Current Events in May 2011

The Federal Trade Commission has charged Russell Dalbey, the CEO and founder of the company behind the “wealth-building” program “Winning in the Cash Flow Business,” with defrauding consumers, in some cases out of thousands of dollars, with phony claims that they could make large amounts of money quickly and easily by finding, brokering, and earning commissions on seller-financed promissory notes.

A consumer who allegedly provided a misleading testimonial was also charged.

The FTC’s complaint against Dalbey and others involved in marketing the program, filed jointly with Colorado Attorney General John W. Suthers, alleges that the defendants misled consumers about how much money they could make using the program and how quickly and easily they could make it.

“‘Winning in the Cash Flow Business’ was a real loser for hundreds of thousands of consumers nationwide,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “When someone is selling a program designed to help people make money, they have to accurately describe how much consumers can expect to make and be truthful about how quickly they will be able to do so. None of that happened in this case, and people who bought the program paid the price.”

Millions of consumers nationwide saw infomercials for the “Winning in the Cash Flow Business” program, which were hosted by TV personality Gary Collins. The program supposedly teaches consumers how to find, broker, and earn commissions on seller-financed promissory notes – privately held mortgages or notes that are often secured by the home or land that is the subject of the loan.

The FTC complaint alleges that consumers spent approximately $40 to $160 on the initial program, and were later encouraged to spend hundreds or thousands of dollars more on additional products or services, such as multi-day seminars, coaching sessions, and promissory note holder lead lists.

Few successes

Few of these consumers made the money that Dalbey promised them. The FTC and the State of Colorado seek a court order to stop Dalbey, his wife, and the corporate entities they control from making the allegedly misleading claims, and to obtain money for consumer refunds.

According to the complaint, since at least 1996, Dalbey has used various corporate entities to market his program. Beginning as early as 2002, he has done so mainly through a 30-minute infomercial. Along with pitches on the Internet and through direct mail, the infomercial claimed that consumers could successfully earn substantial income brokering promissory notes in three easy steps – “Find ‘Em,” “List ‘Em,” and “Make Money.”

“[Y]ou’ll be amazed at just how easy it is to generate a stream of extra income every month. Build financial freedom and a better quality of life in just minutes a day. Or even retire earlier than you ever dreamed possible. Order now and you’ll be ready to profit in minutes,” an infomercial allegedly claimed. 

These claims allegedly were supported by “testimonials” from consumers who claimed to have made “$1.2 million in 30 days,” “$79,000 in a few hours,” and “$262,216 part time,” for example. “In less than 30 days, I closed two transactions and I netted 1 point – a little bit over $1.2 million,” a testimonial by “Don B.” from New York stated.

Unfortunately, according to the FTC and Colorado Attorney General, this was far from the typical consumer experience. The complaint charges that Dalbey and the other defendants violated the FTC Act and Colorado law by making false and unsubstantiated claims that consumers are likely to quickly and easily find, list, and broker promissory notes and earn substantial amounts of money; and that defendants’ additional products and services, such as coaching programs, workshops, seminars, note holder leads, and other resources, will meaningfully increase the likelihood that consumers will succeed in the note business.

The complaint also alleges that while Dalbey claimed he has earned substantial money finding, listing, and brokering promissory notes himself, most of his note-related income for the past two decades has come from marketing and selling products and services supposedly to teach consumers how to find and broker such notes. In addition, the complaint alleges that consumer testimonials in the defendants’ advertising are inaccurate and do not reflect the results that customers are likely to achieve if they buy the program. For example, some testimonialists, the complaint charges, stated earnings claims that were total earnings figures accumulated over several years, rather than in one year.

Sales calls

The complaint also charges the defendants with violating the FTC’s Telemarketing Sales Rule by making similar misrepresentations to consumers during sales calls.

Finally, the FTC and Colorado Attorney General charged Marsha Kellogg – one of the consumers who provided a testimonial in an infomercial – with falsely claiming that she earned $79,975.01 from one promissory note transaction using Dalbey’s program, and that her total earnings were more than $134,000. The complaint alleges that Kellogg made this statement even though she earned $50,000 less than what she claimed.

Kellogg has agreed to an order settling the FTC charges against her. The order is the FTC’s first against a consumer charged with making misrepresentations in a product or service testimonial. It prohibits Kellogg from making several types of misrepresentations in the future. In addition, Kellogg has agreed to cooperate with law enforcers in their case against the remaining defendants.

Horizon Hobby Inc. is recalling about 18,000 model helicopters because the main blade grips and main rotor blades can release from the main rotor head, posing an impact and laceration hazard.

The recall affects the Blade mCP X Bind-N Fly and Ready to Fly Remote Control Model Helicopters and replacement Blade mCP X Main Blade Grips with Bearings.

Horizon Hobby has received 312 reports of the rotor blades releasing from the rotor head, including 34 reports of a blade striking a user, resulting in 12 laceration injuries.

Blade ultra-micro indoor/outdoor helicopters have red and blue canopies with the name "Blade mCP X" printed on both sides. The model numbers are printed on the underside of the products' boxes with the bar code. The following are recalled:

Retailers nationwide sold the helicopters during March 2011 for $180 to $220 for the model helicopters and $10 for the replacement part. They were made in China.

Consumers should contact Horizon Hobby for free replacement of main rotor grips and do-it-yourself instructions.

For additional information, contact Horizon Hobby Support Team toll-free at (877) 504-0233 between 8 a.m. and 7 p.m. CT Monday through Friday, between 8 a.m. and 5 p.m. CT on Saturdays, and between 12 p.m. and 5 p.m. on Sundays, or visit the website at www.bladehelis.com/MCPX

It appears as though predictions of a double dip housing recession have come true. The S&P Case-Shiller National Home Price Index declined by 4.2 percent in the first quarter of 2011, after having fallen 3.6 percent in the fourth quarter of 2010.

The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1 percent versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.

Of course, in real estate is all about location. Property is some areas is doing better than in others. With the exception of Washington, DC however, houses in major cities are still losing value.

Minneapolis posted a double-digit 10.0 percent annual decline, the first market to be back in this territory since March 2010 when Las Vegas was down 12.0 percent on an annual basis. In the midst of all these falling prices and record lows, Washington DC was the only city where home prices increased on both a monthly (+1.1 percent) and annual (+4.3 percent) basis. Seattle was up a modest 0.1 percent for the month, but still down 7.5 percent versus March 2010.

Confirms a double-dip

“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation,” said David M. Blitzer, Chairman of the Index Committee at S&P Indices. “Since December 2010, we have found an increasing number of markets posting new lows. In March 2011, 12 cities - Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland (OR) and Tampa - fell to their lowest levels as measured by the current housing cycle.”

Blitzer says the rebound in prices seen in 2009 and 2010 was a temporary occurrence, largely due to the first-time home buyers tax credit. Without that artificial stimulus, housing has continued to lose value.

The Sunbelt states and industrial Mid-west continue to be the hardest hit real estate markets. Florida, Arizona, Nevada, Michigan, and Ohio are among the states with significant declines in property values.

Eleven cities and both the 10-city and 20-city Composites have posted at least eight consecutive months of negative month-over-month returns. Of these, eight cities are down one percent or more. The only cities to post positive improvements in March versus their February levels are Seattle and Washington D.C. with monthly returns of +0.1 percent and +1.1 percent respectively.

So, your insurance company canceled your policy? You're not alone. Even a former insurance agent says his policy was pulled. Michael, of Spanish Fork, Utah says he was once an agent with Nationwide Insurance and has just learned the company canceled his policy. And he's not happy with the way it was handled.

