Current Events in February 2011

A class action suit filed in Boston accuses Wozo, LLC, Tatto, Inc., and Adknowledge, Inc., of promising consumers a free poster and then enrolling them in a monthly club at a cost of $29.99 per month.

The suit charges that the companies are “selling a completely different product than the one displayed on the web pages” promising the “free” poster and says there is no mention of the monthly fee anywhere on the web pages.

Instead, consumers who expect to pay a one-time shipping fee of 99 cents find themselves enrolled in a “useless 'poster club,'” the suit alleges.

“Few consumers, if any, would ever elect to buy a $29.99 monthly membership to receive only two posters per month, particularly when those posters are arbitrarily selected by someone else,” said the named plaintiff, Suk Jae Chang, of Arcadia, Calif.

The suit, filed in U.S. District Court in Boston, says the companies' practices violate Massachusetts laws that prohibit using misleading and deceptive advertise and failing to adequately disclose the true terms of an offer.

The suit also charges that the web sites contain a pre-checked box indicating that the customer agrees to all terms and conditions but does not contain a hyperlink to any such terms and conditions.

Congress recently passed a measure called Restore Online Shoppers Confidence which specifically prohibits opt-out membership programs, the suit notes.

The case was filed by Boston attorneys Todd Heyman and Robert Ditzion.

What's most annoying about your supermarket? If you're like respondents to a recent poll, your leading complaints might be: too few cashiers (44%), top shelves too high to reach (35%), and too many promotional displays in the aisles (28%).

The survey was conducted by SupermarketGuru.com and allowed multiple responses, so numbers don't add up to 100%.

When it comes to sales, shoppers say they're most annoyed when the store runs out of the sale item (62%), requiries companion purchases to get the sale price (46%) and issues coupons at checkout with short expiration times (32%).

In departments like produce and meat, shoppers say their supermarkets are most often guilty of high prices (38%), inconsistent freshness (34%), out of stock (28%) and short dates (25%).

During Sunday night's Grammy Awards, Los Angeles television reporter Serene Branson appeared to be having a stroke during a live report. She slurred words and at times spoke gibberish, what physicians describe as classic stroke symptoms.

Despite the fact that Branson says she's fine, the video of her on-air meltdown has gone viral on YouTube, and has become a tool for at least one Facebook scam, according to security experts at Sophos software.

In his blog Naked Security, Sophos security expert Graham Cluley reports Facebook users have started getting messages, which look like they are from friends, that say something like "OMG, this reporter had a stroke on Live TV check it out," followed by a link.

If you get this message, Cluley says, don't click on the link.

What happens if you do? You'll get a screen that tells you the video requires a "verified app" to be viewed. To get the app, you will be told, you'll need to click a button to download it.

The scammers' plan is to exploit interest in the Serene Brandon video, by tricking users into approving an application that will be able to access profiles and post messages onto the walls of Facebook accounts. Though you can't see it, your own Facebook account is reaching out to all your friends, encouraging them to click on the link and view the same video.

Cluley says the scam is spreading very quickly across the social networking site. The scammers make money by requiring you to fill out a brief survey before you can watch the footage. If you complete the survey, the scammers earn a fee. If you really want to see the footage, you should watch it directly on YouTube.

As for Branson, she reportedly did not seek emergency medical treatment as some media had reported. Her employers, CBS 2 in Los Angeles, said she did visit her physician the next day for some medical tests.

Connecticut Attorney General George Jepsen is asking Facebook for information about its procedures for detecting and disabling fraudulent accounts following a complaint by a Milford legislator that her identity was misused in a scam that solicited her friends for money.

Rep. Kim Rose said the social media site did not respond quickly to take the posting down after repeated complaints that her name and photograph were being used without her permission in solicitation of money.

Jepsen wrote a letter to Facebook Monday saying his office would investigate “because of the real and immediate danger of financial fraud and identity theft associated with this scam.”

Jepsen asked the company for information about the number of complaints it had received in the last 18 months about fraudulent or “hacked” accounts; its policies and procedures for responding to complaints and how long it took them to do so and information about any safeguards in place to detect and disable fake or “hacked” Facebook accounts.

“My hope is to work cooperatively with Facebook to ensure that is users in Connecticut and elsewhere are provided adequate security and receive quick and effective responses when security breaches occur,” Jepsen said.

