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    Clearwire Slapped With Class Action

    Complaint alleges shoddy service and illegal cancellation fees

    Internet and phone service provider Clearwire has been hit with a class action lawsuit alleging shoddy service and unlawful early termination fees. The suit, filed in Washington state court, alleges that the company's internet service is slow and unreliable, in contrast to ads touting it as a reliable "always-on" alternative to cable and DSL. The suit further alleges that when customers try to cancel their service they are slapped with "early termination" fees, which can run up to $220.

    According to the suit, when customers sign up for the service, they are required to enter "'click through' online form contracts" that provide for a fee for early termination. The service agreement usually requires customers to commit to either a one- or two-year period of service. The suit says that the company charges termination fees "even where the customer moves to a geographical location in which [Clearwire] does not offer service, or where the consumer unexpectedly finds that the service does not function as originally anticipated and advertised."

    Clearwire's website touts the service as "the Internet as it was meant to be — easy." The site promises service that is "reliable," "fast" — purportedly up to 25 times faster than dial-up — and affordable — "only the Internet speed is high, not the price."

    These rosy promises stand in stark contrast to the service described in the complaint, which is described as "extremely poor, and no doubt far worse than DSL or cable internet, which are described by [Clearwire] as comparable alternatives." As the suit points out, a slow internet connection is especially problematic for Clearwire's phone service, since it is completely dependent on a reliable Internet connection.

    The complaint alleges that Clearwire's advertising "deceive[d] members of the class." Indeed, the suit notes that Clearwire acknowledged in its most recent 10-K filing that "subscribers may experience lower call quality" and "higher dropped-call rates" than they would with a traditional phone service.

    The suit seeks an injunction of all future termination fees and the creation of a constructive trust to reimburse consumers who have already forked over the money.

    The suit includes plaintiffs from Washington state, Hawaii, Minnesota, and North Carolina, and names Chad Minnick of Washington as the lead plaintiff. The suit defines a class of all Clearwire Internet or telephone subscribers who have paid a termination fee anytime from April 21, 2005 to the present. The complaint anticipates that there are "at a minimum, tens of thousands" of such individuals. The suit is being prosecuted by Tycko — Zavareei LLP of Washington, D.C., and Peterson Young Putra of Seattle.

    This is not the first time Clearwire has faced wrath from consumers. The website is full of postings from consumers going back as far as May 2007. Several consumers have also written to Consumer Affairs about their woes. Tracie of Robstown, TX, received horrible service and tried to cancel; she quickly found out that would be easier said than done. "We are now trying to cancel the service and are being told that there will be a cancellation fee of approximately $200 because we signed up for a 2-year contract," writes Tracie. "Not once in all of the phone calls I made to Clearwire was I ever informed that I was signing up for a 2-year contract or that there would be a cancellation fee charged."

    Last year, under pressure from the FCC, AT&T;, Sprint, and Verizon all implemented less strict termination fee policies. At the time, the FCC said it wanted termination fees that more closely reflected what consumers actually paid for their phones.

    Internet and phone service provider Clearwire has been hit with a class action lawsuit alleging shoddy service and unlawful early termination fees....
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    Chrysler Files for Bankruptcy, GMAC Takes Over Financing

    Obama urges consumers to consider buying a new Chrysler product

    After months of bailouts and attempted retooling, Chrysler is filing for Chapter 11 bankruptcy protection, President Obama announced at the White House.

    Later in the day, Chrysler CEO Bob Nardelli said he would resign after the company emerges from bankruptcy.

    "Now is an appropriate time to let others take the lead in the transformation of Chrysler with Fiat," Nardelli said in a statement. Nardelli, who formerly headed Home Depot, said he would return to a position at Cerberus, the private investment firm that bought Chrysler in 2007.

    Efforts to head off a bankruptcy collapsed after the carmaker and government officials were unable to reach an agreement with Chryslers senior bondholders. The bondholders said the plan diluted their investment in the number three U.S. automaker more than some junior lenders.

    Obama blasted the bondholders, charging they held out for what he called a government bailout while dealers, suppliers and employees made concessions for the good of the company and the overall economy. The bondholders said they had already agreed to a 40 percent cut.

    Before the announcement, members of the White House auto task force expressed confidence that Chrysler would emerge from Chapter 11 within 60 days. A speedy process is considered critical to preserving Chryslers perception as a viable car company. In fact, President Obama went out of his way to present the bankruptcy in a positive light, and urged consumers to consider buying a new Chrysler.

    If you buy a Chrysler, your warranty will be safe because it will be backed by the federal government, the President said.

    Obama also announced that Chrysler and Italian carmaker Fiat had successfully completed merger talks and that the partnership would be part of the new, post-bankruptcy Chrysler.

    Obama also said that GMAC, which finances GM car purchases, would take over financing Chrysler purchases as well, phasing out Chrysler Financial, Inc., which he said is not viable. In addition, the number of Chrysler dealers will be consolidated.

    Its a bittersweet conclusion, Chrysler CEO Robert Nardelli told CNBC following the Presidents announcement. But breathing new life into Chrysler is what its all about.

    Chryslers bankruptcy will be filed in New York, where the final outcome will be determined. Whats likely is a fight between the holdout bondholders and the government, which is seeking a speedy conclusion.

    Four major banks that own 70 percent of the Chrysler debt agreed to terms with the government. However, a number of smaller lenders, that have not received government bailout money, balked.


    Besides providing financing for new-car purchasers, GMAC will provide wholesale financing for Chrysler dealers. A senior White House official was quoted as saying that the Barack Administration's auto task force had determined that Chrysler Financial "did not have the resources" to meet Chrysler's needs.

    Both GMAC and Chrysler Financial had turned to the federal government for help during the recent credit crunch. GMAC got $6 billion in federal funds, Chrysler $1.5 billion.

    The lack of credit has been frustrating both would-be new car purchasers and dealers. Even buyers with good credit have found it difficult to find affordable loans for new cars, while dealers have lost "floorplan" financing, the short-term loans that enable them to maintain inventory and keep their doors open.

    GMAC had earlier said it would ease wholesale finance charges for dealers and earmark $5 billion for consumer auto loans over the next 60 days, hoping to jump-start domestic auto sales, which are critical to both Chrysler and GM's recovery plans.

    GMAC is a bank holding company with operations in North America, South America, Europe and Asia-Pacific. General Motors, the near-bankrupt car maker, is only a minority stockholder in the company.

    Chrysler Files for Bankruptcy, GMAC Takes Over Financing...
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    Can the Right Mask Prevent Swine Flu?

    Consumer Reportsexperts say the answer may be yes

    People covered with facemasks are a common sight in news reports from Mexico about the swine flu outbreak. Do people in the U.S. now need to consider wearing masks, and can they really help?

    The Mexican government has been handing out face masks to its citizens. In areas where the flu has already reached epidemic proportions, it may be advisable to wear masks in all public places.

    In the U.S., where most infections are now clustered in communities, it makes sense to wear a high-grade mask in situations where youre likely to be exposed to the virus. For example, if youre sick with the flu, wearing a mask can help prevent spreading it to others. And if youre caring for someone who is sick, wearing a mask yourself can also help reduce exposure to the droplets from a cough or sneeze that spread infection.

    If there is an outbreak in your community, masks can be helpful tools to reduce your exposure to the virus in confined or crowded places, like buses, trains, and airplanes.

    But not all masks are created equal. To prevent the inhalation of most virus-bearing droplets from a cough or sneeze masks and respirators should be labeled N-95 or higher, which means they have been cleared by the FDA. They may also bear a label from the National Institute for Occupational Safety.

    How a mask fits is a big influence on its effectiveness. The mask should fit tightly over your nose and mouth, with no gaps. To get the full protective effect, youll need to wear it as long as youre in a high risk situation and replace it after each use.

    Masks can help, but are no replacement for basic preventative hygiene, which can go a long way in protecting you from the flu. Wash your hands vigorously for 20 seconds under warm running water before eating or preparing meals, after the using the bathroom, after blowing your nose, and after other potential exposures to the flu virus. Alcohol based hand sanitizer, like Purell, with an alcohol content of at least 60 percent, can be effective, when soap and hot water arent an option.

    See the Consumer Reports Health Blog for more information.

    Find out everything you need to know about swine flu.

    Can the Right Mask Prevent Swine Flu?...
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      FTC Charges Hoodia Claims Are Bogus

      Suppliers accused of deceptive claims

      The Federal Trade Commission has charged the suppliers of supposed Hoodia gordonii, also known as hoodia, with deceptive advertising for claiming that using their product would lead to weight loss and appetite suppression.

      In its complaint, the FTC alleges that the defendants not only made false and deceptive claims about what hoodia could do, but also, on one or more occasions, claimed that their product was Hoodia gordonii, a plant native to southern Africa, when it was not.

      The complaint names Delaware-based Nutraceuticals International, LLC, New Jersey-based Stella Labs, LLC, and four individuals as liable for these charges. The individual defendants are David J. Romeo, whom the complaint identifies as controlling both companies; and Deborah B. Vickery, Craig Payton, and Zoltan Klivinyi, who are officers or directors of one.

      The FTC has requested that the court order the defendants not to make false or deceptive statements or destroy documents pending trial. The Commission seeks to permanently bar the defendants from deceptively advertising hoodia, and to obtain disgorgement of the defendants' profits from their hoodia sales.

      The defendants allegedly made false and deceptive claims when advertising their fake hoodia to trade customers who manufactured and marketed supplements. The complaint further charges that the defendants provided trade customers with deceptive advertising and promotional materials — along with other materials that purported to substantiate their claims. These customers then had the means to deceive consumers who bought weight-loss products purportedly containing hoodia.

      The complaint charges that the defendants made these false and deceptive claims about their product: that it would enable consumers to lose weight and suppress appetites; that it was scientifically proven to suppress appetite, resulting in weight loss; that it was clinically proven to reduce caloric intake by 1,000 to 2,000 calories per day; that it was derived from South African Hoodia gordonii; and that hoodia was an effective treatment for obesity.

      More Scam Alerts ...

      FTC Charges Hoodia Claims Are Bogus...
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      Ad Watch: Boniva's Misleading Ad

      Video commentary gives consumers the facts the commercials leave out

      In the sixth installment of Consumer Reports' Ad Watch, CR takes a look at a commercial for Boniva, a drug to treat osteoperosis. Ad Watch is a series of video commentaries that give consumers the facts that the commercials leave out. Direct-to-consumer advertising is big business but it doesnt always give consumers the information they need to make smart health decisions. In 2007 alone, drug companies spent $5,375,117,382 on advertising. Yes, that's $5.375 billion dollars.

      Consumer Reports has a few things to say about Bonivas 800 number for consumers interested in a free trial. Its medical advisers say that, while free trials may sound like a great deal, they tend to get consumers started on a drug that they're likely to stick with, even when they have the option of switching to a cheaper version that's just as effective.

      Read more ...

      Ad Watch: Boniva's Misleading Ad...
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      Swine Flu: What You Need to Know

      Don't believe rumors; listen to the experts

      The number of known cases of swine flu in the U.S. rose to 40 Monday, with most of them in New York City. The Centers for Disease Control reports 28 cases in New York City, seven in California, two each in Kansas and Texas, and one in Ohio.

      With more outbreaks of the new strain of swine flu come outbreaks of misinformation and rumor. Below are 20 questions answered by infectious disease expert Charles Ericsson, M.D., professor of internal medicine and director of Travel Medicine at The University of Texas Medical School at Houston.

      Also, Robert Emery, DrPH, vice president for Safety, Health, Environment & Risk Management at UT Health Science Center and associate professor in the UT School of Public Health explains common sense preparedness and prevention of illness.

      1. How do symptoms of swine flu differfrom other types of flu?

      None, really, although this flu might include gastrointestinal symptoms (diarrhea and vomiting), as well as the usual respiratory symptoms. The basic symptoms for swine flu are similar to the seasonal flu we are vaccinated for each year, which may include:

      • Fever (greater than 100F or 37.8C)
      • Sore throat
      • Cough
      • Stuffy nose
      • Chills
      • Headache and body aches
      • Fatigue

      2. If I felt flu-like, how would I know if I had swine flu?

      You wouldn't really, nor would your physician know for sure without a respiratory specimen taken within the first 4-5 days. The specimen would then be sent to the US Centers for Disease Control and Prevention (CDC).

      The cases so far in the US have been relatively mild compared to the illness described in patients in Mexico. We do not yet know why the US cases have been milder.

      The important point is to call your doctor if you think you have the flu. Prescription anti-viral drugs such as TamiFlu or Relenza can be called in by your doctor. Unless you are:

      • exceptionally ill with flu-like symptoms
      • are chronically ill
      • immune-suppressed
      • quite elderly
      • or have a very young child, under age 2.

      It is best not to report to the hospital, clinic or doctor's office, where you could risk spreading the disease. Again, call your doctor first to get instructions as to what you need to do next.

      3. How long are people contagious?

      Adults are potentially contagious for the length of time one has symptoms, up to 7 days following the beginning of illness. The shedding stage of the virus is during the first 4-5 days of illness. Children can be considered contagious longer, up to 10 days. The initial incubation period is 24-48 hours.

      4. Is there medication for this?

      Yes, Tamiflu or Relenza have shown to be effective against these recently reported strains of swine flu. Altogether, there are four anti-viral drugs that we commonly use to treat various strains of flu.

      5. Can I start taking medicine for it now, just in case I get it later?

      That is not presently advised. Preventative medication might be advised for very special circumstances where a person had to expose themselves to potentially ill people during an epidemic (which we do not yet have here). Such people might include ER workers. An outbreak in a nursing home, for instance, might lead to protecting all the other residents with a drug like TamiFlu.

      For the general public, the current answer is no to prophylactic (preventative) use with anti-viral medications. Its coverage time is limited.

      Do not confuse over-the-counter cold and flu preparations for anti-flu medications that require a prescription.

      6. Are the symptoms in children different from adult symptons?

      Though the basic symptoms are similar, the signs of potentially life-threatening complications differ.

      The CDC advises those with these symptoms to seek emergency care immediately: Emergency warning signs in children are:

      • Fast breathing or trouble breathing
      • Bluish skin color
      • Not drinking enough fluids
      • Not waking up or interacting
      • Being very irritable
      • Fever with a rash Emergency warning signs in adults are:
      • Difficulty breathing or shortness of breath
      • Pain or pressure in the chest or abdomen
      • Sudden dizziness
      • Confusion
      • Severe or persistent vomiting

      7. Is there a vaccine?

      Not yet, but the CDC has this current strain of virus and will consider whether to add it to next years flu vaccine as time goes on.

      8. If I took the swine flu vaccine in the swine flu scare during the 70s, would that cover me? What about this year's flu shot I just took?

      We dont know yet. Previous vaccines could be expected to afford only partial, incomplete protection at best.

      This new strain of the swine flu virus (H1N1) actually has a mixture of swine and avian components (not to be confused with the deadly avian flu of Southeast Asia).

      9. Can I catch it from pigs?

      No. This strain is one that is communicable through human-to-human contact. It is a mutated form of a swine virus.

      10. Can I catch it from eating pork?

      Absolutely not! Swine flu is not transmitted by food. It is not a so-called foodborne illness. Bacon, ham and other pork products are safe to eat, assuming they are prepared properly. An internal temperature of 160 degrees for cooked meat will kill any bacteria or virus.

      Swine flu is transmitted by airborne droplets from an infected persons sneeze or cough; or from germs on hands, or germ-laden surfaces. Eating pork will not give you swine flu any more than eating chicken will give you bird flu.

      11. How does it cross from a pig to a human?

      The swine virus mutates so that it can infect humans and be spread by humans.

      12. Can it kill me?

      Deaths have been reported from the Mexico City outbreak. So far the cases in the US have been mild and there have been no deaths as of this writing (Monday, April 27) We do not know all the factors geographically and demographically that may contribute to the mildness or severity of this flu. But, like seasonal flu, there is the potential for serious outcomes.

      13. Why the big concern if the regular flu kills 35,000 people a year, which is why we are all encouraged to get a flu shot?

      This is a new flu strain that our bodies have not been exposed to before. The flu strains that the CDC creates a vaccine for each year all have the potential to cause great harm, especially in elderly, pediatric and chronically ill patients.

      This particular flu strain has struck seemingly healthy, young adults, with some resulting in death in Mexico. It also appears to be quite contagious. We will know more about this strain in the coming days.

      14. How is it different from avian (bird) flu?

      Avian flu so far has had difficulty infecting humans unless they are exposed intensely to birds, because the virus has not mutated in a way that makes it transmissible by humans to other humans. This virus has origins genetically from both pigs and birds, and the big difference from the avian flu is that this swine virus can be transmitted readily from human to human.

      15. Is this just another scare that will go away like bird flu?

      Bird flu is a theoretical threat and will need a mutation to be able to be transmitted among humans to become a serious threat. The present "swine/avian" virus clearly has already caused a major outbreak in Mexico City and San Luis Potosi, Mexico and has spread to places in the US (California, New York, Texas, Kansas and Ohio).

      What is not clear yet is whether this virus will result in a so-called pandemicworldwide spread with major outbreaks — or whether it will fizzle out. But, even if it fizzles out, there is logical concern that it might re-emerge next flu season.

      16. Should I cancel my vacation to Mexico?

      At this writing, the situation is very fluid, changeable. I suggest checking frequently with the CDC Web site for possible Travel Alerts. I probably would not travel to Mexico City for a vacation that could easily be rescheduled, if for no other reason than the city has tried to limit access to crowded or public places where transmission might be facilitated. That does not sound like a very pleasant vacation to me!

      Having said that, there are more than 4,000 flights to Mexico from the US and none have been cancelled as of this writing. However, some international airports in Europe and Asia are stepping up precautions and issuing alerts. Again, check the CDCs Travel Alerts page.

      17. What if I'm on a plane? Should I wear a mask?

      Not necessary. The air on a plane is filtered. Transmission might occur if someone sitting close to you coughs or sneezes on you. The newer designs of aircraft airflow keep the air in a top-down flow, not forced air from front to back. However, if you do have a respiratory illness, it might be best not to travel.

      18. How long does the germ live on surfaces, like on my desk if someone sneezes in my office?

      Influenza virus survives only minutes on inanimate objects or hands, so these are very inefficient ways to spread the illness. Influenza is most easily spread by droplets that come into contact with our mucus membranes such as when someone coughs or sneezes in our faces.

      If we shake hands with an infected person who has just wiped their nose and then we rather quickly rub our nose or eyes with our own hand, then we could get the flu. So, good hand washing does play a role in diminishing the spread of the disease.

      19. Other than hand washing and covering my mouth if I sneeze or cough, what can I do to take care of myself and others?

      If you are ill, stay home. Control your sneezes and coughs. If you cough into your hand, remember the virus could be live on your hand at least for a few minutes, so wash your hands before touching anyone else. If you get symptoms suggesting the flu, call your doctor, who can call in a prescription for medication to treat the flu.

      Resist going to the doctors office or a hospital ER for influenza symptoms unless you are seriously ill. You do not want to spread the disease to others.

      20. What else can I do?

      Keep in touch with the most recent CDC messages through the following links:

      Go to the sources of verifiable information such as WHO (World Health Organization) or the CDC.

      Most important, be alert, not panicked.

      There is a huge difference between preparedness and paranoia, says Dr. Robert Emery, occupational health expert at the UT School of Public Health at Houston. Although were dealing with a new strain of flu, a set of universally applicable preventive measures exist that can be employed right away by everyone to help stop the spread of this disease

      Proper hand hygiene:

      Theres a right way and useless way to wash hands — and wash away — micro-organisms. The object is to break down the protective membranes of germs, dislodge them from your hands and let them go down the drain. Plain soap in the right hands is strong stuff.

      • Lather well with a bar of soap or squirt a coin size of liquid soap in the palm of your hand.
      • Vigorously rub your hands together, soap up between your fingers, AND your wrists, front and back for 15 seconds. Sing the first chorus of any song you know and thatll take you through the 15 seconds.
      • Rinse under warm, RUNNING water. Remember, the object is to dislodge germs. The force of water is key.
      • Dry thoroughly your hands with a disposable towel or under the blower, again, rubbing your hands together.
      • Discard the towel.

      If youre using alcohol-based gels as hand cleansers:

      • Put a dime-sized amount in one hand:
      • Vigorously rub your hands together and in between your fingers until the GEL IS DRYabout 30 seconds.
      • DO NOT touch your face!

