Current Events in September 2010

Student Loan Xpress, Inc. (SLX) has reached an agreement with the Commonwealth of Kentucky that will result in an estimated $3.6 million reduction in the loan obligations for students who attended a now bankrupt West Kentucky law school.

"I am pleased we were able to conclude this investigation by getting significant loan forgiveness for students," Attorney General Jack Conway said. "As we investigated this case over many months, we found dozens of students who were obligated to pay thousands of dollars in student loans for academic credits that didn't transfer."

Conway says the lender charged fees when it said it would not and required loan repayment when students were entitled to deferments because they were still in school. "There was an overall pattern of abuse by the lender that ignored federal and state consumer protection requirements and put students in a financial bind before they even started their careers," he added.

Loan reductions

As a result of the Assurance of Voluntary Compliance (AVC) entered in Franklin Circuit Court, students of the law school who had SLX loans will have their overall loan amounts reduced and will be given an extended period of time before they are required to make payments.

Students' loan indebtedness will not include any amounts for tuition and school fees for credits that were not transferred to another school; interest on the loans will be based on the reduced loan amounts and any capitalized interest will be removed from their loan accounts; and late fees for delinquent payments and certain loan fees will also be removed from borrowers' accounts.

The average loan reduction per student is $25,000. The loan reduction per student ranges from just under $1,000 to as much as $75,000. The amount of reduction is based on how many academic credits the students were able to transfer and how much money students borrowed in living expenses.

"This agreement will allow students to finish their studies before they must pay back loans and significantly reduces the loan principal by only requiring students to pay for credits that they transferred and living expenses," said Conway.

Borrowers must apply to have their loan restructured pursuant to a claims process that will begin once the borrower receives a notification from SLX within the next 90 days. While the dollar amount of relief for each individual borrower will vary, the settlement is estimated to achieve an overall reduction of $3.6 million in the total principal that includes tuition, school fees, living expenses and loan fees. There will be additional interest savings to borrowers because of the reduction in principal and the restrictions on capitalized interest provided in the AVC.

The investigation

The Office of Attorney General obtained the settlement with SLX after alleging multiple misrepresentations in the company's marketing materials and loan application instructions -- which SLX denies -- including language that students would be able to defer repayment on their loans while in school and for nine months after leaving school.

However, the fine print of the promissory notes limited the period of deferment to 33 months after the loan was disbursed. The effect of this 33-month cap was that holders of the loans required students to begin repaying their school loans while still in school or enter into "forbearance" -- a loan status that effectively increased the amount of the borrowers' loans through repeated capitalization of interest.

Deceptive terms

"The terms of the loans were deceptive and made it very difficult and outrageously costly for students to continue their law school education after American Justice School of Law closed," Conway said.

The AG's investigation also revealed that the borrowers' promissory notes did not contain disclosures required by the Federal Trade Commission (FTC). In situations where a seller refers its customers to a specific lender, the "FTC Holder Rule" requires that consumers be made aware that the lender is subject to the same legal defenses as the seller.

"Without the holder clause," Conway explained, "you get a situation where the seller gets the loan proceeds, goes out of business, doesn't deliver the product the buyer paid for, yet the buyer is obligated to repay the loan for something he or she never received. That is simply unfair."

Student info

American Justice School of Law and Barkley School of Law students with SLX Loans must complete necessary forms in order to obtain the relief available under the AVC. SLX will send those forms in an official packet via Certified Mail within 90 days. Loan reductions will be calculated for each student individually based upon a number of factors, including the number of credits they transferred and the amount borrowed for living expenses.

This isn't the first run-in SLX has had with the legal system. In 2009, the company was forced to provide relief to flight instruction students in California.

And in New York, the attorney general's office is investigating the possible involvement of SLX with student aid advisors at three universities.

The Consumer Federation of America (CFA) and 21 of its member, state and local groups have written President Obama, urging adoption of a fleet-wide car and light truck fuel economy standard of 60 miles per gallon (mpg) by 2025, saying it will save consumers money.

"Consumers across the country want higher fuel efficiency," said Mark Cooper, CFA Director of Research. "They want us to get off oil, and they want to save money at the pump. Sixty mpg by 2025 will help deliver both."

Opportunity to act

The letter, signed by consumer groups in Arizona, California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New York, Oregon, Virginia and Wisconsin, states: "Your Administration has an extraordinary opportunity to benefit consumers, while also improving our global competitiveness, energy independence, and environmental quality. We are writing to ask you to establish a target of 60 miles per gallon (mpg) for cars and trucks as the goal for the fuel economy standards for model year 2025.

The letter says a recent CFA analysis of studies by the National Academy of Sciences and the Massachusetts Institute of Technology shows the technology for a 60-mpg fleet is technically feasible and will save consumers money.

The letter also cites a recent CFA analysis, which found:

• Savings from reduced gasoline consumption at 60 mpg would more than offset any increase in vehicle prices likely to result from adding technologies in order to lower gasoline consumption.

• For the individual consumer, buying a car that gets 60 mpg would result in gasoline savings in the first month that are larger than the likely increase in the monthly loan payment. Investing in fuel economy will yield net savings for the household from the first month, and savings will grow over time as gasoline prices increase. (This assumes the Energy Information Administration's projected cost of gasoline, National Highway Transportation Safety Administration estimates of average household miles driven, and a five-year auto loan at seven percent).

Mileage complaints

Even cars that are already touted to get good mileage are the targets of criticism.

Deborah H. in Louisville, Kentucky is angry. "I feel there was false advertising by Toyota stating there was 50 miles per gallon on the highway and 60 miles per hour in the city driving my Toyota Prius hybrid," she wrote.

Deborah was one of thousands of Prius buyers who paid the dealer a "market adjustment" or extra money for her new hybrid.

"They jacked up the price $8,000 from sticker stating it was a car that was hard to come by and that was their price. They said I would actually save money on gas."

But Deborah writes that gas mileage results her Prius achieves continue to be disappointing: "After six months of tracking, the best mileage I ever got was 43 miles per gallon. Most often my mileage is between 30 and 36 miles per gallon."

