News in August 2009

Thousands of individuals and self-employed business owners have purchased health insurance policies with MEGA Life and Health Insurance, many through membership in the National Association for the Self-Employed.

The State of Massachusetts claims the company used deceptive and unfair practices to market those policies - at least in the Bay State. As a result of the state's legal action, MEGA has agreed to settle the charges, paying more than $17 million in consumer relief, penalties and costs. The defendants will be banned for at least five years from selling their health plans in Massachusetts and are required to exit the Massachusetts health plan business completely.

"With health reform in Massachusetts and the requirement that individuals in Massachusetts have health insurance, it has been even more important to stop predatory practices in the health insurance market," said Massachusetts Attorney General Martha Coakley. "These companies used unfair and deceptive marketing and other practices to convince Massachusetts residents to buy health plans with limited benefits."

Coakley says MEGA targeted the self-employed and small business owners in Massachusetts through sales of products packaged with association memberships in the National Association for the Self Employed, Americans for Financial Security and the Alliance for Affordable Services.

The consumer relief portion of the funds will be used to provide relief to current or former Massachusetts policyholders whose claims for certain benefits mandated by Massachusetts law, such as maternity health care, were denied based on purported lack of coverage, and other policyholders whose claims were denied based on illegal pre-existing condition exclusions or waiting periods.

Consumer relief is also expected to be paid to other categories of Massachusetts consumers who have suffered harm from defendants' conduct at issue in the litigation.

MEGA ran afoul of Massachusetts authorities because the state requires insurance companies to cover certain medical issues and procedures. MEGA policyholders in other states that don't have that law should closely examine their policies to determine what is covered.

On a recent day, Michelle McCloskey began to pack her belongings from her four-bedroom Phoenix home, scheduled to be sold at auction Sept. 3. McCloskey, a litigation specialist and single mother of two teens, lost her home to foreclosure.

She tried to modify her $411,000 mortgage to lower the monthly payment after she lost income. But Litton Loan Servicing denied the application because she was not delinquent on her payments.

McCloskey, 47, stopped paying her mortgage in February in the hopes that Litton would modify her loan to a payment she could afford.

They kept denying the application and didnt say why, McCloskey said, adding the value of the property is now about $150,000 lower than when she bought it. I could never get anybody on the phone to answer my questions.

Michelle McCloskey in front of her foreclosed home.

In Santa Barbara, Calif., Michele Cheverez is in the process of moving out of the only home shes known for 20 years. Her condo was put up for auction on Aug. 10 after Litton denied a mortgage modification and began a foreclosure action.

Cheverez, a state employee, said she couldnt afford to make her payments after her pay was cut earlier this year. Cheverez, who bought the property for $200,000 in 1988, said she sent her application and documentation to Litton three times after the staff claimed they didnt receive the paperwork.

My house is gone and Im still waiting to find out why, said Cheverez, who learned about the auction on July 21 after a notice of trustees sale was taped on her front door. All I wanted was my payment to come back to $2,208 from $2,934 with an adjustable rate.

Common thread

McCloskey and Cheverez, 61, share something in common: both tried to modify their mortgages with Litton. Now they are homeless with their credit ruined.

Litton, based in Houston, Texas and owned by Goldman Sachs, handles the operations aspects of consumer loans including sending out statements, receiving and tracking payments, notifying consumers of overdue payments and initiating foreclosure proceedings.

ConsumersAffairs.com has received dozens of consumer complaints -- including Cheverez and McCloskey -- stating that Litton promised loan modifications, but the process dragged out and they were told months later that they did not qualify. In many cases, consumers sent documentation multiple times after staff claimed they never received it, putting consumers in a dangerous situation because they got closer to foreclosure because of the delays.

In April, Litton settled a class-action lawsuit alleging that the company failed to credit borrowers' mortgage payments in a timely fashion, then turned around and charged late fees for the purportedly tardy payments. In some cases, consumers' accounts were put into default. The suit covered all homeowners whose mortgage transaction was transferred or sold to Litton between October 2002 and February 2009, and who were charged erroneous late fees within 60 days of the transfer.

But even after the settlement, consumers continue to complain that Litton fails to post payments in a timely manner and subjects them to a run-around when they try to modify their mortgage.

Litton's response

Donna Marie Jendritza, a Litton spokesperson said in a written statement, that Litton Loan Servicing does not provide specific comments about its customers due to privacy restrictions. But she said the company was looking into the handling of the specific cases we inquired about.

We take complaints from our customers very seriously, Jendritza wrote. Litton has a dedicated department that handles customer inquiries and determines a course of action to resolve a matter if an issue exists.

Jendritza said that if a customer has a question or concern, he or she should contact the Customer Care Department at (800) 2479727 or mail a written inquiry to:

Litton Loan Servicing
4828 Loop Central Drive
Houston, Texas 77081

"Litton modified more than 44,000 loans, representing about 10 percent of its loan portfolio in the 12 months prior to the announcement of the Home Affordable Modification Program (HAMP), according to the statement. Currently, Litton has offered more than 39,400 trial modifications to our customers using terms in accordance with the principles of HAMP and more than 28,900 have accepted and started their trial modifications," Jendritza wrote.

Practice suffered

I never thought I would find myself in this situation, said Gene James, a chiropractor in Phoenix, who lost his six-bedroom house where he raised five children, ages 5 to 15.

James, 52, lost the home where he lived with his family for 14 years.

James applied to modify his $520,000 mortgage after he fell behind his mortgage payments in February because his private practice lost revenue as the economy staggered, he said. An auction on the property took place in July.

They never accepted any e-mails and I didnt have much correspondence with anybody, James said. They dont keep documentation very well.

Nationwide, homeowners are struggling to make their mortgage payments and over a million homes have already been lost to foreclosure, according to the Center for Responsible Lending, a consumer watchdog group based in North Carolina.

Consumer advocates contend the federal government could save billions of dollars worth of mortgages if bankruptcy judges had the option to modify loans on primary residences.

We believe we are not going to get out of this bad situation until those [foreclosures] numbers are reduced and a bankruptcy provision is passed by Congress, said Kathleen Day, a spokeswoman for the Center for Responsible Lending. If the government makes changes on bankruptcy law, they will be able to help millions and quickly.

The Mortgage Bankers Association reported recently that 1 of every 12 borrowers was seriously delinquent, defined as 90 days delinquent or in foreclosure. The report, released on Aug. 20, shows record levels of delinquencies in the second quarter of 2009 compared with last year, when 1 in 22 borrowers was delinquent and two years ago, when 1 in 40 was.

Moreover, no segment of loans (subprime, prime and FHA) has been immune to this deterioration, the MBA report stated. Clearly loan servicers are not helping enough troubled borrowers through voluntary loan modification efforts and, as a result, prospects for an improved housing market remain distant.

Neighborhoods devastated

Foreclosures devastate entire neighborhoods because when a home is foreclosed its value drops, affecting nearby properties.

CRL estimates that there will be 2.4 million foreclosure starts in 2009, costing 69.5 million neighboring families $502 billion in lost property value. Nine million foreclosures are expected within the next four years which will cost 92 million neighboring families about $1.9 trillion in lost property values, according to CRL.

Glenn Russell, a Massachusetts attorney, said homeowners who have fallen behind in their payments have several options besides foreclosure including a short sale, bankruptcy or modifying their loans under the Home Affordable Modification Program (HAMP), which is free.

But even if you get to lower that mortgage payment you need to ask yourself if you can afford that monthly payment, Russell said. Maybe it's not worth it.

After the housing market collapsed, thousands of loan modification and foreclosure rescue companies surfaced nationwide, all promising homeowners to reduce mortgage payments -- many of them run by the same people who had brokered the disastrous "creative" mortgages.

Since April, the Federal Trade Commission and state agencies have sued dozens of mortgage foreclosure rescue and loan modification companies.

In Florida, thousands of homeowners have filed complaints with state agencies and Florida Attorney General Bill McCollum has sued 14 loan modification and foreclosure rescue companies on allegations that the companies failed to perform the services or for charging upfront fees, which is against state law.

Recently, California Attorney General Edmund G. Brown Jr. threatened civil and criminal action against 386 foreclosure rescue companies operating in the state.

And Texas Attorney General Greg Abbott has taken legal action against several foreclosure rescue companies.

Lauri Saathoss, a spokeswoman with the Texas attorney generals office, said the office has received several complaints against Litton, but she refused to acknowledge any investigation.

Were mediating the complaints and monitoring Littons actions to resolve them, Saathoss said.

The dream has died

For now, the American dream is gone for these families and their credit is destroyed, which has made it difficult for them to find places to rent.

But looking back, homeowners said, they did everything they could to save their homes. And they hope the sleepless nights and stress will become part of the past as they start over again.

Im going to move out this weekend, said McCloskey Aug. 25. You never know if they [Litton] will kick me out after the auction. I want to get on with my life.

McCloskey said she has a short-sale offer on the table to buy the property for $264,000, but Litton has yet to respond to the offer.

James said: Im moving in the next couple of weeks. We have to move forward.

Cheverez found a place to rent, but shes still angry and hurt.

Ive worked all my life, Cheverez said. But this experience has opened my eyes on how little the average American really counts, including regular people and those like me who work for a paycheck.

More about foreclosure ...

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Mc Nelly Torres is a former investigative reporter for the South Florida Sun-Sentinel. She is a member of the board of directors of the Investigative Reporters & Editors organization.

If you missed "Cash for Clunkers," you might want to give "Dollars for Dishwashers" a whirl.

Although it's not getting nearly the attention the auto rebate program did, the Department of Energy's program is making nearly $300 million in funding available from the economic for state-run rebate programs for consumer purchases of new ENERGY STAR qualified home appliances.

The allocation of money is based on a state's population. That gives California the lion's share - more than $35 million. The territories of American Samoa and Northern Marianas have been allocated the minimum amount of $100,000 each.

"Appliances consume a huge amount of our electricity, so there's enormous potential to both save energy and save families money every month," said Energy Secretary Steven Chu when the program was launched back in July. "These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy and create jobs."

Under the program, each state or territory will submit a plan that specifies which ENERGY STAR appliance categories will be included in their rebate program, the rebate level for each product type, how the rebates will be processed, and their plan for recycling old appliances.

Eligible appliances

States have the flexibility to select which residential ENERGY STAR qualified appliances to include in their programs and the individual rebate amount for each appliance. DOE recommends that states and territories focus their program efforts on heating and cooling equipment, appliances, and water heaters as these products offer the greatest energy savings potential.

ENERGY STAR qualified appliance categories eligible for rebates include: central air conditioners, heat pumps (air source and geothermal), boilers, furnaces (oil and gas), room air conditioners, clothes washers, dishwashers, freezers, refrigerators, and water heaters.

Appliance industry hopeful

The Association of Home Appliance Manufacturers (AHAM), which calls replacing older appliances with ENERGY STAR appliances "the most practical and effective step a homeowner can take to save energy and money on utility bills," says rebate programs will be announced by the states starting in mid-October or early November.

AHAM spokeswoman Jill Notini tells ConsumerAffairs.com that her organization is "hopeful that this will spur consumer sales and get people into the retail environment to purchase appliances." Notini says that while this program, at $300 million is just a fraction of the $3 billion spent on Cash For Clunkers, AHAM hopes "it will entice people to stores to look for appliances."

The manufacturers say sales have been off for the past three years because of the economy. Last year saw a slump of ten percent and Notini says sales through the first seven months of 2009 are down 15 percent.

Christine Kielich, a spokeswoman for the Department of Energy, told ConsumerAffairs.com that while it's expected the rebate program to have a stimulative effect on the economy, "increases in sales will depend on how states structure their individual rebate programs, which appliances are included, and how much the rebates are worth."

The amount of energy saved, she added, "will depend on the specific appliance and model being replaced, but new ENERGY STAR appliances save significantly more energy than those manufactured years ago. For example, replacing a clothes washer made before 2000 with a new ENERGY STAR model can save up to $135 per year."

More about appliances ...

This is one case where "use it or lose it" definitely doesn't apply. For a higher credit score, almost all financial gurus suggest keeping your credit balances low in relation to your lines of credit.

Your credit utilization ratio is determined by the amount of credit you've used, compared to the amount you have at your disposal. For example, if you have three credit cards with a combined total of $50,000 in available credit, and your combined balances on the card is $25,000, your credit utilization ratio is 50 percent.

As recently as last year some financial advisors believed a credit utilization ratio of 50 percent was acceptable, but that was before last fall's credit crunch. Now, the recommended ratio is much less. Some advisors say no more than 25 percent - some say no more than 10 percent.

Unfortunately for millions of consumers, that's changing the rules in the middle of the game. Many already have a credit utilization ratio of 50 percent or higher. To make matters worse, credit card companies have begun reducing many customers' credit lines to their existing balances. That can push their credit utilization ratio to 90 percent or higher.

"I was a Washington Mutual customer with a low interest rate," Deel, or Berkley, California, told ConsumerAffairs.com. Now my credit card has been closed by Chase. I have never been late nor missed a payment."

Deel was one of thousands of former Washington Mutual cardholders who had their accounts closed by Chase, which took over the bank earlier this year. That reduction of credit made their credit utilization ratio spike upward.

"I had a Washington Mutual credit card, with a limit of $15000. I never missed a payment, was never late, always paid more than the minimum due, and paid it off last October, said Monica, of Santa Cruz, California.

With a zero balance on a $15,000 line of credit, Monica's credit utilization ratio should be very low.

"So in August, Chase decided to decrease the credit line from $15000 to $3800, she told ConsumerAffairs.com.

Unfortunately, when your credit utilization ratio goes up, your credit score goes down. The ratio is the second most important factor in determining your credit score, after timely bill payment.

In may be hard to do in this new credit environment, but consumers who find themselves with a rising credit utilization ratio should try to get another credit card and keep the balance low.

Another, more obvious step is to pay down your balances as quickly as possible. Liquidating other assets to pay off debt could provide significant benefits, if the result is an improvement in your credit score.

Why is your credit score so important? Financial services Website LendingTree.com says raising your credit score by 30 points will save the average consumer $105 a year.

Starting Sept. 1, many of the pre-recorded calls that seem to come in just as you're sitting down to dinner will become illegal.

Recent amendments to the Telemarketing Sales Rule (TSR), the main federal statute governing telemarketing practices, include prohibitions against a large number of so-called "robocalls." The changes, announced over a year ago, are set to go into effect at the beginning of next month.

There are a few catches, however. First, purely "informational" calls are exempt under the new rules. Thus, those calls from Orbitz announcing that your flight is departing two minutes later than expected will not be subject to a penalty.

Perhaps more annoyingly, public service announcements are exempt from the new rule, as are political calls. Political robocalls are especially common during election season, and aren't likely to stop anytime soon. Banks and telephone carriers are likewise exempt from the rule.

The TSR amendment, approved by the Federal Trade Commission (FTC) in August 2008, subjects violators of fines up to $16,000. The regulation doesn't apply to calls from a live telemarketer--"Robocall" refers pre-recorded message that is played back when you pick up the phone.

Consumers can waive the prohibition by giving companies written permission to contact them.

The FTC, which oversees and enforces the TSR, has already asked consumers to be on the lookout for calls that violate the new policy. Consumers can also report violations by calling 1-877-FTC-HELP.

As FTC Chairman Jon Leibowitz put it in a news release, "American consumers have made it crystal clear that few things annoy them more than the billions of commercial telemarketing robocalls they receive every year."

Leibowitz urged consumers being "harassed by robocallers" to "let us know, and we will go after them." Lois Greisman, associate director of marketing practices, echoed Leibowit'z sentiment, pledging that the FTC "will enforce them [the new rules] vigorously."

Consumers who want additional protection from telemarketers should add their name to the federal Do Not Call Registry.

How clear-cut the rules are remains to be seen. Telemarketing rules are notorious for inviting court challenges, given the extent to which certain industries rely on them. The Do Not Call Registry, originally scheduled to go into effect in 2003, was delayed by a series of court challenges challenging the law's constitutionality. An appeals court decision the following year allowed the law to take effect.

There wasn't much movement in the average price of gasoline over the last seven days. The AAA Fuel Gauge report shows the national average price of self-serve regular gas is $2.613 a gallon Friday, down just over a penny from a week ago.

The national average price of diesel fuel is $2.697 a gallon, up just over a penny.

"Determining a long-term direction in the price of oil and refined products proves difficult when considering mixed economic data and sudden swings in the price of crude oil," said Andrew Delmege, AAA manager of regulatory affairs. "Even though the Department of Energy reported crude inventories were down more than eight million barrels last week, domestic and global oil supplies remain robust. For much of 2009, crude oil's march above $60 a barrel, and now potentially to $75, has not been shaped by traditional supply and demand dynamics. Increased money flow into commodities markets, or speculative investment, has served as the primary driver of oil prices."

Gasoline prices are highest in Hawaii, at $3.297 a gallon, and cheapest in South Carolina, at $2.38 a gallon.

California gas prices have remained stable during the week, averaging $3.046 a gallon. The priciest market is San Francisco, where the average cost is $3.133 a gallon. The cheapest market is Yuba City, with an average price of $2.948 a gallon.

The average price of gas in New York is $2.836 a gallon, with the most expensive market in the state the New York City Metro, with an average price of $2.908. New York's most affordable market for motorists this week is Utica-Rome, at $2.769 a gallon.

The U.S. continues to have plenty of crude oil and refined gasoline on hand. The Energy Information Administration reported Wednesday that supplies of crude rose by 200,000 barrels last week. At the same time, supplies of refined gasoline fell by 1.7 million barrels. However, supplies of both commodities remain near all time highs.

For years, buying a car--especially a used one--has entailed a number of precautions. One of those was making sure that the vehicle's odometer display was correct, given the tendency of car dealers and individual sellers to "roll back" mileage in an effort to make the car look less broken-in.

In recent years, new technology has added an extra measure of protection for car buyers. Carfax, the popular website that checks cars' total loss and lemon status, among other things, also offers a free odometer check to alert customers to vehicles with inaccurate mileage readings.

Now, a class action lawsuit against Subaru makes allegations on the other end of the spectrum: that the carmaker sold and leased cars whose odometers subsequently overstated mileage. Why would an auto manufacturer want to sell cars that aged prematurely?

According to the lawsuit, filed in federal court in New York's southern district, Subaru had plenty of incentive to inflate the cars' mileage as quickly as possible. Specifically, the suit says that the excessive mileage readings allowed Subaru to duck claims from owners whose cars were purportedly outside their warranty, and to charge lessees with "excessive mileage" fees when they turned their cars back in.

The action, led by class representatives Peter Vasilas, Scott Diamond, and Robert Kasindorf, outlines a complex process by which Subaru's odometers allegedly overstate mileage on a regular basis. According to the suit, the odometer's readout is dictated by an "external device that recognizes the electronic impulses generated by the vehicle's transmission, and converts the impulses to a mileage figure." The plaintiffs further allege that Subaru purposefully used this device to inflate odometer readings, in spite of the fact that the odometers were capable of reflecting the vehicles' actual mileage.

When suspicious Subaru owners tried to notify the company of their concerns, Subaru responded that the odometers were working as intended. Subaru pegged the odometers' "tolerance range"--a concept similar to margin of error--at plus or minus 4 percent. Thus, Subaru maintained that the mileage readings were substantially correct, but that periodic fluctuations were normal and to be expected.

The plaintiffs brought the suit under the Federal Odometer Act, passed in 1972, which prohibits the use or installation of any device whose readout is beyond the odometer's tolerance range. The statute also bars a seller from altering an odometer "intending to change the mileage registered by the odometer."

Earlier this month, Judge George Daniels denied Subaru's motion to dismiss the suit, allowing the class action to proceed. In arguing that the suit failed to state an actionable claim, Subaru insisted that the Federal Odometer Act doesn't apply to original factory-installed odometers that are performing as intended. Daniels disagreed, ruling that whether Congress originally intended the Act to apply to manufacturers is irrelevant. The key issue, Daniels said, is whether the odometer is "deliberately manufactured" to produce an inaccurate readout.

The plaintiffs claim that Subaru has collected or saved millions of dollars because of improperly denied warranty claims or excessive mileage fees from leased vehicles. They are seeking monetary damages as well as the refund of improperly collected fees, and have also demanded that Subaru replace all defective odometers.

Vacation Clubs, LLC, which does business as La Bonne Vie Travel, is now a defendant in New Jersey's lawsuit against travel companies it claims took consumers money but provided no services.

In May, the state sued Daryl T. Turner and his businesses, Dreamworks Vacation Club, Five Points Travel Company and Bentley Travel. These businesses had previously operated out of locations in Parsippany, Sewell and Westampton. Defendants are now operating La Bonne Vie Travel at 600 Park Avenue, Suite 200, in Manalapan, New Jersey.

"We're continuing our investigation of Turner and his companies. This investigative effort has led us to La Bonne Vie Travel, which we've added as a defendant," said David Szuchman, New Jersey's Consumer Affairs Director.

To date, the division has received complaints from approximately 300 consumers against the defendants either directly or from the Burlington County Consumer Affairs Office. The defendants this month filed a response to the state's complaint, in which they deny all the alleged violations.

The state's complaint alleges that the defendants 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. The state also alleges that the defendants depicted specific resorts, regions and packages in mailings and sales presentations that, in actuality, were not available to consumers.

The state also alleges that 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.

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

The Federal Communications Commission (FCC) voted 5-0 today to launch an investigation of the wireless industry, focusing on efforts to improve innovation and increase consumer protections in the American mobile market.

The statement, a prelude to a formal "Notice of Inquiry" issued by the agency, expands on an earlier investigation of "truth in billing" disclosures, designed to ensure consumers are being billed fairly for their wireless services. The additional investigation "asks questions about the information available to consumers at each stage of the purchasing process."

"The Commission seeks comment from communications service providers, academic researchers, consumer groups and third-party analysts on how best to ensure consumers have the information they need to make informed decisions in the communications marketplace," the agency said.

Although the vote to launch the investigation was unanimous, the sentiments behind it were not. Democrats, who hold a 3-2 majority on the commission, emphasized the need for stronger consumer protections, while Republicans warned against excessive regulation that could hamper innovation.

FCC chairman Julius Genachowski said the investigation would "seek to ensure that consumers have the information they need to make the market work," while new commission member Mignon Clyburn--both Democrats--urged industry leaders to share customer data in order to avoid "developing solutions that are suboptimal for both consumers and industry."

"We have a responsibility to weigh the benefits of any proposed regulation against the costs, as well as to carefully consider potential unintended consequences of our actions," said Republican commissioner Meredith Atwell-Baker.

The announcement comes on the heels of the FCC's inquiry into why Apple and AT&T; have allegedly blocked access to the Google Voice calling application on the iPhone. AT&T's exclusive contract with Apple to carry the iPhone made it a target of complaints from critics that it was hindering competition by blocking the app. Neither Apple nor AT&T claimed responsibility for the issue.

Genachowski also reiterated yesterday that the agency would support net neutrality, the concept that all information on the Internet should be equally accessible to all users. Supporters of net neutrality say the wireless industry hampers equal access, as carriers can block user access to applications on a whim, and the use of mobile devices for Internet access demands fair treatment.

ConsumerAffairs.com regularly receives complaints on everything from cell phone service quality to billing problems for all four of the major carriers.

Darren, from Santa Monica, CA, wrote on August 26 that "I have been a Sprint wireless ustomer for years, yet for some unknown reason they have not provided me with a bill for over 10 months now. I have been paying this bill blind for that amount of time but no more. I feel I have been overcharged during most of this time but cannot place a dispute because I have NO WAY of documenting it!"

The formal Notice of Inquiry will be published on the FCC Web site soon, the agency said. Interested parties have 30 days to comment from the date of publication.

The whole purpose of the national Do Not Call list is to prevent unwanted telemarketing calls. If you're still receiving these calls, you may be wondering why.

For starters, make sure you are actually signed up on the official list. You can visit www.donotcall.gov and verify that your number is actually registered. Registration for the service is free, and consumers should notice fewer unwanted calls within the first month of signing up.

Unfortunately, being on the Do Not Call list isn't going to stop all telemarketing call, although it will block most of them. However, charity organizations can still call you. So can political organizations.

Also, if you have had previous contact with a company, the Do Not Call list will not stop them from calling you.

For example, if you sign up to win a free car at the mall, in many cases youre also giving the business permission to contact you. Sometimes, even answering questions in a survey gives a business to follow up with a sales pitch.

Ohio Attorney General Richard Cordray says consumers can ask a business to place them on their internal do not call list to prevent unwanted calls. If an individual continues to receive the calls, that person can file a complaint with the Attorney General's Office and the Federal Trade Commission, the agency in charge of the Do Not Call registry.

You may place your personal cell phone number on the National Do Not Call Registry too, even though cell phones don't usually get that many telemarketing calls. However, that could change as more consumers only use cell phones in place of land lines. The registry has accepted cell phone numbers since it opened for registrations in June 2003. There is no deadline to register a home or cell phone number on the registry, according to the FTC.

You may have received an email telling you that your cell phone is about to be assaulted by telemarketing calls as a result of a new cell phone number database; however, that's just an Internet rumor. Federal Communications Commission regulations prohibit telemarketers from using automated dialers to call cell phone numbers.

The Do Not Call list is an important tool to prevent fraud, because it limits the number of telephone pitches directed at consumers. Older consumers are especially vulnerable to high-pressure telemarketers.

The "Great Trade-In" event is designed to call attention to the fact that, due to safety concerns, certain used baby products, such as car seats and cribs, are not the best candidates to be handed down or resold.

Safety experts have recently reported that sales of used products are on the rise and are warning consumers to be cautious about purchasing second-hand children's items. The trade-in event puts an emphasis on specific old or second-hand baby products that may be potentially unsafe, but are still in circulation.

The consumer advocacy organization Kids In Danger (KID), says that, in general, less than 30% of affected items are returned when a baby product is recalled. Beyond recalls, certain older and used baby products can raise other concerns. This could include products that have been damaged or others where advances in product safety have rendered older models non-compliant with the latest standards.

"In today's economy, we are all looking for ways to stretch our dollars, but in doing so, children's safety should not be compromised," said Jerry Storch, Chairman and CEO, Toys 'R' Us, Inc. "We hope this program will help raise awareness of the importance of being vigilant about potentially unsafe children's items that may still be in the marketplace, while encouraging customers to use the 'Great Trade-In' event as an opportunity to remove used baby products, such as cribs and car seats, from their garages and attics."

