Current Events in June 2011

Teletrack, Inc. has agreed to pay $1.8 million to settle Federal Trade Commission charges that it sold credit reports to marketers, in violation of the Fair Credit Reporting Act (FCRA). The settlement seeks to protect consumers’ privacy by ensuring that their sensitive credit report information is not sold for marketing purposes.

According to the FTC’s complaint, as part of its business Teletrack sells credit reports and other services to businesses – such as payday lenders, rental purchase stores, and non-prime rate auto lenders – that mainly serve financially distressed consumers. These businesses use Teletrack’s credit reports to decide whether and on what terms to provide credit to their customers.

The complaint alleges that Teletrack created a marketing database of information that it gathered through its credit reporting business. It then sold the information in this database – including lists of consumers who had applied for non-traditional credit products – to marketers.

For example, Teletrack sold lists of consumers who previously sought payday loans to third parties that wanted to use this information to target potential customers. The FTC’s complaint alleges that these marketing lists were credit reports under the FCRA because they contained information about a consumer’s creditworthiness.

The FTC charges that Teletrack violated the FCRA, which makes it illegal to sell credit reports without a specific “permissible purpose” under the statute; marketing is not a permissible purpose.

“The fact that a consumer has applied for a payday loan is credit report information protected by the FCRA,” said FTC Bureau of Consumer Protection Director David Vladeck. “The FCRA says a credit reporting agency like Teletrack can’t sell a consumer’s sensitive credit report information for mere sales pitches.”

The settlement order resolving the FTC’s charges requires Teletrack to furnish credit reports only to those people that it has reason to believe have a permissible purpose to receive them under the FCRA, or as otherwise allowed by the FCRA. It also requires Teletrack to pay a civil penalty of $1.8 million, and contains reporting and record-keeping requirements to ensure the company’s compliance with the decree.

What's the biggest energy hog in your home? Your refrigerator? Your microwave? Not even close, says the Natural Resources Defense Council (NRDC).

In a report, NRDC says the cable TV set-top box, present in about 80 percent of U.S. homes, consumed approximately 27 billion kilowatt-hours of electricity in 2010. That's equivalent to the annual output of nine average coal-fired power plants.

If you get your television signals from a cable, satellite or telephone company, you probably have a set-top box. There are about 160 million of them in use in the U.S., according to NRDC and its partner, Ecos.

'Startling' findings

The groups say their findings were startling. The electricity required to operate all U.S. boxes is equal to the annual household electricity consumption of the entire state of Maryland, results in 16 million metric tons of carbon dioxide (CO2) emissions, and costs households more than $3 billion each year.

How can such a relatively small appliance use so much electricity? Today’s set-top boxes operate at near full power even when the consumer is neither watching nor recording a show. As a nation, we spend $2 billion each year to power these boxes when they are not being actively used.

Boxes equipped with digital video recorders (DVRs) use even more electricity. DVRs typically use around 40 percent more energy per year than their non-DVR counterparts, the study says.

How to reduce energy consumption?

Is there any way to reduce this electricity consumption, aside from unplugging set-top boxes when they aren't in use? The study says there is.

Better designed pay-TV set-top boxes could reduce the energy use of the installed base of boxes by 30 percent to 50 percent by 2020, the groups say.

The big opportunities include: a) shifting to whole-home solutions that include a main box connected to the primary TV with either TVs specially designed to access the video content stored on the main box or low-power thin client boxes that serve the same function, and b) having the boxes automatically power down to much lower power levels when not in use, much like a programmable thermostat controls heating and cooling costs.

How likely is that to happen? The cable and satellite providers control set-top box installation, configuration, software updates, repair, refurbishment, retirement, and resale. The consumer, who pays the electric bill, has little choice about what box the service provider installs and how much energy it uses. Since the cable company doesn't pay the electric bill, they have no incentive to make the boxes more energy efficient, NRDC says.

New TV sets that are able to stream video content directly from the Internet may be one solution. According to the study, streaming devices use significantly less power than set-top boxes. The most efficient of the streaming devices studied is AppleTV, which drew just three watts in “on” mode and less than one watt in “sleep” mode. 

A firm that markets medical imaging scams is being accused of using high pressure to sell long-term imaging contracts that many patients don't need.

The company claims its scans can detect dangerous heart conditions and other health problems but doctors say many people the company pitches aren't likely to need the scans. And even for patients who are at risk, some experts say there's no medical evidence that the test's benefits outweigh its potential risks.

Regulators in Nevada and Colorado earlier cited one Heart Check America location and shuttered another, saying they lacked adequate medical supervision and had not taken proper precautions to avoid exposing patients to excessive radiation.

The latest suit was field by Illinois Attorney General Lisa Madigan, who accused the business of using “unfair and deceptive business practices” to manipulate consumers into signing up for expensive 10-year body scan contracts costing up to $7,000 plus annual dues.

