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    Kumho Recalls Light Truck All-Terrain Tires

    June 30, 2009
    Kumho Tire USA is recalling about 36,000 Mohave light truck all-terrain tires. The recall is for sizes LT225/75R16, LT245/75R16, and LT265/75R16, produced between December 7, 2008 and June, 2009.

    The tires can cause the vehicle's handling to become difficult when operated under load or when changing lanes. this could cause the vehicle to sway and possibly cause a crash.

    Tire Brand Name / Tire Line / Tire Size: Production Dates:

    • KUMHO / MOHAVE A/T / LT225/75R16 DEC 07, 2008 - JUN 13, 2009
    • KUMHO / MOHAVE A/T / LT245/75R16 DEC 07, 2008 - JUN 13, 2009
    • KUMHO / MOHAVE A/T / LT265/75R16 DEC 07, 2008 - JUN 13, 2009

    Kumho will notify tire owners and replace the tires free of charge when the recall begins in July. Owners may contact Kumho at 1-800-445-8646.

    Consumers may contact the National Highway Traffic Safety Administration (NHTSA) at 1-888-327-4236 (TTY: 1-800-424-9153) or at

    Kumho Recalls Light Truck All-Terrain Tires...
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    Midas Faces Bait-and-Switch Charges in California

    Suit names 22 muffler shops probed by undercover investigators

    Following more than two dozen undercover sting operations, Attorney General Edmund G. Brown Jr. today sued Maurice Irving Glad and his 22 California Midas auto shops to stop a "massive bait-and-switch scam" in which customers were offered cheap brake specials and then allegedly charged hundreds of dollars more for unnecessary repairs.

    The undercover operations revealed that over four years Glad's Midas shops regularly advertised $79 to $99 brake specials to draw customers in and then charged another $110 to $130 for unnecessary brake rotor resurfacing services — and hundreds of dollars more for repairs that were not needed or never performed, Brown charged.

    The suit, filed in Alameda County Superior Court, seeks $222 million in civil penalties, costs and reimbursements to customers.

    "These Midas shops were running a massive bait-and-switch scam, in which customers were lured in with the promise of cheap brake specials and then charged hundreds more for unnecessary repairs," Brown said. "This investigation revealed a shady and deceptive operation that violated the trust of its customers."

    Brown's lawsuit, filed jointly with Alameda County District Attorney Tom Orloff and Fresno County District Attorney Elizabeth A. Egan, involves 22 Midas shops in Campbell, Clovis, Concord, Dublin, Fremont, Fresno, Hayward, Manteca, Merced, Modesto, San Jose, San Leandro, Turlock and Walnut Creek.

    The lawsuit follows a four-year California Bureau of Automotive Repair investigation into Glad and his Midas shops to monitor compliance with a 1989 Alameda County Superior Court injunction. The 1989 injunction prohibited Glad's shops from performing unnecessary repairs, charging for services not performed, or using scare tactics to convince customers to purchase unnecessary parts and services.

    Undercover agents, posing as customers, conducted approximately 30 sting operations at Midas shops owned by Glad. In total, there were more than 35 incidents in which shop managers, mechanics and employees made false or misleading statements to pressure customers to purchase unnecessary parts and services.

    On average, the shops charged undercover agents almost $300 in unnecessary brake rotor resurfacings, brake drum repairs, brake adjustments, brake cleaning services and other services. For example:

    • In May 2007, at a Dublin Midas shop, an undercover agent was informed that the car needed thicker, more expensive brake pads than what was advertised. This was despite the fact that the manufacturer listed the advertised brake pads as a direct replacement. The agent was also told that the car's new rotors "could be saved" if they were resurfaced and was charged for the removal of all four wheels when only three wheels were removed for inspection. In total, the agent was charged almost $400.

    • In June 2006, at a Clovis Midas shop, an undercover agent was informed that the front rotors needed to be resurfaced, a brake fluid flush was needed and the rear brakes required adjustment, when in fact, none of the repairs was necessary. The agent was charged over $275 for the unnecessary repairs, including the brake fluid flush that was never performed.

    • In May 2006, at a Merced Midas shop, an undercover agent was informed that the rear brakes required replacement and adjustment when they did not, and that the rotors required resurfacing when they were new and not in need of any service. The agent was charged $320.

    • In April 2006, at a Fresno Midas shop, an undercover agent was informed that the front rotors should be resurfaced because of "a safety issue" when the rotors were new and in good condition, had no scoring or hot spots, were within factory specifications and were not in need of resurfacing. The agent was charged over $230 for the unnecessary repairs.

    • In October 2005, at another Modesto Midas shop, an undercover agent was informed that the struts were "completely blown" and "leaking a lot of oil," that two of the rotors and brake pads needed to be replaced and that the other two rotors needed to be resurfaced at a cost of over $1,700. None of the repairs or services was necessary.

    • In October 2005, at a Clovis Midas shop, an undercover agent was informed that the front rotors should be resurfaced and a transmission fluid flush should be performed when the rotors were new and within manufacturer's specifications and the automatic transmission had just been flushed and refilled. The shop charged over $230 for the unnecessary repairs.

    • In September 2005, at a Modesto Midas shop, an undercover agent was informed that the brakes needed to be adjusted and cleaned and a brake and cooling system flush was required, when in fact, none of the services was necessary. The agent was charged over $200 and the brake flush was never performed.

    In July 2008, the California Bureau of Automotive Repair referred the case to Brown's Office for prosecution. Alameda County District Attorney Orloff and Fresno County District Attorney Egan joined due to the large number of shops operating in their counties.

    Brown, Orloff and Egan are suing Glad and his 22 Midas shops for:
    • False and misleading advertising in violation of Business and Professions Code 17500;
    • Unlawful, unfair and fraudulent business practices in violation of Business and Professions Code 17200; and
    • Breaking the 1989 Alameda County Superior Court injunction in violation of Business and Professions Code 17535.5 and 17207.

    If successful, the lawsuit would require these Midas shops to pay up to $222 million in penalties, costs and reimbursements to customers. This includes up to $1 million, or $2,500 per violation, for false and misleading advertising; up to $1 million, or $2,500 per violation, for unlawful, unfair and fraudulent business practices; and up to $220 million, or $12,000 per violation, for violating the 1989 injunction.

    The lawsuit also seeks a permanent injunction prohibiting these shops from:
    • Coercing its customers into buying unnecessary motor vehicle repairs or services;
    • Making or authorizing false and misleading statements; and
    • Obtaining payment for repairs or services that were not performed or for retail products that were not provided.

    Consumers who believe they have been ripped off by an auto repair facility can file a complaint with the California Department of Consumer Affairs, Bureau of Automotive Repair online at: or by calling 1-800-952-5210.

    The following Midas shops are named in today's lawsuit:

    - 1236 White Oaks Road, Campbell
    - 704 Clovis Avenue, Clovis
    - 2525 Monument Boulevard, Concord
    - 6955 Village Parkway, Dublin
    - 4045 Thornton Avenue, Fremont
    - 3741 Washington Boulevard, Fremont
    - 7340 N. Blackstone Avenue, Fresno
    - 3937 N. Blackstone Avenue, Fresno
    - 4304 W. Shaw Avenue, Fresno
    - 1078 La Playa Drive, Hayward
    - 24659 Mission Boulevard, Hayward
    - 1412 W. Yosemite Avenue, Manteca
    - 1420 V Street, Merced
    - 338 McHenry Avenue, Modesto
    - 3833 McHenry Avenue, Modesto
    - 93 S. Capitol Avenue, San Jose
    - 4224 Monterey Highway, San Jose
    - 5287 Prospect Road, San Jose
    - 2200 Stevens Creek Boulevard, San Jose
    - 13745 E. 14th Street, San Leandro
    - 2651 Geer Road, Turlock
    - 2710 N. Main Street, Walnut Creek

    Midas is one of the world's largest providers of automotive services with more than 1,600 franchised and company-owned locations in the United States.

    Midas auto shops sued for "massive bait-and-switch scam" in which customers were offered cheap brake specials and allegedly charged hundreds of dollars for...
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    Don't Give Out Credit Information In a Job Hunt

    Financial data is easy target for scammers

    Scammers often target job-seekers because they are usually very likely to provide requested information. But law enforcement officials are warning job applicants about a recent scam in which criminals posing as employers ask for copies of their personal credit reports.

    "Credit reports contain a wealth of background information about consumers, including social security numbers, summaries of bank and credit card accounts, employment history, current and previous addresses and other details that are extremely valuable to con artists," said Pennsylvania Attorney General Tom Corbett. "Falling for Internet job schemes can be a double threat — leaving victims unemployed and struggling to untangle a web of financial problems caused by identity theft."

    "Corbett noted that con artists are using Internet postings and email messages to circulate ads for high paying part-time work as personal assistants, check processors and a variety of other work-at-home positions. The exact wording of these scams varies greatly, but all of them have common features:

    • They offer "easy money" for little work.

    • Consumers work from home, rather than an office.

    • It is difficult to meet your "employer" in-person, often because they travel frequently or are based overseas.

    • Consumers need to respond quickly.

    "It is important to be watchful for online job scams, especially students looking for summer work, graduates hoping for their first job or older residents searching for part-time work or new careers," Corbett said. "Consumers should always be wary of offers that seem 'too good to be true,' especially in situations where you are being asked to provide detailed personal information to people you do not know."

    "In addition to asking consumers to email copies of their credit report — a practice that leaves that personal information vulnerable to interception or theft — some con artists are including bogus website links in their email messages, directing victims to look-alike websites that can be used to electronically steal a consumer's personal information.

    "Legitimate businesses that require credit reports as part of an employee screening process can obtain that information directly from the major credit bureaus," Corbett said. "There is no need for a business to ask consumers to obtain their own credit report and then forward that information by email."

    "Additionally, Corbett said consumers should avoid any type of online offer that involves a request to wire-transfer money to someone you do not know.

    "An important element in many job-related scams is that consumers are given checks and are asked to wire-transfer money to other people, believing that they are paying bills for the 'employers', processing checks, handling payments for an overseas business or dealing with other financial matters," Corbett said. "In reality, victims are depositing counterfeit checks or money orders into their bank accounts and then wire-transferring that money to scam artists overseas."

    "In all of these cases, the bogus checks will eventually be returned and banks will require consumers to repay any funds they withdrew."

    Don't Give Out Credit Information In a Job Hunt...
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      Firestone Recalls FR380 Tires

      June 30, 2009
      Bridgestone/Firestone is recalling about 127,000 Firestone FR 380 tires, size P235/75R15, manufactured from Sept. 9, 2007 through July 2, 2008.

      Continued use of the tires may lead to vibration and groove cracking, which could in turn lead to tread distortion or tread separation and loss of vehicle control.

      Bridgestone will notify owners and replace the tires free of charge. The company will also mount and balance the replacement tires at no charge when the recall begins in June.

      Owners may contact the company at 1-800-465-1904 or visit their Website at

      Consumers may contact the National Highway Traffic Safety Administration (NHTSA) at 1-888-327-4236 (TTY: 1-800-424-9153) or at

      Firestone Recalls FR380 Tires...
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      Massachusetts Puts Charity Telemarketers On Hold

      Consumers not told fundraisers were pros

      More states are taking harder looks at telemarketing operations that supposedly collect on behalf of law enforcement charity groups but in fact, keep most of the money for themselves.

      In Massachusetts, Attorney General Martha Coakley's office has obtained two separate preliminary injunctions in conjunction with a lawsuit against Disabled Police Officers Counseling Center, Inc., a Florida public charity; its president, Terry Morrison; and its professional fundraisers, Patrick Kane, doing business as the Kane Marketing Group, Mark Hemphill, doing business as Infiniti Marketing Firm, and James Vincent, doing business as Northeast Advertising.

      Under the terms of the first injunction, Disabled Police Officers Counseling Center, Inc., is restrained from engaging in deceptive practices or otherwise breaking the law while soliciting charitable donations in Massachusetts; must not destroy or alter records while the civil lawsuit is pending; and must account for money raised from Massachusetts residents in the next 30 days.

      Under the terms of the second preliminary injunction, the professional solicitors involved in the lawsuit are restrained from engaging in deceptive tactics when soliciting funds in Massachusetts; must not destroy or alter records while the civil lawsuit is pending; and are prohibited from spending funds collected for the Disabled Police Officers Counseling Center, Inc., or any other charitable organization the defendants solicit for.

      The preliminary injunctions were filed in conjunction with a civil lawsuit that was filed on May 20, 2009 in Suffolk Superior Court against the defendants. The lawsuit alleges the defendants misled potential donors into believing that fundraisers were volunteers calling on behalf of local disabled police officers.

      The lawsuit also alleges that the defendants did not disclose their status as professional fundraisers, did not disclose the charitys Florida address, and did not file fundraising reports for their fundraising campaigns, all of which are required by law.

      The lawsuit also alleges the professional solicitors working for Disabled Police Officers Counseling Center failed to disclose to potential donors their status as professional fundraisers who are paid by charitable organizations to solicit the public for donations.

      The Attorney General's Office, through its Non-Profit Organizations/Public Charities Division, is responsible for overseeing the public's interest in the Commonwealths non-profit charitable organizations.

      Massachusetts general laws require public charities to register and file annual reports with the Non-Profit Organizations/Public Charities Division of the Office of the Attorney General and copies of these reports are available to the public.

      Massachusetts Puts Charity Telemarketers On Hold...
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      Credit Cards Giving Consumers Heartburn

      Consumers at banks' mercy until new law takes effect

      By Mark Huffman and Martin H.Bosworth

      June 30, 2009
      After regulatory agencies adopted tougher rules on credit card companies and Congress passed the Credit Card Holders' Bill of Rights, the world was supposed to be better for consumers with credit card accounts.

      But neither the new rules nor the new law take effect until next year, and if anything, credit card customers are even more miserable. While Chase customers are currently the most vociferous, other lenders are also drawing complaints.

      Jacqueline, of Sacramento, says she had been paying nine percent on her Bank of America credit card for years, always paying on time. She says she considers herself "a good customer." Last week she was notified her nine percent rate was being raised to 25 percent. And that wasn't all.

      "This was a high-limit card with a balance of $5000, but they then lowered my limit to just $200 above the balance owed on this card," she told "They gave me no notice of these actions and I could have easily gone over my limit by making one $200 purchase. I'm sick about this, they are ruining my credit and my husband and i are trying to buy a home."

      Bank of America isn't the only lender raising rates. Hector, of Ventura, California, has a Capital One card.

      "I opened my Capital One statement this morning to pay my July payment. I was shocked to see the interest rate skyrocketed from 9.90 percent to 17.90 percent," he told ConsumerAffairs.Com. "I called the customer service line and was told a notice was sent earlier this year about this change. However I never received a notice. He told me it was not for my performance but for economic times."

      John, of Lexington, Kentucky started with an MBNA card at 7.99 percent, before the bank was acquired by Bank of America. After one payment the credit card company said was late, he says his rate for raised to 17.99 percent. That was four years ago, and at a rate of 17.99 percent you might not think John' would be in danger of having his rate raised. But you would be wrong.

      "Even though we pay on time, they just raised the rate to 27.99 percent," John told "They blame it on the government."

      "Bad investments"

      Banks may be acting now to maximize returns before new rules take effect that give consumers more leverage, though under the new law they still have the ability to raise rates when a payment is late. The fact that Chase this month has increased the monthly minimum payment for its customers with lifetime low rates allows the bank to regain money that is earning low rates and lend it out again at high rates. Should the higher rates cause some consumers to default, the low rates will go to 18 percent or higher.

      Lauren Zeichner Bowne, staff attorney for Consumers' Union, confirmed that banks are raising rates, cutting credit lines and imposing more fees in order to "recoup from their bad investments and losses."

      "We're also seeing signs of fees being raised on regular bank checking accounts," Zeichner Bowne said. "'Courtesy overdraft' fees are a huge profit center for banks, and we're hoping to get stronger regulations passed against them."

      The new rules

      Once the Credit Card Holders' Bill of Rights takes effect, credit card companies must live under these rules:

      • Creditors cannot increase the annual percentage rate (APR) during the first 12 months of opening up an account.

      • Creditors are required to provide consumers with a 45-day advance notice of changes in rates and significant contract changes. Rates that change due to a change in the index that the rate is based on are excluded from this 45-day notice requirement.

      • Promotional rates need to be in effect for at least six months from the beginning date of that promotion.

      • Creditors need to provide a 30-day advance notice of an account closure.

      • With certain exceptions, credit card issuers are prohibited from charging a finance charge based on the double billing cycle method.

      • Creditors are prohibited from charging a fee on an outstanding credit card balance at the end of the billing period if the fee is attributed to the interest accrued on an outstanding balance that was fully repaid during that preceding billing period.

      • Consumers have the right to reject a new credit card after the creditor notifies a consumer reporting agency of its corresponding account.

      • Creditors are required to remove information provided to a consumer reporting agency about newly established credit card accounts if the consumer has not used or activated the account and and if the consumer contacts the creditor within 45 days of its establishment to close it.

      • If two or more different APRs apply to different portions of an outstanding balance, the amount of any payment above the required minimum payment needs to be applied to the balance with the highest APR first and then to lower APR balances.

      • Creditors are required to provide a grace period for payments even if the cardholder takes advantage of a promotional rate balance or deferred interest rate balance.

      • Creditors are required to send credit card statements at least 21 days before the due date of the outstanding balance.

      • Creditors are prohibited from providing credit to consumers under age 18 (unless they are emancipated under state law, or the consumer's parent or legal guardian is designated as the primary account holder).

      • For college students who do not have a co-signer, the maximum amount of credit extended will be limited to the greater of 20 percent of the student's annual gross income or $500 dollars. The aggregate amount of credit extended from all of their credit cards will be limited to 30 percent of the student's annual gross income (for the recently completed calendar year).

      • Creditors are prohibited from opening a credit card account for any college student who does not have any verifiable annual gross income or already maintains a credit card account with that creditor, or any of its affiliates.

      • Creditors are prohibited from charging a fee to make telephone and web-based payments. However, a fee may be charged for expedited telephone payments made on the due date or the day before the due date.

      • Creditors are required to post their written credit card agreements on the Internet.

      "Shine a light"

      Until the new rules take effect, however, consumers are bluntly being told that the old rules apply. Zeichner Bowne said there was little customers could do, but there are a few options.

      "The best thing you can do is pay the balance down as fast as you can," she said. "You could cancel the card, but that could do long-term damage to your credit rating. Paying it off on time, keeping your debt-to-credit ratio low — that's really the best option."

      Cardholders who are suffering undue harassment or hardship can file a complaint with the Office of the Comptroller of the Currency (OCC), the federal agency most directly charged with overseeing consumer protection in the financial industry. The OCC has a dedicated Web site for consumers to file complaints against banks, although it's not easy to find on the OCC site.

      "[Chase's policies] are the first big sign of systemic changes we're seeing since the regulations got passed," Zeichner Bowne said. "They'll be a big help, but until then, shining a light on these practices is very important."

      Credit Cards Giving Consumers Heartburn...
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      Sprint Text Messaging Tax Suit Dropped

      Alleged improper taxes for users of network cards

      Sprint scored a victory last week when a federal judge dismissed a nationwide class-action complaint alleging that the company charged extraneous fees for text messages and voicemails sent to customers using network cards.

      The suit was filed by the Utility Consumers' Action Network (UCAN), a non-profit consumer advocacy group. According to the suit, Sprint began charging taxes and surcharges for text messages to network card users in September 2006. This practice is improper because the cards have no keypad or screen and thus can't alert customers when they've received a message. The suit further alleged that Sprint refused to issue refunds when prompted by consumers.

      U.S. District Judge Robert Bryan decided that the plaintiffs failed to show that a nationwide class action would "outweigh the complexity of such a proceeding." Bryan concluded that "a nationwide class in this situation would not be a superior method of adjudicating" the issue.

      UCAN, based in California, was founded in 1983 and boasts over 30,000 members. The organization's website says that UCAN "was formed to protect consumers from utility and corporate abuse" and that the group's "not-for-profit legal team has saved San Diego consumers billions of dollars in unfair utility rate hikes." The organization is especially involved in consumer issues surrounding energy, gas and water, and communications.

      Bryan took over the case in 2008, after colleagues recused themselves.

      The instant action is only one in a number of recent class actions involving text messages. Two weeks ago, a federal court ruled that publisher Simon & Schuster violated telemarketing laws when it sent out unsolicited e-mails hawking a new Stephen King book. That decision will likely have wide-ranging implications for electronic marketing in the 21st century.

      A suit last year accused wireless providers of overcharging customers for text messages, which use very little bandwidth and cost next to nothing to process. That action brought counts in unjust enrichment, unauthorized charges, and wrongful collections, and named as defendants seven wireless providers, including Sprint, Verizon, and AT&T. A similar suit was also lodged against T-Mobile.

      Bryan's decision, while barring a nationwide suit, leaves the door open for a class action made up entirely of California residents. Plaintifffs' attorneys often file suits on behalf of statewide classes when nationwide suits fail or are impracticable.

      And while the ruling is a welcome development for Sprint — spokesman John Taylor said the company is "pleased with the judge's decision" — the company also has other lawsuits to contend with. In March, leading class action firm Coughlin Stoia Geller Rudman & Robbins filed a securities suit in Kansas accusing the company of misrepresenting its own health and stability, thereby driving up stock prices.

