Current Events in March 2012

If you watch television at all, you can't help but see a large number of commercials for prescription medications. But since doctors are the only ones who can really decide whether that medication is used, isn't spending millions of dollars on TV ads a waste of money?

Apparently not, or else they wouldn't be doing it. So what's the real motivation? Obviously it is to prompt consumers to mention specific drugs to their doctors.

In 2009 Congressional Democrats tried to place some restrictions on direct-to-consumer prescription drug advertising. Rep. Henry Waxman (D-CA) called on the Food and Drug Administration (FDA) to bar prescription drug ads until they have been proved safe in real world use.

A consumer’s take

Dee, a consumer from Playa Del Ray, Calif., thinks the ads are harmful.

"Not only are the drug companies instilling psychosomatic symptoms in many Americans, they are unnecessarily educating our children on prescription drug availability and usage," Dee wrote in a post on ConsumerAffairs. "Fifty million of us do not even have access to medical insurance, so who are they really pushing their drugs to? And why not OxyContin and Cocaine? This is an issue of greed and ego. Depression, erectile dysfunction, sleep aids, RA, etc, etc should all be discussed on an individual basis in the privacy of your doctor’s office, and NOT on national television."

It's a debate that isn't likely to go away anytime soon, as pharmaceuticals are a multi-billion dollar industry, and the U.S. is one of only two nations that allows direct-to-consumer prescription drug advertising.

FDA's position

The FDA's position is different from Dee's. The agency sees some benefits from the ads.

"Prescription drug advertisements can provide useful information for consumers to work with their health care providers to make wise decisions about treatment.," the FDA said on its website.

For example, a product claim ad names a drug, the condition it treats, and talks about both its benefits and risks. A reminder ad gives the drug's name but not the drug's use.

However, if you think a prescription drug ad violates the law, contact FDA's Division of Drug Marketing, Advertising, and Communications.

Here's some sobering news: one in four consumers with student loan balances were late on at least one payment in the third quarter of last year.

The report from the New York Federal Reserve Bank showed a dramatic increase in past dues because the bank, for the first time, excluded students still in school and exempt from making payments.

No surprise

This perhaps isn't news for regular readers of ConsumerAffairs. In the last few years consumers have increasingly reported the burden of paying back loans - many times used to pay for for-profit colleges - in a soft economy.

"My son enrolled at this school (ITT Technical) in their multi-media course," Peggy, of Clarkston, Mich., posted at ConsumerAffairs. "They promised help with obtaining a job, which they haven't done. He has been out of school for two years and can't find a job. I believe that they oversold their school. Some of his classes didn't even have a qualified teacher, and he became frustrated with them. Now he owes so much money for student loans and can't find a job."

Others, like Holly, of Sound Beach, N.Y., report difficulty in making payments for the loans they accumulated as they sought an education, even when they do find employment.

"I am a 26 year old female who has had the run around with Citibank for two years now," Holly wrote. "I have called numerous times trying to set something up, seeing as I was making under $25,000 a year. They want me to pay $600 a month minimum. Yeah, okay, who can do that nowadays?"

Be realistic

Stories abound of students graduating with six-figure loans but with relatively low-paying jobs. Guidance counselors repeatedly stress the need to be realistic, matching your student loan requirements with your employment prospects upon graduation.

For example, a large number of consumers writing to ConsumerAffairs have revealed they enrolled in a for-profit college to obtain a two-year associates degree. While the for-profit institutions charged as much as $40,000, the same degrees are available at state-supported community colleges at a fraction of the cost.

April's tax-filing deadline is closing in. While major reforms are out of the taxpayer’s control, staying informed and using a tax preparation service are two simple ways to make filing your taxes as stress-free as can be.

“Stay informed and you won’t leave money on the table,” said Saint Joseph's University professor and former Internal Revenue Service (IRS) agent Dennis Raible, C.P.A. “There are broad deductions that apply to many people. Tax credits and deductions run the gamut from childcare costs — if they enable an individual to go to work — to energy savings credits for approved windows, doors, or energy-efficient heaters.”

Education expenses

If you've spent money on education in 2011, don't overlook the American Opportunity Tax Credit and the Lifetime Learning Credit as two ways to alleviate the cost of higher education. Other ways to earn a break include charitable contributions, retirement planning and logging mileage — whether it is for a personal business, commute or a job search.

If you plan on preparing your taxes yourself, Raible suggests using a tax preparation software because it will help you stay on top of available credits and deductions. He likes Turbotax, as well as TaxACT, H&R Block and esmarttax.com. Some are free, he says, while others require the user to pay a nominal fee each year.

Professional help

How much should you pay to have your taxes professionally prepared. It's all going to depend on how simple or complex your tax situation is. Taxpayers who opt to have their taxes prepared by a professional can expect to spend upwards of $150 to $250 dollars. For seniors and taxpayers with a low income, free professional tax preparation services are offered.

