Current Events in June 2009

The recall of Nestle cookie dough that's possibly tainted with E. coli is taking an economic as well as a health toll. The company says the Virginia plant that produces the dough has been closed temporarily and some workers will likely be put on furlough.

Nestle recalled the cookie dough after getting word from the Food and Drug Administration and the Centers for Disease Control and Prevention that the product was linked to an E. coli 0157:H7 outbreak.

A company spokeswoman said within 24 hours Nestle closed the plant — in the small southeastern Virginia town of Danville — and stopped shipping product. The company recalled 300,000 cases of the cookie dough. Each case contains 12 packages and each package bakes 24 cookies.

Of course, some of those who got sick never got around to baking, but rather ate the dough raw. Eating raw cookie dough, it turns out, is a guilty pleasure for millions. But health experts advise against it, with the latest E. coli outbreaking demonstrating the reason.

According to the CDC, 70 people in 30 states were infected with E. coli 0157:H7 between March 1 and June 22. Victims ranged in age from two to 57 years, though more than 70 percent were younger than 19. Three-quarter of those infected were female, according to the CDC.

Twenty-five people required a stay in the hospital, and seven had developed a kidney failure called hemolytic uremic syndrome. No fatalities had been reported, according to the CDC.

"Preliminary results of this investigation indicate a strong association with eating raw prepackaged cookie dough," the agency said. "Most patients reported eating refrigerated prepackaged Nestle Toll House cookie dough products raw."

What to do

The agencies said consumers should:

• Throw away any prepackaged, refrigerated Nestle Toll House cookie dough products you may have in your home.
• Do not cook the dough because you might get the bacteria on your hands and on other cooking surfaces.
• Contact your health care professional immediately if you or your family have recently eaten the dough and have had stomach cramps, vomiting or diarrhea, with or without bloody stools.
• If you have additional questions about the recalled products, contact Nestle consumer services at 800-559-5025 or visit the companys Web site.

Safe Food Handling

FDA reminds consumers they should not eat raw food products that are intended for cooking or baking before eating. Use safe food-handling practices when preparing these products, including

• following package directions for cooking at proper temperatures
• washing hands, surfaces, and utensils after contact with these types of products
• avoiding cross-contamination
• refrigerating products properly

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 www.helpnowalliance.org.

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.

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, ConsumerAffairs.com 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 ConsumerAffairs.com 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

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 ...

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.

By Jon Hood
ConsumerAffairs.com

June 21, 2009
Blue Cross has settled a lawsuit brought by parents of children with autism, reimbursing them for the costs of therapy they had to pay out of their own pockets.

The suit, filed in Detroit, alleged that Blue Cross refused to pay for Applied Behavioral Analysis (ABA) therapy for autistic children on the grounds that it was experimental.

Blue Cross policies exclude experimental therapies for a variety of conditions. The plaintiffs in the current suit, Johns v. Blue Cross Blue Shield of Michigan, argued that characterizing ABA as experimental was arbitrary, capricious, and possibly even illegal.

John Conway and Gerard Mantese, attorneys for the plaintiffs, said in a statement that ABA is "supported by science and is not 'experimental.'" The therapy is used to help autistic children develop the deficient verbal and social skills that are hallmarks of the disease.

ABA is based on the classical conditioning concepts of positive and negative reinforcement — rewarding good behavior and discouraging unhealthy actions. ABA therapy has been recognized and respected for decades, and is implemented under the supervision of psychologists and other medical professionals. Classical conditioning itself stretches back to the early 1900's, when Ivan Pavlov developed his now-famous experiment involving "conditioned reflexes." By pairing the ringing of a bell with the scent of raw meat, Pavlov eventually trained — or conditioned — dogs to drool at the sound of the bell alone.

Indeed, as the plaintiffs pointed out, Blue Cross acknowledged in a 2005 draft policy that ABA is anything but controversial. That draft explicitly noted that ABA is "currently the most thoroughly researched treatment modality for early intervention approaches to autism spectrum disorders and is the standard of care recommended by" a number of professional organizations, including the Association for Science in Autism Treatment.

Additionally, as the draft pointed out, the earlier the treatment is applied, the better the child's prognosis for a normal and productive life.

During a court deposition, Dr. Calmaze Dudley, Blue Cross's medical director, said that he would probably employ the therapy if he had a child with autism. These findings call into question why Blue Cross refused to pay for the treatment in the first place. Indeed, the settlement came shortly after the court ordered Blue Cross to produce these documents.

