Current Events in September 2011

LG Electronics is urging consumers to check if they have recalled Goldstar or Comfort-Aire dehumidifiers.

The firm is re-announcing the recall of about 98,000 of the dangerous dehumidifiers that pose a serious fire and burn hazard, and are believed to be responsible for more than one million dollars in property damage.

The power connector for the dehumidifier’s compressor can short circuit, posing fire and burn hazards to consumers and their property.

The dehumidifiers were first recalled in December 2009 following eleven incidents, including four significant fires. Since that time, the company has received sixteen additional incident reports of arcing, smoke and fire associated with the dehumidifiers, including nine significant fires. No injuries have been reported. Fires are reported to have caused more than $1 million in property damage including:

• $500,000 in damage to a home in Gibsonia, Pa.
• $200,000 in damage to a home in New Brighton, Minn.
• $183,000 in damage to a home in Hudson, Mass.
• $192,000 in damage to a home in Valparaiso, Ind.
• $139,000 in damage to a home in Salem, Ohio
• $129,000 in damage to a home in Brielle, N.J.
• $ 95,000 in damage to a home in Philadelphia, Pa.

Because of the severity of the risks, CPSC and LG Electronics are concerned with the lack of consumer response to the recall. Only two percent of the 98,000 consumers who purchased these units have received a free repair, which means that consumers and their property remain at serious risk.

Anyone who has the recalled dehumidifiers is strongly encouraged to immediately stop using them, unplug them, and contact LG Electronics for the free repair.

The recall involves the 30 pint portable dehumidifiers sold under the Goldstar and Comfort-Aire brands. The dehumidifiers are white with a red shut-off button, controls for fan speed and humidity control, and a front-loading water bucket. “Goldstar” or “Comfort-Aire” is printed on the front. Model and serial number ranges included in this recall are listed in the table below. The model and serial numbers are located on the interior of the dehumidifier, and can be seen when the water bucket is removed.

The recalled dehumidifiers were sold at The Home Depot, Walmart, Ace Hardware, Do It Best, Orgill Inc., and other retailers nationwide from January 2007 through June 2008 for between $140 and $150. They were manufactured in China.

For additional information about the recall and for the location of an authorized service center for the repair, contact LG toll free at (877) 220-0479 between 8 a.m. and 7 p.m. CT Monday through Friday, and between 8 a.m. and 2 p.m. CT on Saturday, or visit the firm’s website at www.30pintdehumidifierrecall.com

John Deere is conducting two recalls of various lawn tractor models.

Brake problem

The company is recalling about 5,200 D100 lawn tractors. Hardware used to hold the brake assembly to the transmission housing can break. This can cause the brakes to fail, posing an injury hazard due to loss of control.

The recalled lawn tractors are green with yellow seats and mower decks. Model D100 tractors are included in this recall. The model number is located on both sides of the tractor’s hood. Tractors with the serial numbers below are included in this recall. Serial numbers are located under the right rear fender.

• 1GXD100A…BB051247 thru 1GXD100A…BB053312
• 1GXD100E…BB114388 thru 1GXD100E…BB139599

John Deere dealers, Lowe’s, and Home Depot stores sold the tractors nationwide, except California, from October 2010 through September 2011 for about $1,500. They were made in the U.S.

Consumers should immediately stop using the recalled lawn tractors and contact the company for a free hardware inspection and repair.

For additional information, contact Deere & Company at (800) 537-8233 between 8 a.m. and 6 p.m. ET Monday through Friday and between 9 a.m. to 3 p.m. ET Saturday or visit the firm’s website at www.johndeere.com

Blade assembly

The company is also recalling about 15,500 tractors because the hardware used to hold the mower blade brake assemblies on the mower decks can break. This can cause the mower blades to spin longer than normal after the operator turns off the power, posing a laceration hazard.

The recalled lawn tractors are green, with yellow seats and mower decks. Model numbers D100, D110, D120, and D130, all with a 42-inch Edge™ Cutting System mower deck, are included in this recall. The model number is located on both sides of the tractor’s hood. Lawn tractors with the serial numbers listed below are included in the recall. The serial number is located under the right rear fender.

John Deere dealers, Lowe’s, and Home Depot stores sold the tractors nationwide from December 2010 through September 2011 for between $1,500 and $2,000.

Consumers should immediately stop using the recalled lawn tractors and contact the company for a free hardware inspection and repair.

For additional information, contact Deere & Company at (800) 537-8233 between 8 a.m. and 6 p.m. ET Monday through Friday and between 9 a.m. to 3 p.m. ET Saturday or visit the firm’s website at www.johndeere.com

Best Buy may have won the hearts and minds of consumers but it appears to be losing the battle for their money, as customers defect to Amazon and other online retailers or trudge over to the Walmarts of the world.

No question Best Buy has won the Last Man Standing battle, outlasting Circuit City, which surrendered and went out of business a year or so ago. But the victory party had hardly ended when sales took a sickening plunge.