      Once your hands are clean, do not touch your face, nose, eyes or lips. Rubbing your eyes and nose provides a freeway for micro-organisms and good breeding ground once theyve arrived.

      Cover your cough

      If you must cough or sneeze, cover your mouth with a tissue, your sleeve or your hand.
      • Throw the tissue away in a waste basket. Do not leave discarded tissues on your desk or other surfaces.
      • Then, wash you hands thoroughly.
      • The throw-it-away part is essential. Micro-organisms live a life span from a few seconds to days on inanimate surfaces such as desks, table tops, faucetstissues. If your tissues are scattered on your coffee table, they then are in contact with community surfaces. Both the tissues and the surface it sits on can spread germs to the person who touches the coffee table.

      If you begin to feel ill: feverish, achy, have a dry, painful cough, sore throat, go home from school or work and call your health care provider for further instructions.

      If you feel sick with flu-like symptoms and you care for the very young or the very elderly or the chronically ill, inform your health care provider when you call their office.

      If you have recently traveled to Mexico or to one of the areas worldwide that has reported a swine flu outbreak, inform your health care provider. He or she may prefer to treat you with prescription anti-viral medications from home, or may request that you come in for a visit. Follow instructions from your health care providers.

      Swine Flu: What You Need to Know...
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      Rest In Peace, Countrywide Financial

      Bank of America officially "retires" brand name for its lending company

      There is no more Countrywide Financial. That company, a major player in the subprime market for much of the decade's housing boom, will now simply be called Bank of America Home Loans.

      Bank of America, which bought the troubled mortgage lender last year, said the change will offer homeowners "greater clarity in the home finance process."

      In fact, the bank has renamed its one-page loan summary presented to borrowers the Clarity Commitment. The bank said it will contain interest rate, terms and other details of the loan in plain language.

      "We met with thousands of customers and created tools that reflect the transparency they want in the home-buying process," said Barbara Desoer, president, Bank of America Home Loans. "Doing the right thing for our customers is the foundation of our brand promise to always be a responsible lender and help create successful homeowners, and these tools exemplify that promise."

      Provided both at application and at closing, the Clarity Commitment document, says Bank of America, is available on most new purchase and refinance transactions, including traditional and government-backed loans.

      In addition, the company said it has introduced the Bank of America Home Loan Guide as part of the new Bank of America home loans Web site.

      By explaining key data inputs, highlighting "rules of thumb" and tips with each step, and providing context around the results, the guide is supposed to give consumers relevant, personalized information that helps them understand their options and make informed decisions.

      "Purchasing a home is one of the biggest decisions an individual makes, and we take seriously our responsibility to educate customers and arm them with the information they need to make smart decisions," said Desoer. "Especially in this environment, it's important that consumers understand the true, comprehensive costs of homeownership so they can buy a home and enjoy it with confidence."

      Bank of America Home Loans said it is also introducing Flat Fee Mortgage Plus through the 6,100 Bank of America banking centers. A new mortgage product, Flat Fee Mortgage Plus has no application fee and one single closing fee that represents the lender and other fees required for third-party services. The product features a close-on-time guarantee and best value guarantee.

      The Countrywide brand may not be missed by either Bank of America or consumers. Last year Countrywide settled with Texas Attorney General Greg Abbott, agreeing to make $345 million in total benefits available to Texas homeowners. The restitution program was set up for homeowners who lost their homes due to foreclosure.

      Rest In Peace, Countrywide Financial...
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      'Gifting Clubs,' Pyramid Schemes Flourish on Web

      Scams target cash-strapped consumers looking to earn extra income

      Online promotions promising easy wealth by joining a cash gifting program or gifting club are flourishing on the Internet. With many families struggling to make ends meet in the current economy, the Better Business Bureau warns that cash gifting is not a legitimate way to make a few extra dollars, and in fact, is nothing more than a pyramid scheme.

      Like most pyramid schemes of the past, cash gifting operations are targeting people with some form of an affinity — such as womens clubs, community groups, church congregations, social clubs and special interest groups. But in keeping with the digital age, schemers have moved operations to the Internet and are now marketing their programs as easy ways to make money in a tough economy through videos on YouTube, paid ads on Google and attractive Web sites that engage victims.

      According to TubeMogul, an online video analytics company, currently there are 22,974 cash gifting videos on YouTube, adding up to an astounding 59,192,963 views.

      While the creators of the videos vary, the content is usually the same. Typically, the person in the video explains — in vague terms — that theyve discovered a new program to help people make money through cash leveraging or cash gifting and might even open a FedEx envelope with cash inside to prove the effectiveness of the program.

      Bernie Madoff isnt the only guy with a ponzi scheme; money-making opportunities promising big returns for little work are all over the Internet and are extremely enticing to millions of people struggling with todays economy, said Steve Cox, BBB spokesperson. Anyone tempted by slick cash gifting marketing appeals should run in the opposite direction, or they run the risk of being the next person ripped off by a pyramid scheme.

      Some cash gifting schemes are touted as fundraisers for a good cause or as an empowerment program to help people help themselves. In order to take part, the participant must pay anywhere from $150-$5,000. After making the contribution, which is funneled to people farther up the pyramid, the participant must then convince more people to join in order to start making money themselves.

      Recruiters may claim that the operation is legal and often allude to IRS laws regarding gifting. However, almost every state has laws prohibiting pyramid schemes and/or assesses penalties on those who participate, and the Federal Trade Commission and many State Attorneys General have issued warnings about cash gifting clubs.

      BBB advises people to ask themselves three questions in order to evaluate dubious money-making opportunities:

      • Do I have to make an investment or give money to obtain the right to recruit others into the program?

      • When I recruit another person into the program, will I receive what the law calls consideration (that usually means money) as a result?

      • Will the person I recruit have to make an investment or give money to obtain the right to recruit and receive consideration for getting other people to join?

      If the answers are yes, BBB warns people to steer clear of the scheme, dont give in to tempting claims online and never buckle under to high-pressure sales pitches, even when they come from the mouth of a trusted friend, co-worker, neighbor or church member.

      'Gifting Clubs,' Pyramid Schemes Flourish on Web...
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      Texas Sues 'GoogleMoneyTree' Promoter

      Scam uses high-profile name to deceive consumers, state charges

      Texas Attorney General Greg Abbott today charged two Utah-based defendants with operating a fraudulent work-at-home scheme. The states enforcement action names Infusion Media Inc. and Jonathan D. Eborn, whose promised six-figure earnings for conducting specialized Google and Yahoo Internet searches.

      According to investigators, the defendants promised big payouts in order to convince Web users to spend $3.88 on shipping and handling for a free kit that supposedly would show them how to make money from home. Those who purchased the kit were later surprised to discover they were being charged $72 a month by the defendants.

      Internet users encountered the defendants Google and Facebook advertisements, which linked to blogs that were created to promote their work-at-home offer. The blogs included testimonials that touted their products and led viewers to believe that previously unemployed users were earning high salaries conducting Internet searches. According to the blogs, interested parties need only acquire a free kit, which was available through GoogleMoneyTrees sign-up page.

      Individuals who requested the kit were required to provide substantial personal information, including their name, address, telephone number, email address, and credit card payment information, which was supposed to be used to pay the $3.88 shipping and handling fee. Customers believed they were only obligated to pay the refundable processing fee and were not aware there would be additional charges to their credit cards.

      According to the states enforcement action, GoogleMoneyTree failed to clearly inform purchasers that they had been enrolled in monthly memberships and had only seven days to cancel their trial membership. Purchasers who failed to cancel within seven days were automatically charged $72 on their credit card statements each month.

      In addition to the unexpected credit card charges, customer complaints obtained by state investigators indicate that GoogleMoneyTree failed to actually send the free kit and refused to honor customer refunds.

      The state is seeking an injunction, civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act, as well as restitution for purchasers.

      Texas Sues 'GoogleMoneyTree' Promoter...
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      Massachusetts Approves Settlement in Inflated Drug Price Lawsuit

      Companies inflated prices without economic justification

      A federal court in Massachusetts has preliminarily approved a settlement in a case alleging that a drug wholesaler inflated drug prices, and targeted consumers stand to get some of their money back. The total settlement of the suit is $350 million.

      The suit alleges that defendant corporations McKesson and FirstDataBank inflated the average wholesale price (AWP) of prescription drugs. The AWP is a pricing benchmark used to calculate the amount that insurance companies will reimburse consumers for wholesale prescription drugs.

      Typically, the AWP is set by the manufacturer, and becomes effective on a given date. According to the suit, the defendants inflated a "mark-up factor" used to calculate the AWP of over 400 drugs.

      Specifically, FirstData, a publisher of drug data, told the pharmaceutical industry that it derived the AWP from "a survey" of wholesalers in an attempt to verify the prices reported by the manufacturer. In reality, however, McKesson was the only wholesaler that FirstData actually surveyed. The two companies increased the AWP markup from 20 to 25 percent for over 400 drugs, without any economic justification. To conceal the scheme, the companies only increased the markup when another price announcement was made by a drug manufacturer.

      Although the defendants deny wrongdoing, they have agreed to reimburse eligible consumers. McKesson, a Fortune 500 health care services company, has agreed to pay $350 million into a settlement fund. Sixty million of this will go directly to consumers; the rest is allotted to be paid to "non-governmental third parties."

      The suit alleged counts under the Racketeer Influenced and Corrupt Organizations Act (RICO), since the defendants used interstate mail to perpetuate the fraudulent scheme; untrue and misleading advertising; unfair competition; negligent misrepresentation; civil conspiracy; and the California Consumer Legal Remedies Act, which prohibits the use of deceptive acts in an attempt to sell a product.

      Eligible class members include anyone who paid a co-payment for one of the settlement drugs between August 1, 2001 and March 15, 2005, and uninsured or underinsured consumers who paid the full value of one of the drugs between August 1, 2001 and January 23, 2009.

      The plaintiffs' attorney, Steve W. Berman of Hagens Berman Sobol Shapiro, said that eligible class members would "receive some money back in the near future if they file a claim."

      McKesson's Web site describes the corporation as "the oldest and largest health care services company," and asserts that the company "is helping transform the health care industry into a modern, efficient, and quality-driven system."

      Consumers who think they may be eligible to recover should fill out a claim form, available at the official settlement Web site.

      Massachusetts Approves Settlement in Inflated Drug Price Lawsuit...
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      Scam Artists Profit from Chinese Drywall Fears

      Bogus tests, phony remedies being widely promoted, Florida warns

      Florida Attorney General Bill McCollum is warning Florida homeowners affected by Chinese drywall to avoid scams related to the situation.

      At least two types of fraudulent activity involving the defective drywall have been reported to the Attorney Generals Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies which falsely claim to remove the corrosive properties of the product. The Attorney General cautioned homeowners not to fall victim to these scams and others which may develop.

      According to authorities reports, when defective Chinese drywall is present in a house, a chemical process causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home.

      Most homes that contain defective imported drywall were built between 2004 and 2008. If a home was not built during that time period it is unlikely that the product is present.

      The Attorney General noted that a homeowner can determine if defective drywall is present in his or her home by asking the homebuilder or a qualified air conditioner technician to conduct a professional visual inspection. The presence of defective imported drywall cannot be determined by testing the air in the home.

      Additionally, if the substance is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. These products may make the problem worse.

      Homeowners should be aware of and attempt to avoid the following scams which builders have reported to the Attorney Generals Office:

      • Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.

      • Solicited home inspections costing thousands of dollars by experts with no apparent qualification. Homeowners should beware of cold calls and door-to-door solicitors.

      • Sale of sprays and applications which allegedly claim to miraculously cure the corrosion problem. Not only are these products ineffective, the addition of moisture may accelerate the corrosion problem.

      • Sale of ozone generators. Ozone will actually increase the chemical reaction between the drywall and copper and the corrosion will be accelerated.

      Task force needed?

      Earlier this week, a Florida state senator said quick action was needed to avoid "a wave of hysteria" over Chinese drywall. Florida Gov. Charlie Crist should convene a task force to study the problem, State Sen. Dave Aronberg said. The task forces mission should be to determine the best way to remove and replace any defective drywall, and recommend whether new or revised state laws or regulations are needed, he said in a conference call with reporters.

      "We need results urgently," said Aronberg, a lawyer, according to the Palm Beach Post. "Lengthy litigation and lawsuits are not in the best interest of Florida homeowners, who need help now."

      Two U.S. Senators have already called for a ban on the importation of Chinese drywall, as reports of damage spread to five states. Sens. Bill Nelson (D-FL) and Mary Landrieu (D-LA) introduced a bill seeking a recall of affected drywall and a temporary ban on all drywall imported from China.

      Nelson has called on the Consumer Product Safety Commission (CPSC) to determine the cause and scope of the problem, and to initiate a recall if necessary. He also called on the agency to draw up general drywall safety standards, noting that such regulations are not currently in place.

      The CPSC began an investigation in February, which is continuing. The agency is trying to determine if consumers' problems are caused by sulfur-based gases coming from the drywall. If it finds a problem, the commission can place a moratorium on sales of some drywall.

      Most of the complaints so far have come from Florida, Louisiana, Mississippi, Texas and Virginia, where builders weren't able to get enough domestic drywall to keep up with demand during the housing boom of the last decade. They turned to imported drywall from China, which many consumers say is contaminated with a sulfur compound that produces a rotten-egg smell and causes headaches, difficulty breathing and other health problems.

      Aronberg and Walter Dartland, executive director of the Consumer Federation of the Southeast, said the task force would be a logical next step in the states attempt to deal with the problem. Crist's office said he is monitoring the situation and the state health department says it is planning to take air samples from homes containing Chinese drywall to determine how serious the problem really is.

      The department earlier said it has determined that Chinese drywall, unlike its American-made counterpart, contains the compound strontium sulfide, which lets off the rotten egg smell reported by so many consumers.

      In their bill, Sens. Nelson and Landrieu want the CPSC to study 10 samples imported from China since 2004 and used in houses in the affected states. They are also asking the Departments of Treasury and Housing and Urban Development to provide assistance, including mortgage relief, to affected homeowners. The senators note that in addition to the cost of repair, most affected homes have decreased in value. Under the proposal, the costs would be borne by the responsible parties, not American taxpayers.

      Scam Artists Profit from Chinese Drywall Fears...
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      Texas Sues

      Devices don't work, tax breaks don't apply, state charges

      Texas Attorney General Greg Abbott has charged a southern California businessman with violating the Texas Deceptive Trade Practices Act (DTPA). According to the states enforcement action, the defendants do-it-yourself manuals on installing water-to-fuel devices in vehicles do not reduce fuel costs, increase gas mileage or enhance engine performance.

      Eyal Siman-Tov, also known as Ozzie Freedom, operates 1 Freedom Inc. and an affiliated Web site,, as well as several other online sites. In addition to his manuals claims about the benefits of water-to-fuel conversion, the defendant also falsely stated that purchasers who fitted their vehicles with water-to-fuel devices would be eligible for a federal income tax credit.

      The company's practices were exposed in a July 2008 story by's David Wood, who reported that scientists found the claims preposterous, with one saying the energy created would "not amount to a hill of beans."

      Almost 3,200 Texas customers purchased the manuals between October 2007 and September 2008, when gasoline prices peaked. The so-called Water4Gas manuals cost $97 for a two-book set.

      The defendants Web sites claim that the manuals guide users through a vehicle modification process that purportedly allows customers to use water as a fuel source.

      To achieve this, the manuals claim to instruct customers how to construct an onboard hydrogen-on-demand device, which allegedly works with the vehicles battery to split water molecules into oxygen and hydrogen gases through electrolysis. The resulting mixture of these gases, called Oxyhydrogen, is then burned as fuel along with gasoline or diesel.

      The Attorney Generals investigation revealed that Siman-Tov has no competent and reliable scientific studies to support his claims. For example, investigators have uncovered no reliable lab test results concluding that customers can expect the enhanced engine performance as described in the defendants online testimonials.

      The Office of the Attorney General seeks injunctions to halt the unfounded claims, as well as civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act, and restitution for financially harmed customers.

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      Texas Attorney General Greg Abbott has charged a southern California businessman with violating the Texas Deceptive Trade Practices Act (DTPA)....
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      California Sues Wells Fargo Affiliates for $1.5 Billion

      Attorney General wants money recovered for defrauded investors

      Attorney General Edmund G. Brown Jr. today filed suit against three Wells Fargo affiliates to recover $1.5 billion for California investors who purchased auction-rate securities based on "false and deceptive" advice that these financial instruments were "as safe and liquid as cash."

      "Wells Fargo's affiliates promised investors auction-rate securities were as safe and liquid as cash, when in fact they were not, and now investors are unable to get their money when they need it," Attorney General Brown said. "This lawsuit seeks to recover $1.5 billion for Californians and holds these companies accountable for giving investors false and deceptive advice."

      Auction-rate securities are investments with long-term maturity dates (e.g., bonds) that Wells Fargo and other banks marketed as short-term investments equivalent to cash. These investments paid a slightly better rate of return than a bank account. And, investors could sell the securities at regular weekly or monthly auctions which provided the promise of liquidity.

      In February 2008, these auctions froze up nationwide, and investors were no longer able to redeem their securities for cash, as promised. This left approximately 2,400 Californians who had invested with Wells Fargo without access to more than $1.5 billion. Almost 40 percent of Wells Fargo's auction-rate securities were held by Californians, far more than any other state nationwide.

      By August 2008, major financial institutions including UBS, Citigroup, Wachovia, and Merrill Lynch met their obligations to investors and restored the cash value of these securities. The three Wells Fargo affiliates, however, have refused to do so.

      Consequently, Attorney General Brown filed his complaint in San Francisco Superior Court today to restore the cash value of these securities, force the companies to disgorge any subsequent profits tied to the securities, and obtain civil penalties of $25,000 per violation. This could amount to hundreds of millions in civil penalties.

      The suit contends that three Wells Fargo's affiliates — Wells Fargo Investments, LLC, Wells Fargo Brokerage Services, LLC, and Wells Fargo Institutional Securities, LLC — violated California's Securities Law by:

      • Routinely misrepresenting, marketing and selling auction-rate securities as safe, liquid and cash-like investments similar to certificates of deposit or money-market accounts and omitting material facts in violation of California Corporations Code 25401;

      • Offering and selling, as a broker-dealer, securities by means of a manipulative, deceptive or other fraudulent scheme, device, or contrivance in violation of California Corporations Code 25216(a);

      • Marketing and selling auction-rate securities to investors for whom these investments were unsuitable in violation of California Corporations Code 25216(c) and California Code of Regulations, title 10, section 260.218.2; and

      • Failing to supervise and adequately train sales agents pushing these investments in violation of California Corporations Code 25216(c) and California Code of Regulations, title 10, section 260.218.4.

      In marketing and selling these investments, Wells Fargo's affiliates ignored clear industry and internal warning about risk and previous auction failure:

      • In March 2005, the Securities and Exchange Commission (SEC), the "Big 4" accounting firms, and the Financial Accounting Standards Board all determined that auction-rate securities should not be considered "cash equivalents."

      Despite these warnings, Wells Fargo's affiliates continued to aggressively sell and falsely market auction-rate securities as safe, liquid, cash-like investments until the nationwide auction markets froze in February 2008.

      In marketing and selling these investments, Wells Fargo's affiliates failed to inform investors about how auction-rate securities or the auction process worked and the risks and consequences of auction failure.

      Following the collapse of these auctions, Wells Fargo's affiliates took advantage of the situation and offered loan programs to those who needed immediate access to the money tied up in these investments.

      Investments ranged from $25,000 to millions, and investors included small businesses and small business owners, retirees, married couples, and other hard working Californians. These investors were led to believe they were putting their savings and assets into a safe and accessible place, but instead, they were left without access to their cash, leading to serious hardship. For example:

      • A Southern California woman suffering from lung cancer and needing extra funds to help treat her illness sold her home and put the money into a Wells Fargo savings account. A Wells Fargo agent later recommended she put the money into an account with a higher interest rate. When the woman told the agent she needed to access the money and could not afford to lose any of it, she was reassured that her money would be safe like cash. Without disclosing the nature of the investment, the agent invested the funds in auction-rate securities and when the auctions failed, the woman could not access her money.

      • A Bay Area company invested $400,000 in a money market account until it was solicited by phone to invest in what was described to them as a liquid, money market-like-account. They were told the only difference was the amount of notice needed to pull the funds (one week vs. one day). The funds were intended to help the business expand, but after the auctions failed, employees were instead laid off. The company was never informed that they were investing in auction-rate securities or that there were substantial risks tied to the investment.