      Sprint Text Messaging Tax Suit Dropped...
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      GM Vows To Honor Lemon Law Commitments

      Answers critics worried about consumers' rights

      In an effort to head off consumer objections to its bankruptcy reorganization, General Motors has promised to honor lemon law claims on future vehicle defects.

      The move answers a challenge filed by nine state attorneys general and consumer groups who filed objections with the bankruptcy court, claiming the bankruptcy would deprive consumers of protections they now enjoy.

      The Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety, National Association of Consumer Advocates and Public Citizen filed objections to the GM bankruptcy sale because it attempted to immunize the new GM from claims of people who have been or will be victimized by defective GM vehicles.

      "We are gratified the General Motors bankruptcy sale documents have been amended to state that the 'new GM' will assume liability for future product liability claims -- that is the claims of people who have not yet been, but who will in the future be, injured or killed in accidents caused by defects in GM vehicles," said Adina Rosenbaum, an attorney with Public Citizen.

      "We argued that allowing the sale to go through 'free and clear' of current and future claims would violate the Bankruptcy Code and that it would violate due process to take away the rights of people who will be injured in the future and do not yet even know that they will one day have claims," Rosenbaum said.

      GM is apparently hoping to pre-empt challenges that were raised in the Chrysler bankruptcy earlier this month. Chrysler eventually said it would abide by its previous lemon law commitment.

      The promise was contained in a document filed with the court. The document assures Treasury Department officials that the new GM would assume liability for future product defect claims. The assurance was requested by Treasury officials.

      "The purchaser will expressly assume all product liability claims arising from accidents or other incidents arising from the operation of GM vehicles subject to the closing," the document said.

      The reorganization is also being challenged by a group representing about 300 consumers with pending lawsuits against GM for alleged vehicle defects.

      Most state lemon laws specify that a manufacturer must provide a refund or replacement for a defective new vehicle when a substantial defect cannot be fixed in four attempts, a safety defect within two attempts or if the vehicle is out of service for 30 days within the first 12,000 to 18,000 miles or 12 to 24 months.

      Success in using state lemon laws depends upon three things: keeping good records, providing the right notice, and using arbitration programs where required. As with all cases involving two or more parties, it is important to document the transaction. When it comes to dealing with auto manufacturers and dealers, it's even more important.

      In an effort to head off consumer objections to its bankruptcy reorganization, General Motors has promised to honor lemon law claims on future vehicle defe...
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      Snapple Lawsuit To Be Reinstated

      Alleges drink's claims of "all-natural" are deceptive

      A class action lawsuit alleging that the best stuff on earth is actually made from cheap and unhealthy junk is on the verge of reinstatement after being tossed two years ago.

      The lawsuit, filed in New Jersey in 2007, alleged that Snapple manufacturer Cadbury Schweppes defrauded consumers by labeling the drink "all natural," and, of course, "the best stuff on earth." The suit said this language was misleading because the drink contains man-made high fructose corn syrup.

      The suit was thrown out by a lower court after the judge determined that federal regulations preempted the state-based claims. According to the judge, labeling requirements set forth by the Food and Drug Administration (FDA) prevented the plaintiffs from arguing a case based on state laws.

      Judge Mary Cooper reasoned that FDA guidelines "so thoroughly occupy the field of the beverage labeling at issue in this case that it would be unreasonable to infer that Congress intended states to supplement this area."

      But a three-judge panel that recently heard arguments appears likely to reopen the case, according to legal experts. Recent years have seen more courts allowing state-based claims even when federal regulations are in place.

      Whether the suit will succeed is another matter. The FDA hasn't outlined what "all natural" actually means, and scientists disagree as to whether high fructose corn syrup falls under the "natural" umbrella.

      The controversial ingredient — made of fructose and glucose — is common in soft drinks and plays a large role in America's growing obesity epidemic. It is also cheaper for manufacturers than actual sugar, due in part to corn subsidies provided by the government. Unsurprisingly, the Corn Refiners Association filed an amicus curaie brief on behalf of Snapple in the instant action.

      In November 2008, Snapple rolled out a newly-calibrated line of beverages. Along with a higher-brow bottle design and an emphasis on the drinks' black and green tea leaves, the new formula uses actual sugar in place of high-fructose corn syrup. The decision to give the company a makeover came after increased competition from lower-key drinks, including Honest Tea, a favorite of President Barack Obama. Recent years have seen a decline in Snapple sales as more teas and other beverages enter the market.

      Just because Snapple no longer uses high-fructose corn syrup doesn't preclude the suit moving forward, however. If the class is reinstated, it will be on behalf of those who bought "all natural" Snapple before November 2008.

      Cadbury Schweppes was spun off into the Dr. Pepper Snapple group in May 2008. The company, unsurprisingly, manufactures both Snapple and the popular soft drink Dr. Pepper, which was originally made by the Coca-Cola company.

      About a year before the present lawsuit was filed, a California woman filed suit against the drink manufacturer, claiming that the company's Diet Lime Green Tea contained "a disgusting foreign substance," and that several bottle tops were not properly sealed. That plaintiff was so enamored with Snapple that she was known to purchase up to seven cases of lime green tea at once.

      A class action lawsuit alleging that the best stuff on earth is actually made from cheap and unhealthy junk is on the verge of reinstatement after being to...
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      Chase Raises Minimum Payments On Credit Cards

      Consumers with low rate, high balance, caught in trap

      Thousands of Chase credit card customers have gotten some bad news this month. The bank has informed them that the minimum monthly payment on their accounts is being raised from two percent of the balance to five percent.

      That might not sound like a huge increase, but for many who are carrying large balances and are tightly budgeted, its a severe and unexpected blow. Kay, of Pottsville, Pennsylvania, said she contacted Chase and was told the change in policy was related to the poor economy.

      I was told I could possibly re-negiotate a lesser monthly payment but my interest would go from 3.9 percent to 21.99 percent. I was told that out of over a billion credit card holders 850,000 were effected by this change, she told My monthly payment from my four accounts will go from $961.00 a month to $2394.00 a month. Needless to say I will not be able to make these payments and will end up defaulting on my accounts and probably claim bankruptcy.

      The change in minimum payment has little to do with how long customers have been Chase cardholders, or their credit ratings, though in an analysis of complaints to in the last few days, many customers do seem to have one thing in common. They all mention that they took advantage of a previous promotion and signed up for a Chase credit card, with the promise of a low, fixed rate for an extended period of time.

      In the past year I took advantage of balance transfer offers with their life-of-the-loan low interest rate offers of 5.99 and 6.99, Wendy, of Cardiff By The Sea, California, told I basically used the card as debt consolidation this year in lieu of the economy, wanting to close some other accounts and just use the Chase card to pay this amount down. I am horrified at the new five percent minimum! This will increase my payment by about $475 a month.

      Dana of Dacula, Georgia, also took advantage of the promotion and transferred money to a Chase account at 4.9 percent. In August her minimum monthly payment goes from two percent to five percent.

      This could put me in default since it would cause my payment to more than double each month, she told I do not want to use the card, I just want to pay it with the terms I agreed to when the card was issued.

      With new credit card rules on the way, thanks to changes by regulators and legislation passed by Congress, lenders are preparing for a new consumer lending environment. By increasing its minimum monthly payment for customers with low, fixed interest rates, Chase recovers that low-interest money faster, and can loan it out again at much higher rates.

      The new credit card rules that go into effect next year prevent lenders from arbitrarily raising interest rates, but do not address the issue of minimum monthly payments. In fact, regulators in the past have encouraged lenders to increase the minimum payments, so that consumers pay down their balances faster.

      But a number of consumers who thought they were doing the smart thing — transferring large balances to cards with locked in, low rates, are finding themselves in a trap. The increased minimum payment is now unaffordable. The price of keeping their payment the same is to give up that promised low rate, so that more of their monthly payment goes to interest each month, not paying down the principal.

      Chase Raises Minimum Payments On Credit Cards...
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      FDA Approves Generic Plan B Pill

      Still prescription-only under 17

      The U.S. Food and Drug Administration has approved the first generic version of the emergency contraceptive Plan B (levonorgestrel) tablets, in the 0.75 mg dosage. The generic product will be available by prescription only for women ages 17 and under.

      Plan B was first approved in 1999 for prescription use only for women of all ages. Plan B is manufactured by Duramed Pharmaceuticals Inc., of Cincinnati.

      In 2006, Plan B was approved for nonprescription use for women ages 18 and older. Plan B remained available as a prescription-only product for women ages 17 and under.

      The new approval allows marketing of a prescription-only generic product for women ages 17 and under. No generic levonorgestrel product for emergency contraception can be approved for nonprescription use in women ages 18 and older until Aug. 24, 2009, when the marketing exclusivity held by Duramed for the nonprescription use expires.

      The generic levonorgestrel tablets 0.75 mg are made by Watson Laboratories Inc., based in Corona, Calif.

      Levonorgestrel can prevent pregnancy after unprotected intercourse or a known or suspected contraceptive failure. It is not effective in terminating an existing pregnancy and does not protect against sexually transmitted diseases, including HIV infection.

      The drug delivers a surge of hormones, similar to a high dose of birth-control pills, interfering with fertilization and preventing implanation of a new embryo in the uterus. Most medical authorities do not consider this to be an abortion but some anti-abortion groups disagree.

      Plan B is not the same as mifepristone, sometimes called RU-486, a pill that chemically induces an abortion.

      Even when it was available only with a prescription, Plan B was not widely available in some areas. For example. Wal-Mart did not stock it in its pharmacies until March 2006, when it succumbed to pressure from Illinois, Massachusetts, Connecticut and other states.

      Three Massachusetts women had sued Wal-Mart for not carrying the pill, leading to the state Board of Pharmacy's decision to require the chain to stock the drug.."

      The U.S. Food and Drug Administration has approved the first generic version of the emergency contraceptive Plan B (levonorgestrel) tablets, in the 0.75 mg...
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      Most Consumers Lack Confidence In Food Safety, Survey Says

      Skepticism grows in wake of recalls

      There was a time that the safety of food Americans put on their tables was not among their most pressing concerns. Not anymore.

      A new IBM study reveals that fewer than 20 percent of consumers trust food companies to develop and sell food products that are safe and healthy for themselves and their families. The study also shows that 60 percent of consumers are concerned about the safety of food they purchase, and 63 percent are knowledgeable about the content of the food they buy.

      The survey of 1,000 consumers in the 10 largest cities nationwide shows that consumers are increasingly wary of the safety of food purchased at grocery stores, and their confidence in -- and trust of -- food retailers, manufacturers and grocers is declining.

      Eighty-three percent of those surveyed were able to name a food product that was recalled in the past two years due to contamination or other safety concerns. Nearly half -- 46 percent -- named peanut butter, the staple of school lunches for children across the nation, as the most recognizable recall. Spinach came in a distant second, with 15 percent awareness nearly two years after the incident.

      Consumers are proving to be extra cautious in purchasing food products after a recall. Nearly half of those asked would be less likely to purchase a food product again if it was recalled due to contamination. Sixty-three percent confirmed they would not buy the food until the source of contamination had been found and addressed. And eight percent said they would never purchase the food again, even after the source of contamination was found and addressed.

      These findings underscore how the rise in recalls and contamination has significantly eroded consumer confidence in food and product safety, as well as with the companies that manufacture and distribute these products.

      Sixty-three percent of respondents report they have purposefully changed their grocery shopping behavior in the past two years because they wanted better value for their money. And almost half have changed shopping behavior to access fresher foods (45 percent) or better quality foods (43 percent).

      "Especially in today's economy, if consumers are going to pay a little extra for a branded or organic product, they want to be assured that they're paying for something different and better quality," said Guy Blissett, Consumer Products Leader, IBM Institute for Business Value. "Across the board, consumers are demanding transparency and more information about the food they purchase to ensure their safety and that of their families. As the government, industry associations, retailers and manufacturers work through the operational issues associated with ensuring food safety, we can each become more aware and take greater responsibility for the food we purchase."

      The survey found that over the past two years, consumer appetite for information about food products increased. Seventy-seven percent of consumers want more information about the content of the food products they purchase, and 76 percent would like more information about its origin.

      Seventy-four percent said they are willing to dig deeper and seek more data about how the food products are grown, processed and manufactured. Despite industry efforts to keep consumers informed with more detailed product information, there's still a significant gap between consumer expectations and what retailers/manufacturers are providing.

      The survey also found that consumers are spending more time poring over food labels to know which ingredients were used, questioning supermarkets and product manufactures about product detail, paying closer attention to expiration dates, and doing more in depth background checks on specific food brands and their origin.

      This will have an even bigger impact as the younger, more Internet savvy generation of consumers evolve into being the primary purchasers of groceries.

      An estimated 76 million people in the United States get sick every year with food borne illness and 5,000 die, according to the U.S. Centers for Disease Control and Prevention. Food safety is top of mind for governments, retailers, manufacturers and consumers alike, and in fact, President Obama's proposed budget includes $1 billion for the FDA to spend on improving food safety. More than 600 bills addressing food safety have been introduced in state legislatures since January 2009.

      "The ability to trace a contaminated product all the way back to the source of production is key to modernizing our food industry, said Caroline Smith DeWaal, director of food safety, Center for Science in the Public Interest. It would also allow producers to more precisely identify the source of a problem in order to improve production practices and could help narrow the scope of recalls by more quickly identifying the specific plant or country of origin.

      More than half of those asked trust food manufacturers when handling a recall in the event that a food product is contaminated, indicating a decrease in their level of trust over the past two years. Meanwhile, 72 percent said they trust the store where they buy groceries to properly handle food product contamination recalls.

      Fifty-seven percent of consumers report they've stopped purchasing certain foods, even for a short time, within the past two years due to safety considerations.

      Most Consumers Lack Confidence In Food Safety, Survey Says...
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      Feds Offer DTV Reception Advice

      Some tweaking may be necessary

      Still having problems receiving certain channels following the June 12 transition to digital TV? The Federal Communications Commission suggests "double rescanning," and double-checking and relocating your antennas. Meanwhile, local broadcasters are working to resolve any problems on their end.

      Many consumers already know about the need to run the "scan" function on their digital converter boxes or digital TV sets periodically following the June 12 digital TV transition. Scanning searches for and "remembers" the available digital broadcast channels.

      But in some cases where stations moved their digital frequencies on June 12, simple scanning may not be enough. There is a procedure — sometimes called "double re-scanning" — that can clear your box's memory of saved channels. These earlier scans may have saved channel information that is now incorrect.

      There are five simple steps to a double re-scan for a converter box or digital TV:

      1. Disconnect the antenna from the box or digital TV

      2. Re-scan the box or digital TV without the antenna connected. As with any scan follow the on-screen instructions or owner's manual for your device

      3. Unplug the box or digital TV from the electrical outlet for at least one minute

      4. Reconnect the antenna to the box or digital TV and plug the unit into the electrical outlet.

      5. Rescan the box or digital TV one more time.

      You must have a VHF/UHF antenna. "Rabbit ears," rods, or other elements are needed to pick up channels 2-13 (VHF), and a circle, "bow tie," or other element is needed to pick up channels 14-51 (UHF). Some antennas marketed as HDTV antennas don't perform well on VHF channels; some antennas are VHF or UHF-only.

      For the best reception of channels 2-6, extend the rods all the way out. For the best reception of channels 7-13, reduce the length of the rods to 12-18 inches.

      The location of an indoor antenna is key. And one of the most popular spots for indoor antennas — on top of the TV — may not be the best. Consumers having trouble with digital TV reception should try moving their antennas to one of these locations:

      • Near a window

      • As high as possible

      • Away from other electronic equipment, including computers, VCRs, DVD players, converter boxes, and the television itself

      • Change the direction the antenna is facing

      • Rooftop antennas may be needed in some instances

      Consumers may need to run the "scan" function again on their converter boxes after moving the antenna

      For more information about antennas and rescanning, visit the government's DTV site,, particularly their "Fix Reception Problems" page. And good luck.

      Feds Offer DTV Reception Advice...
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      Wireless Carriers Agree To $1.5 Million Cramming Settlement

      Some Florida subscribers to get refunds

      Verizon Wireless and Alltel customers in Florida will get millions of dollars in refunds of third-party charges that ended up on their telephone bills. Florida Attorney General Bill McCollum struck a deal that holds the telecoms liable for "cramming" by third party billers.

      As part of the deal Verizon Wireless, LLC has agreed to adopt a series of "best practices" standards which will protect consumers from third-party charges, including charges for "free" ringtones and other cell phone content customers either didnt order or didnt realize would result in a monthly charge.

      "Consumers deserve to get their money back when a company misrepresents something as free that isn't," said Attorney General McCollum. "I commend Verizon Wireless for providing full restitution to their Florida customers and changing the business model to better protect consumers nationwide."

      Cell phone content includes ringtones, music, wallpaper, horoscopes and other material that is often promoted by online marketers as "free," but ultimately ends up costing up to $19.99 a month. The charges appear on a subscriber's monthly wireless bill and are usually recurring. The bill charges often appear under the following indiscernible names: "OpenMarket," "M-Qube" and "M-Blox."

      A large number of complaints related to the mobile content industry led to an investigation which revealed that thousands of Florida consumers had received these charges on their cell phone bills for mobile content downloads that they neither knowingly authorized nor desired. Prior to the investigation, Verizon offered its customers the ability to block third-party mobile content and to implement parental controls free of charge. The investigation and subsequent settlement have been negotiated by the Attorney Generals CyberFraud Section.

      McCollum says Verizon Wireless has agreed to first-of-their-kind standards for advertising on websites, prohibiting the use of the word "free" without clear disclosure of the actual price and requiring all content providers and advertisers to clearly and conspicuously disclose the true cost of cell phone content.

      These compliance standards, which include website design restrictions for online advertisers, will ensure consumers see and understand the terms and conditions of the purchase. Verizon Wireless will enforce these new standards through its contracts with all content providers and advertisers nationwide. Alltel will also be required to adopt these "best practices" under the company's acquisition by Verizon Wireless.

      As part of the settlement, the company will pay a total of $1.5 million, with $1 million for Verizon Wireless and $500,000 for Alltel, to reimburse the state for the costs of its investigation and to help the Attorney General's Office fund the efforts of the task force as it continues to press for similar reform across the industry. The agreement was negotiated with full cooperation for Verizon Wireless LLC.

      The Attorney General's Office has already obtained several settlements with players from each part of the industry, including marketers, billing aggregators, content providers and wireless service providers. Verizon Wireless is the second wireless provider to set up these standards and offer consumer refunds; AT&T Mobility reached an agreement in February 2008.

      Wireless Carriers Agree To $1.5 Million Cramming Settlement...
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      Payday Lenders Resist APR Comparisons

      How much are you really paying for that loan?

      Consumer advocates say borrowing money from a payday lender is always a bad idea. Doing business with an online payday lender can lead to double trouble.

      Doing business with an online payday lender that claims "tribal sovereign immunity" could means triple trouble., one such lender, has generated a number of consumer complaints lately.

      "I appied for a pay day loan with One Click Cash and was approved with the understanding that I would only have to pay back a service fee of $75.00 on the loan amount of $250," DeAnna, of South Lake Tahoe, California, told "They had taken 4 payments of $75.00, which I thought would leave me a final payment of $25.00 . When I went to check my account it said that my next payment would be $125.00, with only $50.00 of that to princapal and $75.00 for another service fee."

      Even by payday loan standards, those numbers are grossly excessive. But huge fees appear to be a common refrain in complaints about

      "I took a payday loan from these people who call them selves One Click Cash in February of 2009. I did not receive the $200 until March," said Joe of Dennison, Texas. Since then they have withdrawn $700 from my account."

      "I took a loan out for $150 and agreed to pay back this loan with $45 as the interest fee," Maria, of Springfield, Massachusetts, told "All was well until the automatic withdrawals from my account wouldn't stop. And not only that, they would take out multiple withdrawals of various amounts on the same days. So the problem with all of us is very obvious, so what can we do about it? Is there anything?"

      States have tried, but there are problems. A number of online payday loans have affiliated with federally recognized Indian tribes. Operating under the auspices of a sovereign tribe, they claim immunity from state prosecution.

      The good news for consumers is that some states aren't completely rolling over. In West Virginia last year, Attorney General Darrell McGraw mounted a vigorous crackdown on payday lenders making the tribal sovereign immunity claim.

      In September 2008, McGraw reached a settlement with 17 online payday lenders, including three that were affiliated with Indian tribes., operating under the umbrella of Miami Nation Enterprises, was among them.

      The settlements with the tribal corporations, Miami Nation Enterprises and SFS, Inc., affiliated with the Santee Sioux Nation of Nebraska, and MTE Financial Services, affiliated with the Modoc Tribe of Oklahoma, resulted in $128,239.50 in cash refunds and canceled debts for 946 West Virginia consumers. The companies did business under numerous trade names.

      According to the Center for Responsible Lending, the case was settled before the tribal sovereign immunity issue was addressed. Consumers who feel they have been victimized by an online payday lender should contact their state attorney general.

