenview, IL, Georgia Nut's Chocolate House location in Greenfield, WI, and through the Company's website from Dec 3, 2008 through March 23, 2009;

Mixed Nuts Deluxe Roasted and Salted Bulk with shelled pistachios purchased from clear plastic bulk bins in the produce department at Dominick's Finer Foods stores in the greater Chicagoland area from Dec. 10, 2008 through March 25, 2009.

The company said it had not received any reports of illness linked to these products, and the action is only being taken as a precautionary measure.

The company said consumers should not consume the recalled product. Customers are urged to return any amount of product in their possession to the place of purchase for a replacement or refund.

Georgia Nut Company has established a 24-hour consumer information line at (800) 914-4110 and a Web site at www.gncinfo.com for more information.

Two advocacy groups are calling on the Obama Administration to move swiftly to address food safety issues, that have resulted in a number of high-profile foodborne illness outbreaks in the last two years.

Trust for America's Health and the Robert Wood Johnson Foundation have compiled a new report, Keeping America's Food Safe: A Blueprint for Fixing the Food Safety System at the U.S. Department of Health and Human Services (HHS), which examines problems with the current system, which they call "fragmented and antiquated."

"Our food safety system is plagued with problems, and it's leading to millions of Americans becoming needlessly sick each year," said Jeff Levi, PhD, Executive Director of TFAH. "The system is outdated and unable to effectively deal with today's threats. Its current structure actually prevents the kind of coordinated, focused effort that Americans need more than ever and have a right to expect."

The report calls for the immediate. consolidation of food safety leadership within the Food and Drug Administration (FDA) and ultimately the creation of a separate Food Safety Administration within HHS.

Currently, no FDA official whose full-time job is food safety has line authority over all food safety functions. A speedy effort by the Obama administration to consolidate leadership within FDA, followed by Congressional action to create a separate Food Safety Administration, would both ensure immediate progress on food safety and create a platform for long-term success in reducing foodborne illness, the report notes.

"Food safety needs to be a priority on the prevention menu," said Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation. "We shouldn't have to worry about our children getting sick from their school lunch or from a family meal at a restaurant. And we shouldn't have to wait until people become sick to learn about food safety problems. We need modern, comprehensive ways of preventing and detecting problems before food gets to the table."

Approximately 80 percent of the food supply is regulated by FDA — including millions of food producers, processors, transporters, storage facilities, grocery stores, and restaurants — and the vast majority of known foodborne illnesses are associated with products regulated by FDA. Some recent problems associated with products regulated by FDA include the 2009 Salmonella outbreak in peanut butter and peanut butter products; potential imports of the 2008 melamine-contaminated infant formula and related diary products in China; the 2008 Salmonella outbreak in peppers; and a 2008 Salmonella outbreak from imported cantaloupes.

Some key problems with the current structure of food safety programs at HHS, identified in the report, include:

• Inadequate leadership, prioritization, and coordination. FDA's three major food safety components are managed separately, hampering efforts to effectively prevent disease outbreaks.

• Inadequate technologies and inspection practices. Current laws and practices are antiquated. Existing laws date back to 1906 and 1938, and policies are disproportionately focused on monitoring food after it has been produced, instead of trying to prevent and detect problems throughout the entire production process. And there is no system in place to keep inspection practices up-to-date with the constantly modernizing food production technologies and practices.

• Inadequate staffing and resources. The FDA's Science Board found the agency is chronically underfunded. While the U.S. Government Accountability Office reports the turnover rate in FDA science staff in key areas, including food safety, is twice that of other government agencies.

• Inadequate inspection of imports. Only one percent of imported foods are currently inspected, even though approximately 60 percent of fresh fruits and vegetables and 75 percent of seafood Americans consume is imported.

"FDA certainly needs a modern food safety law and more resources, but to make good use of these tools, HHS needs a unified and elevated management structure for food safety that can implement a science- and risk-based food safety program dedicated to preventing foodborne illness," said Michael R. Taylor, JD, Research Professor of Health Policy at the School of Public Health at The George Washington University and Former Deputy Commissioner for Policy at FDA and Former Administrator of the Food Safety and Inspection Service at the U.S. Department of Agriculture. "Major organizational change requires careful planning and implementation and should not be rushed, but the time is ripe for building sustainable solutions to the problems in our nation's food safety system."

The Keeping America's Food Safe report recommends:

Increasing and aligning resources with the highest-risk threats;

• Modernizing the mandate and legal authority of the HHS Secretary to prevent illness, which would include enforcing the duty of food companies to implement modern preventive controls and meet government-established food safety performance standards;

• Immediately establishing a Deputy Commissioner at FDA with line authority over all food safety programs, including the Center for Food Safety and Applied Nutrition, the Center for Veterinary Medicine, and the food functions of the Office of Regulatory Affairs, as an interim step toward creating a Food Safety Administration; and

• Working through Congress toward the creation of a Food Safety Administration within HHS, strategically aligning and elevating the food safety functions currently housed at FDA and better coordinating regulation policies and practices with the surveillance and detection of outbreak functions at CDC and with food safety agencies at the state and local level.

A proposed settlement has been reached in a case alleging a manufacturing defect in certain tablets of Paxil, the popular antidepressant drug manufactured by GlaxoSmithKline (GSK). If approved, the settlement will provide up to $28 million to claimants and their insurance companies.

The suit alleges that Paxil "controlled release" (CR) tablets made between April 1, 2002 and March 4, 2005, contained a manufacturing defect that caused them to split apart. In March 2005, armed marshals with the Food and Drug Administration (FDA) raided GSK plants in Puerto Rico and Tennessee after learning that some pills manufactured there had split apart. Two medications — Paxil and Avandamet, a diabetes medication — were being produced at the facilities. Although the investigation didnt conclusively show that anyone had been harmed by the pills, the FDA said the burden was on the manufacturer to ensure that the medication was safe.

The FDA had originally discovered the problem at the Puerto Rico plant in February 2002, and the problem continued despite repeated warnings and inspections. GSK was unable to determine what was causing the problem, which concerned the FDA.

Paxil CR is a "controlled-release" version of the antidepressant, meaning that it releases medication slowly and evenly, in an attempt to deliver more consistent effects throughout the day. However, the CR version has not been compared to standard Paxil in lab tests, and some believe that any added benefits are negligible at best.

Split pills make it harder for patients to accurately estimate doses, and can render the "enteric coating," which controls the medication's time and rate of release, inactive. More importantly, the medically effective ingredients tend to remain in only one side of the pill after the split, making the other half comparable to a placebo. Taking a pill containing no medication could cause immediate withdrawal symptoms, as Paxil stays in the bloodstream for a shorter time than most other popular antidepressants.

Under the settlement, GSK denies liability and all of the claims in the lawsuit. If approved, the $28 million settlement will be split between consumers who paid for their Paxil and insurance companies seeking to be reimbursed for their expenditures. The amount each class member recovers will depend on how many defective pills they bought, with a maximum recovery of $150 per person. For a pill to be "defective" under the settlement, it must have split before it was removed from the container.

Potential class members who want to recover should fill out a claim form, available at the settlement Web site. Class members can also choose to exclude themselves from the settlement or object to its terms, but must do so by May 15 and July 1, respectively. A final approval hearing will be held on July 10, 2009. Plaintiffs are represented by the firms Strange & Carpenter and Salas & Co.

A federal court in New York has given the green light to a class action alleging that Best Buy violated its "price match" guarantee. Under the policy, the store guarantees consumers that it will match lower prices offered by local retail competitors. The lawsuit alleges, however, that Best Buy created an "anti-price-matching policy."

The suit, led by plaintiff Thomas Jermyn, describes the electronics chain's brazen effort to encourage employees to "build a case against the price match." Using internal Best Buy documents and statements by current and former Best Buy employees, the suit describes the methods by which Best Buy tried to convince customers that the guarantee didn't apply to their purchase.

An internal Best Buy memo, titled "Competition Insider Template," tells employees that the price match is disfavored and to be avoided whenever possible. The October 2006 memo sets forth the Best Buy policy that, when a customer presents a lower price from a competitor, "[w]e attempt to build a case against the price match.(Trust me, I've done it too)."

The "I" in that sentence is Best Buy employee Phil Bratton, a member of the company's Competitive Strategies group. According to growth partnership firm Frost & Sullivan, Bratton is no bit player; he serves (PDF) as Best Buy's market intelligence lead, where he oversees a team of competitive managers, considered Best Buy's "'eyes and ears' in the competition."

The memo gives employees a number of ways to convince customers that the policy doesn't apply to their purchase: the model numbers are different, the item isn't in stock at the competing store, the quoted price is from a warehouse (and thus subject to membership fees), or the competitor is "across town," just to name a few. According to the suit, however, none of these purported exceptions to the policy are spelled out in its terms.

Indeed, Best Buy's website promises consumers that, if they find a lower price elsewhere, "let us know and we'll match that price on the spot." The policy even offers a refund of the difference to consumers who already purchased the item at the competing retailer.

The suit is also bolstered by claims from Juan Ortiz, a former supervisor at three Best Buy stores in Connecticut. According to Ortiz, the store rejected over 100 bona fide price-match claims every week. In his order approving class certification, the judge also noted that, "Best Buy's own records reveal that the price match guarantee was applied inconsistently and 60 percent of customer requests to match warehouse club prices are wrongly denied."

The suit, brought on behalf of New York consumers, is being litigated by Michael Braunstein of Kantowitz, Goldhamer and Graifman. In a statement, Best Buy claimed that plaintiff Jermyn's price difference was in excess of $700, and that such "huge fluctuations" set off "red flags" for employees. However, when pressed, the company conceded that there is no set price limit on the guarantee.

Connecticut Attorney General Richard Blumenthal, who already has one suit pending against Best Buy, announced Monday that he may file another suit related to the price-matching scheme. Blumenthal's existing suit alleges that Best Buy maintained a separate website at in-store kiosks, in an attempt to deceive customers. The website looked like the company's standard page at BestBuy.com, but did not contain sales prices as the homepage did. When consumers clicked through to the store "Intranet" and found higher prices than they did on BestBuy.com, sales representatives would suggest that they had misread the price, or that the sale was no longer in effect.

The string of allegations could harm Best Buy at a time it appears to be riding high in the industry. Despite the dismal economy, Best Buy was the prime beneficiary of Circuit City's recent bankruptcy, and is now arguably the biggest player in consumer electronics. To stay on top, however, they will need to show that they aren't using their formidable position to manipulate consumers.

It might sound like a rerun but the federal government says that this time it really, really has figured out how to help taxpayers make the transition to digital over-the-air television.

With the once-postponed June 12 deadline for the nationwide conversion to digital TV approaching, the program has now started to accept replacement requests from eligible households whose coupons expired without being redeemed. The reason for that, in many cases, was that they were mailed out after their expiration date but that little fact wasn't noted in the government's latest self-congratulatorily effusive announcement.

"This is very good news for Americans who were unable to redeem their coupons before they expired," said Anna Gomez, acting administrator of the National Telecommunications and Information Administration (NTIA). "With the backlog of applications now eliminated, consumers can apply for coupons and get assistance right away, allowing them to continue to receive important local television news and emergency information by purchasing a converter box at a reduced cost.

Of course, it's not good news for consumers who have already made the conversion and are finding that they can no longer receive the stations they've come to depend on.

"We live in a remote area on a mountain. We always had great free TV. Only ever needed an indoor antenna, got plenty of channels," said Chris of Cairnbrook, Pa. "So now we have the converter boxes. ... We get only 3 channels and they are either non-viewable with checkerboard appearance and intermittent freezing and no sound, or no signal at all.

"Boy, that surely was worth the money the government made us spend for their bright idea!" Chris said. " We live paycheck to paycheck and don't have money for new TVs or antenna's or satellite. We don't get cable up this mountain. Thanks a lot for taking away another piece of our life. You're on a roll now."

Then there are those for whom the government's belated attempt to get organized simply comes too late.

Jean of Reno, Nev., said her coupon expired before she could find a store that would accept it. "I was refused a replacement coupon and ended up buying a box at full price as one of our stations had already converted and the other two were planning on converting about 10 days later," she told ConsumerAffairs.com.

"The box by the way didn't work, but I am expecting a replacement," she added. "It cost me $40 additional and I still don't have a box."

How to apply

If an eligible household has redeemed one coupon toward the purchase of a TV converter box and the other coupon has expired, then it will be approved for a single replacement coupon, Gomez said.

Consumers may apply for replacement coupons by calling 1-888-DTV-2009 (1-888-388-2009), mailing an application to P.O. Box 2000, Portland, OR 97208 or faxing an application to 1-877-DTV-4ME2 (1-877-388-4632). Deaf or hard of hearing callers may use 1-877-530-2634 (TTY).

NTIA also claims that the coupon program has eliminated its waiting list and is processing all coupon requests as they come in with a maximum nine-business day turnaround time.

On January 4, 2009, the coupon program ran out of money and placed incoming coupon requests on a waiting list, to be fulfilled as previously issued coupons expired. The economic stimulus bill provided NTIA $650 million to issue at least 12.25 million more coupons, to start mailing coupons via first class mail and to ensure vulnerable populations are prepared for the transition from analog to digital television transmission.

Applications are now being processed on a first come, first served basis while supplies last.

I urge all consumers who are still unprepared for the transition to act today to get their converter boxes and resolve any technical issues well ahead of the June 12 deadline, Gomez said, placing the blame for being "unprepared" on citizens whose pleas for help have often been ignored by their government.

Consumers can receive digital television today by purchasing and connecting a TV converter box (with or without a government coupon); buying a digital TV; or subscribing to cable, satellite or another pay service.

Consumers who currently have coupons in hand should use them immediately. The coupons may not be used as a rebate and must be presented to the retailer at the time of purchase.

The DTV Delay Act established June 12, 2009, as the final date by which all full-power television stations in the country will be required to shut down analog broadcasts. However, some stations and entire markets may choose to switch before then. The Federal Communications Commission says that of the nation's nearly 1,800 full-power televisions stations, a total of 641 stations 36 percent-- terminated their analog signals as of February 17, 2009.

The company last year settled a $24 million lawsuit that grew from the largest pet food recall in U.S. history. The case was heard in New Jersey and parties are still wrapping up various items on the docket, but now a Washington state litigant is charging that the company illegally destroyed thousands of samples of food, potentially leaving him without evidence to pursue his claim.

During discovery for the New Jersey suit, the defendants collected thousands of cases of pet food — both recalled and non-recalled — in their warehouse. In December 2007, the defendants claimed that preserving all of these samples was an unnecessary waste of time and money. The court agreed, and allowed the defendants to destroy all but 500 units of recalled pet food.

Relying on a research model compiled by their expert, a Purdue statistics professor, the defendants claimed that these units would provide sufficient evidence for any future suits relating to the recalled food. The courts order allowed the destruction of all other unorganized product, including food not implicated in the New Jersey recall but directly related to at least two other suits pending at the time.

Donald Earl, a plaintiff in a Washington state suit against defendants Menu Foods and the Kroger supermarket chain, filed a motion objecting to the orders in January 2008. Earls suit involved cake style cat food, which does not contain gluten and was not implicated in the March 2007 recall. Laboratory tests of Earls food showed that it was contaminated with acetaminophen and cyanuric acid, nitrogen-based chemicals often used to artificially boost a foods apparent protein content. Neither chemical was discovered in the recalled food.

Criminal prosecution

Earls objection says that the defendants are highly motivated to destroy as much evidence as possible, to limit liability outside the recall period, as well as to avoid possible criminal prosecutions for violations of the Food, Drug, and Cosmetics Act.

In his pleadings, Earl contends that the defendants grossly exaggerated the time and money it would take to organize and store all of the samples, and points out that it was defendants own lack of care which created the burden in the first place. Moreover, Earl asserts that he did not receive notice of the evidence-destruction agreement until January 2008, a full month after the court approved the plan. Despite his allegations, the court dismissed Earls objection without comment in February 2008.

Earl also filed a motion in Washington state court, where his own suit was pending. That court rejected his claim in February 2008.

Menu accuses Earl of pursu[ing] a protracted campaign of baseless appeals and of whipping up scurrilous allegations of misconduct against Menu Foods counsel. In October 2008, the Washington court awarded Menu almost $5,000 in attorneys fees and expenses relating to Earls litigation.

Undeterred, Earl filed a second objection and motion to intervene in January 2009. Earl again claimed that the now-destroyed evidence was crucial to his own suit, and that he was substantially prejudiced by its disposal. Earls motion also alleged that Menu was well aware of the relevance of the non-recalled pet food when it asked for permission to destroy it.

The companys first quarter 2007 financial filing specifically stated that several lawsuits were pending in North America, and that the U.S. Food and Drug Administration had commenced a criminal investigation to determine whether the company violated the Food, Drug, & Cosmetic Act. The company noted that additional actions or investigations may arise in the future. Moreover, Menu was served with a summons in Earls Washington action in July 2007, months before they filed their New Jersey motion to destroy evidence.

Earls 2009 objection asserts that [a]n order permitting destruction of evidence is contrary to rule and law, is void, and must be vacated. The New Jersey Rules of Professional Conduct, based on national ethics standards for attorneys, forbids a lawyer from altering or destroying a document having potential evidentiary value. Earls motion points out that while the unorganized product is no longer relevant to the New Jersey case, it is directly material to his own suit.

Motion denied

In a two-page order issued in February, Judge Noel Hillman denied Earls motion to intervene, holding that Earl has not demonstrated that he has an interest in the unorganized inventory requiring that this Court vacate its prior orders regarding that inventory.

Model Rule of Professional Conduct 3.4(a) prohibits the destruction of any evidence with potential evidentiary value. Earl correctly notes in his 2009 objection that there is little case law relating to motions to destroy evidence, presumably because the overwhelming majority of practicing attorneys would prefer not to put their licenses at risk by filing such a motion in violation of the rule. However, most courts have adopted the rule that a party to a suit has the duty to preserve evidence when she is on notice of potential litigation.

A landmark case in this area is Fire Insurance Exchange v. Zenith Radio Corporation, a 1987 decision from the Supreme Court of Nevada. There, an insurer sued a TV manufacturer, claiming that a faulty set was the cause of the insureds house fire. The insurance company had not saved the TV, however, and the court dismissed the case. The court ruled that there is a duty to preserve evidence even when an action has not been commenced and there is only a potential for litigation.

With regard to Menus actions, the affected suit was more than potential — it had been occurring for some time. The company received notice of Earls lawsuit nearly six months before it filed its request to destroy evidence.

The companys actions also have the potential to adversely affect another class action suit. Blaszkowski v. Mars, filed in Florida in May 2007, alleges that several brands of pet food — including some made by Menu — contained ground up roadkill, blood, hair, and euthanized animals, among other items. The destroyed evidence from the New Jersey suit would likely have been directly material to this action as well.

The court undoubtedly had broad discretion to limit the amount of material produced during discovery, given the potentially vast amounts of possibly contaminated food. But Earl claims that it was another matter entirely for the court to order destruction of already-produced evidence, especially when it was potentially useful — and perhaps even critical — in at least two other cases involving a common defendant. Indeed, Earl contended that the evidence was unique and irreplaceable.

In any event, the courts have sided decisively with the pet food manufacturers, and there is no evidence that they will change their minds anytime soon.

The call to reform the most abusive and restrictive practices of the credit card industry was once again heard on Capitol Hill yesterday, as two separate hearings emphasized both the need for more oversight and new legislation to protect consumers.

The Senate Judiciary Committee convened a hearing over S. 2359, aka the "Consumer Credit Fairness Act," introduced by Senators Sheldon Whitehouse (D-RI) and Dick Durbin (D-IL). The bill would, if made law, amend a portion of the 2005 bankruptcy legislation to enable consumers to divest a portion of their debt in bankruptcy.

Under the terms of the Act, if a filer's consumer debt threshold — including credit card debt, payday loans, or other debts — exceeded 15 percent plus current rates on 30-year Treasury bonds, they could have it liquidated in bankruptcy. The Act would also exempt filers with debt levels above the threshold from the "means test" mandated by the new bankruptcy law.

"The standard credit card agreement gives the lender the power to bleed their customers through evolving and ever more crafty tricks and traps," Whitehouse said in his opening statement. "The typical credit card agreement, which twenty years ago was a page in length, has grown to a 20-page, small print contract filled with legalese. In substance, it gives the companies the right to raise interest rates for almost any reason, and in some cases no reason at all."

The committee heard testimony from Douglas Corey, a Bank of America customer who had been paying his card debt on time for years, until he accidentally paid less than his normal minimum payment in August 2008. That triggered a spiral of rate increases and penalty fees that threatened to bury Corey under even more debt.

"With my next statement in October 2008 came the devastating news that my interest rate had skyrocketed to an astonishing 28.99 percent," Corey said. "I went from paying $360 in interest to $792 in one month and I was charged a $39 late payment fee. The following month, I was laid off from my sales representative position of seven years."

Corey's debt troubles increased to the point where he was missing payments on his mortgage, but, he said, he struggled to keep current on his loans. "Bank of America has come before you asking for help, understanding, and, with both hands open, for financial support," he said. "Yet when we the consumers go to these institutions looking for the same help, understanding and financial support, we get roughed up and receive no compassion."

Whitehouse introduced the Act in the previous session of Congress, but no action was taken on it. The House of Representatives passed the "Credit Cardholder's Bill of Rights" last year, but that bill did not come to the Senate for consideration. The House Financial Services Committee is expected to act on credit card legislation next week.

"It must do more"

Meanwhile, the House Subcommittee on Commerce, Trade, and Consumer Protection grilled new Federal Trade Commission (FTC) chairman Jon Leibowitz for what they perceived as the agency's failure to aggressively protect consumers from unscrupulous lending and punitive fees.

"These schemes were allowed to happen in part because of a fierce anti-regulatory ideology that was held by the Bush Administration," said Rep. Henry Waxman (D-CA), who said the opposition to regulation led to failures to protect citizens from tainted pet food to predatory mortgage lenders.

