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    New York Announces Settlement With Three Home Health Agencies

    Cuomo's suit accused company of employing unqualified aides

    New York Attorney General Andrew Cuomo has announced a settlement with three home health agencies that are alleged to have defrauded Medicaid by billing the system for hundreds of unqualified health aides.

    The settlement was reached with Brooklyn-based B&H Health Care Services Inc., doing business as Nursing Personnel Home Care; Excellent Home Care Services LLC, also of Brooklyn; and Manhattan-based Extended Nursing Personnel CHHA LLC of Manhattan. Cuomo's suit accused all three of sending hundreds of health aides with little or no training to provide health care for elderly and indigent New Yorkers.

    Under the terms of the settlement, the three providers will return $23,963,100 to Medicaid, with $14,377,860 of that going to New York State. It is the largest settlement reached between New York's Medicaid Fraud Control Unit (MFCU) and the state's home health care industry. The MFCU is the largest unit in the Attorney General's criminal division and has the sole responsibility to prosecute wrondoing related to patient care in hospitals and nursing homes, as well as by home health agencies.

    In order to become certified, home health aides in New York must complete a program licensed by either the Department of Health or the Department of Education. Any training program requires at least 75 hours of training, 16 of which must be supervised by a registered nurse. Cuomo's investigation revealed that health aides for the three agencies were operating with false credentials, many of which were sold by "schools" purporting to train home health aides. In addition to the civil suit, Cuomo's investigation resulted in convictions for improperly certified aides, the schools that provided their credentials, and the companies that employed them. More prosecutions are pending.

    The suit, filed in May 2008, was part of Cuomo's "Operation Home Alone," a three-year-old investigation of home health care agencies in New York. The investigation was aided by allegations from two whistleblowers, who filed claims under both the federal False Claims Act and state laws. The False Claims Act, also known as the "Lincoln Law," encourages individuals to come forward with evidence of fraud against the government by promising them a substantial portion of any eventual recovered damages. The law has netted about $22 billion for the government since 1986, when significant changes to the satute expanded liability against alleged wrongdoers.

    In a statement, Cuomo said, "The size of this settlement underscores the seriousness of the allegations and the importance of vigorous oversight of the Medicaid program and the medical care of our loved ones." He went on to assert that home health providers, which are funded by taxpayer dollars, "have an obligation to ensure that the health care workers they employ are qualified for the job."

    This week, California Attorney General Jerry Brown announced that he has settled a suit accusing Schering-Plough of its own brand of Medicaid fraud. Brown's suit accused the pharmaceutical giant of inflating the price of drugs, including Albuterol, used to treat ashtma and other breathing problems. Brown's settlement, which netted $21.3 million, is one of three settlements that netted a grand total of $69 million.



    New York Announces Settlement With Three Home Health Agencies...
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    Visa Pledges Help On Unauthorized Charges

    Identifying merchants with excessive cardholder disputes

    After years of consumer complaints about unauthorized charges on their credit cards by scammers and unscrupulous businesses, Visa says it plans to help.

    The company said it is aware of the growing number of abusive "negative option" marketing practices that "sell" consumers products without their consent and that it plans to better publicize the way consumers can fight back.

    "Most e-commerce merchants care about their customers and conduct business fairly, but even a few bad actors can cause consumer distrust," said William M. Sheedy, Group President, The Americas, Visa Inc. "We want to let consumers know more about the protections they have against these types of practices and how to pursue a reversal of charges if they've been charged improperly."

    Visa's response follows a letter from Sen. Jay Rockefeller (D-WV) asking credit card processors to do a better job of protecting consumers from the negative option, especially when it involves a "free trial." Unauthorized charges topped ConsumerAffairs.com's annual "Top 10 Scams of 2009."

    With free trials with a negative option feature, a company takes a consumer's failure to cancel as permission to begin charging. While many merchants use this billing process appropriately, others pre-check consent boxes, bury the details of the offers in the terms and conditions and make cancellations or returns difficult, catching consumers in a cycle of recurring charges for products and services they do not want.

    According to a Visa survey, 29 percent of American consumers have fallen victim to deceptive marketing when unscrupulous e-commerce merchants require them to cancel or opt-out of a recurring charge for future products or services.

    Visa said it monitors its payment network to identify merchants with excessive levels of cardholder disputes, which may indicate the use of deceptive marketing practices. In fact, merchants who use deceptive marketing practices have up to 20 times as many consumer disputes as the average e-commerce merchant, according to Visa's figures. Visa requires the merchant and its bank to take corrective action to reduce excessive consumer disputes, or risk termination of Visa acceptance privileges.

    ConsumerAffairs.com regularly receives thousands of complaints about unauthorized charges. These charges can be for a product, such as a "trial-size" bottle of supplements, or a services, such as a "discount club" membership.

    Visa offered these tips to online shoppers on how to spot deceptive free trial offers and deceptive negative option features, and how to deal with unauthorized charges:

    • Take time to read and understand all terms and conditions, so a free trial doesn't turn into a costly purchase you didn't intend to make.

    • Pay particular attention to any pre-checked boxes before you submit your payment card information for an order. Failing to un-check the boxes may bind you to terms and conditions you're not interested in.

    • Review card statements when you get them for any unauthorized charges, and notify the card issuer promptly of any unusual activity or unauthorized charges.

    • Try to resolve the situation with the merchant. If you're unsuccessful, contact the card issuer immediately to dispute the charge.

