Current Events in November 2012

Remember when companies would offer special discounts on their  products if you joined a consumer club? The old CD clubs like Columbia House were like that, where you were sent a bunch of new music, and chose which CDs you wanted to keep.

Then of course there was (and, yes, still is) the Book of the Month Club, as well as food clubs, home decorating clubs — you name it. But with the explosion of the Internet and the sudden rise of online shopping, monthly clubs that relied on post office delivery went away just as fast as it became popular.

Well as they say—what’s old eventually becomes new again—and all of a sudden a bunch of start-ups around the U.S. have returned to the idea of offering subscription based clubs to sell its products.

But what’s different this time around is companies are using the Internet to better learn about their customer base, so the products sent are much more tailored to the individual and not just a random selection of items.

Kids' clothes

The children’s clothing company Wittlebee is a prime example of a start-up that offers subscription based shopping for its members, by using the newness of the Internet along with the old method of post office delivery.

The company asks parents to fill out profile pages for their children so it can get a firm idea of what style, sizes and overall looks you and your child are going for.

In about two weeks after filling out the profile, members will receive a box of clothes through the mail for their child, and each package is valued at around $100, the company says.  You can bypass each shippment if you don't like what's selected for you, or you can completely stop the shipments altogehter.

Wittlebee is just one of the many start-ups that have rebelled against the trend of online shopping as more and more companies are seeing that not everyone wants to purchase things virtually.

Selling mystery

In fact, many of these companies are not only selling products, they’re also selling the anticipation of receiving something new. It’s kind of what makes a Christmas or birthday gift so fun to get, because although you’re involved in what’s being mailed to you, there’s still an element of surprise.

In other words, start-ups are counting on the fact that consumers still like to have a little mystery when it comes to receiving new products, and getting a box each month and being surprised about what’s chosen for you  is a lot of fun for many consumers.

TastingRoom.com is another start-up that’s going the subscription route, as it partners with some of the top wineries, and then mails you monthly wine samples each month.

From there, members can see what they like and order full bottles on the company’s website, so they can not only discover new wines each month, but they’re also able to be more educated about the wines they spend money on.

This can potentially alleviate purchasing something you don’t like, or buying something you find just average.

Certainly wine clubs aren’t a new invention, but not many clubs let you taste the wines before you purchase a full bottle. Each monthly sample will run you between $20 and $30 depending on the type of wine you select, and certain subscriptions offer a $4.99 monthly shipping rate.

Surprise! Healthy snacks

Healthy Surprise is another start-up that’s relying on the subscription model to build its customer base.

For $33 to $99 a month, depending on what size box you choose, the health food company sends you a package of healthy snacks that aren’t sold in stores, and each item is made by both popular and obscure health food companies—so consumers are bound to be introduced to a product they’ve never heard of or tried before.

And for coffee lovers, Craft Coffee offers monthly samples of premium coffees from different parts of the U.S., where members can sample various brands and decide which ones they want to buy more of. Those interested in Craft Coffee can either sign up for a $19.99 yearly subscription, a $22.49 monthly subscription or a monthly membership for $24.99.

It will be interesting to see how well these start-ups do with subscriptions being so much a part of their successes or failures. It’s possible that people miss being able to hold an actual product in their hands before buying the complete version of it.

Sure consumers still visit brick and mortar stores to test products out, but one usually doesn’t buy smaller versions of that product to sample it before buying it.

Also, many of these start-ups rely heavily on the Internet, which also makes the modern day subscription service very different from those consumer clubs of the past.

With the old version of subscription clubs, consumers weren’t really involved with the items that were mailed to them, and many times you would just hope to find something that you actually wanted to keep.

The new version of subscription services promise to send you things that are better tailored to your likings and taste, which could make all the difference in the world  on whether monthly clubs will be popular again and used by more companies. I guess we'll all soon see.

Believe it or not, McDonald’s isn’t doing so well.

Don’t get me wrong, it’s not like the global franchise chain is in danger of closing up shop, or permanently shutting off its fryers--it’s just that McDonald’s hasn’t seen the type of growth lately that it's seen in the recent past, and executives are starting to fret.

McDonald’s just announced it recorded its lowest sales growth in nine years in  the third quarter, and many feel it’s just not the automatic go-to restaurant that it used to be when one wants cheap eats.

There was a time when McDonald’s was pretty untouchable when it came to owning a bulk of the fast-food market, and besides having just a few other chains like Burger King nipping at its heels, the golden arches pretty much stood out front as the first or second option when consumers thought of getting a fast and cheap meal they didn’t have to think about.

McDonald’s has also been a last resort when you can’t figure out what to eat for lunch. It’s been a restaurant of default when you’ve exhausted all of your lunch timepossibilities, and you just can’t think of anything else to eat that’s fast and nearby.

