Current Events in July 2011

A TTY system is a telephone specially outfitted for users who are hearing-impaired. In a disturbing new trend, it is being increasingly used to commit fraud against small businesses.

“TTY” stands for “teletypewriter,” and the term is sometimes used to describe teletypes in general. TTY systems allow people who are deaf and hard of hearing to make calls to each other, and with the assistance of relay systems, users can also communicate with people who do not have TTY systems.

A North Carolina restaurant nearly lost hundreds of dollars to a scammer using the system.

“Don’t let scammers take advantage of you and the TTY system,” said North Carolina Attorney General Roy Cooper. “Falling for one of these calls will cost your business money instead of helping you earn a profit.”

Active in North Carolina

According to Cooper, Big Ed’s restaurant in downtown Raleigh received a call last week made through a TTY operator with a message from a customer who wanted to order 200 sausages at a cost of $700. The customer provided a credit card number and an email address to receive the invoice.

When the caller asked the restaurant to also send $852 by Western Union and charge it to the credit card, Big Ed’s got suspicious and reported the call to Cooper's office.

A Wilmington bakery, Hot Pink Cake Stand, reported getting a similar call last week via a TTY operator. The caller claimed to be a regular customer who needed money wired right away because his car had broken down.

The TTY scam is a new wrinkle on an old scheme. The objective remains the same – the persuade the victim to wire money to the scammer. Authorities believe the use of the TTY system is designed to elicit sympathy from the victim and make them lower their guard.

Red flags

Here’s how to spot and avoid similar scams:

• If you get a TTY call from someone you don’t know, always ask for the person’s full name, address and telephone number.
• If the caller wants to place an order from your business by credit card, ask for the name of the bank that issued the card, their toll-free number as listed on the card, and the three or four digit verification code listed on the back of the card. Verify the information with the bank before placing the order. This will help weed out callers using stolen credit card numbers.
• Never agree to charge a credit card or cash a check and then wire money back to someone.

Judith, of Kissimmee, Fla., is one of thousands of consumers who purchased an extended auto warranty from US Fidelis, which has declared bankruptcy and has ceased operations. It has left Judith, and others like her, high and dry.

“I purchased an extended warranty with US Fidelis and now that company has been shut down by the Attorney General in Missouri,” Judith told ConsumerAffairs.com. “I paid over $2400.00 and the last payment was made a couple of months ago. The lady took my payment over the phone even though I just found out they have been shut down and the two owners have been indicted. What can I do? I lost my job and struggled to get these payments made which I paid off and now I have no warranty. How can I get my money back?”

A year ago, Missouri Attorney General Chris Koster asked the federal bankruptcy court to order the appointment of an independent trustee over the US Fidelis bankruptcy proceedings, with the goal of protecting assets for the company’s customers.

Koster also urged the need for a top-to-bottom, scrupulous financial examination of the company, citing concerns regarding explicit business practices intended to defraud consumers. At the time, Koster made clear that the filing of the US Fidelis bankruptcy does not end the state’s interest in protecting policyholders of the company. Judith should contact Koster's office to learn the status of those efforts.

Illegal pitch

Beware of companies that call you on the phone and promise they can lower the interest on your credit cards. In nearly every case, it's an empty promise.

“I was told they could lower my interest rates on all my cards to as low as 1.24 – 6.9 percent fixed rate for the life of the cards,” said Lucy of Weirsdale, Fla. “They couldn't guarantee an exact percentage but it would fall in that range.”

Lucy said the telemarketer told her a new law that had just passed that allowed companies like Consumer Credit Group to help Americans get out of debt faster. She was also told it was a one-time deal and they would go to the next consumer if she didn't take the deal the same day.

That, of course, is untrue. There is no such law and the pressure tactic of saying she had to act immediately should have told her it was not on the up and up, but she said she was caught off guard and agreed to pay an advance fee of $795.

“Boy do I feel like a big dummy,” Lucy said. “I'm a single mother struggling to make ends meet but am veru proud of paying all my creditors on a timely manner, and then to get taken for a ride like this.”

While the “law” Lucy said the telemarketer mentioned does not exist, there is a law that bans telemarketers from collecting an advance fee to help consumers with credit and debt problems before actually providing the service. Lucy might have a chance of getting her money back if she complains to Florida Attorney General Pam Bondi's office.

Not covered

Computer problems are aggravating, especially if you think they are covered by a warranty and they aren't.

About two weeks ago, when shutting down my computer, it said there were updates to install. It took forever for them to install and when I turned it on in the morning, it stayed on the blue Microsoft page” Cleo, of Clearlake, Calif., told ConsumerAffairs.com. “Since under warranty I took it to the Best Buy in Sacramento, where they said the system needed to be restored. “I said to go ahead and restore it as it was still under warranty. When I went to pick it up I was told there was a $200 charge. I asked why, since it was still under warranty? He said that only is for hard drives etc. “I was not informed of a charge or told the warranty does not cover restoring.”