Facebook was asked to provide the information to Jepsen's office by Feb. 22.

Jepsen said Rep. Rose’s complaint followed other public reports of security lapses resulting in the hacking of private Facebook pages, including the pages of Facebook’s own chief executive.

“I’m pleased that the Attorney General has recognized the significance of this matter for consumers and has worked so quickly to get some answers,” said Rep. Rose. “I’m hopeful this action will help to protect other consumers from identity theft in the future.”

The percentage of consumers who posted a negative or positive comment about their interaction with a Consumer Affairs Department has doubled in just one year, according to a study sponsored by The Center For Client Retention (TCFCR). 

In the Second Annual Social Media Benchmarking Study, 20 companies (a combination of Fortune 100 and Fortune 500 companies) provided information on their social media policies to see how it compared with their consumers’ expectations and behaviors. 

The study included feedback from 28,000 consumers about their use and impressions of social media platforms. 

“This is a significant finding for the 20 companies and reinforces the value of investing more heavily in customer service", said Richard Shapiro, president of TCFCR and author of the soon-to-be-published book, The Service Genie: Getting The Service You Wish For.

"Fifty-four percent of the postings were positive, compared to 23% being negative, with the primary driver of negative postings being related to the product itself and not the service delivery by the representative.” 

Study Highlights 

• While the percentage of consumers using social media remained consistent at 60%, 54% of the respondents said their social media usage had increased in the past year, compared with 11% who said it decreased;
• Overall, 36% of the respondents said they are following companies/brands on Twitter, Facebook, YouTube, etc. or have them on their friends list. There was a variance by age demographic, with 53% of consumers who were 40 years old or younger following companies/brands versus 18% for respondents who were 55 years of age or older; and
• When consumers were asked how social media has influenced their purchasing decisions, 24% said they will consider purchasing a product after seeing a positive post, and 15% said they will stop buying a product after reading a negative comment on a social media site.

“The data collected from this study clearly demonstrates the power and influence of social media on consumer purchasing habits," says Shapiro. "Companies have an opportunity to significantly increase their revenues by providing excellent service with more and more consumers posting positive comments about their interactions. Conversely, companies can easily damage their brands by not providing good service that demonstrates to the consumer that their business is welcomed, appreciated and important.” 

Shapiro says with such significant increases in the percentages in just one year, he's looking forward to the findings from the Third Annual Social Media Benchmarking Study, which is scheduled for this coming September.

If you are just sitting down to work on your taxes, chances are you have lots of questions. One question might be "which form do I use?"

For example, some taxpayers are able to use the shorter 1040EZ, or 1040A forms rather than the longer, more complicated standard Form1040. The job of filing your taxes will be much easier if you can use one of the shorter forms.

According to the IRS, you can use the 1040EZ if:

• Your filing status is single or married, filing jointly
• You were under age 65 and not blind at the end of 2010
• You do not claim any dependents
• Your taxable income is less than $100,000
• Your income is only from wages, salaries, unemployment compensation, Alaska Permanent Fund dividends, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.
• You did not receive any advance Earned Income Credit payments
• You did not claim any adjustment to income, such as a deduction for IRA contribution or student loan interest
• You do not claim any credits such as the earned income tax credit or the making work pay credit
• You do not owe any household employment taxes on wages you paid to a household employee
• You are not claiming the additional standard deduction

If you don't qualify for the 1040EZ, perhaps you can use the 1040A. To qualify, your income must be limited to wages, salaries, tips, IRA distributions, pensions and annui- ties, taxable social security and railroad retirement benefits, taxable scholarship and fellowship grants, interest, ordinary dividends (including Alaska Permanent Fund dividends), capital gain distributions, and unemployment compensation.

Other requirements include:

• Your taxable income is less than $100,000
• Your deductions are limited to IRA contributions and student loan interest
• You do not itemize
• Your taxes are from the tax table, alternative minimum tax, advance earned income credit, recapture of education credit, Form 8615, or Qualified Dividend and Capital Gain Tax Worksheet
• Your tax credits are limited to child care, making work pay, earned income credit, education credits, additional child tax credit, elderly or disable tax credit, the child tax credit

If you are doing your taxes yourself, using a 1040EZ or 1040A will save time. If you are paying someone to prepare your taxes, using these short forms will probably save money.

Regular consumption of dietary fiber can bring a wealth of health benefits like reduced blood cholesterol levels, improved blood glucose levels, lower blood pressure, but a new report found it may help you live longer, too.