“Services like Volunteer Income Tax Assistance (VITA) are in place to help the people who often depend on a tax refund, but can least afford the tax preparation fees" Raible said.

Saint Joseph’s VITA program, ran in cooperation with the IRS and the Pennsylvania Department of Revenue, is offered during the Spring Semester of each Academic Year. The program trains Saint Joseph’s students in tax return preparation and then allows them to connect with members of the community who are in need of their services.

“Tax reform comes very slowly if it comes at all,” says Raible, “so taxpayers need to take advantage of the different ways they can make tax season easier for themselves.”

Missouri Attorney General Chris Koster has filed consumer fraud suits against six nationwide companies he says have been 'cramming' consumers' telephone bills.

Cramming is the practice of placing charges on a phone bill without the consumer's consent. Named in Koster's lawsuit are:

• Coast to Coast Voice of Concord, N.H.
• Green Certification of Miami, Fla.
• Family Contact 911 of Clearwater, Fla.
• SBO Online of Los Angeles, Calif.
• Odyssey Communications of Tenafly, N.J.
• ID Life Guards, Inc. of Glendale, Calif.

 The lawsuits charge the companies have placed unauthorized charges on thousands of consumers’ telephone bills for products and services they did not purchase, want, or use.

“Telephone cramming costs Missouri consumers tens of thousands of dollars each year and something must be done to stop this abuse,” Koster said. “Disregard for the consumer protection laws and regulations of the state of Missouri will not be tolerated.”

Restitution

The suits seek restitution for consumers and a permanent injunction against the defendants to stop the unfair practices and return to Missouri consumers the money that was unlawfully charged.

Telephone cramming is an unfortunate byproduct of the Telecommunications Act of 1996. In an effort to spur competition, the legislation allows third-party providers to place charges on a consumers telephone bill. Of course, these providers are first supposed to sell these services to the consumers. In many case, they overlook that detail.

A consumer’s telephone bill can operate much like a credit card. Thus, companies can charge consumers monthly for services unrelated to their telephone subscription. The crammer, or “content provider,” will repeatedly bill the consumer through his or her telephone bill, even in cases where the consumer did not actually sign up for the crammer’s purported service.

These charges generally appear on the last page of the consumer’s bill as “enhanced services” or in the name of the billing aggregator, such as OAN, ILD, or ESBI. Many consumers do not realize that they are being charged, or they believe it is from their telephone provider.

New chemical analyses have found that Coca-Cola, Pepsi-Cola, Diet Coke, and Diet Pepsi contain high levels of 4-methylimidazole (4-MI), a known animal carcinogen, according to the Center for Science in the Public Interest (CSPI), the nonprofit watchdog group that commissioned the tests. 

The carcinogen forms when ammonia or ammonia and sulfites are used to manufacture the “caramel coloring” that gives those sodas their distinctive brown colors. CSPI first petitioned the FDA to ban ammonia-sulfite caramel coloring in February 2011.

CSPI today reiterated its call to the Food and Drug Administration to revoke its authorization for caramel colorings that contain 4-MI, and in the interim to change the name of the additive to “ammonia-sulfite process caramel coloring” or “chemically modified caramel coloring” for labeling purposes.

“Coke and Pepsi, with the acquiescence of the FDA, are needlessly exposing millions of Americans to a chemical that causes cancer,” said CSPI executive director Michael F. Jacobson. “The coloring is completely cosmetic, adding nothing to the flavor of the product. If companies can make brown food coloring that is carcinogen-free, the industry should use that. And industry seems to be moving in that direction. Otherwise, the FDA needs to protect consumers from this risk by banning the coloring.”

15,000 cancers

CSPI collected samples of Coca-Cola, Pepsi-Cola, Diet Coke, Diet Pepsi, Dr Pepper, Diet Dr Pepper, and Whole Foods 365 Cola from Washington, D.C.-area stores. Pepsi’s products had 145 to 153 micrograms (mcg) of 4-MI in two 12-ounce cans. Regular Coca-Cola had 142 mcg per 12 ounces in one sample and 146 mcg in another. Diet Coke had 103 mcg per 12 ounces in one sample and 113 mcg in another.

To put those levels into context, the state of California has a 29-microgram benchmark for 4-MI. Levels above that in a serving of food or beverage may be required to bear a warning notice. Based on California’s risk model, CSPI estimates that the 4-MI in the Coke and Pepsi products tested is causing about 15,000 cancers in the U.S. population.

While federal law bans food additives that cause any number of cancers, the FDA has an exception for contaminants of food additives, for which it tolerates a lifetime risk of one cancer in one million people.

Three of four samples of Dr Pepper or Diet Dr Pepper that CSPI tested had low levels of 4-MI, with about 10 mcg per 12 ounces. But even those levels pose a cancer risk of seven in one million—seven times greater than what FDA allows. The lower levels in those three samples indicate that it is possible to lower, if not eliminate, the amount of 4-MI.

Pepsi told CSPI that it has switched to a coloring in California that contains much less 4-MI and plans to do the same in the rest of the country.

