Current Events in September 2010

Google has agreed to pay $8.5 million to settle a class action lawsuit alleging that Google Buzz, the search engine's attempt at social networking, failed to take steps to protect users' privacy.

The suit was filed in February by Harvard Law student Eva Hibnick, who discovered Buzz only when she logged into her Gmail account on February 9 -- the day Buzz was formally launched -- and saw the application advertised on the left side of her screen.

Hibnick's suit alleged that Buzz broadcast users' private information without obtaining advance permission, or even warning them that certain data was about to become public.

Indeed, Todd Jackson, the project manager in charge of introducing Buzz, went so far as to write on Google's blog that Buzz is built right into Gmail, so you don't have to peck out an entirely new set of friends from scratch -- it just works.

Blogger says Buzz put her in danger

One of Hibnick's biggest concerns was Buzz's auto-follow feature, which automatically signed users up to receive status updates from the six contacts that they most frequently spoke with.

Hibnick was not alone in her concern; on February 11, blogger Harriet Jacobs recounted her own personal horror story. Jacobs wrote that, while her two most frequently-used contacts were her boyfriend and her mother, [t]here's a BIG drop-off between them and my other 'most frequent' contacts.

Jacobs's third most frequent contact was none other than her abusive ex-husband. Equally troubling, several of this ex-husband's close friends rounded out the top six.

Which is why its SO EXCITING, Google, Jacobs blogged, that you AUTOMATICALLY allowed all my most frequent contacts access to my Reader, which in many instances contained my current location or workplace.

My privacy concerns are not trite, Jacobs continued. They are linked to my actual physical safety, and I will now have to spend the next few days maintaining that safety by continually knocking down followers as they pop up.

Google quickly did away with auto-follow, instead providing a list of recommendations but leaving the ultimate decision with the user.

Google pleased with settlement

In a statement, Google declared itself satisfied with the [settlement] agreement and glad to move forward.

We have always been committed to offering users transparency and choice in Buzz and all our products, and will continue to work together with users to provide the best user experience possible, Google said.

The bulk of the settlement money will be provided to groups promoting Internet privacy. Part of the fund will also cover attorneys' fees. When the suit was originally filed, Hibnick's lawyer, Gary Mason, said that money wasn't really an object.

What we'd like to see as result is a commitment from Google that they're not going to do this again the next time they launch a product, Mason said at the time.

The settlement, which was filed in federal court in San Jose, California, still requires final approval from a judge.

According to the Labor Department, new jobless claims in mid-August unexpectedly jumped to 500,000, an increase of 12,000 over the previous week. Not only did jobless claims rise suddenly, but the length of unemployment is bleak for many. According to a July report from the Bureau of Labor Statistics, nearly 45 percent of unemployed Americans had been out of work for more than 6 months.

The dismal employment rate means that a lot of people are desperate for work and may be grasping for any job which creates a great opportunity for scammers, said Stephen A. Cox, President and CEO of the Council of Better Business Bureaus. Not thoroughly researching a job opportunity can make a bad situation even worse and a victim can lose hundreds or even thousands of dollars to any number of job-related scams.

BBB recommends looking out for the following seven red flags when searching for a job:

Red Flag: The employer offers the opportunity to become rich without leaving home
While many legitimate businesses allow employees to work from home, there are also a lot of scammers trying to take advantage of senior citizens, stay-at-home moms, students and injured or handicapped people looking to make money conveniently at home. Job hunters should use extreme caution when considering a work-at-home offer and always research the company at www.bbb.org and at www.consumeraffairs.com.

Red Flag: The employer asks for money upfront
It is rarely advisable for an applicant to pay upfront fees or make a required purchase to get a job. BBB often hears from job hunters who paid a phony employer for supposedly required background checks or training for jobs that didnt exist. Always research the job thoroughly before opening up your wallet. Also be wary of job placement companies that ask for large upfront fees to find you a job.

Red Flag: The salary and benefits offered seem too-good-to-be-true.
The adage holds true for job offers: if the deal sounds too good to be true, it probably is. Phony employers might brag about exceptionally high salary potential and excellent benefits for little work and no experience necessary in order to lure unsuspecting job hunters into their scam.

Red Flag: Employer e-mails are rife with grammatical and spelling errors.
Online fraud is often perpetrated by scammers located outside the U.S. Their first language usually isnt English and this is often evident in their poor grasp of the language which can include poor grammar and the misspelling of common words.

Red Flag: The employer requires you to check your credit report
After posting their resumes online or responding to online job listings, many job hunters received what they thought was good news: an e-mail from an interested employer. In order to be considered for the job, the applicant has to check his or her credit report through a recommended website. The truth is, the e-mail is just an attempt to get the job hunter to divulge sensitive financial information or sign up for credit monitoring services.

Red Flag: The employer is quick to ask for personal information such as Social Security or bank account numbers
Some job seekers have been surprised to learn theyve gotten a job without having to do a single interview. However, when the employer then asked for personal information in order to fill out the necessary paperwork, suspicions were raised and rightly so. Regardless of the reason, a job applicant should never give out his or her Social Security or bank account numbers over the phone or email and only after theyve confirmed the job is legitimate.

Red Flag: The job requires you to wire money through Western Union or MoneyGram or receive and forward suspicious goods
Many phony jobs require the employee to cash a check sent by the company through the mail and then wire a portion of the money on to another entity. Reasons given for this requirement vary from scam to scam. Whatever the reason though, the check might clear the employees bank account but will eventually turn out to be a fake and the employee is out the money he or she wired back to the scammers. BBB also warns against receiving and mailing suspicious goodssuch as electronics or luxury itemsoverseas.

By Lisa Wade McCormick
ConsumerAffairs.com

A federal jury has indicted a California woman for her role in a morbid insurance scheme that staged funerals, forged death certificates, and even filled an exhumed coffin with cow parts and a mannequin.

Jean Crump, 67, of South Los Angeles, is the fourth and final member of the extravagant insurance fraud ring charged in the plot that duped life insurance companies out of thousands of dollars, the Federal Bureau of Investigation (FBI) said.

Jurors found Crump -- a former mortuary employee -- guilty of two counts of wire fraud and one count of mail fraud.

During its investigation, the FBI discovered that Crump and her three female accomplices filed fraudulent claims against $1.2 million in life insurance policies for a person who had not died as they alleged.

The FBIs investigation revealed the women went to great lengths to lend credibility to their scheme, including staging a funeral and burying an empty casket.

In one instance, investigators learned that Crump and her accomplices bought life insurance policies for a Jim Davis, and named his so-called niece and nephew as the beneficiaries.

When Davis allegedly died, Crump and her partners in the scheme created a fraudulent death certificate -- with a doctors forged signature -- to collect the life insurance money, the FBI said.

The women also staged a phony funeral for Davis and recruited people to play mourning family members in case anyone was watching, the FBI said.

The sham didnt stop there.

Documents the women filed with financial companies also claimed they purchased an ornate casket and elaborate floral arrangements for Davis funeral, the FBI said. The women even purchased a burial plot for Davis and buried him without a headstone.