Fast casual

But several factors have made it hard for the burger chain to maintain its dominance. Fast casual restaurants have taken away a portion of business for McDonald's when consumers want an inexpensive meal, but want a healthier menu and a nicer place to dine.

And other fast-food restaurants have taken some of McDonald’s ideas, like adding a dollar menu, frequently changing food items and using celebrity endorsements--which have made Mickey D less dominant in the mind of consumers.

Many believe there are so many other fast-food options that provide more or less the same type of meal and service--and sometimes a lot better--why should they go to McDonald’s?

Cheddar Bacon Onion

For some reason McDonald’s is banking on the release of its new Cheddar Bacon Onion sandwich, which comes in both chicken and beef to help grow sales in the fourth quarter.

The new sandwich is a part of the restaurant’s growing “premium menu,” which is supposed to offset cheaper food options like the dollar menu, which some experts believe hurt McDonald’s, because more and more people are sticking with the lower-priced selections which turn over very little profit.

“We’re balancing our value messaging with premium menu news, including this month’s introduction of the Cheddar Bacon Onion Sandwich, (CBO) which is made with hickory-smoked bacon, white cheddar cheese, caramelized grilled onions and creamy mustard sauce on top of a grilled or crispy chicken patty, or our Angus beef patty,” said Don Thompson, McDonald’s CEO in a published statement.

“The CBO as we like to call it was inspired by a similar entry in Europe. This is the first time we’ve offered one sandwich with a choice of chicken or beef in the U.S. and we’ve seen that both have a high rate of extra value mill conversion and average check increase in our test markets. And in December, we’ll bring back the popular mackerel sandwich nationally. Local markets also continue to focus on beverages in an effort to generate additional consumer excitement,” he said, speaking Marketese, an odd variant of English found mainly in marketing departments. 

Cheap cream cheese

If you haven’t seen the CBO yet, it doesn’t appear to be anything special, and besides the white cheddar cheese that looks more like a cheap cream cheese you would put on a bagel, it pretty much mirrors any other sandwich the restaurant offers.

But that’s kind of what McDonald’s does. Instead of creating a completely new sandwich with different flavors, bread and seasonings--it just adds a couple of new toppings to the sandwich, rolls out a huge ad campaign and hopes consumers will get excited. 

In many ways, McDonald's is an advertising company that cranks out food as an after-thought.

One could easily say this age-old approach is what stunted McDonald’s growth in the first place. And if the restaurant doesn’t take huge steps to change some of its food options, its growth will continue to stall experts say.

Also, because the franchise chain has counted so much on its dollar menu to drive in consumer traffic, it has ignored the bigger portion of consumers who are willing to spend a little more for better quality and a wider menu variety.

A McDonald’s restaurant owner explained why his location is suffering low sales growth.

“Commodity increases along with construction project upgrades are draining whatever cash flow we might bring in,” he said in a published  interview with a news publication. 

“The Dollar Menu has limited our ability to cover these costs by raising the rest of menu prices,” he added. “This has created a huge gap between high and low-end, driving more consumers down to supposed Extra Value Menu items which have no useful upside profit potential.”

“Next year projected service cost increases are going to be a backbreaker. Just increasing transaction counts is not going to work if they are unprofitable ones. We have created a scenario of working harder for less. There needs to be a window of time to just make profits without giving them all back."

It’s doubtful the CBO will help McDonald’s that much with sales growth or trick consumers into believing that the company is really making huge efforts to change and provide better menu options.

Better service

Maybe what the restaurant should be doing is improving its customer service and doing a better job of making sure its staff and managers provide a high level of treatment and service.

Just ask Shirley of Washington State, who recently got both lousy food and service from a local McDonald's.

“I ordered a Southwestern Chicken Sandwich at McDonald’s, Belfair Wash.,” she wrote in a ConsumerAffairs posting. “I paid $4.12 for a bun, a piece of chicken and two thin slices of pickle. When a sandwich is advertised with all the condiments, and fresh and yummy, you should expect that. I complained and was offered to purchase some condiments.”

“That same morning, going through the drive-thru, I got two sandwiches that were so hard from sitting under the warmer that I fed them to my dog. And what about that pink slime? How long have we been eating pink slime without our knowledge?” she asked.

So it seems before McDonald’s can reclaim some if its past glory, it should start out small by providing better menu items and a consistent level of good customer service. That’s the trick to better sales. Not slathering new fixings on the same old sandwich. 

HughesNet recently launched a next generation satellite to provide high-speed Internet service to rural America, matching a step taken in January by its rival Exede, which is owned by ViaSat. Both companies say their new services are nothing like the old satellite-delivered broadband.

