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    Older Blacks More Wary Of Flu Shots

    Many worry that vaccines will cause illness

    Only 48 percent of black senior citizens get flu shots, largely because of inaccurate and incomplete information about the flu itself, safety of inoculations, and ease and necessity of the shots.

    Also contributing is a lingering distrust of public health inoculation programs, because of misinformation about the notorious 1932-72 Tuskegee syphilis studies of black men, says Lance Rintamaki, assistant professor of communications at the University at Buffalo, in a new study published in Health Communications.

    Vaccination rates for non-Hispanic white seniors are 65 percent. The low percentage of inoculations for blacks is of concern to the medical community, Rintamaki says, because 44,000 U.S. residents 65 and older die from flu and its complications every year, compared with a total of 7,000 flu-related deaths in all other age groups.

    The researchers found several reasons for the reluctance of older blacks to get flu shots. The study subjects did not understand how often they need to be vaccinated, Rintamaki says.

    Some thought that, like vaccines against common childhood illnesses, the flu vaccine provided lifelong protection against the flu. Many did not know they needed to be re-vaccinated every year.

    "The participants knew there are different strains of influenza," he says, "but they didn't realize they needed to be vaccinated against each strain as it turned up.

    "Some also thought -- as do many members of the public -- that the vaccines cause the flu. If they became sick with a virus of one kind or other around the time they had a flu shot," he says, "they drew the erroneous conclusion that the shot made them sick.

    "This is a common misperception and one that needs to be corrected," Rintamaki adds. "We often tell people the vaccine doesn't 'cause' flu but in failing to address why they might assume that it does, we leave the door open for them to think they are avoiding illness by avoiding the vaccine."

    Better and more targeted messages and interventions are necessary to address concerns specific to older blacks and to emphasize how important it is for those in this age group to be vaccinated, the researchers say.

    The study involved six focus groups of black seniors in the Chicago area. Their average age was 75, and 85 percent of them were women. They were asked to identify their current perceptions about influenza and influenza vaccination.

    While 77 percent of participants said they had received a flu shot, only 50 percent had been vaccinated the previous year.

    Despite the group size and the fact that their responses cannot be projected to the community as a whole, the authors say the results of the study confirm those conducted by the Centers for Disease Control and Prevention and others.

    Some disturbing news to emerge from the study, says Rintamaki, is that the Tuskegee syphilis experiments continue to affect levels of trust among blacks about public health programs.

    The Tuskegee experiments, whose original goal was to justify treatment programs for blacks, involved 399 black sharecroppers infected with syphilis.

    In 1932, when the study began, the available treatments were highly toxic and of limited effectiveness. The study aimed to determine if patients were better off if they were not treated with those remedies. The researchers also wanted to study the efficacy of specific remedies for individual stages of the disease.

    By 1947, penicillin was commonly used as an effective cure for the disease. The researchers, however, failed to treat study participants with the medication. As a result, many men died of syphilis, wives contracted it from husbands, and children were born with congenital syphilis. The study was not discontinued until news of this fact emerged, causing a public uproar.

    Rintamaki points out that although the some of the seniors interviewed were not familiar with these experiments, those who were thought that the Tuskegee researchers did more than withhold treatment. They thought they actually injected the men with syphilis.

    "The Tuskegee experiments have stirred fear and suspicion in the African American community over many health initiatives," he says, "and the suspicion they spawned has a continuing negative effect on the health of that community.

    "In fighting the flu by encouraging inoculation, it is imperative that as health communicators we recognize that such fears exist and address such them," he says.

    Older Blacks More Wary Of Flu Shots...
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    California Consumer Advocate Slams Brown Over Taping of Phone Calls

    Ties to insurance company questioned

    With the sudden announcement that San Francisco mayor Gavin Newsom -- the rival to Attorney General Edmund G. "Jerry" Brown for the Democratic nomination for Governor of California in 2010 -- was dropping out of the race, things might seem pretty smooth for the former governor.

    But Santa Monica-based Consumer Watchdog is taking Brown to task for changing the language of a ballot initiative designed to protect consumers from auto insurance hikes, allegedly at the behest of campaign donor Mercury Insurance.

    If that wasn't enough, the San Francisco Chronicle reported today that Brown's spokesman Scott Gerber was taping conversations on the matter between himself and Chronicle reporter Carla Marinucci without her consent -- a violation of California law. Consumer Watchdog founder Harvey Rosenfeld asked "Who is going to prosecute the spokesman for the state's top cop?"

    "Since when does the Attorney General of California try to censor the free press in order to kill a news article about how he took the extraordinary step of rewriting a ballot title about a donor's initiative?," Rosenfeld asked.

    The initative in question would enable insurers like Mercury to hike motorists' premiums if they have had a lapse in coverage at any point. Consumer Watchdog contends that the language of the ballot initiative was changed after Mercury Insurance donated $13,000 to Brown's gubernatorial campaign, in order to obscure the potential rate hikes California drivers would face under the new law."

    "The people of California deserve to know the consequences of the ballot measures they are voting on," Rosenfeld said. "This new title and summary hides the true impact on people who must stop driving due to these hard economic times or because they choose to stop using their car for other reasons."

    "I have rarely seen political cowardice on this level from a seasoned public official," he said.

    In conversation with Marinucci over the article discussing Rosenfeld's allegations, Gerber admitted that he had taped their conversation, as well as that of several other reporters. California's penal code strictly prohibits taping private conversations without consent, and the state is one of 12 that requires all involved parties consent to taping any conversation.

    Consumer Watchdog has been a frequent foe of Mercury Insurance. In August, the group posted a billboard near downtown Los Angeles proclaiming that "You Can't Trust Mercury Insurance." The billboard display owner, CBS Outdoor, pulled the billboard under pressure from Mercury chairman George Joseph.

    Consumer Watchdog claimed breach of contract and threatened to sue if the billboard was not restored.

    California Consumer Advocate Slams Brown Over Taping of Phone Calls...
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      68,000 CalOptima Members at Risk in Data Breach

      Missing CDs contain patient information, Social Security numbers

      October 30, 2009
      As many as 68,000 members of CalOptima, the Medicaid plan for Orange County, California, may be at risk of identity theft and fraud after several CDs containing their personal information disappeared while in transit, the agency reported.

      "CalOptima's claims scanning vendor sent the electronic media devices to CalOptima through the U.S. Postal service by certified mail," the agency said. "On Tuesday, October 13, 2009, CalOptima discovered the apparent loss of the devices when the external packaging materials were delivered by the U.S. Postal Service without the box containing the devices."

      The missing discs include patient information such as names, addresses, Social Security numbers, diagnoses, and billing codes. CalOptima said it notified state and federal agencies of the breach on October 14, and posted an alert on its Web site on October 15.

      CalOptima is currently negotiating with one of the three major credit reporting agencies -- Equifax, Experian, and Trans Union -- to provide credit monitoring services for the affected members. The agency is also investigating why the data was not encrypted prior to its delivery.

      The CalOptima incident comes at a sensitive time for rules governing data breaches or compromises. The economic stimulus package had initially contained rules that mandated disclosing breaches of personally-identifying health information held by organizations covered under the Health Insurance Portability and Accountability Act (HIPAA).

      But the Department of Health and Human Services (HHS)'s interpretation of the law allows for a "harm standard," where the business affected does not have to disclose any information about the breach unless there is a risk of significant financial harm to itself or an affected individual. Critics say HHS' interpretation of the law effectively guts its usefulness as a data breach warning tool.

      The CalOptima breach required mandatory reporting, even without the new laws, as some of the breached information included Social Security numbers.

      68,000 CalOptima Members at Risk in Data Breach: The missing discs include patient information such as names, addresses, Social Security numbers, diagnoses...
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      Blair LLC Expands Recall of Highly Flammable Robes

      At least nine deaths linked to Chenille products

      A Pennsylvania clothing company has expanded a recall of highly flammable bathrobes, as a Connecticut woman says the company's negligence led directly to her mother's fiery death.

      Blair LLC, based in Warren, Pa., initially recalled 162,000 of its chenille robes in April, as it announced that it had received reports of three deaths blamed on the robes' extreme flammability. The company also received a complaint from a woman who suffered second-degree burns but survived after her robe caught fire.

      Now Blair and the Consumer Product Safety Commission (CPSC) have expanded that recall, as six additional deaths are linked to at least four types of chenille robes and other chenille products produced by the same manufacturer.

      At least five of the reported deaths involved women who were cooking while wearing the robes. According to CPSC spokesman Scott Wolfson, most of the victims were elderly, and at least three were in their 80s. All of the recalled products were produced by A-One Textile & Towel, based in Karachi, Pakistan.

      Meanwhile, Sharon Davis of Connecticut is seeking $30 million in a wrongful death suit against Blair. Her mother, Atwilda Brown, was making tea in her chenille robe in 2005 when it caught fire. She was able to call 911, but the robe burned so quickly that she was dead by the time emergency crews arrived. According to local Connecticut news channel WFSB, the responding fire crew said they had never seen anything burn so quickly.

      Davis received all of Brown's mail after her death, and was devastated when she received April's recall notice. "My husband and I were just beside ourselves and it proved that it didn't have to happen," Davis told WFSB. Davis hopes her suit will make other families aware of the robes' deadly propensity.

      The expanded recall covers around 300,000 items. Products covered by the recall include full length women's chenille robes, women's chenille jacket, women's chenille lounge jackets, and women's chenille tops.

      Recalled robes bear the item numbers 3093111, 3093112, 3093113, 3093114, 3093115, and 3093116. According to the CPSC, the items are one-piece garments made of plush sculpted chenille, a shaped stand collar, and horizontal chenille front and back yolks and cuffs. The robes have a full-button front with seven matching button closures.

      Affected items were sold both in Blair catalogs and on the company's website, as well as Blair stores in Warren, Pa., Grove City, Pa., and Wilmington, Del., from January 2003 through March 2009. Consumers can return the robe to Blair and receive a refund or a $50 gift card by contacting the company at (877) 392-7095 between 9 a.m. and 9 p.m. ET Monday through Saturday, via the firm's Web site at, or by e-mail at blairproductrecall(at)

      Meanwhile, the CPSC urged consumers to remain vigilant. "CPSC urges all consumers to report any incidents or injuries involving consumer products, even after a recall has been announced," Acting CPSC Chairman Thomas Moore said in a statement. "Contact the CPSC so that we may help prevent tragic deaths or injuries like those that might be related to the Blair robes."

      The recall bears a resemblance to a 2001 situation involving clothing store The Limited. The company agreed to pay a $500,000 penalty to the CPSC for knowingly selling polyester pajamas and bathrobes that didn't meet federal flammability standards for sleepwear.

      At the time, CPSC spokeswoman Ann Brown said, "The message to industry should be clear -- we will not tolerate conduct that puts consumers at risk, including the sale of flammable sleepwear to consumers." In that case, The Limited had also instituted a voluntary recall.

      Blair LLC Expands Recall of Highly Flammable Robes...
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      Gas Prices Near 2009 High

      Prices climb amid fairly weak demand

      The average price of gasoline continued rising this week, and today is $2.695 a gallon, up six cents a gallon in the last seven days, according to AAA.

      The cost of fuel has accelerated in October, rising nearly 22 cents a gallon in the last four weeks. Gas prices are now less than a penny under their high for the year, reached during the second week of June.

      The average price of diesel fuel is $2.832 a gallon, up almost six cents since last Friday.

      The most expensive gas in the nation is found in Alaska, Hawaii and California the only three states where the average price exceeds $3 a gallon. In Alaska the statewide average is $3.40 a gallon; the price in Hawaii is $3.27 and in California it's $3.01.

      In California, San Francisco has the most expensive average price, at $3.136 a gallon. The cheapest gas is found in Yolo, with an average price of $2.908 a gallon.

      Nationwide, the lowest price for self-serve regular is found in Wyoming, at $2.501 a gallon. South Carolina is next at $2.531.

      Gasoline prices have risen because of the recent rise in world oil prices, which have more than doubled this year. Oil prices have gone higher due to a decline in the value of the U.S. dollar and the expectation that recovering world economies will consume more oil next year.

      Over the course of last week, market oil prices jumped past the $80 per barrel mark for the first time since September 2008, said Andrew Delmege, AAA's manager of regulatory affairs. The resulting increase in gasoline futures and retail gasoline prices has attracted widespread media attention, with some outlets going so far to suggest a surge in gasoline prices could slow the speed of economic recovery. However, given the severity of the recession from which the economy is seemingly now emerging, retail gasoline prices that are 10-20 cents higher than they had been for much of the summer while certainly an unwelcomed sight for motorists are a minor concern by comparison.

      The latest report by the U.S. Energy Information Administration shows demand for gasoline remains subdued. In the last week stockpiles of gasoline actually increased by more than one million barrels.

      Gas Prices Near 2009 High...
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      More Kids' Products Found Containing Unsafe Chemicals

      PIRG tests toys in Chicago, finds lead and contaminants

      Consumer advocates in Illinois have discovered some toys and other children's products sold in Chicago-area stores violate current safety standards for lead or contain illegal chemicals.

      Researchers with the Illinois Public Interest Research Group (PIRG) tested 87 different children's products -- including toys, jewelry, and Halloween accessories -- for lead, bromine, and other toxic chemicals like phthalates.

      Test results released this week in a report titled "Chemical Compliance: Testing for Toxics in Children's Products" revealed two products contained phthalates. Those are a family of chemicals banned earlier this year by the federal government.

      Phthalates can cause reproductive defects in men and women, premature birth, early onset puberty for young girls, and lower sperm counts in men, according to PIRG officials. Children are more susceptible to these health effects, PIRG said, because their bodies are still developing.

      Dangerous toys

      The two children's products found containing what PIRG called "actionable levels of phthalates" that violate federal law are:

      The Little Princess handbag: Tests on the purse, purchased at Claire's Boutique, revealed it contained the phthalate chemical DEHP at 54000 ppm and DINP at 2200 ppm;

      Elmo's Lunch Box: Tests revealed the lunch box contained 730 ppm of the phthalate chemical DEHP and 72,000 ppm of the phthalate DIDP.

      Illinois researchers, who partnered with in these tests, also discovered six children's products with levels of lead that exceeded the current 300 parts per million (ppm) allowed by federal law.

      Those toys, jewelry, and Halloween accessories include:

      • Marvel Hot Rodz: Tests revealed the top of a car and Spider-Man's head contained 1,940 parts ppm of lead and 380 ppm of the chemical bromine;

      • A painted duck: Tests revealed the duck's face contained 2,215 ppm of lead and 306 ppm of arsenic. The duck's red jacket contained 1,545 ppm of lead and 247 ppm of arsenic;

      • Pink diamond clip on earrings from Claire's: Tests revealed the dangling section of the earrings contained 26,932 ppm of lead;

      • A Knight's helmet Halloween costume: Tests revealed the top, painted part of the helmet contained 384 ppm of lead, 38 ppm of arsenic, and 207 ppm of bromine;

      • LOVE Pink Block Cell Phone (Halloween) Accessory from Claire's: Tests revealed the product contained 7,637 ppm of lead;

      • Alligator Cell Phone Charm from Claire's: Tests revealed this Halloween accessory contained 282,439 ppm of lead.

      PIRG officials said these are the first tests done on children's products since the Consumer Product Safety Improvement Act (CSPIA) required the amount of lead allowed to decrease from 600 parts per million (ppm) to 300 ppm by August 15, 2009.

      The new law, which also bans the use of six phthalates in toys, requires lead levels in children's products to drop to 100 ppm by August 2011.

      Toys and other children's products tainted with lead pose a serious health concern, PIRG officials said, because the chemical can harm nearly every organ in the body, attack the central nervous system, lead to permanent brain and behavioral damage, or even cause death.

      Although some of the toys tested contained dangerous toxins, PIRG officials said the results are still encouraging.

      "After the wave of record recalls of dangerous toys just two years ago, we're glad to see that most of the toys we tested are in compliance with the law," said Brian Imus, director of Illinois PIRG. "But not all toys are safe and we must do more to prevent toxic toys from ending up on store shelves."

      The group's report echoed those sentiments. "The testing conducted is but a small sample of the toys and other children's products currently on the market," the report states. "However, based on this small sample, it is good to see the vast majority of products meeting current safety regulations...but, there should be no products available on store shelves that violate current lead and phthalate standards."

      "Overwhelming weight of evidence"

      Lead and phthalates, however, aren't the only worrisome chemicals in children's products, the report said. "Cadmium, brominated flame retardants and Bisphenol-A all pose a threat to the growth and development of children," the report noted. "Yet these chemicals and others are being used in toys, baby bottles, and other children's products."

      PIRG Public Health Advocate Liz Hitchcock said the government should expand the number of chemicals it regulates in toys.

      "Tougher lead safety standards and a ban on phthalates may be making toys safer, but there are other harmful chemicals commonly found in children's products that are not regulated," she said.

      One of those chemicals is bromine, which is widely used in children's products. Studies have shown damaging impacts to the thyroid and motor and memory skills from this chemical, Hitchcock said.

      To ensure the safety of children's products, PIRG officials called on state and federal policy-makers to take the following action:

      • Phase out dangerous chemicals: "The federal government must act based on the overwhelming weight of evidence showing that some chemicals might harm human health," the report states. "Manufacturers should be required to remove chemicals that may pose a particular threat to fetuses, infants, and children, particularly when the chemical is not necessary for the product to function according to design."

      • Reform chemical policies: PIRG officials said manufacturers can now put chemicals on the market without proving they are safe. "Manufacturers should be required to provide all hazard and health-impact information to the state and federal government so agencies can begin to assess the thousands of chemicals currently on the market for which little or inadequate data are available," the report states.

      • Inform consumers about the dangerous chemicals: PIRG officials said manufacturers should be required to label products with the names of dangerous chemicals. That action would allow parents to choose less toxic products;

      • Give financial support to the Consumer Product Safety Commission (CPSC). "Congress should fully fund this important agency so that it may utilize the new authority and responsibility that it was given in the Consumer Product Safety Improvement Act," the report states.

      PIRG officials bought the toys it tested from four retailers in Chicago: Target, Toys R' Us, Claire's Boutique, and Dollar Tree.

      All of the group's test results are posted on's Web site, a national database of more than 5,000 products tested for toxic chemicals. is a project of the Michigan-based Ecology Center, which has spearheaded research on toxins in toys, cars, pet toys, and children's car seats. The non-profit environmental group annually tests toys for lead and other toxins.

      More Kids' Products Found Containing Unsafe Chemicals...
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      'Conveyor Belt' Route To Better Vaccines

      Injections could become a thing of the past

      Scientists have identified a protein that could enable more vaccines to be delivered through the mouth or nose, thus strengthening the body's defenses where the body first encounters many bacteria and viruses.

      Foreign invaders often get inside our bodies by breaching mucosal surfaces such as the soft tissues in the nose, mouth, or intestine. But most vaccines in use today are administered by injection.

      Ifor Williams, a pathologist at Emory University School of Medicine, thinks M cells, a type of cell found in the intestines, may be a key to effective mucosal vaccines.

      For an orally delivered vaccine to stimulate the immune system properly, enough of it has to cross the barriers posed by mucosal surfaces, Williams says.

      M cells act like "conveyor belts" transporting small particles across the barriers and into Peyer's patches, which resemble lymph nodes but are specialized for the intestines.

      Effective oral vaccines such as polio vaccine come from pathogens that preferentially stick to M cells and exploit them to invade mucosal tissues in the intestine.

      "As bacteria and food come through the intestine, M cells divert a bit of that stream," Williams says. "It's how the immune system keeps track of what's out there."

      Working with Williams, graduate student Kathryn Knoop discovered that a protein made by the body called RANKL is essential for the proper development of M cells. The results were recently published by the Journal of Immunology.

      Mice lacking the gene for RANKL have more than 50 times fewer M cells in their intestines, the authors found. The intestines in these mice also have trouble taking up fluorescent beads that are a stand-in for bacteria.

      By injecting mice with artificial RANKL, the scientists could correct the defect. In addition, regular mice treated with RANKL had more M cells throughout their intestines. Usually M cells are found next to Peyer's patches.

      The Emory team has earned a Grand Challenges Explorations grant from the Bill and Melinda Gates Foundation to test their ideas. Williams says the Gates grant will allow his laboratory to test whether RANKL treatment can boost the immune response to oral vaccines in mice. Also, he plans to examine how RANKL treatment affects the mucosal surface inside the nose.

      "We're still trying to figure out if it works for other mucosal surfaces like those in the nose," he says.

      RANKL is also important for bone development and breast milk production. That means prolonged RANKL treatment throughout the body might have unwanted effects on bone density in humans, Williams says.

      However, a temporary dose delivered through the nose could minimize those effects, and there may be more selective ways to stimulate development of M cells via the RANKL pathway, he says.

      'Conveyor Belt' Route To Better Vaccines...
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      Report: Deceptive Credit Card Practices Remain Widespread

      Every bank studied engages in unscrupulous behavior

      By James Limbach

      October 29, 2009
      One hundred percent of credit cards offered online by the leading bank card issuers continue to include practices that will be outlawed once legislation passed in May takes effect next year, according to a new report by the Pew Health Group's Safe Credit Cards Project.

      The report also found that advertised credit card interest rates rose an average of 20 percent in the first two quarters of 2009, even as banks' cost of lending declined. With the Federal Reserve currently developing rules to ensure penalty charges are "reasonable and proportional" as required under the Credit CARD Act, the report also includes policy recommendations for regulators.

      "Since passage of the Credit CARD Act, we found that credit card issuers have done little to remove practices deemed unfair or deceptive by the Federal Reserve," said Shelley A. Hearne, managing director of the Pew Health Group, which oversees the project. "In fact, some of the most harmful practices have actually grown more widespread-not one of the bank cards reviewed would meet the legal requirements outlined in the Credit CARD Act, which is bad news for consumers."

      The new report examines all consumer credit cards offered online by the largest 12 bank issuers in America. These banks control more than 90 percent of outstanding credit card debt nationwide. The report also reviewed cards offered by the largest credit unions.

      The Pew Safe Credit Cards Project gathered data from July of this year on nearly 400 cards, building on its previous research from December 2008.

      Key findings of the report show that:

      • 99.7 percent of bank cards allowed issuers to increase interest rates on outstanding balances -- a jump from 93 percent in December;

      • 95 percent of bank cards permitted issuers to apply payments in a way the Federal Reserve found likely to cause substantial financial injury to consumers; and

      • 90 percent of bank cards had penalty rate hikes with the vast majority imposed by "hair triggers" of one or two late payments in a year.

      "The Federal Reserve must ensure that the rules it is developing will prevent unreasonable or disproportionate penalties, including penalty rate increases, which our data show remain far too common," said Nick Bourke, manager of Pew's Safe Credit Cards Project.

      In July, median advertised annual percentage rates (APRs) for purchases on bank issued cards were between 12.24 and 17.99 percent, compared with a range of 9.99 to 15.99 percent in December 2008 (issuers advertise a range of rates depending on applicant credit profiles). Compared with December of last year, lowest advertised bank rates grew by more than 20 percent, while highest advertised rates grew by 13 percent.

      Pew's previous report showed that issuers raised rates on nearly one-quarter of existing accounts, costing consumers a minimum of $10 billion in a one-year period between 2007 and 2008.

      The report also provides the first comprehensive comparison of bankcards to those issued by credit unions, based on advertised terms and conditions. The analysis showed that credit unions offered much lower APRs, less punitive penalty rates and engaged in far fewer unfair or deceptive practices than their commercial peers.

      To ensure that the Credit CARD Act is implemented to meet its goal of safeguarding the consumer, the report outlines policy recommendations for the Federal Reserve and other regulators to ensure that the new rules under development will:

      • Regulate penalty interest rate increases in its rules governing "reasonable and proportional" penalty fees and charges in accordance with the law;

      • Scrutinize partially variable rates, which can increase when the index rises but cannot drop below a minimum set by the issuer; and

      • Eliminate credit card penalties that are not aligned with achieving the Act's primary goals of protecting consumers against risky practices.

      "When the Credit CARD Act takes effect next year Americans can expect to see safer, more transparent cards," said Bourke. "How well the new law works, however, will depend significantly on how the Federal Reserve creates new rules under the law to protect consumers. In the meantime, issuers have the opportunity to move as quickly as possible to ensure their products are clear of the unfair and deceptive practices that unfortunately remain part of every card we reviewed for our report."

      Report: Deceptive Credit Card Practices Remain Widespread...
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      Do I Need a Thyroid Check?

      The Healthy Geezer

      By Fred Cicetti

      October 29, 2009
      Q. As an authentic geezer, I've had so many medical tests that I think I've seen more acronyms than were around during the New Deal. Recently, a friend of mine suggested that I get a TSH test for my thyroid. What, in the name of FDR, is a TSH test?

      The thyroid is a small, butterfly-shaped gland located in the middle of the lower neck. It produces hormones that control metabolism, which are the chemical processes cells in the body perform to keep us alive.

      It should come as no surprise that the thyroid gland often peters out as we get older. The thyroid stimulating hormone (TSH) test checks to see if your thyroid is producing the right amount of hormone for your system. If the gland is making too much hormone, you get hyperthyroidism; if it makes too little, you get hypothyroidism.

      Hypothyroidism is very common in people over 60 years of age; the incidence of it steadily increases with age. About 25 percent of people in nursing homes may have undiagnosed hypothyroidism because the symptoms of this condition can be misinterpreted as signs of aging.

      The Thyroid Foundation of America recommends that people over 50 years old get a TSH test at least once every five years, and more often if there are symptoms. When thyroid disease is caught early, treatment can control the disorder even before the onset of symptoms.

      The symptoms of hypothyroidism include: fatigue, intolerance to cold, constipation, forgetfulness, muscle cramps, hair loss, depression, weight gain, dry skin, hoarseness and mood swings.

      The symptoms of hyperthyroidism include: weight loss (not always in seniors), heat intolerance, hyperactivity, muscle weakness, palpitations, tremors, nervousness, irritability, insomnia, enlarged thyroid gland, frequent bowel movements, vision problems or eye irritation.

      About 27 million Americans of all ages have overactive or underactive thyroid glands but more than half the conditions are undiagnosed. More than 80 percent of people with thyroid disease are women.

      Thyroid diseases are life-long, but treatable conditions. However, if untreated, thyroid disease can cause elevated cholesterol levels and subsequent heart disease, infertility, muscle weakness, osteoporosis and, in extreme cases, coma or death.

      Treatment to balance your hormone levels is simple and not very expensive.

