Current Events in March 2009

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.

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.

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.

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."

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.

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.

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.

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.

As the value of the average American home continues to fall, one in five home mortgages is now underwater, meaning the principal on the loan exceeds the market value of the property. Thats the conclusion of a new study by Firm American CoreLogic.

When a property is under water, the owner is unable to refinance the mortgage, or sell it.

The study shows that 8.21 million homes had negative equity at the end of December, rising nine percent from 7.63 million at the end of September. The study warns that another two million homes could go underwater if property values dip another five percent.

Analysts say the most worrisome part of the report is the fact that home prices are beginning to fall in markets that, thus far, have mostly escaped the worst of the housing downturn. Until now, most of the most severe price declines have been in California, Nevada, Florida and Arizona.

Those states, along with Georgia, Michigan and Ohio remained the hardest hit states, with 62 percent of negative equity borrowers and just 41 percent of mortgages.

Connecticut, meanwhile, is racing to join the group. Its share of homes with negative equity surged 25 percent in 2008.

In December, national housing prices fell 11.1 percent from a year ago. As of the end of 2008, the total value of residential properties was $19.1 trillion, down $2.4 trillion from $21.5 trillion in December of 2007.

Home price declines have accelerated the last few months due to the rapid geographic diffusion. As of December 2008, more than 700 CBSAs or nearly three-quarters of all metropolitan markets were experiencing home price depreciation, up from 254 markets in December 2007 and 394 markets in June 2008. The number of metropolitan markets experiencing price declines is by far the highest ever.

"During 2008 homeowners lost $2.4 trillion of their housing wealth, which will continue to put significant stress on consumer balance sheets, particularly as job losses continue to grow. The geographic breadth of price declines rapidly expanded in the second half of 2008, which means that housing wealth losses are broadening across much of the country," said Mark Fleming, Chief Economist for First American CoreLogic.

Since US home prices peaked in July 2006, they have declined 19.3 percent on a cumulative basis and are currently back to the lowest price level since May 2004.

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.

Radio Shack and AT&T are facing a class action lawsuit alleging that they violated Oklahoma consumer protection laws by failing to adequately disclose limitations on a recent promotion.

In December, Radio Shack offered the Acer Aspire One notebook for just $99. Even with the prerequisite that customers sign up for two years of AT&T mobile broadband service for about $60 a month the deal still seemed too good to be true. As it turns out, it probably was.

Billie Parks brought suit against both companies in U.S. District Court for the Western District of Oklahoma, alleging that the terms and conditions of her laptop purchase failed to indicate that she would be charged exorbitant fees for exceeding a pre-set five gigabyte limit on the computers built-in wireless connection.

Parks was shocked when she received her first bill, which totaled more than $5,000. She says she was unaware that exceeding the gigabyte limit would result in any charge, let alone one more than 80 times her monthly internet fee.

The lawsuit alleges that, Although the customer service summary informed plaintiff and other consumers that their first bill might be higher than expected because of a $36 activation fee, one months service billed in advance, and prorated charges and fees for the month when the customer signed up, neither plaintiff nor other consumers were informed, nor could they have reasonable discerned from the paper work that wireless Internet usage exceeding 5GB per month would result in astronomical charges running into the thousands of dollars.

The lawsuit alleges counts under Oklahoma consumer protection statutes and common law fraud, charging that Radio Shacks advertising of the DataConnect plan was false, misleading, and inaccurate.

Parks is seeking restitution for the extra charges she incurred, consequential damages for harm to her credit rating, an injunction to prevent AT&T from enforcing the extra fees, and, most consequentially, an end to DataConnect contracts altogether.

On the go

The plan offered unique appeal for anyone constantly on the go. The Acer notebook sports a compact 8.9 inch screen and weighs less than three pounds, and sports wide-area network capabilities, a WiFi connection, and a built-in webcam . Without the AT&T plan, the computer generally sells for about $300.

The relevant AT&T terms and conditions provide that, If you are on a data plan that does not include a monthly megabyte allowance and additional data usage rates, the parties agree that AT&T has the right to impose additional charges if you use more than 5 gigabytes in a month.

The suit threatens to stymie the recent trend toward built-in wireless plans similar to DataConnect. Such arrangements have been gaining popularity in recent years, since they allow consumers to travel without having to make sure that a nearby hotel or coffee shop will be able to provide them internet access. At the very least, the suit threatens to make consumers think twice before entering into any such plan, no matter who is offering it.

And the filing doesnt exactly come at a great time for Radio Shack, which reported a 39 percent drop in earnings late last month. The company posted these dismal numbers despite a recent surge in sales of digital-box converters in anticipation of the upcoming switchover to digital TV. An analyst told the Wall Street Journal that the retailer is likely headed for its worst-ever same-store results in 2009. And now they will have a class action to contend with as well.

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.