      Payday Lenders Resist APR Comparisons...
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      "Clear" Registered Travel Program Goes Dark

      Company abruptly shuts off service for frequent flyers

      It was billed as the perfect antidote to long airport waits for busy flyers — simply pay $200 a year, submit some personal information, and you could be whisked to the front of the line for flights from many major airports. That was the promise of the "Clear" airport program, largest of the "Registered Traveler" priority-passenger programs.

      But subscribers to the program were in for a shock yesterday, as the company abruptly ceased operations, its Web site replaced with a brief note saying it was closing down due to a dispute with its creditors.

      "At the present time, because of its financial condition, Verified Identity Pass, Inc. cannot issue refunds," the Web site stated. The company's parent, later updated the site to add that it would take "appropriate steps" to delete the passenger data it had gathered.

      The "Clear" program and its siblings were designed to circumvent higher security and longer lines imposed on airports in the wake of the September 11, 2001 terrorist attacks. The premise was that business travelers would submit extensive personal data — including biometric verification — to the Transportation Security Authority (TSA), which would vet the applicant and grant them permission to use "Clear," or other services.

      Users of "Clear" would get a clear plastic ID card that could be used at any participating airport, or with competitors' terminals, in an effort to speed business travelers on their way while other passengers endured long lines, byzantine rules, and humiliating searches.

      Many analysts blamed the program's shutdown on the economy, claiming that tight business budgets and high unemployment meant less air travel, and consequently less need for a fast-registration program.

      Although "Clear" had the imprimatur of its founder and former CEO, media magnate Stephen Brill, and over $50 million in venture capital funding backing it, critics charged that programs like "Clear" did not offer any real security, as any potential terrorist or saboteur would find a way to forge their credentials and get past the system.

      Privacy advocates also noted that the information gathered by Clear was not actually held by the TSA, but by the private companies backing the venture, such as Lockheed Martin.

      "Now my personal information is within a database controlled by Lockheed Martin along with my biometrics," Greg of Centerville, Virginia told ConsumerAffairs.Com. "I don't know where it's going to end up or sold to in the future. The representatives told me they were just following instruction, but by who?"

      The TSA temporarily shut down "Clear" in August of 2008 after a laptop was stolen from San Francisco International Airport containing personal data on 33,000 new applicants for the program.

      Angry customers complained on various news sites that Clear had been charging them for renewals right up until the company's sudden shutdown, and demanded that Boston-based investor Spark Capital refund their payments.

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      TJ Maxx Settles Data Breach Charges

      Company will pay $9.75 million to 41 states

      Retail chain TJX, operator of TJ Maxx stores, has settled charges with 41 states, resolving a 2007 security breach that exposed thousands of customers' sensitive financial information.

      The company was charges with failure to appropriately protect its customers' financial information and to guard against a massive data breach that placed thousands of consumers' personal data at risk, nationwide. TJX has agreed to pay $9.75 million to the states and to implement and maintain a comprehensive information security program, designed to safeguard consumer data and address any weaknesses in TJX's systems in place at the time of the breach.

      "Protecting consumers' personally-identifiable information is of paramount importance to prevent fraudulent use of credit and identity theft. All retailers and companies that hold or use personally-identifiable information must employ data security systems that guard against the improper disclosure or use of that information," said Massachusetts Attorney General Martha Coakley. "This settlement ensures that companies cannot write-off the risk of a data breach as a cost of doing business. In addition to the monetary relief, this agreement requires TJX to implement and maintain a substantial data security program to ensure that this kind of data breach does not happen again."

      In January 2007, TJX announced that certain persons had obtained unauthorized access to its computer systems enabling them to seize cardholder data and other personally identifiable information. A coalition of attorneys general conducted an extensive investigation into TJXs data security policies and procedures in place when the breach occurred.

      That investigation concerned a number of alleged vulnerabilities in TJXs data security systems that may have facilitated the unlawful intrusion and allowed it to last undetected for an unacceptable duration. The settlement reflects the lessons learned from that breach and provides for an information security program designed to guard against future intrusions or unauthorized disclosures. The settlement's relief, in that regard, is the most comprehensive relief achieved to date following a data breach investigation.

      The settlement ensures that TJX will employ a comprehensive "Information Security Program" that assesses internal and external risks to consumers' personal information, implements the safeguards that will best protect that consumer information, and regularly monitors and tests the efficacy of those safeguards. TJX also will report regularly to the Attorneys General on the efficacy of its program, after obtaining a third-party assessment of its systems.

      Of the $9.75 million monetary payment under the settlement, $5.5 million is to be dedicated to data protection and consumer protection efforts by the states, and $1.75 million is to reimburse the costs and fees of the investigation. Further, $2.5 million of the settlement will fund a Data Security Trust Fund to be used by the state Attorneys General to advance enforcement efforts and policy development in the field of data security and protecting consumers personal information.

      The 41 States participating in todays agreement are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and the District of Columbia.

      Retail chain TJX, has settled charges with 41 states, resolving a 2007 security breach that exposed thousands of customers' sensitive financial information...
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      Mayo Clinic Announces Cancer Cure Breakthrough

      Inoperable tumors almost disappear in three patients

      For years its been medicines Holy Grail — a cure for cancer. Doctors at the Mayo Clinic arent saying theyve found it, but they think they may be getting close.

      Two patients whose prostate cancer had been considered inoperable are now cancer-free, doctors say. The men were treated using an experimental drug therapy that was used in combination with standardized hormone treatment and radiation therapy.

      The men were participating in a clinical trial of an immunotherapeutic agent called MDX-010 or ipilimumab. In these two cases, physicians say the approach initiated the death of a majority of cancer cells and caused the tumors to shrink dramatically, allowing surgery. In both cases, the aggressive tumors had grown well beyond the prostate into the abdominal areas.

      "The goal of the study was to see if we could modestly improve upon current treatments for advanced prostate cancer," said Dr. Eugene Kwon, Mayo Clinic urologist and leader of the clinical trial. "The candidates for this study were people who didn't have a lot of other options. However, we were startled to see responses that far exceeded any of our expectations."

      The patients first received a type of hormone therapy called androgen ablation, which removes testosterone and usually causes some initial reduction in tumor size. Researchers then introduced a single dose of ipilimumab, an antibody, which builds on the anti-tumor action of the hormone and causes a much larger immune response, resulting in massive death of the tumor cells.

      Both men experienced consistent drops in their PSA counts over the following weeks until both were deemed eligible for surgery. Then, during surgery, came a greater surprise.

      "The tumors had shrunk dramatically," said Dr. Michael Blute, Mayo urologist, co-investigator and surgeon, who operated on both men. "I had never seen anything like this before. I had a hard time finding the cancer. At one point the pathologist, who was working during surgery, asked if we were sending him samples from the same patient."

      One patient underwent radiation therapy after surgery; both have resumed their regular lives. Further research is being planned to understand more about the mechanisms of the antibody and how best to use the approach in practice. The researchers, however, note the significance of their findings.

      Mayo Clinic Announces Cancer Cure Breakthrough...
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      New York Shuts Down Debt Collection Ring

      Buffalo-based collectors allegedly used illegal tactics

      New York Attorney General Andrew M. Cuomo today shut down a nationwide collection operation that consisted of at least nine debt collection companies across Western New York, run by Buffalo resident Tobias Boyland, the latest in Cuomo's probe of debt collection practices.

      According to hundreds of consumer complaints filed with law enforcement agencies across the country, Boyland's employees violated state and federal law by routinely posing as law enforcement officials, threatening to arrest consumers and throw them in jail unless they made arrangements to pay the company immediately.

      Under the terms of the court order obtained today by Cuomo's office in Buffalo Supreme Court, Boyland's operation will shut down all of its companies in the Buffalo area. Attorney General Cuomo also announced that his office executed search warrants on four of the operations known locations and on Boyland's residence. When investigators from the Attorney General's Office arrived at the residence, they found a loaded, .380 semi-automatic pistol on Boyland's person. Boyland was taken into custody by the Erie County Sheriff and the Office of the Erie County District Attorney will handle the resulting gun-possession case.

      "Plain and simple, this company was run by people who lied, bullied and preyed on vulnerable Americans struggling to resolve their financial situation," Cuomo said. "Pretending to be a police officer, threatening to throw consumers in jail — these practices are as despicable as they are illegal."

      According to Cuomo's lawsuit, Boyland, a convicted felon, and three other individuals ran numerous debt collecting companies that operated out of at least four locations in Western New York.

      The debt collection agencies operated under several names across the Buffalo area, including: Central Resource Management, Final Claims Asset Locators, Final Control Asset Locators, Interchange Payment Solutions, Next Step Services, Portfolio Asset Assurance, Silverbay Services, and Teleport.

      Their collectors routinely made scripted telephone calls designed to intimidate consumers into paying their debts. The debt collectors pretended to be law enforcement officers and threatened consumers with arrest and incarceration if they failed to pay. These employees also falsely informed consumers that they were being sued in civil court.

      Cuomo's investigation revealed that collectors regularly demanded payment for non-existent debts, demanded payments for debts that had already passed the statute of limitations, or substantially inflated the amount owed on an actual debt.

      Using their false law enforcement identities, collectors coerced and cajoled terrified consumers into agreeing to make payments. Frightened at the prospect of arrest and humiliation, consumers authorized withdrawals from their checking accounts, sent Western Union moneygrams and/or money orders out of fear. Consumers were intentionally given misleading names, addresses and telephone numbers that led them to believe the businesses were located far from the Buffalo area.

      The federal Fair Debt Collection Practices Act, the New York State debt collection and consumer protection laws prohibit the following conduct: posing as an attorney, threatening lawsuits or other legal action which cannot be taken, saying a consumer committed a crime or will be arrested and talking with third parties except to get location information. The law further requires collection agencies to send a written notice within five days of initial communication with the consumer explaining how he or she can dispute the debt. If properly disputed, the collection agency must stop all collection attempts and send verification.

      Earlier this month, Cuomo announced settlements with three Western New York-based debt collection companies to reform their deceptive methods. He also subpoenaed nearly twenty companies and law firms operating as debt collectors throughout the state. His office shut down two collectors for threatening and intimidating consumers into paying debts that they did not owe. In early May, Cuomo announced a lawsuit against two debt settlement companies for fraudulent business practices and false advertising by selling misleading debt settlement plans that very rarely deliver the promised benefits to consumers dealing with debt.

      New York Shuts Down Debt Collection Ring...
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      People to People Settles Wrongful Death Lawsuit

      16-year-old died in Tokyo after allegedly being refused medical attention

      Tyler Hill (Family photo)

      The parties involved in the wrongful death lawsuit involving a Minnesota teenager who died on a 2007 People to People trip to Japan have settled the case, confirmed today.

      The terms of the settlement in the case Sheryl and Allen Hill filed after their 16-year-old, Tyler, died on the People to People Student Ambassador trip are confidential and must be approved by the judge hearing the matter in Minnesotas Hennepin County District Court. The familys attorney, Charles Hvass, declined to comment. The Hills could not be reached for comment.

      The Hills' lawsuit alleged that People to Peoples Student Ambassador group and its delegation leaders refused to get Tyler the medical attention he requested and charged that his June 29, 2007, death in Tokyo was the result of their negligence. Tyler suffered from Type 1 diabetes and complex migraine headaches — conditions his family disclosed before he went on the overseas journey.

      But the travel organization that touts its ties to President Dwight D. Eisenhower convinced the family that it had a solid safety record and a 24-hour response team that could handle any medical emergency. That promise laid the foundation for the lawsuit, which alleged that no one with the organization responded to Tylers pleas for medical attention when he became sick after hiking Mount Fuji.

      After that climb, the Hills alleged, Tyler asked his delegation leaders to take him to the hospital. He said he had altitude sickness. But People to People's delegation leaders refused his request for medical treatment, told him to "work through it," and sent him to his hotel room with water, according to the familys lawsuit.

      The lawsuit also stated that People to People failed to contact the Hills about Tyler's illness.

      Sometime around 4 a.m. on June 27, 2007, Tyler's condition deteriorated and he started vomiting blood. Around 7 that morning, People to People's four delegation leaders learned about Tyler's failing health. But they again refused to seek any medical treatment — even though he requested that attention "because he had been vomiting blood since four o'clock in the morning."

      The delegation leaders also failed again to contact Tyler's parents, the lawsuit alleged.

      For the next ten hours — from 7 a.m. to 5 p.m. — People to People's delegation leaders allegedly left Tyler alone in his room without any medical attention. According to the lawsuit, People to People did not seek any medical attention for Tyler until he was found unconscious in his hotel room — sometime around 6 p.m. on June 27, 2007.

      A few hours later, one of the delegation leaders notified the Hills that Tyler was in the Japanese Red Cross Medical Center. The delegation leader also told the family that Tyler's heart had stopped beating for more than an hour, that he was then resuscitated and had been put on dialysis.

      Tyler died two days later.

      "They killed him, Sheryl Hill told when her family filed the wrongful death lawsuit. This was involuntary manslaughter, neglect, and abandonment."

      The Hills filed their lawsuit against Ambassadors Group, Inc., People to People Student Ambassador Programs, People to People International, a United Kingdom organization called docleaf Limited, two of its employees — Larry McGonnell and Dr. David Perl — and the four delegation leaders on Tyler's trip: Susan Stahr, Pat Veum-Smith, Josh Aberle, and Angela Hanson.

      Earlier this year, the Hills reached a confidential agreement with the non-profit People to People International, based in Kansas City, Missouri. The remaining parties in the case reached a confidential agreement during a mediation hearing earlier this month, according to the Hills' attorney.

      In a statement released today, Jeff Thomas, president and chief executive officer of Ambassadors Group, Inc., said his organization accepted some responsibility for Tylers death.

      Through hindsight we can see that there are steps that all of the leaders should have taken that could have prevented Tyler's death on June 29, 2007, during a trip to Tokyo, Japan, and regret that they were not taken, said Thomas, who is also chief executive officer of Ambassador Programs, Inc. We are very sorry for Tyler's death and the Hill Family's loss and the impact it has had on many. We continue to review all policies surrounding students with pre-existing conditions, including diabetes protocols, to refine our procedures.

      More about People to People

      People to People Settles Wrongful Death Lawsuit...
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      Massachusetts Halts False Foreclosure "Rescue" Activity

      Firm claimed to be "non-profit"

      One by one, the state of Massachusetts is targeting firms that claim they can "rescue" distressed homeowners from impending foreclosure. The Massachusetts Attorney Generals office has obtained a preliminary injunction against defendants H.O.P.E. Alliance, Inc., (H.O.P.E. Alliance), Law & Associates, LLC and Thomas E. Law, II.

      The preliminary injunction prohibits the defendants from publishing advertisements concerning foreclosure-related services, contacting Massachusetts consumers regarding foreclosures or mortgages, and taking and/or soliciting advance fees from consumers. The preliminary injunction follows a temporary restraining order granted against the defendants in early June.

      In a complaint centers on the all-too-common practice of soliciting unlawful advance fees for foreclosure-related services, and unnecessarily delayed negotiations regarding loan modifications. The two together, says Massachusetts Attorney General Martha Coakley, usually pushes homeowners further into debt.

      The complaint also alleges that H.O.P.E. Alliance, with the help of co-defendants Law & Associates, LLC, and Thomas E. Law, II, solicited homeowners facing foreclosure by sending letters that directed them to a toll-free number and to the website

      The website states that it is an alliance of nonprofit organizations and housing counselors that can assist homeowners in obtaining a loan modification or stopping foreclosure. The website also states that it is a 501 (c) (3) non-profit organization.

      "H.O.P.E. Alliance is not registered with the IRS or the Attorney General's Office as a non-profit," Coakley said. The Attorney General's complaint also asserts that in its letter to homeowners, H.O.P.E. Alliance deceptively used a similar name to the government-sponsored non-profit organization, HOPE NOW Alliance.

      During telephone calls with consumers, defendants apparently attempted to skirt the law by asking for a "donation" instead of a fee, but Coakley says the request is still an unlawful fee. Defendants also allegedly promised to obtain loan modifications for consumers, and then after months of delay either failed to provide any services or only provided inadequate assistance to homeowners.

      Massachusetts Halts False Foreclosure Rescue Activity...
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      Con Artists Prey On The Faithful

      Growing number of churches victimized

      The pitch speaks the language of faith and appeals to the budget. "There's no cost to your church. It may even make money to use for good works.

      Its a win-win situation, right? Maybe not. In fact, its probably a scam. That right, scammers are not beneath ripping off a church, something they seem to be doing more lately.

      Con artists with similar pitches are targeting black churches with so-called opportunity scams. Emphasizing a shared faith, culture, or concern for the community to win your trust, they offer the opportunity to use equipment or services that supposedly wont cost the church a thing.

      Their goal? To get access to your churchs bank account, either by lifting account information from a check or by persuading you to sign up to have payments automatically deducted from the account. Once they have access, they can make oversize withdrawals or completely clean out the account.

      Recently, scammers offered computer equipment to the staff of several churches, claiming the cost would be covered by a "sponsor." The church staff simply had to sign an agreement to lease the equipment, make a regular payment, and deposit checks from the sponsor to cover the checks the church staff had written.

      But in the end, the equipment didnt work, the sponsor checks started bouncing, and the churches had thousands of dollars taken out of their accounts.

      How can you avoid a potential church opportunity scam? The Federal Trade Commission, the nation's consumer protection agency, recommends remembering:

      • A contract is a commitment. Before you sign a contract — like a lease — make sure you understand what it's saying. Don't rely on the person making the pitch to sum up the details. They may gloss over obligations outlined in the agreement that can cost your organization a lot.

      • If a contract says you're financially responsible, take it seriously. A special payment arrangement where a third party reimburses you for payments you make is a sign of a scam. Dont take someones word that the language in the contract is "standard" or a "technicality."

      • Scammers may look legitimate. They may direct you to websites theyve created, or they may say they are working with other churches in your area. Dont be swayed by an appearance of legitimacy. Do research on an organization before you do business with it.

      • Never wire back money. In some schemes, scammers send a generous check, asking you to deposit it and wire back a portion or to make a payment right away. Days later when the bogus check bounces, the scammer will have made off with your money.

      Con Artists Prey On The Faithful: The pitch speaks the language of faith and appeals to the budget. "There's no cost to your church. It may even make money...
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      Unwelcome "Cell" Text Violated Federal Communications Laws

      Verdict a blow to texting telemarketers

      A court ruled Friday that publisher Simon & Schuster violated federal telecommunications laws when it sent out an unsolicited — and, in most cases, unwelcome — text message promoting Stephen King's latest book, conveniently titled "Cell."

      The suit, brought in 2006 by Laci Satterfield of New York, alleged that such unsolicited text messages violated the Telephone Consumer Protection Act of 1991. That Act prohibits the use of automatic dialing systems, prerecorded or artificial voices, or the use of fax machines to send unsolicited ads.

      The decision, rendered by the Ninth Circuit Court of Appeals, reversed a ruling from the United States District Court for the Northern District of California, which held that the texts were not covered under the TCPA. Specifically, the lower court held that text messages did not constitute an "automatic telephone dialing system" as defined by the statute.

      Given the TCPA's relative age and the rapid technological advances made in the last two decades, the seemingly straightforward case presented a number of nuanced issues. The TCPA has, to date, targeted mostly telemarketers and other business that use "robo-calls" or faxes to promote their products and services.

      How did Satterfield end up in court in the first place? Her initial story might sound familiar. Caving to her six-year-old son's nagging, Satterfield visited Nextone's website to download a free ringtone. To complete the process, Satterfield had to click through a number of sign-in pages. Eventually, she checked a box next to the words "Yes! I would like to receive promotions from Nextones affiliates and brands. Please note, that by declining you may not be eligible for our FREE content."

      Nextone argued that the words "and its affiliates" give it license to give the customer's phone number out to any related campaign. And, sure enough, about a year after downloading her "free" ringtone, Satterfield received a text on her phone advertising horror writer Stephen King's latest book, "Cell."

      TCPA provisions can be waived if the consumer has given express prior consent. The lower court had held that Satterfield's act of clicking the box next to the boilerplate provided such express consent, defeating her claims. However, the Ninth Circuit reversed summary judgment on this issue, ruling that there were genuine questions of fact as to whether Satterfield really knew what she was agreeing to.

      The court noted that express consent must be "clearly and unmistakably stated," which was not the case here, given that Satterfield really only agreed to receive promotions from Nextones, not Simon & Schuster. The court's refusal to let Simon & Schuster off the hook on this point demonstrates that marketers cannot use vaguely-worded agreements as an excuse to bombard consumers with unsolicited texts or other advertisements.

      Since the Ninth Circuit merely reversed a summary judgment holding — rather than ruling outright in Satterfield's favor — the case will now go back to the Northern District for further consideration.

      The case has broad implications for modern interpretations of the TCPA, as robo-calls and faxes ride into the sunset and online communities and networking sites pop up around the globe. Only time will tell which activities fall under the umbrellas of "solicitation" and "consent."

      More Scam Alerts ...

      A court ruled Friday that publisher Simon & Schuster violated federal telecommunications laws when it sent out an unsolicited text message promoting Stephe...
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      Mothers Cry Foul Over Baby-Gender Test

      Lawsuit alleges expensive test not foolproof after all

      By Jon Hood

      June 19, 2009
      A group of New York mothers is suing the manufacturer of an infallibly accurate fetus gender test, claiming that the product doesn't live up to its hype.

