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    Toyota Ready to Expand Safety Recall Beyond Floor Mats

    Reports say carmaker has set aside $5 billion to replace accelerator pedals


    It's not just American car manufacturers who are sometimes slow to recognize and admit safety problems in their vehicles. In September, Toyota grudgingly agreed to recall about 3.8 million Toyota and Lexus models because of reports of unintended acceleration.

    The company set no land speed records with the recall. Consumers had been complaining about the sudden acceleration for years. And many were not happy with Toyota's explanation of the problem. The company blamed the frightening out-of-control spurts of speed on floor mats which supposedly could slide onto the accelerator, pressing it to the floor but many Toyota owners find the explanation unconvincing.

    "I have had three accidents or near accidents with my new 2009 Toyota Prius due to a combination of mysterious acceleration and loss of brakes," Paul of Sedona, Arizona, told ConsumerAffairs.com. My car suddenly seemed to accelerate on its own and my brakes failed. How I stopped my car I will never know."

    Not only were consumers skeptical, so was the National Highway Traffic Safety Administration (NHTSA). Earlier this month, NHTSA issued a highly unusual statement scolding Toyota for what it called "inaccurate and misleading" information in Toyota press release about the recall.

    "NHTSA has told Toyota and consumers that removing the recalled floor mats is the most immediate way to address the safety risk and avoid the possibility of the accelerator becoming stuck. But it is simply an interim measure," NHTSA said. "This remedy does not correct the underlying defect in the vehicles involving the potential for entrapment of the accelerator by floor mats, which is related to accelerator and floor pan design."

    Now what?

    So much for buying a few million floor mats. The auto industry is now abuzz with speculation about what Toyota will have to do to remedy the problem to NHTSA's satisfaction. Reports from Tokyo say Toyota has set aside more than $5 billion to replace the accelerator pedals on all of the 3.8 million vehicles, although the company has so far denied those reports.

    It's not clear exactly what changes will be made but it apparently involves a complete redesign of the accelerator pedal.

    The problem with the floor mats is not that they can slip over the accelerator and push it down -- but rather that the mats can slide under the pedal and push it forward, which in the worst case can result in full-throttle acceleration that defies an instant solution. Many Toyotas have "On" and "Off" buttons that take three seconds to operate.

    No one knows how many accidents may have been caused but an August tragedy on a San Diego freeway put the problem at the top of the auto safety agenda. In that accident, a California highway patrolman and his family were killed in their runaway Lexus ES 350. Someone calling from the car before it crashed at over 100 miles per hour said they couldn't stop it. Seconds later, it struck an SUV.

    Narrow escapes

    Others have escaped injury, but only narrowly. Radha of Philadelphia was in a parking lot earlier this year when his 2009 Prius began accelerating unexpectedly.

    "I went all in for the brakes -- no reaction from the car," he said. "Car crashed into a light pole, tilted to its right crashed down in parking spot right next to where I wanted to park. With me hanging by the seat belt, car still accelerating, I went for the power button. No response to that either.

    Radha managed to crawl through the window to escape from the car, the engine running wide open as the car lay on its side. When police arrived, they managed to switch the car off, Radha said.

    Mary of Medford, Oregon, also reported that four incidents of unintended acceleration in her 2007 Prius were accompanied by an apparent lack of response from the brakes. She said her dealer was able to duplicate the problem twice but couldn't resolve it.

    "It has nothing to do with the floor mat," Mary said.

    Affected models

    Toyota and Lexus vehicles affected by the recall are:

    • 2007-2010 Camry

    • 2005-2010 Avalon

    • 2004-2009 Prius

    • 2005-2010 Tacoma

    • 2007-2010 Tundra

    • 2007-2010 ES 350

    • 2006-2010 IS 250 and IS350

    Toyota recalled 55,000 Camry and Lexus models in September 2007 following complaints of runaway acceleration. Owners of the popular Prius Hybrid had also complained of the problem but were not included in that recall, though Prius models are included in the current recall.



    Toyota Ready to Expand Safety Recall Beyond Floor Mats...
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    California Arrests Alleged Mastermind of Multimillion-Dollar Ponzi Scheme

    Attorney General hits alleged culprit with 100 criminal counts

    November 16, 2009
    Attorney General Edmund G. Brown Jr. today announced the arrest of William Arthur Sassman II who "looted" the life savings of dozens of investors to bankroll his lavish lifestyle and prop up a multi-million dollar Ponzi scheme.

    Sassman, 41, of Sacramento, was arrested at his residence this morning on a total of 100 counts: 43 counts of grand theft, 40 counts of misrepresentation or omission in the sale of a security, 16 counts of first-degree burglary and 1 count of use of a device, scheme, or artifice to defraud in the sale of a security. If convicted, Sassman faces up to 52 years in prison. Sassman is being held in the Sacramento County Jail and bail has been set at $3.2 million.

    "William Arthur Sassman solicited millions of dollars from California investors with promises of high returns on business and real estate investments," Brown said. "In reality, Sassman looted their savings to prop up a Ponzi scheme, so he could buy homes and Ferraris."

    Over the past decade, Sassman used four companies-InTex, LLC; Formulating Insurance Agency (FIA); Formulating Investments (FI); and Systematic Management Services (SMS)-to solicit investments ranging from approximately $10,000 to $500,000 from more than 50 individuals across Northern California and beyond.

    Sassman, a licensed insurance agent, convinced investors, many of whom were senior citizens, to shift their savings from IRAs, annuities, life insurance accounts, 401(k)s and certificates of deposit to "high return" investments with his companies. These investments included foreclosed properties and real estate in Georgia, Mare Island and Vallejo; a strip mall in Folsom; commercial property in El Dorado Hills; the production of a laptop computer stand called the "Notefloat" and annuity, stock and foreign currency investments.

    However, Sassman made few, if any, of these investments and rarely paid the double to triple digit returns he promised. Instead, Sassman spent investors' millions financing his lavish lifestyle, including $1.1 million on his American Express card, $300,000 on automobiles, $75,000 at Polo Ralph Lauren and three homes.

    The limited funds Sassman invested were channeled into other illegal operations including a "stock trading program" run by a group indicted in federal court earlier this year for running a Ponzi scheme and a European investment scam that promised a 200 percent profit in 45 days or 800 percent annually.

    As Sassman burned through investor funds, he paid returns to early investors by using funds from new ones. Investors are still owed close to $4.4 million, and additional losses could reach $3 million.

    In September 2009, Sassman and his companies filed for bankruptcy.

    Some of Sassman's victims

    In October 2004, a Sacramento resident invested more than $250,000 in FIA. Sassman promised her a seven percent annual return. Her money was combined with money from other investors for a total of more than $700,000. Of that money, approximately $400,000 was spent on Sassman's personal expenses, more than $50,000 went to Sassman's wife, and more than $34,000 was paid in returns to other investors. The victim lost $170,000 of her investment.