      California Sues Wells Fargo Affiliates for $1.5 Billion...
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      Missouri Joins Mortgage Scam Smackdown

      Attorney General promises "zero tolerance" for fraudsters

      Missouri Attorney General Chris Koster has announced a "zero tolerance" campaign against mortgage scams and has filed lawsuits against two businesses that sent allegedly misleading direct-mail advertisements for mortgage refinancing to consumers.

      The two lawsuits follow a similar lawsuit Koster filed against a California-based mortgage broker doing business in Missouri, as well as coordinated actions by other states and the Federal Trade Commission.

      In his latest actions, the state filed suit against Goldstar Home Mortgage, which sent direct-mail letters to consumers with the consumers' own bank name at the top of the letter, making it appear that the consumers' bank was encouraging them to refinance.

      In addition, Goldstar allegedly marketed mortgage-refinancing products that were inappropriate for the homeowners they targeted. In at least one case, the Attorney General says the business offered a loan that likely would have left a homeowner with a mortgage that was higher than the home was worth.

      Koster's second lawsuit was filed suit against Oxford Lending Group, which allegedly made deceptive representations regarding the "Economic Stimulus Act of 2008" in its mailing to appear that consumers had a special opportunity to refinance, and using the U.S. Department of Housing and Urban Development label and name to mislead the recipient that the letter was related to the federal government.

      "This Attorney General's office will have zero tolerance for any mortgage broker or refinancing lender that uses deception to lure consumers into doing business with them," Koster said. "The Attorney General's office will use all its powers to investigate and prosecute businesses that use deception and fraud in advertisements to Missouri consumers."

      Koster said he is concerned that consumers are particularly vulnerable to mortgage scams now, as foreclosures continue to increase, interest rates are at historic lows for refinancing, and the federal government is launching its plan to help struggling homeowners.

      He noted that while the federal government's program puts measures in place that can help homeowners, unscrupulous businesses are luring consumers into scams that can actually leave them in worse financial condition. Koster warned that seniors are particularly at risk for such scams.

      "Increasingly, mortgage brokers are using deceptive ploys to draw Missourians back into the refinancing game," Koster warned. "Our goal is to alert consumers that these scams are out there and to sue every mortgage broker who crosses the line."

      Missouri Joins Mortgage Scam Smackdown...
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      NUTRO Bites Back; Denies Probe of Pet Deaths, Illnesses

      Hundreds of pet owners say the company's food made their pets ill

      NUTRO Products Inc. denies it's under investigation by the Food and Drug Administration (FDA) — even though an official of that agency told on Monday that the pet food maker is the focus of a probe.

      An FDA official who spoke on the condition of anonymity confirmed that ongoing investigation is the reason the FDAs Division of Freedom of Information denied a request for a list of complaints and lab results the agency has collected about NUTRO pet food. The FDA did not elaborate on the focus of its investigation, saying only that it could be criminal or civil in nature.

      Hundreds of pet owners nationwide have told their dogs and cats have experienced sudden and recurring bouts of vomiting, diarrhea and other gastrointestinal problems after eating various flavors of NUTRO. In many cases, the animals recovered after their owners switched them to another brand of pet food. Others died.

      NUTRO has repeatedly defended its products, saying they are 100 percent safe, and also denies that it is being investigated.

      We've been in contact with officials from the U.S. Food and Drug Administration (FDA) regarding your April 20th posting that claims there is an ongoing FDA investigation into NUTRO pet food, spokeswoman Monica Barrett wrote in an e-mail Tuesday night. This is not true. We have confirmed with officials of the FDA division responsible for regulating pet food, the Center for Veterinary Medicine (CVM), that there is no current or ongoing investigation of Nutro Products, Inc.

      The FDA had not previously commented on complaints regarding NUTRO pet food. News of its investigation came to light only after the agency denied a request filed by under the Freedom of Information Act for a list of all complaints and lab results the FDA has collected since 2007 about NUTRO.

      The FDA said the release of those records could interfere with law enforcement proceedings.

      The document (s) constitute record (s) complied for law enforcement purposes, the disclosure of which could reasonably be expected to interfere with law enforcement proceedings, the FDAs George A. Strait Jr. wrote in a letter denying the FOIA request.

      In a follow-up telephone call, an agency official confirmed that the request was denied because of an ongoing investigation. The official requested anonymity because he or she was not authorized to speak publicly about the investigation.

      Menu investigation

      Another pet food company, Menu Foods, said in a recent financial filing that the FDA had commenced a criminal investigation to determine whether Menu violated the Food, Drug, & Cosmetic Act. The company noted that additional actions or investigations may arise in the future. It did not mention any other pet food companies. Menu last year settled a $24 million lawsuit that grew from the largest pet food recall in U.S. history.

      NUTRO is a division of privately-held Mars, Inc., which is not required to file the extensive financial disclosure statements required of publicly-traded companies. After NUTRO was acquired by Mars in 2007, Mars was fined a record 4.5 million (about US$5.8 million) by the German Federal Cartel Office (FCO) for not observing the required waiting period before closing the transaction.

      Mars had been by far the leading provider of cat and dog food in Germany prior to the merger. NUTRO also had extensive marketing operations in Europe, but under pressure from the German regulators, Mars divested NUTRO's Austrian and German businesses.

      Worrisome trend filed its Freedom of Information request for NUTRO records last year after an analysis of consumer complaints revealed that scores of pets from California to South Carolina had experienced sudden and recurring bouts of diarrhea, vomiting, and other digestive problems.

      A common denominator among those dogs and cats was NUTRO pet food. In many cases, consumers said their pets conditions improved once their owners stopped feeding them NUTRO pet food. Some animals died, however. continues to receive complaints about NUTRO from dog and cat owners nationwide. In the past year, consumers have filed more than 600 complaints saying their dogs or cats suddenly became ill after eat NUTRO. The problems these pets have experienced are similar: vomiting, diarrhea, and other digestive issues.

      Most of the complaints mirror one received last week from Linda P. of New Baltimore, Michigan.

      For three years, I have been feeding my dog NUTRO Natural Choice Lamb Meal & Rice Formula Small Bites Dry Dog Food, she said. The last bag I bought, I notice the food color was lighter than in the past. Me being who I am, I believed there was a changed in formula for the better. My Dachshund/Lab became ill, vomiting food chunks and yellow bile as well. We took him to the vet and I have been feeding him homemade chicken and rice and antibiotics and he is on the mend.

      She adds: How can so many dogs get sick and nothing be done? Today I will start mixing his homemade food with a different brand of dry food. I never want anyone else to go through, what appears to be many, the same situation as our dogs. It will be a week or two before Im sure my dog is okay.

      NUTRO denies it

      NUTRO defends its products and insists its food is safe. Many NUTRO customers also tout the food, saying their pets have had no problems. And veterinarians say several factors can cause gastrointestinal problems in dogs and cats, including changes in diet, newly developed sensitivities to pet foods, and viral infections.

      But pet owners who complain to on a nearly daily basis are convinced something is wrong with NUTROs food. And they say its no coincidence that so many dogs and cats have become sick — with the same symptoms — after eating various flavors of that pet food.

      NUTRO makes dogs sick, says Erin of Encino, California. It is a fact and Im outraged that nobody is taking it off the shelf.

      Erin says her three-year-old Puggle was a healthy active dog until she started eating NUTRO Natural Choice Lamb Meal & Rice Formula and NUTRO Max Beef & Rice Dinner Chunks in Gravy: After about two weeks of this food, she became sick. (She was) constipated for a few days, then had diarrhea, and finally vomiting and was always extremely thirsty. The last straw was her laying lethargic on the couch with white gums.

      Thats when Erin rushed her dog to the vet.

      The vet said she had allergies, prescribed an antibiotic and cortisone and gave me a bag of Science Diet. I feed her the Science Diet in place of NUTRO because it was free, and she was fine within a week.

      Erin, however, says she made the mistake of switching her dog back to NUTRO after the Science Diet was gone.

      She again had constipation, followed by horrible diarrhea, and finally vomiting yellow bile and white gums, Erin told us. There is no way that all these stories are just coincidences (not) if my dog is fine when she isnt eating NUTRO and when she is eating it, shes horribly sick. I have switched her back to Science Diet and all her symptoms are gone and her appetite has returned to normal.

      Another California pet owner says her dog also became ill after eating NUTRO pet food.

      My husband and I purchased NUTRO chicken and rice small bites for our two Chihuahuas, says Jessica of Larkspur. After about five days, our six-year-old male Chihuahua became lethargic, groaned a lot, developed a fever, was not excited to go on walks, and lost excitement for anything that used to bring him joy.

      My husband began to suspect it was the new food as he had only developed these symptoms after eating NUTRO. He has always been a healthy and active Chihuahua.

      The couple took the dog to their vet, who ran tests but couldnt pinpoint the problem. He was given antibiotics and we are crossing our fingers they work. Our Chihuahua can barely walk, he is groaning in pain, and is extremely depressed.

      Across the country, a longtime NUTRO pet owner in Pennsylvania told us her dog suddenly became ill after eating the food.

      I had been feeding my dog NUTRO for years, says Amy D. of Webster, Pennsylvania. I started feeding her NUTRO for sensitive stomachs about 6 months ago. At first everything seemed fine. Then my dog, who never urinated in my house, started having accidents (frequently). She needed to go out constantly and would squat repeatedly, come in, and ask to go right back out. I took her to the vet and began treatment for bladder infection. Upon finishing treatment it started all over again.

      Amys vet discovered crystals in the dogs urine, which also had a high PH balance. The vet put the dog on another medication.

      In the meantime other than the restless pacing to go outside, she seemed disinterested and lethargic, Amy says. Then she began having extremely loose bowel movements (an awful bright yellow) in the house.

      Amy launched her own investigation and discovered the scores of complaints about NUTRO on

      I couldn't believe my eyes. Could it really be the dog food I had trusted so much making my beloved pet ill? I immediately threw away all my NUTRO dog food.

      Amy is now feeding her dog another brand of pet food. And Im thrilled to say she is her old self again. She no longer has to take any medicines and has no more accidents or uncontrollable urges. Thanks to this Web site and everyone who took the time to file a complaint, I have my healthy happy dog back.

      Not a fluke?

      A pet owner in New York said his puppy had the same experience as Amys dog after eating NUTRO. And hes convinced its not a fluke.

      We got our dog two weeks ago and our puppy was healthy when we got her, says Manny of Fresh Meadows, New York. She started eating NUTRO Natural Choice for puppies, since it was recommended by a friend of ours. A week later, she started squatting to urinate, but only small drops or none at all came out. When she can urinate, it is frequent, in small amounts, and contains blood.

      Manny took his puppy to the vet, who prescribed amoxicillin.

      She received a sonogram, culture test, and urinalysis test. The results showed that she may have a stone in her bladder. The blood in her urine is caused by the stone scraping the bladder walls. The urinalysis test showed that she had a high PH balance. I don't think it is a coincidence that I have the same exact problem as Amy, adds Manny. I wonder if something is wrong NUTRO pet food again. Our puppy is still sick.'s investigation into the complaints weve received about NUTRO pet food has also revealed:

      • Six dogs unexpectedly died — or were euthanized — in 2008 after eating NUTRO pet food. Those dogs include two Italian Greyhounds in Indiana, a Beagle/Whippet mix in Pennsylvania, two German Shepherd puppies in North Carolina, and a Doberman Pinscher in Texas;

      • The FDA investigated the April 2008 deaths of two Italian Greyhounds dogs in Indiana. The FDA tested samples of the NUTRO food those dogs ate, but did not find any toxins. An autopsy indicated the dogs died from antifreeze poisoning. The dogs owner doesnt believe those results, saying there is no antifreeze around her home. No one has tested the NUTRO food the other dogs ate before they died;

      • Two Italian Greyhounds at a military base in Italy became sick after eating NUTRO food. The dogs owner told us she hopes the FDA is investigating NUTRO and urged the agency to move quickly. It is hard to tell how many people at overseas military bases are feeding this (food) to their dogs and possibly killing them, says Michelle M. who bought her dogs NUTRO food at the bases commissary.

      • A pet nutrition specialist for NUTRO told us shes heard complaints about the companys food making dogs and cats sick. She reported those concerns to her supervisor, but said they were ignored. She later resigned.

      Some pet owners, however, say NUTRO is the only brand of food their dogs and cats can eat.

      My Shar-peis are the most sensitive dogs I have ever owned, says Allison R. of Nampa, Indiana. On the wrong food their hair falls out, their eyes weep and their ears get nasty. It takes me a good 3 months of only NUTRO dog food in order to reverse the affects of the other food. I have found that the senior diet is what works best, not sure why, but it seems to keep my Shar-Peis looking healthy.

      A Tennessee pet owner also defends NUTRO pet food — and warns consumers not to jump to conclusions based on Internet complaints.

      I feed all of my dogs and cats Nutro products and they are just as healthy as they have ever been, says Brenda of Springfield, Tennessee. They have healthy shiny coats and their stools are firm.

      Gradual transition

      Brenda also had some advice to pet owners switching brands of food.

      Do a gradual transition from the old food, she said. If you dont, your dog will likely experience these issues. Not every bout of diarrhea, constipation, bladder infection, liver and kidney failure and loss of excitement to go on walks should be attributed to food. Your first responsibility as a pet owner should be to take your dog to the vet before you blame anyone. Do your research and don't let any Web site diagnose your pet.

      NUTRO has repeatedly insisted its food is 100 percent safe and meets all standards set by FDA, the U.S Department of Agriculture (USDA) and the Association of American Feed Control Officials (AAFCO). A spokeswoman said all NUTRO products are tested for melamine, molds, toxins and other bacteria. And she called the complaints weve received isolated reports of inaccurate information posted online.

      The company, however, set up a special a section on its Web site in response to the issues and concerns raised in the stories. NUTRO said it takes all customer complaints seriously and encouraged pet owners with concerns about the food to contact the company at 1-800-833-5330.

      Veterinarians have said its not uncommon for pets to have sudden bouts of vomiting, diarrhea, and other gastrointestinal problems. They also said a number of factors — pet food, stress, or a viral infection — could be the culprit.

      Dr. Steven Hansen, a veterinary toxicologist with the American Society for the Prevention of Cruelty to Animals (ASPCA), reviewed some of the NUTRO complaints, in an effort to find out why so many pets have become sick — or even died — after eating NUTRO food.

      Unfortunately the cases are not consistent and appear to be anecdotal with no real definitive diagnostic findings, Dr. Hansen said. Without any consistent trends in findings we can not do anything any further. This does appear to us to be a situation where bad things happen, but they are not likely food-related.

      Hansen, however, said consumers who suspect NUTROs food is a factor in their pets illnesses should have their animals examined by a veterinarian and document the problems.

      I would also recommend that if they suspect the food is the problem, they should take a freezer bag full of it — along with the label information that has the products name and lot numbers — to their vet, he told us. If the vet suspects the food is the cause, the vet should then contact the company and FDA. If theres a problem, we need to document it and get supporting lab results.

      Owners anxious

      The arguments back and forth don't mean much to anxious pet owners, who say its about time some federal agency investigated NUTRO and its products.

      After so many complaints, how can this dog food still be on the market for consumers to purchase and feed to their dogs? Andrea G. of Sicklerville, New Jersey asked us. I have been feeding my Dachshund NUTRO Ultra dry dog food for many months. Suddenly, 10 days ago, he started vomiting yellow bile 1- 2 times daily.

      It makes me sick to think that I might be the one responsible for my dog's vomiting by feeding him this food. I can only hope that something is done, very soon, to prevent other pets from becoming ill.

      Read verbatim complaints and comments from consumers.

      NUTRO Bites Back; Denies Probe of Pet Deaths, Illnesses...
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      Home Prices Show Surprising Gain in February

      More signs of a turnaround?

      The latest numbers from the Federal Housing Finance Agency have taken a lot of real estate brokers — as well as homeowners — by surprise. The government agency reports U.S. home prices actually rose 0.7 percent on a seasonally adjusted basis from January to February.

      A fluke or a sign of something more hopeful?

      Most analysts say it's much too soon to read anything into one-month's worth of numbers. Prices over a longer period remain depressed. For the 12 months ending in February, U.S. prices fell 6.5 percent. The U.S. index is 9.5 percent below its April 2007 peak.

      The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.

      For the nine Census Divisions, seasonally-adjusted monthly price changes from January to February show the most improvement was in the west. In fact, prices ranged from a negative 1.2 percent in the East North Central Division to 3.8 percent gain in the Pacific Division.

      In addition to the Pacific region, other regions showing a gain in home prices include the New England states with a 2.2 percent gain; West South Central states, with a 1.9 percent gain; West North Central states, with a 1.5 percent gain; the Middle Atlantic states with a 0.7 percent gain; and the Mountain region, with a 0.1 percent gain.

      According to the report, February 2009 home values are roughly where they were in April 2005.

      Home Prices Show Surprising Gain in February...
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      Telephone Industry Still Lacks Significant Competition

      25 years after AT&T breakup, competition comes from wireless, VoIP

      Janine Migden-Ostrander
      Ohio Consumers' Counsel

      April 21, 2009
      Twenty-five years after the breakup of AT&T, consumers have seen significant changes in how they make telephone calls, what they pay and the services they receive.

      The telephone monopoly agreed in a 1982 settlement with the U.S. Department of Justice to break itself into seven companies, called Baby Bells, to provide local telephone services by region. AT&T kept its long-distance service, then its most profitable division. The agreement went into effect in 1984.

      Technology and industry structures have since changed and AT&T has reconstructed itself, without many of the regulations that once applied to the original company. Instead of seven companies, there are three — AT&T, which also includes long-distance operations; Verizon, which absorbed former long-distance carrier MCI; and Qwest.

      The Office of the Ohio Consumers Counsel (OCC) has advocated on behalf of residential telephone consumers over those 25 years, making sure they have a voice when higher rates are proposed and service quality decreases. Its been a constant struggle.

      Are we better off today than we were 25 years ago?

      The answer depends on whos talking. Competition for AT&T service has not come from similar providers as was hoped when the government broke up the monopoly. Instead, it has come from companies offering mobile phone or Voice over Internet Protocol (VoIP) services. But these services are different.

      Many consumers are as dependent on mobile phones as they are on traditional land lines. Others still have phone service through a wire line, but that line might be connected to a cable TV system or directly to the Internet.

      Cell phones offer mobility, but require a wireless signal that is not available in many rural areas of Ohio. VoIP service requires a broadband Internet signal that also is not available to many. Unlike traditional wire line service that operates even during extended electrical outages, wireless and VoIP services cannot operate after back-up batteries, if any, are depleted.

      Less regulation

      Moreover, the price and quality of cell phone and VoIP services are generally not regulated by state government compared to the way the Baby Bells services were.

      Cell phone service with unlimited calling is typically more expensive for consumers than wire line service. VoIP service requires consumers to pay a separate monthly fee for access to the Internet and a charge for VoIP service itself.

      Today, 25 years after it was broken up, AT&T and other telephone companies seek fewer regulations and less regulatory oversight. While price has been deregulated, in order to protect consumers, the terms and conditions of service should continue to be regulated.

      Similar regulations should be applied to wireless and VoIP services to protect consumers of those services as well. It is fairly typical that services that have been deregulated in terms of price still retain regulation of consumer protections.

      Unfortunately, some traditional telephone companies have asked for rate increases even as they argue there is plenty of competition. This claimed competition should result in decreasing prices for consumers.

      Despite what the OCC considers to be the lack of effective competition for traditional phone service, the PUCO recently gave permission to AT&T Ohio to increase its basic local service rates. It has not yet increased these rates, but Cincinnati Bell (a company that was not part of the break-up) has increased some basic service rates in some exchanges by $3.75 per month over the last three years. Also, telephone companies tend to bundle services such as Caller ID and inside wire maintenance with their basic dial tone, which can be problematic for consumers who neither want nor need all the bells and whistles - and the expense - of additional services.

      Not nearly enough competition

      The OCC experts worry there is not nearly enough competition to drive down consumer costs and improve quality.

      Twenty-first century technology made construction and maintenance of telephone systems less expensive than 25 years ago, but prices are headed upward. We are fighting for consumers so they can benefit from cost savings. At the same time, we are advocating that all companies meet minimum telephone service standards.

      The upside of all this is that depending on where you live, you may be able to take advantage of bundled packages of services that include various telephone features as well as cable TV and/or Internet service. Long distance calling has become more affordable over the years as well.