The mileage, she complains, is "no better than cars I have had in the past. I am very disappointed in Toyota's advertising and the money I have shelled out."

"I am getting 40 mpg in a Honda Civic Hybrid with EPA estimates of 49/51 mpg," Jill of Los Angeles CA, writes ConsumerAffairs.com. "I've had the car looked at by three different service technicians at three different Honda dealerships. I've filed a complaint with Honda corporate which was closed based on the fact the dealerships couldn't find what was wrong."

The Obama administration is scheduled to release a Notice of Intent for 2017-2025 fuel economy standards for cars, SUVs and pickup trucks on September 30th.

Blumenthal has warned consumers to be suspicious of any unexpected solicitation callers or visitors claiming to represent Connecticut Light & Power (CL&P) and offering to lower electric rates. He says the solicitors may actually be representatives of competing suppliers seeking to switch consumers, without proper consent, by accessing their utility account information.

A consumer recently reported an incident to Blumenthals office in which she received a call from someone claiming to be from CL&P stating that they could reduce her electric bill. The caller requested her account number to make the switch. The marketer provided his CL&P badge number as proof and a number to reach him, which turned out to bea New Jersey number.

The consumer hung up without providing the information and then looked up and called CL&Ps legitimate number to confirm the caller was not associated with CL&P.

Blumenthal said the call is similar to recent door-to-door solicitations by people claiming to represent CL&P. The solicitors typically offer to switch the consumers electric supplier or otherwise lower the consumers bill.

Code of conduct

Blumenthal said the Department of Public Utility Control (DPUC) is currently conducting a code of conduct proceeding to set new rules for suppliers and aggregators -- including assurances that sales representatives dont mislead consumers.

These callers and visitors make flagrantly false claims about what company they represent -- and then use personal account information to surreptitiously switch a consumers supplier without their consent, Blumenthal said. The lesson from this scheme is the same as all others -- never provide private information to unsolicited or unknown callers or visitors. Protect your private information fiercely, even when offers claim to come from legitimate sources -- including companies in which you have ongoing business relationships.

Blumenthal reiterated recent warnings by utility companies that consumers should know or do the following if they receive such solicitations:

• Hang up the phone or decline a door-to-door offer, even if the caller claims some form of proof, such as a badge number from the utility company. Call the company directly -- using the number on your bill or from the phone book -- to confirm any offers.

• Never provide personal financial information to any unsolicited caller or visitor, even if the caller seems legitimate.

• Report the incident to local police.

• Remember that CL&P does not conduct such solicitation calls or visits.

William B. Foster was sentenced to three years in prison in Manhattan federal court by U.S. District Judge Kimba B. Wood, who presided over the three-week jury trial. In addition to Foster, co-defendants Mark Alan Shapiro and Irving Stitsky were found guilty.

Beginning in late 2003, Foster, Stitsky and Shapiro founded a group of companies that operated under the name "Cobalt," which purportedly engaged in the acquisition and development of multi-family real estate properties throughout the United States.

Through the Cobalt entities, the trio fraudulently induced victims to invest by -- among other things -- (a) misrepresenting Cobalt's operating history; (b) failing to inform prospective investors that Cobalt was owned and controlled by Stitsky and Shapiro, both convicted felons; and (c) misrepresenting and causing others to misrepresent Cobalt's purported ownership interests in certain properties to prospective investors.

In fact, Cobalt was a new company with little or no record of real estate investment success, was managed and controlled by Stitsky and Shapiro, and did not own several of the properties that it claimed to own.

Multi-faceted scheme

In order to carry out their scheme, Foster, Stitsky and Shapiro established Cobalt's corporate headquarters in Springfield, Massachusetts, and a telemarketing center in Great Neck, New York. Foster, who worked out of Cobalt's Massachusetts office, was identified in the company's marketing materials as the individual responsible for overseeing all aspects of the operations of all of the Cobalt entities.

The defendants and their employees solicited funds from investors by making false and misleading oral and written representations about the investment for which the investors' funds were solicited, including false representations about:

• the identities and relevant background information about the individuals controlling the Cobalt entities;

• the identities of Cobalt's business partners;

• the properties that Cobalt owned; (iv) the properties in which investor funds were to be invested;

• the history of the Cobalt entities; (the amount of management fees to be taken by Cobalt entities from the investor funds;

• the uses of the management fees taken by Cobalt entities from the investor funds; and

• Shapiro's educational background.

Foster, Stitsky and Shapiro then caused millions of dollars of investors' funds to be transferred to accounts for the defendants' personal benefit.

Jail time

In addition to the prison term, Judge Wood sentenced Foster, 70, of East Hampton, Massachusetts, to three years of supervised release and ordered him to pay $22 million in restitution and to forfeit $23 million in proceeds from his offenses.

Stitsky, 55, of Milan, New York, was sentenced to 85 years in prison on July 6, 2010. Shapiro, 50, of Avon, Connecticut, is scheduled to be sentenced on October 14, 2010.

"It is a very serious, egregious scheme that defrauded hundreds of people of their hard-earned money," Judge Wood said during the sentencing proceeding. "Some people in fact face financial ruin." Of Foster's role, Wood said, "Mr. Foster was in a position of trust with respect to the investors and it is a position of trust that he abused."

By Mark Huffman
ConsumerAffairs.Com

September 27, 2010
Southwest Airlines, which grew from upstart regional carrier to the nation's largest domestic carrier, is getting even bigger. The company announced today it is purchasing rival discount airline AirTran for an estimated $1.4 billion.

Southwest said the agreement has been unanimously approved by the boards of directors of each company, and closing is subject to the approval of AirTran stockholders, receipt of certain regulatory clearances, and fulfillment of customary closing conditions.

"Today is an exciting day for our employees, our customers, the communities we serve, and our shareholders," said Gary C. Kelly, Chairman, President, and CEO of Southwest Airlines.

