Current Events in January 2012

Disgruntled Chicago fitness buffs have filed a class-action lawsuit against Bally's Fitness, which recently abandoned the Windy City and turned some of Chicago properties over to LA Fitness.

In the lawsuit, filed by attorney Christopher Cooper, the Chicagoans say they were assured in an email from Bally that their memberships would be honored at LA Fitness facilities, but some say they haven't found that to be the case.

Mike Markzon, one of the named plaintiffs in the case, say that as of Dec. 1 when LA Fitness took over, their memberships no longer were honored and they weren’t allowed to work out. One plaiintiff, Juan Dorado, said Bally's suggested he work out at a Bally's in St. Louis if he didn't like the Chicago locations.

The suit charges that Bally violated the Illinois Consumer Fraud and Deceptive Business Practices Act by selling lifetime memberships to consumers, knowing that it did not have facilities in every locality in the United States.

In some cases, plaintiffs say there are LA Fitness gyms in their area but for unknown reasons, those gyms are refusing to honor the Bally's memberships.

Left behind

It's not only Chicagoans who are frustrated in their attempts to enlarge their shoulder muscles.  The suit says Bally similarly sold lifetime memberships in other cities, then pulled out and left their members gymless and consumers writing to ConsumerAffairs.com have told similar stories.

"I have a lifetime membership to Bally's that originated in NY, but I live in LA. LA Fitness bought out Bally's here and I am told that because Bally's still exist in NY, I cannot use the gym in LA," said Elizabeth of Los Angeles.

In the New York area, Bally sold out to LA Fitness, which has no facilities in New York City.  In Seattle, former Bally members are finding their memberships are not honored if they were purchased in Texas.

"Have a lifetime membership since 1975. Originated with Jack LaLanne - acquired by Bally," said Marguerite of Nesconset, NY. "Bally recently transferred all active accounts from their Lake Grove, NY gym to LaFitness, Lake Grove. I went to pay my fees this morning and workout and was told that it no longer existed. ...  Bally claimed that they did not know of our accounts and that they cannot help us."

In some cases, Bally abandoned entire metropolitan areas without making any provision for its members, the suit argues.

Dorado said he has four Bally memberships, one for himself and the rest for his family.  Bally has not transferred his memberships to LA Fitness and continues to insist he is a Bally member and can work out at Bally facilities in St. Louis, roughly five hours away.

The suit seeks an injunction requiring the class members be allowed to exercise at Bally and LA Fitness facilities.  It also seeks compensatory damages and legal fees.

The consumer group Public Citizen wants the Food and Drug Administration (FDA) to impose a nearly $10 million fine on the American Red Cross because of hundreds of violations the agency found in a 2010 inspection of a donor support center in Philadelphia.

An FDA fall 2010 inspection of this national Red Cross center in Philadelphia, which was obtained by Public Citizen via a Freedom of Information request, documented hundreds of violations of a 2003 agreement between the FDA and the American Red Cross intended to ensure the safety of the nation’s blood supply, the organization said.

Public Citizen said it separately learned that months ago, the FDA decided to impose a financial penalty of nearly $10 million for those violations, but this has been held up for inexplicable reasons.

Failing to notify

The violations included:

• failing to notify health departments when a blood donor has been determined to have infectious diseases, such as HIV, Hepatitis B or C, West Nile Virus or syphilis; 
• failing to review donors whose blood donations needed to be quarantined in the past; 
• failing to promptly add people with known problems such as infections to the national list of deferred donors; and 
• delays in logging problems with donations more than five days after their discovery.

“Since the FDA and American Red Cross’s 2003 agreement, the Red Cross has been previously fined $37 million, but the substandard performance of critical Red Cross blood handling functions continues,” said Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group. “The longer HHS delays in imposing the financial penalties, the more opportunity it will afford for the Red Cross to claim that things are much better now, even if they are not.

"Too many lives are at risk if the Red Cross continues violating the important 2003 Consent Decree it agreed to abide by,” Wolfe said.

Central Coast Nutraceuticals has agreed to pay $1.5 million to settle federal claims that it used fraudulent marketing, phony claims and bogus endorsements from Oprah Winfrey and Rachael Ray to peddle its acai berry supplements, "colon cleansers," and other products.

The settlement order bans the Phoenix company from so-called "negative-option" sales, such as continuity plans and free or introductory price trial offers, in which consumers pay nothing up front or only a small fee to receive a product, but are then automatically charged a higher price unless they take steps to cancel the shipments, or return the product before the end of the trial period.

That's what  happened to Almondo of Champaign, Ill., and hundreds of other consumers who wrote to ConsumerAffairs.com about their experience.

"I ordered the free trial of Acai Berry and Advanced Colon Cleanse. The company charged my credit card $200 and have charged $87 a month for the past two months. I have made numerous calls to the company and they said my subscription was canceled. But it hasn't stopped," Almondo said.

Loretta  of Falls Church, Va., had a similar experience. 

"I ordered the Acai capsules as part of a "free" trial. I foolishly gave them my Visa number," she said. "I got the order but was charged $59.00 for some other stuff I never ordered. For the next 2 months, I noticed money coming out of my account for something I never ordered. ... Altogether I was charged more than $100.00 for this 'free' trial."

The Federal Trade Commission's 2010 complaint alleged that two individuals and five related companies deceptively claimed that their Acai Pure supplement would cause rapid and substantial weight loss, and that their Colotox colon cleanser would prevent colon cancer.

Also, despite claiming to offer a "free" trial for a nominal fee and full refunds upon request, the defendants allegedly repeatedly made unauthorized charges to consumers' bank accounts, and made it all but impossible to avoid paying full price for the products, typically $39.95 to $59.95.

Court order

At the request of the FTC in August 2010, a federal court halted the allegedly illegal conduct of the Central Coast Nutraceuticals defendants, imposed an asset freeze, and appointed a receiver to oversee the corporate defendants.

The settlement order against the defendants includes an $80 million judgment, which represents the total amount of consumer injury caused by their scheme. The monetary judgment will be suspended when the FTC receives assets worth approximately $1.5 million from the defendants.

The settlement order requires defendant Graham D. Gibson to pay the FTC the balance of his investment account; transfer to the FTC $500,000 after mortgaging his home in Phoenix, Arizona, or transfer the property to a court-appointed liquidator if he cannot obtain the mortgage; and divest himself of his interest in a Hawaii vacation property.

It also requires the court-appointed receiver to transfer to the FTC the estimated $600,000 that will remain in the accounts of Central Coast Nutraceuticals and the affiliated corporate defendants after their outstanding expenses are paid. 