Sales were off 30 percent in the second quarter this year, setting off a race for the exits by investors who are fearful that Best Buy's bright and attractive stores and its emphasis on customer service are no longer the qualities consumers are looking for.

As discretionary income dries up and the American middle class gets whittled down to a workable size, consumers are increasingly not willing or able to pay for a nifty shopping experience and on-site service.

"The consumer is willing to trade customer service for the best possible price," said one analyst quoted by the Wall Street Journal. Not only are consumers increasingly becoming bargain hunters, they're also cutting back on discretionary purchases, including the computers, big-screen TVs, games and gizmos that are Best Buy's bread and butter. 

Nothing personal

Sure enough, a ConsumerAffairs.com analysis of nearly 11 million consumer comments on Facebook, Twitter and other social media and blogs finds consumers feeling generally positive about Best Buy despite the chain's falling sales.

Using computerized sentiment analysis of about 2.3 million postings, we found Best Buy easily maintaining a net positive sentiment over the last 12 months, peaking at 60% positive in July but beginning what may be either a descent or a dip to below 40% by early September.

Amazon also maintained a consistently positive net sentiment for the year, generally around 60%, dipping occasionally to just above 40%, as shown in this graph based on about 8.6 million consumer postings.

What's to like?

What is it that consumers like about these retailing giants? Perhaps surprisingly, in a world where most retail loyalty programs are little more than yet one more detail to keep track of, Amazon customers are wild about its "Prime" program, which costs a hefty $79 per year.

The enthusiasm for Prime comes blazing through in our sample of consumer postings. 

"I love being an Amazon Prime member. Free 2nd day shipping :)! I think it's freeness ends soon though so I need to be careful," enthused @HK-Barbie on Twitter. Actually, HK-Barbie, 2nd-day shipping is still free for almost all purchases. (You should still be careful though.)

Best Buy customers, meanwhile, are evenly divided between the chain's gift cards and its "deals" at 20% each.

Fiddling

So is Best Buy vainly trying to hold back the tide? Maybe not. Besides brightening its stores, it's making them smaller and putting even more emphasis on personal service from its in-store employees, dubbed "blue shirts," and its Geek Squad, which will make house calls to set up and fix computers, TVs and the like.

Amazon doesn't do any of that but then neither do Costco, Walmart or other discounters who have been eating ever-larger bites of Best Buy's lunch.

Best Buy has also been beefing up its online presence. Consumers can order merchandise online and pick it up at the local Best Buy (though why that is better than just ordering from Amazon and letting somebody else lug it up to your house a day or two later is debatable). It has also commissioned a virtual Geek Squad, called "Twelpforce," which offers technical advice through Twitter.

All dressed up …

So in the end, will Best Buy wind up as likeable, clever and attactive but somehow unable to get a date? Time, as they say, will tell.

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Target's website is back online today after a crush of traffic Tuesday caused it to crash several times during the day. The reason for the increase in visitors was the retailer's roll-out of its Missoni apparel.

For days Target had created a buzz about its partnership with the Italian luxury knitwear designer. The partnership has created a limited number of items that will be sold exclusively through the discount retailer.

The anticipation produced a flood of web traffic to the company's site Tuesday, the day the items were first offered for sale. It was exactly the kind of response marketers dream of, but unfortunately, the company's web servers just couldn't handle it.

Visitors to the site read a message saying "Woof! We are suddenly extremely popular. You may not be able to access our site momentarily due to unusually high traffic. Please stay here and we'll try to get you in as soon as we can!"

Excited

Today, visitors see a message that reads “Missoni for Target! Yep, it's that Missoni. We're excited too.

The New York Times critiqued the product launch, calling the website crash “a rare misstep.” It wasn't just people shopping online who experienced difficulty. Consumers traveling to Target stores Tuesday reported the stock quickly sold out. Target said some stores would be restocked but provided few details.

The Missoni label on clothing usually runs up the price to hundreds or thousands of dollars, but it has produced a number of less-expensive items for Target. The offering includes a $40 skirt, silk floral dresses for $30, bath towels for $13 and a $600 patio set.  

Just because something is advertised in a legitimate media doesn't mean it isn't a scam. That's the message West Virginia Attorney General Darrell McGraw is delivering to consumers about ads produced by the “Royalty Resource Network” (RRN), which he calls “a scam operating out of Canada.”

McGraw says ads, appearing in area publications, offer promises of “fast and easy loans.” McGraw says the ads claim
that the company charges no application, processing or consulting fees for loans ranging from $2,500.00 up to $1 million. In reality, consumers are required to send in advance a portion of the funds they intend to borrow, usually through a wire service such as Western Union or Money Gram. Once the funds are picked up, RNN’s fake loan officers disappear with the cash, McGraw says.