      The OCC welcomes the development of new technologies and options for consumers, but believes consumer protections are needed to ensure fairness.

      Consumers must remain diligent and selective in their decisions about phone service. When given the opportunity to switch telephone carriers, you should research which company offers the best plan and cost for services. You should carefully read and understand your monthly bill and question charges you do not understand or believe you should not have to pay



      The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals.

      Telephone Industry Still Lacks Significant Competition...
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      Some Efforts To Control Eating May Backfire

      Addition of healthy options to menu spurs unhealthy eating

      More restaurants and vending machines offer healthy choices these days, so why do Americans' waistlines continue to expand? A new study in the Journal of Consumer Research shows that some efforts to control eating may backfire.

      Consumers may feel they have fulfilled a healthy eating goal even if they choose an unhealthy food, and the presence of a healthy option among food choices may draw their attention to the least-healthy choice available, according to authors Keith Wilcox and Lauren Block of City University of New York, Beth Vallen of Loyola College, and Gavan J. Fitzsimons of Duke University.

      "Just because we consumers want to see healthier items available does not mean that we are going to choose them," write the authors. "We present evidence that for many consumers, the addition of healthy alternatives to food choice sets can, ironically, increase the consumption of very indulgent food items."

      In a series of four studies, the researchers examined how consumers' food choices differed when a healthy item was included in a set compared to when it was not available. The study results showed that the mere presence of a healthy item vicariously fulfills health-related eating goals, drives attention to the least-healthy choice, and provides people with license to indulge in tempting foods. They also demonstrated that these effects were more pronounced in people with relatively high levels of self-control.

      In one study, participants chose from a menu that included French fries, chicken nuggets, and a baked potato or these items plus a side salad. After being told that each item cost the same amount of money, respondents were instructed to choose a side dish for their lunch.

      "As we predicted, when given the choice of fries, chicken nuggets, or a baked potato, people high in self-control rarely chose the fries, which are considered the least-healthy option in the set. However, add the salad to the set and what happens? High self-control individuals were significantly more likely to choose the French fries."

      The authors found the opposite was true for people with low self-control.

      Some Efforts To Control Eating May Backfire...
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      Massachusetts Tackles Timeshare Scam

      Owner collected $1.5 million for resort that was never used

      April 17, 2009
      The State of Massachusetts has obtained a temporary restraining order against a former timeshare operator who allegedly collected over $1.5 million from consumers for timeshare intervals at the Navigator Beach Club Resort, which were never made available for use.

      In a lawsuit, the Massachusetts Attorney General's Office alleges that the defendants' conduct violated the Massachusetts Consumer Protection Act and the Massachusetts Real Estate Time-Share Act in connection with the construction and development of the Navigator as well as the marketing and sale of the time-share intervals.

      The temporary restraining order prohibits Robert Reposa, the former owner of the Navigator Beach Club and LSC Associates (LSC), the time-share's developer and managing entity partner, from collecting monies from consumers for any time-share intervals in Massachusetts.

      "The defendants in this case took well over $1 million in deposits from consumers for Navigator time-share intervals, yet failed to ever complete construction on the time-share resort or even record the time-share licenses," said Attorney General Martha Coakley.

      "Time-share developers cannot mislead consumers by making sales pitches that promise what they cannot deliver in order to obtain hard-earned money from consumers," Coakley said.

      According to the complaint, from 2005 through 2008, Reposa and LSC targeted and deceived over 100 consumers, including dozens of senior citizens, in connection with the sale of time-share intervals for the Navigator, a time-share resort located in Dennisport, Massachusetts. The defendants allegedly gave consumers false assurances that the resort was financially sound and would be completed by 2007.

      Coakley says the defendants took significant payments from consumers for time-share weeks, but never recorded the individual time-share licenses, or completed the construction on the project beyond installation of some rough plumbing and electricity in Navigator's pre-existing buildings.

      As part of their sales strategy, Coakley claims Reposa and LSC also falsely represented that the Navigator would be part of a time-share exchange network, which would allow consumers to exchange their time-share week at the Navigator for a week at a different resort, but evidence suggests that any membership the Navigator had in an established time-share network was quickly revoked.

      According to the complaint, prices for the time-shares ranged from $10,900 up to $54,900. By at least as early as the summer of 2006, however, Reposa and LSC allegedly knew that the Navigator was experiencing financial problems and that construction would not be completed by its target date. In an effort to quickly acquire as much cash as possible from consumers, the defendants allegedly induced consumers into paying off their entire remaining balances by offering an "early payment" discount.

      The complaint further alleges that Reposa and LSC violated the Massachusetts Real Estate Time-Share Act by failing to record consumers' time-share licenses with either the Barnstable County Registry of Deeds or the Barnstable County Registry District of the Land Court, thereby leaving no record of consumers' time-share interval ownership.

      Under the temporary restraining order issued April 15, 2009, by Judge Christopher Muse, the defendants are prohibited from forming a business to manage or develop a time-share resort in Massachusetts, destroying records that relate to their personal and business finances and disposing of any of their assets. As part of this lawsuit, the Attorney General's Office is seeking restitution, penalties and costs, including attorney's fees from the defendants. A hearing for a preliminary injunction is scheduled for Tuesday, April 21, 2009 at 2:00 p.m. in Suffolk Superior Court.

      More Scam Alerts ...

      Massachusetts obtained a TRO against a former timeshare operator who allegedly collected over $1.5million from consumers for timeshare intervals at the Nav...
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      Energy Drinks Work, But Not The Way You Think

      Taste receptors improve athletic performance in unusual ways

      A runners clutching a bottles of an energy drink is a common sight, and it has long been believed that sugary drinks and sweets can significantly improve athletes' performance in endurance events. The question is how?

      Clearly, "sports" drinks and tablets contain calories. But this alone is not enough to explain the boost, and the benefits are felt even if the drink is spat out rather than swallowed. Nor does the sugary taste solve the riddle, as artificial sweeteners do not boost performance even when they are indistinguishable from real sugars.

      Writing in the latest issue of The Journal of Physiology, Ed Chambers and colleagues not only show that sugary drinks can significantly boost performance in an endurance event without being ingested, but so can a tasteless carbohydrate — and they do so in unexpected ways.

      The researchers prepared drinks that contained glucose (a sugar), maltodextrin (a tasteless carbohydrate) or neither, then carefully laced them with artificial sweeteners until they tasted identical. They asked endurance-trained athletes to complete a challenging time-trial, during which they rinsed their mouths with one of the three concoctions.

      The results were striking. Athletes given the glucose or maltodextrin drinks outperformed those on 'disguised' water by 2-3 percent and sustained a higher average power output and pulse rate, even though didn't feel they were working any harder.

      The authors conclude that as-yet unidentified receptors in the mouth independent from the usual 'sweet' taste buds must be responsible.

      "Much of the benefit from carbohydrate in sports drinks is provided by signaling directly from mouth to brain rather than providing energy for the working muscles," Chambers said.

      The team then used a neuro-imaging technique known as fMRI to monitor the athletes' brain activity shortly after giving them one of the three compounds. They found that both glucose and maltodextrin triggered specific areas of the brain associated with reward or pleasure, while the artificial sweetener did not. This acts to reduce the athletes' perception of their workload, suggest the authors, and hence enables them to sustain a higher average output.

      Their findings support the emerging 'central governor hypothesis' — the theory that it is not the muscles, heart or lungs that ultimately limit performance, but the brain itself, based on the information it receives from the body. Stimulating the brain in certain ways — such as swilling sugary drinks — can boost output, perhaps giving athletes that all-important edge over their rivals.

      Energy Drinks Work, But Not The Way You Think...
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      Time Warner Cable Backs Down On Bandwith Caps

      Company halts trials of "metered broadband" after negative publicity blitz

      Consumers scored a big win today when Time Warner Cable announced it would halt proposed trials of "metered" Internet broadband services, where users would pay extra for going over "caps" on the plans they subscribed to.

      "It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption-based billing," said Time Warner Cable CEO Glenn Britt. "As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met."

      The announcement that Time Warner Cable was backing down on the trials was made by Senator Chuck Schumer outside the company's regional headquarters in Rochester, New York. "The Internet is vital, like water, like electricity, and before you dramatically mess around with the way its provided, you ought to be very, very careful," he said.

      The cable company had planned to roll out trials for metered broadband in several markets, including Rochester, Austin, Texas, and Greensboro, North Carolina, where subscribers would select one of several "tiers" of service based on their usage, with each tier including a cap on how much bandwith the user could utilize, and over-use charges if the user exceeded the cap.

      But the plan was greeted with massive protests, both online and off. Users organized town meetings in the test markets to challenge what they saw as a punitive billing system designed to protect the cable company's investment in video and television services — by penalizing those who watched lots of video and TV shows online, which could easily cause the user to exceed their cap.

      Web sites and blogs such as Karl Bode's Broadband and Philip Daupier's became focus points for opposition to the caps, providing daily updates on the campaign against Time Warner Cable's policy. Activists used Twitter to debate with Time Warner Cable representatives over every aspect of the proposed changes.

      The opposition grew so severe that it convinced Congressman Eric Massa (D-NY) to push for legislation that would ban "unfair pricing structures" and address Internet service competition in areas only served by one cable or one telecom provider.

      Massa called Time Warner Cable's retreat a "grassroots victory," but said he would "move forward with our legislation to ensure that any future plans to charge customers based on how much they download do not spring up anywhere else."

      Media watchdog group Free Press sent a petition with over 15,000 signatures urging the company to back down on its plan. Free Press' campaign director Tim Karr echoed Massa's statement that while the company's policy change was a huge victory, the issue would no doubt come up again.

      "Let this be a lesson to other Internet service providers looking to head down a similar path...Consumers are not going to stand idly by as companies try to squeeze their use of the Internet," Karr said.

      Britt's own language in the statement implied that the issue would be revisited, as he said Time Warner Cable would continue to roll out tools to help subscriber measure the amount of bandwith they use.

      "While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process," he said.

      Time Warner Cable Backs Down On Bandwith Caps...
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      Federal Court Reinstates Credit Card Suit

      Merchants charged with violating identity theft law

      By Jon Hood

      April 16, 2009
      A federal court reinstated a consumer class action alleging violations of the Fair and Accurate Credit Transactions Act (FACTA), meaning the case will likely be heard by a jury. The suit alleges that vendors violated the Act by printing too much credit card information on consumers' receipts.

      FACTA was passed in 2003 as an amendment to the Fair Credit Reporting Act (FCRA). FCRA requires merchants to take certain steps to protect consumers' credit information. FACTA is aimed specifically at protecting identity theft, and provides that "no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder ..."

      The plaintiffs in the action, Bobbie Harris and Julie Best Grimes, originally filed separate suits against Mexican Specialty Foods, Inc. and Rave Motion Pictures, respectively. Both complaints requested class certification for a class action lawsuit. The suits defined putative classes consisting of every customer who used a credit or debit card at either merchant's location, and whose receipt included more than the last five digits of their credit card number.

      The district court dismissed both actions, ruling that FCRA's damages provision is unconstitutionally vague and thus unenforceable. If a law does not sufficiently define a term or element of an offense, the statute's vagueness renders it unconstitutional. The reasoning behind this is that if a law does not adequately dictate which actions are illegal, people cannot be held to account for taking those actions.

      FCRA allows plaintiffs to collect between $100 and $1,000 for "willful violations" of the law. The district court ruled that this provision was unconstitutionally vague because it provided no criteria to allow a judge how much to award a given plaintiff.

      The Eleventh Circuit overturned the district court, ruling that the statute is not unconstitutionally vague. The court first noted that other laws, such as the Copyright Act, contain larger damage ranges that FCRA. Further, the court noted that the law sufficiently tells vendors which conduct is illegal (printing more than the last five digits of a credit card number).

      The court further ruled that the law did not give juries an excessive amount of discretion in awarding damages, since it limited their awards within a $900 range.

      In its ruling, the Eleventh Circuit vacated the district court's dismissal, and sent it back for further proceedings. As a result, Harris's and Grimes's lawsuits, which have since been consolidated, will likely be sent to a jury.

      While FACTA originally held merchants liable for printing either more than five digits or the expiration date, they are now only liable for the former. In 2008, then-President Bush signed legislation exempting merchants from liability for simply printing credit card expiration dates on the receipt. The law applied retroactively, wiping out any suits involving illegal printing of expiration dates. Thus, for liability under the Act, a merchant must have printed more than the last five digits of a consumer's cardholder.

      A federal court reinstated a consumer class action alleging violations of the Fair and Accurate Credit Transactions Act (FACTA), meaning the case will like...
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      Consumers Left to Sweep Up as Martha Stewart Tables Shatter

      Courts, feds, the press, Kmart and Martha turn their backs on consumers

      As winter turns to spring, consumers across the country are once again waking up to the sounds of their Martha Stewart Everyday glass tabletops exploding into thousands of tiny pieces. The tables, sold at Kmart, have a long history of spontaneously shattering, and they dont show signs of stopping anytime soon, not that anyone in authority seems to care.

      Months after a federal court dismissed a class action lawsuit alleging that the tabletops are defectively manufactured, owners of the product remain without recourse and several hundred dollars poorer, as they are left to clean the glass off of their patios and sometimes dig it out of their skin.

      Late last year, a federal court in Illinois rejected class certification in the action, ruling that the court would have to decide individual issues of causation for each plaintiff, making a class action impracticable.

      The suit, originally filed in 2005 on behalf of lead plaintiff Michelle Ronat, alleged that Kmart refused to give aggrieved customers refunds or replacements, since the tabletops werent covered under warranty. Martha Stewart Living Omnimedia (MSLO) — named after convicted felon and media darling Martha Stewart — when confronted by consumers, passed the buck to JRA Manufacturing, the Chinese company that produced the tables. The manufacturer, in turn, said the problem lay in a design defect attributable to MSLOs designers.

      The suit, prosecuted by Horwitz, Horwitz & Paradis, a New York class action firm, sought replacement tabletops for an estimated 300,000 consumers. With tabletops potentially costing as much as $500 apiece, the action threatened to leave MSLO liable for up to $150 million.

      The glass replacements cost so much because JRA, the manufacturer, declared bankruptcy in 2007, leaving consumers unable to obtain factory replacements. Instead, they have been forced to have glass custom-made to fit their tables. In some cases, individuals could end up paying more for the replacement top than they did for the entire table set in the first place.

      Although MSLO contends that a relatively small number of consumers were affected, has received hundreds of complaints over the past five years, as have other Internet sites. Like the swallows returning to Capistrano, the complaints increase predictably each spring, as tables are brought back outside and exposed to the sun's rays.

      Additionally, according to the lawsuit, because the tabletops werent covered under warranty, Kmart didnt keep records of most complaints. As a result, the complaints Kmart does have on file likely represent only a fraction of actual incidents.

      Similar complaints

      Affected consumers experiences are strikingly similar, and the most common and disturbing thread is that there is no way to know when a table is about to explode.

      My Martha Stewart Glass topped patio table exploded after only one year of use, writes Marylou of Brockton, Ma. I am left with a set of six chairs and no table to use. I received minor cuts from cleaning up all of the exploded glass which is fine but emotionally I was very upset after spending all that money on something that is now useless to us.

      In a similar vein, Judy of Unionville, Oh., writes, Table shattered into a million pieces. Paid good money for poor quality. It is so sad especially with the economy like it is. Who can afford this[?].

      A considerable number of consumers have had more than one table shatter. Some bought a set and ended up having several shatter over time, as happened to Lisa of Austintown, Oh.

      Two years after I purchased this set, the glass on the leaf design coffee table shattered into a hundred pieces, writes Lisa. The following year, the glass on the round table shattered ... The damage was not due to abuse by the owner. A defect in the product is obviously the cause.

      Others replaced tables that exploded, only to relive the experience months or years later. Thats what happened to Margaret of Cedar Rapids, IA.

      [We] have now had TWO patio tables from the Victoria Collection explode, writes Margaret. The first time it was over a year since we had it and our Kmart replaced it with a new table. It just happened again and it has been over [a] year or more.

      CPSC mulls the problem

      Martha Stewart Tabletops

      Trina Harris' visiting family was sitting at this table when it exploded in Yakima, Wash.

      Stephanie Green's "Lazy Susan" portion of her table exploded after less than two years of ownership in Van Nuys, Calif.

      Karen Dozier's local Kmart in Bakersfield, Calif., told her that it was probably vandalism that caused her table to shatter while she vacationed in Cancun, Mexico.

      More about Martha ...

      The Consumer Product Safety Commission (CPSC) looked into the problem in 2006. The Commission asked MSLO to redesign the tables which MSLO has supposedly done but never issued a recall.

      Even after years of complaints, the official cause of the problem remains a mystery. In 2006, contacted glass experts to get their opinions, but many were at a loss.

      Ken Toney of the Custom Glass Corporation in Kittanning, Pa., told that he ha[d] no idea what would cause that. He speculated that, because the glass was made overseas, a defect in the molecular compound could have caused it to shatter.

      However, William Lingnell, an expert who testified in the Ronat action, had a different theory. He hypothesized that the glass tabletop bumps against the tables metal frame, creating microcracks in the glass. According to Lingnell, these cracks eventually cause the glass to explode entirely. Lingnell noted that the edges of the glass are not dressed, or smoothed over; rather, theyre jagged and rough. This makes it easier for the glass to bump up against the metal edges of the table, form hairline cracks, and eventually explode.

      The JRA tabletops are made from tempered glass, which breaks into very small pieces, making it less dangerous than glass that breaks into larger shards. Nonetheless, a number of consumers have reported cuts and other injuries caused by the tabletops.

      A few days ago, the table shattered right in front of me and on top of my feet and legs, describes Tracy of South Park, Pa., in a representative complaint. My son, thank God, had just gotten up less than a minute before it shattered. I was covered in blood and slivers of glass. It was quite frightening.

      Some injuries were even more startling. Pam of Beavercreek, Oh., described the scene after her table exploded with her granddaughter sitting underneath.

      Glass was all over her. One big chunk stuck in her calf. She had blood everywhere. We ended up ... [at the h]ospital. She had glass all over. She had stitches in her leg and she has tiny scars various places from the little [shattered] pieces.

      Martha's not in

      Customer service has been virtually nonexistent.

      Kmart refuses to cover the glass under consumers warranties and routinely directs them to MSLO. Martha Stewarts conglomerate, in turn, blames Kmart and JRA, and essentially refuses to assist customers.

      In November 2008, when Martha Stewart herself was confronted by New York reporter Arnold Diaz, she was adamant that, We are not the liable party. Kmart is responsible for the tables. She also insisted that, I have not heard of one reported injury. With Kmart and MSLO pointing fingers at each other, JRA long gone from the marketplace, and Ronats suit dead in the water, consumers are left to fend for themselves.

      The Diaz incident was highly unusual. The daily press, which spends much time and energy complaining about Internet bloggers supposedly poaching on its turf, looks down its nose at consumer journalism and spends more time planning the table arrangement for the annual Gridiron Show or Radio-TV Correspondents Dinner than it does confronting Martha Stewart about her exploding tables.

      One consumer did manage to get MSLOs attention. David Potts of Marietta, Ga., called Kmart in 2005 to report that his tabletop had shattered. At first, Kmart was characteristically unresponsive, until Potts told them something that grabbed their attention: he was also known in some circles as Dave Michaels, the 1990s-era CNN anchor. Kmart relayed the inquiry to MSLO, which promptly took care of Potts.

      Potts himself was injured as he tried to clean up the broken glass. As Potts told, I was sitting at my computer when I heard this tremendous crash. I went outside to see what it was and it looked like my patio was covered in ice. It was the glass from the table top. I got a couple of slivers of glass in my fingers while I was cleaning it and here I am a year later and I can still feel pain in the tips of my fingers.

      Causation questions

      The class action suit was felled by individual issues of causation. Specifically, the court noted that some table tops may have been broken because of human error, such as a flower pot being dropped on the glass, rather than by spontaneous shattering. The court also said that differences in state laws made the class unmanageable.

      Individual causation factors are often used to justify the dismissal of consumer class actions. Just last week, a class action involving Microsoft Vista was tossed on similar grounds.

      The court also noted that it would be difficult to fashion a uniform remedy for all class members. Since some plaintiffs tables were practically brand new when they shattered, while others had been around for years, it would be impossible for the court to decide how to distribute a settlement award.