      Hypothyroidism is treated with a drug called levothyroxine. This is a synthetic hormone tablet that replaces missing thyroid hormone in the body. With careful monitoring, your doctor will adjust your dosage accordingly, and you'll soon be able to return to your normal lifestyle.

      Hyperthyroidism, generally more difficult to treat, requires the normalization of thyroid hormone production. Treatment could involve drug therapy to block hormone production, radioactive iodine treatment that disables the thyroid, or even thyroid surgery.

      The most popular treatment for hyperthyroidism is radioactive iodine. This therapy often causes hypothyroidism, requiring levothyroxine to bring the system back to normal.

      All Rights Reserved © 2009 by Fred Cicetti

      The most popular treatment for hyperthyroidism is radioactive iodine. This therapy often causes hypothyroidism, requiring levothyroxine to bring the system...
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      Vertrue Discount Program Lawsuit Underway

      Company allegedly signed customers up for service without permission

      A three-year-old suit involving allegedly fraudulent discount buying programs is finally underway this week, with three Iowa plaintiffs testifying that Vertrue, Inc. signed them up for discount programs without their permission and hit them with ever-growing monthly fees.

      Iowa Attorney General Tom Miller filed the suit in May 2006, after a survey revealed that, of around 400 Vertrue members questioned, precisely zero were satisfied with the companys services.

      Connecticut-based Vertrue, which also answers to the aliases MemberWorks and MWI, provides a number of membership programs that offer supposed discounts on items ranging from restaurants to jewelry to home improvement products.

      Miller says Vertrue went to great lengths to trick consumers into signing up for the service. Many consumers were inadvertently enrolled when they made a routine call, such as one to their own credit card company or to place an order over the phone. Toward the end of the call, the consumer was offered a risk-free membership, usually on a trial basis. According to Miller, any consumer who then failed to affirmatively cancel the membership became subject to monthly fees taken directly from their bank account or credit line.

      Many consumers didnt notice the charges because they often were listed next to an innocuous-looking name on statements. Debits were often charged to either MWI or ap9, followed by one of the club names HomeWorks, Simple Escapes, Connections, Essentials, or Leisure Advantage. Thus, a typical debit might be to MWI HomeWorks, a name that wont catch the hurried consumers eye, especially when the charge is for a relatively small amount of money.

      Worse, Miller said that consumers never actually gave their credit card numbers to the company; account information was instead obtained from the business that the consumer called in the first place. Vertrues well thought-out scheme ensured that, as Miller put it, busy consumers too often pay [the charges] without realizing it.

      Pamela Douglas testified that she was enrolled in three separate memberships in 1999, which she attributed to very aggressive tactics by a telemarketer. In 2008 a full nine years later Douglas received a letter from ValuMax informing her of her longstanding membership. She then noticed that yearly charges on her credit card had gone from $59.95 in 1999 to $239.95 in 2008. Douglas complained to Millers office, and Vertrue refunded her money.

      The case is being heard by Polk County District Court Judge Robert Hutchison instead of a jury. Earlier this week, Hutchison ruled that he would close the courtroom for parts of the trial in order to protect Vertrues trade secrets. Hutchison said he hopes to keep the courtroom open as much as possible, but that it might have to be sealed when examining a particular witness. The company claims that revelation of consumer data could hurt its supposed competitive advantage. Hutchison promised to close the courtroom whenever there is testimony concerning exact company data.

      Protection of trade secrets has long been accepted by American courts as a worthwhile goal. The vast majority of states have adopted the Uniform Trade Secrets Act, which imposes civil liability on anyone who misappropriates formulas or techniques that contribute to a companys success. Companies often further protect such secrets by asking employees to sign non-disclosure agreements. has received its fair share of Vertrue complaints. Alexander of New Brighton, MN writes: "I have unauthorized credit card charges from Vertrue companies: Health Trends, Simply Yours, Pharmacy Gold, and Dealmax. I cannot reach Health Trends to cancel. I will have to cancel the credit card."

      Terry of Indianapolis, IN offers a representative complaint: "Their AP9 companies have taken 537.30 out of my checking account without my approval, even after I have talked with them about it. I want them to stop removing money from my account and give all my money back in full."

      Millers suit charges Vertrue with violations of the Buying Club Memberships Law, an Iowa statute that requires certain important commitments to be memorialized in writing, and mandates that corporations notify consumers of their right to cancel. Millers office says that as many as 500,000 residents of Iowa alone have been enrolled in the service.

      Vertrue Discount Program Lawsuit Underway...
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      Con Artists Use Attorney General to Push Spam Email

      Hoax claims recipient is under federal investigation

      Con artists continue to use the names of high-ranking government officials to dupe consumers and steal their identities or infect their computers with spyware.

      In the latest scheme, unscrupulous spammers falsely use the name of United States Attorney General Eric Holder. The fraudulent e-mail alleges the Department of Homeland Security and the Federal Bureau of Investigation (FBI) have information that the e-mail recipient is involved in money laundering and terrorist-related activities.

      To avoid prosecution, the e-mail claims recipient must pay $370 for a certificate from the Economic Financial Crimes Commission (EFCC) Chairman. The e-mail gives consumers the name of the EFCC Chairman and contact information for the required certificate.

      FBI officials, however, warn consumers that these e-mails are a hoax.

      "Government agencies do not send unsolicited e-mails of this nature," according to a warning issued today by the FBI. "The FBI, Department of Justice, and other United States government executives are briefed on numerous investigations, but do not personally contact consumers regarding such matters."

      Government agencies also never send threatening letters or e-mails to consumers that demand payments for Internet crimes, the FBI added.

      Consumers can protect themselves from getting taken in these scams by:

      • Never responding to unsolicited e-mails or clicking on embedded links associated with these types of e-mails because they may contain viruses or malware;

      • Guarding your name, Social Security number, e-mail address, and other Personally Identifiable Information. Proving that information to con artists could compromise your identity.

      Consumers victimized by these or other Internet crime should file a complaint with the Internet Crime Complaint Center (IC3). The IC3 is a partnership between the FBI, the National White Collar Crime Center (NW3C) and the Bureau of Justice Assistance.

      Con Artists Use Attorney General to Push Spam Email...
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      Ford Named Among World's Most Reliable Carmakers

      Ford Fusion, Mercury Milan reliability tops Honda Accord and Toyota Camry

      Ford has secured its position as the only Detroit automaker with world-class reliability.

      About 90 percent (46 of 51) of Ford, Mercury, and Lincoln products were found to have average or better reliability, according to Consumer Reports' 2009 Annual Car Reliability Survey.

      Ford's sustained production of vehicles that are as dependable -- or better than -- some of the industry's best dispels the notion that only Japanese manufacturers make reliable cars, the magazine found. It went on to note that other than the Toyota Prius, the reliability of the 4-cylinder Fusion and Milan ranks higher than that of any other family sedan. Both of those Ford Motor Company products, it says, continue to beat the Honda Accord and Toyota Camry, while the upscale Lincoln MKZ tops its rivals, the Acura TL and Lexus ES.

      "It's rare for Consumer Reports to see family sedans from domestic carmakers continue to beat the reliability scores of such highly regarded Japanese models as the Camry and Accord," said David Champion, senior director of Consumer Reports' Automotive Test Center. The last domestic sedan that had better reliability than the Camry and Accord was the Buick Regal in 2004, he noted.

      Ford's position as the most reliable domestic carmaker includes good scores for its new Ford Flex SUV. But the Lincoln division has had mixed results; some models score below their Ford equivalents. All-wheel-drive versions of the Lincoln MKS, MKX, and MKZ, essentially high-end versions of the Ford Taurus, Edge, and Fusion, respectively, are all below average.

      A large margin separates the best from the worst. The least reliable vehicle, the Volkswagen Touareg, is 27 times more likely to have a problem than the most reliable car, the Honda Insight.

      In addition to the Insight, small car reliability scores stood out. Twenty of 37 small cars have above-average predicted-reliability including the Honda Fit, Scion xD and Volkswagen Golf. Family cars fared nearly as well, with 21 out of 42 scoring above average. Five of the eight most reliable family cars are hybrids, including the Toyota Prius, Ford Fusion Hybrid, Mercury Milan Hybrid, Nissan Altima Hybrid and Toyota Camry Hybrid.

      Even good brands falter. Among the least reliable vehicles in their respective classes are the all-wheel-drive Lexus GS, the Nissan Versa sedan, and the Subaru Impreza WRX.

      GM improves, Chrysler struggles

      Some newer GM products are bright spots. Overall 20 of the 48 GM models Consumer Reports surveyed have average reliability scores, while the Chevrolet Malibu V6 has shown better-than-average scores and is on par with the most reliable family sedans. The Buick Lucerne did well in road tests, and it scores average in reliability.

      The Chevrolet Traverse SUV also makes the cut, as does its cousin, the Buick Enclave, but only in the all-wheel-drive version. The reliability scores of the Chevrolet Silverado and GMC Sierra 1500 pickups are good performers and earn Consumer Reports' Recommendation. CR recommends only vehicles that have performed well in its tests, have at least average predicted reliability based on the Annual Auto Survey, and performed at least adequately if crash-tested or included in a government rollover test.

      GM has a number of strong contenders either just released or in the pipeline, but they are too new for CR to have reliability data on them.

      Chrysler continues to struggle. More than one-third of Chrysler products are much worse than average, including its new car-based SUV, the Dodge Journey. Last year, Consumers Reports couldn't recommend any of its products either because of mediocre performance, poor reliability scores, or both. However, this year CR can recommend one important vehicle in Chrysler's lineup: the four-wheel-drive version of the redesigned Dodge Ram 1500 pickup. It did well in CR road tests and rates average in reliability.

      Asian brands still rule

      Of the 48 models with top reliability scores, 36 are Asian. Toyota accounts for 18; Honda, eight; Nissan, four; and Hyundai/Kia and Subaru, three each. With only a few exceptions, Japanese vehicles are consistently good. All Honda and Acura products have average or above average reliability. Although, Toyota, with its Lexus and Scion brands, provides a broader product range, the Lexus GS AWD is the only Toyota model with below average reliability.

      Models from Nissan and its Infiniti luxury division have mostly been very reliable. The once-troublesome Infiniti QX56 and Nissan Armada are now average, as is the four-wheel-drive Nissan Titan, although its rear-wheel-drive version is still troublesome. The Nissan Versa has produced uneven results. Over the last two surveys, the hatchback has been average while the sedan has been far below average. The Nissan Quest minivan also remains troublesome.

      Hyundai and Kia continue to make reliable cars. The Hyundai Elantra and Tucson, and the Kia Sportage get top marks. The new Hyundai Genesis V6 is better than average; the V8 version is average. Only Kia's Sedona minivan and Sorento SUV score below average.

      European models rally

      European brands continue to improve. Mercedes-Benz has significantly rebounded, with most models average or better, and the GLK did exceptionally well in its first year in CR's survey. Scores from rival BMW are more mixed. The 535i sedan and X3 SUV declined in reliability, and the 135i, debuting in this survey, scores below average. Some BMW models have average or better reliability, but the 328i versions are the only ones that we have tested and can recommend.

      Volkswagen and Audi are also staging a nice reliability recovery. The Volkswagen Rabbit (Golf) and the new CC earn top scores. The VW Jetta's Recommendation now extends to the diesel version, making it the only diesel the magazine currently recommends.

      Both the VW Passat and Audi A3 have improved so that they now have average reliability scores. The new VW Tiguan SUV is average. The Audi Q7 SUV continues to be much worse than average, but not as bad as its platform mate, the VW Touareg, which not only scores poorly but also has the worst new-car predicted reliability score in the survey.

      All of Volvo's sedans are average or better, but Volvo's XC90 SUV is below average. Porsche, which has been doing quite well in our survey of late, has one serious hiccup this year: The Boxster drops to below average, which strikes it from CR's Recommended list. But the Cayenne SUV improved to average.

      Findings are based on responses on more than 1.4 million vehicles owned or leased by subscribers to Consumer Reports or its Web site, the biggest response in the Annual Auto Survey's history. The survey was conducted in the spring of 2009 by Consumer Reports' National Survey Research Center and covered model years 2000 to 2009.

      Ford Named Among World's Most Reliable Carmakers...
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      States Want Coordinated Crackdown On Debt Relief Firms

      Want tighter regulations at federal level

      By Mark Huffman

      October 27, 2009
      The attorneys general of 40 states have asked the Federal Trade Commission to tighten regulation of companies offering debt relief services to consumers. The FTC is currently reviewing a new rule proposal to amend the current Telemarketing Sales Rule.

      The move follows a number of individual actions by various states. Earlier this month, Illinois Attorney General Lisa Madigan sued Credit Solutions of America (CSA) and its CEO Douglas Van Arsdale. The Attorney General's complaint alleges that the company falsely claims that its services can help to reduce consumers' credit card debt by 50 percent.

      Madigan's lawsuit contends the company continually fails to negotiate with consumers' creditors even though consumers cease to pay their creditors directly and, instead, make months of upfront payments to CSA. As a result of CSA's failure to take any effective debt settlement action on behalf of consumers, according to Madigan's lawsuit, creditors frequently sue consumers to collect on the outstanding balances.

      Madigan said her office has seen a sharp rise in debt- and credit-related consumer complaints. Over the last few years, her office has received more than 12,000 complaints regarding debt and credit issues.

      Problem increases as economy fails

      Last year, at the height of the economic downturn, consumer debt-related issues surged to the top category of complaints filed with the Attorney General's Consumer Fraud Bureau, including credit card debt, abusive collections and deceptive debt settlement practices.

      Consumers with debt settlement complaints typically report that, after they enroll in debt settlement programs, the firms charge excessive upfront fees and advise consumers to stop paying their credit card bills.

      All too often, consumers report that after they make many upfront monthly settlement payments, the debt settlers fail to negotiate with consumers' credit card companies. As a result, the credit card companies add interest, fees and penalties to consumers' credit card balances and begin collection efforts to recoup the debt, which in turn negatively impacts consumers' credit reports. In many instances, credit card companies have sued consumers enrolled in debt settlement agreements in an attempt to collect the balance of the consumers' accounts.

      'Failing to deliver'

      "In an ever-building wave of ploys and scams on consumers, debt settlement and debt negotiation companies promise to help consumers eliminate or reduce their debts, but often fail to deliver on these promises," said Ohio Attorney General Richard Cordray. "Tougher regulations will help to rein in some of the most deceptive and unfair practices in this industry."

      Among other things, the new rule proposes:

      • Prohibiting debt relief companies from charging fees until they have performed services. Requiring improved disclosures to consumers, including informing the consumer of the length of time it will take to settle debts and what the costs will be.

      • Prohibiting misrepresentations, including misleading statements concerning fees, success rates, and the impact the services will have on a consumer's credit history.

      • Extending the Telemarketing Sales Rule so that it covers incoming calls made to debt relief companies in response to advertisements.

      The Ohio Attorney General's Office has received more than 600 complaints involving debt relief services since January 2007 and through its complaint resolution process has recovered more than $320,000 on behalf of consumers. has also received hundreds of complaints over the years about debt settlement firms, including Credit Solutions of America.

      "We signed up with Credit Solutions 3 months ago. We have made 3 payments of 600+, and they have done nothing for us," Virginia, of Inlet, N.Y., told "All creditors have contacted us and said we could negotiate directly with them. We have also been threatened with a lawsuit."

      The letter of support was sent to the FTC on behalf of Cordray as well as attorneys general from Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Guam, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wyoming.

      States Want Coordinated Crackdown On Debt Relief Firms...
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      Dodd Bill Would Freeze Credit Card Rates

      Banks jacking up fees, interest rates in advance of new rules

      By Truman Lewis

      October 27, 2009
      Sen. Christopher Dodd (D-Conn.) has introduced a measure that would immediately freeze credit card interest rates, as Congress continues trying to rein in the financial services sector.

      Dodd, who heads the Senate Banking Committee, said credit card companies are using the delayed implementation of legislation passed earlier this year to jack up fees and interest rates.

      We worked long and hard to enact the safeguards included in the Credit CARD Act, said Dodd, who had introduced the bill in 2004, 2005 and 2008 before successfully passing it this spring. And no sooner had it been signed into law, but credit card companies were looking for ways to get around the protections this Congress and the American people demanded.

      "At a time when families are struggling to make ends meet, jacked up rates can quickly create crushing debt. People need to be responsible with their money, but they shouldnt be taken to the cleaners by outrageous rates, Dodd said.

      The Credit CARD Act requires 45-day notification of interest rate increases, and lengthens from 14 days to 21 days the amount of time before the due date that a statement must be delivered, but it does not become fully effective until Feb. 1, 2010.

      In April, Dodd and Sen. Charles Schumer (D-N.Y.) sent a letter to the heads of the Federal Reserve, OTS, and NCUA calling on them to implement an emergency freeze on interest rates tied to existing balance on credit cards.

      In the House, Reps. Carolyn Maloney (D-N.Y.) and Rep. Barney Frank (D-Mass.), who chairs the House Financial Services Committee, have pushed to speed up implementation of the CARD measure to December 1, 2009, two months ahead of schedule.

      When it finally takes effect, the CARD Act will require credit card companies to review every account that has seen an interest rate increase since January 1, 2009 and reduce rates where warranted.

      Dodd sent a letter to the Chairman of the Federal Reserve and the heads of key regulatory agencies in July directing them to let credit card companies know that they will be held accountable for rate increases. He also called on the Federal Reserve to provide clear, robust requirements for the reviews and called on the agencies enforcing those regulations to hold the credit card companies strictly accountable for conducting thorough reviews and decreasing rates.

      Dodd Bill Would Freeze Credit Card Rates...
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      Florida Sues Used Car Dealer For Deception

      Cars allegedly broke down miles from the lot

      The State of Florida is taking a South Florida used car dealer, and related companies, to court, accusing the businesses of deceptive and unfair business practices.

      Attorney General Bill McCollum has sued Hollywood Auto Gallery, Inc. and owner Zachary S. Kessler, in response to numerous complaints filed with the Attorney General's office, all referencing the warranties advertised by Kessler and his related businesses.

      The Attorney General's Economic Crimes Division determined that Hollywood Auto Gallery, Inc., located in Pompano Beach, allegedly advertised that all vehicles sold were under warranty, and Kessler verbally assured consumers that the vehicles would be covered. In reality, the warranty was only a limited warranty good for a maximum of $500 in repairs.

      Additionally, Kessler allegedly assured all potential consumers that once a deposit was made on a vehicle to hold it, a mechanic could look at the vehicle within three days of the deposit, but consumers who attempted to have their mechanics examine the vehicles were allegedly told the deposit committed them to purchasing the vehicle, regardless of the mechanic's diagnosis.

      According to consumer complaints, the vehicles sold by Kessler and his company were in such bad condition that they were not road-worthy and would often break down just miles from the car lot. Mechanical problems cited included a transmission that was completely worn out and an engine that needed a total overhaul. Consumers also reported they were unable to obtain refunds for the vehicles.

      The lawsuit seeks injunctive relief against Hollywood Auto Gallery, Inc. and several related business operating under fictitious names, including UltimateCarDeal.Com, CashOnlyAuto.Com, and CheapestCarsIn Florida.Com, as well as Kessler himself.

      The relief requested would prohibit further business activities in the sales of used vehicles, restitution on behalf of all victimized consumers, civil penalties of $10,000.00 to $15,000.00 for each violation of the Florida Unfair and Deceptive Trade Practices Act, and reimbursement for fees and costs related to the investigation.

      The State of Florida is taking a South Florida used car dealer, and related companies, to court, accusing the businesses of deceptive and unfair business p...
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      Word Is Out On Unapproved Swine Flu Products

      Feds warn of dangerous scams

      The Food and Drug Administration (FDA) is informing consumers of potential harm associated with unapproved products claiming to diagnose, prevent, or otherwise act against the 2009 H1N1 virus, aka "swine flu."

      Within the past two weeks, the FDA has:

      • Urged caution regarding promotions and Internet sites offering products for sale that claim to diagnose, prevent, mitigate, treat or cure the virus

      • Enhanced efforts to warn about potentially deceptive products, and encourage reporting of suspected criminal activity, with the release of a flu fraud widget.

      • In partnership with the Federal Trade Commission (FTC), issued a warning letter to a Web site marketing fraudulent supplements that claim to help prevent the spread of the virus. The letter advises the site's owners to discontinue marketing the products or face legal action

      These new measures follow FDA actions earlier this year to protect consumers against Web sites offering unapproved products. These actions included enforcing laws that protect consumers against these sites, and warnings posted through media outreach and a "Fraudulent Products List" posted on FDA's Web site.

      Since May 2009, FDA has warned more than 75 Web sites to stop the sale of more than 135 products with fraudulent H1N1 influenza virus claims.

      "Products that are offered for sale with claims to diagnose, prevent, mitigate, treat or cure the 2009 H1N1 influenza virus must be carefully evaluated," says Commissioner of Food and Drugs Margaret A. Hamburg, M.D. "Unless these products and the claims they make are proven to be safe and effective, they will not prevent the transmission of the virus or offer effective remedies against infection. Furthermore, they can make matters worse by providing consumers with a false sense of protection."

      Consumers are urged to purchase only FDA-approved products from licensed pharmacies located in the United States, and should contact their health professional if they have any questions or concerns about medical products or personal protective equipment.

      Tamiflu (oseltamivir phosphate) and Relenza (zanamivir) are the only two FDA-approved antiviral drugs for treatment and prophylaxis of the 2009 H1N1 influenza virus. In addition to their approved labeling, these drugs have been issued Emergency Use Authorizations by FDA that describe specific authorized uses during the swine flu public health emergency.

      Patients who buy prescription drugs from Web sites operating outside the law are at increased risk of suffering life-threatening adverse events such as side effects from inappropriately using prescription medications, dangerous drug interactions, contaminated drugs, and impure or unknown ingredients found in unapproved drugs.

      FDA actively monitors the Internet and, where appropriate, purchases and analyzes drug products. It recently announced what it found when it purchased and analyzed several products represented online as Tamiflu.

      One of these online orders resulted in delivery to FDA of an unmarked envelope postmarked from India. Inside were unlabeled, white tablets taped between two pieces of paper that were found to contain talc and acetaminophen, an active ingredient found in many medicines to help relieve pain and reduce fever. Not found was oseltamivir, the active ingredient of Tamiflu.

      The Web site selling this product disappeared shortly after FDA placed the order.

      The agency also bought four other products purported to diagnose, prevent, treat or cure the H1N1 influenza virus from other Web sites. These products contained various levels of oseltamivir but were not approved for use in the United States. Several did not require a prescription from a health professional.

      In actions it announced in June 2009, FDA issued warning letters and advised operators of offending sites to immediately ensure that they weren't marketing products intended to act against the swine flu virus that have not been cleared, approved, or authorized by the agency.

      Among the unapproved, uncleared, or unauthorized H1N1 flu products it targeted at that time were:

      • A shampoo said to protect against the H1N1 flu virus.

      • A dietary supplement said to protect infants and young children from contracting the virus.

      • A "new" supplement said to cure H1N1 flu infection within four to eight hours.

      • A spray that claims to leave a layer of ionic silver on one's hands that kills the flu virus.

      • Several diagnostic tests that have not been approved to detect the swine flu virus.

      • An electronic instrument whose sellers claim uses "photobiotic energy" and "deeply penetrating mega-frequency life-force energy waves" to strengthen the immune system and prevent symptoms associated with H1N1 viral infection.

      Word Is Out On Unapproved Swine Flu Products...
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      FDIC Warns Against Fake Bank Failure Scam

      E-mail claims that reader's bank has been seized

      October 26, 2009
      It's all too easy to believe these days that your bank has failed and been seized by the Federal Deposit Insurance Corporation (FDIC). The current crop of bank failures is ripe for scammers trying to fool unsuspecting account holders into handing over their personal information.

      The FDIC has received numerous reports of a fraudulent e-mail that has the appearance of being sent from the FDIC.

      The subject line of the e-mail states: "Check your Bank Deposit Insurance Coverage." The e-mail tells recipients that "You have received this message because you are a holder of a FDIC-insured bank account. Recently FDIC has officially named the bank you have opened your account with as a failed bank, thus, taking control of its assets."

      The e-mail then asks recipients to "Visit the official FDIC website and perform the following steps to check your Deposit Insurance Coverage," complete with a fake link to the Web site. It then instructs recipients to "Download and open your personal FDIC Insurance File to check your Deposit Insurance Coverage."

      This e-mail and associated Web site are fraudulent. Recipients should consider the intent of this e-mail as an attempt to collect personal or confidential information, some of which may be used to gain unauthorized access to online banking services or to conduct identity theft.

      The FDIC does not issue unsolicited e-mails to consumers. Financial institutions and consumers should NOT follow the link in the fraudulent e-mail.

      FDIC Warns Against Fake Bank Failure Scam...
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      Redbox Facing Late-Fee Class Action Suit

      Plaintiff claims she was charged despite company policy

      Embattled DVD vendor Redbox has already fought plenty of legal fires this year, but now the company has a consumer class action on its hands. Laurie Piechur, of St. Clair, Ill., accuses the company of routinely charging fees to consumers who return videos late, despite the company's claim that it never charges late fees of any kind.

      Piechur's suit lists several instances in which she was charged a fee for returning videos after 9 P.M., the required return time. On at least two occasions one of which fittingly involved the movie "Fool's Gold" -- Piechur was charged the ominous-sounding $25 "maximum fee." That fee is only imposed on consumers who return a DVD after the end of the "maximum rental period," which varies from disc to disc. Those subject to the fee are allowed to permanently keep the DVD, however.

      The plaintiffs contend that a surprising amount of money is at issue in the case. Piechur's attorneys say that between January 2002 and now the period covered by the complaint Redbox has collected around $100 million in "illegal and punitive" late fees.

      Unlike other video rental companies -- Netflix and Blockbuster, for example -- Redbox doesn't have full-fledged stores or a video-by-mail operation. Instead, the company sets up kiosks in grocery stores and pharmacies, and allows customers to rent videos for $1 per night. Aside from its convenience, the company attracts customers with its no-fee policy; Redbox's website touts "Easy DVD rentals with no late or hidden fees ever."

      According to Piechur's suit, though, the no-fee policy is little more than smoke and mirrors. The suit correctly notes that customers who don't return the video by the 9 P.M. deadline are charged an extra $1. Under the company's policy, the customer has essentially re-rented the video for an additional 24-hour period. Piechur's complaint says this practice is illegal, noting that "the customer never actually entered into a contract for a re-rental, nor signed an agreement" and that the fee was "unilaterally imposed."