The complaint, filed in Chicago, charges:

• Multiple scans may not be medically appropriate, and sales are based on a false premise that early detection of disease always leads to better outcomes.

• The people selling the scans were not medically trained, and no medical provider evaluated patients before they received the scans.

• Consumers were not informed of risks, including radiation exposure, false-positive tests and a false sense of security from false-negative tests.

• Some test results were inaccurate.

Cancer Check

The suit also names Sheila Haddad, the owner of Heart Check America, and her son David Haddad.

The Haddads previously owned Cancer Check America which ceased operating in May after questions about its connection with Heart Check America, according to the Island Packet newspaper. The paper said the Cancer Check center in Hilton Head, S.C., offered free lung or heart CT scans in the hopes people would sign up for a package of examinations.

Madigan's complaint says the Illinois Attorney General's office has received 25 complaints against Heart Check since June 2010. The Federal Trade Commission, Better Business Bureau, Colorado and Nevada state regulators also have received complaints.

The suit seeks to halt the company's activities and requests civil penalties up to $50,000 per violation if the court determines there was intent to defraud. It also seeks restitution for consumers and asks to have their contracts voided.

"Minor" violations

The Chicago Tribune said David Haddad earlier characterized any regulatory violations as minor.

“People come back and say, ‘Thank you, my wife will be (alive) because we found this,’” Haddad said. “I made my mom and sister go. People hug and kiss us goodbye in these clinics.” 

A study finds what many smartphone addicts already know but may not want to admit: Androids have a much higher rate of hardware problems than their competitors.

The survey, conducted by British telecom consulting firm WDS, tracked 600,000 support calls over a 12-month period and found that of the support calls seeking help with Android handsets, 14% were for hardware issues.

Windows Phone 7 had a 9% rate for hardware-related support calls, Apple iPhone 8% and Research In Motion's BlackBerrys 3.7%.

The study found that instances of hardware faults varied between OEM deployments, with some brands showing a propensity to display failures, others keypad/button failures and some battery issues. Unfortunately, it didn't name the manufacturers associated with each type of failure.

Runaway success

“Android has been a runaway success and has been instrumental in bringing smartphone technology to the mass-market,” said Craig Rich, Chief Marketing Officer at WDS. “Its open nature, coupled with the greater availability of hardware components and a reduction in manufacturing costs has seen some manufacturers bring the price-point of Android smartphones down below US$100.”

“However, the Android ecosystem is not without its faults. Many of the factors that have led to Android’s success are driving varying levels of hardware quality into the market, in turn delivering an inconsistent customer experience,” Rich said.

Why the high Android failure rate? Isn't Android software made by the almighty Google? Yes, but as a semi-open-source platform, Android can be used by just about any manufacturer. WDS included 35 different Android manufacturers in its study.

The other major platforms all maintain tight control over their hardware. Windows Phone 7 licensed to only five manufacturers while both the iPhone and Blackberry have just one manufacturer each. In fact, both Apple and Blackberry-maker Research In Motion manufacture their own phones and thus control every step of the design and manufacturing process. 

Now that summer is in full-swing, many children are spending extra hours in front of a computer or on their cell phone with Internet access. Unfortunately, this also makes them ideal targets for identity thieves.

“The younger the victim, the more time these thieves have to exploit the child’s identity,” said Sandy Chalmers, Administrator of the Wisconsin Division of Trade and Consumer Protection. “Identity theft against a child can go undetected for years and do a lot of damage to their good name.”

The Office of Privacy Protection, part of the Bureau of Consumer Protection, reminds parents to tell their children not to give out personal information unless it's vitally important and exchanged with a reliable source.

The Federal Trade Commission enacted a rule in 2000 called COPPA, or Children’s Online Privacy Protection Act. It requires websites directed at children, or that knowingly collect information from kids under 13, to post a notice of their information collection practices that includes:

·         Types of personal information they collect from kids – for example, name, home address, e-mail address, or hobbies.

·         How the site will use the information – for example, to market to the child who supplied the information, to notify contest winners or to make the information available through a child’s participation in a chat room.

·         Whether personal information is forwarded to advertisers or other third parties.

·         A contact at the site

“In many cases, a site must obtain parental consent before collecting, using, or disclosing personal information about a child,” added Chalmers. “Parents should review the privacy policy on any website aimed at children.”

In addition to talking to children about potential online dangers, the Bureau of Consumer Protection’s Office of Privacy Protection also encourages parents to occasionally check their child’s credit report. If a report exists, that is a red flag, and often the first sign of identity theft.