      The Baby Gender Mentor is advertised as giving 99.9% accurate results as early as five weeks into a mother's pregnancy.

      According to the lawsuit, Acu-Gen Biolab, which manufactures the kit, referred to it in ads as the gold standard for prenatal gender detection. A website devoted to the test,, claims that the early prenatal gender detection test is based on established qPCR technology that, when properly administered by a qualified laboratory, has been proven highly accurate in detecting targeted DNA markers.

      An attempt to click through to the site's Total Advantage section, which purports to explain why the test is a safe, quick, and easy way to find out the gender of your baby, resulted in an error message. It is unclear whether this page's absence is due to the lawsuit.

      Barry Gainey, the plaintiffs' attorney, told the New York Post that Acu-Gen has already admitted that as many as 20% of consumers sought a refund from the company because their tests had given inaccurate results. It's not surprising that disgruntled new parents — already spending entire paychecks on diapers and disposable baby bottles — would be upset about a defective kit with a retail price of $275.

      Expectant mothers complete the test by pricking their fingers with a provided lancet, and then mailing in three drops of blood to the manufacturer. The kit's procedures warn customers not to take the test in the vicinity of male humans, claiming that their presence could contaminate the results. Whether this will be raised by Acu-Gen as a defense — or whether it is even true — is one of many issues yet to be determined.

      At least one mother suffered damages far overshadowing any economic loss.

      One of the named plaintiffs used the kit during her second pregnancy, when she and her husband, already the parents of a son, hoped for a girl. The test confirmed their hopes, which were subsequently crushed when a sonogram reported that a second son was on the way after all. The couple has since abandoned their marriage, in part due to the stress and resentment caused by the erroneous test results.

      Not the first time

      This is not the first time the controversial test has raised eyebrows. In 2006, a number of customers claimed that Acu-Gen reneged on its 200% money-back guarantee, instead telling mothers that they needed to provide birth certificates, fingerprints, and other hard-to-produce evidence. The company also claimed that many of the affected mothers had conceived a vanishing twin — one that dies in the uterus and is essentially absorbed into the surviving fetus.

      The test has also been criticized by a number of medical experts. In a 2006 interview with National Public Radio, Diana Bianchi, a fetal DNA expert at Tufts University, said that she was concerned whether the test is accurate or not. I think it's caveat emptor. Let the buyer beware. Some have also raised concerns that the test could be used for gender selection, leading mothers to terminate pregnancies unless their fetus was a certain gender.

      The suit names as defendants both Acu-Gen and certain companies involved in the test's marketing. The action alleges counts in negligence and fraud.

      A group of New York mothers is suing the manufacturer of an infallibly accurate fetus gender test, claiming that the product doesn't live up to its hype....
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      Consumers Underestimate Calories, Sodium In Fast Food

      More unhealthy food harder to estimate

      When fast food restaurants begin posting calorie content next to food items, some consumers are likely to be in for a shock. A news study by researchers at the University of Arkansas indicates that many consumers have a poor understanding of the calorie, fat and sodium content of quick-service restaurant meals.

      In fact, the less healthful the food, the more consumers seem to underestimate its calorie and fat content.

      The researchers — Scot Burton and Elizabeth "Betsy" Howlett, marketing professors in the Sam M. Walton College of Business, and graduate student Andrea Tangari — found that as the calorie content of a meal increased, so did the extent to which calorie, fat and sodium levels were underestimated. In other words, although most consumers expected a large cheeseburger and fries to be high in calories, few realized just how unhealthy that meal was.

      For example, sodium levels from these purchased meals provided more than 75 percent of the daily-recommended level of 2300 milligrams, and consumers underestimated the amount of sodium in their meals by roughly 1,000 milligrams.

      Results also showed that when nutrition information was worse than expected, consumers product evaluations were much more negative.

      "Our findings provide potential insight into why frequent restaurant diners may have difficulty maintaining or losing weight," said Howlett. "On average, frequent diners unknowingly consumed 900 extra calories a week from restaurant meals. This degree of underestimation appears capable of causing significant weight gain over the long term."

      Within the context of the national obesity problem and possible legislation mandating disclosure of calorie and nutrient information on menus, the researchers conducted three studies to determine how accurately consumers estimate calorie, fat and sodium content of quick-service restaurant meals. Of particular interest was how objective nutrition information interacted with prior expectations to influence product evaluations, purchase intentions and perceptions of diet-related disease risks.

      "Our results suggest that when obligated to disclose nutrition information, quick-service restaurants with signature items that are substantially higher in calories than consumers' expect may find their firms in a relatively less favorable position," Burton said. "These restaurants may wish to improve their portfolio of healthy items by either introducing new products or improving the nutrition profile of foods on their current menu by switching to lower calorie ingredients."

      An example of this strategy has been demonstrated recently by KFC, which recently introduced a grilled (unfried) chicken meal that is healthier than a fried-chicken meal.

      Fast food patrons are likely to get calorie information in the near future. Consumer advocates and the restaurant industry are backing a compromise menu labeling bill that is currently making its way through Congress, and is considered likely to pass.

      Consumers Underestimate Calories, Sodium In Fast Food...
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      House Committee Unanimously Passes Food Safety Bill

      Legislation would empower FDA to police food system

      The House Energy & Commerce Committee unanimously passed by voice vote the "Food Safety Enhancement Act of 2009," legislation that would, if passed, overhaul the Food & Drug Administration (FDA)'s power to police food suppliers and producers for signs of contaminated product.

      "A series of foodborne disease outbreaks...has not only sickened and killed American consumers, but has laid bare unacceptable gaps in our food safety laws," said committee chair Rep. Henry Waxman (D-CA). "Today the Committee will act to close those gaps — and give the Food and Drug Administration new authorities, new tools, and a new source of funding to carry out this vital mission."

      Proposed powers for the FDA under the new law include:

      • Creation of a registry of all food facilities and importers serving Americans, which would be updated on an annual basis. Affected parties would pay fees to be included in the registry, and would be tagged with unique identification numbers for easier tracking.

      • Registered facilities would pay an annual fee of $500 to fund FDA oversight, including inspections, recalls, and certifications for export of food to the U.S.

      • The FDA's powers to "quarantine" potentially unsafe food or products from entering geographic areas would be enhanced.

      • The FDA would issue regulations requiring every company in a food produce chain — including manufacturers, processors, and transporters — to maintain records for the origin and distribution of the food, and ensure the records are usable and transferable in multiple formats.

      • Enhanced safety requirements for infant formula.

      • New authority to subpoena records and protect whistleblowers in case of alleged violations of the law.

      The annual fee was originally set at $1,000, but was lowered to $500 after concerns were raised that small business farms and independent producers would not be able to pay the fee, while large agribusinesses and farms could do so easily.

      Republicans also introduced amendments that would enable the FDA to set aside the inspection procedure on its discretion, and to limit the "quarantine" power to only the minimal amount necessary to prevent an outbreak.

      Jean Halloran, director of food safety campaigns for Consumers' Union, said "The bill would go a long way towards preventing outbreaks like the ones we have seen with spinach and peanut butter. [W]e've pushed hard to require high-risk food processors to test for contaminants and tell the FDA when they find them, and we're pleased that this provision was added to the bill approved today."

      The nonprofit expressed concern that language ensuring state food safety laws would not be preempted was removed from the legislation, and advocated its return in subsequent drafts of the bill.

      Ami Gadhia, Consumers' Union policy counsel, said "We hope that the legislation moves to the House floor quickly and the Senate passes a strong bill so a final package can be sent to the President soon. Congress needs to act before we discover another food contamination that takes consumers' lives."

      House Committee Unanimously Passes Food Safety Bill...
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      Senate Committee Investigates Cell Phone Contracts

      Hearings held on exclusivity in mobile market

      When you buy a wireless phone in America, the vast majority of the time, that means you have to buy into a multi-year agreement with whichever carrier has an exclusive deal to carry that phone. These "deals" really aren't deals for consumers, as they entail high fees, blocked functionality, and the inability to take the phone with you if you switch carriers.

      Although legislation to enact better consumer protections has yet to become law, some members of Congress are taking another crack at cracking down on the cellular industry.

      The Senate Commerce Committee held a hearing yesterday on "The Consumer Wireless Experience," exploring how "exclusive" contracts can hinder both wireless customers and companies from getting the most out of their phones.

      "We have too many places in this country where wireless call quality is low and service is unreliable — places where wireless broadband is only a pipe dream. This is absolutely unacceptable to me," said committee chair John "Jay" Rockefeller (D-WV).

      The hearing, which contained no testimony from consumer advocates or actual citizens, had ample representation from industry spokesmen. AT&T retail division president Paul Roth said the wireless marketplace "[encouraged] the necessary collaboration that optimizes handset performance and accelerates the delivery of next-generation features."

      Hu Meena, president of U.S. Cellular South, disagreed, equating the wireless marketplace to the financial industry prior to the global economic meltdown.

      "Our country's banking and finance policy mistakenly believed that free reign in the marketplace with little oversight was the best course of action and that certain institutions were simply too big to fail," Meena said. "Congress must take action now to ensure that the wireless industry remains the competitive and innovative marketplace that Congress intended for consumers to have.

      Members of the committee also wrote acting FCC chairman Michael Copps on the subject of competition in the wireless marketplace, urging the agency to take another look at exclusivity in contracts.

      "We ask that you examine this issue carefully and act expeditiously should you find that exclusivity agreements unfairly restrict consumer choice or adversely impact competition in the commercial wireless marketplace," the Committee wrote.

      "Today, we've got a wireless marketplace where four companies account for more than 85 percent of all subscribers," committee member Sen. John Kerry (D-MA) wrote on's blog. "In fact, nine of the most popular ten phones are locked in a deal with one of these big wireless carriers, and are only available through one network."

      At his confirmation hearing on Tuesday, incoming FCC chairman Julius Genachowski did not directly address the question of exclusivity contracts, but said more needs to be done to emphasize consumer choice and protect customer rights in the wireless marketplace.

      Fans of the ultra-popular iPhone have been complaining to and elsewhere that AT&T — the exclusive carrier of the iPhone — cripples the phone's functionality and has made upgrading to the new 3GS model too confusing.

      "I purchased an iPhone on May 4th and they are not allowing me to exchange my 3G iphone to a 3Gs when it comes out," wrote Anthony of Lawrenceville, New Jersey. "I have discussed my problem with Apple, who has agreed AT&T is engaging in poor business practices."

      There have been multiple legal challenges to exclusivity contracts in court, mostly centered around the expensive termination fees customers have to pay to switch from one carrier to another. Wireless companies say the fees are necessary to recoup the costs of the handsets, but critics charge they're designed to lock a customer in and prevent them from shopping for the best offer.

      All four wireless carriers — AT&T, Sprint, T-Mobile, and Verizon Wireless — began prorating their termination fees and streamlining their customer service plans after judges in several states ruled the contracts were "unconscionable" and violated state consumer protection laws.

      Senate Committee Investigates Cell Phone Contracts...
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      Consumer Groups Back Obama Regulation Changes

      Applaud creation of consumer protection agency

      National consumer protection organizations are solidly behind President Obamas proposal to create a new federal Consumer Financial Protection Agency to ensure the safety, fairness and sustainability of credit.

      The agency would have broad powers to ensure that credit and payment products do not have predatory or deceptive features that can harm consumers or lock them into unaffordable loans.

      The international economic crisis was triggered by the failure of federal regulators to stop abusive lending, particularly in the housing sector, said Travis Plunkett, Legislative Director of the Consumer Federation of America. If the presidents proposal had been in place five years ago, this agency would have been able to better protect consumers, financial institutions, and the entire economy.

      Currently, seven federal regulatory agencies are charged with protecting consumers in the financial services marketplace. Five of these agencies also oversee the soundness of financial institutions. The presidents proposal would consolidate most federal consumer protection efforts into a single agency.

      Too often, captive federal banking regulators have treated consumer protection as less important or even in conflict with their supposed primary mission to ensure the safety and soundness of financial institutions, said Ed Mierzwinski, Consumer Program Director of U.S. PIRG. The presidents proposal would streamline and dramatically improve the current splintered, ineffective federal financial regulatory system because the new agency would be required to make consumer credit protection its top priority.

      Under the Obama proposal, the new agency would oversee all credit and payment products, no matter what kind of financial institution offers them. It would be charged with setting high federal minimum standards, which would allow the states to impose tougher requirements if warranted.

      The days of allowing financial institutions to shop around for the weakest form of regulation are over, said Pamela Banks, Senior Policy Counsel with Consumers Union. Under the presidents proposal, the only regulatory competition that would exist would be to increase consumer protections.

      The plan is very similar to legislation to establish a Financial Products Safety Commission proposed by Senator Richard Durbin and Representative William Delahunt (S. 566/ H.R. 1705). Both Senate Banking Committee Chairman Christopher Dodd and House Financial Services Chairman Barney Frank have endorsed the concept as well.

      "The economic crisis has caused a painful loss of confidence in financial products and institutions. It appears that no one was minding the store," said Linda Sherry of Consumer Action. "We support the creation of a new agency with powers to cut through the web of financial regulations and strengthen consumer protections. We need a watchdog to restore consumer confidence and increase the availability of innovative financial products to promote wealth building and access to capital for all communities."

      We urge Congress to act quickly on the Presidents proposal so a strong, independent agency is in place to protect consumers in the financial services marketplace by next year, said David Arkush, Director of Public Citizen's Congress Watch division.

      Consumer Groups Back Obama Regulation Changes ...
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      Mississippi Lawyers Falling For Fake Check Scam

      Hell hath no fury like a scammed attorney

      The fake check scam is nothing new, and all kinds of consumers have been burned by it over the years. But now a new group of people have become its target - lawyers.

      In the past, the scam has worked like this: a consumer would be contacted by email and recruited to handle money for a transaction. In some cases the scammer told victims they were collecting money for a charity, making the victim more likely to want to "help." But no matter now the scam was structured, the victim would always receive a check and be told to deposit it in his or her personal bank account. Then they would be instructed to wire a portion of the funds to the scammer.

      Since the check was counterfeit, the bank would eventually discover there was no money backing it up and the victim, who had wired money to the scammer, would have to repay the bank that amount.

      So, how are attorney's getting caught up in this scam? When you think about it, they make a perfect target.

      Mississippi Attorney General Jim Hood says the Mississippi Bar Association has recently alerted its members to be on the lookout for an email referral from someone saying that they have a collection matter or contract dispute and need a local attorney to handle.

      They will establish a relationship and after a short period of time, the client will notify the attorney that they have resolved the matter and have instructed the debtor to issue a check payable to the attorney. The attorney is instructed by the client to deposit the money into his account, take his fees and then wire the balance to the client. The scam occurs when the attorney receives the check and deposits it into his bank account. The check is bogus and comes back unpaid and the attorney is liable for the funds.

      "Local attorneys and law firms are urged to use extreme caution and exercise diligence when presented with a situation similar to the one described above," said Hood. "If you encounter a similar situation, verify the names and contact information provided to you and do not disburse the deposited funds until the bank on which the cashiers check is drawn clears the check."

      The fake check scam is nothing new, and all kinds of consumers have been burned by it over the years. But now a new group of people have become its target ...
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      BattEQ Battery Equalizers Recalled

      June 18, 2009
      SmartSpark Energy Systems is recalling about 800 BattEQ battery equalizers. They can overheat and start a fire.

      The firm has received one report of an equalizer that overheated which resulted in fire that caused damage to the equalizer and batteries. No injuries have been reported.

      The recalled battery equalizers are charge balancing devices designed to increase the performance and longevity of rechargeable batteries.

      The equalizers were sold by authorized distributors and retailers from July 2006 through March 2009 for about $300. They were made in the U.S.

      Consumers should immediately stop using these recalled battery equalizers and contact SmartSpark for a full refund.

      For additional information, contact SmartSpark at (800) 905-6137 anytime Monday through Friday or visit the firm's Web site at

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

      BattEQ Battery Equalizers Recalled...
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      Abercrombie & Fitch Closing Ruehl Stores

      Company shutters brand due to recession

      Abercrombie & Fitch is closing its Ruehl stores, a victim of the recession. The upscale retailer said the reduction in consumer spending, especially in the upscale space, made it impossible to keep the stores open.

      The closings are expected to be completed by the end of the company's current fiscal year.

      Abercrombie & Fitch (NYSE: ANF) today announced that its Board of Directors approved the closure of its 29 RUEHL branded stores and related direct-to-consumer operations. The Company anticipates the closure will be substantially complete by the end of the current fiscal year.

      While it was encouraged by the initial performance of RUEHL, the Company has determined that, given the severe economic downturn and its impact on the retail and consumer sectors, the timing is not right to continue to pursue the further development of RUEHL.

      Ruehl, a brand aimed at an older demographic, generated a pre-tax operating loss of approximately $58 million for the fiscal year ended January 31, 2009, including a non-cash impairment charge of approximately $22 million, the company said. The pre-tax operating loss included store operating results and home office and other costs directly attributable to Ruehl operations.

      "It has been a difficult decision to close Ruehl, a brand we continue to believe could have been successful in different circumstances," said Mike Jeffries, CEO of Abercrombie & Fitch Co. "However, given the current economic environment, we believe it is in the best interests of the company to focus its efforts and resources on the growth opportunities afforded by our other brands, particularly internationally."

      The Company operates 350 Abercrombie & Fitch stores, 210 Abercrombie stores, 507 Hollister Co. stores, 29 Ruehl stores and 16 Gilly Hicks stores in the United States.

      Abercrombie & Fitch (NYSE: ANF) today announced that its Board of Directors approved the closure of its 29 RUEHL branded stores and related direct-to-consu...
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      Expedia Hit With Second Class Action Loss

      Company faces continuing litigation related to sales tax

      Expedia is reeling from its second class-action loss in a month, after the Georgia Supreme Court ordered the popular travel reservations website to pay an undetermined amount to the city of Columbus, Georgia.

      The suit alleged that, while Columbus hotels charged taxes based on a room's wholesale value, Expedia collected taxes calculated according to the retail price of the room, and pocketed the difference. The exact amount owed by Expedia will be determined by a trial court.

      The city's argument was the same one asserted in a successful class action settled earlier this month in Washington state. There, plaintiff consumers alleged that the difference between retail- and wholesale-based taxes were disguised as part of a "service fee," included in the same billing line as the taxes themselves.

      That suit was ultimately resolved when Judge Monica Benton of the King County Superior Court ordered Expedia to pay $184 million to consumers who purchased tickets between Feb. 18, 2003 and Dec. 11, 2006. The suit contained a number of embarrassing revelations for the travel conglomerate, including a 2001 e-mail predicting that the service charge would "add between $2-3 million in our net profit (the bottom line) next quarter."

      Expedia is filing a motion to reconsider the Georgia ruling and, if that proves unsuccessful, has already announced that it will appeal the decision.

      Even if its subsequent efforts prove successful, the company may not be out of the woods. Still pending are similar suits brought by 175 municipalities in Texas, and the Georgia cities of Atlanta and Rome. The ruling also did not address whether Expedia will be forced to pay back taxes, an issue that could come back to haunt the company in future suits. And other travel-oriented sites should think twice before deciding to rest easy; Columbus, the victor in the most recent suit, is also suing Orbitz Worldwide and

      Atlanta, smelling blood in the water ahead of its own suit's resolution, issued a statement calling the ruling "a very positive development." In case it wasn't clear enough, the city added that the ruling "validates the positions that [Atlanta] has taken in its lawsuit." C. Neal Pope, an attorney representing Columbus, called the ruling "a severe blow" to Expedia.

      Expedia, headquartered in Bellevue, Washington, was founded as part of Microsoft in 1996 and struck out on its own three years later. The company counts itself among the S&P 500 and NASDAQ 100.

      Columbus hotels charged taxes based on a room's wholesale value, Expedia collected taxes calculated according to the retail price of the room, and pocketed...
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      FDA Issues Warning About Zicam Cold Remedy

      Agency says products may deaden sense of smell

      The U.S. Food and Drug Administration says consumers should stop using three products marketed over-the-counter as cold remedies because they are associated with the loss of sense of smell, a condition known as anosmia. Anosmia may be long-lasting or permanent.

      The products are:

      • Zicam Cold Remedy Nasal Gel

      • Zicam Cold Remedy Nasal Swabs

      • Zicam Cold Remedy Swabs, Kids Size, a discontinued product

      The FDA said it has received more than 130 reports of loss of sense of smell associated with the use of these three Zicam products. In these reports, many people who experienced a loss of smell said the condition occurred with the first dose; others reported a loss of the sense of smell after multiple uses of the products.

      "Loss of sense of smell is a serious risk for people who use these products for relief from cold symptoms," said Janet Woodcock, M.D., director of the FDA's Center for Drug Evaluation and Research. "We are concerned that consumers may unknowingly use a product that could cause serious harm, and therefore we are advising them not to use these products for any reason."

      People who have experienced a loss of sense of smell or other problems after use of the affected Zicam products should contact their health care professional. The loss of sense of smell can adversely affect a person's quality of life, and can limit the ability to detect the smell of gas or smoke or other signs of danger in the environment.