    In late 2005, Sassman promised a Rancho Cordova woman that if she closed her $78,000 life insurance policy and invested the funds with him, she would receive an 8 percent return on her investment. In early 2009, the victim was diagnosed with cancer and her son took over her finances. Her son contacted Sassman and requested $7,000 from his mother's investment to help pay for her medical expenses. Sassman promised to send a check, which never arrived. Soon after, the victim's son contacted Sassman and asked him to return the entire balance of the $78,000 investment. Sassman sent a check for $14,000 that bounced. The victim's investment was never returned.

    In January 2007, a Sacramento couple invested more than $80,000 with Sassman's company SMS to be invested into real estate and to earn interest. Sassman informed the couple that their money had been used to purchase property, which was undergoing renovation. The couple was unaware that their entire investment had been used to pay other investors.

    California Arrests Alleged Mastermind of Multimillion-Dollar Ponzi Scheme...
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    Three More Cases Of Swine Flu In Pets

    FDA approves additional vaccine for use

    Health officials have confirmed three new cases of the 2009 H1N1 influenza virus in pets, while the Food and Drug Administration (FDA) has approved a fifth vaccine for use against the disease.

    The latest cases involve three ferrets in Oregon, according to The American Veterinary Medical Association (AVMA). The new findings bring the total number of confirmed H1N1 cases involving ferrets in that state to four.

    The diagnosis comes just days after a cat in Iowa tested positive for the H1NI virus. That cat, diagnosed earlier this month, was the first feline in the country with a confirmed case of the H1N1 strain of influenza.

    In the Oregon case, the ferrets that tested positive for the virus are among a group of nine that lived with a family near the city of Roseburg. All nine ferrets had flu-like symptoms, but state health officials said the family only took three of the animals to a veterinarian.

    Those three ferrets tested positive for the H1N1 virus, said Dr. Emilio DeBess, the Oregon state public health veterinarian. Family members who owned the ferrets, Dr. DeBess added, were sick with flu-like symptoms the week before the animals became ill.

    There are no indications the ferrets passed the virus to other people or animals, Dr. DeBess said.

    Oregon health officials in early October confirmed the first case of H1N1 in a ferret. All of the sick ferrets have since recovered, health officials said.

    In the Iowa case, health officials suspect the cat caught the H1N1 virus from its owners, who were sick with that strain of the flu.

    The cat has recovered and there are no signs it passed the virus to any other humans or animals, officials said. Besides the Iowa cat and the Oregon ferrets, health officials have confirmed cases of the H1N1 virus in pigs and birds.

    The AVMA said these cases illustrate that some viruses can spread from people to animals. The organization said pet owners should contact their veterinarians if their animals show any signs of illness.

    Oregon's Dr. DeBess also urged pet owners to take simple precautions to reduce the spread of the H1N1 virus from themselves to their animals.

    "Wash your hands, cover your cough and your sneeze, and do your best to prevent contaminating objects your pet may come into contact with," he said. "The key message is to protect your animals much like you protect your family."

    The AVMA will continue to track cases of the H1N1 virus in animals and post those findings on its Web site, the organization said.

    New vaccine details

    The new vaccine approved by the FDA against the H1N1 virus is manufactured by ID Biomedical Corp. of Quebec, Canada, owned by GlaxoSmithKline PLC.

    As with the four previous 2009 H1N1 influenza vaccines licensed by the FDA on Sept.15, 2009, ID Biomedical Corporation will manufacture its H1N1 vaccine using the established, licensed egg-based manufacturing process used for producing seasonal flu vaccine.

    Potential side effects of this H1N1 vaccine are expected to be similar to those of the seasonal and H1N1 flu vaccines. The most common side effect is soreness at the injection site. Others may include mild fever, body aches and fatigue for a few days after the inoculation.

    As with any medical product, unexpected or rare serious adverse events may occur. The FDA is collaborating with other government agencies to enhance adverse event safety monitoring during and after the H1N1 2009 vaccination program.

    ID Biomedical's H1N1 monovalent vaccine will be produced in multi-dose vials, in a formulation that contains thimerosal.

    As more vaccines become available, there is concern that Internet scamsters will try to take advantage of the spreading fears about flu.

    ConsumerAffairs.com recently reported warnings from the FDA on Internet sales of purported swine flu drug products.



    Three More Cases Of Swine Flu In Pets...
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      How Much Protection Does Overdraft Fee Rule Provide?

      Banks could drop unprofitable customers

      The Federal Reserve this week issued a new rule requiring banks to allow customers to decide whether they want the automatic "courtesy" overdraft protection, that covers debit card purchases when they overdraw their accounts, but nicks them with a hefty fee.

      Under the new Fed rules, bank customers must be allowed to "opt-in" for this protection. It addresses a longstanding consumer complaint that paying the overdraft fees is much worse than having a purchase denied due to insufficient funds.

      While the new rule should go a long way in mitigating this consumer complaint, some think it doesn't go far enough. Rep. Carolyn Maloney (D-NY) has drafted legislation that also allows bank customers to "opt-in" to overdraft protection.

      "I'm glad that the Federal Reserve has recognized the need to address outrageous overdraft policies by requiring a strong affirmative opt-in to debit-card overdraft plans, and I commend Chairman Bernanke for taking the regulators in this direction," Maloney said. "The Fed's rule is an endorsement of the need for more overdraft protection for consumers."

      But Maloney said Congress still needs to act on the issue. She says there are shortcomings in the new Fed rule that her bill would address.

      "The Fed still allows institutions to charge an unlimited quantity of overdraft fees, would do nothing to make fees proportional to the amount of the overdraft, and would not address the manipulation of posting order of charges to accounts," Maloney said. "Under the Fed's new rule, a $5 cup of coffee could still become a $40 cup of coffee after an overdraft fee is added!"

      Maloney says her bill, H.R. 3904, caps the quantity of fees at one per month or six per year, requires that fees be reasonable, and prohibits posting-order manipulation, and includes all transactions, not just debit cards. She says her bill has wide support, including from House Financial Services Chairman Barney Frank, who is a co-sponsor.

      Unintended Consequences

      But as with the credit card reforms passed earlier this year, some in the financial industry warn of unintended consequences. They point out that banks will likely respond to rule changes - that remove billions from their revenue lines each year - with some rule changes of their own.

      For example, Tim Smith, CEO of Probity Financial Services and the former President of a nationwide bank consulting firm, says nothing in the new Fed rule or the Maloney bill requires banks to keep customers.

      What will banks do when a consumer hits the six overdraft fee maximum in a year? Smith says the most likely outcome will be to close their accounts, just as credit card companies have been closing many cardholder accounts in the wake of the credit card reform bill.

      Smith cites an FDIC study of bank overdraft programs to suggest more than one in ten checking accounts would fall into this category. He says these consumers may be forced to turn to check cashing services and prepaid debit card services to meet their spending needs, both of which are likely to be just as expensive as bank's overdraft programs.