“The credit reporting agencies do not knowingly maintain credit files on children,” Chalmers explained. “A check of your child’s credit should turn up nothing until the age of 18 unless they are the victim of identity theft or a secondary user on a credit card authorized by a parent.” 

Although cigarette makers have denied using race or ethnicity to target customers, researchers at the Stanford School of Medicine say their data suggests otherwise.

According to their study, tobacco companies increased the advertising and lowered the sale price of menthol cigarettes in stores near California high schools with larger populations of African-American students. The lead researcher for the study said the data shows a "predatory" marketing pattern geared to luring young African Americans into becoming smokers.

"The tobacco companies went out of their way to argue to the Food & Drug Administration (FDA) that they don't use racial targeting," said Lisa Henriksen, PhD, senior research scientist at the Stanford Prevention Research Center. "This evidence is not consistent with those claims."

The study is published online in Nicotine & Tobacco Research and comes at a time when the FDA is gathering information on whether to ban menthol as a flavoring agent in cigarettes.

Menthol not included in flavorings ban

A federal law passed in 2008 banned 13 candy flavorings in cigarettes but allowed for the continued use of menthol. Menthol makes the smoke from tobacco smoother and less harsh; even non- menthol cigarettes often have low levels of the substance.

A draft report by the Tobacco Products Scientific Advisory Committee, which the FDA asked to investigate the harms from the use and marketing of menthol cigarettes, found that the use of menthol cigarettes is highest among minorities, teenagers and low-income populations. When these products are advertised, the copy often emphasizes the "freshness" of menthol cigarettes, and the report said many smokers mistakenly believe that the addition of menthol makes cigarettes less of a health risk.

The committee's report says that "removal of menthol cigarettes from the marketplace would benefit public health in the United States." The FDA may, or may not, follow that recommendation.

The committee is scheduled to meet July 21 in Rockville, Md., to discuss final changes to the document. An FDA spokesman said the edited version of the report will be posted soon on the agency's website, but there is no timeline yet as to when the FDA will make a decision on menthol.

"The committee was charged with considering a broad definition of harm to smokers and other populations, particularly youth," said Henriksen. "We think our study, which shows the predatory marketing in school neighborhoods with higher concentrations of youth and African-American students, fits a broad definition of harm."

Teens prefer menthol

In the Stanford study, Henriksen and her colleagues note that the preference for menthol cigarettes among teenage smokers increased from 43.4 percent in 2004 to 48.3 percent in 2008. Menthol cigarettes were also most popular among African-American smokers ages 12-17 (71.9 percent), compared to Hispanics (47 percent) and non-Hispanic whites (41 percent) of the same ages.

To find out how the leading brands of menthol and non-menthol cigarettes were promoted near California high schools, the researchers randomly selected convenience stores, small markets and other tobacco retailers within easy walking distance of 91 schools. The researchers then rated how the cigarettes were marketed in those stores. The data were collected in 2006.

The researchers found that for every 10-percentage-point increase in the proportion of African-American students at a school, the proportion of advertisements for menthol cigarettes increased by 5.9 percentage points. Additionally, the odds of an advertised discount for Newport, the leading brand of menthol cigarettes, were 1.5 times greater.

Prices of menthol and non-menthol cigarettes

When it came to price, the average per-pack price for Newport was $4.37 at the time of the study, with Marlboro - the leading non-menthol brand - averaging $3.99. It also found that for every 10-percentage-point increase in the proportion of African-American students at the nearby school, the per-pack price for Newport was 12 cents lower. Advertised discounts and prices for Marlboro, however, were unrelated to school or neighborhood demographics.

"That's important because lower prices tend to lead to increased cigarette use," Henriksen said.

In addition, the study found that for each 10-percentage-point increase in the proportion of neighborhood residents ages 10-17, the proportion of menthol advertisements increased by 11.6 percentage points, and the odds of an advertised discount for Newport was 5.3 times greater.

Although the study was limited to California high schools, the authors believe the findings would be similar throughout the country.

Wayne, of Front Royal, Va., says he had been a State Farm Insurance policyholder for seven years, when he purchased a new car and was notified that his policy was being canceled.

“The reasoning on the non-renewal letter I received stated because there were two accidents in the last few years,” Wayne told ConsumerAffairs.com. “I called and spoke to the corporate underwriting department and they advised me that State Farm suffered significant loss. If they are basing it on the two accidents they had listed, the total cost was less than $5,000.”

Wayne said he spoke with an attorney and a state official and was told State Farm is within its rights to cancel his policy.

“I know the driving record of two other individuals with State Farm and I know their records are far worse than mine so why was I dropped,” Wayne asked. “Perhaps it is because I now have a new car? Because I am a single male?”

It could be all those things. Insurance companies have to play the odds in order to “win,” which is what they have to do to stay in business. In recent years, with the need to increase profits and support stock prices, insurance companies have been even more conservative to keep the odds in their favor.

