Current Events in August 2009

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.

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

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."

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.

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.