During the "Great Trade-In" event, which begins Friday, August 28 and continues through Sunday, September 20, all Babies"R"Us and Toys 'R' Us locations nationwide will accept returns of any used cribs, car seats, bassinets, strollers, travel systems, play yards and high chairs in exchange for a 20 percent savings on the purchase of any new baby item, in any of these product categories, from select manufacturers.

The New York State Consumer Protection Board is commending Toys "R" Us, Inc., and its participating suppliers, for launching its "Great Trade-In Program" to help remove unsafe items from homes, community centers, the marketplace and other locations.

"The incentive program sets a good example of how retailers can make a difference in our efforts to help keep children safe by raising awareness and offering consumers the occasion to drop off their no-longer-safe-for-use items at their Toys "R" Us and Babies "R" Us stores nationwide," said Mindy A. Bockstein, executive director of CPB.

Safety agencies, such as the Consumer Product Safety Commission (CPSC), have noted that it continues to be challenging to get dangerous products out of the home following a product recall. The CPSC advises parents to check its website to make sure a product has not been recalled before using or purchasing it second-hand. In addition, parents should be aware that used baby products can raise other safety concerns. For example:

• Federal and voluntary standards and regulations for safety testing, particularly for cribs, have changed significantly over the past few years, and older products may not have been produced to meet these stringent requirements;

• Car seats can sustain damage in an accident that may not be visible to the naked eye, but could prevent the seat from functioning properly;

• Car seats have expiration dates, as the materials can deteriorate over time, potentially making the car seat less effective in a crash. Parents can check with the car seat manufacturer to determine the recommended period of use for a particular car seat;

• Certain baby products, particularly car seats, are regularly introduced with new innovations in technology that can improve the products' safety efficacy;

• Products made of or that contain certain materials, like wood and plastic, for example, can deteriorate when exposed to extreme weather conditions, like heat, potentially compromising safety integrity; and

• Parts or instruction books for proper assembly, installation or use may be missing.

It can be difficult for consumers to determine whether used baby products are safe, and with so many ways to purchase used products, it's important for parents to be informed and vigilant when making purchasing decisions. And, because consumers often do not know the history of a second-hand baby product, leading safety organizations such as Safe Kids USA recommend not purchasing used car seats, for example. Additionally, the CPSC advocates not purchasing used items that have a history of safety problems, including cribs, play yards and bassinets.

Manufacturers participating in the "Great Trade-In" event include Baby Cache, Babi Italia, Baby Trend, Bertini, Britax, Chicco, Contours by Kolcraft, Cosco, Delta, Eddie Bauer, Evenflo, Graco, Jeep, Nature's Purest by Summer Infant, Safety 1st and Sorelle.

Newly-minted Federal Communications Commission chairman Julius Genachowski promised that his agency would enforce rules relating to "net neutrality," the principle that all content on the Internet should be accessed equally, and that networks cannot block some content in favor of other offerings.

"One thing I would say so that there is no confusion out there is that this FCC will support net neutrality and will enforce any violation of net neutrality principles," Genachowski told TheHill.com.

Genachowski's statement came in reference to its decision to enforce penalties on Comcast over the cable provider's blocking of user access to the BitTorrent file-sharing engine. The FCC voted 3-2 in August of 2008 that Comcast's actions were a violation of the "Internet Policy Statement" the agency adopted in 2005 under former chairman Michael Powell.

Powell's successor, Kevin Martin, generally preferred a hands-off approach to net neutrality, but said that the agency had jurisdiction to police Comcast and other Internet service providers under the terms of the statement. Comcast is currently appealing the ruling.

Genachowski, a former technology executive and longtime friend of President Barack Obama, has largely been silent on the issue of net neutrality since he was nominated to become FCC chairman. Although he professed support for it, he has been primarily focused on overseeing the disbursement of economic stimulus funds for broadband development.

The agency has also been slow to act due to delays in confirming Genachowski, as well as new committee members Mignon Clyburn and Meredith Atwell-Baker.

But the FCC hasn't been completely ignoring the issue. The agency sent letters to Apple, AT&T, and Google inquiring as to why Google Voice, which enables low-cost international calling, was blocked from usage on the iPhone.

Critics have claimed that either Apple or AT&T deliberately blocked Google Voice from being sold in the Apple Store in order to prevent competition. AT&T said it was not responsible for the denial, and Apple claims Google's application is still pending.

Supporters of net neutrality say that as more and more people use mobile devices to access the Internet, net neutrality will be increasingly important, as wireless carriers can block services or features on phones for multiple reasons.

A federal district court has ordered the marketers of two dietary supplements -- "Supreme Greens" and "Coral Calcium" -- who claimed the products would cure ailments ranging from cancer and Parkinson's disease to heart disease and autoimmune diseases to pay nearly $70 million for deceiving consumers about the products' effectiveness and safety.

The court also froze the assets of some of the defendants.

In July 2008, the court found that infomercial pitchman Donald W. Barrett and his affiliates deceptively touted the supplement Supreme Greens to treat, cure, or prevent cancer, heart disease, diabetes, and arthritis. Barrett also deceptively claimed that the product could cause dramatic weight loss and could safely be taken by children, pregnant women, and people on medication.

In addition, Barrett marketed a second dietary supplement, Coral Calcium, which the court found he and the other defendants deceptively claimed could treat cancer, Parkinson's disease, heart disease, and autoimmune diseases; could be absorbed in greater quantity and more quickly than other calcium products; and could be completely absorbed by the body. Barrett also wrongfully claimed that scientific research had proven calcium supplements could prevent, reverse, or cure cancer in humans.

ConsumerAffairs.com has received a number of complaints about Coral Calcium.

• Maggie from Vineland, N.J., wrote that six weeks after taking the product, "I started noticing body aches, not joint but muscle aches. The pain grew more severe on an accelerated basis I felt like an invalid for months with terrible muscle aches that greatly restricted my day to day life, both personally and work related."

• Al of El Dorado Hills, California, tells ConsumerAffairs.com, "I bought the coral calcium from the bogus claims they said, and it never did anything for me."

The Federal Trade Commission charged Barrett, his associate Robert Maihos, and two companies they control -- Direct Marketing Concepts, Inc. and ITV Direct, Inc. -- with making these unlawful claims regarding Supreme Greens and Coral Calcium, and with making unauthorized credit and debit charges. The FTC also charged three other defendants -- Allen Stern and two companies he controls -- with deceptively marketing Coral Calcium.

The court froze the assets of Barrett, Maihos, Direct Marketing Concepts, and ITV Direct and ordered them to pay $48.2 million for consumer refunds. It also barred them from making deceptive claims about Supreme Greens and Coral Calcium; misrepresenting that scientific research validated their claims; making any health, performance, or efficacy claims about any food, drug, dietary supplement, cosmetic, or device unless such claims are true, non-misleading and substantiated by competent and reliable scientific evidence; failing to disclose that promotional programming is, in fact, a paid advertisement; and billing consumers or charging their credit or debit cards on an ongoing basis without their consent.

The U.S. District Court for the District of Massachusetts ordered Stern, King Media, Inc., and Triad ML Marketing, Inc. to pay $20.4 million for consumer refunds.

It also barred them from making deceptive claims about Coral Calcium; misrepresenting that scientific research validated their claims; and making any health, performance, or efficacy claims about any food, drug, dietary supplement, cosmetic, or device unless they are true, non-misleading, and substantiated by competent and reliable scientific evidence.

Four deceptive telemarketing operations have agreed to abandon the illegal tactics they allegedly used to scam consumers -- such as charging for products that were never ordered, making bogus claims about their products, and harassing consumers with unwanted phone calls -- under settlements with the Federal Trade Commission.

Defendants responsible for the four telemarketing operations, which were sued by the FTC last year as part of the largest telemarketing fraud sweep ever coordinated by the agency, have signed court orders barring them from these and other illegal practices.

The law enforcement sweep, "Operation Tele-PHONEY," included 13 FTC complaints against unscrupulous telemarketers who allegedly defrauded more than 500,000 consumers, resulting in losses of more than $100 million. With these settlements, all defendants in nine of the 13 "Tele-PHONEY" cases have settled the FTC's charges, and courts have permanently prohibited the telemarketers' illegal activity.

In one other "Tele-PHONEY" complaint, the FTC said it has added 15 new defendants, and a court has preliminarily barred the illegal conduct of 10 of them.

Combined with the actions brought by other agencies, the "Tele-PHONEY" sweep encompassed more than 180 cases, including both civil and criminal actions in the U.S. and Canada. In many of the FTC actions, federal courts temporarily froze the defendants' assets and suspended their operations pending trial soon after the complaints were filed.

In the complaints resulting in these settlements, the FTC charged that:

• Montreal-based Med Provisions operated a bogus online pharmacy that sold sham "membership packages" to elderly consumers for $389. The company claimed its online pharmacy could save customers 30 percent to 50 percent on prescription drug costs, and offered a 30-day money-back "guarantee." But according to the FTC, consumers who ordered the package got either nothing, or a prescription drug card that turned out to be worthless. Consumers did not get refunds.

• Steven Breitling/ICS Financial Firm used phony loan offers to bilk consumers out of $75 each. Consumers received a direct mailing from ICS Financial "guaranteeing" them a loan of between $2,000 and $5,000. Those who responded were contacted by telemarketers, who told them that to get their loan they first had to pay a $75 consulting fee and sign a contract. Consumers who paid the fee never received any loans, and many never heard from the company again, according to the complaint.

• City West Advantage, Inc. d/b/a Unified Services allegedly duped consumers into disclosing their bank account information, and then charged them about $149 without their permission. City West called consumers and told them they had won a $1,000 shopping spree or other "free gift," and that the bank account information they provided would be used to charge them $1.95 for shipping and handling. Consumers who hesitated were called back repeatedly and harassed by telemarketers, even after consumers asked them to stop calling. Consumers who provided their financial information were charged approximately $149 without their consent.

• Direct Connection Consulting, Inc., et al. allegedly billed consumers for products they never agreed to buy after bombarding them with a confusing sales pitch over the phone. The company contacted consumers with promises of free gift cards, gas cards, or free resort vacations. The telemarketers often read their pitch so fast that consumers didn't understand or realize they were agreeing to pay for products or services. Consumers who understood the pitch were told that they would not be billed, since they did not provide their billing information. However, although consumers did not know it, the telemarketers already had their billing information and charged their credit cards or debited their bank accounts, without providing the "free" goods or the services they promised.

The four settlements against 16 defendants contain judgments totaling more than $27.6 million, although the courts have suspended large portions due to the defendants' inability to pay. Each of the settlements includes provisions that bar the defendants from further deceiving consumers and restrict the way they do business in the future.

In the case of Direct Connection Consulting, Inc., the settlement order also bans JoAnn R. "Jody" Winter, the co-owner and officer of the corporate defendants, from telemarketing of any kind. All the other defendants in this case settled the FTC's charges in March 2009.

Weeks after reaching a settlement with three retailers to block sale of the electronic cigarette NJOY, the state of Oregon is taking another e-cigarette maker to court.

Oregon Attorney General John Kroger is suing Smoking Everywhere, alleging that the Florida-based e-cigarette company made false health claims about its nicotine delivery device and targeted children with sweet flavors such as bubblegum, chocolate and cookies 'n' cream.

Electronic cigarettes are not approved by the U.S. Food and Drug Administration (FDA) and some contain known carcinogens. Even so, they are advertised on radio and television, where tobacco cigarettes have been banned from the airwaves for three decades.

Thus far, Oregon remains the only state that has taken legal action against e-cigarette importers and retailers. In addition to the recent settlement with retailers, the state reached agreement with Sottera, Inc.,distributor of NJOY, prohibiting it from doing business in Oregon until local and national standards are met.

Kroger said he offered to settle with Smoking Everywhere, but the company rebuffed his offer. The result was the attorney general's lawsuit.

As a general rule, nicotine products other than traditional tobacco products used to get a nicotine "buzz" or to quit smoking are considered by the FDA to be drugs and must be submitted for pre-approval. Prior to approval, the FDA requires manufacturers to submit reliable scientific evidence that proves the product is safe and effective for its intended use.

Kroger said Smoking Everywhere did not seek FDA pre-approval under the theory that a regulatory loophole allowed the sale of the devices as long as they were not marketed for smoking cessation. E-cigarettes are not approved by the FDA for any purpose. The FDA has rejected the defendants' arguments and has seized e-cigarette shipments from China.

Smoking Everywhere responded by suing the FDA. Sottera, Inc., whose electronic cigarettes were also seized by the FDA, later joined the suit.

The FDA has never declared e-cigarettes safe for public consumption, but they remain easily available throughout the country - except in Oregon, where the Department of Justice in July reached agreements with retailers to temporarily stop selling them while DOJ continued its investigation.

Electronic cigarettes are designed to mimic the look and experience of smoking a conventional cigarette. Smoking Everywhere e-cigarettes contain a battery-operated heating element and a replaceable plastic cartridge that contains various chemicals, including liquid nicotine. The heating element vaporizes the liquid, which is inhaled by the user.

Oregon's lawsuit alleges that Smoking Everywhere has marketed e-cigarettes as safe in general and safer than conventional cigarettes, yet the company possesses no scientific evidence to support such claims.

Smoking Everywhere claims that e-cigarettes contain "no harmful carcinogenic ingredients" and are "free of tar & other chemical substances" that are "produced in traditional cigarettes." In fact, lab testing by the FDA found tobacco-specific nitrosamines, which are known carcinogens in humans. FDA testing also found diethylene glycol, an ingredient used in antifreeze that is known to be highly toxic in humans.

Some electronic cigarette cartridges have been sold as containing no nicotine, but FDA testing found detectable levels of nicotine.

Oregon's lawsuit also alleges that Smoking Everywhere's promotional efforts target adolescents and youths who may not already be addicted to nicotine. Although Smoking Everywhere claims e-cigarettes are "intended for use by adult smokers," the lawsuit alleges that advertisements are designed to attract young people.

For example, advertisements use young female models who look like teenagers. The use of sweet flavored cartridges such as bubblegum and cookies 'n' cream also appeals to young people. Further, as part of its advertising campaign, Smoking Everywhere staged a promotional event on the Howard Stern radio show that told listeners: "For kids out there, you still look cool 'cause, like, it still looks like a cigarette..."

"We're fighting to make sure kids are protected from unapproved gimmicks like e-cigarettes that get them hooked on nicotine," Kroger said.

August 25, 2009 

Consumers around the country are complaining that they have received bogus notifications claiming that they are entitled to a damages award as part of a class action lawsuit. The letters, mailed from Hagerstown, Md., ask the recipients to send a check to "start an account" so that they can claim their share of the award.

The scheme is a fraud, says Harvey Rosenfield, a California attorney who founded the non-profit Consumer Watchdog organization. Rosenfield learned of the scam when he began receiving calls from hapless consumers who found his name on a list of pending class-action cases. The list, which Rosenfield said is virtually worthless, is all consumers receive for their money.

"You may be entitled to a portion of distribution claims paying in aggregate more than $5,854,000,000.00 ($5 Billion Dollars) from identified defendants in multiple class action lawsuits," says one letter Rosenfield obtained and shared with ConsumerAffairs.com. "Your payment is strictly contingent upon identification and confirmation of your eligibility."

The letter, supposedly from a "claim facilitation" firm called Lynch, Galbraight & Branley, was signed by a Linda K. Branley. Like similar letters from supposed organizations with names like "Offices of Class Action Watchdog," it bears a return address of PO Box 5032, Hagerstown, MD 21741-5032. The Maryland Bar Association does not list any attorneys named Linda Branley. Nor do any of the commonly-consulted legal directories.

The letter goes on to state that, "Our offices are authorized to transfer directly to you full reporting documents and claim instructions regarding the aggregate $5,854,000,000.00 ($5 Billion Dollars) ... You need only check the box below and Mail the Fee as appointed." The fee in the letter we reviewed was $79, though similar letters from the same address asked for varying amounts.

While a casual reading of the letter would lead one to think that paying the fee would result in the consumer receiving payment, that's not the case. A more telling paragraph states:

"Our offices will reply by postal delivery of your Special Tracking Code and your personalized report file folder including our most current database update of newly added class action lawsuits. This will permit you to review actual cases we are currently tracking."

In other words, the fee will at best produce a list of pending class actions, leaving it up to the recipient to determine whether he or she is eligible for inclusion in the class.

A consumer who sent back the fee received a letter, again from PO Box 5032, confirming her "annual online subscription to the Class Action Watchdog Member website." It advised her to go to www.classactionwatchdog.com and use the username and password provided in the letter.

But in fact, www.classactionwatchdog.com is what is known as a "parked domain" -- a page that displays search results for various topics, in this case class actions. There is no content and no place to enter the username and password.

Public records available at DomainTools.com indicate the domain is registered to New Ventures Services Corp., which owns about 36,000 other domain names. The registration is handled by Network Solutions Inc., which -- for an extra fee -- keeps registrant contact information confidential.

It's the second deadline extension since last week and is blamed on the Transportation Department's computer problems. The department has had trouble keeping up with dealer submissions because the department's computer system couldn't handle the crush of dealer submissions.

Dealers, on the other hand, have complained bitterly of delays in reimbursement and what they view as needlessly complex filing procedures.

This is likely to be another busy day for the overworked computer system, as dealers rush to close and submit last-minute deals.

The program, which enables drivers to trade in their old gas-guzzler for a credit of up to $4,500 towards a more eco-friendly vehicle, has been wildly popular with consumers, and credited with keeping auto manufacturers from shuttering plants and dealerships from closing.

"This program has been a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work," said Transportation Secretary Ray LaHood on Friday. "At the same time, we've been able to take old, polluting cars off the road and help consumers purchase fuel efficient vehicles."

But it's also proven to be a headache for dealers and buyers alike, as the huge demand and complex requirements for making the sales led to the program running out of money before many claims could be properly reimbursed.

Because of a large number of pending transactions, no one is sure just how many vehicles have been sold and, therefore, no one knows exactly how much money has been spent. Congress allocated $3 billion for the program and the auto dealers' trade group suspects that every cent -- and then some -- is already spoken for. Federal officials have expressed confidence there's enough money to cover all the deals that have been made.

The Transportation Department said that as of today dealers have turned in applications for $1.9 billion in rebates for voucher payments made to customers.

"I know dealers are frustrated, but they're going to get paid," LaHood said earlier. Dealers have been complaining that the clunker program paperwork is too complex, that too many applications are rejected and that the processing time is excessive.

The National Automobile Dealers Association (NADA) yesterday formally asked the government to suspend the clunkers program because a survey by the group found that the $3 billion fund has been exhausted. General Motors, thrilled with the boost in sales, said it would provide cash advances to dealers to cover the outstanding rebates.

Ford and Chrysler didn't immediately respond to GM's offer to advance cash to cover dealers' outstanding rebate payments. GM said it will deposit the money in a dealer's open account and then retrieve it after 30 days if a payment had been received from the federal government.

GM said its sales over the past two months have exceeded internal forecasts by more than 60,000 vehicles, largely because of the clunkers program. New vehicle sales overall are expected to exceed 1 million in August, the first time that's happened in at least a year, according to J.D. Power and Associates.

Consumers stew

It's not just car dealers who are frustrated with the program. Would-be car buyers are also complaining of just about every type of snafu imaginable.

Many consumers have found dealers unwilling to hand over their new car until the dealer gets reimbursed by the feds. Consumer groups have warned that many auto dealers will attempt to "double-dip" and extract additional payment terms from buyers as the program winds down.

"I signed a purchase agreement and loan agreement to purchase a new 2009 Chevy Impala under the cash for clunker program," said Mike of Howell, Mich. "The new vehicle is suppose to be handed over at time of deal. Dealer has held new car for 3 weeks now and refuses to hand it over until they get reimbursement from the government of $3,500."

Fred of Longmeadow, Mass., not only didn't get his new vehicle -- his old one nearly went into the crusher.

"We purchased a new 2009 Chevy Silverado at Balise Chevrolet on 8/13/09. We had agreed on a price of $11900 with a $4500 cash for clunkers rebate," he told ConsumerAffairs.com. "They looked up the trade in vehicle and told us it qualified for a $4500 rebate."

Fred said he took out a loan to cover the agreed-upon price. When he went to pick up the new truck, "They took my old truck and wrote clunker on it and towed it away. The man who was delivering the car then informed us our truck did not qualify for the clunker rebate," he said.

"We could not afford to pay anymore for the truck so we had to cancel the deal and wait for an hour and a half to get our truck back. They blamed the cash for clunkers government website for the problem. I than had to go back to my bank and try to cancel the loan for the truck.," he said.

Nancy of Manchester, N.J. said she spoke with the Internet sales department at Pinebelt Chevy and was told there were two trucks of the type she wanted sitting on the dealer's lot. So she had her trade-in towed in, only to be disappointed.

"When I got there the salesman was rude, told me the truck was sold and they only had trucks with 6' beds when we needed a 8'. ... This was a bait and switch situation," said Nancy, who had to have her trade-in towed to another dealer.

Weight Watchers is the world's largest support group, with more than 1.5 million members worldwide. What makes overweight consumers turn to this organization for help? A new study in the Journal of Consumer Research says dieters are attracted to its combination of spirituality and therapy.

Authors Risto Moisio of California State University, Long Beach and Mariam Beruchashvili of California State University, Northridge undertook observations of weekly Weight Watchers meetings and conducted interviews with female members and group leaders. They conclude that Weight Watchers provides a powerful service to its clientele.

"Even if Weight Watchers' advertisements make it sound as if it were only about weight loss, the social function of weekly meetings extends far beyond the tricks of the weight loss trade," write the authors.

Interviewing members and observing meetings taught the researchers that Weight Watchers aids dieters' pursuit of well-being in a world that fails to understand them. "Pursuing weight loss is an immensely daunting project fraught with many troubles, whether psychological, social, or physical," they point out. "To overcome these challenges, consumers turn to Weight Watchers."

Members of Weight Watchers seek to alleviate many psychological traumas they link to their struggles with weight, the authors found. "As consumers evolve into full-fledged Weight Watchers members, the support group becomes their spiritual and therapeutic companion," the authors write.

For many members, weekly meetings are crucial for their well-being. "The presence of fellow Weight Watchers is equally therapeutic as it is spiritual: it transforms the support group into a greater, spiritual power that engenders therapeutic aid to members struggling with their diets," the authors write.

Mary of West Covina, California didn't find that to be the case. She tells ConsumerAffairs.com, "When I went to Weight Watchers on Thursday, June 8th (2006) to be weighed in, Linda, the meeting leader for Thursday, 12:15pm, looked at the scale at my weight and said 'not pretty.' Then she proceeded to tell me that I could skip 2 more meetings. The tone of her voice was like she was trying to shame me, instead of trying to help me get back on track and encourage me."

Monique of Long Island City, New York, tells ConsumerAffairs.com of an unpleasant experience. "My first meeting about 1 month ago was with Lauren at the Forest Hills location. This was the last meeting one could attend at the $9.95 special. The entire meeting time was very disruptive, and at no time did the Instructor stop to gain control. I find this to be very upsetting and unfair for those who have paid and came to learn this program."

Nonetheless, the authors conclude, "The support group gives meaning to members' at times trauma-ridden overweight condition, grants forgiveness for members' weight loss failures, offers valued oversight and overarching guidance needed to make it through the trials and tribulations of the week, as well as casting the occasional weight-loss successes in a veneer of much-needed glamour."

Today's kids' menus are so last year.

Mintel Menu Insights, which tracks restaurant menu trends, says the average kids' menu doesn't offer enough variety or healthy food, even as parents, kids and chefs alike call out for better options.

In an analysis of kids' menus from 2005 to the present, Mintel found the same clichd foods repeated year after year. Chicken fingers steadily account for ten percent of kids' menu items, followed by grilled cheese sandwiches, macaroni & cheese, and burgers. Despite increasing health and obesity concerns, other top kids' menu items include hot dogs, pizza and corn dogs.

Do kids and parents really never tire of the same old thing? Not at all, says Maria Caranfa, RD and director of Mintel Menu Insights. "Our research shows parents want more nutritious options for their kids, and children are open to fruits, veggies and healthier versions of standard fare. The generic kids' menu really doesn't meet the needs and desires of today's families."

Only three in ten parents say their children eat healthfully at restaurants. But Mintel found kids would eat fruits and veggies. More than three in four children (77 percent) are open to ordering foods with vegetables, and six in seven (86 percent) would order fruit-containing items.

Some restaurants have started toying with healthier menus for kids. Though french fries are still the most common side (offered with 66 percent of kids' menu items), fruits and vegetables have risen in popularity (now at 43 and 39 percent, respectively). Even rice and salad (18 percent each) are showing up as kids' side options.

Additionally, more restaurants now use menu descriptors to quantify health. "Fresh" is the top marketing claim on kids' menus, appearing on 17 percent of items during the second quarter of 2009. In the same quarter of 2005, only eight percent t of kids' menu items carried the "fresh" claim.

"Restaurants dabble in healthier menus for kids, but there's still significant work to be done," said Caranfa. "Health and obesity issues, the popularity of ethnic foods and increased media coverage are creating pressure for revamped kids' menus. Soon, health and menu variety will be the new standards in kids' dining."

Caranfa points out recent innovations in healthier kids' menu items:

• Bob Evans: grilled chicken strips with a fresh garden salad

• Burger King: fresh apple fries

• Elephant Bar Restaurant: tropical citrus salad with chicken

Karen Cullen, Associate Professor of Pediatrics at the Baylor College of Medicine, tells ConsumerAffairs.com that offerings such as those mentioned above are a step in the right direction. She notes that a lot of what restaurants offer is a function of the marketplace.

"Whether or not they ultimately serve these healthy foods depends on how many parents and children purchase them," Cullen said. "If a restaurant wants to capture some of the audience looking for this fresh food for their children, the could easily market some of those things in a more aggressive manner and advertise those things and maybe that will pull more of those parents into those restaurants, making it profitable to sell those items."

Cullen says many restaurants already offer healthy choices: low-fat milk or 100 percent fruit just instead of a soft drink, or apple slices and carrot sticks instead of french fries. "If these items are selected," she says, "they'll stay on the menu."