Big difference

“When most people see ‘caramel coloring’ on food labels, they likely interpret that quite literally and assume the ingredient is similar to what you might get by gently melting sugar in a saucepan,” Jacobson said. “The reality is quite different. Colorings made with the ammonia or ammonia-sulfite process contain carcinogens and don’t belong in the food supply. In any event, they shouldn’t be obscured by such an innocuous-sounding name as ‘caramel coloring.’”

As troubling as the new test results are, CSPI says soda drinkers should be much more concerned about the high-fructose corn syrup or other sugars used in soft drinks.

Soda drinkers are much more likely than non-soda drinkers to develop weight gain, obesity, diabetes, and other health problems. 

The Save the Plastic Bag Coalition is trying to fight its way out of a plastic bag ban in San Francisco.

The coalition, which not surprisingly includes packaging manufacturers, contends a San Francisco law prohibiting restaurants and retailers from using plastic bags is unconstitutional, and will actually hurt the environment, claiming that paper bags take more energy to produce than plastic ones, Courthouse News Service reported.

They claim that a report from Los Angeles County found that a reusable bag must be used at least 104 times before it offsets its greater negative environmental impacts than a plastic bag.

Could be, but public opinion is pretty solidly wrapped up against plastic bags, according to a ConsumerAffairs sentiment analysis of about 740,000 consumer comments on blogs and social media over the last year.

Paper bags, on the other hand, have a positive sentiment rating Mitt Romney can only envy.  We found about 300,000 consumers raving about their love affair with paper, with only a few scattered complaints having to do with cost and, in one case, lack of handles. (Hint: Trader Joe's bags have handles).

If, in fact, there is a vast left-wing conspiracy whose goal is to poison the well of consumer sentiment against plastic bags, it has done its job well.  It's hard to find anyone who'll say anything good about them, except that they're free and are a handy way to scoop up dog poop.

Ordinance No. 33-12 bans plastic carryout bags at retail stores, restaurants and other food establishments, and requires that consumers pay a 10-cent fee for each paper or compostable carryout bag.

The coalition says it asked the city to prepare an environmental impact report on the different bags, to which the City and County of San Francisco did not respond. 

No doubt this is an issue of the greatest possible importance but some skeptics might say the bagmen would be well advised to, well, bag it.

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Sentiment analysis powered by NetBase

It was just a week or so ago that the Consumer Confidence Index issued by the Conference Board was rising in lockstep with gasoline prices, causing more than a little head-scratching.

We don't know about the Conference Board but the Consumer Reports Index, a measure of overall consumer financial health, showed that the confidence of the American consumer is waning, with signs of mounting financial difficulty emerging.

After three months of improvement, the Consumer Reports Sentiment Index fell this month to 46.1, from 49.6 last month. Further challenging consumer confidence, The Trouble Tracker Index increased slightly this month to 52.2 from 49.1 in February, and is now at its highest level since August 2011.

The impact of financial troubles is very different across income levels. The Trouble Tracker Index for those living in households earning less than $50,000, about half of all American adults, stands at 73.9, nearly four times as great as those in households earning $100,000 or more (18.9).

Retail lagging

Since the holidays, retail has yet to regain its footing with Americans continuing to pull back on spending. Consumer Reports Past 30-Day Retail Index fell slightly to 11.5 from 11.8 last month, a pattern similar to last year. Planned purchasing over the next 30 days, reflecting anticipated March activity, is 8.7, up from 7.1 the prior month, seeding hopes for an upturn in the near term.

“Consumers are not yet comfortable in their financial situation as the country limps into its fifth year of near-recessionary times,” said Ed Farrell, director of the Consumer Reports National Research Center. “Weak retail is the symptom, not an underlying cause. Consumers will need a clear signal led by a greatly improved jobs outlook to resume spending.”

The Consumer Reports Employment Index this month (49.9) is once again approaching positive territory, but is little changed from February (49.5). In the past 30 days, roughly the same proportion of Americans reported starting a new job (5.8%) as losing a job (6.0%).

The complete Consumer Reports Index report is available at www.ConsumerReports.org.

Hoots of derision

The Conference Board report was issued at the end of February with gasoline prices are at a record high for this early in the year but nevertheless found folks downright cheerful. Its Consumer Confidence Index jumped from from 61.5 in January to 70.8 in February. The index is at its highest level in 12 months.

That report brought hoots of derision from ConsumerAffairs readers.  

"This report is just another example of how media wants manipulate people's thoughts in to believing it's a majority," said Donna DeShon Phillips. 

"Who is the ultimate moron who came up with this bucket of horse manure?" asked Taipan Lam in a posting on ConsumerAffairs' Facebook wall. "This is insulting our intelligence."

That's not the only evidence of growing confidence, either. Last week, the Dow Jones Industrial Average closed above the 13,000 level for the first time since well before the financial meltdown of October 2008 and the start of the Great Recession.