    What kind of negative option marketing is acceptable? According to the FTC, it must meet these criteria:

    • Disclosing material terms in an understandable manner, without making them unnecessarily long or inconsistent;

    • Making the disclosures clear and conspicuous by placing them where consumers are likely to look on Web pages, by labeling disclosures (and links to them) to indicate their importance and relevance, and by using easy-to-read fonts and colors;

    • Disclosing the offer's material terms before the consumer incurs a financial obligation;

    • Getting consumers' affirmative consent to the offer by, for example, having them click "I Agree" And without relying on pre-checked boxes;

    • Not impeding the effective operation of promised cancellation procedures and honoring cancellation requests that comply with such procedures.

    If a consumer is charged in any way, other than those listed above, the consumer should contest the charges.



    After years of consumer complaints about unauthorized charges on their credit cards by scammers and unscrupulous businesses, Visa says it plans to help....
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    Blackberry Data System Down for Several Hours

    Sprint SMS system may also be affected

    It was a case of withdrawal for Blackberry addicts Thursday morning when they turned on their phones and there was no familiar vibrating motion or flashing red light indicating new email.

    The system was apparently restored, at least in parts of the country, around 10:00 am PST Thursday.

    Users nationwide reported being unable to access email, though the devices still made and received voice calls and can be used to access the Internet through Verizon's mobile broadband service.

    When a Verizon customer service representative in Virginia dialed into the system and punched in a customer's phone number, an automated response said the data server was down, but that crews were at work attempting to fix the problem.

    The tech blog CrunchGear reports the outage affected all of the U.S. and Canada.

    Blackberry users weren't the only ones experiencing technical trouble Thursday. Many Sprint mobile users reported problems with the SMS text system. Many customers reported getting a message saying "The message could not be delivered due to a network setup error. Please contact Customer Care. Error 2112."



    Blackberry users weren't the only ones experiencing technical trouble Thursday. Many Sprint mobile users reported problems with the SMS text system....
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      4 Ways To Avoid Costly Cell Phone Fees

      Consumer group offers ways around contract "gotchas"

      If you're like most Americans, you're probably looking to save money any way you can at the moment. One easy way to do that is to switch from your current cell phone plan to a cheaper service. But many people are afraid to switch carriers or plans, for fear of being dinged with an expensive contract "early termination fee (ETF)," which can average $175 dollars, and as much as $350 if you're a Verizon customer.

      San Francisco-based Consumer Action, in partnership with low-cost mobile carrier TRACFone, is advocating for consumers to dodge the ETF trap, claiming that even a heavy cancellation fee penalty can be offset by the savings gained from several months of low-cost cell phone service. As Consumer Action Executive Director Ken McEldowney put it in a press conference today, "informed consumers can make smart choices in the marketplace...consumers have a golden opportunity to save hundreds of dollars by making a switch in wireless carriers."

      McEldowney and Consumer Action outlined four steps wireless customers can take to avoid getting slammed with termination fees:

      • Determine if you are in the ETF "penalty box." Not sure if you face an ETF? Get on the phone with your cell phone company and find out what penalty (if any) you would face for switching providers. If youve had your cell phone and current plan for two years or more, you may be out of the ETF penalty box. All four of the major wireless carriers -- AT&T, Verizon Wireless, Sprint, and T-Mobile, have prorated their ETFs over the life of a two-year contract, but many customers will still find themselves owing some amount when renewal time arrives.

      • Do the math on your cell phone penalty. Dont just take a penalty at face value if it is in the range of $150-$200. If you are now paying $90 a month for basic cell phone service and switch to a cheaper cell phone service, you can "pay off" a $150 penalty in just three months. After that point, you would be saving $45 a month compared to your current plan.

      • If you are out of the penalty phase and want to stay out of it, avoid being lured back into it by your cell phone provider. When contract renewal time arrives, many providers will offer discounts on phones, more minutes on your current plan, and many other enticements in order to sign up for another contract -- which carries another hefty ETF with it.

      •If you want to switch, keep an eye out for your cell provider changing the terms of the contract. Under certain circumstances, major changes by your cell provider to the terms of the contract you signed can be used as the basis for escaping early termination fees. If you are interested in switching cell phone providers and want to avoid an ETF, be on high alert for bill inserts, emails and phone calls that spell out new terms and ask for you to agree to them. Keep in mind that your cell phone provider doesnt want you to use the contract term changes as a basis for switching, so this may all be buried in the fine print.

      For more adventurous customers, McEldowney recommended using a contract-swapping service, where another person takes on the contract in exchange, but warned that it can be relatively costly, though still cheaper than paying an ETF.

      Although a low-cost carrier like TRACFone would obviously benefit from more wireless customers switching to its cheaper and prepaid services, McEldowney emphasized that they were not directing the course of Consumer Action's initiative against ETFs. "We retain editorial control," he said.

      One correspondent brought up the claim that the wireless industry often makes -- that contracts and ETFs are necessary in order to subsidize the sale of handsets at low prices, and recoup the company's investment. McEldowney was skeptical, saying that if the wireless industry was worried about that, they "didn't think clearly about their 'Buy one, get one free' offers."

      "I'd like to see more data on whether or not there is a direct relationship between the manufacturer price and the ETF fee," he added. "I bet the phone is far cheaper."

      As part of a recent filing with the Federal Communications Commission (FCC), several consumer groups, including Consumers' Union and Free Press, claimed that the average cost of a wireless phone to a carrier is $14.33 -- and that even the cheapest ETF of $175 represents a profit over ten times greater than the cost of the phone itself.

