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    Express Scripts Extortion Scheme Widens

    Company claims hacker wants money for personal information

    An ongoing investigation into the breach of personal medical records held by pharmacy benefits manager Express Scripts took a new turn yesterday. The company claimed the alleged perpetrator was trying to prove they held more records than originally reported.

    The breach was first reported a year ago, when an unidentified culprit claimed they possessed 75 personal records of Express Scripts customers, including in some cases names, addresses, Social Security numbers, and prescription information. The culprit claimed they had access to millions of other records, and would release the information unless their monetary demands were met.

    Express Scripts instead notified the Federal Bureau of Investigation (FBI) and offered a $1 million reward for information leading to the arrest of the perpetrator. Now, the company claimed, the FBI informed them that the alleged culprit does have access to the records.

    The company has already notified 1,771 customers in New Hampshire that their information was compromised, according to DataBreaches.Net, but Express Scripts spokesperson Maria Palumbo said there was no evidence that any of the breached information had been misused.

    "We did send letters to members across the country," Palumbo told the Dow Jones Newswire.

    The Express Scripts news comes at a sensitive time due to the Obama administration's push for increased adoption of electronic medical records, online prescriptions, and other online-based health practices. The company's recent purchase of NextRX, the benefits manager formerly owned by health insurer WellPoint, Inc., leaves it poised to be an even bigger player in the online prescription world.

    Express Scripts came under fire in 2004 from former New York State Attorney General Eliot Spitzer, who claimed the company overcharged the state's employee health plan for prescription drugs and pocketed the differences for itself.

    The company settled charges with 29 states in 2008 that it deliberately pushed customers to switch from certain brand-name drugs to others without explaining the process clearly, often leaving customers paying higher prices. readers regularly write in with complaints about Express Scripts, ranging from difficulties getting prescriptions filled to problems tracking requests and authorizations from insurance companies.

    What you can do

    If you've been contacted by Express Scripts regarding the data breach, the New York State Board of Consumer Protection recommends the following:

    • Get the facts from the notification: Read the letter carefully to understand what assistance the company may be offering you. If you have questions, contact Kroll Inc., the company assisting Express Scripts, at the phone number provided in the letter.

    • Call the credit reporting agencies: Report the breach to all three of the major credit reporting agencies by calling any one of the following toll-free fraud numbers: Trans Union 1-800-680-7289, Experian 1-888-397-3742 and Equifax 1-800-525-6285. You will reach an automated telephone system that allows you to flag your file with a fraud alert at all three agencies. You will also be sent instructions on how to obtain a copy of your report from each of the credit agencies. A fraud alert helps protect you against the possibility of an identity thief opening new accounts in your name. When a merchant checks the credit history of someone applying for credit, the retailer receives a notice that there may be fraud on the account, and must take steps to verify the identity of the applicant.

    • Order your credit reports for free: You may order one credit report from each of the three credit reporting agencies every twelve months. You can place your order online or by phone at or by calling 1-877-322-8228. We recommend that you order one report from a different credit reporting agency every four months to help maximize your protection. Should you become aware that you are a victim of identity theft, you are entitled to an additional free credit report each year.

    • Watch for signs of fraud: Read your credit reports, look for accounts you don't recognize, especially accounts opened recently. Look in the inquiries section for names of creditors from whom you haven't requested credit. Some companies bill under names other than their store names. The credit reporting agency will be able to tell you when that is the case. You may find some inquiries identified as "promotional." These occur when a company has obtained your name and address from a credit reporting agency to send you an offer of credit. Promotional inquiries are not signs of fraud. (You are automatically removed from lists to receive unsolicited offers of this kind when you place a fraud alert.)

    • Read your financial statements, including your credit card statements, checking account statements, mortgage and auto loan statements, etc. carefully. As a general precaution, look in the personal information section of your credit report for any address listed for you where you've never lived.

    • Close all compromised accounts. This is the best way to reduce your risk of an ongoing breach.

    • Retain all paperwork. Maintain a file documenting all the actions you have taken along with copies of all the letters you have written and the documents you have reviewed.

    An ongoing investigation into the breach of personal medical records held by pharmacy benefits manager Express Scripts took a new turn yesterday....
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    Avoid Brokers Pushing 'Fishy' Stocks

    Investors getting $4 million restitution in NJ Case

    The stock market has been in a sustained rally since March, tempting more and more investors -- burned by Wall Street's free-fall that began one year ago, to take another look at stocks.

    For those putting a toe back in the water, the best advice is to proceed cautiously and beware of anyone pushing a "sure thing."

    A New Jersey judge has ordered a broker to pay $5,193,280 in penalties and restitution for violating the New Jersey Uniform Securities Law by fraudulently operating a publicly-traded penny stock shell company, Digital Gas Inc., fraudulently issuing stock and issuing false press releases to boost the value of that stock.

    Superior Court Judge Thomas W. Cavanagh, entering a final decision in a suit brought by New Jersey Attorney General Anne Milgram and the New Jersey Bureau of Securities, permanently barred broker Brian Smith of Spring Lake from the securities industry, and ordered him to pay $4,693,280 in restitution.

    The judge also ordered Smith and Digital Gas to each pay $500,000 in civil penalties, and ordered Lynn Smith, Smith's wife and co-defendant, to disgorge $809,237 in funds she received from her husband's scheme.

    Judge Cavanagh filed his decision following a 10-day civil trial which concluded in June in his Monmouth County courtroom. He found that for seven years, from 1999 to 2007, Smith sold unregistered Digital Gas securities to at least 200 investors but was not a registered agent.

    The judge also found that Smith issued press releases that manipulated the price and demand for Digital Gas and concluded that Brian and Lynn Smith used investor funds for their personal benefit, including home improvement and mortgage expenses related to their Spring Lake home.

    The Bureau of Securities had obtained a temporary order in October 2006 freezing the assets of Digital Gas and the Smiths. While Digital Gas is currently in a Chapter 7 Bankruptcy in Michigan, the Smiths' assets, including their home in Spring Lake, are subject to collection efforts by the Bureau of Securities.

    "This case is another example of why investors need to carefully research company backgrounds before investing their hard earned money," Milgram said. "It is also why we urge consumers to check with our Bureau of Securities to determine whether securities are properly registered."

    Digital Gas was a Michigan-based corporation that publicly traded on the Over-The-Counter market as DIGG.PK. The Bureau of Securities charged that Digital Gas was a shell corporation with no known business operations, although its Website claimed it was a business incubator for new technologies in the energy and natural resource fields.

    The judge found it had no bank accounts in its name, and that Smith used fraudulent corporate resolutions to cause a transfer agent to issue shares of the stock.

    Avoid Brokers Pushing 'Fishy' Stocks...
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    John Deere Recalls Compact Tractors

    September 30, 2009
    John Deere is recalling compact utility tractors models 3032E and 3038E. An incorrectly sized differential was installed in the tractor transaxle affecting the engagement of the differential lock and causing the tractor to turn to the left when braking. This causes the vehicle to veer left when the brake is applied, posing a risk of collision.

    The recalled tractors have model numbers 3032E and 3038E painted on the side of the tractor. The serial number plate is on the tractor frame above the front wheel to the right of the operator. The recall includes the following serial numbers:

    Tractor ModelSerial Numbers
    3032ELV3032E111981 - LV3032E111988
    LV3032E111990 - LV3032E111993
    LV3032E111999 - LV3032E112001
    LV3032E112003 - LV3032E112019
    LV3032E112022 - LV3032E112024
    LV3032E112031 - LV3032E112032
    LV3032E112046 - LV3032E112047
    LV3038E111804 - LV3038E111805
    LV3038E111817 - LV3038E111818
    LV3038E111820 - LV3038E111823
    LV3038E111825 - LV3038E111827
    LV3038E111829 - LV3038E111832
    LV3038E111835 - LV3038E111840
    LV3038E111844 - LV3038E111850
    LV3038E111853 - LV3038E111854
    LV3038E111871 - LV3038E111872
    LV3038E111875 - LV3038E111876
    LV3038E111879 - LV3038E111881
    LV3038E111883 - LV3038E111884
    LV3038E111888 - LV3038E111889

    The tractors were sold by John Deere dealers nationwide from July 2009 through August 2009 for between $13,000 and $15,000.

    Consumers should stop using the recalled vehicles immediately and contact a John Deere dealer to schedule a free repair. John Deere tractor dealers were notified of this recall and registered owners of the recalled tractors will be directly contacted by the firm.

    For additional information, contact Deere & Company at (800) 537-8233 Monday through Friday from 8 a.m. to 6 p.m. and on Saturdays from 9 a.m. to 3 p.m. ET or visit the firms Web site at

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

    John Deere Recalls Compact Tractors...
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      Consumers Have Little Trust That Food They Buy Is Safe and Healthy

      Outbreaks and recalls contribute to eroding confidence

      A new IBM study reveals that less than 20 percent of consumers trust food companies to develop and sell food products that are safe and healthy for themselves and their families.

      Sixty percent of consumers surveyed said they are concerned about the safety of food they purchase, and 63 percent claimed to be knowledgeable about the content of the food they buy.

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

      The Debilitating Impact of Recalls

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

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

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

      Changing Consumer Behaviors

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

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

      Where is my Food From?

      The survey found that over the past two years, consumer appetite for information about food products increased. Seventy-seven percent of consumers want more information about the content of the food products they purchase, and 76 percent would like more information about its origin. Seventy-four percent said they are willing to dig deeper and seek more data about how the food products are grown, processed and manufactured.

      Despite industry efforts to keep consumers informed with more detailed product information, there's still a significant gap between consumer expectations and what retailers/manufacturers are providing.

      The survey also found that consumers are spending more time poring over food labels to know which ingredients were used, questioning supermarkets and product manufactures about product detail, paying closer attention to expiration dates, and doing more in depth background checks on specific food brands and their origin. This will have an even bigger impact as the younger, more Internet savvy generation of consumers evolve into being the primary purchasers of groceries.

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

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

      Are Food Retailers and Manufacturers Looking Out for Me?

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

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

      Take Responsibility: "Smart" Recommendations for Consumers:

      • Seek out other concerned consumers: connect with those interested in food safety issues. Share information and insights with others.

      • Make yourself known: Speak up and let your local grocery know you'd be interested in more information on the products they are selling and their origins. Grocers want to listen; they are in a very competitive marketplace. Research from IBM shows 75 percent of consumers are dissatisfied with their grocer.

      • Ask your retailer: Assess who provides more information about the products they sell. This is being accomplished through in store kiosk and touch screen computers and brochures.

      • Read the packaging closely: Some products are providing more information than ever, including specific details on the farm where ingredients were grown.

      • Take responsibility: Leverage the Internet and visit consumer products company websites to learn more about the companies and processes behind the products you buy. Companies are providing a wealth of background information on their products to gain consumer credibility and shift consumer attitude.

      Consumers Have Little Trust That Food They Buy Is Safe and Healthy...
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      Fed Proposes New Credit Card Rules

      Would bring new regulations into line with tougher new law

      September 29, 2009
      The Federal Reserve has amended its credit card rules, drafted last December, to bring thing into line with the tougher consumer protection aspects of a law passed in May. The rules are designed to protect consumers from some long-standing abuses by the credit card industry.

      "This proposal is another step forward in the Federal Reserve's efforts to ensure that consumers who rely on credit cards are treated fairly," said Federal Reserve Governor Elizabeth A. Duke. "The rule bans several harmful practices and requires greater transparency in the disclosure of the terms and conditions of credit card accounts."

      Among other things, the proposed rule would:

      • Protect consumers from unexpected increases in credit card interest rates by generally prohibiting increases in a rate during the first year after an account is opened and increases in a rate that applies to an existing credit card balance.

      • Prohibit creditors from issuing a credit card to a consumer who is under the age of 21 unless the consumer has the ability to make the required payments or obtains the signature of a parent or other cosigner with the ability to do so.

      • Require creditors to obtain a consumer's consent before charging fees for transactions that exceed the credit limit.

      • Limit the high fees associated with subprime credit cards.

      • Ban creditors from using the "two-cycle" billing method to impose interest charges.

      • Prohibit creditors from allocating payments in ways that maximize interest charges.

      In December 2008, the Fed adopted final regulations prohibiting unfair credit card practices and improving the disclosures consumers receive in connection with credit card accounts. However, Congress and the Obama Administration said tougher rules were needed. This Fed proposal amends aspects of those 2008 regulations to incorporate provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act), which was enacted in May 2009.

      The proposed rule represents the second stage of the Fed's implementation of the Credit Card Act. On July 15, 2009, the Board issued an interim final rule implementing the provisions of the Credit Card Act that went into effect on August 20, 2009.

      The proposed rule would implement the provisions that go into effect on February 22, 2010. The remaining provisions of the Credit CARD Act go into effect on August 22, 2010 and will be implemented by the Federal Reserve at a later date.

      Some consumer advocates have complained that both the Fed and Congress waited too long to implement the new rules. Over the last few months many credit card companies have raised rates on existing balances and closed thousands of accounts before the new law and regulations could take effect.

      Fed Proposes New Credit Card Rules...
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      Recession Creating New Drain On Social Security

      More 62-year olds opting for benefits than expected

      Like everyone else in this economy, the Social Security Administration is feeling the pinch. In January, when most social security recipients anticipate a small cost of living adjustment, there is probably not going to be one.

      While the check won't get smaller, it won't rise by the anticipated two to three percent. It would be the first time in nearly three decades that's happened.

      The reason is two-fold. The government's inflation index, by which it sets cost of living increases, has been mostly flat over the last year, thanks to a severe recession. The recession has also had another ill effect; an unexpectedly large number of Americans are opting to receive benefits at age 62, rather than wait until later, even though it means a reduced benefit.

      In fact, applications for benefits this year are running more than 20 percent ahead of last year. That's putting an additional strain on Social Security funds.

      While Social Security checks won't be going up, premiums on Medicare Part B drug coverage will. Many retirees have depended on that annual cost of living increase to offset the rising drug coverage premiums.

      While recipients are unlikely to get a raise in 2010, they got a larger than expected one at the beginning of this year. The cost of living adjustment amounted to 5.8 percent nearly double the normal increase because of last year's soaring gasoline prices.

      Douglas Elmendorf, Director of the Congressional Budget Office, says Social Securities could become more pronounced, and have a greater drag on the economy, as the population quickly begins to age, with baby boomers entering their retirement years.

      "The aging of the U.S. population and rising costs for health care are making federal spending on Social Security, Medicare, and Medicaid a much larger burden relative to GDP," Elmendorf wrote in his blog last week. "During the expansion of the 1980s, federal spending on those three programs stayed close to 7 percent of GDP; in the 2013 to 2019 period, CBO projects that spending on those programs will rise from just over 10 percent of GDP to a little below 12 percent. Beyond the 10-year budget window, CBO expects that this share would continue to rise rapidly under current law."

      This sobering outlook for the federal budget is likely to weigh on policy decisions for some time, Elmendorf says.

      Recession Creating New Drain On Social Security: Like everyone else in this economy, the Social Security Administration is feeling the pinch....
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      Consumers Union Opposes USDA Proposal On Salad Safety

      Group urges Congress to pass FDA food safety program

      Consumers Union is voicing opposition to a proposed national USDA Leafy Green Marketing Agreement, claiming the pact will fail to adequately improve the safety of raw spinach and other salad ingredients.

      "We urgently need improvements in the safety of many kinds of food, from spinach and other leafy greens to peanut butter to imported fish," said Elisa Odabashian, Director of Consumers Union's west coast office. "But this USDA Marketing Agreement approach is the wrong way to go about it.

      Consumers Union claims the agreement amounts to industry self-regulation, wrapped up in a USDA package, so consumers think the government is insuring that their food is safe. "But," points out Odabashian, "all the safety standards will be developed by the big food processors and other members of the industry. There will be only one consumer member on their Administrative Committee, and that consumer member will be chosen by the food processors."

      At issue is whether the California Leafy Greens Marketing Agreement, which has set food safety standards for California growers and processors, should be expanded nationally. While the agreement has imposed new safeguards on its participants, it is voluntary.

      Growers and processors can choose whether to participate, and CU says that opens the door for unsafe leafy greens to enter the marketplace. Some farmers, environmentalists, and scientists are critical of the agreement because what Consumers Union calls "its damaging impact on the environment."

      The publisher of Consumers Reports says it supports stronger Food and Drug Administration regulation of leafy green safety. "The right way to improve the safety of leafy greens is to strengthen FDA's ability to regulate processors," said Odabashian, "so that new stronger government standards are set and enforced through a transparent, open, public process that takes into account the views of consumers, environmental scientists and activists, organic farmers, and sustainable agriculture. FDA's weakness has left a vacuum in food safety."

      Congress is currently considering FDA food safety reform. The House of Representatives passed a bill in July that would require the FDA to set new leafy green safety standards, and inspect all high risk food processors -- such as those that bag spinach and leafy greens -- at least once every six to 12 months. Consumers Union supports passage of a companion bill, the Food Safety Modernization Act, S.510, in the Senate.

      "Industry self-regulation without public input falls far short of what we need to keep contaminated lettuce greens from reaching our tables," said Odabashian. "We should create an open and inclusive process for FDA to implement stronger standards that will keep consumers safe."

      Consumers Union Opposes USDA Proposal On Salad Safety...
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      Cemetery Operator Sentenced For Stealing Funeral Funds

      Defendant accused of "stealing from the dead"

      September 28, 2009
      A Grand Rapids, Mich., cemetery operator has pleaded guilty to two felonies for embezzling more than $4.2 million in cemetery trust funds from Chapel Hill Memorial Gardens in Grand Rapids, and failing to properly administer numerous funeral contracts over a three year period.

      "Stealing from the dead is a betrayal of the highest order," said Michigan Attorney General Mike Cox, who brought the case against 41-year old Robert Earl Nelms. "Families who have laid their loved ones to rest have a rightful expectation that this sacred ground will forever be protected."

      Nelms pleaded guilty to one count of embezzlement and one count of failing to trust funeral contracts. Nelms will serve a prison term of 20-120 months for the embezzlement charge and 20-60 months for the failure to trust count.

      Nelms, who resides in Indiana, also must pay restitution of more than $4,256,000.00, which will be returned to the cemetery's trust accounts. If Nelms fails to pay restitution at the time of his sentencing, he will be required to serve 3 to 10 years in prison for embezzlement and 3 to 5 years for the failure to trust.

      In December 2007, a joint Attorney General and Department of Energy, Labor, and Economic Growth investigation uncovered the theft, resulting in criminal charges and forcing Nelms to lose control of Chapel Hill Cemetery.

      In total, it is alleged Nelms stole more than $24 million from cemeteries and funeral homes he controlled in Michigan and Indiana. He did this by selling cemetery products and services but failing to deposit the required portion in trust for cemetery upkeep and consumers' use. Approximately $4.2 million dollars were from the Grand Rapids cemetery, with Nelms facing charges in Indiana for the rest, Cox said.

      Bereaved consumers should always make sure they are dealing with a reputable funeral service provider. In July hundreds of outraged families brought a class action suit against an Illinois cemetery accused of illegally interring remains and altering grave sites in the name of profit. Employees of the Burr Oak Cemetery in Chicago allegedly stacked and disposed of bodies in an attempt to create space at the graveyard in order to maximize their income. They also allegedly desecrated and destroyed bodies in order to resell the plots on which they were buried.

      In Michigan, Cox said this is the second defendant to be convicted for involvement in a major theft of cemetery trust funds. Carter Green of Nevada was convicted in Wayne County Circuit court in December of 2007 for his role in aiding co-defendant Clayton Smart.

      Cox alleges that Smart embezzled as much as $70 million in cemetery trust funds from 28 Michigan cemeteries. Clayton Smart is awaiting trial in Tennessee on related charges. Upon completion of that trial, Smart will be transferred to Michigan for arraignment on charges filed by Cox.

      Cemetery Operator Sentenced For Stealing Funeral Funds...
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      Children's Tylenol Products Recalled

      Manufacturing problems could cause contamination

      September 27, 2009
      McNeil Consumer Healthcare is recalling certain children's and infant's Tylenol products that were manufactured between April 2008 and June 2008. The company said potential manufacturing problems could result in bacterial contamination.

      No contamination has been found in any finished product, McNeil Vice President Edwin D. Kuffner, M.D., said. He said Burkholderia cepacia (B. cepacia) was detected in some of the raw material used in the manufacture of children's Tylenol products but he emphasized that, so far, none has been found in finished products.

      The full list of recalled products is on the company's Web site and also appears below.

      B. cepacia can cause severe problems in high-risk patients, including those with underlying pulmonary disease, cystic fibrosis or compromised immune systems. The risk of contamination is higher with nasal sprays, mouthwashes and similar products, he said.

      Kuffner said parents and caregivers seeking more information and a coupon for a replacement product can contact the company at 1-800-962-5357 between the hours of 8 a.m. and 8 p.m. (Eastern time) Monday through Friday.

      Children's Tylenol Products Recalled...
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      Fat Chance: A Simple Approach to Weight Loss

      What your grandmother could have told you about losing weight

      I'll never forget my first impression of America as I hauled my luggage off the conveyor belt in an airport in South Carolina: while the rest of the passengers pushed their carts on towards the arrival hall, a special transport buggy had arrived to shuttle away an obese woman in her 40's.

      She had no visible impediment other than her weight and seemed overall quite content to relinquish the tedium of walking. The driver seemed impervious to the human luggage he was carrying and I wondered if I was looking at the next step in human evolution.

      Of course, it's easy to poke fun. For years stand-up comedians and slapstick movies have fallen back on the have-a-cheap-laugh-at-fat-people routine. Smokers, drinkers and even drug addicts may have something of a tragic charm to them but of all the self-afflicted conditions a person might suffer from, obesity is often seen as the least excusable. Hence fair game for wisecracks like:

      'How come I have to pay for extra luggage on my flight when the guy in front weighs 60 pounds more than me?'

      Obese passengers supposedly cost airlines some $275 million a year but that's nothing compared to the health costs from treating medical conditions connected to being overweight, which run to around $78 billion a year. Obesity is the second leading cause of preventable death (smoking wins every time) and is the major underlying cause of diabetes in the U.S.

      Yet everywhere we look we see ultra-thin role models in advertisements, music videos, films and TV shows. All the products in the grocery store are required to show a breakdown of ingredients and calories, and science has laid out the formula for weight loss in terms that only a monkey would have trouble understanding: spend more calories than you consume and your weight goes down.

      So how on earth did we end up in a situation where, according to the American Obesity Association, 64% of Americans are overweight, half of those qualifying as obese?

      The answer is that America, God bless her, is a confused country. It's not so much that the information isn't out there, it's that there's too much data to digest.

      Americans wanting to lose weight are confronted by any number of fad diets, calorie charts, pills to prevent food absorption, weight loss programs, nutritional controversy and food industries that are less than clear about just what their products contain.

      And although there are countless unquantifiable factors that influence one's weight, in essence the problem is pretty simple: Americans eat too much and don't get enough exercise.

      The roots of the problem

      In the old days, most of the people were hungry at least some of the time. Scarcity was the norm and the temptation of a third helping of dessert just wasn't an option. There were no jars of Skippy's on the shelf to jazz up your bread and when you were thirsty you took a drink of water instead of breaking open a can of Coke. For the vast majority of the world's population, food was never abundant enough to be considered a luxury and obesity was only really an option for the rich.

      All that changed (in the so-called developed nations at least) with improvements to agriculture and the economy in the 20th century. Hunger became a thing of the past. Eating out became an option for just about everyone as fast food outlets and cheap supermarkets replaced the local store.

      But as Americans began to include the hamburger, the soda and the packet of cookies in their daily diets, they began eating food they didn't understand. Salts, fats and sugars made their way into seemingly innocuous produces, making snacking an exercise in gluttony. It didn't help that manufacturers could hide sugar content, for instance, under names like dextrose, glucose, sucrose, lactose and corn syrup.

      Take sodas, for instance. Around a quarter of the calories that American children take in these days come from soft drinks. The promotional team at Coke may have convinced the national pysche that drinking sugared caffine water is as essentially American as pledging allegiance to the flag, but the current generation of 9 million overweight kids might one day ask themselves how they were suckered into swallowing some 140 calories a can or about 7% of their daily requirement.