Attorney General Edmund G. Brown Jr. today forced CashCall, Inc., an Anaheim-based fast-money lender, to stop using "loan shark tactics" in collecting debt, including abusive calls at all hours of the day and night and empty threats of law enforcement action.

The court-ordered judgment also forces CashCall to stop misleading consumers with deceptive advertising and pay $1 million in civil penalties and legal expenses. CashCall used former child actor Gary Coleman as its television spokesman.

"CashCall preyed on consumers desperate for cash, charging triple digit interest rates and using loan shark tactics to collect on their debts," Brown said. "This judgment forces CashCall to stop harassing its customers and should serve as a warning to consumers to be wary of fast-money lenders."

CashCall, owned by Paul Reddam, founder and former owner of DiTech mortgage company, currently charges 139.34% annual interest on the $2,600 loan it offers to consumers. This means that consumers who make the required $298.94 monthly payment over 36 months pay $10,761.84 over the life of the loan. That adds more than $8,000 in interest to the loan.

Brown contends that CashCall used illegal and abusive debt collection practices when customers were unable to make on-time payments, in violation of California Business and Professions Code Section 17200. These practices included:

• Making excessive and verbally abusive telephone calls at all hours of the day and night;

• Causing borrowers to incur bank fees by repeatedly trying to collect payments despite knowing there were insufficient funds in the borrowers' accounts;

• Threatening to initiate law enforcement and wage garnishment proceedings against borrowers without any basis for doing so;

• Improperly discussing private financial information with borrowers' friends, colleagues and neighbors;

• Failing to honor borrowers' requests to cancel automatic withdrawals from checking accounts; and

• Continuing to contact borrowers by phone after receiving requests to only contact them in writing.

Brown also contends that CashCall misled customers with deceptive television, radio and online advertising in violation of Business and Professions Code Section 17500.

CashCall's advertisements falsely suggested that low interest rate loans were available to all borrowers, when in reality, the rates advertised were only offered to some borrowers, usually members of the military. CashCall offered lower interest rates because Federal law limits the interest it can charge on loans to active duty servicemembers and their families.

Today's court order puts an end to CashCall's illegal debt collection practices and stops its misleading advertising. The settlement also requires CashCall to:

• Stop making excessive and verbally abusive telephone calls at all hours of the day and night;

• Pay $1 million in civil penalties and expenses related to the investigation and resolution of this case;

• Train its employees within 30 days and not fewer than four times per year thereafter to ensure compliance with the judgment;

• Terminate any officer, director or employee who violates the terms of the judgment;

• Record all telephone calls made to, or received from, prospective and current borrowers; and

• Maintain a detailed log of all consumer complaints.

More Scam Alerts ...

By Mark Huffman
ConsumerAffairs.com

August 24, 2009
The first phase of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 went into effect last week, with the rest of the rule changes taking effect in February. Congress changed the law to help consumers, but like many of Congress's actions, this one is producing unintended consequences.

True, the new law addresses some of the industry's long-standing abuses. It prevents lenders from raising rates on existing balances. Payments must be applied first to the part of your balance that has the highest interest rate. And universal default raising your rate because you happen to be late paying some other, unrelated bill will be a thing of the past.

But banks will still make profits, and if they don't get your money one way, they'll try to do it another way that isn't impacted by the new law. In fact, that process has already started. with credit card companies using the time between last May's passage of CARD and the effective date to do all the things they will soon be prevented from doing.

Many consumers who considered themselves good credit card customers have had their accounts unilaterally closed by the lender. Others have had their rates hiked substantially. Still others have seen their minimum monthly payments almost double.

Now, some consumers will be charged for the privilege of carrying a credit card. Citigroup announced last week that it will begin imposing an annual fee on account holders. Other banks are expected to follow suit.

To keep the credit you have and avoid new fees, there are a number of steps consumers should take.

First, if you have credit, use it. Most of us have one or two credit cards we like to use and tend to ignore the rest. In the new credit environment, banks will be quick to close accounts that lie dormant. An open credit line is an element of risk for a bank. If it's not providing revenue, the bank sees no reason to keep it open.

To prevent the lender from closing your account, try to use each card for a small purchase once every three months. When the bank reviews your account, it will see some activity and will be less likely to close it.

Second, don't add to your balances. In fact, pay them down if possible. Banks have been reducing credit limits and have targeted consumers with high debt to credit ratios.

Personal finance experts suggest a debt to credit ratio of 10 percent is ideal. If you don't carry a balance on the card paying it off in full each month you have almost nothing to worry about in that regard.

Third, look around for lower interest rate alternatives if you're carrying a balance on a major bank card. Almost all credit card issuers are raising rates to make up for the fact that delinquencies are on the rise.

That said, it will be very hard to find an interest rate below 10 percent in this new environment, even with stellar credit. But one often overlooked credit source is a credit union. By joining a credit union you should be able to get a credit card with a lower than average rate.

Finally, make sure you pay your credit card bill on time. The penalty for not doing so is steep, and will likely get steeper. Not only will you pay a late fee, the penalty rate for a missed payment could be in excess of 30 percent.

As the credit environment changes, consumers will have to stay alert. That means reading every communication that comes from your lender. It could contain important changes to your account, and not acting on the information could result in needlessly higher fees and interest rates in the new credit universe.

States continue to reign in companies in the foreclosure rescue business, most of which take money from desperate homeowners and provide little or nothing return. Florida Attorney General Bill McCollum has sued a Kissimmee-based company over allegations it targeted Hispanics in a foreclosure rescue fraud scheme.

JPB Consulting Inc. and its president, Juan P. Bordali, allegedly charged up front fees of more than $1,000 per customer to homeowners about to lose their homes, but never performed any services. Charging fees up front before completing foreclosure rescue services is a direct violation of Floridas Foreclosure Rescue Fraud Prevention Act.

Preying on people about to lose their homes and tricking them into believing that genuine help is being offered is cause for outrage McCollum said.

An investigation conducted by members of the Attorney Generals Economic Crimes Division, working as part of the Attorney Generals Mortgage Fraud Task Force, determined that JPB Consulting and Bordali marketed the companys services primarily to those in the Hispanic community using posters and signs in neighborhood stores and flyers handed out on sidewalks and street corners. The company also used radio and TV ads to solicit clients.

According to the lawsuit, unsuspecting consumers were charged up front fees ranging from over $1,000 to $3,500 and were promised foreclosure relief. The complaint says the company performed no services for its clients.

The Attorney General's investigation further revealed the company was advised by a law firm in February that it was acting in violation of the law, but the company continued to collect the illegal up-front fees.

The Attorney Generals Office knows of over 30 victims, but believes the company may have hundreds of clients. JPB Consulting, Inc. is also known as JB Consulting, which sometimes does business under the name "Mortgage Modification Solutions."

The Attorney General's lawsuit asks that the company be shut down and requests the defendants be permanently barred from charging up-front fees and failing to provide services. The lawsuit also seeks civil penalties of $15,000 per violation, full victim restitution, and reimbursement for the cost of the states investigation and litigation.

A coalition of consumer groups is calling on the U.S. Department of Transportation (DOT) to ensure, as the agency winds down the Cash for Clunkers program, that dealers are not "double-dipping" and getting paid twice -- once by their customers and again by the government.

During the past several weeks, the rejection rate for Cash for Clunkers transactions has hovered around 80 percent. Many dealers jumped the gun and entered into a high volume of contracts in July, before the rules governing the program were issued and before any deals were approved. Since then, the program has been overwhelmed, causing delays in payments to dealers.

As a result, many dealers are on the hook for tens of thousands of dollars. Experiencing cash flow problems and under pressure from lenders, some dealers have resorted to pressuring their customers to make up the difference. The program is now scheduled to end Monday, Aug. 24.

Some dealer associations even provide standardized "contingency agreements" for their dealer members that shift all the risks for rejected deals from the dealers to car buyers. Whether they signed the agreements or not, car buyers across the country are complaining that they are being pressured to give the dealers $3,500 or $4,500 extra in cash or sign a new contract agreeing to pay more, typically under threat of losing their new car or having the dealer report it stolen.

Dealers, of course, see it differently. Many have not yet seen their first check from the government and, in a business that relies on fast, upfront payments, that's causing some sleepless nights in autoland. Nissan is the latest automaker to say it will front money to dealers who are waiting for their clunker payments from Uncle Sam. Toyota and Volkswagen are also offering financial aid to cash-strapped dealers, as is General Motors.

Some dealers -- including Auto Nation, the largest U.S. auto retailer -- said it stopped making clunker rebate sales Friday night to make sure it had time to submit all of the deals for approval before Monday night. Auto Nation said it is owed about $45 million in taxpayer-finaned rebates.

President Obama denies there have been "extraordinary delays" in the processing of dealers' cash-for-clunkers claims and said the government has to be scrupulous in reviewing them to avoid fraud, Automotive News reported.

"This is actually a high-class problem to have -- that we're selling too many cars too quickly, and there's some backlog in the application process," Obama said in a radio interview released by the White House.

Acknowledging the consumer groups' complaints, DOT posted information on its Web site to advise car buyers that they do not need to sign the contingency agreements. However, many car buyers are unaware of that information. Having surrendered their "clunker" and dependent on their new car for transportation, they are vulnerable to being pressured, even if they did not sign the agreement.

Car buyers have no way to know if the dealer is being paid by the government, making it easy for auto dealers to game the system by collecting the $3,500 or $4,500 from the car buyers and collecting that amount from the government.

To protect taxpayers and reduce the risk of fraud and abuse, the groups are calling upon the DOT to require auto dealers to certify in writing that they have not already collected the amount of the incentive from the car buyer or reconfigured the deal in a subsequent contract.

They also say DOT should send a notice to the car buyers informing them that the deal was approved and the dealer was paid either $3,500 or $4.500. DOT is also urged to provide a simple pre-addressed form with prepaid postage for the car buyers to mail to the National Highway Traffic Safety Administration if they have paid that amount to the dealer themselves, or if they entered into an amended contract to buy the same vehicle. "Unless the DOT takes these simple steps, it will have no way to know whether the dealers are gaming the system," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety (CARS).

Joe Ridout, consumer services manager of Consumer Action, says, "By including these simple safeguards, the Department of Transportation can both protect consumers and verify that the taxpayers' investment in this program has not been misused."

DOT spokesman Bill Adams tells ConsumerAffairs.com that as the program begins to wind down, the department has three shifts working across the country to make sure dealers get their reimbursements. Adams adds says DOT "will continue to be diligent about the potential of fraudulent activity by all who are involved in the transactions."

He emphasizes, "Consumers are not required to sign contingency agreements to pay back the dealer should the cars credit be rejected." But he said nothing about the consumer groups' calls for notifying car buyers that that the deal was approved and the dealer was paid.

Last week, CARS and Consumer Action wrote to Secretary LaHood urging DOT to prohibit dealers from luring or pressuring car buyers into signing the contingency agreements and to survey car buyers to find out the full extent of the problem.

Ends Monday

The "Cash for Clunkers" program ends next Monday night (Aug. 24) at 8 p.m.

Because of a large number of pending transactions, no one is sure just how many vehicles have been sold and, therefore, no one knows exactly how much money has been spent. Congress allocated $3 billion for the program and the auto dealers' trade group suspects that every cent -- and then some -- is already spoken for. Federal officials have expressed confidence there's enough money to cover all the deals that have been made.

The Transportation Department said that as of Thursday, dealers have turned in applications for $1.9 billion in rebates for voucher payments made to customers.

GM said its sales over the past two months have exceeded internal forecasts by more than 60,000 vehicles, largely because of the clunkers program. New vehicle sales overall are expected to exceed 1 million in August, the first time that's happened in at least a year, according to J.D. Power and Associates.

Consumers stew

It's not just car dealers who are frustrated with the program. Would-be car buyers are also complaining of just about every type of snafu imaginable.

Many consumers have found dealers unwilling to hand over their new car until the dealer gets reimbursed by the feds.

"I signed a purchase agreement and loan agreement to purchase a new 2009 Chevy Impala under the cash for clunker program," said Mike of Howell, Mich. "The new vehicle is suppose to be handed over at time of deal. Dealer has held new car for 3 weeks now and refuses to hand it over until they get reimbursement from the government of $3,500."

Fred of Longmeadow, Mass., not only didn't get his new vehicle -- his old one nearly went into the crusher.

"We purchased a new 2009 Chevy Silverado at Balise Chevrolet on 8/13/09. We had agreed on a price of $11900 with a $4500 cash for clunkers rebate," he told ConsumerAffairs.com. "They looked up the trade in vehicle and told us it qualified for a $4500 rebate."

Fred said he took out a loan to cover the agreed-upon price. When he went to pick up the new truck, "They took my old truck and wrote clunker on it and towed it away. The man who was delivering the car then informed us our truck did not qualify for the clunker rebate," he said.

"We could not afford to pay anymore for the truck so we had to cancel the deal and wait for an hour and a half to get our truck back. They blamed the cash for clunkers government website for the problem. I than had to go back to my bank and try to cancel the loan for the truck.," he said.

Nancy of Manchester, N.J. said she spoke with the Internet sales department at Pinebelt Chevy and was told there were two trucks of the type she wanted sitting on the dealer's lot. So she had her trade-in towed in, only to be disappointed.

"When I got there the salesman was rude, told me the truck was sold and they only had trucks with 6' beds when we needed a 8'. ... This was a bait and switch situation," said Nancy, who had to have her trade-in towed to another dealer.

The passengers were trapped in the small plane for six and a half hours with nothing but pretzels to eat. After its initial investigation, DOT said the crew of the airliner acted properly.

"We have determined that the ExpressJet crew was not at fault. In fact, the flight crew repeatedly tried to get permission to deplane the passengers at the airport or obtain a bus for them," Transportation Secretary Ray LaHood said.

"The local representative of Mesaba Airlines improperly refused the requests of the captain to let her passengers off the plane," LaHood said. "The representative incorrectly said that the airport was closed to passengers for security reasons, which led to this nightmare for those stuck on the plane."

The 50-seat commuter jet took off at 9:30 pm August 7 from Houston, bound for Minneapolis. However, after a two-hour flight, it was diverted to Rochester, Minnesota because of severe weather.

ExpressJet, the carrier operating the plane for Continental, told a Minneapolis TV station that the planes crew had reached the limit on its flying time. That required locating another crew and flying it to Rochester.

Meanwhile, the passengers of flight 2816 had to stay on the plane. The airline told the station they were not allowed to deplane the passengers because off because of security. The TSA screeners had already gone home for the night so, if the passengers deplaned, the airline could not legally allow them to get back on. At least, that's what the plane's flight crew was told. As it turns out, it wasn't the case.

The representative of Mesaba - the only carrier able to assist Continental at the airport - said that the airport was closed to passengers, apparently because there was no one from the Transportation Security Administration available to screen passengers. In fact, TSA procedures allow passengers to get off the plane, enter the terminal and re-board without being screened again as long as they remain in a sterile area.

Passengers remained on the plane overnight, finally getting off at 6:30 am, once security personnel had returned to their posts. But Rochester airport officials say the passengers were needlessly inconvenienced.

"They wouldn't have had to go through security. They could have come into the airport," airport manager Steve Legve told the Rochester Post-Bulletin. That was confirmed by the DOT investigation.

"There was a complete lack of common sense here," LaHood said. "It's no wonder the flying public is so angry and frustrated."

LaHood said the Aviation Enforcement Office is considering the appropriate action to take against Mesaba as it completes the investigation, which it expects to conclude within a few weeks.

Mesaba is a wholly owned subsidiary of Northwest Airlines, which is a wholly owned subsidiary of Delta Air Lines.

By James Limbach
ConsumerAffairs.com

August 21, 2009
A U.S. district court has halted a phony job placement operation that allegedly stole money from job seekers by promising them full-time work, with benefits, that never materialized.

The court shut down the job placement operation, Career Hotline, Inc., and its principal, Susan Bright, who also does business as Unique Flowers, until a hearing on a preliminary injunction can be held, and froze its assets. According to a complaint filed by the Federal Trade Commission, the scam took out ads in local newspapers around the United States.

The ads urged job seekers to call an 800 number, where they got a pitch from telemarketers urging them to provide information about their work histories and to pay a placement fee that ranged from $89 to $195.

The FTC complaint charges that the defendants misled consumers by guaranteeing that they would land jobs making at least $25,000 a year if they paid the placement fee and provided the work history information.

Consumers who did this did not get the promised jobs, however. Their repeated efforts to follow up with the defendants or ask for a refund were fruitless.

ConsumerAffairs.com recently reported on a warning from Pennsylvania Attorney General Tom Corbett that Internet job scams are on the rise. He warned "falling for these schemes will not only leave you unemployed, but victims can also lose thousands of dollars and find themselves targeted by identity thieves."

These kinds of scams, and variations thereof, are fairly common, if the complaints received by ConsumerAffairs.com are any indication:

• Tommy from Gonzales, California, says he was offered a job and schooling, made a deposit of $150, but was never contacted about job placement by Hunter business school of academics. He says after calling and being put on hold for as log as four hours, "I just realized they are a scam and getting sued by the state so I am in desperate need of getting my refund back."

• Richard of Las Vegas, Nevada, tells ConsumerAffairs.com, "I graduated in 2005 from ITT Technical Institute with highest honors and they promised to have lifetime job placement when you graduate from their school, which they did not do that with me and I have over $80,000 worth of student loans that I need to pay back but can not due to the fact of not getting a job like they promised."

• Angela of Brooklyn, New York, says she attended Katharine Gibbs of New York from 2001-2003 and has not been able to find employment in the field in which she majored. "As I was told in the beginning," she said, "Gibbs GUARANTEED a lifetime of job placement. All it turned out to be was some lame internships at start up companies that would never hire and would not even pay a minimal fee. When I confronted someone at the job placement department, they basically told me that I was not their responsibility of what kind of jobs they placed people in, their job was to simply provide a job ad and that they did not guarantee the actual job or pay."

Susan Grant, Director of Consumer Protection at the Consumer Federation of America, says that given the state of the economy and the labor situation, "solicitations to help you find a job are probably more attractive that ever."

Grant says the real tip-off that a job placement offer may be a scam is the request for an up-front fee. She says, "That's not something legitimate employment agencies do." Grant says placement agencies should tell you what services they will be offering. "If that's not clear," she concludes, "I would stay away from it."

A class action lawsuit is proceeding against Metropolitan Money Store (MMS), the foreclosure consultation company that scammed hundreds of troubled Washington, D.C.-area homeowners out of money by promising to help them keep their homes and improve their credit.

From September 2004 until June 2007, MMS employees preyed on consumers who had considerable equity in their homes but struggled to keep up with monthly payments. MMS representatives approached these homeowners promising to help them avert foreclosure and improve their credit scores. As the central part of its scheme, MMS asked homeowners to release title of their property to a third party for one year.

The third party -- or straw buyers, as they are referred to in the indictments -- were supposed to withdraw equity from the consumers' homes and use it to pay off mortgages and other expenses, and to generally improve homeowners' credit. Instead, the straw buyers withdrew as much equity from the homes as they could, while applying for mortgage loans vastly exceeding the value of the house. The buyers then paid off the homeowners' original mortgage and converted the rest for their own use.

According to the complaint, MMS engaged in a massive advertising campaign on a number of fronts, targeting homeowners with financial problems and African-Americans.

The suit was brought on behalf of three families, all of whom reside in Maryland. In addition to MMS, the suit names as defendants Joy Jackson, Kurt Fordham, Jennifer McCall, and Clifford McCall, all of whom were indicted in June 2008 for conspiracy to commit mail fraud and wire fraud, as well as money laundering. All four defendants designed and participated in the MMS scheme, and Jennifer McCall went so far as to act as a straw buyer in several transactions.

All have since pleaded guilty to the charges against them, along with six other defendants. The charges carry a maximum sentence of 30 years in prison; Fordham was sentenced to 10 years last month.

Prosecutors say case is one of the largest mortgage fraud schemes in Maryland history. While the scam has had a devastating effect on the more than 200 consumers who fell for it, even homeowners not directly affected may take a hit. The lawsuit predicts that entire neighborhoods will lose millions of dollars in home values as a result of the high number of foreclosures that have occurred, or are just around the corner.

The complaint notes that the FBI has already identified the Washington, D.C. Metropolitan area as a 'hotspot' for mortgage fraud, and predicts that the MMS scam will likely move it to the highest possible ranking.

The complaint alleges violations of the Federal Racketeer Influenced and Corrupt Organizations Act (RICO), the Real Estate Settlement Procedures Act (RESPA), and a Maryland fraud statute. The court said that, if the case goes to trial, it will begin early next year.

"This program has been a lifeline to the automobile industry," Transportation Secretary Ray LaHood said in a statement today as he announced the cut-off time for the program.

Because of a large number of pending transactions, no one is sure just how many vehicles have been sold and, therefore, no one knows exactly how much money has been spent. Congress allocated $3 billion for the program and the auto dealers' trade group suspects that every cent -- and then some -- is already spoken for. Federal officials have expressed confidence there's enough money to cover all the deals that have been made.

The Transportation Department said that as of today dealers have turned in applications for $1.9 billion in rebates for voucher payments made to customers.

"I know dealers are frustrated, but they're going to get paid," LaHood said earlier. Dealers have been complaining that the clunker program paperwork is too complex, that too many applications are rejected and that the processing time is excessive.

The National Automobile Dealers Association (NADA) yesterday formally asked the government to suspend the clunkers program because a survey by the group found that the $3 billion fund has been exhausted. General Motors, thrilled with the boost in sales, said it would provide cash advances to dealers to cover the outstanding rebates.

Ford and Chrysler didn't immediately respond to GM's offer to advance cash to cover dealers' outstanding rebate payments. GM said it will deposit the money in a dealer's open account and then retrieve it after 30 days if a payment had been received from the federal government.

GM said its sales over the past two months have exceeded internal forecasts by more than 60,000 vehicles, largely because of the clunkers program. New vehicle sales overall are expected to exceed 1 million in August, the first time that's happened in at least a year, according to J.D. Power and Associates.

Consumers stew

It's not just car dealers who are frustrated with the program. Would-be car buyers are also complaining of just about every type of snafu imaginable.

Many consumers have found dealers unwilling to hand over their new car until the dealer gets reimbursed by the feds.

"I signed a purchase agreement and loan agreement to purchase a new 2009 Chevy Impala under the cash for clunker program," said Mike of Howell, Mich. "The new vehicle is suppose to be handed over at time of deal. Dealer has held new car for 3 weeks now and refuses to hand it over until they get reimbursement from the government of $3,500."

Fred of Longmeadow, Mass., not only didn't get his new vehicle -- his old one nearly went into the crusher.

"We purchased a new 2009 Chevy Silverado at Balise Chevrolet on 8/13/09. We had agreed on a price of $11900 with a $4500 cash for clunkers rebate," he told ConsumerAffairs.com. "They looked up the trade in vehicle and told us it qualified for a $4500 rebate."

Fred said he took out a loan to cover the agreed-upon price. When he went to pick up the new truck, "They took my old truck and wrote clunker on it and towed it away. The man who was delivering the car then informed us our truck did not qualify for the clunker rebate," he said.

"We could not afford to pay anymore for the truck so we had to cancel the deal and wait for an hour and a half to get our truck back. They blamed the cash for clunkers government website for the problem. I than had to go back to my bank and try to cancel the loan for the truck.," he said.

Nancy of Manchester, N.J. said she spoke with the Internet sales department at Pinebelt Chevy and was told there were two trucks of the type she wanted sitting on the dealer's lot. So she had her trade-in towed in, only to be disappointed.

"When I got there the salesman was rude, told me the truck was sold and they only had trucks with 6' beds when we needed a 8'. ... This was a bait and switch situation," said Nancy, who had to have her trade-in towed to another dealer.

A New Jersey court affirmed the dismissal of a class action against the manufacturer of the drug Relacore last week, agreeing with the trial judge that attorneys for the plaintiffs had not satisfied the prerequisites for granting class certification to the case.

The suit, filed by lead plaintiff Melissa Lee in November 2004, alleged that the Carter-Reed Company fraudulently advertised the drug as reducing belly fat. Despite Carter-Reed's claims, Lee actually gained weight while on the recommended 90-day regimen. In addition to common law and statutory fraud claims, Lee's suit also included counts for unjust enrichment and breach of implied and express warranty.

The court ruled that too many factual and legal issues varied from plaintiff to plaintiff, defeating one of the main justifications for bringing a class action suit. Under federal court rules, class actions must involve issues of fact or law common to every class member.

Specifically, the appellate judges endorsed trial Judge Catherine Dupuis's finding that 14 fraud-related factors would require a hearing for every member of the class. These factors included which advertisements consumers saw, whether these advertisements induced them to buy the product, the amount they paid for the drug, and whether they asked for a refund after discovering Relacore's ineffectiveness.

Lee's lawsuit had defined a class of all New Jersey consumers who bought Relacore since it was first introduced in 2002. The suit had originally sought certification of a nationwide class, but Lee's attorneys narrowed it to New Jersey in 2006.

The decision by the Appellate Division apparently leaves the case in limbo, at least for the moment. Lee's attorneys have not announced whether they plan to appeal to the New Jersey Supreme Court. If they don't, Relacore buyers may be out of luck; the appellate judges noted that individual damages, ranging from $40 to $120, are not high enough to make it worth consumers' while to spend time and money bringing individual cases.

The case attracted the attention of at least one consumer rights group. In an amicus curiae brief filed with the court, Public Citizen, a non-profit consumer advocacy organization, said its goal was to ensure that consumers are protected from "fraudulent mass media advertising campaigns."

Relacore's website tells consumers that "It may take more than diet and exercise to fight stress-related belly fat." Relacore claims to work by triggering stress-reducing compounds, which in turn lower the level of cortisol produced by the body. Cortisol is a hormone produced when a person is stressed, and, according to Relacore, "is associated with stubborn stress-related abdominal fat."

Like many weight loss supplements, Relacore is not approved by the FDA. In 2006, the Federal Trade Commission (FTC) warned manufacturers of diet supplements that advertisements containing unsubstantiated claims could violate consumer laws. After that announcement, Relacore modified commercials to say that Relacore is a drug that may reduce stress levels and indirectly lead to weight loss. The company no longer promises that Relacore will lead directly to a better body.