      Despite the run of bad luck, owners of Martha Stewart tables are not completely out of options. They can file a complaint on, or can report their experience to the CPSC. Consumers could theoretically file their own suits, although the costs of doing so would likely outweigh the amount recovered from MSLO.

      Consumers Left to Sweep Up as Martha Stewart Tables Shatter...
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      Toymaker Fined $1.1 Million For Consumer Violations

      Company accused of not providing data on products

      Mega Brands America Inc., of Livingston, N.J., formerly Rose Art Industries Inc., has agreed to pay a $1.1 million civil penalty, settling allegations that the company failed to provide the government with timely information about dangers to children with Magnetix magnetic building sets, as required under federal law.

      In December of 2005, Rose Art filed an "initial report" with the Consumer Product Safety Commission that a 22-month-old child from Washington state had died, due to ingesting multiple magnets that fell out of pieces from a Magnetix set. The report contained no other product or incident information and Rose Art attributed the magnets falling out to unusually abusive play by the toddler's older siblings.

      On February 1, 2006, Rose Art submitted a full report that again lacked incident and product information, the agency said. Rose Art stated that it did not retain any complaint or incident records. On March 31, 2006, Rose Art voluntarily recalled nearly 4 million Magnetix sets for users under the age of 6.

      After discovering documents that led CPSC staff to believe Rose Art had compiled incident information, a subpoena was issued to the firm — which had been renamed Mega Brands America and was under new ownership and control — to obtain product and incident information.

      CPSC said it learned through the subpoena that at the time Rose Art filed its "initial report" in December 2005, it had received over 1,100 consumer complaints that magnets had fallen out of plastic pieces from dozens of different Magnetix models. Additionally, the subpoena revealed that Rose Art had received at least one report of an injury due to magnet ingestion, prior to the toddler's death in Washington state.

      By the time Rose Art agreed to the recall of Magnetix in March 2006, it had received more than 1,500 complaints of magnets falling out of plastic pieces in more than 65 different models of Magnetix, according to the CPSC.

      In April 2007, Mega Brands America expanded the recall of Magnetix sets for users of any age, after more than 25 children suffered intestinal injuries that required surgery to remove the magnets.

      Federal law requires firms to report to CPSC within 24 hours of obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or violates any consumer product safety rule, or any other rule, regulation, standard, or ban enforced by CPSC.

      In agreeing to settle this matter, Mega Brands America and its parent, Mega Brands Inc., of Montreal, Canada contend that 1) Mega Brands Inc. did not know of the Magnetix defect at the time it acquired Rose Art and 2) Rose Art's prior owners never advised Mega Brands Inc. of the problems of associated with Magnetix.

      CPSC said it strongly encourages consumers to check to see if they have any of the recalled building sets and return them to Mega Brands for a free replacement toy. Potentially millions of recalled units remain in homes today and accessible to young children.

      Toymaker Fined $1.1 Million For Consumer Violations...
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      West Virginia Sues Texas Debt Settlement Company

      Crackdown on deceptive marketing for debt relief continues

      The crackdown continues on companies that promise distressed consumers debt relief but provide only more trouble. West Virginia has filed suit against Able Debt Settlement, Inc. of Irving, Texas, seeking injunctive relief and restitution for consumers who paid for debt settlement but only received ruined credit and debt collection calls.

      Able Debt Settlement, formerly of Dallas, Texas, claims to settle consumers' debts. Many consumers find out, however, that Able Debt Settlement doesn't settle debts and then refuses to refund the very large fees it charges.

      West Virginia Attorney General Darrell McGraws Consumer Protection Division started an investigation of Able Debt Settlement in 2007 and obtained an injunction against the company when it refused to comply with the investigation. Able tried to stop McGraw by twice asking the West Virginia Supreme Court to intervene. The Court refused Able Debt Settlement's petitions, allowing McGraw to continue the investigation.

      Although debt settlement services are unrestricted in some states, West Virginias law regarding debt settlement only permits for-profit companies to charge a fee of two percent of the payments made by consumers. In his complaint, McGraw is alleging that Able Debt Settlement was charging more than the two percent fee allowed by state law and not settling debts.

      "Debt settlement companies that simply sign consumers up, take their money and then fail to negotiate debts on behalf of consumers will not be tolerated in West Virginia," McGraw said. "Consumers in desperate financial situations should consult an attorney or non-profit credit counseling agency before paying any money to an unknown debt settlement company."

      The debt settlement industry has arisen as consumer credit card debt has ballooned in the past few years. Debt settlers claim to make repayment plans to help consumers repay outstanding debts, at a deep discount, to avoid being sued or filing for bankruptcy. Monthly payments are then made by consumers to the debt settlers, who are supposed to then negotiate with creditors to reduce the amount of debt owed.

      West Virginia Sues Texas Debt Settlement Company...
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      New York Sues Process Server for High-Volume Debt Collectors

      Company allegedly failed to serve legal notices on consumers; law firm also faces suit

      New York Attorney General Andrew M. Cuomo today announced criminal charges against Long Island-based American Legal Process (ALP) and its CEO and President William Singler. He charged that the company failed to provide proper legal notification to thousands of New Yorkers facing debt-related lawsuits, causing them unknowingly to default and have costly judgments entered against them without the chance to respond or defend themselves.

      According to the court papers, ALP, as a legal process server, was hired by high-volume debt collection law firms in New York to serve legal papers, usually a summons and complaint, notifying individuals that they are being sued and must answer the complaint. ALP, however, allegedly engaged in sewer service, where process servers take advantage of individuals facing lawsuits by failing to properly alert them and denying them the chance to respond.

      As a result, thousands of judgments were allegedly obtained against unsuspecting New Yorkers, many of whom first learned they were being sued when they found their bank accounts frozen or their wages garnished. ALP allegedly covered up the fraud by falsifying sworn affidavits of service in courts across New York. The Attorney Generals Office also filed a parallel civil suit against ALP and Singler seeking a court order prohibiting them from engaging in improper service of process, monetary damages and substantial penalties.

      In addition, Cuomo announced his intent to sue one of ALPs largest customers, the law firm of Forster & Garbus, for violations of New York States consumer protection laws. According to Cuomo, Forster & Garbus used ALP to serve over 28,000 summons and complaints across the state, but failed to supervise the company and relied on legal papers from ALP that it knew or should have known were false.

      The laws of this state are supposed to ensure that each and every New Yorker has their day in court, said Attorney General Cuomo. If proven to be true, the schemes detailed in the cases filed today undermined the legal rights of thousands of citizens by corrupting our legal system and abusing individuals who happened to have consumer debts."

      With respect to the notice sent to the law firm of Forster & Garbus, the Attorney General said: "I am putting all law firms on notice that they are responsible for the conduct of the companies they use to serve complaints and other legal documents. Law firms cannot turn a blind-eye to abuses perpetrated on their behalf.

      Legal process servers are hired by law firms to serve legal papers, usually a summons and complaint, which notify individuals that they are being sued. New York law explicitly states how summons must be served upon individuals facing legal action. A process server can deliver the summons directly to the person being sued; can deliver the summons to a substitute person of suitable age and discretion at the place of business or the home of the person being sued and then mail the summons; or, should the first two options be exhausted after several attempts, can "nail and mail," meaning the summons is posted on the door of the home or workplace of the person being sued and the summons is mailed to them.

      According to the court papers filed today, between January 2007 and October 2008, ALP claimed to have served 98,000 summons and complaints throughout New York State to New Yorkers alleged to owe debt. The majority of these were done through nail and mail, the method of service that is easiest to abuse. The Attorney Generals investigation revealed that thousands of legal documents were not properly served, or served at all, to the individuals they were intended for.

      Furthermore, ALP allegedly attempted to cover up its unlawful business practices by falsifying documents, submitted to courts across the state, swearing that proper legal notification had been duly served upon these individuals. According to the criminal and civil complaints filed today, ALPs conduct included:

      • Instances in which ALP process servers claim to have made process serving attempts in more than one place at the exact same time. In one particular case, a process server claimed to have been at four different addresses at precisely the same moment;
      • Instance in which an ALP process server claimed to have made process serving attempts that would have required him to drive more than 10,000 miles in a single day;
      • Instances in which ALP process servers claim to have made process serving attempts before they had actually received the summons and complaint from ALP; and
      • Instances in which ALP process servers claim to have made process serving attempts before the summons and complaint had actually been filed with the appropriate court.

      According to the criminal complaint, Singler organized and orchestrated ALPs fraudulent activities. He was personally responsible for notarizing thousands of legal documents submitted to the New York Courts in which his process servers purportedly swore individuals had been served, when they had not.

      The civil lawsuit announced by Cuomo today charges that ALP and Singler violated multiple New York statutes by falsifying these legal documents, which were in turn used by debt-collection law firms who provided them to courts as proof that New Yorkers had been given proper legal notice of the lawsuits against them. In many instances, the individuals had not been given proper legal notice and failed to appear in court, ultimately having default judgments entered against them. The lawsuit seeks monetary damages, penalties and injunctive relief against both ALP and Singler.

      The Attorney Generals letter today to Forster & Garbus provides the required five-day notice of his intent to sue the firm pursuant to NYS consumer protection law. In the same 20-month period in 2007 and 2008, Forster & Garbus used ALP to serve more than 28,000 summons and complaints throughout the state. In obtaining default judgments, Forster & Garbus submitted to courts ALP affidavits of service to show that service had been proper when in many cases it had not been. The Attorney Generals notice letter makes clear that Forster & Garbus, by failing to supervise ALP and relying on affidavits that it knew or should have known were false, has harmed the New Yorkers who were the defendants to its lawsuits, the courts, and the clients who that law firm was representing.

      New York Sues Process Server for High-Volume Debt Collectors...
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      Pepsi Takes Coke To Court Over Energy Drink Claims

      Gatorade vs. Powerade at heart of "false advertising" dispute

      Pepsi and Coca-Cola normally compete in the soft drink aisle, but the two beverage giants are about to square off in court. PepsiCo is suing its competitor for false advertising.

      At issue is Pepsi's Gatorade sports drink. Coke is currently promoting its own sports beverage, Powerade ION4, by suggesting Gatorade is "an incomplete sports drink."

      Lawyers for Pepsi argue the claim is false and they want a judge to order Coke to stop the ads. The Pepsi legal team claims the Coke campaign is all "a calculated, intentional strategy designed to falsely and viciously attack the readily identifiable market leader, Gatorade, in the hopes of unfairly gaining precious market share."

      So, why does Coke say Gatorade is "incomplete?" Coke claims that Gatorade doesn't have all the electrolytes a sports drink should have to replenish the body's minerals. Specifically, it says Gatorade doesn't have calcium and magnesium and that Powerade does.

      Visitors to the PowerAde Website are immediately hit with the claim, with a flash program loading a partial Webpage and the message "you wouldnt settle for an incomplete Website, so don't settle for an incomplete sports drink."

      Pepsi responds that Powerade may contain calcium and magnesium, but does so in such trace amounts they're meaningless.

      The lawsuit, filed in federal court in New York, claims Coke's extensive ad campaign against Gatorade is deceptive and amounts to unfair competition.

      Pepsi Takes Coke To Court Over Energy Drink Claims...
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      Texas Targets Hurricane Ike Scammers

      Attorney General charges roofers with deceptive practices

      Texas authorities have taken legal action against three men who ran an unscrupulous construction scheme that targeted victims of Hurricane Ike.

      Attorney General Greg Abbott on Monday charged Benton R. Barber of Houston, Cody Miller of Houston, and Jacob R. Horn of Dallas with violating the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA).

      State officials said the men ran the following unlicensed businesses in Texas: 1 Day Roof, Roof Teams, Roof All Texas, Green Star Roofing, HB Roof Partners LLC, HBCI Texas Ltd. and Horn Brothers Roofing.

      According to the state, the defendants sent misleading fliers and delivered deceptive door-to-door mailers and post cards to homeowners hardest hit by Hurricane Ike. Those advertisements referred to the official-sounding "Texas Department of Insurance Agency," and bore the state of Texas seal, which gave consumers the false impression they were from an official state agency.

      "The postcards state that 'A brief review is required for you to possibly receive additional benefits from your insurance provider,'" the state alleged in its lawsuit.

      The deceptive materials further urged homeowners to contact the fraudulent — but official-sounding — "Disaster Relief Management Team."

      The misleading advertisements used such language as "Urgent!" and "Response Requested" and gave consumers information about the defendants' businesses. That, the lawsuit alleged, duped consumers into believing the state sanctioned these businesses.

      The fliers also encouraged homeowners to visit a Web site the defendants set up, which looked similar to the official Web site for the state of Texas.

      For a fee, the defendants claimed they could to negotiate with homeowners' insurance companies — action they falsely implied would "facilitate relationships and payments from insurance carriers."

      "The Statements' overall appearance leads a reader to believe that the Defendants sending this information are affiliated with either The Department of Insurance, a state organized Disaster Relief Management Team, or insurance adjusters hired by the State to oversee claims," according to the state's lawsuit. "However, neither the Department of Insurance nor any other governmental agency has any part in this private business, does not approve of or sanction the Defendants' businesses, has not licensed the individual or businesses, and the Defendants are not agents of the State nor are they performing services on behalf of the State."

      The Texas Department of Insurance is the state agency that regulates insurance carriers. That agency, which received numerous complaints about the defendants' fliers, referred this case for prosecution to the attorney general's office.

      The state's lawsuit seeks restitution for homeowners who purchased the defendants fraudulent services and civil penalties of up to $20,000 for each violation of Texas law.

      More Scam Alerts ...

      Texas authorities have taken legal action against three men who ran an unscrupulous construction scheme that targeted victims of Hurricane Ike....
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      Last-Minute Tax Tips

      When all else fails, an automatic extension will buy you time

      April 14, 2009
      Haven't filed your income tax return yet? The Internal Revenue Service offers these last-minute reminders to taxpayers who have not yet filed a tax return, paid what they owe or requested an extension of time to file as the April 15 tax filing and payment deadline approaches.

      File and Pay on Time

      Taxpayers who owe taxes and dont file their tax return by the deadline may face interest on the unpaid taxes and a failure-to-file penalty. Interest and penalties add to the total amount a taxpayer owes. Filing by the deadline allows taxpayers to avoid the failure-to-file penalty, even if they cant pay all or some of their taxes by the deadline. Taxpayers who cant file their return by the deadline can request an extension of time to file. However, an extension of time to file is not an extension of time to pay.

      Taxpayers who file on time but dont pay all or some of their taxes by the deadline could face interest on the unpaid amount and a failure-to-pay penalty. Taxpayers who cant pay the full amount should pay as much as they can by the deadline to minimize any interest and penalties due. In addition, taxpayers may take advantage of a variety of electronic and other payment options, such as using charge or debit cards to pay their taxes, to make it easier.

      Taxpayers may also pay any taxes owed by check made out to the United States Treasury using Form 1040-V, Payment Voucher, which must be included along with the payment and tax return. Taxpayers who have already submitted their tax return, but still need to pay all or some of their taxes, may mail the check to the IRS with Form 1040-V.

      File Electronically

      Taxpayers can take advantage of e-filing, which is fast, accurate and easy. Most available tax preparation programs check for errors and necessary information, increasing the accuracy of the return and reducing the need for correspondence with the IRS to clarify errors or omissions. With most programs, taxpayers can usually file a state tax return at the same time they electronically file their federal return. Once the return is accepted for processing, the IRS electronically acknowledges receipt of the return. Generally, when someone files electronically, their refund will be issued in about half the time it would take if they had filed a paper return. Those who choose direct deposit will get their refund in even less time.

      Use IRS Free File

      Free electronic filing from nearly 20 companies is available to taxpayers whose 2008 adjusted gross income was $56,000 or less. That means 70 percent of all taxpayers, or 98 million filers, can take advantage of the IRS-sponsored Free File program. The only way to access this program is through this Web site. There is no charge for this service.

      This year, the IRS and its partners are offering a new option, Free File Fillable Forms, which opens up Free File to virtually everyone, even those whose incomes exceed $56,000.

      Free File Fillable Forms allow taxpayers to fill out and file their tax forms electronically, just as they would on paper. It allows taxpayers to enter their tax data, perform basic math calculations, sign electronically, print their returns for recordkeeping and e-file their returns. This option may be right for those who are comfortable with the tax law, know what forms they want to use or dont need assistance to complete their returns.

      Choose Direct Deposit

      Whether filing electronically or on paper, taxpayers can opt to have their federal tax refund deposited directly into their bank account. Taxpayers who choose direct deposit will get their refunds faster than those who receive a paper check. Taxpayers who both e-file and use direct deposit will receive their refunds even faster. And, a refund that is directly deposited in a savings or checking account cannot be stolen or lost in the mail.

      Using direct deposit is easy. Paper return filers just enter bank account and routing numbers in the boxes provided on Form 1040, 1040A or 1040EZ.

      Taxpayers can split their deposits into up to three different accounts. Most e-file and tax preparation software allows taxpayers to split refunds. Paper return filers need to file Form 8888, Direct Deposit of Refund to More Than One Account, to split a refund among different accounts.

      Make Sure Your Paper Return is Error-Free

      Those who file a paper return can avoid most potential delays in processing the return and can avoid additional correspondence with the IRS to clarify errors by making certain they:

      • Double-check their figures.
      • Make sure all Social Security numbers are correct.
      • Sign their form.
      • Attach all required schedules.
      • Send their return or request an extension by the April 15 filing deadline.

      Pay Electronically

      Electronic payment options are convenient, safe and secure methods for paying taxes or user fees. Taxpayers can make payments online, by phone using a credit or debit card, or through the Electronic Federal Tax Payment System. Taxpayers who e-file their return may use the electronic funds withdrawal option for submitting an electronic payment. They can e-file before April 15 but schedule their payment for withdrawal on April 15.

      Some taxpayers who itemize may now deduct the convenience fee charged for paying individual income taxes with a credit or debit card as a miscellaneous itemized deduction. The deduction is subject to the 2 percent limit on Form 1040, Schedule A. Taxpayers should not add the convenience fee to their tax payment.

      For those who cant file or pay on time, the IRS provides extensions of time to file and payment plans.

      Request an Extension of Time to File

      Taxpayers who can't meet the deadline to file their tax return can get an automatic six-month extension of time to file from the IRS by filing Form 4868, Automatic Extension of Time to File, but they must submit the request by April 15. Taxpayers can e-file the extension request from a home computer or through a tax professional who uses e-file at no cost. Several companies offer free e-filing of extensions through the Free File Alliance; these companies are listed on

      The extension gives taxpayers until Oct. 15 to file the tax return. However, an extension of time to file does is not an extension of time to pay. Those who owe taxes can make a payment when they file the extension either by mailing a check made out to the U.S. Department of the Treasury or by several electronic payment methods, such as electronic funds withdrawals from bank accounts and credit card payments.

      Apply for an Installment Agreement

      An installment agreement allows taxpayers to pay any remaining balance in monthly installments. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Or they may attach Form 9465, Installment Agreement Request, to the front of their tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges $105 for setting up the agreement or $52 if the payments are deducted directly from the taxpayers bank account ($43 for qualified lower-income taxpayers).The IRS will automatically give taxpayers the low income installment agreement fee if they qualify. The taxpayer does not have to request it. Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for ea ch month or part of a month after the due date that the tax is not paid. A taxpayer who does not file the return by the due date including extensions may have to pay a failure-to-file penalty.

      Avoid Scams

      There are numerous scams in which people receive unsolicited e-mails, phone calls or faxes that claim to come from the IRS or include an IRS logo or send recipients to a phony IRS Web site, and which request personal and financial information that may be used to commit identity theft. Typically, identity thieves use someones personal data to empty the victims financial accounts, run up charges on the victims existing credit cards, apply for new loans, credit cards, services or benefits in the victims name, file fraudulent tax returns or even commit crimes.

      Anyone who receives one of these bogus e-mails, phone calls or faxes should avoid responding, clicking on any links or opening attachments. Recipients may forward the e-mails or report the calls to

      For more information about filing and paying taxes, visit and choose 1040 Central or refer to the Form 1040 Instructions or IRS Publication 17, Your Federal Income Tax. Taxpayers can download forms and publications from or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).

      Last-Minute Tax Tips...
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      Vista Class Action Reaches End of the Road

      Judge denies amended class, prohibits additional filings

      A federal judge in Washington has again denied class certification in a lawsuit involving Microsofts Vista operating system, leaving the plaintiffs with few options after years of trying to move the case forward.