Using small newspapers

The Attorney General notes that this type of scam surfaces frequently on the Internet. This time, he says, the criminals are using smaller newspapers and publications. In this particular instance, a large ad was ordered and placed in a West Virginia newspaper using a stolen credit card. Not only were consumers scammed – so was the newspaper.

“Consumers should use extra caution when responding to any sort of advertisement regarding lending and finance,” McGraw said. “Thieves will use newspapers, websites, e-mails, telephone calls – any medium at their disposal – to help you part with your hard-earned money. “No legitimate company or organization will require you to wire money in advance using a wire transfer service in order to qualify for a loan, grant or any other financial aid.” 

Hard to trace

By using free e-mail accounts, disposable cell phones and remotely routed toll-free numbers, scammers are able to open up and close shop in a matter of days. The toll-free number used by RRN, the swindlers who also operated as the Vintage Consumer Network and Forum Family Services, now rings as a fast busy signal. 

McGraw’s Consumer Protection Division has referred complaints received against Royalty Resource Network, Vintage Consumer Network, and Forum Family Services, as well as other across-the-border advance-fee loan scams, to the Canadian Anti-Fraud Centre, a joint task force of the Ontario Provincial Police, the Royal Canadian Mounted Police and the Competition Bureau Canada. 

Consumers in other states should be vigilant against the scam as well.

Last week's consumer credit report from the Federal Reserve showed a drop in consumer credit card debt in July. But numbers buried deep in the report showed July's slowdown followed a dramatic plastic binge in the second quarter.

In its analysis of data for the second quarter of 2011, CardHub.com reports consumers ran up a staggering $18.4 billion in credit card debt in the April through June period. To give you an idea of how significant that is, the July 2011 total is 66 percent more than consumers accumulated in the same quarter in 2010 and 368 percent more relative to the second quarter of 2009.

Based on the results of this study, CardHub.com’s latest projection is that consumers will end 2011 with around $54 billion more in credit card debt.

The study focused on consumer debt data from the Federal Reserve’s G19 report in conjunction with quarterly charge off data to determine how much consumer debt actually increased when you consider the amount of bad debt written off the books.

Worrisome

Like the first quarter of 2010, consumers ended the first quarter of 2011 with a significant net decrease in credit card debt. However, in subsequent quarters they proceeded to wipe out any reduction. What’s worrisome about 2011, according to the financial website, is that they seem to be doing it at a faster rate than ever.

Last year ended with a net increase in debt of $9.1 billion, which practically erased the net decrease of $10.0 billion in 2009. In contrast, 2011’s projected $54 billion increase in debt puts consumers on a very alarming trajectory, the company said.

Some might see the renewed credit card spending as a sign of confidence, but consumer confidence surveys this year have actually shown a steady decline in confidence. What appears more likely, according to some economists, is that consumers are using plastic to meet basic expenses, and that much of the increase in credit card spending could be purchases of more expensive gasoline.

The Fed's report last week suggests the alarming trend has been reversed, at least for one month. In July non-revolving credit, which includes auto loans and loans for educational purposes jumped $15.4 billion. However, that was offset by a $3.44 billion decline in credit card spending.

Lost in the din of the talking heads is a key element of President Obama's plan to pay for his proposed $447 billion job-creation package: he wants to curb the amount of interest "high-income" taxpayers can deduct for municipal bonds, and limit deductions for charitable contributions.

Income from municipal bonds would be included in a proposed cap on deductions, possibly curbing demand for state and local government securities, one of the primary ways governments finance building infrastructure.

“We’ve got to decide what our priorities are,” Obama said as he released the legislative text yesterday. “Do we keep tax loopholes for oil companies -- or do we put teachers back to work? Should we keep tax breaks for millionaires and billionaires -- or should we invest in education and technology and infrastructure, all the things that are going to help us out-innovate and out-educate and out-build other countries in the future?”

Just a few days ago, state and local governments sent a letter to the 12 members of the so-called "Super Committee" that has been charged with balancing spending and revenue.

“In a world in which there are likely reductions to domestic discretionary and perhaps even mandatory and entitlement spending, it is critical that this tool be preserved in order for us to protect our investments,” said Michael Bird, federal affairs counsel for the National Conference of State Legislatures.

“NCSL truly understands that if you are going to do serious deficit reduction and debt-management control, we are going to have to make a contribution to that reduction, and since federal funding will therefore diminish potentially in the future, the retention of tax-exempt financing becomes all that more important,” Bird said.

The money Obama is trying to raise would be used to offset part of the cost of cutting the payroll tax for employers and some lower- and middle-income taxpayers, along with infrastructure programs. Republicans say they may be willing to support some of the tax cuts but are skeptical about the spending and tax increase proposals.

Taxing the "rich"

The biggest chunk of revenue in the jobs package, about $400 billion, would come from capping at 28 percent the itemized deductions and certain exclusions for individuals earning more than $200,000 a year and married couples earning more than $250,000.