Kelly said the purchase of AirTran will give Southwest entry into key markets it does not serve and positions the carrier for further growth, at a time when its legacy competitors continue to consolidate.

"This acquisition creates more jobs and career opportunities for our combined Employee groups, as a whole. It allows us to better respond to the economic and competitive challenges of our industry, and fits perfectly within our strategy for our fifth decade of service, Kelly said.

Adds Atlanta, Washington National

Southwest sees the addition of AirTran as a way to establish service to and from Atlanta and Washington, D.C.'s Reagan National Airport. The company also said it expects to expand at New York LaGuardia, Boston Logan, and Baltimore/Washington.

Southwest executives say there is minimal overlap in service between the two carriers, but the deal will have to receive approval from U.S. anti-trust officials. It's possible overlapping flights would be consolidated during the merger.

Based on current operations, the combined airlines would have nearly 43,000 employees and serve more than 100 million customers annually from more than 100 different airports in the U.S. and near-international destinations. In addition, the combined carriers' all-Boeing fleet consisting of 685 active aircraft would include 401 Boeing 737-700s, 173 Boeing 737-300s, 25 Boeing 737-500s, and 86 Boeing 717s.

Southwest says the average age of the aircraft is approximately 10 years, making it one of the youngest fleets in the industry. Southwest also announced, previously, that it is evaluating the opportunity to introduce the Boeing 737-800 into its domestic network.

Until closing, Southwest Airlines and AirTran will continue to operate as independent companies. After closing, Southwest plans to integrate AirTran into the Southwest Airlines Brand by transitioning the AirTran fleet to the Southwest Airlines livery.

In sworn deposition, an executive of Ally Financial, which now owns GMAC Mortgage, admitted that he did not always sign or read foreclosure affidavits, as required by law. That's prompted a letter to the company from Illinois Attorney General Lisa Madigan, demanding a meeting.

In her letter, Madigan said she's concerned the company has violated the states Consumer Fraud Act in its pursuit of Illinois homeowners in foreclosure.

Families homes are at stake here, Madigan said. If I determine that Ally is rubber-stamping affidavits and filing them with our courts as evidence, I will take appropriate action. The law demands that lenders prove their case in foreclosure actions, and Illinois homeowners demand the same.

The Ally executive testified in a Florida court case that he routinely signed affidavits for foreclosure lawsuits and submitted them to Allys attorneys without reviewing the homeowners loan documents. These affidavits were then filed with the court as evidence of Allys right to foreclose on the homes. The employee testified that he signed at least 10,000 affidavits a month without reviewing the underlying paperwork, and thus had no way of knowing whether the information in the affidavits was actually true.

Impact on Illinois homeowners

Madigan also requested that Ally immediately provide her office with details on the impact of Allys conduct on Illinois homeowners, including the number of Illinois homeowners affected by the suspension of foreclosures; the names of the Illinois law firms that Ally retains to pursue foreclosure actions; information about how these firms will implement and monitor the suspension of foreclosure lawsuits in Illinois; and the length of the suspension.

GMAC ranked fourth among U.S. home mortgage lenders in the first six months of this year, according to Inside Mortgage Finance, an industry newsletter.

While there are many positive aspects to city-grown produce, it turns out there could be some health concerns as well.

As city dwellers across the country are harvesting fruits and vegetables for family consumption and planning ahead for the next planting season, geochemist Gabriel Filippelli, Ph.D., professor of earth sciences at the School of Science at Indiana University-Purdue University Indianapolis, warns that urban soil may be contaminated with lead. He advises investigating the legacy of contamination in soil before planting and eating.

Harmful metals

"Most surface contamination in urban settings like Baltimore, Brooklyn, Detroit or Indianapolis is from harmful metals, especially lead, and tends to be found near roadways, older homes or lead smelters. Sources of contamination can be automobile exhaust, degraded paint, tire and vehicle debris, industrial emissions or other products of human technology," said Filippelli, who is an international leader in the emerging field of medical geology.

How can you make sure your garden plot isn't laced with lead? Filippelli encourages urban gardeners to study a map of their metropolitan area and determine potential soil contamination risk by proximity to busy streets, major roadways, freeways, dilapidated painted structures or older industrial facilities.

Gardens with no or low levels of lead contamination as determined by location or with test results of less than 200 parts per million (ppm) can be abundantly planted, but may benefit from high phosphate fertilizer which immobilizes metals like lead.

For gardens at medium risk based on location or soil tested at 200-500 ppm, he recommends covering the soil, planting in raised bed settings, and mulching between beds to reduce the risks of tracking lead-rich soil onto the plots or into the home.

Caution

For gardens at high lead risk or found to have lead levels of over 500 ppm, he counsels proceeding with caution as contamination could be coming from the soil below and the air above. While taller fruit plants are probably safe to consume, root vegetables and leafy greens like lettuce and kale are not, mainly because of the difficulties of cleaning this produce thoroughly before consumption.

In this setting, raised-bed planting is critical, as is ensuring mulch or ground cover between beds and extending for 10 feet around the perimeter of the garden. The produce of all urban gardens, even those at low risk of contamination, should be washed carefully, he cautions.

"Urban gardens are powerful tools for personal health and for neighborhood revitalization. These plots should be encouraged but need to be tended with special care to ensure that lead does not adhere to the food children and adults are consuming," said Filippelli.

The Wal-Mart discrimination class action, involving allegations that the mega-corporation systematically discriminates against female employees, is drawing attention from advocates for laborers and corporations alike.

The Ninth Circuit Court of Appeals certified the case as a class action in August, rejecting Wal-Mart's argument that the massive number of people involved -- the class could potentially encompass over one million employees -- renders the case unmanageable.

Late last month, Wal-Mart asked the Supreme Court to hear the case, contending that the appeals court's decision contradicts numerous decisions of other appellate courts and even the Supreme Court itself.

Because of its potential precedential value -- the case is the largest employment class action ever certified, and could open the proverbial floodgates for similar actions -- the suit is drawing attention from both sides of the aisle.