The study, by Yikyung Park, Sc.D., of the National Cancer Institute, Rockville, Md., and colleagues, found fiber may be associated with a reduced risk of death from cardiovascular, infectious and respiratory diseases, as well as a reduced risk of death from any cause over a nine-year period.

Fiber, the edible part of plants that resist digestion, has been hypothesized to lower risks of heart disease, some cancers, diabetes and obesity, according to background information in the article.

It is known to assist with bowel movements, promote weight loss, reduce inflammation, and bind to potential cancer-causing agents to increase the likelihood they will be excreted by the body.

For the study, the researchers analyzed data from 219,123 men and 168,999 women in the National Institutes of Health-AARP Diet and Health Study. Participants completed a food frequency questionnaire at the beginning of the study in 1995 and 1996. Causes of death were determined by linking study records to national registries.

Participants' fiber intake ranged from 13 to 29 grams per day in men and from 11 to 26 grams per day in women.

More is better

Over an average of nine years of follow-up, 20,126 men and 11,330 women died. Fiber intake was associated with a significantly decreased risk of total death in both men and women -- the one-fifth of men and women consuming the most fiber (29.4 grams per day for men and 25.8 grams for women) were 22 percent less likely to die than those consuming the least (12.6 grams per day for men and 10.8 grams for women).

The risk of cardiovascular, infectious and respiratory diseases was reduced by 24 percent to 56 percent in men and 34 percent to 59 percent in women with high fiber intakes.

Dietary fiber from grains, but not from other sources such as fruits, was associated with reduced risks of total, cardiovascular, cancer and respiratory disease deaths in men and women.

"The current Dietary Guidelines for Americans recommend choosing fiber-rich fruits, vegetables and whole grains frequently and consuming 14 grams per 1,000 calories of dietary fiber," the authors write. "A diet rich in dietary fiber from whole plant foods may provide significant health benefits."

The study will be published in the June 14 print issue of Archives of Internal Medicine, one of the JAMA/Archives journals.

The Smart ForTwo car seemed like a smart idea at the time but corporate parent Daimler AG has decided it's time to make some even smarter moves.

It's taking back Smart car distribution in the United States from the Penske Automotive Group and turning it over to its Mercedes-Benz division. It has also scrapped plans for the Quattro – no, not a four-wheel drive Smart, just a four-door one.

Penske launched the Smart ForTwo in the U.S. In 2008 and it shot off the line, selling 24,622 cars in 2008, but quickly fell behind the pack and sales fell 59 percent to 5,927 in 2010.

Mercedes-Benz USA CEO Ernst Lieb said bringing the Smart under the Mercedes banner will give the company more leverage in meeting the tough new U.S. fuel economy standards that take effect in the 2016 model year. Automotive News reported.

The little fuel-sipper will help compensate for some of the dreadnoughts in the Benz fleet, pulling down the overall corporate fuel economy.

Smart dealers who are not also Mercedes-Benz dealers will be terminated as part of the deal, and Smart cars will be sold exclusively by Mercedes-Benz dealers.

Malicious code in a bogus White House email, a misspelling scam and a fake online receipt top the recent cyber crime trends as determined by the Internet Crime Complaint Center (IC3), a joint project of several federal law enforcement agencies.

White House greetings

A  recent malware campaign, disguised as a holiday greeting from the White House, targeted government employees. The recipient received the e-mail with links to what masqueraded as a greeting card, but when they clicked on the link, it attempted to download a file named "card.exe."

The executable program proved to be an information-stealing Trojan, which would disable the recipient’s computer security notifications, software updates, and firewall settings. The malware also installed itself into the computer’s registry, enabling the code to be executed every time the computer was rebooted.

At the time of review, this particular malicious code sample had a low antivirus detection rate of 20%, with only 9 out of 43 antivirus companies reporting detection.

Social network

During December 2010, the IC3 discovered misspellings of a social network site being used as a social engineering ploy. Misspelling the domain name of this site would redirect users to websites coded to look similar to the actual website.

The website users were redirected to answer three or four simple survey questions. Upon answering those questions, users were offered a choice of three free gifts. Multiple brands were observed as being offered as gifts, including gift cards to retail stores and various brands of laptops.