That's not going down well with charities, who might be hit hard by limits on itemized deductions.

"This is the very last moment in time that you would think it would be productive to limit the funding of the charitable sector,” said Andrew Schulz, vice president of the Council on Foundations in an interview with Investment News.

The airwaves were full of 9/11 tribute ads over the weekends, and critics were quick to label them mawkish, exploitative, crassly commercial and syrupy, just to name a few.

But guess what?  Somebody liked them.  Lots of somebodies, in fact.

A survey by Ace Metrix, which measures ad effectiveness, finds that the ads were very well received by the consumers they were aimed at.

"American consumers, by and large, rated the ads very favorably," the company said after polling 500 adults.

Anheuser-Busch's Clydesdale tribute spot for Budweiser, beat out the others in the genre, with State Farm's "Thanks" ad second, and a series of Chevy ads that aired during Discovery Channel's "Rising: Rebuilding Ground Zero" coming in third.

Ace Metrix found it significant that the tribue ads did better than the usual product ads in terms of effectiveness.  The Bud spot -- admittedly a thing of beauty -- scored a 655 on the Ace Metrix effectiveness scale of 0 to 950, Advertising Age reported, far ahead of the average beed-ad score of 478.

A ConsumerAffairs.com analysis of about 280,000 consumer comments on Facebook, Twitter and other social media and blogs supported Ace Metrix's findings, showing a clear upswing in positive comments in recent days.

Nearly 3,000 consumers posted comments our computerized sentiment analysis classified as positive about Bud so far this month, compared with about 1,700 one year ago.  

Among the most frequently used words and phrases used to describe Budweiser were: "Budweiser commercial," "advert," "horse" and "best commercial."  

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It's hard to know which businesses have embraced fees with the most enthusiasm, banks or airlines. Both, in recent months, have found ways to impose new levies on consumers.

The U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reports U.S. airlines collected $1.38 billion from baggage fees and reservation change fees in the first quarter of 2011, which helped airlines counter increased costs of fuel.

According to the report, airlines received $784 million from baggage fees and $598 million from reservation change fees in the first quarter. These are the only fees paid by passengers that BTS can identify separately. All other fees paid by passengers are included in larger categories with other types of revenue.

One consumer, Leigh, of Brooklyn, N.Y., discovered that buying a ticket on Spirit Airlines can carry a fee.

“On August 28th, I attempted to purchase a ticket on Spiritair.com, only to have the website continuously time out,” Leigh told ConsumerAffairs.com. “I therefore, called the company to book over the phone and was forced to pay an extra $10 fee for 'phone reservations.' I asked why I was being punished because their website wasn't working and was simply told there was nothing they could do.”

Airlines say charging fees allow travelers to cut their costs by not checking a bag or asking for a pillow. But it also allows airlines to advertise low fares that, for most travelers, aren't so low once fees are factored in.

In July, the department issued a notice of proposed rulemaking that would require airlines to report 16 additional categories of fee revenue in addition to the baggage and reservation change fees to provide additional airline pricing information to consumers and airline analysts.

Auto safety regulators are opening an investigation into complaints that Chrysler minivan headlights go out unexpectedly.

The National Highway Traffic Safety Administration (NHTSA) has received 1,541 complaints from consumers about the problem, including two reports of crashes, one of which caused a minor injury.

Drivers have reported that the headlights turn off and stay off indefinitely. Toggling the headlight switch can sometimes get them to come back on, but not always.  

Additionally, vehicle owners have complained that the lights sometimes blink and flicker.

Vehicles included in the investigation are:

NHTSA said it needed to “further evaluate this issue” before deciding whether a recall was warranted.

With the economy in weak recovery mode since officially emerging from recession in 2009, it might come as no surprise that more Americans are living in poverty.

The U.S. Census Bureau confirmed it today, reporting that in 2010, median household income declined, the poverty rate increased and the percentage without health insurance coverage was not statistically different from the previous year.

According to the report, real median household income in the United States in 2010 was $49,445, a 2.3 percent decline from the 2009 median. The nation's official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009 ? the third consecutive annual increase in the poverty rate.

There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 ? the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published.

Real income declines

Since 2007, the year before the most recent recession, real median household income has declined 6.4 percent and is 7.1 percent below the median household income peak that occurred prior to the 2001 recession in 1999. The percentages are not statistically different from each another, the report notes.

Economic conditions have also made it more likely that a family member would move in with you, created a so-called doubled-up household. Doubled-up households are defined as households that include at least one "additional" adult: a person 18 or older who is not enrolled in school and is not the householder, spouse or cohabiting partner of the householder.

Doubled-up households

In spring 2007, prior to the recession, doubled-up households totaled 19.7 million. By spring 2011, the number of doubled-up households had increased by 2.0 million to 21.8 million and the percent rose by 1.3 percentage points from 17.0 percent to 18.3 percent.