      Burning it off

      Overweight people are often looked down for being lazy. If they could just be bothered to put on a pair of running shoes or pump a little iron they would slim down in no time, the thinking goes. Where's their get-up-and-go energy? They are, in the worst possible sense, self-made.

      Yet many dieters include morning runs and laps in the swimming pools in their weight loss regimes and still get nowhere. A recent study featured in Time revealed that while people might burn off calories by putting themselves through the paces, they tend to put them all back on again by snacking out afterwards. Working out makes people hungry and they end up eating more than they would have done otherwise.

      I remember trying to explain the concept of exercise to a friend in Nepal. I told him all about weight lifting, aerobics and jogging. He almost cried with laughter when I told him about power walking.

      "What's the point?" he giggled, "Why don't they just walk everywhere normally?"

      Living in a mountain village he couldn't imagine a country so dominated by the car that going places by foot isn't even an option. When he went to market he walked half an hour there and then carried his groceries back up the slope to his house. His wife then prepared lunch by grinding up the spices and then kneading the dough for the flat bread chapattis by hand. Her arms were already muscular from washing clothes by hand, just as her husband's were from chopping wood. Everything they did was exercise. What need did they have of a gym?

      Of course, there's no turning the clock back. Most of us are happy enough to buy our bread and the washing machine was the salvation of mothers across the modern world. But we have largely failed to see the true costs of all the labor-saving devices that fill our homes. We get around by car. Any number of kitchen appliances save us from actually squeezing lemons, kneading dough or washing our own dishes. Hell, I remember when to change stations on the TV, you had to get up and push the button yourself.

      Diets galore

      Luckily, the free market is here to help.

      I'd like to say I'd uncovered a secret agreement between the fast food companies, a major car manufacturer and the weight loss industry, the former two providing a customer base for the latter. But it's bad enough to think that it could even have been true. The number of diet plans and products facing Americans today is overwhelming, an almost gluttonous number of methods and pseudo-scientific approaches drowning out all common sense as they cash in some $30 billion a year.

      Take for example, Body Solutions, a company that promised you could "lose weight while you sleep." Their secret formula? You had to swallow a spoonful of their fruity liquid and wait for those pounds to come rolling off. Following a lawsuit alleging false advertising Body Solutions now urges exercise to complement its product.

      In fact, you'd have to be a little too trusting to believe any of the claims the diet companies make. As Richard Cleland of the Federal Trade Commission noted: "The ads are filled with testimonials about amounts of weight that are just physiologically impossible for a person to lose. You just don't lose 30 pounds in 30 days."

      But then came Atkins, a diet that seems to actually work. At least, in the beginning. Never mind that we'd been eating wheat for tens of thousands of years, that it was a healthy staple of the American diet providing fibre and minerals. People were reportedly losing pounds on Atkins and that was all there was to it ... until they came off the diet and put them all back on again.

      Core mission

      The human body is a complex organism and its core mission is to stay alive. Storing fat is part of its survival strategy for times of scarcity and it's believed that it can be tricked into burning those reserves of fat by eating a protein-only diet. But apart from the strain on your overall health that such an approach entails, the fact remains that once you go back to your usual menu, if you're consuming more calories than you spend the weight will come right back on again.

      As food writer Michael Pollan observed about the Atkins phenomenon: "Such a violent change in a culture's eating habits is surely the sign of a national eating disorder."

      While researching this article a biologist friend even told me about the tapeworm approach. The parasite is bought (illegally) over the internet or is consumed at a roadside restaurant in Guatemala and pretty soon, you have a little friend lightening the load from inside.

      "It makes about as much sense as Atkins." she shrugged.

      The boring but sober truth is that it takes at least as long to lose weight as it did to put it on in the first place. A healthy target of losing a pound a month puts you on course to lose 12 over the course of a year. No stress is placed on your body in the process and it's likely to involve sustainable changes to your lifestyle and thus be a long-lasting change.

      One way to shed pounds is to burn fat more quickly. Lots of expensive nutritional supplements claim to help you do that, but there's really only one way and that's through eating right and keeping fit. But you already knew that, didn't you? For a how-to guide, see Laurie Hedlund's excellent Speed Up Your Metabolism.

      A modest proposal

      So here is Tom Glaister's Common Sense Guide to Losing Weight not the kind of title that makes a national best seller but then I couldn't in all honesty make money by giving advice your grandmother could have given you.

      1. Don't Eat As Much The first time I went to a restaurant in America my friend suggested that we save money by sharing a meal. I was feeling pretty hungry but my doubts vanished when I saw the size of the plate the waitress brought us. To be honest it could have fed three.

      We eat way more than we need to. We're gotten used to being greedy. But if you eat slower, then less becomes more. Slow down and chew your food, enjoy the tastes as they meet your palate instead of just shoveling it all in.

      2. Drink Water When You're Hungry We're supposed to drink about 36 ounces of water a day but almost no one does. When our bodies dehydrate we often confuse the need to drink something with the urge to eat something. So next time you feel like snacking out, try drinking a pint of water and see if that does the trick.

      3. Don't Eat Out If you go out to eat you have no idea what's in the food. Eat meals that you prepare yourself and you can make sure that it's not packed with salt, sugar and fat. Of course if you'd believe the ads from Center for Consumer Freedom, an organization partly funded by the fast food industry, obesity is not an epidemic but 'hype'.

      Don't you just love how every time a corporation tries to sell something that's bad for you they invoke the "freedom to choose?"

      4. Cut Down On the Carbohydrates But Don't Cut Them Out Completely. Eating less carbs does seem to help lose weight but you still need them to stay healthy. Got that? Never go to extremes where your health is concerned.

      5. Walk Places You Want To Go Those two things at the end of your legs were designed for doing more than just pushing gas pedals. Walking gets you out into the fresh air, gets your circulation going, gives you time to think and burns calories at a steady, gradual rate.

      Of course in an ideal world, people would recognize their limits by themselves, food manufacturers would sell products that were good for us rather than addictively tasty and cities would be redesigned to get people out on their feet and bicycles.

      Will it happen?

      Fat chance.


      Tom Glaister is the author of children's books and is also the founder and editor of - The Online Travel Guide for the Free and Funky Traveller.

      Fat Chance: A Simple Approach to Weight Loss. Including information on the roots of the problem, burning it off, diets galore, core mission and a modest pr...
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      Food Industry Seeks To Maintain Junk-Food Marketing In Schools

      Bill seeks thorough study of school-based marketing

      By James Limbach

      September 25, 2009
      Despite rising public concern over childhood obesity, food companies, through an industry-funded self-regulatory group, have proposed a set of "principles" by which the companies can use a variety of approaches to market junk food to children in schools.

      The nonprofit Center for Science in the Public Interest is calling on the industry group to go back to the chalkboard and consider whether Ronald McDonald truly belongs in the classroom. Also, a bill introduced in Congress would require the Department of Education to conduct a thorough assessment of school-based food marketing.

      The industry document at issue is a "Fact Sheet on the Elementary School Advertising Principles" released by the Children's Food and Beverage Advertising Initiative, which is funded by industry and administered by the Council of Better Business Bureaus.

      Members of the initiative include Burger King, Coca-Cola, General Mills, Hershey Company, McDonald's, Campbell Soup Company, and other major food companies.

      The fact sheet begins with an introduction stating that the member "companies agree that they will not advertise any food or beverage in elementary schools," and lists coupons, food samples, posters, and book covers among several other forms of prohibited advertising.

      That sounds promising, says CSPI, but the document then spends much of the following ten pages describing what food marketing it does not include, such as marketing on vending machine exteriors, label-collection programs, branded display racks, tray liners that promote food sold in schools, and menu boards, many of the techniques that are used most widely in schools.

      The self-regulatory plan also allows companies to sponsor curricula, other educational materials, and public service announcements. "Spokescharacters" like Ronald McDonald or Tony the Tiger are allowed, as is the sale -- by students -- of low-nutrition foods in fundraisers. It even omits the most common form of in-school marketing: the sale of the food itself.

      Although some of the CFBAI-participating companies have pledged to address school food sales through an agreement with the Clinton Foundation and American Heart Association, the majority of companies have not.

      In a letter to Elaine Kolish, the initiative's director, CSPI also expressed concern that the guidelines only cover elementary schools (K-6). At the very least, the group says, the guidelines should cover middle schools, where the average 6th grader is 11 years old.

      "These principles are a sham, written more to protect the commercial needs of food marketers than the health of children," said CSPI nutrition policy director Margo G. Wootan. "It's bad enough that junk food is still available for kids to buy in schools. But who wants their son or daughter to be enlisted in an unpaid, drone army actually selling junk food?"

      CSPI cites Pizza Hut's Book It! Program as an example of an in-school marketing program that is allowed under the principles outlined in the industry fact sheet, since the Pizza Hut logo is small compared with other text on the materials. Logo aside, it is the prospect of free Pizza Hut pizza that really captures children's attention. (Yum! Brands [Pizza Hut's parent company], Chuck E. Cheese's, Topps Candy, and a number of other major marketers to children have not joined the self-regulatory program.)

      "Schools should teach the joys of reading," said Wootan. "Programs like Pizza Hut's turn reading into a commercial proposition that, unfortunately, ends up promoting obesity and disease in children." Experts warn against using food as a reward, which can instill in children lifetime habits of rewarding or comforting themselves with unhealthy food behaviors.

      CSPI says that without a substantial expansion of the marketing principles the food industry's self-regulatory system won't adequately protect kids' health.

      The legislation sponsored by Representatives Carolyn McCarthy (D-NY) and Todd Platt (R-PA), would require the U.S. Department of Education, along with the Division of Adolescent and School Health at the Centers for Disease Control and Prevention, to assess the nutritional quality of foods available in schools and the forms of food marketing in schools.

      The bill is supported by a broad coalition of national and state health groups, including the American Academy of Pediatrics, the American Diabetes Association, the American Heart Association, the Campaign for a Commercial-Free Childhood, and the Trust for America's Health.

      Food Industry Seeks To Maintain Junk-Food Marketing In Schools...
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      DIRECTV Takes Disputes Fees Out of Customer Accounts, Suit Charges

      Suit seeks to stop further collections until matter is litigated

      Consumers who are being charged an early cancellation penalty by satellite television company DIRECTV asked the Los Angeles Superior Court to block the company from automatically removing the fees from customers bank accounts or charging their credit card accounts without their prior knowledge and written consent until the lawsuit is resolved.

      The motion for a preliminary injunction notes that DIRECTV is systematically withdrawing the fees of up to $480 which the lawsuit contends are unlawful from customers accounts without their knowledge or permission. The withdrawals have caused consumers accounts to be overdrawn, customers checks to bounce, over-limit penalties to be assessed and their credit reports to be harmed as a result.

      The DIRECTV customers who brought the lawsuit on behalf of current and former California DIRECTV customers asked the court to bar the company from collecting the disputed fees in this manner until the court determines whether the fees themselves are lawful.

      DIRECTV charges its customers an early cancellation penalty when they terminate their service before what DIRECTV calls the term commitment period, typically eighteen to twenty-four months, is over. This early cancellation penalty is charged regardless of the reason for the cancellation. The lawsuit contends that DIRECTV fails to disclose this penalty to new customers or to existing customers who replace their equipment or add a new receiver, and that these practices are unlawful.

      These days, many families are struggling to make ends meet. Now is the last time DIRECTV should be plundering peoples financial accounts to pay a fee that we believe is unlawful, said Harvey Rosenfield, founder of the non-profit Consumer Watchdog, who, along with Litigation Director Pamela Pressley, is one of the attorneys in the case. The DIRECTV customers that we represent had no notice that this early cancellation penalty would be directly withdrawn or charged to their accounts without any advance warning or opportunity to dispute the charge, leaving them caught completely by surprise when they discovered after the fact that the money was taken from their accounts, stated Pressley.

      The companys unauthorized seizure of peoples money from their bank accounts jeopardizes the fragile financial status of these customers, and since DIRECTV has refused our request to stop collecting the fees in this manner, we are asking the court to prevent it from doing so, said Jennifer Steinberg, another attorney on the case.

      I was shocked and appalled to find that, after having been a loyal DIRECTV customer for over seven years and cancelling my service because of problems with my equipment and terrible customer service, DIRECTV had taken money directly from my bank account, said Mary Cox, a putative class member in this litigation. Cox continued, this fee caused my account to go into overdraft, thereby resulting in my bank charging me overdraft fees. I spent countless hours trying to get the charges reversed with my bank. This is money I need to pay for my groceries and other bills.

      It's outrageous for a company to be able to deduct money from its customers personal checking accounts without their written or verbal consent. This unlawful practice needs to be stopped, said Ingrid Evans, counsel for two of the representative DIRECTV customers in the suit.

      In a complaint filed last September in Los Angeles Superior Court on behalf of current and former California DIRECTV customers who were charged an early cancellation penalty, Los Angeles resident Kathy Greiner explained that when her DIRECTV receiver stopped working, she ordered a new one. It began experiencing problems, but DIRECTV would not resolve the problem.

      So Greiner, a six-year customer of the company, cancelled her service and returned the equipment. DIRECTV subsequently levied a $240 early cancellation penalty on Greiner, which the company took directly from her bank account (after deducting some amounts she had previously paid) without her knowledge or permission.

      Greiners complaint was later consolidated with another lawsuit brought by Amy Imburgia and Marlene Mecca, also California residents. The joint lawsuit, Imburgia, et. al, v. DirecTV, Inc., alleges that DIRECTV failed to disclose to customers that it imposed an 18 or 24 month term of service and that cancellation before the end of the term would result in enormous penalty fees. The company would also automatically extend the contractual obligation by another 18 to 24 months if malfunctioning equipment needed to be replaced or the customer decided to make a change to programming or other services. These policies were not properly disclosed to purchasers beforehand, and consumers did not agree to them, the suit states.

      Reader complaints regularly receives complaints from readers that they've been unknowingly roped into contract renewals with DIRECTV. Here's a sample: .

      • Robert of Wirtz, Virginia, tells that after he canceled his DIRECTV service six months into his contract, "I was informed that I would receive a final bill after cancellation. Funds of $195.90 were deducted (snatched) from my bank account, without prior notice. I went to my bank and was going to try and stop this transaction. My banker called and tried but it had already gone through. So I had to put this amount of money back in my account to prevent a shortage. No one at DIRECTV was remotely interested that I hadn't been notified in advance."

      • Justin of East Falmouth, Mass., says he cancelled service due to poor customer service, poor quality, and poor business practices even though he knew the cancellation fee would cost him more than $300. He wrote, "I called and authorized DIRECTV to charge 40 dollars to my debit card. The following morning I had a charge for 180 dollars to my account. When I called DIRECTV to complain, the first call I was hung up on, the second call I was told a supervisor was unavailable and there was nothing they could do as I had authorized the payment, when I asked for copies of the recorded phone conversation they said they had none, the third call said it would take between 8-16 business days to refund the 140.00."

      • Heather of Simi Valley, California, tells that she learned about DIRECTV contracts the hard way: "A few months ago, DIRECTV installed a new HD DVR in our home. What we didn't know was that signing the work order also threw us into another contract with them, beginning that day. When we called to cancel our service with DIRECTV...we were told we could not cancel until next year or pay a $240 cancellation fee. We were shocked! I think it's horrible that DIRECTV would trick their customers this way. We've contacted a lawyer to find out if we can fix this and keep it from happening to others.

      DIRECTV Takes Disputes Fees Out of Customer Accounts, Suit Charges...
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      Lawmakers Propose Faster Adoption Of New Credit Card Rules

      Consumers hit with rate hikes, account changes, over summer

      By Mark Huffman

      September 25, 2009
      When Congress passed a package of credit card reforms in May, the new law gave banks until February 1, 2010 before the new rules would be implemented. Now, some lawmakers say that was too much time.

      Two Congressional Democrats, Rep. Carolyn Maloney (D-NY) and Rep. Barney Frank (D-MA), who chairs the House Financial Services Committee, said they will push to speed up implementation on December 1, 2009, two months ahead of schedule.

      Maloney said credit card companies have used the time between passage of the law and the implementation date to squeeze additional money out of their customers. For example, under the new law, credit card companies will not be allowed to raise rates on existing balances. They can't raise rates without notifying customers 45 days in advance. Maloney says that has led to a flurry of changes to credit card account terms over the last couple of months.

      Starting in June, Chase began contacting customers who had taken advantage of a promotion and transferred large balances to a Chase account at a low interest rate that was promised for the life of the loan. But the guarantee said nothing about the minimum monthly payment.

      At the time of the promotion, the minimum monthly payment was two percent, and many customers, like Waymon, of Deland, Fla., made the balance transfer based on what they could afford to pay monthly.

      "I took advantage of the 4.9 percent offer," Daymon told "Chase has now increased the monthly payment to five percent. The balance on this card is approximately $9200, which means the minimum monthly payment went from $190 to $469."

      Waymon says a Chase customer service rep told him he could continue paying the two percent per month, but that the annual interest rate would go up. Other Chase customers who have participated in the "low interest rate for the life of the card" promotion have posted similar stories.

      Chase also closed a large number of accounts that were former Washington Mutual Credit Card accounts. Neither of those activities would be specifically barred under the new rules, but industry analysts say all credit card companies are trying to get themselves in the most favorable financial position possible before the new rules take effect. It seems nearly every credit card company adjusted its rates over the summer months.

      "On Capital One's credit card statement this month, I noticed the percentage rate had jumped from 7.9 percent to 17.9 percent," Brian, of Hazelton, Pa., told "I contacted customer service and was told this rise was due to the current economic climate."

      The "economic climate" is not specifically about the interest rate climate. Interest rates are near an all time low, hardly a reason to be raising consumers' credit card rates. Instead, banks are increasingly worried about customers' ability to repay the money they have borrowed.

      The credit card default rate has risen past 10 percent, so banks are attempting to collect more money from customers who are still paying their bills to offset potential losses on other accounts.

      Consumers, however, are confused and angry and have pressured lawmakers like Maloney and Frank for relief.

      The two lawmakers say they will sponsor legislation to speed up implementation of reforms, but with Congress's full plate of issues, the legislation -- which would have to be passed in the next 60 days -- faces an uncertain future.

      It will also face strong opposition from the banking industry. A spokesman for the American Bankers Association said it would be extremely difficult, if not impossible, to meet the December 1 deadline.

      Lawmakers Propose Faster Adoption Of New Credit Card Rules...
      Read lessRead more Settles Billing Class Action

      Suit alleged site fraudulently re-enrolled users after cancellation

      A Texas court has approved a settlement in a lawsuit accusing dating site of continuing to charge customers who attempted to closed their accounts.

      Plaintiff Thomas Wong filed the suit in 2007, accusing the site of charging him three separate times after he canceled his subscription. The suit described a misleading system billed Auto-Subscription that reactivated users' accounts without their knowledge or consent.

      According to the complaint, True regularly sent e-mails to users who had canceled their subscriptions, informing them that other members were trying to contact them. The lawsuit alleged that these members didn't actually exist, and that consumers who responded to the e-mail unwittingly reactivated their membership, allowing True to begin charging them again.

      Consumers who chose to dispute the charges with their credit card companies were also in a bind, as True's terms of agreement provide that users agree not to dispute any authorized charge by or its authorized agents.

      The lawsuit also said that True sneaked snuck extra charges onto consumers' bills without informing them. Users were allegedly charged $2.99 per month for access to a live chat feature, and $0.99 per month for enrollment in the coaching center, which says provides ongoing feedback, advice and counsel to its subscribers, helping guide them through every stage of their relationships. The site's terms of agreement said that consumers would be automatically billed for the services unless they canceled them, even though they were described as separate product offerings from the website itself.

      The suit alleged counts of breach of fiduciary duty, fraud, and violation of Texas consumer statutes, and was heard in Dallas County, Texas, where the site is based. A preliminary settlement was reached in March, and the court gave its final approval this week. has heard from a number of consumers whose cards were charged after they closed their accounts. Lisa of Sarasota, FL writes:

      I told them no matter what I want to cancel in Sept. 2009 and they still charge to my Mastercard account-$49.99, $6.00 and $3.99. I reported to my Bank and they still won't give me my money back. This is one of those scam companies and I want my money back now.

      Malisa of Brooklyn, NY was charged for services she didn't know she was receiving:

      I did an online cancellation of the services offered by However, I observed that my credit card was charged two weeks later. I called the number provided with the credit card payment; at this time I was told that the online cancellation was insufficient for a cancellation. I was told that buried in the initial contract it is stated that cancellation have to be done via phone but it is not mentioned when you cancel online. After much discussion I was refunded the two payment they too, one for $2.99 and the other for $49.99. However, the next day there was another charge for $0.99. When I called about the other charge, I was told that the default setting included with the services provided by caused this additional charge but that I could have been changed it.

      True, which has millions of members, bills itself a safer, smarter, more satisfying dating site. One of the site's main bragging points is its criminal screening process; True compares member names against a criminal database and turns away felons, sex offenders, and even married people who represent themselves as single. The site says it reports these individuals to federal authorities.

      Not just True

      True isn't the only site that finds it difficult to completely do away with ex-members. In July, a New York man filed suitagainst, claiming that the website shows current members photos of people who closed their accounts, thwarting what initially appear to be promising romantic prospects.

      Under the terms of the settlement, True will pay $1.5 million into a fund, from which refunds will be paid to eligible consumers. Affected True users will be eligible to receive either $35 (if they were charged for one additional month) or $50 (if they were charged for two or more months). An ill-defined larger group will be given a free 45-day membership to the website. In all, at least 150,000 consumers will be eligible for compensation, and plaintiffs' attorney Jonathan Tycko said that number is expected to grow. True denied any wrongdoing, claiming that it was settling to prevent protracted litigation and to return our focus on bringing people together.

      Affected consumers who wish to take advantage of the settlement must act quickly; the deadline for submitting claim forms is Oct. 21. More information is available at Settles Billing Class Action...
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      Delaware To Reward Electric Car Drivers

      New state law provides incentives to go electric

      By Mark Huffman

      September 24, 2009
      Some might say driving an electric car is its own reward, smiling as you glide silently past gas station after gas station. But in the tiny state of Delaware, driving an electric car now brings an additional reward from the state government.

      A newly signed law makes Delaware the first entity in the world to reward owners of electric cars with vehicle-to-grid (V2G) technology for plugging in. The state, of course, has an ulterior motive. Vehicle-to-grid technology is a home grown advancement, pioneered at the University of Delaware.

      Scientists say V2G vehicles work like an electrical sponge, capable of absorbing excess energy when demand for power is low, and returning some back to the electric grid when the demand for power is high. The new law lets people take advantage of this ability by requiring owners providing V2G services be "net metered," meaning they only pay for the net amount of electricity they draw. Owners will now be compensated for electricity sent back to the grid at the same rate they pay for electricity used to charge the battery.

      The bill was signed into law by Delaware Governor Jack A. Markell this week at an event that included the delivery of two electric vehicles to customers in Delaware. The vehicles were delivered by AutoPort, a New Castle, Del. automotive processing and modification facility. One is the first electric vehicle assembled in the state.

      The new law also sets inspection and safety requirements like those for home solar power and small wind generators. While the vehicles do not generate electricity like solar panels or wind turbines, their ability to provide electricity when needed means at times V2G customers meters will actually run backwards.

      The vehicles will help make the electric grid more efficient, cleaner, and more economical, said V2G pioneer Willett Kempton, a professor in the University of Delawares College of Earth, Ocean, and Environment.

      "This technology improves the electric system by providing balancing power via storage that would otherwise require burning fossil fuels to produce," he said.

      Kempton is a member of UD's Center for Carbon-free Power Integration, which is credited with founding the concept of V2G and continues to lead research on its development and adoption. Studying under Kempton, marine policy master's student Scott Baker played a major role in the law's development by providing much-needed background information to legislators.

      Earlier this year, the Delaware Economic Development Office issued a green-collar training award to AutoPort Inc. in New Castle, Del., which is in the process of making its first V2G vehicle. Delmarva Power and Delaware Municipal Electric Corporation Inc., Delaware utility companies affected by the legislation, were supportive of the new law.

      "We are excited about the potential electric vehicles bring to our nation and with our deployment of advanced meters we look forward to continuing to find innovative rate structures that support the development of this technology and making Delaware a leader in the nation in doing so," said Delmarva Power Region President Gary Stockbridge.