“This happened more that seven months ago without any notification,” Michael told ConsumerAffairs.com. “Normally if a policy is non-renewed the agent would call and inform the client so that other insurance could be put into place in a timely manner. Not only did I not receive any calls regarding the termination but did not receive any termination notice from the company despite their claims that they sent one to me.”

Michael says he is still at a loss as to why he was canceled. He says he's had the same policy in effect for the last four years. We have received other reports of canceled policies, especially in the wake of weather disasters.

Dangerous scam

Over the last week ConsumerAffairs.com has seen an increase in reports from consumers reporting contact by the scammer who claims to represent Fast Cash USA. The the sound of it, it's the same operation, they just keep changing the name of the payday lender they supposedly represent.

“I received a phone call from a financial Fraud Claims stating they were calling on behalf of USA Fast Cash,” said Kim, of Newport News, Va. “He stated that they were taking charges out against due to a payday loan I took out, canceled and they could not get back.”

Kim didn't recognize this for the scam that it is, but fortunately she didn't fall for it either. The name, who threatened to have her arrested, demand that she fax a copy of her drivers license and financial information. She refused, but is worried.

What she should be worried about is this character has her personal information. Where he got it is the million dollar question. The fact that most of the targets of this scam did, at one time, apply for a payday loan might be an indicator that the information was stolen from, or sold by, a payday loan company. This seems ripe for a Federal Trade Commission investigation.

If you get one of these calls, hang up immediately. Then, contact all three credit reporting agencies and place a fraud alert on your account.

Not my plan

Jane, of New York, feels like she has been a victim of bait and switch at the hands of Vonage.

“I signed up with Vonage for a $17.99 for 500 minutes of VoIP service,” Jane told ConsumerAffairs.com. “They have informed me that they are now charging me $19.99 for more minutes, which is not what I want. They are refusing to offer me the initial baited offer but have now switched me to higher rate.”

Communications companies routinely have wording in their terms of service that say they are allowed to substitute your plan with another, if they discontinue the plan you are on. It does seem unfair, especially since they require you to commit to a two-year contract.

As the summer driving season officially got underway, motorists were getting a little relief at the gas pump. The national average price of gasoline Monday, according to AAA's Fuel Gauge Survey, was $3.795 a gallon, 20 cents a gallon less than its May 5 peak.

But will the downward trend continue? It depends on who you ask.

Most analysts agree that in the short term, prices at the pump are headed still lower. The price of crude oil for June delivery has been dropping like a rock, meaning gasoline prices may look even better for consumers in the early part of the summer.

July price surge predicted

But both Goldman Sachs and JPMorgan Chase are predicting oil prices will surge come July, with Goldman predicting oil at more than $135 a barrel. That would likely push gas prices back over $4 a gallon in much of the country, and even $5 a gallon in some of the more expensive areas.

But it should be pointed out that both Wall Street firms might have a lot to gain from higher oil prices. And if they have already placed their oil bets for the summer, they could certainly have a lot to lose if oil and gasoline prices continue their slide.

What would make oil prices suddenly reverse course and head higher again? It's hard to see that anything, short of a catastrophic supply shortage, would do that. Currently, there is plenty of oil and demand, in the U.S. at least, is not rising. In fact, consumers confronted with sky-high prices have trimmed their gasoline consumption for eight straight weeks.

High gasoline prices also have the effect of slamming the brakes on the economy. Economists say that every time gasoline goes up 50 cents a gallon, it sucks $70 billion out of the economy. That's money that doesn't get spent at the grocery, at retailers, or at tourist attractions.

A weak economy requires less energy, reducing demand even more. So, assuming the supply situation doesn't change, it's hard to see where the two Wall Street giants are finding the basis for a surge in prices.

OPEC's role

Then there's this. Oil suppliers, countries that really have nothing to offer the world other than their oil, do not want to see oil get too expensive.

In a candid interview with CNN, Saudi Arabian Prince Alaweed said his government does not want to see oil get so expensive that the U.S. and other countries start looking for alternatives. He said the kingdom would like to see oil prices stay in the $70 to $80 a barrel range, which should translate into $3 a gallon gas.

And in fact, industry analysts point out that one reason oil supplies are rising is because the Saudis and other OPEC countries pumped more oil in May. According to a Reuters survey, the increase has more than compensated for the recent drop in Libyan oil output.

Oil discovery

In more hopeful news for motorists, geologists have discovered a huge new oil field in Texas that could be adding to the nation's oil output within just a few years, without offshore drilling.

“It’s the one thing we have seen in our adult lives that could take us away from imported oil,” Aubrey McClendon, CEO of Chesapeake Energy, told the New York Times.

So, if things are looking positive for consumers, why does Wall Street think they are about to turn negative in a big way? Do they know something we don't?

If you spend your time, as I do, reading and editing consumer complaints and reporting about misfortunes that befall consumers, you fall prey to a condition similar to agoraphobia (fear of the outdoors).

After more than 12 years at ConsumerAffairs.com, you might expect that I would have an advanced case of consumerophobia (fear of buying stuff). But in fact, I don't and it's not because I'm a particularly careful consumer. Rather the opposite in fact: I expect things to go wrong and am therefore not surprised or disappointed when they do. When things go right, it's a pleasant surprise.

Thus, when a relative purchased a tiny but pleasant waterfront apartment (photo) on Great South Bay in Sayville, N.Y., I volunteered to handle the set-up chores, figuring this would give me an excuse to buy lots of toys while also conducting a real-world test of companies our readers frequently complain about.

Transport

Since Sayville is way out East on Long Island and I live way down South (comparatively speaking) in Northern Virginia, the first thing I did was conduct a comprehensive study of my transportation situation. After all, I would be running up and down the New Jersey Turnpike and blasting out the Belt Parkway through Brooklyn, a grueling test of car and driver.

The little two-seater that lolls around my garage was, as it is for most things, useless. Too small. My long-suffering spouse's Saturn Vue wouldn't do. Too old and not nimble enough for chaotic high-speed East Coast traffic.

So after extensive research, consisting mostly of poring through old car magazines at the dentist's office, I stopped into Fairfax Volkswagen on my way to a concert one night.

“Got any all-wheel drive (AWD) Tiguans in stock?” I asked. They had one, all decked out with big alloy wheels, GPS, 87-speaker stereo (or something like that), nuclear headlights and so forth.

“Good, wrap it up and write me a 36-month lease. I'll be back after the concert.”

It wasn't quite ready that night but was all washed up and ready to roll when I dropped by a few days later. The lease deal was just as described – a few thousand down and a monthly payment of about $400, including maintenance. Like many consumers, I don't like to dicker over price and, realistically, as the dealership had only one AWD in stock, my chances of chipping at the price seemed minimal.

The Tiguan, a “crossover,” is everything the VW Touareg is not. It's small where the Touareg is big and economical where the Touareg is boastfully expensive. Cargo room is not great but with the back seats down, it's big enough to jam in two big chairs and a few lamps or end tables.

Its 2-liter turbocharged engine and 6-speed electronic transmission make for a very lively little package. Cargo space is big enough for most chores and gas mileage on several trips up and down the Turnpike and around Long Island worked out to 24.9 miles per gallon. Handling and acceleration are excellent and the all-wheel-drive makes this overgrown Jetta feel like it's nailed to the road.

Verdict: No worries. Great little car, a bit more expensive than comparable crossovers from Honda, Hyundai and Toyota but a lot better-looking and much more fun to drive.

Macy's Furniture

OK, so at that point we had the condo and a car but not much else. The task of furnishing the condo turned out to be relatively easy.