Federal health officials are warning consumers not to use skin creams, beauty and antiseptic soaps, or lotions that might contain mercury.

The products are marketed as skin lighteners and anti-aging treatments that remove age spots, freckles, blemishes and wrinkles, says Gary Coody, national health fraud coordinator in the Food and Drug Administration’s Office of Regulatory Affairs. Adolescents also may use these products as acne treatments, adds Coody. Products with this toxic metal have been found in at least seven states.

The products are manufactured abroad and sold illegally in the United States — often in shops in Latino, Asian, African or Middle Eastern neighborhoods and online. Consumers may also have bought them in another country and brought them back to the U.S. for personal use.

“If you have a product that matches these descriptions (and others listed below), stop using it immediately,” says Coody.

“Even though these products are promoted as cosmetics, they also may be unapproved new drugs under the law,” says Linda Katz, M.D., director of FDA’s Office of Cosmetics and Colors. FDA does not allow mercury in drugs or in cosmetics, except under very specific conditions, which these products do not meet.

“Sellers and distributors should not market these illegal products and may be subject to enforcement action, which could include seizure of the products and other legal sanctions,” says attorney Brad Pace, J.D., of the Heath Fraud and Consumer Outreach Branch within FDA’s Center for Drug Evaluation and Research.

Dangers of mercury

“Exposure to mercury can have serious health consequences,” says Charles Lee, M.D., a senior medical advisor at FDA. “It can damage the kidneys and the nervous system, and interfere with the development of the brain in unborn children and very young children.”

You don’t have to use the product yourself to be affected, says FDA toxicologist Mike Bolger, Ph.D. “People—particularly children—can get mercury in their bodies from breathing in mercury vapors if a member of the household uses a skin cream containing mercury.” Infants and small children can ingest mercury if they touch their parents who have used these products, get cream on their hands and then put their hands and fingers into their mouth, which they are prone to do, adds Bolger.

How to Protect Yourself

• Check the label of any skin lightening, anti-aging or other skin product you use. If you see the words “mercurous chloride,” “calomel,” “mercuric,” “mercurio,” or “mercury,” stop using the product immediately.
• If there is no label or no ingredients are listed, do not use the product. Federal law requires that ingredients be listed on the label of any cosmetic or drug.
• Don’t use products labeled in languages other than English unless English labeling is also provided.
• If you suspect you have been using a product with mercury, stop using it immediately. Thoroughly wash your hands and any other parts of your body that have come in contact with the product. Contact your health care professional or a medical care clinic for advice.
• If you have questions, call your health care professional or the Poison Center; it is open 24 hours a day.
• Before throwing out a product that may contain mercury, seal it in a plastic bag or leak-proof container. Check with your local environmental, health or solid waste agency for disposal instructions. Some communities have special collections or other options for disposing of household hazardous waste.

Tracking Skin Products Containing Mercury

Investigations in the past few years by FDA and state health officials have turned up more than 35 products that contain unacceptable levels of mercury. FDA continues to add mercury-containing skin products to its import alerts, which authorize the agency’s field staff to refuse admission of shipments of these products.

But this is only a partial solution, says Coody. “Many of these products are coming into the country through channels we can’t easily track, such as international mail and personal baggage. That’s why it’s so important for consumers and sellers to know about the dangers of possible mercury poisoning associated with the use of these skin products.”

Texas health officials say samples of face cream they tested contained mercury up to 131,000 times the allowable level. And a teenager in southern Texas who used a mercury-containing skin cream was recently hospitalized for mercury poisoning.

In Northern California, a 39-year old woman had more than 100 times the average amount of mercury in her urine and had symptoms of mercury poisoning, according to the California Department of Public Health. For three years, the woman and her husband had been using an unlabeled mercury-containing face cream that was brought into the U.S. from Mexico by a relative. Several other family members who did not use the cream, including a four-year-old child, also had elevated levels of mercury in their bodies.

Virginia, Maryland, and New York have also seen cases of elevated mercury levels in people exposed to skin products containing mercury. In Minnesota, 11 of 27 imported skin products taken from store shelves contained mercury.

It seems consumers have finally gotten the ears of some powerful advocates. A number of state attorneys general used the occasion of National Consumer Week to issue compilations of the top consumer complaints in their states in the last year, and what they've done about it.

New York Attorney General Eric Schneiderman, for example, reports that Internet-related complaints topped the list in his state in 2011. Close behind on the list were credit issues, including complaints about credit card billing and debt settlement companies. Complaints about auto dealers and particular brands also garnered a number of complaints from New York consumers.

Crime scene

“The crime scene of the 21st century is the Internet, and it is important for consumers to not only know their rights online, but how to seek justice,” Schneiderman said. “In addition to taking action against those who cheat New Yorkers, our office is always a resource to stop scams before they start.”

In New Jersey, meanwhile, complaints about home improvement services and contractors generated the largest category of complaints filed by consumers last year with the State Division of Consumer Affairs, representing 7.7% of all consumer complaints received. Motor vehicles was the second largest category of complaints, followed by credit issues. 