      The FDA has issued Matrixx Initiatives, maker of these Zicam products, a warning letter telling it that these products cannot be marketed without FDA approval.

      Companies have an obligation to the public to demonstrate to the FDA that their products are safe, particularly when there is evidence they may be causing serious adverse events, and they are marketed for minor, self-limiting conditions like the common cold," said Deborah M. Autor, director of CDER's Office of Compliance.

      FDA Issues Warning About Zicam Cold Remedy...
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      Nevada Couple Pleads Guilty to Distributing Melamine-Tainted Gluten

      Possible sentence of two years in prison, $200,000 fine

      By Lisa Wade McCormick

      June 16, 2009

      A Nevada couple pled guilty in federal court today to distributing melamine-tainted wheat gluten, the ingredient blamed for the illnesses of deaths of thousands dogs and cats nationwide during the massive 2007 pet food recall.

      Sally Qing Miller, 43, a Chinese national, and her husband, Stephen S. Miller, 56 — along with their company, Chemnutra, Inc., — entered their guilty pleas late this afternoon before U.S. Magistrate Judge John Maughmer.

      Sally Miller is the controlling owner and president of Chemnutra; Stephen Miller is an owner and chief executive officer of Chemnutra.

      Each of the co-defendants pleaded guilty to one count of selling adulterated food and one count of selling misbranded food.

      "Millions of pet owners were impacted by the pet food recall in 2007," said Matt J. Whitworth, acting United States Attorney for the Western District of Missouri. "The conduct of these defendants in violating federal health and safety standards caused the deaths and illness of thousands of family pets, as well as anxiety among dog and cat owners across the country and economic harm to many pet food manufacturers."

      By entering their guilty pleas, the Millers and Chemnutra admitted:

      The chemical melamine — used to make plastic — was added to the wheat gluten to make it appear that the product had a higher protein content;

      The wheat gluten's labeling was false and misleading because it represented the product had a minimum protein level of 75 percent — when it did not — and melamine was not listed on the label as an ingredient.

      Under federal statutes, the Millers can face up to two years in federal prison without parole, plus a fine of up to $200,000, and an order of restitution. Chemnutra is subject to a fine of up to $400,000 and an order of restitution.

      The Las Vegas, Nevada, business buys food and food components in China and imports those products into the United States. The company then sells those products to businesses in the food industry, including pet food manufacturers.

      According to the U.S. Attorney's Office, Chemnutra and the Millers imported more than 800 metric tons of tainted wheat gluten from China — in at least 13 separate shipments — between November, 6, 2006, and February, 21, 2007. Federal authorities said those shipments — which totaled nearly $850,000 — were tainted with melamine.

      Chemnutra and the Millers received the melamine-tainted wheat gluten at a port of entry in Kansas City, Missouri, and then sold and shipped the product to customers across the United States. Pet food makers then used the tainted product in various brands of food.

      Role in pet food recall

      During 2007, pet food manufacturers recalled more than 150 brands of dog and cat food that contained the tainted wheat gluten. Dogs and cats across the country that ate tainted pet food suffered kidney problems or died.

      The Food and Drug Administration (FDA) estimated approximately 1,950 cats and 2,200 dogs died after eating the melamine-tainted pet food. heard from thousands of dog and cat owners nationwide and in Canada who said their pets became sick or died after eating the contaminated pet food.

      Pet food manufacturers use wheat gluten as a binding agent in certain types of food as a thickening agent for gravy.

      The Millers and Chemnutra will be sentenced after the United States Probation Office finishes its presentence investigations.

      Authorities said the conduct charged against the Millers in the remaining counts included in their 2008 federal indictment could be considered by the court and used against them at the time of sentencing.

      Assistant U.S. Attorneys Gene Porter and Joseph Marquez prosecuted the case, which was investigated by FDAs Office of Criminal Investigation and U.S. Immigration and Customs Enforcement.

      The newly-appointed FDA Commissioner applauded the investigative team and their results.

      "The FDA's Office of Criminal Investigations acted aggressively in 2007 to investigate Chemnutra," said Dr. Margaret A. Hamburg. "Today's announcement reflects our continued commitment to investigate and prosecute companies and individuals that violate the law and endanger the publics health through illegal conduct."

      Nevada Couple Pleads Guilty to Distributing Melamine-Tainted Gluten...
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      House Panel Hears From Consumers Who Lost Insurance

      Speakers discuss inability to get coverage due to illness

      A key element of health care changes being proposed in Washington is universal coverage and coverage for pre-existing claims. House Democrats Tuesday tried to demonstrate why they think both reforms are needed.

      The House Subcommittee on Oversight and Investigations convened a hearing to take testimony from people who struggled to get coverage, or had their existing coverage rescinded. Lawmakers also hauled the executives from these insurance companies before the subcommittee to explain their actions.

      "Cancer is expensive and no one wants to help," said Robin Beaton, a Texas woman battling breast cancer.

      She told lawmakers that her doctor had scheduled a double mastectomy but before the operation, her insurance company rescinded her health coverage. The company said it had reviewed Beaton's medical records and found discrepancies in the information she had provided. Beaton said they were unintentional.

      As for the insurance executives, they said their companies rely on their clients to report complete medical histories. Being able to rescind a policy, they said, is an important tool to prevent fraud.

      Don Hamm, CEO of Assurant Health, said his company rescinds policies only in cases where the withheld information would have made a material difference in the policy.

      The hearing was a result to a year long investigation into abuses within the health insurance industry and a warm-up to the debate to come over health care reform.

      Rep. Henry Waxman (D-CA), Chairman of the House Energy and Commerce Committee, said the results of the investigation show that the nation's health insurance system is flawed.

      "One of the biggest problems is that most states allow insurance companies to deny coverage for people with preexisting conditions," Waxman said. "So if you lose your job, and you can't qualify for a government program like Medicare or Medicaid, it's nearly impossible to get health insurance if you are sick or have an illness. This creates a perverse incentive. In the United States, insurance companies compete based on who is best at avoiding people who need life-saving health care."

      House Panel Hears From Consumers Who Lost Insurance...
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      Starbucks, Seattle's Best Coffee Grinders Recalled

      June 16, 2009
      Starbucks is realling about 530,000 coffee bean grinders sold under the Starbucks Barista and Seattle's Best Coffee brand names.

      The grinder can fail to turn off or can turn on unexpectedly, posing a laceration hazard to consumers.

      The firm has received 176 reports of grinders that failed to turn off or that turned on unexpectedly, including three reports of hand lacerations that occurred when the grinders turned on unexpectedly during cleaning.

      This recall includes the Starbucks Barista Blade Grinders and Seattle's Best Coffee Blade Grinders with the following colors and SKU numbers:

      BrandColorSKU #
      Starbucks Barista® Blade GrinderStainless Steel171884
      Starbucks Barista® Blade GrinderGreen195234
      Starbucks Barista® Blade GrinderPink195235
      Starbucks Barista® Blade GrinderOrange220623
      Starbucks Barista® Blade GrinderTeal220624
      Starbucks Barista® Blade GrinderCranberry242275
      Starbucks Barista® Blade GrinderOlive344476
      Starbucks Barista® Blade GrinderBlack454482
      Seattles Best Coffee® Blade GrinderBrown Metallic474881

      The grinders were sold at Starbucks and Seattle's Best Coffee stores nationwide from March 2002 through March 2009 for about $30. They were made in China.

      Consumers should immediately stop using the coffee grinders and contact Starbucks to receive a free replacement grinder.

      For additional information, contact Starbucks toll free at (866) 276-2950 between 9 a.m. and 9 p.m. MT or visit the company's Web site at

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

      Starbucks, Seattle's Best Coffee Grinders Recalled...
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      Pet Owners Unsurprised by FDA Shutdown of Evanger

      Many suspect agency investigating NUTRO as well

      Pet owners who were informed of the Food & Drug Administration's (FDA) suspension of Evanger's ability to sell pet food across state lines were relieved — and unsurprised — by the news.

      News of the FDA's crackdown confirmed dog owner Leslie K.'s suspicions about Evanger's food — and federal authorities' interest in the company.

      "A special agent with the FDA's Office of Criminal Investigations (OCI) called me in May 2009 and wanted details of what happened to my dogs after they ate Evanger's food," the Tabernacle, New Jersey, woman told us. "He came out and said Evanger's failed multiple inspections, and this was not a simple paperwork issue or something to do with an unimportant process. He said it was about ingredients and the manufacturing process and people are not getting what they pay for."

      The FDA announced late Friday that it had suspended Evanger's temporary Emergency Permit — a decision that, for now, prevents the company from shipping products in interstate commerce. The agency said it took this action as a safety precaution.

      "Evanger's, operating in Wheeling, Illinois, deviated from the prescribed process, equipment, product shipment, and recordkeeping requirements in the production of the company's thermally processed low acid canned food (LACF) products," the FDA said. "The deviations in their processes and documentation could result in under-processed pet foods, which can allow the survival and growth of Clostridium botulinum (C. botulinum), a bacterium that causes botulism in some animals as well as in humans."

      Evanger's downplays the FDA's enforcement measures, suggesting the problems are simply a paperwork mix-up.

      "In August of 2008, while updating required process information to the FDA our 'process authority' (processing expert) inadvertently deleted pertinent filings," Joel Sher, the company's vice-president, says in a statement on the pet food maker's Web site. "Evanger's has been working with the FDA to resolve this issue quickly. This situation does not call into question the safety of any Evanger's products. No Evanger's product are involved in any recall, nor is there any indication that any Evanger's product is unsafe."

      "Just a paperwork problem"

      Leslie's concerns with Evanger's food surfaced in May 2007 when three of her healthy dogs — a Chihuahua, Beagle, and Elkhound mix — suddenly became sick after eating the company's Pheasant and Brown Rice dry pet food.

      Two other dogs — one belonging to a friend, another to a neighbor — also became ill after eating that same food. All the dogs experienced vomiting, diarrhea, dehydration, and urinary tract problems.

      "We bought the food during the pet food recall when we were trying to find a safe food," Leslie recalls. "We opened one large bag and two small bags and started to add it to the dogs' regular food. But they all started having trouble. I spoke to someone who said to stop the food. Four of the dogs then got better."

      But Leslie's Chihuahua, Remy, continued to deteriorate.

      "He was urinating constantly, vomiting bile, his eyes were sunken from dehydration, and he had horrible lethargy," she said. "He wouldn't get up and do anything. This is a Chihuahua who loved to play. One of my neighbor's came over and said it looked liked Remy had aged ten years."

      Blood tests run by Leslie's veterinarian revealed problems with Remy's urine and liver counts. Leslie contacted Evanger's about the dogs' illnesses, but said the company didn't seem concerned.

      "The owner said he'd check into this and get back to me. I waited a few days and Joel (Sher, the company's vice-president) called me back. He said the company hadn't found any problems with the food. I asked him if he wanted to test my food, but he said 'No, we keep a sample of every batch so we can test it.'"

      "After that call, all I got were answering machines and the secretary."

      Leslie then worked with The Pet Food Products Safety Alliance (PFPSA) and had her Evanger's food tested.

      Those tests, she says, revealed the copper levels in the food were 2.5 times the amount recommended by the Association of American Feed Control Officials (AAFCO).

      When Leslie contacted Evanger's again, "At first, the office manager was nice, but as soon as she knew it was me on the line she became hostile and rude," she said. "She basically said they (Evanger's) were aware of the copper problem and were not concerned. She said they had not tested my food and no intention of doing so because they didn't get that many complaints."

      "She knew she went too far because she later sent an e-mail that said the total opposite of what she told me in our conversation."

      But could those elevated copper levels cause the dogs' illnesses?

      "All my vet can say is the elevated levels (of copper) are consistent with the problems in the dogs: vomiting, diarrhea, lethargy, elevated liver enzymes, and urinary tract problems," Leslie said. "My vet feels it is the food, but says there is no way to prove that."

      When asked about Evanger's comment that the FDA's latest action "does not call into question the safety" of any of its products, Leslie told us: "Obviously it does affect the safety of the food because how can the food be safe if the canning isn't done correctly.

      "That comment makes me angry," she adds. "He (Joel Sher) tries to refute the FDA orders and notices in legalese. He words it carefully to make it sound like the FDA is wrong. He's trying to make it sound like this is just a paperwork problem. I hope people don't believe it."

      "Should be criminally prosecuted"

      Deborah V., of Monrovia, Maryland, agrees with Leslie. "People such as the Shers should be criminally prosecuted and put out of business," she said.

      "Mr. Sher's callous attitude from day one has been shocking, and yet, here comes our vindication — a little late," she said. "Some people lost their pets to these awful people's food."

      "I'm glad this (FDA action) finally happened. I feel relieved that, hopefully, no one else will go through what I have gone through with my dogs."

      In Deborah's case, her two healthy 10-pound Pomeranians became gravely ill in November 2008 after sharing a can Evanger's beef chunks.

      "Within half an hour, I was rushing to the vet," she recalls. "My dogs were unable to stand, hold up their heads, and they were blind. The vet stabilized them enough to allow me to then drive to the emergency animal clinic, where they were hooked to IVs, and my little guy even had his stomach pumped. He now has seizures, which started in the hospital. He is on a wide variety of meds...and now has a collapsed trachea and [has to use] an endotracheal tube."

      Deborah repeatedly contacted Evanger's about her dogs' illnesses, but says the company ignored her concerns. Her roommate finally reached the company's vice-president, Joel Sher.

      "And his comment, when told our dogs got sick from their food, was 'Oh, please'. He and his wife are all over the Internet, as well as an employee of theirs, posting information to have you believe they are a very concerned firm. Why not just be upfront? People deserve to know the truth, and I am talking about all of the issues people have had with their food, not just the horror we've gone through and are still going through."

      Deborah says her female Pomeranian has improved, "but the little guy will never be 100 percent."

      The FDA's latest action against Evanger's is the third in an ongoing series of enforcement proceedings against the pet food maker.

      In April 2008, the FDA issued an "Order of Need for Emergency Permit" against Evanger's. That action came after the FDA determined the company had "failed to meet the regulatory requirements to process a product that does not present a health risk."

      Two months later the FDA issued a temporary Emergency Permit against Evanger's.

      FDA officials said they took that action after inspections of the company between March 2009 and April 2009 determined "Evanger's was not operating in compliance with the mandatory requirements and conditions of the Temporary Emergency Permit."

      When the FDA announced its latest enforcement against Evanger's, the agency's Dr. Bernette Dunham said: "The FDA is stopping Evanger's ability to ship pet food in interstate commerce. Today's enforcement action sends a strong message to manufacturers of pet food that we will take whatever action necessary to keep unsafe products from reaching consumers."

      Before Evanger's can resume shipping products, the FDA said, it must prove that corrective actions and processing procedures have been made to ensure the company's finished product will not present a health hazard.

      Botulism is a toxin that affects the nervous system and can be fatal, the FDA said. Symptoms of botulism in dogs and cat include progressive muscle paralysis, disturbed vision, trouble chewing and swallowing, and progressive weakness to the body. Death is usually caused by paralysis of the heart or the muscles used in breathing.

      NUTRO investigated?

      Meanwhile, pet owners like Leslie are convinced that Evanger's isn't the only pet food maker on the FDA's radar.

      "They have to be investigating NUTRO," she told us. "When I spoke with the FDA's agent from Office of Criminal Investigations, I mentioned NUTRO and he said he was very aware of the problems. But he said 'I'm not working on that case.' He caught himself and said that (investigation) could be in the process. Every time I talked to him, he struggled to find a way to say he was not working on that case, but it seemed to me that he was deliberately trying to give me the impression that there was an investigation of NUTRO.

      She adds: "Why else would FDA agents not want to talk about it or the agency wouldn't release the NUTRO records [ConsumerAffairs.Com] requested under the Freedom of Information Act?"

      Leslie pointed out that the health problems her dogs suffered after eating Evanger's food with elevated levels of copper — vomiting, diarrhea, lethargy, and elevated liver enzymes — sounded eerily familiar to the ones pets eating NUTRO have experienced.

      "I'm seriously thinking that this is what's going on...that this could all be something a simple as the vitamins and minerals off," she says. "That can cause acute illnesses."

      Just last month, NUTRO recalled seven flavors of its dry Natural Choice Complete Care and NUTRO Max cat food, saying the products contained incorrect levels of zinc and potassium.

      The company blamed the problem on a production error by its U.S. premix supplier, Trouw Nutrition. One of the premixes, NUTRO said, contained excessive levels of zinc and not enough potassium. A second premix did not contain enough potassium.

      NUTRO claims it has not received any complaints about the recalled food, but warned cat owners to monitor their pets for such symptoms as vomiting, diarrhea, a reduction in appetite or refusal of food, and weight loss., however, continues to hear from cat owners who say their felines became ill — with those same types of symptoms — after eating NUTRO's recalled food. Some even suspects their cats' deaths are linked to the recalled food, and two contacted NUTRO regarding their sick pets.

      Tests run last August by the PFPSA revealed samples NUTRO's Natural Choice Chicken Meal, Rice, and Oatmeal formula and Nutro Puppy Max contained levels of zinc and copper that the PFPSA said exceeded the recommendations of the AAFCO.

      PFPSA's founder Don Earl says NUTRO's cat food recall — trigged by "incorrect levels of zinc and potassium" — gives credence to his organization's test results.

      "I feel a certain amount of vindication as a result, particularly as the symptoms are identical to those reported by legions of dog owners," he told us. has received nearly 900 complaints from pet owners nationwide who say their healthy dogs and cats suddenly became sick after eating various flavors of NUTRO's pet food. The pets all have similar symptoms — vomiting, diarrhea, and other digestive problems. And in nearly every case, the dogs and cat became better after their owners stopped feeding them NUTRO.

      NUTRO maintains its food is 100 percent safe and meets all federal guidelines. But Leslie says those are nothing but empty words and promises.

      "The fact they keep saying nothing is wrong with their food and they are testing tells me that something is wrong. If they were testing the food, it wouldn't take an audit to find the problem. If they were testing the food, they would know that something is wrong."

      The active poster on many pet-related message boards adds: "I'm not in this to get any money. That's not my point. My point is that whether you're buying Evanger's or NUTRO or a store brand of pet food, you should be able to buy a product that is safe and doesn't make your pets sick."

      Pet Owners Unsurprised by FDA Shutdown of Evanger...
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      Eli Lilly Accused of Pushing Ineffective Dementia Drug

      Company knew Zyprexa was ineffective, suit charges

      In the early part of this decade, physicians — at the urging of drug maker Eli Lilly — prescribed Zyprexa for elderly patients with dementia. But the drug was not approved to treat dementia and was ineffective, and Lilly apparently knew that, some health insurers claim.

      Unsealed company documents reveal Lillys marketing campaign for the drug, originally approved for use as an anti-psychotic. The documents have been presented as evidence in litigation against Lilly for overpayment.

      One such document summarizes a 1995 company study showing that Zyprexa "did not show efficacy" in treating behavioral disturbances in elderly patients who were suffering from dementia.

      Last year Zyprexa was Eli Lillys best-selling medication, bringing in more than $4.7 billion in sales. But while some doctors were apparently prescribing it for patients suffering from dementia, the company told the Food and Drug Administration in late 2003 that data from a number of studies failed to show Zyprexa was helpful for patients suffering from Alzheimers disease or other forms of dementia.

      Eli Lilly entered a guilty plea earlier this year to illegally marketing Zyprexa for off-label purposes to elderly consumers. But the company says that occurred only during a narrow window of time -- from late 1999 through early 2001.

      A company spokesman said the plaintiffs have released "one-sided, cherry-picked" documents that do not tell the whole story, and that Lilly will contest the charges in court.

      The released documents also allege that Eli Lilly produced a number of articles about Zyprexa, showing the drug in a positive light, and asked doctors to submit them to medical journals as their own work. The documents also allege that Lilly assembled a guide to selecting scientists who would write favorable articles.

      The documents saw the light of day only because of suits against the drug marker brought by health insurers and pension plans. These plaintiffs are seeking to recoup the money spent on Zyprexa to treat elderly policy holders with dementia.

      The plaintiffs also demand that Lilly pay $6.8 billion in damages for soft-peddling Zyprexas health risks and marketing it for unapproved uses.

      In January Eli Lilly settled with the U.S. Government and a number of states, paying $1.42 billion to resolve off-label marketing allegations. The company has paid out $1.2 billion so far to settle more than 30,000 individual consumer claims, according to a company document.

      Zyprexa has produced a number of complaints to, but mostly about side effects.

      "I ... took Zyprexa and it was a nightmare; gained a lot of weight; sleepless nights among other side effects," Denise, of Fresno, Calif., said.

      Linda, of Vallejo, Calif., said she took Zyprexa for depression, but the side effects were worse.

      "Caused severe weight gain, serious insomnia that could not be helped with medication. A kind of 'zombie' feeling during the day," she said. "It caused my children and friends to question my ability to think for myself. It made the depression worse."

      Eli Lilly Accused of Pushing Ineffective Dementia Drug...
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      Recording Industry Faces Class Action

      Defendant in previous trial wants referendum on legal tactics

      The recording industry, which has been suing hundreds of consumers for copyright infringement, is getting a sample of the flip side. A New Jersey woman has countersued the big record labels, charging them with extortion and violations of the federal antiracketeering act.