We started at Macy's where we picked out a queen-sized leather sleeper couch for the living room. It cost a few bucks under $1,000 and seemed to be well put together if weight is any indication. The leather was fairly thick and seemed sturdy. Furniture in a beach house takes a lot of wear so we wan't something durable.

But what about delivery? Our complaints about Macy's Furniture would fill a good-sized moving van, and many of them are beefs about botched or missed deliveries.

We began to quake in trepidation, first because we had to cancel a scheduled delivery owing to a blizzard. I motored north a few days before the replacement date and spent the next couple of nights sleeping on a cot that I believe once had something to do with the Boy Scouts. My physicians expect me to regain partial movement later this decade.

The dread day approached. A Macy's computer called to confirm the date and three-hour window. As the day dawned, a cold and very blustery wind blew in off the Atlantic, making it difficult to walk along the narrow outside walkway that leads to the condo after one ascends some narrow, winding stairs and navigates several doors that tend to slam without warning.

Right on time, the men from Macy's showed up – three rather skinny little guys who didn't look as though they could lift the couch much less carry it up the stairs and along the gangplank through the gale-force winds.

But a few minutes later, the couch was set up and unwrapped and the lads were removing the little red booties they had donned before entering the condo and were rolling up the red Macy's carpet. A bit later, we filled out the online survey from Macy's, giving the delivery team an A+.

Not being one to shirk our duties, we slept on the thing a few times and also lounged around on it. No problems found. The leather seems durable but is soft enough to keep couch potatoes comfortable.

Verdict: No worries. Good value and quality, excellent delivery.

IKEA

The IKEA experience also involved delivery, except that this time it was up to me and Mr. Tiguan. My spouse had furnished me with a list of chairs, tables, etc., complete with the IKEA stock numbers. This meant I could ignore the IKEA showroom and go directly to the self check-out.

The first day I bought two leather tulip chairs. They came in two huge boxes, which fit nicely into the Tiguan. I wrestled the chairs up the stairs, screwed the legs on, plopped down on one and put my feet up on the other while enjoying an adult beverage.

The chairs are comfortable but have the rather dangerous habit of tipping over if you lean on them or even tilt a little to the side. The legs need to a bit farther out towards the edge of the chair and perhaps a little bigger. This is actually not a small defect, as it could cause personal injury.

My next trip to IKEA netted an odd chair I would describe as a sort of Norwegian version of the bentwood rocker, minus the rockers, and a couple of small end tables. These came in small boxes, a tip-off that “minor assembly” lay ahead.

The tables were simple enough but the chair remained in a desultory state for more than a week. The three layers of fabric which fit over the metal frame were – to put it simply – too damned small. Whenever I had some spare time, I would stop by the disassembled chair and tug vigorously on the various fabrics, sort of like trying to squirm into a uniform or suit that fit just great 30 years ago.

I finally got everything stretched into shape on my last day. The chair looks OK and is quite comfortable, though I have my doubts that it would withstand extended use by a person of size.

Verdict: I wish I liked IKEA's stuff a bit more. It is always a little disappointing. I can't honestly say I think any of this stuff will wear very well and the chairs are actually a safety hazard.

UPS

One of the crucial elements in this project was the bed – ordered by my spouse from some company in Canada, the name of which I have unfortunately lost. It is a platform bed with drawers in the bottom and storage space in the headboard, designed for tight spaces.

Customers are warned that the thing weighs about as much as Mars and is delivered by freight, so delivery dates are approximate. We were given a 10-day window, the first day being a Thursday.

On Thursday, I pulled into the condo parking lot after running an errand around noon and saw Big Brown pulling out. We exchanged waves and I made my way upstairs, where – lo! – outside the condo door (up all those stairs and through all those doors) were three roughly eight-foot-long, very heavy cardboard cartons, along with a “Sorry we missed you note” from UPS.

It took quite a bit of blundering around, with lots of help from the family's resident handyman, to get the thing put together. Not the least of the problems was that the bedroom was just big enough to hold the bed – which makes it kind of hard to spread out all the pieces and put the bed together.

The next time I saw the UPS guy, I thanked him profusely for lugging the stuff up there. He smiled and said that he got the best part of the bargain since he didn't have to assemble it.

Verdict: Big Brown comes through again. Accidents do happen (there was that unfortunate incident when a front-end loader rolled over a laptop I had sent myself) but all things considered I have had excellent service from UPS and its great drivers for many years.

Sleepy's

Long Island is Sleepy's home and there seem to be more Sleepy's stores than Starbucks. My biggest problem in buying a mattress was figuring out which of four or five Sleepy's stores in the area was the most convenient.

I picked one at random and walked in. No one else was there except for the salesman. Before he could speak, I told him I wanted a queen-sized Serta Perfect Sleeper, firm. Many retail salesmen would be unable to resist launching into their customary sales pitch despite the customer having already stated his decision but, not wanting to snooze past the close, the Sleepy's rep asked merely, “You sure you don't want to try one out?”

“I try one out every night,” I assured him. “It's fine.”

He ushered me to his computer, took down my info, traded a few tales and announced that the earliest delivery would be in two days between 10 and 2. He explained the warranty in great detail, including the conditions under which the mattress could be returned if it proved unsatisfactory.

Total price was in the $1,500 range, including box spring, liner and delivery. I may lose my membership in the Crusading Consumerist Club for saying this but I am not a big comparison shopper. The price seemed about right. Besides, I had my wife's credit card.

A couple of days later, when the gale force winds were once again blowing, two stout and chipper guys showed up on schedule, fought their way up the stairs and in two quick trips delivered the mattress, box spring and liner. They set everything up, invited me to flop down on it (I obliged this time), collected my signature and left. Elapsed time: 10 minutes.

Verdict: Nothing to lose any sleep over. Everything went like clockwork, as people used to say back when clocks were common.

Verizon

Things were coming together but not until Verizon's FiOS was installed would I consider the place truly livable. Fortunately, while waiting for the FiOS man, I was able to work by using my Verizon Wireless 3g broadband card, also called the MiFi. Service was very good – download speeds around 3 mbs, decent uploads. (Update: I have since upgraded to a 4g card and the difference is astounding. I use it regularly in Los Angeles, where it delivers download speeds that sometimes hit 20 mbs – cable modem speed.)

Verizon was busy taking over the world and I couldn't get an installation appointment until the following Tuesday. Monday night, therefore, entailed a wild drive up the Turnpike to get to Sayville before FiOS showed up the next day “between 8 .m. and 4 p,m.”

FiOS finally put in an appearance around noon. Hearing a knock, I opened the door to find a sight that has often greeted me in matters telephonic: a Verizon installer shaking his head and muttering, “Not going to happen.”

There were several reasons FiOS couldn't be installed, he said, some technical, others legal. I pointed out that I had filled out numerous online forms and been told installation would be a snap. Nope, he said. Muttering and shaking his head, the FiOS guy drove off, promising to speak to someone about it. He was at least true to his word. Some desk jockey from Verizon called a few days later to say it really was too bad I couldn't have their service, even though at least one other person in the condo complex has it. Something about not enough outlets available.

Verdict: It's amazing that Verizon has spent billions to build such an advanced product while doing such a terrible job of selling it, installing it and servicing it. We had our FiOS connection in Virginia taken out because it sped along at a crawl. It wasn't until after the service had been shut off and we had gone back to Cox Communications that Verizon offered to come out and try to fix it.

Cablevision

I then took the action I had tried to avoid. I called Cablevision. No one ever has a good word for Cablevision, which besides NBC Universal also owns Newsday, Long Island's only newspaper of any import. The customer service rep offered me a triple-play package (phone, TV, Internet).