      Termination fees have been a hot topic in the industry for years, and have been getting attention on Capitol Hill of late. The FCC sent an inquiry to Verizon asking it to justify its termination fee hike, and the Government Accountability Office (GAO) released a report recently claiming that 42 percent of wireless customers would not switch carriers for fear of incurring a fee.

      "I'd like to see more data on whether or not there is a direct relationship between the manufacturer price and the ETF fee," he added. "I bet the phone is...
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      Bipartisan Senate Bill Would Reinstate Glass-Steagall Act

      Banks wouldn't be able to trade securities

      After the Wall Street crash of 1929, Congress enacted Glass-Steagall, a law preventing banks from engaging in securities trading. In 1999 Congress repealed Glass-Steagall and Wall Street crashed nine years later.

      A coincidence? Sen. John McCain (R-AZ) and Sen. Maria Cantwell (D-WA) think not. They have quietly introduced legislation that would bring back the 1933 law that many credit for keeping the economy out of meltdown mode for 65 years.

      What would it mean? It would prohibit the affiliation of Federal Reserve member banks with firms that engage principally in securities activities, and prohibit bank employees and Board members from working for securities firms.

      It would mean that Bank of America couldn't own Merrill Lynch, as it does now. The bill would also prohibit depository institutions from engaging in insurance-related activities, like credit swaps and derivatives.

      The immediate effect would be to require the large multi-function banks that were at the heart of last year's banking crisis and were the primary recipients of bailouts, such as Goldman Sachs, Morgan Stanley, Citigroup, JP Morgan Chase and Wells Fargo, to spin off their investment and insurance operations from their depository, commercial banking operations.

      In other words, banks would be just banks. They would accept deposits and make loans, making their profits the old fashioned way. The bill immediately won backing from some consumer groups, including Demos.

      "The American people shouldn't be subsidizing the risk-taking of Wall Street traders, but that's exactly what has happened since the repeal of Glass-Steagall," said Heather McGhee, Director of Demos' Washington office. "Separating speculation from government-supported banking is a prudent reform that would protect American taxpayers and restore competitiveness to the banking sector."

      Consumer groups also say re-instating Glass-Steagall would help eliminate the "too big to fail" problem that Treasury and the Federal Reserve have yet to resolve. Under Glass-Steagall, they argue, a wall of separation between banking and securities trading would lead to a more stable environment.



      Bipartisan Senate Bill Would Reinstate Glass-Steagall Act...
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      GM Introduces Wi-Fi In Cars

      But how about an Internet radio system?

      Automotive entertainment systems have come a long way since the 1930s when the Galvin Manufacturing Corporation introduced the first car radios.

      Manufacturers added FM to radios in the 1970s. Then came the 1990s, when minivans offered built-in video systems so small back-seat passengers could watch DVDs instead of harassing Mom and Dad.

      What's next? General Motors says its in-car Wi-Fi. The carmaker is introducing Chevrolet Wi-Fi for its Equinox, Traverse, Silverado, Tahoe, Suburban, Avalanche and Express models.

      GM says this dealer-installed system enables full Internet access inside the vehicle, and up to a 150 feet radius around the vehicle, with a laptop or mobile Wi-Fi device.

      "Chevrolet Wi-Fi by Autonet Mobile enhances commuting, family vacations and work," said Chris Rauser, Chevrolet Accessories Manager. "It benefits active families on the go, as well as professionals who need immediate information at remote job sites. Its uses are almost endless."

      While it might be yet another way to keep the kids quiet in the back seat, business users who already have a smart phone might find the service redundant. The equipment costs $199 (after $200 mail-in rebate) and $29 a month on a two-year contract. Those who already have a Verizon Blackberry, for example, can pay an extra $30 a month and connect their laptops anywhere within the network, not just in their cars.

      While it was only a matter of time before the Internet came to the automobile, there might be more useful applications than the one GM has come up with. Instead of creating another way for passengers to connect to the Internet while riding, why not instead replace the car's audio system with a device that streams Internet radio?

      For example, instead of being stuck listening to one of a dozen adult contemporary radio stations in your city, you could drive down the Interstate listening to your own station on Pandora, or any of hundreds, perhaps thousands, of stations around the world that stream over the Internet.

      With an Internet "receiver" as part of a car's entertainment system, the choices are almost endless. Best of all, the driver could get some benefit from it as well.



      Automotive entertainment systems have come a long way since the 1930s when the Galvin Manufacturing Corporation introduced the first car radios....
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      Maryland Officials Halt Foreclosure Rescue Scam

      Scheme robbed homeowners of equity

      December 16, 2009
      Maryland Attorney General Douglas F. Gansler says the state has won a court judgment of nearly $1 million against individuals and companies operating what state officials characterize as a foreclosure rescue scam.

      A circuit court in Baltimore entered the judgment against Rodney Spellen, Mid Atlantic Consulting, Inc., Jemel Lyles, Absoloot Ventures Inc., Brian Boyd, 1st Choice Property Management Firm, Inc., Sahar Ali, Alan Muniu, Phillip George, Certified Title & Escrow, Inc., and Reggie Simmons, based on violations of Maryland laws.

      The court also issued an order that bars each of the defendants from offering and selling services of any kind to a homeowner who is in default on a mortgage or is in foreclosure, and requires them to pay a total of $987,030 in damages, restitution and penalties.