Victimized consumers flooded law enforcement agencies with thousands of complaints about the company.

The defendants' marketing traded on the rampant popularity of acai berry supplements, which are derived from acai palm trees that are native to Central and South America. 

There are a number of commercial products designed to help smokers kick the habit, including nicotine patches and nicotine gum. Collectively, they are known as nicotine replacement therapies (NRT).

Do they work? Researchers at the Harvard School of Public Health (HSPH) and the University of Massachusetts Boston suggest that they do not. They claims, they say, just don't add up.

"What this study shows is the need for the Food and Drug Administration (FDA), which oversees regulation of both medications to help smokers quit and tobacco products, to approve only medications that have been proven to be effective in helping smokers quit in the long-term and to lower nicotine in order to reduce the addictiveness of cigarettes," said co-author Gregory Connolly, director of the Center for Global Tobacco Control at HSPH.

The research team included lead author Hillel Alpert, research scientist at HSPH, and co-author Lois Biener of the University of Massachusetts Boston's Center for Survey Research. They followed 787 adult smokers in Massachusetts who had recently quit smoking.

How they reached their conclusions

The participants were surveyed over three time periods: 2001-2002, 2003-2004, and 2005-2006. Participants were asked whether they had used a nicotine replacement therapy in the form of the nicotine patch (placed on the skin), nicotine gum, nicotine inhaler, or nasal spray to help them quit, and if so, what was the longest period of time they had used the product continuously. They also were asked if they had joined a quit-smoking program or received help from a doctor, counselor, or other professional.

The results showed that, for each time period, almost one-third of recent quitters reported to have relapsed. The researchers found no difference in relapse rate among those who used NRT for more than six weeks, with or without professional counseling. No difference in quitting success with use of NRT was found for either heavy or light smokers.

"This study shows that using NRT is no more effective in helping people stop smoking cigarettes in the long-term than trying to quit on one's own," Alpert said. He added that even though clinical trials have found NRT to be effective, the new findings demonstrate the importance of empirical studies regarding effectiveness when used in the general population.

Dueling studies

Their findings appeared the same day as researchers at George Washington University called for including smoking cessation treatments under Medicaid, arguing the government would receive a good return on its investment in the form of improved health. The Massachusetts researchers disagree.

Biener said that using public funds to provide NRT to the population at large is of questionable value, particularly when it reduces the amount of money available for smoking interventions shown in previous studies to be effective, such as media campaigns, promotion of no smoking policies, and tobacco price increases.

Smoking cessation medications have been available over the counter since 1996, yet U.S. Centers for Disease Control and Prevention statistics show that the previous adult smoking rate decline and quitting rates have stalled in the past five years.

The National Credit Union Administration (NCUA) today assumed control of service and operations at People for People Community Development Credit Union (CDCU), a state-chartered, federally insured credit union, in Philadelphia. The credit union will remain open, NCUA said.

Deposits at People for People CDCU remain federally protected. Administered by NCUA, the National Credit Union Share Insurance Fund (NCUSIF) continues to insure individual accounts at People for People CDCU up to $250,000. 

Service to People for People CDCU’s 1,561 members will continue uninterrupted. Members can continue to conduct normal financial transactions—deposit and access funds, make loan payments, and use shares. People for People CDCU serves an underserved 14.3 square mile area of north Philadelphia. The credit union reported assets of $1.1 million as of Sept. 30, 2011. 

The decision to conserve a credit union enables the institution to continue regular operations with expert management in place, correcting previous service and operational weaknesses. During conservatorship, members may therefore continue to conduct business at the credit union.

The Federal Credit Union Act authorizes the NCUA Board to appoint itself as conservator when necessary to conserve the assets of a federally insured credit union, protect members’ interests, or protect the NCUSIF. The Pennsylvania Department of Banking, which chartered People for People CDCU, concurred with the conservatorship decision. People for People CDCU is the first federally insured credit union placed into conservatorship during 2012.

Researchers at the University of California San Francisco (UCSF) say their analysis of tobacco industry documents shows that Philip Morris USA manipulated data on the effects of additives in cigarettes, including menthol, obscuring actual toxicity levels and increasing the risk of heart, cancer and other diseases for smokers.

The takeaway, they conclude, is that industry information shouldn't be accepted at face value. Further, they say there is abundant evidence that hundreds of additives, including menthol, should be eliminated from cigarettes on public health grounds.

For the study, the researcher said they reassessed data from Philip Morris’ “Project MIX,” which detailed chemical analyses of smoke and animal toxicology studies of 333 cigarette additives. Philip Morris, the nation’s largest tobacco company, published the findings from that study in 2002.

By investigating the origins and design of Project MIX, the UCSF researchers conducted their own inquiry into the Philip Morris results and came up with a strikingly different outcome. They said they found that many of the toxins in cigarette smoke substantially increased after additives were added to cigarettes.

Just the opposite

Not only that, they say the also found, after obtaining evidence that additives increased toxicity, that tobacco scientists adjusted the protocol for presenting their results in a way that obscured these increases.

“We discovered these post-hoc changes in analytical protocols after the industry scientists found that the additives increased cigarette toxicity by increasing the number of fine particles in the cigarette smoke that cause heart and other diseases,” said senior author Stanton A. Glantz, PhD, UCSF professor of medicine and director of the Center for Tobacco Control Research and Education at UCSF.

Glantz says that when scientists conducted their own analysis by studying additives per cigarette – following Philip Morris’ original protocol -- they found that 15 carcinogenic chemicals increased by 20 percent or more. Additionally, in the independent study, the researchers discovered the reason behind Philip Morris’ failure to identify many toxic effects in animal studies: its studies were too small.

Size matters

“The experiment was too small in terms of the number of rats analyzed to statistically detect important changes in biological effects,” Glantz said. “Philip Morris underpowered its own studies.”

Glantz said the results of Project MIX were published in the journal Food and Chemical Toxicology. He said an examination of the publication found that its editor and many members of its editorial board had financial ties to the tobacco industry.

The UCSF study was supported by the National Cancer Institute.

It's been a long time since a U.S. carmaker displayed a new compact car that got anyone very excited.  But this year's Detroit auto show includes a number of new models that are catching the eye of car enthusiasts.

Perhaps the most intriguing is the 2013 Dodge Dart, which Chrysler Group LLC would have us believe is channeling Alfa Romeo.  It's the first new model to come out of the melded Fiat-Chrysler design studios and it betrays a strong Italian influence.

The new Dart is built on the Fiat platform that in Europe underpins the Alfa Romeo Giuletta.  It's the first of at least seven cars, SUVs and crossovers that will be built on Fiat platforms -- giving Chrysler what it hopes is a fast lap onto the compact/mid-size track in the U.S.