As with many developmental and psychological disorders, autism isn't covered by most medical insurance plans. Depending on the severity of a child's autism — which varies greatly from case to case — intensive speech and developmental therapy can cost nearly $100,000 per year. In Michigan, where the instant suit was filed, the state House has introduced two bills mandating coverage for diagnosis and treatment of autism-spectrum disorders, including Asperger Syndrome and Rett Syndrome. HB 4776 applies specifically to plans issued by Blue Cross; HB 4183 applies to all other insurance companies.

In the settlement, Blue Cross agreed to reimburse the families of more than 100 autistic children who paid for their own behavioral therapy over the past six years. Included in the settlement are families covered by a Blue Cross policy who never actually submitted a claim.

The U.S. Food and Drug Administration (FDA) has granted an appeal filed by ConsumerAffairs.com regarding the agencys refusal to release lab results and consumer complaints about NUTRO pet food.

The FDA, however, has not yet turned over any of the records that ConsumerAffairs.com requested under the Freedom of Information Act (FOIA).

The national consumer news Web site — which has received more than 900 complaints from pet owners nationwide who say their dogs and cats suddenly became sick after eating NUTRO pet food — filed its FOIA request in June 2008. Ten months later — in April 2009 — the FDA denied that request, saying the release of those records could interfere with law enforcement proceedings.

An FDA official, who spoke on the condition of anonymity, told ConsumerAffairs.com in April that its FOIA request was denied because the federal agency was investigating NUTRO. But the FDAs Center Veterinary Medicine (CVM) later issued a statement claiming the pet food maker was not under investigation.

The CVM, however, is not the FDA division that handles complaints about pet food and is not the division that confirmed the probe of NUTRO.

ConsumerAffairs.com has also independently confirmed that FDA agents have visited the homes of at least three pet owners to investigate the deaths of their dogs, which all ate NUTRO pet food.

In May, an attorney for ConsumerAffairs.com appealed the FDAs refusal to release the NUTRO records requested under the FOIA.

Though the reports on whether the FDA is investigating Nutro have been conflicting, the FDAs official position is that there is no pending investigation of Nutro. Therefore, the FDA may not rely on the law enforcement exemption of FOIA because, according to the FDA, there is no pending enforcement proceeding against Nutro," said New York attorney Cameron Stracher.

In response, the FDA said it would "reopen your FOIA request."

FDA reports that it will reopen your FOIA request and provide you with the requested records subject to any applicable FOIA Exemptions, Carol Maloney, director of the FDAs Division of FOIA Services wrote in response to ConsumerAffairs.coms appeal.

Time for action

"One can only hope that it doesn't take the agency another ten months to consider whether or not it will produce the publicly-owned documents which were gathered at taxpayers' expense," said James R. Hood, ConsumerAffairs.com's editor and president.

"This is an urgent public health issue that affects not only animals. Humans handle the food they feed to their pets and are also potentially at risk if there is a hole in the food safety net. Taxpayers deserve action — and straight answers."

Read more ...

• Recall notice

By Jon Hood
ConsumerAffairs.com

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, www.babygendermentor.com, 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.

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.

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."

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.

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

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 SaveTheInternet.com'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 ConsumerAffairs.com 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.

Lab results on a sample of the recalled NUTRO cat food reveal the product contains concerning and sky high levels of zinc that could cause gastrointestinal problems and liver and kidney damage in felines, according to a veterinary toxicologist.

The non-profit Pet Food Products Safety Alliance (PFPSA) hired Washington Animal Disease Diagnostic Laboratory to test a sample of the recently recalled NUTRO Max Adult Roasted Chicken Flavor cat food.

Those test results reveal the food contains an excessive amount of zinc -- 2100 parts per million (ppm).

The concentration of zinc identified in this report of 2100 ppm is very high, said Dr. Stephen Hansen, a veterinary toxicologist and senior vice-president of Animal Health for the American Society for the Prevention of Cruelty to Animals (ASPCA). That zinc level jumps off the page. It is awfully high and does concern us. Its certainly gotten our attention.

Do those high levels of zinc pose health problems for cats?

The problem in this case is that we believe no one actually knows (or at least has published) the effects of 2100 ppm dietary zinc long-term in cats, Dr. Hansen said. Typically, cats are more tolerant of high zinc than other species, including dogs and humans.

But its certainly possible that those levels of zinc would likely cause health problems in cats that could involve significant intestinal upset and liver and kidney damage.

"Deadly" levels

Don Earl, founder of the PFPSA, paints a much graver picture for cats exposed to what he calls the deadly levels of zinc in the recalled NUTRO food tested.