      The long-running suit alleges that Microsoft allowed computer manufacturers to label machines as Vista capable, thereby leading consumers to believe that the computers were capable of operating any version of the Microsoft operating system. In fact, according to the suit, the machines were only compatible with Vista Basic, which lacks a number of features included in higher-priced versions.

      A little over a month ago, Judge Marsha Pechman decertified the original class of plaintiffs, which had originally been certified in February 2008. In that ruling, which initially seemed like a death blow for the suit, the judge ruled that the plaintiffs had not proven that Microsofts labeling computers as Vista capable had increased demand for the machines.

      The plaintiffs pled a price inflation theory, which essentially alleged that, by allowing computers to be labeled Vista capable, Microsoft drove up demand for the machines and caused consumers to pay more than they would for a computer only able to run Vista Basic. While the class was originally certified on the condition that the plaintiffs prove class-wide causation, their failure to do so led to Pechmans order stripping the class a year later.

      That ruling was a major blow, given that attorneys for the class had estimated Microsofts potential liability at $8.5 billion just a few weeks earlier.

      Refusing to throw in the towel, the plaintiffs refiled, alleging a more narrowly-defined class that they said would solve any problems with causation. This amended class included two distinct groups: consumers who bought their computers through a program that allows owners of XP-equipped machines to upgrade when Vista became available, and those whose computers didnt support advanced Vista graphics.

      In her latest decision, Pechman ruled that the newly-defined class suffers from the same causation-based flaws that led to the February decertification. Pechman wrote that because the plaintiffs underlying claim is that they were deceived by the Vista marketing campaign, each class member would have to prove that the campaign was the cause of his purchase, making a class action so costly and time-consuming as to render it impossible.

      Pechman specifically constrained the plaintiffs options going forward to either appealing her decision, or proceeding with individual suits on behalf of the six named plaintiffs. This prevents the plaintiffs from narrowing the class even further, and effectively renders the class action dead in the water unless Pechman is overturned on appeal.

      In statements made before the latest ruling, attorneys with Gordon Murray Tilden LLP, which represents the plaintiffs, said that they would appeal an adverse ruling to the Ninth Circuit Court of Appeals.

      Individual suits would have a much better chance of succeeding, since each plaintiff could presumably show that he or she bought the computer because of its status as Vista capable. While this might be of some comfort to the named plaintiffs, damages resulting from these suits would be negligible, especially when compared to the billions of dollars that plaintiffs for the class had hoped to recover.

      One of the main justifications for a class action lawsuit is that damages for each plaintiff are small enough to make individual suits futile, since the time and money spent prosecuting them may exceed the amount eventually recovered. For this reason, unless plaintiffs appeal is successful, Microsoft is unlikely to pay much of a price for the Vista marketing campaign.

      Vista Class Action Reaches End of the Road...
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      Texas Charges JK Harris with Misrepresentation

      Firm overstates its ability to reduce tax debts, suit alleges

      Texas Attorney General Greg Abbott today charged JK Harris & Company with misrepresenting their ability to help Texans resolve their unpaid tax obligations. The state charged that JK Harris failed to provide promised services, misrepresented its employees professional skills and experience, overstated its ability to reduce debts that customers owe to the Internal Revenue Service, and accepted large, prepaid fees from customers whose tax liabilities the firm knew or should have known it could not reduce.

      The defendants are charged with unlawfully misrepresenting and overstating their ability to reduce unpaid debts that taxpayers owe to the IRS, said Attorney General Greg Abbott. Struggling Texans who paid large, upfront fees were told that their unpaid taxes could be resolved for pennies on the dollar. Todays enforcement action seeks restitution for the defendants Texas customers and a court order enjoining the defendants unlawful conduct.

      The suit names JK Harris LLC and related companies, JKH Financial Recovery Systems LLC, and Professional Fee Financing Associates, along with the firms owners, John K. Harris and Charles R. Harris, Jr. Citing Texas Deceptive Trade Practices Act violations, the state is seeking an injunction, penalties, fees and restitution for the Texas-based JK Harris customers.

      The defendants advertising and marketing materials claimed that JK Harris could settle customers unpaid tax obligations for pennies on the dollar. JK Harris typically charged $2,000 to $5,000 paid in advance for its tax resolution services, which largely relied upon the IRS Offer-in-Compromise (OIC) program.

      According court documents filed by the state, the defendants charged customers without actually reviewing individual tax files to see whether individual taxpayers were eligible for relief through the OIC program which is limited to very specific situations. The states investigation revealed that few of JK Harris customers qualified for OIC relief. Further, the suit charges that the defendants often failed to file their customers OIC application forms and frequently took no steps to reduce customers tax debts. When customers realized that JK Harris had undertaken little or no action, they frequently demanded refunds and the defendants often failed to return the customers money.


      The states enforcement action also cites the defendants for misleading customers about JK Harris regional employees qualifications.

      While the defendants advertisements claimed that former IRS agents, Certified Public Accountants, lawyers, and other professionals were available to meet with consumers in 325 locations in 43 states, investigators discovered that JK Harris regional offices are staffed by sales personnel who are not trained tax experts. As a result, Texas customers who believed they could actually meet with JK Harris tax resolution experts in person were misled.

      The Better Business Bureau and the Office of the Attorney General said they have received approximately 1,000 complaints against the company in the past 36 months. Texans considering tax resolution services should research a firm before entering into a contract or paying any fees.

      Texas Charges JK Harris with Misrepresentation...
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      Key Corporate Earnings Due This Week

      Telltale signs of economic recovery or continuing meltdown

      In the last few weeks there have been tantalizing signs that the recession may be bottoming, and even President Obama says he sees "glimmers of hope" in the economy, despite an unemployment rate of 8.5 percent.

      But this week may offer more concrete evidence, one way or the other, about the direction of the economy. A number of key U.S. based corporations will report their first quarter earnings this week, and the numbers will not only influence the future direction of the stock market, but give policy makers insight into the strength of the economy.

      For consumers, this week may determine whether their 401(k) accounts continue to recover or give up most of the gains they've recorded in the market's four week rally. It may also determine whether corporations will continue layoffs or begin to plan for future growth.

      On Tuesday, look for earnings reports from CSX Corporation, Johnson and Johnson, and Intel. These three companies represent diverse sectors of the economy, and all three are bellwethers.

      CSX is a major U.S. railroad, whose profits depend on other companies transporting raw and finished goods to market. If shipments remain flat or decline further, that's a bad sign for the economy. If shipments increase, then the reverse is true.

      Johnson and Johnson has weathered the current recession as well as any company, since it makes products that consumers use on a daily basis. But the company also produces prescription drugs, and if sales in that sector falter, that's a bad sign for the economy. If consumers are cutting back on prescription drug purchases they are likely feeling a lot of economic pressure.

      Intel Corp. produces computer chips and its earnings report will provide insight into the corporate economy. An increase in demand for computer chips means computer makers are gearing up for new demand. A disappointing earnings report from Intel, on the other hand, will signal a sluggish business environment in the months ahead.

      Friday is also a big day for earnings reports. General Electric will report its earnings then, and could well provide a snapshot of the economy, since GE is made up of so many diverse businesses. Analysts will closely inspect the numbers from GE Capital, for clues on how the financial sector is doing.

      Citigroup, which also reports on Friday, will also provide insight into how the battered financial sector is doing. Citi helped fuel the recent Wall Street rally when it reported that it had moved into the black during the first two months of the year. If that trend is borne out in its first quarter earnings report, analysts say it would be a very hopeful sign for the economy and could kick the stock rally into overdrive.

      On the other hand, a disappointing earnings report could trigger a significant sell off, with investors concluding that hopeful signs of a recovery were simply premature.

      Key Corporate Earnings Due This Week: In the last few weeks there have been tantalizing signs that the recession may be bottoming despite an unemployment r...
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      Computer Scam Targets African-American Churches

      'Free' information kiosks cost churches $50,000 and up

      Dampening Easter services at African-American churches around the country this year is a computer scam that District of Columbia officials say has cost some congregations $50,000 or more.

      District of Columbia Attorney General Peter Nickles filed suit against several individuals and companies accusing them of a nationwide scam to defraud African-American church congregations of hundreds of thousands of dollars. The scam allegedly targeted up to 50 predominantly congregations in the District, as well as many more in Maryland, Michigan, Wisconsin, Texas, California and other states, he said.

      While it is not surprising that in tough economic times we see an increase in financial scams, what is unconscionable is that these Defendants allegedly targeted their scheme at religious congregations — groups whose funds are often used to feed the poor, assist people with housing, and otherwise benefit those in need in their community, Nickles said. The community is outraged at this egregious behavior, and I intend to aggressively pursue recovery on behalf of these congregations, many of which have been severely impacted by this scam.

      The Districts suit alleges that the defendants approached numerous congregations offering free computer kiosks that they could place in the church lobbies to provide community and church information. Some churches were allegedly told they could make money from advertising.

      Long-term lease

      As part of the agreement to receive the equipment, congregation officials unwittingly signed documents that obligated the groups to long-term lease payments amounting to $50,000 or more. But in fact, Nickles suit alleges, the computer equipment was valued at no more than a few thousand dollars, and in some cases, did not function properly.

      Defendants named in the case are Television Broadcasting Online, Inc., Washington, D.C.; Urban Interfaith Network, Inc., Oxon Hill, Md.; Michael Morris, Willie Perkins, and several national leasing companies, including United Leasing Associates of America, Brookfield, Wis.; Balboa Capital, Irvine, Calif.; and Chesapeake Industrial Leasing, Baltimore.

      Although Nickles' lawsuit is thought to be the first governmental action against the companies, several churches in Wayne County, Mich., have filed a civil suit against TVBO, Urban Interfaith and United Leasing, claiming fraud and civil conspiracy. They are seeking monetary damages and to have the leases voided.

      United Leasing, through its attorney Steve Morgan, denied the allegations and will seek to have the lawsuit dismissed, the Milwaukee Journal-Sentinel reported. Morgan said United Leasing simply provided the financing and had no contact with the churches other than when they signed leases. He said the leases contain the same standard wording used by other leasing companies throughout the nation and are not unusual.

      The newspaper said that over the last year, United Leasing has filed lawsuits against 39 churches in eight states, contending the churches owe it at least $1.4 million for failing to make monthly payments on the computer kiosks they leased.

      The "business-as-usual" defense is customarily used by leasing companies that finance — and profit from — scams and get-rich-quick schemes but it doesn't always work. In 2003, Leasecomm agreed to cancel $24 million in judgments and reform its business opportunity financing contracts to settle charges by the Federal Trade Commission and an eight-state task force that the practices violated federal and state laws.

      Leasecomm had financed the purchase of supposed business opportunities such as work-at-home operations using business opportunity sellers as its agents.

      Angry mayor

      Washington, D.C. Mayor Adrian Fenty reacted angrily to news of the alleged scam. He called on the Justice Department to open a civil rights investigation into the matter.

      "They made it seem like they were bringing a technological advance to the church, and what they were doing was setting themselves up to take thousands of dollars from the churches who needed the money for their own survival," Fenty said at a news conference, The Washington Post reported.

      Fenty said some church bank accounts were raided after the congregations provided their checking account information to the companies. Washington's Mount Horeb Baptist Church said it lost $62,000 and has had to cut back services to make ends meet. United Leasing said it debited the church's checking account 22 times in one day without the congregation's consent, removing $62,801, but said the lease the church signed permitted it to do so.

      Dampening Easter services at African-American churches around the country this year is a computer scam that D.C. officials say has cost some congregations...
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      Time Warner: Metered Broadband Will Prevent "Internet Brownouts"

      Chief operating officer reveals details of tiered pricing plans

      If Internet users don't moderate their bandwith consumption, and providers don't put in caps on their usage, the Internet could start seeing "brownouts" by 2012, said Time Warner Cable's chief operating officer Landel Hobbs today.

      Preventing outages for users was the rationale behind Hobbs' latest statement on Time Warner Cable's plans to expand its metered broadband trials to more areas of the U.S. The cable company is testing a "pay-by-the-byte" approach to billing and consumption of Internet services, rather than the flat-price "all you can eat" model of most competitors.

      "Here at Time Warner Cable, consumption among our high-speed Internet subscribers is increasing by about 40 percent a year," Hobbs said. "As a facilities based provider, weve built a network that must be maintained and upgraded. We have increasing variable costs and we have to continue to invest in the network itself. "

      The idea of "Internet brownouts" comes from the "exaflood," the concept that the many interlocking networks that form the modern Internet will break under the strain of accomodating increasing data consumption. First advanced as early as 1995, the theory was revived in 2007 due to the increasing prominence of online video streaming and television broadcasting.

      Proponents of the "exaflood" used the concept to oppose "net neutrality," the idea that all Internet users should access all content equally, without hindrance or favoritism. The "exaflood" concept was substantially refuted by research indicating that worldwide Internet consumption was growing modestly, and actually declining in some regions, as recently as December 2008.

      New details on "tiers"

      Hobbs also added more detail on Time Warner Cable's new packages and pricing plans under the tiered model, which include:

      • A 1 gigabyte (GB) per month tier offering speeds of 768 kilobytes (KB) download /128 KB upload for $15 per month, comparable to DSL speeds. Over-use charges would be $2 per GB per month. Hobbs said this package would be for "light" Internet users.

      • The current Internet offerings would get increased bandwidth tier sizes, to 10, 20, 40 and 60 GB for the company's Lite, Basic, Standard and Turbo packages, respectively. The package prices would remain the same, and over-use charges would be $1 per GB per month.

      • The company will introduce a 100 GB Road Runner Turbo package for $75 per month (offering speeds of 10 MB/1 MB). Overage charges will be $1 per GB per month.

      • Hobbs said that all overage charges would be capped at $75 a month.

      • Time Warner Cable will also roll out new upgraded DOCSIS 3.0 infrastructure in the trial markets where caps are being tested, at speeds of 50 megabytes (MB) for download and 5 MB for upload, at $99 per month.

      The trial markets currently include Rochester, New York, Beaumont, Texas, and Greensboro, North Carolina, which will see the new plans rolled out by August. Depending on the result of the trials, the services may roll out to Austin and San Antonio, Texas, by October.

      First reactions to the latest tier plans were critical. Scott Cranfill, a Rochester-based Web developer who has been campaigning against the caps, said that it was "[mindboggling] that TWC thinks tossing us such a paltry bone as 20 more GB and a cap on overages will be good enough. Not good enough."

      Karl Bode, editor of Broadband Reports,said that "A real concession would be if the carrier announced they were eliminating overages completely, and affixing caps that were more reasonable as the age of HD video approaches. "

      The chief criticism of metered broadband plans — besides claims that the over-use charges are too high — is that it will scare users away from watching video online, or uploading their own videos, for fear of breaching their plan's cap and paying extra fees. Critics say the purpose of metered broadband plans is to protect cable and telecom companies' investments in existing television networks.

      Time Warner: Metered Broadband Will Prevent...
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      Easter Surprise: Bank of America Raises Credit Card Interest Rates

      Latest increase hits about 4 million customers who carry a monthly balance

      As Congress mulls new restrictions on credit card issuers, Bank of America is raising interest rates on millions of its customers who routinely carry a balance on their credit cards, a move already taken by most other larger issuers but not one that goes down well with consumers.

      Basically, BofA and other banks are penalizing customers who don't pay off their bills each month. It's a reversal of banks' usual practice. During normal economic times, bankers loathe customers who pay their balance each month, since by so doing they deprive the bank of the interest it would have earned on the unpaid balance. But now, with banks hoarding every cent, the worm has turned.

      "The changes are extreme," said Jonathan of Hyde Park, Mass., one of hundreds of consumers who've complained to "My interest is doubling from 4.9% to 9.9%. My credit score is excellent and I have a perfect five-year history since opening this account. There is no reason for my rate to increase."

      Starting with the June statements, stiff increases are being applied to customers whose interest rate has been below 10% and who carry a monthly balance, the bank said. Exact numbers aren't being released but estimates of consumers affected range as high as four million of Bank of America's 70 million credit card customers.

      Other banks have already been down this road. Citigroup, Chase and America Express have all increase similar rate increases in recent months, as have many other smaller issuers. The banks are under increasing pressure because of rising delinquencies among their credit card customers -- but critics say that raising interest rates on good customers who pay their bills on time isn't the answer.

      Evelyn of Willow Grove, Pa., was puzzled and angered when she got a letter informing her that her interest rate was going from 7.24% to 12.24%.

      "As I have never been late and always make my payments on time and pay more than asked, I called to inquire about this significant jump in the interest rate. The representative tried to be as helpful as possible and advised that they are doing this increase due to the economy," Evelyn said. "What I don't seem to understand is if our economy is doing so poorly ... why are we penalized for paying our bills on time?"

      Evelyn said the bank representative told her she could pay down the debt if she didn't want to pay the monthly interest, but she complained that curbing consumer spending does nothing to stimulate the economy. Consumer advocates generally recommend that, in similar situations, consumers should pay down their balance but not close the account, as doing so can damage their credit score.

      New rules

      New rules enacted by federal regulators in December limit banks' ability to raise credit card interest rates but the rules don't become effective until June 2010.

      Legislation is being considered in Congress but separate House and Senate measures must be reconciled before the measures go any further. Banking industry lobbyists argue that the restrictions would inhibit banks' ability to manage risk and result in less, not more, consumer credit.

      Tamara Draut, Vice President for Policy and Programs at Demos, a non-partisan policy center, says legislative action is all the more necessary because of the deepening recession.

      In this tough time, it is unthinkable that credit card issuers would think of tightening their grip on the household pocketbook, but that's exactly what many have done in recent months -- capriciously raising fees and penalties, even as the government poured billions of dollars into them, she said.

      But the American Bankers Association said it was disappointed by the Senate Banking Committee vote, and that passage of the bill would hurt consumers as much as it would banks.

      "Credit cards provide access to credit for millions of Americans and small businesses every day. Making this credit available is a very risky business and the Committee's action today will unfortunately make it harder - not easier - for banks to continue doing so, said Kenneth J. Clayton, ABAs senior vice president, card policy. Credit card lenders of all sizes will likely have to pull back on providing reasonably-priced credit to a wide range of consumers and small businesses. It is hard to see how that makes good policy sense.

      Sen. Chris Dodd (D-CT), sponsor of the bill, said the close committee vote indicated the bill may need modification to ensure passage by the full Senate. Similar legislation is currently making its way through the House of Representatives.

      Easter Surprise: Bank of America Raises Credit Card Interest Rates...
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      Ross Stores Recalls Folding Patio Chairs

      April 9, 2009
      Ross Stores Inc. is recalling about 730 folding patio chairs. The side supports on these chairs can splinter when weight is placed on them, posing a fall hazard to consumers.

      Ross Stores has received one report of a consumer who suffered shoulder pain after her chair collapsed.

      The folding wooden patio chairs are made of eucalyptus. SKU 400037791757 and manufacturer style number KTOC-1638-ROS are printed on a hangtag attached to the chair.

      The chairs, made in Vietnam, were sold at Ross Stores nationwide in February 2009 for about $50.

      Consumers should stop using these chairs immediately and return them to any Ross Store for a full refund.

      For additional information, contact Ross Stores at (877) 455-7677 anytime, or visit the firm's Web site at

      The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

      Ross Stores Recalls Folding Patio Chairs...
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      FCC Launches National Broadband Internet Plan

      Agency will coordinate stimulus money for nationwide Web access

      The Federal Communications Commission (FCC) today launched the first phase of its "national broadband plan" to bring affordable, high-speed Internet to all Americans. As part of the economic stimulus plan passed by Congress, the agency must complete the plan by February 17, 2010.

      The FCC began the process through an open meeting this morning in Washington, D.C., where it solicited public input from interested parties on several key issues relating to broadband access, including:

      • How to achieve broadband access for Americans most effectively

      • Evaluating current broadband deployment programs, including grants, for success or failure

      • How to best use broadband to improve the economy, health care, energy independence, job creation, public safety, and national security

      "Broadband can be the great enabler that restores Americas economic well-being and opens doors of opportunity for all Americans to pass through, no matter who they are, where they live, or the particular circumstances of their individual lives," said acting FCC chairman Michael Copps. "It is technology that intersects with just about every great challenge confronting our nation."

      Under the American Reinvestment and Recovery Act, Congress granted $7.2 billion for investment in broadband access expansion, to be coordinated by the FCC and disbursed by the U.S. Department of Agriculture's (USDA) rural broadband initiative, and the Commerce Department's National Telecommunications and Information Administration (NTIA).