After clicking on one of the gifts, users were further redirected to other websites claiming to give free gifts for completing surveys. The surveys typically asked for name, address, phone number, and e-mail address. A user could spend hours filling out multiple surveys and never receive any of the gifts advertised.

Fake receipt generator

A new scam aims to swindle online marketplace sellers by generating fake receipts. This Receipt Generator is an executable file that has been circulating on hacking forums recently.

The IC3 investigators say it's a particularly interesting scam - because it does not target regular PC users, it targets the sellers on online marketplace websites.

The program produces what appears to be a genuine marketplace receipt and a copy of the "Printable Order Summary," similar to the documents resulting from legitimate marketplace purchases. Small details such as "Total before tax," "Sales tax," and other particulars make the receipt convincing

Many sellers on these markets will ask the buyer to send them a copy of the receipt should the buyer run into trouble, have orders go missing, lose the license key for a piece of software, and so on. The scammer relies on the seller to accept the printout at face value without checking the details. After all, how many sellers would be aware someone went to the trouble of creating a fake receipt generator?

Sellers must remain ever vigilant about this scam, which has been a popular topic in recent hacker forums.

A consumer protection lawsuit was filed today against a Philadelphia based Internet electronics store that allegedly failed to deliver products to consumers and created new websites and company names to confuse consumers or to avoid negative feedback.

Acting Attorney General Bill Ryan said the lawsuit was filed against Zoommania, LLC, Pro Digital Cameras, Inc., and owners Andrew Schwartz and Paul Nimerozky. The company storefront was located 21 South 12^th St, 2^nd Floor, Philadelphia. However, a majority of the business was conducted from the owners’ homes in Merion Station and Huntingdon Valley, Montgomery County.

According to the lawsuit, the defendants operated numerous websites under different names, locations, telephone numbers and fax numbers, but all were actually the same company.

Ryan said the stores allegedly created new websites with different names and locations after receiving negative feedback from consumers. By creating seemingly new companies, the defendants were allegedly able to trick consumers into thinking they were dealing with a different company.

Some of the business names included Zoommania, Pro Digital Cameras, Fotospirit, Iprodigital, Ewaydigital and Digiemporio. None of these names were registered with the Pennsylvania Department of State as corporations or fictitious names, as required by law.

The lawsuit alleges that the stores listed all inventory as being “in-stock” or “available,” but within 48 hours of purchasing a product, consumers would receive a phone call or email stating that the item was out-of-stock.

Ryan said the stores then informed consumers that they could purchase an additional “kit” that would make them eligible to receive their goods in a timely manner, but if they refused, there would be no definite time when the goods would be delivered, if at all.

The lawsuit seeks restitution for consumers and $1,000 for each violation of the Consumer Protection Law, $3,000 for violations when involving a consumer aged 60 or older.  The lawsuit also seeks litigation and investigation costs.

Consumers who believe they may have purchased items from any of these companies is encouraged to filed a complaint with the Pennsylvania Attorney General’s Bureau of Consumer Protection by calling 1-800-441-2555 or filing an online complaint at www.attorneygeneral.gov.

EchoStar Corporation, which owns the Dish Network satellite television system, is purchasing Hughes Communications, Inc., which operates a satellite broadband Internet service, HughesNet.

The transaction is valued at approximately $2 billion, including Hughes debt expected to be refinanced in connection with the transaction. EchoStar said the deal will greatly enhance its capabilities for broadband transport of video and data.

Under the terms of the transaction, which has been approved by the Boards of Directors of both companies, Hughes' shareholders will receive $60.70 per share without interest, which represents a premium of 31 percent over Hughes' unaffected closing share price of $46.43 on January 19, 2011.

Regulatory approval required

The transaction is expected to close later this year, subject to certain closing conditions including receipt of federal regulatory approvals. Investment funds affiliated with Apollo Management IV, L.P., who own a majority of Hughes' outstanding stock, have approved the transaction by entering into a written shareholder consent.

"We are very pleased to announce this transaction as it brings together the two premier providers of satellite communications services and delivers substantial value to our shareholders," said Pradman Kaul, President and Chief Executive Officer of Hughes. "By combining Hughes' operational strength and proven record of customer satisfaction with EchoStar's expertise in cutting edge satellite video technology, customers will benefit significantly from our shared institutional excellence."