Using this food by Nutro recommended feeding guidelines, a pet eating this food would receive over 38 times the amount of zinc recommended by the National Research Council, or 175 mg. zinc a day, he said. Using the most frequently cited median lethal dose for zinc of 100 mg. per kilogram of body weight, a 4 kilogram cat (9 pounds) would be exposed to the median lethal dose of zinc in slightly over 2 days.

I consider it highly unlikely that any cat exposed to this food would survive much over a week.

When asked to comment on Earls assessment of the excessive levels of zinc in the recalled NUTRO cat food, Dr. Hansen said: Thats definitely a high level of zinc. Is it deadly? Thats an interesting question. It sure seems possible. But we dont have access to information on the long term effects of high levels of zinc in cats.

Those high levels of zinc in pet food, however, would not be allowed in the European Union, Earl said.

The European Union sets a maximum level of 250 ppm zinc in all animal foods, with a recommended maximum of 150 ppm (mg/kg), he said. Compare that to the AAFCO maximum of 1,000 ppm in dog food and 2,000 ppm in cat food.

By any measure of such things, the EU is light years ahead of the US in food safety.

The sample of recalled food that Earls group tested came from an unopened bag of NUTRO Max cat food with a Best by date of 07 JUN 2010 07:17 2AD6 "A. The group purchased the cat food on May 22, 2009.

Thats one day after NUTRO announced its recall.

Not overly concerned?

It is our understanding the store had not been informed there was a problem with the food, Earl said. NUTRO doesn't appear overly concerned if a few more pets are killed by their poisoned food after a recall is announced, but who knows, maybe Nutro would be more aggressive about getting its deadly products off store shelves if it knew there are concerned pet owners out there who will intentionally buy recalled products strictly for testing purposes.

NUTRO recalled recalled seven flavors of its dry Natural Choice Complete Care and NUTRO Max cat foods, 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 contained too much zinc and not enough potassium, NUTRO said. A second premix did not have enough potassium.

Both zinc and potassium are essential nutrients for cats and are added as nutritional supplements to NUTRO dry cat food, the company said.

When NUTRO pulled the cat food off store shelves, it warned pet owners to monitor their felines for such health problems as a reduction in appetite or refusal of food, weight loss, vomiting, or diarrhea. NUTRO also said -- and continues to say -- that it has not received any complaints about the recalled cat food.

But ConsumerAffairs.com has heard from scores of cat owners nationwide who say their healthy felines started vomiting, refused to eat, and experienced other health problems after eating the recalled food. Some blame their cats' recent deaths on the food.

And many say theyve contacted NUTRO about their cats illnesses.

Theyre pet owners like Stacey M. of Seattle, Washington. Her two felines became sick in April after eating some of NUTROs recalled cat food.

The two-year-old started vomiting and refusing the food and our six-year-old started having motor difficulties, spacey behavior, and vomiting, she says.

Stacey took the older cat to her veterinarian, who could not pinpoint any problems.

Shortly after the vet visit I found out about the food recall, she says. Both our bags were that of the contaminated food.

Stacey immediately contacted NUTRO.

And I did not get a response from them for a couple of weeks, she says. They said they would contact me within 72 hours. I want it on record that I feel I received poor customer service, and I dont feel the company has been truthful about the side affects and complaints from pet owners that had given their pets this food.

She adds: The company claims that no sickness had resulted from the tainted food, when indeed I know several people have had sick cats.

Copy to NUTRO

ConsumerAffairs.com sent NUTRO a copy of the lab results on its recalled cat food. The company did not respond.

ConsumerAffairs.com also contacted NUTRO about the problems pets owners say their cats have experienced after eating the recalled food. The company hasnt responded to those inquiries, either.

NUTRO, however, has publicly said that cat owners with questions about the recall should contact the pet food maker at 1-800-833-5330.

FDA

In the meantime, Dr. Hansen said the lab results on NUTROs recalled cat food should be brought to the attention of the Food and Drug Administration (FDA). ConsumerAffairs.com sent a copy of the test results to the FDAs Center For Veterinary Medicine today (Thursday).

The PFPSA has also posted the lab results on its Web site.

NUTROs recalled food isnt likely to be the last sample of pet food the PFPSA tests. Earl vows his group will continue its watchdog efforts on all brands of pet foods.

No one should have to watch their cherished companion animals die a slow and terrible death because the food they trusted to preserve their pet's life ended it.

Read more ...

• Verbatim complaints and comments from consumers.
• Recall notice

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."

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.

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 Hotels.com.

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.

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.

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."

By Lisa Wade McCormick
ConsumerAffairs.com

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.

ConsumerAffairs.com 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."