I admit I was a skeptic. Having lived in rural Northumberland County, Va., for the last ten years, I have tried just about everything to keep pace with the Internet as it has required more and more speed.

In the early- to mid-2000s I tried both HughesNet and Wild Blue, also owned by ViaSat, and found them totally inadequate. For the last few years I have relied on Verizon Wireless' old Mobile Broadband service (now HotSpot) for Internet service at home.

Just getting by

There were many challenges. First, it's a measured plan with only 5 GB of data per month. That meant careful monitoring on my usage. Watching a movie was out of the question, but not just because of the data it would consume. The 3G speed just wasn't conducive to watching streaming video.

I was also three and a half miles from the nearest Verizon tower so my signal was marginal. With a booster antenna installed in the attic I could usually get close to 1 mps download.

But then smartphones came along and suddenly the demands on the network rapidly increased. On a good day my download speed was .6 mps and the congestion on the network meant pages would often time out before they loaded.

While my urban colleagues long ago upgraded their DSL connections to FiOS, to me DSL was only a dream. Half of Northumberland County is served by Verizon switching stations still using analog equipment. Despite repeated appeals from county officials, Verizon has declined to upgrade its system.

New generation

So last month, when I interviewed Lisa Scalpone, VP Marketing for ViaSat, I was intrigued when she said the new satellite system was nothing like the old ones. Because Exede was the same price I was paying for Verizon Wireless, and I would get 10 GB of data per month instead of 5, I decided to give it a try.

The system was installed on October 20. The installer appeared knowledgeable and competent, properly siting the dish, setting up the system and making sure each computer in the house was connected.

After using the system for a few weeks, I have to say I am impressed, with a couple of caveats. The advertised download speed is 12 mps. Scalpone said I could expect it to actually be slightly higher. In fact, it's something less. Not enough to notice, but less than advertised.

When measured by the Speakeasy.net speed test, the download speed was 10.21 mps with an upload rate of 2.09 mps. When measured using SpeedTest.net, the download speed was only 6.79 with an upload rate of 2.94 mps. The “ping rate,” the response time from my computer to the server, is 724. A normal DSL connection has a ping rate of about 40. The higher the number, the longer the delay.

Latency

And that gets to the real meat of the argument against satellite broadband, the “latency,” or lag between the time you click on a link and the time the page begins to load on your computer. On the old systems latency was seen as a huge problem. But Scalpone says latency was not responsible for consumers' frustrating delays; congestion on the satellite was. That has been rectified, she says, with a bigger, faster satellite.

Latency is still there, of course, because you really can't do anything about the distance between your dish and the satellite in earth orbit. Scalpone said the delay should only be a half-second. We have found it to be more like three to four seconds. While that's slightly annoying, it's easily overlooked because, once the page begins to load, it's extremely fast. Video plays with no buffering.

The system also seems very stable. In the short time we have had Exede there have been no outages or dropouts. The service was even rock solid during Hurricane Sandy.

The satellite providers will tell you that the service might not be right for everyone. The latency issue makes online gaming problematic and Skype or other Internet phone service is a no-go. If you are an extremely heavy user, you might need to pay more for a larger data package. But for the average user, 10 GB should be ample.

I have an office in nearby Richmond, Va., where I have access to DSL Internet. As I have used the two systems over the last couple of weeks, I have been able to compare them.

Compares favorably to DSL

The DSL system provides a consistent 5 mps download speed. Because of its low latency, it seems a little bit faster. It also provides for unlimited data and is about $10 a month cheaper.

For those reasons, if I had access to DSL, I would probably choose that. The fact is, however, I don't have that choice at my rural digs and the new generation of satellite-delivered Internet gives me -- and the rest of rural America -- an option to catch up with our urban peers. And a pretty good option, at that, and it's available right now, not in a few years.

For policymakers trying to find ways to expand broadband service to rural America, the new satellite systems are something that deserve close attention. Satellite broadband requires no infrastructure investment, beyond a dish, and could be a reasonable alternative to huge taxpayer subsidies to major telecommunications companies.

The way beetle-browed old-media types see it, if somebody's reading a newspaper, they're not watching TV and vice versa.  Well, that as anyone can see, is no longer true and The Huffington Post is working to take advantage of our love for multitasking.

HuffPo has launched an iPad app  -- called HuffPost Live -- that offers a mix of entertainment and social interaction. Nothing new about that but the unique feature of this little app is that it can throw itself onto your TV screen by using Apple TV.

So you could be lolling around flipping through The Huffington Post on your iPad with one eye while taking in the video eye candy on your big screen with the other. Even better, as the Huffington Post folks see it, you could be commenting on your iPad on the HuffPost Live platform  while watching the video feed on their TV. It's "social TV at its best," a HuffPost spokesperson told us. 