      In June 2008, the Attorney General's Consumer Protection Division filed a complaint in Baltimore City Circuit Court alleging that each defendant participated in an illegal foreclosure rescue scheme. The complaint alleged that the defendants, acting together, promised to save consumers' homes from foreclosure and restore their credit ratings.

      In fact, Gansler says the defendants attempted to take title to the homes and strip them of the equity, in violation of the Maryland Consumer Protection Act, the Maryland Protection of Homeowners in Foreclosure Act and the Maryland Credit Services Businesses Act. On November 9, 2009, the Circuit Court for Baltimore City entered summary judgment in favor of the Division and against each of the defendants except Reggie Simmons.

      A trial was held in November to determine Simmons' liability and the appropriate measure of damages, restitution and penalties for each of the defendants. The court found that each of the defendants violated Maryland law by operating an illegal foreclosure rescue scam and entered a monetary judgment totaling $987,030.

      "Maryland law prohibits foreclosure consultants from attempting to strip equity from the homes of vulnerable consumers," Gansler said. "The court's order should send a strong message to unscrupulous individuals who operate these illegal schemes and take advantage of consumers desperate to keep their homes."

      The case involved 10 consumers' homes. Under the court's order, the defendants have been ordered to pay $757,030, which equals the amount of equity that the court found was stripped from these homes. The order further requires the defendants to pay penalties totaling $230,000.

      Gansler says the state has won a court judgment of nearly $1 million against individuals and companies operating what state officials characterize as a for...
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      Connecticut Post Office Hiding Mail

      You've got mail...or do you?

      It's no doubt that December is the busiest month for the U.S. Postal Service, but for one branch in Connecticut, it's just too busy. Some employees have reportedly resorted to hiding the mail rather than sorting and delivering it.

      In an interview with the Waterbury Republican-American, Ray Arcovio, president of the Waterbury postal union local, blames the mail-hiding on managers. He says they have been hiding mail in closets and unused rooms at USPS facilities in Waterbury and Wallingford because they can't keep pace with the high volume of mail.

      "They're just pushing it aside for the next day," Arcovio told the newspaper. "We've had issues with them hiding the mail."

      Arcovio told the paper that postal service employees have witnessed the mail-hiding but have been reluctant to speak out because of fears of repercussions.

      The union leader's public outing of management apparently comes at a time of rising tensions at the Connecticut facility. Four years ago sorting operations were moved from Waterbury to Wallingford, displacing some employees.

      Arcovio took his dispute with Postal Service management public earlier this month when he published an open letter in the Republican-American:

      "Lately, postal management, locally, has been caught finding 'creative' ways of reducing mail volume which has caused more than one to be reprimanded," the letter states. "Ultimately, however, these 'creative' ways of reducing mail volume only have one affect (sic) -- degradation of service to our customers."

      Consumers in all parts of the country have written to ConsumerAffairs.com this month, complaining about various issues at their local post offices.

      "An Amazon order was delivered to my Post Office box and returned to sender due to 'wrong address,' but address was correct and AMAZON still has not received a return one month to the day later," Gail, of Newport, R.I., told ConsumerAffairs.com. "Package is spinning around through different POs as I write this."

      Brittany, of Pittsburgh, finds it difficult to send a simple first class letter across the country in a timely manner.

      "I mailed a money order in the amount of $229.17 on December 2nd 2009 to a company in Las Vegas, Nevada to purchase a product," she told ConsumerAffairs, com last week. "As of today, December 11, they still have not received it. I called company that issued the money order and confirmed that it had not been cashed. I did not send it certified or registered or express mail because I assumed that it would arrive at its intended destination."



      Connecticut Post Office Hiding Mail...
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      National Home Protection Settles New York Suit

      Defunct "warranty" company accused of defrauding customers

      National Home Protection, Inc., the shuttered home warranty company accused of defrauding thousands of consumers across the country, has agreed to a settlement with New York Attorney General Andrew Cuomo. NHP will pay $900,000 to settle claims that it misled consumers about its services and failed to honor legitimate warranty claims.

      NHP sold a one-year "warranty plan" that promised repairs or replacements for any appliances damaged as a result of normal wear and tear. The plan typically cost around $370 per year, making it a relatively inexpensive option for homeowners worried about shelling out thousands of dollars for an unforeseen water heater or oven malfunction.

      Despite its promises, however, NHP routinely denied legitimate claims and canceled homeowners' policies for no apparent reason, Cuomo said. Cuomo's office also accused NHP of engaging in "deceptive advertising," pointing to the company's statements that it would replace appliances "regardless of age, make or model," and that there was "no home inspection required to enroll" in the plan. And while the company promised consumers a $50 gift card "today" if they signed up for the warranty, that offer was in fact "a rebate offer subject to undisclosed and restrictive wait periods," according to Cuomo. Many consumers who complied with the rebate offer's terms and conditions still never received any money.

      New York Supreme Court Justice O. Peter Sherwood issued a decision on December 8, finding NHP liable for, among other things, engaging in false and misleading advertising, failing to provide timely rebates under New York law, and failing to post rebate forms on its website. Justice Sherwood said that NHP's misrepresentations extended to its website, where it assured consumers that it would "replace your unit with the same or like model." In fact, Justice Sherwood said, many consumers were offered inferior products or a cash amount considerably lower than their broken appliance's value.