"There is a unique and compelling fit between Hughes and EchoStar," said Michael Dugan, President and Chief Executive Officer of EchoStar. "With a rich engineering culture, an extensive fleet of owned and leased satellites, and experienced personnel in communications centers around the world, the combination of EchoStar and Hughes will create a powerful leader in video and data transport."

Rural service area

HughesNet offers broadband Internet services to customers in mostly rural areas, who do not have access to traditional wired or wireless broadband. Consumers often complain about bandwidth allotments and slow speeds.

"I have run numerous speed tests that point out that I am running at six percent of my hosts average speed," Kevin, of Moran, Kan., told ConsumerAffairs.com. "I call and complain and they tell me it will be fixed in two hours and to call back if the problem continues. I can't run very many speed tests because of their dismal download allowance."

Dish Network started as a mostly rural television provider but, in recent years, has begun competing in urban and suburban areas with cable TV providers.

Berries.  They’re sweet, they’re natural, and they may even fight off Parkinson’s disease.

In a study released today, researchers have found men and women who regularly eat berries may have a lower risk of developing the disorder of the central nervous system.

Men may further lower their risk for the disease by regularly eating apples, oranges and other sources rich in dietary components called flavonoids.

Flavonoids are found in plants and fruits, known collectively as vitamin P and citrin. They can also be found in berry fruits, chocolate, and citrus fruits like grapefruit.

The study will be presented this week at the American Academy of Neurology's 63rd Annual Meeting.

Researchers gave the study participants -- 49,281 men and 80,336 women -- questionnaires, calculated how many flavonoids they ate regularly, then analyzed the association between flavonoid intakes and risk of developing Parkinson's disease.

They also analyzed consumption of five major sources of foods rich in flavonoids: tea, berries, apples, red wine, and oranges or orange juice.

The participants were followed for 20 to 22 years. During that time, 805 people developed Parkinson's disease.

In men, the top 20 percent who consumed the most flavonoids were about 40 percent less likely to develop Parkinson's disease than the bottom 20 percent of male participants who consumed the least amount of flavonoids.

In women, there was no relationship between overall flavonoid consumption and developing Parkinson's disease, but women who regularly ate berries, which contain a sub-class of flavonoids called anthocyanins, did receive added health benefits like the men in the study.

Study author Xiang Gao, MD, PhD, with the Harvard School of Public Health in Boston said this is the first study in humans to examine the association between flavonoids and risk of developing Parkinson's disease.

"Our findings suggest that flavonoids, specifically a group called anthocyanins, may have neuroprotective effects. If confirmed, flavonoids may be a natural and healthy way to reduce your risk of developing Parkinson's disease."

The Internal Revenue Service has a Valentine's Day gift for nursing mothers: breast pumps and lactation supplies may now be taken as a medical deduction on your tax return, or can be reimbursed under flexible-spending accounts or health-savings accounts.

The ruling is effective immediately and documented expenses can be taken on 2010 returns.

(Read consumer complaints about tax preparation companies.)

Previously, the IRS had ruled that breast-feeding wasn't a health benefit. But now the agency has decided that, like obstetric care, breast pumps and related nursing supplies may be eligible.

In a classic bit of bureaucratic hair-splitting, the IRS cautions taxpayers that before claiming a deduction, taxpayers should be certain the item in question is used “primary for extracting milk or for other purposes.” What other purposes might those be? Good question.

Keep in mind that medical expenses are not deductible until they exceed 7.5 percent of adjusted gross income.

The American Academy of Pediatrics praised the ruling, saying it makes breast-feeding “a more practical option for new and working mothers.”

Consumers should consult their tax advisor for more information.

You need a place to live, but should your buy or rent? Prices have crashed from their peak and mortgage rates are low. It seems like an ideal time to buy.

Maybe it is, but it's going to depend on a number of factors. For starters, you must think about how long you plan to live in one place before moving.

Even though home prices are down 30 percent or more in most area, that doesn't mean they have stopped going down. Many housing analysts think home prices could go down another 10 percent this year.

So a house you buy today might be worth a bit less next year. Not only that, it's value may stay stagnant for a few years. At the height of the housing market, you could expect a home to gain 10 to 15 percent in value each year. Those days are long gone.

Costs of owning a home

When deciding whether to buy or rent, it isn't enough to compare the monthly mortgage payment to the rent payment. You have to factor in other costs associated with owning a home, beginning with the closing costs when you buy it.