      Michele Scimeca sued the Recording Industry Association of America (RIAA), charging that by suing file-swappers for copyright infringement and then offering to settle instead of pursuing the case, the RIAA is violating the anti-racketeering statues, which are normally applied to gangsters and organized crime.

      "This scare tactic has caused a vast amount of settlements from individuals who feared fighting such a large institution and feel victim to these actions and felt forced to provide funds to settle these actions instead of fighting," Scimeca's attorney, Bart Lombardo, wrote in documents filed with a New Jersey federal court. "These types of scare tactics are not permissible and amount to extortion."

      The RIAA has been suing ordinary consumers for hundreds of thousands of dollars, accusing them of infringing the recording companies' copyrights by sharing music files over the Internet. It filed its latest batch of suits, against 531 people, last week. A total of nearly 1,500 have been sued so far. About 380 have settled out of court, usually by paying thousands of dollars.

      In San Francisco, computer user Raymond Maalouf is preparing to fight back. His daughters allegedly used Kazaa to download music.

      In court documents, Maalouf's attorneys noted that downloading through Kazaa was openly discussed at Maalouf's daughter's school by teachers, and they downloaded songs used in classes. That should be a protected fair use of the music, the attorneys said.

      Recording Industry Faces Class Action...
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      FTC Fines Canadian Company $2 Million for Ad Scheme

      Company charged with selling listings in fake business, travel directories

      At least one Canadian schemer selling unauthorized listings and advertisements in non-existent business and travel directories to U.S. businesses has been brought to justice.

      The U.S. Federal Trade Commission (FTC) says it has obtained a $2 million summary judgment against an Ontario-based operation that, it says, defrauded U.S. businesses out of millions of dollars.

      According to the FTC's complaint filed in October 2006, four defendants in Ontario operated a scheme that targeted businesses and municipalities in the United States, and a related scheme aimed at hotels and resorts in this country and more than 25 others.

      The court order requires Michael Robert Petreikis to pay $2 million in redress for victims and bans him from marketing or selling business or travel directories and listings. The order also bars him from misrepresenting that consumers have a preexisting business relationship or that consumers purchased, have agreed to purchase, or owe money for business or travel directory ads or listings, office supplies, or consulting services.

      In addition, Petreikis is prohibited from collecting payments on any invoices the defendants sent prior to the court order, and from disclosing or benefiting from personal information obtained as a result of activities alleged in the FTC's complaint. The order also contains record-keeping and reporting provisions to allow the FTC to monitor compliance with the order.

      The FTC investigated this case with the assistance of the Toronto Strategic Partnership, which, in addition to the FTC, includes the Toronto Police Service Fraud Squad, Telemarketing Section; the Ontario Provincial Police, Anti-Rackets Section; the Ontario Ministry of Government Services; Canadas Competition Bureau; the Royal Canadian Mounted Police; the U.S. Postal Inspection Service; and the United Kingdoms Office of Fair Trading.

      FTC Fines Canadian Company $2 Million for Ad Scheme...
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      Chinese Drywall Class Actions Consolidated

      Louisiana court to hear multidistrict proceeding

      A number of lawsuits regarding defective Chinese-manufactured drywall have been consolidated and will be heard by a federal judge in New Orleans, the city whose post-Katrina construction boom is partly to blame for the issue.

      The Judicial Panel on Multidistrict Litgation (JPML) has assigned the newly-consolidated action to Judge Eldon Fallon.

      Florida-based attorneys had argued that the proceeding should be heard in Miami, since most complaints had emanated from there. Additionally, more lawsuits have been filed in Florida than in any other state. Attorneys in Ohio also argued that their state was the best candidate.

      The JPML, made up of seven sitting federal judges appointed by the Chief Justice of the Supreme Court, determines whether two or more lawsuits involve common questions of fact. If the panel makes such a finding, it consolidates the cases and assigns them to a court and judge. Suits alleging mass-tort claims, like the drywall action, are prime contenders for consolidation.

      The issue is also receiving attention from Congress, although funding is currently being held up in the House. In May, the Senate Subcommittee on Consumer Protection approved $2 million for the Consumer Product Safety Commission (CPSC) to study the cause and effects of the drywall defects, but the House has yet to ratify the funds. South Florida Reps. Robert Wexler, a Democrat, and Mario Diaz-Balart, a Republican, are fighting to approve the funding. Bill Nelson, Florida's Democratic senior senator, has led the charge in the upper chamber.

      Local municipalities are also taking the matter into their own hands. In May, the Norfolk, Virginia city council unanimously approved a measure banning the use of all Chinese drywall in the city.

      Approximately 550 million pounds of the drywall were imported into the U.S. between 2004 and 2006. The relatively cheap wallboard was welcomed by homebuilders, who were suffering supply shortages due to the housing boom and construction in the wake of Hurricanes Katrina and Rita.

      The bulk of the drywall appears to have been manufactured by Knauf Plasterboard Tianjin Co. (KPT), although other manufacturers may also be to blame. KPT prints its name on the back of its drywall, making it the most easily identifiable culprit — and consequently the most frequently named defendant.

      Lennar Homes, the country's second-largest homebuilder, opened itself to liability when it confirmed that it used KPT in some of its houses. Lennar says it is taking steps to remedy the problem.

      The drywall poses risks to both property values and homeowners' health. The wallboard emits an egg-like sulfur smell, which corrodes metal fixtures like air conditioners, and causes health problems ranging from coughing and wheezing to asthma and pneumonia.

      In addition to Florida and Louisiana, suits have been filed in Virginia, Ohio, Mississippi, and North Carolina.

      Chinese Drywall Class Actions Consolidated...
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      TV Switcheroo Leaves Millions with No Free TV

      Signals disappear as broadcasters move to new frequency band

      While government martinets congratulated themselves and network anchors pompously proclaimed themselves "all-digital," millions of taxpayers fumed as the 60-year era of high-powered, free, over-the-air television faded abruptly to black or, in some cases, broke up into tiny digital fractals.

      "Since the digital change I have lost all Cincinnati TV stations," wrote Jerry of Rochester, Ohio. "I can no longer get my local news or traffic reports. I do get Dayton news but what for -- I have never even been to Dayton nor do I plan to go."

      "Currently, I don't have any digital signals," said Penny of Roselle, N.J. "No New York mainstays, like 2, 4, 5, 7, 9, 11, 13, 31 like before. Moving the antenna doesn't help. Basically, I just don't use it. Why bother?"

      "Things went about as smoothly as we could have hoped," said FCC Commissioner Jonathan Adelstein. "It's looking more like Y2K than the Bay of Pigs. Certainly, if we had not delayed and prepared, it might have been a disaster. But with the additional time, resources and actual planning, we put things in order just in time."

      Tell that to Jim of Minneapolis.

      "Digital TV is pathetic," he complained to "I no longer receive major channels. What does come in is OK. I now get channel 2 four times. (yipee)"

      Not since the 1950s have so many tried so hard to get a simple over-the-air television signal. That didn't stop the Federal Communications Commission (FCC) from saying there had been "few major problems" while in the same breath saying it had received nearly 800,000 calls from citizens complaining they had lost their free TV signals as the nation's television broadcasters switched to digital transmission on a different set of frequencies than those that have been in use since the early days of commercial television.

      According to the FCC's report, the largest volume of calls per TV household among markets registering 1,000 or more calls came from the Chicago media market, followed by the Dallas-Ft. Worth, New York, Philadelphia, and Baltimore markets.

      What's the frequency, Kenneth?

      While the focus has been largely on the analog-to-digital transition, the change in frequency bands is a more significant contributor to the problem. And why did all those broadcasters have to move? Because the federal government auctioned off the frequencies formerly used by VHF broadcasters for several billion dollars a few years ago, that's why.

      The change is being hailed by silver-tongued government spinmeisters as a great leap forward for average American couch potatoes. But what has gone largely unnoticed is that the same demographic changes that have killed afternoon newspapers and clogged freeways -- namely, urban sprawl -- have also greatly increased the geographic size of local TV markets.

      As New Yorkers, Dallasites and Chicagoans have moved ever farther from the city center, their distance from the TV transmitters -- typically located atop such structures as the Empire State Building and the Sears Tower -- has increased.

      The unfortunate truth is that the new frequency band assigned to television broadcasters simply doesn't have the -- to use a technical term -- oomph that the old one did. And therefore, those in the far reaches of suburbia are suddenly finding they can't get a decent signal.

      The problem, though, is not confined to the burbs. Many close-in urban dwellers have for years been able to get by with a set of "rabbit ears," inside antennas that can pull in a strong local signal. But the new frequencies don't penetrate buildings as well as the old ones, so the rabbit ears no longer "hear" anything.

      In many urban areas, it's impossible to erect an outdoor antenna. Multi-story buildings generally don't allow it and, in the suburbs, clipboard-toting homeowners association enforcers stand ready to persecute, and even prosecute, those who dare to put an antenna on their house or condo.

      The end result is that, for many Americans, free TV is no longer an option. To continue watching local stations, they'll need to subscribe to cable or satellite services.

      Government and big media, of course, generally blame the victims for the failure of huge public programs. And so, FCC spokesmen and such outlets as The Wall Street Journal put the onus for signal loss on consumers. "Shift to Digital TV sends Late Adapters Scrambling," sniffed the Journal.

      But in fact, many of those who today are left to reacquaint themselves with the Great Books did everything their fumbling government told them to do, hoping to be ready when the switch occurred.

      "I did everything the government said to do," said Ann of Annapolis, Md. "Got a new antenna, bought a converter box and the result? I used to get 14 stations from both Washington and Baltimore and now I get 1 station. One. I have rescanned repeatedly, all day. Moved the antenna around inch by inch in a complete circle and still I get 1 station."

      "All the info that is thrown to us from the stations and the government are lies. There is no better reception, there are no 'extra' channels, there is no easy fix. These are just lies. There are far less channels, and reception is just awful if you don't live right under the station's antenna (like I do for the 1 channel I can still get)."

      "Truly historic"

      Government policymakers declared victory and withdrew.

      "Yesterday was a truly historic day," said acting FCC chairman Michael Copps. "For TV broadcasting, it was a final farewell to the Dinosaur Age and the dawn of the Digital Age. We said goodbye to the analog transmission technology that has served us well for the past 60 years and replaced it with something that can serve us even better."

      Copps might want to talk to Penny of New Jersey, who has given up on over-the-air TV. Her solution to the government-inflicted problem: "I watch old VCR tapes and DVDs. Or internet TV (which is the only bright spot in this wretched transition)."

      TV Switcheroo Leaves Millions with No Free TV...
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      'Cash For Clunkers' Bill Rolls On

      Congress hopes to jump-start consumer demand for new cars

      By Mark Huffman

      June 13, 2009
      Congressional leaders have given a big push to the "cash for clunkers" program that would pay consumers up to $4,500 for trading in old gas guzzlers for new cars, attaching the legislation to a must-pass bill that will fund troops in Iraq and Afghanistan.

      Voting could take place next week but passage is almost assured and President Obama, a strong supporter, is almost certain to sign the bill, which lawmakers hope will stop a steep slide in new-car sales. Now that taxpayers have paid billions to prop up Chrysler and GM, there's growing concern that suddenly thrifty consumers simply will choose to keep their old cars on the road instead of ponying up for new ones.

      The measure would subsidize the purchase of up to one million vehicles. The current price tag on the bill is $1 billion. The program would end when the money ran out.

      The bill would require that trade-ins get no better than 18 miles per gallon, be a 1984 or newer model, and have been registered and insured during the past year. The last provision is intended to keep quick-buck artists from flooding the program with junkers scavenged from used car lots.

      If consumers purchased a new vehicle that gets an extra four miles per gallon or more, they would receive a voucher for $3,500. If they purchased a new vehicle that gets 10 miles per gallon or more than their trade-in, the value of the voucher goes up to $4500.

      Critics object

      Is it worth it? Not everyone thinks so.

      Republicans say the program would cost too much and accomplish too little.

      Perhaps surprisingly, some environmentalists are also critical. These critics, inclduing Sen. Dianne Feinstein (D-Calif.), say the measure is not strict enough in its mileage requirements and could, under some circumstances, subsidize the purchase of gas-guzzling SUVs.

      "It is amazing how quickly a good idea can go bad in Washington," said Feinstein and Sen. Susan Collins (R-Maine) in an opinion article in the Wall Street Journal, headlined: "Handouts for Hummers."

      Auto industry analysts say the plan, if implemented, could stimulate new vehicle sales beginning as early as August. Since many of the "clunkers" are in the truck category, they say the plan would likely have the most impact on U.S. truck sales.

      Congressional leaders have given a big push to the "cash for clunkers" program that would pay consumers up to $4,500 for trading in old gas guzzlers for ne...
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      FDA Orders Evanger's To Stop Shipping Pet Food

      Agency suspends permit issued after earlier incidents

      The U.S. Food and Drug Administration announced today it was suspending Evanger's Dog & Cat Food Co.'s emergency permit to ship pet food because the company's procedures could allow the bacterium that causes botulism to survive in some of its products.

      The FDA is stopping Evanger's ability to ship pet food in interstate commerce, said Dr. Bernadette Dunham. Todays enforcement action sends a strong message to manufacturers of pet food that we will take whatever action necessary to keep unsafe products from reaching consumers.

      Botulism is a powerful toxin that affects the nervous system and can be fatal. The disease has been documented in dogs and cats. Signs of botulism in animals are progressive muscle paralysis, disturbed vision, difficulty in chewing and swallowing, and progressive weakness to the body. Death is usually due to paralysis of the heart or the muscles used in breathing.

      The symptoms fit those described by consumers who complained to In December 2008, Chris of Monrovia, Md., described what happened when she fed her two Pomeranians some Evanger's Beef Chunks in Gracy.

      "Within 45 minutes they were both in critical condition with signs of complete neurological shutdown, blindness, inability to stand or walk, difficulty breathing and swallowing," she said. "Both dogs were treated for symptoms of botulism and the food was to be sent out for testing through Greenbriar Emergency Hospital."

      And how did Evanger's react to the near-disaster?

      "When I called the office number listed on Evanger's Web site on November 19th, I was hung up on. When Dr. Rossi called Evanger's on November 20th, she was told by the person who answered that they would not speak another word to her because she could not prove she even was a vet," Chris said.

      Earlier FDA action

      In April 2008, Evangers was issued an Order of Need for Emergency Permit after the FDA determined that the company had failed to meet the regulatory requirements to process a product that does not present a health risk.

      In June, 2008, FDA issued Evangers a temporary Emergency Permit. During inspections conducted between March 2009 and April 2009, the FDA said it determined that Evangers was not operating in compliance with the mandatory requirements and conditions of the Temporary Emergency Permit.

      In order for Evanger's to resume shipping in interstate commerce, the company must document that corrective actions and processing procedures have been implemented to ensure that the finished product will not present a health hazard.

      The FDA said that Evanger's, operating in Wheeling, Illinois, "deviated from the prescribed process, equipment, product shipment, and recordkeeping requirements in the production of the company's thermally processed low acid canned food (LACF) products" and that under-processed pet food could be the result.

      While FDAs Center for Food Safety and Applied Nutrition is responsible for regulating all human and animal LACF processing, FDA's Center for Veterinary Medicine has authority over animal feed and foods. The two centers are collaborating on the Evanger's enforcement action, the agency said.

      Todays enforcement action sends a strong message to manufacturers of pet food that we will take whatever action necessary to keep unsafe products from reac...
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      New Jersey Sues Travel Club Operators

      Attorney General targets companies for not providing discounts or rewards

      June 12, 2009
      It seems pretty simple; if you sell consumers a vacation package, you'd better be able to deliver what the vacationers have paid for.

      In New Jersey the state attorney general has filed suit in state Superior Court against travel club companies operating under several different names and their principal, charging that they failed to provide any services to consumers and misrepresented their relationship with hotel, airline and car rental companies through the unauthorized use of their corporate logos.

      Defendants Dreamworks Vacation Club, Five Points Travel Company and Bentley Travel are accused of depicting specific resorts, regions and packages in mailings and sales presentations that, in actuality, were not available to consumers. Defendant Daryl T. Turner is the owner and operator of these companies. The investigation that led to the States action began with the Burlington County Consumer Affairs Local Assistance office, and was referred to the Division of Consumer Affairs for joint investigation.

      Burlington County CALA Director Renee L. Borstad joined with New Jersey Consumer Affairs Director David Szuchman to announce the lawsuit at a press conference at the Division's South Jersey office in Cherry Hill.

      "We believe the defendants had no intention of providing the advertised travel services. They lured consumers in with promises of deep discounts, free gifts and misrepresentations about their affiliation with respected corporations, all for the purposes of defrauding consumers and enriching themselves," said New Jersey Consumer Affairs Director David Szuchman.

      "Dreamworks and its other vacation clubs offered a 'dream' vacation that was too good to be true. Consumers must realize that high-pressure sales tactics, coupled with prepaid vacation packages, plus freebee airline ticket offers are always a dangerous combination," said Burlington County CALA Director Renee L. Borstad.

      "In addition to not providing the contracted-for travel packages, the defendants also did not provide the free gifts that consumers were led to believe they would receive, including seven-day cruises, round-trip airline tickets for two, hotel stays, free dinners, car rentals and/or free gas coupons. When consumers contacted the "800" telephone number listed on the mailings to claim their gifts, they were informed that they had to attend a 90-minute sales presentation for vacation packages. Even if they attended the presentations, consumers were not provided with the gifts.

      Consumers paid $1,200 to $8,000 upfront to purchase a vacation package, but were not provided with the airline, hotel or other travel arrangements at the price and quality represented by defendants prior to purchase.

      Dreamworks and Five Points Travel Company have business and mailing addresses in Parsippany, Morris County; Sewell, Gloucester County; and Westampton, Burlington County. Bentley Travel is not incorporated to do business in New Jersey. Turner's address of record is in Cherry Hill, Camden County.

      The state's eight-count Complaint, filed in New Jersey Superior Court in Morris County, alleges that the defendants violated the Consumer Fraud Act and Advertising Regulations by:

      • Utilizing the terms "Bailout", "Division of Revenue" and "Department of Funding" on mailings sent to consumers to falsely imply that the mailing originated from a state or federal government agency or department;

      • In mail solicitations and other advertising materials, utilizing without authorization, the trademarks of airlines, hotels, car rental companies and restaurants;

      • Forwarding mailings to consumers which indicated that consumers were entitled to complimentary gifts, when receipt of such gifts were conditioned upon attendance at a sales presentation for vacation packages;

      • During sales presentations, inducing consumers to purchase vacation packages by showing them brochures with resort areas and packages that were not available;

      • Advising consumers prior to purchase that they have the right to cancel the contract if they were not satisfied with the vacation package, and then refusing to permit the consumers to cancel the contract;

      • Charging consumers' credit cards for fees and services that were not authorized by the consumers;

      • Submitting bills to collection agencies after consumers have cancelled the contract and formally disputed the charges;

      • Representing to consumers that they were members of the Better Business Bureau ("BBB") in good standing, when such was not the case;

      • Failing to disclose to consumers prior to their purchase of a vacation package that they would be required to pay additional fees prior to utilizing the service;

      • Requiring consumers to sign incomplete or blank sales contracts for vacation packages and then failing to provide consumers with full and accurate copies of such contracts;

      • Failing to include in the contract a statement advising consumers of their right to cancel prior to the midnight of the third business day after execution of the contract.

      To date, the state said it has received complaints from 198 consumers against the defendants either directly or from the Burlington County CALA Office. The state's lawsuit seeks injunctive and other relief, maximum civil penalties, consumer restitution and reimbursement of the states legal fees and investigative costs.

      More Scam Alerts ...

      New Jersey Sues Travel Club Operators...
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      Researchers: Pregnant Women Should Avoid BPA Exposure

      New study documents how BPA-related fertility defect can occur

      The body of evidence against the chemical bisphenol A, or BPA, appears to be growing.

      The chemical, found in a wide range of household items, including beverage and food containers, is believed to to cause a fertility defect in the mothers offspring in animal studies, and now researchers say they have found how the defect occurs.

      Exposure during pregnancy to the chemical bisphenol A, or BPA, found in many common plastic household items, is known. The results of the new study will be presented Saturday at The Endocrine Societys 91st Annual Meeting in Washington, D.C.

      The study, funded partly by the National Institutes of Health, joins a growing body of animal research showing the toxic health effects of BPA, including reproductive and developmental problems. Last August the U.S. Food and Drug Administration found BPA to be safe as currently used but later said more research on its safety is needed.

      BPA is used to make hard polycarbonate plastic, such as for baby bottles, refillable water bottles and food containers, as well as to make the linings of metal food cans. BPA has estrogen-like properties and in pregnant animals has been linked to female infertility.

      The big mystery is how does exposure to this estrogen-like substance during a brief period in pregnancy lead to a change in uterine function, said study co-author Hugh Taylor, MD, professor and chief of the reproductive endocrinology section at Yale University School of Medicine.

      To find the answer to that question, Taylor and his co-workers at Yale injected pregnant mice with a low dose of BPA on pregnancy days 9 to 16. After the mice gave birth, the scientists analyzed the uterus of female offspring and extracted DNA.