The U.S. Chamber of Commerce, the nation's primary lobbying group for businesses, is the latest to take sides. It has filed an amicus brief on Wal-Mart's behalf, urging the high court to hear the case.

This is the most important class action case facing the Court in over a decade, Robin Conrad, executive vice president of the Chamber's Litigation Center, said in a statement. The Ninth Circuit radically lowered the standards for certifying blockbuster class actions. Unless the Court steps in to undo the mess created by the Ninth Circuit, the West Coast will become a haven for bet-the-business class actions.

The brief, the sixth filed by the Chamber since the case was first certified in 2004, says the narrowly divided Ninth Circuit's contentious 6-5 ruling essentially sanctions a loose approach to class certification that effectively [bars] Wal-Mart from presenting individualized evidence to prove it [has] complied with the law.

Corporations at risk

Conrad warned that the suit threatens the very existence of every corporation.

The Ninth Circuit has opened the door to nothing less than court-sanctioned shakedowns, Conrad said. By denying businesses their fundamental right to defend themselves in court, the Ninth Circuit leaves them with a harsh choice: either settle meritless lawsuits, or potentially face financial ruin.

Meanwhile, labor advocates contend that the suit is a crucial tool in their fight to provide fair working conditions.

Richard Seymour, an attorney who focuses on employment class action lawsuits, told USA Today that the situation is a no-win proposition for employers. According to Seymour, no matter what the outcome of the appeal, plaintiffs will have a better idea of how to get similar actions certified in the future.

Wal-Mart also has a friend in Judge Sandra Ikuta, who dissented from the Ninth Circuit's decision.

Never before has such a low bar been set for certifying such a gargantuan class, Ikuta wrote in her opinion. She said the plaintiffs' case was built on general and conclusory allegations, a handful of anecdotes and statistical disparities that bear little relation to the alleged discriminatory decisions. Ikuta's approach and precedent could provide a path for the Supreme Court if it decides to take the case and overturn the Ninth Circuit's opinion.

A federal appeals court upheld a settlement against AT&T in a case involving universal connectivity fees that rural California consumers said were too high.

In a 44-page opinion, the 10th Circuit Court of Appeals held that AT&T's language describing the fee was a legally binding promise, and that consumers were thus entitled to hold the company to its word.

The litigation, which involved several consolidated class actions, concerned a monthly line-item charge amounting to nearly 10 percent of consumers' phone bills. The charge was explained in consumers' service agreements, which also contained a clause forbidding customers from bringing class action lawsuits, instead providing that any dispute would be determined by a neutral arbitrator.

Despite the arbitration clause, a district court allowed the class action to proceed, and a jury awarded the class $16 million.

AT&T charged nearly double

AT&T contended that the charge was necessary to make up for its contribution to the Universal Service Fund, created by the Federal Communications Commission in 1997. The fund, which was set up in response to the comprehensive Telecommunications Act of 1996, was intended to ensure that low-income consumers, and those in rural or high-cost areas, had access to reliable and relatively high-quality phone service.

The Act specifically required all service providers to provide equitable and non-discriminatory contributions to the fund.

The suit, however, contended that AT&T was charging its customers an amount nearly double that which it was required to provide to the fund. According to the suit, the FCC required a contribution of 6.8 percent from service providers; by contrast, AT&T was charging consumers 11.5 percent percent of their long distance charges.

The suit alleged that AT&T kept the difference, an amount that added up to five percent of its consumers' long-distance fees. And the plaintiffs said that AT&T hid its practices not only from consumers, but also from states and regulatory agencies. According to the suit, this scheme allowed AT&T to advertise lower rates than what it was actually charging, since it could essentially make up the difference in the hidden fees.

AT&T didn't outright deny the allegations, but rather said that the fund's complexities made it difficult to determine how much it would have to pay. The court conceded that it was virtually impossible for AT&T to charge exactly the correct amount each billing cycle, but countered that the company could implement a mechanism to allow it to calibrate its charges over several billing cycles.

In its decision, the Court of Appeals held that AT&T's description of the fee -- as a monthly charge to Customers to recover amounts AT&T must pay into -- constitutes a valid promise under New York law, under which the case was decided. The suit had noted that AT&T described the fee this way in mailings, recordings on its 800 number, and on its website.

The suit contained counts for fraud and violation of the Federal Telecommunications Act.

The two-year project will test the theory that nicotine metabolism, the byproducts of vitamin D metabolism, and increased levels of anti-Epstein-Barr virus (EBV) each interact with variations in specific genes to cause increased neurodegeneration and increased lesions in MS patients.

"We will use a novel approach to measure the levels of vitamin D and its metabolites, EBV exposure, and nicotine metabolites from cigarette smoking," says Murali Ramanathan, professor of pharmaceutical sciences and neurology at University at Buffalo.

"We have developed sensitive and selective measurements for key metabolites in the vitamin D and nicotine metabolism pathways using mass spectrometry," Ramanathan pointed out, "a method that has not been used previously to study vitamin D metabolism."

Researchers will assess the risk of developing clinically definite MS and the time to progression, as well as the neurodegeneration in the brain of MS patients, as measured by brain atrophy, and the extent of brain injury caused by lesions.

Genetic factors

The study will include the genetic variations that were associated with the risk of developing MS, as well as genes that determine the levels and responses to environmental factors.

MS patients will be divided into two equal groups: a training group that will be used to identify gene-environmental interactions, and a group that will be used to replicate the training group result.

"Identifying gene-environmental interactions is critical for developing better strategies for slowing the progression of MS, because it could enable patients with preexisting genetic risk factors to reduce the rate of disease progression through lifestyle modification," Ramanathan says.

The study results will identify the gene-environment interactions that promote disease progression in MS and facilitate the development of preventive and therapeutic interventions for MS that disrupt these interactions.

Researchers from Charles University in Prague contributed to the study, which received a grant from the U.S. Department of Defense.