When talk show host Oprah Winfrey raved about the weight loss properties of the acai berry, supplement makers were quick to cite her endorsement in advertising for all sorts of related products.

The only problem is, Winfrey was talking about the berry, not supplements. Now the talk queen is fighting back.

Chicago-based Harpo, Inc., producers of "The Oprah Winfrey Show," and "Dr. Oz" has joined forces with Illinois Attorney General Lisa Madigan to alert consumers to the numerous complaints about acai berry supplement marketers.

Winfrey and her company have filed trademark infringement suits against 40 Internet marketers of dietary supplements and Madigan has sued three companies in particular - Advanced Wellness Research, Crush LLC and Amirouche & Norton, LLC - over their business practices.

The Attorney General's Office and representatives from Harpo coordinated an investigation of consumer complaints - many provided to the Attorney General's Office by Harpo - revealing the alleged deceptive practices of these companies. Neither. Winfrey nor Oz has ever sponsored or endorsed any acai berry or dietary supplement product.

"The acai berry supplement sales programs are among the most aggressive that we have seen using misleading sales tactics to scam consumers," Madigan said. "Consumers should always be skeptical and educate themselves instead of blindly believing any endorsement claims. Also, consumers need to be very wary of weight loss and health claims that sound too good to be true."

Madigan sued the three promoters for consumer fraud, charging that the companies lure customers with free trial offers - through aggressive Internet marketing techniques - and then charge customers' credit cards prematurely, do not always supply the product and make it nearly impossible to cancel.

"For thousands of dieters, the quest for a miracle product has become a nightmare," said Madigan. "Far too often, consumers end up losing their money - not weight - in these deals."

ConsumerAffairs.com has also received hundreds of complaints about companies selling acai berry supplements, including some named in the suit. This complaint, from Sherri in in Brentwood, Tennessee, is typical:

"I ordered the Acai berry product off of an AOL advertisement for $6.99," she told ConsumerAffairs.com. "I started receiving a bottle monthly, I did not realize for a couple of months that they were charging me $83.80 per bottle. I sent numerous emails, and called them three times, to cancel order and give me credit for two returned bottles, and that I needed to return another bottle. When I tell them I do not want it to cancel they reply that they will get back with me in 72 hours."

The complaints against the suppliers allege that these companies engage in a very similar scam to market and sell acai berry supplements. According to the complaints, the companies offer consumers a "free trial" to entice them to sign up by providing a credit card number for shipping and handling charges.

The companies use the "free trial" period to hook the consumers into a continuity sales program, where consumers are often unaware that they have agreed to buy a monthly supply of acai berry supplements (or other health supplement products) for $29 to $89 per month unless they cancel their orders within 14 days. Many consumers do not even receive shipment of the trial supplements before they are billed for the first monthly installment shipment.

As part of this scam, Madigan says consumers then find it very difficult to cancel future orders. The companies often bill consumers' credit cards for a few months supply before the consumers are able to cancel the orders or cancel their credit card payments.

Madigan's three suits ask the court to enter a permanent injunction barring the defendants from selling dietary supplements or continuing with misleading marketing schemes that impact Illinois consumers. The lawsuits also ask the court to order the defendants to pay restitution for consumers who have lost money and civil penalties of $50,000 for violating the Illinois Consumer Fraud and Deceptive Business Practices Act.

Countless times each day consumers encounter sales people online, over the phone and in person, who use deception to take their money. They may appear to be salesmen, but people who deceive you for a buck are actually scammers.

Wouldn't it be nice if there were an easy way to identify a scammer? Well, there are signs you're being scammed, if you'll only be aware of them.

We often think of a conman as smooth and sophisticated, and some of the really good ones are. But more often than not, the people responsible for taking your money are nothing more than common thugs, and they behave that way.

When you are dealing with any business person, you have every right to be treated in a respectful manner and, above all, in a professional manner. A consumer recently wrote to ConsumerAffairs.com detailing her experience with a home warranty company. Things seemed fishy from the outset.

"I got a call from a gentleman, definitely using a fake voice, offering to give me a quote," she said. "At first, he seemed very helpful, but then as his fake voice kept going in and out, he started talking to someone else in his office, cussing, laughing, and making jokes."

Using profanity--not to mention a fake voice--is unprofessional behavior, and when you encounter it from someone trying to sell you something, it's a tipoff you're dealing with a scammer.

It's also unprofessional if a business person threatens you. ConsumerAffairs.com receives numerous complaints from consumers describing harassment at the hands of debt collectors. Honest debt collectors will always maintain a firm, but professional demeanor. However, consumers have reported receiving repeated calls at work, complete with threats of arrest, and even physical harm.

People making these calls are scammers and should be reported to your state attorney general. You should not give them any money.

Professionalism should extend not just to verbal communication, but written communication as well. If letters and emails are filled with misspellings, poor grammar and punctuation, and odd syntax, it's another tipoff you're could be dealing with a scammer.

Business promotions are all too often scam territory. Unfortunately, legitimate and well-meaning businesses get caught up in these schemes because they don't do their homework, and hire what turn out to be scam operations to provide enticements to their customers.

"Free gas" promotions are a recent favorite, and many have turned out to be scams. If a business offers you a "free gas" card in return for doing something like sitting through a sales pitch, chances are, you'll never get the gas.

When you suddenly find it impossible to get in touch with the sales rep who is handling your account, chances are they're a scammer. Cassie, of Liberty, Missouri, found out the hard way after paying $3500 to a company that promised to help settle her tax debt with the IRS.

"We have called for a year and left message after message for a return phone call," she told ConsumerAffairs.com. "We still haven't received that call back. They did absolutely nothing for us. We will probably never see the money they took from us. We have since worked out a deal, by ourselves."

Scams have been around forever and there's no reason to think they'll ever disappear. If you can see one coming, you improve your chances of avoiding becoming a victim.

Turns out Debt Relief USA could have used a little debt relief itself. The Texas based company is in bankruptcy, leaving hundreds of distressed clients in the lurch. Pam, of Newport, Tennessee, is one of them.

"Saw the ad on TV, called them and signed a contract," Pam told ConsumerAffairs.com. "Now I am being sued and they are closed. I need my money back to settle with my creditors."

Pam may be in luck.

Texas Attorney General Greg Abbott has taken legal action to recover $4.6 million that he says Debt Relief USA wrongly withheld from its clients in Texas and other states.

In June, Debt Relief USA Inc. of Addison filed for bankruptcy protection in the Northern District of Texas. As a result, more than 2,500 financially distressed customers did not receive the debt relief they were promised. In fact, debtors' problems were exacerbated by the bankruptcy because some of Debt Relief USA's clients received no assistance and are now being pursued by collection companies.

According to investigators with the Office of the Attorney General, the firm targeted individuals with thousands of dollars in unsecured debt, promising customers it would render them "debt-free in as little as 36 months."

Under Debt Relief USA's model, debtors stop paying their debts in order to save the money they would have paid creditors over time. Instead, they paid monthly installments to Debt Relief USA, which promised to later negotiate discounted pay-offs with creditors.

However, Abbott says his investigation concluded that the company assessed an "administration fee" of about eight percent of each customer's total debt, as well as monthly "maintenance fees" of up to $40. If the company successfully settled a debt, it then charged a "negotiation fee" of 13 percent of the amount of debt saved.

According to court documents the state filed with the bankruptcy court, Debt Relief USA collected "set-aside" funds from its customers. However, the Texas Finance Code prohibits set-aside funds unless a company is licensed or registered and has posted a bond with the Office of Consumer Credit Commissioner. Abbott says Debt Relief USA failed to meet the legally mandated registration and bond requirements.

As a result, the Attorney General has filed a proof of claim in the bankruptcy case seeking restitution for financially harmed debtors and the return of any fees paid to Debt Relief USA by current or former clients.

In addition, the Office of the Attorney General moved to protect the defendant's clients' privacy by successfully arguing that their names and confidential information be removed from the public record. Further, the Attorney General successfully moved to have the bankruptcy case converted from a Chapter 11 reorganization to a Chapter 7 liquidation with a neutral trustee appointed by the court. The trustee's duties will include liquidating the debtor and paying claims to creditors.

Investigators with the Office of the Attorney General say they found that Debt Relief USA often never contacted creditors on behalf of their "clients," which ultimately damaged its customers' credit reports and even led to debt collection lawsuits by creditors. Debt Relief USA customers risked the ongoing accruals of late fees, interest, over-limit charges and other fees associated with the creditor's account.

Therefore, even in the event of a settlement, customers often owed significantly more on their accounts, which reduced their overall debt settlement savings. In addition, any savings realized under a settlement would be subject to taxation, since these are considered "income."

In addition to restitution, the Attorney General seeks civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act, as well as attorneys' fees.

Consumers who believe they may qualify for restitution call the Office of the Texas Attorney General's toll-free complaint line at (800) 252-8011.

By James Limbach
ConsumerAffairs.com

August 19, 2009
With identity theft continuing to be near the top of consumer complaint lists, the Internal Revenue Service reminds consumers to avoid such scam that use the IRS name, logo or Web site in an attempt to convince taxpayers that the scam is a genuine IRS communication.

In an identity theft scam, a fraudster, often posing as a trusted government, financial or business institution or official, tries to trick a victim into revealing personal and financial information, such as credit card numbers and passwords, bank account numbers and passwords, Social Security numbers and more.

These thieves generally use someone's personal data to steal his or her financial accounts, run up charges on the victim's existing credit cards, apply for new loans, credit cards, services or benefits in the victim's name and even file fraudulent tax returns.

The scams may take place through e-mail, fax or phone. When they take place via e-mail, they are called "phishing" scams.

The IRS urges consumers to avoid falling for the following recent schemes:

Making work pay refund

This phishing e-mail, which claims to come from the IRS, references the president and the Making Work Pay provision of the 2009 economic recovery law. It says that there is a refundable credit available to workers, consumers and retirees that can be paid into the recipient's bank account if the recipient registers their account information with the IRS. The e-mail contains links to register the account and to claim the tax refund.

In reality, most taxpayers receive their Making Work Pay tax credit, which was designed for wage earners, in their paychecks as a result of decreased tax withholding, not as a lump sum distribution from a federal fund. Additionally, consumers and retirees who are not wage earners are not eligible for this tax credit.

Inherited funds / lottery winnings / cash consignment

In this phishing scheme, recipients receive an e-mail claiming to come from the U.S. Department of the Treasury notifying them that they will receive millions of dollars in recovered funds or lottery winnings or cash consignment if they provide certain personal information, including phone numbers, via return e-mail.

The e-mail may be just the first step in a multi-step scheme, in which the victim is later contacted by telephone or further e-mail and instructed to deposit taxes on the funds or winnings before they can receive any of it. Alternatively, they may be sent a phony check of the funds or winnings and told to deposit it but pay ten percent in taxes or fees. Thinking that the check must have cleared the bank and is genuine, some people comply. However, the scammers, not the Treasury Department, will get the taxes or fees.

Form W-8BEN

In this scam, fraudsters modify a genuine IRS form, the W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to request detailed personal and financial information. This could include nationality, passport number, bank account and PIN numbers, spouse's name and mother's maiden name, or other personal or financial information or security measures for financial accounts. The scammers may use the genuine form number and name or may make up a new form number, such as W-4100B2.

They either e-mail or fax the form or letter. If only a letter, the letter itself contains the request for the personal and financial information. The letter, which claims to come from the IRS, states that the recipient will face additional taxes unless he or she quickly faxes the required information to the number provided by the scammer.

In reality, taxpayers file the genuine Form W-8BEN with their financial institutions, not with the IRS. Additionally, the genuine W-8BEN does not request the taxpayer's passport number, bank account number, security or similar information.

Refund scam

The bogus e-mail, which claims to come from the IRS, tells the recipient that he or she is eligible to receive a tax refund for a given amount. It instructs the recipient to click on a link contained in the e-mail to access and complete a form for the tax refund. The form requires the entry of personal and financial information. The refund scam is the most common one seen by the IRS. Several recent variations on this scam have claimed to come from the Exempt Organizations area of the IRS. Some others have included the name and purported signature of a genuine or a made-up IRS executive.

Taxpayers do not have to complete a special form to obtain a refund. Taxpayer refunds are based on the tax return they submit to the IRS.

How to spot a scam

Many e-mail scams are fairly sophisticated and hard to detect. However, there are signs to watch for, such as an e-mail that:

• Requests detailed or an unusual amount of personal and/or financial information, such as name, SSN, bank or credit card account numbers or security-related information, such as mother's maiden name, either in the e-mail itself or on another site to which a link in the e-mail sends the recipient.

• Dangles bait to get the recipient to respond to the e-mail, such as mentioning a tax refund or offering to pay the recipient to participate in an IRS survey.

• Gets the Internal Revenue Service or other federal agency names wrong.

• Uses incorrect grammar or odd phrasing (many of the e-mail scams originate overseas and are written by non-native English speakers).

• Uses a really long address in any link contained in the e-mail message or one that does not start with the actual IRS Web site address (www.irs.gov). To see the actual link address, or URL, move the mouse over the link included in the text of the e-mail.

• What to do

The IRS does not initiate taxpayer contact via unsolicited e-mail or ask for personal identifying or financial information via e-mail. If you receive a suspicious e-mail claiming to come from the IRS, take the following steps:

• Do not open any attachments to the e-mail, in case they contain malicious code that will infect your computer.

• Do not click on any links, for the same reason. Also, be aware that the links often connect to a phony IRS Web site that appears authentic and then prompts the victim for personal identifiers, bank or credit card account numbers or PINs. The phony Web sites appear legitimate because the appearance and much of the content are directly copied from an actual page on the IRS Web site and then modified by the scammers for their own purposes.

• Contact the IRS at 1-800-829-1040 to determine whether the IRS is trying to contact you.

• Forward the suspicious e-mail or URL address to the IRS mailbox phishing@irs.gov, then delete the e-mail from your inbox.

Genuine IRS web site

The only genuine IRS Web site is IRS.gov. All IRS.gov Web page addresses begin with www.IRS.gov. Anyone wishing to access the IRS Web site should initiate contact by typing the IRS.gov address into their Internet address window, rather than clicking on a link in an e-mail.

August 19, 2009
About 1,500 Felt FIX Cyclocross bicycles are being recalled. The bicycles fork steerer tube can break, causing the rider to lose control and fall, posing a risk of injury.

Felt Bicycles has received six reports of the bicycle forks breaking, including two reports of minor cuts and scrapes.

The recall includes all 2007/2008 Felt F1X Cyclocross Bicycles. These bicycles are available in semimatte black and have aluminum frames with carbon fiber forks with aluminum steerer tubes.

The bicycles, made in Taiwan, were sold by bicycle specialty stores nationwide from July 2006 through April 2009 for between $1,400 and $1,500.

Consumers should immediately stop using the recalled bicycles and contact a local Felt Bicycles dealer to receive a free inspection and repair.

For additional information contact Felt Bicycles toll-free at (866) 433-5887 between 8 a.m. and 5 p.m. PT Monday through Friday, or visit the firms Web site at www.feltracing.com.

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

Times are tough for folks in the consumer advocacy business.

Recently, ConsumerAffairs.com reported on a recent Consumer Federation of America survey showing consumer complaints are up, but agency resources are down. The Commonwealth of Virginia is a prime example of the strain some states are feeling.

Elaine Lindholm of the Virginia Department of Agriculture and Consumer Services told ConsumerAffairs.com that since 2002, her agency has lost about 30 percent of its staff - going from 750 full-time employees to fewer than 500. And, she says, more cuts are in the works.

What it boils down to, Lindholm says, is "more work with fewer people."

And it isn't just the state level that's absorbing the hits. As of July 1, for example, the city of Alexandria's Office of Consumer Affairs stopped processing consumer complaints. Lindholm says those calls are now coming to her agency.

The Consumer Protection Division of the Attorney General's office in Indiana has found a way to handle the shortfall in both staff and funding. Abby Kuzma, the division's director and chief counsel, tells ConsumerAffairs.com she's turned to using volunteers from VISTA, the anti-poverty program created in the 1960s.

Kuzma says while the department has lost staff because of the recession and accompanying economic turmoil, it is not able to hire people to hire more people to handle what she says is "an increase in complaints" many of which are "financial in nature."

In particular, there's been an explosion of scamsters offering to help people stave off foreclosure and she says the VISTA volunteers are working to get out the word that pro bono attorneys are available to assist people who are in danger of losing their homes.

The situation in Utah appears to be a little different.

Jennifer Bolton, spokeswoman for the Utah Department of Commerce, which houses the Division of Consumer Protection, tells ConsumerAffairs.com that the department "has had significant budget reductions." But she adds, "Attrition in other divisions in the department thus far has allowed Consumer Protection, which already operates on a net zero budget, to escape any budget reductions." Thus, she says staffing has not been affected - so far.

Nonetheless, the number of complaints received by the Division during the period of January 1, 2009 to June 30, 2009 is 18 percent higher than the number of complaints received during the same months in 2008.

Bolton says the two most common types of scams that the Utah Division of Consumer Protection continues to receive from consumers involve fake check and phishing scams. She points out that while it's hard to say with certainty whether these scams are a reflection of the down economy, "what is apparent is that con artists seem to tailor their message to whatever is topical at the moment."

In the CFA survey of 34 state, county, and city agencies from 19 states across, 47 percent said they had budget cuts just prior to or during the 12-month survey period in 2008.

Overall complaints rose by 10 percent, it said, with all agencies surveyed saying they responded to 265,324 complaints.

Four months after Litton Loan Services settled a class action accusing the company of imposing bogus late fees, complaints about Litton continue to roll into ConsumerAffairs.com. Some consumers allege that Litton failed to timely post payments to their accounts, the main issue in the class action. Still others get the run-around from the mortgage servicing company on the possibility of receiving a loan adjustment, leading to confusion and, in many cases, the threat of foreclosure.

As a loan servicer, Litton -- owned by Goldman Sachs -- handles the operational aspects of consumer loans: sending out statements, receiving and tracking payments, notifying consumers of overdue payments, and initiating foreclosure proceedings.

In April, Litton settled a class-action lawsuit alleging that the company failed to credit borrowers' mortgage payments in a timely fashion, then turned around and charged late fees for the purportedly tardy payments. In some cases, consumers' accounts were put into default. The suit covered all homeowners whose mortgage transaction was transferred or sold to Litton between October 2002 and February 2009, and who were charged erroneous late fees within 60 days of the transfer.

Litton tracks consumer payment records using a complex automated servicing platform. Known as Risk Assessment Default Analytic and Reporting (or RADAR), the system transfers information from primary lenders to Litton for processing. This procedure is known as the boarding process. According to the suit, RADAR glitches were the main cause of payments being wrongly flagged as late.

In court papers, former Litton employee Debra Murray said that [I]t was common that information regarding loan histories was improperly transferred from the prior lender during the loan boarding process. Murray further said that 95% of consumer complaints were caused by Litton's mistakes in servicing the borrowers' loans and were resolved in favor of the borrower. The bulk of these complaints alleged that Litton failed to credit consumers for payments they had already made.

Overwhelmed

Murray also said that Litton was becoming overwhelmed by the number of accounts it handled, and became increasingly careless and negligent as a result.

For example, Murray said that when a payment couldn't be matched to an account, it was placed in a catch-all payment clearing account, where it sat for months or even years. Meanwhile, the account of the consumer who sent in the payment went into default, collecting late fees and sometimes ending up in foreclosure. Murray also said that, when she found a missing payment, she was instructed to apply it as of the day it was discovered, rather than the date it was received. This, too, caused customers who sent their payments in on time to be assessed a late fee.

In July 2007, a federal judge in California certified a class of plaintiffs alleging claims under the Real Estate Settlement Procedures Act, or RESPA. The case was settled in April; as part of the agreement, Litton agreed to create a settlement fund containing $537,500, from which plaintiffs can draw up to $60 each. The narrow definition of the class and relatively small settlement amount likely left some consumers disappointed, but it at least signaled that Litton was willing to put the issue to rest.

Loan modifications

Four months after approval of the settlement, ConsumerAffairs.com continues to be bombarded with Litton complaints. An overwhelming number of homeowners report that they were promised a loan modification, only to be told months later that they did not qualify. In some cases, Litton dragged the process out by claiming they haven't received necessary paperwork or that the evaluation is taking longer than expected; in many cases the delay is so great that consumers come dangerously close to foreclosure.

In fact, it wasn't until earlier this month that Litton began officially participating in the federal government's mortgage modification program, the Home Affordable Modification Program (HAMP).

Low-income advocacy group ACORN labeled mortgage servicers that don't participate in the program as "homewreckers," but Litton and HomEq, the only other lender that had failed to participate in the program, have since announced they'll start doing so.

Litton said it has offered more than 35,000 trial modifications using terms "consistent with the Treasury program" since it was announced. Litton modified another 44,000 loans, the company said, in the 12 months before the start of the program.

"Our company has used modifications as the primary method of helping homeowners avoid foreclosure. In the 12 months prior to the announcement of the Home Affordable Modification program, we modified more than 44,000 loans, representing about 10% of our loan portfolio. As the details of the federal program emerged, we continued to modify loans, and by adopting this program, we will continue to make every effort to keep homeowners in their homes, said Larry B. Litton, Jr., Littons president and CEO.

Litton said customers who are having difficulty making their mortgage payments are encouraged to call (800) 247-9727 or visit www.littonloan.com to determine if they are eligible for a modification or other loan workout solution.

Homeowners beg to differ

But homeowners who have sought assistance from Litton say the process isn't as easy as the company claims.

Al of Empire, MI writes:

I applied for a loan modification March 4, 2009. Since that time I have sent all requested documents and forms including tax forms, proof of pension and SS income. These documents were claimed via phone conversation as "haven't been received" or "in review" or "I can't tell you" or "we'll let you know in writing. They would never commit to a process or approximate date. Now as of July 28, 2009, nothing.

Delianes of Miami, FL had a similar experience:

In December 2008 I had requested a loan modification to Litton Loan Services. I was paying my monthly payments on time but struggling in order to keep my loan current. They told me that it takes aprox 90 days. A month after I called them and they said that they never received any documents, even though I had the fax confirmation, I faxed all the documents again. A month later they sent me a letter that my request was denied because we had insufficient income.

Barbara of Bowie, MD has waited over two months for a response. Barbara writes:

I contacted Litton to receive a loan modification and sent them all the paper work. They stated they will do a worked out a plan to decrease my paments. In April 2009, I spoke with a Litton representative regarding my loan modification. It is now June 2009 and I have not heard from Litton Loan Servicing Company. I don't know if Litton really modifies loans. According to there website they help people to stay out of foreclosure.

Payments held

More disturbingly, some consumers also complain that Litton is still holding mortgage payments they sent in long ago. Missy of Northlewisburg, OH writes:

They held mortgage payments we did make for reasons I don't know. Some are still being held today. So it looks like we are behind on payments.

Mary of Vista, CA says that Litton failed to apply payments to her escrow account:

Loan modification since Oct 2008. I have had nothing but problems with this company. Paid 1,500 towards the escrow account yet they did not apply it towards the account. Now they say I owe 3,500 toward escrow account. I recently paid 900 towards escrow account they are not showing that paid.

More litigation?

If Litton is again applying payments late, they are putting themselves at risk of incurring a second class action, or at least a number of individual lawsuits. While consumers covered by the first settlement agreement are unable to pursue further claims, the same is not true of homeowners who fall outside the class definition. The Supreme Court has held that class actions only bar subsequent actions if they could have been litigated during the original suit.

Litton's practices with regard to loan modification could also put it on shaky legal ground, given the strict disclosure requirements imposed by the Truth in Lending Act (TILA) and other federal legislation.

Qwest has informed its customers that they have two months to switch to another provider, as it will be discontinuing wireless phone service by October 31st, 2009.

The Denver, Colorado-based company, which originally partnered with Sprint Nextel to provide voice and broadband services to customers in 2004, switched to Verizon Wireless last year. Qwest began transitioning its customers to Verizon Wireless in August of 2008, and the company claimed it has successfully switched "tens of thousands" of customers.

Customers were informed by Qwest that they could make the switch to Verizon Wireless within 60 days without incurring any termination or cancellation fees.

Qwest, which has customers in 14 Western and Midwestern states, attempted to profit through entering the Mobile Virtual Network Operator (MVNO) business, where a wireless carrier rebrands and resells another company's services to particular markets. The MVNO market has been seen as a growth opportunity, as cost-conscious consumers switch to prepaid plans rather than all-you-can-eat monthly plans for their services.

Qwest, however, was unsuccessful in profiting off the resale of Sprint's and Verizon's services. Of Qwest's total 763,000 wireless customers, only 185,000 were remaining with its MVNO service, said Chief Operating Officer Tom Richards during the company's quarterly earnings call on July 29.

Qwest plans to focus on its landline phone service and reselling bundled "triple-play" phone/cable/Internet offerings from other companies. Qwest also partners with DirecTV to resell its satellite television service.

Coincidentally, The Department of Justice said yesterday that it would let stand a ruling by a federal appeals court that shortened the sentence of former Qwest CEO Joe Nacchio, convicted in 2007 for insider stock trading. The court ruled that Nacchio's sentence should be reduced due to a miscalculation in how much money he had allegedly made as a result of the trades.

New York Attorney General Andrew Cuomo is going after another Buffalo-based debt collection operation.

In June the Attorney General's Office obtained an order a nationwide collection operation that consisted of at least nine debt collection companies across Western New York, run by Buffalo resident Tobias Boyland. According to the complaint, 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.

This week Cuomo filed a lawsuit seeking to shut down another Buffalo-based debt collection operation consisting of 13 debt collection companies run by Buffalo residents Omar Smith, Narvell Benning and Keith Marshall. The announcement has a similar ring.

According to the complaint, the Benning-Smith Group's employees violated state and federal law by routinely posing as law enforcement officials and threatening to arrest or to physically harm consumers unless they made arrangements to pay the company immediately.

Additionally, the Benning-Smith Group allegedly made abuse and humiliation a trademark of their collection practices by verbally abusing consumers and, in some instances, sexually harassing them. To date, the Attorney General's Office said it has identified more than a thousand instances in which the Benning-Smith Group breached state and federal statutes.

Cuomo's lawsuit, filed Tuesday in Buffalo Supreme Court, seeks to shut down all of the Benning-Smith Group's operations in the Western New York.