Cleo may be annoyed, but it is really up to the consumer to know what the warranty does, and does not cover. A manufacturers warranty typically covers parts and labor. It would have been nice, however, if Best Buy had informed Cleo ahead of time what the charge would be for restoring her system.

Those of a certain age may become nostalgic when watching Don Draper toss back martinis at lunch. But those yearning for a return to the “Mad Men” era will have to get a lunch break before worrying about what they'll be quaffing at lunch.

Most of us, it turns out, are still chained to our desks at lunch, with less than 20% using their full lunch break and 9% not taking any time for lunch at all, according to a new survey from Birra Moretti, an Italian brewer.

We can dream though.

The survey found that roughly 20% of us are “inclined” to order an alcoholic beverage at lunch. Of course, being included to order a cold one or toss back a double vodka aren't quite the same, now are they?

The survey may have measured how many of us actually act on the impulse but if it did, Birra Moretti isn't telling. Ask any bartender or waiter, though, and they'll tell you lunchtime imbibing is about as common in the U.S. today as commuting by unicycle.

La bella vita

In Italy, on the other hand, both lunching and drinking are alive and well, grazie. The survey found that 100% -- yes, that's 100% -- of Italians take a lunch break, with nearly 80% leaving their workplace for their midday repast.

And how inclined are the Italians to have a drink or two with lunch? Nearly half (48%).

Back in the day …

All of this sounds pretty good to those of us who lived through the Draper era in Manhattan. No doubt drinking at lunch is bad for the drinker but it works wonders for the morale of mid-level wage slaves who benefit from their bosses' imbibing.

Your earnest reporter once toiled in a midtown Manhattan media mill and dreaded the mornings, when top-level executives arrived scowling, hung over from the night before and fuming about the delays on the Metro North and the rotten stench bubbling up from the mean streets as they plodded the last few blocks to work. Many unpleasant meetings ensued as their displeasure flowed downhill.

But come noon, the upper crust departed with newfound alacrity for the reserved tables that awaited them nearby, double martinis already in place.

Slumbering silently

Afternoons were golden, the top executives napping quietly in their dens until late afternoon, when it was time to once again head for the bar car on the 5:30 to Stamford.

Perhaps it is this more normal rhythm of life that Birra Moretti hopes to revive with a series of lunch events it's planning for New York City this summer. “Pop-up” cafes will serve four-course meals with, of course, Italian beer. Mayor Bloomberg, who has tried to dissuade New Yorkers from following their baser instincts might not approve, but we say Salute!

As regulators and legislators fume and fret about talking and texting while driving, an even more insidious threat is emerging – the use of mobile apps by drivers.

How prevalent is the problem? A University of Alabama at Birmingham study finds that more than a third (35%) of college students use mobile phone applications while driving -- even after facing the dangers firsthand.

"The participants seemed to understand that using mobile apps while driving is dangerous, and some have even experienced motor vehicle crashes while using mobile apps, but they continue to do it," said UAB student Lauren McCartney, who conducted the survey.

"The technology is evolving so rapidly that science hasn't caught up to looking at the effects that mobile app usage can have behind the wheel of a car," said McCartney. "But something needs to be done because in psychological terms, Internet use involves substantial cognitive and visual distraction that exceeds talking or texting, making it much more dangerous."

Dangers well-known

The dangers of driving while texting or talking are well known and both state and federal lawmakers have been fast to inveigh against it, but there has so far been little recognition of the apparent threat presented by ever-smarter smartphones.

Thirty-three states ban text messaging while driving. However, no state currently bans the specific use of mobile Internet with the penalty of a primary or secondary offense.

No one questions that mobile apps are habit-forming, as McCartney's survey confirmed. Among survey respondents, one in 10 "often," "almost always" or "always" use mobile apps while driving; more than one-third use them "sometimes."

The survey included 93 UAB students who own a smartphone and use Internet-based applications on it at least four or more times per week; it is not a random sample. Even so, David Schwebel, Ph.D., director of the UAB Youth Safety Lab, is concerned.

Complex task

"Driving a car is an incredibly complex task for humans to complete safely. There are enormous cognitive, perceptual and motor tasks an automobile driver must complete, frequently very quickly and with split-second precision," Schwebel said.

"A driver using his or her smartphone is clearly distracted, both visually and cognitively, and really should not be driving. The fact that 10 percent of college students with smartphones 'often' are using them while driving is astounding -- the fact that 35 percent 'sometimes' do is equally concerning," he said.

The data in McCartney's findings were part of a larger research study at the UAB Youth Safety Lab that examined the effects of mobile application use on pedestrian safety.

McCartney, a student in the Department of Psychology, will present her findings in August to the 119th American Psychological Association (APA) convention in Washington, D.C. Her work was chosen because her survey of this at-risk population is unique.