The Segway may seem cool, but theres nothing cool about a head injury, said Mary Pat McKay, MD, MPH, FACEP, of George Washington University in Washington, D.C. One-quarter of the patients who came to our emergency department with Segway injuries were admitted to the hospital. Forty percent of the admitted patients were admitted to the ICU because they had traumatic brain injuries.

Researchers examined the records for 44 patients who came to the emergency department with injuries sustained while riding the Segway. Only seven percent of the patients had worn helmets, which are not required by law for Segway riders in Washington. The number of cases increased significantly over time, with three cases appearing in 2006, eight cases appearing in 2007 and 25 cases appearing in the first 11 months of 2008.

All of the injuries were sustained by riders simply falling off, mostly from striking an inanimate object, said Dr. McKay. Segways are pretty new to the marketplace and its often only as products become popular that the risks involved become apparent.

"We urge the Consumer Product Safety Commission to assign the Segway a unique product code and collect data on injuries sustained from riding the Segway so we can develop a clearer idea of the scope of the problem," McKay said. "In the meantime, all Segway riders should wear helmets and pay close attention to what is in front of and around them when riding.

Tourists on wheels

The Segways have become popular among tourists in Washington who want to avoid the endless treks from one gleaming pile of marble to the next. Besides being a danger to their users, they are also an increasing annoyance to pedestrians, bicyclists and motorists.

But the D.C. government is taking a jaundiced view of the irksome devices not because of safety considerations but because of the unlicensed tour guides who have been leading tourists around town on Segways.

D.C. requires tour guides to have a license. To get one, the would-be guide must pay $200 and pass a 100-question multiple-choice exam. This is intended to ensure that the guides don't pass on misinformation to their charges.

But at least one comapny, Segs in the City, has refused to apply for licenses for its guides. They have challenged the District's law on the grounds that it violates the First Amendment.

The Constitution does not allow the government to be in the business of deciding who is and who is not allowed to speak about various topics, said Robert McNamara, staff attorney at the Institute for Justice, declared: That is un-American, that is unconstitutional and we will put a stop to it, according to The Daily Caller.

The spectrum, known as white spaces, is the first to be made available for unlicensed use in more than 20 years.

TV white space spectrum is considered prime real estate because its signals travel well, making it ideally suited for mobile wireless devices.

Unlocking this valuable spectrum will open the doors for new industries to arise, create American jobs, and fuel new investment and innovation, the agency said in a statement.

The National Broadband Plan noted the importance of unlicensed spectrum in creating opportunities for new technologies to blossom and recommended that the Commission complete the TV white spaces proceeding as expeditiously as possible.

The FCC began this project more than two years ago, investigating arguments that the use of the spectrum might interfere with existing wireless devices and television broadcast industries.

The National Association of Broadcasters (NAB) was a staunch opponent of the "white spaces" project.

Supporting the use of white spaces is an array of tech titans including Google and Microsoft, as well as consumer advocacy groups such as Consumers' Union, the U.S. Public Interest Research Group (PIRG), and Free Press.

Cheap wireless broadband

Among its uses, the spectrum could be used to deliver low-cost wireless broadband to rural and poor areas, transmit traffic videos, build electric-utility smart grids, create faster home networks, and create services not yet imagined.

MediaG3, Inc. a wireless technology venture, said the company is planning to exploit white spaces airwaves that exists in all U.S. cities.

MediaG3 last week introduced WiFiBridges technology, a multi-channel, multi-mode network which was designed in part to work in these white spaces. It's chairman, Val Westergard, hailed the FCC decision.

"This new spectrum allows signals to penetrate through buildings and walls much better, delivering superfast Internet connections in places other frequencies didn't," said Westergard. "We call this 'Next Generation,' WiFi3 or WiFiCubed. This will bring a whole new level of Internet mobile device usage.

"As more channels and frequencies are added and made available, more and more ways to use them will be developed. This is a very exciting day for all of us in wireless technology. The door to innovation has just been cracked open a little more."

Results of the study by Johns Hopkins researchers revealing these racial disparities is published in the August issue of the American Journal of Surgery. The study suggests that injury-prevention programs -- like state laws mandating the use of motorcycle helmets -- may not be sufficient to protect all riders equally.

Uncertainty

"For reasons that we are still trying to figure out, one size of injury prevention does not fit all groups of people and just wearing a helmet is not enough," says Adil Haider, M.D., M.P.H., an assistant professor of surgery at the Johns Hopkins University School of Medicine and the study's senior author. "Helmet for helmet, African-Americans have more lethal injuries."

Haider, who is also co-director of the Johns Hopkins Center for Surgical Trials and Outcomes Research, suspects several factors may combine to account for the gap in survival between black and white victims.

Previous studies of other accidents and illnesses have shown that lack of health insurance, reduced access to care, poorer quality of care and a greater number of pre-existing illnesses or injuries contribute to racial differences in survival.

It is also possible, he says, that riders of different races may prefer different types of helmets or more dangerous types of motorcycles. More research is needed, he says, to determine what role, if any, these issues may play.

Rising casualties

Motorcycle crashes injure roughly 88,000 people a year in the United States and kill 4,810 annually. The rate of fatal motorcycle crashes has been steadily rising for the past decade and now account for nearly one in eight motor vehicle deaths.

In the new study, Haider and surgical resident Dr. Joseph Crompton reviewed National Trauma Data Bank information on 68,840 people involved in motorcycle crashes between 2002 and 2006. Along with the finding that even after controlling for factors such as insurance status, gender and injury severity, black crash victims were 1.5 times more likely to die from their injuries than similarly injured white victims.

This was so despite the fact that black motorcycle crash victims were 30 percent more likely to be wearing helmets when injured than were white crash victims. The research also found that whites who were not wearing helmets were less likely to die than blacks who were wearing helmets, and that the highest mortality rates were among black motorcyclists without helmets.

Helmets have been proven to reduce traumatic brain injury deaths following motorcycle crashes and reduce the cost of hospital stays.