      The suit also takes issue with Redbox's $25 "maximum fee," which it says is much too high for a used disc. Piechur notes that "Redbox itself only charges $7 for used DVDs at its kiosks -- less than one-third the amount it charges its customers for a used DVD." Thus, the suit contends, consumers are paying top dollar for an "inferior quality disc."

      Piechur's claims are technically true, but they are unlikely to gain much traction in court. So-called "adhesion contracts" -- those with predetermined, non-negotiable terms -- are not only valid, but extremely common. Any time you get a new credit card, lease an apartment, or even create an eBay account, you enter into and are bound by such a contract.

      Adhesion contracts are only unenforceable when they contain unconscionable terms. Paying $1 for every day a DVD is late hardly seems unconscionable; indeed, most people would consider this a bargain. The $25 maximum fee might be a closer call, but it is unlikely to be found unreasonable. Indeed, Blockbuster has a similar policy -- any video rental is converted to a purchase on the eighth day the DVD is out.

      Piechur's suit, which includes counts for unjust enrichment, fraud, and violation of several Illinois state laws, asks for $350,000 plus attorneys' fees.

      Redbox has a uniquely American history. The company was originally owned by McDonald's Corp. -- that of fast food fame -- and has since been acquired by Coinstar, another kiosk-centric company that converts coins into spendable money for an 8.9 percent fee.

      The company has recently been occupied with litigation against Universal Studios, Warner Brothers, and 20th Century Fox, after the movie studios refused to release movies to Redbox until 28 days after they hit store shelves. This policy was aimed at preventing Redbox from eating into bona fide DVD sales, but Redbox says it violated antitrust laws.

      Embattled DVD vendor Redbox has already fought plenty of legal fires this year, but now the company has a consumer class action on its hands....
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      Lawsuit Says Grilled Chicken Increases Cancer Risk

      Suit by Cancer Project seeks class action status

      Mindful of the nation's concern with its collective waistline, fast food restaurants have in recent years sought to entice a more health-conscious group of customers through their front doors. Along with salads and fruit parfaits, almost every fast-food menu contains that staple of relatively healthful eating: grilled chicken.

      Alas, grilled bird might pose a menacing risk of its own, according to a lawsuit filed in Hartford, Connecticut on Wednesday. The class action complaint, brought by the nonprofit Cancer Project on behalf of two Connecticut residents, alleges that McDonald's, Burger King, and Friendly's knowingly sold grilled chicken containing "substantial levels" of PhIP, a known carcinogen.

      Daniel Kinburn, a Cancer Project lawyer, says that "Dozens of studies show even relatively small amounts of PhIP can increase the risk of various forms of cancer." McDonald's, Burger King, and Friendly's disagree; spokespeople for all three companies say that there is no evidence that small amounts of PhIP pose any appreciable risk.

      The Cancer Project, based in Washington, D.C., focuses on preventing cancer and extending longevity in cancer survivors by promoting healthy lifestyles.

      The complaint alleges not only that the defendants knew the chicken contained PhIP, but that they actively concealed this fact to prevent chicken sales from plummeting. The companies "concealed the presence of a known carcinogen in their grilled-chicken products to retain profits that would be lost, in whole or in part, as a result of properly informed consumers choosing other food products."

      Maybe, but it's unclear which foods properly informed consumers would choose, at least if they still had to eat fast food. Even without considering the meteoric calorie levels and fat content of most fast food products, lately it seems that certain doom lurks around every greasy corner. Last month, a Chicago man sued Denny's, accusing the diner chain of hiding the fact that some of its foods contain sodium levels four times the recommended daily dosage. (Never mind that Denny's posts all nutrition information, including sodium content, right on its Web site.)

      In July, the Cancer Project filed a suit in New Jersey demanding that hot dogs carry warnings similar to those found on cigarette packages. That suit cited clinical findings that two ounces of processed meat -- the amount in a typical hot dog -- increases the risk of colorectal cancer by a full 21 percent. The Cancer Project wants hot dogs labeled with a warning that "consuming hot dogs and other processed meats increases the risk of cancer."

      The Cancer Project may end up seeking a similar remedy in this case. Kinburn said that, rather than preventing the sale of grilled chicken, his organization thinks the product "should be sold with a warning, like a chainsaw." Burger King already settled a similar suit in California, agreeing to post warnings in all restaurants in that state.

      With all this talk of cancer, perhaps consumers should stick with a Big Mac? Maybe, but remember that the number one cause of death in America is heart disease, exacerbated by poor diet and inactivity. A recent study found that annual medical expenditures related to obesity have doubled in less than a decade, and might be as high as $147 billion every year.

      And ground beef poses its own, uniquely terrifying risks: hamburger meat remains susceptible to E. Coli infection, which can be fatal. A recent New York Times expose detailed the struggle of a young dance instructor paralyzed by infected beef, and suggested that food inspection processes aren't much better than they were when The Jungle was published over 100 years ago.

      So while statements like, "Even a grilled-chicken salad increases the risk of developing some cancers," -- offered by Cancer Group President Neal Barnard -- might be true (or they might not), the same can be said of a lot of things. It's very hard to live a normal life when you're constantly calculating the odds that today's lunch will land you in your deathbed. Consumers' best bet is to examine their diet as a whole, and consistently make the healthiest choices available to them.

      Besides, we've heard that excessive worrying can lead to hypertension, which in turn can cause heart disease. So don't lose too much sleep over that grilled chicken sandwich.

      Lawsuit Says Grilled Chicken Increases Cancer Risk...
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      Bank Closings Pass 100 for 2009

      106 banks shut by FDIC; Most since 1992

      The number of bank closings for 2009 has officially passed the milestone of 100 today, hitting a new total of 106. 2009's bank failures are the most since 1992, during the savings-and-loan crisis, and will cost the Federal Deposit Insurance Corporation (FDIC) $25 billion to shore up.

      Regulators working with the FDIC, the Office of Thrift Supervision (OTS), the Comptroller of the Currency (OCC), and state officials closed three banks in Florida, one in Georgia, one in Illinois, one in Minnesota, and one in Wisconsin. The seven banks closed today include:

      • Flagship National Bank, Bradenton, Florida. The FDIC entered into a purchase and assumption agreement with First Federal Bank of Florida, Lake City, Florida, to assume all of the deposits of Flagship National Bank. As of August 31, 2009, Flagship National Bank had total assets of $190 million and total deposits of approximately $175 million. In addition to assuming all of the deposits of the failed bank, First Federal Bank of Florida agreed to purchase essentially all of the assets. Total cost to the FDIC: $59 million.

      • Hillcrest Bank Florida, Naples, Florida, was closed by the Florida Office of Financial Regulation. The FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of Hillcrest Bank Florida. As of October 1, 2009 , Hillcrest Bank Florida had total assets of $83 million and total deposits of approximately $84 million. Stonegate Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of Hillcrest Bank Florida. In addition to assuming all of the deposits of the failed bank, Stonegate Bank agreed to purchase $28 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition. Total cost to the FDIC: $45 million.

      • Partners Bank, Naples, Florida, was closed by the Office of Thrift Supervision. The FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of Partners Bank. As of September 30, 2009, Partners Bank had total assets of $65.5 million and total deposits of approximately $64.9 million. Total cost to the FDIC: $28.6 million.

      • American United Bank of Lawrenceville, Georgia, whose deposits will be assumed by Ameris Bank, of Moultrie, Georgia. As of August 11, 2009, American United Bank had total assets of $111 million and total deposits of approximately $101 million. Ameris Bank will pay the FDIC a premium of 1.02 percent to assume all of the deposits of American United Bank. In addition to assuming all of the deposits of the failed bank, Ameris Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $44 million.

      • First Dupage Bank, Westmont, Illinois, was closed today by the Illinois Department of Financial & Professional Regulation -- Division of Banking. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Midwest Bank, Itasca, Illinois, to assume all of the deposits of First Dupage Bank. The sole branch of First Dupage Bank will reopen on Saturday as a branch of First Midwest Bank. As of July 31, 2009, First Dupage Bank had total assets of $279 million and total deposits of approximately $254 million. In addition to assuming all of the deposits of the failed bank, First Midwest Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $59 million.

      • Riverview Community Bank, Otsego, Minnesota, was closed today by the Minnesota Department of Commerce. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Central Bank, Stillwater, Minnesota, to assume all of the deposits of Riverview Community Bank. As of August 31, 2009, Riverview Community Bank had total assets of $108 million and total deposits of approximately $80 million. In addition to assuming all of the deposits of the failed bank, Central Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $20 million.

      • Bank of Elmwood, Racine, Wisconsin, was closed today by the Wisconsin Department of Financial Institutions. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Tri City National Bank, Oak Creek, Wisconsin, to assume all of the deposits of Bank of Elmwood. Bank of Elmwood had total assets of $327.4 million and total deposits of approximately $273.2 million. Tri City National Bank did not pay the FDIC a premium for the deposits of Bank of Elmwood. In addition to assuming all of the deposits of the failed bank, Tri City National Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $101.1 million.

      Worst still to come?

      While the world's largest banks were able to avail themselves of bailout money provided at taxpayer expense, many regional and community banks were left to fend for themselves. Crushed under the weight of delinquent loans due to unemployment and crashing home values, and overextended with too much easy credit, smaller local banks have simply been unable to cover their assets.

      The cascading bank failures have also severely depleted the FDIC's deposit insurance fund, which chairwoman Sheila Bair said would be in the red through 2012 at least. She also predicted that the U.S. would see more bank failures through the remainder of 2009 and into 2010.

      Bank Closings Pass 100 for 2009...
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      Colored Contacts Can Trick, Not Treat, for Halloween

      FDA warns against unauthorized use of costume lenses

      Your eyes could be in for some dirty tricks and potentially serious risks if you use unregulated decorative contact lenses this Halloween.

      That's the warning issued today by the U.S. Food and Drug Administration (FDA), which said unauthorized decorative contact lenses can cause corneal ulcers, corneal abrasion, vision impairment, and blindness.

      "Although unauthorized use of decorative contact lenses is a concern year-round, Halloween is the time when people may be inclined to use them, perhaps as costume accessories," said James Saviola, the Ophthalmic and Ear, Nose and Throat Devices network leader in FDA's Center for Devices and Radiological Health. "What troubles us is when they are bought and used without a valid prescription, without the involvement of a qualified eye care professional, or without appropriate follow-up care."

      Decorative contact lenses -- which can change the color of eyes or give them such weird appearances as "eye-of-the-tiger" or zebra looks -- are regulated by the FDA. But the agency has learned some beauty salons, video stores, flea markets, records stores, convenience stores, beach shops, and online vendors have sold those types of lenses to consumers without valid prescriptions.

      The over-the-counter sale of decorative contact lenses, however, is now illegal under recent legislation, according to the FDA.

      The agency said consumers who want to safely use decorative contact lenses -- without fears of damaging their eyes -- should:

      • Get an eye exam from a licensed eye care professional, even if you feel your vision is perfect;

      • Get a valid prescription that includes the brand and lens dimensions;

      • Buy the lenses from an eye care professional or a vendor who requires that you provide prescription information for the lenses;

      • Follow directions for cleaning, disinfecting, and wearing the lenses, and visit your eye care professional for follow-up eye exams.

      Consumers should report any problems with decorative contact lenses to their local FDA consumer complaint coordinator and the FDA's MedWatch Program.

      Colored Contact Lenses Can Trick, Not Treat, for Halloween...
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      Investment Brokers In Two States Face Fraud Charges

      Be careful who you put in charge of your money

      October 22, 2009
      Investors looking for a safe and profitable place to put their money still face the risk of fraud, unless they carefully select their broker or investment advisor. In the wake of the Bernard Madoff swindle, law enforcement officials continue to level charges against investment brokers they say violate not only the law, but investors' trust.

      In Pennsylvania, Attorney General Tom Corbett has filed criminal charges against a Beaver County man accused of operating a $2 million "Ponzi scheme," defrauding credit unions in Armstrong, Westmoreland and Luzerne counties.

      Corbett identified the defendant as Eugene D. Miley. Corbett said that Miley allegedly served as a financial broker for clients, including three credit unions operating in southwestern and northeastern Pennsylvania, offering to locate and purchase various high interest rate certificates of deposit (CD's) for those institutions. Instead of purchasing CD's, Miley allegedly diverted the funds for his own personal use, depending on new credit union purchases to pay-off older fictitious "investments."

      Investments an 'illusion'

      "Miley claimed to be helping his clients earn a good return on their investments, but this was simply an illusion," Corbett said. "As with other ponzi schemes, the money received from new clients was used to pay-off older investors, or siphoned off for personal use, until the flow of new money stopped -- causing the operation to collapse and leaving victims with nothing more than empty promises."

      According to the criminal complaint, Miley sold $2,080,000 in fictitious certificates of deposit between 2006 and 2008, including $1,387,000 to Moonlight Credit Union, located in Worthington, Armstrong County; $594,000 to VANtage Trust Credit Union, in Wilkes-Barre, Luzerne County and $99,000 to Stanwood Area Credit Union, in New Stanton, Westmoreland County.

      'Misappropriated client funds'

      In Massachusetts, meanwhile, a Barnstable County Grand Jury has returned indictments against a former financial broker in connection with the alleged theft of hundreds of thousands of dollars from his former clients. Shane Selewach of Hyannis is charged with six counts of larceny over $250, six counts of securities fraud, and transacting business as an unregistered broker/dealer.

      In 2007 Massachusetts Attorney General Martha Coakley's Office began an investigation after Selewach's alleged activities had been referred by the Massachusetts Securities Division (MSD) in the Secretary of State's Office. The MSD's investigation concluded that while working as a securities broker-dealer agent for a major financial company, Selewach had misappropriated client funds he had been entrusted to invest. As a result, Selewach was fired from his former employer and his registration was terminated in April 2006. The MSD subsequently suspended Selewach for three years, beginning in May 2006.

      Investment Brokers In Two States Face Fraud Charges...
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      Food Toxin Linked To Liver Cancer

      Finding by UCI scientists could help prevent deaths

      A toxin produced by mold on nuts and grains can cause liver cancer if consumed in large quantities. Now, University of California Irvine researchers for the first time have discovered what triggers the toxin to form, which could lead to methods of limiting its production.

      Because of lax or nonexistent regulation, 4.5 billion people in developing countries are chronically exposed to vast amounts of this toxin, called aflatoxin -- often hundreds of times higher than safe levels. In places such as China, Vietnam and South Africa, the combination of aflatoxin and hepatitis B virus exposure increases the likelihood of liver cancer occurrence by 60 times, and toxin-related cancer causes up to 10 percent of all deaths in those nations.

      While U.S. inspectors are supposed to carefully screen the toxin, recent food safety lapses plus an increasing reliance on imported food ingredients is cause for concern, scientists say.

      "It's shocking how profoundly these molds can affect public health," said Sheryl Tsai, UCI molecular biology & biochemistry, chemistry, and pharmaceutical sciences associate professor and lead author of a study appearing Thursday, Oct. 22, in the journal Nature that reports the finding.

      Contamination occurs in the field

      Aflatoxin can colonize and contaminate nuts and grains before harvest or during storage. The U.S. Food & Drug Administration considers it an unavoidable food contaminant but sets maximum allowable limits.

      The researchers say the toxin wreaks havoc on a cancer-preventing gene in humans called p53. Without p53 protecting the body, aflatoxin can compromise immunity, interfere with metabolism, and cause severe malnutrition and cancer.

      Tsai, graduate student Tyler Korman and undergraduate Oliver Kamari-Bidkorpeh, along with Johns Hopkins University researchers, found that a protein called PT is critical for aflatoxin to form in fungi. Previously, scientists didn't know what prompted the toxin's growth.

      "The protein PT is the key to making the poison," Tsai said. "With this knowledge, perhaps we could kill the PT with drugs, inhibiting the mold's ability to make aflatoxin."

      Destroying the mold -- rather than just the PT -- is the traditional method of decontamination, but it's expensive, costing hundreds of millions of dollars worldwide.

      "This finding will lead to an increased understanding of how aflatoxin causes liver cancer in humans," said Dr. Frank Meyskens, Daniel G. Aldrich Jr. Endowed Chair and director of UCI's Chao Family Comprehensive Cancer Center. "It should allow for the development of inhibitors and, hopefully, a new chemoprevention approach to this deadly cancer."

      Aflatoxin belongs to a class of organic compounds called polyketides.

      Trigger of deadly food toxin discovered...
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      FCC Votes To Create Net Neutrality Rules

      5-0 decision opens floor for "open Internet" debate

      The Federal Communications Commission (FCC) voted unanimously today to begin the process of crafting formal rules for "net neutrality," the principle that all content on the Internet should be equally accessible to all users, and that companies cannot discriminate or block one set of content in favor of another.

      The Commission agreed at its monthly open meeting to publish a "Notice of Proposed Rulemaking" that would solicit public comment on how best to create rules for ensuring net neutrality, while enabling Internet service providers and telecom networks to continue policing their systems for spam and illegal content.

      "Any rules we adopt must preserve our freedom to connect, to communicate, and to create that is the wonder of the open Internet," said FCC chairman Julius Genachowski in prepared remarks. "Each and every user of the Internet must have access to an unlimited online universe of ideas and commerce."

      Under the proposed rulemaking, net neutrality rules:

      • would not be allowed to prevent any of its users from sending or receiving the lawful content of the users choice over the Internet;

      • would not be allowed to prevent any of its users from running the lawful applications or using the lawful services of the users choice;

      • would not be allowed to prevent any of its users from connecting to and using on its network the users choice of lawful devices that do not harm the network;

      • would not be allowed to deprive any of its users of the users entitlement to competition among network providers, application providers, service providers, and content providers;

      • would be required to treat lawful content, applications, and services in a nondiscriminatory manner; and

      • would be required to disclose such information concerning network management and other practices as is reasonably required for users and content, application, and service providers to enjoy the protections specified in this rulemaking.

      Not a clean sweep

      Commissioner Michael Copps praised the ruling. "The Internet must never be about powerful gatekeepers and walled gardens," he said. "It must always be about the smoothest possible flow of communications among people."

      Although the commission -- 3 Democrats and 2 Republicans -- voted unanimously to support it, several members offered some dissent. "Freedom is best served if we promote abundance, collaboration and competition over regulation and rationing," said Republican commissioner Robert McDowell. "No government has ever succeeded in mandating innovation and investment."

      McDowell emphasized that he was voting in favor of the rulemaking process, as opposed to the overall principle, and quoted former President Bill Clinton's support of limited government intervention in the communications marketplace as support for his position..

      "Before imposing new rules, we need to carefully think through all potential unintended consequences that could harm consumers by increasing prices, impeding innovation, eliminating choices, and/or reducing quality of service," said new commissioner and former National Telecommunications and Information Administration (NTIA) head Meredith Atwell-Baker.

      But Baker's fellow new commissioner Mignon Clyburn used her story of running a small weekly newspaper in her hometown of Charleston, South Carolina -- which eventually closed down -- to illustrate the need for net neutrality. "To me, that is what this proceeding is all about: preventing barriers to entry and ensuring that Americans have access to the best and most useful information and services," she said.

      No easy victory

      Supporters and opponents of net neutrality alike were already marshaling forces in advance of today's decision. Ben Scott, director of consumer advocacy group Free Press, hailed the vote as "an important step toward securing the open Internet and a victory for the public interest."

      Free Press and its opponents, such as AT&T, have been dueling it out in the marketplace over whether or not net neutrality would hamper or spur innovation and investment in America's Internet industry.

      AT&T recently circulated a letter among its employees urging them to write the FCC and media outlets with those claims, while Free Press fired back with a report claiming that an open Internet would encourage investment from new companies.

      The rules also face a rocky road in Congress. Several Senators have introduced legislation that would codify net neutrality into law, while others are ramping up opposition to the new rules.

      Senator John McCain (R-AZ), who opposed net neutrality regulations in his 2008 presidential bid, promptly introduced legislation in the Senate to block the FCC from making its proposed rules law. In a Washington Times editorial, McCain compared the rules to the government's bailouts of the auto and financial industries, as another "power grab" for control.

      "These new rules should rightly be viewed by consumers suspiciously as another government power grab over a private service provided by private companies in a competitive marketplace. Does that sound familiar? It should," he wrote.

      The Sunlight Foundation and the Center for Responsive Politics recently published a joint report documenting the massive amounts of money donated by telecom companies and their political lobby groups to members of Congress in order to influence their votes -- totaling $9.4 million dollars between January 2007 and June 2009.

      The top recipient of donations was Senator McCain.

      FCC Votes To Create Net Neutrality Rules...
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      Judge Rules Craigslist Not Liable For Adult Ads

      Web sites protected under federal law

      A federal judge dismissed a lawsuit brought against Craigslist by Cook County, Illinois sheriff Thomas Dart, who claimed the classified-ad site's "adult services" section was contributing to prostitution. The judge cited federal law protecting Web sites from liability based on comments or posts made by readers.

      U.S. District Judge John Grady reaffirmed that Web sites like Craigslist were protected under Section 230 of the Communications Decency Act (CDA), which classifies them as third parties that do not directly facilitate or enable actions their readers take. Users of Craigslist who post comments soliciting prostitution should be held responsible for their acts -- but not the site, the judge said.

      "Craigslist does not 'provide' that information, its users do," Grady wrote. "'Facilitating' and 'assisting' encompass a broader range of conduct, so broad in fact that they include the services provided by intermediaries like phone companies, ISPs, and computer manufacturers. Intermediaries are not culpable for 'aiding and abetting' their customers who misuse their services to commit unlawful acts."

      "Sheriff Dart may continue to use Craigslist's Web site to identify and pursue individuals who post allegedly unlawful content...but he cannot sue Craigslist for their conduct," the judge added.

      The ruling is a victory for Craigslist, which has been rocked by numerous lawsuits and threats against it by law enforcement officials in multiple states. Dart's initial lawsuit emboldened Attorneys General in other states, such as South Carolina's Henry McMaster, to demand that Craiglist shut down its "erotic services" section.

      Craigslist made numerous changes to its site in response, including renaming the "erotic services" section as "adult services," increasing the fees to post ads, and stepping up its cooperative efforts with law enforcement to catch predators and sex traffickers using the site.

      Craigslist CEO Jim Buckmaster traded potshots with McMaster in the press, accusing him and other state officials of capitalizing on sensational stories like the "Craigslist killer" to get headlines by going after his site.

      Section 230 of the CDA does not protect against federal or state criminal charges, which critics claim gives ambitious politicians a way to make easy victories by appearing "tough on crime."

      Judge Rules Craigslist Not Liable For Adult Ads...
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      Super PoliGrip Now Contains Zinc Warning

      Adhesive has been linked to poisoning

      The makers of Super PoliGrip have apparently caved to consumer pressure, adding a zinc-related warning to packages of the popular denture cream. The move by GlaxoSmithKline (GSK) comes after dozens of lawsuits and a prominent medical article outlined the danger of zinc poisoning resulting from overuse of denture adhesives.

      Zinc, a type of metal, is abundant in the earth's crust and is one of the most commonly found elements on the planet. Zinc is an essential human nutrient, and some amount is present in all foods. Indeed, a diet deficient in zinc can ultimately lead to nausea, an inhibited sense of taste, and decreased immune function.

      That said, getting too much zinc is no picnic either. Excessive zinc intake over a long period of time can ultimately lead to anemia, pancreatic diseases, and decreased levels of HDL, also known as the "good cholesterol."

      Boxes of Super PoliGrip now come with an insert informing consumers of the product's zinc content and warning generally that excessive zinc intake can lead to "serious health effects." The insert advises users who take zinc supplements to talk with their doctor. The insert warns that consumers should not use Super PoliGrip more than once a day, and that a regular-sized tube should last several weeks.

      Both Super PoliGrip and Fixodent, another well-known adhesive, have been linked to cases of zinc poisoning. A disturbing 2008 article published in Neurology, a monthly medical journal, described four patients whose use of denture cream caused neuropathy, a nerve disorder affecting the central nervous system. The patients, who all used about two tubes of adhesive every week, suffered copper deficiency, which ultimately caused neurological problems. Neuropathy can cause distinct motor and sensory disturbances; the patients detailed in the article suffered from weakness in the limbs, poor balance, and urinary incontinence, among other things. At least one was confined to a wheelchair.

      The U.S. Drug Watchdog, a consumer advocacy group, has taken the lead in warning consumers of the potentially fatal effects of denture-induced zinc poisoning. The group recently warned that inadequately labeled denture creams have the potential to create "the worst case of zinc poisoning in U.S. history." The Watchdog notes that the Food & Drug Administration (FDA) does not require companies to disclose the real danger of zinc poisoning posed by denture creams.

      GSK, the manufacturer of Super PoliGrip, has already been hit with a number of lawsuits relating to denture-induced zinc poisoning. And they aren't alone; other denture cream manufacturers have also been served with complaints, most notably Procter & Gamble, which makes Fixodent. About thirty lawsuits against those two manufacturers alone have been consolidated and are being handled by Judge Cecilia Altonaga of the United States District Court for the Southern District of Florida.

      Denture cream users should be on the lookout for signs of zinc poisoning. These symptoms include burning sensations, abnormal heartbeat, a metallic taste in the mouth, constipation or urine blockage, tingling in the extremities, poor balance, and slowed movements. Denture users who think they are experiencing zinc poisoning should immediately seek medical attention. The National Poison Control Center (800-222-1222) also has experts on hand who can provide instructions.

      The makers of Super PoliGrip have apparently caved to consumer pressure, adding a zinc-related warning to packages of the popular denture cream....
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      Auto Bail-Out Chief: GM's CEO Had To Go

      Ratner describes Wagoner's style as 'friendly arrogance'

      The man who led the auto industry bailout says he couldn't believe the condition in which he found General Motors when he took on the largest restructuring in American history.

      Writing in Fortune magazine, Steven Rattner says he was "shocked by the stunningly poor management" he found, particularly at GM. He says what he encountered at the automaker was "perhaps the weakest finance operation any of us had ever seen in a major company."

      Rattner says it became obvious very quickly that any management team that had burned through $21 billion of cash in a year and another $13 billion in the first quarter of 2009 could not be allowed to continue.

      At GM's Detroit headquarters, Rattner says, the top brass were "sequestered on the uppermost floor, behind locked and guarded glass doors. Executives housed on that floor had elevator cards that allowed them to descend to their private garage without stopping at any of the intervening floors."