Federal investigators learned the women also made up grossly inflated bills from a mortuary to cover Davis funeral and burial costs. The women then wired those bills which listed different amounts -- to two assignment companies.

Both companies paid the mortuary, which was owned and operated by one of the four players involved in the insurance scheme, Lydia Pearce.

One company paid Pearces mortuary nearly $30,000 and the other paid a little more than $16,000, the FBI said. An insurance company also paid more than $230,000 in life insurance to Davis so-called nephew.

The womens scheme unraveled when two insurance took a closer look at the claims, the FBI said.

After an insurance investigator started asking questions, Crump and her accomplices exhumed the coffin that allegedly contained Davis remains and filled it with a mannequin and cow parts to ensure the proper weight. The women then sent the coffin to a crematory and filed fraudulent documents with the County of Los Angeles stating the remains were scattered at sea.

Investigators with the FBIs Los Angeles office also learned that Crump offered a physician $50,000 to create medical records documenting the phony death certificate.

Crump is scheduled to be sentenced on November 29 for her role in the scheme. She faces a maximum sentence of 90 years in prison, the FBI said.

The jury in Crumps case, which returned its verdict on August 27, could not reach a decision on two mail fraud charges connected to a $50,000 life insurance policy for a woman who died in 2004, the FBI said.

The other women charged in connection with this insurance scheme, the FBI said, are:

• Faye Shilling, 61, of Hawthorne, California. She has pleaded guilty to two counts of wire fraud and is also scheduled to be sentenced on November 29;

• Barbara Ann Lynn, 64, of Los Angeles, California. She has pleaded guilty for her role in the scam and was sentenced to one-year of home detention as part of three-year probation;

• Lydia Eileen Pearce, 35, of Signal Hill, California. She pleaded guilty and is scheduled to be sentenced on November 8.

The FBI said each of the women brought their own expertise to the scheme. Crump and Pearce, for example, worked in mortuaries and knew about funerals and death documents. Shilling, a phlebotomist, understood how to file insurance claims. And Lynn was a notary who used her stamp to make the fraudulent documents look legitimate.

Insurance companies, however, werent the only ones duped in the womens scheme.

The FBI learned the women also defrauded several financial assignment companies. Funeral homes and mortuaries often use those types of companies to advance cash for funeral expenses. In exchange for those advance payments, the companies receive a portion of the deceaseds life insurance policies.

The FBI said consumers can protect themselves from insurance fraud by:

• Reading all insurance policies carefully and only paying for coverage they ordered;

• Avoiding policies that are sold over the phone or door-to-door. Also be wary if the price for the coverage seems too low;

• Always writing premium checks to the insurer not the agent. And never sign a blank claim form;

• Checking with their states insurance department to ensure the company and agent are licensed. Consumers should contact those departments if they suspect theyve become a victim of insurance fraud.

By Truman Lewis
ConsumerAffairs.com

September 5, 2010
Bowing to years of threats and intimidation by 17 state attorneys general, Craigslist has shuttered its Adult Services section, pilloried by the AGs for supposedly fostering prostitution and child abuse, problems which have festered for centuries.

The Craigslist home page now shows a black bar reading "censored" where the Adult Services link formerly appeared. Adult Services ads are estimated to have generated about $36 million of annual business for the nont-for-profit site, about a third of its total income.

The company made no statement about the action and it's not known if it is intended to be permanent or if Craigslist is trying to make a point. The black-out affects only the United States. Web users in Cuba, China and other countries without a tradition of free speech are still able to access the ads.

The attorneys general -- ignoring federal law which shields Web sites from liability for postings by users -- have sought to hold Craigslist responsible for ads said to include offers of prostitution and other activities that are illegal in some jurisdictions.

Section 230 of the Communications Decency Act shields Internet forums from liability for the content of postings by users. Individuals making the postings, however, retain responsibility for their statements.

Oddly, newspapers, professional journalism organizations and civil liberties groups have been relatively silent on the AGs' persecution of Craigslist, although some commentators were quick to note that it's unlikely the persecution of Craigslist will put an end to online advertising of a sexual nature.

"If the "Adult Services" section is gone for good, it's a safe bet those type of listings may soon flood other categories on the site," said PC World's Paul Suarez.

The American Civil Liberties Union (ACLU) and the Electronic Frontier Foundation (EFF) did not respond to ConsumerAffairs.com's request for comment Sunday.

However, the EFF came to Craigslist's defense last week in an unrelated case involving a lawsuit filed against the site by an individual who sued Craigslist for allegedly posting ads written by an impersonator.

In that case, an individual referred to as Scott P. complained to Craigslist that a series of ads had been written by impersonators. Craigslist responded by saying it would take care of the matter and removed the ads. When the ads were re-posted, Scott P. sued, saying Craigslist had agreed to solve the problem.

EFF said such suits could discourage Craigslist and other Web publishers from trying to help solve their readers' problems.

"Section 230 was a deliberate effort by Congress to encourage service providers to find innovative ways to self-regulate," said EFF Senior Staff Attorney Kurt Opsahl. "Yet Craigslist is facing the prospect of extended litigation because it tried to do just that. Allowing this litigation to continue could result in websites being less helpful to users with complaints."

Additionally troublesome is the specter of further lawsuits, which could convince other Internet innovators not to host user content at all, EFF said.

"Congress created Section 230 to allow for online interactivity without a flood of lawsuits. But this case could undermine the immunity that the law created," said Opsahl. "If litigation can survive merely because a plaintiff asserts that the site made a vague promise, sites may decide that allowing comments or user generated content is not worth the legal exposure. Then we'll lose the vibrant online environment that Section 230 helped create in the first place."

Joining EFF in the letter to court were the Center for Democracy and Technology, the Citizen Media Law Project, and law professors Eric Goldman, David S. Levine, David G. Post, and Jason Schultz. Separately, a group of Internet companies, including Yahoo!, Amazon, Facebook, Twitter, Google and Linkedin filed another amicus brief in support of Craiglist.

Screening criticized

In their latest attack, the 17 states wrote to Craiglist CEO Jim Buckmaster and founder Craig Newmark, contending that since Craiglist was not screening ads to the politicians' satisfaction, it should stop accepting them altogether and shut down the Adult Services section.

The increasingly sharp public criticism of Craiglists Adult Services section reflects a growing recognition that ads for prostitution -- including ads trafficking children -- are rampant on it, Mississippi Attorney General Jim Hood said. In our view, the company should take immediate action to end these ads."

In a blog posting, Craiglist CEO Jim Buckmaster said the company began manually screeening Adult Services ads in May 2009 and, since then, has intensified its efforts to keep objectionable material from being posted on its site.

"Before being posted each individual ad is reviewed by an attorney licensed to practice law in the US, trained to enforce Craiglists posting guidelines, which are stricter than those typically used by yellow pages, newspapers, or any other company that we are aware of," Buckmaster said. "More than 700,000 ads were rejected by those attorneys in the year following implementation of manual screening, for falling short of our guidelines."