Surge in debt collection complaints

“Debt collection complaints rose from 8th place in 2010 to 3rd place last year, likely reflecting the difficult economy we’re in,” said Thomas R. Calcagni, Director of the New Jersey Division of Consumer Affairs. “Home improvement and motor vehicles complaints switched positions but continued as the two top complaint categories in the last two calendar years.”

In North Carolina, Attorney General Roy Cooper reports that, for the first time, complaints about lenders topped the list in 2011.

A total of 3,998 consumers filed complaints about interest rate hikes, charges for late payments, foreclosure relief scams and other lending related issues in 2010, compared to 3,909 complaints in 2011. Complaints about health care, the second leading source of complaints, were down sharply, with 3,271 complaints in 2011 compared to 4,605 in 2010. At number three, complaints about Do Not Call violators were up to 2,933 in 2011 compared to 2,514 in 2010.

Attorneys general seek input

The attorneys general went out of their way to encourage consumers who have experienced a consumer problem to contact their office. New Jersey Attorney General Jeffrey Chiesa said consumer complaints are “key tool” used by investigators. Cooper agrees.

“If you didn’t get what you paid for or think you’ve been scammed, we want to know about it,” Cooper said. But we’d rather help you avoid trouble in the first place by warning you about common problems,” Cooper said.

So, in addition to posting your complaint at ConsumerAffairs, it's a good idea to also send a copy to your state attorney general's office. You can find your state attorney general here.

This is Consumer Protection Week, when you'll hear all kinds of somber pronouncements about identity theft, bogus Web sites and so forth. But in New York City, Department of Consumer Affairs (DCA) Commissioner Jonathan Mintz has declared predatory schools the top fraud of the year.

Unlicensed and unaccredited schools and some GED, certificate and associate degree programs lure potential students by making false promises such as guaranteed job placement or internships, and six-figure incomes, while few deliver, Mintz warned. Some also fail to disclose whether or not credits will transfer or that the financial aid that students receive are actually loans, which and can total tens of thousands of dollars and must be paid back with interest.

"In these difficult economic times, many New Yorkers are returning to school to acquire new skills to help them gain employment and unfortunately there are also predatory schools trying to take advantage of them," Mintz said. "In November, the city launched a public awareness campaign to highlight the dangers of wasting hundreds of hours and thousands of dollars for degrees that prove useless and don’t prepare New Yorkers for jobs, rather than accessing options that offer high-quality instruction and support services that lead to employment.

"Since then we have heard from many New Yorkers who are angry about their experience and are in dire financial straits as a result of loans they took out to finance worthless degrees. The combination of false promises and the overwhelming debt accrued puts predatory schools at the top of our list this year," Mintz said.

Many schools market their services through subway and bus ads, community newspapers, TV and radio, ethnic media, and community-based outreach mechanisms. Many students are unaware of free and low-cost education and training programs.

More than 500

Mintz said there are more than 500 licensed for-profit, non-degree-granting proprietary schools in New York State. More than 300 of these are in the five boroughs of New York City, as well as several dozen for-profit degree-granting schools.

Schools offer various courses of study, from air conditioning repair and cosmetology to medical technician training and English language courses. An estimated 200,000 students attend for-profit schools throughout the state, and at least half of those -- more than 100,000 -- live in New York City.

One of the ads produced by Mintz's department features Garvin, a 26-year-old resident of Brooklyn, who completed a two-year Associate’s degree at a school that he saw advertised on television.

After completing his Associate’s degree and attempting to transfer to the City University of New York (CUNY) for his bachelor’s degree, he discovered that his degree was not transferable and, despite owing $25,000 in student loans, he will have to start college over and enter CUNY as a freshman.

Despite high fuel prices and concerns about the economy, U.S. consumers flooded new car showrooms last month, handing most carmakers a banner month. Audi, Acura, Mazda and several other brands scored double-digit sales gains

Audi reported its 14th straight record-setting month of sales with 8,531 luxury vehicles sold in February 2012. The results surpassed the prior February record set in 2011 by 778 vehicles. Closing in on a promising first quarter, year-over-year vehicle sales increased 10% over February 2011, and recorded 14.9% year-to-date growth compared to 2011.

Acura's line of sedans again led overall sales in February with 6,612 units sold, up 26.0 percent based on Daily Selling Rate (DSR). While the TL performance luxury sedan was up 26.0 percent, the TSX sports sedan edged out the TL as Acura's top selling car.

Mazda North American Operations (MNAO) reported strong February U.S. sales of 25,651 vehicles, representing an increase of 32.3 percent versus last year and best February total sales since 1994. On a Daily Selling Rate (DSR) basis, Mazda's February 2012 sales were up 27.0 percent.

American Honda Motor Co., Inc., reported February new-vehicle sales of 110,157, an increase of 7.8% over February 2011, based on the daily selling rate. The Honda Division posted February 2012 sales of 98,899, an increase of 8.8 percent year-over-year.