"This company made lies, threats and abuse their calling cards in their efforts to manipulate and take advantage of consumers already facing tough economic times," Cuomo said. "They did everything they could to demean and humiliate their targets, stooping so low as to sexually harass and verbally abuse individuals nationwide. My Office will continue to protect consumers by making it clear that companies like this one will not be permitted to operate in the State of New York."

Cuomo said the investigation revealed that collectors regularly demanded payment for non-existent debts 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, the complaint says.

In one instance, a Benning-Smith collector allegedly kept repeating the name of a consumer's daughter, describing various sexual things he would do to her unless the debt was paid. Another collector told a female consumer that if both she and her husband would engage in sexual acts with him, he would pay their debt himself. Collectors routinely called consumers "drunks," "scumbags," "deadbeats," and, in one instance, "a low-life piece of trash."

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.

These statutes also bar the use of deception and harassment in collection practices. 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.

Not all job-search methods are created equal.

In fact, a recent survey of human resources executives found that networking is the most valuable tool in the job seeker's arsenal, while going to job fairs is the leas effective.

The survey asked the hiring execs to rate the effectiveness of various job-search methods on a scale of 1 (least effective) to 5 (most effective). Networking averaged a 3.98 as about half of those asked gave networking the highest effectiveness rating of five.

The second most effective job-search tool available, according to by global outplacement consultancy Challenger, Gray & Christmas, Inc., which conducted the poll, is a relatively new one. Social/professional networking sites, such as LinkedIn, Facebook and Twitter, garnered an average rating of 3.3, with 47 percent of respondents giving it a rating of four or five.

Meanwhile, job fairs ranked as the least effective job-search method, scoring an average rating of 1.6. It was followed closely by responding to newspaper classified ads and sending resumes to employers, which each averaged 1.7 on the rating scale.

"Job fairs are particularly ineffective in recessions," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. "They are heavily attended by job seekers and lightly attended by employers. Many of the employers that do attend are seeking very low-level workers, volunteers or unpaid sales representatives/franchisees who would have to be prodigious sellers to make a living wage."

While job seekers do get to interact with a representative of the company at the job fair, Challenger says it hardly qualifies as networking. The employer representative is rarely a decision maker and simply there to administer and collect applications.

Those surveyed gave Internet job boards relatively high marks. It averaged a middle-of-the-road rating of 3.0, but 38 percent of respondents gave it a 4.0. While the Internet has the potential to be very useful for job seekers, Challenger said that it has become the primary tool for many, when it should be considered secondary to the traditional technique of networking and meeting prospective employers in person.

"It is important to remember that the job search is a multifaceted process," he said. "Those who rely on just one tool, even if it is networking, will take longer to find a position. The problem with the ease and accessibility of the Internet is that many job seekers make it their primary job search tool."

Challenger also warns that overuse of the Internet also threatens to prolong the hiring process on the employer's end, as well, by inundating employers with irrelevant resumes. Some human resource executives complain that for every qualified candidate that comes in from the Internet, there are ten to 20 who do not even come close to being a good fit.

"The more irrelevant resumes that hiring managers have to wade through in order to select the handful to bring in for interviews, the longer it takes to fill the position," he cautions. "One result of this has been the increased use of digital screening software that scans incoming resumes for keywords. Resumes without the right words are filtered out of the process. This will make it even more difficult for job seekers to get their resume in front of the hiring executive.

Challenger adds that this is not to say that the Internet has not revolutionized job searching. He points out that it has certainly made it easier for someone in San Francisco, for example, to search for job openings in Miami. In addition, the ability to conduct keyword searches has reduced the amount of time it takes to target the type of position a person is seeking.

"Job seekers must learn how to use all of the tools at their disposal, including networking, the Internet, newspapers, job fairs and even cold-calling employers," he concluded.

Miami man Albert Gonzalez, 28, and two unidentified Russians were indicted today for hacking into the computer networks of some of America's biggest retail chains, and stealing as many as 130 million credit and debit card numbers, according to the Department of Justice (DOJ).

According to the DOJ, Gonzalez and his accomplices were able to breach the security of Hannaford Bros. a New Jersey-based credit card payment processing company, and the Hannaford Bros. supermarket chain, as well as the 7-Eleven nationwide convenience store chain.

Gonzalez, who operated under aliases and handles including "segvec," "soupnazi" and "j4guar17," and his accomplices would allegedly then send the stolen data to servers in California, Illinois, Latvia, the Netherlands and Ukraine, which they could then sell in the "underground economy" of black-market stolen personal and financial data.

Gonzalez was already under indictment for his role in the TJX data breach, where the credit and debit cards of over 40 million shoppers at stores such as T.J. Maxx and Marshall's were purloined.

Gonzalez had previously been a federal informant in a 2003 fraud case, but authorities discovered he was actually criminally involved in the crime being investigated.

Gonzales has been indicted on charges of wire fraud and conspiracy. If convicted, Gonzales faces up to 20 years in prison on the wire fraud conspiracy charge and an additional five years in prison on the conspiracy charge, as well as a fine of $250,000 for each charge.

The various data breaches Gonzalez and his compatriots have allegedly been involved with have proven costly for all concerned. TJX has already paid over $60 million to settle charges brought against it by MasterCard, Visa, multiple banks, and the Federal Trade Commission (FTC), alleging negligence in not setting up strong security for their payment data processing.

Heartland has paid $12.6 million in costs so far over the loss of cardholder data from its own network, while Hannaford Bros. faces a class action charging negligence in its loss of 4.2 million credit and debit card numbers, and 1,800 reported cases of fraud connected to the breach.

Health care credit cards are designed to help consumers pay for uninsured health costs. They're supposed to be a better deal than regular credit cards, but they seem to draw the same kinds of complaints from consumers.

Amanda, of Newnan, Georgia, got a GE Money CareCredit card nearly two years ago to finance some extensive dental work. The terms were excellent - pay it off in 24 months and there would be no interest charges. She says she rapidly paid down the balance.

"I received a letter in February stating they were reducing my credit limit from $4,000 to $1,000 because of my credit score," she told ConsumerAffairs.com. "Well my credit score hadn't changed until they closed my account."

Amanda said she wasn't that upset, since she had paid her balance down from over $2500 to $346.

"Then I check my account today and they put $679 of accrued interest on my account. I highly recommend that you avoid them at all costs!"

Minnesota Attorney General Lori Swanson sees a bigger problem with these cards. When health care providers receive incentives to get their patients to open accounts, she says consumers often lose.

Swanson has just sued a Minnesota chiropractic clinic that she says enrolled patients in health care credit cards without their permission and then placed charges of up to $5,040 on those credit cards without patients' consent.

The lawsuit was filed against Express Health, P.A., a Minnesota chiropractic clinic, and its owner, Cory Couillard, D.C. The lawsuit alleges that Express Health and Couillard aggressively enrolled patients in the CareCredit Credit Card offered by GE Money Bank, convincing some patients to complete applications by telling them that they were not applying for a credit card but that the clinic simply wanted to check to see if they would qualify for credit.

The complaint further alleges that, unbeknownst to these patients, Express Health and Couillard then submitted the application to GE Money Bank, which issued a CareCredit credit card in the patient's name. To make matters worse, according to Swanson, the defendants sometimes submitted to the lender false annual income for patients, in some cases doubling or more patients' actual income. Once patients were issued a credit card, the defendants placed lump-sum charges of up to $5,040 on the credit card, without patients' knowledge or consent.

"The clinic engaged in predatory lending, only with health care credit cards instead of subprime mortgages," Swanson said. "The clinic jeopardized patients' credit ratings by fraudulently signing them up for credit cards and then charging their accounts thousands of dollars," she added.

GE Money Bank, the nation's largest issuer of health care credit cards, describes the CareCredit Credit Card as a "health care credit card that can be used as a payment option for certain expenses not covered by insurance or to bridge situations when desired care exceeds insurance coverage."

While a patient may believe they are borrowing the money interest-free, if they do not pay back the amount borrowed on a CareCredit credit card on time, default interest rates of up to 29.99 percent apply.

Swanson says patients should be very wary of high-pressure sales pitches in which they are marketed health care credit cards by health service providers. She said that chiropractors, dentists, medical clinics, cosmetic and eye surgeons, weight loss programs, hearing aid dispensers, and other providers sometimes aggressively promote health care credit cards as a way to make money for their clinics but that the credit cards may not always be in the best interests of patients.

"A clinic's primary interest in marketing health care credit cards as a sales agent for the lender is to boost its bottom line," Swanson said. "This may collide with the best interests of the patient, particularly when the credit cards come with high interest rates and high fees."

To illustrate the point, Swanson said her office received a complaint from a 91-year-old Minnesota woman whose hearing aid dispenser convinced her to take out a health care credit card to pay for her hearing aids. The woman- who lives on $12,000 per year in Social Security benefits-made all of her monthly payments of around $110 on time and thought that the credit card company would bill her for her final payment.

When she didn't receive a bill, she made the final payment just a few days after it was due. The credit card company then billed her for interest of $1,200--charged retroactively to the date of the original charge. Swanson says it turned out to be a very expensive way for a senior citizen on a fixed income to finance her hearing aids.

A Florida man convicted of heading up a massive "business opportunity" scam that fleeced investors to the tune of more than $4 million has been sentenced to 27 months in prison.

In addition, Stewart Pope, who headed the Miami-based Global Resources, has been ordered to pay $4,313,093 in restitution.

The U.S. Department of Justice says Pope was listed as the President of Global in the company's marketing materials, communications with potential customers, and disclosure documents. In reality, Pope's name was used to hide the involvement of Global's true owners and principals, who, among other things, had a history of selling various sorts of failed business opportunities, according to the complaint.

Pope's conviction and sentence brings to eight the number of individuals convicted in this scam that victimized over 200 people and caused more than $4,000,000 in losses.

Global promoted business opportunities to consumers across the country through television commercials and other media, touting the profits that could be earned by purchasing a Global distributorship, and urging consumers to call a telephone number that appeared in the ads. Potential purchasers were told that for a purchase price of approximately $15,000, Global would provide three terminals, numerous prepaid cell phones, and advertising material, and that potential purchasers would earn their investment back in approximately six months to a year.

Global salespeople told consumers that Global would find viable, high-traffic locations to place the terminals; relocate any terminals that underperformed; only sell distributorships in a limited geographic area; and provide ongoing technical support and customer service.

In fact, the government says the locations where terminals were placed drew almost no business and many of the prepaid cell phones did not work.

"We are continuing to prosecute individuals who take advantage of hard economic times by offering false hope to people looking for income," said Assistant Attorney General Tony West. "The lure of a business opportunity is the promise of a stream of income coming from kiosks, vending machines, automated teller machines, or other mechanisms for selling goods or services to the public. The problem is that the promises of good locations and potential profits are often completely bogus."

In addition to Pope, seven other individuals were previously convicted and sentenced in connection with the Global Resources fraud. Two of the principals of the firm, Richard Goodman and William Judd, were sentenced to 70 months and 46 months in prison, respectively.

Each day, American consumers encounter problems in their dealings with businesses, ranging from simple misunderstandings to outright fraud. We know, because we hear from hundreds of consumers each day.

"They took my initial $7.95 and guaranteed I would make money in seven days," Linda, of Oklahoma City, told ConsumerAffairs.com.

Linda said she had signed up with an online company called DataMoneyonline.com, which she said offered a way to earn extra money. Instead, she says, it took her money.

"They took $197 out of my bank account under the name of "Money Machine" and now they will not even return my emails," she said.

In addition to complaining to ConsumerAffairs.com, Linda should also complain to her state attorney general -- in her case, Oklahoma Attorney General Drew Edmondson. Most consumers don't realize that they have an elected official in their state whose job is to see they don't get ripped off. In most cases, these officials take this task seriously.

For example, the Pennsylvania attorney general's office says it receives more than 30,000 complaints related to consumer issues each year. These complaints include health care issues, insurance fraud, violations of the Pennsylvania Do Not Call Law, SPAM email and junk mail, and numerous other subjects. The office says it begins an investigation in an attempt to resolve the complaints.

Despite being a relatively small state, West Virginia also has an active attorney general who takes his role as a consumer advocate seriously. So far this year, Attorney General Darrell McGraw's office has blocked collection agencies from harassing consumers, forced marketers to live up to their free gas promotions, and sued a number of businesses for violating consumer law.

"After your complaint is received, we first decide whether it can be resolved through our voluntary mediation process. These complaints are assigned to a mediator who contacts the business and requests a written response to the complaint. Many complaints are resolved successfully when the business makes a favorable response or when the consumer and business reach a compromise," McGraw's office says.

When mediation is unsuccessful, staff attorneys investigate to determine whether consumer laws have been violated.

In January 2008, a New Jersey wedding photography studio suddenly closed its doors, throwing New Jersey brides into a panic and triggering an avalanche of complaints to ConsumerAffairs.com and New Jersey Attorney General Anne Milgram.

Milgram went to court and, by November 2008, had seized Celebration Studios' assets, including wedding photos and videos, and began distributing them to the brides who had paid for them.

"The sheer volume of materials made this a major undertaking, but for our staff, it was a labor of love because we know these photos and videos are cherished keepsakes," said New Jersey's Consumer Affairs Director, David Szuchman.

Colorado Attorney General John Suthers recently announced that his office's consumer credit compliance examinations retreived more than $1.8 million in refunds to more than 13,000 Colorado consumers during the 2008-2009 fiscal year.

"Although individual refunds might be small in most cases, the overall results are sizeable.," Suthers said. "Consumers may not know if the terms of their credit agreements are legal or if payments have been correctly applied. However, my staff is able to review loan files and require appropriate corrective action when violations are discovered."

But violations can't be discovered unless consumers speak up. When consumers visit ConsumerAffairs.com to lodge a complaint, they should also take advantage of the site's connection to their state attorney general. Just click on the Resources link and then click on your state.

By James Limbach
ConsumerAffairs.com

August 14, 2009
The first phase of the Credit CARD Act of 2009 goes into effect August 20, 2009. But if you think that means an end to your credit card problems, Eleanor Blayney, consumer advocate for the Certified Financial Planner Board of Standards, says, "Think again."

While the Act does put a lid on some unfair practices by credit card issuers, unless you -- the consumer -- make just as many changes in the way you use your card and credit, the new legislation won't necessarily improve your personal financial situation. In fact, you could be worse off than ever.

The law does aim to put a stop to the most egregious practices of the credit card industry. But it does not make credit cheaper or more available. And many of the provisions of the law do not come into effect for six months. This could mean trouble for consumers who now depend on every dollar of their current credit limit.

Until next February, card companies can still raise the interest rates on existing balances to compensate for their loss of revenue from the economic contraction and the rise of bankruptcies and delinquent accounts. They are also canceling accounts, and cutting credit limits, both of which have the effect of damaging consumers' FICO scores, which in turn makes them targets for rate increases.

These kinds of problems are legion:

• Denise of Scotchtown, New York, tells ConsumerAffairs.com that she has three credit cards with Chase - all with low interest rates. "Last winter," she says, "I was notified that my Chase Master card rate was being increased from 9.99% to 13.24% and that I had to either accept the rate increase OR I could choose to CLOSE the account in order to keep the prevailing rate. I opted to simply transfer the balance to a new card that I got through my credit union and let that go."

• Mario of West Palm Beach, Florida, writes, "My Visa card was cancelled without notification and the way I found out is when I tried to use it. I have kept it always on-time and paid more than the minimum for at least three years."

• Christine from West Warwick, Rhode Island informed ConsumerAffairs.com of this problem: "I have two credit cards with Bank of America (BOA), one with a much lower interest rate of 10.99 percent. I called to see if I could transfer the credit card with the higher interest rate of 24 percent to the one with the lower interest rate. I had a $22,000 credit limit on that card. Instead they lowered my credit limit and now raised the interest rate from 24 percent to 27.99 percent on that card."

When the Act takes effect, fees will take over from rate increases as the means for credit card companies to stay profitable, and even good credit risks who pay in full every month, will need to be on the lookout for the instances when these fees will be charged. Blayney says you can expect to pay extra for cash advances, service calls to a credit card company employee, paper statements, or balance transfers. She offers the following advice to consumers to make sure the new legislation works in their favor:

• Keep using your cards (so they don't get cancelled) but keep your balances low relative to your credit limit. Under the new law, credit card companies must give you longer lead time between billing you and the date you have to pay. Use that extra time to get extra funds to pay down that balance.

• Start actually reading those statements before you pay and shred them. They will become the vehicle to inform you of any changes in your credit limit or rates.

• Get out your BlackBerry or day planner: Time periods and dates become more important than ever under this new law. Make sure you pay your bill on time to avoid increased late fees; if you are late with a payment, make sure it is no more than 60 days late; if you get an interest increase because you go beyond that 60 days, make an extra effort to be on time for the next six months. If you meet that time requirement, the credit card companies are required to restore the lower rate you paid before you were delinquent.

The best advice, according to Blayney, "Use your credit card for the simple, original reason it was invented: as a more convenient form of cash. Do not use it because you do not have the cash in the first place. Think of it only as a very short-term loan between the time of purchase and the time you pay your bills. Forget about airline tickets and redeemable points: your greatest reward will be a more financially secure life."

By Fred Cicetti

August 14, 2009

Q. My grandson asked me to participate in a family tree about our medical conditions. He wants to ask me questions about my health, but Im a pretty private person. I dont know about this. What do you think?

I respect your reluctance to discuss personal matters with your grandson. However, the information you have to share with him would benefit your entire family and future generations. Perhaps your grandson could submit questions in writing and you could answer them in the same way. That might help avoid uncomfortable moments.

A medical family tree or family health history (also known as a medical genealogy) is like the ones genealogists prepare, but it also includes all the maladies suffered by members of the family. A medical tree can reveal patterns and help everyone in a family choose medical tests, diagnose diseases, prevent medical problems, and assess health risks.

Many of the causes of our illnesses are inherited from our ancestors. Almost a third of known diseases have genetic links. These include colon cancer, heart disease, alcoholism and high blood pressure.

Family gatherings are an opportunity to get started on a medical genealogy. If you want to prepare one, you should write down your questions in advance. You should ask enough questions and the right questions to make a medical genealogy useful to members of the families and their doctors.

The following is important information about each family memberliving and deadthat should be included in a health history. Frame your questions to elicit this data.

1. Birth and death dates.

2. Cause of death.

3. All medical conditions with dates and outcomes. Include anything outside the norm, not just serious diseases. Don't forget problems such as allergies, vision and hearing difficulties.

4. Birth defects.

5. Mental health problems.

6. Lifestyle description. This would include information about smoking, drinking, diet, obesity and exercise.

7. Racial and ethnic background. Some medical conditions are more common in certain groups of people.

If you want to prepare a medical genealogy, an extremely helpful resource is "My Family Health Portrait," an online tool provided by the U.S. Surgeon General. You can find it at: http://familyhistory.hhs.gov/

The tool guides you through a series of screens that helps you compile information for each of your family members. Then you get a graphic printout with the information organized in a diagram or a chart. The tool allows users to return and update information.

My Family Health Portrait requires only a computer with a Web browser. The health information you provide is stored only on your computer and not on a U.S. government server. You own the information file and can choose what to do with it at any time. It is easy to email the file around to all family members.

Users also have the option to download the original My Family Health Portrait software and install it on their computers if they have the Windows operating system.

I used the online tool to do my own family tree. It was a simple process that produced a valuable report. I also tried the downloadable software. I recommend avoiding this program--it had many flaws and was worthless.

If you want something more basic, you can get a free five-generation ancestor chart at: http://www.familytreemagazine.com/forms/download.html#

This chart is designed for a standard genealogy, but it's a good basic document to create your own medical family tree.

The information in a medical tree provides indications, not guarantees that family members will inherit problems from their ancestors. How you take care of yourself is a major influence on your health.

All Rights Reserved © 2008 by Fred Cicetti

The enormously popular Apple iPhone finds itself at the center of two class action lawsuits this week, as angry consumers accuse AT&T of touting the phone's nonexistent multimedia messaging capabilities, or MMS.

The complaints, filed in Illinois and Louisiana, allege that "Apple's print and video advertisements in and on television, the Internet, radio, newspapers, and direct mailers all touted the availability of MMS," but that the phones remain unable to support the advanced text messaging capability.

MMS allows cell phone users to send messages that include not only plain text, but also images, videos, and audio recordings. While the technology is growing outdated -- Seth Weintraub of the blog "9 to 5 Mac" points out that mobile e-mail accomplishes everything MMS does, and more -- it remains popular among text message junkies.

Both versions of the phone -- the 3G and 3G S -- were supposed to be fully MMS capable by June. Consumers who downloaded the necessary software, however, quickly discovered that their phones remained MMS- incompatible. On June 8, Apple further disappointed customers by reiterating their promise that MMS capability was forthcoming, but that they weren't yet ready to say just when.

The suits claim that representatives of both AT&T Wireless and the Apple Store failed to inform consumers that the phones didn't yet have full MMS capability. The complaint says that in some instances, employees "concealed, suppressed, or omitted material facts" about the texting technology. Apple's only apparent warning to consumers came in a microscopic disclaimer on the company's website: "MMS Support from AT&T coming in late summer."

Attorneys for the plaintiffs say that the putative class could include up to 10,000 consumers. The class representatives are seeking unspecified "damages" for their phones, which run anywhere between $100 and $700, depending on whether they are purchased with a calling plan.

Under its contract with Apple, AT&T is the only wireless provider that offers the iPhone. The agreement was originally set to expire this year, but in August 2008 the two companies announced that AT&T's exclusivity rights would continue into 2010. It's a great deal for AT&T, which collects, on average, $100 per month in voice and data fees from iPhone users, compared to just $55 a month for other customers.

Despite its relatively young age, the iPhone has been the subject of several high-profile class actions. A 2007 suit accused Apple and AT&T of forming a monopoly through their exclusivity agreement, which prevents other wireless carriers from selling the iPhone. The suit further alleged that Apple aggressively protected the monopoly by blocking phones that had been "unlocked" and connected to non-AT&T networks.

A suit filed last summer claimed that the iPhone 3G delivered performance far inferior to that promised in advertisements. Plaintiff Jessica Smith of Alabama said that the phone's e-mail and other data connections were slower than expected, and that the phone only connected to AT&T's network less than 25% of the time. Smith also suffered through an "inordinate amount of dropped calls."

While both the iPhone 3G and 3G S come equipped with numerous technological toys, the 3G S is the better-equipped of the two. The upscale model includes a built-in video camera, compass, voice control, and unquantified "improved performance." Apple sold one million 3G S models in the first three days after its introduction.

Attorney General Andrew M. Cuomo says his office has filed a lawsuit against New York-based American Modification Agency, Inc., also known as "Amerimod," one of the largest foreclosure rescue companies in the country, and its owner Salvatore Pane, Jr.

The defendants are charged with engaging in a wide variety of deceptive business practices and false advertising to induce beleaguered homeowners on the brink of foreclosure to sign up for their services.

Cuomo said his investigation into Amerimod revealed that while claiming to modify home mortgage loans and lower monthly payments of consumers on the brink of foreclosure, Amerimod typically falls short on its promises. In fact, after Amerimod collects illegal, up-front fees, he says the homeowners often find themselves in worsened circumstances with respect to their mortgages and unable to obtain accurate information from Amerimod's representatives or other customer service.

The lawsuit seeks refunds and damages for Amerimod's customers who were charged illegal up-front fees and were deceived by the company's empty promises, misleading representations, and false advertising. It also seeks to shut down the company's New York operations.

"Amerimod shamelessly took advantage of thousands of vulnerable homeowners desperately trying to save their homes," Cuomo said. "By charging up-front fees and making misleading and deceptive claims about its ability to prevent foreclosure, Amerimod blatantly ignored the law and tried to squeeze the last dollars from struggling consumers nationwide. My office is determined to obtain relief for these individuals and families, and to prevent Amerimod and other foreclosure rescue companies from continuing to engage in this kind of unlawful conduct."

The lawsuit asserts that Amerimod:

• Fails to obtain loan modifications for the vast majority of its customers, many of whom end up in foreclosure or negotiate loan modifications on their own.

• Illegally charges thousands of dollars in up-front fees, and fails to refund these fees as promised when loan modifications are not obtained.

• Engages in deceptive and misleading practices by grossly exaggerating its success rate, making false promises about its ability to save customers' homes, underestimating the amount of time it takes to achieve a loan modification, and misrepresenting that the company is a law office and that lawyers will work on customers' files.

• Makes false guarantees of 100% customer service when, in fact, once Amerimod has collected its up-front fees, its representatives often fail to return calls of customers facing imminent foreclosure who are desperately seeking a status update on their files.

• Makes false and misleading statements on its website, in newspaper advertisements, and in radio advertisements.

Fails to include legally required disclosures and notices in its customer contracts, including notice of a customer's right to cancel a contract within five business days.

• Provides detrimental advice to customers, such as recommending that they stop making monthly mortgage payments, ignore communications from their lenders and avoid consulting with non-profit housing counseling agencies.

• Targets Spanish-speaking consumers who are signed up by Spanish-speaking representatives, and then fails to provide the consumers Spanish-language contracts as required by law.

Amerimod's central office is in Uniondale, NY, and it has had more than ten branch offices throughout the state, as well as offices in various states throughout the United States. The lawsuit seeks a court order directing Amerimod to stop marketing and providing loan modification services in New York State, provide an accounting of customer fees, pay refunds and damages to all injured customers, and pay monetary penalties to the state.

Job losses appear to be slowing, but a bigger question looms: when will the employment rolls begin growing again?

While the unemployment rate dipped to 9.4 percent in July, new claims for unemployment benefits jumped unexpectedly in the last week. At the same time, July's retail sales were lower than expected.

But those indicators look backward, telling us what has happened in the economy recently. What about what's going to happen in the future?

The Association for Operations Management and the Cameron School of Business at the University of North Carolina Wilmington have released a report that, on its surface at least, provides a measure of hope for those looking for a job.

Data reported in the July 2009 Operations Management Employment Outlook survey indicate that 47 percent of respondents with hiring responsibility anticipate hiring staff in one or more of the following operational areas; execution and control of operations, purchasing/customer relationship management (CRM), quality, resource planning and supply chain management. Quality and resource planning are expected to see the greatest rate of growth, according to the report.