Our uniquely intensive manual screening process has resulted in a mass exodus of those unwilling to abide by Craiglists standards, manually enforced on an ad-by-ad basis.

But in their statement, the attorneys general discounted Craiglist's efforts.

Your much-touted 'manual review' of Adult Services ads has failed to yield any discernible reduction in obvious solicitations, the letter says. We recognize that Craiglist may lose the considerable revenue generated by the Adult Services ads, the attorneys general said. No amount of money can justify the scourge of illegal prostitution, and the suffering of the woman and children who will continue to be victimized, in the market and trafficking provided by Craiglist.

Hot spot

The AGs said that even following its 2008 public pledge to attorneys general and the public that it would better police its own site, Craiglist remains a hot spot for blatant prostitution ads.

In July 2010, two girls who said that they were trafficked for sex through Craiglist wrote an open letter to Craiglist officials, pleading for the elimination of the Adult Services section. The girls told of brutalization and assault suffered not just by them, but also by untold numbers of other children, the attorneys general said.

The attorneys general call recent blog posts and public statements from Buckmaster and Newmark, including a CNN interview, deeply troubling because they seem to imply that victims, law enforcement officials and childrens advocates are at least partially to blame for these incidents due to their failure to provide Craiglist with police reports, ad copy or links documenting the crimes.

The attorneys general said this position fails to acknowledge that Craiglist is the only party positioned to stop these ads before they are published. While the perpetrators may eventually be apprehended and brought to justice, the victims -- assuming they survive -- will carry the scars for life, the attorneys general said.

Not alone

But in his blog, Buckmaster suggested that Craiglist is being unfairly singled out for criticism while other companies -- including eBay -- continue to profit from pornography and prostitution.

Buckmaster said that eBay's LOQUO.com site offers "tens of thousands of exceptionally hardcore pornographic ads explicity offering sex for sale." He said eBay has blocked access to the site from U.S. addresses but continues to make the site available internationally.

Buckmaster scoffed at eBay's promise to take down the spicy ads.

Ill make a friendly wager that rather than taking down such listings, which eBay has aggressively marketed over the years to a very high level of profitability, upselling their users to higher and higher fees, eBay will instead soon sell their non family friendly sites such as this one to the highest bidder.

Participating states

States participating in the campaign to censor Craigslist postings are: Arkansas, Connecticut, Idaho, Illinois, Iowa, Kansas, Maryland, Michigan, Mississippi, Missouri, Montana, New Hampshire, Ohio, Rhode Island, South Carolina, Tennessee, Texas, Virginia.

Forty-one-year-old Corey N. Johnston appeared before United States District Court Judge David S. Doty and entered a plea of guilty to one count of bank fraud and one count of filing a false income tax return in connection to this crime. Johnston was charged on August 6, 2010.

Loan participation scheme

In his plea agreement, Johnston admitted that from 2005 through March of 2009, he oversold participation in large commercial and personal loans arranged by him through his company, First United Funding (FUF). Loan participation is a common banking practice in which a bank pays an original lender all or a portion of a particular loan and then assumes that loan, along with its associated risk. From that point on, the bank receives the loan payments from the borrower, as if the bank had made the loan in the first place.

Johnston's scheme involved selling more than 100 percent participation in at least 10 different loans arranged through FUF. In other words, he purportedly sold loan participation to banks after already selling that same participation to other banks.

In each instance, Johnston failed to disclose that the total participation exceeded 100 percent of the original loan, making it impossible for the participating bank to receive the money expected.

Scam investments

For example, Johnston oversold loan participation for a project known as White Out Way Investments. The original White Out Way loan, arranged through FUF, was for $7 million. Johnston sold 100 percent participation in that loan to Western National Bank. At the same time, however, he persuaded several other banks to participate in the loan, including 100 percent participation by The National Bank in Bettendorf, Iowa, as well as partial participation by four other lending institutions. In all, Johnston solicited and received $23.65 million from six banks for the $7 million loan.

In addition, Johnston oversold loan participation for a project known as JM Land Development II. The original JM Land Development loan was for $8 million, and once again, Johnston sold 100 percent participation in the loan to Western National Bank.

However, he simultaneously obtained full loan participation from Choice Financial, The National Bank, and Hillcrest Bank, along with partial participation from four other banks. Johnston solicited a total of $38.65 million for an $8 million loan. Six additional lenders also were defrauded during the course of this scheme by overselling participation in other loans.

Johnston used some of the proceeds of the fraud to repay other loans and perpetuate the scheme. He also diverted fraud proceeds for his personal use as well as for use by family members. Furthermore, Johnston failed to report the fraudulent income on his 2005 federal income tax return. That failure resulted in an underpayment of taxes to the United States of approximately $508,905.

For his crimes, Johnston faces a potential maximum penalty of 30 years in prison on the bank fraud charge and three years on the charge of filing a false income tax return. Judge Doty will determine his sentence at a future hearing, yet to be scheduled.

Motorists are enjoying lower prices for fuel heading into the Labor Day weekend, as many Americans hit the road in a final summer fling.

The nationwide average price of self-serve regular gas is $2.681 a gallon, fractionally lower than last Friday, according to AAA. While the decline in gas prices has slowed in the last week, prices are down about a dime a gallon in the last three weeks.

Today's average price of diesel fuel is $2.953, compared with $2.959 a week ago.

Prices fell throughout much of August as more evidence emerged that the economy is not rebounding as fast as many economists predicted. That sent oil prices falling toward the $70 a barrel mark, pulling retail gas prices down with them.

The U.S. Energy Information Administration this week reported oil inventories in the latest week rose more than expected, but product stockpiles dropped. Crude oil inventories for the week ended Aug. 27 increased 3.4 million barrels. Gasoline stocks fell 200,000 barrels; analysts expected a drop of one million barrels.

10 percent travel increase

"AAA is forecasting a 10 percent increase in travel over the Labor Day holiday weekend, with 90 percent of travelers taking trips by automobile," said Andrew Delmege, AAA's manager of regulatory affairs. "The good news for drivers is that they will be able to factor in a reliable, consistent fuel price in their travel budgets."

The states with the most expensive gasoline today are:

Alaska ($3.525)
Hawaii ($3.459)
California ($3.066)
Washington ($3.048)
Oregon ($2.976)
Idaho ($2.986)
Utah ($2.922)
Nevada ($2.893)
Montana ($2.894)
New York ($2.829)

The states with the least expensive gasoline today are:

South Carolina ($2.447)
Mississippi ($2.493)
Tennessee ($2.501)
Missouri ($2.501)
New Jersey ($2.502)
Alabama ($2.507)
Virginia ($2.509)
Texas ($2.514)
Georgia ($2.539)
Louisiana ($2.547)

September 3, 2010
Nothing is more aggravating than finding you've been charged for something you never wanted or agreed to buy. The State of Illinois, responding to thousands of complaints, has sued a California firm placing unauthorized charges on consumers' phone bills, a practice known as "cramming."