      He says that in the few interactions he had with chairman and CEO Rick Wagoner, he found him be "likable, dedicated, and generally knowledgeable." But he says Wagoner set a tone of "friendly arrogance" that seemed to permeate the organization.

      Rattner writes that Waggoner told him, "I'm not planning to stay until I'm 65 but I think I've got at least a few years left in me. But I told the last administration that if my leaving would be helpful to saving General Motors, I'm prepared to do it."

      Rattner concluded, "If ever a board of directors needed shuffling, it was GM's, which had been utterly docile in the face of mounting evidence of looming disaster." He says he and his team decided to recommend, among other things, that Waggoner be replaced by Fritz Henderson as interim CEO, changing at least half of the board, and making an outside director chairman.

      The man who led the auto industry bailout says he couldn't believe the condition in which he found General Motors when he took on the largest restructuring...
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      MoneyGram to Pay $18 Million Over FTC Fraud Charges

      Company charged with allowing its money transfer system to be used for fraud

      MoneyGram International, Inc. will pay $18 million in consumer redress to settle FTC charges that the company allowed its money transfer system to be used by fraudulent telemarketers to bilk U.S. consumers out of tens of millions of dollars.

      The second-largest money transfer service in the United States, MoneyGram also will be required to implement a comprehensive anti-fraud and agent-monitoring program.

      The FTC charged that between 2004 and 2008, MoneyGram agents helped crooked telemarketers and other con artists who tricked U.S. consumers into wiring more than $84 million within the United States and to Canada -- after these consumers were falsely told they had won a lottery, were hired for a secret shopper program, or were guaranteed loans.

      The $84 million in losses is based on consumer complaints to MoneyGram - actual consumer losses likely are much higher.

      The FTC charged that MoneyGram knew that its system was being used to defraud people but did very little about it, and that in some cases its agents in Canada actually participated in these schemes.

      According to the FTC's complaint, MoneyGram knew, or avoided knowing, that about 131 of its more than 1,200 agents accounted for more than 95 percent of the fraud complaints it received in 2008 regarding money transfers to Canada; a similarly small number of agents was responsible for more than 96 percent of all fraud complaints to the company in 2006.

      "Money transfer services have a responsibility to make sure their systems don't become conduits to rip people off," said David C. Vladeck, Director of the FTC's Bureau of Consumer Protection. "In this case, MoneyGram not only ducked this responsibility, but also looked the other way while its agents took part in the scams."

      Minneapolis, Minnesota-based MoneyGram operates through a worldwide network of approximately 180,000 agent locations in 190 countries and territories. In its complaint, the FTC charged that in recent years this network has increasingly been used by telemarketing scammers to prey on U.S. consumers. Con artists prefer to use money transfer services because they can pick up transferred money immediately, the payments are often untraceable, and victimized consumers have no chargeback rights or other recourse.

      In 2007, 72 percent of all complaints received by the FTC involving Canadian-based fraud reported using money transfer services to make payments. According to a recent FTC survey cited in the complaint, at least 79 percent of all MoneyGram transfers of $1,000 or more from the United States to Canada over a four-month period in 2007 were fraud-induced.

      The Commission's complaint further stated that based on the more than 20,600 fraud complaints MoneyGram itself received, U.S. consumers lost more than $44 million to cross-border money-transfer frauds between 2004 and 2008 alone. When combined with losses reported by U.S. consumers on money transfers within the United States, that number grows to $84 million.

      The most prevalent of these scams were lottery or prize schemes in which consumers were told they had won thousands of dollars and just had to pay a fee for "taxes," "customs," or "insurance" to a third-party to collect their winnings. Consumers paid the fee using MoneyGram, but received nothing.

      Barbara of Gaffney, S.C., got caught up in one of the scams. She tells that she was contacted and told she was a multimillion-dollar winner. According to Barbara, the caller "stated that they were going to deliver the money to me personally. That changed when she said that they were having problems with that, so the transaction would have to made from bank to bank. I gave her my account number and all the bank information. In the meantime, I was still having to send money through the Western Union and MoneyGram. I sent a lot of money to them, so much so that I have been banned from using the Western Union or MoneyGram because they feel that I was involved in some type of illegal doings." She says she and her husband are on the verge of filing for bankruptcy. "Everything that we have is in jeopardy of being lost," she concludes. "All our savings is gone."

      In another scheme, telemarketers told consumers they were guaranteed loans, regardless of their credit score. All they had to do was pay "insurance," "paperwork," or "processing" fees to complete the transaction. Consumers who sent funds using a money transfer service got nothing in return.

      The FTC's complaint contends that MoneyGram ignored warnings from law enforcement officials and even its own employees that widespread fraud was being conducted over its network, claiming that proposals to deal with the problem were too costly and were not the company's responsibility. The company even discouraged its employees from enforcing its own fraud prevention policies or taking action against suspicious or corrupt agents. Some employees who raised concerns were disciplined or fired, the FTC charged.

      In addition, at least 65 of MoneyGram's Canadian agents have been charged by Canadian or U.S. law enforcers with, or are currently being investigated for, colluding in fraud schemes that used the MoneyGram system.

      The complaint charges MoneyGram with violating both the FTC Act and the FTC's Telemarketing Sales Rule by helping sellers or telemarketers who it knew -- or consciously avoided knowing -- were violating federal law, and for not taking adequate steps to prevent fraud.

      The agreed-upon court order settling the FTC's charges bars MoneyGram from knowingly providing substantial help or support to any sellers or telemarketers that are violating the Telemarketing Sales Rule and requires it to implement a comprehensive anti-fraud program. Under the anti-fraud program, MoneyGram must conduct background checks on prospective agents; educate and train its employees about consumer fraud; institute agent monitoring; and discipline agents who don't comply with the rules.

      The order also requires MoneyGram to provide a clear and conspicuous fraud warning on the front of all its money transfer forms. The order's conduct provisions apply to all MoneyGram money transfers sent worldwide from either the United States or Canada.

      Finally, MoneyGram will pay the Commission $18 million, which will be used to provide redress to consumers.

      MoneyGram to Pay $18 Million Over FTC Fraud Charges...
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      Attorneys General Mount Debt Relief Offensive

      Florida is latest state to take action

      The Attorneys General of the 50 United States regularly stay in close contact on major issues, but are acting more and more in concert when it comes to consumer protection these days.

      A case in point is what appears to be a coordinated crackdown on abusive debt settlement companies.

      Last week New York Attorney General Andrew Cuomo won a lawsuit against against Nationwide Asset Services, barring it from doing business in New York unless its posts a $500,000 performance bond to protect consumers. Over the course of the summer, he took action against a number of New York-based firms that he said were engaging in abusive and illegal debt settlement practices.

      Meanwhile, Florida Attorney General Bill McCollum announced his office has filed two lawsuits on behalf of Florida consumers against five debt settlement-related companies. According to the complaints, the businesses promised consumers they could pay off their debts for a fraction of the amount owed, but instead collected large up-front fees and left customers with little or no money to pay creditors.

      "These victims were hit with a one-two punch: they paid substantial up-front fees for services not provided as promised, then ended up with increased debt, ruined credit, lawsuits, bankruptcy and more," McCollum said.

      One of the lawsuits was filed against Texas-based CSA-Credit Solutions of America, Inc., a self-proclaimed debt settlement industry leader. The lawsuit alleges that CSA unlawfully charges significant advance fees before completing or, in many instances, commencing performance of its debt settlement services. CSA offers to settle consumers debts at approximately 50 percent of their balance within 12-36 months and, according to the lawsuit, falsely represents the success rate of its program.

      Under the CSA plan, consumers are instructed to stop paying their creditors and start a savings account, supposedly to accumulate enough funds to allow CSA to negotiate a lump sum payoff of the debt. However, for the first three months, CSA allegedly withdraws 85 percent of the funds for its own fees, leaving the consumers with little or no money to negotiate a settlement with their creditors.

      Additionally, while the consumer is trying to save enough for the lump sum payoff, he or she may suffer increased penalties for nonpayment to creditors, lawsuits, damage to credit scores, bankruptcy and more. McCollum's office has over 140 complaints, but estimates the company has thousands of Florida victims.

      The second lawsuit filed names Clearwater-based ADA of Tampa Bay, Inc., which does business as American Debt Arbitration. The lawsuit also names the companys principal Glenn P. Stewart, as well as Arizona-based entities Nationwide Asset Services, Inc., Service Star, LLC, and Universal Debt Reduction, LLC.

      The lawsuit alleges the defendants promise to help consumers pay off their debts at significant savings, but fail to adequately disclose the true cost of their services. Also allegedly withheld from consumers is the fact that the companies collect at least the first three months of payments as fees, in violation of Florida law, before the consumer can start accumulating any funds for settlement and before any services begin. During the savings period, consumers are counseled to cease all payments to and communications with their creditors. As a result, consumers suffer great financial harm and can be subject to increased penalties and lawsuits.

      Because these companies do business nationwide, its not surprising they have attracted the scrutiny of so many attorneys general. In Illinois, Attorney General Lisa Madigan sued Credit Solutions of America in early October. West Virginia Darrel McGraw sued Able Debt Settlement in August.

      Debt settlement firms are not new, but have proliferated in recent months as the economy plunged and more consumers struggled to pay credit card bills.

      Attorneys General Mount Debt Relief Offensive...
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      California Sues Bank Over Alleged Pension Fraud

      Attorney General claims bank overcharged funds for millions of dollars

      Seeking to recover more than $200 million in illegal overcharges and penalties, Attorney General Edmund G. Brown Jr. today announced that he has filed suit against State Street Bank and Trust -- one of the world's leading providers of financial services to institutional investors -- for committing "unconscionable fraud" against California's two largest pension funds -- CalPERS and CalSTRS.

      The suit, which was unsealed today by a Sacramento Superior Court judge, contends that Boston-based State Street illegally overcharged CalPERS and CalSTRS for the costs of executing foreign currency trades since 2001.

      "Over a period of eight years, State Street bankers committed unconscionable fraud by misappropriating millions of dollars that rightfully belonged to California's public pension funds," Brown said. "This is just the latest example of how clever financial traders violate laws and rip off the public trust."

      The case was originally filed under seal by whistleblowers -- "Associates Against FX Insider Trading," who alleged that State Street added a secret and substantial mark-up to the price of interbank foreign currency trades. The interbank rate is the price at which major banks buy and sell foreign currency.

      Subsequently, Brown launched an independent investigation into the allegations.

      Brown's investigation revealed that State Street was indeed overcharging the two funds. Despite being contractually obligated to charge the interbank rate at the precise time of the trade, State Street consistently charged at or near the highest rate of the day, even if the interbank rate was lower at the time of trade.

      Additionally, State Street concealed the fraud by deliberately failing to include time stamp data in its reports, so that the pension funds could not determine the true execution costs by verifying when State Street actually executed the trades. Commenting on this deception, one State Street senior vice president said to another executive that "...if providing execution costs will give [CalPERS] any insight into how much we make off of FX transactions, I will be shocked if [State Street] or anyone would agree to reveal the information."

      Brown's office estimates that the pension funds were overcharged by more than $56.6 million over eight years. The lawsuit asks for relief in the amount of triple California's damages, civil penalties of $10,000 for each false claim; and recovery of costs, attorneys' fees and expenses. It is estimated that damages and penalties could exceed more than $200 million.

      Under California's False Claims Act, anyone who has previously undisclosed information about a fraud, overcharge, or other false claim against the state, can file a sealed lawsuit on behalf of California to recover the losses. They must notify the Attorney General as well.

      Such a case is called a "qui tam" case. If there is a monetary recovery, the law provides that the whistleblower "qui tam plaintiff" receives a share of the amount recovered if the requirements of the statute are met.

      California Sues Bank Over Alleged Pension Fraud...
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      Do Loan Servicers Really Prefer Foreclosures?

      Report may explain why homeowners get the runaround

      At the start of the foreclosure crises, personal finance experts urged struggling homeowners to contact their lenders if they started to fall behind on their mortgages. The lenders want to do everything they can, homeowners were told, to avoid a foreclosure.

      Now, the experts aren't so sure that's the case.

      Consumers who have jumped through a frustrating series of hoops to achieve a mortgage modification a lower interest rates or more manageable payments are convinced that old conventional wisdom is flawed.

      Jason, of San Diego, says he's become frustrated trying to complete a loan modification.

      "I have gone through the modification process but have been denied, although no clear explanation was provided," Jason told "I have been seeking assistance and guidance from quite a few bank representatives and have only received rude, misguided information."

      In the last year has received hundreds of complaints from consumers who said they followed loan modification instructions, faxing requested documents repeatedly, only to have their applications disappear into a black hole.

      "I faxed papers repeated times and was told that I need to fax more or that they never received them so they can start a modification," Maria, of Sussex, N.J., told "I made payments and they never credited my account. Now they calls in October 2009 and they tell me that they stopped the modification because I never faxed out the papers. Is this a joke!"

      The same story

      Regardless of the loan servicer, the story seems to be the same. Consumers start down a road they think will lead to a modified mortgage, only to meet a wall of incompetence and indifference at the mortgage company.

      "We sent all information requested by certified mail," Regina, of Whitefish Bay, Wisc., told "As the others have described, we have had to make contact. They do not respond. The usual answer is 'Whoever told you that is wrong.' I actually have a tape of one of their agents stating 'I can't be responsible for what someone else told you.' Should not they be required to respond in writing? Is this not a government funded program?"

      The Treasury Department did, in fact, begin a loan modification program in March 2009 to encourage loan servicers to modify troubled loans to prevent foreclosures. But the process has proved slow, and for many, frustrating. Meanwhile, foreclosures continue unabated.

      A new report by the National Consumer Law Center says its no mystery why loan servicers seem to be dragging their feet in modifying troubled mortgages. The report suggests these companies actually stand to profit if the troubled property goes to foreclosure.

      The report, "Why Servicers Foreclose, When They Should Modify, and Other Puzzles of Servicer Behavior," reveals that servicers, unlike investors or homeowners, generally dont risk losing money on foreclosures.

      "One common sense solution to the foreclosure crisis is to modify the loan terms in more instances," said Diane Thompson, a NCLC attorney and author of the report. "Foreclosures are a costly ordeal for the homeowner, the lender, and the community. Yet they continue to outstrip loan modifications because servicers have no incentive to help borrowers stay in their homes."

      Doesn't own loan

      In almost every case, the loan servicer doesn't own the loan. It's simply a company -- usually a bank -- hired to collect the money from the homeowner and deliver the funds to the investors who own the mortgage. The investors lose money if the property goes to foreclosure, but the servicer doesn't.

      Homeowners seeking to save their homes by modifying unaffordable loans typically deal with servicers. That is why the financial interests of servicers have the potential to hurt homeowners, the report says.

      And too many of those financial incentives encourage servicers to ignore the interests of homeowners. For example, the report suggests that servicers often deny homeowners principal and interest rate reductions because as servicers they find it profitable to offer repayment plans or forbearance agreements that do little to reduce homeowners' debt burdens.

      "Loan modifications inevitably cost the servicer something," the report says. "A servicer deciding between a foreclosure and a loan modification faces the prospect of near certain loss if the loan is modified, and no penalty, but potential profit, if the home is foreclosed."

      The NCLC report also found that the lack of third-party oversight allows servicers to pursue foreclosure instead of effective loan modifications that would benefit homeowners as well as investors. While credit rating agencies and bond insurers do monitor servicers, their oversight too often encourages servicers to foreclose.

      The NCLC report includes a detailed examination of loans in foreclosure from 1995-2009 and how components of servicer compensation affected the likelihood and speed of foreclosure. It also looks at the rise of the servicer industry as a by-product of securitization; and the limited, but only effective oversight of servicers by credit rating agencies and bond insurers.

      No incentives

      The people who could change the way servicers are doing business -- Congress, the Administration, and the Securities and Exchange Commission -- and the market participants who set the terms of engagement -- credit rating agencies and bond insurers -- have failed to provide servicers with the necessary incentives to reduce foreclosures and increase loan modifications, Thompson said.

      The report suggests that rule changes remove the financial incentives for servicers to block modifications and mandate loan modifications before a foreclosure as a matter of law. Until it does, the report says, the foreclosure crisis will continue.

      "I feel that I have been set up to lose my house," Alesea of Kinston, N.C., told "Where is the justice in this?"

      Do Loan Servicers Really Prefer Foreclosures?...
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      Katrina Fallout Continues In Mississippi

      Home repair fraud arrests made four years after storm

      October 20, 2009
      Hurricane Katrina devastated the Gulf Coast four years ago, but the impact is still being felt in southern Mississippi. In the wake of the storm's devastation, scam artists spread man-made havoc across the region as well.

      Mississippi Attorney General Jim Hood says two out-of-state contractors have been arrested for felony home repair fraud against Katrina victims on Mississippis Gulf Coast.

      Carlos Enrique Sanchez of Pearland, Texas (dba Mineo Homes) was arrested on three indictments for felony home repair fraud. Sanchez and his now former business partner, Samuel Mineo were indicted for failing to do work they were paid to do on three homes that were lost due to Hurricane Katrina.

      Mineo turned himself in to the Attorney General's Office in October 2008. Sanchez did not turn himself in after agreeing to do so and has since been considered "on the run." The Mississippi Attorney General's Office requested the assistance of the Texas Attorney General's Office after learning Sanchez was in Texas. He was arrested in Austin, TX on September 16, 2009 by the Texas Attorney General's Office and returned to Mississippi last week by the Harrison County Sheriff's Office.

      Sanchez was booked into the Harrison County Adult Detention Center. He faces up to 10 years and/or a $10,000 fine, plus restitution to the victims. The case was investigated by the Consumer Protection Division of the Attorney Generals Office and will be prosecuted in conjunction with District Attorney Cono Carannas Office.

      "We would like to thank Texas Attorney General Greg Abbott, Travis County Texas Sheriff Greg Hamilton and both of their offices for all of their work in this case," Hood said. "Their teamwork combined with the efforts of Harrison County Sheriff Melvin Brisolara, District Attorney Cono Caranna and their offices will make sure this case reaches a just resolution."

      Additionally, Ed Schreader, age 43, from Birchwood, Tenn., working for Hurricane Relief Corp., was arrested on this month following an indictment for one count of Felony Home Repair Fraud.

      The Consumer Protection Division of the Mississippi Attorney General's Office investigated the case and obtained the indictment following allegations by a Gulfport homeowner that Schreader obtained $30,000 to fix a home damaged by Hurricane Katrina, but failed to do the work.

      The indictment was served by the Harrison County Sheriffs Office and Schreader was booked into the Harrison County Adult Detention Center where he posted $5,000 bond. If convicted, he faces up to 10 years and/or a $10,000 fine plus restitution to the victim.

      Katrina Fallout Continues In Mississippi: Hurricane Katrina devastated the Gulf Coast four years ago, but the impact is still being felt in southern Missis...
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      College Tuition Costs Jump

      Educators blame declining state support

      At a time when the cost of many things are actually going down, the price of a college education continues to go up.

      Tuition costs at the average four year public college rose 6.5 percent, to just over $7,000, according to a report by the College Board. The board attributed the hike in tuition costs to declines in state support and endowment declines.

      The financial difficulties facing households across the nation are putting increased pressure on financial aid budgets, the report said. Although grant aid also rose significantly in 2008-09, the latest year for which data are available, student borrowing continues to increase, as does the gap between available resources and the overall cost of attending college.

      Trends in College Pricing 2009 and Trends in Student Aid 2009 provide insight into how colleges and universities and their students are grappling with recent economic pressures.

      "It is vital that we assure access to a high-quality college education for all students," said College Board President Gaston Caperton. "While a college education is critical to long-term financial security, it feels out of reach to many students and families in today's economy."

      Colleges want more aid

      Caperton said states and institutions must increase their efforts to reduce costs and to prevent tuition from rising as rapidly as it has in the past.

      "We must provide generous financial aid for those who most need the funds and help students and families to understand the wide array of options available to them in our diverse educational system," he said.

      The average published price of tuition and fees for in-state students at four-year public colleges in the U.S. is $7,020 in 2009-10, $429 higher than a year ago. After adjusting for inflation, the average net price paid for tuition and fees by public four-year college students overall is lower in 2009-10 than it was five years ago -- but higher than it was last year.

      Like published prices for tuition and fees, expenses for food, housing, books and supplies, and other living costs continue to rise more rapidly than the rate of inflation, and only at public two-year colleges does grant aid for the average student stretch beyond tuition and fees.

      Community colleges a better value

      Undergraduate tuition and fees at public two-year colleges in 2009-10 average $2,544, compared to $5,930 at public colleges awarding baccalaureate degrees, $6,094 at public masters universities, and $7,797 at public doctorate-granting universities.

      In the private not-for-profit sector, tuition and fees average $24,040 at baccalaureate colleges, $23,700 at masters universities, and $32,349 at doctorate-granting universities. About 19 percent of full-time private college students are enrolled in institutions with published prices below $18,000, and 20 percent attend institutions with prices $36,000 or higher.

      Grant aid increasing 3.4 percent per year

      About two-thirds of full-time undergraduates receive grants. In 2008-09, they received an average of $5,041 in grant aid per full-time equivalent student, supplemented by $4,585 in federal loans. Forty-one percent of all grant aid to postsecondary students was provided by colleges and universities, 32 percent by the federal government, 11 percent by states, and 16 percent by employers and other private sources. Over the decade from 1998-99 through 2008-09, grant aid per undergraduate student increased at an average of 3.4 percent per year after adjusting for inflation.

      In 2007-08, public four-year institutions distributed about two-thirds of their institutional grant aid without regard to financial circumstances. Students from families with incomes below $32,500 received an average of $700 in non-need-based and $830 in need-based institutional grant aid, compared to $940 and $300, respectively, for those from families with incomes between $60,000 and $100,000. Students at private not-for-profit four-year institutions receive significantly more institutional grant aid than do those at public colleges and universities, and the patterns of that aid differ considerably at institutions with different prices.

      College Tuition Costs Jump...
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      Cybercriminals Use Fear And Anxiety To Push Rogue Security Software

      Users lulled into false sense of security while exposed to greater risks

      Cybercriminals are employing increasingly persuasive online scare tactics to convince users to purchase rogue security software, according to a report from Symantec Corp.

      Rogue security software, or "scareware," is software that pretends to be legitimate security software. These rogue applications provide little or no value and may even install malicious code or reduce the overall security of the computer.

      "Scareware creators can scam thousands of people for comparatively small amounts of money all at the same time and make huge aggregate profits," said David Wall, PhD. professor, Centre for Criminal Justice Studies, University of Leeds. "This type of fraud works because the fake security software tricks users into believing they have an immediate threat which only their program can resolve. Ultimately, it's a con. I would advise Internet users to be careful while online and only download from trusted sources."

      Marci of Wildomar, California, has experience with such sites. She tells that a virus software called Anti Virus 2010 invaded her computer. "This program announced my pc had a virus and my computer was going to crash. Then a screen popped up to remove it. I clicked. It took me to a pay $40 site." Marci writes that in a panic, she paid the $40.

      She downloaded the program and says it was a hoax. "I contacted them via email. They sent me a generic reply. In the process of paying, they have all of my information including the last 4 digits of my social. My bad!! The result could be identity theft."

      To encourage unsuspecting users to install their rogue software, cybercriminals place website ads that prey on users' fears of security threats. These ads typically include false claims such as "If this ad is flashing, your computer may be at risk or infected," urging the user to follow a link to scan their computer or get software to remove the threat.

      According to the study, 93 percent of the software installations for the top 50 rogue security software scams were intentionally downloaded by the user. As of June 2009, Symantec has detected more than 250 distinct rogue security software programs.

      The initial monetary loss to consumers who download these rogue products ranges from $30 to $100. However, the costs associated to regain one's identity could be far greater. Not only can these rogue security programs cheat the user out of money, but the personal details and credit card information provided during the purchase can be used in additional fraud or sold on black market forums resulting in identify theft.

      To make matters worse, some rogue security software actually installs malicious code that puts users at risk of attack from additional threats. As a result, installing these programs can lower the security posture of a computer while claiming to strengthen it.

      For example, rogue programs may instruct the user to lower or disable any existing security settings while registering the bogus software or prevent the user from accessing legitimate security Web sites after installation. This, in turn, leaves users exposed to the very threats the rogue software promised to protect against.

      Deceptive ads

      There are several methods employed to trick users into downloading rogue security software, many of which rely on fear tactics and other social engineering tricks. Rogue security software is advertised through a variety of means, including both malicious and legitimate Web sites such as blogs, forums, social networking sites, and adult sites.

      While legitimate Web sites are not a party to these scams, they can be compromised to advertise these rogue applications. Rogue security software sites may also appear at the top of search engine indexes if scam creators have seeded the results.

      To increase the likelihood of fooling users, rogue security software creators design their programs so that they appear as credible as possible, mimicking the look and feel of legitimate security software programs. In addition, these programs are often distributed on Web sites that appear credible and enable the user to easily download the illegitimate software.

      Some malicious sites actually use legitimate online payment services to process credit card transactions and others return an e-mail message to the victim with a receipt for purchase -- complete with serial number and customer service number.


      Cybercriminals are profiting from a highly organized pay-for-performance business model that pays scammers to trick users into installing bogus security programs. According to the study, the top ten sales affiliates for the rogue security distribution site reportedly earned an average of $23,000 per week during the 12-month study period of the report, or almost three times the weekly salary of the President of the United States.

      These practices are similar to the affiliate marketing programs made popular by online retailers. Affiliate marketing programs reward participating affiliates or members for each visitor or directed to the online retailer's website due to the affiliate's marketing efforts. Through this model, affiliates of rogue software scams can earn between $0.01 and $0.55 for every successful installation.

      The highest prices are paid for installations by users in the U.S., followed by the U.K., Canada, and Australia. Some distribution sites also offer their affiliates incentives in the form of bonuses for a certain number of installs, as well as VIP points and prizes such as electronics and luxury cars.

      "The findings of our Report on Rogue Security Software make it clear that cybercriminals are willing, eager, and well-equipped to prey on today's Internet user," said Stephen Trilling, Senior Vice President, Symantec Security Technology and Response. "To avoid becoming a victim of such predatory practices, Symantec strongly urges Internet users to make sure they are using the latest security protection and always obtain their security software directly from trusted vendors' websites."

      What to do

      To protect against rogue security software, Symantec recommends that both enterprises and users:

      • Avoid following links from emails, as these may be links to spoofed or malicious websites. Instead, manually type in the URL of a known, reputable website.