      In January, the city of Newark, Delaware, became the first electric utility in the nation to approve electrical "interconnect" for a V2G vehicle to store and provide power for the local electric grid. In June Delmarva Power did the same. UD researchers plan to have a fleet of six vehicles in operation by the end of 2009.

      A newly signed law makes Delaware the first entity in the world to reward owners of electric cars with vehicle-to-grid (V2G) technology for plugging in....
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      140 Conference Takes On Everything Twitter

      Much talk, many tweets about the microblogging phenom

      The event attracted a mix of celebrities, techies, and those weird hybrids who are "Internet famous," yet could pass the average person on the street witho..

      Florida Sues Acai Berry Product Distributor

      Company also faces suit in Illinois

      Advanced Wellness Research, Inc., a company allegedly offering free trials for its products, including Acai berry supplements and whitening toothpaste, faces a lawsuit in Florida. That state's attorney general filed the action, claiming the company failed to mention that customers would be charged approximately $80 on a monthly basis for products they did not intend to purchase.

      Attorney General Bill McCollum says his Economic Crimes Division began investigating the companies after receiving over 700 complaints about the companies. According to the complaints, consumers who tried to cancel the continuation program were unable to contact the company from which the products were purchased. has received about 100 complaints from consumers all over the company, complaining about Advanced Wellness Research practices.

      "Free offers are not free offers from these people," Sharon, of Ridgecrest, Calif., told "I ordered Vital Rezv which I thought was grape seed supplement and a wrinkle reducer. Never used any of their products because after calling to cancal, I knew this was a scam."

      Investigators also believe that Advanced Wellness company president Nicolas Molina and vice president Michael Trimarco became aware of the investigation and sold their business to Kelly OShea, a former Advanced Wellness employee. OShea created a new entity, Netalab Corp., and allegedly continued the same unfair and deceptive trade practices initially begun by Advanced Wellness. The complaints, in fact, have kept on coming.

      "I stupidly ordered a free trial of Dermacai Anti Wrinkle Serum for the cost of shipping $4.99," June, of Sacramento, Calif., told "I recieved another bottle in the mail and when I received my credit card bill I had been billed $85.49. I called the number and was told that since I had not called to cancel with in two weeks I would have to pay. No where did I ever see anything about two weeks notice or even the cost of this product."

      The lawsuit seeks injunctive relief against the defendants, prohibiting further business activities which violate Floridas Deceptive and Unfair Trade Practices Act, as well as restitution on behalf of all victimized consumers, civil penalties of $10,000 for each violation, and reimbursement for fees and costs related to the investigation.

      In August, Advanced Wellness Research was one of 40 companies sued by talk show host Oprah Winfrey, who charged the companies were using her name and likeness to promote their acai berry supplements. In addition, Illinois Attorney General Lisa Madigan sued Advanced Wellness over their business practices.

      Advanced Wellness Research, Inc., a company allegedly offering free trials for its products, including Acai berry supplements and whitening toothpaste, fac...
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      Fed Sees Recovering Economy

      Policymakers not concerned about inflation -- yet

      The Federal Reserve ended two days of meetings with a mostly upbeat message; the economy, it says, appears on the road to recovery, but the pace is not so quick as to require the Fed to boost interest rates.

      For consumers who can still get loans, that likely means lower interest rates for the foreseeable future.

      Economic activity has picked up following its severe downturn, the policymakers said in a statement. The statement said all signs seemed to be pointing to recovery, with improving financial markets, a rebounding housing market and stabilizing consumer spending.

      Of the three signs, the financial markets appear to be in the best shape. The Dow Jones Industrial Average is within striking distance of 10,000 and not far from it's pre-plunge level of last year. The Dow bottomed in early March of this year, at around 6600. Many stock portfolios and 401(k) plans, decimated by last year's stock market crash, have recovered much of their losses.

      Sluggish housing

      Housing, meanwhile, remains somewhat sluggish although is showing signs of a pulse. However, much of the recent uptick in sales has been driven by foreclosures, which have driven home prices down to 2003 levels.

      Consumers, meanwhile, are still spending but are showing a new sensitivity to price, and seem to be seeking out bargains. Discount retailers like Wal-Mart are doing better while many high end retailers continue to suffer.

      Even though the Fed and Congress are spending trillions of dollars to pump up the economy, the Fed statement said inflation is not an immediate concern. It says the economy, while recovering, will do so at a slow pace with significant unemployment factors it says will keep the breaks of rising prices.

      High unemployment

      August's unemployment rate was 9.7 percent, the highest level since the early 1980s. Some economists think it could reach 10 percent before it starts to fall.

      Wall Street's initial reaction to the Fed statement was positive, with stocks shooting higher in afternoon trading. But some market analysts are asking when the Fed plans to start exiting its bail-out strategy, and address the vast amounts of money it has pumped into the system.

      The dollar continues to fall as foreign countries, particularly China, grow leery of U.S. spending. A weak dollar will make imported goods including oil more expensive. While weak demand has kept gasoline prices stable in recent months, further weakness in the dollars could begin to cause consumers some pain when the next summer driving season rolls aroumd.

      Fed Sees Recovering Economy: The Federal Reserve ended two days of meetings with a mostly upbeat message; the economy, it says, appears on the road to reco...
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      Nissan Settles GT-R Class Action

      Suit alleged defects in supercar led to transmission failure

      Nissan has agreed to replace the so-called launch control on its high-end GT-R sports coupe, bringing to an end a saga that started with one owner's truly horrifying story.

      In October 2008, Autoblog reported that a GT-R owner took his car to the dealership after hearing loud noises in the rear end. The verdict? His transmission was finished, which Nissan said was the direct result of turning off the car's vehicle dynamic control, or VDC.

      The owner had apparently disengaged the system several times in order to activate the Nissan's launch control, which allows the car to shoot from zero to 60 miles per hour in 3.3 seconds (versus a flat 4.0 with launch control turned off).

      Nissan informed the owner he was out of luck, as GT-R's owner's manuals warn consumers to never turn off VDC unless trying to extract their car from the snow or mud. He would have to pay the repair costs himself, at a grand total of $20,000.

      Much was made of launch control when the GT-R debuted in the States last year, and for good reason. Sixty miles an hour in four seconds would be more than satisfactory for most people, but the GT-R is an enthusiast's car; 3.3 seconds puts it ahead of the Tiptronic version of Porsche's 911 Turbo (which reaches 60 in 3.4 seconds) and even a good number of motorcycles.

      Under the settlement, consumers are eligible to upgrade to a new-and-improved launch control (appropriately named LC2), which provides safeguards to reduce the likelihood of any more five-digit mechanic bills. Once GT-R owners upgrade, their warranties will be extended to five years or 60,000 miles, whichever comes first.

      In spite of the new system's improved technology, however, consumers whose transmissions fail as a direct result of VDC being turned off will still not be covered.

      If a consumer turns VDC off, then back on, and subsequently experiences a failure, the burden is on Nissan to prove that the VDC's disengagement was the cause of the problem. And it's not necessarily easy to game the system; Nissan has previously used black box data to determine whether problems were caused by the owner turning VDC off. 2009 GT-R owners will also get a service coupon worth $75.

      The GT-R was launched in Japan in late 2007 and burst onto the American scene the following year. While Nissan has had some hits with enthusiasts before including its 350Z coupe the GT-R was the company's first American offering designed to compete with European supercars.

      At a starting price of $80,790, the GT-R is not cheap by conventional standards, but pitted against, say, a Maserati GranTurino at $117,500 it's a downright steal. It also competes favorably with the 911 Carrera, which starts at a similar $76,300, and, in base form, is nearly a full second slower to 60 miles per hour. Time is money, after all.

      Nissan Settles GT-R Class Action...
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      Bank of America, Chase Rush to Cut Fees as Congress Gets Restless

      Consumer anger forcing Congress to get tough on high bank fees, charges

      Under pressure from Capitol Hill and consumers, Bank of America and JPMorgan Chase are easing up on overdaft charges and other fees.

      Banks make billions of dollars per year in revenue from overdraft charges, in many cases levying them on customers who didn't even know they had -- and had never asked for -- overdraft protection. But with Congress considering proposals to impose reforms, banks are trying to get in front of the problem with reduced fees and more lenient terms.


      Bank of America said that, beginning Oct. 19, it will:

      • Not charge Overdraft item fees when a customer's account is overdrawn by a total amount less than $10 for one day
      • Not charge overdraft fees on more than four items per day;
      • Improve the process for customers to opt out of overdraft capability;
      • Offer customers a "Clarity Commitment" that spells out in clear, unambiguous terms what customers can expect from their deposit relationship with Bank of America.

      Effective June 2010, the bank will:

      • Introduce an annual limit on the number of times customers can overdraw their accounts at the point-of-sale when they do not have sufficient funds to cover their transactions
      • Contact customers who are nearing the annual limit to provide education and tools to help them better manage their finances
      • Limit overdraft capability, and therefore fees, for customers who reach the annual limit
      • Provide new customers the choice to opt into overdraft capability at account opening.


      Chase said its new policies, when fully effective, mean that customers "won't pay big fees for small mistakes." The changes will apply to all current and new customers and will include:

      • Eliminating overdrafts for debit cards unless the customer opts in to overdraft services;
      • Modifying posting order to recognize debit-card transactions and ATM withdrawals as they occur;
      • Eliminating overdraft fees if a customer's account is $5 or less overdrawn'
      • Reducing the maximum number of overdraft fees per day to 3 from 6.

      "Customers will be given the opportunity to decide whether they want to participate in Chase's debit-card overdraft services," said Charlie Scharf, head of Retail Financial Services at JPMorgan Chase. "We believe it's important to give all 25 million existing debit card customers, as well as new customers, the ability to decide whether to opt in. We expect many of our customers will continue to find these services very useful."

      Chase will continue its current policy of not allowing customers to withdraw more cash from an ATM than they have available in their account.

      Chase will update customer accounts and balances for debit-card purchases and ATM withdrawals as they occur. "The new posting order will be more logical for customers, and they will incur fewer fees," Scharf said.

      In addition, Chase said it will continue to offer overdraft protection for customers who link their checking account to a savings account, credit card or home equity line of credit. Millions of customers use this for peace of mind in case they forget to record a transaction, make a subtraction error in their checkbook or lose track of the dates of direct deposits or automatic debits.

      Chase said it expects to implement these changes in the first quarter of 2010.

      Angry bankers

      Not all bankers are taking consumer restlessness to heart. Dan D. Graham, president of Flora Bank & Trust, Flora, Ill., responded angrily to an earlier story, Bulls Eye on Bank Overdraft Charges.

      "I find it amusing that no banker, or bank association, was contacted for information, and certainly not a community banker. Your article was misleading on many fronts, and down right (sic) biased and disingenuous for the most part. Here are the facts as they relate to our bank, and for the most part the industry as a whole," Graham wrote.

      Graham listed these "facts:"

      1. You assert that banks let customers overdraw their accounts without their knowledge. BULL! First and foremost it is the customers responsibility to manage their checking account. Who else is going to know if they have money in their account besides them when they write a check? Once again though we are taking personal responsibility out of the individuals hands, blaming someone else, and asking the government to control our lives. Can you get Senator Dodd to remind me to go to the bathroom; Im not smart enough to do it myself?

      2. There is a cost involved to the bank, and a charge will apply even if the check is returned. In a lot of cases if the check is returned the merchant charges a fee that is often higher than the banks. When are you going to go after them? By paying the item and charging a fee, we in a lot of cases end up saving the consumer money.

      3. I guess its ok for the Check Cashers, who would replace this service to charge enormous amounts of interest.

      4. We notify our customers before they get the service, and give them the opportunity to opt out; in fact, they can opt out at any time. The fees associated with an overdraft are also disclosed to customers at account opening and again annually. We have had very few customers opt out, or complain. In fact we have a far greater number of customers thank us for the service.

      5. You make it sound like American families are getting deeper into debt due to overdraft fees. Fact is, our overdraft fees are down considerably this year as people tighten their belts, and manage their finances better. Point: People can manage their finances and avoid fees, they simply choose not to.

      Clock is ticking

      Graham's assertions aside, Congress is hardly known for its antipathy towards the banking industry, but lawmakers have been getting an earful from constituents and fear for their political lives if they are seen as not doing anything to protect consumers. Senate Banking Committee Chairman Christopher Dodd (D-CT) has already announced that he is working on legislation.

      "Overdraft protection programs" let customers overdraw their accounts, without their knowledge, when they use checks, electronic transfers, debit card purchases, and ATM withdrawals. Account holders are often enrolled in the programs without their consent and many banks will slap customers with fees of upwards of $30 for this "courtesy" even if their account is only overdrawn by a few cents.

      It is a service most customers do not know they have and may not want. According the Center for Responsible Lending (CRL), 80 percent of consumers would rather have their transaction denied than have it covered in exchange for a fee.

      A recent survey released by the Consumer Federation of America found the median overdraft fee is $35. The highest is $39, charged by Citizens Bank for the third overdraft in a year. Fourteen of the sixteen largest banks charge $35 or more per overdraft, either initially or after a few overdrafts in a year.

      Nine of the largest banks surveyed charge tiered overdraft fees, escalating the cost of more than one or two overdrafts over a year. For example, Regions Bank charges $25 for the first overdraft, $33 each for the second and third, and $35 each for four or more.

      The Financial Times reported that banks stand to collect a record $38.5 billion in fees for customer overdrafts this year. The most cash-strapped customers are the hardest hit, with 90 per cent of overdraft fees coming from ten percent of checking account holders. According to CRL, banks collect nearly $1 billion per year in overdraft fees from young adults and $4.5 billion from senior citizens. has received thousands of complaints about overdraft charges. Among them:

      • Vesta of Sacramento, California, who writes, "Provident extended me $500.00 courtesy pay on my checking account for being a long time customer. So, if I have an overdraft, the courtesy pay will cover it. But, the problem is, every time I have an overdraft and courtesy pay pays it, they charge me $23.00 fee. If I'm one cent overdraft, courtesy pay will pay it and charge me $23.00 fee."

      • Reginald of Washington, DC, tells that he has been charged two overdraft fees of $35.00 each by Chevy Chase Bank. "The two charges," he says, "were for amounts of $3.08, and for $1.05. These charges were made prior to a $4.94 purchase at McDonalds. If there was an overdraft, it should have been only one and that should have been for the $4.94 purchase since it was the last purchase." Reginald says a representative of the bank with whom he spoke, "was of absolutely no help whatsoever."

      "Excessive, automatic overdraft fees are forcing many American families deeper into debt at a time when they are already struggling to make ends meet," said Dodd. "I am working on a bill to protect consumers from these fees."

      Dodd's bill will require customers to "opt-in" to these programs, prohibiting banks from charging consumers overdraft fees without their consent.

      CRL President Michael Calhoun expressed his organization's support for President Obama's call for the creation of a new agency to bring oversight to the financial services industry.

      "The regulators responsible for making our financial system work have failed," said Calhoun. "We urge Congress to act quickly to create the Consumer Financial Protection Agency so that individual Americans, who account for nearly $7 out of every $10 spent in the economy, can put the money that financial institutions unfairly siphon off to more productive purposes, like buying beneficial goods and services and saving for the future."

      Bank of America, Chase Rush to Cut Fees as Congress Gets Restless...
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      Safety Alert Issued For Lifeline Pendant Personal Help Buttons

      'Lifeline' could be deathline

      The Food and Drug Administration today is warning people who wear personal emergency response buttons around the neck of a potential choking hazard.

      The agency says it is aware of at least six reports between 1998 and 2009 of serious injury or death, including three deaths in the United States and one in Canada, from choking after the cord on the Philips Lifeline Personal Help Button became entangled on other objects worn around the neck.

      More than 750,000 people use these devices in the United States and Canada. By pushing the "help" button on the device when in distress, users can call for emergency assistance to their home. Philips Lifeline says the device is used primarily by seniors living independently, who feel they are at risk for falls or other medical emergencies.

      The Lifeline pendant button is intentionally designed to not break away when tugged, which prevents the button from accidentally falling off. However, because it does not break away, there is a risk of choking, including the possibility of serious injury or death.

      Risks are greater for those with mobility limitations or for those who use wheelchairs, walkers, beds with guard rails, or other objects that could entangle with a neck cord.

      Philips Lifeline is currently sending letters to its 750,000 customers and has changed the labeling of this product to include a warning against the potential choking hazard.

      The FDA recommends users consult their health care providers to determine which style of emergency button, including those that are worn on the wrist, is most beneficial for them.

      The widely used devices provide critical and immediate access to emergency care for those at risk of falls or who may be more likely to need outside assistance. While the number of adverse events reported is small compared to the number of people who use this device, the severity of these events is of concern.

      It is important that users, along with their health care providers, assess the options provided by each style of button, and choose the option that best fits their condition.

      Safety Alert Issued For Lifeline Pendant Personal Help Buttons...
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      Big Lots Recalls Wooden Bunk Beds

      September 23, 2009

      Big Lots Stores, Inc. is recalling about 20,000 wooden bunk beds. The mattress support slats and side support railings can break, posing a risk of the bunk bed collapsing.

      Big Lots has received 14 reports of the recalled bunk beds support slats cracking or breaking, including four reports of minor injuries.

      This recall includes wooden bunk beds with a three step ladder. Model numbers WP-9108-1 and WP-9108-2 are included in this recall. The model number is located on a sticker on the bunk beds interior panel of the headboard or the footboard.

      The beds were sold exclusively at Big Lots stores nationwide from May 2008 through February 2009 for about $300. They were made in Vietnam.

      Consumers should immediately stop using recalled bunk beds and contact Big Lots to return the defective parts and to receive a free repair kit.

      For more information, contact Big Lots toll-free at (866) 244-5687 between 9 a.m. and 5 p.m. ET Monday through Friday, or visit the firms Web site at

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

      Big Lots Recalls Wooden Bunk Beds...
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      Money Management Problems Could Be Alzheimer's Warning

      Caregivers need to consider overseeing financial monitoring,researchers say

      Older adults who suddenly develop problems handling their financial affairs could face a worse problem down the road. New research links poor money management skills with the onset of Alzheimers disease.

      The study is published in the September 22, 2009, print issue of Neurology, the medical journal of the American Academy of Neurology.

      "Our findings show that declining money management skills are detectable in patients with 'mild cognitive impairment' in the year prior to developing Alzheimers disease," said study senior author Daniel Marson, JD, PhD, with the Department of Neurology and Alzheimers Disease Research Center at the University of Alabama at Birmingham. "Doctors should proactively monitor people with MCI for declining financial skills and advise them and their caregivers about steps they can take to watch for signs of poor money management."

      He said caregivers should consider overseeing a person's checking transactions, contacting the person's bank to find money issues such as bills being paid twice, or become cosigners on the checking account so that both signatures are required for checks written above a certain amount. Online banking and bill payment services are also good options, he said.

      The study involved 76 older people with no memory problems and 87 older people with mild memory problems but no symptoms of dementia. The participants were given a money management test at the beginning of the study and then again after one year. The test included tasks of counting coins, making grocery purchases, understanding and using a checkbook, understanding and using a bank statement, preparing bills for mailing, and detecting fraud situations.

      After one year, 25 of the 87 people with MCI had developed Alzheimer's type dementia. The study found that while those people with no memory problems and those with MCI who did not develop dementia scored higher initially and maintained the same scores a year later, the scores of those people with MCI who developed dementia were lower initially and dropped by nine percent on checkbook management abilities, and six percent on overall financial knowledge and skills during the same period.

      Money Management Problems Could BeAlzheimer's Warning...
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      Home Health Aide Shortage Looms, Experts Warn

      Job more dangerous than mining coal

      By Mark Huffman

      September 22, 2009
      As the baby boom generation ages, many will do so at home, rather than an institution. But that requires someone to be on hand to provide needed care, and the way things are going, we could soon face a labor shortage.

      For one thing, it doesn't pay all that well. Also, it's dangerous. That's right, dangerous.

      "It's more dangerous to be a home health aide than it is to be a coal miner," said Howard Gleckman, senior research associate at the Urban Institute.

      Gleckman cited Bureau of Labor Statistics figures that show the injury rate for coal miners is 3.6 per 100 workers. The official injury rate is 4.1 for home health aides.

      Gleckman and others spoke Monday at a long term care symposium in Washington. They warn that aging baby boomers will put unprecedented demands on the nation's long term care resources and policy makers should act now to prepare for what appears to be an uncertain future.

      Stress mounts

      As most people who require long term care services prefer to be taken care of at home rather than in a nursing or assisted living facility, Gleckman said that it is becoming critical that society acknowledge and address the stresses being placed on caregivers, most of whom have no formal training in providing care. He noted that 80 percent of the long term care giving taking place in the U.S. is done by informal caregivers, often family members or close friends who receive no financial compensation.

      Part of the emotional strain facing many home care givers results from low wages paid for providing these services. According to a 2008 white paper, 19 percent of home care aides and 16 percent of nursing home aides are compensated at a level insufficient for them to rise above the poverty line. The report adds that the typical working family caregiver loses approximately $110 per day in wages and health benefits due to care giving responsibilities.

      "The wellbeing of family caregivers and direct care workers are inextricably tied together. As the wages of the latter go up, it makes it that much harder for family caregivers to purchase the services they need, said Suzanne Mintz, co-founder of the National Family Caregivers Association. The solution to this ironic situation is that easing the financial strain on family caregivers must go hand in hand with raising the wages of direct care workers."

      Health care reform

      With Congress attempting to address health care reform and its many components, Monday's symposium emphasized the need for a national long term care strategy including funding, education and support for the caregiver. Additionally, the event served to highlight the viability of numerous legislative proposals in support of caregivers aimed at helping to solve the nation's long term care challenges.

      "We've got to do much more with regard to long term care and how it's provided, how it's financed," said Rep. Charles W. Boustany, Jr., (R-LA). He noted that "most seniors did not realize that Medicare doesn't do much in terms of providing for long term care."

      As the baby boom generation ages, many will do so at home, rather than an institution. But that requires someone to be on hand to provide needed care....
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      California Sues Bernie Madoff Associate

      Investment broker allegedly steered millions to Ponzi scheme

      Bernie Madoff is behind bars but the repercusions from his multi-billion dollar Ponzi scheme continue. In California, Attorney General Jerry. Brown has filed suit against Stanley Chais, who Brown says directed hundreds of millions of dollars of his clients' investments to Madoff, while actively concealing the link between the two.

      This suit seeks at least $25 million in civil penalties, restitution for victims, repayment of profits and compensation and an injunction prohibiting future violations of California law.

      "For decades, Stanley Chais posed as an investment wizard, but in truth, he was nothing more than a Madoff middleman, channeling hundreds of millions of dollars in investor funds to his friend's Ponzi scheme," Brown said. "Chais intentionally concealed his close ties to Madoff, while collecting nearly $270 million in fees."

      From the early 1970s until December 2008, Brown charges Chais directed hundreds of millions of dollars to Madoff through three funds -- the Brighton, Lambeth and Popham companies -- collectively known as the Chais Funds.

      Chais, who operated out of Beverly Hills, attracted hundreds of investors to these funds by producing annual returns of 20 to 25 percent.

      Chais claimed that he generated these high returns through superior skill and experience, use of advanced technology and connections to sophisticated brokers in New York. Brown says investors were discouraged from asking about his investment strategy and were led to believe that he utilized a complex and diversified approach involving arbitrage, derivates, stock, currency and futures trading.

      In reality, the suit claims Chais turned over all of the Chais Funds' investments to Madoff, who relied on such feeder funds and middlemen to attract the cash flow needed to prop up his Ponzi scheme. In return, Madoff produced made-to-order returns.

      Between 1999 and 2008, despite supposedly executing thousands of trades on behalf of the Chais Funds, Madoff did not report a loss on a single equities trade. The Chais Funds received improbably high and consistent returns of between 20 and 25 percent, with only three months of negative returns between 1996 and 2007.

      For his services, Chais charged investors an annual fee of 25 percent on all profits. Over the past decade, Chais collected almost $270 million in fees, the complaint says.

      Although Chais turned over all the Chais Funds' assets to Madoff, most investors had never heard of Madoff and were completely unaware of the connection between the two men until after the Ponzi scheme collapsed and their investments were lost.

      Brown said the suit is the result of a seven-month investigation.