Leibowitz agreed, but said that his agency was often constrained by both its small numbers and lack of enforcement authority, as well as an inability to keep up with quickly evolving problems.

As is clear from recent experience, markets for financial services are complex and dynamic, changing in response to developments in the economy, technology, the law, and many other factors," Liebowitz said. "To remain an effective protector of and advocate for consumers of financial services, the FTC recognizes that the government must continually increase its knowledge of changing practices, evaluate its efforts, and modify its approach as needed."

Leibowitz recommended that Congress authorize it to use calls for public comment and rulemakings to declare certain business practices unethical, and to invest in the agency more enforcement power to obtain civil penalties against lawbreakers in federal court.

The suit alleges Petland and the Hunte Corporation deceived thousands of pet owners nationwide by falsely claiming their puppies came from reputable breeders when most were from commercial breeding operations called puppy mills.

Six pet owners — including two members of The Humane Society of the United States (HSUS) — filed the lawsuit in Arizona federal court.

Petland has approximately 140 stores in 31 states and is the country's largest retail chain that sells puppies. The Hunte Corporation calls itself the "world's leading licensed distributor of pure-bred puppies" to select pet stores.

The action alleges Petland and the Hunte Corporation violated federal law and various state consumer protection laws by misrepresenting that the puppies sold in Petland stores are "the finest available" and come from reputable breeders, when the puppies actually come from puppy mills, and are bred and raised in unsafe and unsanitary conditions.

Puppy mills are commercial breeding operations that experts say churn out two to four million puppies each year.

"To operate this puppy production line, female dogs are bred at every opportunity without sufficient recovery time between litters," the lawsuit states. "Once these breeding females are physically depleted to the point they lose the ability to reproduce, they are generally destroyed using inhumane methods."

"While alive and forced to reproduce, the breeding female and her puppies are confined to a wire cage barely large enough to turn around in, sometimes exposed to the elements, twenty-four hours a day, seven days a week and three hundred sixty-five days a year," the lawsuit alleges. "[T]hese cages in which the breeding female spends her entire life, and the puppies' first several weeks of life, are floored with wire mesh to facilitate waste removal and cleanup without regard for the health and wellbeing of either the puppies or their mother."

Puppy mill puppies often have health problems, genetic defects, and behavioral issues, according the lawsuit.

The class action lawsuit describes several cases in which Petland sold sick and dying puppies — many of which came from puppy mills — to consumers nationwide, including the six plaintiffs in the case.

Petland also requires each of its stores — which are either owned by the corporation or operated as a franchise — to buy their puppies from suppliers the company has approved. "And nearly every one is either a puppy mill or a puppy mill broker," the lawsuit claims.

Companies: Allegations are "false and baseless"

Petland and the Hunte Corporation denied what they called the "false and baseless" allegations in the class action lawsuit.

"Petland Inc. is outraged and disappointed at the latest false accusations propagated by the Humane Society of the United States (HSUS), a radical animal rights group that has no affiliation with local humane societies," the company said in a written statement. "This new attack from HSUS is in the form of a class action lawsuit based upon vague and undefined legal arguments. This is a continuing public relations campaign to smear the good name of Petland and to increase HSUS donations by utilizing sensationalized media and legal attacks."

Petland said at least two veterinarians certify that all its puppies are healthy, and that the company stores meet or exceed all state and federal requirements related to the health of each of the puppies it sells.

"Petland only supports breeders that abide by the 'Humane Care Guidelines' developed by Petland in conjunction with the U.S. government," the company said. "It has been Petland's policy for more than 40 years to stand against substandard breeders."

"I've read every word of the lawsuit and I can only see one puppy that even came through the Hunte Puppy Care program," said Hunte Corporation company president Steve Rook. "The other (puppies) don't have anything to do with us."

"This lawsuit (was filed) to help the Humane Society of the United States reach its goal to receive publicity and increase its donations," he added.

Rook said that puppies come into their only after it receives a complete health evaluation, and that most pet stores also have their own veterinarians examine the puppies upon arrival.

"A puppy must have two to four veterinary examinations before it's sold," he said. "How does that make us a business model for conspiring to sell unhealthy puppies?"

Meanwhile, Petland downplayed the complaints received from consumers, saying puppies, like babies, sometimes get sick.

"It's no different than a child being more conducive to colds or earaches," said Petland spokeswoman Lacey Clever. "And, all Petland puppies are screened and examined by at least two and often three or more licensed certified veterinarians. The veterinarians certify these puppies' health."

Petland's warranty also protects puppies against congenital and hereditary disorders for up to a year after purchase, Clever said. "In other words, if a pet develops an issue at some point in their lives, this does not in any way indicate that the puppy came from a substandard breeder."

Consumers who have complaints about their puppy's health should immediately contact their local Petland store, Clever said. She did not, however, say what consumers should do if the Petland store where they purchased their puppy goes out of business or if the corporate office does not respond to inquiries.

The HSUS claims that it contacted the United States Department of Agriculture (USDA) over Petland's claim of adherence to the "Humane Care Guidelines" developed in conjunction with the agency. The HSUS filed a Freedom of Information Act (FOIA) request with the USDA to verify that such guidelines existed, but the agency could not locate any records sufficient to answer their request.

"Needs to be shut down"

The class action lawsuit comes on the heels of an eight-month investigation by the HSUS , which revealed most of Petland's puppies came from puppy mills.

Since news of the class action lawsuit has spread, the HSUS said it has received hundreds of calls from heartbroken pet owners.

ConsumerAffairs.com has also received scores of complaints about Petland selling sick puppies or dogs with behavior issues. One reader even wrote in claiming that Petland employees mistreat animals. For example:

• "On March 11, 2008, we purchased a black and tan, male Miniature Pinscher from Petland in Murfreesboro, Tennessee," says Don H. "Prior to the purchase we made several trips to Petland to play with him and observe his behavior. On each visit we were told by a Petland employee how all the puppies were breed by top breeders and guaranteed to be free of any major illnesses or deformities. When our puppy, Hans, was approaching his first birthday we noticed he was not using his one of his back legs as before. After having him examined by the veterinarian, we were told Hans had a very serious problem with his hip. Consequently, due to the increasing pain and limitations, Hans had to undergo a femoral head and neck ostectomy (FHO). The surgery was very painful for Hans, and very expensive. Hans is currently undergoing physical therapy. In addition, the surgeon informed us that he was confident that Hans had Legg's Perthes Disease. This is a disease our healthy puppy had when we purchased him. We attempted to contact Petland in Murfreesboro, but the store went out of business. We have contacted the cooperate office, with no response. We do not wish to return our puppy. We love him and consider him a part of our family. Because of the Petland guarantee, we expect the company to reimburse us for medical cost. Also, it is very disturbing to know this company continues to sell sick puppies. We have tried to find the breeder, with no luck;"

• "We purchased a Cavalier King Charles (from Petland) back on 1/12/07 and from the day we got her home the health problems began," says Candace B. of Georgetown Texas. "She had kennel cough which then turned out to be pneumonia. We went to their (Petland's) recommended vet in Cedar Park, which did nothing for us. Then we found out our puppy had a hernia operation during the time she was at Petland...our new vet informed us that she has luxating patella or trick knee, so she carries her leg when she walks. Surgery would cost thousands, and after that, she still may not get better. This dog has had reoccurring ear infections as well as anal gland issuesthe dog also has food aggression, which is very uncommon to this breed. We also spoke with professional breeders of this breed and they determined she is not a pure breed Cavalier King Charles due to her long nose and size plus features. We love this dog so much and don't blame her for Petland's greedy business tactics. I feel this company needs to be shut down."

• "I know not all Petland stores can be so bad, but I do know the one in Boardman is run horribly," Amber of Boardman, Ohio told us. "I personally know a few of the employees that have previously worked there, but got sick of supporting the animal cruelty and quit. I am aware of the fact that they keep rat poisoning out to punish any animal that gets out of his or her cage. I am also aware of the fact that the dogs mostly come from puppy mills (which is no surprise). I have heard from my friend that when the puppies come in they are dirty (and) they all have ear mites and worms. Some have fleas that are so bad the dogs are bleeding. However, they do test for medical problems by their vet and kill the ones that aren't accepted rather than to just give them away to a good home."

The class action lawsuit seeks to end what it calls the misleading practices by Petland and The Hunte Corporation — and to recover monies for consumers nationwide "victimized" by what the plaintiffs call the companies' unscrupulous conduct.

Consumers who have purchased a sick puppy from Petland since November 20, 2004, can join the class action lawsuit. A form is available on the HSUS Web site.

Attorneys for the HSUS are serving as counsel to the three private laws firms that represent the plaintiffs in this case.

Health advocates have long cautioned consumers about eating too much red meat. Now a new research study may add more fuel on the fire.

A report in the March 23 issue of Archives of Internal Medicine says people who eat more red meat and processed meat appear to have a modestly increased risk of death from all causes and also from cancer or heart disease over a 10-year period.

In contrast, a higher intake of white meat appeared to be associated with a slightly decreased risk for overall death and cancer death.

"Meat intake varies substantially around the world, but the impact of consuming higher levels of meat in relation to chronic disease mortality [death] is ambiguous," the authors write as background information in the article.

Rashmi Sinha, Ph.D., and colleagues at the National Cancer Institute, Rockville, Md., assessed the association between meat intake and risk of death among more than 500,000 individuals who were part of the National Institutes of Health-AARP Diet and Health Study.

Participants, who were between 50 and 71 years old when the study began in 1995, provided demographic information and completed a food frequency questionnaire to estimate their intake of white, red and processed meats. They were then followed for 10 years through Social Security Administration Death Master File and National Death Index databases.

During the follow-up period, 47,976 men and 23,276 women died. The one-fifth of men and women who ate the most red meat - a median or midpoint of 62.5 grams per 1,000 calories per day - had a higher risk for overall death, death from heart disease and death from cancer than the one-fifth of men and women who ate the least red meat, median of 9.8 grams per 1,000 calories per day.

When comparing the one-fifth of participants who ate the most white meat to the one-fifth who ate the least white meat, those with high white meat intake had a slightly lower risk for total death, death from cancer and death from causes other than heart disease or cancer.

"For overall mortality, 11 percent of deaths in men and 16 percent of deaths in women could be prevented if people decreased their red meat consumption to the level of intake in the first quintile," the authors wrote. "The impact on cardiovascular disease mortality was an 11 percent decrease in men and a 21 percent decrease in women if the red meat consumption was decreased to the amount consumed by individuals in the first quintile. For women eating processed meat at the first quintile level, the decrease in cardiovascular disease mortality was approximately 20 percent."

There are several mechanisms by which meat may be associated with death, the authors note. Cancer-causing compounds are formed during high-temperature cooking of meat. Meat also is a major source of saturated fat, which has been associated with breast and colorectal cancer. In addition, lower meat intake has been linked to a reduction in risk factors for heart disease, including lower blood pressure and cholesterol levels.

"These results complement the recommendations by the American Institute for Cancer Research and the World Cancer Research Fund to reduce red and processed meat intake to decrease cancer incidence," the authors conclude. "Future research should investigate the relation between subtypes of meat and specific causes of mortality."

Trouble paying health plan premiums and difficulty affording out-of-pocket expenses for medications aren't just problems of the uninsured anymore. They're also concerns for families with private insurance, according to the C.S. Mott Children's Hospital National Poll on Children's Health.

"Often times, the federal government focuses on kids who don't have any coverage at all, and they are certainly in very vulnerable circumstances. But we wondered whether children with private insurance are also vulnerable," said Matthew Davis, M.D., director of the National Poll on Children's Health. "In this poll, we found that over two-thirds of parents are concerned about out-of-pocket health care costs, and about two-thirds are concerned about the premium costs and deductibles of their health plans."

While these concerns were found among parents across all demographic groups, parents in the middle income bracket making $30,000 to $59,999 per year showed the greatest concern.

"Parents in this group make enough money to afford private insurance but not enough to comfortably cover the additional costs of that insurance," Davis said.

Seventy-nine percent of these parents were concerned about the out of pocket costs; 74 percent were concerned about the costs of the deductible; and 73 percent were concerned about premiums.

The poll also finds among parents of all demographic groups:

• 32 percent are concerned their private health insurance does not cover the costs of all the care their child needs

• 20 percent are concerned their private health insurance does not cover their children's medicines.

"Over the next few months, as the economic crisis is expected to worsen, we're likely to see stress among privately insured families continue to increase. That may spell trouble for kids in terms of getting care in a timely way and for health care institutions that depend on people seeking care to stay in business," Davis said. "The federal government and perhaps state governments need to step in to ensure that individuals with private insurance — especially kids — don't fall behind in their care at this time."

Connecticut Attorney General Richard Blumenthal is investigating the business practices and questionable science associated with Acai berry products -- primarily pitched by Internet-based companies as a wonder treatment for weight-loss.

Blumenthal's office has received numerous consumer complaints related to Acai berry purchases, and is investigating with other states.

There is no competent scientific research that demonstrates any of the claimed effects of Acai berry, including weight loss, detoxification and increased energy and vitality, Blumenthal said.

Blumenthal said various companies selling Acai berry products -- in addition to bogus weight loss claims -- have improperly charged consumer credit cards.

After promising 14-day "free trials" of Acai berry products, the companies often make it virtually impossible for consumers to cancel the trial, resulting in charges to consumer credit cards ranging anywhere from $59 to $89.

Even worse, some consumers never even receive the product within the trial period -- making it impossible to try the product before deciding whether to cancel.

That's what happened to Robin of Covington, Ga., who complained to ConsumerAffairs.com about her dealings with Advanced Wellness Research.

"I ordered the free trial of Acai Berry capsules for $4.99. It took 2 weeks to get the bottle. That's their SCAM..you have to call withing 14 days to cancel. It's hard to cancel when you haven't received the product! ... On my next credit card statement, I had been charged $78.81 on 2/7/09 and another $83.80 on 2/22/09."

"There are no magical berries from the Brazilian rainforest that cure obesity -- only painfully real credit card charges and empty weight loss promises," Blumenthal said. "Aggressive Acai berry pitches on the Internet entice countless consumers into free trials promising weight loss, energy and detoxification. These claims are based on folklore, traditional remedies and outright fabrications -- unproven by real scientific evidence.

"In reality, consumers lose more money than weight after free trials transition into inescapable charges. We will investigate these allegedly misleading or deceptive nutrition and health claims and take action under our consumer protection statutes -- as we have done with other food products. As problematic as the berries are the bills.

"Supposedly free online product offers commonly entail costs. These false celebrity endorsements and fake blogs show the dark side of online marketing."

David Schardt, senior nutritionist for Center for Science in the Public Interest, said, "If Bernard Madoff were in the food business, he'd be offering 'free' trials of aai-based weight-loss products. Law enforcement has yet to catch up to these rogue operators. Until they do, consumers have to protect themselves."

More Scam Alerts ...

Florida Attorney General Bill McCollum is suing a Miami company and its owner on charges the company is engaged in foreclosure rescue fraud.

According to the lawsuit, Lincoln Lending Services, LLC targeted Hispanics facing foreclosure and charged up-front fees for loan modification services — both in violation of the Foreclosure Rescue Fraud Prevention Act, according to the state.

"Our citizens should not be targeted when they are in a time of financial distress and are desperately trying to protect their homes," said McCollum.

According to consumer complaints, Lincoln Lending advertised for mortgage foreclosure assistance and rescue services. The complaint contends that to get around the statutory prohibition against up front charges, the company would have consumers pay $2,700 for "forensic analysis" services, then sign a contract for alleged modification services.

The forensic analysis fee was allegedly created to circumvent the new law, which was created last year, the state maintains. Lincoln's business of offering legal services, directly or indirectly, constitutes the unauthorized practice of law and violates FS 877.02(1).

The Attorney General's Economic Crimes Division determined Lincoln Lending also forwards consumers to an attorney working under the business names of Florida Foreclosure Law Center, LLC and Florida Homeowner Assistance Center, LLC.

The lawsuit asks the Court to issue a temporary injunction against the company while litigation continues. It also seeks consumer restitution and ultimately a permanent injunction prohibiting the company and its owner, Rita Gomez, from engaging in similar business practices.

March 23, 2009
Attorney General Edmund G. Brown Jr. and the Contractors State License Board (CSLB) have finalized an agreement that will stop a massive service and repair scheme that unfairly overcharged thousands of Californians for "shoddy and woefully inadequate" home repair work.

"This massive scheme defrauded thousands of California homeowners who were charged exorbitant fees for shoddy and woefully inadequate home repair work by unlicensed and unskilled contractors," Attorney General Brown said. "The agreement stops the illegal practices and gives homeowners a chance to recover some of their losses."

A months-long investigation by the Attorney General's Office and the Contractors State License Board found that SRVS Charge Inc. and its affiliated companies had been cheating some 6,000 customers each year for overpriced and substandard home repair work since 1989.

To stop the companies' illegal practices and provide restitution to those who were victimized, Brown and the CSLB reached a settlement with:

- SRVS Charge Inc. and its affiliates,

- Principal owner, Sarkis Terabelian, 43, of Burbank;

- General manager, Zohrab "Rob" Mkhitarian, 40, of Burbank; and

- Associates Marine Metspakyan, 33, Avetik Avo Gyandzhyan, 38, Lilit Lusparyan, 28, Alisa Oganyan, 35, Estine Akopyan, 28, and Vardui Terabelian, 45.

The defendants operated various service and repair companies that employed electricians, plumbers, and heating and air-conditioning technicians in Southern California, the San Francisco Bay Area, and the Sacramento region. These companies routinely targeted elderly Californians.

Exorbitant customer fees enabled Sarkis Terabelian, Mkhitarian, and his associates to purchase two helicopters, a Mercedes-Benz, and real property valued in excess of $1 million. Title to these vehicles and real property were seized by the Attorney General's Office last year and will be released as a result of the settlement.

SRVS Charge Inc.'s scheme worked like this:

The company placed millions of dollars in telephone directory advertising, including many full-page ads. The ads, which listed different company names, claimed a 100% satisfaction guarantee and senior discounts. When customers called the numbers listed in any of the ads, they would be directed to a central call center.

- Many times repairmen would be dispatched from a different company than the customer called.

- Often, these workers had not undergone the criminal background check required of all contractors and Home Improvement Salespeople licensed by the Contractors State License Board since January 1, 2005.

- Customers were charged high prices for emergency home service and repair, often unrelated to the actual home repair work. Much of the work was poorly done or never completed.

- If a customer refused to pay, the company would file a lien against the home to force payment.

• A permanent injunction against the defendants' prior illegal activities. This includes:

• CSLB monitoring of the defendants' operations for one year;

• Mandatory registration of all company service technicians with CSLB. This requires technicians to undergo a criminal background check;

• Capping the number of business licenses that the defendants can use to a maximum of five;

• Preventing the defendants from charging exorbitant fees or fees that have nothing to do with the actual work that is performed;

• Fully disclosing to CSLB the names of the directors, officers, and employees of their company; and

• Mandatory customer complaint tracking with proper complaint investigation and reasonable efforts to resolve them.

• Prohibiting the defendants from engaging in false advertising.

• $3 million in penalties and restitution to be distributed as follows:

• $1.3 million to be used for consumer restitution;

• $450,000 to be assessed in penalties for state Business and Professions Code violations; and

• The remainder to be used to reimburse CSLB for investigative costs, legal costs, and costs of monitoring future compliance with the judgment.

• "This settlement is a victory for California consumers and legitimate contractors, and brings resolution to thousands of hours of investigative work," said CSLB Registrar Steve Sands. "Victims will now be able to regain some of their money, and CSLB will be able to watch this company closely so others aren't harmed."

• If the terms of the settlement are violated, the defendants could face jail time.

• The following companies are affiliated with the defendants and are included in the settlement:

• American Electric (CSLB #834398)

• American Home Repairs, Inc. (CSLB #834206)

• 59 Minute Service (CSLB #837697)

• Cal Repair Services, Inc., dba Pick Red Plumbing (CSLB #797241)

• Answering Resources, Inc., dba Thrifty Electric (CSLB #723375)

• Orbell Enterprises, Inc., dba Plumbing One (CSLB #713006)

• USA Services, Inc. (CSLB #775863)

• Love My Home, Inc. (CSLB #811361)

• Electric Avenue, formerly A Plus Electric Company (CSLB #569322)

• American Electric 911 Fast Inc. (CSLB #826916)

• Pro Electric Co. (CSLB #670171)

• RG Electric (CSLB #516892)

• Pacific West Heating & Air Conditioning (CSLB #604150)

If you think you have been the victim of fraud by this company and its affiliates, please contact the Contractors State License Board at 1-800-321-CSLB (2752) and press 7.

TV home shopping channel QVC, Inc. has agreed to pay $7.5 million to settle Federal Trade Commission charges that it made false and unsubstantiated claims about three types of dietary supplements in violation of an FTC order, and about an anti-cellulite skin cream in violation of the FTC Act.

The agency claims QVC, one of the worlds largest multimedia retailers, violated a 2000 FTC order barring it from making deceptive claims for dietary supplements.

According to the commission, QVC aired approximately 200 programs in which false and unsubstantiated claims were made about For Women Only weight-loss pills; Lite Bites weight-loss food bars and shakes; and Bee-Alive Royal Jelly energy supplements.

In addition, the complaint charged that QVC violated Section 5 of the FTC Act by making unsubstantiated claims about Lipofactor Cellulite Target Lotion.

The settlement requires QVC to pay $6 million for consumer redress and a $1.5 million civil penalty. In addition, the settlement expands the prior FTC order and further bars QVC from making unsubstantiated claims that any drug or cosmetic eliminates or reduces a users cellulite.

QVC aired ads that werent true and violated an FTC order, said Eileen Harrington, Acting Director of the FTCs Bureau of Consumer Protection. Simply put, we arent going to let QVC get away with this. The company is responsible for the product claims made on its programs, and we expect that going forward, QVC will do a better job for its audience and make sure that its programs are truthful and not deceptive.