      "Banks can and should adapt to limitations placed on their aggressive overdraft policiesBut, let's be honest, if Congress establishes a limit on the number of overdrafts a bank can charge in a given year, there is a very real possibility that millions of consumers will be forced out of the banking system," Smith said. "This is a classic case where the intentions are good, but the outcome will likely be very different than what Congress envisions."


      How Much Protection Does Overdraft Fee Rule Provide?...
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      Marsh & McLennan Settles Investor Suit For $400 Million

      Alleged scheme caused stock to lose half its value

      When insurance broker Marsh & McLennan came under investigation for bid rigging in 2004, its share price lost half its value. Now, some investors in the company will get some of their money back.

      The company announced today it will pay $400 million to settle a lawsuit, led by pension funds in New Jersey and Ohio. The firm earlier negotiated an $850 million settlement with the State of New York, which brought the first case.

      Ohio Attorney General Richard Cordray says today's settlement holds Marsh accountable for its wrongdoing and requires the company to compensate investors for their injuries.

      "Through violations of securities laws, Marsh harmed the investments and retirement benefits of workers in Ohio and across the country," Cordray said. "This massive fraud was built on unethical and illegal practices and violated the best interests of clients and shareholders alike."

      The Public Employees Retirement System of Ohio, the State Teachers Retirement System of Ohio and the Ohio Bureau of Workers' Compensation, together with the State of New Jersey Department of Treasury, Division of Investments, have served as lead plaintiffs representing shareholders in the case.

      Investors harmed

      Marsh is one of the world's largest providers of insurance brokerage and consulting services. In the lawsuit against Marsh, the lead plaintiffs sought redress for investors who were harmed by Marsh's failure to disclose an alleged scheme that generated substantial earnings from illegal, anticompetitive arrangements with insurance carriers.

      The alleged scheme involved steering business to certain insurance carriers in exchange for kickbacks known as "contingent commissions." According to the complaint, in some instances Marsh even generated fake bids to shield participating insurance carriers from competition. The alleged scheme violated numerous laws.

      In 2005 Marsh & McLennan agreed to pay $850 million in restitution to policyholders harmed by its actions and adopt a new business model that avoids similar conflicts of interest.

      According to the original complaint, filed by then-New York Attorney General Elliott Spitzer, Marsh collected approximately $800 million in contingent commissions in 2003. The complaint alleged that those commissions were tainted by conflicts that harmed Marsh's customers -- large corporations, small and mid-size busineses, municipal governments, school districts and some individuals.

      Cordray says Marsh never revealed this scheme to the investing public, despite the huge role contingent commissions played in the company's earnings. Marsh's improper business practices came to light in October 2004 after Spitzer's investigation revealed an industry-wide scandal involving price-fixing and improper bid manipulation activities.

      Within days of that news, Marsh & McLennan Companies lost $9 billion in market capital as its stock price collapsed. Shareholders, including many in Ohio, suffered tremendously, Cordray said.



      Marsh & McLennan Settles Investor Suit For $400 Million...
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      DOT Fines Ultimate Fares $600,000 For Advertising Violations

      Company failed to state full fare to customers

      By James Limbach
      ConsumerAffairs.com

      November 13, 2009
      A U.S. Department of Transportation administrative law judge (ALJ) has okayed a set of stiff fines levied against the Internet travel agency Ultimate Fares and its owner for violations of advertising regulations.

      ALJ Richard C. Goodwin has fined the company $600,000 and its owner, owner Roni Herskovitz, $30,000. The order also bars Herskovitz from any involvement in the online air travel agency business for 12 months.

      An investigation by DOT's Aviation Enforcement Office found that Ultimate Fares failed to include the federal excise tax and the service fee it charged to consumers in fares published on its website between March 2008 and September 2009. This violated the Department's requirement that published airfares must state the full price to be paid including service fees and any ad valorem tax, such as the Federal excise tax, which is assessed as a percentage of the fare.

      Ultimate Fares continued to omit the tax from its stated fares even after the enforcement office began its investigation, and also failed to disclose which flights were being operated on a code-share basis as required by the Department's rules.

      Ultimate Fares has been the subject of numerous consumer complaints:

      • Sandeep A. from Nesconset, N.Y., tells ConsumerAffairs.com, "After giving my credit card number and no confirmation from the company after 48 hours regarding my flight, the company has put me on phone hold in excess of 30 minutes on three occasions and no response even after getting in touch with the operators. They can't tell me even if the tickets are going to be ready for the international travel."

      • Darlene K. of Brick, N.J., writes ConsumerAffairs.Com that after receiving confirmation of her booking of a flight to Reno, she and her husband arrived at the airport to find they had no reservations. "As a result, I needed to purchase new airline tickets at a cost of $1427. I also had to cancel my time-share reservation at an additional cost of $189. We also needed to purchase our hotel accommodations at a cost of $621.22. Due to Ultimate Fares' negligence, we encountered monetary hardship, unnecessary stress and an enormous amount of time trying to resolve this problem to no avail."

      • Dror Z. of Toronto writes ConsumerAffairs.com, "I booked a flight from NYC to Mumbai, India through ultimatefare.net, which is the website for Ultimate Fares Inc. I paid with my debit card. By the day of traveling, the money was not collected from my account and when I arrived to the airport, the ticket was cancelled. In the days before the flight, I sent a few e-mails to the customer support department, but all I got back was an automatic response that the message was received but no action was taken. A month later I found out that the money was taken, since I needed it and it wasn't there. I've contacted them over the phone and via e-mail but the money was not returned to me. About two months ago I have contacted Ultimate Fares Inc. again, demanding my money back. Again I was moved from one agent to the other and at the end, no action was taken. I was forced to borrow $600 from various people. I needed a medical treatment, and couldn't get it because I didn't have money to pay for it."

      The fine -- the largest ever assessed for advertising violations -- will become final in 30 days unless the Department decides to review the action or a petition for review is filed.



      DOT Fines Ultimate Fares $600,000 For Advertising Violations...
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      American Home Mortgage Servicing Agrees To 8200 Modifications

      Subprime loans orginated by H&R Block, Option One

      American Home Mortgage Servicing has reached a settlement with the State of Massachusetts, agreeing to modify 8,200 mortgages held by Massachusetts homeowners.

      The firm had previously been blocked by a state court from foreclosing on the mortgages, originated by H&R Block Mortgage and Option One Mortgage. The mortgages were the subject of a lawsuit last year by Massachusetts Attorney General Martha Coakley.

      The suit alleged Option One and H&R Block Mortgage originated the risky subprime loans with reckless disregard for whether borrowers would be able to afford their loan payments -- a practice that has contributed significantly to the foreclosure crisis in Massachusetts, Coakley says. Under the agreement, filed in Suffolk Superior Court, AHMSI will be required to provide affordable loan modifications to certain borrowers who fall behind in their mortgage payments.