The number of people with health insurance increased to 256.2 million in 2010 from 255.3 million in 2009. But between 2009 and 2010, the percentage of people covered by private health insurance declined from 64.5 percent to 64.0 percent, while the percentage covered by government health insurance increased from 30.6 percent to 31.0 percent. The percentage covered by employment-based health insurance declined from 56.1 percent to 55.3 percent.

Connie, of Muscatine, Iowa says she was surprised when she opened her bank statement and saw an automated withdrawal of $382.80 by VistaPrint that she says she didn't authorize.

“I cannot reach these people,” Connie told ConsumerAffairs.com. “Apparently, I have ordered from them before but I did not authorize anything recently. I received a phone call from someone about magazine subscriptions but I told them I was not interested. They told me they would send me a letter in five days to review but it never came. I am really ticked off. It is a good thing my retirement check had just been deposited to cover this.”

If the withdrawal was not authorized, Connie should not pay it. She should contact her bank's fraud department and have them sort it out by asking for a proof of purchase.

Rigid policy

Cellular phone companies hit consumers with a hefty early termination fee when they end their contracts before they are up, but most companies make rare exceptions. In T-Mobile's case, that exception appears to be pretty much cast in stone.

“T-Mobile policy states that if one moves overseas the termination fee will be waved,” Marie, of Monterey, Calif., said. “I moved overseas, canceled my T-Mobile service, provided them with my new address, got the last bill, paid it. A month later I got a bill with the termination fee that I am still fighting a year later.”

The problem, apparently is that T-Mobile requires a utility bill within 30 days of moving overseas. Marie said she didn't have a utility bill because they were living with her husband's parents for two months before they found a place on their own.

“I provided T-Mobile with a stamp from my passport showing when I arrived to Germany, my medical bills that show that I was overseas and finally the rental agreement that started 60 days after we arrived. T-Mobile denied these docs stating that they needed a utility bill.”

T-Mobile obviously wants to make sure people it lets out of their contracts have actually moved overseas and are not just taking a long vacation. Seems like their should be some alternative to a utility bill, however.

Hot dish

Paula Deen is the deeply southern host of a TV cooking show has put her name on a set of high end copper cookware. Not everyone using the product is happy.

“I purchased a Paula Deen saucepan and used it for about a year regularly before it melted onto my glass stovetop, causing the stovetop to explode and shrapnel to be sent flying everywhere,” Erin, of Wisdom, Mont., told ConsumerAffairs.com.

A chef has pointed out that many consumers may not realize that these sauce pans are designed to be used with very low heat. Use too much heat and you could have a mess like the one Erin describes. Maybe Paula should do a show about that.

Depends on the definition of hurricane

When is a hurricane not a hurricane, and why does it matter? Just ask Linda, of Virginia Beach, Va. Earlier this month, when Hurricane Irene churned up the Atlantic Coast, Linda's roof suffered damage. But Nationwide denied Linda's claim, invoking the “hurricane clause” in her policy. Turns out she isn't covered for hurricane damage.

But was Hurricane Irene actually a hurricane when it hit Linda's house? Linda claims it wasn't.

“The National Weather Service called for winds to not come close to the 74mph sustained winds needed to qualify for a hurricane," Linda said. "The winds we experienced were sustained at 40mph, with gusts 55-57mph in this area.”

Her house was damaged by a really bad storm, not a hurricane, Linda says. So far, Nationwide isn't buying it. Linda says her deductible has been raised from $1000 to $10,000.

Have you priced a replacement headlight for your car lately? Many of them cost about as much as a used car once cost. One reason may be a global price-fixing conspiracy that's being investigated by the U.S. Justice Department.

The investigation put one on the scoreboard today when Maxzone Vehicle Lighting Corp. agreed to plead guilty to a one-count felony charge and pay a $43 million fine in U.S. District Court in San Francisco today.

The government says Maxzone conspired with others to suppress and eliminate competition by fixing the prices of aftermarket auto lights, which are installed in a car after a collision or as accessories or upgrades . The department said that Maxzone, a wholly-owned subsidiary of the Taiwan-based aftermarket auto lights manufacturer Depo Auto Parts Industrial Co. Ltd., participated in the conspiracy from about April 2000 to about Sept. 3, 2008. 

$43 million fine

Under the plea agreement, which is subject to court approval, Maxzone has agreed to pay a $43 million criminal fine and to assist the department in its ongoing investigation into the aftermarket auto lights industry. 

According to the charge, Maxzone and co-conspirators participated in a conspiracy in which the participants met and agreed to charge prices of aftermarket auto lights at certain predetermined levels.  According to the court documents, the participants in the conspiracy issued price announcements and price lists in accordance with the agreements reached, and collected and exchanged information on prices and sales of aftermarket auto lights for the purpose of monitoring and enforcing adherence to the agreed-upon prices. 

The department said that the conspirators met in Taiwan, the United States and elsewhere for their discussions.