Nope, I said, all I want is a 30 mps Internet feed. I'll use my cell phone, Skype and Netflix for the rest. He gave me no argument and signed me up for something around $40 per month.

Two days later (as opposed to the month or so it took to get Verizon to come out and do nothing), the Comcast installer arrived, hooked up a modem to the already-installed coax, tested it and left. Elapsed time: about ten minutes.

I hustled over to Best Buy, where a salesman fell into step beside me and asked what I wanted. “Wireless router,” I said. He handed me a dual-band Netgear that was the exact model I had in mind and, without breaking stride, I beat it over to the cashier line, grabbed a Blu-ray of the first season of “The Walking Dead” (strong family resemblance) and was soon back in the Tiguan.

As expected, setting up the router was a snap and in a few minutes, I was watching “Law and Order” via Netflix, checking out the latest FiOS complaints on my laptop and carrying on a rather trite conversation via Skype.

After a few months of occasional drop-ins to see how everything is going, I have heard no complaints about Cablevision, except that service disappears sporadically for no apparent reason.

Verdict: So far, so good. Better than expected, in fact.

Amazon

While we're on the subject of electronics, I wanted an easy-to-use DVD/streaming video system that was not too expensive and didn't take up too much room, as the property in question is truly tiny. Turning to Amazon.com, I ordered a 26-inch ASUS computer monitor and an LG Blu-ray DVD player/streaming video receiver.

Wanting to avoid having lots of wires, I looked for an all-in-one audio system to replace the built-in monitor speakers and provide a little more oomph. I settled on the ZVOX 525 low-profile sound system, $329 from Amazon. You've heard of a black box? This amazing unit is just that – a short but deep black box that slips in underneath the monitor. It uses phase-shifting (or something) and a bunch of small speakers to create a surround-sound effect that is quite convincing.

The sound quality is quite good. A little fiddling will get you something that lends just the right degree of crispness to dialogue without blasting your next-door neighbors out of bed.

Verdict: Amazon never disappoints. Selection is outstanding, prices competitive and things show up on schedule.

Final Grade

It pains me to say it, but things went pretty well, with the exception of Verizon and IKEA. Back in 1998, when we started ConsumerAffairs.com, there was a widespread attitude among consumers that retailers and product manufacturers didn't much care whether their customers were satisfied.

Whether or not this was true is open to question but certainly, consumers had fewer ways of making their complaints and compliments public and businesses had fewer communication channels at their disposal.

Now, nearly every transaction is followed up by a survey of some kind, asking the customer to rate the product, service and the sales and delivery process. Do I want to take some of the credit for this? Sure, why not? Certainly there are still lots of problems with consumer goods (and everything else) but as this little experiment showed, it is possible to conduct a number of treacherous tasks in a short period of time and come out with a pretty good outcome.

I had a good time doing this and, more importantly, I plan to make frequent return visits to the Closet By the Sea this summer, just to make sure everything remains ship-shape.

HP is expanding its recall of lithium-ion batteries used in HP and Compaq laptop computers. About 124,000 batteries were recalled over the last two years.

The batteries can overheat and rupture, posing fire and burn hazards to consumers.

Since the May 2010 recall expansion, HP has received 40 additional reports of batteries that overheated and ruptured, resulting in seven burn injuries, one smoke inhalation injury, and 36 instances of property damage.

The recalled lithium-ion rechargeable batteries are used with various model series of HP and Compaq notebook computers and include batteries that consumers were informed were not included in previous recalls. The chart below includes all notebook model numbers associated with batteries recalled to date. The computer model number is located at the top of the service label on the bottom of the notebook computer. Not all batteries matching the bar codes are being recalled.

The computers and batteries were sold by computer and electronics stores nationwide, hp.com and hpshopping.com from July 2007 through July 2008 for between $500 and $3,000. The battery packs were also sold separately for between $100 and $160. They were made in China.

Consumers should immediately remove the batteries from their notebook computer and contact HP to determine if their battery is included in this recall. Consumers who had previously checked their batteries and were informed they were not included in previous announcements are urged to check again. Consumers with recalled batteries will receive a free replacement battery. After removing the recalled battery from their notebook computer, consumers may use the AC adapter to power the computer until a replacement battery arrives.

For additional information, visit the HP Battery Replacement Program website at www.hp.com/support/BatteryReplacement or call (888) 202-4320 between 7 a.m. and 7 p.m. CT Monday through Friday.

We've gotten increasingly safety conscious about car travel. Fifty years ago few vehicles had seat belts. Now cars come equipped with all manner of safety equipment to keep its human occupants from getting injured in an accident.

But what about non-human passengers? It turns out there are equipment and procedures designed to protect dogs that are traveling by car.

Many pet owners might prefer to keep the dog in a crate, and while that's not a poor alternative, it does have its drawbacks. In the event of an accident, the dog could be slammed into the side of the crate; and if the crate is not properly secured, it may not hold in place.

We've had it drummed into us for a generation or two how important it is for adults to buckle up and for children to be properly restrained in age-appropriate car seats. So it should come as no surprise that the safest way for your dog to travel is in a harness and seatbelt.

Restraining harness

Keeping the dog in a restraining harness isn't just safe for the pet, but for the driver as well. An unrestrained dog can become a dangerous projectile in the event of an accident or even a short stop.

A survey by AAA last year found that nearly one-third of dog-owning drivers admitted they'd been distracted by their dogs in the car. One pet safety advocacy group has put the number of car accidents caused by dogs at 30,000 annually.

Experts consulted by Edmunds.com also warn drivers not to let dogs ride with their heads out the window. As much as they might enjoy it, they could be at risk of getting injured by flying debris.

Open trucks

Likewise, it's even more unsafe for dogs to travel in the flatbed of a pickup truck, where they could jump or be ejected at high speeds. Some states even have specific laws regulating how dogs can be transported in an open area of a vehicle.

The car doesn't have to be in motion to pose a threat to your dog; leaving your pet in an unattended vehicle can also be very harmful. Experts say that even on a 60-degree day, the temperature in a car exposed to the sun can rise to over 100 degrees.

Prolonged exposure in that type of heat can cause seizures or central nervous system problems in the short term and organ function problems in the long term. The best advice from experts is to simply leave your dog at home when you're out running errands.

A group of scientists and consumer activists say that a deadly oubreak of untreatable infections in the U.S. is just around the corner because federal agencies have failed to crack down on the use of antibiotics in animal feed.

Low doses of antibiotics in animal feed over a long period of time contribute to the growth of antibiotic-resistant bacteria that can be transferred to humans and is a greater risk to public health than anyone wants to admit.

The Union of Concerned Scientists, the Natural Resources Defense Council, the Center for Science in the Public Interest, the Food Animal Concerns Trust, Public Citizen, and the Union of Concerned Scientists sued the U.S. FDA and its Commissioner Margaret Hamburg, the Center for Veterinary Medicine and its Director Bernadette Dunham, and the Department of Health and Human Services and its Secretary Kathleen Sebelius.

The watchdog groups say the FDA first approved feeding of "preventative" antibiotics to healthy livestock in the 1950s. 

But in 1977, the FDA found that found that "subtherapeutic" doses of penicillin and tetracyclines - at levels too low to treat disease - contributed to development of antibiotic-resistant bacteria that could be transferred to humans.

"This litigation does not concern targeted, short-term uses of antibiotics to treat animals that are already sick," the complaint states but rather deals with the constant and habitual use of antibiotics in all animals, even those that are not sick.

Findings confirmed

The FDA never retracted its 1977 study, and later research confirmed its findings, the suit says. It notes that drug resistance is a fact of life for virologists and public health workers, who, for example, must design new forms of influenza vaccine each year to try to counter the diseases' ability to survive old forms of vaccines and drugs.