A federal class action claims L'Oreal failed to warn that the two main ingredients in its "leave-in" hair-styling product, Garnier Fructis Sleek & Shine Anti-Frizz Serum, "are flammable upon contact with temperatures reached by most hair styling appliances." 

The suit was filed by Catherine Altamura of Los Angeles and Lisa Pearly of New York say they purchased the product believing it was safe but later learned otherwise.

Women who buy “leave-in” hair-styling products typically do so before using a heated hair-styling appliance, Altamura and Pearly said. They point to the Serum packaing which instructs the consumer to use “as much as needed for your hair type” … “do not rinse” … “style using brush and blowdryer.”

The women say that L'Oreal went even farther in its misleading advice by including a warning that implied the product was safe to use with styling appliances: “Avoid fire, flame, smoking and heat (except for styling appliances) during application and until hair is completely dry.”

The suit notes that Serum's main ingredients are cyclopentasiloxane and dimethiconol, both allegedly known to be flammable substances with a flashpoint of only 171 degrees, while the normal heating range for hair-styling appliances is between 200 and 450 degrees.

“Serum is therefore flammable and is unsafe to bring into contact with heated syling appliances because use of the product with a heated styling appliances puts the consumer at an unreasonable risk of injury from burns to the face, head and neck,” the suit charges.

The lawsuit charges that thousands of consumers bought the product believing it to be safe but would not have done so had L'Oreal warned them of its dangers. It seeks damages and injunctive relief.

The Coalition Against Breast Cancer (CABC) is "a sham charity that has diverted nearly all of the millions of dollars raised in the name of breast cancer to its officers, directors and fund raisers," the New York attorney general says.  

In a lawsuit, attorney general Eric Schneiderman suit says the coalition falsely claims to be affiliated with major hospitals including Memorial Sloan-Kettering and says it uses “other lies and deceptions” to bilk donors who think their contributions will go to fight breast cancer.

In reality, the suit says, the coalition “spends none of its funds on eradicating breast cancer” and has no affiliation with any major hospital or research organization.

$9 million 'squandered'

The suit says that in the last five years, during which 200,000 women died from breast cancer, the coalition has “squandered and misused virtually all of the $9.1 million it raised,” spending less than 4% of its donations on any kind of charitable program.

In 2008, the suit says CABC raised $1.4 million from the public but spent only $374 for mammograms.

In the past three years, despite raising more than $4 million, the coalition has funded only 11 mammograms, the suit alleges.

“In short, Defendants have misused and wasted millions of charitable dollars that could have been used to treat and potentially save an untold number of breast cancer victims,” the suit charges.

The suit says that CABC founders Andrew Smith and Garrett Morgan launched CABC in 1995 when they were both short of cash. Smith was emerging from bankruptcy and Morgan was being investigated for his role in a fraudulent meals-on-wheels charity, Schneiderman alleges.

The suit quotes a February 2010 email from Smith to Morgan as summarizing the duo's attitude: “We are in a bad place. You need the money and so do I.”

Just how attached are you to your smartphone? Not that much? Really?

Esther Swilley, who teaches marketing at Kansas State University, doesn't buy it for a minute. She says her research finds that when people lose their smartphones, they experience feelings of loss and hopelessness – almost as though a family pet had gone missing.

What's more, Swilley says these feelings are natural.

"The cellphone's no longer just a cellphone; it's become the way we communicate and a part of our life," Swilley said.

Mobile affinity

In one long-term study Swilley looked at the attitudes people have toward their mobile phone and how these attitudes are influenced by a user's relationship with their device. That attachment, called mobile affinity, depends on whether an owner views their cellphone or smartphone as a device that's more fun than it is functional or vice versa.

What Swilley discovered is that we have very personal relationship with our smartphones.

"People share other devices like computers, but cellphones are an interesting thing because we each have our own,” she said. “That individual ownership is a really big deal for people."

Swilley found that a majority of the participants in her study said they are attached to their phone because of its functionality as an entertainment device rather than as a tool that can communicate anytime and anywhere. So it comes to no surprise to Swilley that games are the most downloaded application for cellphones, according to app stores.

What is surprising to her is that study participants indicated their mobile phone allowed for little to no self-expression. This is odd because while mobile phone owners have said their phone is a part of themselves, it's not a way they express themselves, Swilley said.

That's entertainment

With the adoption of more smartphones and the introduction of apps, Swilley has noticed that for many owners, their phone's entertainment factor has become a source of pride and joy -- similar to that of a lovable new pet.

"It's sort of similar to when people had those Tamagotchi pets as children; cellphones are just the adult version of that," Swilley said. "People don't turn them off, are constantly playing with them, and want to show off the neat things the phone can do."