Maxzone is the second U.S. distributor of aftermarket auto lights to be charged in connection with the department’s ongoing investigation. On Aug. 30, 2011, the department announced that Sabry Lee (U.S.A.) Inc. was charged and had agreed to plead guilty. 

Maxzone is charged with violating the Sherman Act, which carries a maximum penalty of a $100 million criminal fine.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.

A South Dakota payday lender has agreed to stop garnishing consumers' wages pending trial on charges the garnishments were illegal.

The Federal Trade Commission (FTC) complaint alleges that Payday Financial, LLC, doing business as Lakota Cash and Big Sky Cash, along with other defendants, illegally attempted to garnish consumers’ wages without obtaining a court order, to collect payments on payday loans. 

As a result, the defendants illegally revealed consumers’ supposed debts to their employers and deprived consumers of their right to dispute the debts or make payment arrangements, the FTC alleges.

According to the FTC, defendant Martin A. Webb operates Payday Financial, LLC, and several related businesses in Timber Lake, South Dakota.  

Short-term, high-fee loans

The defendants offer short-term, high-fee, unsecured payday loans of $300 to $2,525 to consumers throughout the country, advertising on television and through websites such as www.bigskycash.com and www.westernsky.com.

The FTC complaint alleges that when a consumer does not pay back a payday loan on time, the defendants send documents to his or her employer that mimic those used by federal agencies collecting debts owed to the government in an attempt to garnish the consumer’s wages. 

Under federal law, the government can directly require employers to garnish wages for debts it is owed without a court order.  But private creditors must obtain a court order before garnishing a debtor’s wages.  The complaint charges the defendants with violating the FTC Act by:

•  misrepresenting to employers that the defendants are legally authorized to garnish an employee’s wages, without first obtaining a court order;

• falsely representing to employers that the defendants have notified consumers about the pending garnishment and have given them an opportunity to dispute the debt; and

• unfairly disclosing the existence and the amounts of consumers’ supposed debts to employers and co-workers without the consumers’ knowledge or consent.

The complaint further alleges that the defendants have violated the FTC’s Credit Practices Rule by requiring consumers taking out payday loans to consent to have wages taken directly out of their paychecks in the event of a default, and have violated the Electronic Funds Transfer Act and Regulation E by requiring authorization for electronic payments from their bank account as a condition of obtaining payday loans.

Do you ever feel frustrated, ripped off and generally mistreated when the last little bit of toothpaste just won't come out of the tube?

This really annoys Jonathan Rothstein, a Californian who takes his dental hygiene very seriously. He's been using Procter & Gamble's toothpastes that come in the “Neat Squeeze” container to keep his pearly whites gleaming but he's become outraged by how much of the product stays in the tube.

It's at least 20 percent, Rothstein estimates, and he's not willing to take it any longer, so he's filed a class action lawsuit against P&G on behalf of the millions of other victims who may not even recognize their plight.

Rothstein may be onto something but then again, he may be a man ahead of his time.  ConsumerAffairs.com conducted an analysis of more than 400,000 mentions of the word "Crest" on Facebook, Twitter and other social media and blogs over the last year and found that almost none of them had anything to with toothpaste.

Of the roughly 440 consumers who made comments about Crest toothpaste, most were positive, as the chart shows:

There are, of course, other P&G toothpastes packaged in the allegedly nefarious Neat Squeeze packaging but after squeezing the social media tube so hard and extracting so few comments, we decided that perhaps this was not a matter of burning public import, at least at the moment.

Rothstein's suit, filed by the Houston law firm Caddell & Chapman, alleges that P&G is not only aware of the shortcoming but positively gloats about it by placing this instruction on the toothpaste label:

“The Neat Squeeze dispenser has a unique inner bag that empties itself as you squeeze in the middle. When the package gets lighter and is harder to squeeze, it's time to buy more Crest.”

What P&G fails to explain, Rothstein grumps, is that the full volume of toothpaste will not be dispensed, no matter how hard the consumer squeezes. In fact, as Rothstein sees it, once the dispenser becomes “lighter” and “harder to squeeze,” it has effectively shut down, taking any unused toothpaste with it.

Knife attack

At this point, the frustrated consumer is left with no alternative but to attack the offending packaging with scissors or a knife.

But in so doing, P&G's promise of “Less Mess” is shown to be yet another shameless lie, Rothstein argues.

But wait, there's more.

Rothstein notes that the Neat Squeeze dispenser states on the label the net weight of the toothpaste the tube contains – but cruelly gives no hint that the consumer will be denied access to the entire amount.

Not wanting anyone to miss the point, Rothstein's lawsuit explains in great detail that P&G benefits when consumers run out of toothpaste, as they are then likely to go forth and purchase additional toothpaste.

The suit charges P&G with fraudulent concealment, breach of warranty, unfair competition, false advertising, negligent misrepresentation and other travesties and seeks the usual cornucopia of damage awards. 