This may not sound so good to the red-blooded Americans who drive those big Dodge trucks but it's worth remembering that Fiat is the second-biggest carmaker in Europe, trailing only the mighty Volkswagen.

“The all-new Dodge Dart is a groundbreaking car that will surprise and delight customers who want a no-compromise, fun-to-drive car that’s a great value,” said Dodge President Reid Bigland. “With 12 exterior colors, 14 interior color and trim options, three powerful, fuel-efficient engines, three transmission choices, unsurpassed safety features and world-class aerodynamics, the new Dodge Dart sets a new standard for the compact car class.”

The 2013 Dodge Dart will be available in five trim levels: SE, SXT, Rallye, Limited and R/T. It will be built in the United States at Chrysler Group’s Belvidere Assembly Plant in Belvidere, Ill. Production of the 2013 Dodge Dart will begin in the second quarter of 2012.

It will offer a nine-speed transmission later in 2012, providing better fuel economy without overly dampening performance.

January isn't just a month for New Years resolutions. It's also the time to start pulling together documents for filing your federal income tax. There are some important changes this year that taxpayers should be aware of.

For the second straight year, the tax-filing deadline is being extended from the traditional April 15 to April 17. That's because April 15 falls on a Sunday and the following day is a holiday in the District of Columbia. The April 17 date serves as a deadline for tax return filing, for payment of first quarter estimated taxes, for requesting a filing extension, and for making a 2011 contribution to a tax-deferred retirement account.

If you are reporting a capital gain or loss in 2011, there is an additional form this year. Use form 8949 to list the specifics of the gain or loss. In the past tax payers used Schedule D. This year, you will also use Schedule D, but only to summarize the transactions.

If you are claiming mileage deductions for the business use of your vehicle, there are changes to the deduction amount. You may deduct 51 cents for each business mile driven before July 1, 2012 and 55 ½ cents for miles driven after July 1.

The tax law also allows you to deduct mileage driven to receive medical car, but the allowance is less generous. The mileage deduction for miles driven before July 1 is 19 cents and 23 ½ cents a mile after July 1. The deduction applies to trips to the doctor or driving to receive specialized medical services, such as radiation treatments.

Standard deduction

Taxpayers who do not itemize deductions are allowed to take what is known as a “standard deduction,” and that amount has increased for the 2011 tax year. The new standard deduction will depend on your filing status.

If you are single or married, but filing separately, the standard deduction is $5,800. If you are married and filing jointly, the amount is $11,600 and if you are the head of a household, the amount is $8,500. The standard deduction is subtracted from your gross income on form 1040.

If you have questions about your 2011 taxes, chances are you can find the information at the IRS website.

The tech world is abuzz about a new smartphone today -- and no, it's not an iPhone or an Android.  It's the Lumia 900, Nokia's attempt to fight its way back into the smartphone market.

The Lumia 900 goes on display at the International Consumer Electronics Show in Las Vegas Monday and will be sold through AT&T stores.  It joins the simpler Lumia 710, already available through T-Mobile.  

But what's causing all the buzz is not the hardware behind the Lumia. It's the software. That's because the Lumia 900 runs Windows Phone, long derided by the technohip as a drab also-ran, somewhere on the evolutionary scale between a rotary dial phone and an early Blackberry.

But the latest version of Windows Phone -- known officially as 7.5 Mango -- is turning heads with a snappy design that critics say shows the kind of obsessive attention to detail and usability that has long defined Apple products.

Mom factor

“Our work is very visual, very engaging, and it also has the Mom factor—you can show your Mom exactly what you’re working on and she’ll get it,” said James Drage, a senior software development engineer on the Windows Phone Shell Team, in a news release.

Ricardo Espinoza, a software development engineer on the team, agreed. “Working on the Windows Phone has taught me how important it is to create something that’s intuitive right out of the box,” he adds. “Mobile phones need to be easy to use even for somebody who’s never used one before. You can’t have a learning curve.”

Drage helped develop several features for the start screen including a prominent feature called the “task switcher” that enables users to flip back and forth among applications that are running. That's part of what sets Mango apart from earlier versions, and from other smartphone operating systems: it runs many programs in the background, alerting you with a flashing button when something new wants your attention.

Hard-wired

Both Facebook and Twitter, for example, are hard-wired directly into Mango, so that they're running all the time.  A button flashes when a friend posts a new update or someone you're following emits a new tweet.

Not too many mortals, us included, have yet seen Mango in person so we have to take the word of reviewers like the New York Times' Nick Wingfield, who is impressed by the "bold, on-screen typography and a mosaic of animated tiles on the home screen."

The tiles light up as calls come in, emails are received and social networks beckon.  The design is said to be much easier for the average user to understand.  Anyone who's ever fumbled frantically with the latest 'Droid trying to figure out how to unlock the damned phone and answer a call should appreciate the simple way in which a tile springs to life -- making it easy to figure out what's demanding your attention and, just as important, making it easy to respond by simply pressing the blinking tile.

Will it catch on?  It's too soon to say but both Microsoft and Nokia desperately need a hit.  Microsoft has been on the sidelines of the smartphone wars for years, losing vital market share to Google and Apple while Nokia has been shoved aside by the likes of HTC and Samsung.

By Edward Roeder
Guest Columnist

Eleven months before the U.S. conducts the most expensive general elections in history, it's worth recapping what's just happened in pre-primary politics, and previewing what's to come.

Since the first debate of the 2012 Republican presidential nominating process last May, 13 debates and no elections have been held.  The pace is about to quicken.  In  January, six debates are scheduled as political junkies prepare for the first three Republican presidential primaries on January 10, 21 and 31 (in New Hampshire, South Carolina and Florida, respectively.)

Last summer, Mitt Romney, the multimillionaire former governor of Massachusetts, led a big field.  With seven or eight candidates plus a huge chunk of undecideds in most polls, Mr. Romney's 25% was generally enough to put him way out ahead.  

The Tea Party was riding high after its success in the mid-term elections, wielding its new power in the House of Representatives in an effort to curtail the size of the government by refusing to allow more federal borrowing.  By the time a deal was reached, most of the country had soured on the tea partiers, public approval of Congress was in single digits, and the credit rating of the United States had been downgraded for the first time in history.  

Still, the calendar beckoned candidates to run for the GOP nomination, and at least a dozen names were floated as possible Republican standard-bearers to oppose the reelection of President Barack Obama.