      The Attorney General's litigation with Option One, H&R Block Mortgage, Block Financial Corp., and their parent company, H&R Block, Inc., is ongoing, and is expected to go to trial in 2010. The lawsuit is seeking redress for the damage incurred by homeowners and Massachusetts communities as a result of the unfair and deceptive lending practices of the defendants. The lawsuit also alleges civil rights violations because the defendants' policies and practices resulted in discriminatory pricing to the detriment of black and Hispanic borrowers; disparate pricing violates antidiscrimination laws.

      In April 2008, AHMSI purchased the right to service the Option One and H&R Block Mortgage loans. As a result, AHMSI was named as a defendant in the office's ongoing enforcement action, and became subject to certain obligations under a preliminary injunction issued by the Suffolk Superior Court in November 2008, which limited the defendant's ability to foreclose on the loans originated by Option One and H&R Block Mortgage. The Attorney General's complaint did not allege loan origination misconduct by AHMSI, and the company cooperated with the Attorney General in reaching this agreement.

      "Our office continues to work to protect homeowners from the fallout of the subprime lending crisis in Massachusetts, and to assist those homeowners who fell victim to unfair and deceptive lending practices to stay in their homes," Coakley said. "Our agreement with AHMSI is another step toward that goal, and it will provide much-needed relief to thousands of homeowners. As I said in testimony to Congress earlier this year, I believe that loan modifications are key to stemming the tide of foreclosures in our state and across the nation."

      The agreement provides that borrowers holding Option One and H&R Block Mortgage loans now serviced by AHMSI will receive a number of significant benefits, including:

      • Loan modifications for eligible borrowers who are unable to make their scheduled payment and are more than 45 days past due in their mortgage payments. AHMSI will modify those loans through a variety of steps to provide borrowers affordable monthly mortgage payments. The steps include reduced interest rates, extended amortization periods, and, if necessary, principal forbearances.

      • Relocation payments of $3,000 to $7,500 for delinquent borrowers who do not qualify for loan modifications, and alternatives to foreclosure, such as deeds-in-lieu of foreclosure.

      • Opportunities for the Attorney General's Office to object to foreclosures and denials of loan modifications, including a requirement that AHMSI obtain court approval to foreclose upon a loan where AHMSI and the Attorney General's Office cannot resolve an objection.



      American Home Mortgage Servicing Agrees To 8200 Modifications...
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      Celebration Studios Owner Pleads Guilty To Theft

      Closes book on New Jersey bridal nightmare

      The owner of a now-defunct New Jersey wedding photography studio has pleaded guilty to theft charges, bringing to a close one of the state's biggest consumer nightmares for brides.

      Marc S. Schwartz, 47, of Randolph, N.J., pleaded guilty Wednesday to fourth-degree theft of services before a New Jersey Superior Court judge.

      Schwartz is the former owner of Celebration Studios, which contracted to provide still and video photography services at weddings throughout New Jersey. In 2005 ConsumerAffairs.com began receiving numerous complaints from New Jersey brides who said they had paid thousands of dollars up front for the company's services but had not gotten any pictures.

      In January 2008 the company closed its doors and went out of business, causing even more consternation.

      "I hired them for both photo and video for my wedding on December 5, 2004," said Jennifer, of North Bergen, NJ. "I received my proofs but didn't receive any prints, albums or video footage. They were never available to make appointments and never attempted to help me get all that I paid for."

      Brides complained that they paid as much as $6,000 in advance but never received any pictures. One year ago, the New Jersey Attorney General's Office obtained a court order, allowing it to retrieve the stashed merchandise and begin distributing it to customers of the now-defunct Morris County photography company. The court also ordered subcontractors who had worked for Celebration Studios, some of whom were never paid, to turn over their materials as well.

      Happy ending

      While the story had a happy ending, many brides received their wedding pictures years after their wedding had taken place.

      Under Schwartz's plea agreement, he must pay $75,000 in restitution to eight photographers, and the state will recommend that Schwartz be sentenced to one year of probation. In pleading guilty, Schwartz admitted that he hired the photographers to take photos and videos for Celebration Studios and failed to pay them in accordance with their agreements.

      In addition, a plea was entered on behalf of the corporate defendant, Celebration Studios, to a third-degree charge of theft by failure to make required disposition of property. The company, through its attorney, admitted that it engaged in theft and fraudulent business practices by entering into contracts with customers and receiving money for wedding photography services and products that were paid for, but not delivered.

      "We took swift legal action through the Division of Consumer Affairs to ensure that any photos and videos that were in the possession of Celebration Studios were secured for the affected couples," said New Jersey Attorney General AnneMilgram.

      Celebration Studios Owner Pleads Guilty To Theft...
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      Virginias Price Gouging Statute Activated As Storm Batters the East

      Tropical Storm Ida and coastal Nor'easter bring high water, power failures

      Virginia Attorney General Bill Mims has announced that the state's Anti-Price Gouging Statute, which prohibits the charging of unconscionable prices for necessary goods and services, has been activated as the remnants and Tropical Storm Idea and a coastal Nor'easter bringing flooding and tidal surges along the Eastern Seaboard.

      Storm surges and localized flooding were being reported up and down the East Coast, as far north as New Jersey and throughout the Gulf Coast and Southeastern regions. Oil companies raced back to the Gulf as Ida moved ashore and, in Mobile, Alabama, a new cruise ship -- the Carnival Fantasy -- arrived a day late for its maiden voyage to the Mexican coast.

      In Virginia's Chesapeake Bay communities, many homeowners awoke this morning to find boat docks underwater and electrical service interrupted. There were no immediate reports of injuries.

      Gov. Tim Kaine declared a state of emergency in Virginia last night. By law, Virginias price-gouging statute goes into effect upon the issuance of a declared state of emergency by the Governor.

      The Virginia Post-Disaster Anti-Price Gouging Act, which became law July 1, 2004, prohibits the charging of "unconscionable" prices for "necessary goods and services" in the affected areas within Virginia for the 30-day period following the disaster that resulted in the declared state of emergency.

      The basic test under the statute is whether the price charged for the goods or services "grossly exceeds" the price charged within 10 days before the disaster. "Necessary goods and services" includes those goods or services for which demand does, or is likely to, increase as a result of the disaster.

      The Attorney Generals Office has reached seven legal settlements with gas stations over price gouging after a state of emergency was declared Sept. 10, 2008 as Hurricane Ike approached the Gulf Coast.

      Virginias Post-Disaster Anti-Price Gouging Act leaves room for standard market forces to work in times of disaster and prohibits only the charging of unconscionable prices for necessary goods and services during these rare times, Attorney General Mims said. Hopefully Virginia retailers will be aware of this laws current activation, and keep it in mind as they proceed with business during this flooding and storming. We intend to enforce our statute, as our record of law suits and settlements demonstrates. We will continue to do so in a reasonable and fair manner.

      Anyone who suspects price gouging should report it to the Office of Consumer Affairs -- 804-786-2042



      Virginias Price Gouging Statute Activated As Storm Batters the East...
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      Boomers Entering Their 60s With More Disabilities

      UCLA study finds older generation appears healthier

      Baby boomers are supposed to be different, the first generation to redefine retirement and aging on their own terms; robust, active and energetic.