Fewer February incentives

While many dealers offered traditional Presidents Day sales in February, manufacturers were offering very little in the way of incentives. Automotive site Edmunds.com suggests that's a sign sales were robust across the entire industry.

Edmiunds reports that the average incentive per vehicle in February was $2,193, up 2.4 percent over January, but down 14.5 percent from February of last year.

"The decreased incentives spending across the industry so far in 2012 really underscores the healthy performance we've been seeing at dealerships nationwide," said Edmunds.com Senior Analyst Jessica Caldwell. "Car manufacturers know that consumers who deferred purchases in 2011 are still coming back to the market and by stepping back the discounts, they stand to pocket bigger profits. The first quarter of 2012 is shaping up quite well for automakers."

Of the top six automakers, only Ford Motor Co. increased its incentives spending year over year in February. Ford's incentives spend climbed 1.8 percent in February to $2,827. Toyota, meanwhile, boasted the biggest year-over-year drop in spending, cutting incentives by nearly one-third to $1,431 per vehicle.

Bridget, of Champaign, Ill., is a student at the University of Illinois. It sounds like she and others are getting an education in unauthorized credit card charges.

“There is an unauthorized $19.95 charge from Experian on my credit card,” Bridget wrote in a post on ConsumerAffairs.” I have not checked my credit score (ever) nor have I signed up for anything from this company.”

Bridget says she knows of other students who have had the same experience, and most recently she said, faculty and staff at the university have voiced the same complaint.

“Perhaps there was a glitch in a store on campus and our information was compromised,” Bridget wrote. “I am not sure who or how they got my information but this is an unauthorized charge that my credit card company is dealing with as we speak. This company should be looked at and investigated carefully by consumers before signing up for any of its services!”

It happens a lot

Bridget is not alone. Many of the complaints ConsumerAffairs receives about Experian have to do with unauthorized charges. And the complaints come from everywhere.

“They took money in the amount of $39.90 without my permission,” Diana, of Brawley, Calif., wrote in a recent post. “I don't remember giving my account number to them. Can they hack into my computer and do this?”

They didn't hack into Diana's computer – or anyone else's – because they didn't have to. Some companies maintain third party marketing relationships with other companies. When a consumer makes a credit card purchase with one company, without their knowledge that company shares their credit card information with another company, who then offers to sell the same consumer a recurring service.

Beware the negative option

But in many cases, the offer is written is such small print, and contains a “negative option” clause – such as “unless you tell us not to, we're enrolling you in this membership program and charging your credit card $39.95 a month – the computer doesn't notice it and, therefore, is surprised and angry when the charge shows up on their credit card.

Experian owns FreeCreditReport.com which offers free and low cost services, in exchange for enrolling in a “trial” of their credit monitoring service. It sounds like that could be the source of the widespread unauthorized charges on campus.

Diana said she is contesting the charges though her credit card company and that is the correct course of action. Arguing with the company that placed the charge on your account is usually unproductive. Credit card companies, on the other hand, argue with them every day, and have a lot more leverage that an individual consumer.

To avoid these traps, always decline “free” or “trial” offers. They always end up costing money. And if you want a free copy of your credit report, go to the government-maintained site www.annualcreditreport.com. It really is free.  

Would the Kardashian sisters lead you astray?  A proposed class action lawsuit says the reality TV star and two of her sisters have made false claims about QuickTrim diet pills.

The lawsuit says the pills amount to little more than caffeine with a few herbal ingredients thrown in and says the claims made by the Kardashians are "false, misleading, and unsubstantiated."

The plaintiffs in the case live in New York, California and Florida and alleged that they purchased the diet pills because of the Kardashians' endorsements.

The suit, filed in federal court in New York, seeks over $5 million in damages.  It was filed by the law firm of Bursor & Fisher.

Kim Kardashian, 31, made an estimated $65 million in 2010 from her TV shows, clothing line and numerous endorsements of fitness, beauty and weight-loss products.

A class-action lawsuit filed in Kentucky seeks money damages for consumers who paid a “premium price” for Skechers “Shape-Ups” based on TV, print and Internet ads that touted the toning shoes’ health benefits.

In reality, the complaint alleges, the shoes provide no additional health benefits. Instead, they pose a risk of injury due to their pronounced rocker bottom sole, according to the complaint.

The lawsuit seeks money damages and an order that would stop Skechers from “deceptive and unlawful advertising.”

According to the lawsuit, the shoes are marketed, sold and promoted by Skechers, U.S.A., Inc., and its subsidiaries.

“If you’ve bought a pair of Skechers ‘Shape-Ups shoes for the health benefits, you’ve been misled,” attorney Robert K. Jenner said in a statement. “You deserve not only to get mad, but to get your money back.”

Jenner is a Baltimore attorney who has been involved in previous toning shoe injury cases. 