Early drop-outs

Two of the classiest potential contenders, Indiana Governor Mitch Daniels, whose credentials include a stint as director of the Office of Management and Budget in the first term of President George W. Bush, and former Minnesota governor Tim Pawlenty, dropped out early, apparently unable to find sponsors and unwilling to drink the Tea Party's Kool-aid.  

Former vice presidential nominee and Alaska governor Sarah Palin never moved into campaign mode, perhaps because she can make far more money as a celebrity than as a politician.  Dealmaker Donald Trump, who has never sought election to public office but can flip-flop with the best of them, led in the polls briefly.  But after reviving the canard that President Obama wasn't born in the U.S. (which, if true, would make Mr. Obama ineligible to be president), Mr. Trump decided not to lower himself into the mosh pit of the primary process.

Newt Gingrich, a failed teacher at a small Georgia college who got elected to Congress in 1978, became Speaker of the House in 1995 and was forced out by his colleagues four years later after being fined $300,000 for ethics violations, is now a Washington political entrepreneur whose various operations have grossed more than $100 million since he left office.  

Mr. Gingrich’s campaign all but collapsed in June, shortly after it began, as 16 aides, including almost all of the top staffers, quit in a dispute over the candidate’s refusal to commit to basic scheduling.  Yet Mr. Gingrich participated in the debates, and while he wasn’t asked many questions because he was so far behind in the polls, he was articulate when he spoke.

Ron Paul, the perennial Libertarian now in his last term in the House, appealed to idealistic young people, but is seen as unacceptable to the party elders.  

Shaken, not stirred

The debates have done well in the TV ratings, but it's unclear whether that's because viewers are interested in politics or entertainment.  Mr. Romney, who always does well in debates, has perfected the art of suffering fools gladly;  he resists the temptation to roll his eyes as his rivals reveal how unprepared they are.

The debates may have left voters feeling like a 007 martini -- shaken, not stirred.  Michele Bachmann, the Minnesota Congresswoman and fundamentalist Christian who has embraced all things Tea Party-ish, won the Iowa straw poll last August, making her the first to challenge Mr. Romney's lead.  

Then Texas Gov. Rick Perry threw his Stetson into the ring, and soared in the polls.  He espoused Tea Party and right-wing values, but as a big guy and governor of a big state, projected more substance than Ms. Bachmann, whose accomplishments in Congress are limited to rhetoric.  Mr. Perry became "flavor of the month," leading in the polls, in September.

Mr. Perry proved to be terrible in televised debates, and the shadowy Tea Party leadership soured on him after he failed, in Florida debates, to adhere to the party line trashing undocumented immigrants.  In Orlando's straw poll they threw their support behind Herman Cain, a glib former Godfather's Pizza executive and radio talk show host, the only black person on the stage.  Cain had acquitted himself well in the first debate, in May.

Mr. Cain won the Florida straw poll and became the new hit flavor for October, as Southerners often like to deny their racism by suggesting that they have nothing against black people like the celebrity/athlete/success/hero before them.   But Mr. Cain soon flamed out, partly due to flubs in the debates and partly due to a burgeoning sex scandal that he handled classically wrongly.

Meanwhile, Gov. Perry continued to implode onstage in debates, at one point fumbling through 53 seconds of silence as he failed to remember the names of all the federal agencies he wanted to abolish.

ABM forces

By mid-Fall, the ABM (Anybody But Mitt) forces were getting frantic, seeing the race as a choice between fundamentalist Christian right and Tea Party conservatives such as Ms. Bachmann and Mssrs. Perry, Santorum and Gingrich on one hand, and moderates like Mr. Romney on the other.

They didn't believe Mr. Romney's pledges of ideological purity, and sought a challenger who would hew closely to right-wing dogma.  (Ironically, in one of their debate conflicts, on immmigration, Mr. Perry advocated allowing the children of undocumented parents to attend college at in-state tuition rates while Mr. Romney took the hard right line.)  New Jersey Gov. Chris Christie declined the entreatments.

Then, apparently channeling his inner Jim Lehrer, Trump announced he would moderate a presidential primary debate.  After Trump's bid became the object of derision and all but two of the candidates opted out, he dropped the idea, and later indicated he might support a third-party candidate. Not that anyone had asked.

Mr. Romney didn’t need to win in Iowa;  he just needed to assure that no apparent alternative developed.  By December, Mr. Perry had self-destructed, along with Mr. Cain and Ms. Bachmann.  Ron Paul represented no threat, because his libertarian views were scary to the party elders.  That left Mssrs. Gingrich and Santorum.  The latter was the lesser threat, far less well-known, less wealthy, and less qualified than the former Speaker.

Smartest guy in the room

After Thanksgiving, Newt Gingrich became the leading alternative to Mr. Romney.  But Mr. Gingrich, who is the oldest, most obese and most accomplished of the candidates, is accustomed to being the smartest guy in the room, in rooms eschewed by smart people.  

Due to an incredible and entirely unjustified belief in his appeal or to an uncommon ignorance of modern presidential politics, Mr. Gingrich was blown away during December by Mr. Romney, and by a “superpac” set up by friends of Mr. Romney to do the dirty work.

Mr. Gingrich had pledged to avoid negative advertising, and had not spent the money on organization or advertising to counter Mr. Romney’s stealthy Iowa campaign.  Overtly, Mr. Romney was not negative.  But his sound bites and ads, such as one pointing out that he’d been married for 42 years, invited unfavorable comparisons with Mr. Gingrich, who is in his third marriage.  And the superpac’s ads were biting, accusing Mr. Gingrich of accepting $1.6 million from federal mortgage underwriter Freddie Mac at the peak of the housing bubble, and of producing an ad with former House Speaker Nancy Pelosi supporting policies to curb global warming.

As more of Iowa’s undecided caucus-goers decided, poll numbers went up for candidates who hadn’t embarrassed themselves, except for Mr. Romney, who stayed around 25%.  Thus, the new hot flavor became former Pennsylvania Senator Rick Santorum, who had made more trips to Iowa than any other candidate.

Ultimately, Mr. Romney won the Iowa caucuses by eight votes over Mr. Santorum, with Mr. Paul almost 4,000 votes behind.  But it was so close, for so long into the night, that Mr. Santorum’s excellent victory speech, given when he led by 18 votes and before Mr. Romney spoke, reached a far larger chunk of the electorate in future primaries than Mr. Romney’s.

With a bit more than half as many votes as the front-runners, Mr. Gingrich ran fourth, trailed by Mr. Perry and Ms. Bachmann.  Mr. Romney had gotten almost exactly what he wanted.  He won first place, albeit narrowly.  Second went to Mr. Santorum, an underfunded unknown, with no known base of support.  Third went to Mr. Paul, unacceptable to most of the party.  Mr. Gingrich and Mr. Perry had to settle for distant fourth and fifth place finishes -- not a good record to take to donors to inspire funding the South Carolina primary, on January 21.  