Paying to be rejected

If a telemarketer calls you and asks if you would like to apply for a pre-paid credit card over the phone, politely decline.

“As many consumers have reported, Premier Savings contacted me in August of 2010 with the promise of helping to build my credit and lower credit card bills,” said Shirley, of Bear, Del. “They took three minutes to take payment from my account while advising me of upcoming information that would help the process along. After receiving the information which included filling out all of my credit card information pertaining to other accounts, Premier savings never returned any of my calls.”

Shirley said she she finally did reach someone at Premier, they tried to sign her up for another credit card, for use to consolidate bills.

“Within a few days I received a letter stating that I had been rejected,” she said. “Upon getting this information I called Premier Savings again and was told that I would receive a refund minus the percentage that they would take out for their services. I was told that a refund would be mailed out within thirty days.”

By April 2011, Shirley said she still hadn't gotten her refund. Despite repeated calls, as of this week she she hadn't gotten it. Even if she does eventually get her refund, she will still have paid Premier to consider her for a credit card, even though they turned her down. Not a very good deal.

Hot coffee

Sheila, of Fallbrook, Calif., like a hot cup of coffee in the morning, but not this hot. She says her Cuisinart DCC 1200 coffee maker burned up yesterday.

“Right after making coffee with it, I noted a burning smell in the house,” Sheila told ConsumerAffairs.com. “Went to the coffee maker where I found all the lights off on the unit but the warming plate was burning up and the coffee in the carafe was boiling. I immediately unplugged the unit, took it outside. This product is a fire hazard!”

Sheila is not alone in her complaint. Several consumers have reported the problem with their Cuisinart coffee makers. Many of these complaints have also been filed with the Consumer Product Safety Commission (CPSC), which we can only assume is investigating.

Counting pesos

Maybe this is nothing new, but we seem to be getting more complaints about rental car companies, from consumers who feel they are being nickeled and dimed. Mark, of Jefferson City, Mo., said he rented a car from Thrifty in Cozumel, Mexico for 10 days and held out for a price of $339.88, down from the initial price of $381.79.

“When I checked out on June 2, 2011 the amount on the receipt was in pesos and a notation in dollars for $339.88,” Mark said. “I told the manager that if the charge was more than $339.88 that I would dispute the bill and he told me that due to the rate of exchange the amount would not be for $339.88, the amount I agreed to. Once home I checked my credit card account and found the charge was for the original amount of $381.79.”

Interestingly, Mark said the amount in pesos worked out exactly to $381.79, but the notation in dollars was for the lower amount they had agreed to.

“My feeling is that the manager never intended to rent me the car for $339.88, knowing I wouldn't check the exchange rate when I dropped off the car,” Mark said. “Thrifty Car Rental denied my claim stating they don't intervene when dealing with currency exchanges.”

Before renting a car in Mexico, Mark suggests you brush up on the peso to dollar exchange rate.

Ford slipped and Toyota recovered somewhat in the latest J.D. Power and Associates survey that tracks buyer satisfaction with new cars and trucks.

Ford fell to No. 23 this year, far down from last year, when it was No. 5, making it the highest-ranking mass-market brand in the Initial Quality Study, which measures problems reported by new car owners during the first 90 days of ownership.

Problems reported by Ford owners in the first 90 days rose to 116 per 100 vehicles, up from 93 last ywear.

Power said one element that affected Ford and other manufacturers is consumer discomfort with complex new infotainment features and fuel-saving power train refinements that sometimes make automatic transmissions seem to hesitate while shifting.

Toyota rebounded to No. 7, with 101 problems per 100 vehicles, a big gain from the previous survey when it dropped below the industry average for the first time.

Lexus topped all brands with 73 problems per 100 vehicles. It was followed by Honda, Acura, Mercedes-Benz, Mazda and Porsche, which placed first in 2010.

Dodge finished last, with 137 problems per 100 vehicles. Suzuki, Mitsubishi, Volkswagen and Mini also placed at the bottom of the survey.

The Federal Communications Commission (FCC) is proposing fines totaling nearly $12 million against four companies that allegedly charged thousands of customers for long-distance services without authorization — a practice known as “cramming.”

The FCC says that Main Street Telephone, VoiceNet Telephone LLC, Cheap2Dial Telephone LLC and Norristown Telephone added “dial-around” long-distance services to customers' bills even though the customers may not have requested or used the servcie.

Dial-around services bypass a customer's regular long-distance carrier and usually require the customer to dial a “10-10” access code before placing a long-distance call.

The FCC's Enforcement Bureau said its investigation found that only one-tenth of one percent of the affected customers actually used the services for which they were charged over a period of months and sometimes years.

That's what happened to Mariann of Los Angeles.