The complaint states that Skechers is currently being investigated for its toning shoes marketing claims by the Federal Trade Commission. In September, the FTC reached a $25 million settlement with Reebok for making similar fitness claims about its own brand of toning shoes, the lawsuit states. 

No evidence

In particular, the lawsuit alleges that Skechers promoted that its “Shape-Ups” would provide health benefits “without setting foot in a gym.”

However, the plaintiffs claim, the company has produced no valid scientific proof that the toning shoes provide any greater benefit than regular athletic shoes.

The complaint cites an American Council on Exercise study that concluded, “There is simply no evidence to support the claims that these shoes will help wearers exercise more intensely, burn more calories or improve muscle strength and tone.”

However, the lawsuit alleges, the shoes do pose health risks. Because the rocker bottom soles create instability and change gait mechanics, they can trigger chronic injuries and cause wearers to fall and suffer injuries, the plaintiffs claim.

The Internal Revenue Service is warning senior citizens and other taxpayers to beware of an emerging scheme tempting them to file tax returns claiming fraudulent refunds. The scheme carries a common theme of promising refunds to people who have little or no income and normally don’t have t file a tax return.

Promoters claim their victims can get a tax refund or nonexistent stimulus payment based on the American Opportunity Tax Credit, even if the victim was not enrolled in or paying for college.

In recent weeks, the IRS has identified and stopped an upsurge of these bogus refund claims coming in from across the United States. The IRS is actively investigating the sources of the scheme, and its promoters may be subject to criminal prosecution.

False hopes

“This is a disgraceful effort by scam artists to take advantage of people by giving them false hopes of a nonexistent refund,” said IRS Commissioner Doug Shulman. “We want to warn innocent taxpayers about this new scheme before more people get trapped.”

Typically, con artists falsely claim that refunds are available even if the victim went to school decades ago. In many cases, scammers are targeting seniors, people with very low incomes and members of church congregations with bogus promises of free money.

The IRS has also seen a variation of this scheme that incorrectly claims the college credit is available to compensate people for paying taxes on groceries.

The IRS has already detected and stopped thousands of these fraudulent claims. Nevertheless, the scheme can still be quite costly for victims. Promoters may charge exorbitant upfront fees to file these claims and are often long gone when victims discover they’ve been scammed. 

The IRS is reminding people to be careful because all taxpayers, including those who use paid tax preparers, are legally responsible for the accuracy of their returns, and must repay any refunds received in error. 

Get the facts

To get the facts on tax benefits related to education, go to the Tax Benefits for Education Information Center on IRS.gov.

To avoid becoming ensnared in this scheme, the IRS says taxpayers should beware of any of the following:

• Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
• Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
• Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.
• Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
• Offers of free money with no documentation required.
• Promises of refunds for “Low Income – No Documents Tax Returns.”
• Claims for the expired Economic Recovery Credit Program or for economic stimulus payments. 
• Unsolicited offers to prepare a return and split the refund. 
• Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.

The United States subsidiary of the company that makes Maclaren strollers has filed for bankruptcy, although affiliated companies outside the U.S. are apparently unaffected.

The high-priced strollers have been popular with upscale parents for years despite problems you'd normally expect from lower-priced merchandise: wheels breaking, strollers tipping over and, most notably, not one but two recalls because of fingertip amputations that occurred when infants' fingers became trapped in the hinge mechanism.

In the Chapter 7 bankruptcy filing, Maclaren USA lists liabilities of $15.9 million against assets of just $45,413.  Included among the creditors are at least seven families whose children suffered fingertip amputations and who were awarded damages in court, The New York Times reported.

The rest of Maclaren's global operations are apparently unaffected by the bankruptcy filing and, the Times noted, some of the liabilities listed in the filing are debts to other Maclaren entities.

A black eye

The Maclaren recalls were a black eye for the company.  The first recall, in 2009, affected more than one million strollers and was announced after 15 incidents, including 12 fingertip amputations in the U.S.

The recall was repeated in May 2011. By that time, the total number of incidents had grown to 149, including 37 additional injuries, five involving fingertip amputations.

Recalls are sometimes repeated when incidents continue to occur after an initial recall, as was the case with Maclaren.  This often happens when consumer products -- particuarly baby gear -- are donated or sold when a family's children outgrow them and the second generation of owners don't hear about the recall.

But in Maclaren's case, even consumers who tried to follow up on the recall were frustrated.

"I tried the link from the ConsumerAffairs website, consumer safety website, and the Maclaren USA website for recall. None of these links worked," Tim of North Hollywood, Calif., said last January. "Maclaren USA should be responsible for providing information about the recall to the public. How am I to get information about the recall and if my stroller is part of the recall if their website and recall tab is not working?"

Evette of North Brunswick, N.J., had a similar experience: "I have been trying to contact Maclaren concerning the hinge recal at there tool free number and their website. I cannot get through on either. How are we supposed to get the kit for the stroller? I cannot use a stroller that I paid almost $200 for."