Illinois Attorney General Lisa Madigan has filed suit alleging that a Web-based California business signed up and charged thousands of Illinois consumers for identity protection assistance even though the consumers never asked to purchase such a service.

The lawsuit contends that ID Lifeguards, Inc., and its owner, Arthur Natanyan of Burbank, California, deceived consumers into unknowingly purchasing the identity protection when they responded to a sales offer for other products or services on a third-party Web site. According to the complaint, between September 2009 and March 2010, the defendants charged $157,562 for unauthorized services on the phone bills of 5,071 Illinois consumers.

Irony

"The defendants in this case claim to be in the business of identity protection, but in fact they're in the business of scamming people out of their hard-earned money," Madigan said.

The attorney general's lawsuit alleges that ID Lifeguards, in addition to maintaining its own Web site, marketed its identity protection services on several websites belonging to other companies and offering products and services unrelated to identity protection, such as discount coupons and online contests.

Consumers responding to offers on these third-party Web sites were automatically directed to a sign-up page owned by the defendants and prompted to provide personal information. By completing the sign-up page, consumers were unknowingly signed up for ID Lifeguards' purported services and billed $12.95 a month for those services, with the charges appearing in the miscellaneous section on their phone bills.

Where's my credit report?

Additionally, ID Lifeguards' Web site claims the company provides consumers with free copies of their credit reports, yet none of the consumers who spoke with Madigan's office had received copies of their reports from the defendants.

"Unfortunately, it is fairly easy for companies to add charges to your telephone bill that have nothing to do with your phone service," Madigan said. "Consumers should be aware of this and carefully check their phone bills each month for any additional charges."

To further reduce the risk of becoming the victim of a scam artist, Madigan advised consumers to call their local phone company and request that third-party billings be blocked from their phone bill.

In the suit, Madigan is asking the court to prohibit the defendants from engaging in the business of offering identity protection services in Illinois. She also seeks to have the defendants pay restitution to consumers, a civil penalty of $50,000 per defendant, and additional penalties of $50,000 for each act committed with the intent to defraud.

Evan Walter Coleman, who also uses the name Walter E. Coleman, founded the U.S. Fallen Heroes Foundation in March 2010, ostensibly to construct a national memorial in Kennedale, Texas, for Iraq, Afghanistan and Gulf War veterans. Coleman abruptly resigned as the charity's chairman just one day before he was required to respond to a subpoena from the AG's office.

Earlier this summer, Abbott's office was contacted by veterans who expressed concerns about the legitimacy of Coleman and his organization. After reviewing information provided by the veterans, state investigators concluded Coleman fabricated IRS forms to create the impression that his foundation was a legitimate, registered 501(c)(3) public charity.

Solicited donations

According to state investigators, Coleman solicited charitable contributions from individual and business donors for a national monument honoring Iraq, Afghanistan and Gulf War veterans. To help raise funds, Coleman placed donation jars for the monument in several business locations.

Coleman, who used the additional name Walter Raleigh Coleman Jr., falsely told donors that the foundation was a legitimate, federally recognized charity and was authorized to receive tax-exempt donations. In addition to misleading beneficiaries, Coleman also made these false representations to the City of Kennedale and the local First National Bank.

In order to acquire a real estate purchase contract with the city for land on which to build the memorial, Coleman provided a fraudulent IRS letter and falsified tax-exempt application. Additionally, Abbott's preliminary review of the U.S. Fallen Heroes Foundation's records indicated that Coleman diverted donors' charitable contributions to cover his personal expenses -- including his mortgage payments and utility bills.

After submitting his resignation as chairman of the foundation on July 28, Coleman notified the Office of the Attorney General that he had appointed Larry W. Summers to act as new chairman in his absence. Summers, who is not a defendant in this case, has fully cooperated with investigators from both the attorney general's office and the Tarrant County District Attorney's Office.

The state's enforcement action is seeking civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act, as well as attorneys' fees and court costs. Court documents ask the court to set aside any funds that were fraudulently collected under false pretenses and decide whether to order that donated funds be returned to contributors or redistributed to the reorganized U.S. Fallen Heroes Foundation.

In a settlement with the Washington State Attorney Generals Office, Great Lakes Window, Inc. agrees not to make false or unsubstantiated representations about the energy efficiency of their window products.

Window manufacturers like Great Lakes and not just companies that sell windows directly to consumers must avoid deceptive marketing tactics like energy savings pledge programs that promote false or unsubstantiated energy savings claims, said Assistant Attorney General Jack Zurlini. Our settlement prohibits those marketing practices and puts a few dollars into the pockets of affected consumers.

Great Lakes Window, Inc. sells replacement windows to retail window companies nationwide, including businesses in Washington state. One such company is Statewide, Inc., also known as Penguin Windows. The Attorney Generals Office reached a separate settlement with Penguin Windows in March.

From about 2004 through 2009, Great Lakes sponsored an energy savings pledge program used by Penguin Windows. The program promised that consumers who purchased new windows and doors throughout their homes would save at least 40 percent in energy costs the first year, or be paid the difference. In its complaint, the Attorney Generals Office says the claim was false a violation of the states Consumer Protection Act.

The AGs Office says the energy savings actually realized as a result of replacing old windows varies greatly due to many energy-consumption factors, including the type, size and location of the windows replaced; the homes insulation; the climate at the homes location and the type and condition of the homes heating and cooling systems. As a result, consumers should not believe advertising claims that promise all homeowners will realize the same high percentage of energy savings.

The only way to accurately estimate the actual energy savings a particular home will achieve by replacing windows is to have an extensive whole-home energy audit conducted by a reputable company that looks at all energy-consumption factors, not just the windows.

Under the settlement, Great Lakes does not admit to wrongdoing and specifically denies the allegations. However, it agrees not to engage in the prohibited marketing practices and will set aside $50,000 for refunds for qualifying homeowners. The window manufacturer will also review and respond to written customer complaints about energy efficiency claims and keep records of those complaints for four years.

But do you really save money? Increasingly, evidence suggests smart comparative shopping can provide the same or better results, with more flexibility than these sites offer.

The business model for these booking sites isn't exactly new and is relatively simple. Hotel rooms, rental cars and airplane tickets are perishable commodities. On any given day, an empty hotel room, an unsold plane ticket or an idle rental car loses all of its value to the hotel, airline or rental car agency. Better to get something, rather than nothing, the theory goes.

Acting as a broker, or middleman, the booking site negotiates a lower rate for these about-to-perish commodities and sells them to consumers for a slightly higher price. The consumer saves money and the broker pockets a small profit. At least that's the way its supposed to work.

More deals for the asking

But in this economy travel and hospitality businesses are more competitive than ever, and many offer very good deals on their own. Josie, of Oakhurst, Calif., owns a small bed and breakfast near a national park. Her establishment is listed with Hotels.com, Expedia, Travelocity, Kayak and some other small affiliated booking sites through Bedandbreakfast.com.

"We list through these booking sites only because they seem to be the way everyone is booking these days," Josie told ConsumerAffairs.com.