“I was enrolled and billed for telephone long distance service for over a year without my knowledge,” she told ConsumerAffairs.com in July 2010. “The company refuses to issue a refund for services never utilized or authorized.”

The charges are often handled by an intermediary, like ILD Teleservices.

Bill of Grass Valley CA, said he noticed a $17.06 unauthorized charge on his At&T bill. He called VoiceNet telephone and said, “They claimed a Nicole submitted a web form authorizing the service. … Yep a charge for NOTHING. Never heard of her.”

Bill said he asked AT&T to flag his account to prohibit third-party billing but was told that was not an option.

It may be in the future. The FCC says it will be more aggressively enforcing rules banning cramming, a practice that has produced huge volumes of consumer complaints for decades but little action.

A dispute over "overrun" - the air pumped into ice cream - has led a franchisee of a low-calorie ice cream chain to accuse Rupert Murdoch's News Corp. and Fox 5 News of defaming it in a "disparaging" broadcast "assault."  

The suit was brought by Matthew Prince, a restaurateur who invested in three D'Lites Emporium franchises on New York's Long Island, only to become enraged when Fox 5 News “inducted” the sweet shops into its “Hall of Shame,” reporting that independent tests had found higher levels of fattening substances than the stores claimed.

In his lawsuit, Prince says the D'Lites ice cream is lower in sugar, fat, carbohydrates and cholesterol, and is a healthier alternative to traditional ice cream.

“Since it’s [sic] founding in 1982, in Plantation, Florida, DEI has provided diet friendly ice cream that is just as creamy and tasty as traditional ice cream products,” the typo-infested suit states. “DEI products are designed to be attractive sweets for diet conscience [sic] shoppers.”

Prince said he had invested more than $1 million in the healthy ice cream business only to see it melt away as Fox 5's Arnold Diaz featured D'Lites on his eight-minute “Shame, Shame, Shame” segment, telling viewers that D'Lites was “selling a lie.”

Liquidity an issue

Prince's suit argues that ice cream is “made up of three components – the ice cream mix (formula), air, and refrigeration.”

It makes the indisputable assertion that, when it melts, ice cream becomes a liquid. When that happens, air escapes and the melted ice cream takes up less space than it did when it was frozen.

Prince argues that in its testing of his stores' ice cream, Fox 5 used a quantity of melted ice cream that did not correspond to the appropriate volume of frozen ice cream. 

“The only fair way to accurately measure the nutritional value of D’Lites’ ice cream is to measure by the volume of the ice cream product in its frozen state as served to the customer,” the suit argues.

Prince also claims that ice cream, because it contains milk, is “in a constant state of change.”

“In recognition of the extraordinary difficulty in serving a product who’s [sic] properties are in a constant state of flux, the FDA allows nutritional labels for ice cream to be off by as much as 20%,” the suit states.

News Corporation owns The Wall Street Journal, the New York Post and numerous other media outlets.

For the first time, Congress may consider a measure to remove federal penalties for possession and use of marijuana, a news agency reported late Wednesday.

In a dispatch from Washington, AFP, the French news agency, said Rep. Ron Paul (R-TX) and Rep. Barney Frank (D-MA), lawmakers from opposite ends of the political spectrum, plan to introduce the legalization bill sometime today. AFP based its report on comments from unnamed officials in organizations promoting the legalization of the drug.

According to the report, the sweeping bi-partisan bill would limit the federal government's role to stopping smuggling. People would be free to grow and use marijuana in states that choose to legalize it.

Controlled substance

It would effectively end the federal sanction against cannabis, which is outlawed under the Controlled Substances Act. Prior to the federal prohibition, a number of states outlawed the drug in the early 20th century.

Ironically, it has been states in recent years that have been inching toward legalization. Fifteen states now have medical marijuana laws, making it legal for health care professionals to prescribe marijuana for treatment.

However, recreational use of marijuana, which gained widespread popularity among Baby Boomers during the 1960s and 70s, remains outlawed. The AFP report mentioned no specific details of the expected bill.

State by state efforts

Meanwhile, the National Organization for the Reform of Marijuana Laws (NORML) reports A coalition that includes former U.S. Attorney John McKay, Seattle City Attorney Pete Holmes and travel guide Rick Steves is launching an initiative that would legalize marijuana in Washington state.

The group, led by the American Civil Liberties Union of Washington, reportedly decided to push the initiative after Gov. Chris Gregoire vetoed most of a medical-marijuana bill that had passed the state Legislature.

The initiative would regulate the recreational use of marijuana in a way similar to how the state regulates alcohol.

It would legalize marijuana for people older than 21, authorize the state Liquor Control Board to regulate and tax marijuana for sale in “stand-alone stores” and extend drunken-driving laws to marijuana, with blood tests to determine how much of the substance’s active ingredient is present in a driver’s blood.