The ads allegedly included:

• Unsubstantiated claims that the weight-loss supplements could cause people to lose significant amounts of weight, maintain their weight loss for a long time, and prevent carbohydrates from being stored as fat;

• False claims that the weight-loss supplements could prevent dietary fat from being absorbed in peoples bodies; unsubstantiated claims that the energy-enhancing supplements could reduce fatigue and increase energy in people with severe fatigue and other physical ailments; and

• Unsubstantiated claims that Lipofactor lotion could reduce cellulite, including measurable decreases in the sizes of individuals arms, legs, and abdomens.

Many health insurance policies include prescription drug coverage, covering most of the cost of medicine, with the consumer paying a $15 to $30 co-pay. But a new pricing system implemented by many U.S. insurance companies could give some policy-holders sticker shock on their next visit to the pharmacy.

Health insurance companies are rapidly adopting this new system, commonly called Tier IV, for many of the expensive drugs used in the treatment of several diseases like rheumatoid arthritis, multiple sclerosis, hemophilia, hepatitis C and certain types of cancer.

For these expensive drugs, the co-pay is replaced by a system requiring the consumer to pick up 20 to 40 percent of the cost.

"The Tier IV pricing system essentially represents discriminatory pricing for certain patients," said Dr. Charles King, a rheumatologist in Tupelo, Miss. "Asking my patients to pay 20 to 40 percent of their drug costs out-of-pocket, often up to $600 each month, means they will not have access to these life-altering therapies. My office has been flooded with calls from worried patients since the Tier IV system took effect. They are fearful of losing access to medicines that afford them the ability to lead independent, productive lives, and this is of great concern to me as their rheumatologist."

Robin Bates, a 34 year-old patient of Dr. King's has suffered from rheumatoid arthritis since she was 21, and was faced with the challenge of purchasing her expensive Tier IV treatment from a specialty pharmacy assigned to her by her insurer. Her treatments were costing her well over $1,000 per year on top of her insurance premium, leaving her baffled as to why this was happening.

"I can't function without my medication, and I have four small children and a husband who need me; I have to be able to get up and go," said Bates. "But, this Tier IV pricing system made me wonder if I could find a cheaper medication — which I couldn't — and for a moment, I stopped considering the best option for my treatment, and started looking for the most affordable one."

Charged by this kind of fear and frustration, physicians, health care professionals, patients and caregivers in Mississippi recently rallied together and overwhelmed phone lines and message boards demanding fair pricing and appropriate access-to-care, and their efforts worked. As a result of this action, Blue Cross Blue Shield of Mississippi has lowered out-of-pocket expenses for Tier IV drugs to 10 percent of the cost of the drug with a $200 maximum co-pay per month.

The American College of Rheumatology says it believes it is important for physicians, patients and caregivers in all states to come together and overturn the Tier IV pricing system, which it says has lead to a severe access-to-care issue. For the Mississippians who rallied against Tier IV pricing, the results were great — they influenced change in one of the biggest insurance companies in the United States.

"Picking up the phone and making a call to your insurance company, contacting members of Congress, contacting local news outlets, and simply learning more about Tier IV pricing can make a huge impact in your state, just as it did in Mississippi," said ACR President, Sherine Gabriel, MD.

By Trevor Butterworth

March 22, 2009
An alarming new report by the Campaign for Safe Cosmetics claims bath products for babies contain carcinogens, but by the standards it used to measure risk from formaldehyde and 1,4-dioxane shouldn't we be even more worried about bathwater, tomatoes and fried chicken? And did the activist group actually measure exposure?

The Campaign For Safe Cosmetics (CSC), a coalition of activist groups that have been campaigning for years about chemical exposure in personal care products has released a new report — No More Toxic Tub — on the apparent cancer risks from baby bath products. The study was dutifully transcribed by news media outlets, including ConsumerAffairs.com and USA Today, which headlined the piece Group finds carcinogens in kids bath products.

Many children's bath products contain chemicals that may cause cancer and skin allergies, according to a report released Thursday by the Campaign for Safe Cosmetics, wrote Liz Szabo in USA Today. Twenty-three of 28 products tested contained formaldehyde, the report says. Formaldehyde — considered a probable carcinogen by the Environmental Protection Agency — is released as preservatives break down over time in a container.

There followed a description of the study, comments from a scientist who worked with the cosmetics manufacturer saying there was no cause for concern and an environmental health pediatrician.

The story perhaps explains why only one percent of health journalists said health reporting in the U.S. was excellent.

First, the CSC is driven by a group of environmental activist groups with a long history of hyperbole. The study was self-published, it wasnt peer-reviewed; in fact, it wasnt even scientific — if one takes science to be formulating a hypothesis and testing it against the full range of data.

If USA Todays reporter had interviewed any cancer researchers on the studys content, or did any background research on the chemicals (instead of finding a source against the study and one for it — lazy, formulaic journalism which gets the story off the desk in super quick time), the result would not be the inevitable panic among consumers when confronted with the headline Group finds carcinogens in kids bath products.

First of all, some information crucial to understanding cancer risks from STATS survey of 401 randomly chosen members of the American Association for Cancer Research. Only one in four thought that cancer-causing agents were unsafe regardless of the dose (28 percent). This is important because if every carcinogen was carcinogenic at any level, one would have to start a Campaign for Safe Vegetables — which would have the unfortunate and silly goal of removing most vegetables from peoples diet.

The CSC is not interested these kind of distinctions. A carcinogen is a carcinogen is a carcinogen — and no risk, even the most wildly hypothetical, is justifiable (in cosmetics that is — members of the coalition presumably drink coffee, alcohol, eat carrots, smoke and so forth).

And mews organizations such as USA Today dont seem interested in the fact that this is not how science assesses cancer risks.

CSCs report focused on two chemicals: formaldehyde and 1,4-dioxane.

Formaldehyde

Formaldehyde is widely used in manufacturing for a vast array of purposes, including foam insulation material, plywood adhesives, explosives, and disinfectants. It is a nearly colorless gas with a pungent odor usually used and stored in a solution. It is lethal at very high doses by ingestion and considered a human carcinogen by the International Agency for Research on Cancer due to a weak association with nasal cancer incidence in workers with chronic exposure to formaldehyde.

The Carcinogenic Potency Project at U.C. Berkeley notes that formaldehyde damages DNA, kills cells and causes cell proliferation in both rodents and humans, but that the risk declines markedly at levels that do not kill cells.

Formaldehyde also occurs naturally in some fruits and food.

The risks of formaldehyde have been assessed as exposure from manufacturing in 1979 and long-term studies of workers exposed to high levels of the chemical (the National Cancer Institute explains why it is so difficult to prove that formaldehyde exposure in workers is linked to cancer); exposure from mobile home air (which caused a controversy in the wake of Hurricane Katrinas need for mobile homes), and normal home air.

The most substantial risk came from manufacturing through gas inhalation. Workers were exposed to levels so high that they were nearly equivalent to those used in tests that caused tumors in 10 rodents.

The average daily exposure to formaldehyde in conventional home air (over 12 hours per day) is 80 times less than the amount that produced tumors in 10 percent of rodents. This is close to that of coffee, where average daily exposure is 90 times less than the amount that produced tumors in 10 percent of rodents.

Where does our exposure to formaldehyde come from? As the eleventh edition of the Report on Carcinogens by the National Toxicology Program notes:

"The general population may be exposed to formaldehyde through its use in construction materials, wood products, textiles, home furnishings, paper, cosmetics, cigarette smoke, and pharmaceuticals. Formaldehyde released to indoor air from construction materials, furnishings, and cigarettes are major sources of exposure. Cigarettes may contribute as much as 10% to 25% of the indoor exposure. Automobile exhaust is a major source of formaldehyde in ambient air. In addition, formaldehyde can be absorbed through the skin from cosmetics or contact with other consumer products containing formaldehyde."

Formaldehyde is used in some cosmetics as a preservative, and the Campaign for Safe Cosmetics claims that 23 out of 28 products they tested contained formaldehyde at levels of between 54 and 610 parts per million.

The European Union has stipulated that the total content of formaldehyde in the finished cosmetic product must not exceed 0.2% — which is equivalent to 2000 parts per million. In other words, the products assessed by the CSC were well within European safety margins. There is no indication that this could pose a risk. CSC did find one item which released levels above the EU limits — Baby Magic Baby Lotion.

But here we come to the fundamental methodological flaw in the report — one that underscores the need for real, peer-reviewed scientific analysis of chemical exposures and health and not activist reports designed to maximize media attention through sensationalism: The Campaign measured how much formaldehyde was in the product, but not how much a child would actually be exposed to or absorb in the course of using that product.

Heres the CSC testing protocol:

Formaldehyde: 1 to 2 grams of product sample was weighed to the nearest milligram, and placed into a glass vial. 20 milliliters of an aqueous buffer (pH=5 acetic acid) was added volumetrically. The sample vial was sealed with a teflon lined cap, vortexed and then placed on a shaker table for 12 hours. 0.5 to 1 milliliter of the aqueous buffered extract was volumetrically transferred to a 250 bottle to which 100 milliliters of organic free dionized water had been added; 4 milliliters of acetic acid buffer was added to the bottle to maintain a pH=5 and then 6 milliliters of a 2,4-Dinitrophenyl hydrazine (DNPH) solution was added. The 250 ml bottles were placed in a shaking water bath with the temperature maintained at 40 degrees C for 1 hour to complete the derivatization. The aqueous derivatized sample was transferred to a separatory funnel and extracted with methylene chloride. The methylene chloride extract was concentrated and exchanged to a final 5 milliliter volume of acetonitrile (ACN). 10 microliters of the acetonitrile extract was introduced into an Agilent HPLC. The HPLC column was a Restek Ultra Aqueous C18 (150mm x 4.6mm). A 70%/30% ACN/water to 100% ACN eluent gradient program was used to elute the derivatized formaldehyde which was detected with an ultraviolet detector set to 365 nanometers. Standards of formaldehyde were derivatized and extracted similarly. Method blanks were used to assess background contamination from formaldehyde.

In other words, not only did all but one of the products meet the EU safety guidelines, they may or may not expose infants and children to formaldehyde at the levels found. It is unlikely that a parent is going to place an infant in a shaking bath filled with water at 104 degrees Fahrenheit for an hour.

This isnt meant to be flippant. If formaldehyde in bath lotions is as dangerous to children as the Campaign for Safe Cosmetics claims, why didnt it measure actual exposure? And why didnt the media spot — by simply reading the report — that it failed to do this?

This is the ongoing problem with activist studies: they arent really scientific and, of course, they always manage to confirm what the activist group is lobbying against.

1,4-dioxane

The other chemical highlighted by the Campaign for Safe Cosmetics is 1,4-dioxane, which occurs in small amounts in cosmetics as a byproduct in manufacturing, and which cosmetics companies strive to remove. The Campaign found that 32 out of 48 products tested (67%) contained 1,4-dioxane at levels ranging from 0.27 to 35 ppm — and noted that the chemical was banned by the EU in cosmetics (although it isnt banned in the U.S. and the FDA is not, apparently, concerned about the trace amounts in cosmetics.)

The IARC has declared 1,4-dioxane as possibly carcinogenic to humans. The National Toxicology Program has described it as reasonably anticipated to be a human carcinogen based on studies in rodents where the chemical was consumed through drinking water and at very high levels. The FDAs position on the chemical is that: The 1,4-dioxane levels we have seen in our monitoring of cosmetics do not present a hazard to consumers.

Concerns initially were raised in the 1970s, when studies at the National Cancer Institute found an association between 1,4-dioxane and cancer in animals when 1,4-dioxane was administered in high levels in the animal feed. However, the levels in cosmetic products are far lower than those found to be harmful in feeding studies and, for the most part, the types of products in which it is found are only in contact with the skin for a short time.

As a precaution, FDA followed up with skin absorption studies, which showed that 1,4-dioxane can penetrate animal and human skin when applied in certain preparations, such as lotions. However, further research by FDA determined that 1,4-dioxane evaporates readily, further diminishing the already small amount available for skin absorption, even in products that remain on the skin for hours. (Robert L. Bronaugh, "Percutaneous Absorption of Cosmetic Ingredients," in Principles of Cosmetics for the Dermatologist, Philip Frost, M.D., and Steven Horwitz, M.D., Eds. St. Louis: The C.V. Mosby Company, 1982)

The other confounding problem with 1,4-dioxane is that we are exposed to it routinely in tap water, either by drinking or when we shower (as a volatilized compound), and in seafood, cooked meat, fried chicken, deep fry oil, ripe tomatoes, tomato paste, peppers, coffee, herbs and spices (within the range of 2-15ppm). In fact, given that 1,4-dioxane is more easily absorbed by ingestion and inhalation rather than absorption (due to its propensity to evaporate), the route of exposure is much more likely from the water we wash and shower in than through skin absorption from a cosmetic lotion.

Again, this underscores the need for exposure to be measured, and not simply to examine whether a solution contains 1,4-dioxane or not. Is a child actually exposed to more 1,4-dioxane through eating a regular meal and drinking water than through using a lotion? If 1,4-dioxane is as dangerous as CFSC claims, surely this is more alarming?

But there is considerable controversy over how dangerous 1,4-dioxane really is. The studies all focus on inhalation and ingestion rather than absorption, and required substantial quantities of the chemical to produce cancer in the lab animals. This underscores the important of distinguishing the presence of a chemical from actual exposure.

Should you take the Campaign for Safe Cosmetics report seriously?

It will be obvious by now that we are exposed to formaldehyde and 1,4-dioxane from a multiplicity of routes, and in each case absorption through cosmetics is, arguably, the least significant route of exposure. There is much greater concern in the regulatory and scientific research about environmental release and exposure from other sources.

The problem with the Campaign for Safe Cosmetics is that its report isnt scientific. It is an argument that any exposure to a chemical that can be shown to cause cancer in any possible way should be banned. This is not consonant with mainstream scientific or regulatory thinking.

Second, the Campaign equates presence with exposure. But if you cant show that a chemical is being absorbed, you cant measure its effect. A tank full of gasoline is lethal if you drink it, but the fact that its sitting in your car doesnt pose the same degree of risk.

Third, the bodys metabolism — even in an infant — is capable of processing many chemicals quickly and without any negative consequence. Even chemicals that are dangerous at high levels can have no negative effect whatsoever. If this wasnt the case, almost every known food would be toxic.

There is also increasing disquiet among toxicologists about the reliance on high doses of a chemical in animals to determine human cancer risks. As the Carcinogenic Potency Project notes in its latest evaluation of cancer risks: The chronic, high dose rodent cancer test is not much use in understanding human cancer risk. Tumor development is likely due to high dose effects or processes that are not relevant to humans.

In pursuing its cause, the Campaign for Safe Cosmetics systematically avoids addressing the science in a scientific way, and acknowledges no scientific limitations to its claims despite failing to develop the kinds of tests that would actually support its conclusions.

We need real science. And we need the media to be able to distinguish what counts as real science and what is merely self-serving activism.

Trevor Butterworth is a Senior Fellow at STATS, a research organization affiliated with the George Mason University. He received his BA and M.Phil from Trinity College Dublin and did graduate work in philosophy and intellectual history at Georgetown University. He received an M.S. from Columbia University's Graduate School of Journalism, where he was awarded the Sevellon Brown Prize for outstanding knowledge of the history of the American press.

Individualized issues of proof have killed off another consumer class action, this one brought against Merck by consumers seeking to recover expenses resulting from their use of the heart medication Vioxx.

New Jersey Superior Court Judge Carol Higbee ruled that problems with individualized issues of proof, including why the drug was prescribed and how much each consumer paid, would be unmanageable.

The judge conceded that her decision was likely a death knell for most of the putative class members, since individual damages are so small that few if any are likely to bring suit on their own behalf. The judge insisted, however, that the court cannot find that a class action is a superior form of resolution, either.

The judge said that the court would have to make an individualized inquiry into whether concealment of cardiovascular risks played a role in the consumers decision to purchase the drug. As a result, the plaintiffs had failed to show a causal nexus between the companys representations and consumers ascertainable loss — the money they paid for the drug. These issues built an insurmountable barrier to class action.

The case was brought on behalf of all consumers — except those in California — who purchased the drug from its introduction in June 1999 until September 2004, when it was withdrawn from the market due to safety concerns. The plaintiffs asserted claims under the New Jersey Consumer Fraud Act, alleging that Merck knowingly used misleading advertising to hide the risks presented by the drug.

Vioxx, an anti-inflammatory drug prescribed widely for arthritis and other ailments causing chronic pain, was withdrawn from the market after several studies showed it led to an increased risk of heart attack and stroke.

A study in 2000 found that the risk of these events was four times that of patients on an over-the-counter painkiller, and that the elevated risk began during the patients second month on the drug. In 2001, Merck began its own three-year study, which it cut short after finding that long-term use of Vioxx doubled the risk of heart attack or stroke.

In 2007, Merck settled another Vioxx class action for $4.85 billion. Unlike the economic suit, that claim was on behalf of patients who suffered cardiovascular problems from the drug, including heart attacks and strokes. That same year, the New Jersey Supreme Court declined to certify a class claiming that Merck deceived health insurance companies about Vioxxs safety.

At its zenith, Vioxx was a widely-used and extremely profitable drug. The drug netted Merck $2.5 billion in 2003, and was prescribed to over 80 million patients worldwide during its five-year run. The drug was one of the most widely-used ever to be withdrawn from the market,

The state of Texas has shut down a direct mail marketing firm that it says operated an unlawful "lead card" scheme and targeted senior citizens.

Prospect Pros LLC, which did business as American Seniors Alliance, used improper tactics to obtain senior citizens' personal information. According to state investigators, the firm packaged and sold the unlawfully obtained information to insurance companies and sales solicitation firms.

In early 2006, the attorney general took legal action against four "lead card" generation schemes, including Prospect Pros in early 2006. All but one — Lead Concepts Inc. and its owner Christopher Weir — have been resolved.

Prospect Pros produced and mailed misleading direct mail solicitations that were intended to alarm senior citizens. The mailers featured urgent messages in boldface type, appeared to come from government agencies and were intended to obtain the recipient's personal information via postage-paid return cards.

Prospect Pros, for example, mailed a "Medicare Update" that purported to provide information about changes to the Medicare program and appeared to be sponsored by the federal government. By law, the lead card solicitation must state clearly that it is not affiliated with any governmental agency. Other mailers appeared to inform older Texans about estate and probate tax avoidance.

In other cases, mailers were designed to make elderly recipients think their government benefits might be in jeopardy and that returning the cards would preserve those benefits.

Under the agreed final judgment, Prospect Pros LLC, Prospect Pros Inc. and owners William D. and Lynn Thompson are prohibited from sending misleading or untrue direct mail to senior citizens.

In the future, they must clearly disclose when mailers are sent on behalf of a particular insurance agent or other vendor and that these representatives may contact seniors who respond. The newly required disclosures will ensure that senior citizens are aware of the direct mail solicitations' true purpose.

"Grandparent scam"

Texas authorities also warned seniors to be wary if they receive a call from someone claiming to be a grandchild in trouble. Those calls could be from a con artist trying to get money in an old ruse called the "grandparent scam."

In this scam, con artists call and says something like "Hi, grandma," or "Hey, it's your favorite grandson." The con artists then claims they've had an accident, were arrested, or in some other type of trouble and need money. Many times, they claim they're calling from Canada.

"The 'grandchild' also insists that the victim not tell anyone else, which increases the odds that the fraud will be successful," Texas authorities warn. "If all goes according to the con artist's plan, the victim will wire money to the 'grandchild.'"

When senior citizens learn this is a scam, their money is gone. And authorities say it's unlikely their funds will be recovered.

"This type of fraud is particularly troubling, as it plays upon a grandparent's natural desire to protect a grandchild," Texas officials said. "Although variations of this scam have been around for a long time, it has become more sophisticated with the proliferation of information on the Internet."

Authorities say con artists now use personal information gleaned from family blogs, genealogy Web sites, social networking Web sites, and online newspapers. That information often gives the callers more credibility.

To protect themselves from getting taken in this scheme, seniors should be wary of the following red flags:

• Callers requesting money;

• Callers claiming to be in Canada or other foreign location;

• Callers insisting on secrecy;

• Callers pressuring them to take quick action;

• Callers with unfamiliar voices;

• Callers requesting money be sent by wire transfer. Those funds are hard to track and almost impossible to recover, authorities say;

• Elusive callers who get personal details wrong;

Seniors who receive a call from any relative asking for money should ask personal questions that only a family would know, authorities says. They should never "fill in the blanks" for any caller.

Seniors should also ask for the callers name and a phone number where they can reach them. And always verify the caller's story with another family member.

Texas seniors who have lost money in this or any scam can contact the Office of the Attorney General at (800) 252-8011 or file a complaint on the Attorney General's Web site. .

More Scam Alerts ...

A ConsumerAffairs.com investigation that exposed what asthma patients nationwide call a life-threatening ban on medication that gave them instant relief — their chlorofluorocarbon (CFC) albuterol inhalers — has triggered action and support from Sen. Chuck Grassley (R-IA) and four-time Olympic track and field star Jackie Joyner-Kersee.

Grassleys office is reviewing the more than 200 complaints ConsumerAffairs.com has received from asthma and pulmonary patients nationwide who are outraged by the recent ban on CFC rescue inhalers and say the hydroflouroalkane (HFA) alternatives they must now use under federal law leave them gasping for air.

Staffers in California Senator Barbara Boxers office and Connecticut Congresswoman Rosa L. DeLauros office also said they would review our investigations findings. But Emilia DiSanto, chief investigative counsel in Grassleys office, decided to take a deeper look and review all the complaints ConsumerAffairs.com has received about the problems and concerns asthma patients have with HFA inhalers.

Our review continues, DiSanto told us earlier this week.

Meanwhile, among the growing number of asthma patients worried about the ineffectiveness of HFA inhalers is three-time Olympic gold medalist Joyner-Kersee, who said federal bureaucrats are being "insensitive" to the life-threatening problems asthma patients are experiencing.