When it comes time to sell the home, there are also costs associated with that, including a brokerage fee for the real estate company that handles the sale. In between there are taxes, repairs and insurance. On the plus side, however, mortgage interest is tax deductible.

There are fewer costs associated with renting, except that you can count on your rent going up around five percent every year. So if you start off paying the same amount in rent as you would pay for a mortgage, within a few years you will be paying substantially more.

Economists have developed a formula to sort out the financial pros and cons of home ownership and renting.

Non-financial factors

Besides dollars and cents, there may also be some psychological benefits to owning your home. Owning your home may provide a greater sense of community and stability. You are also free to redecorate a home that your own, or make changes to the landscaping. If something needs repair, you don't have to wait for the landlord to get around to it.

But if freedom and less responsibility are more important to you, then there are benefits from renting. You aren't responsible for maintenance and, if you feel like moving in a year, there is nothing holding your back.

Also, the money that would be tied up in a down payment remains in your bank or investment account instead, available when you need it.

It was one thing when home values were going up every year and homes sold almost as soon as they were listed. Owning a home was profitable and much less confining. Today, you should plan on owning a home for several years if you make a purchase.

Perhaps for that reason, homeownership appears to be on the decline, whether voluntarily or because consumers can't get a mortgage. According to the U.S. Census Bureau, 66.5 percent of  U.S. households owned their home at the end of 2010. That's down from 69 percent at the end of 2005.

The co-founder of a criminal enterprise known as the Tran Organization has entered a plea of guilty to scamming casinos across the country out of millions of dollars -- bringing to a close one of the largest card-cheating cases in recent FBI history. 

Van Thu Tran, along with her husband, parents, extended family, and others, participated in a surprisingly simple scheme to cheat casinos at the gaming tables. 

"False shuffle"

Tran and her husband were dealers at an Indian tribal casino in San Diego in 2002 when they devised a plan to use a “false shuffle” to track cards and thereby guarantee successful betting. 

“Initially, it was a pretty bare bones operation,” said Special Agent Peter Casey, one of several case agents who worked the Tran investigation out of the FBI's San Diego Field Office. 

Over time, the couple branched out from an Asian card game called Pai Gow to blackjack, and they enlisted many others in the scheme -- including dealers at other casinos -- with the promise of easy money. 

For a while, the money was easy, because some of the tribal casinos’ security was not yet sophisticated enough to pick up on the scam. Before the ring was rounded up in 2007, some 29 casinos from Canada to Mississippi were hit for about $7 million. 

How it worked

When signaled, the crooked dealer would make a false shuffle. Through sleight-of-hand techniques that security cameras and pit bosses failed to notice, the false shuffle created a “slug” -- a group of played cards whose order would not change when the rest of the cards were shuffled. When the slug next came to the top of the deck, members of the ring recognized the card pattern and knew how to bet. 

“It’s a sophisticated scam, but at the same time it’s simple,” Casey said, “And that’s why it worked so well. The organization controlled every aspect of the table.” 

The ring eventually began using card trackers, nearby spotters who used concealed devices to relay the order of the played cards to someone at a remote location who instantly entered the information into a computer. 

When the slug reappeared, the computer operator picked up the pattern and relayed it to the spotter, who then secretly signaled the bettors. One finger on a cigarette, for example, might mean bet, two fingers might mean stand pat. “It was almost like a catcher giving signs to the pitcher in baseball,” Casey said. In one instance, the ring won $900,000 in blackjack during a single sitting. 

Enter the FBI

Some of the casinos realized they were being cheated, even if they weren’t sure exactly how, and called the authorities. The FBI opened a case in 2004. But even as the Indian tribal casinos beefed up their security, the Tran Organization was hitting other casinos in the U.S. and Canada. 

All the while, the ringleaders were living large. Tran and her husband had two homes in San Diego and property in Vietnam. They drove high-end vehicles and bought expensive jewelry -- most of which was seized and forfeited when they were arrested. 

The FBI says it broke the case with the help of surveillance, wiretaps, an undercover operative posing as a crooked dealer, and strong partnerships with Internal Revenue Service investigators, the San Diego County Sheriff’s Department, the California Department of Justice, and the Ontario Provincial Police. 

To date, 42 of the 47 individuals indicted in the case have entered guilty pleas to various charges.

Now that the buzz about Apple's Verizon iPhone has run its course, the electronics firm is at the center of a new round of speculation concerning its iconic smartphone.