Conversely, 36 percent of survey respondents with hiring responsibility anticipate layoffs during the same period of time, with 22 percent of those planning to layoff in one of the following operational areas: execution and control of operations, purchasing/CRM, quality, resource planning and supply chain management.

"The most recent data from the Operations Management Employment Outlook indicate that hiring professionals generally expect operations management jobs will be added at a higher rate than they are being lost over the next 12 months," said APICS CEO Abe Eshkenazi. "This is a promising sign of economic stabilization because operations management job growth sheds light on a variety of industries, including manufacturing."

"Hiring and employment are critical elements of economic forecasting and the data in this report indicate a slight upturn in the economy and improved unemployment numbers over the coming year," said Drew Rosen, professor of operations management at the University of North Carolina Wilmington and a member of the research team.

The initial data collection took place in March 2009, with a second round of data collection in July 2009. A random sample from a population of 30,000-plus operations management professionals was surveyed to identify prevailing compensation levels and anticipated hiring trends for operations management professionals over the next year.

August 13, 2009
About 52,000 Homelite, Husky and Black Max brand generators are being recalled. The fuel gauge can leak excessive amounts of gasoline, posing a fire hazard to consumers.

This recall involves Homelite and Husky brand generators sold exclusively at Home Depot stores and Black Max brand generators sold exclusively at Sams Club stores. Affected generators include Homelite models HG3500, HG3510, HG5700 and HG5700R, Husky models HU3650, HUCA5700 and HUCA7000 and Black Max models BM10700A, BM10700B, BM10711A, BM10700DG, BM10700R, BM10700BR & BM10722G. Generators included in this recall have manufacturing date codes between BML306-BMM151, CHL122-CHM151 and CRL153-CRM059. The model number and manufacturing date code are included on the data label located on the top or side of the generator engine. Products with a green dot on the outside of the package or a silver dot on the fuel gauge face are not included in the recall.

The generators, made in China, were sold exclusively at Home Depot and Sams Club stores nationwide from July 2008 through May 2009 for between $480 and $1,600.

Consumers should immediately stop using their generator and contact Homelite Consumer Products Inc. (Homelite and Husky brands only) or Black Max (Black Max brands only) for a free repair kit.

For additional information regarding Homelite or Husky brand generators, contact Homelite Consumer Products, Inc. at (800) 242-4672 between 8 a.m. and 5 p.m. ET Monday through Friday, or visit www.homelite.com. For additional information regarding Black Max brand generators, contact Black Max at (800) 726-5760 between 8 a.m. and 5 p.m. ET Monday through Friday or visiting www.blackmaxtools.com.

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

Threatening possible criminal and civil prosecution, California Attorney General Edmund G. Brown Jr. today ordered 386 mortgage foreclosure consultants to post $100,000 bonds and register with his office.

He also ordered more than two dozen companies to justify suspicious loan modification claims made in "slick advertising," online and through the mail.

"There has been an unprecedented series of scams and exploitation in the state," Brown said at a press conference today. "Too many homeowners have been paying money in advance, because they were desperate, and were coming up with nothing."

"Hoping to lower their mortgage payments, thousands of homeowners were instead duped by slick advertising and money-back guarantees," Brown said. "The time for accountability is at hand, and this rogue industry must clean itself up or face legal action," Brown added.

Working in concert with the California Department of Real Estate (DRE) and the State Bar Association, Brown unveiled a new Web site that provides California homeowners with tips to avoid loan modification fraud, allows them to determine if a company is registered with his office and makes it easier to file complaints.

Attorney General Edmund G. Brown unveiling the new crackdown on foreclosure consultants. From left to right: Jeff Davi, head of the California Department of Real Estate, Brown, California State Bar Supervising Trial Counsel Suzan J. Anderson, and Los Angeles County firefighter Brian Batiste, who was victimized by a mortgage modification consultant. Photo by Martin H. Bosworth.

According to Brown, a total of 1,062 complaints against loan modification and foreclosure consultants have been filed with the Attorney General's office from January 2007 through July 2009. The office received 27 complaints in 2007, 163 in 2008, and 872 in 2009, an increase of 500 percent.

The agencies were sharing the complaints they received with each other and noticed a steady increase in allegations of mortgage modification fraud, said Robyn Smith, Supervising Deputy Attorney General, which led them to initiate a joint action against the consultants.

Brown has sent letters directing 386 mortgage foreclosure consultants to register with his office within 10 days and post $100,000 bond, or demonstrate why they are not required to. If the consultants are required to register and have failed to do so, they are subject to criminal penalties of up to a year in jail and fines ranging from $1,000 to $25,000 per violation. Eighty-five of these consultants are based in Los Angeles County, 133 in Orange County, 47 in the Inland Empire, 68 in San Diego County and seven in the Bay Area.

Additionally, Brown sent letters today demanding that 27 loan consultants substantiate suspect claims made on the internet and in direct mail advertising. For instance:

• Brown directed Irsfeld, Irsfeld & Younger, LLP of Glendale, Calif. to substantiate its claims including: "Our team has 10 years of success in negotiating 90% of all mortgage loan modification requests to a successful outcome...For the modification requests we accept, our modification failure rate is less than 1%."

• Brown directed 21st Century Real Estate Investment Corporation of Rancho Cucamonga to substantiate its written solicitations including: "[y]our proposed loan modification is a 30 year fixed/3.5% interest rate with a monthly payment of $495. Your monthly savings is $705. Total savings over a 30-year period is $253,800. . . . Your first payment will be negotiated to begin March 2009 - payable to your current lender for $495."

• Brown directed Mortgage Modification Solutions of Irvine to substantiate its claims including: "Our services are due to the FEDERAL MANDATE which makes it mandatory for mortgagees, upon the default of a single family mortgage, to engage in loss mitigation actions" and "Why $3995.00 is nothing compared to what you can accomplish in return? #1- It's 10 times more expensive to hire a CPA or a Financial Advisor to exclusively analyze & Research your financial affairs to create a plan acceptable to the Banking standards."

• Brown directed Alliance Law Center of San Diego to substantiate its letters to consumers stating: "Final Notice: 3/11/09, our review of certain information indicates you may be a victim of federal disclosure violations and/or predatory lending violations, therefore your loan may be invalid, and you may qualify for a loan modification saving you thousands of dollars."

Jeff Davi, head of the California DRE, said that the mortgage modification scams were an "abhorrent, terrible practice" that saw "unlicensed people doing business because the opportunity was there."

The State Bar of California, meanwhile, announced that it has obtained resignations from two lawyers and filed charges against a third for their loan modification activities. The State Bar's special team on loan modification complaints continues to investigate more than four hundred active complaints from consumers about lawyers' roles in loan modification scams.

Supervising Trial Counsel Suzan J. Anderson said that the State Bar has received hundreds of complaints this year alone, and that "this only seems to be the beginning."

Also speaking at the conference was Brian Batiste, a member of the Los Angeles County Fire Department who applied for mortgage modification assistance after his wife, a schoolteacher, lost her job and they had trouble paying the mortgage. Batiste said the company he spoke to was very receptive initially, but once he paid the upfront fee of $2,895, the company stopped returning his calls.

"Eventually my wife and I went down to the office and I threatened to act a fool and turn the place out if they wouldn't talk to me," Batiste said. When the company claimed they weren't getting his calls, he used his cell phone to call the company, seeing his number appear on their incoming call system, which was then promptly routed to voicemail.

Batiste was able to get assistance on his mortgage by dealing directly with the lender. Brown said that first and foremost, borrowers who are in trouble financially should talk to their lenders directly.

Brown also urged homeowners to contact his office or other state offices immediately if they were having problems with a loan modification company. "The sooner you contact us, the sooner we can work on getting some of your money back," Brown said.

As part of a nationwide sweep last month, Brown filed suits against 21 individuals and 14 companies who ripped off thousands of homeowners seeking mortgage relief. In total, Brown has sought court orders to shut down 32 companies and has brought criminal charges and obtained lengthy prison sentences for deceptive loan modification consultants.

The complete list of unregistered consultants was released by Brown's office.

Two of four people charged in connection with an investment scam that has cost its victims more than $516,000 have pleaded not guilty to more than 80 felony counts related to the scheme.

Robert and Ann Scarborough, both of Hopkinsville, Ky., pled not guilty at their Tuesday arraignment in Christian Circuit Court on more than 80 felony counts related to the scheme.

Ann Scarborough, of Hopkinsville, Ky., is charged with four counts of theft by deception over $300, 22 counts of selling unregistered securities, 22 counts of selling securities without a brokerage license and 22 counts of employing a scheme, device or fraud in sale of security. She is also facing trial this fall in U.S. District Court in Tennessee on charges of wire fraud, mail fraud and money laundering.

Her husband, Robert, is charged with six counts of complicity to selling unregistered securities, six counts of complicity to selling securities without a brokerage license and six counts of complicity to employing a scheme, device or fraud in sale of security.

The Scarboroughs are accused of soliciting investors in purported real estate opportunities in Kentucky, Indiana and Nevada. Investors were allegedly led to believe they would receive as much as five-times their investment amount within weeks or months.

"During a time when many Kentuckians have seen their retirement and pensions threatened by the economic downturn, investment schemes that offer get-rich-quick returns are very tempting, even to the most sophisticated consumer," said Kentucky Attorney General Jack Conway.

Also charged in connection with the phony investment scheme are Kenneth and Sheila Kennedy, both of Clarksville, Tenn. Kenneth Kennedy is charged with 15 felony counts of theft by deception over $300 in connection with a single individual who paid him $89,500. His whereabouts are currently unknown.

His wife, Sheila, is facing 95 felony counts related to the scam. She also pled guilty on March 27, in U.S. District Court in Nashville, Tenn., to one count of wire fraud, one count of mail fraud and two counts of money laundering. Sheila Kennedy could face a maximum of 30 years in prison on the federal charges.

"On behalf of those who were victimized, my office will make every attempt to get their money back and to punish those responsible for their losses. We also want to encourage consumers to leery of any "investment" or promise that sounds too good to be true; they usually are," said 3rd District Commonwealth's Attorney Lynn Pryor.

In the cascade of complaints to ConsumerAffairs.com lately about major banks, a theme is emerging. Many consumers -- who've had rates raised, accounts closed and fees imposed -- long for the day when they can tell their bank, "you're fired."

Tina, of Denver, Colorado, expressed it recently in her complaint about the sudden increase on her Chase credit card.

"I have had it with these people," she told ConsumerAffairs.com. "When the economy rebounds and even before so, let's revolt, people! We can find trustworthy, reputable companies to work with. We the American people do not deserve this treatment."

Is it actually possible for Tina, and others who feel as she does, to exist in 21st Century America without doing business with a bank? Maybe, because there do appear to be some alternatives.

Yahoo! personal finance columnist Laura Rowley says consumers ticked off about excessive overdraft fees and sky high credit card rates should consider ditching their checking account and put all their cash into a prepaid debit card.

"Users direct-deposit their paychecks onto the cards (the money is FDIC-insured) and can do point-of-sale transactions and pay bills online," she wrote in a recent column. "There are no overdraft fees; the purchase is declined if the card is empty."

If going that route, consumers should research prepaid cards carefully, because some come laden with fees. However, many have fees that amount to only $70 or $80.

More practical

Credit unions may provide a more practical alternative to banks, providing many of the same services but without the policies that seem to drive consumers up the wall. They tend to charge customers, or "members," lower rates when they borrow money and offer higher rates on their savings. Like banks, most are federally insured.

Credit unions began in 1844 in England, and first appeared in the U.S. in 1908. They are cooperative organizations, "owned" by their members, or customers. That means they don't have to show a profit and provide dividends to shareholders - because there aren't any.

Credit unions also tend to be more stable. Since they are membership organizations, they aren't sold and rarely merge with other financial institutions. Some member find that gives them a feeling of safety and security they don't get with a bank.

How do you join a credit union? It's not quite as simple as opening an account at a bank, which may be why more consumers aren't taking advantage of them.

While anyone can be a member of a credit union, the law places some limits on the people they may serve. A credit union's charter defines its "field of membership," which could be an employer, church, school, or community. Anyone working for an employer that sponsors a credit union, for example, is eligible to join that credit union.

In recent years, individual credit unions have been able to expand their "field of membership" to include wider sections of the population. For example, the Virginia Credit Union was originally established to serve state and county employees. But membership has been expanded to people who work for state-supported colleges, some Virginia-based companies, and "individuals who live, work, worship, volunteer or attend school within the boundaries of" the City of Richmond and six other Virginia cities and counties.

The Credit Union National Association offers assistance to consumers who are searching for a credit union they can join.

Meanwhile, federally insured credit unions totaled 8,100 at the end of 2007, with 86,837,478 members, according to the National Credit Union Administration, a U.S. Government agency.

Two states - Colorado and Florida - have teamed up to crack down on deceptive mortgage advertising.

Colorado Attorney General John Suthers, in conjunction with the Florida Attorney General's office, has reached an agreement to prevent a Colorado-based brokerage firm, Assurity Financial Services, LLC, from engaging in deceptive trade practices.

According to the complaint, Assurity Financial Services was contacting consumers with direct mailings designed to look like they were from a government agency or the borrower's lender. According to the assurance of voluntary compliance, Assurity Financial Services sent out hundreds of thousands of mailings that appeared to be materials from the U.S. Department of Housing and Urban Development, the U.S. Department of Veterans Affairs or other governmental entities.

The mailers, which used a Washington, D.C., P.O. Box as a return address, informed homeowners in Colorado, Florida and other states that they were eligible for refunds on their mortgages.

Other mailers from the Englewood firm were made to appear as though there were from the homeowner's lender or implied that the homeowner was delinquent on their mortgage when, in fact, the homeowner was not. When consumers used the phone number listed on the mailers, they were directed to operators working for Assurity Financial Services who were trying to solicit business.

These actions, the attorneys general alleged, violated the Colorado Consumer Protection Act and the Florida Deceptive and Unfair Trade Practices Act.

Under the assurance of voluntary compliance, Assurity Financial Services has agreed not to engage in any false or deceptive trade practices and will be required to clearly label each mailer as "a solicitation for a home loan." Also as part of the agreement, Assurity Financial Services will pay $100,000 each to Colorado and Florida to reimburse the cost of their investigations.

Mystery Writers of America (MWA) and the Science Fiction and Fantasy Writers of America (SFWA) are co-sponsoring a Writer Beware program, which exposes publishing scams.

The project is also designed to educate writers on how to protect themselves from fraud, and it maintains a massive database on their website of questionable literary agents, publishers, editorial services, and literary contests.

"We are pleased to be able to support the important work that Writer Beware is doing on behalf of all writers, professional and aspiring, by exposing scams aimed at defrauding authors," said Frankie Bailey, executive vice president of the Mystery Writers of America, which is giving SFWA a financial grant of $1000 and providing other resources, such as inviting Writer Beware representatives to share their booth at BookExpo and supplying volunteers to speak at writing conferences about fraudulent publishing practices.

Like the SFWA, which launched Writer Beware in 1998, the MWA is not only concerned with the issues that affect professional authors but also with the problems that face aspiring writers.

"It's vital that organizations like SFWA and MWA team up on these kinds of challenges. We can accomplish far more working together than we can working on our own, and I hope other organizations will see this as an invitation to join in these types of group efforts," said Russell Davis, President of SFWA.

Up until now, Writer Beware has been the public face of SFWA's Committee on Writing Scams. But with this partnership between the two organizations, that has changed.

"We are not only showing our support and making Writer Beware stronger, but sending a message to scammers that we won't stand by and let them take advantage of authors," said Lee Goldberg, the MWA board member who will act as the MWA's liaison with Writer Beware. "All writers organizations, no matter what genre they represent, share a common interest in protecting writers from literary and publishing scams. We hope our sponsorship will inspire other organizations to join us in supporting the important work that Writer Beware does for all writers."

Writer Beware's efforts are not limited by country or genre. Their website can be used by any writer, regardless of subject, style, genre, or nationality. . .or professional standing.

The Writer Beware blog offers up-to-the-minute information on specific scams and schemes, along with advice for writers. And Writer Beware offers free research service for writers with questions about agents, publishers, and others.

Public Citizen is proposing ten 10 cost-cutting, patient safety measures that it contends would save an estimated 85,000 lives and $35 billion a year. The report, "Back to Basics," analyzed the results of scientific studies of treatment protocols for chronically recurring, avoidable medical errors.

In contrast to the high-tech tests and procedures that many experts blame for staggering increases in the nation's health care costs, most of the reforms in Public Citizen's report involve fundamentals as simple as practitioners consistently washing their hands, sufficiently tending to patients to prevent bed sores, and following simple safety checklists to prevent infections and complications stemming from operations.

Aside from the tragedy of needless deaths and injuries, the financial toll of failing to follow accepted safety procedures is astounding. Severe pressure ulcers cost an average of $70,000 apiece to treat. A catheter infection costs $45,000. Each instance of ventilator-associated pneumonia costs $5,800. Collectively, avoidable surgical errors cost an estimated $20 billion a year, bed sores $11 billion and preventable adverse drug reactions $3.5 billion.

"There are many incentives to order expensive tests and procedures and too few rewards for providing basic, sensible care," said David Arkush, director of Public Citizen's Congress Watch division. "As the largest investor in the nation's health care system, the federal government should ensure that fulfilling basic patient safety standards is a condition of receiving federal reimbursements. And the government should pay providers for doing the right thing. It will save money in the long run."

Public Citizen proposes that health care providers:

• Use a checklist to reduce avoidable deaths and injuries resulting from surgical procedures (saves $20 billion a year);

• Use best practices to prevent ventilator-associated pneumonia (saves 32,000 lives and $900 million a year);

• Use best practices to prevent pressure ulcers (saves 14,071 lives and $5.5 billion a year);

• Implement safeguards and quality control measures to reduce medication errors (saves 4,620 lives and $2.3 billion a year);

• Use best practices to prevent patient falls in health care facilities (saves $1.5 billion a year);

• Use a checklist to prevent catheter infections (saves 15,680 lives and $1.3 billion a year);

• Modestly improve nurse staffing ratios (saves 5,000 lives and $242 million a year);

• Permit standing orders to increase flu and pneumococcal vaccinations in the elderly (saves 9,250 lives and $545 million a year);

• Use beta-blockers after heart attacks (saves 3,600 lives and $900,000 a year); and

• Increase use of advanced care planning (saves $3.2 billion a year).

Public Citizen also proposes five steps to ensure near-universal adoption of these changes:

• The federal government should use its enormous leverage from its $750 billion annual investment in health care to compel providers to use proven patient safety practices. The Department of Health and Human Services (HHS) has the authority to enact many of reforms proposed in Public Citizen's report through the regulatory process. Congress could ensure rapid adoption by including instructions to HHS in legislation;

• Congress should require HHS to take responsibility for accrediting providers to receive Medicare reimbursements. At present, the federal government delegates most accrediting authority to the Joint Commission, a private entity that derives its income from the very hospitals it oversees and denies accreditation to less than one percent of these hospitals;

• Congress should make significant financial investments to increase the country's supply of nurses and set federal minimums of acceptable nurse-to-patient ratios. Nurse shortages are often implicated in patient safety errors. Modest increases would yield significant improvements. A significant increase in the number of nurses could produce dramatic results. One study estimated that increasing the number of nurses by a little more than one-third would save an astounding 72,000 lives annually;

• Congress should require mandatory reporting of adverse events, including requiring hospitals to institute strong internal reporting systems, and creating whistle-blower protections for health care workers. National reporting of the most serious medical errors is largely left to the Joint Commission. However, that organization estimates that it learns of only about one-tenth of 1 percent of serious medical errors despite its stated requirement that doctors disclose all errors to patients. In 1996, the Joint Commission contemplated requiring mandatory reporting but succumbed to industry pressure and settled for voluntary reporting; and

• Congress should ensure that the requirements for hospitals to report doctor discipline and maintain viable peer review processes are followed. Hospitals have been required since 1990 to report to the federal government cases in which doctors are suspended for more than 30 days. But nearly 50 percent of hospitals have never reported a single disciplinary action. This may be due to hospitals flouting the law, evading the spirit of the law by customizing penalties to sail below the reporting threshold, or failing to carry out warranted doctor discipline altogether because of inadequate peer review processes.

The nightmare started with a product a North Carolina pet owner thought would protect her beloved dogs from fleas and ticks.

The horror unfolded within minutes after Diane S. applied Sergeant's Gold Flea and Tick Squeeze-On For Dogs on her Shih Tzu-Maltese named Tipsy and her Shih Poo named Pebbles. The tiny dogs began to whine and jerk uncontrollably. The skin where Diane applied the flea and tick product turned scarlet. Then it started to blister.

Their poor backs were red and it seemed to be eating at their hair, she said, adding she carefully followed the directions on the package. Both dogs had severe burns on their skin.

Diane immediately dialed the number listed on the package and learned some shocking news from the person who answered her call: Im panicking and he told me this has happened before. He then said this is what to do. He told me to wash the dogs in Dawn dish detergent several times, put ice packs on their backs -- I used frozen bags of peas -- and take them to the vet if they started to foam at the mouths.

We didnt foam, but we jerked and whined all night.

At 7 a.m. the following morning, Dianes dogs sat in their veterinarians examination room. She looked at the ingredients on the box and said it was pure poison and its a wonder it didnt kill them. She also told me they may not make it.

Thanks to some medication and lots of prayers and tears, Dianes dogs survived the ordeal. But the scars on their backs havent healed and Tipsy has a black mark on her back and is still a little shaky on her paws. The more than $200 vet bill also drained Dianes bank account. She couldnt pay her entire rent for July and feared she and her young daughter would be evicted from their home.

I was told I had to be out by the end of the month, Diane told us in late July. That was scary. Im a single mom with no other support. But I just couldnt plan for things like this. And my pets are very important to me and I wasnt going to let them suffer.

Dianes landlord has since agreed to work with her on the late payment. Thats good, but Im still dealing with the stress caused by seeing my pets in so much pain and the guilt of knowing that I did that to them.

"Horrific"

Dianes pets arent the only ones whove experienced what many consumers call horrific reactions from the various spot on -- or topical -- flea and tick products on the market.

ConsumerAffairs.com has heard scores of similar stories from pet owners across the country who say their dogs and cats started to shake and tremble uncontrollably, drool excessively, vomit, have seizures, suffer burns and welts on their skin, whimper in agony, lose control of their legs and experience other neurological problems after using those products.

A few pet owners even suspect the products played a role in their pets deaths.

An analysis of records in our database reveals the majority of complaints weve received about topical flea and tick products are ones made by Sergeants Pet Care Products, Inc. That Nebraska-based company makes flea and tick products under its name and the Sentry name.

Our analysis also uncovered another trend among pet owners: theyre clamoring for the immediate removal of these topical flea and tick products -- regardless of the brand -- saying theyre toxic and poisonous.

They echo the sentiments of New York pet owner Diane D., who told us her three dogs suffered burns on their backs and shoulder blades and screamed in agony after using Sentrys Natural Defense Flea & Tick Squeeze-On product.

It is extremely unfair to manufacture and distribute a product that can cause horrific conditions, she says. Bottom line: this product is dangerous and should be taken off the market.

So why hasnt The Environmental Protection Agency (EPA) -- which regulates flea and tick products -- pulled these potentially dangerous pesticide-based treatments off store shelves?

After all, the agency has spent the past few months intensifying its scrutiny of topical flea and tick products because of the increased number of reported adverse reactions.
 

A class action firm is suing two leading lenders for providing loans to consumers they knew wouldn't be able to repay them.

Roddy, Klein and Ryan, based in Boston, is seeking class action status in its case against Bank of America and Wells Fargo. A decision on the firm's motion for class certification is pending.

Gary Klein, an attorney with Roddy, says the banks "created these toxic products" by pushing loans to homeowners and hiding the details in complicated fine print incomprehensible to the average consumer.

The lawsuit involves loans known as "payment option" mortgages. Under such arrangements, all unpaid interest is tacked onto the homeowner's balance. After a set amount of time, the consumer has to make payments that cover both the interest and the principal. This combination often proves too much for homeowners to handle, as required monthly payments jump to figures well out of their reach.

Indeed, fully 40 percent of payment option loans are now in default, either because homeowners could not afford the payments, or because they abandoned their homes as values--and equity--fell precipitously.

The case is novel and somewhat risky, in that it seeks to hold lenders accountable for their borrowers' inability to pay their mortgages. If it is successful, it could spawn a wave of similar litigation against other banks who pursued irresponsible lending practices. Indeed, Suffolk University law professor Kathleen Engel went so far as to tell the Boston Globe that Klein's suit could "be a model throughout the country."

The suit essentially argues that, while the contracts may have been technically lawful, they were so unconscionable as to be unenforceable. Courts often invalidate contracts that involve a disparity in bargaining power or some other situation in which consumers have been especially taken advantage of.

Roddy based its suit on a decision out of Massachusetts's highest court last year. The Supreme Judicial Court ruled that Fremont Investment & Loan, a California-based bank, was pushing loans to consumers despite knowing the loans were not likely to be repaid. The lender ultimately settled with Massachusetts Attorney General Martha Coakley for $10 million. The money was used to help borrowers repay the toxic loans. Engel said the decision "should put lenders on edge."

Wells Fargo is on edge with or without the latest suit. Earlier this week, Illinois Attorney General Lisa Madigan announced that she is suing the lender for targeting African-American and Latino homeowners in peddling its high-cost subprime loans. Madigan says that white borrowers received better terms on their loans while minorities were left out in the cold. Madigan's suit further alleges that deceptive marketing led many consumers to think they were doing business with Wells Fargo's prime lending division, when in fact they were dealing with the company's subprime section.

Both lenders were tight-lipped about the Roddy suit, with Wells Fargo offering no comment. Bank of America would only say that the suit is without merit.

When salesmen resort to high pressure and misleading information, it's a safe bet you don't want what they're selling. In Texas, officials say a travel club crossed the line and now faces state charges.

The state's enforcement action, filed in Dallas County District Court, names Infiniti Vacations, L.L.C. and its principals, Brad A. Cormack, Craig Narez and Jerald F. Jackson.

An investigation by the Office of Attorney General Greg Abbott found that the defendants purported to offer free trips, airline tickets and even gasoline if customers agreed to attend sales presentations about the company's travel deals. Additional conditions were added once prospective club members attended the defendants' sales presentations.