"The misuse and overuse of antibiotics has given rise to a growing and dangerous trend of antibiotic resistance," the complaint states. "Increasingly, bacteria are resistant to not one but multiple antibiotics, resulting in infections that are difficult to treat, require longer and more expensive hospital stays, and are more likely to be fatal. The Institute of Medicine of the National Academy of Sciences has warned that '[t]he specter of untreatable infections - a regression to the pre-antibiotic era - is looming just around the corner.'"

In 1999, four of the plaintiffs submitted citizen petitions asking the FDA to withdraw its approvals for nontherapeutic uses of antibiotics in livestock if the antibiotics are also important in human medicine.

The fifth plaintiff, the Natural Resources Defense Council, joined the others in 2005. 

The nonprofits say the FDA "unreasonably delayed ruling on" these petitions, and "has never issued a final response to either petition" even though the scientific evidence is overwhelming, the groups say.

80 percent

"Approximately 80 percent of all antibiotics used in the United States today are used in livestock. Most of these drugs are not used to treat disease. Instead, they are given to healthy animals in their feed or water, both to promote faster growth and to prevent infections that tend to occur when animals are kept in cramped, unsanitary conditions,” the suit says.

“Research has shown that the use of antibiotics in livestock leads to the development of antibiotic-resistant bacteria that can be - and have been - transferred from animals to people through direct contact, environmental exposure, and the consumption and handling of contaminated meat and poultry products."

The FDA's failure to act violates the Administrative Procedure Act and the Food and Drug Act, the groups say. They want the FDA ordered to withdraw its approval of subtherapeutic uses of penicillin and tetracyclines in animal feed. 

We haven't heard much lately about robo-signing of foreclosure documents in the mortgage industry, but the issue is still on the radar screen in Illinois.

Illinois Attorney General Lisa Madigan has expanded her investigation, issuing subpoenas to two national mortgage servicing support providers. The subpoenas were issued to Lender Processing Services Inc. and Nationwide Title Clearing Inc., two Florida-based corporations that provide “document preparation services” and other loan management services to mortgage lenders for use against borrowers who are in default, foreclosure or bankruptcy.

“Foreclosure became a rubber-stamping operation that robbed many homeowners of the American Dream without a fair and accurate process,” Madigan said. “I will not relent in my investigation into the fraudulent practices by lenders and others that caused and exacerbated the mortgage crisis and the resulting massive foreclosure crisis.”

Major players

Madigan said Lender Processing Services (LPS) provides loan servicing support for more than 50 percent of all U.S. mortgages. More than 80 financial institutions use LPS to service more than 30 million loans. These loans have an outstanding principal balance exceeding $4.5 trillion.

Nationwide Title Clearing (NTC) provides a range of mortgage loan services to eight of the top 10 lenders and mortgage servicers in the country. NTC specializes in creating, processing and recording mortgage assignments, which are often needed for a lender to foreclose on a borrower.

Madigan said she is looking into reported allegations that LPS and NTC engaged in the practice of “robosigning” legal documents filed with the court to foreclose on borrowers. Robosigning occurs when an individual has no knowledge of the information contained in the document and often doesn’t even read or understand the document that he or she is signing.

The use of robosigned documents was pervasive as lenders foreclosed on borrowers’ homes. The probe will also include a complete review of the accuracy of the systems and services that LPS and NTC provide to the large lenders including servicing platforms, foreclosure attorney interaction with these platforms and the assignment of mortgage process.

Looking for whistle-blowers

Madigan also took the unusual step of publicly appealing to former employees of LPS, NTC, or former employees of any residential mortgage servicer or bank who have knowledge of any unlawful practices relating to mortgage servicing or the execution of documents, to contact her office.

The robo-signing scandal first came to light last year when a Florida attorney, deposing a GMAC Mortgage official, learned that the official, who was required to read and affix a notarized signature to thousands of foreclosure documents, employed a robo-signer.

It was later determined that several large mortgage servicers, to cope with the crush of foreclosure documents, did the same thing.

You may think you are buying mahi-mahi, but chances are it's really yellowtail. The red snapper you order in a restaurant could be talapia.

Seafood consumers are being exploited by mislabeled fish products, according to the environmental group Oceana, which has released a report entitled Bait and Switch: How Seafood Fraud Hurts Our Oceans, Wallets and Our Health.

“We can track organic bananas back to packing stations on farms in Central and Latin America, yet consumers are given little to no information about one of the most popular foods in the United States – seafood,” said Dr. Michael Hirshfield, senior vice president for North America and chief scientist for Oceana. “With imports representing the vast majority of the seafood eaten in the United States, it’s more important than ever to know what we are eating and where, when and how it was caught.”

Minimal inspection

The report says that while 84 percent of the seafood eaten in the United States is imported, only two percent is currently inspected, with almost no thought given to potential fraud. In fact, the report says recent studies have found that seafood may be mislabeled as often as 25 to 70 percent of the time for fish like red snapper, wild salmon and Atlantic cod, disguising species that are less desirable, cheaper or more readily available.

“We’ve tested well over 1,000 fish fillet samples over the past four years, from more than 50 cities across the country,” said William Gergits, co-founder and managing member of Therion International, LLC, a worldwide leader in DNA testing of seafood. “Results from our DNA lab show that about half the time the fish you are eating is not the species listed on the menu.”

Consumers shortchanged

The report maintains that consumers are frequently shortchanged, served a cheaper fish than the one they've paid for. With about 1,700 different species of seafood from all over the world now available in the U.S., the report says it is unrealistic to expect consumers to be able to independently and accurately determine what fish is really being served.

“Seafood fraud puts consumers and restaurants trying to make honest, eco-friendly choices at a disadvantage,” said Ellen Kassoff Gray, general manager and co-owner of top-tier D.C. restaurants Watershed and Equinox. “We need the U.S. government to provide us with the tools to make good decisions for our oceans, our pocketbooks and our health. It’s just good business.”

Oceana says the technology now exists to accurately identify different species of fish and that these tools should be put into action to stop what it calls seafood fraud. It says the government should implement existing laws, increase inspections, and improve coordination and information sharing among federal agencies.

The group said it is also working to ensure that the seafood sold in the U.S. is safe, legal and honestly labeled, including requiring a traceability scheme where information such as when, where, and how a fish is caught follows it throughout the supply chain – from boat to plate – allowing consumers to make more informed decisions about the food they eat.

The economic crash of 2009 hit a lot of small businesses very hard. Elizabeth of New Market, Md., said her husband's construction company, an LLC, was forced to close its doors, with creditors placing a lien on the business property. One creditor, 84 Lumber, asked for a lien against all of Elizabeth's husband's bank accounts.

“The only checking accounts and savings accounts that he had was a personal BB&T joint checking and savings account with myself,” Elizabeth told ConsumerAffairs.com. “In the state of Maryland it is illegal to put a hold on a joint account. I was not named on the any lawsuits and I was never an owner or stake holder in the business. We spoke with the garnishment department about this and they said there was nothing they could do.”

That was 2009. Elizabeth says the accounts are still frozen but 84 Lumber hasn't gotten any money.

“So if BB&T never sent the money, why are they still holding it,” Elizabeth asked. “The lawsuit has been dropped and still they won't release our money.”

If Elizabeth is correct that Maryland law forbids putting a hold on a joint account, then she needs to contact Maryland Attorney General Douglas Gansler's office. However, if Elizabeth's husband was using their joint bank accounts for the business, that might give the bank an out.

