1. Home
  2. News
  3. 2009
  4. April

News in April 2009

Browse by year

2009

Browse by month

Get trending consumer news and recalls

    By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

    Thank you, you have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

    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 ConsumerAffairs.com. "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...
    Read lessRead more

    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...
    Read lessRead more

    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...
    Read lessRead more

    Get trending consumer news and recalls

      By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

      Thank you, you have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

      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...
      Read lessRead more

      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....
      Read lessRead more

      Lost Baggage Suit Against British Airways Moves Forward

      "Reckless conduct" exemption cited as backing for class action

      By Jon Hood
      ConsumerAffairs.com

      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...
      Read lessRead more

      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...
      Read lessRead more

      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:

      NKS ITEM CODE
      RETAIL UPC
      BRAND
      PRODUCT DESCRIPTION
      UNIT WT. UM
      SELL BY DATE
      FL SM656SP
      Sample Paks
      Nature Kist
      Salted In Shell
      Pistachios
      .50 oz
      Produced 02?23?09
      FL 241M
      0 70334
      00241 4
      Nature Kist
      Salted In Shell
      Pistachios
      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
      Pistachios
      3.5 oz
      Dates between: Sep 10 09 and
      Mar 11 10
      FL 67321M
      0 70334
      00657 3
      Nature Kist
      Salted In Shell
      Pistachios
      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
      HolidayNuts
      Salted In Shell
      Pistachios
      1lb; 2lb; 4lb
      Dates between: Aug 29 09 and
      Nov 30 10
      HB GH600
      Internet Sales
      HolidayNuts
      Salted In Shell
      Pistachios
      42 oz
      Dates between: Aug 29 09 and
      Nov 30 10
      WP621
      WP621
      Bulk
      Salted In Shell
      Pistachios
      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....
      Read lessRead more

      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.

      SCI

      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...
      Read lessRead more

      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...
      Read lessRead more

      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...
      Read lessRead more

      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...
      Read lessRead more

      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...
      Read lessRead more