But she warns consumers this isn't the best way to book a room, at least not at her B & B.

"They list our B & B at about $1.50 less than we advertise," she said. "Usually if anyone asks we'll give them five to 10 percent discount just for asking."

There have been cases, she says, when she does not receive the booking from the booking site and the client is the one who suffers if there is no vacancy. And there have been other problems.

Bad information

"The room descriptions are often wrong ,stating there is a spa tub, or a fireplace or is a pet-friendly room when it is not," she said. "The latest problem we had was a guest who was told by Hotels.com that there was a shuttle from the other side of the park to our B & B which is an hour drive away! There is no shuttle!"

William, a traveler from Keizer, Ore., said he booked two nights at a hotel through Orbitz and paid a total of $220.

"When I got to the hotel I found out they would have charged just $165.57 for the stay," he said. "I called Orbitz and they said the hotel had no right to tell me their price."

Penelope, of Kernersville, N.C., experienced the "lost" reservation so many others have reported in recent months. Having booked a three night stay through Hotels.com, she arrived to find no such reservation existed. The hotel was able to provide a room, but she had to pay for it. Since she had already paid Hotels.com for it, she paid twice.

"I contacted Hotels.com for a refund the next day," she told ConsumerAffairs.com. "I was told the refund was put through. It has been two weeks and I still have not received the refund."

Wrong hotel

Maureen, of Brooklyn, N.Y., booked a hotel using the "name that price" option on Priceline.com. She got her price, but not the hotel she thought she had booked.

"They had a map that had four zones," she said. "I chose zone one and made an offer for a hotel that was accepted. Only problem is that the hotel was not in the area that I requested!"

When a consumers use a booking site to reserve a hotel room, they pay in advance and the payment, in most cases, is non-refundable. But today, many hotels will also give you a lower price if you make a non-refundable reservation.

For example, the Hyatt Regency in Baltimore's Inner Harbor charges $249 for a room, but $199 for the same room if made with an advance, non-refundable purchase. Other hotels, increasingly have similar policies.

Consumers should also remember that using a booking site to purchase a hotel room a month or two in advance greatly reduces any discount the booking site can offer. Hotels are more likely to offer attractive discounts -- both to you and to booking sites -- closer to the arrival date, since they have a better idea how many extra rooms they have and how many with "perish" if they don't book them.

September 2, 2010
Following a sharp drop in the months immediately after expiration of the home buyer tax credit, pending home sales have modestly risen, according to the National Association of Realtors (NAR).

The Pending Home Sales Index (PHSI), which is based on pending sales of existing homes, rose 5.2 percent -- to 79.4 based on contracts signed in July. The June figure was revised downward to 75.5 , but remains 19.1 percent below July 2009 when it was 98.1.

The data reflect contracts and not closings, which normally occur with a lag time of one or two months.

Long road ahead

Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. "Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery," he said. "But the recovery looks to be a long process. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity."

Yun believes affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed's very accommodative monetary policy. "The loan underwriting standards are tighter, but home buyers can improve their chances of getting a loan by staying well within their budget," he noted.

Regional breakdown

The PHSI in the Northeast rose 6.3 percent -- to 62.5 in July, but is 21.1 percent below a year ago. In the Midwest the index increased 4.1 percent -- to 66.7, but remains 25.7 percent below July 2009. Pending home sales in the South rose 1.2 percent to an index of 86.3, but are 15.6 percent lower than a year ago. In the West the index jumped 11.6 percent to 95.0, but is 17.6 percent below July 2009.

The national index had fallen 29.9 percent in May and another 2.8 percent in June.

The PHSI rounds out a series of reports on the housing market. Late last month, NAR reported a drop in existing home sales for July. And the government reported sales of new homes sank July to the lowest point since government started keeping records in 1963.

You might remember that, back in May, parents were complaining that the new Procter & Gamble's Pampers "Dry Max" diapers seemed to be associated with a particularly virulent diaper rash.

Far from pampering the upset parents, P&G basically called them liars. "For a number of weeks, Pampers has been a subject of growing but completely false rumors fueled by social media that its new Dry Max diaper causes rashes and other skin irritations," snapped Jodi Allen, P&G Vice President for Pampers.

Moving with its usual alacrity, the U.S. Consumer Product Safety Commission (CPSC) looked into the matter and today issued its findings, namely: none.

"To date, the review has not identified any specific cause linking Dry Max diapers to diaper rash," the CPSC said in a statement on its Web site. But fear not, CPSC said it will "continue to evaluate consumer complaints related to Pampers Dry Max diapers and will provide parents with updated information if this assessment changes."

The agency said that from April through August 2010, it received nearly 4,700 incident reports about diaper rash. Nearly 85 percent of these complaints came in May and then dropped off significantly.

CPSC said it and its sister agency in Canada "considered certain characteristics of the diaper, including the materials used, the construction of the diaper, and heat and moisture retention issues." But, after its intensive probe, it found nothing.

So was it just mass hysteria? Or a calculated attempt by consumers to give P&G acute indigestion?

"While the investigation thus far does not find a link between the diapers and the health complaints received, CPSC recognizes the serious concerns expressed by parents. CPSC staff cannot rule out that there may exist a health concern for some babies, especially those babies that may be sensitive and develop rashes or other skin problems as a result of contact with the materials in this or other products," the agency's statement concluded.

Not quite over

But while P&G and the CPSC seem content to believe that complaints have "dropped off significantly," consumers continue to complain to ConsumerAffairs.com about the issue.

Just yesterday, Rosalind of Avondale, Ariz., reported that her grandson developed a rash after just three diaper changes with Pampers Cruisers.

"We have used Pampers for years but in comparing the new diapers to a few left over at home, we discovered that the new bag had a distinct chemical odor," Rosalind said.

Was Rosalind happy to find that P&G and her government have known about the problem since May? She was not.

"If they had taken these parents seriously, my grandson would not have experienced the trauma that he endured last night. I am outraged by the position P&G has taken and am committed to being heard on this matter. Someone has to stop big business from placing profits above people."

Maybe it's just a bad batch of diapers? Could be, but if so, it's certainly been widely distributed. Belinda wrote to us just last week from Elsburg, South Africa.

"I bought Pampers Premium for my babies and it burnt their little bums. So I bought Pampers Active Baby and it is so thin you could see they they were watering. I had to use two nappies so as not for them to wet themselves. This was the first time that this has happened as I only use Pampers," Belinda said.

Closer to home, Sarah of New Kensington, Pa., wrote:

"I had just bought a box of Pampers Swaddlers with Dry Max at my local Target. I have been using Swaddlers on my daughter since she was born 4 months prior to this incident with absolutely NO problems. When I went to Target that day I bought the "new" Dry Max swaddlers. Within 1 hour my daughter started doing this gasping sound for air, almost like she couldn't catch her breath.

Sarah said her daughter's condition deteriorated so rapidly that she rushed her to Children's Hospital in Pittsburgh.