Not in the driver's seat

Carrie, of Homestead, Fla., says she reserved a car through Hertz and told them she would be paying with a debit card because she had no credit.

“I called them and asked them if this could be possible and they said it was no problem,” Carrie said. “When I arrived at the airport they noticed I had no credit at all. They denied me, making me sit in the airport from 3pm to 11pm that day. Every other car rental place was booked.”

Rental companies want you to have a credit account because, if something happens to the car, they want to have a way to hold you responsible for damages. According to the Hertz website, you can pay cash for a rental, but you are required to have what they call a “cash deposit ID card.” The customer service rep should have explained that to Carrie when she called.

In or out?

Under new federal debit card rules, bank customers cannot be automatically enrolled in the bank's overdraft “protection.” The customer must “opt in.” You would think that by “opting in,” a customer would be aware they were doing so. Michelle, a Wells Fargo customer from San Francisco, says apparently not.

“The telephone customer service agent told me that on one of my 10 accounts I had opted IN to have overdraft protection, so they could charge me $35.00 for each and every check card purchase I made,” Michelle told ConsumerAffairs.com. “I didn't want this so I did not opt in. They say I did and refuse to provide me proof. Over the last six months it has cost me $1200.00.”

Presumably, Michelle has changed the option on that account, so she will no longer be subjected to fees. A Center for Responsible Lending survey indicates that most consumers do not want high-cost overdraft coverage for their checking accounts, and that most of the opt-ins so far are largely based on aggressive and misleading marketing, rather than clear and accurate information from banks.

Any change changes the terms

Parag, of Richardson, Tex., was preparing to travel to India on a religious pilgrimage, so she called Dish Network to see if she could suspend her account for a few weeks. She had recently signed up for a special Dish Network promotion, getting America's Top 120 for $24.99 for 12 months and $39.99 for the second 12 months.

“Dish Network advised that Dish Pause was the best option, stating that it would only cost us a $5.00 monthly charge for Dish Pause duration,” Parag said. “The account would remain active and resume when we returned.”

Parag said she was shocked when she returned two months later and found that, by using Dish Pause, she has “forfeited” her promotional rate.

“My monthly bill now was almost doubled from $24.99 now to $44.99 for Americas top 120 package,” she said. “They knowingly omitted this key piece of information.”

It's possible the customer service rep Parag spoke with didn't know about that particular wrinkle. It's also possible that, as Parag suspects, they let her give up the promotional rate without informing her that she was doing so. However it went down, it's good to keep in mind that anytime you change the terms of a subscription contract in any way, you may be in danger of losing any kind of special deal you enjoy.

The Federal Trade Commission has filed two court actions against five companies and their owners for allegedly tricking consumers into paying fees for vacation packages they supposedly won in contests, and then failing to provide the promised vacations.

At the FTC’s request, the court halted the defendants’ allegedly deceptive practices and froze their assets pending further litigation.

VGC Corporation of America

In the first case, the FTC charged that the defendants used Spanish-language radio and TV ads nationwide to offer a vacation package they claimed was worth thousands of dollars as a prize to callers who answered a simple trivia question.

For instance, the defendants ran television ads proclaiming “Attention! This program has been interrupted. It’s time to win for the first thirty people that dial the number that appears on the screen and can tell me correctly how that famous Mexican comedian (Mario Moreno) was also known ... If you know the answer ... you are going to go to Disneyland ...”

Callers were told they had won a prize, and that if they paid a fee of up to $400 they would receive their promised vacation package.

However, according to the complaint, when the “winners” tried to redeem their prize, they were almost uniformly denied. Many consumers who called the defendants to book their vacations were told they were not eligible because they did not meet previously undisclosed conditions, limitations, and restrictions, including age, income or marital-status requirements, or required attendance at a timeshare presentation.

Others were told the promised vacations were no longer available or that they had to pay more to redeem their prize. Some consumers could not reach the defendants to claim their prize, and those who did reach them and asked for their money back were told there were no refunds and they were simply out of luck.

The FTC charged the defendants with violating the FTC Act. The State of Florida charged them with violating the Florida Deceptive and Unfair Trade Practices Act.

The defendants in this case are VGC Corporation of America, also doing business as All Dream(s) Vacations, All Dreams Travel, Five Star(s) Vacations, 5 Star(s) Vacations, Total Tours, and Travel & Tours Corp.; All Dream Vacations Corp., also doing business as All Dreams Vacations; and several individuals.

Holiday Vacations Marketing Corp.

The defendants in the second case also targeted Spanish-speaking consumers in a similar scam.

According to the FTC’s complaint, when consumers called to accept the “prizes,” the defendants’ telemarketers took their credit or debit card numbers, charged their accounts a fee of up to $400, and mailed them a payment invoice, a vacation brochure, and instructions to call 30 days or more before the desired vacation date to make reservations.

The defendants sometimes mailed terms and conditions stating that consumers had to make reservations within 18 months of purchase, pay their own air fare, present two forms of ID at the hotel, and be 21 or older.

The complaint also alleges that consumers often could not reach a live operator to schedule vacations, or managed to make reservations but could not reserve as many nights as they were promised. Some consumers learned, after arrival, that they had to attend timeshare presentations and meet income and marital-status requirements to receive free hotel stays.

At least one person, who traveled from Texas to Florida, was charged for the hotel because she could not attend a timeshare presentation scheduled for the day after her departure. Consumers who complained or demanded refunds had trouble reaching anyone by phone, and others were promised a refund that was never provided, according to the complaint.

In addition, the defendants allegedly re-charged consumers’ accounts up to $400 without their authorization, and without disclosing that they would be charged a second time.

When consumers reported the unauthorized charges to their banks or credit card companies as fraudulent, the defendants used certified mail to send those consumers a new invoice and brochure that was nearly identical to those sent after the initial charge. The defendants then sent the consumers’ banks or credit card companies a copy of the consumers’ signatures from the certified mail receipt and a copy of a false invoice. This led some banks and card companies to refuse consumer requests to cancel or reduce charges to their accounts.

The FTC charged Holiday Vacations Marketing Corp., Happy Life Carribbean Corp., Happy Life Corporation of America Inc., and several individuals, with violating the FTC Act.

Two purported debt relief firms that claimed they could help consumers lower their credit card balances have been put out of business.

The Federal Trade Commission (FTC) had charged Advanced Management Services NW LLC (AMS) and PDM International with making deceptive telemarketing calls, calling consumers on the Do Not Call Registry, and using illegal robocalls. The settlements will ban all of the defendants from selling debt relief services.

The FTC charged that AMS soaked clients up to $1,590 and promised a refund if they failed to deliver at least $2,500 in interest rate savings. But, instead of arranging reduced interest rates, the defendants sent consumers instructions to pay down their credit card debts early to save money on interest.

Consumers who demanded refunds allegedly were denied outright, got the runaround, or had a $199 “nonrefundable fee” deducted from their refund.

Under two settlement orders, all of the Advanced Management Services defendants are banned from selling debt relief services. The defendants, who were based in Washington and Texas, are also prohibited from misrepresenting material facts about any good or service, selling or using customers’ personal information, failing to properly dispose of customer information, and collecting payments from their debt relief customers.

The order against PDM International Inc., also doing business as Priority Direct Marketing International Inc., and William D. Fithian, also bans them from telemarketing and from violating the FTC’s Telemarketing Sales Rule, and imposes a $13.8 million judgment.

The order against Advanced Management Services NW LLC, also doing business as AMS Financial, Rapid Reduction Systems, and Client Services Group; Rapid Reduction System’s LLC; Ryan David Bishop; and Michael L. Rohlf; imposes an $8.1 million judgment.