      On March 12, 2009, Madoff pleaded guilty to 11 felony counts and admitted to defrauding thousands of investors of billions of dollars. Federal prosecutors estimated client losses, which included fabricated gains, of almost $65 billion. On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum allowed.

      On June 22, 2009, the SEC filed a complaint against Chais in U.S. District Court for the Southern District of New York alleging that he committed fraud by misrepresenting his role in managing the funds' assets and for distributing account statements that he should have known were false.

      California Sues Bernie Madoff Associate...
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      New Scam Targets Veterans

      Callers falsely claim VA has changed procedures

      By Mark Huffman

      September 22, 2009
      Scammers have figured out a new way to steal credit card numbers and other sensitive financial information. They target military veterans, pretending to be working for the U.S. Department of Veterans Affairs.

      In the scheme, the caller tells the veteran that the VA is updating its prescription information and asks for the victim's credit card information.

      "Americas Veterans have become targets in an inexcusable scam that dishonors their service and misrepresents the Department built for them," said Dr. Gerald Cross, VAs Under Secretary for Health. "VA simply does not call Veterans and ask them to disclose personal financial information over the phone."

      The scam was brought to the VA's attention earlier this month by several veteran service organizations, which heard from their members about the suspicious calls. The VA says veterans should not be fooled by a caller who claims the VA is updating is procedures for dispensing prescriptions.

      "VA has not changed its processes for dispensing prescription medicines," Cross said. "Nor has VA changed its long-standing commitment to protect the personal information of this nations Veterans."

      At the state level, law enforcement officials say they are stepping up their anti-scam efforts and have added the veterans scam to the growing list of known schemes they talk about. Ohio Attorney General Cordray reminds all Ohioans to be wary of any call soliciting personal information such as credit card or social security numbers.

      "I strongly recommend never giving out personal information over the phone when someone calls you," said Cordray. "Scammers thrive on their ability to catch us off-guard. The best defense in these situations is to play offense. Take control of the conversation and ask the caller if you can call them back. Take the time to research the legitimacy of the call."

      Cordray says that if someone tells you to "act now" or to keep the transaction a secret, its a good reason to be skeptical. Veterans shouldn't be pressured into making a rash decision, he says. Talk to trusted family members and friends for advice.

      New Scam Targets Veterans...
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      Feds Charge Two In ATM Ponzi Scheme

      Investors ponied up $80 million for allegedly bogus company

      September 21, 2009
      On paper, it looked like a "can't miss" investment. Own a piece of 4,000 ATMs in high traffic locations around the country and share in the transaction fees from the thousands of consumers in need of cash.

      Maybe such an investment would pay off, but it didn't for the investors who poured money into what federal prosecutors say was an $80 million Ponzi scheme. The U.S. Attorney for Manhattan has charged two men -- Vance Moore of Raleigh, North Carolina, and Walter Netschi of McKinney, Texas -- with nine counts of wire fraud and one count of conspiracy.

      "Moore and Netschi knew when they collected these funds that the promises on which the fund-raising was based were false," according to an indictment unsealed in Manhattan federal court.

      According to the FBI, the defendants never purchased more than a few ATMs. Instead, they used some of the money to pay generous returns to early investors. Those early investors, convinced they were in on a great thing, helped spread the word, convincing others to invest as well.

      "The defendants claimed the revenue in their investment opportunity derived from ATM fees," said FBI Assistant Director-in-Charge Joseph Demarest. "In fact, it was a classic Ponzi scheme, and the phantom revenue came from new investors. The scheme itself, until discovered, was one giant cash machine."

      A lawyer representing Netschi said his client is innocent and said he intends to take the case to trial.

      Feds Charge Two In ATM Ponzi Scheme...
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      Bulls Eye On Bank Overdraft Charges

      Charges produce billions in bank profits

      Momentum is building for a way to protect Americans from excessive checking account overdraft fees.

      Senate Banking Committee Chairman Christopher Dodd (D-CT) has already announced that he is working on legislation.

      "Overdraft protection programs" let customers overdraw their accounts, without their knowledge, when they use checks, electronic transfers, debit card purchases, and ATM withdrawals. Account holders are often enrolled in the programs without their consent and many banks will slap customers with fees of upwards of $30 for this "courtesy" even if their account is only overdrawn by a few cents.

      It is a service most customers do not know they have and may not want. According the Center for Responsible Lending (CRL), 80 percent of consumers would rather have their transaction denied than have it covered in exchange for a fee.

      A recent survey released by the Consumer Federation of America found the median overdraft fee is $35. The highest is $39, charged by Citizens Bank for the third overdraft in a year. Fourteen of the sixteen largest banks charge $35 or more per overdraft, either initially or after a few overdrafts in a year.

      Nine of the largest banks surveyed charge tiered overdraft fees, escalating the cost of more than one or two overdrafts over a year. For example, Regions Bank charges $25 for the first overdraft, $33 each for the second and third, and $35 each for four or more.

      The Financial Times reported that banks stand to collect a record $38.5 billion in fees for customer overdrafts this year. The most cash-strapped customers are the hardest hit, with 90 per cent of overdraft fees coming from ten percent of checking account holders. According to CRL, banks collect nearly $1 billion per year in overdraft fees from young adults and $4.5 billion from senior citizens. has received thousands of complaints about overdraft charges. Among them:

      • Vesta of Sacramento, California, who writes, "Provident extended me $500.00 courtesy pay on my checking account for being a long time customer. So, if I have an overdraft, the courtesy pay will cover it. But, the problem is, every time I have an overdraft and courtesy pay pays it, they charge me $23.00 fee. If I'm one cent overdraft, courtesy pay will pay it and charge me $23.00 fee."

      • Reginald of Washington, DC, tells that he has been charged two overdraft fees of $35.00 each by Chevy Chase Bank. "The two charges," he says, "were for amounts of $3.08, and for $1.05. These charges were made prior to a $4.94 purchase at McDonalds. If there was an overdraft, it should have been only one and that should have been for the $4.94 purchase since it was the last purchase." Reginald says a representative of the bank with whom he spoke, "was of absolutely no help whatsoever."

      "Excessive, automatic overdraft fees are forcing many American families deeper into debt at a time when they are already struggling to make ends meet," said Dodd. "I am working on a bill to protect consumers from these fees."

      Dodd's bill will require customers to "opt-in" to these programs, prohibiting banks from charging consumers overdraft fees without their consent.

      CRL President Michael Calhoun expressed his organization's support for President Obama's call for the creation of a new agency to bring oversight to the financial services industry.

      "The regulators responsible for making our financial system work have failed," said Calhoun. "We urge Congress to act quickly to create the Consumer Financial Protection Agency so that individual Americans, who account for nearly $7 out of every $10 spent in the economy, can put the money that financial institutions unfairly siphon off to more productive purposes, like buying beneficial goods and services and saving for the future."

      Bulls Eye On Bank Overdraft Charges...
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      Time Running Out On First-Time Homebuyers' Credit

      Make sure you plan to live in the house three years

      First-time home buyers still have time to cash in on the government's $8,000 tax credit, but they'd better hurry. Only home purchase transactions that close before November 30, 2009 are eligible.

      The tax credit is contained in the American Recovery and Reinvestment Act, passed to stimulate home purchases. The Internal Revenue Service says more than 1.4 million taxpayers so far have taken advantage of the credit.

      If you currently own a home, or have owned a home within the last three years, you won't qualify. But for others, the program makes purchasing a house that much more affordable.

      The credit of up to $8,000 is generally available to homebuyers with qualifying income and who meet the above requirements.

      While the IRS has encouraged all eligible homebuyers to take advantage of the first-time homebuyer credit, the agency acknowledges misinformation about the program can lead to fraud. It has cautioned taxpayers to avoid schemes that help ineligible people file false claims for the credit. Currently, the agency said it is investigating a number of cases of potential fraud and is using computer screening tools to identify questionable claims for the credit.

      Since a home closing can sometimes take 60 days, home buyers have little time to lose. Closings are often completed in less time, but the IRS says buyers who are counting on the credit should plan for the worst.

      The credit cannot be claimed until after the purchase is completed. For purchases made this year before Dec. 1, taxpayers have the option of claiming the credit on their 2008 returns or waiting until next year and claiming it on their 2009 returns.

      The credit is 10 percent of the purchase price of the home, with a maximum available credit of $8,000 for either a single taxpayer or a married couple filing jointly. The limit is $4,000 for a married person filing a separate return. In most cases, the full credit will be available for homes costing $80,000 or more.

      The credit reduces the taxpayer's tax bill or increases his or her refund, dollar for dollar. Unlike most tax credits, the first-time home buyer credit is fully refundable. This means that the credit will be paid to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

      There's one other consideration. If you take the $8,000 tax credit and sell or rent the home within three years, you will be required to repay the $8,000 to the IRS. So make sure you're going to live in the home for a while before signing on the dotted line.

      Time Running Out On First-Time Homebuyers' Credit...
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      Facebook Turns Off Beacon

      System assailed by privacy advocates is casualty of class action

      Facebook has agreed to shut down its controversial Beacon advertising program, at long last bowing to privacy advocates and users of the social-networking site concerned about the system's Orwellian nature. The agreement is part of a settlement in a class action filed against Facebook last year.

      Beacon has been a key Facebook feature since its November 2007 rollout. The service recorded users' activity on other sites, then relayed those actions back to the user's friends. The concept was intended to promote products and services in a more personal way; Facebook users who saw activity on friends' news feeds, the thinking went, would be more likely to visit the external website themselves. At its inception, over 40 websites signed up to participate.

      The system tracked and recorded activity such as buying a product or signing up for a company's service. According to the lawsuit, Facebook began tracking users' actions even before it gained permission to post that information on their profiles. By the time users became aware of the practice, the suit alleges, personally identifying information had already been communicated to Facebook.


      Beacon has attracted controversy almost since its inception. In November 2007 the same month the service was introduced Facebook announced that users would be given greater control over how the Beacon system worked on their page. When that failed to satisfy privacy-conscious consumers, Facebook turned Beacon into an opt-in system, so that consumers had to actively choose to participate in the program.

      At the time, Facebook CEO Mark Zuckerberg took action to stop the bleeding. We've made a lot of mistakes building this feature, but we've made even more with how we've handled them, he said in a groveling statement. We simply did a bad job with this release, and I apologize for it.

      The extent to which Facebook had actually protected users' privacy, however, was still in dispute. An analyst with Computer Associates (CA) found that even consumers who didn't opt into Beacon still had their actions tracked by Facebook; the activity just wasn't reported on the consumers' news feeds. More disturbingly, CA reported that even users who weren't logged into Facebook still had their actions tracked by the site.

      Complex procedure

      The suit also notes that Beacon was originally an opt-out system, meaning that to remain unaffected by Beacon, users had to actively turn the feature off. While this was technically possible, the suit alleges that the procedure to do so was exceedingly complex, requiring users to go to every participating site and opt out on each one. This procedure discouraged consumers from taking action, the suit says.

      Facebook claims it had already been phasing the Beacon program out, but that a small number of advertisers were still making use of the service. In a statement, company spokesman Barry Schnitt said that Facebook has learned a great deal from the Beacon experience.

      Beacon was just one of many Facebook features that drew the ire of privacy advocates. Facebook has revamped its privacy controls twice in the past three months, in response to concerns that the system had grown large enough that users were ignoring it altogether.

      The suit concerns the period between November 7, 2007, when Beacon was introduced, and December 5, 2007, when the opt-out feature became available. The settlement agreement was finalized last night and will require final approval from the U.S. District Court for the Northern District of California.

      Facebook Turns Off Beacon...
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      Quorn Foods Sued For Not Disclosing Potential Allergic Reactions

      Vat-grown mold tastes like chicken but allegedly makes some violently ill

      An Arizona woman has filed a class action lawsuit accusing Quorn Foods of not disclosing on labels the fact that some people have serious allergic reactions to the main ingredient in its Quorn line of meat substitutes.

      That ingredient happens to be a fungus-mold, actually-discovered in the 1960s in a British dirt sample. The company grows the fungus in vats and processes it into a fibrous, proteinaceous paste.

      But more than a thousand people have reported to the Center for Science in the Public Interest (CSPI) that they have suffered adverse reactions, including nausea, violent vomiting, uncontrollable diarrhea, and even life-threatening anaphylactic reactions after eating the patties, cutlets, tenders and other products made with Quorn's fungus.

      Kathy Cardinale, a 43-year-old advertising executive, ate Quorn's Chik'n Patties on three separate occasions in 2008. Each time, within two hours of eating the product, Cardinale became violently ill. Thinking she had had a stomach virus, Cardinale didn't realize that she was reacting to the Quorn until the third time she ate one of the patties, after which she vomited seven or eight times within two hours.

      "I felt like the soles of my feet were going to come out of my mouth, I was vomiting so hard," said Cardinale. "Once I began to research Quorn online I realized I wasn't alone and that other people had similar stories. It was unbelievable to me that the company knew this was going on and wasn't warning consumers about these problems."

      Quorn Foods, which is British-owned, markets its signature organism as being related to mushrooms, truffles, and morels, since all of those are fungi. While that's true, it's as misleading as claiming that humans are related to jellyfish since they're both animals, according to CSPI. Quorn's fungus is named Fusarium venenatum; "venenatum" is Latin for "venomous."

      As early as 1977, a study found that some people have adverse reactions to Fusarium venenatum. That unpublished study conducted by Quorn's developer found that ten percent of 200 test subjects who ate the fungus experienced nausea, vomiting, or other gastrointestinal symptoms, compared with five percent in a control group.

      The company claims the rate of illness is trivial, though a 2005 telephone survey of consumers in Britain -- where the products have been marketed longer and more widely than in the United States -- commissioned by CSPI found that almost five percent of Quorn eaters experienced adverse reactions. That was a higher percentage of people than that of those who reported allergies to shellfish, milk, peanuts or other common food allergens. Since 2002, more than 1,400 British and American consumers have filed adverse reaction reports on a website maintained by CSPI,

      "It's almost unheard of for a company to market something as healthy when it actually makes a significant percentage of its customers sick within minutes or hours," said CSPI litigation director Steve Gardner. "It is the company's legal obligation to warn consumers about these serious adverse reactions, and getting the company to meet that obligation is the purpose of this lawsuit."

      "Quorn Foods should either find a fungus that doesn't make people sick, or place prominent warning labels about the vomiting, diarrhea, breathing difficulties, and other symptoms Quorn causes in some consumers," said CSPI executive director Michael F. Jacobson.

      While the Food and Drug Administration (FDA) does not disagree that Quorn products cause sometimes-severe allergic reactions, the agency still considers the Quorn ingredient to be "generally recognized as safe."

      "At a time when the public and doctors are deeply concerned about the rise in food allergies, it is deeply distressing that the FDA knowingly permitted a powerful new allergen into the food supply," said Jacobson. "We call on the FDA to revisit its policy."

      Quorn Foods Sued For Not Disclosing Potential Allergic Reactions...
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      Feds And States Get Tough On Scams

      Officials crack down on mortgage related fraud

      By Mark Huffman

      September 18, 2009
      Scams are nothing new. Federal and state governments working together to combat them, however, is a more recent development.

      In the last few months federal regulators and state attorneys general have shown a new aggressiveness in dealing with economic crimes aimed at consumers. Foreclosure rescue and other mortgage related scams have drawn special attention.

      "A clear lesson of this financial crisis is that American consumers need better protection against fraud," said Treasury Secretary Tim Geithner. And while we will prosecute anyone who violated the law, going forward we will not wait for problems to peak before we respond. The Obama Administration is acting preemptively, across federal agencies and alongside state governments, to stop consumer fraud."

      Treasury, Financial Crimes Enforcement Network, the U.S. Department of Justice, the Department of Housing and Urban development and the Federal Trade Commission have recently committed to taking proactive measures to curb abuse by coordinating information and resources across agencies to maximize targeting and efficiency in fraud investigations. This includes alerting financial institutions to emerging schemes, stepping up enforcement actions and educating consumers to help those in financial trouble avoid becoming the victims of a loan modification or foreclosure rescue scam.

      "Our efforts to attack mortgage fraud must be, and are, concerted and coordinated," said Attorney General Eric Holder. "Working together, we can send a clear and straightforward message: Those who prey on vulnerable American homeowners cannot hide from the hand of the law. If you perpetrate mortgage fraud, we will find you and we will bring you to justice."

      Geithner and Holder were among the officials meeting this week with 12 state attorneys general to compare notes on their respective anti-scam efforts. The officials reviewed emerging trends and proactive strategies to combat fraud against consumers in the housing markets as well as best practices to bolster coordination across state and federal agencies.

      Meanwhile, the FTC announced two new law enforcement actions in a continuing crackdown on mortgage foreclosure rescue and loan modification scams, bringing to 22 the number of these cases the Commission has filed since the housing crisis began. The FTC also announced developments in similar pending mortgage-related actions, several of which have involved coordinated case work from FinCEN.

      Connecticut Attorney General Richard Blumenthal said his state has adopted a landmark ban on upfront fees for mortgage repair schemes -- a model, he says, for national action in the battle against exploitation of consumers seeking to save their homes.

      "Homeowners should never pay an upfront fee for help with negotiating a loan modification," said Illinois Attorney General Lisa Madigan. If youre asked to pay an upfront fee, thats a sure sign youre dealing with a scavenger whose only goal is to con you out of money you cant afford to lose, and who will ultimately rob you of any opportunity to save your home with the help of legitimate organizations."

      Michigan victims get refunds

      In Michigan, Attorney General Mike Cox says residents of his state victimized by foreclosure fraud schemes can receive refunds as a result of charges filed against SaveMyHome USA, Payment Doctors and the Michigan Economic Reinstatement Program. The companies were held accountable after an undercover investigation by the Attorney General's office discovered that the companies' representatives made misleading statements and charged borrowers upfront fees in violation of the Michigan Credit Services Protection Act.

      "Families already facing a foreclosure crisis should not have to worry about being ripped off in the process," said Cox. "This sends a clear message to scam artists that we are watching."

      The companies offered mortgage modification assistance to homeowners facing foreclosure. They claimed they would help homeowners by working with their lenders in an attempt to modify the borrower's mortgage.

      However, an undercover investigation by the Attorney General's office discovered that the companies charged borrowers upfront fees, a practice prohibited by law. After paying the upfront fee, many borrowers found that the companies could not secure a modification and were subsequently unable to get their money back.

      Feds And States Get Tough On Scams...
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      Technology Could Be Key To Stopping Unauthorized Charges

      Visa pilot project could be first step

      By Mark Huffman

      September 18, 2009
      Many third-party marketing agreements, in which one business shares consumers' credit information with another business, results in unauthorized charges on debit and credit cards.

      While these charges can be disputed, it's a headache for consumers. If they don't notice the charge for a month or two and end up paying it, its almost impossible to get a refund. has received hundreds of these complaints over the years, including one recently from Sherry, in Meadow Vista, Calif. But Sherry also suggested a solution.

      Why don't we require the banks to send out an electronic notice to have us consumers approve the electronic payments before they come from our accounts? she asked. They have the ability to send us overdraft notices.

      When a consumers uses a debit or credit card, they almost always either enter their signature or provide a PIN. However, a merchant may enter a transaction on a consumer's account without either one. They just need the account number, name on the card and expiration date.

      What Sherry would like to see is a requirement that consumers actively approve any transaction entered without a signature or PIN. And she's probably correct that the technology exists to do it.

      In fact, Visa last year began a pilot project with eight large North American banks to to test the delivery of real-time notification alerts on Visa accounts.

      The program was designed to help consumers by alerting cardholders in real-time or near real-time of transaction activity on their Visa account -- typically within seconds rather than hours or days. Participants received notification alerts from Visa through email or Short Message Service (SMS) delivered directly to their mobile devices.

      While such a system is not the authorization check that Sherry is requesting, it's the next best thing. Through the alert received via email or SMS text, Visa says cardholders can verify the transaction details, and if the transaction appears to be irregular, can immediately contact their bank to help stop further transactions on the card.

      The service is designed to help cardholders keep closer track of their transactions and spending levels as they go about their daily routine. According to a recent Javelin Strategy & Research report, consumers also view timely alerts as a valuable resource to help detect fraud.

      "Information is power, especially when delivered in a timely manner," said Elizabeth Buse, Global Head of Product at Visa Inc. "Visa already delivers real-time transaction risk scores to financial institutions, and we are now empowering cardholders in this pilot with real-time transaction alerts.Participating Visa cardholders can typically receive alerts before they walk out of the store, rather than hours or even days later."

      Visa made the system available on mobile devices powered by Android, the Open Handset Alliance's open source platform for mobile devices, including the T-Mobile G1 phone, at the end of last year. No word on when the system might be expanded.

      Technology Could Be Key To StoppingUnauthorized Charges...
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      California Probes Credit Rating Agencies

      Did agencies give stellar ratings to junk assets for profit?

      California, one of the hardest-hit states in the mortgage meltdown, has launched an investigation into credit rating agencies' role in fueling the financial crisis.

      California Attorney General Edmund G. Brown Jr. today issued subpoenas to Standard & Poor's, Moody's and Fitch to determine whether the firms violated California law when they gave stellar ratings to assets that turned out to be shaky.

      "Standard & Poor's, Moody's and Fitch put their seal of approval on high risk mortgage-backed securities, recklessly giving stellar ratings to shaky assets that proved toxic to the entire financial system," Brown said. "This investigation is meant to determine how these agencies could get it so wrong and whether they violated California law in the process."

      Moody's Investors Service, Standard & Poor's, and Fitch Ratings grade the creditworthiness of corporations and municipalities and the financial instruments, including bonds and securities, they issue. Investors depend on these ratings to gauge risk and make investment decisions.

      At the peak of the housing boom, these agencies gave their highest ratings to complicated financial instruments -- including securities backed by subprime mortgages -- making them appear as safe as government-issued Treasury bonds.

      In rating these securities, Brown maintains the agencies worked behind the scenes with the same Wall Street firms that created them. For their work, he says the firms earned billions of dollars in revenue, at a rate nearly double what they earned for rating other financial products.

      Banks, pension funds and other investors relied on these ratings when they purchased trillions of dollars of securities backed by subprime mortgages because of the high returns and apparent low-risk. Those purchases helped fuel the housing bubble by providing funding for lenders to issue ever-riskier subprime and other toxic mortgages. When the bubble burst, however, those risky mortgages defaulted in record numbers and investors were left holding worthless securities, unable to sell them.

      Subsequently, the agencies downgraded the credit ratings of $1.9 trillion in residential mortgage backed securities, a tacit acknowledgement of their failure to adequately assess the risks of the debt they rated. The rating agencies either ignored or did not understand the risks of the debt they rated.

      Given the role the rating agencies' played, Brown is directing the agencies to provide by October 19, 2009 information that will help answer questions designed to establish whether the rating agencies failed to conduct adequate due diligence in the rating process.

      California Probes Credit Rating Agencies...
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      Florida Sues To Stop Travel Scam

      Victims told club membership provided free travel

      September 16, 2009
      The deal sounded too good to be true. And in fact, it was.

      Florida Attorney General Bill McCollum says Suncoast Incentives LLC's offer of a travel club with unlimited free travel was nothing but a scam and he's hauled the company into court.

      McCollum's complaint alleges that the company owner Nicholas Congleton enticed victims to purchase travel club memberships for thousands of dollars, but failed to provide the incentives advertised. McCollum says his suit was prompted by the more than 500 consumer complaints his office has received.

      Victims received advertisements for sales seminars that featured images of various commercial cruise ships. The advertisements encouraged consumers to attend the seminars and receive a free cruise.

      Once at the seminars, consumers were allegedly told they would never have to pay retail price for travel again if they joined the travel club. Membership fees ranged from $2,495 to $7,495, and annual renewal fees ranged from $199 to $249.

      The Attorney General's Economic Crimes Division determined the free cruises were not free and included substantial fees, often over several hundreds of dollars. Additionally, investigators believe the companies had a contract with only one condo association, and no contracts with any airlines, cruise lines, hotels, or motels. Former employees told investigators they would merely search online for price options, just as consumers might otherwise do for themselves.

      Congleton is associated with several other companies, including Royal Palm Vacations, World Travel, and Capital Financial. The Attorney General's lawsuit has requested the Court prohibit Congleton and his companies from selling any travel packages. The lawsuit also requests full consumer restitution and recovery of the costs of the state's investigation and litigation.