Solidly positioned

Going into the New Hampshire primary, Mr. Romney is solidly positioned at just over 40% in the polls.  Mr. Santorum raised a million dollars after his showing in Iowa, but can’t put together much of an organization in one week.  Nor can Mr. Gingrich.  

That makes it very likely that Mr. Romney will compete in South Carolina -- and debate on TV -- as the only candidate who has won anything, having won Iowa and New Hampshire.  The right-wing vote will be split among Mssrs. Perry, Santorum and Gingrich.  (Ms. Bachman has decided to “step aside” after garnering only 5% of the vote in Iowa caucuses.  Former Utah Gov. John Huntsman, who skipped Iowa to concentrate on New Hampshire, will only serve to further split Mr. Romney’s opposition.)

The first January debate, scheduled for tonight (Saturday night), should provide some interesting fireworks.  Mr. Gingrich, an angry elephant, will be trying to stomp, shove, and gore Mr. Romney, in hope of helping Mr. Santorum, who Mr. Gingrich feels confident he can beat.    

Tax representation firm JK Harris & Co. has suspended operations, sent its employees home and is reported to be preparing to liquidate its assets.

The firm, the subject of hundreds of complaints to ConsumerAffairs.com over the years, has been in Chapter 11 bankruptcy proceedings since October but has reportedly been unable to raise enough funding to continue operations.

"This is truly the most devastating event I have been forced to deal with in my 58 years on this earth," CEO John K. Harris said in an email to employees as he apparently prepared to file for a Chapter 7 liquidation.

The firm won't be mourned by many of the consumers who turned to it in their time of need.

One call does it all?

"My husband began working with JK Harris over 3 years ago and we have paid them at least $3,000.00 or more. They never return your calls, they are constantly telling you they are 'still working on it', they demand more money, they always have a new rep, etc.," said Christine of Anoka, MN, in a complaint to ConsumerAffairs.com a few days ago.

"Their ad says 'one call does it all.' That's a lie. I was told by my rep that I met with that no one could take money out of my disability checks. Well, they did. I am disabled and live on my disability," said Suzan of Blytheville, AR. "Every time I called J.K Harris' office, I was directed to a new rep. I sent in paperwork every 3 months and every time, it went to a new rep. I was told to ignore notices from IRS. This went on for over 4 years."

The company has been the target of complaints for years -- and it was those complaints and the resulting lawsuits that finally pushed it over the edge.

Harris filed for bankruptcy protection last October after Texas Attorney General Greg Abbott charged the firm with misrepresenting its ability to help Texans resolve their unpaid tax obligations. Harris agreed to pay $1.2 million in penalties to settle the case.

The state charged that the firm failed to provide promised services, misrepresented its employees professional skills and experience, overstated its ability to reduce debts that customers owe to the Internal Revenue Service, and accepted large, prepaid fees from customers whose tax liabilities the firm knew or should have known it could not reduce.

Sales personnel

Abbott's charges echoed many of the complaints voiced by consumers.

"While Harris' advertisements claimed that former IRS agents, Certified Public Accountants, lawyers, and other professionals were available to meet with consumers in 325 locations in 43 states, investigators discovered that JK Harris regional offices are staffed by sales personnel who are not trained tax experts," Abbott said.

Last July, Harris agreed to provide full refunds to West Virginia consumers who hired the firm but received no tax relief. The refunds total just over $14,000.

In 2008, the company agreed to pay $1.5 million to settle a suit filed by 18 states. 

"This company took advantage of people who paid for tax assistance and, in some instances, profited by taking their money and not giving them any help at all," said Massachusetts Attorney General Martha Coakley in announcing the settlement. 

Also in 2008, then-Missouri Attorney General Jay Nixon sued Harris on behalf of customers who received neither the services for which they paid as much as $4,500 each nor the refunds they requested.

"JK Harris promises it can help consumers who are having tax problems, but the Missourians who complained to my office told a different story -- one of unreturned phone calls, lost paperwork, and a worse financial situation than when they started," Nixon said.

In 2007, a class action lawsuit sought $6 million for consumers who complained that, far from solving their tax problems, JK Harris actually made their worse.

Holding the bag

The South Carolina-based company owes its primary lender, RAI Credit, nearly $11.9 million but has assets worth only about $3.8 million.

The firm's collapse not only leaves its employees and current clients in the lurch but also raises questions about the millions of dollars in owes in court settlements.  Unsecured creditors are typically at the back of the line in bankruptcy proceedings, leaving the possibility that many who are owed money will get little or nothing.

The company has a Jan. 10 court date at which the court is expected to appoint a trustee.

We've long known that traffic only gets worse.  And now a new study confirms that it's not just vehicular traffic that displays this seemingly immutable rule.

Thanks to new smartphones and the apps that tag along, mobile data is accelerating beyond expectations, network management company Arieso finds in a new study.

Following a similar study in 2010, Arieso’s new analysis reveals that so-called "extreme" users are becoming even more extreme, with 1% of subscribers now consuming half of all downloaded data.

One thing is clear, the study finds: the capacity issues plaguing mobile operators around the world will worsen in 2012.

iPhone 4S

The Arieso study compares data usage across a variety of smartphones and connected devices. It finds that users of the iPhone 4S demand three times as much data as iPhone 3G users and twice as much as iPhone 4 users, who were identified as the most demanding in the 2010 study.

In a finding consistent with 2010 results, it also shows that Google Nexus One users make twice as many data calls as iPhone 3G users.

“The introduction of increasingly sophisticated devices, coupled with growing consumer demand, is creating unrelenting pressure on mobile networks. The capacity crunch is still a very real threat for mobile operators, and it looks set to only get harder in 2012,” commented Dr. Michael Flanagan, CTO, Arieso and study author. “The mobile industry needs new investment and new approaches to boost network performance and manage the customer experience”.

Top line results

The Arieso analysis compares the data consumption of users of the latest smartphones against the iPhone3G as a “normalised benchmark”. The study found that different users and different devices exhibit very different demands on the network.

The most significant change in consumer behavior between 2010 and 2011 data has been driven by the introduction of the iPhone 4S. iPhone 4S users download 2.76 times as much data as users of the iPhone 3G. And while an Android-powered device maintains last year’s position at the top of the table for uplink data volumes, with HTC Desire S users typically uploading 3.23 times as much data as iPhone 3G users, the iPhone 4S falls just behind in this category with a typical 3.20 times as much data uploaded.