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Everybody knows that some people seem to lose weight quickly while others who follow the same diet and exercise regimens progress much more slowly. 

Weight loss is a complicated process but researchers say they have created a mathematical model—along with an accompanying online weight simulation tool—of what happens when people of varying weights, diets and exercise habits try to change their weight.

The model challenges long-held assumptions about weight loss.

Organizations promoting weight loss often state that eating 3,500 fewer calories or burning them off exercising will result in a pound of weight loss. But the reality is a lot more complicated than that.

A growing body of evidence shows that the body’s metabolism can change as you lose weight and alter your exercise habits. These changes can  differ significantly from one person to the next,  depending on age and other factors.

Computer simulation

A research team led by Dr. Kevin Hall of NIH’s National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) set out to develop a computer simulation taking metabolic changes into account.

They designed their model to accurately simulate physiological differences between people based on gender, age, height and weight, as well as body fat and resting metabolic rate. To test the model, the researchers compared predicted weight changes to actual changes in people. Their results appeared on August 26, 2011, in the Lancet.

The team found that people’s bodies adapt slowly to changes in dietary intake. The simulation highlights how long it takes for the body to reach a new steady weight after a dietary change.

Heavier people can expect greater weight change with the same change in diet, but reaching a stable body weight will take them longer.

The model also revealed a potential simplified method to approximate weight loss in an average overweight adult. For every pound you wish to lose, permanently cut 10 calories from your current intake per day. At that rate, it will take about a year to achieve half of the weight loss, with 95% of the total weight change within about 3 years.

Online tool

An online simulation tool based on the model will enable researchers to accurately predict how body weight will change and how long it will likely take to reach weight goals based on a starting weight and estimated physical activity. The tool also allows researchers to plan for a weight loss phase followed by a weight maintenance phase.

“This research helps us understand why one person may lose weight faster or slower than another, even when they eat the same diet and do the same exercise,” Hall says. “Our computer simulations can then be used to help design personalized weight management programs to address individual needs and goals.”

The researchers hope to continue refining the tool and using it to gain insights into what changes are required to achieve and maintain goal weight.

For example, a comprehensive mathematical model of human metabolism was used recently to design an NIH clinical trial comparing the effects of reducing fats versus carbohydrates in obese adults.

The online tool isn’t meant as a weight-loss guide for the public. The program can run simulations for changes in calories or exercise that would never be recommended for healthy weight loss. People should consult with their physician prior to embarking on a diet plan.

Lawyers for AT&T have filed their response to the U.S. Justice Department's antitrust suit that seeks to block the wireless carrier's acquisition of rival T-Mobile.

The document contends the government has failed to make its case that allowing AT&T and T-Mobile to merge will create a wireless monopoly that will harm consumers.

“The Complaint largely ignores the significant competition from established providers such as Verizon Wireless and Sprint, innovative upstarts such as MetroPCS and Leap/Cricket, and strong regional providers like US Cellular and Cellular South, among others,” the lawyers write. “The Department does not and cannot explain how, in the face of all of these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation. Now can it explain how T-Mobile, the only major carrier to have actually lost subscribers in a robustly growing market, provides a unique competitive constraint on AT&T.”

Takes issue with government conclusion

The Justice Department suit noted that the proposed merger would create, by far, the U.S.'s largest wireless company, giving it and second largest Verizon dominance over the marketplace. As a result, the suit contends, service is likely to get more expensive for consumers. AT&T argues just the opposite.

“Blocking this transaction will not help T-Mobile or its customers, but the transfer of T-Mobile’s network capacity and infrastructure to AT&T, a healthy competitor, will enhance competition for all, now and in the future,” the document says.

AT&T argues that any anticompetitive effects of the merger are more than outweighed by significant efficiencies. AT&T further responds that the burden of proof is on the government that “the net effect of the transaction is to substantially lessen competition.”

There's a lot riding on the outcome. If AT&T loses it will not only lose the market share, bandwidth and customer accounts the T-Mobile deal would bring, it will also have to pay T-Mobile owner Deutsche Telekom a $3 billion fee and surrender some spectrum space to T-Mobile.  

S, of Edgewood, Texas, says he's a little surprised at all the negative reviews from consumers unhappy with the service from Wildblue, a satellite Internet provider. He thinks a lot of people take the service not understanding what it is. It's all a matter of being realistic, he says.

“No, you cannot download movies, it IS NOT DSL, but it is a million times faster than dial up,” S told ConsumerAffairs.com. “Two years ago we had a rebound child come home. He exceeded our usage and we were cut back to a slower speed. He was used to DSL and didn't know the rules of using our service. We upgraded to a higher package and our usage was restored. If you want to be treated with kindness and respect you have to treat people that way. Sorry so many have issues, but we love our wildblue and are looking forward to the bigger, faster satellite.”