Ive had problems with HFA inhalers, she said during an exclusive interview this week with ConsumerAffairs.com. I didnt feel like I was getting the same rescue effect that I was before with my (CFC) inhaler. Im telling you, I thought they made a mistake when they gave me that (HFA inhaler). To me, it was differentand I was getting lightheaded. It doesnt have the same effect as my CFC inhaler. Im not feeling it.

The woman many consider the greatest female athlete in history said our investigation had shed light on a problem that could impact the more than 40 million asthma patients across the country.

Im glad you brought this to my attention, said Joyner-Kersee, an advocate for asthma awareness. We need someone fighting for us on thisasthma is a silent killer.

Silent killer

Im concerned about the lives of others with asthma, she added. Like the person who is not on top of their medication or taking their asthma seriously. Or some young child who might reach for an HFA inhaler and find out it doesnt work for them.

As ConsumerAffair.com has reported, CFC inhalers are banned in the United States — as of December 31, 2008 — under an international agreement called the Montreal Protocol on Substances that Deplete the Ozone Layer.

According to the Food and Drug Administration (FDA) — and other supporters of this 1987 agreement — the CFC propellant in the inhalers damages the ozone.

CFCs reduce the amount of ozone in the ozone layer that surrounds the earth and protects the earth against the sun's harmful rays, the FDA said in a written statement. The loss of ozone can increase the risk of skin cancer, cataracts, and other health problems.

Asthma and other pulmonary patients must now use environmentally friendly — and expensive — inhalers that contain the propellant hydroflouroalkane (HFA).

The FDA, pharmaceutical companies, and pulmonologists say the HFA inhalers have a different feel and taste — and asthma patients need to take deep breaths when using them.

But they say the four HFA inhalers now on the market — ProAir, Proventil, Ventolin, and Xopenex — — are just as effective as CFC inhalers when properly used.

The more than 200 asthma and pulmonary patients whove contacted ConsumerAffairs.com, however, disagree.

So do the hundreds of asthma and pulmonary patients whove contacted The National Campaign to Save CFC Asthma Inhalers . The California-based group is lobbying Congressional leaders to amend the Clean Air Act and make CFC inhalers permanently legal in the United States.

No relief

ConsumerAffairs.com receives complaints almost daily about HFA inhalers from asthma patients across the county. Most say the inhalers do not give them quick relief and sometimes make their asthma worse.

Unfortunately for me, the HFA inhalers do not relieve my asthma, Star R. of Whitethorn, Calif., wrote us. Since November 2008 to the present I have had increased, terrifying asthma attacks that the HFA inhalers have done little to control. I have found that in an emergency the HFAs are worthless and, therefore, quite dangerous.

I was never informed that my inhaler formulation had been changed to a different propellant, she added. The way I found out was in the middle of the night, during an asthma attack, when my new HFA inhaler didn't work.

Some asthma patients have experienced allergic reactions to the ethanol or other ingredients in the HFA rescue inhalers.

I cannot use HFA albuterol inhalers as I am allergic to the propellants in all of them, says Paulette B. of Sacramento, Calif. I tried two different ones and they made me cough really badly and my lungs burned awfully. They gave me an awful headache and caused nausea, too. I fortunately still have a few CFC albuterol inhalers and then will have to go to a nebulizer only. I may die if I cannot have my CFC inhaler.

Many asthma patients also say theyre not convinced the CFCs in their old inhalers harm the ozone.

They all say theyre environmentalists. What asthma patient doesnt want clean air? many have asked us. But they believe the government picked the wrong product to ban.

I found out that the effect that the CFCs in the old inhalers were actually proven to only show negligible effects on the ozone, if any at all, Heather C. of Abilene, Texas, told us. Shame on the FDA and everyone else involved in making this come aboutI wonder if this will lead to any deaths or hospitalizations in regard to not getting the relief you must get from these (rescue) inhalers.

The increased cost of the HFA inhalers is another concern many asthma patients have repeatedly expressed. HFA inhalers do not have a generic version and can be five to ten times more expensive than their $5 CFC albuterol counterparts.

The new inhaler is about $40, say Suzanne G. of Jackson, Wyoming. Apparently, I will need three a month for a total of $120. My CFC inhaler cost me around $12 and lasted over a month. So I'm out $108 a month.

(But) the cost is not as burdensome as the loss of a normal athletic and basic life for a young woman and mother, she adds. The HFA inhalers do not work as effectively as the CFC inhalers in rescue situations. I have to take twice as much medicine with the HFA inhalers, and the HFA inhaler clogs causing medicine to go up in the air instead of into the mouthpiece and lungs. This is really scary for me. I cannot exercise at the gym like before, and I dare not go for a run. I cannot play with my 4-year-old daughter like I used to do for fear of a complete bronchial shut down.

The skyrocketing costs of HFA inhalers are also worrisome to Joyner-Kersee, founder of a non-profit organization that helps children in her hometown of East St. Louis, Illinois.

Cost has always been a concern with me, Joyner-Kersee said. With there not being a generic of this (HFA inhaler).its very expensive. I dont want to see some of my asthmatic counterparts dropping and drying (because they cant afford their medicine).

FDA won't budge

Despite asthma patients concerns, ConsumerAffairs.com has learned the FDA is not likely to change its position on CFC inhalers.

CFC inhalers damage the ozone, spokesman Christopher Kelly told us. People will have to get used to the new (HFA) inhalers. Kelly said his agency researched its decision to phase-out CFC inhalers for several years.

He referred us to pages of documentation on the FDAs Web site about the ban and the safe and effective alternatives for CFC inhalers.

There are three albuterol HFA inhalers and one levalbuterol HFA inhaler that are alternatives to albuterol CFC inhalers, one posting states. Each of the HFA inhalers is different. It is important to remember that it is the deep breath that gets the medication into a patient's lungs, not the force of the spray. The spray from an albuterol HFA inhaler may feel softer than the spray from an albuterol CFC inhaler, but this will not affect the amount of drug that a patient breathes into their lungs.

The posting adds: If patients have problems with the albuterol HFA inhaler, they should talk to their healthcare provider as a different product may work better for them.

Kelly said the FDA knows many consumers are upset about the ban on CFC inhalers.

More than 300 consumers, he said, filed complaints with FDA last year about this action 295 by phone and 39 by e-mail. The complaints concerned the cost increase and patients getting used to the new formulation," Kelly said. But I don't think our position is going to change on this."

Kelly and other proponents of the ban say a generic alternative should be available in a few years, which will reduce the cost of HFA inhalers. Some pharmaceutical companies and the The Partnership for Prescription Assistance now offer programs and coupons to help consumers cover the increased costs of HFA inhalers.

"Advocates" sit it out

During our investigation, weve also talked to The American Lung Association and supposed advocates of asthma patients whove emphasized the salient issue for patients is to get their disease under control.

Someone who uses a 'quick reliever' inhaler many times a day does not have well-controlled asthma, said Dr. Norman H. Edelman, chief medical officer for the American Lung Association. Patients shouldn't need their quick relief inhalers more than two to three to four times a week. Asthma is a variable disease and doctors are always readjusting medications and dosages. If patients are not getting good asthma control, they need to talk to their doctor.

Edelman said asthma patients will notice a difference when using an HFA inhaler. It's a softer feel. The particles are more finely disbursed and people don't feel that same blast.

Patients must also prime the HFA inhalers and keep them clean to prevent build-up and blockage of the medication.

But as far as we know, the studies done on these (HFA inhalers) show that when they are used properly, they are as effective as the old (CFC) inhalers, Edelman said.

A clinical professor at the University of Florida — and the co-author of a 2007 paper in the New England Journal of Medicine about the transition to HFA inhalers — agrees the four HFA-albuterol inhalers now are the market are safe and effective alternatives for asthma and pulmonary patients.

There was a wide range of studies done on these (HFA inhalers), pharmacist Leslie Hendeles told us. These were double-blind, random, placebo studies. The FDA was careful to require studies (on HFA inhalers) to detect any differences and make sure they were equivalent (to CFC inhalers.").

Proper technique

Hendeles said he reviewed all the HFA inhalers now on the market for his article in the New England Journal of Medicine.

We analyzed the data. There isn't a hint that any one of those drugs doesn't work as well as CFCs. The difference is everyone in those studies was trained to use the HFA inhalers correctly.

That's why Hendeles suggests patients work on the technique" they use with these new inhalers.

What I tell our patients is 'let me see how you use (the HFA inhaler) and maybe I can make some suggestions to get an increase of the medicine in your lung.' Studies that have examined how people use inhalers have shown many dont use them correctly.

He added: I'm also going to throw out the possibility that the HFA inhaler is less forgiving (to bad technique) than the CFC inhalers. If you didn't have good technique with a CFC inhaler it may be magnified with the HFA inhaler.

Hendeles said he's had excellent results with patients who've improved their technique. I've rarely had anyone come back (with complaints) who is using the correct technique. It's uncommon.

Some patients also respond differently to the various HFA inhalers, he said. We've had a lot of patients say the ProAir (which has ethanol) doesn't work for them and we've switched them to Ventolin, (which doesn't have excipients other than the propellant) and they say they're okay.

Other patients, he said, have trouble with the HFA inhalers because they don't clean them as often as their CFC devices.

Unlike the CFC inhalers, the HFA propellant plugs the opening if patients don't follow the directions, Hendeles said. What we have found is people are — after using them a few times — may not be washing them. That makes them clog and they don't get a full dose. Or some patients may not prime the (HFA) inhaler when it comes out of the package or if they haven't used in a few weeks.

If people say they're having trouble with these inhalers, Hendeles added, ask them how often they're washing them.

Decision was political

Hendeles also told us the decision to ban CFC inhalers had nothing to do with protecting the environment. The motivation, he said, was political.

Why was it political? asked Hendeles. "Some years ago, the United States, along with other countries, signed an agreement to phase out all CFCs. Thats political. Secondly, Congress amended the Clean Air Act to include this (ban). Thats political.

He disagrees with political and environmental officials who say CFC inhalers harm the ozone.

The science is not there that these (CFC inhalers) were damaging the ozone, he told us. A majority of the damage (from CFCs) came from refrigerators and air conditioners.

A medical exemption allowing CFC inhalers to remain on the market was included in the Montreal Protocol when it was signed in 1987. At the time, there weren't viable alternative propellants for CFCs. But that exemption was removed when HFA-albuterol inhalers became available. In 2005, the FDA determined CFC inhalers were no longer "essential" and said they must be phased out by December 31, 2009.

Longtime asthma patients say their CFC inhalers are medically essential because the HFA alternatives do not relieve their breathing problems during an attack.

Ive had it with these HFA-metered-dose inhalers, says Wendy W. of Springfield, Illinois. They dont work. I have had to resort to using an electric nebulizer machine to dispense my fast-acting relief medicine.

Wendy and other asthma patients also take issue with those who suggested they arent using their inhalers correctly — or cleaning them according to the directions. They say they know how to use the HFA inhalers — and they clean them regularly. And nearly every patient whos contacted us says their asthma was in control until they used an HFA inhaler.

I am 43 year old and have (had) asthma since for the past 31 years, says Kathleen Ann F. of Fresno, California. I have always had my asthma under control and have never had to use any kind of inhaler until 2003. The reason for my use of an inhaler is the fact that I am allergic to many chemicals that were and are used at my place of employment. I have used albuterol, which was the most effective treatment I have used. Since the ban on CFCs and the change in inhalers allowed to be prescribed it is almost unbearable to continue working.

Kathleen and scores of other pulmonary patients also say anyone who suggests they need to take deep breaths when using an HFA inhaler has never had an asthma attack.

How are asthmatics who are suffering an asthma attack supposed to inhale deeply when they are having trouble breathing in the first place? she asks.

"Insensitive"

Joyner-Kersee echoes those sentiments.

I think those comments about breathing deep and cleaning your inhaler are insensitive and come from people who are not asthmatics.

She added: I do have my asthma under control and I noticed a difference with these HFA inhalers.

During our interview, Joyner-Kersee offered to lend her voice to help asthma patients who are struggling with HFA inhalers and want their trusty and affordable CFC devices back on the market.

I would support 100 percent changes in the law (to bring back CFC inhalers), she said. We need a voice (on Capitol Hill) to take a serious look at this and not let us asthmatic die by the wayside.

The founder of The National Campaign To Save CFC Asthma Inhalers said hed like Joyner-Kersee to join his team, which has launched a grassroots effort to convince lawmakers in Washington D.C. to change the Clean Air Act.

We are very pleased to hear that a world-class athlete of Jackie Joyner-Kersees stature supports our campaign to permanently legalize CFC inhalers, and that she agrees with us that the problems that many patients have with HFA inhalers cant be solved by improved inhaler technique, said Arthur Abramson. We greatly appreciate her support, and wed love to have her join our campaign.

Abramson is also grateful that Sen. Grassleys office is taking a closer look at this issue.

Sen. Grassley has had a reputation for many years as the leading defender of patient health and safety in Congress several others in Congress like to talk a good game when it comes to patient safety, but most of them are owned by drug companies and/or environmental extremist groups, Democrats and Republicans alike.

He added: We are confident that when Senator Grassley understands the magnitude of this problem, and reviews the substantial clinical and anecdotal evidence that we have (including three years worth of FDA MedWatch data) that proves that the replacement HFA MDIs (metered-dose inhalers) are not nearly as safe and effective for all patients as CFC MDIs are, he will work with us to permanently legalize CFC inhalers, even though it will require us to abrogate certain provisions of the Montreal Protocol, amend the Clean Air Act, and upset a handful of drug companies.

Asthma patients like Leonard S. of Wisconsin hope something is done soon to get CFC inhalers back on the market.

The HFA alternatives, he says, are death machines.

How many of us will wind up in the morgue thanks to these HCA inhalers? Leonard asks. This is quack medicine at its best. Death comes to those who cannot deliver sufficient albuterol to the lung. The pressure required to push the inhalant must be able to overcome the opposing pressure of an inflamed lung. An HFA (inhaler) fails all the way. It's a death machine.

Read consumers' comments about the new inhalers.

It's hard to imagine anything coming between consumers and their cell phones, but a sagging economy might be the thing that finally does.

As fears about the recession become more widespread, millions of Americans are on the verge of disconnecting expensive cell phone plans, according to a survey by Opinion Research Corporation.

Two out of five Americans with contract-based cell phones — 39 percent or 60.3 million consumers — are likely to cut back on their cell phones to save money if, as is widely expected, the economy gets worse over the next six months, according to the survey of 2,005 Americans conducted by ORC for the New Millennium Research Council.

The survey on cell phones and economic trends also finds that:

A potentially major shift in consumer habits at the expense of contract-based cell phone service is underway as more consumers seek to save money in the face of the recession. No fewer than 40 million Americans — 26 percent of consumers with contract-based cell phone service — are "more inclined today than...six months ago to look at a way to save money on your cell phone bill, such as by switching to a prepaid cell phone service." This group includes 38 percent of those in households making $35,000 a year or less, 32 percent of African Americans and 30 percent of those aged 18-34.

Cell phone extras, such as Internet connectivity, email and texting, are also likely to take a hit in the economic downturn. A total of 19 million Americans — one in five cell phone users with cell-phone extras — have "considered cutting back" (5 percent) or actually "have cut back" (15 percent) on such features "in the last six months because of actual job loss, fear of job loss, the recession, or any other related financial concerns." More than two out of five cell phone users with extras on their phones (41 percent) say it is "very" (19 percent) or "somewhat" (21 percent) likely that they will cut back on cell phone extras "if the economy gets worse in the next six months." Fewer than two in five (39 percent) say it is "not likely at all" that they will make such cuts in the face of a deepening recession.

"The era of cell phone penny pinching is officially here," said NMRC's Allen Hepner. "Thanks to the recession, the U.S. cell phone marketplace is undergoing fundamental changes that will just get bigger as the economic downturn deepens. What we see in these survey findings is clear evidence that most consumers will keep a cell phone during this recession, but only after shifting to less expensive cell phone plans, such as prepaid, and also by scaling back on cell phone extras including Internet connectivity and texting."

Graham Hueber, senior researcher, Opinion Research Corporation, said consumers are already beyond "just thinking about" changing their habits, but are already making changes.

"For example that, we see that 8,740,000 Americans — that is 19 percent of consumers with a cell phone — report that they already have 'discontinued cell phone service in the last six months because of actual job loss, fear of job loss, the recession, or any other related financial concerns," Hueber said. "This strongly suggests that a recession-related shift in attitudes and purchasing habits is already underway."

Nearly one in five Americans who now have prepaid cell phone service say they switched in the last six months from a contract-based cell phone service due to job or recession-related concerns, according to the survey.

A judge preemptively nixed a class action against Wal-Mart and dog food manufacturer Menu Foods, among others, ruling that the need for individual factual inquiries made a class action untenable.

The suit alleged that "Ol' Roy" brand pet food, sold in Wal-Mart stores, was branded as "Made in the USA," when in fact several ingredients were manufactured overseas. Specifically, the plaintiff claimed that wheat gluten in the dog food came from China, a worrisome development given recent reports of pets becoming sick from China-manufactured food ingredients. The proposed class consisted of all consumers in eight states who bought Ol' Roy pet food before March 16, 2007, and who had not received a refund.

The suit was filed in April 2007 by lead plaintiff and Nevada resident Margaret Picus, represented by San Diego-based Blumenthal, Nordrehaug & Bhowmik. The action alleged violations of the Nevada Deceptive Trade Practices Act and similar statutes in the seven other subject states.

The plaintiff alleged that the "Made in the USA" labeling was in bold, capital letters, and was essentially identical on all Ol' Roy products. Moreover, Picus pointed out that all eight states included in the suit expressly prohibited sales of products mislabeled as to geographic origin. This seeming uniformity across consumers made the suit look like an ideal class action.

Judge Philip Pro, however, ruled that individual issues precluded class certification. The plaintiff would have to prove, for example, that every class member bought the food because of the "Made in the USA" labeling. This would require an individual factual inquiry into each consumers thinking, defeating the efficiency and commonality that make class actions so appealing.

The judge's decision was unusual in that he denied class certification before any substantial discovery had been performed. Indeed, the court noted that so-called preemptive motions are generally disfavored, since "the shape and form of a class action evolves only through the process of discovery." However, the court determined that the class was untenable as a matter of law, and "it would be a waste of the parties' resources and judicial resources to conduct discovery on class certification." The full decision is available online.

The suit was originally consolidated with a now-famous multi-district class action in New Jersey, which alleged that tainted food distributed by Menu Foods and others led to the death of hundreds of pets. That action consisted of over 100 suits that grew out of the largest pet food recall in U.S. history, and settled in April 2008 for an eye-popping $24 million. The Ol' Roy suit, however, was severed from the Menu Foods action in 2008.

Individual inquiries, especially into causation or injury, are often the death knell for class actions. Recently, a Washington judge threw out a class action against Microsoft that alleged similar fraudulent labeling, ruling that the plaintiffs had not proved that the labeling was what caused consumers to buy computers.

Remember Verizon's promise to buy its FiOS customers flat-screen television sets and other promotional gifts? Well, the state of New Jersey says the company failed to deliver in many cases, and the state has filed suit against the telecom giant.

The Office of the Attorney General through its Division of Consumer Affairs has filed suit against Verizon New Jersey, Inc., alleging that its marketing, sales, billing and customer service practices for its FiOS television, telephone and internet services are deceptive and misleading.

The state also alleges that Verizon charged consumers higher prices for service than prices quoted in door-to-door solicitations and advertisements and also charged activation fees after consumers were told that such would be waived.

"FiOS is touted for its clearer picture but Verizon obscured the truth from potential customers in its advertising and sales pitches," New Jersey Attorney General Anne Milgram said. "Deception and misrepresentations have no place in the marketplace and we will hold businesses accountable when they violate the public's trust."

In its four-count complaint filed in State Superior Court in Essex County, the state alleges that Verizon violated the Consumer Fraud Act through unconscionable commercial practices, misrepresentations and knowing omissions of material facts, as well as the Advertising Regulations.

The state specifically alleges that Verizon engaged in the following conduct:

• Quoting one price for FiOS Service in door-to-door solicitations, direct mail advertising and otherwise, then billed consumers at a higher price;

• Charging consumers an activation fee, after the salesperson in the door-to-door solicitation waived the fee;

• Charging consumers for services, such as movie packages, that were never ordered;

• Representing that movie packages were free, then billing consumers for such services;

• Advertising promotional gifts, yet failing to provide consumers with the opportunity to contract for the types of FiOS service necessary to obtain the promotional gifts;

• Using the term "additional charges apply" in advertisements, without providing a description of those charges;

• Failing to provide consumers with the rewards letter or other instructions necessary to receive their promotional gifts;

• Failing to provide consumers with a copy of their signed contract;

• Representing that consumers are entitled to receive promotional gifts, but failing to provide promotional gifts;

• Providing consumers with promotional gifts only after significant delay and/or after consumers made repeated calls or other contacts with Verizon;

• Billing consumers at a price other than that initially quoted;

• Billing, on a monthly basis, inconsistent amounts to the same consumers with the same services;

• Failing to honor a consumer's request to cancel the FiOS service; and

• Making it very difficult (i.e. long delays, varied telephone numbers) for consumers to reach a customer service representative in order to address or resolve issues as to promotional gifts, services and/or billing.

"Verizon conducted a very aggressive marketing campaign to introduce its FiOS service, which included promotional gifts that were never to be provided," said David Szuchman, New Jersey's Consumer Affairs Director. "We will seek to ensure that Verizon complies with all relevant laws when advertising and selling services and products."

To date, the Division has received 266 consumer complaints related to FiOS marketing and sales.

Attorney General Edmund G. Brown Jr. today announced the arrest of two scam artists — Mary Alice Yraceburu and Marianne Curtis — who "coldly and heartlessly" conned over one hundred and sixty victims out of thousands of dollars for non-existent loan modification services.