      Under the settlement, NHP will pay compensatory and punitive damages totaling $900,000. Those eligible to receive restitution include NHP customers who were denied contracted-for or advertised services, those who did not receive a gift card offered as an incentive to buy NHP insurance, and those who were prohibited from canceling their warranty within a given time -- either within 20 days of mailing the warranty, or within 10 days of the sale if the warranty was delivered at that time.

      Cuomo's office will send claim forms to all NHP customers over the next few weeks. Those seeking more information can contact his office at (800) 771-7755.

      Cuomo filed the suit in April, and the Manhattan Supreme Court immediately granted his request to freeze the bank accounts and assets of the company and its principals. The temporary restraining order covered principals Leo Serrur, David Seruya, and Victor Hakim, and was aimed at preventing them from selling any more warranty plans while the case was pending.

      The suit was filed in New York, where NHP is based, but the scam reaches far beyond the Empire State. At the time the suit was filed, Cuomo reported that his office had received over 340 complaints about the company from at least 32 states, New York included, and that another 950 had gone to the Better Business Bureau.

      ConsumerAffairs.com has received its share of complaints as well, stretching back to August 2008. A number of complaints came from consumers who couldn't get in touch with NHP after the company shut its doors.

      Such was the case with Mariana, of Lexington, Ky. "I signed a contract with NHP in OCtober 2008 for 3 years at a cost of 900," she wrote. "When my garage door broke, I tried to call them on their 800 number and got the operatior's 'this number is not in service' message repeatedly. What's going on with this company? I feel as if I've been scammed out of nearly 1000!"

      Chaqueta, of Baltimore, Md., had a bad experience back in May. "I put a servie call in for my air conditioner that took about month for them to get someone to my house," she wrote. "Amazing heating and air came out to fix it on 5/20/2008 and received a authorization number NHWP to replace my thermostat. Now I am getting the portion of the bill with finance charges that NHWP will not pay. I paid to renew my policy they took two payments out and I had to send in a lot of proof that it was taken out of my account twice to get my money back."

      NHP, Inc., the shuttered home warranty company accused of defrauding thousands of consumers across the country, has agreed to a settlement with NY Attorney...
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      Florida Resolves Toll Pass Dispute With Avis

      Company allegedly changed policy without telling customers

      December 15, 2009
      Florida Attorney General Bill McCollum says he has reached an agreement with the Avis and Budget car rental companies over allegations that customers were not clearly informed about the terms of usage for a toll plaza pass. Under the agreement, Floridians who rented cars from Avis or Budget between March 1, 2008 and September 30, 2008 will be entitled to refunds for fees charged for the "Plate Pass" service on days they did not use the service.

      Avis, which owns Budget, provides a service known as "Plate Pass" which allows car rental customers to avoid waiting in lines at Florida toll plazas and instead receive a bill for the amount of the tolls, plus a fee for the use of the feature. According to an investigation by the Attorney General's Economic Crimes Division, when Avis originally initiated the plate pass service customers were billed the fee only for the days they actually used the plate pass.

      In March 2008, Avis allegedly changed its policy so that if a customer used the feature just once during the rental term, the customer was billed a $2.50 fee per day for the remainder of their retail period.

      McCollum began investigating after customers complained they were not clearly informed that they would be billed the fee for days on which the plate pass was not used. Avis has cooperated with the Attorney General and by September 2008 made voluntary changes to clearly disclose that once the plate pass is used, customers will thereafter be charged a daily fee for the use of the plate pass, including days the plate pass is not used.

      The agreement contains injunctive relief requiring that Avis continue to clearly and conspicuously inform customers that they will be billed, even for days they do not use the service. Avis will also refund Florida Avis and Budget Customers who, between March 1, 2008 and September 30, 2008, were billed on days when they did not use the service. Avis has also agreed to make a contribution of $10,000 to the Florida Law Enforcement Officer of the Year fund as part of the agreement.

      McCollum began investigating after customers complained they were not clearly informed that they would be billed the fee for days on which the plate pass w...
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      Toyota to Roll Out Plug-In Electric Car in 2011

      Plans all-electric version of the Prius

      Toyota is serving notice that it doesn't intend to allow other car makers to pass it by in the race to be the "greenest" auto company. The maker of the gasoline hybrid Prius said it will introduce a plug-in electric car in 2011.

      Toyota will have plenty of competition. General Motors recently announced plans to produce up to 60,000 Chevy Volt plug-in hybrids a year beginning next year. Nissan also plans to introduce a plug-in next year while Ford and Volkswagen are also working on plug-in models.

      Toyota said it plans to take its popular Prius and create a plug-in version of the gasoline hybrid. Instead of an engine that is powered by both gasoline and batteries, the plug-in model is powered almost exclusively by electricity.

      Batteries can be plugged into electrical outlets overnight to recharge. On longer trips, a small gasoline engine recharges the batteries, providing extended range.

      Toyota hasn't said how much its plug-in hybrid will cost, but the New York Times quotes a Toyota executive as saying the new model will be "affordable." The Chevy Volt plug-in hybrid is expected to start at around $40,000.

      Toyota says its all-electric Prius would be twice as efficient as the current gasoline hybrid model and would recharge in only one and a half hours.

      Toyota has proven in the past that consumers will purchase fuel efficient cars that have a "green" image, even paying a premium for the privilege. Perhaps the Prius is the best example of that. Since rolling out in 1997, demand has been strong for these cars. In fact, when gasoline prices soared over $4 a gallon in 2008, there were often waiting lists for Prius' at Toyota dealers and consumers who were able to get one had to pay a "surcharge."