      • Never view, open, or execute email attachments unless the attachment is expected and comes from a known and trusted source. Be suspicious of any emails that are not directly addressed to your email address.

      • Be cautious of pop-up windows and banner advertisements that mimic legitimate displays. Suspicious error messages displayed inside the Web browser are often methods rogue security software scams use to lure users into downloading and installing their fake product.

      Cybercriminals Use Fear And Anxiety To Push Rogue Security Software...
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      GAO: FDA and USDA Not Kept In Food Import Loop

      Gaps in import safety controls identified called 'troubling'

      Many agencies share responsibility for ensuring the safety of the increasing volume of imported food, including the Food and Drug Administration (FDA), the Agriculture Department's Food Safety and Inspection Service (FSIS), and Homeland Security's Customs and Border Protection division.

      But in a report made public recently, the Government Accountability Office (GAO) found those agencies' efforts are hampered by what the GAO said are gaps in enforcement and collaboration.

      The GAO found that while importers report information about food shipments to the Customs agency, that agency's computer system does not notify FDA or FSIS when shipments arrive at the border, increasing the risk that contaminated food passes through border checkpoints undetected.

      The report found that Customs and FDA do not use a unique identification number for importers, making it difficult for FDA to track high-risk imports and importers. The government watchdog also said that FDA lacks the authority to fine importers who don't comply with its regulations. As a result, importers can ignore rules against selling food shipments before they are cleared by FDA.

      "A high and growing portion of the American food supply is imported, so it is essential that those foods meet U.S. safety standards," said CSPI food safety director Caroline Smith DeWaal. "Border inspection provides an important -- and sometimes the only -- food safety checkpoint. GAO describes a food safety framework for imports that doesn't keep the regulators 'in the loop' to the extent that they can inspect risky products before they are released to the public."

      In July, the House of Representatives passed the Food Safety Enhancement Act with broad, bipartisan support. That measure would give FDA the authority to require food processors to design and implement food safety plans, provide specific safety standards that growers would have to meet, establish and pilot test tracking systems for foods, and require FDA to visit inspect food facilities regularly. It also addresses problems identified in the GAO report.

      The House bill calls for closer collaboration between the Customs and Border Protection and the FDA, requires each importer to have and use an unique identification number that is registered with FDA, and gives FDA authority to impose civil fines. In the Senate, similar legislation, sponsored by Sen. Richard Durbin (D-IL), is pending.

      GAO: FDA and USDA Not Kept In Food Import Loop...
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      Minnesota Charges Propane Supplier With Deception

      Failed to disclose per-gallon prices

      In rural areas of the upper Midwest, many consumers depend on propane to heat their homes. The State of Minnesota has sued Ferrellgas, LP, a large national propane energy company, alleging that it deceived Minnesota consumers about the rates and fees charged for propane for heating.

      Minnesota Attorney General Lori alleges that the propane energy company failed to disclose specific per-gallon prices to consumers when they called to fill their tanks and represented in its fine-print contracts that it would charge "our current market price," even though Ferrellgas often charged above-market rates and in many cases charged rates substantially above the average market rate on file with the state and federal government.

      "For many people living in rural areas, the only available energy source to heat their home is propane. This propane energy company deceptively failed to disclose its prices and fees and then twisted its fine-print contract language to charge above-market rates," Swanson said.

      The lawsuit claims that the company's advertisements were designed to create the impression among consumers that the company charges a competitive market price for its propane. When consumers called to fill their propane tanks, Ferrellgas did not inform the consumer of the actual price to be charged. It also represented in a 24-page contract that it would charge "our current market price" for propane gas.

      The Minnesota Department of Commerce and the U.S. Department of Energy both conduct surveys of average propane prices charged by the industry. The state's lawsuit includes a chart comparing the actual prices charged by Ferrellgas to Minnesota consumers with the average rates charged by the industry. The lawsuit states that the rates charged by Ferrellgas often exceeded competitive market rates and were at times double the average rates charged by the propane industry as filed with state and federal governments.

      The lawsuit also alleges that Ferrellgas charged Minnesota consumers significant fees without adequately disclosing them, including "low usage" fees of up to $199 for consumers who in its judgment did not use enough propane, as well as tank pick-up fees of up to $99.

      In 2008 Ferrellgas reported sales of approximately $2.2 billion. In 2007, the Arkansas attorney general filed a similar lawsuit against it for charging fees that were not adequately disclosed.

      Ferrellgas has approximately 50,000 customers in Minnesota. Attorney General Swanson noted that with winter approaching, many Minnesotans will soon be filling up their propane tanks for the winter. She cautioned consumers to ask suppliers to document their actual per-gallon price before filling a tank, as well as to disclose any fees.

      Minnesota has sued Ferrellgas, LP, a large national propane energy company, alleging that it deceived Minnesota consumers about the rates and fees charged ...
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      Class Action Challenges Cheerios Claims

      FDA earlier questioned 'heart-healthy' cholesterol-lowering claims

      Does anybody really think a breakfast cereal will lower cholesterol? Two New Jersey residents swear they fell for General Mills' claims that certain types of Cheerios would prevent heart disease by reducing harmful cholesterol in the bloodstream.

      Edward Myers and Elsa Acevedo, both of Hudson County, N.J., have filed a class action suit against General Mills and a federal court judge in Newark has consolidated the case with other, similar suits filed by more than 100 other plaintiffs across the country.

      In May, the Food and Drug Administration fired off a warning letter to General Mills, taking issue with its claim that Cheerios Toasted Whole Grain Oat Cereal can reduce cholesterol.

      In a letter to Ken Powell, Chairman and CEO of General Mills, the FDA said its review of the Cheerios label found serious violations of the Federal Food, Drug and Cosmetic Act. The agency said that if Cheerios reduced cholesterol the way the label said it does, then Cheerios isn't a cereal, its a drug. And an unapproved drug, at that.

      The plaintiffs claim they were misled to believe Cheerios had drug-quality properties to reduce their cholesterol levels. The plaintiffs are seeking in excess of $5 million in relief from General Mills.

      Science 'not in question'

      In a statement issued after the FDA warning last May, the company said Cheerios soluble fiber heart health claim has been FDA-approved for 12 years, and Cheerios lower your cholesterol 4% in 6 weeks message has been featured on the box for more than 2 years.

      The science is not in question, the statement said. The scientific body of evidence supporting the heart health claim was the basis for FDAs approval of the heart health claim, and the clinical study supporting Cheerios cholesterol-lowering benefit is very strong. The FDA is interested in how the Cheerios cholesterol-lowering information is presented on the Cheerios package and website. We look forward to discussing this with FDA and to reaching a resolution.

      In its warning, the FDA said: Based on claims made on your product's label, we have determined that your Cheerios Toasted Whole Grain Oat Cereal is promoted for conditions that cause it to be a drug because the product is intended for use in the prevention, mitigation, and treatment of disease, the agency wrote.

      Specifically, the FDA took issue with the following label claims:

      • "You can Lower Your Cholesterol 4 percent in 6 weeks"

      • "Did you know that in just 6 weeks Cheerios can reduce bad cholesterol by an average of 4 percent?

      • Cheerios is ... clinically proven to lower cholesterol. A clinical study showed that eating two 1 1/2 cup servings daily of Cheerios cereal reduced bad cholesterol when eaten as part of a diet low in saturated fat and cholesterol."

      The FDA says these claims indicate that Cheerios is intended for use in lowering cholesterol, and therefore in preventing, mitigating, and treating the disease hypercholesterolemia. And that's not all.

      According to the FDA's interpretation of the cereal box label, Cheerios is intended for use in the treatment, mitigation, and prevention of coronary heart disease through, lowering total and "bad" (LDL) cholesterol.

      Two New Jersey residents swear they fell for General Mills' claims that certain types of Cheerios would prevent heart disease by reducing harmful cholester...
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      California Law Cracks Down On Foreclosure Rescue

      Outlaws advance fees charged by scammers

      October 17, 2009
      In response to escalating foreclosure rescue scams, the state of California now has a new law with a tough requirements for firms offering services to homeowners facing foreclosure. California Gov. Arnold Schwarzenegger signed the bill into law this week.

      "Over the past two years, unscrupulous attorneys and real estate brokers have abused their trusted roles and exploited desperate homeowners seeking to avoid foreclosure," said California Attorney General Jerry Brown. "The loophole that allowed this abusive practice to continue has now been closed, and homeowners should avoid any person charging up-front fees for foreclosure relief services."

      The new law makes it unlawful for any licensed attorney or real estate agent "who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrowerto claim, demand, charge, collect, or receive any compensation until after the [attorney or agent] has fully performed each and every service the licensee contracted to perform or represented that he, she, or it would perform."

      Until now, licensed attorneys and real estate brokers could charge advance fees under certain limited circumstances. Foreclosure scam artists often sought to exploit this exception. The new law closes this loophole.

      In August, threatening possible criminal and civil prosecution, Brown ordered 386 mortgage foreclosure consultants to register with his office and post $100,000 bond. Brown also ordered more than two dozen foreclosure assistance companies to substantiate suspect claims made on the Internet and in direct mail advertising.

      This action followed a nationwide sweep in July that led to lawsuits against 21 individuals and 14 companies who ripped off thousands of homeowners seeking mortgage relief. In total, Brown has sought court orders to shut down more than 30 companies and has brought criminal charges and obtained lengthy prison sentences for dozens of deceptive loan modification consultants.

      Loan modification consultants continue to exploit homeowners desperate for relief. This year, Brown's office has received more than 2,500 complaints against loan modification consultants and their businesses. This is a dramatic jump from 2008, when less than 200 complaints were filed.

      Tips for homeowners

      As part of a consumer alert, Brown offered the following tips to homeowners:

      • Don't pay up-front fees. Foreclosure consultants are prohibited by law from collecting money before services are performed.

      • Don't ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.

      • Don't transfer title or sell your house to a "foreclosure rescuer." Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.

      • Don't pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.

      • Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict.

      California Law Cracks Down On Foreclosure Rescue...
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      Office Depot 'Quantum' Chairs Recalled

      October 16, 2009
      Raynor Marketing is recalling about 150,000 Quantum desk chairs sold exclusively at Office Depot. The bolts attaching the seatback on the recalled chairs can loosen and detach, posing a fall and injury hazard to consumers.

      Raynor has received reports of 33 seatback detachments and 14 injuries involving bumps and bruises.

      The recall involves the Quantum Realspace PRO 9000 Series Mid-Back Multifunction Mesh Chair SKU # 510830 and the Quantum Realspace PRO 9000 Series Mesh Chair with Headrest SKU # 690690. The Realspace PRO Mesh Guest Chair is not involved in this recall.

      The chairs were sold at Office Depot stores nationwide and on the Web at from May 2006 through August 2009. The mid-back chairs sold for about $300 and the chair with headrest for about $350. They were made in China.

      Consumers should immediately stop using the recalled office chairs and contact Raynor to receive a free repair kit.

      For additional information and to receive a free repair kit, contact Raynor toll free at (866) 244-8180 between 9 a.m. and 5 p.m. ET Monday through Friday or visit the firm's Web site at

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

      Office Depot 'Quantum' Chairs Recalled...
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      Passenger Rights Advocate Claims Delta Hacked Her Email

      Says hacker accessed files to thwart passing legislation

      By Jon Hood

      October 16, 2009
      A leading proponent of the Airline Passenger's Bill of Rights making its way through Congress says that Delta Airlines hacked into her e-mail account in an effort to thwart the legislation.

      Kate Hanni's complaint, filed in federal court in Houston, accuses Delta and a contractor of conspiracy and violation of privacy, and seeks at least $11 million in damages, most of them punitive.

      Hanni founded the Coalition for an Airline Passengers Bill of Rights, which is lobbying Congress to impose more passenger-friendly requirements for planes stuck on runways for long periods of time. The bill would give passengers the right to disembark any aircraft that has been grounded for at least three hours, unless such an exit is deemed unsafe or the pilot reasonably believes the plane will take off within a half-hour. The legislation also requires airlines to provide adequate access to food, water, and restrooms for grounded passengers. The bill imposes fines for violations, and requires the Department of Transportation to approve airlines' individual plans for delayed flights.

      Hanni's computer was illegally accessed over the summer; AOL confirmed that her e-mail account had been compromised. The hacker corrupted and destroyed some files, and copied others to a still-unknown location.

      The facts of Hanni's case are bizarre and surprisingly dramatic. Hanni apparently began exchanging data about delays on Delta Airlines with an employee of Metron Aviation, a Virginia-based corporation that specializes in improving traffic flow management and reducing airline delays. Metron counts Delta as a client.

      In a sworn affidavit, Frederick Foreman, the Metron employee, said that his superiors approached him in late September and informed him of the breach. They told him that the e-mails at issue were those between himself and Hanni, and that they were sent from his private, rather than company, e-mail account. Worse, Delta was furious that he had access to the flight delay data, despite the fact that it is publicly available information. Foreman was fired on the spot and escorted off of Metron's property.

      Delta is fighting back, calling Hanni's allegations "absurd." But the airline certainly has an interest in preventing the legislation from passing. Such a bill would cost airlines at least $40 million in lost revenue.

      Airlines have fought for years to keep Bill of Rights-style legislation from being passed. In 1999, the aviation industry headed off a similar bill by promising to meet tighter self-imposed standards. But support for federal legislation surged again in August, when 47 passengers were stranded on a grounded plane in Rochester, Minnesota. Inclement weather forced Continental Express Flight 2816 to divert while en route from Houston to Minneapolis, and passengers sat on the runway for six hours before finally being cleared for takeoff. The crew ran out of food almost immediately, and the small plane's sole toilet quickly filled up and sent a foul smell throughout the cabin.

      While Flight 2816 drew its share of negative publicity, it was hardly the first such incident in recent years. In 2007, a JetBlue flight sat on the runway for 11 hours at JFK International Airport in New York, and a 2004 Northwest flight from Amsterdam to Seattle took 28 hours once all was said and done. The Northwest passengers, too, suffered through food and water shortages and an overwhelmed toilet. A passenger told the Today show that "at one point it seemed like we would have a riot towards the end."

      Hanni's advocacy is based on personal experience. After being stranded on a tarmac in Austin in 2006, Hanni founded and began a determined push to get Congress to act.

      Passenger Rights Advocate Claims Delta Hacked Her Email ...
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      Is a Reverse Mortgage a Good Idea?

      Homeowners should get advice from objective source

      The recession hit at a bad time for people getting ready to retire. Not only did their retirement investments take a major hit, their homes also lost significant value.

      Many retirees are looking at reverse mortgages as one way to make up the difference, but are reverse mortgages a good idea? It all depends, financial experts say.

      A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash while you continue to live in it. The equity that built up over years of home mortgage payments can be paid to you in a lump sum, or in payments.

      But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. If you were to die, or move into a nursing home for example, the payment would come due.

      In recent years -- even before the financial meltdown -- these kinds of loans have gained in popularity. In fact, the government's FHA program created the first reverse mortgage.

      "The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program which enables you to withdraw some of the equity in your home," the U.S. Department of Housing and Urban Development says on its Website. "The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements and more."

      To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home. You are further required to receive consumer information from an approved HECM counselor prior to obtaining the loan.

      Why not just get a traditional second mortgage, or home equity line of credit? You can, of course, but you'll need sufficient income to qualify for the loan and you'll have to make monthly payments, which could eat into the equity you take out.

      No monthly payments

      The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, and the lower the interest, the more you can borrow.You don't make payments, because the loan is not due as long as the house is your principal residence.

      What happens when you die? Is there anything left for your heirs? It all depends. When your heirs sell your home, your estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to your heirs.

      Not all financial planners are sold on reverse mortgages. Anna Rappaport, a former president of the Society of Actuaries and now head of a Chicago consulting firm, says reverse mortgages may offer significant income potential to some households, but at relatively high cost and risk.

      "Furthermore, they may help older households remain in their homes, but they limit future housing choices and are presented as a last resort option by some financial planners," she said.

      Earlier this year AARP warned its members that scammers have moved into the business of offering reverse mortgages with mailing designed to look like they come from government agencies. Last year Florida Attorney General Bill McCollum warned his state's large elderly population to be very careful when considering a reverse mortgage.

      "When our senior citizens are concerned about finances and are seeking a legitimate option for financial relief, they should not have to worry about predatory lenders or brokers trying to capitalize on their precarious position," said McCollum. "Consumers should take every precaution to avoid scams and situations which could leave them in even worse financial shape."

      May be a bad deal

      Even if the reverse mortgage is not a scam, it may come with so many charges and hidden fees to make it a bad deal. And of course, the person trying to sell it to you probably won't mention that.

      If you think you might be interested in a reverse mortgage, your best course would be to speak with a HUD counselor, or a financial planner who does not sell mortgage-related products.

      Is a Reverse Mortgage a Good Idea?...
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      Attorneys General Back Consumer Financial Protection Agency

      State officials say consumers need new federal protection

      A number of attorneys general from around the country have voiced support for creation of a federal Consumer Financial Protection Agency, saying consumers need strong, unified protection.

      A measure now before Congress, H.R. 3126, would take those powers from the Federal Reserve and place it in the hands of independent regulators who would oversee credit cards and other financial services. The Fed, along with much of the financial services industry, opposes the legislation.

      "People are hurting," said Illinois Attorney General Lisa Madigan. "Now more than ever, consumers deserve an independent federal regulator whose sole mission is to protect their interests. They need protection at the federal level against the very practices that have caused so many of them to struggle financially, lose their jobs, see their home values decline and watch their college savings and retirement funds disappear."

      Madigan says the current financial crisis, caused in part by the banking industry's lending practices, is reason enough for a new consumer regulatory agency. Madigan noted that her office's Consumer Protection Division has heard from record numbers of consumers who are struggling to make their credit card payments, pay off their rising debts, and avoid getting buried under an avalanche of unfair rate hikes, penalty fees, and hidden charges piled on by their banks.

      "Abusive lending practices and regulatory loopholes are at the heart of the mortgage crisis that has devastated Arizona families and our state's economy," said Arizona Attorney General Terry Goddard. "I am aggressively prosecuting those who defraud Arizonans, but state action alone is not enough. Federal policy makers must reform the system to be more efficient and operate in the best interests of consumers."

      The CFPA would protect consumers by setting and enforcing national rules for the financial services industry. Overall, the new agency would consolidate authority in one place with the sole mission of looking out for consumers across the whole lending market. It would have broad authority over consumer financial products including mortgages, credit cards and payday loans with the power to enforce existing statutes and levy fines for violations.

      "Risky lending practices and a free-for-all in the financial services industry helped cause our current economic problems," said North Carolina Attorney General Roy Cooper. "Smarter regulation and stronger enforcement, from federal and state authorities, are clearly needed to protect individual consumers and our entire economy."

      Cooper noted that strong North Carolina laws against predatory lending prevented a foreclosure problem in the Tar Heel state until federal regulators "pre-empted" those laws, allowing national banks to engage in subprime lending.

      "Creation of a federal CFPA will be an important step toward a safer and sounder financial marketplace," he said.

      The administration proposal would give state regulators, including state attorneys general, the authority to enforce their state consumer protection laws against federally-chartered institutions. New Jersey Attorney General Anne Milgram said states need all the help they can get.

      "The breadth of financial fraud occurring in the current economic climate outstrips the resources of both the federal and state government - let alone either by itself," Milgram said in her letter to the Congress. "The joint resources of both federal and state government are not only desirable but are necessary if the security of consumers' financial resources is to be adequately protected."

      Attorneys General Back Consumer Financial Protection Agency...
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      Mattel Settles Suits Over Dangerous Toys

      Company agrees to consumer reimbursement, stricter quality control

      By Jon Hood

      October 15, 2009
      Mattel announced Tuesday that it has agreed to settle a group of cases arising from the company's recalls of millions of dangerous toys. The settlement, filed in Los Angeles on Tuesday, would put to rest 22 consolidated cases stemming from the massive 2007 recalls, which implicated toys containing lead paint and magnets that could harm children if swallowed.

      Under the terms of the agreement, customers who participated in the recalls will receive either $10 or 50 percent of the value of recall vouchers, whichever is greater. After Mattel initiated the recalls, consumers with defective toys received vouchers for the product's retail value. The settlement will allow those consumers another bite of the apple.

      Class members who didn't take part in the recalls, but who have an eligible toy or proof that they once owned one, will receive either a check or a voucher for the amount they originally paid. Consumers who destroyed a recalled toy are eligible to receive reimbursement for up to three items. Class members may also recoup money they spent for lead testing, with up to $600,000 of the settlement set aside for that purpose.

      A statement from Whatley Drake & Kallas, one of the firms representing the plaintiffs, said the settlement amounts to "tens of millions of dollars in monetary relief."

      The recalls, announced in August 2007, shone an uncomfortable spotlight on the toy industry and raised questions about manufacturing oversight and quality control. On August 2, 2007, Mattel recalled 967,000 toys contaminated with lead paint. That recall implicated 83 separate products, including Dora the Explorer and Sesame Street-themed toys. Two weeks later, on August 14, Mattel simultaneously recalled 436,000 die-cast toy cars covered with lead paint and a shocking 18.2 million toys containing small magnets that posed dangers if swallowed.

      The recalls also furthered concerns about the safety of foreign-made products. All of the recalled items were manufactured in China, and the incidents followed recalls of pet food implicating Chinese-manufactured ingredients. Even before the 2007 incidents, Mattel had initiated 16 recalls in a 10-year span.

      Tests showed that, in some cases, the level of lead in affected toys was 180 times the legal limit of 0.06 percent. To put things in perspective, that means the toys' lead level was twice that allowed before lead house paint was banned.

      A number of the recalled products contained tiny magnets with an unfortunate habit of falling out of the toys. The magnets were so small -- some measuring an eighth of an inch in diameter -- that parents often didn't notice them. If a child swallowed more than two, the magnets could attract one another and cause potentially fatal internal perforation. Three children were seriously injured when they swallowed more than one magnet, according to a recall notice by the Consumer Product Safety Commission (CPSC). The commission received over 170 incident reports of magnets falling out.

      After the recalls were announced, in an apparent attempt at damage control, Mattel CEO Bob Eckert took out a full-page ad in several nationwide newspapers touting the company's "long record of safety" and assuring parents that "nothing is more important than the safety of our children."

      The recalls were so extensive that Mattel had to set up a separate website to guide consumers through the process. That site includes links to the original recall announcement and a "recall brochure," an eight-page document with labeled pictures of recalled toys and a table listing affected date codes and the voucher amount for recalled toys. The incidents prompted Congress to pass new legislation that essentially banned lead in toys.

      In addition to consumer reimbursement, Mattel has agreed to donate $275,000 to the National Association of Children's Hospitals and Related Institutions and to set up a stricter quality-control process. Specifically, Mattel is required to annually verify to the court that it is meeting certain benchmarks, and to comply with new federal regulations and rules created by the American Society for Testing and Materials (ASTM).

      The settlement, which will require final court approval, follows Mattel's decision last year to pay $12 million to end investigations by a number of states into the recalls.

      Mattel Settles Suits Over Dangerous Toys...
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      Wysong Pet Food Pulls Products Due To Mold

      Third company in as many weeks to issue recall

      By Lisa Wade McCormick

      October 15, 2009
      A third pet food company in as many weeks has pulled some of its products off the market.

      Wysong Pet Food confirmed that it recalled five batches of Canine Diets Maintenance and Senior dry dog food -- manufactured in June and July 2009 -- because the products contain mold.

      "Penicillium and fusarium mold species have been identified," Lucas Wysong, the company's vice-president, told "All mycotoxin tests conducted thus far are negative with regard to the recalled products."

      "That we released some product that was not of the highest quality and may have caused any animals harm makes us frankly ashamed and heartsick," he added.

      Specifically, the Michigan-based pet food maker recalled the following batches of dry dog food:

      • Wysong Maintenance: lot #: 090617

      • Wysong Maintenance: lot #: 090624

      • Wysong Maintenance: lot #: 090706

      • Wysong Maintenance: lot #: 090720

      • Wysong Senior: lot #: 090623 talked to a pet owner in Hawaii who says her Doberman Pinscher recently died -- and her eight other dogs became sick -- after eating Wysong's moldy food.

      Lucas Wysong said his family's company is working closely with that pet owner. He called the case "exceptional" and said his company has received only two other minor complaints -- reports of diarrhea -- linked to the recalled food.

      Wysong told us his company discovered the problem in late September after it investigated customer complaints' of possible mold contamination in the food.

      In a prepared statement, Wysong said "At first report of potential mold in our products, Wysong launched an internal investigation. Batch records were re-examined, numerous bags of product opened and scrutinized, product samples were acquired from customers, and testing in-house and out-of-house conducted."

      That investigation, the company said, revealed the problem with the food stemmed from the "unusually high heat and humidity" on the days the products were made in June and July. The company also blamed the higher moisture issues on a "malfunctioning moisture checking device."

      Wysong said his company notified its distributors about the problem on September 29, 2009.

      "Once Wysong ascertained that there was mold presence and the potential for mold (based on moisture tests) in certain batches we alerted our distributors, who were the primary recipients of these batches of product," he said. "Distributors were instructed to dispose of the product, as well as pull product from stores that had already received the product."

      The company also said it contacted stores that received the recalled product and asked them to remove the food from store shelves. In addition, the company destroyed any "problematic" batches that remained in-house.

      Wysong also told us that his company notified the Food and Drug Administration (FDA)about the mold problem. The FDA's new Reportable Food Registry requires U.S. companies to file a report when there is a "reasonable probability" that their food will cause serious health consequences to people or animals.

      Wysong also posted a recall notice on its Web site, but that warning is buried under the dry dog food section.

      When asked why his company didn't immediately notify pet owners about the mold problem, Wysong said "The vast majority of the recalled product was sent to our distributors and retailers. We have therefore focused our efforts on alerting distributors and stores and asked them to dispose of the product."

      "In other words, we are focusing on the supply chain because the customers at the retail/store level are not identifiable," he said.

      Wysong admitted that posting a notice on the company's Web site is not the most effective way to reach customers who may have the recalled products.

      "The actual recipients of the product -- distributors and retailers -- have already been alerted, and those that buy our product in stores are likely not site visitors," he said. "The notice on the site therefore serves as an alert to those who did not receive these products."

      "We keep records of the distributors and stores that were shipped this product," he added. "Our best chance at notifying customers is through these mediums."

      Pet owners who have any of the recalled food should immediately stop feeding it to their dogs, Wysong said.

      "She did not deserve to die that way"

      That warning, however, came too late for Julie P. of Hawaii. She says her healthy Doberman Pinscher, Scarlet, died on September 26, 2009, after eating some of Wysong's moldy food.