"When we got there and went to check her rectal she had a severe chemical burn all over her entire bottom! From front to back. The rash was so bad and so painful it was causing her so much pain she couldn't breathe. I felt horrible and couldn't believe what had happened. I put a ton of Desitin on her bottom and discontinued using the swaddlers. Within 12 hours of discontinuing the swaddlers the burn was healing and her breathing was getting a lot better. "

"The PC market revived in the first half of 2010, but the real test of its resilience is yet to come," said Ranjit Atwal, research director at Gartner, an information technology research and advisory company. "We have reduced our forecast for second-half 2010 PC growth to 15.3 percent, approximately two percent below our previous forecast, in light of the uncertain economic outlook for the United States and Western Europe."

Slower consumer PC purchases

Atwal said there is no doubt that consumer, if not business, PC demand has slowed relative to expectations in mature markets. Recent dramatic shifts in the PC supply chain were "in no small part a reaction to fears of a sharp slowdown in mature-market demand," he said. "However, suppliers' risk-aversion is as much a factor in these shifts as any actual downshift in demand."

Consumers buoyed the PC market in 2009 as businesses delayed their purchases. But the slow pace of economic recovery and austerity measures in Europe have made PC suppliers very cautious in 2010. Atwal believes consumer demand is likely to remain strong even if the economic recovery stalls because consumers now view the PC as a relative 'necessity' rather than a 'luxury' and will continue to spend on PCs, even at the expense of other consumer electronic devices.

Gartner analysts said businesses will find it very difficult to delay PC replacements further. The age of the professional PC installed base is already at an all-time high.

"Businesses that delay replacing much longer risk alienating employees, burdening themselves with more service requests and support costs, and ultimately facing higher migration costs when they eventually migrate to Windows 7," Atwal said. "The bottom line is that businesses need to refresh their PCs sooner rather than later. Thus, the full bloom of the long-awaited professional PC refresh can't be more than a few quarters ahead."

The mini factor

Mini-notebooks' impact on the PC market has peaked and is now waning, according to Raphael Vasquez, research analyst at Gartner. Mini-notebooks' share of mobile PC shipments declined for the second consecutive quarter in the second quarter of 2010, falling under 18 percent.

Mini-notebooks' share of the mobile PC market peaked in late 2009, when they accounted for nearly 20 percent of total mobile PC shipments. Their share is expected to continue falling until it reaches around 10 percent by late 2014.

"We still think the mini-notebook has a place in the mobile PC market, but not as a substitute for a standard mobile PC. Indeed, the recent decline in mini-notebooks' share of the mobile PC market reflects a general realization among buyers that mini-notebooks are less-than-perfect substitutes for standard low-end laptops," Vasquez said. "Buyers who once would have bought a mini-notebook based solely on its low price now seem more inclined to buy a low-end standard notebook, especially since the prices of the two have converged. Mini-notebooks are slowly but surely carving out a market niche for themselves as companion devices. However, the emergence of media tablets is a growing threat to that niche."

Gartner defines a tablet PC as having a touchscreen size of five inches or more, outfitted with a full-function operating system (OS), such as Windows 7, Windows Vista, Windows XP or Mac OS X. A media tablet is defined as a device that has a screen size of five inches or larger and is outfitted with a restricted-function OS, such as iPhone, Android and Chrome.

Gartner includes tablet PCs in its PC market statistics and forecasts, but excludes media tablets from both. Nonetheless, media tablets will affect the PC market, especially mini-notebooks, and the forecast reflects this impact, said George Shiffler, research director at Gartner.

"The iPad hasn't had much of an impact on mini-notebook units so far, if only because it is generally priced higher than most mini-notebooks," said George Shiffler, research director at Gartner. "However, we anticipate lower-priced iPad imitations will begin to take larger bites out of mini-notebook units as they are released next year."

By James Limbach
ConsumerAffairs.Com

September 2, 2010
A credit repair operation has reached a settlement with the Federal Trade Commission (FTC) and has agreed to stop making false claims and stop charging up-front fees.

The settlement is part of a continuing crackdown on scams that target financially strapped consumers -- in this case taking hundreds of dollars in fees to purportedly remove negative information from consumers' credit reports even if the information is accurate and timely.

The FTC filed the action in Operation Clean Sweep in October 2008.

The settlement agreement requires that Clean Credit Report Services, Inc., Ricardo A. Miranda, Ruthy Villabona, and their son, Daniel R. Miranda give up two cars, three houses, and six commercial properties in Broward and Miami-Dade counties in Florida, and in Bogota, Colombia.

Broken promises

According to the agency, they told consumers they would help remove all the negative remarks from their credit reports, as well as current debt. Clean Credit often debited $400 from consumers' bank accounts before receiving a signed contract, and then did little, if anything, to fulfill its promises.

Nicole of Deerfield Beach, FL, says she was scammed by Clean Credit Report Services. "We paid $760.00 in January 2006. The company sent us a package filled with dispute letters for us to sign and mail to all three credit bureaus," she writes ConsumerAffairs.com.

"When I called them to find out the update on my account they said they were sending out more dispute letters, that was never done," she says. "Now when we call the company all they tell us is our accounts are being reviewed -- and that's if you get good phone reception or someone who speaks English. When I demanded my money back because they did not commit to the service they offered -- to clean our credit, and continue to monitor our credit reports to verify these negative items don't appear again -- they refused without explanation."

Up-front money ban

The settlement order bars Clean Credit and its owners from making misrepresentations about any good or service, such as the ability to improve a consumer's creditworthiness or remove negative information from a consumer's credit report. The order also prohibits the operation from charging money up-front for credit repair services, and from collecting payments from consumers who purchased its services before October 22, 2008, when the court froze the defendants' assets, including their bank accounts. It further bars the defendants from disclosing, benefiting from, or failing to properly dispose of customer information.

In addition, the settlement order imposes a $14.4 million judgment that will be suspended, contingent upon the defendants surrendering their assets, including frozen funds totaling about $165,000 and any proceeds received from selling their six commercial and three residential properties under foreclosure in Florida; commercial property in Bogota, Colombia; a 1992 Mercedes S300; and a 1997 Chevrolet Venture.

The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

In an effort to curtail the temptation for college students who may lack financial literacy skills, New York Attorney General Andrew Cuomo has launched a statewide investigation into deceptive credit card marketing practices that target college students through their colleges.

Cuomo has sent letters to every college and university in New York requesting that the schools submit any exclusive contracts they currently have with credit and debit card companies so that his office can examine them for problematic marketing practices. The letters also call on the schools to adopt policies that will help students avoid getting saddled with credit card debt before their graduation.

Cuomo has already investigated conflicts of interest in the student lending industry, which led to nationwide reforms. Like student loans, credit cards are a major cause of students increasing debt burdens. Cumom says banks and credit card companies target students in part because they are less financially savvy and more likely to incur fees and penalties that result in substantial profits for credit card companies.