"These scam artists coldly and heartlessly preyed on Californians desperate for help in saving their homes," Attorney General Brown said. "Homeowners in financial trouble have to be on guard against loan modification fraud, so they don't make a bad situation worse."

Attorney General Brown today filed 49 felony charges Orange County Superior Court against Mary Alice Yraceburu, 45, of Riverdale and Marianne Curtis, 67, of Costa Mesa.

Yraceburu was arrested today in Fresno County and Curtis was arrested today in Orange County on the following charges:

• 24-counts of grand theft;

• 25-counts of violations of California's foreclosure consultant statutes;

• One special allegation that the total value of theft was over $65,000;

• One special allegation that the total value of theft was over $100,000;

Both women are convicted felons who have served time in state and federal prisons.

The two women operated a company called Foreclosure Freedom, which sent hundreds of fliers to Californians promising help in stopping the foreclosure of their homes. The fliers read: "FINAL NOTICE — Respond only to this notice immediately." This is similar to First Gov scam, which the Attorney General stopped late last year.

When homeowners called the number on the flyer, they were told their mortgages could be renegotiated to a lower monthly payment. Victims, however, were required to pay thousands of dollars in up-front fees and were instructed not to contact their lenders.

Victims were assured the company had "private lenders and specialists exclusive to their company who are very experienced in the options and methods used to renegotiate home loans," yet neither of the women who operated the company had real estate licenses, legal training, or any experience in the home mortgage market.

Investigators found no evidence of any successful loan modifications and most of the victims were either forced into bankruptcy or lost their homes to foreclosure.

Assets seized through search warrants served at Foreclosure Freedom and the bank accounts held by Yraceburu and Curtis totaled over $10,000. If convicted of all charges, Yraceburu and Curtis face 21 years in prison.

Capitalizing on the anxiety surrounding identity theft, dozens of services have sprung up claiming to protect consumers' identity for fees that can add up to hundreds of dollars a year. But when CFA studied the websites of 16 for-profit identity theft services, it found that the descriptions of how they help consumers are often confusing, unclear, and ambiguous.

Furthermore, these services may not always offer the protection that consumers are led to believe they will get, the group claims.

CFA's new report explores the types of services currently offered in the marketplace, the fees they charge, how they describe what they do, the claims they make about the benefits of membership, and how what they do compares with what consumers can do to protect themselves.

"Some of these services may be helpful to consumers, but none can absolutely prevent your personal information from being stolen or used," said Susan Grant, CFA Director of Consumer Protection and author of the report.

Many of the benefits that these services advertise are things that consumers can do on their own for free or at minimal cost. CFA encourages consumers to follow Ten Easy Steps to Protect Your Personal Information and Detect Fraud:

• Practice mail security.

• Guard your Social Security number.

• Lock and shred.

• Stop prescreened credit and insurance mailings.

• Keep private information to yourself.

• Be safe online.

• Look at your bills and bank statements promptly.

• Monitor your accounts online frequently.

• Check your credit reports regularly.

• Pay attention to debt collectors.

In examining identity theft services websites, CFA said it uncovered troublesome practices. Some make overly broad assurances about their ability to prevent consumers from becoming victims. Other key problems that CFA found:

• Identity theft services often fail to provide clear, complete information about what they do and how they work, and in some cases the cost is not disclosed until consumers click to enroll.

• Many identity theft services tout insurance as a benefit, but few provide details about the coverage.

• Guarantees don t always provide the protection that consumers may expect.

• Some identity theft services place fraud alerts on all customers credit bureau files, even if they re not victims, and make misleading claims about how the alerts will protect them.

• Some identity theft services provide credit reports to customers by requesting the free reports that consumers are entitled to once a year under federal law, preventing them from being able to get their free annual reports on their own.

• The personal information that consumers provide to identity theft services could be at risk if it is not adequately secured.

• Many services attempt to limit consumers legal rights by requiring mandatory binding arbitration for disputes in their terms of service.

To address these concerns, CFA recommends that policymakers in government and business take several pro-active steps.

"The Federal Trade Commission and state attorneys general should investigate and take enforcement action to stop misleading claims and practices that harm consumers, such as preventing them from requesting their free annual reports," said Grant. "They should also examine how secure the extremely sensitive personal information is that consumers provide to these companies."

CFA said it believes that rules to govern identity theft services and industry best-practices would both be helpful. The group also suggests that identity theft services should be explicitly prevented from requesting consumers free annual reports on their behalf and consumers should have stronger rights regarding their credit reports.

"Since it s their information, consumers should be able to check their credit reports online, whenever they want, at no charge," said Grant. "Furthermore, consumers should have the option to place a flag on their credit bureau files requiring creditors to contact them to verify requests for new credit accounts or changes in existing accounts, regardless of whether they are already identity theft victims."

To help consumers decide whether to purchase identity theft services and which ones to consider, CFA recommends that they ask themselves:

How likely that you will become an identity theft victim?

• How much does the service cost and how does that compare with doing the same things on your own?

• What specific action will the service take on your behalf if you become an identity theft victim?

If consumers are considering purchasing identity theft services, CFA s provides Six Questions to Ask When Shopping for Identity Theft Services:

• Does it monitor more than credit reports?

• How does the service help you if you are a victim?

• Will it prevent you from getting your free annual reports when you wish?

• Should you look for identity theft services that offer insurance?

• Does the guarantee really protect you?

• What are the costs and terms?

To offer the best value to consumers, CFA believes that identity theft services should have the following characteristics:

• Clearly disclose the exact services and costs.

• Monitor public and private databases and other places typically unavailable to consumers that may contain their personal information.

• Alert consumers of suspicious activity related to their personal information by their choice of email, phone, text message or mail.

• Provide actual assistance, not just advice, to resolve consumers problems if they become identity theft victims.

• Guarantee to do what they promise with no exceptions buried in fine print and no attempt to limit consumers legal recourse through mandatory binding arbitration.

No service that CFA looked at appeared to meet all of these criteria, and none is a panacea, the report concludes.

In the 80's, compact disks replaced vinyl LPs as the preferred medium to listen to music, and now, nearly three decades later, digital downloads threaten to make dinosaurs of CDs.

According to market research firm The NPD Group digital music purchasers increased by just over 8 million in 2008 — to 36 million Internet users. Purchases of online digital music downloads increased by 29 percent since last year; they now account for 33 percent of all music tracks purchased in the U.S.

NPD's Digital Music Study, an annual tracking study covering the music industry, also revealed that there were nearly 17 million fewer CD buyers in 2008 compared with the prior year.

The decline in CD buyers cuts across all demographic groups, but was particularly focused on teens and consumers age 50 and older.

"Rising incidence of paid downloads is a positive development for the industry, but not all lost CD buyers are turning to digital music," said Russ Crupnick, entertainment industry analyst for The NPD Group.

NPD also reported that there were 13 million fewer music buyers in the U.S. last year, compared to the prior year, led by a 19 percent drop in CD sales. Only 58 percent of Internet users reported purchasing CDs or digital music downloads last year, versus 65 percent in 2007.

Consumers' primary reason for not purchasing CDs was that they were spending less on entertainment overall, because of the recession. Consumers were also concerned about the price of CDs, and expressed satisfaction with the collection of titles they already own.

Among the reasons consumers cited for preferring digital music over CDs was that they could choose only the songs they wanted to purchase, and could immediately download and listen to their purchases.

NPD says it has found evidence that music listening is increasing. For example awareness and usage of Pandora, a leading online radio station, doubled year over year to 18 percent of Internet users; one-third of those who were aware of Pandora report using the service.

Similarly, the percentage of consumers claiming to listen to music on social networks climbed from 15 percent in the fourth quarter of 2007 to 19 percent in the year-ago period.

Nearly half of U.S. teens are engaging with music on social networks, which is an increase from 37 percent a year ago; among college-age Internet users, the percentage increased from 30 percent in 2007 to 41 percent in 2008.

"The trends we're seeing in our consumer tracking studies are evidence of the continued transformation of the music industry," said Crupnick. "Just as music piracy and the advent of digital music ended the primacy of the CD, we are beginning to see new forms of listening challenge the practice of paying for music. The music industry now has to redouble efforts to intercept and engage these listeners, so they can create revenue through upselling music, videos, concert tickets, and related merchandise."

Pennsylvania Attorney General Tom Corbett announced a settlement in a suit against the official website of teen pop star Miley Cyrus, ensuring that Pennsylvania members will have their subscriptions extended after they were unable to buy concert tickets as promised.

In September 2007, Corbett began receiving complaints from angry Cyrus fans, who paid nearly $30 for membership in the MileyWorld.com fan club, in part because of assurances that they could purchase concert tickets before they were made available to the public. The website failed to inform consumers, however, that the tickets were sold within the first 15 minutes of being offered to fan club members. More egregiously, the website allegedly continued offering "pre-sale" codes, which allowed access to the early ticket sales, after all the tickets were already sold out, rendering the codes useless.

Most of the complaining consumers were unable to get tickets to "Hannah Montana" concerts in late 2007 and early 2008. Hannah Montana is the star's alter ego and the character she plays on the Disney show of the same name.

The settlement, technically known as an Assurance of Voluntary Compliance (AVC), was reached with Interactive Media Marketing of Nashville, the company that runs the site. Under the agreement, Interactive Media Marketing is required to extend club membership by four months for 996 Pennsylvania consumers. The company is also required to clearly disclose terms and conditions of future pre-sale ticket programs on its website, assuring that the problem doesn't repeat itself.

A recently settled Tennessee class action against MileyWorld.com provided an additional two months of benefits to all affected fan club members. As a result, eligible Pennsylvania consumers will have their benefits extended for a total of six months.

The Tennessee suit, filed in November 2007, alleged that the website "deceptively lured thousands of individuals into purchasing memberships, based on the understanding that by joining, they would be able to purchase tickets before they were offered for sale to the general public." The suit was filed on behalf of Kerry Inman of New Jersey by the firms Robert Peirce & Associates of Pittsburgh and Glassman, Edwards, Wade & Wyatt of Memphis.

The settlement is a step forward for online consumers. Internet-based fan clubs and other organizations are harder to regulate and hold accountable, given the transient nature of many online players.

The Federal Trade Commission has charged seven related companies with violating federal law by falsely promising to remove negative information from consumers credit reports, even information that is accurate and current, and by charging an up-front fee and failing to provide written disclosures. The agency seeks to make them stop the violations and pay restitution to consumers.

According to the FTC, the defendants charge consumers up to $2,000, including $300 in advance, promising to improve credit scores by removing information such as late payments, charge-offs, collections, inquiries, delinquencies, judgments, and accounts discharged in bankruptcy.

Their promotions include an ad on a third-party Web site stating, 100% Guarantee to raise your credit score! Transcripts from telephone calls with consumers include statements such as, I cant tell you much because Ill be giving you my trade secrets, but I can definitely guarantee that well take care of anything thats derogatory on her credit report. Its all legal.

In addition to facing deceptive marketing charges under the FTC Act, the defendants are charged with violating the Credit Repair Organizations Act by misrepresenting their services; charging in advance for credit repair services; and failing to provide consumers with written contracts and other materials that contain written disclosures required by law or deviating from the required wording for the disclosures.

The defendants are

• United Credit Adjusters Inc., doing business as United Credit Adjustors and UCA;
• United Credit Adjustors Inc., d/b/a United Credit Adjusters and UCA;
• United Counseling Association Inc., d/b/a UCA;
• Bankruptcy Masters Corp.,
• National Bankruptcy Services Corp.,
• Federal Debt Solutions Ltd.,
• United Money Tree Inc., and
• Ahron E. Henoch, Ezra Rishty, and Gerald Serino, also known as Jerry Serino.

Time and effort

The FTC advises that only time, a conscious effort, and a personal debt repayment plan can improve your credit report. The first step is to learn what information is in your creditreport. If you find errors or mistakes, federal law gives you the right to have them corrected free of charge.

The Fair Credit Reporting Act requires each of the nationwide consumer reporting companies — Experian, TransUnion, and Equifax — to provide a free copy of your credit report, at your request, once every 12 months from AnnualCreditReport.com, a toll-free telephone number, or a mailing address.

Details are at www.ftc.gov/freereports. Reviewing your credit report regularly is an effective way to deter and detect identity theft.

New Jersey has entered into settlement agreements with seven telecommunications companies regarding their advertising and sale of pre-paid calling cards and concerns whether consumers were receiving the full amount of time for which they paid.

Getting less than what you paid for is illegal and these settlements ensure that the terms governing the use of calling cards are clearly and plainly disclosed to consumers, Attorney General Anne Milgram said. Weve told the industry that every second counts and these companies will account for every second on these cards.

The settlement terms mirror requirements contained in a new state law governing pre-paid calling cards that took effect last year.

These settlements, and the state law governing calling cards provide New Jersey consumers with protection against the deceptive sales practices which have plagued this industry for too long said David Szuchman, Consumer Affairs Director. Weve changed the business practices of this industry and the millions of consumers who buy calling cards each year will benefit.

The seven companies are:

• CVT Prepaid Solutions, Inc., 40 Cuttermill Road, Suite 500, Great Neck, New York 11201
• Dollar Phone Enterprises, Inc., 232 Broadway, Brooklyn, New York 11211
• Epana Networks, Inc., 1250 Broadway, 30th Floor, New York, New York 10001
• IDT Corp., 520 Broad Street, Newark, New Jersey 07102
• Locus Telecommunications, Inc., 111 Sylvan Avenue, Englewood Cliffs, New Jersey 07632
• STi PhoneCard, Inc., 30-50 Whitehouse Expressway, 4th Floor, Flushing, New York 11354
• Total Call International, Inc., 707 Wilshire Boulevard, 12th Floor, Los Angeles, CA 90017

The settlements conclude investigations into each companys business practices related to pre-paid calling cards. Each company has paid $5,000 to reimburse the Divisions costs. Other than CVT (which is no longer selling pre-paid calling calls), each company will pay $5,000 per year for the next three years to offset the cost of the Divisions continued monitoring for compliance.

As part of the settlements, each company also agreed to the following business practices:

• Comply with the Consumer Fraud Act and regulations, as well as any other state and/or federal laws, rules and regulations which are applicable to all future sales and marketing of pre-paid calling cards by or on behalf of the company;

• Ensure that all minutes or rates, or both, advertised on any pre-paid calling card, any point of sale material relating to that card or otherwise relating to any pre-paid calling service, shall be available to the consumer and there shall be no limitations on the period of time for which the advertised minutes, or rates, or both, will be available to the consumer unless those limitations are clearly and conspicuously disclosed in the same location on the card, advertising or point of sale material where the minutes or rates, or both are advertised;

• Ensure that all service minutes promoted, advertised or disclosed on any voice prompts provided at the time the consumer places a call with companys pre-paid calling cards shall be immediately available to the consumer on that call. The consumer shall not be charged for any busy signal or unanswered call;

• Not charge, apply or deduct from a pre-paid calling cards balance any fees, taxes, surcharges or other amounts for use of the card except: (1) the rate per minute for the particular destination called; (2) any permitted fees; and (3) any rate per minute, fee or charge for use of the card, or permitted for calls to or from international telephone numbers, international cellular and international wireless telephone numbers;

• Clearly and conspicuously disclose all permitted fees, as well as any other fees and surcharges, on its pre-paid calling cards and/or packaging materials and on its advertisements;

• Clearly and conspicuously disclose the companys policy of rounding off time for billing purposes on its pre-paid calling cards and packaging materials;

• Make available to consumers a toll-free customer service telephone number to address any post-order inquiries concerning all pre-paid calling cards, and clearly and conspicuously disclose to consumers the telephone number in all materials accompanying the pre-paid calling cards;

• Within thirty (30) days of settlement, make available through the toll-free customer service telephone number all information concerning any charges and deductions and its and its policy of rounding off time for billing purposes; and

• For a three-year period, maintain and preserve, and make available to the Division upon its request, specified documents and records.

March 16, 2009
California Attorney General Edmund G. Brown Jr. and Ventura District Attorney Gregory D. Totten today clamped down on two companies — Imergent, Inc. and Stores On Line — that "falsely promised" customers that they could earn full-time income by selling merchandise over the Internet.

"These companies falsely promised customers that they could get rich by selling merchandise over the Internet," Brown said. "In reality, many customers were left in deep debt, paying high up-front costs, and never earning a dime from their websites. This agreement allows these customers to get back some of their losses."

These two companies sell website-based "stores," in packages of three or six websites, at a cost of between $2,700 and $6,000. They market their products at seminars, which they advertise through postcards and other mailings often sent to senior citizens with limited Internet experience. They often offer seminar attendees a meal and a free gift such as an MP3 player.

The companies made statements such as:

"Are you ready to claim YOUR share of eBay's annual $3.2 Billion in revenue? By attending our FREE 90-minute eBay Entrepreneur Training' Conference you will learn how eBay PowerSellers run successful Internet businesses and how an elite few use additional strategies to boost revenues way beyond the average seller. Learn how nearly half-a-million people create full-time incomes using eBay!"

At the seminars, the companies make tantalizing claims regarding the massive profits that can be earned by consumers who purchase their product. Often, however, these profits are never realized and the customer is left in serious debt.

One victim used the inheritance left by her father to purchase six websites, in hopes that they would help supplement her income after retirement. The victim spent over $10,000 in set up costs. Of the six websites the victim bought, only one has been set up, and it continues to cost more than it brings in.

In August of 2006, the California Attorney General's Office and the Ventura County District Attorney settled a previous case against Imergent, Inc. and Stores On Line. That settlement barred the defendants from engaging in conduct that violated California's laws governing Seller Assisted Marketing Plans.

The Attorney General's office continued to monitor the companies' business practices and discovered that they were violating the 2006 agreement and were continuing to sell Seller Assisted Marketing Plans without registering with the state.

A new action was brought in 2007 to enforce the prior judgment, and to seek penalties, restitution, and an injunction. Today's agreement resolves the 2007 action.

The companies have agreed to the following terms:

• Pay $147,600 for full restitution to California consumers who have complained to the Attorney General's Office, the Ventura County District Attorney, or directly with StoresOnLine.
• Pay $202,400 for restitution to California consumers who submit complaints within 90 days.
• Cancel all outstanding financing contracts for consumers who have complained.
• StoresOnLine will also send a letter to all California purchasers who have bought since January 1, 2008, offering them a 15
• day period within which to cancel the transaction and receive a refund.
• Register with the state as a seller of Seller Assisted Marketing Plans
• Provide a 15
• day right to cancel for purchasers over the age of 65
• Disclose clearly the circumstances under which StoreOnLine will charge consumers a web site hosting fee, and provide consumers the opportunity to opt out of hosting websites with Imergent, Inc. and Stores On Line.
• Provide the Attorney General's Office with recordings of sales presentations and notify the Attorney General and Ventura County District Attorney's Office when sales presentations take place in California, so they can be monitored.

These types of schemes are promoted on TV infomercials, on the Internet, by direct mail, at trade shows, at invitation-only seminars, and through ads that may appear in the classified sections of newspapers or magazines. The ads promise big earnings, and promise that no selling or other experience is necessary.

If you believe you are a victim and have not yet made a complaint to the Attorney General's Office, you may be entitled to restitution if you submit a complaint within 90 days. You may file a complaint online at www.ag.ca.gov/consumers/general.php or call the Public Inquiry Unit at 1-800-952-5225.

March 16, 2009
Texas Attorney General Greg Abbott has resolved the states enforcement action against a direct mail marketing firm that operated an unlawful lead card scheme and targeted senior citizens.

The defendant, Prospect Pros LLC, which did business as American Seniors Alliance, used improper tactics to obtain senior citizens personal information. According to state investigators, the defendants packaged and sold the unlawfully obtained information to insurance companies and sales solicitation firms.

Under the agreed final judgment filed today, Prospect Pros LLC, Prospect Pros Inc. and owners William D. and Lynn Thompson, of Plano, are prohibited from sending misleading or untrue direct mail to senior citizens. In the future, the defendants must clearly disclose when mailers are sent on behalf of a particular insurance agent or other vendor and that these representatives may contact seniors who respond.

The newly required disclosures will ensure that senior citizens are aware of the direct mail solicitations true purpose. Prospect Pros has also agreed to pay $30,000 to reimburse the state for its attorneys fees.

In early 2006, the state took legal action against four lead card generation schemes, including Prospect Pros. All but one, Lead Concepts Inc. and its owner Christopher Weir, have been resolved.

Prospect Pros produced and mailed misleading direct mail solicitations that were intended to alarm senior citizens. The defendants mailers featured urgent messages in boldface type and appeared to come from government agencies and were intended to obtain the recipients personal information via postage-paid return cards.

Prospect Pros, for example, mailed a Medicare Update that purported to provide information about changes to the Medicare program and appeared to be sponsored by the federal government. By law, the lead card solicitation must state clearly that it is not affiliated with any governmental agency. Other mailers appeared to inform older Texans about estate and probate tax avoidance.

In other cases, mailers were designed to make elderly recipients think their government benefits might be in jeopardy and that returning the cards would preserve those benefits.

More Scam Alerts ...

Letting homeowners reduce their monthly mortgage payments can significantly lower the rate of defaults compared with loan modifications that do not reduce payments, according to a new study of recently modified loans conducted by the University of North Carolina at Chapel Hill's Center for Community Capital.

Further, combining lower payments with a write-down of the loan balances for loans that exceed the value of the home can prevent even more defaults.

"Our data clearly show that not all loan modifications are created equal," says Roberto Quercia, director of the center, part of UNC's College of Arts and Sciences. "By using such data to inform policy and practice, the industry can reduce foreclosures and increase stability in the economy."

The study, "Loan Modifications and Redefault Risk: An Examination of Short-Term Impact," analyzed 10,000 loans that were modified to prevent default. These modified loans came from a pool of more than 1.3 million mostly subprime and adjustable-rate mortgages made during the peak of the mortgage boom, from 2005-2006.

The results show that the type of modification matters. Six months after receiving a modification, homeowners who got a "traditional modification" — where past due amounts and fees are added to the loan and the payment rises — had a 60 percent higher rate of delinquency than those whose modification led to a reduced payment.