Both judgments, which represent the total amount of money consumers lost, will be suspended when the defendants have surrendered virtually all of their assets, including several luxury cars, a boat, jet skis, and ATVs. The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition.

Dynamic Financial

In a second case, the FTC alleged that Dynamic Financial Group and other defendants told consumers that, for an up-front fee of up to $1,995, they could save consumers thousands of dollars by reducing their credit card interest rates, and help them pay off their debts faster. The FTC further charged that the defendants promised, falsely, a full refund if consumers did not save a “guaranteed” amount – typically $2,500 or more. However, the defendants allegedly did not negotiate lower interest rates for consumers or failed to provide refunds.

Under five settlement orders in this case, all of the defendants are banned from selling debt relief services.

The order against 2145183 Ontario, Inc., also doing business as Dynamic Financial Resolutions Inc.; The Dynamic Financial Group (U.S.A.) Inc.; R&H Marketing Concepts Inc.; America Freedom Advisors Inc.; Joseph G. Rogister; and Christopher M. Hayden also bans them from robocalling and imposes an $8.3 million judgment that will be suspended due to the defendants’ inability to pay.

The order against Thriller Marketing LLC, Dwayne J. Martins, and John L. Franks Jr. imposes a $4.9 million judgment that will be suspended when Martins has surrendered the proceeds from selling a 2005 BMW 645 and Franks has surrendered the proceeds from selling two business condominiums in Tampa.

The order against Frank Porporino Jr. also bans him from robocalling and imposes an $8.3 million judgment that will be suspended when he has surrendered certain assets. In each instance, the full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The orders against Michael Falcone and Sean Rogister also ban them from robocalling and impose judgments of $93,137 and $90,473, respectively, which must be paid immediately.

Bank of America will be putting $410 million into an escrow account to be divided among its customers who were charged overdraft fees because of checking and debit-card transactions dating back to 2001.

The payment is part of a federal court settlement tentatively approved by a federal judge this week. All of the bank's customers will be eligible, not just those involved in the suit.

The law firm that brought the class-action lawsuit says that about 1 million customers will be eligible for payments, although legal fees are likely to eat up about 30% of the amount.

Randy of Yonkers, N.Y., might be one of them.

Last fall, he overdrew his checking account by writing an $80 check when there was only $53 in the account. Then the bank applied overdraft fees to three debit card charges that Randy said had already been paid.

“They manipulated those $35 fees to be deducted from my account” and made it appear there was no money in the account when in fact the account was not overdrawn at the time the transactions occurred, he said.

“All they tell me is they can't change it,” Randy ruefully told ConsumerAffairs.com last October.

'Resequencing'

The suit was one of several that challenged the way banks treated debit transactions. The suits accused the banks of “resequencing” debit transactions, recording the largest one first rather than in chronological order – thus causing the customer's balance to dwindle faster than it might have otherwise.

Bank of America and about 30 other banks named in the action have denied they did anything wrong but a Bank of America spokesman was quoted as saying the bank was “pleased to reach a resolution” and hoped the settlement was produce “a standard solution that would ensure a consistent posting order approach across the industry.”

Other banks named in the suit, which was consolidated from several individual suits, include J.P. Morgan Chase, Wells Fargo, U.S. Bank and SunTrust. Fifth Third Bank settled last year.

Federal regulations now prohibit banks from charging overdraft fees on debit card purchases unless they first get customers' approval to do so. Some banks have been aggressively urging customers to opt-in to overdraft protection but Bank of America no longer covers overdrafts on debit cards, simply rejecting the transaction at the point of purchase.

A consumer class action claims Fox Rent A Car and Violation Management Services run an "illegal scam" by charging customers a bogus "service fee" of as much as 16 times the amount of automatically charged highway tolls.

The lead plaintiff, Averil Rothrock, says she was charged $100 for two $3 highway tolls.

The suit, filed in King County Court in Seattle, says that Fox does not alert drivers to the fees and offers them no way to pay the toll without also paying the “service fee.”

Many toll roads have automated their toll collection systems so that drivers no longer have the option of paying cash, the suit notes. Instead, drivers proceed at highway speeds through the toll plaza and the owner of the car is later billed for the amount of the toll.

Other rental car companies, the suit says, give their customers the option of having the tolls billed to their credit cards or furnish the renter's information to the toll authority, which then bills the customer directly.

But Fox and Violation Management Services, the suit says, have “conspired to turn Fox customers' tolls into an illegal profit center for themselves.”

Violation Management processes the tolls and bills them directly to the customer's credit card, along with the service fee “sometimes exceeding 1600% of the actual toll,” the class action suit alleges.

“The 'service fee' is nothing other than an illegal scam to collect from customers amounts they do not owe,” the suit charges.

In the suit, Rothrock, a Washington resident, says she rented a vehicle from Fox's Denver Airport location on February 18, 2011. During her travels in the Denver area, she drove on Highway E-470, an unmanned toll road that uses an automatic toll collection system. She ran up two $3 tolls.

Six weeks later, she received two letters informing her that she was being charged for each of the $3 tolls plus a $50 service charge for each toll.

The suit charges that Fox's actions violate the Washington Consumer Protection Act and seeks treble damages, attorneys' fees and an injunction.

For over a year, between one-quarter and one-third of all U.S. home sales have been foreclosures, according to RealtyTrac, an online foreclosure marketing firm. As you might expect, that is having a depressing effect on values.

In it's report on the first quarter of 2011, RealtyTrac said the average sales price of properties in some stage of foreclosure — default, scheduled for auction or bank-owned (REO) — was $168,321, down 1.89 percent from the fourth quarter of 2010 and down 1.46 percent from the first quarter of 2010.

Homes in foreclosure were 27 percent cheaper than homes not in foreclosure, making it much harder for homeowners to sell their homes. Still, overall prices appear to be more stable than in quarters past.

Delaying the recovery

“While foreclosure sales continue to account for an unusually high percentage of all residential home sales, sales volume is well off the peak we saw in the first quarter of 2009, when nearly 350,000 foreclosure properties sold to third parties,” said James J. Saccacio, chief executive officer of RealtyTrac. “While this is probably helping to keep home prices relatively stable, it is also delaying the housing recovery. At the first quarter foreclosure sales pace, it would take exactly three years to clear the current inventory of 1.9 million properties already on the banks’ books, or in foreclosure.”

Some cities, of course, have more foreclosures than others. These tend to be markets where home prices escalated during the housing bubble.

Nevada, California still hard hit

In Nevada, for example, foreclosure sales accounted for 53 percent of all residential sales in the first quarter, the highest percentage of any state but down from nearly 54 percent of all sales in the previous quarter and down from 59 percent of all sales in the first quarter of 2010.

The average foreclosure sales price in Nevada during the first quarter was nearly 18 percent below the average sales price of homes not in foreclosure. Bank-owned properties that sold in the first quarter had been repossessed by the bank an average of 130 days prior to sale, while properties that sold in the earlier stages of foreclosure were in foreclosure an average of 135 days before selling.

California foreclosure sales accounted for 45 percent of all residential sales in the state during the first quarter, up from 43 percent of all sales in the fourth quarter but down from nearly 48 percent of all sales in the first quarter of 2010.

The average foreclosure sales price in California was nearly 34 percent below the average sales price of homes not in foreclosure. California bank-owned properties that sold in the first quarter had been repossessed by the bank an average of 164 days prior to sale, while properties that sold in the earlier stages of foreclosure were in foreclosure an average of 156 days before selling.

Some optimism

Despite the negative numbers, some analysts in recent days have begun to sound a note of optimism about housing. This week, for example, Yahoo! ecnomics editor Daniel Gross offered the contrarian view that we could be on the cusp of a “housing boom.” He points to demographic data that suggest household formation alone will require construction of more than one million new homes a year over a ten year period.