AAA has for decades been the first choice of many motorists when they have a flat tire or dead battery.

Now the nationwide motorist service organization is getting ready to handle another kind of dead battery – the ones found in electric vehicles (EV), like Nissan's Leaf.

AAA says it will be testing fast-charging EV trucks in September. It plans to have at least six of the trucks in states including California, Oregon, Washington, Florida, Tennessee and Georgia.

"We know electric vehicles are coming and we've got to be ready for them," spokeswoman Christie Hyde said.

She declined to provide details on the cost or makers of the units and said AAA will test chargers from multiple suppliers.

More to come

There aren't many EVs on the road yet but Nissan and Tesla Motors are already producing sedans and roadsters and more automakers are set to follow, so the demand is certain to grow.

It's not a matter of just plugging your car in when the battery runs down. Power companies and others are beginning to offer “charging stations” for home and business use. They use a special transformer to deliver the oomph that's needed to recharge batteries quickly.

The Leaf gets about 70 miles on a charge in combined city and highway driving. The Tesla Roadster, a $109,000 high-performance sports model, gets about 200.

Spirit Airlines doesn't yet charge a fee for passengers who want to sit down during their flight but that may be next. The low-fare carrier has just announced it will begin charging $5 for passengers who get their boarding passes at the airport.

Fliers can avoid the fee by checking in and printing their board passes online.

The new fee applies to all flights booked for travel on or after Nov. 1. However, Spirit says it will lower its fares on all nonstop flights by $5 on Nov. 1, thus providing a $5 bonus to passengers who print their own boarding passes.

Spirit said it surveyed its customers and found that 94% said they would favor lower fares in exchange for online check-in.

The low-cost carrier – which prefers to call itself an “ultra-low-cost carrier” – is best known for its $9 one-way promotional fares, but it's almost as well known for its extra fees.

Carry-on charge

The carrier recently became the only major airline to charge extra for carry-on bags. Most airlines charge for checked bags, as does Spirit, but Spirit goes them one better by charging $20 to $35 for a carry-on that won't fit under the seat.

The only free carry-on is a small bag or purse that will fit under the seat.

The airline justifies this by saying it keeps its base fares low by letting customers decide how much extra service they want to pay for.

“Imagine if you went to a restaurant and all the meals came with dessert,” said Ben Baldanza, Spirit's CEO. “That's great if you like dessert but, if you don't, you would prefer the option to pay less for the meal and not take the dessert.”

Years ago the intrauterine device, or IUD, fell from favor as a means of birth control because of its reported side effects. But now the IUD may be making a comeback of sorts, winning an endorsement from the American College of Obstetricians and Gynecologists (ACOG).

In an official position, the ACOG now says the IUD is a suitable birth control device for all healthy adult and adolescent women.

Many women stopped using the IUD after many health experts blamed it for raising the risk of pelvic inflammatory disease, which can result in serious complications. The device was blamed for infertility in some women.

Benefits

But new recommendations published in the ACOG Practice Bulletin say the risks are very small. Other benefits, doctors say, outweigh those risks.

According to Dr. Adam Jacobs of the Mt. Sinai Medical Center in New York, the biggest benefit of an IUD is that it is safe and cost effective. He says the new view of the IUD is the result of a rethinking of ways to prevent unwanted pregnancies.

Currently, only an estimated five to six percent of women use an IUD, but the ACOG says in the future, it expects gynecologists will begin recommending it to more of their patients.

Up front cost

The upfront cost of an IUD can be expensive, but once inserted by a health care provider, the small T-shaped device will last a decade or more. According to Planned Parenthood, it works by affecting the way sperm move, preventing them from joining with an egg. If sperm cannot join with an egg, pregnancy cannot happen.

“Certain conditions increase the risk of side effects,” Planned Parenthood said on its website. “Talk with your health care provider about your health and whether an IUD is likely to be safe for you. There are many other methods of birth control that may be safe for you if you cannot use an IUD.”

A federal class action claims Internet payday lenders eDebitPay and Platinum Online Group take information from loan applicants "and use it to forge checks on behalf of the applicants ... without the applicants' knowledge or consent."

eDebitPay was recently found in contempt of court and fined $3.7 million after a federal judge found that the company had violated the terms of a 2008 court order that prohibited it from  taking money out of consumers' bank accounts without authorization.

The suit alleges that the defendants routinely forge checks payable on the personal checking accounts of consumers who apply for online payday loans, without the knowledge or consent of the consumers.

Through the unauthorized use of loan applicants' personal information, the defendants steal money “from those who need it most,” the suit charges.

Similar complaints

The allegations in the suit are similar to complaints received by ConsumerAffairs.com from consumers nationwide.