      Could that all be just self-congratulatory hype?

      Researchers at UCLA have concluded that Baby Boomers may well be entering their 60s suffering far more disabilities than their counterparts did in previous generations.

      In the study, which will be published in the January 2010 issue of the American Journal of Public Health, researchers from the division of geriatrics at the David Geffen School of Medicine at UCLA found that the cohort of individuals between the ages of 60 and 69 exhibited increases in several types of disabilities over time. By contrast, those between the ages of 70 and 79 and those aged 80 and over saw no significant increases - and in some cases exhibited fewer disabilities than their previous groups.

      While the study focused on groups born prior to the post-World War II Baby Boom, the findings hold "significant and sobering implications" for health care because they suggest that people now entering their 60s could have even more disabilities, putting an added burden on an already fragile system and boosting health costs for society as a whole, the researchers say.

      New Pressures On Health Care System

      If this is true, it's something we need to address," said Teresa Seeman, UCLA professor of medicine and epidemiology and the study's principal investigator. "If this trend continues unchecked, it will put increasing pressure on our society to take care of these disabled individuals. This would just put more of a burden on the health care system to address the higher levels of these problems."

      The researchers used two sets of data -- the National Health and Nutrition Examination Surveys (NHANES) for 1988-94 and 1999-2004 - to examine how disabilities for the three groups of adults aged 60-69, 70-79, and 80 and older had changed over time.

      They assessed disability trends in four areas: basic activities associated with daily living, such as walking from room to room and getting into and out of bed; instrumental activities, such as performing household chores or preparing meals; mobility, including walking one-quarter mile or climbing 10 steps without stopping for rest; and functional limitations, which include stooping, crouching or kneeling.

      The study focused primarily on trends for the more recent 60-69 age group -- those born between 1930 and 1944, just before the start of the Baby Boom, whose data was included in the 1999-2004 NHANES. In particular, researchers felt this group could offer insights into the health of the Boomers following them, who are now entering their 60s.

      Older generation has fewer disabilities

      The researchers found that between the periods 1988-94 and 1999-2004, disability among those in their 60s increased between 40 and 70 percent in each area studied except functional limitations, independent of sociodemographic characteristics, health status and behaviors, and relative weight. The increases were considerably higher among non-white and overweight subgroups.

      By contrast, the researchers found no significant changes among the group aged 70 to 79, while the 80-plus group actually saw a drop in functional limitations.

      One reason for this uptick, researchers say, is that disabilities may be linked with the changing demographic make up of the U.S. population. The fastest growing segments of the population, they say, are over-represented when it comes to obesity, for example.

      The researchers note that their controls for differences in socio-demographics, health status and health behavior do not completely explain the increase in disability trends among the 60- to 69-year olds. Still, the trends within that group "are disturbing," Seeman said.

      "Increases in disability in that group are concerning because it's a big group," she said. "These may be people who have longer histories of being overweight, and we may be seeing the consequences of that. We're not sure why these disabilities are going up. But if this trend continues, it could have a major impact on us, due to the resources that will have to be devoted to those people."



      Boomers Entering Their 60s With More Disabilities...
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      Class Action Suit Filed Against AARP

      Alleges group misled consumers as to extent of medical insurance coverage

      By Jon Hood
      ConsumerAffairs.com

      November 11, 2009
      AARP is taking more heat over marketing of one of its insurance plans, as a Texas couple files a class action lawsuit claiming that ads led them to believe the group's Medical Advantage Plan -- which is no longer being sold through AARP -- was a primary insurance plan, rather than one providing limited coverage for crucial medical care.

      James and Alison Halperin received a packet touting the Medical Advantage Plan in early 2008, and were so excited that they dropped their existing policy and signed up. Shortly thereafter, Alison was diagnosed with breast cancer and informed that she would need costly surgery. In case that wasn't bad enough, the Halperins were treated to another kick in the gut when they found out their new AARP-provided plan wouldn't cover the urgent procedure.

      The Halperins' policy, provided by UnitedHealth Group, is a so-called limited benefit plan: its coverage is limited to a specific dollar amount. Typical insurance plans, by contrast, cover a percentage of all health-related costs, regardless of how high the bill ends up being. Unfortunately for the Halperins, AARP's plan is especially stingy in its coverage of surgical procedures, providing anywhere from a few hundred to $10,000, depending on what kind of surgery is needed.

      The plan's appeal lies in its relatively low premiums, attractive for consumers who might have trouble attaining a traditional plan or who are struggling in the still-gloomy economy. The plans are targeted to consumers between 50 and 64. An AARP spokesman said the plans were not designed to be comprehensive insurance, nor should they be communicated in this manner.

      The Halperins accuse Washington, D.C.-based AARP of violating the city's Consumer Protections Procedure Act. Their complaint alleges that AARP has preyed upon Plaintiffs and thousands of Americans over age 50 by luring unsuspecting consumers in need of affordable health care to enroll in AARPs health insurance program.

      Plan canceled

      The Halperins' allegations are only the latest in a series of claims that AARP misled consumers as to the extent of the plan's coverage. Last year, Sen. Chuck Grassley of Iowa sent a letter to AARP's then-CEO Bill Novelli voicing concerns that consumers who purchased the plan might not realize that it only provides limited coverage. Grassley also sounded the alarm about Essential Plus Health Insurance, a second AARP policy with similar terms as the Medical Advantage Plan.

      Insurance is supposed to limit your exposure to the potentially high cost of a serious illness, Grassley told USA Today. These plans do the opposite.

      The ensuing firestorm led AARP to stop offering the plans, technically known as "fixed-cash benefit indemnity plans."

      Unkind year

      All in all, 2009 has not been kind to AARP.

      Approximately 60,000 seniors have canceled their memberships since July, apparently in protest of the group's support for health insurance reform. A competing, conservative-backed group creatively named the American Seniors Association has been trying to woo AARP members over to its side. While AARP originally refused to back a specific bill, the group last week endorsed the Affordable Health Care for America Act, the bill currently snaking its way through Congress.



      Couple files class action lawsuit claiming that ads led them to believe the group's Medical Advantage Plan which is no longer being sold through AARP was a...
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      Hospital Readmission Rate High For Medicare Heart Failure Patients

      Research shows need for improved care

      By James Limbach
      ConsumerAffairs.com

      November 11, 2009
      Almost a quarter of heart failure patients insured by with Medicare are back in the hospital within a month after discharge, researchers report in Circulation: Heart Failure, a journal of the American Heart Association.

      Each year, from 2004 through 2006, more than a half million Medicare recipients over age 65 went to the hospital for heart failure and were discharged. And each year, about 23 percent returned to the hospital within 30 days -- signaling a need to improve care, researchers said. Readmission rates for all causes were almost identical all three years.