“Unless we start picking up the pace of new-home construction, and soon, the U.S. could face a housing shortage in the not-too-distant future,” Gross writes. “That's the line coming from one of the most sober, data-driven, non-ideological sources I know: Macroeconomic Advisers.”

Investors, many of whom are making all-cash purchases, appear to be driving the housing market at the moment, and they are also among the more optimistic about the sector.

A recent survey by the online real estate firm Move Inc., showed investors are among the most bullish about the outlook for housing. The reasons they give? You can buy and fix up a home for very little money, and there's little competition from traditional buyers, who are either uninterested or can't get the financing.

Classmates.com is now known as Memory Lane. The name has changed, but complaints from members who have been auto-renewed, haven't.

“I have repeatedly attempted to cancel this subscription to no avail,” Grace, of Miami Florida told ConsumerAffairs.com. “Every three months they charge my bank account. I need them to stop it.”

First, let's be clear. Any subscription service will make it as difficult as possible for you to cancel. That's why, when you sign up, it automatically defaults to an auto renewal. You have to go into your account and make sure it's set to manual renewal. Sending them an email telling them you are canceling your membership doesn't work.

According to PC Magazine, if you go into “My Account,” you should find the renewal setting. If that doesn't work you can call 425-917-5000, hit 1 for customer support, then 2 for a question about the Web site, and wait to speak to an operator. Ask the operator for instructions for returning to a free membership.

Dialing for dollars

The government grant scam is still victimizing consumers because, especially in these times, there is a great desire to believe you are about to get a lot of money out of thin air. J., of Brown Mills, N.J., recently got a call out of the blue from a man with good news.

“The man said he had called to tell me that I was chosen to receive a $7000 dollar grant from the US government because my family pay their taxes on time and does not have a criminal background,” J. said. “He said that the money would be transferred to me in 45 minutes. He needed my account information, he could have the money deposited through any debit or credit card or I could give him my savings account number, I would then receive a confirmation number before we ended the call and he would give me call back information in case I needed anything.”

J. said she suspected it was a scam but decided to play along.

“I asked him if he could transfer the funds to the school I am attending,” she said. “I assumed if it was a grant I was eligible for it because I was a student and therefore he should have no problem giving the money to my school. He seemed confused as to why I would even consider having the money transferred to my school and then told me no.”

J. said she sent us the story because she wants others to be aware of these kinds of scams and not to give out personal information to a stranger who claims the government is willing to give you free money. A good reminder for us all.

The case of the missing payment

Kristin, of Stone Mountain, Calif., had what many would say is a low credit card balance of $300, but for a college student, she said it was hard to pay it off.

“I was only paying the minimum due, which was like putting money in a bucket with a hole in it,” Kristin told ConsumerAffairs.com. “Towards the end of 2010, I was unable to pay anything on the balance, and late charges and interest began to accrue. In February after I received my tax return, I paid $300 towards the past due balance. I never heard from Capital One again.”

But she did hear from a collection agency, telling her she owed $521. What happened to the $300 payment?

“I called Capital One and asked them what happened to my payment, and basically they said they didn't know,” she said. “My bank states that Capital One received the $300, but Capital One made it seem as if my money went into the abyss, and they had no way of retrieving it.”

If Kristin has proof from her bank that her check for $300 to Capital One cleared, then she should present that evidence to both Capital One and the collection agency. She may still owe a small amount on her balance, but a $300 payment should have taken it down quite a bit.

Not so green thumb

Lots of spring gardens are sprouting, but not at the home of Jimmy, of Lehigh, Fla. He says he ordered about $129 worth of plants from Gardenerschoice.com. First, he says, they didn't arrive in the mail when they were supposed to. When they did arrive, he said, they looked dead.

“They all look dead but Gardeners Choice said they may still live,” he said. “Weeks later they are still all dead.”

Unfortunately, complaints about Gardeners Choice appear to sprout annually. The company advertises a money back guarantee and Jimmy should insist on it. When he gets the money, he should go to a local nursery and buy his plants. Maybe they'll cost a little more but they'll be a lot healthier.

Lots of homeowners are in default on their mortgages and now Connecticut Attorney General George Jepsen says Bank of America is defaulting on its obligation to help borrowers who are having trouble paying or seeking mortgage modifications.

“I express these concerns on behalf of the thousands of distressed Connecticut borrowers who continue to experience significant difficulties due to Bank of America’s failure to devote adequate resources to loss mitigation,” Jepsen wrote to Brian T. Moynihan, president and chief executive officer of Bank of America. “Bank of America can and should do more.”

“Given that Bank of America is apparently poised to lift its moratorium on Connecticut foreclosures, I do not see that it has any credible plan to deal with the inevitable increase in … requests” from borrowers seeking loan modifications,” Jepsen wrote. The letter followed a recent meeting with bank representatives.

The Office of the Attorney General, the state Department of Banking and the non-profit Connecticut Fair Housing Center continue to receive “numerous complaints” from consumers whose loans are serviced by the bank, Jepsen said.

Those complaints include:

• the bank losing documents repeatedly;

• lack of communication;

• conflicting and contradictory instructions from bank employees;

• receiving foreclosure notices at the same time the borrower is under consideration for a loan modification;

• failure to honor a loan modification the bank has already agreed to, and

• lack of any single employee who is familiar with a customer’s file.

Hundreds of similar complaints

The complaints listed by Jepsen mirror those received by ConsumerAffairs.com, which has heard from 953 Bank of America customers complaining about difficulties in dealing with mortgage problems in recent years.

A recent complaint came from Liz of Wilmington, Mass., who said Bank of America offered her a mortgate modification that would save her $300 a month, “guaranteed” her she would get it and told her to start deducting the $300 from her payments immediately.

“Well I did, then 6 months later I was denied the modification and I was told I owe late fees. I said why do I owe late fees -- I did what you told me to do. They said well you didn't pay your full mortgage amount!! Can you believe that?”

This sounds familiar to Cathy of Chicopee, Mass. She said Countrywide Mortgage offered her a modification back in 2009. Like Liz, she began making the new, lower payment only to learn a year later that the paperwork had never been processed and that her account had been accruing interest and penalty fees and that the bank had reported to the credit rating agencies that she was delinquent on her mortgage.

Cathy took action. She appealed to her Congressman, Richard Neal, who wrote to the bank. A short time later, she heard from someone in the “office of the president” of Bank of America.

Result: none

The result? “Nothing,” fumed Cathy. “They could not fix their mistake and can't explain why, They can't just unlock my loan and let me make my payments. They can't correct the damage they did to my credit.”

Jepsen has also been hearing these complaints and from the sound of his letter to BofA is getting a little tired of it.

“Despite having had more than two years to ‘right-size’ your staff and establish effective procedures and systems, Bank of American has so far not prevented even the most common consumer complaints,” Jepsen wrote.

Jepsen said he was told the bank plans to establish 40 new customer assistance centers nationwide, including one in Dedham, Mass. to serve New England. Establishing one center staffed by a dozen people to cover all of New England is simply not enough, Jepsen wrote. Bank of America is the largest bank in New England.

Nor is it enough for the bank to change its customer service policies, Jepsen said. Bank of America needs to bolster its resources “so that distressed Connecticut borrowers receive fair and honest treatment,” he wrote.

Jepsen is a member of the Executive Committee of the National Association of Attorneys General multistate task force which is seeking to hold major loan servicers, including Bank of America, accountable for the unfair and deceptive default servicing practices they have engaged in across the country.