But with this new study in mind, Haider says, more focus should be placed on injury-prevention programs that go beyond imploring motorcyclists to wear helmets, since they alone do not appear to be doing enough to protect some crash victims -- particularly black riders -- from death.

GMAC Mortgage, a unit of Ally Financial, is under scrutiny for possibly not following the rules when it processed foreclosure papers. And it turns out it may not be the first time.

According to a report by Bloomberg News, GMAC was reprimanded four years ago its processor failed to read the documents and sign them in the presence of a notary, as required. The company is now accused of doing the same thing, with attorneys for evicted homeowners calling into question the legality of the procedure.

A large number of states have what is called a judicial process in a foreclosure, meaning the lender must file an affidavit that confirms the basic facts of the case. There have been so many affidavits that GMAC reportedly relied on robo signers to sign some of the documents.

Bloomberg cites a 2006 Duval County, Florida court order that said GMAC's sworn affidavits in a foreclosure case were false testimony because the mortgage officer did not follow the rules about reading and signing.

Last week GMAC Mortgage suspended evictions in 23 states because of a technical deficiency in the review process. It followed disclosure that mortgage processor Jeffrey Stephan testified in a deposition that he did not always read or sign the documents as required.

Abuse of the process

We're concerned about this because it appears to be a clear abuse of the process, Sturat Rossman, Director of Litigation for the National Consumer Law Center, told ConsumerAffairs.com.

Legal experts are still reviewing facts and say its unclear what this case might mean for homeowners who lost property to foreclosure. But if Stephan's signature appears on your foreclosure papers, Rossman says you should take action.

Homeowneres should immediately notify the attorney who is handling their foreclosure, Rossman said. Further, they should also contact their state attorney general.

It's not known how many foreclosed loans might be affected. The company ranked fourth among loan-originators in the U.S. early this year and fifth among loan servicers.

The practice may also extend beyond GMAC. NPR reports the State of Florida is investigating four law firms that help loan servicers like GMAC.

Plaintiff's lawyers, meanwhile, are conducting depositions with executives at other loan servicers, focusing on their internal procedures for reviewing and signing documents.

Anyone who doubts that video streaming is where the world is going need only consider the implosion of once-mighty Blockbuster and the edginess now infecting the executive suites at the big TV networks and cable companies.

Still not convinced? Consider this: Roku, which manufactures set-top boxes that let you stream Netflix and other online entertainment services to your TV, reports that one in five of its customers has canceled or reduced their pay TV subscriptions.

That's according to Roku CEO Anthony Wood, who says that about 11 percent of Roku customers have completely canceled their cable, while about the same percentage have cut back on pay TV.

Wood said he didn't find that figure too surprising but he was taken aback when the company's research found that while Netflix was, as expected, the most popular service among Roku customers, the Pandora music service was number two. (Amazon video was third).

What's that, you say? People listening to Internet radio on their TV? Wood said he was surprised too but upon looking into it a bit realized that the audio-only appliance is rapidly going the way of the hand-cranked coffee grinder.

"It turns out that people don't have stereos anymore," Wood said. Instead, they have home theater systems which are a perfect way to listen to music while lazing about or doing daily chores. Radio? Stereo? Who needs it.

Meanwhile in New York, noted media analyst Mike Vorhaus, of Frank N. Magid Associates, was telling the annual Goldman Sachs Communacopia conference that change is in the air.

While there hasnt been a measurable change in consumer behavior caused by new media, Frank Magid always used to say that attitude precedes behavior, and media companies need to pay attention to the attitudinal warning signs of rough weather ahead, Vorhaus said.

He told the assembled media executives that while only a small minority of American consumers have so far dropped their cable subscription or stopped buying DVDs or cut back on their TV watching, that doesn't mean it won't happen.

You clearly have to plan for it and not deny that it might happen, he said. Vorhaus was perhaps too polite to make the obvious comparison currently making the rounds in communications circles -- that cable TV is starting to be regarded the way the telephone company used to be, as an embedded monopoly that crafty consumers and early adopters can do without.

What goes around

And while itsy-bitsy start-up ivi may have hit rough water as it tries to stream all the major TV networks and stations without bothering to license the content, it's pretty hard to see how broadcasters will be able to hold back the tide forever.

Those with long memories may recall how vigorously over-the-air television broadcasters, as they were once quaintly called, tried to prohibit cable TV systems from carrying their signals. Or, for that matter, how newspapers became apoplectic when radio stations starting doing news.

How to do it

Here at ConsumerAffairs.com, we're big fans of the Roku box and other video streaming gadgets. Sure, we have a really fast Cox Cable Internet connection but that's about it.

Background (sometimes foreground) music comes from the most basic Roku box with a couple of powered speakers plugged into it. The Roku works off our Wi-Fi network and pulls in endless music selections from Pandora and other Internet sources.

A big-screen TV ($399 open-box model from Geeks.com) stares blankly out at the world most of the time, but on the rare occasions there's any downtime, $30-a-month Netflix offers thousands of movies and TV shows that can be instantly streamed to the TV, which is connected to nothing but a $79 Blu-Ray player that has built-in Wi-Fi video streaming, sort of an internal Roku. And yes, you can find a lot of high-def video on Netflix at no extra charge.

You can do this too. The only fixed cost that's really necessary these days is a high-speed Internet connection from the cable/telephone company. Cheaper Netflix plans are available; ours includes up to three DVDs-by-mail at any given time. Using a cell phone or, better yet, Skype will provide all the talk-time most people need.

There was a time not too many years ago when the common assumption was that consumers would never agree to pay more than $30 for telecommunications service. Now many routinely pay $200 and more for basic cable, premium cable, telephone service, high-speed Internet and a cell phone or two.

Spend it if you got it, but those wanting to save a few bucks should take a deep breath and dive into the video stream. Come on it, the viewing's fine.

The U.S. Food and Drug Administration (FDA) today announced that it will significantly restrict the use of the diabetes drug Avandia to patients with Type 2 diabetes who cannot control their diabetes on other medications.

The new restrictions are in response to data that suggest an elevated risk of cardiovascular events, such as heart attack and stroke, in patients treated with Avandia (rosiglitazone).