      "I was hoping for improvement and was disappointed to find that was not the case," said Joseph S. Ross, M.D., M.H.S., the study's lead author and an assistant professor of geriatrics and palliative medicine at Mount Sinai School of Medicine in New York. "Despite the increased focus on the need to reduce readmissions, about a quarter of patients are back into the hospital within 30 days."

      Heart failure occurs when a heart weakened by disease can no longer pump effectively. Before discharge heart failure patients should receive written information on:

      • Eating a proper diet;

      • Engaging in appropriate physical activity;

      • Taking medicines correctly;

      • Monitoring their weight; and

      • Knowing what to do if their symptoms worsen.

      However, the current fee system in the United States doesn't encourage a focus on prevention, researchers said. In their analysis, they report doctors and hospitals are financially awarded more for treating and hospitalizing patients, not for preventing hospitalizations through such strategies as disease management.

      "Physicians aren't paid to coordinate care," Ross said. "That physician is busy seeing patients and that's what they're paid to do. If we want to deliver better care, this trend is what we need to address."

      Another barrier to optimal care is a lack of communications between doctors who care for patients in the hospital and the patients' regular physicians who help patients manage their chronic disease, Ross said. The disruption to the continuum of care can have a negative effect on the patient.

      The average age of patients in the study was 80 years and more than half (57 percent) were women. Most patients had multiple chronic diseases: 60 percent had heart arrhythmias; 73 percent had atherosclerosis or hardening of the arteries; 49 percent had diabetes; and 29 percent had kidney failure.

      "Coming back and forth into the hospital isn't good for patients, and it isn't good for the healthcare system," said Ross, who plans to research the reasons heart failure patients are readmitted to the hospital. "This is a tremendous challenge."

      Findings of the study are important for patients and hospitals, Ross said.

      "Patients should use this information to vet hospitals, to look at the quality of care delivered there and ask questions about the care they receive," he said. "Hospitals should consider the rehospitalization rate a grade which, from these findings, needs improvement."



      Hospital Readmission Rate High For Medicare Heart Failure Patients...
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      Protecting Your Credit Card From Unauthorized Charges

      Think before giving anyone your credit card information

      By Mark Huffman
      ConsumerAffairs.com

      November 11, 2009
      As the economy has worsened, the number of scams targeting credit and debit cards appears to be on the rise. Consumers should carefully protect their credit card information to prevent becoming a victim.

      An unauthorized charge can be when someone has stolen your credit card or its number and expiration date. The law is very clear about consumers' rights in these cases.

      By reporting the unauthorized charges to your credit card company's fraud department, the Federal Trade Commission (FTC) says consumers can limit their liability for unauthorized credit card charges to $50, under the Fair Credit Billing Act.

      To take advantage of the law's consumer protections, you must:

      • Write to the creditor at the address given for "billing inquiries," not the address for sending your payments. Include your name, address, account number and a description of the billing error, including the amount and date of the error.

      • Send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you. If the address on your account was changed by an identity thief and you never received the bill, your dispute letter still must reach the creditor within 60 days of when the creditor would have mailed the bill. This is why it's so important to keep track of your billing statements and immediately follow up when your bills don't arrive on time.

      • Send your letter by certified mail, and request a return receipt. This will be your proof of the date the creditor received the letter. Include copies (NOT originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.

      The creditor must acknowledge the consumers' complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving the letter.

      Other unauthorized charges

      But many unauthorized charges are made, not by people who physically steal your credit card, but by companies that claim you have made a legitimate purchase. Usually a consumer has never heard of the company making the charge, so rightly feels they could not have authorized the charge.

      "I recently noticed a charge to my checking account for 11.99 from "great Fun CT," Jeanette, of East Rutherford, N.J., told ConsumerAffairs.com. "After further investigation I realized these charges were being charges to my checking account on a monthly basis starting Dec. of 08."

      Jeanette tracked down the company, Trilegiant, and was told they had proof she had registered for the "membership" and agreed to pay the monthly fee. She was told a copy of the authorization would be mailed to her, but she says it never came.

      These types of unauthorized charges stem from "negative option" marketing practices, where the consumer may accept a "free" gift but provide their credit card number for a small shipping and payment fee. Later much larger fees appear on their credit card bill. When they complain, the company claims they agreed to purchase additional "services," with the agreement buried in the fine print.

      Clear and conspicuous

      How does the law treat these kinds of unauthorized purchases? The FTC says the law requires that any additional sale to the consumer must be stated in a "clear and conspicuous" manner. That leaves plenty of gray area for the company and the consumer to disagree over what is "clear and conspicuous."

      To fight these types of unauthorized charges, consumers should ask their credit card company to challenge the charge as fraudulent. According to the Office of the Comptroller of the Currency, actions that a bank can take in reviewing a claim are:

      • Looking at the transaction in light of other purchases,

      • Reviewing if the goods were delivered to the residence or place of business,

      • Comparing signatures, requesting a police report,

      • Requesting documentation to assist in validating the claim,

      • Requesting a signed written statement from the cardholder or authorized user, and

      • Requesting information about the cardholder's knowledge of the person who allegedly used the card or of that person's authority to do so.

      The bank will notify you of the results of their investigation.

      Avoiding the hassle

      Consumers, of course, want to avoid having to go through this hassle in the first place. That requires being very careful in how you use your credit card.

      For starters, never agree to accept a "free" gift or "trial" offer, especially if it is offered at the conclusion of a legitimate transaction in which you have used your credit card. Plenty of well known companies that you have done business with have had third party marketing agreement with other marketers, sharing your credit card information without your knowledge or consent.

      Be especially careful with your debit card, since it is an entryway to your bank account. Money removed from your account in an unauthorized transaction is almost impossible to recover.

      Be very leery of any telemarketer who requests your bank information or your credit card number "for verification." Keep in mind that, since 1996, a seller or telemarketer is required by law to obtain your verifiable authorization to obtain payment from your bank account.

      That means whoever takes your bank account information over the phone must have your express permission to debit your account, and must use one of three ways to get it.

      The person must tell you that money will be taken from your bank account. If you authorize payment of money from your bank account, they must then get your written authorization, tape record your authorization, or send you a written confirmation before debiting your bank account.

      Protecting Your Credit Card From Unauthorized Charges...
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      Study Finds Sexual Problems in Human Males Exposed to High BPA Levels

      Researcher: latest findings 'can't be dismissed'

      By Truman Lewis
      ConsumerAffairs.com

      November 11, 2009
      Barely one week after Consumer Reports found unexpectedly high levels of the chemical Bisphenol A (BPA) in name-brand food products, a federally-financed study says the substance appears to cause erectile dysfunction and other sexual problems in men. A study released last month linked exposure to BPA during pregnancy to hyperactivity and aggression in girls.

      BPA, a synthetic version of estrogen, is used in everything from plastic baby bottles to canned food linings and has been detected in the urine of 93 percent of the U.S. population. It has been linked to a wide array of health effects including reproductive abnormalities, heightened risk of breast and prostate cancers, diabetes, and heart disease.