      They found that BPA exposure during pregnancy had a lasting effect on one of the genes that is responsible for uterine development and subsequent fertility in both mice and humans - HOXA10. Furthermore, these changes in the offsprings uterine DNA resulted in a permanent increase in estrogen sensitivity. The authors believe that this process causes the over-expression of the HOXA10 gene in adult mice that they found in previous studies.

      The permanent DNA changes in the BPA-exposed offspring were not apparent in the offspring of mice that did not receive BPA injection. This finding demonstrates that the fetus is sensitive to BPA in mice and likely also in humans, Taylor said.

      We dont know what a safe level of BPA is, so pregnant women should avoid BPA exposure, Taylor said. There is nothing to lose by avoiding items made with BPAand maybe a lot to gain.

      That means, for one thing, avoiding drinking most bottled water. Last month a Harvard School of Public Health study reported that BPA leaches from the bottle and ends up in the urine of people who drink from them.

      Researchers: Pregnant Women Should Avoid BPA Exposure...
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      House Passes "Cash For Clunkers" Bill

      Legislation would pay for trading in old gas-guzzlers

      The House of Representatives has voted to a pass legislation that would pay consumers up to $4500 for trading in old gas-guzzlers for new, more fuel-efficient vehicles.

      The measure, designed to both spur auto sales and reduce U.S. fuel consumption, now goes to the Senate. If passed, President Obama is expected to sign it.

      Under the so-called "cash for clunkers" bill, a consumer is rewarded for trading in cars that average 18 miles per gallon or less on the combined city/highway cycle. If they purchase a new vehicle that gets an extra four miles per gallon or more, they would receive a voucher for $3,500. If they purchase a new vehicle that gets 10 miles per gallon or more than their "clunker," the value of the voucher goes up to $4500.

      Supporters of the plan say there is no way to game the system. It won't apply to prior sales and consumers can't trade in vehicles that haven't been insured in the last year. Also, if the vehicle is more than 25 years old, it doesn't qualify.

      The measure passed the house by a 298-119 vote and carries a total price tag of $4 billion. The program would end after one year, or when the money runs out, whichever happens sooner.

      Auto industry analysts say the plan, if implemented, could stimulate new vehicle sales beginning as early as August. Since many of the "clunkers" are in the truck category, they say the plan would likely have the most impact on U.S. truck sales.

      House Passes ...
      Read lessRead more Hit With Class Action Lawsuit

      Suit claims non-existent, expired profiles are fraudulent

      A New York man has filed a class action lawsuit against popular dating site, claiming that the site deceives subscribers by showing them photos and profiles of non-paying members who can't respond to romantic advances. allows anyone to create a profile for free, but in order to read or respond to messages, or contact potential partners, customers must sign up for a subscription with the website.

      Sean McGinn, of Brooklyn, NY, alleges that this practice caused him "humiliation and disappointment" when he tried to contact non-subscribing members and never heard back from them. McGinn apparently took this to mean that his efforts had failed, when in fact his romantic interests were unable to read, let alone reply to, his messages without subscribing or re-activating an expired account. ( doesn't delete profiles of members who have canceled their accounts or let them expire, further defrauding bachelors like McGinn.)

      According to McGinn, the user agreement he signed when he created his account never warned him that not every profile is that of a bona fide member. McGinn asserts that "defrauds the consumer of his/her time and personal investment every time a person pays Match's subscription fee and writes to a member who wont have the ability to read what they wrote or see their profile."

      McGinn, already uncomfortable with dating, has been further traumatized by his online experience. His suit says that "despite the emotional vulnerability inherent in the dating process, fraught as it is with fear of rejection and anxiety, Match defrauds the consumer of his/her time, labor, and emotional investment" by failing to inform them that non-subscribing members cannot reciprocate their sweet nothings.

      McGinn's attorney, Norah Hart of Treuhaft & Zakarin, said that affected consumers "are left feeling they've been completely ignored and rejected," and said that the website's practice "could affect their romantic future."

      The suit alleges counts under deceptive trade practices; fraud; negligent misrepresentation; and breach of the implied covenant of good faith and fair dealing, which describes a vendor's promise not to break its word or deny terms that were obviously implied or read into the contract. Although McGinn has not specified the exact amount of money he is seeking, his attorneys expect the damages to be at least $5 million.

      This isn't the first time that has been accused of using fraudulent practices to lure lonely souls to its homepage. In November 2005, Matthew Evans of Los Angeles accused the site of creating fake profiles and sending him "winks" from non-existent members to lure him into renewing his subscription. That suit was dismissed in 2007.

      Earlier this year, competitor eHarmony was the target of a class action based on its strident anti-gay discrimination. The suit stemmed from an earlier action citing eHarmony's refusal to add "man seeking man" or "woman seeking woman" to its menu of choices. The latest claim accuses eHarmony of employing a "separate but equal" approach by creating an entirely new site — — rather than modifying the existing eHarmony site.

      Online dating has become enormously popular over the past few years. It is estimated that over 20 million people visit an online dating service every month, and in 2006, fully 31 percent of Americans said they knew someone who had used an online dating service. A 2004 report found that internet dating sites had collected a total of $473 million in advertising revenues., based in Dallas, has vowed that they will "defend [the suit] vigorously."

      More about online dating ... Hit With Class Action Lawsuit...
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      Internet Publishers Caution Congress

      Well-meaning privacy restrictions could stifle free flow of information

      June 10, 2009
      Smaller Internet publishers converged on Washington, D.C., this week, aiming to demonstrate to Congress the importance of the advertising-supported Internet as a free information source for consumers and as a creator of jobs and economic growth for the U.S. economy.

      "Advertising-supported Internet sites empower consumers in ways no one would have dreamed possible just a few decades ago," said James R. Hood, president and editor in chief of "Hundreds of thousands of sites provide every imaginable information, opinion and entertainment option, while supporting their local economies by providing jobs, paying taxes and helping consumers make better, more informed decisions."

      Hood was one of 30 smaller online publishers from across the country who visited Capitol Hill in a first-of-its-kind event organized by the Interactive Advertising Bureau (IAB).

      All of the publishers operate Web sites that provide free content to consumers, supported primarily by advertising.

      "Well-meaning consumer and privacy advocates are rightly concerned with protecting consumers' privacy, but Congress must be wary of imposing unrealistic and unnecessary restrictions on the advertising that gives taxpayers unrival access to information," Hood said.

      At a press conference at the National Press Club today, the IAB announced news across a number of initiatives from the two-day event:

      • The Economic Value of the Advertising-Supported Internet Ecosystem. Commissioned by the IAB and produced by Harvard Business School professors John Deighton and John Quelch, it is the first-ever comprehensive analysis of the economic impact of this ever-more important medium. Among its findings: 2.1%, or $300 billion, of the total U.S. GDP is contributed by the ad-supported Internet, which has created 3.1 million jobs, including 20,000 small businesses.

      • Long Tail publishers met with Congress and members of the press to tell their own stories of how they have turned their passions into a medium revolution and into businesses that are helping them and their readers achieve the American dream.

      • The formal launch of the IABs Long Tail Alliance, an initiative to give voice through the IAB to smaller ad-supported, publishing and technology sites in the digital ecosystem.

      • The debut of I Am the Long Tail, a seven-minute video, created by the IAB, that ties together vignettes from Long Tail publishers across the nation that puts the human face on the Long Tail and is part of a larger effort to collect and share the Long Tail story in video and online at

      We wanted the Long Tail Publishers to use their voices to speak to their Congresspeople about what interactive means to them, their employees and their families. Small businesses have been created and transformed in massive numbers across the U.S. with the advent of the ad-supported Internet. said Randall Rothenberg, President and CEO of IAB.

      It is vital that our legislators and regulators, when considering potential regulations, understand that ad-supported publishers are responsible for profound economic value throughout the U.S. Federal and state representatives should not diminish the diversity of voices and ideas in this most diverse of communications media.

      "One lawmaker's aide told us that 'saving the newspapers' would be Congress' next job," Hood said. "In fact, journalism is saving itself every day as tens of thousands of small publishers create new content in their various niches. Newspapers are run by adults and can save themselves; they should not become the next ward of the state."

      Internet Publishers Caution Congress...
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      Massachusetts Settles Predatory Lending Charges For $10 Million

      Attorney General secures agreement not to foreclose on homeowners

      Fremont Investment & Loan and its California-based parent, Fremont General Corporation, have settled predatory lending allegations in Massachusetts. To resolve the Commonwealth's lawsuit against it, Fremont has agreed to pay the state $10 million in consumer relief, civil penalties and costs.

      Fremont has also agreed not to foreclose upon unfair loans without certain protections for borrowers or originate unfair loans in Massachusetts. Those protections against foreclosure, which have been in place since the Superior Court issued a Preliminary Injunction in March 2008 are now permanent and also apply to the loan holders and servicers who acquired the Fremont loans since the injunction issued.

      "The American dream of homeownership has turned into a nightmare for many borrowers because of predatory lending practices. We have vigorously sought to hold companies accountable for these practices, and today we have taken another important step toward achieving that goal." said Massachusetts Attorney General Coakley. "With the $10 million we have obtained through this settlement, we have an opportunity to provide consumers and the Commonwealth with additional relief from the predatory lending practices that have besieged our state and nation. We will continue to hold companies responsible for their role in the foreclosure crisis."

      Under the terms of the settlement, Fremont has agreed to pay the Commonwealth $10 million, including $8 million in consumer relief, $1 million in civil penalties, and $1 million in costs, including attorneys' fees. The consumer relief funds will be used to redress the negative impact of mortgage foreclosures, predatory lending practices, and to provide relief to Massachusetts borrowers.

      Additionally, the settlement makes permanent the terms of the preliminary injunction granted in February 2008. In that preliminary injunction, the Superior Court held that certain Fremont loans were "presumptively unfair" because by their very termsshort term interest rates followed by payment shock, plus high loan-to-value and high debt-to-income ratioswere likely to lead to default and foreclosure.

      For those loans, the court established a notice and objection process before Fremont or its assignees or servicers could initiate foreclosures. Under this process the Attorney General's Office receives:

      30 days advance notice for loans that are either (1) "not presumptively unfair"; (2) vacant; or (3) not the borrowers' primary residence.

      45 days advance notice for loans that are "presumptively unfair."

      If the Attorney General's Office objects after initial notice then the parties have 15 days to resolve their dispute. If the dispute remains then Fremont must seek court approval to foreclose. After the notice and objection process, Fremont may only proceed with a foreclosure to which the Attorney General objects if Fremont requests and receives approval from the Superior Court. In considering whether to allow the foreclosure, the court will consider, among other factors, whether the loan is unfair and whether Fremont has taken reasonable steps to work out the loan and avoid foreclosure. Fremont also agreed not to originate unfair loans.

      The Attorney General's Office filed suit on October 5, 2007, in Suffolk Superior Court against Fremont and its parent company, Fremont General Corporation based on the defendants' unfair and deceptive loan origination and sales conduct. The complaint specifically alleges that the company was selling risky loan products that it knew was designed to fail, such as 100% financing loans and "no documentation" loans. The complaint further alleged that the company sold these loans through third party brokers and provided financial incentives to these brokers to sell high cost products.

      As a result of the lawsuit, up to 2,200 Fremont-originated loans have been protected from unrestricted foreclosures, because the preliminary injunction allowed foreclosures to proceed only after the underlying loan was analyzed for unfair, ultra-risky loan criteria. Although Fremont originated about 15,000 loans in Massachusetts from 2004 through 2007, only 2,200 of those loans remained "live" when the lawsuit commenced. Even though most of the 2,200 loans had been transferred to new holders and servicers, the Superior Courts preliminary injunction required that those holders also were restricted by the court's order.

      Massachusetts Settles Predatory Lending Charges For $10 Million...
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      Judge Rejects Lawsuits Claiming "Organic" Milk Is Fake

      Group charges factory farms gaming the organic system

      Can you tell which of these farms produces organic milk?

      A U.S. District Court judge in St. Louis has rejected 19 class-action lawsuits filed by consumers who are claiming fraud in the sale of "organic" milk. The suits claimed the milk labeled as organic actually came from large dairy operations that do not meet the federal government's strict rules for organic products.

      Consumers in 40 states had brought the lawsuits, alleging fraud in the manufacture of organic milk sold as storebrands in Wal-Mart, Target, Safeway, Costco and other national chains served by Aurora Dairy. Lawyers for the plaintiffs said that a 2007 federal investigation found the Aurora Dairy had "willfully" violated 14 different federal organic regulations.

      The Cornucopia Institute, a Wisconsin-based group promoting small-scale farming, says a handful of large dairy operations like Aurora are making a difficult time in the organic industry much worse. By skirting strict federal regulations and creating a surplus of what the group calls "phony" organic milk, they are flooding the market and driving prices so low than small organic producers who follow the rules are being driven out of business.

      The Cornucopia Institute estimates that as much as 30-40 percent of milk labeled as organic is now coming from giant industrial operations, milking as many as 7000 cows each.

      Lawyers representing consumers involved with the class-action lawsuits vow that they will appeal the judges initial ruling, especially in light of a recent Supreme Court decision that clearly gives citizens the right to sue corporations that allegedly act illegally even though federal regulatory agencies provide statutory authority over certain industries.

      According to Mark Kastel, the Senior Farm Policy Analyst for The Cornucopia Institute, the dismissal was a huge setback "because Bush Administration officials had substantially softened USDA penalties recommended by enforcement staff for Auroras organic transgressions." Cornucopia said it first alerted the USDA to Aurora's violations by filing formal legal complaints with the agency.

      "The very essence of the checks and balances system in our three branches of government provides for citizens to seek remedy, when regulatory agencies fail to enforce laws passed by Congress," said Gary Cox, a Columbus, Ohio-based attorney with experience in the organic industry. "It is our contention that a judicial review of the alleged misconduct by these giant corporations, and the lack of enforcement by the USDA, is not only appropriate but imperative."

      The outcome of the pending suits will not only impact consumers but many organic dairy farmers whose livelihoods are now threatened by the giant corporate dairy marketers.

      Meanwhile, there's a glut of organic milk on the market, meaning dairy processors who package and distribute organic products are reducing supplies and cutting the prices they pay to farmers. Dean Foods, the nation's largest milk processor, and owner of the Horizon Organic brand, and H. P. Hood, a giant Boston-based milk bottler, that controls the Stonyfield milk label, have both terminated contracts with farmers Cornucopia alleges.

      "I have invested my life in building this dairy farm, and Hood encouraged many dairy producers to make major investments and ramp-up for organic production, now my entire livelihood and the financial future of my family is at risk," said Kevin Poetker who milks 200 cows near Waterloo, IL, near St. Louis.

      Cornucopia is organizing an effort to pressure the Obama Administration to take a different tack on the issue than its predecessor. The groups says thousands of letters, mostly from organic farmers, have been sent to President Obama and USDA secretary Tom Vilsack asking them to immediately intervene and undertake aggressive enforcement of organic regulations.

      Judge Rejects Lawsuits Claiming...
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      Credit Card Delinquencies Up 11 Percent

      More consumers falling farther behind in paying down debt

      June 9, 2009
      Consumers fell behind on their credit card payments as the recession deepened in the first quarter of the year. For the first three months of 2009, 1.32 percent of consumers were three or more months behind on their credit card payments, up 11 percent over the same period in 2008, according to Trans Union, a credit reporting agency.

      Information for the analysis is culled quarterly from approximately 27 million anonymous, individual credit files, providing a perspective on how U.S. consumers are managing their credit health.

      Average bankcard borrower debt, defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower, inched upward nationally 0.82 percent to $5,776 from the previous quarter's $5,729, and 4.09 percent compared to the first quarter of 2008. The highest state average bankcard debt remains in Alaska at $7,476, followed by Tennessee at $6,869 and Nevada at $6,677.

      The lowest average bankcard debt was found in Iowa, at $4,300, followed by North Dakota with $4,414 and West Virginia with $4,640.

      The steepest increases in average bankcard debt over the previous quarter occurred in Alabama , Mississippi and Tennessee. The District of Columbia experienced the largest drop in average bankcard debt, followed by the Wyoming and New Jersey.

      "As expected, bankcard delinquencies increased in the first quarter both as a national average and in most areas of the country," said Ezra Becker, director of consulting and strategy in TransUnion's financial services group.

      "As the recession entered its sixth quarter, we saw continued increases in average bankcard balances, as consumers struggled to meet repayment obligations in a job market that continues to deteriorate. This increase could be an indication that tax refund checks, typically used to pay down balances in during the first quarter in years past, are now being used to cover daily living expenses."

      At end of the 2001 recession, the national bankcard delinquency rate had increased to a high of 1.69 percent, and as that recession came to a close in November of 2001, three of the five riskiest areas of the country in terms of bankcard delinquency were to be found in the South: North Carolina, Georgia, and South Carolina. In the current recession, Las Vegas, NV is leading in terms of bankcard delinquency, followed closely by Florida and California metros. Not surprisingly, all three states have led the nation in home foreclosures as well.

      This highlights one of the fundamental differences between the two recessions -- the housing market, Becker said. Today, the least risky metropolitan area is Bismarck, N.D., with a credit card delinquency rate of 0.6 percent -- a position fairly consistent with what it held during the previous recession."

      Credit Card Delinquencies Up 11 Percent...
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      U.S. Prius Sales Drop 45 Percent

      Recession, lower gas prices put a chill on sales

      Government involvement in Chrysler and General Motors operations may coincide with a new emphasis on small, fuel-efficient cars. The American taxpayers, who start off owning a big chunk of the bankrupt automakers, better hope consumers warm up to the idea of green cars. But so far, they havent.

      Toyota reports U.S. sales of its Prius hybrid are down a whopping 45 percent so far in 2009. Its a far cry from this time last year, when Toyota dealers were tacking on a premium to the sticker price and had waiting lists for the cars.

      Toyota says it has sold just 42,743 Prius models through the first five months of 2009, compared to 79,675 during the same period last year.

      Why have American consumers fallen out of love with the Prius? Gasoline prices may have something to do with it.

      At this time last year gasoline prices were about a $1.50 a gallon more than they are now, costing consumers an extra $30 per fill-up if they were driving a vehicle holding 20 or more gallons. It suggests consumers flocked to the Prius, not because its cute or they want to save the planet, but because they wanted to save money on fuel.

      Gas prices may not be the only factor.

      In a recession, consumers are buying fewer new cars altogether, and when they do make a purchase, are looking for the best deal possible. The Prius -- especially with the surcharge tacked on by dealers last year -- is more expensive than other small cars.

      The Prius remains a top-selling model in Japan. In fact, it was the best-selling car in Japan during May, according to the Japan Automobile Dealers Association. Of course, gasoline prices are much higher in Japan than they are in the U.S.

      U.S. Prius Sales Drop 45 Percent...
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      Wal-Mart Sued Over Sales Tax

      Plaintiffs claim retailer shorted them during returns

      Angry consumers have filed a class action against Wal-Mart, alleging that refunds from the leading retailer don't include the full amount paid in sales tax.

      Lead plaintiff John Whitwell of Maryville, IL, bought a Blu-ray disc machine at a Wal-Mart store in Collinsville, IL, for a total of $214.04; he later returned it to a store in Glen Carbon, IL and only received $211.56 back.

      The $2.48 difference is explained by the fact that Glen Carbon has a lower sales tax than does Collinsville. According to the complaint, "Upon information and belief Wal-Mart returned the lesser amount because the applicable tax rate at the Glen Carbon, Illinois store is 6.85 percent," lower than the 8.1 percent rate in Collinsville.

      The complaint alleges that Wal-Mart's failure to provide a full refund including sales tax is a breach of contract, since Wal-Mart promises a "refund of all amounts paid by the purchaser if merchandise is returned to it within the prescribed time period." Wal-Mart cannot duck this obligation by making an exception when items are bought at one store and then returned to a different location.

      Wal-Mart also refuses to follow the practice when the situation is reversed; if an item is returned to a store with a higher sales tax than the one at which it was purchased, Wal-Mart won't provide the additional tax money with the refund.

      This isn't the first time that Wal-Mart's sales tax practices have raised eyebrows. Last October, Connecticut Attorney General Richard Blumenthal probed complaints that the chain charged a second sales tax when merchandise paid for in cash was exchanged. After the investigation became public, Wal-Mart spokesman Dan Fogelman was infamously paraphrased as saying that "although [Fogelman] has no idea what Connecticut state tax law is, his company is following it." His replacement, Ashley Hardie, was subsequently forced to issue a more convincing statement, promising that Wal-Mart had "taken steps to ensure that our associates are fully complying with Connecticut law when processing even exchanges."

      The suit is being brought on behalf of "[a]ll persons in the United States who returned merchandise to Wal Mart after May 14, 1999, and received a refund of sales tax in an amount less than the sales tax originally paid for the returned merchandise." More than 50 consumers nationwide have joined the suit. The action, filed in state court in Madison County, IL, is being prosecuted by the law firm of LakinChapman in Wood River, IL.

      Wal-Mart, the world's largest corporation by revenue, has been the biggest American retail beneficiary of the lagging economy, due to its low prices and countless locations. The chain is also currently facing a gender-discrimination suit, which claims that Wal-Mart unfairly discriminated against females when considering pay and promotions. That class, if ultimately certified, would constitute the largest gender-discrimination suit in history, covering 1.5 million women.