A full third of delinquent borrowers in the sample received a modification that increased their payments. "This is like throwing a brick to a drowning man," said Quercia.

Digging deeper to take into account the risk profile of each loan before it was modified, researchers confirmed these trends: homeowners who obtained a rate reduction were about 13 percent less likely to redefault than similar borrowers in similar situations who received a traditional modification. Those whose rate reduction was accompanied by a principal reduction were 19 percent less likely to redefault.

These findings come at a time when 12 percent of all loans — nearly 6 million mortgages — are past due or in foreclosure and 20 percent of all homes in America are "underwater," meaning their mortgaged property is worth less than the amount they owe on their loan.

Policymakers at present are encouraging servicers to reduce monthly payments as a percentage of household income by subsidizing lenders that reduce payments to 31 percent of household income. These plans rely more heavily on interest-rate reductions and term extensions than on the crucial tool of principal write-down.

"Our results support the Obama administration's efforts to seek more broad-based, systematic loan restructuring," Quercia says. "They also suggest the need to reduce the principal amounts on loans, especially loans in which the household owes more than the home's worth, to minimize the risk of redefault long-term."

President Barack Obama has outlined a major overhaul of the U.S. Food and Drug Administration, which has been the target of criticism amidst a series of high-profile foodborne illness outbreaks.

The president's plan would increase the number of food inspectors and update labs to better monitor the nation's food supply. He also toughened USDA rules, preventing sick cows from entering the food supply.

"Food safety is something I take seriously, not just as your president, but as a parent," Obama said in his weekly video address.

Obama has tapped former New York City Health commissioner Dr. Margaret Hamburg as FDA Commissioner. Dr. Joshua M. Sharfstein, Commissioner of Health for the City of Baltimore, was named as Principal Deputy Commissioner.

Obama also announced the creation of a new Food Safety Working Group. Obama said the Food Safety Working Group will be chaired by the Secretaries of Health and Human Services and the Department of Agriculture and it will coordinate with other agencies and senior officials to advise the President on improving coordination throughout the government, examining and upgrading food safety laws, and enforcing laws that will keep the American people safe.

Obama said the government is taking two additional steps to improve food safety. The Department of Agriculture will close a loophole to prevent diseased cows from entering the food supply, and the government will invest in the FDA to substantially increase the number of food inspectors and modernize food safety labs.

The White House says Hamburg is a nationally and internationally recognized leader in public health and medicine, and an authority on global health, public health systems, infectious disease, bioterrorism and emergency preparedness. She served as the Nuclear Threat Initiative's founding Vice President for the Biological Program. Before joining NTI, she was the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services.

Prior to this, she served for six years as the Commissioner of Health for the City of New York and as the Assistant Director of the National Institute of Allergy and Infectious Diseases of the National Institutes of Health.

Sharfstein serves as of the board of four affiliated nonprofit agencies. The White House says he has been recognized as a national leader for his efforts to protect children from unsafe jewelry and over-the-counter medication, and ensuring Americans with disabilities have access to prescription drugs. He is a member of the Board on Population Health and Public Health Practice of the Institute of Medicine.

The Consumer Federation of America said it welcomed the appointments, noting the "series of inexplicable foodborne illness outbreaks" over the past several years that the FDA has been unable to prevent or identify in a timely manner.

"We hope that these talented and caring individuals will bring a new era to the FDA," the group said in a statement.

Scam artists have — in the words California Attorney General Edmund G. Brown Jr. — "sunk to a new low" and are using the forged letterhead of major lenders to con worried consumers into paying thousands of dollars for non-existent loan modification services.

Brown's warning comes on the heels of the recent arrest of Anna Santos, 22, a key player in a loan modification scam using forged letterhead, on charges of money-laundering, conspiracy, and four-counts of grand theft.

Santos is accused of joining with members of the defunct First Gov loan modification ring in a separate criminal enterprise with a disturbing twist. They used forged mail and envelopes that appeared to be from victims' lenders.

Santos allegedly obtained a fictitious business permit through the City of Los Angeles for "Payment Processing Department" and opened several bank accounts and two post office boxes under that name. She and other members of the ring mailed flyers that appeared to be from victims' lenders or a government entity. The flyer used a large, bold header that read "Final Notice" and advised homeowners that they qualified for a special program to save their home from foreclosure.

After providing their mortgage information, homeowners received what appeared to be "confirmation" that the lender had been notified about the loan modification. Many victims also received loan modification documents that appeared to be from the victim's lender. The documents were — of course — forgeries.

The victims were informed they had been placed in a "probationary" program and their mortgage payments should be submitted to "Payment Processing Department" and sent to a given post office box address. None of the payments were credited to the victims' home loans.

Payments sent to the post office box were retrieved by Santos and deposited into the bank accounts she had opened. The money was then transferred to bank accounts held by other members of the ring.

Many victims paid over $6,000 to this loan modification scam.

Here's what homeowners can do to avoid becoming a victim:

• DON'T pay money to people who promise to work with your lender to modify your loan. It is unlawful for foreclosure consultants to collect money before (1) they give you a written contract describing the services they promise to provide and (2) they actually perform all the services described in the contract, such as negotiating new monthly payments or a new mortgage loan. However, an advance fee may be charged by an attorney, or by a real estate broker who has submitted the advance fee agreement to the Department of Real Estate, new window, for review.

• DO call your lender yourself. Your lender wants to hear from you, and will likely be much more willing to work directly with you than with a foreclosure consultant.

• DON'T transfer titled or sell your house to the foreclosure rescuer. Fraudulent foreclosure consultants often promise that if the homeowners transfer title, they may stay in the home as renters and buy their home back later. The foreclosure consultants claim that transfer is necessary so that someone with a better credit rating can obtain a new loan to prevent foreclosure. BEWARE! This is a common scheme so-called "rescuers" use to evict homeowners and steal all or most of the home's equity.

• DON'T pay your mortgage payments to someone other than your lender or loan servicer, even if he or she promises to pass the payment on. Fraudulent foreclosure consultants often keep the money for themselves.

• DON'T sign any documents without reading them first. Many homeowners think that they are signing documents for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership to the "rescuer."

• DON'T ignore letters from your lender. Consider contacting your lender yourself, many lenders are willing to work with homeowners who are behind on their payments.

• DO contact housing counselor approved by the U.S. Department of Housing and Urban Development (HUD), who may be able to help you for free. For a referral to a housing counselor near you, contact HUD at 1-800-569-4287 (TTY: 1-800-877-8339) or www.hud.gov.

Babies across America are sitting in bubbles tainted with cancer-causing chemicals and other toxins linked to serious health effects, according to a consumer group.

The Campaign for Safe Cosmetics says it hired an independent lab to test bubble bath, baby lotion and other products intended for babies and children — purchased in cities across the U.S. — for 1,4-dioxane and formaldehyde. Both chemicals are contaminants that do not appear on product labels, and both are carcinogenic; formaldehyde can also trigger rashes in those with sensitive skin.

The lab tested 48 kids' products for 1.4-dioxane and reportedly found it in 67 percent of the products. Of the 28 products tested for formaldehyde, 82 percent were said to be positive.

Seventeen products were contaminated with both 1.4-dioxane and formaldehyde. Many of the contaminated products are advertised as "gentle," "pure" or "naturally refreshing."

"We know that cosmetics can be made without hazardous ingredients and contaminants," the group said in a statement. "So what's going on? How is it legal for companies to sell baby and kids' skincare products that contain toxic chemicals used in embalming fluid, fumigants and automotive coolant? Worse yet, these chemicals aren't even on the label, so even the most ingredient-conscious parents wouldnt know whether the product is safe."

Consumer product companies, such as Johnson & Johnson, dismissed the report as alarmist and misleading.

"The FDA and other government agencies around the world consider these trace levels safe, and all our products meet or exceed the regulatory requirements in every country where they are sold," Johnson & Johnson said in a statement. "We are disappointed that the Campaign for Safe Cosmetics has inaccurately characterized the safety of our products, misrepresented the overwhelming consensus of scientists and government agencies that review the safety of ingredients, and unnecessarily alarmed parents."

The Campaign for Safe Cosmetics cites the National Academy of Sciences in reporting several factors that can contribute to children's special vulnerability to the harmful effects of chemicals:

• A child's chemical exposures are greater pound-for-pound than those of an adult.

• Children are less able than adults to detoxify and excrete chemicals.

• Children's developing organ systems are more vulnerable to damage from chemical exposures.

• Children have more years of future life in which to develop disease triggered by early exposure.

The chemicals were not disclosed on product labels because they're contaminants, not ingredients, and therefore are exempt from labeling laws.

Formaldehyde contaminates personal care products when common preservatives release formaldehyde over time in the container. Common ingredients likely to contaminate products with formaldehyde include quaternium-15, DMDM hydantoin, imidazolidinyl urea and diazolidinyl urea, the group said.

1.4-dioxane is a byproduct of a chemical processing technique called ethoxylation, in which cosmetic ingredients are processed with ethylene oxide. The group says manufacturers can easily remove the toxic byproducts, but are not required by law to do so.

The Campaign for Safe Cosmetics is a national coalition of nonprofit health and environmental organizations. It says its goal is to protect the health of consumers and workers by requiring the personal care products industry to phase out the use of chemicals linked to cancer, birth defects and other serious health concerns, and replace them with safer alternatives.

The Federal Trade Commission has charged an Atlanta telecom company with deceptive marketing by promising consumers they would receive their rebates within eight weeks of submitting properly completed forms. In reality, tens of thousands of consumers did not receive their rebates within the time promised, and some had to wait up to a year or more for their checks, the agency said.

According to the Commission's complaint, American Telecom Services, Inc. (ATS), offered numerous rebates to consumers as part of its business as a distributor of telephones and phone services. The company has sold both traditional and Internet phones bundled with communications services.

Offering mail-in rebates ranging in value from $5 to $50 for its "Pay 'N Talk" program, ATS used third-party fulfillment houses to process and pay rebate requests received from consumers who bought its products. The FTC contends that the company misrepresented that consumers who bought eligible ATS products would receive their rebate checks within eight weeks after the company received their properly completed rebate requests.

Since 2006, the Commission alleges that tens of thousands of consumers who filled out their rebate request forms correctly and submitted them on time experienced substantial delays in receiving their rebate checks, including, in some cases, delays of a year or more. According to the complaint, the delays stemmed from ATS' inability to pay its third-party rebate fulfillment houses, as well as its refusal to pay fulfillment houses with which it had disagreements over rebate-related issues.

The proposed consent order prohibits ATS from misrepresenting the time in which any rebate will be mailed and from failing to provide any rebate within the time it specifies — or within 30 days if no time is specified in the offer. It also prohibits ATS from misrepresenting any material terms of any rebate program, including the status of the rebate or reasons for delay in providing a rebate.

The order also contains record-keeping and reporting provisions designed to ensure ATS's compliance with its terms.

This is the year Congress may take action to ensure schools offer healthier food to their students.

Rep. Lynn Woolsey (D-CA) has introduced a bill that would get junk foods out of schools once and for all, a measure likely to be addressed when Congress reauthorizes the Child Nutrition Act, which expires this year.

Current federal law prohibits only the sale of narrowly defined "foods of minimal nutritional value" in the cafeteria during meal times. But the nutrition standards for those foods haven't been updated in 30 years, during which time obesity rates in children have tripled.

The Child Nutrition Promotion and School Lunch Protection Act would have the U.S. Department of Agriculture update the nutrition standards for foods sold alongside school meals in cafeterias, vending machines, school stores, and elsewhere. Those standards would apply throughout the school day, and everywhere on campus — important reforms in an era where "multi-purpose rooms" are replacing cafeterias and vending machines line hallways.

While the typical school lunch is reasonably balanced, according to the Center for Science in the Public Interest (CSPI), children may replace it with, or add to it, sugary sports drinks, pizza, French fries, Snickers bars, Cheetos, or other nutritionally poor choices from a la carte, vending, and other sources.

"Despite pockets of progress in some states and school systems, most schools make junk food readily available to children," said CSPI nutrition policy director Margo G. Wootan. "But junk food in schools helps fuel an epidemic of obesity and diabetes in children. And, it undercuts the considerable federal investment we make in the healthy school lunch program."

Current nutrition standards keep some junk food out of the schools but let other junk food in through the back door. Today, doughnuts are allowed but lollipops are not. Cookies are fine, but breath mints are banned.

"It undermines the federal nutrition standards for meals if students spend their money on unhealthy options, said Woolsey. "It also undermines the role of parents who give lunch money to their children expecting them to eat something wholesome and nutritious and their money is spent on unhealthy options instead. That s why I introduced this legislation, and I look forward to working with my colleagues to get it signed into law."

USDA's definition of foods of minimal nutritional value hasn't changed since 1979. The Carter Administration's definition was focused on making sure foods sold in schools had five percent or more of the recommended daily intake levels of protein, vitamin C, calcium, and other nutrients.

However, that definition included no maximum amounts for calories, saturated fat, or sodium — all of which children now consume too much of. As a result, innocuous products like seltzer water or breath mints are forbidden, while ice cream bars and doughnuts are perfectly acceptable.

"Look, you can see how officials 30 years ago might have been concerned about whether our children were getting enough riboflavin or niacin," Wootan said. "Today, we need to reorient food policies toward preventing obesity, diabetes, and other diet-related diseases that might result in this generation of children living shorter lives than their parents."

"Many of the foods being sold to our students on school grounds undermine federal investment in healthy school meals, nutrition education, and the lifelong lessons that parents teach their children about healthy eating habits," said National PTA President Jan Harp Domene. "Families and local leaders have successfully advocated to remove unhealthy alternatives from some schools, but it is time for national leadership on this issue."

Besides CSPI and the National PTA, the legislation is backed by a coalition of medical, health, and children s advocacy groups including the American Dental Association, American Diabetes Association, American Dietetic Association, American Heart Association, Partnership for Prevention, Save the Children, and School Nutrition Association. The bill has 88 cosponsors.

March 12, 2009
The state of New Jersey has revoked the certificates of registration for two funeral homes and a cremation service in Newark that were allegedly involved in illegal body parts harvesting. The action shut down all three businesses.

The Board of Mortuary Science also found that Stephen K. Finley, who with his wife owns the Berardinelli Forest Hill Memorial Home, Funeraria Santa Cruz and Cremation at a Low Cost, acted as a funeral director in violation of a January, 2009 order that revoked his license.

The revocation of the registrations follows the temporary closures of the funeral homes and cremation service ordered by the Board as an interim action earlier this month.

"These businesses are closed and will not re-open for the safety of the public," New Jersey Attorney General Anne Milgram said. "Despite his license revocation, Finley was found to have functioned as a funeral director and interacted with the public, endangering those who came to the businesses."

Finley was allowed to retain ownership of the funeral homes and cremation service but had to employ licensed funeral directors to arrange for and preside over funerals, under terms of the January order with the Board. Undercover investigators from the Division's Enforcement Bureau went to the funeral homes on two separate occasions and made funeral arrangements directly with Finley.

"Finley demonstrated that he cannot be trusted to keep his word by his violating the legal order of the licensing board. My hope is that he never again is in a position where he can harm the public," said David Szuchman, New Jersey's Consumer Affairs Director.

The Board in January ordered the revocation of Finley's funeral director's license after an investigation by the Division's Enforcement Bureau, with the assistance of the Kings County District Attorney's Office and the Food and Drug Administration, uncovered that Finley was involved in a scheme to harvest tissue from the dead without obtaining the proper consent. This tissue was then allegedly sold and used in surgical procedures.

The leader of the alleged scheme, Michael Mastromarino, pleaded guilty in New York to enterprise corruption, body stealing, and reckless endangerment.

More Scam Alerts ...

March 11, 2009

Lobel Financial, a California-based sub-prime auto lender, has been forced to stop its illegal campaign of harassment and intimidation against borrowers behind in their bills.

"This company charged its customers exorbitant interest rates for car loans and then waged an illegal campaign of harassment and intimidation when they couldn' t pay up," said Attorney General Edmund G. Brown Jr. "Now Lobel must stop its abusive tactics and comply with the law."

Lobel Financial, which makes loans to customers throughout the state, provides financing to people with poor credit who purchase vehicles through used-car dealerships. The typical interest rate of their loans is between 21-23 percent. Lobel performed its own debt collection efforts when consumers failed to make the required payments.

In 2007, the California Attorney General's Office initiated an investigation into Lobel s debt collection practices. The investigation found that Lobel frequently violated California's Fair Debt Collection Act by:

• Calling its customers repeatedly and allowing the phone to ring continuously;

• Calling a customer's employer and family members; and

• Using a false name when calling.

Additionally, Brown says the company used more sophisticated pre-texting tactics to obtain confidential information of their customers. For instance, Lobel allegedly deceived ATT Wireless into providing confidential telecommunications records of at least 190 California ATT customers.

Lobel is also accused of using a calling card scam to con consumers into providing their calling information. It had a third-party vendor send the customer a free phone card; the company would then obtain information about the calls made by the customer using the calling card.

Hundreds of California consumers across California were victimized by Lobel's constant harassment and illegal debt collection activities, Brown says. Lobel Financial will pay $150,000 in civil penalties and $100,000 to the state for attorneys' fees and costs.

The U.S. Food and Drug Administration is warning consumers not to eat Queso Fresco Fresh Cheese Mexican style soft cheese or any Queso Cotija Molido Mexican style grated cheese manufactured and distributed by Peregrina Cheese Corp. of New York City.

The agency says these products could be contaminated with Listeria monocytogenes, an organism which can cause serious and sometimes fatal infections in pregnant women, young children, frail or elderly people, and others with weakened immune systems.

Although healthy individuals may suffer only short-term symptoms such as high fever, severe headache, stiffness, nausea, abdominal pain and diarrhea, Listeria monocytogenes infection can cause miscarriages and stillbirths among pregnant women. Consumers who may have recently consumed these products and have these symptoms should contact their health care providers, the FDA advises.

No illnesses are known to be associated with the products at this time. The company is recalling certain products based on sampling and analysis by the FDA that detected Listeria monocytogenesin some of the samples.

The company is recalling two lots of its Queso Fresco Fresh Cheese Mexican style soft cheese and one lot of its Queso Cotija Molido Mexican style grated cheese.

The Queso Fresco Fresh Cheese comes in a 14-ounce foil wrapped packages marked with lot number 4469 or 4477 affixed to each package on a white sticker and bearing UPC number 8 17424 00024 6 and Plant # 36-8431.

The Queso Cotija Molido Cheese comes in 15-ounce clear plastic bags that are marked with UPC number 8 17424 00027 7 and Plant # 36-1388, but do not contain a lot number or production date.

Both products were distributed to retail stores in the New York City boroughs of Brooklyn, Queens, Bronx and Manhattan, and two towns in Pennsylvania (Scranton and Hazelton) in early February. The company has contacted all its customers and instructed them to destroy all affected products in their inventory.

Consumers who purchased any of the products are urged to discard them immediately. Although the FDA detected Listeria monocytogenes in only one production date of Peregrina Cheese Corporation's Queso Cotija Molido Cheese, the agency is urging consumers to discard all of these products because they do not contain a lot code or production day code to allow consumers to distinguish between a product that is of concern and a product that is not of concern.

Job seekers will register with employment agencies, check employment ads, mail out unsolicited resumes, network, post resumes on job search sites and search Craigslist.

In fact, the UK Association for Payment Clearing Services which tracks the prevalence of fake job ads said that fake ads are up 345 percent over the past three years. Unfortunately identity thieves are taking advantage of these uncertain economic times to scam job seekers and gather personal identifying information.

The Identity Theft Resource Center offers these tips:

• Protect your Social Security Number by limiting how many people see it. Never put your SSN on a resume. Let a company ask for it when they consider you a serious applicant. To minimize your risk, you also may want to not list your home address and just put your city and state on the resume.

• Consider opening a separate email account for your job search and keeping your primary email address private. Placing your email address on a resume could open the door to spam and phishing, account verification, and other email scams. (The recent Monster.com breach exposed resumes and email addresses. If you had placed your Social Security number or home email address on your resume, you could have made yourself a target.)

• Check out a company you found on a website carefully before giving them your information, for example Craigs List. Anyone can create a website, but it doesnt mean that they are a real company. You can find information on a company through the Better Business Bureau or the State Attorney General where the company is located. You can also Google the business to find out more about them. Most reputable companies will have a significant presence on the Internet, not just a few mentions.

• Avoid any website that requires you to pre-register with your SSN, home address or drivers license number. Also, you should not be required to prepay to view job listings. Both these requirements are strong indicators of a scam.

• Update your computer security prior to emailing resumes and receiving email correspondence. Making sure your computer security is currently updated against viruses, Trojans, and other types of computer malware can help to protect you from any intrusion in an attachment you might receive.

• Make sure the person who contacted you actually works at the listed company and is not someone who has posted a job pretending to be part of a company. Does the URL address include the name of the company? If not, who actually sent it? Call the company involved, and ask for the Human Resources Department. Some companies recommend not responding via email to any person asking for more information, but rather to call the company directly. Rarely does a company hire someone sight unseen.

• Be wary of some common job scams. Avoid any company, especially a foreign company that wants to hire you as a payment representative or accounts receivable clerk. This scam indicates that you get to keep a percentage of all checks or money orders you place in a bank account for them. Do not open a bank account for a company. You will be the responsible party should any money laundering occur, or if checks bounce. This is called a money mule scam.

Another scam is to notify you that you are one of the finalists for a job, and they need your Social Security number to do a background check. If you have not had a face-to-face interview with the company, you should be very skeptical. No one gets a job based on a resume alone.

Finally, watch out for the work-at home scams, especially those that ask you to forward packages you receive to a third party. That package may contain stolen goods or illegal drugs. There is rarely need to have a private party as a freight forwarder.