      Florida Sues To Stop Travel Scam...
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      Levaquin Manufacturer Hit With Three More Suits

      Claims allege permanent tendon damage

      The manufacturer of Levaquin is facing three lawsuits from consumers who claim the medication caused them permanent tendon injuries. The actions follow a similar lawsuit filed two weeks ago.

      The latest suits were filed by Illinois residents who took the drug and say they suffered serious tendon damage as a result. All three groups are represented by Corey & Danis and the Lowe Law Firm, which also brought the earlier suit.

      The plaintiffs allege that they were unaware of the increased risk of tendon rupture for patients over 60 or those who are on corticosteroid therapy, which uses steroids to fight osteoperosis, arthritis, and a number of other ailments.

      Levaquin is part of a group of antibacterial drugs called fluoroquinolones, used primarily to treat infections by halting the reproduction of bacteria. U.S. law requires makers of such drugs to warn on the label of tendon-related side effects. Although manufacturer Ortho-McNeil technically warns of potential tendon problems, the notice is buried in a long list of other side effects, according to the suits.

      After a number of studies showed that the medication poses a risk of tendon damage to certain groups of patients, Ortho-McNeil updated the label to specifically warn of an increased risk to patients involved in corticosteroid therapy, but failed to note the risk posed to older patients.

      This is disturbing for several reasons. According to the suit, Ortho-McNeil actively marketed Levaquin to older consumers with a "campaign ... themed on Levaquin's excellent safety profile [that] failed to disclose the risks of tendon injury." Moreover, elderly patients are especially likely to use corticosteroid therapy for upper respiratory infections and other problems.

      Studies have linked fluoroquinolones to a number of other potentially serious side effects, including psychosis, depression, changes in heart rhythm, and, in severe cases, seizures. Along with requiring a "black box" warning detailing the danger of tendon damage, the Food and Drug Administration (FDA) has cautioned doctors to carefully weigh the risks and benefits posed by the drug before prescribing it to patients.

      Levaquin was first approved by the FDA in 1996, and has since become a popular antibiotic; $2.3 billion in sales in 2005.

      Other fluoroquinolones posing an increased risk of tendon damage or rupture include Cipro, Proquin, Factive, Levaquin, Avelox, Noroxin, and Floxin. However, the FDA says that Levaquin is especially dangerous, accounting for 61% of all fluoroquinolone-caused tendon injuries between November 1997 and December 2005. According to Carey & Danis, one of the firms prosecuting the suit, the Achilles is the tendon most susceptible to injury, with the hand, rotator cuff, and biceps close behind.

      Along with Ortho-McNeil, the suit names as defendants Johnson & Johnson -- the manufacturer's parent company -- and Walgreen's, which sold the drug.

      Levaquin Manufacturer Hit With Three More Suits...
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      Massachusetts Cracks Down On Medical Discount Plans

      Consumers often believe they are buying health insurance

      A medical discount card is not a health benefit plan. Many a consumer has learned that lesson the hard - and costly - way. All too often, the marketers of these discount plans have done their best to blur the difference.

      In Massachusetts, Attorney General Martha Caokley has filed proposed new consumer protection regulations designed to protect residents of the Bay State from unscrupulous marketing of plans that claim to offer discounts on medical products or services. The proposed regulations are part of the Attorney General's general crackdown on deceptive marketing of medical discount plans.

      In addition to the regulations, Coakley has also published a consumer education advisory and pursued law enforcement actions to protect consumers from medical discount plan scams.

      "As a result of health care reform in Massachusetts, all residents are required to have health insurance and are presented with a wide range of coverage options. It is critical that companies who offer any kind of medical coverage plans or medical discount card clearly disclose what their plans do and do not offer, and whether they fulfill the individual mandate." Coakley said. "We have received numerous complaints from consumers who have fallen victim to these deceptive discount plan scams. The new regulations that we are proposing will complement ongoing efforts to protect consumers from these deceptive practices."

      Medical discount plans claim to offer consumers discounts for specific health care products or services from certain providers in exchange for some form of fee. Under a medical discount plan, the plan member receives a discount, but is obligated to make all payments for services provided. Medical discount plans are not insurance products and are not regulated by the Division of Insurance. These plans also do not meet the minimum coverage standards as required under health care reform.

      The proposed regulations filed with the Secretary of State's Office would require organizations marketing medical discount plans for sale in Massachusetts to fully disclose how the plan works and whether the plan is limited to certain services or products from certain providers. The disclosures must make clear that the discount plan is not insurance and that the consumer will be required to pay for any services or products. In addition, the regulations will require medical discount plans to maintain lists available to consumers of any providers who have agreed to offer the plan's members discounts.

      Massachusetts Cracks Down On MedicalDiscount Plans...
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      prepaid Debit Card Vs. Big Bank

      Debit card can offer lower cost, prevent steep overdraft fees

      By Sara Huffman

      September 15, 2009
      Like millions of Americans, I have a checking account with one of the Big Banks. And like millions of Americans, I have had my share of unexpected, infuriating overdraft fees.

      For a experiment, I decided to try a prepaid Mastercard for a couple weeks and compare its fees and ease of use with my bank.

      After looking through my options, I selected a Silver Prepaid Mastercard, which promises free unlimited purchase transactions anywhere credit cards and debit cards are accepted, and most importantly, no overdraft fees. Because I'm not borrowing money, but putting my own money onto the card, it doesn't matter what my credit score is and I was approved immediately.

      Like just about any bank product, there are some fees. The general knock on these prepaid cards is the number, and amount, of fees. While that's generally true, some have lower, and fewer fees than their competitors. After doing some homework, I settled on the card from Silver.

      The first fee was $9.95 fee to open the account. After checking around, I decided it was worth it because it was similar to others, and it was a one-time charge.

      Step-by-step directions

      Within a week, they sent me my card and after a quick authorization call, I chose my PIN number which I could use to make debit purchases. On the back of the card, they gave me the URL to their website ( where I created a profile and could check my account details online. Again, after a few minutes, I was all set up with my username and password.

      Through the online website, there are step-by-step directions on how to transfer money from a PayPal account onto the card. If you don't have a PayPal account, there are instructions on how to set up direct deposit of paychecks or transferring money via Western Union, but PayPal is the least expensive way to do it.

      I transferred $250 onto the card and within three days, the money was available to use. The cost of the transfer -- a fee of 95 cents.

      Over the next couple of weeks, I used my Silver Mastercard like any other credit card. I used it to make an online purchase, I used it at the post office and I used it at the grocery store. I quickly learned to choose "credit" instead of "debit" when I made a purchase at a store. A "credit" purchase with my Silver card is free. A debit transaction costs 95 cents. So over a typical month, I could probably save $10 to $20 in fees by always selecting "credit" when paying for an item.

      There was also an unexpected bonus my Big Bank doesn't offer. Two minutes after each purchase I got an email from Silver Card telling me I had made a purchase, how much the purchase was for, and best of all, how much money was left in my account. What a great feature!

      A few kinks

      There were a few purchases that eventually worked out fine, but weren't quite as seamless as the others:

      No overdrafts

      At Target, I swiped my card without choosing "credit" first. As a result, it rang up as a debit charge and I got a 95 cents fee.

      At the gas station, I filled up my tank for $35.00. The gas station held onto $50.00 for a few days until the charge cleared. I'm not sure why that happened.

      I paid one of my bills using the Bill Pay feature on Silver Mastercard's website. It took about three days for the payment to clear and my bill to be paid. I wish I had known that -- while the payment went through before the due date, it came dangerously close. I would have paid the bill earlier. Silver Mastercard charged me 95 cents to use Bill Pay.

      At the ATM, I took $20.00 out. The ATM charged me a $3.00 fee and then Silver Mastercard charged me $1.95 for using the ATM. I now realize that when I need cash, I can always get cash back on a purchase from the grocery store. In that case I would select "debit" instead of "credit" but would only have to pay the 95 cents debit fee, instead of almost $5 at the ATM.

      With about $5.00 left on my card, I decided to see what would happen if I tried to use the card on a large purchase that would overdraw my account. At my Big Bank, the charge would go through, but then I would get dinged with a $35 overdraft fee. So, at the grocery store, I swiped the card for a $40 purchase. As promised, the card was declined, instead of going through and causing me to be in the red. Within minutes, I got an email, telling me that I didn't have enough money in my account for that purchase.

      Silver -- as well as almost all of the prepaid debit cards -- advertise that they have "no overdraft fees." And while that's technically true, there is a fee involved when you exceed the money in your account. Only, they don't call it an overdraft fee, but rather a "decline fee." It seems a little misleading, but when I checked the "terms of service," the "decline fee" was among the list of fees.

      But the decline fee was a lot less than my bank's overdraft fee. When I got home, I checked my account online and found that the fee was $2.95. That's it.

      I thought about all those times I would go out and make six or seven debit purchases through my bank, only to come home, check my account online, and see that I was in the red and was getting charged six or seven overdraft fees of $35.00 EACH. A one-time fee of $3 is nothing in comparison.

      In the couple of weeks I used the card to spend $250, I paid $10.75 (not counting the charge to open the account) in fees. If I had used it to pay more bills online, that total would have been higher.

      The card will work best if you can have your paycheck direct deposited into your account. It not only saves time, its an easy way to keep funds in your account.

      I haven't decided whether I will keep using my prepaid debit card now that the experiment is over, but I have to say there are two features that I really like: the $2.95 decline fee instead of a $35 overdraft fee and the email updates to alert me to the charges I've made and my current balance.

      While there is almost no truly free banking, using a prepaid credit card is an alternative to going with the Big Banks. It isn't for everyone, but if you get hit with multiple overdraft charges every month or so, you might find it's just as simple and much, much cheaper.

      A word of caution: Don't just accept whatever debit card plan your Big Bank happens to offer. Many banks pile on debit card fees that are just as expensive as the checking-account fees we've all learned to hate. Shop around and read the terms and conditions carefully.

      prepaid Debit Card Vs. Big Bank...
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      Dell To Pay New York $4 Million In Fraud Charges Settlement

      Court finds Dell used "bait and switch" advertising tricks

      With the New York State Supreme Court ruling that Dell Computer engaged in fraud against consumers in the state, the once-dominant computer maker has agreed to settle charges, paying $4 million in restitution, penalties and costs.

      New York Attorney General Andrew Cuomo brought the case against Dell, claiming it had engaged in fraud, false advertising, deceptive business practices, and abusive debt collection practices.

      The court's decision came as a result of the original lawsuit filed by Cuomo's Office, which charged that Dell engaged in bait and switch advertising with respect to its "no interest" financing promotions, misled consumers to believe they had qualified for promotional financing, failed to adequately disclose the terms of its "next day" service contracts and failed to provide consumers with warranty service and promised rebates.

      "Today's announcement is the final step in ensuring New Yorkers harmed by Dell's deceptive and illegal business practices are fully compensated," said Cuomo. "Going forward, this deal means that Dell will have to clearly and fully disclose the terms and conditions of their products and services, to avoid this kind of fraud at the consumer's expense. My office is committed to ensuring a fair and honest marketplace across New York by rooting out these unlawful practices, and we encourage anyone who was ripped off by Dell to come forward and file a claim to get their money back."

      Along with the $4 million in restitution, penalties and fees, the settlement also requires Dell to make sweeping changes to its advertising, sales and financing practices. Among other things, Dell will be required to advise consumers before they purchase an "at home" or "on site" service contract that they may be required to engage in diagnostic activity over the telephone that includes consumers themselves opening their computers to access internal components. The settlement also requires Dell to disclose in its advertisements for promotional financing the estimated percentage of consumers who will actually qualify for the promotion.

      In the past 12 months, has received 1,368 complaints about Dell, mostly concerning customer service.

      "All I want is for someone to come to my home and fix my computer," Debra, of Vero Beach, Florida, told "They will not set up an appointment for a repair tech to go to your home. I not only have ended up screaming like another person mentioned on this site but I told them to give me an address to send this back because I have never dealt with a company who doesn't have or won't send a repair tech."

      According to the Court's decision upholding lawsuit, Dell deprived consumers of the technical support to which they were entitled under their warranty or service contract by:

      • Repeatedly failing to provide timely on site repair to consumers who purchased service contracts promising "on site" and expedited service;

      • Pressuring consumers, including those who purchased service contracts promising "on site" repair, to remove the external cover of their computer and remove, reinstall, and manipulate hardware components; and

      • Discouraging consumers from seeking technical support; those who called Dell's toll free number were subjected to long wait times, repeated transfers, and frequent disconnections.

      The court concluded that Dell lured consumers to purchase its products with advertisements that offered attractive "no interest" and/or "no payment" financing promotions. In practice, however, the vast majority of consumers, even those with very good credit scores, were denied these deals.

      Cuomo calls it "a classic bait and switch scheme," with DFS instead offering consumers financing at high interest rates, which often exceeded 20 percent. Dell and DFS frequently failed to clearly inform these consumers that they had not qualified for the promotional terms, leaving many to unwittingly finance their purchase at high interest rates.

      The decision also held that DFS incorrectly billed consumers on cancelled orders, returned merchandise, or accounts they did not authorize Dell to open, and then continually harassed these consumers with illegal billing and collection activity.

      Although many consumers repeatedly contacted Dell and/or DFS to advise them of the errors, DFS did not suspend its collection activity and Dell failed to expeditiously credit consumers' accounts, even after assuring consumers it would do so. As a result, many consumers have been subjected to harassing collection calls for months on end and have had their credit ratings harmed.

      Dell To Pay New York $4 Million In Fraud Charges Settlement...
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      Craigslist Scammer Using Fake Wisconsin Department Of Revenue Checks

      At least one "purchaser" used checks to pay for items sold through Craigslist

      Counterfeit checks from the Wisconsin Department of Revenue are being used by at least one "purchaser" to pay for items sold through Craigslist.

      "It appears that this is another fake check scam used to cheat consumers out of their money," said Janet Jenkins, Trade and Consumer Protection division administrator with the Wisconsin Department of Agriculture, Trade and Consumer Protection. "This fraud has been around for a long time but, every now and then there is a new twist which in this case, seems to be the use of fake Department of Revenue checks."

      In this particular version of the fake check fraud, the person committing the fraud pretends to want to buy something that is for sale on Craigslist. This "purchaser" contacts a seller and arranges a sale. The fraudulent purchaser then sends a check to the seller in an amount that is greater than the selling price. The purchaser asks the seller to deposit the check promptly and then send the extra amount back to the "purchaser" using a money order.

      The check issued to the seller ultimately bounces but, by that time the seller has already sent the money order. Neither the Wisconsin Department of Revenue nor the financial institution that cashed or deposited the fake check has any liability for the scam. The seller is the person who ends up losing money.

      Consumer Protection offers a few simple tips to help consumers to avoid fake check scams:

      • If someone sends you a check for more than the amount you're owed, the chances that it is a fake check scam are very high.

      • Anyone who asks you to wire funds via Western Union, MoneyGram or any other wire service this is almost certainly a scammer.

      • With today's computer technology, fake checks, including cashiers checks, and fake money orders are easy to make. If the name of the check issuer seems at all odd, talk to your financial institution.

      • Make certain that the financial institution in which you deposited the check has actually received the money for the check before sending your money to someone else. The fact that the financial institution cashes the check does not necessarily mean that the institution has received the money for the check. Again, talk to your financial institution.

      Craigslist Scammer Using Fake Wisconsin Department Of Revenue Checks...
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      Google Books Settlement Facing Scrutiny

      Concerns center on possible monopoly, invasion of privacy

      By Jon Hood

      September 13, 2009
      The proposed Google Books settlement, once hailed by Google cofounder Sergey Brin as giving consumers unprecedented access to the tremendous wealth of knowledge that lies within the books of the world, is getting decidedly negative reviews from a number of industry players and government agencies, with concerns about monopolies and consumer privacy at the top of the list.

      Google was hit with a lawsuit in 2006, accused of copyright infringement for offering over 10 million protected works to the public free of charge. The search behemoth settled the lawsuit in October of last year, agreeing to pay $125 million in what it called an historic deal that would benefit consumers. Under the agreement, Google would give publishers about two-third of revenues made from selling access to out-of-print works, keeping 37% for itself.

      The settlement was hailed as the first step toward allowing consumers to search for and buy out-of-print books, and provided that U.S. libraries would have free access to Google's master database. In testimony before Congress, Google's chief legal officer David Drummond added that bookstores and online booksellers like would be able to sell access to Google's database on any Internet-connected device they choose.

      The settlement is now facing increasing scrutiny as it awaits final court approval. A key point of contention is a section permitting Google to scan and store orphan books -- those that are no longer in print but still protected by a valid copyright -- without first securing permission from the works' copyright holders.

      Marybeth Peters, head of the U.S. Copyright Office, told Congress that the settlement would give Google a license to infringe first and ask questions later, and added that the agreement makes a mockery of Article One of the Constitution, that anticipates that authors shall be granted exclusive rights.

      John M. Simpson of Consumer Watchdog, a California-based non-profit, said a key problem is the unfair competitive advantage Google receives under the settlement that comes from its attempt to pull an end-run around the appropriate legislative solution to the orphan books problem. This is not an issue for a court and certainly one that cannot be settled by solving the problem for one large corporation and no one else, he said in testimony before the House Judiciary Committee last week.

      He said the problem is Googles monopolistic digital library and how it would be implemented. The proposed class-action settlement is monumentally overbroad and invites the court to overstep its legal jurisdiction, to the detriment of consumers and the public, he said. The proposed settlement agreement would strip rights from millions of absent class members, worldwide, in violation of national and international copyright law, for the sole benefit of Google.

      Google's competitors -- Microsoft, for example -- are also crying foul, claiming that the provision allowing Google to store orphan books would amount to a veritable monopoly on that market. Amazon executive Paul Misener told SF Gate that, while his company also scans and stores orphan books, it first secured permission from copyright holders. We went to the rights holders, and one by one, negotiated deals, Misener said.

      Misener likened Amazon's interest in blocking the settlement with its interest in network neutrality. He said the settlement would give Google an advantage rather than provide a level playing field. "Under the proposed settlement, Google would become a consumer's nightmare: the only store in town," he said.

      In a move aimed at quelling such criticism, the settlement agreement provides that funds for orphan books would be held in escrow for five years, or until the copyright owner claims the book. Additionally, Google has agreed to spend $34.5 million to create a registry in an effort to locate those owners.

      Privacy concerns

      Google is also under fire from privacy advocates, who insist that the agreement will do nothing to protect consumers. The Electronic Privacy Information Center (EPIC) sought to intervene on behalf of consumers' privacy rights, apparently unswayed by Google's newly released privacy proposal.

      That proposal, pitched to the Director of the Bureau of Consumer Protection, stresses that Google would not share users' information with third parties except under very limited and narrow circumstances, which would be explicitly set forth in the final privacy proposal. According to Google, those narrow circumstances are limited to situations where Google shares information with trusted entities that process information on our behalf or to prevent physical or financial harm. Google also promised to enact protections to limit the information ... available to credit card companies about book purchases. Privacy advocates point out that these measures are informal and not legally binding, and thus afford consumers little real protection.

      The amount of data that Google could amass about a readers behavior is unprecedented, Consumer Watchdog's Simpson said. It could be commingled with data from other Google services posing a new threat to user privacy and flies in the face of the U.S. tradition of privacy regarding reading habits, he argued.

      "Consumer Watchdog supports digitization and digital libraries in a robust competitive market open to all organizations, both for-profit and non-profit, that offer fundamental privacy guarantees to users, Simpson concluded. But a single entity cannot be allowed to build a digital library based on a monopolistic advantage when its answer to serious questions from responsible critics boils down to: Trust us. Our motto is Dont be evil.

      Its its defense, Google notes that it has taken measures to protect privacy in the past. The company blurs certain locations on Google Maps including, until January, the Vice President's residence in Washington -- and its privacy policy says that personal information required for customers to log in is not shared with third parties, although it makes an exception for trusted parties.

      Google Books Settlement Facing Scrutiny...
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      California Consumer Group Wants Its Billboard Back

      Bright yellow billboard warned consumers 'You can't trust Mercury Insurance'

      By Truman Lewis

      September 13, 2009
      It's not unusual for businesses to respond aggressively when consumers go online to complain about them, but it's not often a billboard causes a major dust-up. In Los Angeles, the non-profit consumer group Consumer Watchdog is demanding that CBS Outdoor reinstall a bright yellow billboard that read "Consumer Watchdog Says: 'You Can't Trust Mercury Insurance'".

      CBS Outdoor must re-install the billboard immediately and fulfill its contractual obligation, the consumer group demanded in a letter to the billboard company sent last week. The letter, from First Amendment lawyer Anthony Glassman said that Consumer Watchdog would sue CBS Outdoor if the company did not honor the contract.

      On August 24, after following the standard protocol for posting billboard ads, CBS Outdoor posted the billboard at Wilshire Blvd. and Witlon Place near downtown Los Angeles. Sometime around September 3rd, CBS Outdoor ripped the sign down without notifying Consumer Watchdog in violation of the contract. According to a CBS representative, Mercury Insurance's Chairman, billionaire George Joseph, complained and threatened CBS, leading to the removal of the sign.

      At its Web site -- the nonpartisan, nonprofit organization has listed the Top 10 Reasons that Mercury, the third largest auto insurer in California, can't be trusted. The group cites punishments Mercury received from regulators in California and Florida for its claims-handling practices, as well as smoking gun documents exposing the company's practices of lowballing policyholders with claims and incentivizing its body shops to use aftermarket and junkyard-refurbished parts rather than original manufacturer parts when repairing policyholders' cars.

      The group also posted a legal brief from the California Department of Insurance in which the Department wrote: "Among Department [of Insurance] staff, consumer attorneys, and consumer victims of its bad faith, Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference."

      Consumer Watchdog's Executive Director Douglas Heller said: "What's worse than CBS Outdoor breaking its contract and pulling down the billboard, is the fact that Mercury's customers who might have been informed by the billboard, won't be apprised of the problems they might face if they ever need Mercury to pay a claim."

      In its letter calling on CBS Outdoor to replace the billboard, Consumer Watchdog's attorney Glassman cited the group's contract with the billboard firm, which reads: "If Copy is furnished and delivered as required above and such Copy is not rejected by Company pursuant to the terms hereof (i) the Copy shall be posted... "

      Glassman wrote: "The "Copy" furnished and delivered to CBS Outdoor was not rejected and was subsequently posted by CBS Outdoor as required by the terms of the contract. Once posted, it should have remained through the term of the contract as the Copy did not violate any of the terms requiring removal under the contract, i.e., it did not contain [n]udity, pornographic, profane or obscene copy, which would have precluded its initial posting." Glassman added, "Having been approved by CBS Outdoor, and not being in violation of any of the terms of the contract, you are estopped from removing it prior to the period paid for under the contract."

      The group is demanding that the billboard be reinstalled for 16 days, which represents the least number of days left on the contract when CBS removed the billboard. Consumer Watchdog has not yet determined when the billboard was actually removed.

      California Consumer Group Wants Its Billboard Back...
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      Survey: Americans Want Consumer Agency For Financial Products And Services

      Strong support for better disclosures, prohibitions on abusive practices

      By James Limbach

      September 11, 2009
      A year after the Lehman Brothers bankruptcy froze credit markets and sent the stock market into a nosedive, consumers overwhelmingly want government action to increase consumer protections for financial products and services, according to a new national poll released by the Consumer Federation of America (CFA).

      In a country where skepticism about the role of government is high, 57 percent of those polled support the creation of a new federal agency to protect consumers who purchase banking and other financial products and services.

      Those most likely to be adversely affected by many unfair and deceptive financial practices -- adults under 35 blacks, Hispanics and low-income individuals -- expressed the strongest support for a new consumer protection agency.

      "Americans are fed up with the tricks and traps that they confront daily as they purchase and use financial products and services," said Travis Plunkett, CFA's Legislative Director. "To add insult to injury, the same firms that benefited from a taxpayer bailout are hitting consumers with exorbitant and unjustified charges. Americans want a cop on the beat to rein in these abuses, which helped trigger the current economic crisis and have worsened the plight of those hardest hit by the recession."

      President Obama proposed the creation of the Consumer Financial Protection Agency in response to the perceived failure of regulators to rein in lending that helped bring down the economy.