Various media reports over the weekend said Apple is getting ready to release a new iPhone model that will be both smaller and cheaper. Bloomberg News was the first to report the news, but the Wall Street Journal, quoting unnamed sources, put forward more details today, saying the new iPhone could be ready for release this summer.

The Journal quotes a source who viewed the prototype and described it as lighter than the iPhone4 -- the current model -- and having an edge-to-edge screen. The Journal says the codename for the new iPhone is N97.

Half the price

According to media reports, Apple plans to make the phone available to carriers at about half the price of the current model. That would allow cell phone providers to subsidize the entire cost of the phone, making it free to subscribers who sign a two year service agreement.

Currently, AT&T and Verizon pay over $600 for the iPhone4, making it available to customers at the subsidized cost of $199, if they sign a two year contract.

Apple generally introduces new iPhone products at the end of June, and most industry analysts expect a new release this June as well. However, it is not yet clear just what that will be.

In its report today, the Journal referred to the anticipated release as an "upgrade," suggesting the new product might not actually be a new model, just the iPhone4 re-engineered to run on 4G networks.

Persistent rumor

Interestingly, this isn't the first time that Apple has been rumored to be contemplating a cheaper, "Nano" version of its iPhone. The first time the rumor surfaced was September 2007, just a couple of months after the original iPhone hit the market.

Kevin Chang, an analyst for JPMorgan Chase, based in Taipei, reported three and a half years ago that Apple had filed a patent for such a smaller, cheaper iPhone. He also said unnamed parts manufacturers confirmed his hunch.

At the time, the smartphone market was largely non-existent and Apple was still not sure that consumers would pay $400 (less with a carrier subsidy) for an iPhone. Little did they know.

The first Apple iPhone went on sale June 29, 2007, commanding prices of $499 and $599, depending on memory size. Sales estimates for the first two days ranged from 250,000 units to 525,000.

There were early complaints over activation issues, as many consumers who stood in line to buy one of Apples new iPhones had difficulty in getting it to work. With the introduction of the iPhone4, consumers complained that if they held the phone a certain way, the number of bars dropped off and sometimes, so did calls.

Apple eventually addressed the problem by making plastic cases available, that seemed to solve the problem. Though the antennae design was changed in the version of the iPhone made for Verizon, reports suggest some consumers are still having the problem.

The Ohio Civil Rights Commission is accusing Wells Fargo of discriminating against African-Americans seeking home loans by practicing what it called “reverse redlining.”

In a lawsuit filed by Ohio Attorney General Michael DeWine, the commission charges that Wells-Fargo offered African-Americans loans that had “abusive and grossly unfavorable terms” that it said were likely “to have a detrimental effect on African-American neighborhoods.”

The term “redlining” has historically been used to describe banks refusing to make home loans in minority neighborhoods. “Reverse redlining,” the Ohio commission said, amounts to selling African-Americans “abusive and detrimental loans.”

The suit charges that the terms of the loans were so unfavorable that there was almost no likelihood the borrowers would be able to repay them.

Wells-Fargo has “taken advantage of” minority borrowers by its willingness to make, purchase and service mortgages containing abusive and detrimental terms and that are in excess of the market value of residential properties that secure them.”

The named plaintiff in the suit is Latonya Sykes-Jackson, who lives in a section of Warrensville Heights, Ohio, that is defined by the U.S. Census as 96.6% black.

The suit says that Sykes-Jackson refinanced her home, replacing two existing mortgages that totaled $111,642 with a new mortgage, later bought by Wells-Fargo, that totaled $122,700. The new note called for 359 monthly payments of $1,009 and a final balloon payment of $87,292 on February 1, 2037.

Just four months later, Wells Fargo offered to issue an FHA-insured mortgage on much more favorable terms, but with additional closing costs of $5,963. The proposed new mortgage was based on an appraised value of $130,000 for Sykes-Jackson's house, far higher than the $95,000 figure found in the loan file.

“Requiring Complainant to pay the premium of additional closing costs of $5,963.13 in order to unburden herself of the abusive, determinal, and grossly unfavorable terms, further exploited Complainant based on her race by unjustifiably imposing inflated fees for services for which she had paid four months earlier, such as new appraisal fees, new insurance costs, new credit report, and new title work,” the suit charges.