The safest ways to job search are to use local want ads, visit the unemployment office, use temp employment services, tell friends and family about your search, and network via professional groups and business acquaintances. When contacting a local company you can meet them, see the facilities, and ask acquaintances in that industry about their reputation. Consider not contacting foreign companies, especially those from Nigeria, Russia and third world countries.

Should you decide to use the Internet, ITRC strongly recommends that you read the safety tips on job seeking websites and report any suspicious posting to the website concerned.

A tortilla company linked to several outbreaks of gastrointestinal illness in school children is now shut down under action taken by the Food and Drug Administration (FDA).

FDA officials entered into a consent agreement Friday with the Chicago Del Rey Tortilleria Inc., its president, and two general managers that prevents the company from making or distributing soft-shell flour tortillas until it corrects multiple sanitation violations.

The FDA said its enforcement action comes on the heels of the companys extensive history of violating the agency's Good Manufacturing Practice (cGMP) requirements for food.

The FDAs complaint alleges the companys manufacturing operations do not adequately protect consumers against the risk of contamination.

We cannot allow a company to produce potentially contaminated products because of failing to have adequate procedures in place, Michael Chappell, acting associate commissioner for regulatory affairs at FDA, said in a written statement. This enforcement action shows the FDA will take the appropriate measures deemed necessary under the Federal Food, Drug and Cosmetic Act to protect the public's health.

When FDA officials inspected the companys Illinois plant, they discovered cleaning chemicals stored improperly, unsuitable containers used for food processing, and other unsanitary conditions.

The FDAs complaint stated flour tortillas made by the company were associated with several outbreaks of gastrointestinal illness in school children, which triggered a recall of the products.

Under the FDAs action, the company must hire sanitation and food processing experts to develop quality control measures. These experts will also inspect and certify the company complies with FDA regulations and meets other consent decree requirements.

The company cannot start making and distributing tortillas until the FDA inspects the facility and determines it is in compliance with the consent decree and other federal food and safety regulations. If the company fails to comply with the consent decree, the FDA could order it to stop making and distributing food, recall its products, or to take other corrective actions. The company could also face fines of $6,000 per day for being non-compliant.

Consumers who have food safety questions about these or other products can call the FDA's toll-free Food Safety Hotline at (888) SAFEFOOD. They can also report any problems to the www.fda.gov/opacom/backgrounders/complain.html FDAs consumer complaint coordinator in their area.

Six major producers of plastic baby bottles have jointly agreed to stop using bisphenol-A (BPA), an industrial chemical linked to adverse health effects in scientific studies.

The six firms are Avent America, Inc; Disney First Years; Dr. Brown; Evenflo Co.; Gerber; and Playtex Products, Inc. All said they will no longer use polycarbonate plastic bottles for baby products in the U.S.

Polycarbonate is a hard but shatter-proof plastic made with bisphenol A. The chemical is found in a wide variety of products, including in food and drink containers. The companies were prodded by the attorneys general from Connecticut, Delaware and New Jersey, who wrote the companies last year expressing their concern about potential harm to infants.

"This prompt positive response sends a profoundly significant message that baby bottle manufacturers respect the science showing BPA health dangers — and will do the right thing," said Connecticut Attorney General Richard Blumenthal. "Hopefully other industries will heed our plea, and a broader legislative ban will be approved this session.

Blumenthal said he believes Congress should ban BPA from certain products for children.

Environmental groups have argued that growing scientific evidence shows that even small amounts of BPA damages reproductive, neurological and immune systems. They say experiments have linked even low levels of BPA to serious health problems, including prostate and breast cancer, early onset of puberty, obesity and diabetes.

Wal-Mart announced last April that it would stop selling baby bottles containing BPA early this year. But as recently as last October, the U.S. Food and Drug Administration (FDA) took the position than minimal amounts of BPA did not cause human harm.

That was a reiteration of the agency's position expressed before a Senate committee last May, when FDA Associate Commissioner for Science Norris Alderson said the agency is relying on a large body of scientific evidence that shows the chemical can safely be used in plastics that hold food and beverages.

Critics charge the evidence has mostly been supplied by the industry, which wants to keep on using BPA. They say there are plenty of studies that have, at the very least, raised questions about potential health problems in laboratory animals exposed to BPA.

BPA, a synthetic sex hormone that mimics estrogen, is used to make hard polycarbonate plastic. Ninety-five percent of all baby bottles on the market are made with BP, according to the study.

Unless you have been hiding under a rock, you've probably seen advertisements on how the government is giving away grants for almost any need. Need to pay medical bills or fix your busted old clunker of a car? No worries, there are free grants for that — at least according to the hundreds of Web sites currently populating the Web.

"Obama's New Free Grants: Obama Is Giving Out Free Grants To Help Those in Need," reads one ad. "Government Grants Exposed: We've Tested 47 Grant Websites To Tell You Which Ones Really Pay!" exclaims another.

Although government grant scams have been around almost as long as the government itself, the majority of the sites being advertised today didn't exist before the November 2008 election.

According to the grant Web sites, Washington and President Obama are not only bailing out Wall Street, they will also gladly bail out you and everyone on your street — all in the form of free government grants.

Earn Cash From Grants!

One of the hundreds of sites we visited was earncashfromgrants.com. According to their testimonials, people who have purchased the $1.00 Rapid Grants Solutions Kit have received grants for just about everything — even to fix their cars.

But those in the know say it just ain't so.

"I have never seen an individual get a government grant to repair their car," said Gail Vertz, CEO of the American Association of Grant Professionals. "I've been in the grant business for 22 years and looking at these Web sites is frightening. It looks like they are targeting individuals who are in financial distress," Vertz said.

On one of the sites, we gained access to the "members area" where the grant "secrets" were supposedly located. There we found three electronic books (e-books) on the subject of government grants.

In one e-book, The Truth Behind Government Grants Exposed, the author (whoever he or it might be) admits that grants are not easy to get. The e-book goes so far as to say, "Now, I know what you must be thinking, but don't be discouraged because understanding that you do not qualify for the majority of Federal and Private Grants is the first step to actually getting a grant."

That's a strange statement considering their Web site says that "you may qualify for a piece of the millions and millions of dollars awarded each year by private and government grant agencies to regular people like you."

But never mind such niggling details. The book goes on to suggest that you might not even need a grant. Instead, maybe you just need a loan, or an entitlement such as Social Security, Medicare or Workers Compensation.

We wondered just who might know the U.S. government so intimately that it had access to such closely-guarded get-a-grant secrets. We discovered that earncashfromgrants is the Internet property of — what else? — a Canadian company called 1021018 Alberta Ltd., an outfit that has already been sued by Microsoft and Symantec for software piracy.

Now, one must wonder why a Web site would go to so much trouble just to make a dollar. In reality, losing a dollar might be the least of your troubles if you fell for this pitch.

Once you read the terms and conditions of any of the "grant" sites, you'll see that purchasing their "product" will also enroll you in various membership programs, typically ranging in price from $30.00 to $70.00 per month. Most will also enroll you in third-party programs and your credit card will be hit every month until you cancel, which isn't easy to do when you don't know where the charge is coming from.

You'll also probably see some type of trial period. However, many of the sites we checked out started the trial the day that you place the order. Most sites said they gave a 7-day trial but that it could take 5 to 10 days to receive the product. Considering the trial started the day you ordered, the trial would be over by the time you receive the product, therefore your credit card would be charged for all the member fees.

Bogus "review" sites

Just as we saw with the "run your car on water" scheme, the government grant sites typically will flood the Internet with advertising for sites that look like legitimate "review" Web sites.

The majority of these sites are affiliates of the main "grant" companies. The affiliate will create fake reviews and testimonials, along with bogus pictures of supposedly thrilled customers, and then when you click to order you will be taken to the main Web site.

The affiliates make money if you order, and some online forums even teach affiliates how to make a good "review" site, complete with asking a neighbor to write a testimonial.

In an effort to make the sites look more legit, most will use President Obama's picture along with news logos from CBS, NBC, Fox News, etc.

Knowing full well that their product had not been featured by any news station, we asked one telemarketer why their Web site said, "As seen on CNN." She told us that it was because they had bought an advertisement on the CNN Web site, hence the reason they bragged about being seen on CNN.

Many consumers have questioned why legitimate sites allow such advertising.

"The government grants ads are blatantly deceptive, such as the one of President Obama holding up a check," said James, owner of the blog WafflesAtNoon.com. James has been tracking these bogus sites and has a huge list on his blog, but having been in advertising for 20 years, he also questions why advertising companies accept these ads in the first place.

"When I got into advertising in 1989, things were far different. I remember having conference calls to discuss a single questionable word in an ad. Before the internet, advertisers had to jump through hoops to get their ads approved," James said. "Now it's like Mad Max or the Old West. We can't trust advertising even on the most reputable Web sites because they sell advertising to third parties who then re-sell it."

In most cases, a Web site that displays third-party ads can't predict what ads will be shown. And even if a site can block each individual ad, there are numerous new sites created each day that would need to be found and blocked — a virtually impossible task for most sites.

"Consumers need to understand that advertising is not the same thing as news or entertainment. It's paid propaganda and its only purpose is to get you to do something -- buy something, vote for somebody, send somebody money," said the president of one well-known site who insisted on anonymity because he said he was so embarrassed at the grant ads that pepper his site.

"The fact that an ad appears on Oprah Winfrey's show, or in the New York Times or on ConsumerAffairs.com doesn't mean that the product, service or candidate being advertised is any better than similar things advertised somewhere else. The people who write news and produce shows have nothing to do with the ads, and vice versa."

"There's nothing wrong with advertising but consumers have to recognize it for what it is," the Web site president said.

Feds take note

Some of the grant ads have begun to garner the attention of the Federal Trade Commission.

"We care enormously about protecting consumers," said Lois Greisman, Associate Director of the Division of Marketing Practices at the Federal Trade Commission. "We sue bad spammers, bad telemarketers, and bad get-rich-quick schemes," Greisman said. "Even if a company is in Canada, we can sue them here."

Greisman said she wants to hear from consumers about these grant companies, especially if the consumer has purchased anything or had their credit card charged without their knowledge.

"They need to file a complaint at FTC.gov. Our complaint database is available to more than 1600 law enforcement entities, both in the U.S. and Canada."

Research pays off

The fake grant sites want you to believe that you, as an individual, can get a federal government grant, but the fairy tale they tell is just that — a fairy tale. Grants are almost never awarded to individuals.

"The fact is, 98 percent of federal grants are awarded to schools, local governments, colleges and universities, and non-profit organizations," said Vertz of the American Association of Grant Professionals.

Organizations can research grant opportunities by hiring a grant writer. A grant writer will locate potential funding sources such as the feds, the states and foundations. They also develop relationships with funders. Expect to pay $50.00 to $200.00 per hour for their service.

The government also has a Web site dedicated to the subject of grants at http://www.grants.gov Grants.gov.

Ads are ads

Oh, and ignore the ads that surround this article.

March 5, 2009
Recaro is recalling about 5,400 Signo child restraint systems. A defective spring could allow the central front adjuster strap to slip, keeping the harness from being securely tightened.

In the event of a crash, a child might not be properly secured and could be injured or killed.

Recaro will notify ownes and replace any defective system free of cahrge. Owners can contact Recaro at 1-888-473-2290.

Consumers may contact the National Highway Traffic Safety Administration (NHTSA) at 1-888-327-4236 (TTY: 1-800-424-9153) or at www.safercar.gov.

Analysts said this is having an adverse effect on consumer victims who are significantly changing their financial transaction behaviors.

Gartner surveyed nearly 5,000 U.S. adults in September 2008 to gauge the impact of identity theft, and the leading types of financial fraud. Payment card fraud — that is, credit, debit and ATM card fraud — was the method most actively used by crooks to steal money, claiming 36 percent more victims in 2008 than other types of fraud.

New-account fraud, in which a thief steals identity information to open a new account, occurs less frequently than payment card fraud, although Gartner estimates that up to half of all new-account frauds involve synthetic identities, and therefore many cases go unreported.

"When compared with the average consumer, nearly twice as many people who lost money to fraud in 2008 changed their shopping, payment and e-commerce behavior," said Avivah Litan, vice president and distinguished analyst at Gartner. "Furthermore, fraud victims are also more cautious about which brick-and-mortar stores they shop at and how they pay for goods when they get there, demonstrating more awareness of the risk of data breaches."

Litan said victims of electronic checking and/or savings account transfer fraud in 2008 were nearly five times more likely to change banks because of security concerns, when compared with the average customer. About twice as many of the victims curtailed online money transfers and bill payment used in online banking.

Conviction rates for these crimes are quite low. Less than one-third of the victims reported the crimes to law enforcement, and about 5 percent reported them to the Federal Trade Commission. The chances of a criminal getting arrested and convicted for identity-theft-related fraud are much less than half of 1 percent.

Gartner found that financial losses were highest in the case of new-account, credit card and brokerage fraud, with average losses per incident totaling $1,097, $929 and $900, respectively.

However, victims of brokerage, credit card and debit/ATM card account fraud find it easiest to recover their losses, receiving an average of 100 percent, 86 percent, and 77 percent of the funds stolen, respectively.

In contrast, victims of new-account fraud, check forgery, and checking or savings account fund transfer fraud recovered the lowest percentage of stolen funds, or 42 percent, 48 percent and 54 percent, respectively.

New-account fraud is also the most difficult from which to recover, with 35 percent of victims suffering further from a damaged credit rating, which can take years to restore.

"Given the impact of financial breaches on the consumer, it is not surprising that many are now changing their behaviors," said Litan. "In percentage terms, the behaviors most influenced by security concerns include online shopping and payments. Online banking also takes a big hit, with 20 percent of worried consumers in our survey saying that their online banking behavior has been affected. This percentage doubles among fraud victims." Gartner found that PayPal has received a big boost from those who change their online payment behavior because of security concerns.

While a relatively modest 6 percent of all consumers say they changed banks as a result of security concerns; that number rises to 28 percent among victims of checking/savings account transfer fraud. This compares with 5 percent overall who switched because of concerns regarding the financial health of their banks and 21 percent overall who changed because of excessive fees.

Litan advised financial institutions that have implemented strong security controls and protections to make this fact visible to their customers and engage customers in jointly participating in security solutions.

"Most consumers will say that security is as important to them as the financial health of the institution, and this rises significantly in importance among customers who have been victims of a financial account takeover," she said. "Financial institutions that take security seriously will be rewarded with greater customer retention, which is a smart move when you consider that the cost of acquiring new customers is typically much higher than the cost of retaining existing ones."

March 4, 2009
Illinois Attorney General Lisa Madigan has sued a Frankfort, Ill., advertising company for allegedly airing deceptive commercials on Chicago-area media outlets that falsely claim consumers wouldnt pay sales tax on automobile purchases as part of President Barack Obamas stimulus package.

In these difficult economic times when consumers are doing all they can to stay afloat and manage their money wisely, these deceptive commercials are especially troubling, Madigan said.

Madigans complaint alleges that Prime Market Targeting, Inc., which creates advertising to generate sales leads for local auto dealers, is airing radio commercials for a supposed government-sanctioned program (found at www.deductyoursalestax.com or by calling 1-800-452-1498).

The ads imply that consumers will not have to pay sales tax and will receive an additional tax credit on automobile purchases as part of the new federal stimulus program. In actuality, the new federal law only allows for a sales tax deduction not a tax credit, and consumers are still required to pay the automobile sales tax.

The ad claims: Attention Illinois car buyers, save your sales tax and put up to $3,500 in your pocket. The federal stimulus package has passed. Buy a car today and take advantage of this sales tax relief. This is a government sanctioned program. Eliminate the sales tax.

Madigans lawsuit alleges that the defendants ads violate a 2005 settlement agreement reached with her Consumer Fraud Bureau that prohibited deceptive advertising.

The Attorney Generals complaint further alleges that the defendants current activity violates the Consumer Fraud and Deceptive Business Practices Act, the Uniform Deceptive Trade Practices Act and the Illinois Administrative Rules on Motor Vehicle Advertising.

The Attorney Generals lawsuit asks the court to permanently enjoin Prime Market Targeting from selling automobile-related advertising in Illinois. The suit also seeks restitution for consumers and asks the court to assess civil penalties of $50,000 per violation, and an additional $50,000 statutory civil penalty.

As the current economic calamity unfolds, lots of fingers in Washington are pointing at Wall Streets excesses as the cause. But a new study of regulatory and legislative actions suggests the government should look in the mirror.

The financial sector invested more than $5 billion in political "influence purchasing" in Washington over the past decade, with as many as 3,000 lobbyists winning deregulatory decisions that led to the current financial collapse, according to a 231-page report issued by Essential Information and the Consumer Education Foundation.

The report found that Democrats and Republicans split corporate donations almost evenly, with Republicans taking 55 percent of the donations between 1998 and 2008, and Democrats taking 45 percent. Democrats took just over half of the donations in the 2008 cycle.

The organizations describe themselves as nonpartisan, nonprofit advocacy groups which push for stronger consumer protection laws and to curb "excessive corporate power."

The report, "Sold Out: How Wall Street and Washington Betrayed America," shows that, from 1998-2008, the financial sector made $1.7 billion in political contributions and spent another $3.4 billion on lobbyists.

Revolving doors

Nearly 3,000 officially registered federal lobbyists worked for the industry in 2007 alone. Surveying 20 leading financial firms, the report finds 142 of the lobbyists they employed from 1998-2008 were previously high-ranking government officials.

The report documents a dozen distinct deregulatory moves that, together, made a financial meltdown all but certain.

These include prohibitions on regulating financial derivatives; the repeal of regulatory barriers between commercial banks and investment banks; a voluntary regulation scheme for big investment banks; and federal refusal to act to stop predatory subprime lending.

"The report details, step-by-step, how Washington systematically sold out to Wall Street," said Harvey Rosenfield, president of the Consumer Education Foundation. "Depression-era programs that would have prevented the financial meltdown that began last year were dismantled, and the warnings of those who foresaw disaster were drowned in an ocean of political money."

"Americans were betrayed, and we are paying a high price -- trillions of dollars -- for that betrayal," he said.

Legal bribes

"Congress and the Executive Branch," says Robert Weissman of Essential Information and the lead author of the report, "responded to the legal bribes from the financial sector, rolling back common-sense standards, barring honest regulators from issuing rules to address emerging problems and trashing enforcement efforts."

"The progressive erosion of regulatory restraining walls led to a flood of bad loans, and a tsunami of bad bets based on those bad loans. Now, there is wreckage across the financial landscape," Weissman said.

The full report is available online. Guest commentator Ivan Fail offers a no-holds-barred discussion of the report at DCInsider.com.

Home owners who are struggling to make mortgage payments may now begin applying for relief, under the Obama Administration's $75 billion foreclosure relief plan. The plan was unveiled in February.

Until now homeowners who owe more than their homes are worth have been unable to refinance their loans. With their low "teaser" rates setting to a much higher level, the situation has pushed many into foreclosure.

The Treasury Department has spelled out the eligibility guidelines for its mortgage modification program. It offers relief for borrowers who are delinquent in their payments or at risk of falling behind.

Help is available to people who live in single-family homes and have mortgages up to $729,750 taken out before the beginning of this year. There are higher limits for owner-occupied condos.

If homeowners can stay current on their modified loans, they could have the amount of their loan reduced by up to $5,000.

How do you find out if you qualify? Government officials say the first step should be to contact the company that services your mortgage. By looking at the monthly statement or coupon, you should find a contact telephone number.

You need to find out who owns your mortgage, and that might not be easy, since mortgages have been sliced up and bundled into securities.

To qualify for a refinanced loan you can owe up to five percent more than your home is now worth. That leaves a lot of homeowners out in the cold, especially those in Arizona, California, Florida and Nevada, where home values have fallen the most.

The goal of the program is to help consumers get their monthly payments down to no more than 38 percent of their after-tax income. This may be accomplished by lengthening the term of the loan, reducing the interest rate, or both. After than, the government and the lender pay the cost of lowering the principal down to 31 percent of after-tax income.

President Obama has officially named Julius Genachowski to be chairman of the Federal Communications Commission (FCC), a move that cheered supporters of Net neutrality.

"He will bring to the job diverse and unparalleled experience in communications and technology, with two decades of accomplishment in the private sector and public service," Obama said in making the announcement.

Genachowski is a lawyer who has spent time in politics as well as in the private sector, as an Internet executive. He was rumored to be in line for the job, since he played a key role in Obama's Internet strategies during the campaign and had been chief counsel to former FCC Chairman Reed Hundt.

Industry analysts predict Genachowski will advance the Democratic Party's support for more Net neutrality regulations, which are opposed by much of the telecommunications industry. To date, the FCC has come down on the side of Net neutrality, ruling last summer that Comcasts limiting of BitTorrent was illegal.

Genachowski is a co-founder of LaunchBox Digital and Rock Creek Ventures. He worked as an executive at IAC/InterActiveCorp, with owns several Web sites.

New York Attorney General Andrew M. Cuomo has reached a $2.63 million agreement with AT&T Mobility over a misleading and deceptive sales promotion involving rebate offers that were fulfilled with onerous and condition-laden rebate cards.

The Attorney Generals agreement requires AT&T to provide more than $2.63 million to consumers who received rebate cards from AT&T in fulfillment of its rebate offers on cellular phones and other wireless equipment and services.

AT&T, as one of this countrys leading companies, has a responsibility to be forthright with its clients and not rely on deceptive practices to increase profits, said Cuomo.

Since 2005, AT&T Mobility, LLC, headquartered in Atlanta, Georgia, has been fulfilling its rebate offers with rebate cards instead of checks. These cards were portrayed as debit cards in the amount of the rebate offer. However, the cards were not redeemable for cash, could not be used for cash withdrawals and expired 120 days from issuance.

The Attorney Generals Office found that AT&T failed to adequately disclose the cards conditions and limitations in its marketing materials for the promotion. AT&T also deceived consumers with offers for free products when, in fact, consumers had to pay the full price up-front and then submit a mail-in rebate form from which they were sent the aforementioned rebate card with its accompanying limitations.