"They withdrew $99 out of my checking account without my authorization. I have overdrawn fees out of this world," said Lashawn of Petersburg, Va., in a complaint about eDebitPay. "I have several children -- we are on a fixed income that was all the money we had and I don't have money to just be giving to the bank."

In the suit, filed in U.S. District Court in San Francisco, Deborah Deffenbaugh of San Francisco and Allan Wyatt of Malibu, Calif., recount how their checking accounts were raided after they applied online for payday loans on different websites.

Deffenbaugh said that in May 2011, when she applied for an online payday loan the website asked if she wanted to enroll in various unrelated offers and she declined. She then proceeded to enter the information required to get the loan, including her bank routing number and checking account number.

She later discovered a remotely-created $99.49 check had been paid from her account to “Platinum Online Group – SavingPays99,” a company and service she had never heard of and had never authorized to access to her checking account.

Wyatt says in the suit that he also applied for an online payday loan in May 2011 from the website www.paydayloans.com. He also declined all unrelated offers but entered his bank and checking account numbers as requested and, like Deffenbaugh, soon found that a check had been created and used to withdraw $99.49 from his account.

“These checks are fakes,” the suit charges. “They are created without the applicants' consent or knowledge. These checks supposedly pay for Defendants' coupon service, though no applicant ever agreed to buy such services.”  The suit seeks actual and punitive damages.

Long history

It's hardly the first time eDebitPay has faced charges of taking money out of consumers' bank accounts without authorization.  In January 2008, the company setlled Federal Trade Commission charges that it made unauthorized debits from consumers bank accounts and engaged in deceptive marketing practices.

The company was ordered to pay $2,258,000 for consumer redress and in May 2011 was found in contempt of court and ordered to pay $3.7 million for violating hte earlier order.

Under the FTC settlement, the defendants were prohibited from debiting a consumers account or causing billing information to be submitted for payment without first obtaining the consumers express informed consent.

The order also prohibited the defendants from misrepresenting any fact material to a consumers decision to apply for or purchase any product or service.

Despite its history, eDebitPay remains an active player in the online world and in 2008 was named an "Inc 500" company in the financial services sector by Inc Magazine.

On its website, the company today trumpets its forthcoming appearance at "Affiliate Summit East" in New York City August 21-23. 

Something in coffee seems to protect against Alzheimer's disease. Scientists just don't know what it is.

If they did, it might lead to a breakthrough in treatment and prevention of the dreaded disease of aging.

A new Alzheimer's mouse study by researchers at the University of South Florida found that something in coffee interacts with the caffeine to boost blood levels of a critical growth factor that seems to fight off the Alzheimer's disease process.

The findings appear in the early online version of an article to be published June 28 in the Journal of Alzheimer's Disease.

Coffee seems to be special

Using mice bred to develop symptoms mimicking Alzheimer's disease, the USF team presents the first evidence that caffeinated coffee offers protection against the memory-robbing disease that is not possible with other caffeine-containing drinks or decaffeinated coffee.

Previous studies in humans reported that daily coffee/caffeine intake during mid-life and in older age decreases the risk of Alzheimer's disease. The USF researchers' earlier studies in Alzheimer's mice indicated that caffeine was likely the ingredient in coffee that provides this protection because it decreases brain production of the abnormal protein beta-amyloid, which is thought to cause the disease.

The new study doesn't challenge that. Instead, it shows that caffeinated coffee induces an increase in blood levels of a growth factor called GCSF (granulocyte colony stimulating factor). People with Alzheimer's have less GCSF. The substance is has also been demonstrated to improve memory in Alzheimer's mice.

Looking for the reason

A just-completed clinical trial at the USF Health Byrd Alzheimer's Institute is investigating GCSF treatment to prevent full-blown Alzheimer's in patients with mild cognitive impairment, a condition preceding the disease. The results of that trial are currently being evaluated and should be known soon.

"Caffeinated coffee provides a natural increase in blood GCSF levels," said USF neuroscientist Dr. Chuanhai Cao, lead author of the study. "The exact way that this occurs is not understood. There is a synergistic interaction between caffeine and some mystery component of coffee that provides this beneficial increase in blood GCSF levels."

The researchers would like to identify this mystery component so that coffee and other beverages could be enriched with it to provide long-term protection against Alzheimer's.

Parking your car in California may be riskier than in most other states. The National Insurance Crime Bureau (NICB) reports the Golden State claims eight of the top ten cities with the highest per capita vehicle theft rates.

The survey found that Fresno, Calif., led the nation in vehicle thefts per capita in 2010., with 7,559 stolen vehicles. That's up from 5,875 in 2009.

Other California cities making the top ten list were Modesto at number two, Bakersfield in third, Vallejo at fifth, Sacramento at number six, Stockton at number seven, Visalia at number eight, and San Francisco at number nine.

