Current Events in August 2009

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.

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.

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.

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 ...

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 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.

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.

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.

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.

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.

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."

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.

Is Cash for Clunkers starting to resemble the much-delayed switch to digital TV? The Transportation Department has extended the filing deadline once again, this time until 8 p.m. EDT tonight (Tuesday), giving dealers more time to submit their paperwork and get their taxpayer-funded rebates.

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.

August 24, 2009
In a coordinated effort, the California attorney general and eight district attorney brought action against U-Haul, resulting in an agreement by the rental company to improve the way it handles hazardous materials.

As part of the agreement, U-Haul will pay $2 million in fines and penalties.

"U-Haul has turned a blind eye to California's hazardous materials laws for years, even after an explosion and fire severely damaged one of its facilities," said California Attorney General Jerry Brown. "This agreement forces U-Haul to clean up its act and improve the way it handles hazardous materials, plans for emergencies and trains employees."

U-Haul's hazardous materials practices first came under scrutiny in November 2004, following an explosion and two-alarm fire at a Santa Rosa facility, which resulted in flash burns to an employee.

The emergency response team that arrived on the scene had difficulty assessing the situation due to the lack of information about stored hazardous materials. The facility had no site map indicating where hazardous materials were stored as required by law, and employees had failed to properly label flammable materials including gasoline. The building was damaged in the fire and ultimately closed.

Subsequently, the Attorney General's office and 8 District Attorneys launched a 2-year statewide investigation into U-Haul's handling of hazardous materials and training of employees. Brown said the investigation revealed violations at virtually all of U-Haul's 179 California regulated facilities. Despite being repeatedly notified of the violations, Brown said U-Haul did not address them.

The alleged violations include inadequate training regarding handling of hazardous materials and hazardous materials business plans; Improper storage of hazardous waste such as oil filters and pans, waste gasoline and car batteries; Improper transport of hazardous waste; and lack of statutorily mandated hazardous material business plans and emergency response plans.

The Attorney General's office, joined by the District Attorneys of Sonoma, Alameda, Sacramento, San Joaquin, Solano, San Francisco, Santa Clara and Riverside, filed suit on July 27, 2006, seeking penalties and a permanent injunction to enforce compliance with hazardous materials and hazardous waste laws.

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.