In addition to the $2.63 million to consumers, the settlement requires AT&T to clearly disclose all the terms, conditions and limitations of any rebate offers and cease referring to the cards used to fulfill the rebate offers as debit cards in its advertising unless the cards are redeemable for cash.

The agreement also requires AT&T to clearly disclose any conditions in marketing and advertising materials.

Consumers potentially eligible to receive funds will be notified by AT&T. Qualifying consumers will receive new rebate cards that are fully protected under the terms of the New York State Gift Card Law and which may be used both to purchase products and services anywhere that VISA cards are accepted, and to pay consumers AT&T wireless bills.

The Federal Trade Commission is warning consumers its all a scam, which manifests itself in different forms.

Right now, on the Web and in e-mail, scammers are telling consumers they can help them qualify for a payment from the economic stimulus package. All they have to do is provide a little information or a small payment.

E-mail messages may ask for bank account information so that the operators can deposit consumers' share of the stimulus directly into their bank account. Instead, the scammers drain consumers' accounts of money and disappear.

A bogus e-mail may appear to be from government agencies and ask for information to "verify" that you qualify for a payment. The scammers use that information to commit identity theft. Some e-mail scams don't ask for information, but provide links to find out how to qualify for funds. By clicking on the links, consumers have downloaded malicious software or spyware that can be used to make them a victim of identity theft.

"Web sites may advertise that they can help you get money from the stimulus fund. Many use deceptive names or images of President Obama and Vice-President Biden to suggest they are legitimate. They're not," said Eileen Harrington, Acting Director of the FTC's Bureau of Consumer Protection. "Don't fall for it. If you do, you'll get scammed."

Some sites suggest that for a small sum of money — as little as $1.99 in some cases — consumers can get a list of economic stimulus grants they can apply for. But two things can happen: the number of the credit card the consumer uses to pay the fee can fall into the hands of scam artists, or the $1.99 can be the down payment on a "negative option" agreement that may cost hundreds or thousands of dollars if the consumer does not cancel.

"Consumers who may already have fallen for these scams should carefully check their credit card bills for unauthorized charges and report the scam to the FTC," Harrington said.

Add dietary supplements to the growing list of products the beleaguered Food and Drug Administration (FDA) is failing to regulate. According to a Government Accountability Office (GAO) report to Congress, the FDA does not have even the most basic information to protect the public from hazardous supplements.

It doesn't have an accurate inventory of the supplement ingredients on store shelves. It doesn't have a firm handle on the number and nature of serious adverse reactions to dietary supplements.

In fact, the GAO found, the agency doesn't even have a list of the names and locations of herbal supplement manufacturers. And several substances banned overseas are readily available on the Internet and in retail stores all over the U.S. even though they are variously linked to kidney damage, liver damage, seizures, and death.

"When it comes to dietary supplements, it's like the Wild West, and the bad guys know they don't have to take the sheriff seriously," said Center for Science in the Public Interest (CSPI) legal affairs director Bruce Silverglade. "Even when confronted with people dying from a dangerous substance like ephedra, the FDA has limited authority to get the product off the market."

It took the FDA nearly 10 years to ban ephedra, also known as ma huang. Ephedra-containing dietary supplements, often marketed as weight-loss aids and performance enhancers, were linked to numerous deaths and thousands of adverse reactions, including irregular heartbeat and stroke.

The herbal ingredients kava, lobelia, and supplements containing aristolochic acid are all banned in some countries, but FDA has taken no action short of issuing public warnings.

Meanwhile, such products are available to consumers.

St. John's wort, often marketed as an herbal anti-depressant, may interfere with birth control pills, a medicine used to treat HIV, and other prescription medications. While the FDA has issued alerts to that effect, it hasn't required warning labels on the products. As a result, some brands bear warnings while others do not.

Similarly, GAO pointed out that although such popular supplements as garlic, ginkgo biloba, ginseng, and Vitamin E may cause blood thinning and result in life-threatening complications during surgery, consumers are not warned of such risks.

A CSPI market survey of warning labels on Vitamin E and other popular supplements found that such leading supplement manufacturers as GNC, Nature's Plus, and Rite Aid do not warn of the risks associated with Vitamin E.

"The supplement industry operates in a gray area where the loopholes loom larger than the law," Silverglade said. "Congress should close those loopholes by requiring that ingredients be reviewed for safety and effectiveness and that cautionary information appear on product labels."

Under current law, dietary supplements sold before 1994 are presumed safe, and manufacturers of new dietary ingredients only need to notify the FDA 75 days before marketing new products. The vast majority of the claims on the labels, like the substances themselves, do not require any FDA approval.

The GAO also found that the boundaries between dietary supplements and foods that contain herbal ingredients are not clear. The food industry often markets teas and other energy drinks as supplements to take advantage of weaker safety laws.

"This report highlights significant gaps in FDA's ability to ensure the safety of dietary supplements," said Rep. Henry A. Waxman (D-CA), chairman of the Energy and Commerce Committee. "Because of limitations on FDAs authority and its lack of resources, consumers don't have the assurance they should that all supplements are safe."

CSPI has repeatedly urged the FDA to take enforcement action against supplements that contain ingredients the agency has told the industry are not recognized as safe for use in foods, including echinacea, ginkgo biloba, ginseng, chromium picolinate, guarana and gotu kola. Foods containing such ingredients include Arizona Rx Iced Teas, Snapple Awaken, and SoBe Lifewater Zingseng.

In addition, Mars continues to sell its Cocoa Via candy bars despite the fact FDA told the company that folate is not recognized as safe for use in candy. Fuze Black and Green Tea with Acai Berry also contains added folate in violation of FDA rules. Excess consumption of folate masks the presence of anemia in persons with a vitamin B12 deficiency.

The GAO pointed out the FDA lacks statutory authority to keep potentially hazardous supplement ingredients off the market and the resources to study adverse reaction reports or inspect manufacturing facilities. As with contaminated foods, the agency lacks mandatory recall authority.

In comments supplied to GAO, the FDA stated it generally agreed with the report's recommendations for improving regulation of the industry, which in 2007 had more than $23 billion in sales.

The recall of potentially Salmonella-tainted peanut butter, which began in January, has stretched into March.

Natures Path Organic Foods of Richmond, British Columbia, Canada is recalling granola bars and granola cereal, because they have the potential to be contaminated with Salmonella.

Meanwhile, Erin Bakers Wholesome Baked Goods of Bellingham, WA is expanding its recall of Peanut Butter Breakfast Cookies, Rocky Road Breakfast Cookies and Peanut Butter Home-style Granola

The Natures Path EnviroKidz Organic Crispy Rice Peanut Choco Drizzle Bar, Natures Path Organic Granola Bar Peanut Butter Chunky, Natures Path Organic Granola Bars Peanut Choco Chocolate Drizzle Bar and Natures Path Organic Peanut Butter Granola Cereal, were manufactured using peanuts recalled by Peanut Corporation of American because they may be contaminated with Salmonella.

Salmonella is an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. The products were distributed through retail stores nationwide in USA and throughout Canada.

The products affected in the USA are:

• 058449430230 - Natures Path EnviroKidz Organic Crispy Rice Peanut Choco Drizzle, 6 pack, USA
• 058449891109 - Natures Path Organic Granola Bar Peanut Butter Chunky, 5 pack, USA
• 058449891376 - Natures Path Organic Granola Bars Peanut Choco Chocolate Drizzle, 5 pack, USA
• 058449890096 - Natures Path Organic Peanut Butter Granola, Cereal 11.5oz, USA

The products affected in Canada are:

• 058449430216 - Natures Path EnviroKidz Rice Bar Peanut Butter Choco Drizzle, 6 pack, CND
• 058449891093 - Natures Path Peanut Butter Granola Bar, 5 pack, CND
• 058449891352 - Natures Path Peanut Choco Granola Bar, 5 pack, CND
• 058449890089 - Natures Path Peanut Butter Granola 325 g, CND

No known illnesses have been reported to date in connection with these products. The recall was initiated after it was determined that the peanut product received was manufactured by Peanut Corporation of America. Natures Path Organic Foods has informed FDA of its actions and is fully cooperating with the Agency.

Meanwhile, Erin Bakers Wholesome Baked Goods of Bellingham, WA is expanding its recall of Peanut Butter Breakfast Cookies, Rocky Road Breakfast Cookies and Peanut Butter Home-style Granola to include additional code dates and well as recalling Peanut Seed Treats and Peanut Butter Brownie Bites as a precautionary measure because it has the potential to be contaminated with Salmonella. This action is a result of the PCA expanded recall for all products manufactured in their Plainview, TX facility.

The following recalled products were sold nationwide through grocery, mailorder and other retail stores.

• Erin Bakers Original Breakfast Cookie Peanut Butter Individually Packaged 3oz (UPC: 708875 90003) Best By: 06/19/06 to 05/03/09, 06/03/09 & 06/10/09 Lot Code: 06136 to 08240
• Erin Bakers Original Breakfast Cookie Rocky Road Individually Packaged 3oz UPC: 708875 90023 Best By: 02/06/07 to 06/22/08 Lot Code: 07218
• Erin Bakers Home-style Granola Peanut Butter 12oz bag, UPC:708875 00503, Best By: 06/25/07 to 10/30/09 1.5oz individual snack pak, UPC: 708875 00512, Best By: 01/15/08 to 10/30/09 25lb Bulk (no UPC), Best By: 03/02/08 to 10/30/09 10lb Bulk (no UPC), Best By 11/20/08 to 10/30/09
• Erin Bakers Seed Treat Peanut 1.5oz individual package, UPC: 708875 00605, Best Before: 09/11/07 to 01/26/08
• Erin Bakers Brownie Bite Peanut Butter 12oz plastic tub, UPC: 708875 00403, Best Before: 06/21/06 to 07/31/07

There are no reported illnesses associated with these products. Erin Bakers says it has informed the FDA of its actions and is fully cooperating with the agency.

The PCA recall has become one of the largest food recalls in U.S. history. On February 20, PCA issued a statement indicating it had filed for Chapter 7 bankruptcy and that it was no longer able to communicate with customers regarding recalled products.

As a result, FDA and officials from the State of Texas DSHS are now coordinating their efforts to notify companies that received product from PCAs Plainview, TX facility from January 1, 2007 forward.

PCA suspended operation of its Plainview, TX facility on February 10 at the request of the Texas DSHS, after several conditions that posed human health risk were discovered. On February 12, the State of Texas issued an emergency order directing PCA to cease the manufacture and distribution of all food products at the facility and issued a mandatory recall order requiring PCA to recall all products manufactured at the plant.

The FDA now has a database that consumers can search to see if their favorite products are involved in any recalls.

It's estimated that between 11 percent and 20 percent of U.S. teens own such merchandise, which includes T-shirts, hats or other items that feature a particular brand of beverage. Theres growing evidence that this specialized type of marketing effectively reaches teenagers and is associated with alcohol use.

Researchers from the Dartmouth Hitchcock Medical Center conducted a telephone survey of a representative sample of 6,522 U.S. adolescents age 10 to 14 years in 2003. The teens reported information about their drinking behaviors and drinking susceptibility. At three follow-up surveys conducted every eight months, participants answered questions about changes in drinking habits and ownership of alcohol-branded merchandise.

The most commonly owned products were clothing and headwear, with followed by a wide array of items that included jewelry, key chains, shot glasses, posters and pens. Most of the brands were beer, including 45 percent that featured the Budweiser label.

Among teens that never drank alcohol, owning alcohol-branded merchandise and susceptibility to drinking were reciprocally related, with each predicting the other during an eight-month period.

For the last year New Jersey has had a law on the books against using a cell phone while driving, but that hasn't stopped motorists from talking or texting behind the wheel. So for the next two weeks, police will crack down on the practice.

Eighteen local police departments will receive grants of $4,000 each for identifying and stopping motorists who they observe texting or talking on a hand-held cell phone while driving. Running through March 15, the two-week program will aim to further increase compliance with New Jersey's primary cell phone law, which has been in effect since March 1, 2008.

According to Division of Highway Traffic Safety Director Pam Fischer, the initiative will send a strong message to motorists that this behavior is not only illegal, but dangerous.

"We know that in 2007, driver inattention was a contributing factor in 22,641 traffic crashes. Of these crashes, 1,866 crashes involved hand-held phones and 1,421 involved talking hands-free," Fischer said. "A driver's attention should be focused solely on driving, period. Any phone conversation, whether it's hand-held or hands-free, is distracting and can instantly take a driver's mind and eyes off the road, creating a potentially deadly situation."

Under the new effort, police officers will be positioned both on the street and in police vehicles at various intersections in their municipality, where they can observe drivers who may be violating the cell phone law. If a violation is observed, the vehicle will be pulled over and the driver issued a citation. Motorists face a $100 fine for violating the law.

Fischer added that according to a Fairleigh Dickenson University PublicMinds Poll of New Jersey motorists, 59 percent say they never use a hand-held cell phone while driving, yet 79 percent say that they see others violating the law.

"The public perception is that this law is not being enforced, and that's simply not true," Fischer stated. "Between March 1, 2008 and January, 2009 — the first 11 months the primary cell phone law has been in effect — more than 108,000 tickets were issued to cell phone violators. Clearly, the law is being enforced, and this new effort will further the good work police departments throughout New Jersey are already doing to stop cell phone violators."

A West Virginia court has ordered Johnson & Johnson and its Janssen Pharmaceutica subsidiary to pay civil penalties totaling $4,475,000 for making false or misleading statements to West Virginia physicians about two of its products, Risperdal, an antipsychotic drug, and Duragesic, a narcotic pain patch.

The case was filed by West Virginia Attorney General Darrell McGraw in 2004, and was brought under the West Virginia Consumer Protection Act, which authorizes a penalty of up to $5,000 for each violation.

At trial, the parties stipulated to the number or instances that could qualify as violations. The court assessed $5,000 per violation where the message was delivered personally to a West Virginia doctor by a company sales representative, and $500 where the information was conveyed by letter or sales brochure. A total of 4,450 violations were found to have taken place, which would have resulted in a civil penalty of up to $22,250,000 if the court had imposed the maximum of $5,000 per violation.

"The defendants were twice put on notice by previous FDA warning letters that its promotional materials for Duragesic contained false or misleading statements," the court noted in its order. "However . . . the defendants then willfully sent the false or misleading Duragesic brochure to West Virginia health care providers to make its medication Duragesic more appealing for sale."

The order also finds "the wording of [the defendants'] November 2003 Risperdal letter was intentionally constructed to modify the FDAs warning language and mislead healthcare professionals, who rely on this information when prescribing medication for their patients."

"If the FDA has approved a drug for limited purposes and drug manufacturers, in pursuit of profit, market the drug for other purposes, it is false advertising that could put the health and lives of ordinary West Virginians at risk," McGraw said.

Today's teens are falling behind in personal finance education but have a desire to catch up.

A new survey from Mintel shows nearly 80 percent consider themselves knowledgeable about financial matters. But the Federal Reserve's 2008 test of high school seniors resulted in an average financial literacy score of 48 percent — a drop of four percentage points from 2006's average.

Mintel's latest survey also revealed that many teens want to learn more about managing money. Four in five say they would like to learn more about investing. Moreover, approximately half express favorable attitudes towards saving and say they are careful about spending.

"Contrary to many peoples' belief that teenagers only want to spend money, our research found most teens are ready, willing and eager to learn more about managing their finances," said Susan Menke, senior finance analyst at Mintel. "Schools and financial services companies alike should take advantage of this opportunity to equip teens with the financial skills they'll need for future success. Improved financial literacy is something the entire nation could benefit from."

Currently, most teens say they learn about money from their parents. In Mintel's recent survey, an encouraging two-thirds say one way they learned about finances was school lessons. But disturbingly, 51 percent say they've acquired their financial skills through trial and error.

"Teenagers are rapidly initiated into the adult financial world," According to Menke. "Their use of bank accounts, debit cards and credit cards increases very quickly over a short period of time, creating opportunities for financial education as well as relationship-building. Both schools and financial services companies can benefit by offering tips, training and age-appropriate financial products for teens."

Mintel Comperemedia, which monitors direct mail, email and print advertising, has observed some financial products and services targeted at teens and their parents. On the whole, credit unions are more active than banks in targeting teens.

A search of Mintel's database for campaigns referencing the teen market from January to October 2008 brought up 51 results, two-thirds of which came from credit unions.

Prepaid cards such as the Visa Buxx or MasterCard Myplash are another hot item to market to teens, Mintel found. These cards work like credit cards but only contain a fixed value, allowing parents to monitor spending.

"Prepaid cards give teens a chance to learn financial responsibility without risk of debt or excess fees," comments Menke. "They are particularly well-suited for the teen market."

It's always a good time to check your credit reports and make sure there are no errors or problems that could keep you from getting a loan. Unfortunately, many people still end up getting roped into paying for services they don't need when trying to get their report.

Under federal law, you have a right to receive a free credit report from each of the three nationwide credit reporting agencies — Equifax, Experian and Transunion — once a year, for a total of three reports per year. You can order your free credit report online at AnnualCreditReport.com (www.annualcreditreport.com) online or by calling 1-877-322-8228.

If you order your credit report online, make sure you only so at AnnualCreditReport.com. Don't confuse this completely free Web site for a commercial service, FreeCreditReport.com, which is heavily advertised on television.

FreeCreditReport.com has nothing to do with the government-mandated free credit report to which you are entitled. The company, which is a subsidiary of Experian, will provide you a copy of the Experian version of your credit report, but you can't get it without signing up for a "free" trial of the company's credit monitoring service.

If you don't cancel your membership within the seven day trial period, you will be charged $14.95 a month. The FreeCreditReport.com Web site clearly states that it is not affiliated with the government program that provides a free annual credit report, but many consumers writing to ConsumerAffairs.com are apparently confused by the "free" in the company's name and fail to make the distinction.

"I too signed up for free credit report," Rob, of Quinlan, Texas, told ConsumerAffairs.com. "I came to the section where you put in your credit card info and it wouldn't let you bypass it. You couldn't continue without giving your payment info, even though it was to be free. It was very deceptive and who is going to remember to cancel something with 9 days of activating something you didn't even know you activated. My free credit report cost me $15.88."

It isn't clear from the FreeCreditReport.com Web site what the "Triple Advantage" credit monitoring service is. Curiously, the company offers no promotion information about it until a consumer has signed up. It's easy to conclude that the only reason consumers sign up for it is to get a free copy of their credit report.

Most credit monitoring services' value for protection against identity theft is dubious, as they only detect fraud after it has occurred, and do not prevent it. Credit monitoring also doesn't detect misuse of a Social Security number, debit card fraud, or usage of personal information to create new identities for fraudulent purposes.

Unless consumers are interested in a somewhat undefined credit monitoring service for $14.95 a month, they should stick to getting their true free credit reports from AnnualCreditReport.com.

By Jon Hood
ConsumerAffairs.com

March 1, 2009
A federal appeals court has handed down a huge win for beleaguered consumers, rejecting American Expresss claim that they can prevent Garden Staters from bringing class actions against them.

The suit arose out of a promotion for the American Express Blue Cash Card, which claimed that consumers could earn up to 5% cash back on purchases made with the card. Lead plaintiff H.R. Homa brought a class action in New Jersey, claiming that the terms outlined in the promotion were misleading, and that he had not earned cash back as promised. The action was brought under the New Jersey Consumer Fraud Act.

The Blue Cash card agreement included a section prohibiting consumers from bringing class actions against American Express in the event of a dispute. The agreement also mandated that any disputes arising from the agreement would be governed by Utah state law, which conveniently recognizes all class-action waivers in consumer credit agreements.

The plaintiff, Homa, argued that New Jersey law should control, since the suit was brought under a New Jersey statute and the state refuses to enforce certain class-action waivers.

The court held that the provision acted as an "exculpatory clause," which essentially releases a party from liability arising from an agreement. These clauses often fall under the umbrella of contracts of adhesion, since the party against whom the clause is enforced has to either take the agreement as it is, or walk away altogether.

The court quoted New Jersey precedent conceding that, Ordinarily, when parties to a contract have agreed to be governed by the laws of a particular state, New Jersey courts will uphold the contractual choice if it does not violate New Jerseys public policy. The court ultimately sided with Homa, however, citing a 2006 New Jersey Supreme Court decision holding that certain class action waiver provisions were unconscionable.

In that case, Muhammad v. County Bank of Rehoboth Beach, the court asserted that, [t]he public interest at stake in [the ability of consumers] effectively to pursue their statutory rights under [New Jerseys] consumer protection laws overrides the defendants right to seek enforcement of the class-arbitration bar in their agreement.

In the Homa case, the court also noted that the Federal Arbitration Act provides that courts can refuse to enforce class action waivers if they violate a legal or equitable rule that would otherwise deem them revoked.

American Express had tried to argue that another Third Circuit decision, Gay v. CreditInform, compelled the court to uphold the class action waiver. In Gay, the court held as valid a clause preventing consumers from bringing class-action arbitration actions, or those held in a non-courtroom setting. The court distinguished the two cases, noting that Muhammad foreclosed all class actions, while the provision in Gay applied only to arbitrations; the former was unconscionable, since it deprive[d] Muhammad of the mechanism of a class-wide action, whether in arbitration or in court litigation.

Following from this logic, the court held that the American Express clause bears the hallmarks of a contract of adhesion — it was presented on a take-it-or-leave-it basis, in a standardized printed form, [and] without opportunity for the adhering party to negotiate except perhaps on a few particulars.

Turning the knife a bit further, the court held that New Jersey — not Utah — law would apply, as New Jersey had a materially greater interest in the outcome of the litigation. The court took pains to note the importance of New Jerseys interest in protecting its consumers ability to enforce their rights under the Consumer Fraud Act.

The decision could have an influence on other circuits presented with the same problem, given its application of general contract and conflict-of-laws principles. The opinion comes on the heels of another pro-consumer New Jersey decision — the states Supreme Court recently rebuffed a car dealers argument that a car buyer had to notify them of an overcharge before bringing suit.