There are some very hungry handset users, even compared to the iPhone 3G benchmark (iPhone 3G = 100%):

Data calls per subscriber:

• HTC Google Nexus One: 221%
• Sony Ericsson Xperia X10i: 157%
• HTC Desire: 156%

Uplink data volumes:

• 3G Modems (various): 2654%
• HTC Desire S: 323%
• iPhone 4S: 320%

Downlink data volumes:

• 3G Modems (various): 2432%
• iPhone 4S: 276%
• Samsung Galaxy S: 199%

“While the report provides general trends, the studies on which they’re based demonstrate the importance to operators of understanding the increased consumption each type of smartphone brings. Despite stark industry warnings, mobile operators are still playing ‘Guess Who?’ with their subscribers,” continued Flanagan.

“Without adequately preparing networks to support the new generation of smart devices, operators risk spiralling and misplaced operational expenditure and delivering a sub-par quality of experience to customers. It’s critical that operators redouble their efforts to limit the impact of this inevitable squeeze.”

In Iran, the government is imposing new levels of surveillance and intimidation on Internet cafes, giving them 15 days to install security cameras and collect detailed personal information on their customers.

The goal is to choke back the free flow of ideas that are seen as a threat to the government's stability.

In the United States, The Associated Press (AP) and a handful of daily newspapers have launched NewsRight, a surveillance and "licensing" organization that will monitor Web sites and attempt to intimidate them into paying stiff fees for reporting news that the newspapers think they own.

The goal is to choke back the free flow of ideas that are seen as a threat to the newspaper industry's stability.

Libya, China and Cuba also practice aggressive surveillance and intimidation of Web users and publishers and, in some cases, block outside content from reaching readers in their countries.

Aggregators targeted

NewsRight and its ink-stained masters hope to require Web sites that "aggregate" news content to pay for the right to publish news and information of public interest, a right that is generally regarded as protected by the First Amendment.

"Newspapers don't own the news.  They own the presses, the rolls of paper and the rights to their trademarked and copyrighted material but not to the public information that they slice and dice into the day's news menu," said the editor of one well-known Web site which reaches millions of readers each month and maintains its own reporting staff.

Newspapers and the AP -- regarded around the world as the "semi-official American news agency" -- often control the primary news venues that they cover, shutting out reporters from smaller print, broadcast and Web publications.

In Washington, for example, the Senate Press Gallery is controlled by a five-member board of directors that this year includes representatives of AP, Bloomberg News, Congressional Quarterly, the Omaha Herald and the Salt Lake City Tribune.  They decide who gets admission to the Senate and House press galleries as well as to numerous other public venues, including the upcoming national political conventions. 

While granting their employers hundreds of credentials, the board routinely votes to exclude independent reporters and small organizations.

"If the American news cabal is going to control and lock down the major news venues, most of them owned by the American people, they cannot also claim to have the exclusive right to report the people business that is transacted in those venues," said one longtime Washington, D.C., journalist who asked not to be identified because it would result in his being black-listed.

The AP makes no secret of its goal.

“We hope to alter behavior in the marketplace,” said David Westin, CEO of NewsRight, an attorney and former executive at ABC News, which routinely under his tenure sought and won exclusive rights to events such as the Olympics. 

The real question, Westin said in an interview with the trade industry publication Poynter.org, is: “How much value can we generate and return to the producers?”

If you live in the U.S. and take a statin to lower your cholesterol, you're paying a premium price for that drug.

That's the conclusion of the Boston University School of Medicine (BUSM) Boston Collaborative Drug Surveillance Program, which found the cost of statins for people in the U.S. under the age of 65 who have private insurance is approximately 400 percent higher than comparable costs paid by the government in the United Kingdom.

The cost of prescription drugs remains a large part of the ongoing debate on the costs of medical care in the U.S. and U.K. Because of the many variables that contribute to these costs, well-defined estimates of the actual and relative usage and costs for the two countries have not been reliably documented, the researchers said.

Over-prescribed?

Statins are popular but have rare and potentially severe adverse effects, particularly muscle damage, and some doctors believe they are overprescribed. A 2010 Johns Hopkins study of 950 healthy men and women has shown that taking daily doses of a statin medication to protect coronary arteries might not provide additional protection.

Lipitor, one of the most widely prescribed statins, just went generic, but it may be a few years before its price falls significantly. It's price before going generic was well over $1,000 a year.

Statins were prescribed to an estimated 32.7 percent of people in the U.S. and 24.4 percent in the U.K. In the U.S. the estimated annual cost of statins ranged from a high of $1,428 for simvastatin (generic unavailable), to a low of $314 for lovastatin (available in generic formulation).

In the U.K. the annual cost varied from a high of $500 for atorvastatin (generic not available), to a low of $164 for simvastatin (available in generic). The estimated cost per pill was at least twice as high for each statin prescribed in both countries.

When you don't pay, you don't care what it costs

Are American patients that much richer than their British counterparts, that they can afford to shell out $1,400 a year for a prescription drug? Not really. But the point is, they aren't paying for it directly. With so many health plans now providing prescription coverage, American patients often get very expensive drugs for a low co-pay. The actual cost is reflected in higher premiums and shifted to patients without drug coverage.

When the annual cost for each annual statin user together with the number of users were combined, the total estimated cost for statin users was $69.5 million in people covered by private insurance companies in the U.S. The total estimated annual cost for statin users covered by the government in the U.K. was $15.7 million.

"In addition to differences in overall statin use and per unit costs, another significant factor contributing to the disparity of costs appears to be the availability and utilization of generics," said lead author Hershel Jick, MD, Director Emeritus of BUSM's Collaborative Drug Surveillance Program and associate professor of medicine at BUSM.

Generics prove popular

According to the researchers, simvastin was approved in the U.S. for sale in generic formulation in late June 2006. Within the next six months more than 60 percent of users switched from the brand preparation to the generic.

The resulting estimated cost was reduced more than 60 percent. According to the researchers, however, it still was four times higher than that in the UK.

The holidays are over and many consumers are trudging back to the mall to exchange a gift they received. It's not always easy to do.

“My husband received a shirt that my son ordered online from Target,” Judith, of Wrightstown, Wisc., told ConsumerAffairs.com. “The shirt was too small so my husband went to Target locally for a return.

There were no similar shirts left at the store or online. My husband, who had all the appropriate receipts, asked for a refund. He was told that was not the store policy. They said he would receive an in store credit.”

Though not happy with the option of a Target gift card, Judith said her husband then encountered another nasty surprise.

