Current Events in April 2012

This year, the Kia Rio is emerging as a winner in its segment. In late March, Consumer Reports came out with an analysis of the model year’s subcompact market that gave the Rio top ratings in the reviewer’s analysis of subcompact sedans, which have become a lot more popular with gas prices rising back toward $4.00.

Overall, Kia and its sister company Hyundai are starting to be associated with economy, reliability and attractive design, as well as competitive fuel efficiency in the North American market. CR chose the Rio largely because of its decent handling and a nice basket of features for an affordable price. Testers also liked the performance and braking of the car, and noted that the fuel economy of 30 mpg is very competitive.

In getting the nod from Consumer Reports, the 2012 Kia Rio edged out the Hyundai Accent as well as the new Chevrolet Sonic, a car that entered the market to much fanfare as GM started to provide more fuel-efficient offerings. Both of these cars should have been tough competition for the 2012 Rio, but CR details the reasons that its staffers picked the Rio for first.

While the Accent actually gets better estimated gas mileage than the Rio, reviewers found that the interior materials weren’t quite as good, and the ride wasn’t quite as nice. As for the Sonic, Consumer Reports found that the base model only gets 28 mpg, and while this will still get a driver pretty far on a tank of gas, it’s a little surprising to many who have been hearing about the Sonic’s rollout for a while, expecting a small car that will blow others away in terms of gas savings. Some of the confusion may stem from different numbers for city, combined and highway driving: the “just under thirty” number, confirmed by other reviewers like Edmunds, refers to combined estimates, while potential buyers may have heard numbers like 35 mpg, which is what the Sonic is estimated to get on highway. But as Consumer Reports and other venues have pointed out, to get the best fuel economy out of the Sonic, buyers have to choose a turbo-charged upper-trim LT or LTZ Sonic, where these optimized trims can get about 35 mpg combined and 40 mpg on highway.

The news on the 2012 Rio comes along with some great reviews of used models by Kelley Blue Book and other sources. Also, the 2012 Rio isn’t the only Kia getting attention from reviewers; last year, Kelley included another model, the Kia Forte Koup, in its list of “coolest cars under $18,000.”

The 2012 Rio also retails just under $18,000, and according to Consumer Reports, it’s a pretty good deal. Along with this endoresement, the 2012 Kia Rio also got a spot on the list of  "six best car for teens" from Vroomgirls, an auto reviewer with a female perspective on the industry. Consider this option if you are hunting for a small car that promises the right equation of value for cost.

In response to charges by the Federal Trade Commission (FTC), a federal judge has ordered the defendants behind a deceptive robocall scheme to pay a total of $30 million in civil penalties and give up more than $1.1 million in ill-gotten gains for violations of the FTC Act and the Telemarketing Sales Rule.

The court order includes a $20 million judgment against Paul Navestad, which is the largest civil penalty against a defendant in an FTC case, and a $10 million judgment against Christine Maspakorn. The $30 million in total fines is, by far, the largest penalty ever imposed for unlawful calls to consumers on the Do-Not-Call Registry.

According to a decision issued by the U.S. District Court for the Western District of New York, Navestad and Maspakorn, operating primarily as the "Cash Grant Institute," made more than eight million robocalls to consumers, including more than 2.7 million calls to phone numbers on the National Do Not Call Registry.

These calls falsely claimed that "cash grants" for consumers were readily available from federal, state, and local governments, private foundations, and "wealthy individuals." The calls promised consumers that they had already qualified for these "grants," and that they could receive up to $25,000 to overcome personal financial problems.

The robocalls directed interested consumers to one of Navestad and Maspakorn's websites, requestagrant.com, which repeated many of the same deceptive claims about the availability of "Free Grant Money." Another of the defendants' websites, cashgrantsearch.com, declared that it was the "Source of Free Money from the Government." It contained pictures of the U.S. Capitol Building and President Obama, and stated, "Did you know that grant money exists for almost any purpose and does not need to be repaid?"

Yet as the FTC demonstrated to the court, government grant money does not exist for almost any purpose, and none of the defendants' websites actually provided grants. Instead, they merely referred consumers to other grant-related websites that charged a fee for providing general information about how to obtain grants from public or private sources. It was only after consumers had paid the fee that they learned that it was very difficult to obtain cash grants from public or private sources, that very few people qualified for such grants, and that obtaining a grant involves a lengthy, competitive application process.

The FTC filed the case in July 2009. A short time later, the court halted the defendants' operation, froze their assets, and appointed a receiver to oversee the business pending litigation.

Took the Fifth

Navestad and Maspakorn then asserted their Fifth Amendment rights and refused to testify or turn over evidence. Through his attorney, however, Navestad contested the charges, claiming that he was merely a "consultant" for the companies engaged in the deceptive scheme. U.S. District Court Judge Michael Telesca rejected Navestad's claims and held that the FTC had "submitted copious amounts of evidence" – including 120 exhibits consisting of bank records, contracts, witness statements, depositions correspondence, and photographs – "supporting each and every element" of its case against Navestad and Maspakorn.

Judge Telesca then issued orders permanently banning the defendants from marketing grants, grant-procurement goods or services, and credit-related products; from misrepresenting any good or service; and from violating the Telemarketing Sales Rule in any fashion in the future. In addition, the court orders bar the defendants from selling or otherwise benefitting from customers' personal information, and require them to properly dispose of customers' personal information within 30 days.

The defendants are Paul Navestad, also known as Paul Richard, and Chintana Maspakorn, also known as Christina Maspakorn, both doing business as, among others, The Cash Grant Institute, Global Ad Agency, Global Advertising Agency, Domain Leasing Company, and/or Cash Grant Search.

“Cramming” is a scheme in which third-party vendors use consumers’ phone numbers much like a credit card – adding charges to phone bills for bogus products or services, such as identity theft protection, website design or email service, that consumers and businesses never asked for and never used.

It wouldn't be possible, of course, unless the consumer's main telephone provider gave those third-party vendors access to consumers' accounts.

Illinois Attorney General Lisa Madigan has commended two national telephone companies – AT&T and Verizon - for implementing measures to prevent cramming. Madigan hailed the actions as she pushes for complete bans on the practice in Illinois and nationwide.

“An outright ban on third-party billing is the only way to stop this scam and protect consumers,” Madigan said. “Thanks to efforts on the state and federal level, the major phone companies are moving in the right direction, but until an industry-wide ban is in effect, we will continue to pursue our legislation to put an end to this abusive billing practice that’s costing consumers untold millions.”

In her state legislature, Madigan is backing House Bill 5211, a statewide ban on all billing by a third-party company with only limited, commonsense exceptions for legitimate services. Last year, Madigan testified before the U.S. Senate Commerce Committee and filed comments with the Federal Communications Commission calling for a similar, nationwide ban.

30 lawsuits

To date, Madigan says her office has filed 30 lawsuits against crammers, representing more than 200,000 Illinois businesses and residents who were victims of these phone billing schemes.

Telephone companies place an estimated 300 million third-party charges on their customers’ bills each year, and, according to a U.S. Senate Commerce Committee report, third-party billing generates at least $2 billion annually.

The scams originally were perpetrated primarily through telemarketers, especially before the Do Not Call registry was established. More recently, however, the scam has flourished online.

Consumers can avoid “cramming traps” by refraining from submitting their phone number, among other personal information, for online prize drawings, surveys or free recipes. Weeks or months later, consumers almost always find charges on their phone bills for unauthorized services.