Customers were told they needed to pay various deposits and port charges or taxes to redeem the "free" trips and airline tickets; and would need to participate in lengthy surveys in order to obtain "free" gasoline. Customers who paid various fees and taxes for the "free" trips often found that the travel restrictions were so onerous that the trips were virtually impossible to schedule.

Abbott says customers who paid between $1,900 and $7,000 for Infiniti Vacations' memberships were promised travel values for "pennies on the dollar" and at the "lowest prices for travel." However, Infiniti's Vacation Travel Club members soon discovered that their options for booking travel were limited.

Additionally, customers discovered that they could have successfully booked the same trips using various Internet travel services for approximately the same prices. The defendants' promises of significant discounts promised on cruises, air travel, hotels and condominiums proved no better than competing travel companies' deals, Abbott said.

The Attorney General seeks up to $20,000 per violation of the Texas Deceptive Trade Practices Act, as well as restitution for financially harmed customers. The Attorney General also contends the defendants violated the Contest and Gift Giveaway Act by failing to live up to advertised promises of "free" trips, airline tickets and gasoline.

Four delegation leaders on a People to People trip -- in which a Minnesota teenager died -- drank beer in their Tokyo hotel room instead of getting the 16-year-old the medical assistance he requested after he climbed Mt. Fuji.

That is one of the startling findings released today by the teen's parents, who announced the official settlement of their civil action in the wrongful death lawsuit they filed in the wake their sons June 29, 2007, death.

The terms of the settlement are confidential, but Sheryl and Allen Hill are now sharing some of the details they learned -- during depositions and other legal proceedings -- about the death of their son, Tyler, on his "dream trip" to Japan.

The Hills filed their 2008 wrongful death lawsuit in Hennepin County District Court against Ambassadors Group, Inc. -- the company that markets the People to People trips and handles all the travel arrangements --, 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.

In that action, the family alleged that People to Peoples' delegation leaders refused to take Tyler to the hospital when he requested medical attention.

Tyler had Type 1 diabetes and complex migraine headaches conditions his family disclosed before he left on his overseas journey.

But the travel organization that touts its ties to President Dwight D. Eisenhower assured the Hills 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 Hill's lawsuit, which alleged that no one with the organization responded to Tylers pleas for medical attention when he became sick after hiking Mt. Fuji and his death in the Japanese Red Cross Medical Center was the result of that negligence.

Earlier today, the family released more details surrounding Tyler's death.

"Sheryl Hill was told by one of the leaders that on June 26, 2009, Tyler thought he had altitude sickness after climbing Mt. Fuji, and he wanted to go the doctor," the Hills said in a statement. "The leader gave him water, and told him to go to his room and work through it."

At that point, the Hills learned, the four delegation leaders went to a hotel room and started drinking beer.

"Veum-Smith, Hanson, and Stahr joined Aberle in his room, where all of the leaders drank beer until sometime between 12:30 and 12:45 a.m.," the Hills said in todays statement.

Those comments appeared under the heading "Evidence before Hennepin Country Court."

"Tyler had been vomiting for hours and asked for enough water to feed a family," the statement continues. "He was held back for the day's activities; his heart stopped less than 10 hours later. Despite specific training to contact the parents or seek medical attention when a child shows 'moderate' signs of dehydration, no phone calls were made to the Hills until Tyler's heart had stopped for than an hour."

Tyler died of apparent "severe dehydration," the Hill said, adding all four delegation leaders had training on treating dehydration.

The Hills today also said they discovered:

• Two of the delegation leaders searched Tyler's belongings and took pictures of some items while he was in the hospital. "While Tyler was dying in the hospital, Aberle and Hanson went through Tyler's personal belongings and took photographs of his medications and insulin," the family's statement said.

• One of the delegation leaders was on a previous People to People Trip in which student died. "Stahr was a student ambassador leader on a trip to New Zealand where another student died," the Hill's statement said. "The Hills were not informed or her prior safety record."

Asked if the settlement resolves all the issues alleged in their lawsuit -- and brings the family peace -- Sheryl Hill told us: We asked for truth, justice, accountability, and restitution. Justice is an open window and I would accept any help."

The lawsuit, however, does resolve the issues of restitution and accountability, the family said in today's statement.

The Ambassadors' Group CEO Jeff Thomas has publicly apologized and acknowledged that his organization accepts some responsibility for Tyler's 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," Thomas said in a statement released in June. "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."

The judge in the Hill's case also granted a motion permitting the family to amend their complaint and seek punitive damages against Ambassadors Group Inc. and others named in the action.

But does the settlement bring peace and solace to the Hill family -- Sheryl, Allen, and Alec -- who continue to grieve the loss of their beloved son and older brother?

The son and brother they lovingly called "Ty man a top athlete who had 'dominated' his diabetes and was known for his big smile and tender heart.

"I will have found peace when the Travelling Youth Standards of Safety law passes," Sheryl Hill told us today.

Since Tyler's death, the Hills have advocated for the safety for students participating in travel programs. "How could I (we) not do that?" Sheryl Hill said. "To not do that would be like tossing another kid in the fire."

The legislation the Hills support would ensure that safety measures, sanctions, and penalties are in place to protect students participating in various travel programs.

"No safety standards, sanctions or penalties exist to protect children's health and safety rights while entrusted to third parties, especially during travel programs," the Hills said in their statement today. "Children have been denied health care, died, hurt, abandoned, raped and suffered severe illnesses, while traveling with some student travel programs. There is currently no oversight committee dogging the student travel industry."

The Hills' efforts have the backing of two of Minnesota's Congressional leaders.

"I am extremely grateful to Senator Amy Klobuchar and Congressman Erik Paulsen for hearing me and supporting the advocacy for the safety of students on these trips," Sheryl Hill told us.

Tyler, she said, would also champion the family's safety campaign. "Tyler would say 'You rock, mom,'" Sheryl said.

Her husband, Allen, added. "I think he would say that he was proud of us for sticking up for him and other children."

Another advocate of the Hills' legislative effort is Danielle Grijalva, director for the Committee for Safety of Foreign Exchange Students.

"I receive numerous complaints about other travel agencies from children and their parents about supervisors being intoxicated, molestations, children being denied health care when they are sick, unsanitary living quarters and 'unaccounted for' children," she said. "Parents need to inform themselves of the safety record of agencies and supervisors they are entrusting their kids to."

ConsumerAffairs.com has received complaints about students going missing, being "unaccounted" for unknown periods of times, becoming sick, or even struck by a car on recent People to People trips.

A single mom in New York told us her 11-year-old daughter was hit by a car during a recent People to People trip to France and England. The delegation leaders, however, did not disclose all the details of the accident to Heather M. of Schenectady, New York.

"I was informed that another child had bumped her into the narrow street of London and a small light car over her foot," she said. "(They said) nothing was broken and she was given two pain pills and told to take something over the counter for pain."

When her daughter returned home, however, Heather learned the accident was much more serious.

"She was struck - whole body -- by a car. Feet, legs, and arms," Heather said. "She had bruises on her foot, toe, ankle, arm, and stomach. She traveled in an ambulance to the ER - something I was not told on the day of incident.

"We had a follow-up with her pediatrician, who said she was a very lucky little girl," she added. "Only time will tell what will come from her injuries in the future."

People to People offered no apologies for the accident, Heather said. Instead, the organization sent her a bill for the delegation leader's lunch at the hospital and travel to and from the medical facility.

"I am to pay for the delegation leader that was to be watching my child?" Heather asked. "I spent about $6,000 for my daughter to come back in fear and (feeling) that she never wants to do a People to People "adventure" again."

A Kansas mom also told us her 17-year-old daughter lost several pounds on a recent People to People trip because the delegation leaders did not -- as promised address the teenager's severe food allergies and other medical issues.

"My daughter has asthma, a severe milk allergy, immune deficiency and is anemic," Karen D. of Louisburg, Kansas, told us. "If she eats or drinks too many dairy products it will trigger an asthma attack.

"I informed the organization of my daughter's health issues prior to her leaving and they assured me they could handle any medical issues."

During the trip, however, Karen's daughter called home and said she couldn't eat off the "required" People to People menu because it contained too many dairy products.

Karen immediately wired her daughter $300 for pay for food she could eat. The worried mom also sent an e-mail to the delegation leaders reminding them of her daughter's health issues.

The delegation leaders, however, ignored Karen's concerns. "She (my daughter) was never allowed to buy her own food. My daughter went up to the delegation leaders many times and said she couldn't eat what's on menu. But they said thats all you can haveyou have to eat off the People to People menu."

She added: "Instead of contacting me to see what we could do about this, they retaliated against my daughter by harassing her, insulting her dignity, character, and causing her asthma to flare up."

When Karen's daughter returned home, the 5' 7" inch teenager, who normally weighs 120 pounds, had dropped seven pounds.

"She's a tiny thing," Karen says. "She cannot afford to lose that weight. She also came home with raspy voice as well as shallow breathing, and for a week after the trip had to use her breathing machine for heavy duty treatments to get her lungs back on track."

In retrospect, though, Karen says she's lucky her daughter didn't suffer more serious health problems during -- and after -- the trip.

"I think about Tyler Hill and worry that could have been my daughter, too," says Karen, who is still trying to get answers from People to People about her concerns. "I could have gotten a call that said she had a serious asthma attack. And what would they (the delegation leaders) have done? These people need to be trained."

"I know I got very lucky."

ConsumerAffairs.com also confirmed that three American students traveling abroad on recent People to People trips went missing or were unaccounted for an unknown period of time. The Ambassadors Group is also facing a class action lawsuit, which alleges the organization's directors issued misleading and overly optimistic statements about the company's financial future.

ConsumerAffairs.com contacted People to People today regarding the Hill's statements and the recent complaints leveled against the organization. The company did not respond to our inquiries.

Back in Minnesota, Sheryl Hill offered some advice to parents who are considering letting their children participate in a student travel program.

"You have to check out the organization and its leaders," she said. "You have to ask tough questions. The leaders on Tyler's trip were senior leaders -- they had been on previous trips."

"You also need to find out the organization's alcohol policies. And make sure you have a passport so you can get your child (immediately) if you need to. If, at any point, you feel your child is in danger call the Federal Bureau of Investigation (FBI)."

Hill and Grijalva also recommend that parents contact foreign police authorities to report abuse and then contact local, state and federal agencies to report child endangerment.

The U.S. State Department has a special Students Abroad Web site with more information and tips.

The State Department also has a Web site with information on what Americans should do if they become victims of a crime when traveling overseas.

More about People to People

The Federal Trade Commission (FTC) has extended its crackdown in the billion-dollar prepaid calling card industry -- asking a U.S. district court for a permanent halt to the illegal practices of a major calling card distributor and its principals.

The FTC has charged Diamond Phone Card, Inc., a distributor of prepaid calling cards based in Elmhurst, New York, and its principals with advertising that the calling cards they sold provided more minutes than they actually delivered. The complaint also accuses the defendants of failing to disclose adequately that fees could reduce the value of the calling cards. The FTC is seeking to force the defendants to give up the money they made through their deceptive tactics.

Diamond Phone Card marketed the cards to recent immigrants, many of whom rely on calling cards to stay in touch with family and friends in other countries. The defendants' advertisements made bold claims about the number of minutes the cards would provide for calls to a wide range of international locations, including the Dominican Republic, El Salvador, Mexico, India, Pakistan, and Guatemala.

But the FTC charges that consumers didn't receive the number of minutes advertised. For example, a calling card claiming to deliver 400 calling minutes to Mexico provided only 106 minutes of calling time, and one claiming to deliver 50 minutes of calling time to Honduras actually delivered only 20 minutes.

The FTC's complaint also claims that the defendants failed to properly disclose "maintenance" and other fees. For example, the defendants' ads trumpeted in large, colorful text the number of calling minutes their cards purportedly would provide. Less obvious to consumers, however, was a 79-cent "maintenance" fee that applied to $2 and $5 cards, and was "disclosed" in nearly illegible print on the very bottom of the advertisement.

This complaint follows two recent FTC actions against distributors of prepaid calling cards. In February 2009, Alternatel, Voice Prepaid, and Mystic Prepaid agreed to pay $2.25 million to resolve FTC allegations that they had deceived consumers. In June 2009, another leading distributor of prepaid cards, Clifton Telecard Alliance, agreed to pay $1.3 million to settle similar FTC charges.

The FTC has established a joint federal-state task force to address deceptive advertising and marketing practices in the prepaid calling card industry.

The Better Business Bureau (BBB) has put out a national alert about phony debt collectors that are calling consumers nationwide, warning of imminent arrest if they don't pay on a defaulted payday loan immediately.

Claiming to be lawyers, the scammers say they are with the "Financial Accountability Association" or the "Federal Legislation of Unsecured Loans" and are equipped with a disconcerting amount of personal information about their potential victims.

"Because the scammers have so much information about potential victims, BBB is concerned that this may be the result of a data breach," said Randall Hoth, president and CEO of the Wisconsin BBB. "Thousands of people may have had their personal information compromised, and given the scammers' tactics, it appears that those who have previously used payday loan services could be particularly at risk."

According to reports received by BBB and posted online, the scammers accuse the victim of defaulting on a payday loan and claim they are being sued. The phony debt collector threatens that, if the victim doesn't pay as much as $1,000 immediately via wire or by providing bank account or credit card numbers, he or she will be arrested and extradited to California within the hour to stand trial.

The scammers often have the victim's Social Security number, old bank account numbers or driver's license numbers as well as home addresses, employer information and even the names of personal friends and professional references.

Michael of Chicago tells ConsumerAffairs.com of receiving such a call. He says a "G. Smith" told him that there were three felony counts against him because he took out a payday loan and never repaid it. According to Michael, "they were vague about information" and didn't give him dates or amounts.

Michael says that while he did fill out applications for payday loans, he did not request any money. Michel says the caller was "reading off information like my bank that I use and my company that I work for and two references that I put down and telling me they are going to notify these people of these felonies I'm being charged with."

BBB offers the following advice to consumers if they receive a suspicious telephone call about an outstanding debt:

• Ask the debt collector to provide official documentation that substantiates the debt.

• Do not provide or confirm any bank account, credit card or other personal information over the phone until you have confirmed the legitimacy of the call.

• File a complaint with the Federal Trade Commission online if the caller is abusive, uses threats or otherwise violates federal telemarketing laws.

• File a complaint with BBB online if you believe a debt collector is trying to scam you.

According to complaints online, phone numbers that the scammers are calling from include: 949-468-5107, 415-200-0274, 415-200-0274, 213-784-5745, 408-715-1614 and many others.

One of the few pieces of good news to come out of the recent bankruptcy filings from GM and Chrysler is that both companies have promised to honor "Lemon Law" claims made before the companies restructured.

Personal injury suits, however, are a different story altogether. Consumers injured in accidents involving Chrysler and GM cars made before the bankruptcies are likely to be left in the lurch as the companies reorganize.

As they emerge from the rubble of their bankruptcy filings, Chrysler and GM are now essentially brand new companies. Going forward, for legal purposes, there will effectively be a "new" and "old" version of each company. Both "new" companies will remain liable for any injuries suffered in the future, but claims for past injuries, while the "old" companies were still active, are less clear-cut.

Under the arrangement, neither GM nor Chrysler will be held accountable for accidents that occurred before the bankruptcy filings. While this might seem like a trivial footnote in the story of two titans' respective financial crises, its effects are surprisingly widespread: consumers with unresolved claims against the companies number in the hundreds.

Attorneys for accident victims were able to win a small concession from GM; the automaker will remain liable for future accidents involving cars built before the company filed for bankruptcy. Chrysler, however, is off the hook for those accidents as well.

Chrysler spokesman Mike Palese told the Los Angeles Times that it is "really important for the future viability of the company that we would be free from this type of liability." That may be true, but it's likely little consolation for the accident victims drowning in medical bills and struggling to keep from filing bankruptcy themselves.

One member of Congress is trying to hold the automakers accountable. Rep. Andre Carson (D-IA) has introduced a bill that would force GM and Chrysler to cover all future claims for vehicles built before the companies' restructuring. The bill is named after accident victim Jeremy Warriner, who blames an accident that took both his legs on a faulty brake fluid container in his 2005 Jeep Wrangler. Jeep vehicles are manufactured by Chrysler.

Initially, even claims under state Lemon Laws were in doubt after a federal bankruptcy court exempted the "New Chrysler" from liability for defects in vehicles manufactured before the restructuring. Both GM and Chrysler relented after a number of state attorneys general poured on the pressure.

The bankruptcies marked a stunning fall from grace for two of Detroit's "Big Three." Chrysler filed for bankruptcy on April 30; GM followed suit on June 1. Under agreements with the federal government, GM CEO Rick Wagoner was shown the door and Chrysler was forced to merge with Italian automaker Fiat. GM's bankruptcy filing was the fourth largest in U.S. history.

Bumpers on 2009 models of the Honda Accord, Hyundai Sonata, Mazda 6, and Nissan Maxima performed better than their 2007 predecessors in low-speed crash tests conducted by the Insurance Institute for Highway Safety (IIHS). However, bumpers on the 2009 Chevrolet Malibu and 2010 Ford Fusion did worse than earlier models.

None of the 6 popular midsize sedans earns the top rating of "good" in a recent series of tests designed to assess and compare how well bumpers resist damage in everyday fender-benders. The Mazda 6 improved to "acceptable" from "marginal," with an average repair cost of less than $900 after four tests at 3 and 6 mph. The Accord and Sonata improved to "marginal" from "poor," while the Fusion slipped to "poor" from "marginal," and the Maxima and Malibu remained "poor."

"Consumers buy midsize cars for practical reasons. There's nothing practical about a $1,000-plus repair bill after a minor bump in commuter traffic," says Joe Nolan, Institute senior vice president.

This is the second group of vehicles the Institute has evaluated under a new bumper ratings protocol based on repair costs averaged and weighted to reflect real-world damage patterns and insurance claims frequency. The Institute rates bumpers good, acceptable, marginal, or poor based on performance in four tests -- front and rear full-width impacts at 6 mph and front and rear corner impacts at 3 mph.

Each vehicle is run into a steel barrier designed to mimic the design of a car bumper, with the barrier's plastic absorber and flexible cover simulating typical cars' energy absorbers and plastic bumper covers. These tests are designed to drive bumper improvements that lead to better damage resistance in a range of real-world crashes.

"Although midsize car bumpers still allow way too much damage in minor impacts, it's encouraging that some manufacturers are designing better ones," Nolan says. He points out that the front and rear bumpers of the 2009 Mazda 6 are wider, taller, and higher off the ground than the 2007 model. The Mazda 6 is only the fourth car tested under the new protocol to earn an acceptable rating for its bumpers. The others are the Ford Focus, Scion xB, and Smart Fortwo.

"Mazda is trying to protect buyers' pocketbooks while many other carmakers are letting them take a big hit in low-speed crashes," Nolan says.

Mazda, Honda, Nissan, and Hyundai improved the bumpers on their 2009 midsize cars so the bumpers would better resist front underride, which makes collision damage worse. Bumpers have to be tall enough to engage, and to stay engaged, with the bumpers on other vehicles in collisions, even during emergency braking, or they'll bypass each other when the vehicles collide. Preventing override and underride means crash energy is absorbed by bumpers instead of pricey vehicle parts such as hoods, grilles, and fenders, or safety gear such as headlights and taillights.

The 2009 Accord, for example, has sharply lower repair costs in the full front and full rear tests, compared with the 2007 model, because its bumpers are higher than the previous version, plus the front bumper's reinforcement bar now is strengthened with metal pieces that extend upward from the bar to prevent underride. The changes helped the Accord earn a "marginal" rating instead of "poor," but another change held back the car's overall performance. The 2009 Accord's bumpers aren't as wide as the 2007 model's, resulting in higher repair costs in both the front and rear corner tests.

Weaker bumpers mean bigger repair bills: Ford and General Motors made design changes that increased repair costs for the 2010 Fusion and 2009 Malibu over repair estimates for 2007 models.

"Ford fit the Fusion's front and rear with weaker bumper beams, and this had a big effect on the test performance," Nolan explains. The difference is easy to see in the 6 mph full rear test, which simulates a common parking mishap like backing into another vehicle. The Fusion's bumper buckled, which caused it to underride the test barrier, resulting in twice as much damage as the 2007 model in the rear test. In the full front test, the Fusion had $2,529 in damage, more than any other vehicle.

GM raised the Malibu's rear bumper so it's higher than on the earlier model, but it's still the lowest among recently tested bumpers. In the full rear test, the bumper underrode the barrier, resulting in almost $3,500 in damage -- the highest among the midsize cars evaluated. GM lowered the front bumper, which didn't help in the full front test. Damage totaled $2,092, partly because the Malibu's front grille overlays the center of the bumper. The result is that the grille, Chevy emblem, and decorative chromed plastic trim get hit before the bumper does in this test.

"Essentially you have to go through them to get to the bumper," Nolan says. "Replacing just the front grille and emblem cost more than $625."

Ford and GM, along with other automakers who sell the same vehicles in both the U.S. and Canadian markets, no longer have to meet a tougher Canadian bumper standard. The Canadian government last year weakened bumper rules to match U.S. regulations, which require only minimal protection. The previous Canadian standard required bumpers to prevent damage to vehicle safety equipment such as headlights in 5 mph impacts. Under the new rules, full front and rear tests are run at 2.5 mph and corner tests are run at 1.5 mph.

How 11 other sedans rate: The designs of 11 other midsize cars haven't changed since their bumpers last were tested in the 2007 model year. Performance in those tests earns the Mitsubishi Galant and Toyota Camry "marginal" ratings. The Chrysler Sebring, Kia Optima, Nissan Altima, Pontiac G6, Saturn AURA, Subaru Legacy, Volkswagen Jetta, Volkswagen Passat, and Volvo S40 earn "poor" ratings.

Besides the amount of damage sustained in a low-speed impact, repair costs are influenced by both the price of replacement parts and the complexity of repairs. The Volvo S40's "poor" rating reflects recent increases in parts and labor costs. At $335 the S40's rear reinforcement bar has nearly tripled in price since 2006, while the front bar now sells for $311, up from $195 in 2006.

How they're rated: Bumpers are evaluated under a ratings protocol based on repair costs averaged and weighted to reflect real-world damage patterns. These averaged and weighted repair costs determine each vehicle's overall rating of good, acceptable, marginal, or poor in 4 bumper tests representing full-width and corner crashes at low speeds. Weighted average repairs must be less than $500 for a "good" rating, less than $1,000 for "acceptable", and less than $1,500 for "marginal." Repairs of $1,500 or more earn bumpers a "poor" rating.

Both the full front and rear test results are given double the weight of the corner test results because in the real world full-width impacts occur roughly twice as often as corner impacts. The weighted average of the repair costs determines the overall rating. No vehicle can earn a "good" or "acceptable" rating if it's unsafe to drive afterward or can't be driven at all because of headlight or taillight damage, severely buckled hoods, or a compromised engine cooling system.

As the Treasury Department urges mortgage servicing companies to step up their efforts to stop foreclosures, the latest available figures show that the number of households at risk of foreclosure is seven times the number of loan modifications, and the gap has increased steadily for the past year.

Although loan modifications are up from very low levels last year, the rapid growth of serious delinquencies and new foreclosure starts is swallowing modest gains in efforts by loan companies to fix the massive number of loans headed for foreclosure.

During the first quarter of this year, nearly 500,000 loan modifications were completed, but foreclosure starts and serious delinquencies during that period edged up to nearly 3.5 million.

Without significant intervention, foreclosures are on track to mount up to 13 million during the next five years. In 2009 alone, 69 million homeowners who happen to live near foreclosures will see their wealth shrink as property values decline by $502 billion.

"Continuing this same course would be disastrous," said Mike Calhoun, president of the Center for Responsible Lending. "The challenge of closing the gap between the foreclosure epidemic and foreclosure prevention represents a major public policy issue that will affect all Americans."

During the past two years, lenders have strongly resisted key policy proposals to stop the foreclosure epidemic, such as allowing home loans to be modified in bankruptcy court. Loan servicing companies asked for the opportunity to address the problem through the Home Affordable Modification Program (HAMP) launched in March. The New York Times has reported that about 130,000 loans have been modified under HAMP, but this number is dwarfed by the 3.5 million foreclosures that are expected to be initiated this year.

In recent testimony before the House and Senate Joint Economic Committee, Keith Ernst, Director of Research at CRL, emphasized that risky loans, not risky borrowers, led us to today's mortgage troubles. Ernst cited research from the University of North Carolina and CRL which shows that people who received subprime loans were three times more likely to face foreclosure than those who received lower-cost, primarily fixed-rate mortgages -- even when the two borrowers had comparable risk profiles. When multiple risks were layered into the same loan, the risk of default was four to five times higher on subprime mortgages.

To help people facing foreclosure, CRL urges Congress to do the following:

• Ensure that the Administration's current efforts to prevent foreclosures -- the Home Affordable Program and the Hope for Homeowners Program -- work as effectively as possible, and that homeowners who avoid foreclosure don't get set back again by the tax consequences of loan modification and reduced loan balances.

• Lift the ban that now prevents homeowners from seeking loan modifications on their primary residence, as they can on investment properties and other types of loans.

And to keep the current disaster from happening again:

• Pass legislation requiring lenders to determine a consumer's ability to repay the mortgage, and encourage the Federal Reserve Board to finalize its proposed rules banning yield spread premiums (kickbacks that encourage mortgage brokers to overcharge on home loans).

• Create a Consumer Financial Protection Agency as outlined in H.R. 3126, the Consumer Financial Protection Act of 2009, that prioritizes consumer protection and focuses on preventing abusive financial practices before they harm families and the economy.

The State of Oregon has filed two settlements that prevent two national travel store chains from selling "electronic cigarettes" in Oregon. The action is the first of its kind in the country and prevents Oregonians from buying potentially dangerous products that the U.S. Food and Drug Administration has yet to approve.

"When products threaten the health and safety of Oregonians, we will take action," said Mary Williams, Oregon Deputy Attorney General. "If companies want to sell electronic cigarettes to consumers, they have to be able to prove they are safe."