      "Losing Scarlet was just horrible and totally needless," Julie told us. "She died a very painful and agonizing death on the morning of her fifth birthday after suffering all night long. She had gone completely toxic."

      But Julie's nightmare didn't end with Scarlet's death. Her other eight Dobermans also became seriously ill after eating Wysong's moldy food.

      "They're lethargic and continued to get more and more down as time went by," says Julie, who switched her dogs to Wysong in August. "They have very red eyes with yellow gunk that they have had the whole time I was feeding Wysong. That has now finally gone away because I took them off the food after Scarlet died," she said.

      "They also had severe diarrhea the whole time, too. At first I thought it was from the changing of their food, but it got worse with some bloody stools and did not go away until again I stopped feeding them Wysong."

      One of Julie's dogs, a male named Doug, also developed a sore on his leg that would not heal and had "dry flaky skin with red bumps on his neck."

      "Several of my other dogs, including my Daddy, Ruby, and Maybelle all have a bad rash on their groin areas that I also could not get to go away for the last two months," Julie says. "They have had gaseous upset stomachs many times in the last two months. They have been throwing up, and at times, Doug refused to even get near his feeding dish."

      Julie says she didn't make a connection between Wysong's food and her dogs' death and illnesses until she opened a new bag on October 4, 2009.

      "When I opened that bag, I noticed a moldy look to the kibble -- a look I had seen on several previous bags in the two months I feed it to my dogs. I did not notice any smell, but I think my dog Doug did."

      Julie contacted the company that same day. "I was afraid to feed them what looked to me like moldy food," she says. "And I started putting all these symptoms together as being from the food."

      "I'm not sure how I can prove that all of these symptoms were from eating the bad dog food," she adds. "But now that I've stopped feeding the food to them, they are all getting better, which seems to prove that it was."

      Julie says Wysong should give her some compensation -- at least enough to cover her vet bills -- but no amount of money can ever replace Scarlet.

      "She did not deserve to die that way," Julie says. "She was still a young and vibrant dog and very, very special to us. She could have gone on to live another ten's hard to put a price tag on that. What would you pay to have your loved one with you for all those days?"

      Lucas Wysong told us his company is "immensely sorry" for any worry or inconvenience this issue has caused its customers.

      In Julie's case, Wysong said his company is in "direct communication" with her regarding the death of Scarlet and the illnesses of her other dogs.

      "We have requested specific tests be conducted in an attempt to definitively determined the cause of death/sickness," he said, adding the company has not received any other reports of serious adverse reactions linked to the recalled food.

      The company, he added, has also taken steps to ensure a mold problem like this doesn't surface again.

      "We are in the midst of scrutinizing each and every step of our quality assurance processes," he said. "All products going back for months are being tested for moisture and mold, thus eliminating the possibility of further problematic product (if any exists) being released.

      "We vow to all interested parties to do everything we can to ensure that this never happens again."

      Julie, however, isn't taking any more chances with Wysong's food.

      "Like a lot of people I am going to be making my own food for my dogs. But with this many to feed, that's a challenge. It can be hard to get all the vitamins in there, so I would like to supplement with a small amount of kibble."

      Meanwhile, pet owners who have any of Wysong's recalled food -- or questions about the recall -- can e-mail the company at

      Third in a series

      Wysong is the third pet food maker in recent weeks to quietly pull some of its products off the market.

      Earlier this month, Diamond Pet Foods removed some of its Premium Edge Finicky Adult and Hairball cat food off the market because of deficiencies in the thiamine levels.

      Diamond's action came just days after Nutro Products quietly pulled from the market three types of its puppy food because of a production error.

      The company said it voluntarily withdrew the puppy food after it had discovered pieces of melted plastic in the "production line of select varieties of NUTRO dry dog and cat food products."

      Wysong Pet Food Pulls Products Due To Mold...
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      No Social Security Cost Of Living Increase In 2010

      COLA wasn't triggered because prices remained flat

      The Social Security Administration has made it official, announcing Thursday what many had predicted; there will be no cost of living increase in Social Security Benefits next year.

      It will be the first year without an automatic Cost-of-Living Adjustment (COLA) since the adjustment mechanism went into effect in 1975.

      "Social Security is doing its job helping Americans maintain their standard of living," Michael J. Astrue, Commissioner of Social Security said. "Last year when consumer prices spiked, largely as a result of higher gas prices, beneficiaries received a 5.8 percent COLA, the largest increase since 1982. This year, in light of the human need, we need to support President Obama's call for us to make another $250 recovery payment for 57 million Americans."

      But senior advocacy groups were quick to label the announcement a disaster for seniors.

      "This is a serious problem and unless Congress acts, millions of seniors will see their checks stay flat or even reduced while the costs of prescription drugs, utilities and health care continue to climb fast," said Barry Jackson, AARP's online advocacy manager in an email sent to the organization's millions of members just minutes after the announcement was made.

      The Social Security Act provides that Social Security and Supplemental Security Income benefits increase automatically each year if there is an increase in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year to the third quarter of the current year. This year there was no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2009.

      In addition, because there was no increase in the CPI-W this year, under the law the starting point for determinations regarding a possible 2011 COLA will remain the third quarter of 2008.

      But Jackson said the CPI-W is not a reliable indicator of the expenses faced by seniors. "The reality is that the bad economy this year has hit seniors particularly hard. They spend an average of $4,400 out of pocket every year on health care alone. With home values dropping, losses in the stock market, and low returns on interest bearing accounts, it's no wonder that more Americans are counting on the promise of Social Security," he said in his email.

      Jackson said seniors should demand that Congress provide "at least modest relief."

      Some other changes that would normally take effect in January 2010 based on the increase in average wages also will not take effect, even though average wages did increase. Since there is no COLA, the statute prohibits an increase in the maximum amount of earnings subject to the Social Security tax as well as the retirement earnings test exempt amounts. These amounts will remain unchanged in 2010.

      Medicare changes?

      The Department of Health and Human Services has not yet announced if there will be any Medicare premium changes for 2010. Should there be an increase in the Medicare Part B premium, the law contains a "hold harmless" provision that protects about 93 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit.

      Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2010. On September 24th, the House passed legislation by 406-18 that would, on a fully paid-for basis, prevent abnormally large premium increases.

      President Obama has asked the Senate to enact this legislation before it becomes too late for the Social Security Administration to update its computer systems to implement this needed change, the agency said.

      No Social Security Cost Of Living Increase In 2010...
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      Despite Rules Changes, Banks Still Depend On Overdraft Fees

      Customers remain at risk of getting dinged with "courtesy" charges

      Amid consumer outrage and Congressional pressure, banks are beginning to make changes to their overdraft fees. But they aren't about to wean themselves off fees altogether, and that has consumer groups demanding more reforms.

      "None of the largest banks reduced their overdraft fees, which average $35 per overdraft, or dropped sustained overdraft fees tacked on if consumers cannot repay in just days," noted Jean Ann Fox, Director of Financial Services for the Consumer Federation of America. "For a $100 overdraft repaid in one week at that $35 fee, consumers are paying 1,820 percent APR if computed in the same way as a short-term loan. A single $10 overdraft loan can still cost up to $70 if not repaid in just five days."

      Banks extend credit when they cover overdrafts for a fee. However, the Federal Reserve does not require banks to comply with the credit laws that apply to other short-term cash loans. As a result, consumers are permitted to overspend their checking accounts without affirmative consent, do not get comparable cost-to-borrow information, and are not warned when a transaction will trigger an overdraft.

      It now appears the Federal Reserve will change rules requiring banks to allow customers to decide whether they want their banks' "courtesy" overdraft protection, in which the bank covers the overdraft but charges the consumer an overdraft fee of about $30 per overdraft. Fed Governor Daniel Tarullo told the Wall Street Journal that change is likely.

      JP Morgan Chase, Wells Fargo and Bank of America, anticipating these changes, recently announced liberalization of their policies that assess consumers a hefty service charge when they make debit purchases that exceed the funds in their accounts. Some consumers who routinely draw their checking account down to the bare minimum can end up paying hundreds of dollars a month in overdraft fees.

      "Overdraft loans are one of the most expensive and exploitative credit products on the market," said Chi Wu, National Consumer Law Center Staff Attorney. "A few limited reforms by a half dozen banks aren't going to stop the abuses. These reforms are too little and too late, coming after years in which banks made billions off of overdraft abuses."

      Recently announced changes in overdraft programs by some large banks are unlikely to reduce costs significantly to customers, said the groups. Some banks have changed the threshold that triggers overdraft fees and have lowered the total number of overdraft fees a consumer can be charged in one day. But none of the banks are lowering the fees charged for initial or sustained overdrafts.

      Chase Bank plans to permit its existing and new customers to sign up affirmatively to use overdraft loans, while other large banks have announced that they will permit existing customers to opt out of using the banks' most expensive form of credit.

      In some cases, banks will permit only new customers to opt in to some forms of overdrafts in the future. Citibank does not permit its customers to incur overdrafts when using debit cards or at ATMs, and Citibank customers can incur four overdraft fees per day for checks.

      "The Consumer Financial Protection Agency, under consideration this month by the House Financial Services Committee, is needed to restore consumer protections to bank overdraft lending," said Travis Plunkett, CFA's Legislative Director. "The Consumer Financial Protection Agency will monitor these types of transactions and provide a floor of protections for consumers so that Americans are not left to the mercy of the banks to decide on fundamental protections and fair transactions going forward."

      What to watch out for

      Consumers burned by these charges on a regular basis are unlikely to agree to continue the bank's "overdraft protection" once they have the choice, so bank revenue from these fees will probably drop sharply.

      But banks still depend on fees to bolster profits and consumers should be aware of them. To make up for the loss of overdraft fees, these other fees might increase, and new fees might be added.

      For example, when a credit card company offers you an attractive deal on a credit card if you will transfer balances from another card, keep in mind that transfer can come at a cost. Some banks charge up to five percent for a balance transfer, meaning the cost of moving $10,000 can cost $500.

      The same is true for a cash advance. To take out a "loan" from your credit card, the bank will assess a fee, or surcharge, often between two and five percent. That can make a cash advance an expensive proposition -- something that shouldn't be considered except in a dire emergency.

      Using the ATM can also come with fees, though most banks don't charge their customers for using the machines within the bank's network. But using a "foreign" ATM, or one outside the bank's network, can be expensive. Your bank will charge a fee, as will the "foreign" bank. A way to avoid these fees is to make a debit purchase at a store where you can get cash back. That transaction, in most cases, doesn't carry a fee.

      Most banks also charge for checking services unless the customer meets certain conditions. For example, the fee might be assessed when the balance in the checking account falls below a certain level.

      Usually, that minimum balance isn't all that high, so if a consumer has a savings account, it would be much better to keep the savings in a checking account, to maintain the minimum balance. Avoiding a monthly surcharge usually offsets the less than one percent interest usually paid on a passbook savings account.

      Despite Rules Changes, Banks Still Depend On Overdraft Fees...
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      Annual Credit Card Fee Makes a Comeback

      More consumers likely to join those already paying it

      By Mark Huffman

      October 14, 2009
      When Congress passed credit card reform legislation in May, many industry analysts warned that lenders would find new ways to extract the revenue they would soon be losing from consumers.

      Among the mentioned new fees is actually an old one -- the annual fee.

      When credit cards were first introduced almost all cards charged an annual fee. But as the industry grew more competitive, with more and more banks and financial services firms offering cards, the annual fee gradually disappeared from major bank cards.

      Now, Bank of America says it will begin test marketing a new "membership" fee for some of its customers. In other words, not every customer will be assessed the charge. If those who are charged don't cancel their cards or protest too loudly, presumably all customers will soon be required to pay it.

      While other banks are expected to follow suit, it may be helpful to point out that many current credit card users are already paying an "annual fee" for the privilege of carrying a credit card.

      Small credit card issuers that target the subprime market have always charged a high annual fee, one of the many things making these low credit limit cards such bad deals.

      Michael, of Hershey, Pa., said he paid a $100 annual fee recently on his Imagine Visa card.

      "This month I get a letter stating that their credit card program has ended, and that my account will be closed immediately," he told "If they would have sent a letter, stating their intentions, before charging me the annual fee of $100, I would have paid the balance off and cancelled the card myself."

      But to other credit card customers, the appearance of an annual fee on their credit card bill comes as a surprise. Rick, of Erskine, Minn., said he had never been assessed an annual fee on his Washington Mutual credit card. Then Washington Mutual was acquired by JP Morgan Chase earlier this year.

      "I got a charge for over the limit, which was only a few bucks over my limit," Rick told "I looked at my account and saw that what put me over was a $39 annual fee. I had not warning about this charge and didn't know about it."

      When major banks offer a credit card in partnership with another business, such as a hotel or airline, customers often get slapped with an annual fee, although some customers might overlook it. Jennifer, of Murray, Utah, wanted to use her Marriott Rewards Credit Card for a major purchase and called the company to determine how much credit she had.

      "I proceeded with the charge and was quickly notified that it was declined because it put me over the credit limit by $65 - their annual fee that is not published on all of the marketing material," Jennifer told "I called customer service to rectify the situation, they passed me on to three different representatives before they told me it was my fault for not expecting the annual fee to be included in my balance."

      Last year Anna, of Brooklyn, N.Y., lost her Citicard and asked for a new one. The replacement card was Citi's new Diamond Preferred Rewards card, even though she just wanted a replacement for her old card.

      "When I called to inquire about the change, I was told that the new card works just the same as the old card, and only adds the "Thank You Network" feature, at no charge," she told "I asked if I can instead have my old card back, and was told no. Now, less than a year later, I'm being charged a $30 membership fee, for doing nothing more than always paying the card charges in full every month. This change comes without any notice, although the company claims that there was a letter."

      Is there anyway to get out of paying an annual fee? Maybe. Scott Bilker, who writes the Dollar Stretcher Blog and is author of Talk Your Way Out Of Credit Card Debt, suggests calling and asking politely if the bank would waive the fee. He says in his experience, 95 percent of the time the bank will agree.

      Annual Credit Card Fee Makes a Comeback...
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      FTC Stops Two Deceptive Telemarketing Operations

      Magazine seller, medical discount plan pitchmen barred from false claims

      Two telemarketing operations targeted by the Federal Trade Commission as part of a major law enforcement sweep last year must stop the deceptive tactics they allegedly used to trick consumers into buying overpriced magazine subscriptions and worthless medical discount plans -- and must pay a total of $2.06 million in consumer redress.

      The FTC filed the two cases in 2008 as part of "Operation Tele-PHONEY," the largest telemarketing fraud sweep ever coordinated by the agency. With the announcement of a settlement in one case and a court order in the other, 11 of the 13 "Tele-PHONEY" cases have been resolved to the benefit of consumers.

      In the magazine telemarketing case, the FTC charged that U.S. Magazine Services and its principal misled consumers by understating the monthly charges for its subscriptions. Although the actual monthly charge was disclosed in a later call -- often after the consumers provided their billing information -- some consumers learned of the charge only after checking their credit card bill or debit account balance.

      Consumers who subsequently tried to cancel the subscriptions were told that no cancellations were allowed. In addition, the defendants violated the FTC's Telemarketing Sales Rule by failing to disclose important terms during their sales pitches.

      The settlement order resolving the Commission's charges bars the defendants from making any further misrepresentations when marketing any product or service, charging consumers without their express informed consent, or violating the Telemarketing Sales Rule. The order requires them to disclose important facts before consumers provide their billing information, including payment details and refund and cancellation policies. It also includes a $600,000 judgment against the defendants, to be paid over the next year.

      In the other case, the Commission announced a court order and default judgment against Union Consumer Benefits and its owner, Naeem Alvi, who were charged with marketing worthless medical discount packages to elderly consumers throughout the United States.

      The FTC charged them with using deception to persuade consumers to reveal their bank account information, and often pretending they were calling from the Social Security Administration, Medicare, or the consumers' banks.

      According to the FTC's complaint, the defendants offered "free" benefits or a medical discount plan that -- for a one-time fee -- would supposedly save consumers money on medical care and prescriptions. The company then debited $399 from the consumers' bank accounts, sending them only a package containing a prescription discount card that didn't work. The FTC also charged the company with calling consumers whose telephone numbers are on the National Do Not Call Registry.

      The court order bars the defendants from making misleading statements or misrepresentations about any product or service, including its effectiveness, total cost, conditions or restrictions, or refund policies. They also are barred from misrepresenting that they are affiliated with government programs such as Medicare or Social Security, or consumers' banks, or that they can provide consumers with substantial discounts on medical care or prescriptions in exchange for a one-time fee.

      In addition, the order bars them from violating the FTC's Telemarketing Sales Rule, including the provisions of the National Do Not Call Registry, prohibits them from debiting consumers' accounts without their consent, and imposes a $1.46 million judgment to provide redress to defrauded consumers.

      FTC Stops Two Deceptive Telemarketing Operations...
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      AT&T Missouri Pays $1.4 Million To Settle False Claims Suit

      Allegedly exploited E-Rate Program for needy schools

      AT&T Missouri, which used to do business as Southwestern Bell Telephone L.P., has agreed to pay the U.S. Government $1.4 million as part of a settlement of a civil lawsuit alleging that the company violated the False Claims Act in connection with the Federal Communications Commission's E-Rate program.

      The U.S. Department of Justice, which brought the action, announced the settlement.

      The E-Rate program, which Congress created in the Telecommunications Act of 1996, provides funding for needy schools and libraries to connect to and utilize the Internet. Under the program, which is supported by fees collected from telephone users, schools apply for funds to pay for hardware and monthly connectivity service fees.

      The government contended that AT&T Missouri provided false information to the E-Rate program and otherwise violated the program's requirements by engaging in non-competitive bidding practices for E-Rate contracts. The Justice Department further alleged that AT&T Missouri employees colluded with officials in the Kansas City, Mo., School District to award contracts to the company, extended contracts in violation of E-Rate rules and provided meals and other inducements to school district employees.

      The government previously filed suit against and settled with the Kansas City, Mo., School District.

      These allegations arose from a False Claims Act lawsuit filed in Missouri federal court by American Fiber Systems Inc., which submitted an unsuccessful bid to the Kansas City, Mo., School District for the E-Rate contracts that were awarded to AT&T Missouri.

      The False Claims Act allows private parties to bring fraud claims on behalf of the United States and to share in the proceeds of any recovery. American Fiber Systems Inc.'s share of the settlement will amount to $195,000.

      "The E-Rate program provides critical support for Internet access to the most under-served schools in the nation," said Tony West, Assistant Attorney General for the Department of Justice's Civil Division. "Working with our partners at the FCC's Office of the Inspector General, the Department of Justice is committed to ensuring that this important program, which benefits our neediest children, not be misused by those seeking to defraud the public."

      AT&T Missouri Pays $1.4 Million To Settle False Claims Suit...
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      Consumer Legislation Faces Key Vote This Week

      Business groups mount strong opposition

      A bill to create a consumer financial protection agency within the federal government faces its first Congressional vote this week. The measure, which has the strong backing of the White House, is expected to be approved by the House Financial Services Committee.

      The legislation, which would give the new stand-alone agency authority to set rules regarding credit cards and other financial services products, has strong opposition. The banking industry is adamantly opposed, as is the Federal Reserve, which currently has that authority.

      In his weekly radio address over the weekend, President Obama urged lawmakers to approve the new agency and not listen to the business lobbyists who oppose it.

      They're doing what they always do -- descending on Congress and using every bit of influence they have to maintain a status quo that has maximized their profits at the expense of American consumers," Obama said in his remarks. "That's why we need a Consumer Financial Protection Agency that will stand up not for big banks and financial firms, but for hardworking Americans."

      Obama sent the bill to Capitol Hill in June, but it has progressed slowly, as much of Congress's attention over the summer was fixed on health care legislation. House Speaker Nancy Pelosi echoed Obama's plea, saying the agency would prevent abusive anti-consumer practices that she said contributed to the global financial crises.

      Along with robust supervision of financial firms and strong oversight of their practices, this agency will prevent the egregious abuses that hurt working families, the young and the elderly, and the millions of consumers who entrusted their hard-earned dollars to financial firms that deceived them, Pelosi said. "American families deserve a financial marketplace they can trust to protect their financial futures and that no longer rewards reckless behavior on Wall Street.

      Barring a surprise defection or two by Democrats on the House Financial Services Committee, the measure should pass along party lines this week and move to the House floor for a vote, where its outcome is less certain. While nearly all Republicans oppose it, so do some Democrats, who have felt pressure from community bankers in their districts.

      "Consumer protection has been in hands of federal bank regulators, and I figure it is fair to say that no calluses will be found on the hands of those that had consumer responsibilities, because there is no evidence of hard work there," said House Financial Services Committee Chairman Barney Frank, during his panel's hearing on the legislation last month.

      The U.S. Chamber of Commerce, which has been leading the lobbying effort against the legislation, issued a statement calling for expanded power for existing regulators, but said creating a new agency is the wrong approach.

      We disagree that a massive new federal agency with unprecedented powers over vast segments of the business community will be good for consumers, for America's job creators or for the economy," David Hirschmann, president of the Chamber's Center for Capital Markets Competitiveness, said in the statement. "We disagree that adding a new agency atop a broken regulatory system solves the problem or closes regulatory gaps. And, we don't agree that consumers are well served by allowing the states to each create different disclosures, and regulations on top of those created by the proposed new regulator."

      Consumer Legislation Faces Key Vote This Week...
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      Nissan Recalls Cube, Murano, Rogue Models to Fix Tire Pressure Sensor

      Infiniti M35, M45 also recalled for same problem

      October 12, 2009
      Nissan is recalling a number of models to fix a problem with the tire pressure monitoring system.

      Included in the recall are:

      Vehicle Make


      Model Year


      The recall affects vehicles sold or registered in the following states:


      The company said material used to secure the tire pressure sensor may corrode and crack in areas with heavy concentrations of road salt. That could cause the tire pressure light to illuminate in error. If the light is disregarded, drivers may not be aware of dangerously low tire pressure.

      Dealers will replace the part when the recall begins in November. Owners may contact Nissan at 1-800-647-7261 and Infiniti at 1-800-662-6200.

      Consumers may contact the National Highway Traffic Safety Administration (NHTSA) at 1-888-327-4236 (TTY: 1-800-424-9153) or at

      Nissan Recalls Cube, Murano, Rogue Models to Fix Tire Pressure Sensor...
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      New York Makes Arrests In Mortgage Fraud Ring

      Subprime lending not the only contributor to housing collapse

      October 9, 2009
      Targeting corruption in the lending industry, the state of New York and the U.S. Attorney's Office for the Southern District of New York have teamed up to take down what they call a mortgage fraud ring.

      New York Attorney General Andrew Cuomo said the 12 defendants, including lawyers, loan officers, and providers of false identification, illegally obtained $9 million in loans for phantom homebuyers.

      As alleged in the indictment: Between 2005 and 2007, the defendants engaged in an illegal scheme to trick various mortgage lending institutions into giving loans for the purchase of homes in New York City and Long Island. In many instances, the defendants used fake identity information - like driver's licenses and bank statements - and presented imposters at home closings who claimed to be those identities.

      Through the scheme, the defendants obtained dozens of home mortgage loans with a face value of approximately $9 million. Some loans were in the names of individuals who did not exist and others were in the names of individuals whose identification information had been misused. Most of these loans are now in default.

      "This is exactly the type of criminal activity that was caused by - and contributed to - the terrible mortgage crisis facing our nation," said Cuomo. "These defendants were allegedly able to obtain millions of dollars in home loans for phantom buyers precisely because obtaining these loans was far too easy at the time. As we work to reform our nation's mortgage regulation, law enforcement must continue to collaborate to ensure that those who exploited the system for their personal financial gain are brought to justice."

      "The U.S. economy is still reeling from the damage done by mortgage fraud schemes like the one unraveled today," said Preet Bharara, the United States Attorney for the Southern District of New York. "These charges expose the corrupt conduct of industry insiders who allegedly manipulated the mortgage markets to fraudulently obtain millions in loans. What is especially disturbing is that two of the alleged fraudsters were attorneys who used their law degrees to cheat the system and line their pockets. We will continue to prosecute corrupt custodians of the mortgage markets to the full extent of the law because our financial system depends on it."

      The twelve defendants include settlement attorneys, attorneys involved in mortgage loan closings, loan officers, loan processors, as well as individuals who produced false identification documents, secured the fake buyers, and those who pretended to be the fraudulent identities at the closings. All defendants are charged with Conspiracy to Commit Bank Fraud and Wire Fraud, which carries a maximum sentence of 30 years' imprisonment.

      New York Makes Arrests In Mortgage Fraud Ring...
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      Beware Of Chimney Repair Scams

      Phony repair jobs a seasonal concern

      As weather turns colder and homeowners begin using their fireplaces again, chimney fires aren't the only hazard they face. This is the time of year the old "chimney repair scam" makes a reappearance.

      In New Jersey, the Division of Consumer Protection says it has received 24 consumer complaints related to chimney and fireplace repairs between September 2008 and August 2009.

      "Fall is the busy season for cleaning chimneys and removing creosote generated by wood-burning fireplaces. It's also the time of year when consumers should be cautious when someone offers to check their chimney and make repairs," said David Szuchman, New Jersey's Consumer Affairs Director.

      In New Jersey -- and in many other states -- anyone offering to perform chimney repairs must be registered as a Home Improvement Contractor under state law. Chimney sweeps who only clean chimneys and do not perform repairs usually don't face such requirements.

      Consumers should always demand a written contract that specifies the work to be performed, the materials that will be used and the total price, for any home improvement project costing more than $500.

      "It's always a good idea to obtain more than one bid," Szuchman said. "Multiple bids allow consumers to verify that different contractors are finding the same type of problem when each performs an inspection," said.

      Consumers should be alert to the following scenarios as possible scams:

      • Someone comes unsolicited to your home, offers to do a free inspection of your chimney and offers a "special deal" to fix an alleged problem.

      • Someone claims to be "working in the neighborhood" and has leftover supplies to repair your chimney but the work has to be done right away.

      • Someone is unwilling to show you the problem area and explain the problem in detail.

      In most states, a consumer has the right to cancel a home improvement contract within 72 hours of signing the contract. A consumer should not feel pressured into allowing work to begin immediately.

      Consumers who have limited mobility and cannot climb ladders should be cautious about claims of loose bricks or missing mortar if someone goes onto their roof to inspect the chimney.