      Chairman Barney Frank of the House Financial Services Committee and Chairman Christopher Dodd of the House Banking Committee have both strongly endorsed the agency. The House Financial Services Committee is scheduled to take up the legislation to establish the new agency in the next few weeks.

      Poll results

      The poll of 1018 people conducted by Caravan Opinion Research Corporation for CFA asked specifically about mortgage lending, bank practices, and credit cards. The survey showed that, in the wake of the mortgage meltdown, Americans overwhelmingly support disclosure requirements on mortgage documents and limits on fees and certain practices:

      • 89 percent support (82 percent strongly support) requiring banks to disclose all mortgage fees upfront, clearly and conspicuously.

      • 67 percent support (58 percent strongly support) prohibiting banks from charging substantial penalties to borrowers who pay off mortgages early.

      • 61 percent support (45 percent strongly support) prohibiting mortgage brokers from collecting additional fees from banks for persuading borrowers to purchase higher-rate mortgages.

      • 61 percent support (48 percent strongly support) prohibiting mortgage brokers and banks from selling more expensive subprime mortgage loans to borrowers who qualify for less expensive regular mortgage loans.

      Bank practices also are of concern to Americans. They support disclosure requirements and limits on overdraft practices.

      • 85 percent support (73 percent strongly support) requiring banks to disclose, on the ATM screen, that a withdrawal will overdraw an account.

      • 71 percent support (44 percent strongly support) requiring banks to gain the permission of customers before routinely providing loans to cover these overdrafts.

      • 70 percent support (53 percent strongly support) requiring banks to pay checks in the order they are received, as opposed to the current practice of allowing banks to routinely pay the largest first, which drains some accounts more quickly and increases bounced check fees.

      More regulations

      In spite of the recent enactment of credit card protections by Congress, consumers still believe that additional prohibitions on particular credit card practices are necessary:

      • 67 percent support (55 percent strongly support) prohibiting credit card companies from extending total lines of credit that exceed a person's annual income.

      • 63 percent support (51 percent strongly support) prohibiting credit card companies from increasing the interest rate on one card because of their payment history on another card.

      Survey: Americans Want Consumer Agency For Financial Products And Services...
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      Mortgage Brokers Arrested For Theft

      Brokers allegedly changed terms after customers signed documents

      September 11, 2009
      Three California mortgage brokers face charges of criminal conspiracy after they allegedly stole nearly $1 million from borrowers who were trying to refinance their homes.

      California Attorney General Jerry Brown leveled the charges against 39-year old Michael McConville of Simi Valley, sales manager of ALG, Inc, a Los Angeles based mortgage company; Garrett Holdridge, 23, of Palmdale, California and Texas, loan officer for ALG, Inc.; and Alan Ruiz, 28, of Huntington Beach, also a loan officer for ALG, Inc.

      Brown charges McConville and his co-conspirators lured dozens of borrowers into refinancing home loans by falsely promising low interest rates and brokers' fees, and other attractive terms. They then allegedly negotiated different terms with lenders, forged the victims' signatures on the final loan documents and collected hefty brokers fees - ranging from $20,000 to $57,000 - that were never disclosed.

      Only when the borrowers received true copies of the loan documents after the refinance, Brown maintains, did they discover that their names had been forged. In total, defendants are accused of stealing over $950,000 from more than 70 borrowers, leaving victims holding $30 million in loans with terms they did not agree to.

      "After victims signed their closing papers, McConville and his associates doctored the loan documents, forged borrowers' signatures and slipped in hefty fees that were never disclosed," Brown said. "This was not some clerical error but a criminal conspiracy to steal nearly a million dollars from borrowers."

      Brown says McConville promised one couple a 5.5 percent fixed interest rate, cash-out of $58,000 and $4,500 in closing costs. Only after they signed the documents, they realized their copy did not include the pages detailing the key terms of the loan. The couple soon received loan documents from Indymac Bank and discovered their signatures had been forged and they had received a 7 percent interest rate, no cash-out, and over $50,000 in closing costs, including a $42,000 origination fee paid to ALG, according to the complaint.

      Mortgage Brokers Arrested For Theft...
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      August Foreclosures Up 18 Percent Over 2008

      Most activity still centered in a few states

      The rate of foreclosure activity dipped slightly in August from the previous month, but still remains sharply higher than 2008's rate.

      The latest monthly report from RealtyTrac, a foreclosure tracking firm, shows foreclosure filings - default notices, scheduled auctions and bank repossessions - were reported on 358,471 U.S. properties during the month, a decrease of less than 1 percent from the previous month but still an increase of nearly 18 percent from August 2008. The report also shows one in every 357 U.S. housing units received a foreclosure filing in August.

      "The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated," said James J. Saccacio, chief executive officer of RealtyTrac. "After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time."

      Complaints received by in recent months show a high level of frustration by homeowners who are trying to modify their loans to prevent becoming a foreclosure statistic.

      "I called Litton for help to modify my loan back in December 2008. I spent all my time calling them trying to get someone who can help me, but each time I kept getting different answers," Rosa, of Freeport, NY, told I gave them all the information to apply for a modification and it was not approved. I got a letter in the mail stating that it was declined by the investor."

      Nevada, Florida, California post top state foreclosure rates

      With one in every 62 housing units receiving a foreclosure filing in August, Nevada continued to document the nation's highest state foreclosure rate despite an 8 percent decrease in foreclosure activity from the previous month. A total of 17,902 Nevada properties received a foreclosure filing during the month, still an increase of 53 percent from August 2008.

      Florida documented the nation's second highest state foreclosure rate, with one in every 140 housing units receiving a foreclosure filing, and California documented the nation's third highest state foreclosure rate, with one in every 144 housing units receiving a foreclosure filing.

      A 10 percent month-to-month decrease in foreclosure activity helped lower Arizona's foreclosure rate from the nation's third highest in July to fourth highest in August. One in every 150 Arizona housing units received a foreclosure filing in August - still more than twice the national average.

      Other states with foreclosure rates ranking among the nation's 10 highest were Michigan, Idaho, Utah, Colorado, Georgia and Illinois.

      Six states account for more than 60 percent of national total

      Six states accounted for 62 percent of the nation's total foreclosure activity in August despite decreasing REOs in all six states. California REOs dropped 32 percent from the previous month, but the state continued to post the highest overall total of any state, with 92,326 properties receiving a foreclosure filing in August. California's total was down 15 percent from the previous month and was also down nine percent from August 2009 - the first year-over-year decrease in California foreclosure activity in RealtyTrac's monthly reports.

      A total of 62,401 Florida properties received foreclosure filings in August, the nation's second highest state total and an increase of more than 10 percent from the previous month despite a 5 percent decrease in REO filings. Initial default notices in Florida increased 12 percent from the previous month, and scheduled auctions increased 13 percent from the previous month.

      A new law in Michigan requiring lenders to file a separate public notice of default before scheduling a foreclosure auction boosted overall foreclosure activity numbers in the state for August. A total of 9,789 of the new default notices were reported in August, bringing the total number of Michigan properties receiving foreclosure filings to 19,359 for the month - a 134 percent spike from the previous month and third highest among the states. Michigan's foreclosure rate leapfrogged from 19th highest in July to fifth highest in August.

      With 17,902 properties receiving foreclosure filings in August, Nevada posted the nation's fourth highest total despite a 24 percent decrease in REO filings from the previous month, and with 17,807 properties receiving foreclosure filings in August, Arizona posted the nation's fifth highest total despite an 11 percent decrease in REO filings from the previous month.

      Illinois REO filings decreased 15 percent from the previous month, but the state's total of 13,078 properties receiving foreclosure filings was still sixth highest among all the states in August.

      Other states with totals among the 10 highest in the country were Georgia (11,947), Ohio (11,368), Texas (11,261) and New Jersey (8,316).

      August Foreclosures Up 18 Percent Over 2008...
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      California Kaiser Permanente Lawsuit Dismissed

      Plaintiff failed to pursue other options before suing, judge said

      A federal judge in California handed Kaiser Permanente a victory yesterday, dismissing a suit claiming that the insurance company failed to reimburse copayments after collecting its share from personal injury awards.

      In her decision, Judge Maxine Chesney said that lead plaintiff Nicole Glaus failed to sufficiently pursue administrative remedies before filing the lawsuit. In a previous motion, Glaus conceded that she had not filed a formal complaint with Kaiser before initiating the suit.

      Glaus, of Concord, CA, won an award of $4,250 from an individual who rear-ended her car. Kaiser, pursuant to its policy, sought reimbursements of its own costs from the civil award, but failed to credit Glaus the $20 she had already shelled out as a copayment.

      Kaiser's "Evidence of Coverage," or EOC, which provides terms and conditions of coverage, requires consumers who obtain a judgment in their favor to reimburse Kaiser for services provided. The EOC explicitly provides, however, that this provision "does not affect your obligation to pay Cost Sharing for these Services, but we will credit any such payments toward the amount you must pay us under this paragraph."

      Glaus brought suit on behalf of all Kaiser customers covered under a private employer's medical plan, who reimbursed Kaiser after collecting a civil judgment, and who were never reimbursed their copayment as required by Kaiser policy. Glaus said that the company's failure to reimburse the copayment violated both the terms of the contract and Kaiser's fiduciary duty to its customers.

      In her decision, filed in response to Kaiser's motion to dismiss, Chesney relied on the exhaustion doctrine, which requires a putative plaintiff to pursue all available administrative options before resorting to litigation. Chesney noted that the Kaiser EOC explicitly laid out an administrative procedure for the resolution of customer complaints.

      The policy provides that consumers "can file a grievance for any issue," as long as they "submit [the] grievance orally or in writing within 180 days" of the incident they are complaining about. The EOC allows grievances to be filed by mail, phone, online, or in person. Because Glaus received multiple EOC copies during her time with her employer, she was deemed to have had notice of these administrative procedures, and thus could not be excused from pursuing them.

      The exhaustion doctrine, Chesney noted, is a judicially-created requirement, designed to prevent individuals from resorting to legal action unless absolutely necessary. Chesney asserted that "use of the [Kaiser] administrative grievance procedure could resolve the error quickly and inexpensively, without the need for the parties to expend resources to retain counsel and pay the costs incident to the filing and prosecution of a lawsuit."

      Chesney dismissed the suit without prejudice, meaning that Glaus can refile her complaint if she is unsuccessful in recovering under Kaiser's administrative procedures. Another member of the class could also theoretically file suit in the interim, assuming that they have pursued all administrative remedies. While it is unclear how many individuals would be eligible to recover under Glaus's suit -- her class was defined relatively narrowly -- her attorney insists that enough people are affected to make a potential recovery substantial.

      In her decision, Judge Maxine Chesney said that lead plaintiff Nicole Glaus failed to sufficiently pursue administrative remedies before filing the lawsuit...
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      Small Businesses Would Benefit From Health Reform, Study Finds

      High costs called impediment to insuring employees

      As the debate over health care reform continues, a report by the a Commonwealth Fund report says small business owners and employees stand to benefit the most from provisions in some of the proposals under consideration by Congress.

      Provisions to extend health care coverage to everyone and repair the small group insurance market would alleviate high premium costs, high broker fees, underwriting, and a lack of transparency about benefit packages that small business owners currently face, according to the report.

      Currently, 39 million Americans work for small businesses (defined as those with fewer than 50 employees) and only 25 percent of them have health insurance through their employer, the report finds.

      While some workers buy coverage on their own or get it through a family member, half (52percent) of people working for small businesses are uninsured or underinsured, compared with 28 percent working for larger firms. The gap in employer coverage between large and small firm employees widened over 2003 and 2007.

      In addition, when small business employees do have coverage, it is often less comprehensive: 48 percent have health insurance plans with lifetime coverage limits, versus 37 percent of employees in large firms.

      "Small businesses are vital to the strength of our economy, and under our current system they don't have the ability to provide affordable, comprehensive health insurance to their employees," said Commonwealth Fund President Karen Davis. "Health reform provisions that take into account the insurance problems currently facing small business owners and their employees will provide security and stability to a large and important segment of the American workforce and their families."

      The report analyzed the effect specific pieces of legislation will have on small business and found there are several broad categories of reform that would improve the ability of small businesses to provide coverage and for their employees to afford coverage if they do not:

      • The ability to purchase health insurance through the new health insurance exchange would guarantee a standard benefit package, eliminate lifetime maximums, and control premium costs. Eligibility for this option varies in current Congressional bills under consideration, with the Senate Health, Education, Labor and Pensions (HELP) Committee bill opening the exchange to firms with fewer than 50 employees and the House Tri-Committee bill opening it to firms with 10 or fewer employees the first year and those with up to 20 employees in subsequent years. An amendment to the House bill by the Education and Labor Committee would increase eligibility to 15 employees in year one, 25 in year two, and no fewer than 50 employees in year three.

      • An exemption from any requirement to offer health insurance to employees or pay into a fund to finance coverage would protect very small businesses. Again, eligibility varies with the Senate HELP bill exempting employers with fewer than 25 employees and the House Tri-Committee bill exempting small businesses with a payroll of less than $500,000 a year. The House bill phases in the payments as payrolls rise.

      • Tax credits provided to small businesses offering health insurance to their workers would help further offset premium costs for businesses that choose to offer coverage to their employees. The tax credits would vary depending on size of the firm, the average wage, and the percent of the premium that the employer pays.

      • Premium subsidies to purchase coverage through the health insurance exchange and higher income eligibility limits in Medicaid would help those small firm low-wage workers who do not have access to health benefits through their jobs.

      "Small businesses and their employees have a great deal to gain from the health reform proposals under discussion in Congress," said Sara Collins, report co-author and Commonwealth Fund Vice President for Affordable Health Insurance. "The reforms have the potential to increase both the affordability and comprehensiveness of health insurance available to small businesses and individuals by protecting them from underwriting on the basis of health, establishing new standards for health benefits, and lowering their premium costs."

      Small Businesses Would Benefit From Health Reform, Study Finds...
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      Care-Tech To Halt Sale Of Unapproved Germ Fighters

      Company violated numerous regs

      St. Louis-based Care-Tech Laboratories Inc. and its principal officers, John C. Brereton and Sherry L. Brereton, have agreed to stop the illegal manufacture, marketing, and distribution of over-the-counter antimicrobial drugs used to treat and prevent infection.

      The Food and Drug Administration (FDA) says its inspectors found that Care-Tech violated numerous provisions of the agency's current good manufacturing practice (cGMP) regulations that direct how antimicrobial drugs are made.

      Additionally, it says the products do not conform to any applicable regulations for OTC drug products and have not undergone an FDA review, and therefore are considered unapproved drug products.

      Under the terms of a consent decree, Care-Tech may not resume manufacturing and distribution of the drugs until it corrects these and other violations.

      "The FDA is concerned about Care-Tech's products because they lack FDA approval, do not conform to any applicable over-the-counter drug monograph, and are not appropriately manufactured," said Deborah Autor, director of the FDA's Office of Compliance, Center for Drug Evaluation and Research. "Companies have an obligation to consumers to ensure that their products are safe, effective, and high quality, and the FDA recommends that Care-Tech's customers seek alternative products."

      Care-Tech products are sold online and through telephone orders to hospitals, nursing homes and other health care facilities. They are not sold in retail stores.

      The FDA says it is not aware of any reports of injury or illness related to the use of these products. The agency advises consumers to contact Care-Tech at 1-800-325-9681 to return products in their possession, which include:

      • Barri-Care

      • Care-Crme

      • Caricia Care

      • CC-500

      • Clinical Care

      • Consept

      • Formula Magic

      • Humatrix

      • Loving Lather

      • Loving Lather II

      • Loving Lotion

      • Orchid Fresh II

      • Satin

      • Tech 2000

      • Techni-Care

      • Urban Skin

      Health care professionals and consumers may report serious side effects or quality problems for these or any products to the FDA's MedWatch Adverse Event Reporting program, online, or by regular mail, fax or phone.

      • Online:

      • Regular Mail: use postage-paid FDA form 3500 available at: and mail to MedWatch, 5600 Fishers Lane, Rockville, MD 20852-9787

      • Fax: 800-FDA-0178

      • Phone: 800-FDA-1088

      Care-Tech To Halt Sale Of Unapproved Germ Fighters...
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      Victims of Government: Asthma Patients' Lives Shattered by 'Green' Inhalers

      Previously healthy asthma sufferers wind up disabled -- and worse

      On a good day, Victoria O. can walk from her house to the driveway without stopping to catch her breath. But those days are rare for this Florida woman, who has what doctors call severe airflow obstruction.

      I struggle to breathe all the time, she explains, wheezing between her words. Im 43 years old. I should be enjoying my life. I used to have an active life, but I went from a normal person to a very sick person.

      Victoria can pinpoint the moment her health started its downhill spiral -- a rapid decline that has left her unable to work.

      Its the same moment that triggered another, unexpected, battle in her life: one that pits the ailing and financially-strapped woman against her disability insurance company. And in yet another blow to her ongoing battle, Victoria learned just days ago that her employer -- which in May approved her absence under the Family and Medical Leave Act -- will no longer cover her under its health insurance plan.

      As of today, I have no insurance, Victoria told us last Tuesday, choking between breaths. And I have a doctors appointment tomorrow. Here we are in the middle of a national discussion on health care and look what Im going through. I was fine before all this startedI never had a problem with my asthma before.

      But that all changed in April 2008 when Victoria took a puff from her new environmentally friendly rescue inhaler that contains a propellant called hydroflouroalkane (HFA). Victoria hadnt used one of those inhalers before, she says. On the once in a blue moon occasions she needed an inhaler, she used one propelled by chlorofluorocarbons (CFCs).

      And she never had any problems.

      Inhalers banned

      Those albuterol metered-dose CFC inhalers, however, are now banned in the United States under an international agreement called the Montreal Protocol on Substances that Deplete the Ozone Layer.

      That ban went into effect on December 31, 2008, but pharmacies nationwide started switching to HFA inhalers last year in preparation for the mandated change.

      The Food and Drug Administration (FDA) -- and other supporters of the 1987 agreement -- say the CFC propellant in the inhalers damages the ozone.

      Asthma and pulmonary patients must now use the greener and more expensive HFA inhalers, which the FDA acknowledges have a different feel and taste.

      Patients must also breathe in deeply when using the four HFA inhalers now on the market: ProAir, Proventil, Ventolin, and Xopenex.

      FDA officials say these inhalers are a "safe and effective" alternative for the more than 40 million asthma and pulmonary patients nationwide., however, has heard from hundreds of scared and angry patients with asthma and other respiratory problems who say the new HFA inhalers dont give them any relief. The inhalers, they say, fail to open their airways and leave them literally gasping for air.

      Some patients also say the HFA inhalers are too costly; theyve jumped in price from about $5 to, in some cases, more than $50.

      Ethanol allergy

      And then there are patients like Victoria, who had an allergic reaction to the ethanol in her HFA inhaler and can no longer work because of her declining health and the constant battle to breathe.

      Compounding those problems, Victoria says, is the recent denial of her short-term disability benefits and last weeks loss of her employer-provided medical insurance.

      Im facing a dilemma that I didnt anticipate, she says, adding her employer had covered her under its plan during her leave. Ive gotten sicker and sicker and I know its solely because of the HFA inhaler. has learned that other asthma and pulmonary patients are also considering filing for disability, saying theyre unable to work because the HFA inhalers leave them tired and constantly gasping for air.

      Grassley takes an interest

      A few elected officials and public-interest organizations are beginning to take an interest in the asthma victims' plight, however.

      Senator Chuck Grassleys (R-Iowa) office continues its review of the nearly 400 complaints has received about HFA inhalers from asthma and pulmonary patients nationwide.

      And an environmental organization in Washington D. C. said it supports efforts to bring CFC inhalers back to the United States.

      The FDA, however, isnt likely to support any efforts to legalize CFC inhalers.

      CFC inhalers damage the ozone," spokesman Christopher Kelly told us. "People will have to get used to the new (HFA) inhalers."

      Asthma and pulmonary patients must also be sure theyre using the HFA inhalers properly -- and keeping them clean to prevent build-up and blockage of the medication, the FDA said.

      What about the increased costs of the HFA inhalers, which do not have a generic alternative?

      The FDA said it expects those prices to drop in the next few years. Until that happens, The Partnership for Prescription Assistance (PPA) and drug companies that make inhalers have special programs and coupons to help consumers cover the higher costs.

      But the salient issue in this debate, the FDA and pulmonary experts say, is for patients to get their asthma under control.

      Someone who uses a 'quick reliever' (rescue) inhaler many times a day does not have well-controlled asthma, says Dr. Norman H. Edelman, chief medical officer for The American Lung Association. "Patients shouldn't need their quick relief inhalers more than two to three to four times a week.

      Asthma is a variable disease and doctors are always readjusting medications and dosages," he added. "If patients are not getting good asthma control, they need to talk to their doctor."

      Problems started with HFA inhaler

      But Victoria and the hundreds of other patients whove contacted say their asthma was in control until they used an HFA inhaler.

      In Victorias case, her medical -- and now insurance -- problems started in April 2008 when her doctor prescribed an HFA inhaler for bronchitis and wheezing.

      I hadnt used an asthma pump in years, she recalls. But I couldnt get rid of the bronchitis. The doctor gave me that HFA asthma pump and within a week, I was sicker than Id ever been.

      The moment she took her first puff, Victoria knew something was wrong. A burning sensation instantly blistered the back of her throat. It moved down and burned her windpipe and lungs.

      It felt like liquid acid," the Kissimmee, Fla., woman told us. "I realized I couldn't breatheI thought I was going to die."

      Since that day, she says, her health has deteriorated. I have headaches, throat pain, my immune system is all over the place, my hair has fallen out, and I constantly struggle to breathe.

      Her breathing has become so labored at times that shes had to be rushed to the emergency room and spend days in the intensive care unit.

      In the 30 plus years I've had asthma, I have never had it spiral out of control this quickly or this severely," Victoria says. "I think they've put poison on the market."

      Disability filing

      In May, Victoria heeded her doctors advice and filed for short-term disability.

      My pulmonary tests did not come back very good, she says. I had to file for disability. My doctor said that I have moderate to severe lung obstruction.

      Victoria, however, grappled for months over the decision to apply for those benefits. Ive always worked. Ive always had a job. I like my job and I want to keep working. But how can I work when I cant breathe?

      Despite her health problems -- which she says are documented by two of her doctors -- Victorias insurance company denied her claim.

      Oh my gosh, its been a mess. They keep rejecting, rejecting, rejecting, my claim. They dont believe this asthma issue is a problem.

      I paid into this disability for years, she says. Its very expensive. But I wanted to be sure I had coverage in case something happened. When I sent in my claim, though, they said I wasnt sick enough.

      Victorias short term disability is through a company called Lincoln Financial Group of Omaha, Nebraska. In a letter dated July 27, 2009, the company said it had determined that no benefits are payable.

      After a thorough review of the information currently contained in your claim file, we have determined that you do not meet the definition of Total Disability.

      The company cited the following reasons for its denial of Victorias claim:

      • The date Victoria stopped working. The company said one of her doctors stated she was unable to work back in November 2008, but her employer said she continued working until May 2009;

      • Lack of medical proof that she couldnt perform her sedentary duties as a secretary;

      • Pulmonary tests in April 2008 indicated her lung function had improved, according to the company;

      • Her reluctance to try systemic steroids and controller treatment that might improve her condition.

      Victoria balks at those reasons for denying her claim.

      I needed the insurance, she says, adding her family was covered under her employers health care plan until she went on leave in May. I have a 12-year-old son. And like I said, Ive always worked and I like to work.

      Victoria says she was finally forced to stop working in May when her portable nebulizer broke down. I couldnt work without that machine. And I couldnt afford to fix it or rent another one.

      What about her sedentary job duties?

      First of all, I was running all over the place at my job, Victoria says, adding the company used a Department of Labor (DOL) description for her secretarial duties. In a letter she sent to Lincolns president and CEO, Victoria criticized the company for using that job description in her case.

      I dont see how DOL job descriptions apply to my realistic situation or my health, she wrote. My breathing became critical at times because of the undue stress on my lungs at work.

      Victoria also counters the companys claims that her lungs improved and she didnt want to try new treatment methods.