The affected travel store chains, Pilot Travel Centers, which has seven centers in Oregon, and TA Operating, which has four centers in Oregon, both sell "NJOY" brand electronic cigarettes. Electronic cigarettes are actually battery operated nicotine delivery devices constructed to mimic conventional cigarette. Each "cigarette" consists of a heating element and a replaceable plastic cartridge that contains various chemicals, including various concentrations of liquid nicotine. The heating element vaporizes the liquid, which the user inhales as if it were smoke.

Despite FDA issued "Import Alerts" against NJOY and other brands of electronic cigarettes, and despite the fact that the U.S. Customs Service detained several shipments of these devices, sales of electronic cigarettes continue throughout the United States. The products are even advertised on television.

Sales persisted even though just two weeks ago the FDA warned the public about health concerns regarding electronic cigarettes. FDA tests showed a wide variation in the amount of nicotine delivered by three different samples of nicotine cartridges with the same label.

Tests also revealed the presence of nitrosamines a known carcinogen. By the time the FDA issued its warnings, the Oregon Department of Justice had already launched an active investigation of the sale and promotion of electronic cigarettes. NJOY electronic cigarettes were a target of that investigation.

The settlement prohibits the sale of electronic cigarettes in Oregon until they are approved by FDA, or until a court rules the FDA does not have the authority to regulate electronic cigarettes. Even if courts decide that the FDA does not have regulation authority, the settlement stipulates that electronic cigarettes may not be sold in Oregon unless there is competent and reliable scientific evidence to support the product's safety claims.

In addition, the companies must give the Attorney General advance notice that they intend to sell electronic cigarettes in Oregon, provide copies of all electronic cigarette advertising, and provide copies of the scientific studies they maintain substantiates their claims.

With credit card companies tightening credit, some may be tempted to turn to payday lenders for help -- a move many consumer advocates say is never a good idea. But using an online payday lender could be even riskier.

Jackee, of Anaheim, California, said she applied for a loan online with 200cash.com, but her request for a loan was turned down. However, she said she still paid.

"My checking account has been charged a fee of $19.00 on 5/21/09 and another $19.00 on 6/25/09, and now on 7/30/09, fee of $19.00," she told ConsumerAffairs.com. "I have called the number listed but receive no person, only a voice saying they will contact me. But how, since I did not talk with anyone and I cannot leave them my telephone number?"

200Cash.com's Web site states that it charges a non-refundable $19 application fee, which applicants pay whether they get a loan or not. The company also charges $30 per $100 borrowed, every two weeks.

That means if you borrowed $100 for two weeks, it would cost $30 -- plus the $19 application fee that you would have been required to pay. Almost half of that $100 would go right back to the lender in the form of fees.

In recent months states have been cracking down on online payday lenders. In Wisconsin last week, Arrowhead Investments LLC agreed to zero-out all loans to Wisconsin consumers and pay $180,000 in restitution to settle charges of consumer law violations. The settlement stemmed from a class-action lawsuit that alleged Arrowhead's loan contracts violated the Wisconsin Consumer Act.

In mid July, the Pennsylvania Commonwealth Court ruled online payday lender Cash America is not authorized to do business in the state. The court ruled in a 4-3 decision that the state Department of Banking can enforce a 2008 statute that focused on lenders that were getting around the state's interest rate regulations by not having a physical presence in Pennsylvania.

"The July 10 Commonwealth Court decision is a solid victory for Pennsylvania consumers," said Pennsylvania Secretary of Banking Steve Kaplan. "The Department of Banking believes Pennsylvanians should be protected by state laws regardless of where the company with which they are doing business is located, whether it is down the street, in another state or on a Web site."

In March, West Virginia sued 12 online payday lenders and their collection agencies, saying it is against West Virginia law for them to do business in the state. West Virginia has a 18 percent APR cap on loans and does not allow payday lenders of any type to operate within its borders.

McGraw says Internet payday loans are the industry's most recent attempt to skirt consumer protection laws. He says the payday lending industry has historically sought to evade state usury laws through a number of ruses, such as partnering with national and state-chartered banks and by offering the loans over the Internet.

Internet payday loans are electronically deposited into consumers' accounts and typically require payment of interest with annual percentage rates ranging from 600 to 800 APR.

"Internet payday loan providers are the loan sharks of today," McGraw said.

Marketing your product or service as energy efficient, or "green," has a certain advantage these days. Consumers in increasing numbers like the idea of using products that save energy or are otherwise environmentally friendly.

But consumers, unfortunately, can't automatically assume a product labeled "green" or "energy efficient" actually is. State attorneys general are grappling with that issue and Pennsylvania Attorney General Tom Corbett says you have to shop carefully.

In Pennsylvania, Attorney General Tom Corbett Attorney General Tom Corbett says consumers should shop carefully when considering products or services advertised as being "energy efficient," and to thoroughly review claims about financial savings or tax benefits related to certain purchases or home improvements.

"Consumers are anxious to find ways to conserve energy and save money, but it is important to fully evaluate any product or service to determine which is best for your particular situation," Corbett said. "It is vital that consumers educate themselves about all of their choices before spending hard-earned money on items that promise future savings."

That's particularly true when it comes to a marketer's claims about financial savings or tax benefits related to certain purchases or home improvements.

Corbett also recommended that consumers look for independent testing of the products they are considering, in order to properly calculate any possible savings, and verify their eligibility for any federal or state tax credits or energy incentives before committing to a purchase.

In addition to carefully reviewing the energy efficiency of particular products, Corbett stressed that consumers considering home improvement projects - including the replacement of windows and doors, or other large-scale changes - should verify that the installation business or contractor is registered with their state Attorney General's Bureau of Consumer Protection.

For Pennsylvania consumers, Corbett said that all home improvement projects, including the installation of many energy-saving products, are covered by Pennsylvania's new Home Improvement Consumer Protection Act, which went into effect on July 1, 2009.

"This new law requires written contracts for all projects over $500, including specific information about the total price, a start-date and end-date, details about the materials being used and an explanation of a consumer's three-day right to cancel a contract," Corbett said. "The law also requires contractors to register with the Attorney General's Office, so consumers can learn about past problems, including lawsuits, bankruptcies and other issues that may impact their selection of a business."

Ohio has become the first state to file suit against a mortgage servicer, accusing it of not doing enough to modify loans of distressed homeowners.

Ohio Attorney General Richard Cordray teamed with the Ohio Department of Commerce to sue Carrington Mortgage Services, LLC, alleging that Carrington breached its agreement with the state to offer reasonable loan modifications to eligible borrowers.

The lawsuit also alleges that Carrington violated Ohio's Consumer Sales Practices Act by providing incompetent, inadequate and inefficient customer service in connection with its servicing of Ohio mortgage loans.

"This lawsuit makes it clear that we have reached zero tolerance for this kind of behavior from loan servicers," said Cordray. "We've tried to work with them, but now we must take action. I am determined to see that mortgage servicers step up, take responsibility and start making it right with Ohioans. No more excuses."

In January 2008, the Ohio Attorney General's Office and the Ohio Department of Commerce entered into an agreement with Carrington to resolve a dispute arising from the state's New Century litigation. The agreement required that Carrington engage in "good faith" loan workout negotiations with eligible New Century borrowers in order to avoid foreclosure. The agreement entitled borrowers to reasonable loan workouts, forbearance restructuring agreements or other resolutions acceptable to both the borrower and Carrington.

According to the lawsuit, Carrington breached the agreement by failing to provide borrowers with workout terms reasonably designed to avoid foreclosure, did not provide a written copy of the terms to the state and failed to provide proposed terms to borrowers within the 21-day timeframe allocated in the agreement.

"Carrington Mortgage Services owes Ohio borrowers a fighting chance at avoiding foreclosure," said Kimberly A. Zurz, director of the Ohio Department of Commerce. "Mortgage lenders and servicers need to know that this type of negligence will not be tolerated in Ohio. We will hold them accountable for their actions."

In the lawsuit, Cordray also charges that Carrington violated Ohio's Consumer Sales Practices Act by failing to investigate and resolve consumer complaints in a timely manner, by failing to offer loss mitigation options to borrowers, and by pressuring Ohioans into signing unfair, unreasonable and one-sided loan modification documents.

The lawsuit seeks consumer restitution, civil penalties and damages as a result of the breach of the agreement. It also requests that the court order Carrington to implement processes designed to provide efficient, competent and adequate customer service to all of its Ohio mortgage customers.

Federal authorities have taken legal action against Teva Animal Health Inc. to bar the company from making or distributing adulterated veterinary drug, the U.S. Food and Drug Administration (FDA) announced.

The action comes after FDA inspections of the company's St. Joseph, Missouri, facilities -- between 2007 and 2009 -- uncovered what officials call "significant" Good Manufacturing Practice (cGMP) violations.

"Good manufacturing practice standards are the backbone of product quality and the instrument on which the FDA relies most heavily for assurance that veterinary drug products are safe and effective," said Bernadette Dunham, D.V.M., Ph.D., director of the FDA's Center for Veterinary Medicine.

Under the terms of a consent decree reached Friday, Teva Animal Health cannot resume making and distributing veterinary drugs until it complies with current cGMP standards and obtains approval from the FDA. An independent expert will inspect the companys facilities and procedures and certifies they comply with those standards.

If Teva Animal Health fails in the future to comply with any provision of the consent decree, cGMP, or the Federal Food, Drug, and Cosmetic Act, the FDA can order the company to stop making and distributing veterinary drugs, recall the products, or take other corrective actions.

"The FDA will not tolerate the manufacture and distribution of adulterated animal drugs," said Michael Chappell, the FDA's acting associate commissioner for regulatory affairs. "Veterinarians and pet owners can be assured that the FDA will investigate and take regulatory actions against companies that produce animal drugs under conditions and controls that are inadequate to assure their safety and quality."

Under the consent degree, Teva Animal Health also faces penalties of $20,000 for each day the company fails to comply -- in the future -- with any provision of the decree and an additional $25,000 payment for each shipment of veterinary drugs in violation of the decree, up to $7.5 million per year.

The U.S. Securities and Exchange Commission (SEC) filed suit against Bank of America, charging it made false and misleading statements about bonuses paid at Merrill Lynch. But the agency simultaneously announced a settlement with the bank, with Bank of America paying a $33 million fine.

The SEC accused the bank of misleading stockholders and regulators about $5.8 billion in bonus payments made to Merrill Lynch executives after Bank of America acquired the brokerage firm. The suit charged Bank of America claimed that Merrill had agreed to forego end of the year performance bonuses for Merrill executives before the January 1, 2009 merger between the two companies. The bonuses were, in fact, paid.

"Failing to disclose that a struggling company will pay out billions of dollars in performance bonuses obviously violates that duty and warrants the significant financial penalty imposed by today's settlement," Robert Khuzami, Director of the SEC's division of enforcement, said in a statement.

The Bank of America - Merrill Lynch saga broke in early 2009, just as public outrage was building over bonuses paid to major banks that had taken billions in taxpayer dollars. The Merrill Lynch bonuses first came to light in an investigation by New York Attorney General Andrew Cuomo, who made it clear today that his investigation isn't over.

"We are pleased to see that the SEC has taken action with respect to the Bank of America-Merrill Lynch bonus matter, which this Office referred to the SEC on April 23, 2009," Cuomo said. "As we outlined in a letter to Congress on February 10, 2009, the timing of the bonuses, as well as the disclosures relating to them, constituted a 'surprising fit of corporate irresponsibility.' While the SEC has settled their action today, we want to be clear that our investigation of these and other matters pursuant to New York's Martin Act will continue."

The settlement with the SEC remains subject to court approval. Bank of America has made no admission of guilt in accepting the settlement.

Christopher Chase, of Lynn, MA, has been sentenced to 42 months in prison and three years of supervised release after pleading guilty to charges of conspiracy and money laundering. In connection with an Internet drug scheme.

Chase was accused of conspiring to smuggle and illegally distribute anabolic steroids, human growth hormone ("HGH"), insulin-like growth factor ("IGF-1"), and clenbuterol. He also was charged with laundering money by sending it to various foreign countries including China and Moldova.

The substances alleged in the indictment are illegal prescription drugs that were manufactured abroad, primarily in China, as well as other foreign countries. HGH and IGF-1 are injectable drugs and some forms of the anabolic steroids were also injectable.

The indictment charged that Chase and two co-defendants illegally imported the prescription drugs and introduced them into interstate commerce without the prescription of a licensed medical doctor or other licensed medical professional.

Many of the packages that were shipped into the United States contained the prescription drugs but falsely declared that the packages contained test tube samples, mold samples, glass samples, measuring cups and glassware.

The prescription drugs did not bear adequate directions for use in that the labeling did not contain directions under which a layperson could use the drugs safely and for their intended uses.

All of the were sold without a prescription and were nevertheless distributed despite the obvious dangers associated with unsupervised use of prescription drugs. Moreover, none of the drugs were approved by the Food and Drug Administration as safe or effective for body-building, the use for which Chase marketed the drugs.

Anabolic steroids are Schedule III controlled substances and are not FDA-approved for body-building. HGH is not approved by the FDA for body-building and may be lawfully distributed only for the treatment of disease or other recognized medical conditions as authorized by the FDA.

Clenbuterol is not approved by the FDA for any use in humans, and IGF is not approved by FDA for any adult use. Chase nevertheless sold these drugs to customers throughout the United States for a use for which the drugs had not been determined by the FDA to be safe and effective.

Moreover, Chase obtained the drugs from foreign sources with no assurance that the drugs were manufactured under sanitary conditions or that the drugs were what they were purported to be. The drugs originated in countries such as China, Turkey, Poland, and Romania and were not subject to the FDA's comprehensive review.

Thus, Chase not only sold the prescription drugs to customers who lacked a prescription and for a use not approved by the FDA, he sold drugs manufactured and packaged under unknown conditions.

Once the prescription drugs entered the United States, they were distributed over the Internet through websites and customers paid for the prescription drugs using credit cards and cash payments sent through the mail or by Western Union, MoneyGram, Pay Pal and PayByCheck. Most of the prescription drugs were paid for by credit card from customers in New Hampshire and throughout the United States.

To enable the customers to pay for the illegally distributed prescription drugs, defendant Chase obtained 20 merchant accounts in his own name and also in the names of the other participants in the scheme. Between December 1, 2005, and September 30, 2006, Chase mailed approximately 520 packages within the United States and abroad.

Chase represented to the banks that the merchant bank accounts were intended for legitimate merchandise rather than for the illegal sale of prescription drugs. In this regard, Chase created decoy websites that falsely purported to sell legitimate merchandise and provided the names of these decoy websites to some of the banks. Chase used the merchant bank accounts to sell the prescription drugs through websites that were not disclosed to the banks.

Using the merchant bank accounts, credit card sales in the amount of approximately $671,465 were processed and electronically transferred to eleven bank accounts belonging to Chase and other participants in the scheme. Thereafter, approximately $549,047 was withdrawn, $425,890 of which was wire transferred overseas at Chase's direction. The totals do not include the revenues that Chase generated from selling anabolic steroids in the United States, an amount that remains undetermined.

By Mark Huffman
ConsumerAffairs.com

August 3, 2009
The U.S. economy may be in much better shape than anyone thought, and the government's Cash for Clunkers program may be the proof.

The program, modest by Washington standards, began last week, offering consumers up to $4,500 if they would trade in their gas-guzzler on a new, fuel efficient car or truck. There were a lot of caveats and conditions, meaning consumers had to pay attention.

For example, the amount of the government subsidy was dependant on the gas mileage differential between the vehicle being traded and the new one being purchased. The greater that differential, the higher the subsidy. So consumers had to do a little homework before deciding to trade in their clunker and head for the new car lot.

But head for the car lot they did, in huge numbers. Within four days of starting the program, the government had run out of its allotted cash. The White House found itself in a public relations snafu when it was initially reported the wildly popular program was being suspended, but the House quickly appropriated an extra $2 billion. The extra money requires approval by the Senate.

Impressive sales

Lost in the dust-up over whether the White House suspended the program or it didn't is the fact that U.S. consumers purchased new automobiles last week in staggering numbers, after all but abandoning new car showrooms in the last eight months. Sales figures are not yet available, but anecdotal evidence suggests the sales tally will be impressive.

At King's Toyota in Cincinnati, small fuel-efficient models flew off the lot. Managers said their inventory was nearly cleaned out.

"It's been awesome, unbelievable," sales manager Greg Walker told WLWT-TV.

Other car dealers around the country reported similar experiences. Consumers brought in older cars that might bring $400 or less on a trade-in and were able to turn it into a $3,500 to $4,500 down payment on a new vehicle.

Yes, the government was handing out thousands of dollars, but consumers also had to come up with another $12,000 to $15,000 in cash, or take out a loan for that much. The fact that they were willing - and able - to do so suggests that much about this recession may be psychological as well as economic.

With all the talk of the last eight months about the plight of the economy, it's fair to assume that many consumers have been fearful of spending money on a major purchase. Many obviously had the means, but were held back by fear about the economy.

Game-changer

While the Cash for Clunkers program may have the short term benefit of helping car dealers clear their crowded inventory, its more lasting value perhaps could be as a psychological game-changer. Fear's spell over the U.S. consumer may be breaking.

Even people still caught in the grip of the recession appear to be shaking off the fear and taking advantage of the program to buy a new car. The Wall Street Journal reports that James Dunn, newly laid off from his job at a South Carolina manufacturing plant, used his severance check and his 1989 pick-up to get a new truck. Even though he's now out of work, he doesn't seem all that worried.

"The economy is picking up," Dunn told the Journal. "Seems like it, anyway."

Some complaints

Not everyone is happy with the clunkers program. In Cape Coral, Fla., a ConsumerAffairs.com reader complained that some consumers -- and dealers -- were abusing the program.

"A woman interviewed (on a local TV news program) said she had to have her car towed in because it didn't run," Donald of Cape Coral complained. "Isn't this an abuse of the program. If they are doing this what else are they doing to violate rules?"

On New York's Long Island, a consumer said he lost his $5,000 deposit when his clunkers deal with Habberstad Nissan fell through.

Continuing his fight against "rip-off artists," Attorney General Edmund G. Brown Jr. won a $1.2 million ruling against Gaston Muhammad, 42, and Ronna Green, 41, of Duluth, GA, who billed nearly a million California business owners $150 each for deceptive and unnecessary corporate minutes services.

"These rip-off artists sent nearly a million deceptive mailers to business owners, threatening them with loss of their corporate status if they didn't pay $150 for unnecessary services," Brown said. "In reality, this was a massive scam costing California small business owners hundreds of thousands of dollars."

The defendants mailed solicitations to California business owners that were designed to look like State of California official forms-specifically, the Secretary of State's "Annual Statement of Information." The solicitations implied that unless the corporations paid the defendants a $150 annual fee, they could lose their corporate status. The defendants sent out 986,000 solicitations to California businesses between July 2007 and November 2008.

The solicitation appeared to be a government document featuring an official-looking seal, an official-sounding name, the corporation number, citations to the Corporations Code, and a return address in Sacramento. The defendants, in fact, resided in Georgia and the Sacramento address was a mail drop.

The defendants promised to prepare annual minutes for the recipient corporations, even though the information sought on the forms was insufficient to create minutes. Defendants simply invented the dates, meeting places, participants, and actions taken in the fictitious minutes they created.

Brown filed suit in San Diego Superior Court in May 2008, charging defendants with violating:

• Business and Professions Code section 17533.6 (Deceptive Mailing Statute) and 17550 (False Advertising Statute)

• Civil Code section 1716 (Phony Billing Statute)

• Permanent injunction from a previous mail scam judgment against Gaston Muhammad

• Unfair business practices within the meaning of Business and Professions Code section 17200.

On June 22, the Trial Court ruled that the solicitations were misleading. The Court also found that the disclaimers were not big and bold enough to alert the recipients that this was not an official form. It found that the defendants violated all four statues and the permanent injunction.

The court ordered defendants to pay restitution of $200,000 and imposed civil penalties of $986,000. It further issued a permanent injunction which, in addition to requiring the defendants to comply with the law, barred them from engaging in the business of providing corporate minutes in California for five years. The Court also awarded the state the costs incurred in the prosecution of this case.

Earlier this year, Brown filed suit against two brothers operating a similar scam, billing homeowners nearly $200 each for property tax reassessment services that were almost never performed and are available free of charge from local tax assessors.

Illinois Attorney General Lisa Madigan has filed suit against Wells Fargo and Company, charging the bank discriminated against African American and Latino homeowners by selling them high-cost subprime mortgage loans while white borrowers with similar incomes received lower cost loans.

As a result of its discriminatory and illegal mortgage lending practices, Wells Fargo transformed our cities predominantly African-American and Latino neighborhoods into ground zero for subprime lending, said Madigan. The dreams of many hardworking families have ended in foreclosure due to Wells Fargos illegal and unfair conduct.

Madigans lawsuit, which is the result of an investigation into possible violations of fair lending and consumer fraud laws, cites marked disparities in Wells Fargos lending data. In 2005, according to an analysis of Chicago-area data, approximately 45 percent of Wells Fargos African-American borrowers and 23 percent of the lenders Latino borrowers received a high-cost mortgage. That same year, only about 11 percent of the lenders white borrowers received high-cost mortgages.

The trend continued in 2006, with approximately 58.5 percent of Wells Fargos African-American borrowers and 35 percent of its Latino borrowers in the Chicago area receiving high-cost mortgages, compared with only 16 percent of white borrowers. In 2007, approximately 49 percent of Wells Fargos African-American borrowers and 25 percent of Latino borrowers were sold a high-cost loan in the Chicago area, compared with only 15 percent of white borrowers.

The lawsuit also follows a recent Chicago Reporter analysis of mortgage data submitted by Wells Fargo to the federal government. That study found that, in 2007, Wells Fargo sold high-cost, subprime loans more often to its highest-earning African-American borrowers in Chicago than to its lowest-earning white borrowers. According to the study, in 2007, about 34 percent of African Americans earning $120,000 or more received high cost mortgages from Wells Fargo in the Chicago metro area, while less than 22 percent of white borrowers earning less than $40,000 received high-cost mortgages from the lender.

These disparities indicate that something is very wrong with Wells Fargos mortgage lending, said Madigan. They strongly suggest that the predictor of whether a borrower would receive a high-cost home loan from Wells Fargo was race, not income.

Madigans complaint alleges that Wells Fargo established highly discretionary lending policies and procedures with weak oversight that permitted Wells Fargos employees to steer African-Americans and Latinos into subprime loans. As cited in the complaint, Wells Fargos discretionary policies and procedures included a compensation structure that rewarded employees for placing borrowers into high-cost mortgages.

The complaint also alleges that Wells Fargo targeted African-American borrowers for the sale of high-cost loans by hosting a series of wealth building seminars in cities throughout the country, including Chicago.

Madigan noted that high-cost, subprime loans of the kind sold by Wells Fargo are defaulting and going into foreclosure in record numbers, and are largely responsible for triggering the worst economic recession in recent memory. The Attorney Generals complaint comes as the home foreclosure crisis continues to affect hundreds of thousands of homeowners in Illinois and across the nation. Illinois saw almost 69,000 foreclosure filings in the first half of 2009, up nearly 30 percent from the first half of 2008. In Cook County alone, it is anticipated that mortgage foreclosure filings will top 52,000 by the years end, compared with 43,876 in 2008.

By targeting African-Americans for the sale of its highest-cost and riskiest loans, Wells Fargo drained wealth from families and neighborhoods and added to the stockpile of boarded-up homes that are an open invitation to criminals, Madigan said.

Additionally, the lawsuit alleges that Wells Fargo Financial Illinois, a subsidiary of Wells Fargo and Company that primarily originated subprime loans, engaged in unfair and deceptive business practices by misleading Illinois borrowers about their mortgage terms, misrepresenting the benefits of refinancing, and repeatedly refinancing loans, also known as loan flipping, without any real benefit to consumers.

Also, the complaint maintains that Wells Fargo Financial used deceptive mailings and marketing tools to confuse borrowers as to which division of Wells Fargo and Company they were doing business with prime or subprime. As a result, borrowers believed they were doing business with Wells Fargo Home Mortgage, which offered mainly prime loans, when in fact they were dealing with Wells Fargo Financial, a predominantly subprime lender.

The issue of net neutrality--guaranteeing the right of Internet users to access all Web content equally--has been on the back burner in Congress recently, but with growing concern about competition in the wireless Internet market, two representatives today introduced new legislation to enshrine net neutrality into law.

Representatives Ed Markey (D-MA) and Anna Eshoo (D-CA) introduced the "Internet Freedom Preservation Act" of 2009 (aka H.R. 3458), which would amend the Communications Act of 1934 to cover net neutrality to "protect the right of consumers to access lawful content, run lawful applications, and use lawful services of their choice on the Internet," according to the bill.

"A network neutrality policy based upon the principle of nondiscrimination and consistent with the history of the Internet's development is essential to ensure that Internet services remain open to al consumers, entrepreneurs, innovators, and providers of lawful content, services, and applications," the legislation said.

The bill offers provisions for "reasonable network management," the language coined by the Federal Communications Commission (FCC) as a standard for measuring whether Internet service providers are blocking content from users or favoring some offerings over others, but "only if it furthers a critically important interest."

The legislation calls for the FCC to conduct eight public broadband summits around the country, within a year of the bill's passage, in order to solicit opinions from the public and various stakeholders on the U.S.'s Internet-related policies.

"The Internet has thrived and revolutionized business and the economy precisely because it started as an open technology," Rep. Eshoo said. "This bill will ensure that the non-discriminatory framework that allows the Internet to thrive and competition on the Web to flourish is preserved at a time when our economy needs it the most."

Media activists and supporters of net neutrality cheered the introduction of the bill. "The future of the Internet as we know it depends on maintaining freedom and openness online," said Ben Scott, policy director for Free Press. "This crucial legislation will help to ensure that the public -- not big phone and cable companies -- controls the fate of the Internet."

The issue of unrestricted Internet access has gained new traction on Capitol Hill in the wake of reports that Apple and AT&T are each blocking or preventing users from accessing services for the mega-popular iPhone, which is exclusive to AT&T at the moment.

FCC chairman Julius Genachowski recently sent letters to Apple, AT&T, and Google asking why Google Voice, the company's popular free calling service, was rejected for use on the iPhone. Critics say the issue is related to net neutrality, as companies should not be allowed to prevent customers from utilizing legal programs of their choosing on their devices--or computers.