“The shirt was $27.99 plus tax and shipping,” Judith said. “The gift card was for $23.75. When my husband asked why there was a $5.48 difference for the cost of the shirt, he was told the charges were for 'handling' and taxes, which had been paid once already along with the original order! So a shirt that originally cost my son approximately $34.00 was now only worth $23.75!”

Target might have assessed the fee because, rather than keeping the merchandise at the store, it was sending it back to the warehouse. Even so, it doesn't seem that Judith's husband should pay the price.

Wrong approach

Mike, of Elk Grove, Calif., said he joined Gold's Gym back in July and paid for the full year. Three months later, he says, the Elk Grove location shut its doors with no notice. Is Mike due a refund? Sure.

“I opened a dispute with my credit card company, Discover,” Mike said. “I heard back from Discover who stated that they had spoken with the Merchant's bank who agreed to Discover taking the money from the Golds Gym bank to apply the refund. Since then my girlfriend, who has no affiliation with my account apart from the fact that I also paid $99 for her to join, has started receiving collections calls for unpaid fees.

Rather than stopping the credit card payments, Mike should have contacted his state attorney general's office for assistance after he was unable to resolve the matter with Gold's Gym. States have been very active in requiring health clubs to reimburse members when the only clubs in their area close. The part of the company that processes credit card payments has no clue about the club closing and just sees it as a non-payment issue.

Moving bill shock

Why is it that the cost of a household move is almost never what the estimate says it will be? Marilyn, of Hummelstown, Pa., hired Flat Rate Van Lines to move some furniture and other household goods for me from a private home in North Wales, Pa to a self-storage depot in Harrisburg, Pa.

“The original 'Moving Estimate' was for $1225.04, while in fact the total charge on the bill came in at $2,502.00, more than double the estimate,” Marilyn said. “This move was optional, and I would not have even bothered to move the furniture at all if I had known what it was going to cost beforehand. I accurately stated the amount of furniture and the distance we had to travel for the estimate, so I was shocked when presented with the bill as my belongings were held hostage in what I assume was a rented Penske truck.”

Marilyn even says the estimator assured her that the estimate would be the final cost. If consumers are basing their decisions on estimates that are intentionally set low for competitive advantage, why isn't this a case of bait and switch? We'd like to hear from some folks in the moving industry who can explain this and maybe offer some advice or consumers trying to get a reasonably accurate assessment of what their move will cost.

AT&T turned up its 4G Long Term Evolution (LTE) network in 11 new markets over the holidays, bringing its total to 26 markets covering 74 million people at the end of 2011, the company said.

Large cities like New York, San Francisco and LA, were included in the launch, as well as Austin, Chapel Hill, Oakland, Orlando, Phoenix, Raleigh, San Diego and San Jose. 

The additions make AT&T 4G LTE available in a total of 26 markets to 74 million consumers. 

The expansion adds to 15 markets launched in 2011: Athens, Ga.; Atlanta; Baltimore; Boston; Charlotte; Chicago; Dallas-Fort Worth; Houston; Indianapolis; Kansas City; Las Vegas; Oklahoma City; San Antonio; San Juan, Puerto Rico; and Washington, D.C.

"Dual layers"

“We’re building a 4G LTE network that’s blazing fast, and we offer dual layers of 4G technologies to provide customers with a more consistent speed experience,” said John Stankey, President and Chief Executive Officer—AT&T Business Solutions. “Our network, together with our unsurpassed 4G device portfolio and innovative applications, will give our customers an industry-leading mobile broadband experience.” 

AT&T’s mobile broadband service currently covers 284 million people and more than 90 percent of the population, including the top 100 U.S. markets.

AT&T expects its 4G LTE deployment to be largely complete by the end of 2013, Stankey said.

A membership reward service aimed at consumers trying to save money for college will be barred from its allegedly deceptive practice of using a web-browser toolbar to collect consumers' personal information without adequately disclosing the extent of the information it is collecting.

The settlement with Upromise Inc. will require Upromise to clearly disclose its data collection practices and obtain consumers' consent before installing or re-enabling any such toolbar products, and to notify consumers how to uninstall the toolbars already on their computers.

The settlement also will bar misrepresentations about the extent to which the company maintains the privacy and security of consumers' personal information, and require the company to establish a comprehensive information security program and to obtain biennial independent security assessments for the next 20 years.

Upromise offers consumers a membership service that allows them to save money for college. When consumers buy goods or services from Upromise partner merchants, they receive rebates that are placed into consumers' college saving accounts.

"TurboSaver Toolbar"

In its complaint against Upromise, the FTC alleged that to allow consumers to identify and select merchants that would provide rebates, Upromise's website offered a "TurboSaver Toolbar" download that would highlight partner merchants in consumers' search results.

When downloading the toolbar, consumers saw a message that encouraged them to enable the "Personalized Offers" feature of the Toolbar, which Upromise allegedly claimed would collect information about the websites they visited "to provide college savings opportunities tailored to you."

The FTC alleges the Toolbar with the "Personalized Offers" feature enabled collected and transmitted, in clear text, the names of all websites consumers visited and which links they clicked on, as well as information they entered into some webpages, such as search terms, user names, and passwords. In some cases, the information collected included credit card and financial account numbers, user names and passwords used to access secured websites, security codes and expiration dates, and any Social Security numbers consumers entered into the webpages. The Toolbar transmitted consumers' information without encryption.

According to the FTC, while Upromise's toolbar was collecting and transmitting the data, its privacy statement claimed, "We understand the need for our customers' personal information to remain secure and private and have implemented policies and procedures designed to safeguard your information."

Upromise also said it was "proud of the innovations we have made to protect your data and personal identity," and that "Upromise automatically encrypts your sensitive information in transit from your computer to ours."

The Upromise TurboSaver Privacy Statement allegedly stated that the Toolbar would collect and transmit information about websites consumers visited, and that "infrequently" the collection might "inadvertently" collect a "name, address, email address or similar information," but that any personally identifying information would be removed before the data was transmitted.

Failed to disclose

According to the FTC complaint, Upromise's failure to disclose the extent of information collected by the Toolbar, and its claims that it encrypted consumer data and took reasonable measures to protect data from unauthorized access, were deceptive and violated federal law. The FTC also charged that Upromise's failure to take reasonable and appropriate measures to protect consumers' data was an unfair practice.

The proposed settlement order requires Upromise to destroy the data collected through the Personalized Offers feature of the Toolbar, and to provide clear and prominent disclosures to consumers and receive their affirmative consent before installing any similar product.

The disclosures must be made prior to installation and be separate from any user license agreement. The company also must notify consumers who had the Personalized Offer feature enabled, informing them as to the type of information collected, and how to disable the feature and uninstall the Toolbar.