      I have documentation from two doctors who placed me on disability, she says. One said as far as he was concerned I would never go back to work. The other one said maybe I would go back to work. But we dont know all the effects the HFA inhaler (and the ethanol) will have on me. I may clear up. I hope thats the case."

      'Ruined my life'

      She adds: I cant tell you how much HFA inhalers have ruined my life. Im sick all the time and Im not getting better. Some days I feel okay in the morning, but by the afternoon, I feel like a three-week wilted rose.

      Victoria told us shes shocked and disappointed that Lincoln Financial ignored her doctors opinions.

      My doctors have given them everything -- all the analysis and the blood tests. Theyve told them that I have difficulty breathing.

      Their (Lincoln Financial) doctors have never even met me or talked to me, she says. If they did, theyd hear me wheezing and choking. But yet, they said Im fine. Its almost a mockery of how the system is supposed to work. obtained a copy of July 26, 2009, letter from Victorias pulmonologist, who said shes been disabled since April.

      (She) is under my care for moderate to severe persistent asthma, wrote Dr. James Lucio of Kissimmee, Fla.

      Dr. Lucio said he evaluated Victoria in April 2009 and again in Mid-July and did not see signs of improvement. She continues to manifest persistent and disabling respiratory symptoms, including persistent wheezing, shortness of breath, and cough. She has had only a modest response to therapy.

      Dr. Lucio also confirmed that Victoria has been unable to work due to the recalcitrant nature of her symptoms. He wrote: Therefore, in my medical opinion, she has been temporary (sic) disabled as of 4/21/09.

      Victoria is now appealing Lincoln Financial Groups denial of her disability benefits and has included Dr. Lucios July 2009 letter to back her claim. She has also consulted an attorney regarding the companys decision. contacted Lincoln Financial about Victorias case. The company's Assistant Vice President of Risk Services did not respond to our inquiries.

      More disability filings

      New inhalers, like this Proventil model, are powered by non-aerosol propellants

      During our investigation, we also discovered that other asthma and pulmonary patients -- who say the HFA inhalers dont give them any relief or made their conditions worse -- are now considering filing for disability.

      Their problems may signal a new and troubling trend in the ongoing debate over the governments decision to ban what hundreds of asthma patients call their life-saving CFC inhalers.


      The new inhalers dont work for me, says Roberta W. of New York. After the CFC inhalers were banned, I developed a severe respiratory infection. I nearly died and now I can barely shop for necessities or run the vacuum in the living room.

      This legislation could very well end my life decades sooner and it has disabled me completely, she adds. I cannot live independently or care for my disabled husband.

      An asthma patient in Louisiana worried that should couldnt continue working because the HFA inhalers leave her constantly out of breath.

      I would like to know what procedures I need to take to become considered fully disabled as an asthmatic since I can barely function on an everyday basis because of my asthma, says Kimberly W. of Maurepas, La. The government wants this change that affects my quality of living as a normal person. I have to rest after everything I do; Im constantly out of breath.

      Kimberly, however, recently found a job and hopes she can keep working in spite of her asthma. She also hopes the extra income will cover the increased costs of the HFA inhalers.

      I cannot afford the new inhalers, she says. (They are) $80 more ($126 plus tax) than the one I've used since I was 12 years old.

      Early warnings ignored

      In Washington, D.C., the head of an environmental organization said he isnt surprised that so many asthma and pulmonary patients have experienced physical -- and now financial -- problems because of their HFA inhalers.

      He warned the public about these issues before the ban on CFC inhalers went into effect.

      "The breath of life for asthmatics is being seriously threatened by the elimination of CFCs in asthma inhalers, wrote Norris McDonald, president of the African American Environmentalist Association and Center for Environment, Commerce & Energy. We need to immediately amend the Clean Air Act to fix this well intended, but woefully misguided, effort to protect the ozone layer. Asthmatics unite.

      The HFA inhalers are not as effective (as the CFCs), said McDonald, who suffers from asthma, in a interview. And thats the scary part. The old CFC inhalers gave you a nice boost.

      I much prefer the old inhalers with the CFC propellant, which had an insignificant effect on the ozone layer.

      McDonald says his organization supports legislative efforts to legalize CFC inhalers in the United States -- and would even lobby Congress to make that happen.

      Theres a lot on their (Congress) plate and were a little bitty group, he says. It takes a groundswell to get things moving and this is not on top of the radar screen. But as more and more people start having problems with these (HFA inhalers), that might move Congress to do something.

      He added: Your call has refocused my attention to this issuemaybe its now time put out more publicity on this.

      One group that is already spearheading efforts to bring back CFC inhalers is The National Campaign to Save CFC Inhalers.

      The California-based organization -- which says the FDA and other supporters of the ban duped the public about the need for the action and the safety of HFA inhalers -- is lobbying Congressional leaders to amend the Clean Air Act and make CFC inhalers permanently legal in the United States.

      We are the last hope for asthma and pulmonary patients, says the organization's founder, Arthur Abramson. And we will fight this state by state."

      Asked if his organization has heard from asthma and pulmonary patients who are considering filing for disability because of HFA-inhaler related problems, Abramson said: Yes, several. His group, however, doesnt track whether patients have received those benefits.

      Neither does McDonalds environmental organization. But he empathizes with patients whove encountered problems with their insurance companies because of asthma and problems related to their HFA-inhalers.

      I cant get insurance because of my asthma and so I have to pay (cash) for the HFA inhalers, he says. And its a $10 to $15 increase over the CFC inhalers. Its a vicious cycle. I cant get insurance because of my asthma and Im paying more for my asthma medication.

      Back in Florida, Victoria says she can no longer afford her medications or medical treatments.

      Last week, her employer dropped her from its insurance plan.

      It is my understanding that you were turned down by Lincoln Financial Group for your short-term disability claim, her employer wrote in an e-mail. Unfortunately, it is our policy that once a claimant is denied benefits, that individual may no longer remain on our health insurance plan.

      Therefore, regrettably, your coverage will end at the end of business today.

      The only way Victorias employer will put her back on its insurance plan is if Lincoln Financial approves her appeal. But that process could take weeks or months, Victoria says. And she needs medical coverage now.

      This is obviously another upset in this dilemma since I now am not able to seek medical care unless I get Medicaid, which is a very long and difficult process, she says, adding she cant file for long-term disability through the state until her appeal process is over. I just applied online tonight since I know that this could take months in the state of Florida.

      In spite of these setbacks, Victoria refuses to give up her fight. Or change her surprisingly optimistic outlook on life.

      I have emotionally accepted this the best I can, she says. I dont like it and it makes me angry, but I have a strong faith. I believe there must be a reason Im going through this. And I thank God that Im alive.

      Shes also thankful that her husband recently found a job. But hes had to move to New York for that position and he doesnt have medical coverage yet.

      Victims of government

      As she struggles to catch her breath, Victoria says she isnt waging this battle just for herself. Shes fighting for all asthma and pulmonary patients whove experienced similar problems.

      I'm sure I'm not the only HFA victim who became disabled, she told us. I think that asthmatics are still having major reactions to this medication and many (people) should know what life looks like after using HFA inhalers.

      Congressional leaders, she says, need to pay closer attention to this issue and those suffering in its wake. They also need to legalize CFC inhalers in the United States. Unfortunately, the powers that be in Congress are not interested in listening.

      We need somebody to advocate that there are sick people out there, she says. There are people who are so sick (because of their HFA inhalers) and theyre not getting better. They used what was out there (for their asthma or respiratory problems), but that is whats creating their disability.

      And now there are people like me who are not getting their disability benefits. My insurance company isnt there when I need them. I now stand alone.

      Read consumers' comments about the new inhalers.

      Victims of Government: Asthma Patients' Lives Shattered by 'Green' Inhalers...
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      More Consumers Turning To Food Stamps

      People with jobs tapping into food assistance

      The Food Stamp program has long been considered a welfare program for the nation's unemployed, but a growing number of consumers with jobs are turning to the aid program to help put food on the table.

      Nearly 40 percent of the families receiving food stamps have some kind of earned income, according the U.S. Department of Agriculture. In 2007, only 25 percent of working families received the assistance.

      USDA reports the number of Americans receiving food stamps rose for an eighth straight month in June to 35 million, a 700,000 increase over May's total. The June food stamp rolls are up 22 percent over June 2008.

      While the unemployment rate hit has jumped to 9.7 percent, many people who still have jobs are also hurting. With companies cutting back workers' hours, the average work week is now down to about 33 hours, the lowest on record. The number of people forced to accept part-time work, because they can't find full time employment, has risen 50 percent in the last year.

      In addition, many consumers find themselves in a credit squeeze. One bank, JP Morgan Chase, recently doubled the minimum monthly payment for millions of its credit card customers. Other credit card companies have raised rates on existing balances, ahead of new credit card rules that take effect in February.

      Rate resets on subprime and adjustable rate mortgages continue to push homeowners into foreclosure. Falling home values have made it next to impossible to tap into a home's equity for extra cash.

      Many states - which administer the food stamp program - find the crush of new applications is difficult to handle. In Texas, 2.8 million citizens received food assistance last month, ,compared with 2.3 million in August 2007.

      Texas officials haven't been able to keep up with the demand. The state faces a class action suit that accuses it of violating federal rules requiring food stamp applications to be processed within 30 days.

      It's a similar story in other states. In Arizona, the number of people on food stamps in June was up 34 percent over June 2008. In Vermont, the number is up 38 percent over last year. In Alabama, officials say the number of people on food stamps in August hit a record high.

      Congress appropriated additional money for food stamps when it passed the $787 billion stimulus package in February. The program provides the average recipient nearly $300 a month in food assistance.

      More Consumers Turning To Food Stamps...
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      7 Signs It's A Scam

      Clueless scammer targers Ohio Attorney General

      By Mark Huffman

      September 8, 2009
      Since the dawning of the Internet age, scammers have increasingly relied on the Web to ensnare their victims. With the Internet, one pitch can be sent to millions of potential victims for almost no cost.

      Most experienced Internet users have learned to spot the scams in their email inboxes, but a surprising number of people each year fall for the most seemingly transparent hoaxes. So dwelling on what might seem to be the obvious is not exactly a waste of time.

      When one of these blatant scam emails was sent to Ohio Attorney General Richard Cordray, his staff took the time to analyze and deconstruct the document, coming up with seven obvious tip-offs the message was a scam.

      First, here is the message in its entirety:

      Dear, (1)
      I write to you haven taken cognizance (2) of the sensitive nature of this deal and thought carefully of a confidant that will assist me in the transaction. I have deemed it pertinent and appropriate to contact you directly for a prospective business deal in the tune of GBP(3)34.3 million.(4)
      I am a Portfolio Manager with [business name redacted], and I am ready and willing to work this deal out with your sincere assistance and cooperation. It will be unwise to jeopardize the success of this transaction at this point by releasing the details (5) as I cannot confirm your exact stand till I receive your response to this email.
      I will give you the full details of the transaction and how to go about it as soon as I confirm your positive response. Honesty, confidentiality and effective communication is (6) highly needed to ensure prompt conclusion of this deal as this is risk-free (7) and profitable. Please get back to me via my personal mail address: [e-mail address redacted]
      [name redacted]

      In case it didn't just jump out at you, Cordray's staff numbered the clues and outlined the reasons they serve as red flags:

      (1) No recipient listed: The spammer likely sent this same message to many other recipients hoping at least one would fall victim to the scam.

      (2) Hard to understand: "I write to you haven't taken cognizance" isn't exactly a logical statement. In fact, it's totally nonsensical-a common characteristic of spam.

      (3) Foreign money: GBP usually refers to Britain's currency, the pound. This reference indicates the spammer is located in another country.

      (4) Too good to be true: When converted to U.S. dollars, 34.3 million pounds is roughly 55.5 million dollars. Few "prospective business deals" actually are worth that much.

      (5) Details withheld: The sender won't give you any details until you respond, a major red flag that the whole deal is fake.

      (6) Poor grammar: Grammatical errors and spelling mistakes often indicate that an e-mail was written by a scam artist in a foreign country.

      (7) "Risk-free": This claim is simply too good to be true. Business deals and investment opportunities always involve some risk.

      This particular scam is known as a "419 scam," meaning it originated long ago in Nigeria. It's designed to obtain your bank account number and other personal information. And while it seems laughably obvious, the Federal Trade Commission noted as recently as 2007 that people continue to fall for it to the tune of millions of dollars each year.

      Most experienced Internet users have learned to spot the scams in their email inboxes, but a surprising number of people each year fall for the most seemin...
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      Congress Urged To Enact Consumer Privacy Guarantees

      Concerns raised about behavioral tracking

      A coalition of ten consumer and privacy advocacy organizations today called on Congress to enact legislation to protect consumer privacy in response to threats from the growing practices of online behavioral tracking and targeting.

      "Developments in the digital age urgently require the application of Fair Information Practices to new business practices," the groups said. "Today, electronic information from consumers is collected, compiled, and sold; all done without reasonable safeguards."

      The groups noted that for the past four decades the foundation of U.S. privacy policies has been based on Fair Information Practices: collection limitation, data quality, purpose specification, use limitation, security safeguards, openness, individual participation, and accountability. They called on Congress to apply those principles in legislation to protect consumer information and privacy.

      Behavioral advertising, where a user's online activity is tracked so that ads can be served based on the user's behavior, was cited as a particular concern: "Tracking people's every move online is an invasion of privacy. Online behavioral tracking is even more distressing when consumers aren't aware who is tracking them, that it's happening, or how the information will be used. Often consumers are not asked for their consent and have no meaningful control over the collection and use of their information, often by third parties with which they have no relationships."

      "The rise of behavioral tracking has made it possible for consumer information to be almost invisibly tracked, complied and potentially misused on or offline. It's critical that government enact strong privacy regulations whose protections will remain with consumers as they interact on their home computer, cell phones, PDAs or even at the store down the street. Clear rules will help consumers understand how their information is used, obtained and tracked," said Amina Fazlullah of U.S. Public Interest Research Group. "In the event of abuse of consumer information, this legislation could provide consumers a clear pathway for assistance from government agencies or redress in the courts."

      The coalition outlined its concerns and recommended principles for consumer information privacy legislation in letters sent to the House Energy and Commerce Committee, its Subcommittee on Commerce, Trade and Consumer Protection and Subcommittee on Communications, Technology and the Internet.

      "Consumers must have their privacy protected as they conduct business and personal matters online," explained Jeff Chester, executive director of the Center for Digital Democracy. "Ensuring that our financial, health, and household transactions have adequate safeguards must be a top Congressional priority."

      Chairman Rick Boucher (D-Va.) has indicated that the Subcommittee on Communications, Technology and the Internet will consider consumer privacy legislation this fall. Hearings were held this summer.

      So far the online industry has argued that self-regulation provides adequate consumer protection. The coalition said formal regulation is necessary.

      "The record is clear: industry self-regulation doesn't work," said Beth Givens, Director of the Privacy Rights Clearinghouse "It is time for Congress to step in and codify the principles into law."

      The Interactive Advertising Bureau (IAB), which represents more than 375 leading media and technology companies responsible for selling most of the online advertising in the U.S, disagrees. Mike Zaneis, vice president of Public Policy, tells that IAB "is serious about consumer privacy" and has "a plan to make sure we continue to live up to those obligations."

      He says the industry no longer believes in providing the notice, the information for consumers about what happened on the web site buried deep inside a legal privacy policy. Thus, he says, the industry has "committed to pulling the notice out of the privacy policy, to providing it in plain English so that consumers can understand it."

      Among the main points that the coalition said should be included in consumer privacy legislation:

      • Sensitive information should not be collected or used for behavioral tracking or targeting.

      • No behavioral data should be collected or used from anyone under age 18 to the extent that age can be inferred.

      • Web sites and ad networks shouldn't be able to collect or use behavioral data for more than 24 hours without getting the individual's affirmative consent.

      • Behavioral data shouldn't be used to unfairly discriminate against people or in any way that would affect an individual's credit, education, employment, insurance, or access to government benefits.

      Other members of the coalition are the Consumer Federation of America, Consumers Union, Consumer Watchdog (formerly The Foundation for Taxpayer and Consumer Rights), the Electronic Frontier Foundation, Privacy Lives, Privacy Times and the World Privacy Forum.

      Congress Urged To Enact Consumer Privacy Guarantees...
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      Florida Sues Systemax Over Rebate Policies

      Tigerdirect consumers claim almost impossible to receive rebates

      Florida has sued a Delaware company, Systemax, and it its subsidiaries, Tigerdirect and Onrebate, over its rebate policies. Attorney General Bill McCollum claims the company made it so hard to collect the rebate, most consumers simply gave up.

      Authorities say that advertising a low price that includes a virtually uncollectable rebate amounts to bait and switch marketing.

      The complaint says Systemax, through Tigerdirect, offers a variety of electronic merchandise for sale at discounted prices though its retail outlets, catalogs and website. The company allegedly offered and advertised products with rebate incentives, falsely representing to consumers they would receive the rebates in approximately 8-10 weeks.

      After receiving numerous complaints from consumers, the Attorney General's Economic Crimes Division began investigating the companies in April 2007. Consumer complaints reported that the rebate program was very difficult to navigate and often led to consumers giving up their rights to rebates.

      The Attorney General's lawsuit claims rebate requests received by the company often went unprocessed, allowing the offers to expire. Many requests that did get processed were allegedly processed in a haphazard fashion, causing required supporting documentation to be lost in the process and ultimately resulting in denied rebates.

      Consumers calling the company to inquire about their rebates reported they were routinely required to wait on hold for a customer service representative for an hour or more, only to be mislead about the status of their rebate and told nothing could be done for them.

      The Attorney General is seeking a permanent injunction against Systemax and its subsidiaries which would prevent them from unreasonably denying or delaying proper rebate payments. Additionally, the Attorney General has asked for full restitution to consumers, reimbursement for attorneys' fees and costs associated with the investigation, and significant civil fines for the company's willful violations of the Florida Deceptive and Unfair Trade Practices Act.

      Florida Sues Systemax Over Rebate Policies...
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      Oklahoma Sues Car Warranty Telemarketer

      Latest state to take action

      Car warranty telemarketers are apparently at it again. In the wake of a federal crackdown on these warranty schemes, Oklahoma Attorney General Drew Edmondson is asking an Oklahoma court to stop a Florida telemarketer from offering potentially bogus products to consumers and from violating Oklahoma telemarketing laws.

      Edmondson accuses C1F Marketing of employing unfair and deceptive trade practices in the marketing of vehicle warranties and of violating numerous state telemarketing laws.

      The attorney general alleges C1F is calling Oklahoma consumers warning that their automobile warranty is about to expire.

      "We allege the company misrepresents information when they contact consumers," Edmondson said. "The company tells consumers that their vehicle warranty is about to expire whether it's true or not. They even try this ploy with consumers who don't have a vehicle warranty. We also believe the warranty the company is selling doesn't deliver as promised."

      The Clearwater, Fla., company is also accused of violating the state's Do Not Call and automatic dial laws and of operating in the state without registering as a commercial telephone seller as required by statute.

      "We allege C1F's solicitations are knowingly false and misleading and that the company is illegally using an autodial device to contact Oklahomans who are registered on our Don't Call list," Edmondson said. "We also allege the company is not registered to make telemarketing calls in Oklahoma."

      The suit asks the court to permanently enjoin the company from conducting these illegal operations in Oklahoma and seeks civil penalties, costs and expenses. Edmondson also today filed an application for a temporary injunction to stop the allegedly illicit activity pending the outcome of the lawsuit.

      Earlier this month the Federal Trade Commission proposed a settlement with Transcontinental Warranty, Inc., stopping it from using robo callers to make warranty pitches to consumers. Under the settlement, the company its owner will be permanently banned from making any prerecorded calls like the ones it used previously to trick consumers into buying vehicle service contracts under the guise that they were extensions of original vehicle warranties.

      Oklahoma Sues Car Warranty Telemarketer...
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      Taylor Bean-Linked Platinum Bank Fails

      Five banks seized over the weekend

      Regulators seized the Platinum Community Bank of Rolling Meadows, Ill. Friday, closing another chapter in the Taylor, Bean & Whitaker story. It was one of five banks seized over the weekend, bringing the total number of bank failures to 89 for the year.

      Platinum Community Bank was acquired by Taylor Bean kingpin Lee Farkas in 2008. Taylor Bean filed for bankruptcy protection last month, a few weeks after it closed its lending operations under pressure from federal regulators.

      No purchaser for Platinum's assets could be found. The Federal Deposit Insurance Corporation (FDIC) will mail customers checks for their insured funds on Tuesday, September 8.

      MB Financial Bank, NA, will accept the failed bank's direct deposits from the federal government, such as Social Security and Veterans' payments. Customers must use MB Financial's branch located at 2251 Plum Grove, Palatine, Illinois, to access their federal government direct deposits.

      Platinum's failure is the 15th in Illinois this year, making that state second only to Georgia's 18.

      Customers who have questions can call the FDIC toll free at 1-800-640-2751. The phone number will be operational on Saturday from 9:00 a.m. to 8:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC's Web site.

      Other failures

      Other bank failures this weekend include:

      • InBank, Oak Forest, Ill.
      • First Bank of Kansas City, Kansas City, Mo.
      • Vantus Bank, Sioux City, Iowa
      • First State Bank, Flagstaff, Ariz.


      InBank's three branches were scheduled to reopen today (Saturday) as branches of MB Financial Bank, N.A., Oak Forest, which has purchased the majority of InBAnk's deposits.

      Depositors of InBank will automatically become depositors of MB Financial Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until MB Financial Bank, N.A., can fully integrate the deposit records of InBank.

      As of August 3, 2009, InBank had total assets of $212 million and total deposits of approximately $199 million. In addition to assuming the deposits of the failed bank, MB Financial Bank, N.A., agreed to purchase essentially all of the assets.

      Customers who have questions can call the FDIC toll-free at 1-800-640-2607. The phone number will be operational on Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC's Web site.

      First Bank of Kansas City

      Great American Bank of De Soto, Kansas, has agreed to assume the deposits of First Bank of Kansas City, Kansas City, Mo. The sole branch of First Bank of Kansas City reopened today (Saturday) as a branch of Great American Bank. Depositors of First Bank of Kansas City will automatically become depositors of Great American Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until Great American Bank can fully integrate the deposit records of First Bank of Kansas City.

      As of June 30, 2009, First Bank of Kansas City had total assets of $16 million and total deposits of approximately $15 million. In addition to assuming all of the deposits of the failed bank, Great American Bank agreed to purchase all of the assets.

      Customers who have questions can call the FDIC toll-free at 1-800-430-6165. The phone number will be operational on Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC's Web site.

      Vantus Bank

      Great Southern Bank of Springfield, Mo., has agreed to assume all of the deposits of Vantus Bank. The 15 branches of Vantus Bank reopened today (Saturday) with normal business hours as branches of Great Southern Bank. Depositors of Vantus Bank will automatically become depositors of Great Southern Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

      Customers should continue to use their existing branches until Great Southern Bank can fully integrate the deposit records of Vantus Bank.

      As of August 28, 2009, Vantus Bank had total assets of $458 million and total deposits of approximately $368 million. In addition to assuming all of the deposits of the failed bank, Great Southern Bank agreed to purchase approximately $387 million of the assets. The FDIC will retain the remaining assets for later disposition.

      The FDIC and Great Southern Bank entered into a loss-share transaction on approximately $338 million of Vantus Bank's assets. Great Southern Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

      Customers who have questions about the transaction can call the FDIC toll-free at 1-800-405-1439. The phone number will be operational on Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC's Web site.

      First State Bank

      Sunwest Bank of Tustin, Calif., is assuming the deposits of First State Bank. Due to the Labor Day holiday, the six branches of First State Bank will reopen on Tuesday as branches of Sunwest Bank. Depositors of First State Bank will automatically become depositors of Sunwest Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until Sunwest Bank can fully integrate the deposit records of First State Bank.

      Over the weekend, depositors of First State Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

      As of July 24, 2009, First State Bank had total assets of $105 million and total deposits of approximately $95 million. In addition to assuming all of the deposits of the failed bank, Sunwest Bank agreed to purchase essentially all of the assets.

      Customers who have questions about the transaction can call the FDIC toll-free at 1-800-537-4048. The phone number will be operational on Saturday from 9:00 a.m. to 6:00 p.m., MST; on Sunday from noon to 6:00 p.m., MST; and thereafter from 8:00 a.m. to 8:00 p.m., MST. Interested parties can also visit the FDIC's Web site.