      The three agencies are holding multiple public meetings across the country to get input from citizens, businesses, local and state governments, and entrepreneurs on the best ways to invest the stimulus money.

      FCC Commissioner Jonathan Adelstein, who is resigning his position to head up the USDA's broadband disbursement efforts, said that the plan "will require unprecedented [federal] interagency coordination, which we are already seeing on a scale that dwarfs any efforts in the previous Administration."

      President Barack Obama made extension of broadband access a priority plank in his electoral campaign, drawing a contrast between himself and former President Bush, who was criticized for not doing more to address the "digital divide" of lack of affordable, accessible Internet service for minority, low-income, and rural communities.

      According to media watchdog group Free Press, even within America's most tech-savvy cities, including Washington, D.C. and Los Angeles, many communities and neighborhood have little or no access to high-speed Internet service, and the high costs put broadband out of reach for many families.

      "In Washington, where BlackBerries are everywhere, only 52 percent of homes are connected to broadband," the group said in its report,Wired Less: Disconnected in Urban America. "In total, more than 240,000 D.C. residents are not connected to the Internet at home, and nearly 160,000 have no Internet access at all."

      S. Derek Turner, research director for Free Press, said that it was crucial that the broadband plan not fall victim to previous approaches which favored deregulatory, hands-off policies — leading to higher prices, lower speeds, and less competition among Internet service providers.

      "If we want to see any improvement in the availability and adoption of broadband in this country, we need a strong government watchdog and a broadband plan that puts the public interest ahead of Wall Street's whims," Turner said.

      FCC Launches National Broadband Internet Plan...
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      New York Auto Lenders Face Hard Time

      Extended warranty scheme, loan irregularities draw prison sentences

      The two owners of a Western New York auto loan brokerage company have been sentenced to time behind bars for stealing a total of nearly $300,000 from 150 consumers, New York Attorney General Andrew M. Cuomo announced. The two operated a scam in which they sold non-existent extended warranties and wrongfully took consumers auto loan payments from a bank.

      Through the Attorney Generals actions, consumers ripped off by Matthew Hunter and John Pazamickas, operating as Hunter-Paz Funding Services, LLC, a/k/a HP Funding, have received full reimbursement valued at nearly $300,000. The money was primarily provided by warranty companies and Key Bank, which were unknowingly used by the pair in their scheme to defraud customers.

      Hunter, 35, of Buffalo, was sentenced to 1-3 years in prison and Pazamickas, 54, of Youngstown, was sentenced to 90 days in jail with 5 years of probation by New York State Supreme Court Justice Penny M. Wolfgang in Buffalo. Both pleaded guilty in January to Grand Larceny in the 2nd Degree. Hunter also pleaded guilty to Scheme to Defraud in the 1st Degree and Pazamickas also pleaded guilty to Grand Larceny in the 3rd Degree.

      This business played a shell game with money that was not theirs, leaving customers who thought they had valid warranties without coverage, said Attorney General Cuomo. The pair also defrauded unsuspecting warranty companies and banks by selling their services with no intention of actually paying for them. These con artists are now being locked up and consumers who were ripped off are getting their money back.

      Hunter and Pazamickas offered to arrange new loans with better terms for consumers with existing auto loans. When the defendants arranged for new loans, they convinced clients to purchase extended service warranties for their vehicles and added the cost to the new loans. However, they never sent the warranty payments to the companies with which Hunter-Paz had contracted.

      From September 2006 to November 2007, Hunter-Paz received approximately $300,000 from consumers. Hunter-Paz was supposed to pay the warranty companies approximately $160,000 (the remaining amounts were sales commissions). Instead, in most cases Hunter and Pazamickas never forwarded the payments. When consumers contacted the warranty companies for services or a refund, they learned that they actually had no coverage.

      In January 2007, Hunter-Paz arranged for a new loan with Key Bank that a consumer wanted to use to pay off an outstanding loan with M&T Bank. Key Bank wired Hunter and Pazamickas $56,000 to pay off the M&T loan, but the pair never paid it off. Similarly, in April 2007, Hunter-Paz stole another $57,000 that Key Bank wired to pay off a consumers RV loan.

      Recognizing that consumers should not bear the losses resulting from Hunters and Pazamickas theft, Attorney General Cuomos Office reached an agreement with Key Bank and several warranty companies to make all affected consumers whole, even though these companies played no role in the thefts. The companies also agreed to service all Hunter-Paz contracts and provide refunds to consumers who decide to cancel their warranties. Key Bank agreed to write off the two affected consumers loans and return any payments they made to the bank prior to the agreement.

      Attorney General Cuomo thanked Key Bank and the warranty companies for agreeing to protect the consumers who were victims of this fraud. As part of the sentences at Attorney General Cuomos request, the court ordered Hunter and Pazamickas to make full restitution to the warranty companies and Key Bank.

      Matthew Hunter and John Pazamickas operated a scam in which they sold non-existent extended warranties and wrongfully took consumers auto loan payments fro...
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      Texas Shuts Down 'Cheap Gas' Scheme

      'Magnetic resonance' claims targeted Hispanics

      Texas Attorney General Greg Abbott has obtained a temporary restraining order that shut down a California companys efforts to market a cheap gas product. According to the states enforcement action, the defendants unlawful televised marketing campaign targeted Hispanic customers.

      Media Dime Marketing LLC and its co-owners, Wendy Diaz and Hilda Mejia, are not registered to conduct business in the state of Texas. Yet they purchased advertising time and aired Spanish infomercials in the Dallas and Houston media markets. Court documents filed by the state indicate that the defendants marketed a fraudulent product called cheap gas, which they claimed would save customers money on fuel. The magnetic device, also advertised as an MPG Device, costs $169 for one item and $229 for two.

      The defendants advertisements assured customers that the product, which is essentially a small magnetic clip encased in soft foam and fastened to an under-the-hood fuel line, is scientifically proven to increase fuel efficiency and therefore save customers money. They claimed a magnetic resonance process occurred while gasoline flowed through the fuel lines past the magnetic field, purportedly making the gasoline more efficient.

      The defendants also advertised that the product protects the environment by reducing 90 percent of the toxic gas emissions. Advertisements also claimed that the product increased vehicles engine lives by 30 percent.

      According to Dr. Ronald Matthews of the University of Texas School of Engineering, an expert retained by the Office of the Attorney General, there is no scientific basis for the defendants claims. Both the experts study and previous academic studies indicate that gasoline is not affected by a magnetic field. As a result, the studies concluded, the defendants device does not increase fuel efficiency.

      The defendants also falsely claim that the MPG Device was installed on all 2007 and 2008 Kia Spectra and Ford Focus vehicles.

      Citing the defendants false and unlawful claims about their product, the Attorney General charged the defendants with violating the Texas Deceptive Trade Practices Act. The states enforcement action seeks civil penalties of up to $20,000 per violation of this law. Because the defendants transacted business in Texas without a certificate of authority from the Secretary of State, the states enforcement action seeks unpaid franchise taxes that would have accrued if the defendants were properly registered.

      Texas Attorney General Greg Abbott has obtained a temporary restraining order that shut down a California companys efforts to market a cheap gas product....
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      Alleged Madoff Middleman Charged with Fraud

      Charities, non-profits lost billions invested with J. Ezra Merkin

      Bernard Madoff

      New York Attorney General Andrew M. Cuomo has charged J. Ezra Merkin and the funds he controlled with violating New Yorks Martin Act by concealing from his clients the investment of more than $2.4 billion with Bernard L. Madoff.

      In a 54-page complaint filed in New York State Supreme Court, Cuomo alleges that investors, including several prominent charities and non-profits, entrusted their investments to Merkin, who then steered the money to Madoff without their permission, in exchange for $470 million in management and incentive fees.

      The complaint also charges that Merkin ignored irregularities and other glaring red flags related to Madoffs investments. As a result, hundreds of investors lost millions in investments, tragically including important charity organizations that were specifically targeted by Merkin. Attorney General Cuomos lawsuit seeks payment of damages and disgorgement of all fees by Merkin. The complaint also charges Merkins management company, Gabriel Capital Corporation (GCC). Merkin managed several funds, including Ascot Fund Limited, Gabriel Capital L.P., and Ariel Fund.

      Merkin profited enormously from Madoffs scheme, reaping huge commissions while investors lost all their money, said Attorney General Andrew Cuomo. Merkin duped individual investors, non-profits, and charities into believing he was responsibly managing their investments, when in actuality he was dumping them into historys largest Ponzi scheme. The complaint charges that Merkin was not the investing guru he claimed to be but instead just a master marketer.

      In a pattern of fraudulent concealment and misrepresentation spanning nearly two decades, according to the complaint, Merkin held himself out as a skilled money manager and used his social and charitable connections to raise over $4 billion from hundreds of individuals, charities, and other investors. Merkin turned virtually all of this money over to third-party money managers, including Madoff.

      During individual conversations with investors, and through fraudulent quarterly reports, investor presentation materials, and offering documents, Merkin concealed the role Madoff played and misrepresented the role he played in managing the funds, according to the complaint. Though acting primarily as a marketer and a middleman, Merkin pocketed hundreds of millions of dollars in management and incentive fees from his investors.

      Charities and non-profit organizations were particularly susceptible to and victimized by Merkins deceptive tactics. Over 10 percent of the assets managed by Merkin belonged to non-profit organizations. Merkin collected his customary fees from nonprofits that invested with him, but typically did not disclose, or actively obscured, that Madoff was actually managing some or all of the funds they invested.

      Red flags

      The complaint alleges that Merkin kept a total of $2.4 billion of investors funds in Madoff funds that Merkin had fiduciary obligations to protect even though he knew of irregularities and other glaring red-flags related to Madoffs investments. Indeed, at least two of Merkins most trusted colleagues repeatedly told Merkin that Madoffs returns were too good to be true one warning that it could be a Ponzi scheme.

      Merkin knew that investment professionals were suspicious of Madoff because, beyond Madoffs uncommonly steady returns, there were fundamental questions about Madoffs money management business that suggested fraud. Merkin read, and kept in his files, two press articles questioning Madoffs practices and returns, and several of Merkins own investors told Merkin that due to these questions, they would not invest with Madoff.

      Merkin commingled his personal funds, including his management fees from Ascot and Gabriel, with the funds of his management company, GCC. Merkin used GCC funds to make purchases for his personal benefit, including purchases of over $91 million of artwork for his apartment.

      The complaint charges Merkin with violations of the Martin Act, General Business Law 352 et seq., for fraudulent conduct in connection with the sale of securities, Executive Law 63(12) for persistent fraud in the conduct of business, and New Yorks Not-For-Profit Corporation Law 112, 717, and 720 for breaches of fiduciary duty in connection with Merkins service on the boards of certain non-profit organizations. Attorney General Cuomos lawsuit seeks payment of damages and disgorgement of all fees by Merkin, restitution and other equitable relief.

      The complaint alleges several examples where Merkin repeatedly lied to investors and prospective investors about how he was investing their funds:

      • At a presentation to a non-profit organization, Merkin made statements indicating that only 15 percent of Ascot was invested with Madoff; in reality the entire fund was invested in Madoff.

      • Merkin told several investors concerned about rumors that Ascot was managed by Madoff that only a small or insubstantial portion of Ascots assets were held by Madoff;

      • Merkin outright denied Madoffs role in Ascot to an investor who had noticed the similarity between Ascots performance and the performance of another fund generally known to be a Madoff feeder;

      • Merkin told one investor that all of Ascots assets were maintained in a Morgan Stanley brokerage account.

      Alleged Madoff Middleman Charged with Fraud...
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      Time Warner Doubles Down on Metered Broadband Plans

      Company faces heavy criticism but insists plan is necessary

      In the face of a massive negative backlash against its plan to expand pay-by-the-byte broadband Internet plans and caps on usage for certain markets, Time Warner Cable has reiterated that the new plans will be necessary to ensure customers get the best service possible — and that many of them don't use enough bandwith to be affected.

      Landel Hobbs, chief operating officer for Time Warner Cable, said that "Our current pricing plans require all users to pay the same amount, whether they check email once a month or download six movies a day," and that the flat-fee, "all you can eat" pricing structure was becoming increasingly unfair to users who did not use as much bandwith as others.

      "When you go to lunch with a friend, do you split the bill in half if he gets the steak and you have a salad?" Hobbs asked.

      Hobbs added that any changes in billing that would result from adopting metered broadband plans would be used to pay for improvements in cable service, including higher speeds for existing customers and a rollout of advanced infrastructure.

      According to Time Warner Cable, customers will be charged from $29.95 to $54.90 a month, depending on how fast their connection is and how much bandwith they use. Subscribers who go over their cap would be charged $1 per gigabyte (GB) used. Time Warner Cable will offer cap packages of 5, 10, 20, and 40 GB for users in the test markets.

      Many customers are unimpressed, and have been heavily criticizing the move. Rochester, New York-based blog "Stop The Cap," which has been chronicling efforts by Internet service providers in the area to establish bandwith caps, compared the plan to a television network interrupting a favorite show to demand payment before it would continue.

      "For most people the above example would be absurd to the point of idiocy. Any provider trying to enforce such a policy would be laughed out of town and their competitors would be literally falling over themselves to sell you 'unlimited TV viewing' at a similar price point," the author said. "Now, change your television usage in the above example to your Internet bandwidth usage and you have what is beginning to take shape in todays broadband Internet market."

      The cable giant has been testing metered broadband plans in markets where it faces little or no competition. In Beaumont, Texas, site of the first trial, Time Warner Cable's only real competition is from AT&T; — which is testing its own bandwith usage caps in the same area.

      But when Time Warner Cable announced last week that it would expand the tests to larger areas, including Rochester and Austin, Texas, the fierce criticism led legislators at the state and federal level to get involved, largely opposing the move as unfair to their constituents.

      Congressman Eric Massa (D-NY) lambasted the move "as nothing more than a large corporation making a move to force customers into paying more money." ""Just at a time when access to information is driving our economic recovery, Time Warner is moving to stagnate the 21st Century technology needed to rebuild America," he said.

      Austin mayoral candidate Lee Leffingwell said that he was "deeply concerned about the impact of the plan on business owners, especially those working in high-tech and creative industries that require regular access to broadband Internet service. Introducing an economic disincentive for Austin businesses to use the Internet to communicate, collaborate, innovate, and deliver services is very worrisome at best, and catastrophic at worst."

      Internet service providers testing metered broadband plans say they are necessary to prevent network congestion and ensure that heavy bandwith users do not prevent lower-level users from enjoying the same level of Internet access. Critics claim that metered billing will stifle users' ability to download or upload bandwith-heavy Internet content, such as videos, or watch television shows over the network — a move, they say, designed to protect cable and telecom companies' investment in television service.

      Time Warner Doubles Down On Metered Broadband Plans...
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      Lost Baggage Suit Against British Airways Moves Forward

      "Reckless conduct" exemption cited as backing for class action

      By Jon Hood

      April 7, 2009
      A federal judge for the Eastern District of New York ruled that a class action against British Airways for lost passenger luggage could move forward, denying the airline's motion to dismiss.

      The suit, filed in September 2007, seeks actual damages for passengers' lost luggage. BA's current policy only reimburses passengers up to $1,500, and the airline claims that it is not responsible for actual losses until the number of lost bags exceeds 50 percent of the total.

      The $1,500 cap is set by the Montreal Convention, to which 125 countries, including the U.S., are signatories. The Convention caps liability, but contains an exception for circumstances in which the airline acted recklessly, knowing that damage would likely result from their conduct. The suit alleges that BAs conduct was indeed reckless.

      There is plenty of evidence to support the plaintiffs' contention. According to the suit, in 2006 BA lost 23 bags per 1,000 passengers carried. That figure is 60 percent the industry average, and twice the rate of the worst U.S. airline. The suit also cited an internal BA study from April 2007, which found that the airline overloaded its baggage system by nearly 25%, but failed to warn passengers of the risk that their bags would go missing.

      The plaintiffs' claims seem to hold water. A 2008 study reported by the Times Online found that BA loses more bags than any other major European airline. The study found that 26.5 bags per 1,000 passengers were lost in 2007 — an increase over the 2006 average cited in the suit. The study also reported that BA was 50 percent more likely than the average European airline to lose a bag.

      A common thread running through complaints is that BA was less than candid about the whereabouts of passengers' luggage, and that it was less than diligent in locating it. As Dana Katzakian of San Francisco wrote us in May 2008, "[It was like] they did not even have a trace on any of our luggage...It was as if our bags were never checked. The lost bag agents told us they had no idea where our bags were and all I could do was continue to check the status of our case file number [o]nline or by phone."

      Customers are also understandably upset at the time and expense involved in replacing lost or stolen items, especially when the task eats into a long-awaited vacation. John Cherachi, of Burr Ridge, IL, had to spend his time in Paris helping his wife shop for lost items ranging from clothing to toiletries. Writes Cherachi: "We had to waste our priceless vacation time to go around and buy her necessities for a couple of days."

      The lead plaintiffs in the case, Donald and Joan Smith of Tacoma, WA, are being represented by class action firm Hagens Berman Sobol Shapiro LLP. In June 2007, while flying to Italy, BA lost the Smiths bags for weeks on end. Once the airline found the luggage, it had sustained enough water damage that it was written off.

      The lawsuit defines a class of American passengers who flew with BA between Sept. 5, 2005 and Sept. 5, 2007, whose bags were lost, damaged, or delayed.

      Lost Baggage Suit Against British Airways Moves Forward...
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      Pistachio Recall Continues To Expand

      Testing indicated potential contamination as far back as 2007

      The current recall of more than one million pounds of salmonella-tainted pistachios may have its roots in contamination that happened over a year ago.

      Food giant Kraft Foods told the Associated Press it discovered a salmonella-tainted batch of fruit and nuts in December 2007, and found another sample in September 2008, but couldn't identify the source of the contamination until March of this year.

      It took thousands of tests to determine the source of this latest contamination were pistachios supplied by the California-based Setton Pistachio of Terra Bella, Inc., the company said. Kraft's testing found salmonella in the nuts — the only common ingredient in the second and third batch of recalled trail mixes.

      Kraft spokeswoman Susan Davison said that it had not traced the source of the first positive salmonella test in 2007.

      "If we did detect salmonella, of course we would never ship our products," Davidson said. "We conducted extensive testing of all our food, and we were just unable to zero in until March that pistachios were the root cause."

      Kraft notified the Food and Drug Administration (FDA) on March 24 that its Back to Nature Trail Mix tested positive for salmonella. The company recalled that trail mix the following day.

      The discovery triggered a nationwide recall of pistachios and prompted the FDA to warn consumers not to eat the nuts. It also exposed a loophole in the country's food safety laws: food makers are not required by federal or state laws to test the safety of their products or report any contamination findings.

      Many companies, however, notify the FDA if they plan to recall the products.

      "If they find problems in a product prior to shipment, they'll pull it back and destroy it," Dr. David Acheson, the FDA's assistant commissioner for food safety, told the Associated Press. "I wouldn't call that a good manufacturing practice, but that is clearly a good public health practice."

      Lawmakers are now trying to close this food safety loophole, while Kraft claimed it has recalled or destroyed all the suspect products.