The settlement order also prohibits Upromise from misrepresenting privacy and security practices and requires the company to establish and maintain a comprehensive information security program and to obtain biennial, independent, third-party audits for 20 years.

A payment processor and two of its principals have been banned from using a new payment method to process electronic payments under a settlement with the Federal Trade Commission, which resolves charges that they debited consumers' bank accounts without their consent.

Payment processors provide merchants with the ability to obtain customer payments for products and services via electronic banking.

According to the FTC's complaint against Landmark Clearing, Inc. and its principals, Larry Wubbena and Eric Loehr, the defendants used a relatively new payment method called "remotely created payment orders" to give merchants access to consumer bank accounts.

From the fall of 2008 until the spring of 2011, Landmark allegedly used remotely created payment orders to debit, or attempt to debit, millions of dollars from consumers' accounts without their consent.

The FTC charged that in many instances Landmark debited consumers who had never heard of Landmark or its client merchants, had never gone to any of the merchants' websites, and had never knowingly agreed to purchase products or services from the merchants.

According to the FTC's complaint, Landmark's payment processing activities caused substantial injury to thousands of consumers, often those who could least afford to have funds unexpectedly taken from their accounts without authorization.

Overdraft fees

The FTC alleged that as a result of the unauthorized debits, many consumers suffered significant costs from overdraft and bounced check fees, plus the time and expense of closing bank accounts, opening new ones, and ordering new checks.

An example is John Chagoya, a consumer in California who was living on a fixed income when money was taken from his account. While checking his bank statement, he noticed a debit from Landmark payable to Direct Benefits Group (DBG), one of Landmark's client merchants.

"They never contacted me at all, and I never authorized anyone to debit money from my account." As a result of the debit, Chagoya's account became overdrawn, and he had to pay bounced check fees.

The FTC's complaint alleged that Landmark's clients routinely failed to obtain consumers' authorization for the debits. By continuing to process these debits, Landmark played a critical role in its clients' unlawful business practices.

Payment orders

According to the FTC, remotely created payment orders are created by entering a consumer's name and bank account information into an electronic form and are processed like an ordinary paper check. When printed, remotely created payment orders look like regular bank checks, but instead of having the account holder's signature, they bear a statement such as "Authorized by Account Holder" or "Signature on File."

Federal banking regulations require the creator of a remotely created payment order to have the express authorization of a consumer to process the debit.

Unlike some payment mechanisms, such as credit cards, remotely created payment orders are not subject to significant oversight and monitoring, making them vulnerable to abuse. As a result, the FTC alleges, they have become a particularly attractive payment method for merchants and processors engaged in fraud and unauthorized debiting.

A red flag indicating unlawful debiting is a high rate of consumers and their banks rejecting and returning transactions submitted for debiting. According to the FTC's complaint, some of Landmark's clients generated astronomical return rates, sometimes higher than 80 percent, which gave Landmark compelling evidence that its client merchants had not obtained valid consumer authorizations for their debits.

"The return rates posted by Landmark's clients provided obvious signs that they were engaged in dubious practices," said David Vladeck, Director of the FTC's Bureau of Consumer Protection. "But the defendants looked the other way. Payment processors who reach into consumer accounts on behalf of clients engaged in fraud will be held accountable."

Avoided scrutiny

The FTC complaint alleges that Landmark actively promoted remotely created payment orders as a way to avoid the scrutiny associated with other payment mechanisms, advertising on its website that merchants "with a high percentage of overall returns" would benefit from using its remotely created payment order product.

According to the FTC, Landmark processed more than 110,000 remotely created payment orders with a value exceeding $5.3 million through the First Bank of Delaware on behalf of one client merchant, Direct Benefits Group (DBG), of which more than 70 percent were rejected and returned.

In August 2011, the FTC charged DBG with debiting consumers' bank accounts without their consent, and a federal judge halted DBG's operation and froze its assets pending further litigation.

Similarly, Landmark allegedly processed more than $5.7 million in debits through the First Bank of Delaware on behalf of Platinum Online Group, of which more than 83 percent were rejected and returned.

The FTC complaint alleges that Landmark accepted Platinum Online as a client even though Landmark had terminated EdebitPay, Platinum Online's parent company, because of its high return rates. Landmark also knew that in 2008, EdebitPay and its principals had agreed to pay $2.2 million in consumer redress to settle FTC charges for debiting consumers without their consent. The FTC later filed a contempt action against EdebitPay for violating the settlement order.

General Motors says it has made "enhancements to the vehicle structure and battery coolant system in the Chevrolet Volt" that will reduce the risk of a battery fire occurring days or weeks after a severe crash.

The enhancements come in response to a National Highway Traffic Safety Administration (NHTSA) probe of a fire in a battery pack that followed a Volt test crash.

NHTSA opened its probe on Nov. 25 following a severe-impact lab test on a battery pack that resulted in an electrical fire six days later. The test was conducted to reproduce a coolant leak that occurred in a full-scale vehicle crash test last May that resulted in an electrical fire three weeks later.  

“The Volt has always been safe to drive. Now, we will go the extra mile to ensure our customers’ peace of mind in the days and weeks following a severe crash,” said Mary Barra, GM senior vice president of Global Product Development.

Top Safety Pick

She noted that despite the NHTSA concerns, the Volt is a Top Safety Pick by the Insurance Institute for Highway Safety. Through the first 11 months of 2011, Volt owners accumulated nearly 20 million miles without an incident similar to the results in the NHTSA tests, she said.

The modifications outlined by the automaker will protect the Volt battery from the possibility of an electrical fire occurring days or weeks after a severe side crash. The modifications will:

• Strengthen an existing portion of the Volt’s vehicle safety structure to further protect the battery pack in a severe side collision.
• Add a sensor in the reservoir of the battery coolant system to monitor coolant levels.
• Add a tamper-resistant bracket to the top of the battery coolant reservoir to help prevent potential coolant overfill.

GM said it conducted four successful crash tests between Dec. 9 and 21 of Volts with the structural enhancement. The enhancement performed as intended. There was no intrusion into the battery pack and no coolant leakage in any of the tests.

“These enhancements and modifications will address the concerns raised by the severe crash tests,” Barra said. “There are no changes to the Volt battery pack or cell chemistry as a result of these actions. We have tested the Volt’s battery system for more than 285,000 hours, or 25 years, of operation. We’re as confident as ever that the cell design is among the safest on the market.”

Volt customers will be individually notified when the modifications are available for their vehicles. 

“We’re focused on one thing right now: doing what’s right by our customers,” said GM North America President Mark Reuss. “We’ll live up to our commitment to make sure our customers are delighted with their purchase.”