Mountain of debt

Todays students are facing a growing mountain of debt that can burden them long after graduation, Cuomo said. As a new school year begins, we want to make sure that colleges and universities are doing all that they can to help students avoid financial dangers. Especially in this difficult economy, schools must ensure that credit card companies are not engaging in deceptive marketing practices and jeopardizing the futures of their students.

The Attorney Generals investigation concerns deceptive credit card marketing practices that have targeted students, such as: Schools have given marketers their students personal contact information - without students permission - to allow companies to solicit students by mail, telephone, and online.

Credit card companies have bombarded students with solicitations at student centers, athletic events, orientations, classroom buildings, and other campus locations.

Credit card companies pay schools for the exclusive right to market cards to their students and to brand cards with their insignia. Schools have entered into these deals without evaluating if the terms of the cards are in their students best interests and without a competitive bidding process.

Selling out students?

Some schools have had a provision in their contracts with credit card companies that provide the schools with a percentage of the finance charges assessed to certain credit card accounts.

Companies have lured students by providing free gifts and food when they applied for a credit card.

As part of the investigation, Attorney General Cuomo has sent letters to the approximately 300 colleges and universities in New York calling on the schools to:

• Submit any exclusive contracts they currently have with credit and debit card companies for an evaluation by his office. The Attorney Generals office will review the contracts for any problematic practices that put students at risk.

• Ensure that their practices comply with the provisions of a 2009 federal law, the Credit Card Accountability, Responsibility, and Disclosure Act (the Credit CARD Act), which provides new protections to college students from deceptive credit card marketing practices and unfair credit card terms, and other recent changes in federal law concerning debit cards.

• Educate their students about the serious consequences of credit card debt by offering financial literacy programs. Many college students do not understand the negative effects that late payments will have on their credit history or the far-reaching problems that a poor credit history can cause.

Cuomo cites figures showing the average college student graduates with nearly $4,100 in credit card debt, on top of an average of $20,000 in loans for students at four-year colleges. This combined debt burden can be overwhelming for new graduates, he says, particularly as they face the uncertainties of todays difficult economic climate.

He says credit card debt has been found to slow students progress toward obtaining a college degree, as some students become forced to drop out of college and obtain full-time employment to meet their debt obligations. High-interest credit card debt limits graduates career choices and threatens students employment prospects, since many employers check applicants credit scores during the hiring process.

"We take the rights of airline passengers very seriously," said Transportation Secretary Ray LaHood. "Ensuring that the flying public has access to the best possible resources and consumer information is an important part of our mission, and this new version of Fly Rights will help air travelers better understand their rights as consumers."

Since it was first published in 1973, Fly Rights has provided air travelers with helpful advice on such issues as how to get the best airfare, what to expect when a flight is delayed or canceled, and how to avoid travel scams.

The guide provides easy-to-read information on federal airline regulations in a number of areas, including accommodating air travelers with disabilities and rules for bumping and baggage compensation. Fly Rights also contains information on airline safety, air traveler health and how to file official complaints against airlines.

The latest version includes updated information on the DOT's new consumer protections, including the three-hour limit on tarmac delays for domestic flights, the requirement for large airlines to display on-time performance information for domestic flights on their websites, and the requirement for airlines to respond to consumer complaints about an air travel experience. It also features new formatting and graphics to make it easier to read.

Horror stories about tarmac delays have made the issue a hot-button item in the news for years.

Bethany of Kingwood, TX, wrote ConsumerAffairs.com of being stuck on a Continental Airlines flight going from Houston to New York LaGuardia. "Because of weather problems in NYC, traffic was diverted to Dulles in Washington, D.C. Of course, the airlines assume no responsibility for weather delays; however, our plane also had mechanical difficulties. Long after other planes were back in the air, we sat first on the plane for nearly four hours and then in the terminal."

And -- just over a year ago -- there was the incident involving 47 passengers who were trapped aboard Continental Flight 2816 overnight.

Fly Rights is available online.

In addition to Fly Rights, the Department recently developed another guide to assist the flying public. When Kids Fly Alone provides air travel tips for parents of unaccompanied minors.

Print copies of both Fly Rights and When Kids Fly Alone may be obtained free of charge from the DOT warehouse by e-mail at dotwarehouse@dot.gov or by writing to DOT Warehouse, 3341-Q 75th Ave., Lanham, MD 20785.

Recent findings of piles of manure, rodents, and other unsanitary conditions on the Iowa farms linked to the massive salmonella-tainted egg recall are disgusting, but not surprising to the Humane Society of the United States (HSUS).

The conditions on farms owned by Wright County Egg and Hillandale Farms Inc. mirror those found on four other Iowa egg producing farms during a Humane Society investigation earlier this year.

The findings are shocking and disgusting, but unfortunately they are the same as weve documented repeatedly, and as recently as February and March of this year, Dr. Michael Greger, the HSUSs director of public health and animal agriculture told ConsumerAffairs.com. This is an industry-wide problem. These practices are the same as we found in our investigations in Iowaand in other investigations across the country.

The Food and Drug Administration (FDA) in the past week inspected the Iowa farms now blamed for the countrys largest egg recall and, according to their reports, found such deplorable conditions as:

• Doors to hen laying houses blocked by excessive amounts of manure;
• Dark liquid that appeared to be manure seeping though the foundations of hen laying houses;
• Employees working in hen laying houses who did not wear or change protective clothing when moving from house to house. One employee walked out of a hen house with a metal scraper and went to another house without cleaning or sanitizing the equipment;
• Live mice in egg laying houses;
• Live and dead flies too numerous to count inside egg laying houses;
• Live and dead maggots too numerous to count in a manure pit;
• Liquid manure streaming out of a 6 inch gap in a manure pit door;
• Nearly 50 un-caged hens tracking manure from the pit to the hen house areas;
• Scores of unsealed rodent holes.

The FDA reports also revealed that several samples collected during the inspections tested positive for Salmonella Enteritidis, the strain of bacterium that has sickened people in 10 states. Those samples were taken from manure and the feed mill at Wright County Egg facilities and from water at an egg washing station on a Hillandale farm.

According to the Centers for Disease Control and Prevention (CDC), this outbreak is the largest Salmonella Enteritidis (SE) epidemic in U.S. history. The outbreak has triggered a recall of more a half-billion eggs and sickened approximately 1,470 people from May 1 to August 25, 2010, the CDC said.

But the Humane Societys Dr. Greger said these widespread health problems might have been prevented if the industry and government regulators would have investigated the deplorable conditions his organization exposed earlier this year on other Iowa egg producing farms.

The FDA seemed shocked by our findings back in April, he said. But we have not gotten word that they (FDA inspectors) have gone to the four farms we investigated; we certainly hoped they would.

The Humane Society said it discovered such rampant abuses and appalling conditions inside Iowas Rose Acre Farms and Rembrandt Enterprises, the nation's second-and third-largest egg producers, as:

• Manure pits that hadnt been maintained. One worked said a manure pit under a pullet shed hadnt been cleaned in two years;
• Abandoned and starving hens found in manure pits;
• Trapped hens that couldnt reach food or water. The Humane Society said battery cages can trap hens by their wings, necks, legs and feet in the wire;
• Hens with broken bones. The HSUS said it documented workers who yanked young hens from their cages or slammed battery cage doors shut on the birds' wings, legs and necks. Those treatments caused the hens bones to break;
• Hens with eye and beak infections. In some cases, the hens had abscesses that caused their eyes to close and beaks and mouths to swell;
• High death rates.