      Latest recalls

      Here are the latest products recalled in this salmonella-tainted pistachio scare:

      Anton-Argires has recalled three of its products. The recall includes its 14oz & 16oz Roasted (No Salt) Deluxe Mixed Nuts, its 14oz & 16oz Salted Deluxe Mixed Nuts, and its 13oz Salted Pistachio Kernels. The company distributed the products in Illinois through retail stores, direct home delivery, and mail order. The recalled products have an ARGIRES logo on them. They are packaged in clear, recloseable containers (tubs) with pack dates of 08270 to 09089 (YYDDD) or 2702008 to 0892009 (DDDYYY). The UPC numbers for the products recalled include: 079003736117 (Tub Salted Pistachio Kernels 13oz), 079003743054 (Tub Deluxe Salted Mixed Nuts 14oz), 079003743061 (Tub Deluxe Salted Mixed Nuts 16oz), 079003743311 (Tub Deluxe Roasted Mixed Nuts 14oz), 0790037437078 (Tub Deluxe Salted Mixed Nuts 16oz), 079003302411 (Bag Salted Deluxe Mixed Nuts 16oz). The company has not received any reports of illnesses linked to these products. Consumers can return the nuts for a full refund. For more information, contact the company at 1-800-837.0100.);

      • Nature Kist Snacks has recalled some of its Nature Kist and Holiday Nut branded in-shell salted pistachios. The company sold the products to distributors nationwide and through Internet sales. The company has not received any reports of illnesses linked to these products. Consumers can return the products to the store for a full refund. For more information, contact Nature Kist Snacks at 1-800-733-6887. The products included in the action are:

      UNIT WT. UM
      FL SM656SP
      Sample Paks
      Nature Kist
      Salted In Shell
      .50 oz
      Produced 02?23?09
      FL 241M
      0 70334
      00241 4
      Nature Kist
      Salted In Shell
      1.5 oz
      Dates between: Jan 26 10 and
      Mar 04 10
      FL 65621M; FL 659C; FL 673C
      0 70334
      00656 6
      Nature Kist
      Salted In Shell
      3.5 oz
      Dates between: Sep 10 09 and
      Mar 11 10
      FL 67321M
      0 70334
      00657 3
      Nature Kist
      Salted In Shell
      5 oz
      Dates between: Sep 11 09 and
      Feb 04 10
      HB 5CC867; HB 5CSF867;
      HB 5CSF907; HB 1SG806;
      HB 3CR903; HB 1STY801;
      HB 1SR801;HB 3CSF850;
      HB 5CSF867; HB 5CW867
      Internet Sales
      Salted In Shell
      1lb; 2lb; 4lb
      Dates between: Aug 29 09 and
      Nov 30 10
      HB GH600
      Internet Sales
      Salted In Shell
      42 oz
      Dates between: Aug 29 09 and
      Nov 30 10
      Salted In Shell
      16 oz
      Produced on: 09?09?08 thru 03.11.09

      • John B. Sanfilippo and Son has expanded its recall of Archer Farms Roasted Salted Inshell Pistachios. The company distributed the recalled products under the Archer Farms Brand. They were sold exclusively in Target retail stores nationwide. The company has not received any confirmed reports of illnesses in connection with these products. Consumers can return the nuts to for a full refund. For more information, consumers can contact John B. Sanfilippo and Son, Inc. at (800) 874-8734;

      • Chukar Cherry Co. of Prosser, recalled some of its Chukar brand and Norm Thompson brand products that contain shelled, roasted pistachios. The company sold the products to consumers nationwide through retail outlets, gift shops, and the company's retail stores, mail order catalog, and Internet store. The products were also sold in bulk in western Washington at REI, Ballard Market, Town & Country Market, and Central Market; in greater Chicago, IL and Troy, MI area Whole Foods; at Good Earth Natural Foods in Spearfish, SD., and at Neuchatel Chocolates in New York, NY. The recalled items include:

      UPCDescriptionSizeBest By Dates
      0 11261 08604 7Triple Cherry Nut16 oz tin122009 thru 042010
      0 11261 08607 8Berry & Pistachio16 oz tin122009 thru 042010
      0 11261 08618 4Nuts Over Bings Mix16 oz tin122009 thru 042010
      0 11261 08837 9Cherry Chocolate Nut Mix20 oz tin122009 thru 042010
      0 11261 08843 0Triple Cherry Nut20 oz tin122009 thru 042010
      0 11261 08845 4Cherry & Pistachio Mix20 oz tin122009 thru 042010
      0 11261 08945 1Berry & Nut20 oz tin122009 thru 042010
      0 11261 11202 9Dark Chocolate Cherry Chocolate Nut 100% Natural Energy Mix2 oz film bag122009 thru 042010
      0 11261 14102 9No Sugar Added Nuts Over Bings 100% Natural Energy Mix2 oz film bag122009 thru 042010
      0 11261 14702 1No Sugar Added Triple Cherry Nut 100% Natural Energy Mix2 oz film bag122009 thru 042010
      0 11261 14802 8Dried Fruit & Nuts Berry & Pistachio 100% Natural Energy Mix2 oz film bag122009 thru 042010
      0 11261 14803 5Cherry, Cranberry, Roasted Nuts Berry & Pistachio3 oz film box122009 thru 042010
      0 11261 21208 8Dark Chocolate Cherry Chocolate Nut 100% Natural Energy Mix8 oz film bag122009 thru 042010
      0 11261 24108 8No Sugar Added Triple Cherry Nut 100% Natural Energy Mix8 oz film bag122009 thru 042010
      0 11261 24208 5No Sugar Added Cherry & Pistachio 100% Natural Energy Mix8 oz film bag122009 thru 042010
      0 11261 24808 7Dried Fruit & Nuts Berry & Pistachio 100% Natural Energy Mix8 oz film bag122009 thru 042010
      0 11261 25008 0No Sugar Added Nuts Over Bings All Natural Mix. No Sugar Added8 oz film bag122009 thru 042010
      16013 NCLRNorm Thompson Nuts Over Cherries14 oz tinDecember 2009
      0 11261 94110 0Pacific Northwest Triple Cherry Nut5 lb ziplock bag112009 thru 032010
      0 11261 94810 9Cherry, Cranberry, Roasted Nuts Berry & Pistachio5 lb ziplock bag112009 thru 032010

      The current recall of more than one million pounds of salmonella-tainted pistachios may have its roots in contamination that happened over a year ago....
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      Virginia Funeral Home Allegedly Abuses Bodies of Arlington-Bound Veterans

      Service Corporation International facility accused of letting bodies rot in unrefrigerated storage

      The bodies of veterans headed for burial at Arlington National Cemetery were often left to rot in unrefrigerated garages and hallways of a Northern Virginia funeral home operated by Houston-based Service Corporation International (SCI), the nation's largest chain of funeral homes, The Washington Post reported.

      National Funeral Home in Falls Church, Va., acts as a regional clearing house for four other SCI-owned funeral homes in Virginia and Maryland. The facility is so overwhelmed that bodies brought there for embalming, cosmetic treatment and storage are often stacked and left in hallways, unrefrigerated storage rooms, a garage and other inappropriate storage areas, according to a former employee who complained to state officials and reporters.

      Former trooper Steven Napper complained for months to his employers about conditions at the funeral home. He documented his complaints with photos and detailed notes, eventually turning to state authorities and the Post when SCI failed to act, the newspaper reports said.

      Napper said that at times, as many as 200 leaking, decomposing corpses were left in makeshift quarters, an account substantiated by the son of a retired Army colonel who insisted on accompanying his deceased father's corpse to the funeral home.

      Ronald Federici, 53, a child neuropsychologist, said he followed a removal van carrying his father's body and was surprised by the "horrific stench" of decomposition that wafted out from a garage door behind the funeral home.

      "Bodies were lying buck naked all over the place. There was no dignity whatsoever. It was disgusting, degrading and humiliating," Federici told the Post.

      The driver of the van Federici followed was Keith Stringfield, 36, a licensed funeral director. Stringfield told the Post he and other drivers were instructed to leave bodies in the garage if the coolers were full. Stringfield said he has spoken to state investigators about conditions at the facility.

      "You don't leave a body uncovered. You don't let a body leak. You don't leave a body on a stretcher in the garage," Stringfield said in the Post report.

      Arlington National Cemetery refuses to accept coffins for burial if they are emitting an odor or leaking fluids, but Napper said the funeral home got around the problem by covering bodies with an industrial-strength deodorant. What was happening "just wasn't right," said Napper, who has since found a job at a locally-owned funeral home.

      A spokeswoman for the Virginia Board of Funeral Directors said the agency could not confirm that it was conducting an investigation and could not discuss specific allegations.

      It would not be the first state investigation of the facility. In June 2008, it was cited for keeping inadequate records and an unsanitary preparation room, and for operating without a license or manager, according to the Virginia Board of Funeral Directors and Embalmers' Web site. The funeral home was fined $13,000 and placed on probation for three years.

      An SCI spokesman said the company's policies call for the "highest standards and professional behavior" and "would not tolerate" the kind of behavior Napper and others described.


      In a 2001 class action lawsuit in Florida, relatives of three people buried in Jewish cemeteries accused SCI of desecrating remains -- breaking open burial vaults and dumping the contents in the woods, crushing vaults to make room for others, mixing body parts from different individuals and digging up and reburying remains in locations other than the plots purchased.

      The lawyer handling the case for the families, Neal Hirschfeld, said he had heard from hundreds of other families who were concerned about their deceased relatives' treatment in five South Florida cemeteries controlled by SCI.

      "We've already heard from more than 500 other families who are wondering what might have happened to their loved ones," Mr. Hirschfeld told The New York Times. "It's hard to describe how painful and difficult it has been for families to hear that they scooped up remnants of people whose spaces they needed and tossed them in the woods."

      In one case cited in the lawsuit, a former gravedigger at a West Palm Beach SCI cemetery said he had been told to dig up the grave of Hyman Cohen and to throw anything he dug up in the woods in back of the cemetery. Among the remains found in the woods have been bones, a burial shroud and a Star of David necklace. The plot was then used for the burial of Frances Gold, the gravedigger said.

      The lawsuit was blamed for the apparent suicide of an SCI funeral home manager, Peter Hartmann, 45, found slumped over in his company-owned car in his parents' garage in December 2001. Hartmann's wife said he was distraught over the lawsuit and the alleged mishandling of remains by his employer.

      Decreased competition

      In 1999, SCI agreed to sell three of its Jewish funeral homes in New York City after the state attorney general charged that the company dominated the market for Jewish funeral services.

      SCI had been acquiring independently owned Jewish funeral parlors in the city for nearly 30 years, and as competition has decreased because of its acquisitions, has been charging higher fees for services and caskets, then-attorney general Eliot Spitzer said.

      "It's difficult enough to bury a loved one without having to pay unfairly high prices on top of it," Spitzer said.

      Founded in 1962, SCI operates 1,500 funeral homes and 400 cemeteries in 46 states, eight Canadian provinces and Pureto Rico. Its Web site boasts of "robust cash flows" that it says have enabled the company to provide "North America's finest death care services."

      Virginia Funeral Home Allegedly Abuses Bodies of Arlington-Bound Veterans...
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      Court Rules Against Lawsuits Over Vaccine Injuries

      Says federal law preempts claims of design defects

      The Third Circuit ruled last week that children who allege injuries caused by vaccines can't pursue design defect claims, since Congress explicitly prohibited such suits in an attempt to shield manufacturers from liability. The decision, announced in Bruesewitz v. Wyeth Home Products Corp., is at odds with a previous state court decision, signaling that the issue may eventually find itself before the Supreme Court.

      The court granted summary judgment to defendant Wyeth laboratories, ruling that the immunity written into the National Childhood Vaccine Injury Act preempts all design defect claims. Essentially, the court held that Congress's pronouncement, as federal law, bars state suits predicated on defective design.

      In October 2008, however, the Georgia Supreme Court ruled that manufacturers are only immune from design liability if the vaccine is shown to be "unavoidably unsafe." That case, American Home Products Corp. v. Ferrari, said that design defect cases would thus require individual hearings to determine if the injury could have been prevented.

      The Vaccine Act provides that manufacturers are immune from suits dealing with "side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper directions and warnings." The problem, according to Third Circuit Judge D. Brooks Smith, is that "unavoidable," the key word in this phrase, is not defined anywhere in the Act.

      Looking to Congressional intent, Judge Smith pointed out that under the Ferrari analysis, all design defect claims will be entitled to an initial hearing on whether the problem was "unavoidable." According to Smith, this "construction is contrary to the structure of the Act because it does not bar any design defect claims," and could not have been what Congress intended when it wrote the Act.

      Last month, in a similar case, the Supreme Court held that suits alleging that manufacturers failed to warn of possible dangers were not preempted. However, Smith distinguished that case on the grounds that it dealt with "implied" preemption, whereas the Bruesewitz case examines an explicit instruction from Congress regarding manufacturers' immunity from design defect suits.

      The Third Circuit decision affirmed the district court's dismissal of Bruesewitz's suit, in which District Court Judge Michael Baylson held that the Vaccine Act "represents part of a comprehensive statutory scheme which pre-empts all design defect claims brought under state tort law."

      The suit was brought by the parents of 17-year-old Hannah Bruesewitz, who alleged that DPT shots were responsible for her residual seizure disorder and serious developmental delay. DPT is a combination of three vaccines used to inoculate against whooping cough, tetanus, and diphtheria, an upper respiratory tract illness. Bruesewitz received three DPT shots within six months of her birth, and subsequently suffered a string of seizures.

      A British study commissioned in the 1980s showed that 1 in 140,000 doses of DPT lead to neurological problems including seizures, decreased consciousness, or brain disease. In serious cases, the reactions can be fatal. Bruesewitz's parents alleged that a Congressional report discovered two deaths and 66 serious injuries resulting from the vaccine.

      The Ferrari case is currently before the Supreme Court on certiorari, and a direct circuit split may offer the high court sufficient incentive to hear it. If that happens, the Third Circuit view will have plenty of precedent on its side. Before the Ferrari decision, a number of state and federal courts agreed that all design defect claims are preempted under the Vaccine Act.

      Court Rules Against Lawsuits Over Vaccine Injuries...
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      Time Warner Expands Metered Broadband Billing

      "Pay-by-byte" plan hitting more markets

      Time Warner Cable today announced plans to expand its plans to charge Internet users by the byte for heavy bandwith consumption, a controversial practice usually referred to as "metered broadband."

      The tactic combines "caps" for broadband access usage with "overage" charges if the subscriber goes over the limit, and is widely unpopular with subscribers accustomed to a flat-rate, "all you can eat" plan.

      The cable giant, which has been testing metered broadband subscriptions in Beaumont, Texas, said the tests would roll out to Austin and San Antonio, Texas, as well as Rochester, New York, and Greensboro, North Carolina, by late summer 2009.

      According to Time Warner Cable, customers will be charged from $29.95 to $54.90 a month, depending on how fast their connection is and how much bandwith they use. Subscribers who go over their cap would be charged $1 per gigabyte (GB) used. Time Warner Cable will offer cap packages of 5, 10, 20, and 40 GB for users in the test markets.

      Time Warner's Melissa Sorola, regional communications director for Texas, said that "all customers will have access to a 'gas gauge' that will enable them to track their consumption against their current plan," and that "We don't want our customers to have any unpleasant surprises."

      "Consumption based billing will enable customers to choose a tier that makes sense for them," Sorola said. "The vast majority of our customers will see no difference in their monthly bill. "

      Jeff Simmermon, director of digital communications for Time Warner, said that the company would introduce a "super-tier" of service topping out at 100 GB. Simmermon told ConsumerAffairs.Com that details for pricing of the "super-tier" were still being worked out at the time of the expansion announcement.

      Besides Time Warner, AT&T; and Frontier Internet have all rolled out plans for metered broadband tests, usually in low-competition markets where they do not face challenges from Verizon's fiber-optic (FiOS) service.

      Comcast, rather than setting up capped bandwith tiers, has put a cap on all service at 250 GB, with warnings given over the phone to users who go over the limit.

      Opponents of metered broadband billing say that even something as simple as streaming online video can eat up a set broadband cap very quickly, leading users to shy away from downloading — or uploading — broadband-intensive media content.

      Consumer advocates and telecommunications analysts say the real goal of metered broadband is not to prevent bandwith consumption, but to protect the profits from cable television, which faces challenges from the many services enabling video and TV watching over the Internet.

      Early response to announcement of the plan was not kind. Said one commenter at BusinessWeek, "Well, they're cutting their own throats with their greed. The point is to monopolize the internet and stifle the growth of streaming content. I hope they go down in flames. I hope they lose so many customers they can't stay in business!"

      Karl Bode, editor of Broadband Reports, criticized the company for not doing more to expand its infrastructure and improve its service.

      "The pressure to shift to metered billing also comes from investors, who obviously love the idea of charging consumers more money for the same (or less) service in an age where the cost of bandwidth and network hardware continues to drop," he said.

      "Keep in mind that Time Warner Cable has yet to officially announce DOCSIS 3.0 upgrades in a single market," he added.

      ConsumerAffairs.Com asked Simmermon and Alex Dudley, Time Warner's vice-president for public relations, if customers will see any benefit from metered billing in the form of eventual infrastructure upgrades. "Yes," Simmermon said.

      "Yes they will," added Dudley, "but perhaps more importantly, they will see a degradation of service over time if we don't invest to keep up."

      Time Warner Expands Metered Broadband Billing...
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      GMAC Sets Aside $5 Billion For New Car Loans

      Auto lender will lower finance charges for dealers to boost sales

      GMAC Financial Services says it wants to do its part to boost new car sales. The company has announced it will temporarily ease wholesale finance charges for dealers and earmark $5 billion for consumer auto loans over the next 60 days.

      "Dealers have told us that cash flow is critical right now," said GMAC President Bill Muir. "We want to do everything possible to help dealers sell their inventory of cars and trucks, while preserving their working capital during the next couple of months."

      GMAC's actions for dealers, effective immediately, will include:

      • Eliminating all dealer curtailment payments for aged inventory during the month of April. Curtailment is a standard practice in the industry that requires a portion of the wholesale loan to be repaid after a vehicle has been in inventory for an extended period of time.

      • Waiving the fee for dealers to post aged vehicles on SmartAuction, GMAC's leading online remarketing site, through June to reduce their inventory and minimize future curtailment billings.

      • Allowing qualified dealers the option to defer wholesale interest charges for two 30-day periods during the next 120 days. This deferment can be elected by the dealer beginning with the March billing. Payment for the deferral period will be due 90 days following the deferred month.

      • "The option to defer wholesale interest payments alone can be a significant temporary boost to cash flow for most dealers," Muir said. "Our goal is to ease the burden on dealers over the next few months as they work hard to lower costs, reduce inventory and protect their financial stability."

      For retail customers, GMAC said it will further enhance and expand its retail financing programs, adding:

      • Certain rate reductions for new and used vehicle financing.

      • An increase in allowable advance rates for 60-month or less financing terms.

      • The acceptance of automotive finance applications for customers with credit bureau scores below 620. Customers will still need to qualify, but this will expand the credit available to a broader spectrum of buyers.

      "GMAC now finances a broad spectrum of auto buyers, similar to traditional levels," Muir said. "Through March, we financed over $2 billion in new and used retail auto contracts. Over the next 60 days, GMAC will make available at least $5 billion in order to increase the flow of credit to U.S. automotive customers."

      GMAC is a bank holding company with operations in North America, South America, Europe and Asia-Pacific. General Motors, the near-bankrupt car maker, is only a minority stockholder in the company.

      GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking. General Motors As of Dec. 31, 2008, the organization had $189 billion in assets and serviced 15 million customers around the world.

      GMAC Sets Aside $5 Billion For New Car Loans...
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      Senate Committee Approves Credit Card Accountability Act

      Measure would end some of the credit card industry's most abusive practices

      April 1, 2009
      The U.S. Senate will vote on the Credit Card Accountability, Responsibility and Disclosure Act, a measure designed to end some of the credit card industrys more abusive practices.

      The measure made it out of the Senate Banking Committee on a razor thin 12-11 vote.

      The bill would:

      • Protect consumers from "any time, any reason" interest rate increases and account changes;
      • Prohibit unfair application of card payments;
      • Protect cardholders who pay on time;
      • Limit fees and penalties;
      • Ensure that cardholders are informed of the terms of their account; and
      • Protect young consumers from credit card solicitations.

      Many of these same provisions were approved by government regulators late last year. However, backers of the legislation point out they dont take effect until mid 2010. In the meantime, they say, credit card companies are free to continue their present practices.

      Tamara Draut, Vice President for Policy and Programs at Demos, a non-partisan policy center, says legislative action is all the more necessary because of the deepening recession.

      In this tough time, it is unthinkable that credit card issuers would think of tightening their grip on the household pocketbook, but that's exactly what many have done in recent months -- capriciously raising fees and penalties, even as the government poured billions of dollars into them, she said.

      But the American Bankers Association said it was disappointed by the Senate Banking Committee vote, and that passage of the bill would hurt consumers as much as it would banks.

      "Credit cards provide access to credit for millions of Americans and small businesses every day. Making this credit available is a very risky business and the Committee's action today will unfortunately make it harder - not easier - for banks to continue doing so, said Kenneth J. Clayton, ABAs senior vice president, card policy. Credit card lenders of all sizes will likely have to pull back on providing reasonably-priced credit to a wide range of consumers and small businesses. It is hard to see how that makes good policy sense.

      Sen. Chris Dodd (D-CT), sponsor of the bill, said the close committee vote indicated the bill may need modification to ensure passage by the full Senate. Similar legislation is currently making its way through the House of Representatives.

      Senate Committee Approves Credit Card Accountability Act...
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