The only other two cities making the dubious top ten list were in Washington State – Spokane in fourth place and Yakima at number ten. In all, the West Coast accounted for more than 64,000 vehicle thefts last year.

State College, Pa., had the fewest vehicle thefts last year, according to the report.

“While improved anti-theft technology and law enforcement efforts have had a significant impact on thefts, professional criminal rings and gangs are active in parts of the country and stopping them is the ongoing challenge,” said NICB CEO and President Joe Wehrle.

NICB said the best deterrent to vehicle theft is common sense. You should always:

• Remove your keys from the ignition
• Lock your doors /close your windows
• Park in a well-lit area

The former CEO of Taylor, Bean & Whitaker (TBW), was sentenced today to 40 months in prison for his role in a more than $2.9 billion fraud scheme that contributed to the failure of TBW, at one time one of the largest privately held mortgage lending companies in the United States.   

Paul Allen was sentenced by U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. 

Allen, 55, of Oakton, Va., pleaded guilty in April 2011 to one count of making false statements and one count of conspiring to commit bank and wire fraud.   Co-conspirator Sean Ragland, a former senior financial analyst at TBW who reported to Allen, was also sentenced today by Judge Brinkema to three months in prison.   

“As TBW’s chief executive officer, Mr. Allen served as an accomplice to Lee Farkas and his massive fraud scheme,” said Assistant Attorney General Lanny A. Breuer.  “He concealed TBW’s staggering deficits through false financial reports, which ultimately caused investors to lose more than $1.5 billion.  Today’s sentence sends a strong message that corporate fraud by senior executives will not be tolerated.  At the same time, it demonstrates that substantial assistance in the government’s investigation and prosecution of corporate fraud will be taken into account at sentencing.” 

Well-respected

“Paul Allen was a well-respected mortgage executive hired by Lee Farkas to be TBW’s chief executive officer.  Working from Oakton, Va., Mr. Allen led Ocala Funding, a TBW multi-billion dollar lending facility that was used to defraud investors of more than $1 billion,” said U.S. Attorney MacBride.  “Mr. Allen’s sentence reflects his ultimate cooperation with this investigation, but also sends the message that unless executives expose and stop fraud when they first learn of it, they will be punished.”

Ragland, 37, of San Antonio, pleaded guilty in March 2011 to one count of conspiracy to commit bank and wire fraud.   Allen and Ragland both admitted to conspiring with Lee Bentley Farkas, the former chairman of TBW, and others, to defraud financial institutions that had invested in Ocala Funding LLC, a facility wholly-owned by TBW.       

Farkas was convicted on April 19, 2011, on 14 counts of fraud for his role in masterminding the scheme, which was one of the largest bank frauds in the country.   Farkas is scheduled to be sentenced on June 27, 2011.   The Securities and Exchange Commission (SEC) has a civil action pending against Farkas in the Eastern District of Virginia.

Co-conspirators

Co-conspirators Catherine Kissick, a former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division (MWLD); Teresa Kelly, a former operations supervisor in Colonial Bank’s MWLD; Raymond Bowman, the former president of TBW; and Desiree Brown, the former treasurer of TBW, have also pleaded guilty for their participation in the scheme.   

Earlier this month, Kissick was sentenced to eight years in prison, Brown was sentenced to six years in prison, Bowman was sentenced 30 months in prison and Kelly was sentenced to 3 months in prison.

According to court documents and information presented at trial, Allen and Ragland participated in the scheme from early 2005 through August 2009 by distributing materially false documents to investors in Ocala Funding that misrepresented the financial condition of the facility.   The fraud scheme ultimately caused investors in Ocala Funding to lose more than $1.5 billion and Colonial Bank to lose $900 million.

Overdrafts 

According to court documents and information presented at trial, TBW began running overdrafts in its master bank account at Colonial Bank because of TBW’s inability to meet its operating expenses, which included payroll, servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities and other obligations.   

In or about 2002, Farkas and other co-conspirators engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one TBW account with excess funds into another, and later through the fictitious “sales” of mortgage loans to Colonial Bank, a fraud scheme the conspirators dubbed “Plan B.”   

The conspirators accomplished Plan B by selling Colonial Bank mortgage loans that did not exist or that TBW had already committed or sold to other third-party investors.   As Plan B evolved, co-conspirators at TBW also caused TBW to engage in sham sales of groups of mortgage loans, known as “pools,” that other entities already owned to Colonial Bank.   

As a result, false information was entered on Colonial Bank’s books and records, giving the appearance that the bank owned interests in legitimate pools of mortgage loans, when in fact the pools had no value and could not be securitized or sold.   Neither Allen nor Ragland participated in the effort to cover up TBW’s overdrafts or Plan B.