      Taylor Bean-Linked Platinum Bank Fails...
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      Identity Theft Experts Offer Advice For Job-Searching

      Online searches open door to vulnerability

      With the unemployment rate rising and living costs going up, more people are looking for new jobs or second jobs. Job seekers often register with employment agencies, check employment ads, mail out unsolicited resumes, network with others, post resumes on job search sites, and often search craigslist.

      Unfortunately identity thieves are taking advantage of these uncertain economic times to scam job seekers and gather personal identifying information. The Identity Theft Resource Center offers these suggestions to avoid being victimized:

      Resumes and online applications

      • Never put your Social Security Number or Taxpayer ID number on a resume or application. Additionally, do not include driver's license number or professional license numbers. Most items of PII should be only provided during an interview, not on a job application.

      • Omit home address and consider just using city and state.

      • Consider opening a separate email account for your job search and keep your primary email address private. Placing your email address on a resume could open the door to spam and phishing, account verification, and other email scams.

      • Do not provide such personal information as marital status or hobbies.

      Internet and newspaper ads

      • Validate a company you find on a website carefully before giving them your information. Anyone can create a website, but it certainly doesn't mean that they are a real company. Most reputable companies will have a significant presence on the Internet.

      • Confirm any and all contact information for the business. Does the email contain the domain name of the company? Is the FAX number in the same area code as the corporate number? Most importantly, does the company list a "brick and mortar" physical address that can be verified?

      • Confirm the location of the company. Is it within the U.S.?

      • Avoid any website that requires you to "pre-register" with your SSN, home address or driver's license number. Also, you should not be required to prepay to view job listings. The presence of these requirements is strong indicators of a scam.

      • Update your computer security prior to emailing resumes and receiving email correspondence. Make sure your computer security is currently updated against viruses, trojans, and other types of computer malware. This can help to protect you from any intrusion or computer attack.

      Background screenings

      • Companies might want to conduct a background check of you, both financial and/or criminal. Some people find out they are victims of identity theft during this process. Be aware that you are allowed to view the results of any background checks, so that you can verify their accuracy.

      • If you find an error in your report, let the interviewer know immediately. Ask for a photocopy of the report and tell them that this is either fraudulent or a clerical error. Ask for a few days to investigate the problem.

      • If the error/fraudulent records are in your credit history, you automatically qualify for a free credit report from each of the credit reporting agencies. Call Equifax (800-525-6285), Experian (888-397-3742), and TransUnion (800-680-7289) to request your credit reports.

      • If the error is in a criminal background check, you need to contact the law enforcement agency that reported the criminal incident, i.e. outstanding warrant, and find out what is going on. Please contact the ITRC if you need help with this process, toll free (888) 400-5530.

      The safest ways to job search are to use local want ads, visit the unemployment office, use temp employment services, tell friends and family about your search, and network via professional groups and business acquaintances. When contacting a local company, you can physically meet them, see the facilities, and ask acquaintances in that industry about their reputation.

      It is very risky to contact foreign companies, especially those from Africa, Russia, and Asia, unless you have direct knowledge of their credibility.

      Identity Theft Experts Offer Advice For Job-Searching...
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      HSBC Agrees To Better Serve Disabled Consumers

      Reportedly required blind customer to file written report

      At the prodding of the New York Attorney General's Office, HSBC Card Services, Inc., has agreed to draft new policies to accommodate customers with vision and hearing impairments.

      Under the agreement, the company will offer customers with disabilities improved communication options and services, as well as a fully accessible Web site. The agreement resolves an investigation triggered by a complaint from a blind credit card holder in New York.

      HSBC representatives allegedly told the customer, on numerous occasions, that she could not dispute a charge on her statement unless she completed a written form, which she could not read due to her disability. The attorney general's office reviewed the company's existing policies and training with respect to offering accommodations to customers with disabilities, and concluded that they were insufficient to guarantee full and equal access.

      "Failing to provide customers with a way to use services or receive assistance regardless of disability is discriminatory and illegal," said New York Attorney General Andrew Cuomo. "HSBC's willingness to overhaul its policies and systems sets a new precedent in customer service for individuals with disabilities, and I commend the proactive action it's taken today."

      The settlement requires HSBC Card Services to make significant changes to its policies and procedures. Specifically, it will:

      • Overhaul its website to ensure that customers with disabilities, including those with vision loss and hearing disabilities, can utilize its website and services;

      • Offer statements, notices, standardized forms, and informational materials in alternative accessible formats, including on-line HTML versions for customers with visual impairments;

      • Make reader services available via its toll-free customer assistance line for customers with visual impairment;

      • Train customer service staff on responding to calls placed by customers with hearing or speech impairments through a TDD/TTY or a Telecommunications Relay Service, and monitor such calls for quality assurance purposes;

      • Adopt clear and uniform procedures on how to receive, review, track, and promptly respond to accommodation requests; and

      • Designate an ADA Coordinator to ensure that the company effectively meets the needs of customers with visual and hearing impairments.

      "We applaud Attorney General Cuomo for reaching this groundbreaking agreement to give customers with vision loss options to access their financial information, whether via the web, telephone, or hard copy," said Carl R. Augusto, President & CEO of the American Foundation for the Blind. "There is no greater sense of security than knowing you can easily and immediately review information regarding your financial accounts and statements."

      At the prodding of the New York Attorney General's Office, HSBC Card Services, Inc., has agreed to draft new policies to accommodate customers with vision ...
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      New Jersey Firm Pays $7.2 Million In Ponzi Scheme

      Investors' money wasn't invested

      A New Jersey investment company that defrauded investors in a Ponzi scheme will have to pay $7 million in restitution and $200,000 in civil penalties, under a state court judge's ruling.

      The defendants in a lawsuit filed by the Office of the Attorney General on behalf of the New Jersey Bureau of Securities have been ordered to pay approximately $7 million as restitution to defrauded investors, plus pay $220,000 in civil penalties, under a judge's finding that they defrauded investors through a Ponzi scheme that they operated.

      Defendants James Hankins Jr., Hankins Private Client Group L.L.C., The Hankins Group Ltd. and Hankins Life Settlement L.L.C. also are permanently barred from the New Jersey securities industry.

      "Consumers must be wary of advisors who promise consistently high rates of return that are out of line with other financial investments," New Jersey Attorney General Anne Milgram said. "They sound too good to be true because they usually are."

      Based on information provided by Bureau of Securities investigators, the judge found that the defendants sold promissory notes to at least 101 investors. The promised rate of return was between 10 and 15 percent.

      Hankin told the investors he would purchase the rights to viaticals and life insurance settlement policies from beneficiaries. Instead, according to prosecutors, he used the invested monies for his personal benefit, including the purchase of a vacation home in Florida, fractional interest in a private jet, and the purchase of jewelry and watches.

      In a Ponzi scheme, a con artist promises high returns to investors and uses money from new investors to pay previous investors. Inevitably, the scheme collapses and the only people who consistently make money are the promoters who set the Ponzi scheme in motion.

      "Investors should always check to insure that the person, as well as the investments offered by that person, are registered in New Jersey as legally required," said Bureau Chief Marc Minor. "I can't stress enough the value of checking with us before investing your hard-earned cash."

      New Jersey Firm Pays $7.2 Million InPonzi Scheme...
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      Southwest To Sell Early Boarding For $10

      But the rest still have to scramble for seats

      By Mark Huffman

      September 3, 2009
      Southwest Airlines grew at a time its competitors were falling by the wayside, offering cheap fares, no-frills service and lots of flights. If there was one knock against the airline, it didn't offer reserved seating, forcing passengers to arrive at the gate early to secure a decent seat.

      Now that's changed, if you're willing to pay an extra 10 bucks. Southwest this week launched EarlyBird Check-in, which allows passengers to begin boarding the plane after Southwest's Business Select and Rapid Rewards A-List Customers.

      "With EarlyBird Check-in, you no longer need to watch the clock or set your alarm to be one of the first customers to check in for a Southwest flight. EarlyBird Customers can relax, and let us do the work for them," said Kevin Krone, Southwest's Vice President of Marketing, Sales and Distribution.

      The airline says the early boarding position provides customers with the opportunity for a better seat selection and earlier access to overhead bin space. Southwest says it gives customers the option to enhance their travel experience while creating incremental revenue opportunities for Southwest.

      But some Southwest customers ask why Southwest doesn't go to a reserved seating system like other airlines. Rhonda, of Rosamond, Calif., says Southwest's system of boarding passengers in groups, with three different classifications of boarding passes, can lead to angry encounters between passengers.

      "Obviously, people do not understand why they have a letter/number on their ticket. And southwest does not explain this system to the customers," Rhonda told

      She said that while waiting to board a flight from LAX to Las Vegas, a large group of people with B-55 on their tickets walked to the front of the line where one member of their party was waiting.

      "After five people had joined him in the group, they motioned for more members to come forward. As we had B-20 tickets and were standing in the correct area, I kindly asked this group to notice their line number and stand in the appropriate place. This led to one member of the group yelling and screaming at me with foul language," Rhonda said. "The airline employees did nothing to prevent or help this situation."

      The early boarding pass may help this situation, or make it worse, as it will leave fewer - and presumably less desirable seats - for everyone else.

      Southwest says early boarding privileges are already included in the purchase of a Business Select fare and are a benefit of being on the Rapid Rewards A-List. All Customers are required to print their boarding pass prior to their scheduled departure.

      Customers can purchase EarlyBird Check-in through a link in the Travel Tools section of They also can select EarlyBird Check-in from their confirmation page online and from their confirmation e-mail. EarlyBird Check-in can be purchased up to 25 hours prior to the scheduled departure time of the customer's flight.

      Southwest To Sell Early Boarding For $10...
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      Lawsuit Accuses Denny's of Sodium Overload

      Illinois man claims health consequences from too many omelets

      Cigarettes, scalding coffee, hot dogs: American consumers don't shy away from litigating fraudulent marketing or nondisclosure claims when the result is severe injury or health problems.

      The newest culprit, apparently, is sodium. In a class action lawsuit, a Chicago man accuses Denny's of putting consumers at risk by serving meals with dangerously high levels of sodium, and by failing to properly warn diners of the risk. Jason Ciszewski, a Denny's regular, says in his complaint that he now suffers from high blood pressure, requiring him to reduce his salt consumption and take prescription medication.

      According to Ciszewski's complaint, many of Denny's selections "contain more sodium than a human being should consume in 4 days." Ciszewski's attorneys charge Denny's with deceptive practices, alleging that the restaurant was not sufficiently forthcoming about the health risks presented by its food. The lawsuit also alleges unjust enrichment, breach of warranty, and breach of contract. Ciszewski is seeking $5 million in damages.

      Hypertension, a serious consequence of excessive sodium intake, is a hidden epidemic. One in three Americans has high blood pressure, a figure that health officials blame on high-sodium diets lacking in magnesium, calcium, and potassium. The average healthy young adult can take in 2,300 milligrams of sodium in a day; individuals over 40 should keep it to 1,500 milligrams. Those with hypertension are generally urged to further limit their intake, as sodium consumption matched with high blood pressure leads to a higher risk of heart disease or a stroke.

      Saying that Ciszewski's favorite dish exceeds the daily recommended limit would be an understatement. According to his complaint, Ciszewski is partial to the Meat Lover's Scramble, which Denny's online menu describes as, "Two eggs scrambled with bacon, diced ham and crumbled sausage, and topped with Cheddar cheese." In case you're still hungry, the omelet is served with two strips of bacon, two sausages, hash browns, and two pancakes. All in all, the gargantuan meal contains 5,600 milligrams of sodium, more than double the recommended intake for even the healthiest individuals. If that's not bad enough, the dish also boasts 1,960 calories and 112 grams of fat.

      Ciszewski was also a fan of the "SuperBird" turkey sandwich and "Moons Over My Hammy," which consists of ham, scrambled eggs, and two kinds of cheese, stuffed between sourdough bread slices and served with hash browns or grits. The dishes contain 2,600 and 3,200 milligrams of sodium, respectively.

      Lawsuits accusing restaurants of knowingly selling unhealthy food are hardly novel. In 2005, McDonald's settled a lawsuit alleging that the chain broke an earlier promise to reduce its use of trans fats, and failed to inform consumers. As part of the settlement, McDonald's was required to notify consumers that it was still using trans fats in its meals. In 2007, Burger King was slapped with a similar suit, which claimed that the fast food restaurant used partially hydrogenated oil despite the substance's link to heart disease.

      As America's obesity epidemic grows, some municipalities are taking matters into their own hands. In 2006, the New York City Board of Health voted to ban trans fats from restaurant food; Philadelphia followed suit the following year. New York went a step further in 2008, requiring all fast food chains to display caloric content on their menus. The regulation was enacted with the hope that diners will forgo a Big Mac when its 540 calories are staring them in the face.

      Even without legislative intervention, it is easier than ever for consumers to find the nutritional content of the foods they eat. Ciszewski's suit claims that Denny's nutrition-related disclosures are "indecipherable." However, Denny's online menu contains a prominently-placed "Nutrition/Allergens" link that leads visitors to a PDF file containing nutritional information for Denny's items. The chart includes total calories, grams of fat (including saturated and trans fats), cholesterol, and sodium for each menu item.

      Cisewzki's lawsuit follows a similar one filed by Nick DiBenedetto of New Jersey, who also claimed that Denny's meals contained much more sodium than the average person can ingest healthily, and that Denny's did not do enough to disclose the sodium levels in its meals. DiBenedetto's lawsuit is being supported by the Center for Science in the Public Interest (CSPI).

      Lawsuit Accuses Denny's of Sodium Overload...
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      California Fires Bring Out The Scammers Again

      Some so-called relief agencies are anything but

      The fires are burning in southern California again, threatening lives and destroying homes and other property. And along with the devastation of the inferno comes the scourge of the scammers.

      "After virtually every disaster, scam artists come out of the woodwork to defraud individuals wishing to help victims," California Attorney General Jerry Brown said. "Californians should give only to reputable organizations so their donations don't end up lining the pockets of criminals and opportunists."

      Brown noted that fraudulent and misleading charitable solicitations are common following disasters - whether the donation request comes by phone, mail, in front of retail stores, or email. He advised consumers to take time to carefully consider fire-relief solicitations before giving, and offered the following tips:

      • Closely review disaster-relief appeals before giving.

      • Stick with charities that are reputable rather than those that spring up overnight. If you are unsure, check to see if the charity is registered in California with the Attorney General's Registry of Charitable Trusts. Registration does not guarantee legitimacy, but it is an important indicator.

      • Take action on your own rather than responding to solicitations. Seek out known organizations and give directly by phoning the group, finding its official web site, or via regular mail.

      • Listen closely to the name of the group and beware of "copycat" names that sound like reputable charities.

      • Don't give through email solicitations. Clicking on an email may lead you to a site that looks real but is established by identity thieves seeking to obtain money or personal information.

      • Do not give cash. Make checks out to the charitable organization, not the solicitor.

      • Do not be pressured into giving. Even in times of emergency, reputable organizations do not expect you to contribute immediately if you are unfamiliar with their services. Be wary of appeals that are long on emotion but short on details about how the charity will help disaster victims.

      • Ask what percentage of donations will be used for charitable activities that help victims and how much will fund administrative and fundraising costs. State law requires solicitors to provide such information if requested by donors. Be wary of fundraisers who balk at answering.

      • Find out what the charity intends to do with any excess contributions remaining after victims' needs are addressed.

      California Fires Bring Out TheScammers Again...
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      CSPI Slams Domino's New Pasta As Unhealthy 'Food Porn'

      But pizza chain challenges assumptions about its offerings

      Most people wouldn't consider eating an entire medium hand-tossed cheese pizza from Domino's in one sitting. And these days, most folks are carb-conscious enough not to order pizza as a side order to pasta, or vice-versa.

      So why, asks the Center for Science in the Public Interest (CSPI), is Domino's trying to turn back the nutritional clock with its 1,300- to 1,500-calorie BreadBowl Pastas -- white-flour penne, sauce, cheese, and other toppings entombed in Frisbee-sized white-bread crusts?

      Domino's BreadBowl Pastas are the most recent so-called "Food Porn" that CSPI highlights in its Nutrition Action Healthletter.

      "White-flour pasta with cream-cheese sauce can be a nutritional nightmare on its own," said CSPI senior nutritionist Jayne Hurley. "The last thing it needs is an 800-calorie white-bread pizza-crust bowl."

      Savvy eaters will remember that more than a decade ago CSPI called fettuccine Alfredo a "heart attack on a plate." Domino's executives seem to have forgotten since the cream sauce tops three out of the five BreadBowl Pastas: the Chicken Alfredo, the Chicken Carbonara and even the innocently named Pasta Primavera.

      But Domino's spokesman Tim McIntyre takes issue with CSPI's rap on BreadBowl Pasta. He told that "[I]n any Italian restaurant when you order pasta, you get served bread sticks. This is essentially the same thing. We just put them together."

      He also points out that the company's Web site shows BreadBowl Pasta to be two servings. McIntyre says CSPI, "decided to take the two servings, add them together and make an assumption that consumers would try to eat the whole thing. We don't make that assumption."

      CSPI, he concludes, "is really good at stirring things up and using creative terms like 'porn' to refer to food."

      CSPI also says Domino's has an Italian Sausage Marinara (with Provolone cheese) and Three Cheese Mac-N-Cheese. The items range from 1,340 to 1,480 calories and more than a day's worth of saturated fat (22 to 28 grams) and sodium (1,820 to 2,840 milligrams).

      "Topping a pizza crust with an order of macaroni and cheese is probably the most discouraging mac-and-cheese innovation since The Cheesecake Factory decided to ball it up and toss it in the deep-fryer," Hurley said. "What's next, wrapping it in a giant blueberry pancake?"

      Nutrition Action Healthletter spotlights a "Food Porn" in each issue alongside a "Right Stuff" recommendation. Past "Food Porns" include Starbucks' Salted Caramel Hot Chocolate, Cold Stone Creamery's Oh Fudge! shake and Hardee's Thickburger.

      CSPI Slams Domino's New Pasta As Unhealthy 'Food Porn'...
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      Cash4Gold Sues Over Investigation

      Gold buyer already engaged in lawsuit with former employees

      An investigative report by on the business practices of Cash4Gold has been met with a lawsuit, the company said.

      Cash4Gold, which bills itself as the "World's #1 Gold Buyer," recently sued by appending the consumer-focused website to existing lawsuits against two former employees. The employees, Michele Liberis and Vielka Nephew, are accused of defamation and disclosing confidential information about the company in public statements and in Liberis' post about Cash4Gold on a consumer-complaint site. That site,, was also added to the suits.

      The legal action against the stems from its post last February titled "10 Confessions of a Cash4Gold Employee," which was part of the site's ongoing coverage of the company. The post was based on comments that Liberis, who formerly worked in C4G's customer service department, had submitted anonymously to describing how Cash4Gold manages to pay customers a fraction of what their gold is worth.

      In its advertising, the Ft. Lauderdale, Florida-based company had promised "top dollar" to people who send in their valuables to be melted down. But in a test conducted with the help of its sister company, Consumer Reports, found that Cash4Gold offered as little as 11% of the "melt value" of gold necklaces that were submitted for appraisal. "The results reinforce advice we've offered before," the report says, "which is that consumers should not use these services because the payments they offer are too low. No matter how nice the person is who gives it to you, a bad deal is still a bad deal."

      Led by co-executive editors Ben Popken and Meg Marco, the investigation is the months-long culmination of reporting that includes interviews with former employees Liberis and Nephew, Cash4Gold customers, the Better Business Bureau, the local fire department and the US Postal Service.

      "We follow-up on such challenges conscientiously," says Marc Perton, Executive Editor for Online Media at Consumers Union, publisher of and Consumer Reports. "{S}o we immediately set out to learn whether the company's allegations had merit, both through our own research and through requests to Cash4Gold for more information." The company has declined to cooperate, though, and just this week canceled a scheduled interview with Cash4Gold CEO Jeff Aronson.

      The investigation provided support to's decision to publish the "10 Confessions" post in the first place, and also turned up evidence that supports Liberis' account of certain business practices and working conditions at the firm. But the also found that Cash4Gold may have made improvements in the time since Liberis worked there last year. For example, Liberis said the firm was shut down temporarily for "health and code violations," a statement the company disputed. Fire department records show that the Cash4Gold location was indeed shut down after a number of violations last year, but that Cash4Gold has accumulated no new violations since moving to a different address earlier this year.

      "We're proud of the work that Ben and Meg have done, and we only regret that their report could not include a response from Cash4Gold CEO Jeff Aronson beyond his earlier public comments," Perton said. "We also hope today's post will help lay to rest the idea that blogs don't do investigative reporting."

      More complaints has also received a steady stream of complaints charging that Cash4Gold refuses to pay customers the full worth of their goods, or that they claim to have never received the goods at all.

      Sherry, of Dundalk, MD, wrote that "I sent my jewelry, luckily I use UPS and was able to track my package and they could not say they did'nt receive it. Argued with several people before they would agree they had my package. Then I refused to accept that they would call me about my jewelry. I insisted they transfer me to who had my jewelry. She was able to describe my things."

      "I demanded that they send my things back," Sherry added. "She gave me a quote of 80 dollars much less than all of my things are worth. She said some of my jewelry was 12 karat and some was gold-filled - No it is not. She is sending my things back UPS and I made her give me a tracking number."

      Cash4Gold, which bills itself as the "World's #1 Gold Buyer," recently sued by appending the consumer-focused website to existing lawsuits ...
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      Massachusetts Court Throws Out Ticket Resale Suit

      State anti-scalping law dates to 1924

      A Red Sox fan fed up with the stratospheric price of second-hand baseball tickets had his lawsuit tossed by Massachusetts's highest court last week. Colman Herman, of Dorchester, Ma., filed suit against the Admit One Ticket Agency in 2006, claiming that the agency's $415-dollar markup of a 2005 Sox ticket violated state anti-scalping laws.

      The state law cited in Herman's complaint limits ticket markups to no more than $2 over the original face value. On its face, the law perhaps seems a bit harsh toward scalpers who concededly put time and effort into unloading generally high-demand tickets.

      But as with so many laws, this one is riddled with exceptions. Worse, the exceptions are ill-defined, to be generous. The statute vaguely defines the types of fees that can be charged, but provides no concrete definitions or further limitations on such fees.

      As it turns out, Herman's suit was thrown out because he didn't have standing to bring it in the first place. According to the Supreme Judicial Court, since Herman never actually bought a ticket, he was unable to prove that he suffered injury as a result of the allegedly unlawful prices. In a dissent, Judge Judith Cowin said that Herman's being "ready, willing, and able to purchase a lawfully priced ticket" was enough to give him standing to bring the suit.

      It was doubtless a tough blow for Herman, who was awarded $25 million in damages at trial, but saw the verdict overturned on appeal. The Supreme Judicial Court's decision affirmed that of the Appeals Court.

      In any event, the court's ruling acknowledged the near-uselessness of the statute. Judge Mark Covin noted that "the statute specifies the types of fees a ticket reseller may assess...[but] does not impose readily ascertainable restrictions on those fees, such as dollar or percentage limits." Worse, the law allows scalpers to recover "service charges," a term that includes phone calls, messenger services, or any other expenses that may be necessary to get the tickets to the consumer. Determining whether such fees have actually been incurred is essentially impossible, the court noted, without pouring time and money into litigation--and even then the plaintiff may remain in the dark.

      No matter their thoughts on scalping, most would agree that a $2-above-face-price limit might be a bit stringent. As it turns out, there's a good explanation for that: the law was passed in 1924. Indeed, in 2007 the Massachusetts legislature made noise about throwing the law out and starting from scratch, or even doing away with scalping regulations altogether and allowing ticket resellers to charge as much as they want. State Rep. Michael Rodrigues asserted that lawmakers are "less concerned about what people pay. Our concern is consumer protection.

      Herman, the suit's plaintiff, however, was unconvinced. He told the legislature that erasing limits on resale prices would limit Red Sox attendance to the wealthy, leaving the average ball fan out in the cold.

      Herman, of Dorchester, filed suit against Admit One Ticket Agency in 2006, claiming that the agency's $415-dollar markup of a 2005 Sox ticket violated stat...
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