For consumers in rural areas, sometimes satellite is the only alternative to dial-up, even if it doesn't provide the full capacity of full broadband. As long as satellite Internet providers don't make unrealistic claims in their marketing, S makes a valid point.

Smoking TV

Here's another report of a flat-screen TV that overheats to the point that it starts smoking. Rafal, of Virginia Beach, Va., reports the problem occurred in his 47 inch Philips LCD set.

“The problem is with the power board and from what I am reading on here many people have the same problem,” Rafal said. “This power board - or similar - is used in many models of Philips TVs and it should be recalled as soon as possible. This TV is dangerous!”

Rafal says he's reported the incident to Philips. We suggest he also report it to the Consumer Product Safety Commission.

Can you handle the truth?

We increasingly hear from consumers who say a company representative gave them information, upon which they based their buying decision, which turned out not to be true. Roy, of Columbia, Md., says he wished personnel at Ethan Allen had just told him the truth.

“After an order was written up for a sofa and chair, the saleslady was asked if our old sofa and chair could be picked up at the time of delivery,” Roy told ConsumerAffairs.com. “She assured us that they could. When delivery was made, we were told they did not do that. We were left with a living room full of furniture to the point that we cannot walk in our living room now. I am 75 and unable to move the furniture on my own. We would not have made this purchase without a means to remove the old furniture. Basically, the saleslady lied in order to make a sale.”

It happens all the time, it seems.

When no means yes

Many consumers who get signed up for recurring membership charges in a negative option pitch are outraged because they say they were never aware they were agreeing to have their credit cards charged each month. Charles, of Raleigh, N.C., is outraged because he was aware of the pitch but was signed up, even though he insists he clearly told them no.

“I was sent a membership card from Auto Vantage through Trilegiant Corporation,” Chareles said. “I am charged a fee of $16.99 on this month's statement. I did not agree to their service when asked. I declined immediately. I am cancelling that membership today. I am including the fee for this month. I would like to get a refund or apply the fee to next month's payment which is $222.87.”

Charles needs to contact his credit card company and tell them to dispute the charge. The credit card company should demand a proof of purchase. If Charles is correct, Trilegiant won't be able to provide one.

Three years into a stubborn foreclosure crisis, the Federal Housing Finance Administration (FHFA) said it is considering changes to the government's home refinancing programs to make them available to more consumers

The focus of attention is the administration's Home Affordable Refinance Program (HARP), introduced more than two years ago with the aim of helping homeowners avoid foreclosure by refinancing their mortgages to more affordable terms.

The program covers only mortgages owned or guaranteed by Fannie Mae or Freddie Mac and originated before June 2009. To be eligible, borrowers must be current on their payments and have a current loan-to-value ratio (LTV) between 80 and 125 percent.

An essential element of this program is the allowance to carry forward into the new loan any existing private mortgage insurance from the prior mortgage or, if no mortgage insurance existed, none would be required for the refinanced mortgage.

Less than expected results

As of June 30, 2011, more than 838,000 borrowers had refinanced through the HARP program – many fewer than expected or eligible for the program.

“In the meantime, continued declines in house prices and recent declines in mortgage interest rates to historic low levels suggest that more households could benefit from this program and, importantly, such refinances could reduce the Enterprises' credit risk,” said FHFA acting director Edward DeMarco.

Since the beginning of the mortgage modification efforts, frustrated homeowners have written to ConsumerAffairs.com, detailing how difficult it is to work with loan servicers to alter the terms of a mortgage. Those complaints still roll in on a daily basis.

Matthew, of Los Angeles, Calif., wrote last week that his duplex is now in foreclosure. He said he began modification efforts with Chase in October 2009.

“In February 2010, Chase said I qualified for HAMP and I was told to make trial payments,” Matthew told ConsumerAffairs.com. “Every payment has been made on time and I continue to send in my payments along with updated paperwork showing the rental unit as part of my income with every package. All the while, Chase adds penalties and late fees while compounding the difference between my loan modification payments and my original payments.”

Crushing blow

Earlier this year, Matthew said he was approved under the HAMP program and promptly sent in his final paperwork. Then came the crushing blow.

“I was told Chase had denied my loan modification since I lived in a duplex,” Matthew said. “I told them that that I always had disclosed it was a duplex and that I had always reported my rental income. In July 2011, Chase requested that I send in more proof that I lived in the duplex --I had already sent in my phone and gas bill. I sent in another utility bill and called again. Chase said my modification had been denied and did not give a reason. On August 31, 2011. I was sent an Acceleration Warning saying I owe $36,242.86.”

While change may, in fact, be in the works it may come too late for Matthew and thousands in his same situation.

“FHFA is carefully reviewing the mechanics of the HARP program to identify possible enhancements that would reduce barriers for borrowers already otherwise eligible to refinance using HARP,” DeMarco said. “If there are frictions associated with the origination of HARP loans that can be eased while still achieving the program's intent of assisting borrowers and reducing credit risk for the Enterprises, we will seek to do so.”