      The latest study, published in the journal Human Reproduction, was conducted on male workers at four factories in China, is the first to study the effects of BPA on human males. Previous studies have used mice and rats, a point often seized upon by industry-backed critics who have claimed there is no evidence of ill effects on humans.

      "Critics dismissed all the animal studies," said De-Kun Li of the Kaiser Foundation Research Institute, which conducted the study with funding from the National Institute for Occupational Safety and Health, The Washington Post reported. "Now we have a human study and this can't just be dismissed."

      Nevertheless, the American Chemistry Council (ACC) -- which represents the chemical industry -- was quick to discount the findings.

      This study of occupational exposure to bisphenol A (BPA) among male factory workers in China provides interesting new information, although its relevance to average consumers who use products containing minute amounts of BPA is limited, at best," said Steven G. Hentges, Ph.D., of the ACC's Polycarbonate/BPA Global Group. "Based on the significant differences between occupational exposure and consumer exposure, the studys authors state, the findings from this study probably do not apply to populations that are exposed to low levels of BPA." he noted.

      600 workers

      Researchers followed more than 600 workers over a five-year period and compared their sexual well-being with that of male workers in other Chinese plants where no BPA was present. They found that men handling BPA were four times as likely to suffer from erectile dysfunction and seven times as likely to have difficulty ejaculating.

      Researchers said they did not have to wait long to see the results of BPA exposure. Within just a few months of starting to work at the factories, the study's subjects began to develop sexual dysfunction.

      While exposure levels in the Chinese group were as much as 50 times what an average U.S. male faces, Li said the findings nevertheless raise questions about the safety of exposure at lesser levels.

      The National Institutes of Health (NIH) last week said it would spend $30 million to examine the safety of BPA and the U.S. Food and Drug Administration (FDA) is expected to release its own findings from an ongoing study within the next month.

      A recent EPA study found that exposure to low levels of BPA had no effect on a range of reproductive and behavioral activities measured. But the FDA's scientific advisory board has cited more than 100 studies linking BPA with health effects and the Obama administration has pressed agencies to take a "fresh look" at the issue.

      FDA panel

      An FDA special scientific advisory panel reported in late 2008 that the agency's basis for setting safety standards to protect consumers was inadequate and should be reevaluated. A congressional subcommittee determined in 2009 that the agency relied too heavily on studies sponsored by the American Plastics Council. The FDA, now under the leadership of Dr. Margaret Hamburg, is expected to announce soon its reassessment of BPA safety. Bills are currently pending in Congress that would ban the use of BPA in all food and beverage containers.

      Consumers who are concerned might be able to reduce, though not necessarily eliminate, their dietary exposure to BPA by taking the following steps:

      • Choose fresh food whenever possible.

      • Consider alternatives to canned food, beverages, juices, and infant formula.

      • Use glass containers when heating food in microwave ovens.



      Study Finds Sexual Problems in Human Males Exposed to High BPA Levels...
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      Class Action Filed Against SnapNames.com

      Company VP may have submitted thousands of false bids to inflate sale prices

      By Jon Hood
      ConsumerAffairs.com

      November 11, 2009
      SnapNames.com, a prominent domain auction site, has been served with a class action lawsuit brought on behalf of consumers defrauded by a company vice president who allegedly submitted bids in an attempt to artificially drive up prices.

      According to the complaint, filed Monday in a Miami court, Nelson Brady, Vice President of Engineering at SnapNames, submitted bids in tens of thousands of auctions over a four-year period, forcing good-faith bidders to shell out extra cash for their desired domains.

      SnapNames announced the scandal in a notice sent out last week. The statement included the stunning admission that the fraudulent bids affected a full five percent of auctions since 2005 no small amount, given that the site holds hundreds of auctions every day. The company says that the employee flew under management's radar, setting up an account under a false name. This is a clear violation of our internal policy and was not approved by the company, according to the statement.

      Perhaps anticipating litigation, SnapNames immediately promised rebates to consumers affected by Nelson's actions, to avoid any question about whether the company benefited from this conduct. Rebates will be for the difference between the prices they [consumers] paid in winning auctions, and the prices they would have paid had the employee not bid in the auctions. How the company plans to determine the difference between those two amounts is anybody's guess, although it says it will appoint an auditor to evaluate each consumer's claim.

      The case is being handled by Santiago Cuerto, a Miami-based lawyer with the Cuerto Law Group. He filed the suit after his brother, who participated in auctions on SnapNames during the relevant time period, learned of the scam.

      Cuerto told PC Magazine that his brother had suspected false bidding on a number of domain auction sites. He's been frustrated by the process for years, Cueto said of Carlos Cuerto. I think the entire industry needs to be cleaned up. To that end, Cuerto said he won't hesitate to file additional suits against other domain name sites if and where phantom bidding is occurring.

      Brady, who used the handle Halvarez, apparently attracted the attention of fellow bidders long before the scandal was uncovered. A namepros.com thread from early 2006 features one frustrated user asking for good tactics on beating this guy on snapnames. Further downthread, a fellow bidder asks, Is that guy 'halveraz'? He seems to be there most of the time on my names, and I operate in a very specialized niche.

      Users on a March 2009 dotweekly.com thread expressed a mixture of curiosity and grudging respect for the phantom bidder. User Acro notes that Our buddy 'halvarez' has transformed this practice into a science at Snapnames. Farther down, Ms Domainer remarks, Halvarez is legend; he has appeared in many of my auctions, tucked safely in the middle of the bidding list. A user named Tony says, In defense of 'Halvarez', he doesnt back out of domain bids.

      SnapNames is encouraging those with questions to contact the company at (866) 690-6279 or support@snapnames.com. The company has also posted an FAQ page on its website. The Cuerto Law Firm is asking for affected consumers to contact them at (305) 777-0377 or info@cuertolawgroup.com.

      SnapNames.com, a prominent domain auction site, has been served with a class action lawsuit brought on behalf of consumers defrauded by a company vice pres...
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      Florida Accuses Loan Modifiers Of Fraud

      Companies charged homeowners upfront fees

      States continue to step up pressure on companies marketing loan modification services to distressed homeowners, calling some of these operations out and out scams.

      In Florida, Attorney General Bill McCollum has sued two Central Florida companies and their owner over allegations they charged up-front fees for foreclosure rescue-related services.

      National Payment Modification Company and The Bostonian Group, LLC, which conducts business under the name People's First, allegedly charge up to $2,500 in up-front fees to homeowners trying to rescue their homes from foreclosure.

      Also named in the lawsuit is William Rodriguez, the owner of both companies, who was a founding owner of Wineberg, Lopez, & Rodriguez Company. The Attorney General's Office sued Wineberg, Lopez, & Rodriguez Company in March and obtained an emergency injunction barring the company from charging homeowners any fee in advance for providing foreclosure-related rescue services. That case is still pending in Orange County Circuit Court.