The FDA is taking this action today to protect patients, after a careful effort to weigh benefits and risks, said FDA Commissioner Margaret A. Hamburg, M.D. We are seeking to strike the right balance to support clinical care.

Rosiglitazone also is available in combination with other diabetes medications, metformin under the brand name Avandamet or glimepiride under the brand name Avandaryl.

Avandia, manufactured by GlaxoSmithKline (GSK), is in a class of drugs known as thiazolidinediones, or TZDs. It is intended to be used in conjunction with diet and exercise to improve glucose (blood sugar) control in patients with Type 2 diabetes mellitus.

The FDA will require that GSK develop a restricted access program for Avandia under a risk evaluation and mitigation strategy, or REMS. Avandia will be available to new patients only if they are unable to achieve glucose control on other medications and are unable to take Actos (pioglitazone), the only other drug in this class. Current users of Avandia who are benefiting from the drug will be able to continue using the medication if they choose to do so.

Doctors will have to attest to and document their patients' eligibility; patients will have to review statements describing the cardiovascular safety concerns associated with this drug and acknowledge they understand the risks. The agency anticipates that the new rules will limit use of Avandia significantly.

Allowing Avandia to remain on the market, but under restrictions, is an appropriate response, given the significant safety concerns and the scientific uncertainty still remaining about this drug, said Janet Woodcock, M.D., director of the FDAs Center for Drug Evaluation and Research.

Also today, the FDA ordered GSK to convene an independent group of scientists to review key aspects of the companys clinical trial known as RECORD, which studied the cardiovascular safety of Avandia compared to standard diabetes drugs. During the course of the FDAs review of the RECORD study, important questions arose about potential bias in the identification of cardiovascular events. The FDA is requiring this independent review to provide additional clarity about the findings.

In addition, the agency halted the GSKs clinical trial known as TIDE and rescinded all of the regulatory deadlines for completion of the trial. The TIDE trial compares Avandia to Actos and to standard diabetes drugs.

Lengthy controversy

The FDA's action follows a long and contentious debate. In July, an FDA advisory panel said Avandia does, in fact, appear to increase the risk of heart attacks but a majority stopped short of asking that it be banned.

Twelve members of the 33-member panel considering the issue voted to remove the Type-2 diabetes drug from the market, ten voted to allow its continued sale but with changes to its label and restrictions, while seven members said the label should be changed. Only three panel members voted to allow continued Avandia sales with no changes or restrictions.

Health advocates have mounted a strong campaign against Avandia, saying its risks outweigh its benefits. However, some diabetes patients say they take the drug without any problems and asked the panel to keep it on the market.

After the committee vote, Dr. Sidney Wolfe, director of Public Citizen's Health Research Group, said: "Commissioner Hamburg should immediately order this drug off the market and stop the unethical international trial on it."

Meanwhile, some are questioning whether the drug company covered up Avandia's risks long before they became known. The New York Times published documents that it said showed SmithKlineBeecham - the firm's name in 1999 - buried a disastrous study that suggested Avandia posed greater heart risks than a competing drug.

As evidence of a smoking gun, the Times pointed to this 2001 email from Dr. Martin I. Freed, a GSK executive:

"This was done for the U.S. business, way under the radar. Per Sr. Mgmt request, these data should not see the light of day to anyone outside of GSK," the email states.

2007 study

It wasn't until 2007, eight years after the study cited by the Times, that health researchers began to pose questions about Avandia's risks. That year a study by a Cleveland Clinic cardiologist, using data obtained from GSK, raised the first red flag.

The Times report says the documents it has uncovered demonstrate the company was sitting on incriminating data that surfaced soon after Avandia's introduction. In one document cited by the newspaper, GSK tried to add up the lost sales that would result if Avandia's heart safety risk became established. The document put the cost at $600 million over a two-year period.

The Times quotes a GSK spokeswoman as saying the company did not publicize the results of the 1999 study because they "did not contribute any significant new information."

Patients taking Avandia have, over the years, reported adverse effects of the drug to ConsumerAffairs.com.

"I was put on Avandia for type 2 diabetes at least two years ago," Patsy, of East Peoria, Ill., reported in 2008. "I started having dizziness and blackout spells not long after. My doctor said he didn't know what caused them. Three or four times I went to the ER where they got it resolved in from one to three days. The last time, in July of 2007, it did not resolve and still hasn't. I was told at that time I had congestive heart failure also and am being treated for that now."

Last week a medical reviewer for FDA said GSK's analysis of a study it used to justify Avandia's safety was completely misinterpreted. Dr. Thomas Marciniak, in a posting on the FDA web site, said the study actually shows the opposite of the company's position - Avandia may cause heart attacks.

Marciniak's review was part of an FDA effort to brief an expert panel today and tomorrow to determine whether questions about Avandia are serious enough to require its removal from the marketplace. GSK's analysis was part of its case that the drug should not be removed.

But in looking at the data, Marciniak wrote that the information in the study was so misinterpreted that it's hard not to conclude it was done on purpose. "One does not have to be a mathematician or to perform calculations to come to the conclusion that a combined look at all the trials of Avandia would demonstrate that it causes heart attacks," Marciniak writes.

Blockbuster, having fallen even farther behind than the Post Office, has filed for bankruptcy and is expected to close at least 1,000 of its video-rental stoes.

Blockbuster was slow to adapt to changing conditions and lost ground to both digital outlets such as Netflix and Amazon and to Redbox and other vending machines conveniently located in supermarkets, convenience stores and other high-traffic areas.

The company sought to put a good face on its situation, issuing a statement that said it was "making good progress in our recapitalization process."

All of Blockbuster's U.S. operations, including its stores, DVD vending kiosks, by-mail and digital businesses, are open and serving customers in the normal course, the company saidin a statement. Blockbuster is fulfilling all orders as usual, including continuing to provide access to new releases the first day they become available. Blockbuster intends to continue honoring its Rewards program, valid coupons, gift cards and other customer programs.