The HSUS said its undercover investigator pulled dead young hens, some of them mummified and rotting for weeks, from cages every day;
• Inhumane depopulation methods. The HSUS said it documented workers who grabbed hens by their legs and crammed them into gassing carts. The birds were then killed with carbon dioxide.

The Iowa egg producing farms highlighted in the HSUSs investigation house about 10 million caged hens, the organization said. One facility had 18 structures that each confined approximately 300,000 birds.

Deeply troubling

"Our investigation is a deeply troubling indictment of the battery cage egg industry in America, specifically implicating two of its top three egg producers," said Wayne Pacelle, president and CEO of The HSUS. "Misery and suffering are standard at these facilities, and this investigation reveals that animals simply cannot be properly cared for in facilities of this size and type.

Humane Society officials advocate switching from these caged living conditions for hens nationwide to cage-free environments a move they say will reduce the likelihood of salmonella contamination in the egg industry and increase the humane treatment of the birds.

On egg producing farms across the country, the Humane Society said there are now about 280 million hens confined to cages so small the birds cant spread their wings, walk, or even lay eggs in nests.

The extreme confinement enables farms to cram hundreds of thousands of birds under a single roof, Dr. Greger told us. And when you have hundreds of thousands of birds you have a high volume of contaminated fecal dust, which is one way that salmonella spreads.

The massive manure pits (on these farms) are also breeding grounds for flies and maggots and are implicated in the spread of salmonella.

Properly cleaning and disinfecting the cages in these facilities is all but impossible, Dr. Greger said.

The problems were now seeing (with salmonella) are intrinsic to caging, he said. You cant disinfect between flocks so when you put in a new flock (in the cages) they are instantly re-infected.

Imagine a football field-sized shed filled with rows of cages that are stacked high, Dr. Greger added. How do you clean all that equipment? Even with gold standard equipment, you cant sterilize all the cages and the facilities. There are too many nooks and crannies.

Ten studies have also found that hens forced to live in confined cages have much higher rates of salmonella than birds in cage-free environments, the Humane Society said. A 2010 study revealed that caged flocks are 20 times more likely to have salmonella infections than cage-free hens.

Cage-free movement

The cage-free alternative movement is gaining support from consumers, politicians, and even religious leaders across the country and around the world.

Michigan and California have passed legislation to phase out cages for laying hens, the Humane Society said. Agriculture leaders in Ohio have also agreed to a moratorium on the construction of new cage egg facilities. And the European Union will ban barren battery cages starting in 2012.

On Tuesday, His Holiness the 14th Dalai Lama, condemned caged facilities for laying hens.

The abuse we inflict on hens has always been particularly disturbing to me and I have always been particularly concerned toward how these animals are treated in industrial food production, he wrote in a statement. I am troubled to learn about the practice of confining egg laying hens in tiny cages. In these cages, birds cannot engage in their natural behaviours, such as spreading their wings, laying eggs in a nesting area, perching, scratching at the ground, even standing on a solid surface. Each hen has less space to live than the very sheet of paper I have written this letter on.

Turning these defenseless animals into egg-producing machines with no consideration for their welfare whatsoever is a degradation of our own humanity, the Dalai Lama added. Switching to cage-free eggs would reduce the suffering of these animals.

But how can consumers ensure theyre buying eggs produced on cage-free farms?

Check the labels on the cartons, Dr. Greger said. Consumers can be assured the eggs didnt come from hens confined to unsanitary conditions if the cartons states theyre USDA organic eggs, he said.

Consumers should also buy from local farmers. Go to your local farmers markets and establish a relationship with the farmers, Dr. Greger said. They should welcome you to their farms. If they dont want you there, that should tell you something.

Many retailers, restaurants, and supermarkets across the country are now switching to cage-free eggs, Dr. Greger said. Those businesses include Sara Lee, Hellmann's mayonnaise, Starbucks, Wolfgang Puck, Burger King, Denny's, Carl's Jr., Hardee's, Subway, Quiznos, Wal-Mart, Costco, Harris Teeter and Safeway.

What we say to consumers is they can vote with their wallets and choose to support the more hygienic and humane cage-free producers, Dr. Greger said.

Back in Iowa, Hillandale Farms said it is committed to addressing all issues raised by the FDA and plans to be "in full compliance as soon as possible."

Wright County Egg said most of the issues tagged by FDA inspectors have been addressed or will be soon. "We anticipate the expeditious completion of nearly all remaining items by mid-September," the company said in a statement.

By Mark Huffman
ConsumerAffairs.Com

September 1, 2010
Banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported a profit of $21.6 billion in the second quarter of 2010, a $26 billion improvement from the $4.4 billion net loss the industry posted in the second quarter of 2009.

It's the highest quarterly earnings total since the third quarter of 2007.

"This is the best quarterly profit for the banking sector in almost three years," said FDIC Chairman Sheila C. Bair. "Nearly two out of every three banks are reporting better year-over-year earnings. As long as economic conditions remain supportive, most institutions should maintain profitability and increase their capacity to lend."

But as you break down the numbers, you see that big banks are doing much better than small ones. So far this year, FDIC has helped close 118 banks -- most of them small local and regional lenders. And despite the overall improvement, earnings remain below historical norms.

On the positive side, 20 percent of institutions reported a net loss for the quarter, compared with 29 percent a year earlier. And, the average return on assets (ROA) -- a basic yardstick of profitability -- rose to 0.65 percent, from negative 0.13 percent a year ago.

Bodes well for the economy

The improvement in the banking sector is significant for the overall economy, since it was the banking meltdown that sent the economy into a downward spiral two years ago. Despite the remaining problems, Bair remains hopeful.

"The banking sector is gaining strength. Earnings have grown, and most asset quality indicators are moving in the right direction," she said.

Another hopeful sign is the reason banks are doing better. According to the FDIC report, there are fewer bad loans. The report notes that non-current loans fell for the first time since the first quarter of 2006.

There are also fewer bad loans among credit card borrowers, making large banks that issue credit cards more profitable. Most issuers increased interest rates and reduced access to credit in the last 15 months to compensate for expected higher default rates.

Extra cash

Banks that were holding large amounts of capital in reserve to cover expected losses were free to release those reserves in the second quarter, adding to the bottom line.

For example, Citibank released $585 million of its reserve helping it achieve a profit of $2.7 billion. Wells Fargo released $341 million, boosting profits to $2.5 billion.

Small banks, meanwhile, continue to struggle under the weight of underwater commercial real estate loans. The bank failure toll for 2010 stands at 118, on pace to be significantly worse than last year.

But in a small but hopeful sign, FDIC did not report a single bank closing last week, a break from what has become a Friday evening ritual.