The concept for looking at consumer attitudes toward their phone stemmed from the time Swilley was employed at BellSouth Corporation, now a subsidiary of AT&T Inc.

"Every employee was given a BlackBerry,” she said. “Some of us weren't interested in having a pager, so the phones just sat there for some time. But when I left three years later, I almost cried because I had to give up my BlackBerry. It had become a part of me and I was attached to it. It was the way I communicated. Today when I look at people now with their cellphones I see the same attachment."

And then there's the story about President Obama, who refused to give up his Blackberry after he was sworn into office, even though it was considered a security vulnerability. The matter was resolved when the Secret Service provided heavy-duty encryption for the device. 

As seasons go, summer is probably the noisiest. And that can take a toll on your hearing.

“Fireworks, trains, concerts and road construction can be harmful to your hearing. And once hearing is damaged, it cannot be repaired,” said Jyoti Bhayani, certified audiologist at Gottlieb Memorial Hospital, part of Loyola University Health System.

One in 10 Americans has hearing loss that affects the ability to understand normal speech. Aging is the most common cause of this condition. However, exposure to excessive noise also can damage hearing in higher pitches.

“Hearing loss due to excessive noise is totally preventable, unlike old age or a medical condition,” said Bhayani.

Safe decibel levels

Sound is measured in decibel (db) levels. A soft whisper is only 30 db. Normal conversation, or fingers typing on a computer keyboard are about 60 db.

Prolonged exposure to sound levels above 85 db usually call for earplugs. That means wearing ear protection when mowing the lawn, using a chain saw or attending a rock concert.

“It is important to know the intensity of the sounds around you,” said Bhayani, who regularly cares for construction and factory workers, frequent air travelers and seniors in her practice at Gottlieb Memorial Hospital. “I recommend using hearing protection devices for those who are exposed to excessive, loud noises and musician’s ear plugs, which simply attenuate the intensity/loudness without altering frequency response.”

Loud noise kills ear nerve endings permanently

Unfortunately, when nerve endings in the ear die, they don't come back – and loud noise will kill them. Three small bones in the middle ear help transfer sound vibrations to the inner ear where they become nerve impulses that the brain interprets as sound.

“When noise is too loud, it begins to kill the hair cells and nerve endings in the inner ear,” Bhayani said. “The louder a noise, the longer the exposure, and the closer you are to the noise source, the more damaging it is to your nerve endings, or your hearing.” As the number of nerve endings decreases due to damage, so does your hearing. Nerve endings cannot be healed or regenerated and the damage is permanent.

Ear bud warning

If you have a smartphone or iPod, you may use ear bud headphones that are inserted into the ear. Use of ear bud headphones by youngsters may save your ears from being assaulted by the noise of your teenagers’ music or electronic game, but they may be damaging your child’s hearing.

“Three in five Americans, especially youth, are prone to develop hearing loss due to loud music being delivered via ear buds,” Bhayani said. “Sound that is too loud, especially close to the ear, is harmful. “The truth about hearing is loud and painful – once a nerve is damaged, it cannot be restored. It is gone forever.”

The U.S. Food and Drug Administration has entered into an agreement with Howard Sousa, doing business as the Artery Health Institute LLC, and DeSousa LLC, to change the way he labels his dietary supplement products.

The consent decree prohibits Sousa from distributing products with claims in the labeling to cure, treat, mitigate or prevent diseases. Before reaching the agreement, Sousa distributed Advanced Formula EDTA Oral Chelation capsules on his website.

Sousa ran afoul of the FDA by promoting his supplements as drugs through claims on his website. Under the Federal Food, Drug, and Cosmetic Act (FFDCA), a product is a drug if it is intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease. The capsules have been promoted and marketed for serious disease conditions, such as cardiovascular disease and kidney stones.

The FDA has forced Sousa to remove the drug claims from his website. He has also agreed to hire an independent expert to review the claims he makes for his product and to certify that he has omitted all violative claims.

Can still sell the supplements

The order does not require Sousa to stop making and selling the product, only to change its label and marketing. However, under the decree the FDA can order Sousa to stop making and distributing any product if he fails to comply with any provision of the consent decree, the FFDCA or other FDA regulations.

“Products with unapproved disease claims are dangerous because they may cause consumers to delay or avoid legitimate treatments,” said Dara A. Corrigan, the FDA’s associate commissioner for regulatory affairs. “The FDA will continue to take actions against companies that do not meet federal standards for safety, effectiveness, and quality by placing unapproved products on the market.”

The FDA previously issued a warning letter to Sousa for violating the FFDCA by promoting and distributing his product as a drug. Sousa responded to the warning letter promising to remove all such claims from his website, but the FDA discovered during a subsequent inspection that he continued to make the claims.

The warning letter was one of eight issued by the FDA in October 2010 to companies promoting unapproved over-the-counter chelation products with claims to treat and diagnose a range of the serious disease.