 In default

Less than a year later, Wells-Fargo claimed Sykes-Jackson's loan was in default despite her having made timely payments, the suit charges, and assessing a $100 late charge.

The bank's policies “arbitrarily inflated appraisals in order to artificially support mortgages in amounts that greatly exceeded the market value,” leaving the homeowners subject to bankruptcy and foreclosure if their economic circumstances changed.

It charged that the bank also “negligently or intentionally misapplied mortgage payments” and then issued a default notice on Sykes-Jackson's property.

The suit asks that Sykes-Jackson receive damages of up to $25,000 and be granted a mortgage on more favorable terms with no additional closing costs.

McDonald's has faced plenty of litigation regarding its cuisine, and last year recalled 12 million “Shrek Forever After 3D” glasses after finding that the design's paint contained cadmium, a carcinogen.

But here's a new one: now the franchise is facing a suit complaining about both food and glass. Vjollca Lecaj, of suburban Chicago, claims that on August 5, 2010, she was eating a spicy McChicken sandwich at a McDonald's in Oak Lawn, Illinois. Lecaj bit into the sandwich and was surprised to find a large piece of glass waiting for her inside.

Complaint speculates coffee pot responsible

The complaint, filed in Cook County court on Friday, speculates that the “sandwich may have been contaminated after an overheated glass coffee pot exploded, causing glass shards to scatter,” according to a report in Chicago Breaking Business. Lecaj says the franchise “fail[ed] to properly inspect its cooking equipment and ensure that her sandwich could be eaten safely,” according to that report.

Lecaj claims that she sustained “severe and permanent oral injuries as well as great pain and anguish,” as reported by CBS's local Chicago affiliate.

Bona fide complaint, or Wendy's finger redux?

Whether the suit is meritorious or not remains to be seen. Several commenters on various websites are already drawing comparisons to another notorious fast-food lawsuit: that alleging that a woman found a finger in a bowl of chili she ordered at Wendy's.

The suit, brought by Anna Ayala in March 2005, claimed that the finger was well-cooked and concealed in the chili.

The suit forced Wendy's to absurdly insist that “all of our employees have 10 digits,” the defense offered by company spokesman Denny Lynch shortly after Ayala's suit was filed. Lynch added that he wasn't aware of any “finger-related” accidents suffered by the franchise.

But it didn't take long for police to uncover Ayala's litigious history, which included a suit against another fast-food restaurant several years earlier.

Ayala ended up serving four years of a nine-year prison sentence for her role in the scam. Released last year, one of the terms of her probation is that she never set foot inside a Wendy's again.

In an interview with a local CBS affiliate, Ayala admitted that she cooked the ostensibly tainted chili -- inserting a finger belonging to her husband's coworker -- and then froze it for months, eventually driving to the San Jose Wendy's and feigning shock when she “found” the finger in her meal. Wendy's estimated that it lost around $21 million in business due to the highly-publicized suit.

Similar complaints

Whether Lecaj's suit is genuine or a repeat of the Wendy's incident remains to be seen. But one Illinois consumer who wrote to ConsumerAffairs.com in February 2009 claims to have had a nearly identical experience.

 “I went through the drive thru and ordered a McChicken with cheese and got a McChicken with GLASS!,” says Tonya of Peoria, Ill. “I drove off and ate about 1/2 of it before I bit into a large piece of glass. When I bit into it I pulled the [sandwich] away from my mouth and realized there was glass in the chicken patty.”

“At first I [had] a hell of a toothache,” Tonya continues. “Then about 24-36 hours later I started becoming feverish, serious abdominal cramps and [diarrhea]. I went to the [ER] to discover I had a serious infection [of] the entire intestine, and with no med[ical] history to show why, it is believed I actually digested glass.”

And another consumer -- this one in Maryland -- says she found a glass-like substance in a McFlurry she ordered for her son.

"W]hile my son was eating his McFlurry, he was chewing something that he thought was ice,” Manuelita of Oxon Hill, MD wrote in May 2009. “It turned out to be something clear that looks like glass, with sharp edges no less. I am highly disappointed because this object hurt his mouth. Lucky for McDonald's and fortunately for my son, there was no blood. I AM LIVID to say the least.”

McDonald's has yet to comment on the suit.

Lecaj's suit alleges negligence and product liability, and seeks upwards of $600,000 in damages. The suit names both McDonald's and the Oak Lawn franchise as defendants.