      However, in terms of gasoline mileage versus the extra cost of the vehicle, Prius owners didn't always save money. There have also been nagging problems with the car's traction control, as well as other problems, according to ConsumerAffairs.com readers.

      "The engine of my 2007 Toyota Prius frequently fails to shut down when I firmly push the power button, exactly as directed in the owner's manual, often requiring that I push the button a second time," William, of Memphis, Tenn., told ConsumerAffairs.com. "Even if I hold the button in several seconds with the brake depressed. The car has never 'run away' with me, thus I have only experienced this problem when I have come to a stop and wish to get out of the car. The problem started after I had the car about 18 month and had driven approximately 15,000 miles."

      Toyota to Roll Out Plug-In Electric Car in 2011...
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      Missouri Sues California Auto Warranty Telemarketer

      Company allegedly ignored state's Do Not Call List

      Telemarketers not only have to honor the national Do Not Call List, but avoid calling consumers on the individual state lists as well. In Missouri, Attorney General Chris Koster has sued a California telemarketing company he says ignored the state list.

      Koster filed suit against Credexx Corporation, d/b/a Auto One Warranty Specialists, based in Irvine, California. Koster said telemarketing calls were made to consumers in an attempt to sell products described as automobile warranties. A number of consumers complained to Koster's office that they had registered with Missouri's Do Not Call List.

      "Missourians who register with our No-Call list do so with the reasonable expectation that unsolicited, harassing calls will be substantially reduced," Koster said. "This office is committed to vigorously pursuing every telemarketer who violate our No-Call laws."

      Koster said he is asking the court to stop Auto One Warranty Specialists from making calls to Missourians on the No-Call list who have no established business relationship with the companies. He said he is seeking the maximum civil penalties for each violation of the law, in addition to the costs of the investigation and prosecution and all court costs.

      Koster said he is cracking down on businesses that market auto service contracts and auto additives as warranties. In November, he filed suit against six businesses for tactics he says they were using to try to trick people into purchasing bogus auto warranty products of limited value.

      Earlier this year The Better Business Bureau (BBB) warned consumers to be extremely wary of telemarketing calls and mailers which claim their auto warranty has or is about to expire.

      BBB advised that the deceptive solicitations could persuade car owners to purchase an extended auto service contract of questionable value.

      BBB said it had seen a considerable spike in both complaints and inquiries from consumers who state that they received misleading mailers or high-pressure telemarketing calls claiming their auto warranty was about to expire.

      Missouri Sues California Auto Warranty Telemarketer...
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      Washington Sues DIRECTV For 'Unconscionable' Sales Practices

      Claims consumers burned by big fees buried in fine print

      According to Washington's Attorney General Rob McKenna, DIRECTV has generated more complaints from consumers than any other business this year -- 375 in 2009, and over 700 in the last three years. He claims it's time to do something about it. Accordingly, his office is suing the California-based satellite TV company for deceptive and unfair sales practices.

      McKenna claims that DIRECTV has been luring new customers with ads for low-priced service, while burying multiple hidden fees and "gotchas" in the fine print of its contracts. Following a year-long investigation, the Attorney General's office filed suit for what McKenna claims are violations of the state's Consumer Protection Act.

      "The miniscule 5.5 point fine print at the bottom of a DIRECTV advertisement is enough to give someone a migraine," McKenna said. "Even if consumers used a magnifying glass, they still wouldn't discover that the 'good deal' they were promised came with potential expensive pitfalls."

      Assistant attorney general Paula Selis said one key issue was the company's requirement that new customers commit to a two-year equipment lease and programming agreement.

      "Consumers aren't aware of the two-year contact until after they've signed up for service," Selis said. "They don't know that the monthly service charge will increase significantly after a year. They don't know that DIRECTV will charge them up to a $480 penalty if they cancel before the first two years. Customers who weren't able to use the service because of reception problems or faulty equipment were also charged penalties in some cases."

      The Attorney General's office published a host of practices that they say are unfair to customers, including:

      • Rebate terms: In order to obtain a promotional rate, customers sometimes have to submit a rebate. Customers who submit the rebate form after installation may be charged full price for their service for up to two months. Those who fail to return the rebate within 60 days of an order are charged the full price indefinitely -- even if DIRECTV failed to adequately inform them of the need to mail the form.

      • Use of the term "free:" The company advertises "free" installation and upgrades such as an HD receiver, DVR receiver or premium channels such as HBO and Starz. In fact, customers may be required to pay monthly fees for the equipment. The premium channels are offered as a free trial that automatically converts into a paid subscription.

      • Contract extensions: DIRECTV not only requires customers to agree to an extended contract at the beginning of service, but attempts to extend those terms even further. The company extends the length of contracts when customers require equipment repairs, upgrade equipment or move.

      • Financing: DIRECTV fails to disclose that the company's least expensive package of $29.99 per month is only available to customers who meet certain financing conditions and agree to have the costs automatically charged or debited.

      • Cancellation fees: DIRECTV offers customers a $5.99 monthly "Protection Plan" to cover equipment repairs. Customers who weren't even aware they are paying for the plan have been unfairly charged a $10 fee to cancel their enrollment.

      • Retention of funds: Prior to selling programming, DIRECTV asks for a customer's Social Security number in order to perform a credit check. Customers who refuse to provide the number or whose credit is deemed insufficient are required to pay a $200-$300 deposit to obtain service. Those who cancel service prior to the end of their contract lose part of the deposit and may also be charged cancellation fees.