Status symbol 

Maclaren was founded in Britain by Owen Maclaren in the 1960s.  The lightweight, collapsible baby buggies quickly became something of a status symbol in New York City and elsewhere despite complaints that they were prone to tip over and that the wheels weren't sturdy enough to stand up to New York's mean streets.

"I have a chocolate/pink Maclaren stroller and I have just about had it with it tipping over backwards with my 2 year-old in it," said Veronica of Chino, Calif. "I am confused and freaked out."

Jo of Brooklyn experienced the flimsy wheels problem fisthand. "Stroller back wheels became like hard flat bricks after one year of regular use toting my son his first year," she said.

Things turned out even worse for Caroline of New York.

"I was walking down the street with my two-year-old in his Quest and wheel snapped off! We fell down. Could not believe it. Nobody badly hurt but shocked. Carried toddler home with shopping -- had to leave stroller on sidewalk!"

While the federal government delays and dithers about rear-view cameras, the cameras and many other safety and performance systems are no longer limited to high-end luxury cars.

Many 2012 model cars and trucks include as options or standard equipment sophisticated technology that just a few years ago was available only on high-end luxury cars.

The rear-view cameras are a perfect example.  Intended to reduce tragic "backover" accidents that often involve children, the cameras are available as standard equipment on 45 percent of 2012 models, according to automotive research site Edmunds.com. The cameras are an optional feature on 23 percent of models.

“Technologies like anti-lock braking and stability control were once seen as pioneering innovations and are now either required or come as standard features on new cars,” said Martha M. Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Once these safety and performance technologies are developed and the costs for them continues to decline, it is our hope that they will be included on as many vehicles as possible.”

AAA cited the following features as ones which are now often included as standard on 2012 model vehicles:

Brake Assist This feature, now standard equipment in some vehicles, recognizes when a driver has just instituted an emergency stop. The system then applies full braking power, even if the driver has not pressed the brake pedal hard enough to do this. If the driver backs off the brakes, the system steps out of the picture.

This feature was first offered in some vehicles in the mid-90s after studies showed that even experienced drivers were reluctant to use all the braking power built into their vehicles during an emergency.

Parking Proximity Warning Systems and Backup Cameras These features let a driver know when he or she is getting close to an object and/or show the path the car is taking. Using sensors, the warning system identifies items, animals or people, including small children that the driver cannot see because his or her view is blocked by parts of the vehicle. The backup camera shows the area directly behind the vehicle when in reverse.

Originally a luxury car exclusive, today parking sensors and back up cameras are far more common, even on popularly priced vehicles.

Lane Departure Warning Systems A safety feature that lets a driver know they have begun to cross over lane markers without signaling, lane departure warning systems use cameras to sense the lane markings on pavement. It will issue a warning that can be audible or take the form of a vibration in the steering wheel. Originally offered on top Infiniti models, lane departure warning systems are now more widely available.

Active Cruise Control This feature, once a luxury car exclusive, uses radar or laser to maintain a set distance from the car ahead. If a driver using such a system encounters slower traffic, the cruise control will automatically reduce speed by backing off the throttle. If the traffic clears or speeds up, the active cruise control will return to the driver’s original speed.

Newer systems can also apply the brakes when needed to maintain a safe following distance. In some cases the active cruise control system will actually bring the car to a stop if the traffic ahead stops. Active cruise control is now offered as an option on a wide range of vehicles, including those that cost less than $30,000.

Driver Alert Warning System Originally introduced on costly luxury models, this system looks for signs of an inattentive or tired driver.  There are several ways to monitor the alertness or attention of a driver that range from lane departure to monitoring the driver’s movements via cameras. Despite differences in monitoring technology, when the vehicle senses drowsiness or inattention it warns the driver to take a break.

Blind Spot Warning Systems This warning system uses a radar or camera to detect and warn a driver that another vehicle is lurking just out of view in an adjacent lane. Often, an amber light on the appropriate mirror is illuminated when a vehicle is in the driver’s blind spot. If the driver signals to move in that direction, an audible alert or flashing light is activated as a warning.

First seen in costly vehicles, it is now standard equipment is some family vehicles, including several Mazda models.

Weight Reduction Weight reduction is an important feature for all automakers regardless of make or model. This is one area in which lower-priced cars were the pioneers while many luxury car makers and buyers stuck to the theory that heavier is better.

Today, luxury cars from makers such as Audi and Jaguar have adopted aluminum and other lightweight materials to reduce weight. The benefit of lower vehicle weight is better performance from the same engine and suspension package and increased fuel economy in all driving conditions. 

Stop-Start This is a feature that is well known to any hybrid vehicle owner and drivers in Europe. This technology automatically stops the gasoline engine while the driver waits for a red light to turn green. It saves fuel while reducing emissions. Kia may soon bring this technology to non-hybrid applications in two of their low-priced cars, the Soul and Rio. 

Expect expanded use of this technology in the next few years as vehicle manufacturers work to meet the higher Corporate Average Fuel Economy standards set for 2016.

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Departure warning system photo credit: Edmunds.com