      Consumers also should make sure all required permits have been issued by their municipal construction code office prior to the contractor beginning work.

      Beware Of Chimney Repair Scams...
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      Coors Faces Class Action

      Alleges "Silver Ticket Sweepstakes" provided bogus entry codes

      A beer-drinking football fan has filed suit against MillerCoors, alleging that the brewing titan gave him no chance of winning a sweepstakes being marketed to Coors Light drinkers.

      Mario Aliano, of Illinois, picked up a case of ice cold Coors Light after he saw an ad touting the "Coors Light Silver Ticket Sweepstakes," a contest entering Coors drinkers to win NFL-themed prizes. The sweepstakes offers a grand prize of two tickets to a 2009 regular-season NFL game, and a "first prize" of a $100 gift certificate to the NFL's online store. The sweepstakes runs from August 1 until October 31.

      Under the terms of the sweepstakes, a unique code is placed in each Coors Light carton. Consumers can either enter the code on the official sweepstakes website or text it to a Coors-provided phone number to see if they have won.

      Aliano took the beer home and twice tried to enter his code on the sweepstakes website. Both times, Aliano's suit claims, he received an error message calling his code "invalid." He then attempted to have Coors text the results to his cell phone, but again received the same message.

      The suit says that Coors printed ads for the sweepstakes right on the side of Coors Light cartons, enticing shoppers already perusing the beer aisle to opt for a case of the infamous "Silver Bullet."

      Aliano is bringing the suit as a class action, on behalf of everyone in the U.S. who bought sweepstakes-eligible Coors or Coors Light beer and were told they had an invalid code. Aliano's complaint alleges that Coors issued around five million tickets bearing invalid codes, and that, had class members known this, they wouldn't have bought the beer in the first place. The complaint points out that a consumer would have no way of knowing if his code was invalid before entering it on the website.

      While Aliano's outrage will probably resonate with football fans and Coors drinkers everywhere, the case will likely be an uphill battle for the putative class. First, and most importantly, it will be very difficult to prove that every class member bought the beer in anticipation of entering Coors's sweepstakes. There are plenty of consumers who buy Coors on a regular basis, and many of them are football fans anyway -- after all, Coors is the official beer of the NFL. Individual issues of causation routinely doom consumer class actions, and Aliano is likely to have a hard time convincing a judge that his case is appropriate for class treatment.

      Additionally, and more fundamentally, Aliano doesn't explain why he thinks that millions of consumers have received invalid codes. The complaint alleges that Coors has received "hundreds" of complaints about the issue, but goes no further than that. Granted, the barest factual allegations are enough to file a complaint, but Aliano seems to be stretching a bit here.

      Miller and MolsonCoors, two giant American brewers, merged in 2007 to better compete with brewers like Anheuser Busch (which has since merged with InBev, a Belgian company). Coors has had its share of high-profile directors, including current chairman Pete Coors, who made an unsuccessful 2004 bid for the U.S. Senate in Colorado.

      A beer-drinking football fan has filed suit against MillerCoors, alleging that the brewing titan gave him no chance of winning a sweepstakes being marketed...
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      Senate Urged To Pass Food Safety Modernization Act

      Leafy greens, eggs, & tuna top list of riskiest FDA-regulated foods

      Leafy greens, eggs, and tuna are on the top of a list of the ten riskiest foods regulated by the Food and Drug Administration. Those and seven other foods account for nearly 40 percent of all foodborne outbreaks linked to FDA-regulated food, according to a new report.

      That's no reason to forgo the occasional salad Nioise, says the Center for Science in the Public Interest, which wrote the report, nor need one pass up tomatoes, sprouts, and berries, even though those foods are also on the list. But the nonprofit watchdog group says the presence of so many healthy foods on such a list is exactly why the United States Senate should follow the House and pass legislation that reforms our fossilized food safety laws.

      The FDA is responsible for regulating produce, seafood, egg and dairy products, as well as typical packaged foods such as cookie dough and peanut butter -- nearly 80 percent of the food supply. More than 1,500 separate, definable outbreaks were associated with the top 10 riskiest FDA-regulated foods, causing nearly 50,000 reported illnesses. Since most foodborne illnesses are never reported, these outbreaks are only the tip of a large, hulking iceberg.

      "Outbreaks give the best evidence of where and when the food safety system is failing to protect the public," said CSPI staff attorney Sarah Klein, the lead author of the report. "It is clearly time for FDA's reliance on industry self-regulation to come to an end. The absence of safety plans or frequent inspections unfortunately means that some of our favorite and most healthful foods also top the list of the most risky."

      CSPI identified 363 outbreaks linked to iceberg lettuce, romaine, spinach, and other leafy greens, variously contaminated with E. coli, Norovirus, or Salmonella, and causing 13,568 cases of illness. Manure, contaminated irrigation water, or poor handling practices are all possible culprits in those outbreaks. The FDA does not currently require farms and processors to have written food safety plans, nor does it provide specific safety standards for even the largest growers to meet.

      Eggs were linked to 352 outbreaks and 11,163 illnesses; tuna to 268 outbreaks and 2,341 cases of illness, and oysters -- despite their limited consumption -- to 132 outbreaks causing 3,409 illnesses. Outbreaks involving potatoes don't seem to make headlines, but nevertheless they are linked to 108 outbreaks and 3,659 cases of illness. Cheese, ice cream, tomatoes, sprouts, and berries round out the top 10 list. The data come from CSPI's Outbreak Alert! Database, which includes outbreaks from 1990 to 2006, using data collected from the Centers for Disease Control and Prevention and other sources.

      In July, the House of Representatives passed the Food Safety Enhancement Act with broad, bipartisan support. That measure would give FDA authority to require food processors to design and implement food safety plans, provide specific safety standards that growers would have to meet, and require FDA to visit high-risk facilities every 12 months or less, and most other facilities every 3-4 years. In the Senate, similar legislation, sponsored by Sen. Richard Durbin (D-IL), is pending.

      "As consumers, we don't have the power to check on these products," said Kathleen Chrismer, whose 9-year-old daughter Rylee Gustafson was hospitalized for a month after becoming seriously ill from eating spinach salad contaminated with E. coli O157:H7. "Without a better system to protect us, we are totally at the mercy of the next outbreak."

      Senate Urged To Pass Food Safety Modernization Act...
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      Report: Abuses Appear In Reverse Mortgage Market

      Seniors and their home equity are threatened

      Abuses and abusers from the subprime mortgage market have begun showing up in the reverse mortgage market, putting at risk the equity and savings of millions of seniors, according to a report issued by the National Consumer Law Center.

      "In the reverse mortgage market, seniors face some of the same aggressive lending practices that were common in the subprime lending boom," said Tara Twomey, an NCLC attorney and author of the report. "Well-funded marketing campaigns and perverse incentives to brokers are targeting seniors' home equity and using reverse mortgages as their tools."

      Annual reverse mortgage volume has topped 110,000 units and $17 billion, with top banks like Wells Fargo and Bank of America and large insurance companies like Genworth and MetLife leading the way. Despite a slowdown in originations due to the recession, reverse mortgage originations in 2009 continue at a record pace.

      "Many of the same players that fueled the subprime mortgage boom -- ultimately with disastrous consequences -- have turned their attention to the reverse market," says the report titled Subprime Revisited: How the Rise of the Reverse Mortgage Lending Industry Puts Older Homeowners at Risk.

      "Lenders, including some of the nation's largest banks, view that market as a source of profits that have dried up elsewhere. Mortgage brokers see it as a new source of rich fees. Predators who once reaped profits from exotic loans have now focused on wresting more wealth from vulnerable seniors. And securitization, which allowed subprime loan originators to disassociate themselves from the downside risks of abusive lending, is becoming commonplace in the reverse mortgage industry," according to the report.

      U.S. Senator Claire McCaskill says the report validates the need for regulatory improvements in this industry in order to protect America's seniors as well as our tax dollars. "We've seen this movie before and it didn't have a pretty ending. Abuses in the subprime lending market almost brought down our economy. Now we're seeing similar abuses with reverse mortgage lending - something needs to be done before more lifesavings are depleted and more tax dollars are drained," said McCaskill.

      The report describes what's termed "the growth of an aggressive and dangerous reverse mortgage sales culture that has outstripped the limited resources and uncertain funding for the counseling agencies that current laws rely on to prevent reverse mortgage abuses."

      "We urgently need stronger protections for reverse mortgage borrowers, especially a suitability standard that obligates those who arrange and profit from reverse mortgage deals to seek to avoid harming the financial interests of elderly clients," Twomey said. The report also calls for the extension of reverse mortgage protections to all equity conversion products aimed at seniors, a prohibition on yield spread premiums and other perverse incentives in the reverse mortgage market and better data collection by lenders.

      "Reverse mortgages are complicated and expensive financial products that must be used wisely and regulated carefully, or profit and volume driven sales efforts can open the door to abuses and fraud," said Odette Williamson, an NCLC attorney.

      The report also highlights what it calls "the danger of predators who use reverse mortgages as tools in schemes to steal the home equity of unsuspecting seniors, or to fund the purchase of expensive insurance and financial products that pay high commissions."

      Report: Abuses Appear In Reverse Mortgage Market...
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      Massachusetts Seeks Restitution In Alleged Health Club Scam

      Club sold memberships but never opened

      By Mark Huffman

      October 7, 2009
      Consumer complaints about health clubs are quite common - the clubs' sales and marketing techniques in particular. But in Massachusetts, Attorney General Martha Coakley has encountered a new one.

      Coakley's office has filed a lawsuit against Fit 'N Fitness, a Taunton, Massachusetts health club, its manager John Copell and an employee Gail Barbas, for their roles in soliciting and collecting membership fees for a health club that failed to open.

      "Particularly where our economy is still fragile, consumers should be careful before signing contracts and paying advance fees," Coakley said. "It is not uncommon for a business to fail before it has a chance to open. Consumers need to know with whom they are contracting with and the circumstances under which they are able to cancel the contract."

      The complaint alleges that the defendants knowingly solicited membership fees for a health club that they knew was not going to open. The lawsuit seeks restitution for consumers who paid the advance membership fees.

      According to the complaint, filed in Bristol Superior Court, the defendants solicited consumers from September 2007 through September 2008 with false promises that the facility would open in January 2008. In order to persuade consumers to pay up front fees, the defendants represented to consumers that if they signed up before the facility opened, they would save money.

      The complaint further alleges that consumers pre-paid between $99.00 and $349.00 for different membership levels and were told repeatedly throughout 2008 by different employees of the health club that the club would be opening "soon." Coakley says that in November 2008, 10 months after the club was slated to open, the property appeared to be abandoned.

      Massachusetts Seeks Restitution In Alleged Health Club Scam...
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      New-Car Buyers And the Web: Different Strokes For Different Folks

      Manufacturer and third-party sites serve widely different needs

      Although new-vehicle buyers visit automaker Web sites and third-party automotive Web sites at the same rate during the shopping process, buyers rely on each type of Web site for different types of information.

      That's the key finding of the recently released 2009 Web Site Performance Tools Report-Wave 1, a collaborative effort between J.D. Power and Associates and Compete Inc.

      During the six-month period preceding a new-vehicle purchase, more than three in four new-vehicle buyers use the Internet to shop around. Sixty-six percent of all buyers visit at least one automotive brand Web site during this time frame. Likewise, 66 percent of new-vehicle buyers visit a third-party automotive Web site during the same time period.

      However, while overall usage rates are the same for these two different types of sites, the reasons that buyers visit them vary widely.

      Third-party automotive Web sites

      Among third-party Web sites, such as, and, buyers most frequently access such features and tools as inventory search capability, product reviews and trade-in information. Overall, 31 percent of buyers who visit access the site's vehicle reviews, while 55 percent of buyers who visit use the site's trade-in information pages. Among new-vehicle buyers visiting, 61 percent use the site's inventory search tool.

      Automotive brand Web sites

      In contrast, buyers who visit automotive brand Web sites while shopping most often use vehicle configuration features and seek out information about local dealerships and special offers. Among manufacturer Web sites, Ford, Honda and Toyota garner particularly high visitation rates from buyers.

      The report also finds that among buyers who visit specific brand Web sites, sales close rates vary widely. For example, among vehicle buyers who visit the GMC Web site, 34 percent ultimately purchase a GMC vehicle. However, among buyers who visit the Saturn Web site, the close rate is just 4 percent.

      "By understanding the different patterns of usage among actual new-vehicle buyers, both automotive brands and third-party automotive publishers may optimize their sites to provide the information used most often by the visitors they care most about-actual buyers," said Arianne Walker, director, marketing and media research at J.D. Power and Associates. "For manufacturers, improving sites may help maintain in-market shoppers throughout the shopping process. For third-party sites, improvements may help attract in-market new-vehicle buyers, thus increasing advertising opportunities on the sites."

      Additional key findings

      The report finds that, at six months prior to their vehicle purchase, one in four new-vehicle buyers visits a manufacturer Web site and one in four buyers visits a third-party site. However, this Web site visitation rate of buyers increases considerably during the month of purchase, with 34 percent of buyers visiting a manufacturer site and 33 percent visiting a third-party site.

      "During the earliest stage of the shopping process, new-vehicle buyers tend to rely equally on third-party sites and manufacturer sites, although tool usage on those sites differs," said Skip Streets, executive director of sales, automotive at Compete Inc. "As buyers get closer to making their final purchase decision, particularly during the month of purchase, there is an increase in tool usage.

      "For example, more users use vehicle configuration tools, particularly on automotive brand Web sites. To support buyers throughout the entire shopping process, both types of sites need to provide the various kinds of information new-vehicle buyers are looking for through easy-to-find, easy-to-use tools," Streets concluded.

      New-Car Buyers And the Web: Different Strokes For Different Folks...
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      Amazon Settles Kindle Suit

      Provides book replacement to Orwell fans

      It turns out that losing your homework has its advantages.

      Amazon has agreed to fork over $150,000 for removing copies of the novel 1984 from users' Kindles without warning. Eligible consumers will receive a new copy, and $30 for their trouble.

      High school student Justin Gawronski brought the suit in July after discovering that George Orwell's classic had been wiped off his Kindle. Amazon refunded Gawronski the amount he paid for the book, but he sued anyway, claiming damages for time spent creating annotations rendered useless by Amazon's actions. Kindles allow users to make notes in the margin of books, but erasing the text makes it nearly impossible to match those notes to the proper portion of the book.

      Amazon said it deleted the book after learning it had been sold without a proper license. After a tepid response failed to please consumers, Amazon CEO Jeff Bezos apologized profusely, calling the company's actions "stupid, thoughtless, and painfully out of line with our principles." That the company's Big Brother-esque move was directed at a book about omnipresent surveillance and thought crimes could not have been lost on Bezos.

      Gawronski's suit emphasized that Amazon gave customers no notice that books could be removed after they were purchased. Indeed, the Kindle's terms of service seemingly guaranteed consumers the right to a permanent copy of works they bought.

      Under the terms of the settlement, filed on September 25, Amazon will not be allowed to delete e-books without first obtaining permission from the owner, or unless the work contains a virus with the ability to harm the Kindle.

      The case highlighted one of the many pitfalls inherent in the movement toward digital media. Just as an entire iTunes library can be wiped out when a hard drive decides its number is up, an electronic book can vanish into the night as if you never owned it in the first place. Indeed, Gawronski's lawyers, straining to find a sensible analogy, compared Amazon's actions to that of a bookseller who sneaks into houses and takes his books back.

      The settlement amount may seem large, given that the suit centered around handwritten notes in the margin of a 60-year-old book. The good news is that, rather than keep the fee to which they are entitled, Gawronski's attorneys have decided to donate the entirety of that fee to charity. The settlement provides that KamberEdelson LLC, the firm representing Gawronski, "will donate its portion of that fee to a charitable organization that promotes literacy, childrens issues, secondary or post-secondary education, health, or job placement."

      Amazon Settles Kindle Suit...
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      Ponzi Scheme Targeted African-American Churches

      Michigan scam part of nationwide effort, Attorney General claims

      October 6, 2009
      Michigan authorities say they have uncovered a Ponzi scheme that was aimed at defrauding African-American churches around the state.

      Two men - Michael J. Morris and William T. Perkins - have been charged with attempting to defraud twenty-one churches in Detroit, Flint, Saginaw, Inkster, Ferndale, Highland Park, Port Huron and Ypsilanti of approximately $660,000.

      "In this difficult economy, families depend more and more on good works provided by local churches," said Michigan Attorney General Mike Cox. "By essentially pilfering the bank accounts of these ministries the defendants didn't just violate the sanctity of the church, they stole from the entire community."

      Morris and Perkins, representatives of Television Broadcasting Online and Urban Interfaith Network, allegedly schemed to obtain money from leasing companies, leaving the churches responsible for repayment of the funds. The defendants approached Michigan churches and offered to provide electronic kiosks free of charge for use in religious education, community events and fundraising.

      The pastors were told that a "national sponsor" would cover all costs in exchange for advertising that would run on the machines. They were then convinced to sign leases, described as a formality, on each kiosk. In reality, the churches unknowingly became responsible for the full purchase price of the kiosk, Cox said.

      The complaint alleges the defendants took the agreements, along with greatly inflated invoices for the cost of the kiosks, to leasing companies to obtain funding. The leasing companies then paid Morris and Perkins approximately $27,000 for each of the kiosks, generating substantial profits for the defendants.

      However, since there was no "national sponsor" to make the payments, Morris and Perkins used some of the funds from the leasing company to make the initial payments and pocketed the rest, Cox says. When the defendants later stopped making payments, the leasing companies, following the terms of the leasing contracts, demanded payment directly from the churches. In some cases, the contracts allowed leasing companies to take funds directly from church bank accounts, leaving churches in economic distress.

      In addition to the alleged fraud against Michigan churches, Cox says Morris and Perkins are accused of targeting over 160 churches in 13 other states and the District of Columbia.

      Ponzi Scheme Targeted African-American Churches...
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      Overdraft Fees Exploding

      Fees up 35% in two years

      Banks and credit unions collected nearly $24 billion in overdraft fees last year, an increase of 35 percent from just two years earlier, according to a new study by the Center for Responsible lending.

      The explosion in overdraft charges has drained the wallet of as many as 51 million Americans whose accounts become overdrawn annually. It is particularly harmful to financially vulnerable families already hit hard by the recession.

      "Banks and credit unions have become so sophisticated in driving up overdrafts that Americans now pay more in overdraft fees every year than they do for books, cereal, or fresh vegetables," said CRL senior researcher Leslie Parrish. "These billions of dollars drained from consumers each year represent lost opportunities for families to save for a rainy day or buy necessary goods and services that could help spark the economy."

      The most common trigger of overdraft fees are small debit card transactions that could easily be denied for no fee. This is how things used to work, and according to a 2008 nationally representative survey, it's what the large majority of people prefer.

      Thousands of bank and credit union customers have complained to federal regulators that overdraft policies are unfair. Customers typically haven't explicitly agreed to these high-cost overdraft loan programs but are automatically enrolled by their bank.

      When consumers try to avoid these abusive fees, they often find themselves tripped up when, for example, institutions needlessly delay posting deposits or process purchases from largest to smallest to purposely generate multiple overdrafts.

      • Jarrod A. of New York City tells that he has been charged over $350 in overdraft charges In six days by Chase Bank. "I received $175 in refunds," he writes, "only to see it taken back by over $300 in overdraft fees the next day." Jarrod says he is a grad student "and this has made me miss class, late for work and unable to make my next tuition payment."

      • Frank J. of Stoughton, Mass., says Bank of America charged him over $300.00 in overdraft fees. "What they did," he tells, "was start charging by not clearing deposits quickly. They then placed my largest debit card expenses first, then the smaller ones. In this way, they compounded the overdrafts from one to multiple." Frank says he got no satisfaction when he took his complaint to bank representatives.

      • Benjamin C. of Wilmington, N.C., says he's tired of being charged $35 for overdrafts and that he would prefer the transaction be denied if his account is overdrawn. "I never signed up for an overdraft protection program," he tells "They did it automatically I guess."

      Because overdrawing an account by just a few dollars triggers a fee averaging $34, cash-strapped households -- particularly younger adults and seniors on fixed-incomes --often are thrust even further into debt by this overdraft "protection."

      The changes to their overdraft programs several banks announced last month do not address some of the most abusive features of the programs and can easily be reversed once the spotlight shifts. CRL says reform of overdraft practices should be set into law -- and soon - and recommend that policymakers:

      • Require that institutions deny debit card purchases and ATM withdrawals, without charge, if the funds aren't there. As a limited exception, an overdraft fee could be charged if the lender gives the customer a real-time warning and chance to decline.

      • Require that overdraft fees bear some relationship to a lender's cost of covering a shortfall.

      • Limit the number of fees that can be charged to a customer during a year before the institution must enroll the customer in a reasonably priced overdraft product, such as a line of credit, if it wants to keep charging for overdrafts.

      • Consolidate and streamline existing federal consumer protection authority by housing it in one organization: the proposed Consumer Financial Protection Agency, which would focus solely on what's in the best interest of consumers.

      Overdraft Fees Exploding...
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      'Whiter Smile' Ads Can Leave Consumers Frowning

      BBB warns that ads can trick into paying for unwanted services

      Consumers wanting whiter teeth should be wary of online ads that tout products promising brighter smiles.

      That's the latest warning from the Better Business Bureau (BBB), which says it has received a "recent onslaught of complaints" from consumers who believed theyd signed up for free trials of teeth whitening products and were later billed for items and services they didn't want or authorize. has received similar complaints about these teeth whitening ad, which often appear on popular online news sites like,, and

      The ubiquitous ads usually link consumers to phony blogs and fake news sites designed to look like impartial third-party endorsements of the products, according to the BBB.

      The phony endorsements then direct consumers to a main Web site that claims the product sold is "As seen on" ABC,, CBS News, CNN, and USA Today -- and even includes the logos of these news outlets.

      "From the complaints we've received, it's obvious that many consumers are unfortunately letting their trust in respected news outlets influence their level of trust in the products being advertised on their Web sites," said Steve Cox, president and CEO of the Council of Better Business Bureaus. "While it may be true that advertisements for the teeth whiteners were placed on major news Web sites, reporters for USA Today or CNN did not write stories about the efficacy of the specific products being sold."

      Web sites for these teeth whitening products claim to offer a no-risk, money back guarantees, and free trials of the product. To receive the products, consumers must provide a credit or debit card number to cover shipping and handling.

      But some consumers say the companies billed them before their trial periods ended -- and continued to charge them after they cancelled their orders. Other consumers have discovered mystery charges for companies and services they didn't know were included when they signed up for their "free" trials.

      Consider what happened to Christopher S. of East Setauket, New York, who responded to an advertisement for teeth whitening products on He told that a company called Clean Whites charged him nearly $50 during his "free" trial period.

      "I ordered the free trial and thought that it was fairly normal," he told us. "A day later, I received a call from a customer service (representative) to confirm my order. The phone was extremely hard to hear and she confirmed my order of the FREE trial. All I had to do was pay a $5.95 shipping and handling fee."

      The company, however, wound up billing Christopher eight times that amount.

      "A day after that, I was charged $49.95 to my (credit) card," he said. "Upon seeing this charge, I called the company only to stay on hold with them for about 30 minutes (and) only to get no response. I have been unable to get anyone on the phone to cancel my order, and (I) never authorized any $49.95 charge. This is the biggest scam I have ever come across."

      A Texas consumer told us Clean Whites duped her, too.

      "I ordered a 14-day risk-free trial of a teeth whitening system for $99," said Sharon R. of Aledo, Texas. "I was never told I would automatically be scheduled to receive a monthly shipment in their 'membership' for $79.95 + $5.95 shipping."

      "This is a scam and they do not answer the phone," she added. "I cannot cancel their phony membership or my Visa on their Web site as it repeats the offer to get a free trial. I do not want my credit card charged again and I want my name, address, and Visa abated from their system forever. This is a fraud."

      Sharon claimed she was allegedly taken by another company selling teeth whitening products. That company, she said, is called Purely White LLC.

      "I ordered a teeth whitening 'pen' over the Internet that was to cost only $4.95 plus shipping and handling," she said. "Today I received an e-mail (that I couldn't reply to) that I was charged $94.90 + 89.90 by Purely White, plus $79.95 and $83.90 for Health Cleanse, neither of which I ever ordered. None of these charges were made known to me."

      "I want these charges abated, but cannot get through to them," Sharon said, adding her Visa company told her it has received other complaints about this company's billing tactics.

      A New York consumer who responded to a trial offer for teeth whitening products from an outfit called Dazzle White told us the company later made several unauthorized withdrawals from his bank account.

      "While on my computer I observed a trial offer from Dazzle White for teeth whitener for $4.95 only for shipping and handling," said Dennis B. of Riverhead, New York. "I ordered the product, without thinking, and received numerous phone calls thereafter soliciting me for more products, which I emphatically refused.

      "On Wednesday September 16, 2009, I received a package via USPS, which contained three silver cartridges from Dazzle White. I immediately checked my bank accounts and found several unauthorized withdrawals." Those unauthorized withdrawals -- to various companies -- totaled more than $170.

      Dennis immediately contacted his bank, which tried to help him track down the companies that made those withdrawals.

      "The bank officer and I called the numerous toll free phone numbers and spoke to several 'customer care' agents," Dennis said. "With each call the names changed -- both of the companies and representatives. The officer and I both questioned the withdrawals and received very vague information."

      Dennis, however, did learn that one unauthorized withdrawal of $8.95 gave him unlimited access to a "weight loss counselor."

      "From teeth whitening to weight loss what a deal," Dennis said. "Dazzle White and the people behind it, in my opinion, are operating a criminal enterprise, which is bilking unsuspecting individuals throughout North America. I was scammed out of $173 illegally withdrawn from my checking account. If I didn't view my checking account I wonder how many other thieves would help themselves to my money."

      Other complaints

      The BBB said it has received complaints about Dazzle White and other companies selling teeth whitening products, including:

      White Smile, Teeth Smile and Dazzle Smile:

      The BBB serving Edmonton (Canada) has received 506 complaints in the last 12 months from consumers in 47 states, five Canadian provinces, and the United Kingdom about Dazzle White and these three other companies. Consumers say the companies billed them as much as $79 for their "free trials." They also told the BBB they were charged for several other services, including a weight loss program;

      Ivory White:

      The BBB serving Denver has received 611 complaints from consumers in 46 states about this company. Consumer say the company charged them as much as $78 a month for a free trial. Other related companies include Ortho White and Bella Brite, which are mounting complaints as well, the BBB said. Agency officials have asked the three companies to add more disclosures to their Web sites about their free trial offers. The BBB has not yet received a response to these requests;

      Advanced Wellness Research:

      The BBB serving West Palm Beach, Florida, has started to receive complaints from consumers about this company's teeth whiteners, which are sold under the names of Max White, My Whitening, Gleaming White Smile and many others.