      The Attorney General's Office is asking the court to compel DIRECTV to change its business practices, impose civil penalties and provide restitution for consumers.

      Washington isn't the only state to sue DIRECTV for what it claims are bad business practices. California DIRECTV customers filed a class action lawsuit against the company over its practice of automatically debiting contract cancellation fees from their account, often without their knowledge or permission.

      Washington Sues DIRECTV For 'Unconscionable' Sales Practices...
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      Six Holiday Shopping 'Gotchas' To Avoid

      Consumer Reports Money Adviserpoints out the pitfalls


      Tighter budgets and hard-to-get credit tight have many consumers keeping a particularly watchful eye on the holiday shopping out lays this year. But even the savviest shoppers can be lured by the tricks grinchy companies use to get you to spend more.

      The December issue of the Consumer Reports Money Adviser identified six holiday shopping "gotchas":

      1). Debit overdraft fees. Twenty percent of the 1,000 people surveyed by CR National Research Center in October 2009 said they were using their debit cards for purchases more than they did a year ago. But even though they can be convenient, you could end up paying more than you expect. For example, banks used to reject a purchase that exceeded the balance in an account. But many will now process the transaction and then charge customers an overdraft charge ranging from $22 to $39 at 16 of the largest banks. Buying several gifts in one shopping trip could result in multiple fees.

      How to avoid it: Use a credit card for large gift purchases, especially if you pay your balance in full each month. Credit cards offer greater consumer protections than other forms of payment if your account number falls into the wrong hands. Use a debit card for small purchases if you're relatively certain you won't need the extra protection of a credit card, and you're sure you won't exceed your account balance. Or use cash, keeping in mind that you won't have the leverage that a credit card provides in a dispute.

      2) Deep-discount price bait. Many retailers promote deep discounts in "door-buster" sales that usually start in the wee hours of the morning and are on a first-come first-served basis. In a more deceptive version of these sales, an item is advertised at a super-low price on a Web site, but is just a come-on to get you to buy something else and spend much more.

      How to avoid it: Be wary of unrealistically low prices when shopping online. Don't buy additional products or services just because you're getting what looks like a good deal on one. To be super-safe, stick with merchants you know. Don't be worried if you miss a great deal if you skip door-buster sales. Last year, CRMA's experts found plenty of so-called one-day sales that were extended.

      3) Gift Card Fees. Gift cards can shorten your shopping time, but CRMA's experts generally advise consumers to avoid them. Some come with purchasing and processing fees, expiration dates, transaction fees, and inactivity fees that unfairly diminish their value over time. And the recipient could wind up with a worthless piece of plastic if a company goes out of business or files for bankruptcy protection after you buy its card.

      How to avoid it: Consider giving cash instead of a gift cards. If you do buy one, try to stick with those issued by financially sound retailers. Store cards tend to have fewer expiration dates and fees than those issued by banks that bear the logos of credit-card companies like MasterCard or Visa.

      4) Return Policy Limitations. Some companies may have different return requirements for items bought in their stores, through their Web site, or by mail order. Kohl's for example, doesn't accept returns by mail if the merchandise was purchased in a store. Many stores track returns, so if the software flags you as someone who has brought back too many items in a short period of time, your return may be denied.

      How to avoid it: Ask for a store receipt and a gift receipt for the items you buy. Wrap gifts in their original packaging. Check the rules before you try to return a gift.

      5) Restocking Fees. Many items, especially electronics like digital cameras, camcorders, desktops, and laptop computers are subject to a 15 percent to 25 percent restocking fee if they are not returned in a factory-sealed box.

      How to avoid it: Don't open a package if you don't want what's inside. Items like computer software, music CDs, and movie DVDs aren't generally returnable after the seal has been broker. If you are slapped with a restocking fee, try to negotiate a partial refund. But you shouldn't have to pay any fee if an item is defective when you unwrap it.

      6) Extended warranties. This holiday season shoppers are expected to spend $1.2 billion on extended warranties for electronics and appliances. But extended warranties are notoriously bad deals. Some repairs are already covered by the standard warranty that comes with the product. Consumer Reports' data show that products seldom break within the extended-warranty window -- after the manufacturer's warranty has expired and within the typical two to three years after purchase. And when items do break, the cost repairs, on average tend to cost about the same as an extended warranty.

      How to avoid it. Check your credit card agreement before you even consider buying an extended warranty to see if charging an item on your card will provide similar coverage. If you can't rely on your card's additional coverage, and still want an extended warranty for peace of mind, don't pay more than 20 percent of an item's purchase price for one.



      Tighter budgets and hard-to-get credit tight have many consumers keeping a particularly watchful eye on the holiday shopping out lays this year....
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      FTC Goes After Credit Card Robocall Scammers

      Offers of interest-rate reduction claims targeted

      The Federal Trade Commission (FTC) is widening its campaign against telemarketers who violated the Do Not Call Rule and other laws by making hundreds of thousands or even millions of recorded robocalls to consumers.

      This latest effort targets three groups that allegedly made robocalls to sell worthless credit-card interest-rate reduction programs for hefty up-front fees of as much as $1,495. The court has issued an order temporarily halting the robocalls pending trial.

      "The FTC has heard the public outcry against robocalls and has taken swift action to stop them. During these difficult economic times, the last thing anyone needs is to be bombarded by robocalls pitching worthless interest-rate reduction programs," said FTC Chairman Jon Leibowitz.