      An investigation conducted by members of the Attorney General's Economic Crimes Division, working as part of the Attorney General's Mortgage Fraud Task Force, determined that both companies charge the up-front fee and divide it into five equal payments secured by post dated checks.

      Each check, according to the lawsuit, is associated with a separate "sub-contract" or step in the loan modification process. Consumers complained that both companies cash the post-dated checks even though the companies have not begun negotiations or even contacted the consumers' lenders.

      The Attorney General's Office is seeking permanent injunctions prohibiting the companies from charging up-front fees, restitution on behalf of injured consumers, civil penalties of $15,000 for each violation, and reimbursement for attorney's fees and costs related to the investigation.

      The Attorney General's Office has filed numerous civil lawsuits to enforce the state law prohibiting companies from charging up-front fees for foreclosure-related rescue services and is currently investigating over 75 additional companies.

      Florida Accuses Loan Modifiers Of Fraud...
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      Avoid Fraud When Holiday Shopping Online

      AutoTrader.com offers smart buying tips

      With the holiday season rapidly approaching, more and more consumers will be turning to the Web to purchase gifts for family and friends. According to the National Retail Federation, nearly half of consumers plan to use the Internet to purchase holiday gifts this year. But these shoppers need to be aware and prepared for a very real concern when surfing the Web -- online fraud.

      In conjunction with International Fraud Awareness Week (November 8 to 14), AutoTrader.com, is setting out to help educate consumers on how to protect themselves when shopping online.

      "The Internet has made shopping easier than ever, even for high-ticket items such as homes and vehicles," says Sid Kirchheimer, author of Scam Proof Your Life. "But with this increased convenience comes a growing number of scams, especially during the busy holiday shopping season, and there's a greater need for people to learn what to look out for and how to protect themselves."

      Kirchheimer offers the following online fraud awareness tips when shopping online:

      • Research Prices. When researching cars and other big-ticket items for sale online, similar items typically fall into a general price range. If one falls way below that range, be suspicious. Scammers use ridiculously low prices to lure consumers to their ads. If a deal seems too good to be true, it probably is.

      • Don't Fall For Sob Stories. Beware of "act now" low-ball price offers accompanied with a story that speaks of some hardship on the seller's part -- such as a soldier needing to sell a car quickly before being deploying to Iraq, or a recent divorcee wanting to sell her husband's belongings. These bogus ruses usually just empty your wallet, as the items typically don't exist.

      • Don't Rush. A seller pushing to rush a transaction could be trying to prey on a consumer's desire for the item.

      • Watch for "Scammer Grammar." Many scammers posting fraudulent ads are based overseas, and English is not their native tongue. In online ads or in email correspondence, watch for frequent misspellings, misused words or other errors not likely to be made by someone fluent in English.

      • Make Phone Contact. Be suspicious of sellers who want to correspond only by email -- and are not willing to provide a telephone contact number.

      • No Wire Transfers! A wire transfer is the quickest way to lose money -- especially if it's sent overseas, outside the jurisdiction of U.S. officials. If buying a car or another large item locally, make an in-person transaction with cash, money order or another method sanctioned by a bank. If buying from a more distant seller, talk to a bank or reputable escrow service about ways to safely conduct this transaction.

      • Never Go Alone. When meeting a seller to look at a car or other big-ticket items or to conclude the transaction, always go with a friend and, if possible, meet in a public place during the day.

      • Don't Go Off-Site. Many scammers cruise reputable online auction sites, but may entice you to go offline for a similar item. Others will email a link to another site, claiming that it is helping with the transaction. But once you leave a reputable site, your vulnerability to a financial swindle or identity theft increases.

      • See the Product. Many scammers post ads for cars and other items that don't even exist -- they simply steal the pictures and descriptions from other sources. When buying any high-ticket item, insist that you see it in person, get proof it is owned by the seller and be able to have it inspected before any money is exchanged.

      • Use Common Sense. If a shopping experience does not feel right, pay attention to the warning signs and verify that the site and seller are safe before proceeding with the transaction.

      "It's easy to fall into a trap when shopping online if you're not prepared or don't know what to look out for," said Keely Funkhouser, director of fraud prevention strategies at AutoTrader.com. "But by following just a few simple tips, consumers can be more confident and careful when using the Web to make any online purchases."



      Avoid Fraud When Holiday Shopping Online: With the holiday season rapidly approaching, more and more consumers will be turning to the Web to purchase gifts...
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      Companies Sued For Credit Card Interest Rate Scheme

      Consumers warned about telemarketers' claims of immediate savings

      Illinois Attorney General Lisa Madigan has filed suit targeting a telemarketing scam that promises to reduce consumers' credit card interest rates immediately, but ultimately fails to achieve any savings for consumers.

      "During these difficult economic times, consumers are understandably looking for ways to ease the burdens of rising debt," Madigan said. "But I urge consumers to be wary when solicitors try to make tempting claims of 'immediate' savings. In such cases, the schemers rarely deliver and usually leave consumers in an even worse financial situation than before."

      Madigan filed suit against Priority Direct Marketing International, Inc. (PDMI), a Bedford, Texas-based telemarketing firm run by its President, William Fithian, and Advanced Management Services NW, LLC (AMS), a Spokane, Wash.-based firm owned by Ryan Bishop.

      The suit claims that the two companies work in a concerted telemarketing scheme to solicit and enroll consumers in deceptive debt negotiation service agreements that promise to immediately reduce consumers' credit card interest rates, with a guaranteed savings of $2,500.

      PDMI and AMS telemarketing representatives allegedly promise consumers that the companies will negotiate with consumers' credit card companies to lower interest rates, and will provide full refunds if they are unsuccessful.

      After consumers agree to enroll in the program, the telemarketing schemers allegedly charge consumers' credit cards for set up fees ranging from $391 up to $1,590, the suit contends. The defendants allegedly tell consumers that these fees will be reimbursed at a later date by the consumers' banks. Only after consumers' credit cards are charged for the setup fees do they receive any documentation on the program's terms and conditions, which on several points, contradict the telemarketers claims in their sales solicitations.

      Specifically, PDMI and AMS misleadingly claim that they can guarantee an interest rate reduction for all customers or provide full refunds in instances where rate reductions are not secured. When customers have requested refunds, after the defendants have failed to negotiate any interest rate reductions, the defendants allegedly refuse altogether or give refunds minus a non-refundable $199 fee that was not disclosed during the sales pitch.

      Madigan's lawsuit charges the defendants with violating the Illinois Consumer Fraud and Deceptive Business Practices Act by misrepresenting the services they provide to consumers and the effects the services will have on consumers' credit.

      The suit asks the court to enter a permanent injunction barring the defendants from engaging in debt settlement in Illinois and to order the defendants to pay restitution for complainants, 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.

      Madigan advises consumers looking for legitimate financial assistance to consider credit counseling services that charge modest fees and provide true financial and budget counseling based on a consumer's personal circumstances.



      Companies Sued For Credit Card Interest Rate Scheme...
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