      Protect yourself

      To protect yourself -- and your checkbook -- from getting taken by companies selling teeth whitening products online by, the BBB recommends:

      Be wary of "third-party" endorsements for these products. Be cautious of any ad that links to a blog or Web site news articles. The blogs and articles were likely written by the company and are not endorsements from consumers or reporters;

      Always read the fine print. Many Web sites offering free trials of teeth whitening products do not disclose the billing terms and conditions or do not have these details prominently displayed on their sites. Before giving the company any credit or debit card information, review the Web site and be aware that free trials typically result in repeated billings;

      Find out if the company has any complaints on file with, your state's attorney general's office, or the BBB. Consumer can file a complaint about any company that rips them off with their state's attorney general's office or the BBB;

      Regularly check your bank account and credit card statements for any unauthorized charges. If you find any, immediately report them to your bank or credit card company.

      The ubiquitous ads usually link consumers to phony blogs and fake news sites designed to look like impartial third-party endorsements of the products, acco...
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      Credit Card Holders Angrily Abandon Their Cards

      Nearly half of consumers are using credit less

      October 5, 2009
      Credit card holders are angry. More than one-third (32%) have paid off and closed a card since January 2008, and half of those that canceled did so in direct response to the actions of credit-card issuers, such as cutting limits, hiking rates, or imposing fees, according to a national poll by Consumer Reports.

      Twenty-one percent of respondents said they were treated unfairly by card companies, and only 41 percent said they were highly satisfied with their card issuer, making credit cards one of the lowest-rated services that Consumer Reports covers.

      The level of public anger about card issuers shows in the results of Consumer Reports nationally representative survey of 1,211 credit card users, conducted in July, as well as in scores of irate letters and e-mails Consumer Reports has received from readers.

      The survey also found that 45 percent of respondents say they charging less, 43 percent say they are spending about the same, and 11 percent are charging more than they did a year ago.

      How much they owe

      How much don consumers owe?

      • 54% pay their balances in full each month
      • 13% carry balances over $10,000 (Median $17,366)
      • 33% carry balances up to $10,000 (Median $2,554)

      Consumer Reports survey showed credit-card users tended to fall into three camps. One group is made up of consumers who generally pay their bills on time but use cards for convenience or to rack up rewards. Then there are those who reported moderate balances and reasonable prospects of eventually paying off that debt.

      The third group includes consumers with debts totaling $10,000 or more, often from spending for emergencies; 44 percent of that group said they wouldnt be able to survive financially over the next six months without relying on their credit cards to meet monthly expenses.

      Depending on which camp your credit needs fall into, Consumer Reports November report offers a complete strategy guide to dealing with credit card issues, finding the right cards for your needs, and protecting your credit score. The report is available at

      Credit Card Holders Angrily Abandon Their Cards...
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      Diamond Pulls Premium Edge Cat Food from Shelves

      Thiamine deficiency found in some bags of the product

      Another pet food company has quietly withdrawn some of its products from store shelves.

      Deficiencies in the thiamine levels of certain bags of Premium Edge Finicky Adult and Premium Edge Hairball cat food have prompted Diamond Pet Foods to pull the products from distribution.

      The company made that announcement Premium Edges Web site.

      The action comes just days after Nutro Products quietly removed from the market three types of its puppy food because of a production error.

      Nutro confirmed its decision to voluntarily withdrawal the puppy food on its Web site last Wednesday, saying it had discovered pieces of melted plastic in the production line of select varieties of NUTRO dry dog and cat food products.

      In this latest product withdrawal, Diamond said it is pulling from the market Premium Edge Finicky Adult and Hairball cat foods that have the following date codes: RAF0501A22X 18lb., RAF0501A2X 6 lb., RAH0501A22X 18 lb., RAH0501A2X 6lb.

      Product testing proved no contaminants were discovered in the cat food; however the cat foods were deficient in thiamine, the company wrote on its Web site. Diamond tracked the vitamin premix lot number that was utilized in these particular cat foods and have performed testing on another lot of Premium Edge cat food that used the same vitamin premix, and it was not deficient in thiamine.

      Symptoms of thiamine deficiency will be neurological in nature, according to the company. Any cats fed these date codes that display these symptoms should be immediately taken to a veterinarian, the company said, adding it has received calls about these health issues from pet owners or veterinarians primarily in the Rochester, New York, area.

      The company said it asked all stores that received the cat food to pull the products off the shelves. The retailers were also asked to contact their customers via email or telephone requesting them to check the date code of the food, the company said.

      Pet owners who have any of the Premium Edge cat foods involved in this action should return the products to the store, the company said.

      For more information, contact Premium Edge at 1-800-977-8797.

      The Nutro puppy food items quietly pulled off the market last week are:

      • NUTRO ULTRA Puppy food for dogs, 4.5 pound bag, best buy date of 9/10/10, and a UPC of 79105 51313;

      • NUTRO NATURAL CHOICE Chicken Meal, Rice and Oatmeal Formula Small Bites Puppy, 5 pound bag, best buy date of 9/10/10 and a UPC 79105 23050

      Nutro said it shipped those bags of puppy food to PetSmart stores in California, Arizona, Colorado, Texas and New Mexico.

      The pet food maker also pulled select 30 pound bags of NUTRO ULTRA puppy food, which were distributed to PETCO stores in California, Nevada, Hawaii, and Utah. Those bags of food have a best buy date of 9/10/10 and a UPC of 79105 51315.

      A Nutro representative told last week that the company pulled the puppy food off the market after learning a workers plastic hard hat was sucked into the machinery.

      Based on our extensive review, it is highly unlikely that any pieces of plastic made it into finished product, the company wrote on its Web site. However, upon learning of the incident, we voluntarily retrieved all potentially affected products.

      Although Nutro said it found pieces of melted plastic in the production line for dry dog and cat food products, the company is not pulling any feline food off the market.

      Customers who have any puppy food involved in this action can return the product to the store for a full refund or exchange, Nutro said.

      For more information, pet owners can contact Nutro 1-800-833-5330.

      Diamond Pulls Premium Edge Cat Food from Shelves...
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      Oregon Warns Against Bogus 'Public Safety' Solicitors

      Attorney General stops pitches for 'search and rescue' personnel

      When you receive a phone call from a telemarketer asking for help for some police, fire or public safety organization, your safest course of action is to simply hang up.

      At best, the solicitor will probably take the lion's share of your donation. At worst, the caller is an outright fraud.

      These groups may call themselves "Friends of the Police," the "Firefighters Support Brigade," or any number of official-sounding names designed to make you think they are associated with your local police or fire departments. They aren't.

      In Oregon, consumers recently have been receiving calls from telemarketers who say they are raising money to support first responders in the state engaged in search and rescue. After conducting an investigation, Oregon Attorney General John Kroger reached a settlement with the company making the calls - A Growing Concern, LTD, which was soliciting on behalf of a group called Search and Rescue Charities.

      "Search and rescue team members risk their lives to save Oregonians and play a crucial role in public safety," Kroger said. "Oregonians who want to help search and rescue efforts need to know that their donations are going to legitimate charities."

      An Oregon Department of Justice investigation uncovered evidence that A Growing Concern repeatedly deceived Oregon consumers, including falsely claiming that donations would support local search and rescue efforts.

      The settlement prohibits the companies from operating in Oregon for at least three years and requires A Growing Concern to pay a total of $5,000. The companies could have to pay an additional $20,000 if they violate any terms of the agreement and an additional $25,000 for each violation.

      Oregon Warns Against Bogus 'Public Safety' Solicitors...
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      Minnesota Sues Health Discount Card Marketers

      High pressure, bait and switch tactics alleged

      October 5, 2009
      Consumers desperate for low cost health insurance can often be talked into signing up for medical discount cards because marketers are unclear, or downright deceptive. In Minnesota, the state has taken legal action in two separate cases.

      Minnesota Attorney General Lori Swanson has sued Consumer Health Benefits Association, a Missouri non-profit corporation with its principal place of business in Florida; and Home Health America, LLC of Nevada, which offered long-term and home care benefits to elderly citizens for fees of up to $4,000 without being licensed as an insurance company.

      Swanson accused both companies of scamming Minnesota citizens struggling with the high cost of health care into believing they were purchasing health coverage at an affordable price when they were really purchasing non-insurance products that offered limited benefits.

      "Many people are struggling with skyrocketing health insurance premiums. Some companies are exploiting the lack of affordable health coverage by aggressively promoting risky, unregulated health coverage products that offer little or no financial protection if you get sick," said Swanson.

      Swanson said the companies are among a niche group of marketers that seek out citizens who are looking for affordable coverage in the face of high health insurance premiums. Family health insurance premiums in Minnesota rose 108 percent from 2000-2009, while median earnings rose by only 22.6 percent, according to a September, 2009 report by Families USA.

      The lawsuit against Consumer Health Benefits Association alleges that it targeted people looking for affordable health insurance, misleading them into paying an enrollment fee of $129.90 and a monthly fee of between $129.95 to $149.95 by misrepresenting that it offered health insurance or the functional equivalent of health insurance.

      The lawsuit alleges that during sales calls to consumers, CHBA misrepresented that its "New Choice Health Plan" was insurance or just like insurance; covers 80 percent of medical expenses; requires only minimum co-pays for doctor and hospital visits; and has a vast network of doctors and hospitals at which CHBA provides coverage. In reality, CHBA is a so-called "health discount plan" which does not provide insurance coverage or otherwise cover claims, but instead purports to offer certain discounts off the "retail price" charged by certain doctors and clinics. Health discount plans like CHBA are not licensed or regulated by the State of Minnesota; unlike an insurance policy, they do not and cannot legally assume the legal obligation for paying claims.

      The lawsuit alleges that CHBA obtained marketing leads of citizens shopping for health insurance quotes on the Internet and then aggressively telemarketed those citizens, in some cases pushing for quick sales by claiming that its current premiums were only available for a limited time or that it could only sell coverage to a few more customers in Minnesota.

      CHBA immediately charged citizens a combined enrollment fee and monthly fee in excess of $250 after obtaining their bank account information during the initial sales call, the suit alleges. It only sent written materials describing the plan after citizens had signed up. After learning of CHBA's actual limited terms (e.g. when they reviewed the written materials CHBA sent them after they enrolled or when they needed health care and attempted to use the plan), many people soon cancelled.

      Swanson says more than 40 percent of CHBA enrollees cancelled in the first month, 64 percent cancelled in the first three months, 82 percent cancelled in the first six months, and 94 percent cancelled in the first year. Approximately 2,250 Minnesota citizens signed up with CHBA since 2003.

      The Attorney General's Office said this case is the latest example of companies engaging in "bait and switch" tactics, in which marketers make extensive oral misrepresentations and then attempt to "cover" themselves through after-the-fact written disclosures or tape recordings in which they attempt to disclaim these statements.

      For example, the Attorney General's Office said that it is increasingly encountering telemarketers who "coach" citizens to ignore red-flags on recorded verifications. The lawsuit alleges that CHBA "baited" consumers into purchasing the plan by making extensive oral misrepresentations and charging the consumers the processing fee and initial monthly fee at the end of the telemarketing call, before consumers received their membership packet setting forth the terms and conditions of the plan.

      The lawsuit against CHBA alleges that the company violated the State's consumer fraud and deceptive trade practices laws. CHBA was sued by the Illinois Attorney General's Office in 2005. In a 2007 settlement with that office, CHBA agreed not to represent that its plan was health insurance or commensurate to health insurance.

      The lawsuit against Home Health America, LLC and its owner, Michael Woodward, alleges that the company sold elderly Minnesota citizens long-term and home care coverage for fees of up to $4,000, even though it was not licensed as an insurance company.

      The lawsuit alleges that Home Health America sent elderly Minnesotans mailings describing the high cost of home care. The mailings invited the senior citizens to return a post-card for more information on home care benefits.

      People who returned the postcard were soon called by defendant Michael Woodward, using the alias "Mike Woods," who requested to meet with the seniors in their homes. When he did so, Woodward told seniors that Home Health America would provide home care and other long?term care services in exchange for a lump sum payment of between $3,000 to $4,000.

      In some instances, Woodward reportedly told seniors that the payment covered one year of home care services. In other instances, he told seniors that their lump sum payment was not limited to any term. Within days of making their payments, Minnesota seniors received letters stating that their "program" had been "upgraded" to include medical services such as 24?hour nursing care and assisted living care.

      In some cases, Home Health America refused to pay claims, and the Attorney General's Office said it is not aware of any case did where it paid claims in excess of the citizen's initial payment. has received large numbers of complaints about Consumer Health Benefits.

      Discount plans are not insurance.

      A health discount plan is not an insurance policy and does not provide insurance protection; instead, at best it offers limited discounts from the retail price charged by certain doctors and clinics. A health discount plan does not pay your doctor, clinic or hospital for your bills and cannot legally insure you for health care expenses. Under Minnesota law, only a licensed insurance company and agent can sell you an insurance policy. If the company is not licensed, it cannot legally provide insurance coverage for your claims.

      Read the plan before you buy it.

      Some companies pull a "bait and switch" on the consumer. They make all kinds of promises about the supposed benefits of the plan on the phone and then send you written materials describing the actual terms only after you allow your account to be charged for an enrollment fee or monthly fee. These companies may then refuse to make refunds after you discover you were misled. Do not do business with any company that won't send you the written materials to review before you buy.

      Walk away if they say "time is running out."

      Beware of plans that push for quick sales. For example, the salesperson may tell you that the current monthly fee is only good for a limited period of time or that the company is only allowed to sell to a few more customers in the state. Walk away from companies that try to pressure you to buy without doing your homework by telling you that you'll lose the "deal" if you don't accept it on the spot.

      Beware of empty promises.

      Sellers of health discount or other non-insurance plans mislead some citizens by using words that sound like an insurance policy; for example, they may call the monthly payment a "premium" or may talk about deductibles or co-pays. Some citizens purchased a health discount plan because they were told it was an "insurance plan" or "just like" an insurance policy or that it had a broad network of doctors. Remember that it is against the law for a health discount plan or non-licensed company to insure or take responsibility for paying your health claims-the best they can do is offer limited discounts at certain doctors. In some cases, the "plan" or "policy" being sold may not even exist.

      Consumers desperate for low cost health insurance can often be talked into signing up for medical discount cards because marketers are unclear, or downrigh...
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      Consumer Watchdog Urges Investigation Into Health Care Lobbying In California

      "Voluntary" letters may have violated state labor code, group alleges

      With Congress set to come back from its August recess and health care reform front and center on the agenda, Consumer Watchdog is urging California Attorney General Jerry Brown to investigate allegations that some insurers are coercing their employees to lobby for weaker measures.

      "We write to request that you investigate actions by health insurance companies Anthem/Wellpoint and United Healthcare that may violate the right of employees in California to be free of political pressure by employers," the group said. "We believe that such individual political persuasion by an employer amounts to illegal coercion under the California Labor Code."

      The Santa Monica, California-based advocacy group published letters that it claimed were from insurers United Health Group and Wellpoint, urging employees to call Congress with pre-written talking points and included phone numbers.

      The Wellpoint letter asked employees to visit the company's "grassroots" Web site the Health Action Network and "contact your elected officials, as well as notifying friends, neighbors, and family members about this important issue."

      Consumer Watchdog claimed the "voluntary" request was anything but, in light of the instruction to make the calls during business hours, and the companies' ability to monitor their employees for compliance.

      "Wellpoint and United HealthCare are no doubt tracking which employees respond to their demands," said Consumer Watchdog's research director Judy Dugan. "To call such action 'voluntary' defies common sense."

      California Labor Code Section 1101 prohibits companies from preventing their employees from engaging in political activity, or directing the activities they may take. Section 1102 prohibits companies from threatening to fire or punish employees from engaging in political activity.

      Even if the Attorney General does take notice, that might not guarantee any action, however.

      California regulators admitted last year that they could not enforce a previously-levied $1 million fine on Anthem BlueCross, a division of Wellpoint, for rescinding coverage to individuals who made claims, a process called "recission."

      The Department of Managed Health Care (DMHC) said that Anthem Blue Cross could contest each recission, which could "tie us up in court forever."

      Consumer Watchdog Urges Investigation Into Health Care Lobbying In California...
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      Illinois Sues Another Debt Settlement Company

      Part of a crackdown on 'abusive industry'

      Consumers are drowning in debt and unscrupulous "debt settlement" companies, advertising on radio, television and the Internet, are making the situation worse, says Illinois Attorney General Lisa Madigan.

      Madigan, like many of her peers in other states, has recently stepped up the pressure on what she calls "an abusive debt settlement industry." She's proposed legislation that would make it harder for the worst players to operate in Illinois and has filed suit against a Dallas company she said was employing deceptive marketing practices and charging excessive fees without effectively improving consumers' financial standing.

      "With credit card debt at an all-time high, increasing numbers of families have become prime targets for debt settlement companies who lure consumers in with elaborate, deceptive promises to dramatically reduce consumers' debt," Madigan said. "Based on my office's lawsuits and investigations of this industry, we've learned that consumers seldom, if ever, see their debts settled and often end up owing more than the credit card debt they originally incurred."

      The proposed legislation seeks to ban all debt settlement companies from operating in Illinois, unless they meet the following requirements:

      • provide true, individualized credit counseling;

      • charge no up-front fees;

      • obtain a license and a bond;

      • disclose to consumers the risks involved in entering into a debt settlement contract; and

      • provide a written contract and a right to cancel the contract.

      Madigan said her office has seen a sharp rise in debt- and credit-related consumer complaints. Over the last few years, the Attorney General's office has received more than 12,000 complaints regarding debt and credit issues.

      Last year, at the height of the economic downturn, consumer debt-related issues surged to the top category of complaints filed with the Attorney General's Consumer Fraud Bureau, including credit card debt, abusive collections and deceptive debt settlement practices.

      Consumers with debt settlement complaints typically report that, after they enroll in debt settlement programs, the firms charge excessive upfront fees and advise consumers to stop paying their credit card bills.

      All too often, consumers report that after they make many upfront monthly settlement payments, the debt settlers fail to negotiate with consumers' credit card companies. As a result, the credit card companies add interest, fees and penalties to consumers' credit card balances and begin collection efforts to recoup the debt, which in turn negatively impacts consumers' credit reports. In many instances, credit card companies have sued consumers enrolled in debt settlement agreements in an attempt to collect the balance of the consumers' accounts.

      The lawsuit was filed against Credit Solutions of America (CSA) and its CEO Douglas Van Arsdale. The Attorney General's complaint alleges that the company falsely claims that its services can help to reduce consumers' credit card debt by 50 percent.

      Madigan's lawsuit contends the company continually fails to negotiate with consumers' creditors even though consumers cease to pay their creditors directly and, instead, make months of upfront payments to CSA. As a result of CSA's failure to take any effective debt settlement action on behalf of consumers, according to Madigan's lawsuit, creditors frequently sue consumers to collect on the outstanding balances.

      Chris, of Laytonville, Maryland, signed up with Credit Solutions after seeing the company advertised on the Oprah Winfrey Show.

      "They told me to stop paying my creditors and to forward all collection calls and notices to them," Chris told "Yeah right! That did nothing! Phone calls night and day from creditors, most of which stated that they don't and will not work with Credit Solutions."

      Madigan's lawsuit charges defendants with violating the Illinois Consumer Fraud and Deceptive Business Practices Act by misrepresenting the services that the company can provide to consumers and the effect the services will have on consumers' credit.

      The state is seeking a permanent injunction barring the defendants from engaging in debt settlement in Illinois and asking the court to order the defendants to pay restitution for aggrieved consumers, civil penalties of $50,000 for violating the Consumer Fraud Act, and an additional $50,000 for each violation committed with the intent to defraud.

      This is the third lawsuit that Madigan has filed this year against debt settlement firms, following complaints against SDS West Corporation and Debt Relief USA.

      Illinois Sues Another Debt Settlement Company...
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      One Million People File For Bankruptcy In 2009

      Total highest since 2005

      Consumer bankruptcies totaled 1,046,449 filings through the first nine months of 2009 -- the first time since the 2005 bankruptcy overhaul that filings have surged past the 1 million mark during the first three calendar quarters of a year, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center.

      The filings for the first three-quarters of 2009 were the highest total since the 1,350,360 consumer filings through the first nine months of 2005.

      "Bankruptcy filings continue to climb as consumers look to shelter themselves from the effects of rising unemployment rates and housing debt," said ABI Executive Director Samuel J. Gerdano. "The consumer filing total through the first nine months is consistent with our expectation that consumer bankruptcies will top 1.4 million in 2009."

      The September 2009 consumer filing total reached 124,790, a 41 percent increase from the 88,663 consumer filings in September 2008. The September 2009 filings also represented a 4 percent increase over the 119,874 filings in August 2009 and it is the fourth highest single month since the 2005 law change.

      Chapter 13 filings constituted 28 percent of all consumer cases in September, unchanged from the August rate.

      Earlier in the week, the American Bankers Association reported delinquency rates hit record quarterly highs in three key consumer loan categories: home equity loans, home equity lines of credit, and bank cards.

      The composite ratio, which tracks eight closed-end installment loan categories, also hit a record high at 3.35 percent of all accounts (seasonally adjusted) compared with 3.23 percent of all accounts in the previous quarter.

      The ABA report defines a delinquency as a late payment that is 30 days or more overdue.

      ABA Chief Economist James Chessen blamed continued job losses, shorter work weeks and falling incomes, saying, "Six consecutive quarters of job losses have taken their toll. The picture won't change until the labor market improves and the economy picks up steam. This is going to take time."

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      California Sues 'Credit Repair' Firm

      Company allegedly ignored repeated warnings to register with state

      California Attorney General Jerry Brown has sued two California businessmen -- Todd Swick and Michael Sardo, owners of Los Angeles based Executive Financial Credit Services -- for ignoring "repeated warnings" to register with his office and post a $100,000 bond with the Secretary of State.

      "Swick and Sardo violated California law by refusing to register their credit repair business with the Attorney General's office and post a $100,000 bond, even after repeated warnings," Brown said. "So today, attorneys from my office are filing suit, sending a clear signal to credit repair firms operating in California that they must register with the Attorney General's office and follow the law."

      Executive Financial Credit Services offers to help repair their customers' credit by challenging negative or inaccurate items on credit reports directly with the three credit report bureaus-Experian, TransUnion, and Equifax. Under California's 1984 Credit Services Act, companies providing credit repair services in California are required to register with the Attorney General's office and post a $100,000 surety bond with the Secretary of State.

      In late 2008, Brown's office sent a letter directing the business to register and provided information to assist in the process. Brown says the business did not respond. Despite repeated warnings, Executive Financial Credit Services did not register and obtain a bond.

      Swick informed the state the business was no longer conducting credit repair services and didn't need to register. Brown's office, however, said it discovered the business was continuing to operate as a credit repair firm.

      In early 2009, Sardo informed Brown's office that the business was moving from California to Arizona and would not complete the registration process. Brown's office informed Sardo that if the business continued offering credit repair services in California, it was bound by California law to register.

      Nevertheless, Executive Financial Credit Services still has not registered. So Wednesday, Brown filed suit in San Diego Superior Court, contending that the business violated:

      • California Civil Code section 1789.18 for not posting a $100,000 surety bond with the Secretary of State's office;

      • California Civil Code section 1789.25 for conducting a business without first obtaining a certificate of registration from the Attorney General's Office; and

      • California Civil Code section 1789.13(a) for charging consumers money before completely performing the services they promised.

      The suit seeks a permanent injunction to keep Executive Financial Credit Services and its principals from operating illegally, civil penalties of not less than $200,000 and restitution for victims.

      California Attorney General has sued two California businessmen for ignoring "repeated warnings" to register with his office and post a $100,000 bond with ...
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      American Express Axes Gift Card Fee

      Move comes amid sharp drop in gift card sales

      One of the more aggravating aspects of gift cards are the fees that companies tack on. Take John of Lansdale, PA. When his 10-year-old son tried to use the $50 gift card he'd forgotten he had, he found there was only $12 left on the card.

      But not to worry. From now on, American Express says its monthly fee is a thing of the past.

      The company said it is eliminating monthly fees on all of its gift cards, including those now in stores, those headed to market for the coming holidays, and those already purchased that are in consumers' wallets and purses. The change is effective immediately.

      American Express sees this move as a transformational event because it says consumers don't have to worry about using the card quickly. The monthly $2 fee in the past meant that the gift card lost value every month until it was used up.

      American Express says it is the only major issuer of universal, or "general purpose," gift cards to eliminate all fees after purchase, which consumers can only hope becomes a trend.

      "Customers told us that monthly fees undermine the value of gift cards, plain and simple," said Alpesh Chokshi, president of Global Prepaid, American Express. "We believe this sets a new gold standard among gift cards and provides a win for consumers and our business. With today's announcement, recipients now have a gift card that's 100 percent gift, 0 percent fees."

      Consumers have not only been telling American Express how much they despise the fees, they've filed more than 170 complaints with about the fees and related problems.

      American Express says its gift cards now have no fees after purchase -- no fees for activation, no fees for checking a balance, no fees for monthly servicing, no fees for card replacement, and the funds on the cards never expire.

      The fees aren't the only problems customers experience with the cards, however. Many of those who write to say the cards are declined for obscure reasons.

      "NEVER, NEVER, NEVER, NEVER" are the words I am using to describe the American Gift Cards to my friends, acquaintances and anyone standing in line within the sound of my voice," wrote Saundra of Upper Marlboro, MD. "I have been embarrassed numerous times trying to use these cards. ... As long as I have a mouth to talk, I am telling everyone to leave the American Express Gift Cards alone -- they are not worth the hassle and embarrassment.""

      Saundra and others complain that their gift cards -- or, even worse, those they buy for friends and family -- are repeatedly declined even though they have adequate value remaining to cover the disputed purchase. Efforts to resolve the issue are often unsuccessful.

      What brought on American Express' change in policy when it comes to fees? Perhaps the market made it necessary.

      Gift card sales were weak during last year's holiday season as consumers, shocked by the sudden drop in the economy, chose discounted items as gifts, rather than spending on gift cards. Sales of gift cards are also expected to be weak this season, down as much as six percent, according to some retail forecasts.

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