      Angry consumers have filed a class action against Wal-Mart, alleging that refunds from the leading retailer don't include the full amount paid in sales tax...
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      Expedia Ordered to Reimburse Extra Tax Charged to Consumers

      Award is largest in Washington state history

      A Washington state court ordered travel reservations site Expedia to pay $184 million to consumers, the largest consumer class action award in Washington state history.

      The suit alleged that while Expedia paid taxes calculated using the wholesale price of hotel rooms, consumers' taxes were based on the rooms' retail price. According to the suit, the corporation kept the difference for themselves.

      The suit, filed in 2005 by class action firm Hagens Berman Sobol Shapiro, claimed that Expedia breached its contractual obligations to consumers by breaking its promise to charge only enough to compensate for its own expenses. According to partner Steve Berman, who filed the suit, the company masked the price difference by labeling it as a "service fee," and included it in the same billing line as taxes, making the higher prices difficult for consumers to notice.

      Expedia's Terms of Use agreement explicitly promise that the corporation only collects service fees as necessary to "cover the costs" of providing tickets and reservations for hotels, air travel, car rentals, and other travel necessities. In reality, the extra tax was simply pocketed by the company in an effort to increase its profit margin.

      Berman explained that "Expedia used the service fees to sweeten the deal for the company at the direct expense of the consumer. They apparently thought no one would notice if they padded each transaction by a few dollars, money that went straight to profit."

      Indeed, in her ruling, Judge Monica Benton pointed to a smoking-gun internal e-mail from December 2001, which boasted that the additional charge "will add between $2-3 million in our net profit (the bottom line) next quarter."

      The court noted that "[i]n none of the myriad of declarations filed here, does Expedia show that profit, identified as markup, was considered a cost of providing travel reservation services," and that the "[p]laintiffs correctly conclude [that] 'profits, not costs are the subject matter of these service fees.'"

      Under the ruling, the company must return $184,470,452 that it collected in service fees from consumers who bought tickets between Feb. 18, 2003 and Dec. 11, 2006.

      Berman said that he and his firm are extremely pleased with the ruling. "Consumers deserve to know what they are paying for, and companies like Expedia have an obligation to be upfront," Berman said.

      Expedia, based in Bellevue, Washington, is the largest online booking website, ahead of competitors such as Orbitz and The ruling comes at an especially bad time for the company, which announced late last month that it is getting rid of fees for flighs booked on its site, in an effort to reinvigorate the dismal travel market. It is also eliminating fees charged for cancellations or change of reservations. Before the worldwide economic crisis, the site charged $25 for cancelled or changed hotel and car reservations.

      Expedia has announced that it plans to appeal the court's decision.

      Expedia Ordered to Reimburse Extra Tax Charged to Consumers...
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      California Arrests Two who Stole Millions Through Phony Stock Sale claimed to be an online shopping hub

      California Attorney General Edmund G. Brown Jr. announced the arrest of two individuals accused of stealing millions of dollars through "phony stock sales" and an illegal pyramid scheme.

      "These two con men stole $8.8 million dollars through phony stock sales and an illegal pyramid scheme," Brown said. "They stole investors' money and used it to pay for luxury homes, fancy cars and a $100,000 Las Vegas wedding."

      The defendants -- James A. Sweeney, II, 62, of Afton, TN and Patrick M. Ryan, 34, of Canyon Lake, CA -- were arrested in Afton, TN and Las Vegas, NV, respectively, and are being held until they are extradited to Riverside County. Both face 78 counts of grand theft and securities fraud. Bail has been set at $8.8 million each.

      Brown's complaint contends that Sweeney and Ryan, co-founders of Riverside-based Big Co-op, Inc., stole $8.8 million from more than 1,000 Californians through an illegal pyramid scheme and phony stock sales.

      Big Co-op, also operating as, purported to be an online shopping hub where consumers could go to purchase thousands of goods and services from big name retailers including, Sears, Target and Macy's, at discounted prices.

      Pyramid scheme

      Consumers were informed that if they purchased a Big Co-op membership, they could save money on their own purchases and also earn commissions and rewards by convincing others to shop on the site.

      In reality, consumers never received rebates or rewards. Instead, profits were based on recruiting others to purchase memberships, and having those purchasers recruit others to purchase memberships (and so on).

      Members earned $100 commissions for every six members recruited. Those recruited then paid Big Co-op from $19.95 to $99.95 in ongoing monthly membership fees.

      According to the complaint, from 2005 to 2007, Big Co-op generated $1.3 million in revenues through this pyramid scheme.

      Phony stock sale

      In addition to the pyramid scheme, the two sold phony stock in Big Co-op as a stand-alone investment and as part of certain membership plans, Brown charged.

      At seminars and meetings across California, Sweeney and Ryan pitched Big Co-op as the future of online commerce, compared it to Google and EBay, and falsely informed investors the company was already turning huge profits. Investors were also told that an initial public offering (IPO) was imminent, and that when the company went public, the shares could climb to well over $100 per share.

      In reality, Big Co-op was never profitable, there was not an impending IPO, and the only significant revenue generated was a result of the sale of phony stock and membership fees for the pyramid scheme.

      Shares in the company were sold for $0.50 to $5.00, with two-for-one deals offered to investors willing to pay cash. From 2005 to 2007, Big Co-op took in $7.5 million from this scheme.

      With investor cash, Sweeney and Ryan bought luxury homes, country club memberships, five Mercedes, paid for a $100,000 Las Vegas wedding and ran up $30,000 to $50,000 in monthly credit card bills.

      After receiving numerous complaints, the California Department of Corporations issued two "Desist and Refrain Orders" against Sweeney, Ryan and other associates: the first, on October 23, 2006, directed them to cease selling stock in the company and the second, on May 2, 2007, directed them to cease selling memberships in the company. Following the second order, the case was referred to Brown's office for prosecution.

      California Arrests Two who Stole Millions Through Phony Stock Sale...
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      Food Safety Bill Aired In House

      "Not a partisan issue," consumer groups tell Congress

      Consumer groups are generally applauding of the Food Safety Enhancement Act of 2009, which is currently making its way through the House of Representatives. A draft of the legislation got a hearing Wednesday before an Energy and Commerce subcommittee.

      The measure addresses the increasing task of the Food and Drug Administration to protect the food supply. Critics maintain the agency is under-funded and over-stretched, leading to countless food safety lapses -- including record recalls of contaminated spinach, peppers and peanut butter.

      In backing the bill, Consumers Union said the measure would give FDA the funding and powers it will need to better ensure the safety of the American food supply.

      Consumers Union applauds the leadership of the Committee for taking action to finally reform our broken food safety system, said Jean Halloran, Director of Food Policy Initiatives for CU. This is a much needed step to protect the safety of our nations food supply. As Congress moves forward on this legislation, we urge members to add an important provision to require testing and reporting for contaminants, the critical need for which was highlighted by the recent case of Peanut Corporation of America, which, in 12 different instances, found salmonella in its peanut butter and continued to ship deadly peanut products without being required to report known contamination.

      The draft legislation would, for the first time, provide FDA with mandatory recall authority. Under current law, it can only request recalls.

      It would require high-risk facilities to be inspected at least every 6-18 months. Currently, facilities are inspected once a decade on average.

      It would require electronic electronic traceability systems that are able to track identified contaminated food back to its source. All food producers -- both foreign and domestic -- would be assessed a $1,000 registration fee to help pay for the increased oversight.

      "For consumers, food safety is not a partisan issue, Halloran said. The Food Safety Enhancement Act discussion draft provides smart, long-overdue solutions to our food safety crisis, and it should be supported by members of Congress from both parties. We urge both parties to unite to address the problem before there is another outbreak that causes more sickness and deaths."

      New powers

      Some of the proposed new powers for the FDA include:

      • Creation of a registry of all food facilities and importers serving Americans, which would be updated on an annual basis. Affected parties would pay fees to be included in the registry, and would be tagged with unique identification numbers for easier tracking.

      • Registered facilities would pay an annual fee of $1,000 to fund FDA oversight, including inspections, recalls, and certifications for export of food to the U.S.

      • The FDA's powers to "quarantine" potentially unsafe food or products from entering geographic areas would be enhanced.

      • The FDA would issue regulations requiring every company in a food produce chain — including manufacturers, processors, and transporters — to maintain records for the origin and distribution of the food, and ensure the records are usable and transferable in multiple formats.

      • Enhanced safety requirements for infant formula.

      • New authority to subpoena records and protect whistleblowers in case of alleged violations of the law.

      "The current state of our food safety system is dangerous not just for the American public, but also for the food industry itself," said Rep. Henry Waxman (D-CA), Chair of the Energy and Commerce Committee. "This bill recognizes that the hallmark of strong food safety legislation must be a shared responsibility for food safety oversight between FDA and industry. This legislation will go a long way toward restoring Americans' confidence in our food supply."

      Food Safety Bill Aired In House...
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      Feds Stop Cross-Border Directory Scam

      Canadian operation targeted small businesses, non-profits in U.S.

      The Federal Trade Commission has filed suit to halt the illegal operations of three telemarketing boiler rooms in Montreal, Canada.

      The agency alleged that the telemarketers bilked thousands of small- and medium-sized U.S. businesses and non-profits, including churches, schools, and charities, out of millions of dollars by deceiving them into paying for listings they never ordered in worthless business directories.

      The FTC lawsuits, filed in federal court in Illinois, are part of a joint initiative with Canadian law enforcement authorities called Operation Mirage that is aimed at cracking down on business directory scams. The FTC charged that the three telemarketing operations targeted businesses and other organizations with schemes to mislead them into paying hundreds of dollars each for unwanted business directory listings. The court has issued temporary restraining orders in the three cases.

      In their phone calls to businesses and non-profits, the telemarketers often have posed as well-known local yellow pages directories, and have told employees who answer the phone that they are calling to verify addresses and telephone numbers, the FTCs complaints stated. The telemarketers then used the verifications as the basis to claim that these organizations agreed to listings that often cost $400 or more.

      The FTC alleged that the companies then sent their victims invoices that again often imply that they are well-known yellow-pages companies. Many businesses and organizations simply paid these invoices. Those that did not were harassed with threatening phone calls and letters. To hide their location, the companies have used mailing addresses around the United States, in Miami; Phoenix; Plattsburgh, New York; Port Barre, Louisiana; Russell, Illinois; Milwaukee, Wisconsin; and Jersey City, New Jersey, the FTC alleged.

      The FTCs complaints alleged that the companies made three misrepresentations that violated the FTC Act. First, they led the small businesses and non-profits they targeted to believe that there was a pre-existing relationship between them. Second, they falsely claimed that those organizations had agreed to purchase directory listing services. Third, they falsely claimed that the organizations owed money for these supposed services.

      The agency alleged that the telemarketers bilked thousands of small- and medium-sized U.S. businesses and non-profits, out of millions of dollars by decept...
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      Real Estate Agent Takes On Banks Over Short Sales

      Banks say the right thing in public but often don't follow through

      In markets where home places have fallen drastically, short sales are among the few ways for homeowners to get out of their homes, short of foreclosure. In a short sale, however, the lender has to agree to accept payment that is less than for the entire loan amount. Its not something most banks are eager to do.

      San Diego real estate agent Bob Hamzey has encountered his share of short sale horror stories as he has tried to sell homes whose values seemingly dropped by the day. He cheered when the Obama Administration rolled out its Foreclosures Alternative Program, which is designed to streamline the short sale process for distressed homeowners by setting service standards for banks and mortgage companies.

      While the program promises to make life easier for homeowners and the realtors helping them, Hamzey claims that big banks have already found ways to circumvent the rules for their own gain and are gaming the system.

      "The banks have been transferring their equity lines of credit in the middle of the short sale process to affiliate companies," said Hamzey. "These affiliates are not under the auspices of the Office of the Comptroller of the Currency or obliged to follow the rules set up under the president's new program. In essence, they are almost free to be as uncooperative as they please."

      Hamzey claims that by not signing off on the short sale package, the affiliate companies may force the first mortgage to foreclose. He maintains that large banks would prefer a foreclosure to a short sale, even though they may end up losing money in either case.

      "In front of the camera, bank executives smile and explain how they are cooperating with the government and working with distressed homeowners," said Hamzey. "In the back rooms, they transfer their assets to affiliate companies that practically operate free of government regulations.

      Hamzey says he is on a mission to spread the word about big bank abuse of the FAP program and is asking his fellow agents to send him their personal stories of getting caught up in short sale abuse.

      Hamzey said he intends to send these stories to federal regulators in an effort to encourage the Obama administration to develop a system that is fair and responsible for the people they were designed to help.

      Real Estate Agent Takes On Banks Over Short Sales...
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      Oklahoma Charges BP With Propane Price-Fixing

      Attorney General claims unfair and deceptive acts

      Gasoline isn't the only fuel whose price can be fixed. In Oklahoma, state Attorney General Drew Edmondson has accused petroleum giant BP America of a 2004 scheme to artificially drive up the price of propane.

      The state's suit accuses BP of "unfair and deceptive acts in attempting to manipulate and manipulating the commodities markets for propane...with the effect of increasing prices in Oklahoma."

      The state accuses BP of orchestrating a successful strategy to corner the February 2004 propane market and manipulate prices for the commodity. The state alleges, by the end of that month, BP owned 88 percent of all propane in the Texas system, which is the primary source for the gas in Oklahoma.

      According to the complaint, BP's actions had increased the price of propane more than 40 percent from Feb. 4 to Feb. 25. In contrast, the state of Washington, which relies on an Alaskan system for its main propane supply, saw prices decline during that same period.

      Propane is a multimillion dollar industry in Oklahoma and, according to the state's complaint, energy systems designed to burn propane cannot run on other fuels.

      "Oklahomans who use propane systems to heat their homes and power their businesses were held hostage by BP's scheme and had no other choice but to buy propane at the artificially higher price," Edmondson said. "Propane is heavily used by our state's agriculture community as well, and spikes in prices can have a significant impact on Oklahoma farmers."

      The state's civil lawsuit, filed in Oklahoma County District Court, seeks to prohibit BP from engaging in similar conduct. The suit also seeks consumer restitution and penalties. Defendants in the suit are BP America and subsidiaries BP Corporation North America Inc., BP Products North America Inc. and BP American Production Co.

      Although BP has already settled similar federal and class action suits, few if any Oklahoma consumers were included in those cases. Because of the complexities of commodities and futures law, the state is consulting with legal experts in that field regarding the lawsuit.

      In Oklahoma, state Attorney General Drew Edmondson has accused petroleum giant BP America of a 2004 scheme to artificially drive up the price of propane....
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      Pressure to Look Attractive Linked to Fear of Rejection

      New study highlights "appearance-based rejection sensitivity" among college students

      People who feel pressure to look attractive are more fearful of being rejected because of their appearance than those around them, according to a new study by researchers at the University at Buffalo and the University of Kent.

      The study of what's known as "appearance-based rejection sensitivity" among college students was published in the spring edition of Psychology of Women Quarterly.

      It found that overall women showed greater sensitivity to appearance rejection than did men. This was particularly true of women who felt they needed to look attractive in order to be accepted by their peers.

      The study also found that men and women who had internalized media ideals of attractiveness had higher levels of appearance-based rejection sensitivity than did their peers.

      No relationship was found between parents' perceptions of attractiveness and study participants' increased sensitivity to appearance-based rejection. Thus, peer and media influences, rather than parental influence, play a key role in appearance-based rejection sensitivity.

      "There is a lot of research to suggest that physically attractive people are less stigmatized by others in this society, and have significant advantages in many areas of life than those who are viewed as physically unattractive," said researcher Lora Park, Ph.D., assistant professor of psychology at the University at Buffalo.

      "Our study suggests that when people feel pressure to look attractive, whether from their friends or the media, they may be putting themselves at risk for experiencing negative outcomes that may limit their development and enjoyment of life in many ways," she added.

      Indeed, previous research by Park found that appearance-based rejection sensitivity is related to negative mental and physical health outcomes, such as feeling unattractive, feeling badly about oneself when comparing one's appearance with others, feeling lonely and rejected when thinking about disliked aspects of one's appearance, and showing increased risk for eating disorders.

      Although the current study focused on a predominantly young, white college-age sample, Park says future research should investigate appearance-based rejection sensitivity across diverse age and ethnic groups, in order to better understand its prevalence and to examine how it might be reduced.

      Pressure to Look Attractive Linked to Fear of Rejection...
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      California Seeks To Register Foreclosure "Consultants"

      Attorney General wants database to protect against scam artists

      When you're the state with more foreclosures than any other, chances are youll have more than your fair share of foreclosure "consultants." California Attorney General Jerry Brown, seeking to protect his citizens from shady rip-offs, has issued a directive forcing foreclosure consultants to register with his office and post a $100,000 bond by July 1, 2009.

      Those who fail to do so will be in violation of state law, subject to criminal penalties of up to a year in jail and fines ranging from $1,000 to $25,000 per violation.

      "California is awash with con artists who prey on vulnerable families facing foreclosure," Brown said. "By forcing foreclosure consultants to submit detailed information to my office and post a $100,000 bond, this registry will help bring long-overdue transparency to this shadowy world."

      In California, as well as other states, scam artists pose as legitimate foreclosure consultants, promising homeowners they will prevent foreclosure. In reality, these scam artists charge huge up-front costs, but don't provide any help. Often, they make matters worse.

      Earlier this month, Brown's office prosecuted a scam artist who allegedly provided hundreds of homeowners with forged bank documents and directed them to send their mortgage payments to accounts she had created, instead of the homeowners' lender.

      Additionally, Brown's office has seen a significant increase in the number of complaints from homeowners regarding foreclosure consultants.

      The registry unveiled Monday will provide Californians with information about potential consultants and recourse in the event that a consultant violates the law.

      All foreclosure consultants operating in California must post a $100,000 bond and register with Brown's office by July 1, 2009 and submit the following information:

      • Name, address, and telephone number;

      • All names, addresses, telephone numbers, websites, and e-mail addresses used or proposed to be used in connection with their business;

      • Copies of all advertising;

      • Copies of each different contract the consultant will use with consumers; and

      • A copy of its $100,000 bond.

      Foreclosure consultants who provide proper information will receive a Certificate of Registration. Brown's office, however, may refuse to issue, or revoke, a Certificate of Registration if the foreclosure consultant has made any misstatement in its registration form, has been convicted of fraud or misrepresentation, has been convicted of a violation of the state's foreclosure consultant laws, California's false advertising, unfair or deceptive practices laws or other laws dealing with mortgages.

      If the company violates the law, Brown said a court may order restitution to victims out of proceeds from the $100,000 bond.

      In order to obtain a Certificate of Registration by July 1, 2009, foreclosure consultants should send in their registration application and materials as soon as possible so they can be reviewed prior to July 1.

      The registry was established through legislation sponsored by Speaker of the Assembly Karen Bass, AB 180, which was signed into law last year.

      When you're the state with more foreclosures than any other, chances are you'll have more than your fair share of foreclosure "consultants." ...
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      Peak Fitness Blocked From Charging Advance Payments

      North Carolina Attorney General stops health club as lawsuit looms

      Facing a lawsuit, health club chain Peak Fitness agreed to stop selling prepaid gym memberships in North Carolina until the company can secure bonds for each health club. North Carolina Attorney General Roy Cooper said hard times make it more important than ever to follow the rules.

      "Consumers shouldn't be left out in the cold when their health club closes," Cooper said. "These clubs must follow the law before they take upfront money from new members."

      Cooper filed suit against Peak Fitness last week, obtaining a consent judgment. Under the consent judgment, Peak Fitness and its owner Jeffrey R. Stec are barred from selling prepaid gym memberships until the company gets adequate bonds for each health club. Peak Fitness can continue to operate but can only collect money from customers who pay month to month for their membership.

      Cooper's office was notified in March that Peak Fitness' bonding company was canceling all of Peak Fitness' bonds as of May 12. Peak Fitness has not been able to secure replacement bonds. These bonds are required by state law to reimburse consumers if the health club closes and the company doesn't have money to refund consumers who paid in advance.

      In addition, Peak Fitness is required to submit sworn statements of liability to the Attorney General's office twice a year. These statements are used to determine the amount of bond necessary. In March, Peak Fitness did not submit sworn statements for all health clubs and understated its liability by approximately $2 million in the statements that were submitted.

      Earlier this year, Cooper entered into a consent judgment with Peak Fitness that made substantial changes to customer service, contracts and billings at all 28 of its health clubs across North Carolina. Peak Fitness agreed to designate a single point of contact to handle consumer complaints, clearly post contact information for Peak's billing company, give advance notice to gym members and the Attorney General's office when a health club closes or transfers memberships, and purchase and maintain appropriate bonds for each health club.

      Since January's consent judgment, Peak Fitness has abruptly closed gyms in Charlotte, Garner, Knightdale, Raleigh and Winston-Salem. Also, Peak Holdings, a subsidiary of Peak Fitness, filed for Chapter 11 bankruptcy in April.

      In the past five years, Cooper's office has received more than 500 complaints regarding Peak-related health clubs.

      Peak Fitness Blocked From Charging Advance Payments...
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