      The three complaints follow two filed in May that led to court orders stopping other telemarketers from using robocalls with deceptive claims about extended auto warranties. Since September 1, 2009, virtually all robocalls have been illegal, unless the recipients have provided written authorization to receive the pre-recorded calls.

      According to the three FTC complaints, Economic Relief Technologies, LLC, Dynamic Financial Group (U.S.A.) Inc., and JPM Accelerated Services (JPM) and related defendants made illegal pre-recorded robocalls to consumers, using names like "card services," "credit card services" or "account services."

      The robocalls allegedly claimed the companies' services could lower the interest rate on consumers' credit cards. In each case, consumers who pressed 1 after hearing the automated call were transferred to live telemarketers who allegedly misrepresented that consumers could dramatically lower the rates on their credit card.

      The telemarketers also said consumers would save thousands of dollars in a short period of time by lowering their interest rates and would be able to pay off their debts faster -- for an up-front fee ranging from $495 to $1,495. They then falsely stated that if consumers did not save a "guaranteed" amount -- typically $2,500 or more -- they could get a full refund of the up-front fee.

      However, after securing the fee, the defendants allegedly did not negotiate lower rates on behalf of consumers and provided few refunds to those who were dissatisfied with the service.

      Economic Relief Technologies also allegedly operated a related scam: using names like "Auto Protection Center" and "Warranty Services," they tricked consumers into believing they were affiliated with their vehicle manufacturer or dealership, and falsely claimed that the consumers' vehicles' warranties were about to expire. The scheme is similar to several stopped by a court order at the FTC's request earlier this year.

      The lawsuits claim the companies broke the law by making illegal robocalls to consumers and that their deceptive sales pitches violated the FTC Act and the FTC's Telemarketing Sales Rule.

      Additional charges include:

      • Calling consumers whose phone numbers are on the National Do Not Call Registry.

      • Calling consumers who had previously asked not to be called.

      • Failing to transmit their caller ID information, as required.

      • "Spoofing" or masking their caller ID information.

      • Failing to promptly identify themselves, the purpose of their call, and/or the nature of the goods or services they were selling.

      • Improperly abandoning calls.

      • Failing to make required disclosures in their robocalls.

      To help consumers and businesses understand their rights and responsibilities when it comes to pre-recorded telemarketing calls, the FTC issued two new alerts, "New Rules for Robocalls" and "Reining in Robocalls."

      Separately, the FTC has issued a new publication, the National Do Not Call Registry Data Book for Fiscal Year 2009, which contains information about the Registry, along with a breakdown of consumer complaints about companies violating the Do Not Call rules. According to the Data Book, there are more than 191 million numbers on the Do Not Call Registry.


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      Study Sees Little Hope For Rural Internet Users

      Federal stimulus to expand broadband not enough, researchers say

      If you happen to live in a rural area of America, chances are your Internet options are limited. While federal stimulus money has been allocated to expand broadband services to rural areas, a new study suggests rural residents shouldn't get their hopes up.

      Analysis of most recent FCC data reveals that about 45 million of the more than 117 million US households have no Internet service. When "no Internet" households are added to those households using dial-up to reach the Internet, the number of non-broadband households approaches 58 million, according to a new market research study from The Insight Research Corporation.

      These 58 million non-broadband households represent 49 percent of the households in the US. According to Insight Research's market analysis study projecting the FCC 2008 data to year-end 2009 and taking into account further broadband penetrations, it is estimated that 40 million households will still lack broadband access at the close of 2014.

      Major providers of broadband services, such as Verizon, have hesitated to invest in some rural markets because of small customer bases spread out over large areas, which can make infrastructure investment costly. As a result, most rural residents who want broadband have only the alternative of satellite broadband from either Hughesnet or Wild Blue, both of which can be problematic.

      "Living in a rural area, I unfortunately signed on (to Hughesnet)," Earl, of Warrenton, Va., told ConsumerAffairs.com. "Tech support that you can't understand. Service kept dropping off, their contract serviceman on site 4 different occasions, personally observed the problem, and could not correct it. Cancelling the non-functional service cost me $300."

      Joel, of Ramah, N.M, says Wild Blue isn't the answer either.

      "My download speeds have progressively become slower to the point I am giving up," he told ConsumerAfffairs.com. "It now takes several minutes to download ONE song and even then it stops several times, making a download for editing impossible. They promised to take care of the problem but after 5 months nothing has happened unless becoming even slower is the promised change."

      If these consumers are hoping the federal stimulus will provide an answer to their broadband problems, the study says they are in for a disappointment. Current federal Stimulus spending of $6.4 billion would allow for an investment of $164 per household to provide broadband access to the non-broadband households, the study finds.

      The availability of such a small investment amount per household casts serious doubt that any significant expansion of broadband access will result from this government action, the authors say. This position is further bolstered by the argument that, at the current estimate of $1,500 per household, at least $60 billion would be needed to deploy universal broadband access.

      "Certainly the current administration recognizes the direct relationship between extending broadband access to all Americans and the future health of our economy, but the current allocation of funds is just not going to get the job done," said Robert Rosenberg, President, Insight Research. "Our analysis found that a substantial portion of the 49 percent without broadband had no computers in their homes. There is a chicken and egg problem here that needs to be considered by our policy makers."



      Study Sees Little Hope For Rural Internet Users...
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