It would be diplomatic to say that consumers will mourn the company's demise or, at best, shrinkage, but it wouldn't be true, at least among the countless consumers who have felt ripped off by late fees, missing items and unauthorized charges.

Many customers, like Robert of New Bern, N.C., have complained that they were charged for movies or games that were, in fact, returned to a Blockbuster drop box.

"The very first time a female rep said one game had been returned, next time I called they changed it to none," Robert said.

Gretchen of Erie, Pa., was angered when Blockbuster charged a late fee to a debit card that she had never registered on her Blockbuster account. The store manager told her the store's system stored all cards used at the check-out counter, not just those the customer provided at sign-up.

"Watch out for Blockbuster and their unauthorized transactions on your bank account, as they store bank account information if you use a debit card when you rent a movie!! GOODBYE BLOCKBUSTER and HELLO NETFIX!" Gretchen concluded.

Deception charges

Nor has Blockbuster's history been entirely unspeckled by run-ins with the law. In 2005, 48 states and the District of Columbia sued the company, alleging that its "No Late Fees" program was misleading because it did not disclose that customers would be charged for the selling price of any video they did not return within seven days of its due date. The company settled the suit and agreed to provide refunds, credits and coupons to affected customers.

Blockbuster quietly reinstated late fees in 2010, claiming it was simply changing its policy to make it consistent with its competitors.

Also in 2005, Blockbuster closed a store in New York City and left behind a gift for enterprising identity thieves -- boxes and boxes of customer membership applications, containing valuable personal information, all sitting on the sidewalk in plain sight.

The store manager blamed New York City's Sanitation Department for not promptly picking up the boxes.

So, how do you known how many calories are in that donut? While there are calorie lists for many food items, and more restaurants are posting calorie information, most consumers simply estimate calories, if they even think of it at all. And when it comes to estimating calories, most of us aren't even close.

The sequence in which items are considered often influences our evaluations of these items," writes author Alexander Chernev of Northwestern University. "The focus on sequential estimation is important because many meals are ordered and consumed sequentially rather than at once. Moreover, to control their daily calorie intake, people often estimate not only the amount of calories contained in each meal but also the total calories consumed during the day."

In one of Chernev's studies, he found that a group of participants' impressions of how many calories a cheeseburger had depended on whether they were first shown a salad or the cheeseburger.

The people who saw the cheeseburger first thought it had 570 calories, whereas the participants who first estimated the calories of the salad thought the cheeseburger had 787 caloriesa 38 percent difference.

Reversing the order

"Simply switching the order in which our respondents evaluated the two meals resulted in significant changes in their perceived calorie content," Chernev writes. Reversing the order in which the respondents considered the items also increased the overall calorie estimation from 757 to 1,097 calories.

When the foods are very dissimilar (a "virtuous" salad versus an "indulgent" slice of cheesecake), people get even more confused about calories. Even though participants knew a fruit salad had fewer calories than a piece of cheesecake, they perceived a salad/cheeseburger sequence to have more calories than a cheesecake/cheeseburger combo.

"These findings shed light on how consumers estimate the calorie content of meals comprising multiple items," Chernev writes. "This research identifies strategies for managing individuals' perception of the calorie content of the consumed meals.

The bottom line, says Chernev, is individuals should first try to figure out the calories in something healthy before considering something indulgent. You still may be wrong in your estimation, but you're likely to err on the side of greater self-regulation in consumption."

Read more about weight loss.

Another day, another digital privacy lawsuit.

Its been a big year in privacy litigation, with Facebook, Google, and Clearspring beating back suits alleging that they failed to adequately protect consumers identity or personal information.

The latest action targets Ringleader Digital, a Manhattan-based mobile advertising firm. The suits allegations are straight out of 1984, or perhaps The Bourne Identity. According to the complaint, Ringleader and several of its clients use the Media Stamp -- a tool that Ringleader describes as the mobile equivalent of an online cookie -- to track users movements around the internet without their knowledge or consent.

According to the suit, which is seeking class action status, the process starts when a website using Media Stamp technology accesses a device run with HTML5 databases -- a class that includes the iPhone and iPad. The user is given a unique identifying number, which allows Ringleader to track [her] web browsing movements across the entire internet and not just one particular website.

HTML5 databases exploited

HTML5 software, which consists of local storage databases that allow websites to store information on subject devices, is key to Ringleaders alleged scheme. The complaint says that Ringleader found a way to exploit these databases for their own advantage.

According to the plaintiffs, Ringleader stores the users identifying number in an HTML5 database, giving advertisers a detailed picture of [the users] interests and likes, thereby allowing them to target mobile advertising specific to [the users] interests.

Worse, the suit says, theres essentially nothing consumers can do to shut the stamp off.

If plaintiffs cleaned their cookies folder and deleted their browser history, this would have no effect on defendants ability to continue to track plaintiffs because the information necessary to track plaintiffs, the unique ID, is stored in the HTML5 databases, the complaint alleges.

You cant get rid of that database, Majed Nachawati, the plaintiffs attorney, told Wired.com. Youre left with this database tracking you and your phone and your viewing habits on the net, which is a violation of federal privacy laws.

High-profile clientele

While youve probably never heard of Ringleader, youve almost certainly heard of some of its clients: The Travel Channel, CNN Money, Surfline, WhitePages.com, and Merriam-Websters Dictionary all use Ringleader, and all are named as defendants in the suit.

The complaint says that the majority of companies that use Media Stamp fail to address or identify Ringleader and Media Stamp at all.

Ringleader, for its part, isnt denying the allegations, but says it did nothing illegal.

To the extent that the plaintiffs are alleging that Ringleader violated any laws relating to consumers privacy, Ringleader intends to defend its practices vigorously, CEO Bob Walczak told Wired.

The suit, filed in federal court in Los Angeles, alleges trespass, unjust enrichment, and violation of several California state statutes, including the Computer Crime Law and the Computer Fraud and Abuse Act.

Read more about privacy.