HuffPo launched its online TV network in August and is streaming 12 hours of live footage a day from New York and Los Angeles. As anyone in the TV biz will tell you, that is a huge investment, even if the production values are not always right up there with 30 Rock or Breaking Bad.

HuffPo is hoping that all this will even further snag its already super-loyal followers, who help keep the site active with their frantic posting on every topic imaginable, but that soon they'll also start posting video clips of their somersaulting cats, cute babies and amazing culinary creations, thus providing tons of viral content for both HuffPo and its parent, AOL.

You may or may not be a big HuffPo fan but you must admit, this is one audacious strategy. Starched-shirt journalists have dissed HuffPo founder Ariana Huffington, claiming her site is more plagiarism than journalism but if traditional media companies had taken the kinds of chances HuffPo and AOL are taking, maybe they wouldn't be sniveling about how puny their coin stash is looking these days. 

You may be one of those people who eats the most healthful food imaginable, never gets less than eight hours sleep, runs five miles a day, pumps iron religiously and practices yoga to relax each evening.

So you think your risk of developing  heart disease is pretty low? No doubt it is -- at least right now. But a new study finds that the lifetime risk of developing heart disease is high for all of us -- greater than 30 percent for the healthiest among us and more than 50 percent for men and women overall.

The distinction is lifetime risk vs. short-term risk. Sure, the couch potato next door may have a higher risk of having a heart attack or other wake-up call over the next 12 months. This study deals with the risk over an entire lifespan.

It's like the statistic you hear frequently quoted that says one in every eight women will develop breast cancer at some point in their lifetime. It's true but can cause one to have an exaggerated fear of developing the disease tomorrow.  

The studyof cardiovascular disease (CVD)appears in the November 7 issue of JAMA andis being released early online to coincide with the American Heart Association’s Scientific Sessions.

No previous data

“To date, there have been no published data on the lifetime risk for total CVD (including coronary heart disease [CHD], atherosclerotic and hemorrhagic stroke, congestive heart failure [CHF], and other CVD death),” according to background information in the article. “Estimates of lifetime risk for total CVD may provide projections of the future population burden of CVD and may assist in clinician-patient risk communication.”

The researchers found that at an index age of 45 years, overall lifetime risk estimates for total CVD through age 95 years were 60.3 percent for men, and 55.6 percent for women. Women had significantly lower lifetime risk estimates than men at all index ages.

Longer survival time free of total CVD was experienced by individuals with optimal risk factor levels when compared with participants with at least 2 major risk factors across all index ages.

“For example, at an index age of 45 years, individuals with optimal risk factor profiles lived up to 14 years longer free of total CVD than individuals with at least 2 risk factors,” the authors write.

The researchers note that “lifetime risks for total CVD were high regardless of index age, indicating that achieving older age free of total CVD does not guarantee escape from remaining lifetime risk for total CVD.” They add that the finding of a substantial lifetime CVD risk even among individuals with an optimal risk factor profile highlights “the large public health burden and opportunities for prevention of total CVD.”

More vigorous years

In other words, a healthful life style may not necessarily buy you more years of life but it may very well buy you a lifetime that includes many more healthy, vigorous years.

The cynics among us are fond of saying that even ultra-marathoners will get old and die. Advocates of risk reduction -- i.e., healthful living -- will answer that, yes, that's true but they will be swimming, running, playing tennis and hoisting grandchildren into the air for 10, 20 or 30 years longer than their peers who contract heart disease, emphysema, diabetes and other chronic diseases in their 40s and 50s. 

John T. Wilkins, M.D., M.S., of the Northwestern University Feinberg School of Medicine, Chicago, and colleagues conducted a study to estimate lifetime risk for total CVD in separate models for men and women overall and by aggregate risk factor burden at index ages of 45, 55, 65, and 75 years.

The study consisted of a pooled survival analysis of data from 1964 through 2008 from five National Heart, Lung, and Blood Institute-funded community-based cohorts: Framingham Heart Study, Framingham Offspring Study, Atherosclerosis Risk in Communities Study, Chicago Heart Association Detection Project in Industry Study, and Cardiovascular Health Study.

Come Tuesday evening, it will all be over. Finally. The non-stop political ads and, if you live in a swing state, the non-stop robo-calls.

Americans will have gone to the polls and either given Barack Obama another four-year term as President or replaced him with Mitt Romney.

But for many, election day will not just bring closure. It will bring unbridled joy or bitter disappointment because increasingly, Americans hold strong partisan views and take their politics personally.

Dr. Asim Shah, a Harris Health System psychologist, likens this year's election cycle to an emotional roller coaster. Some riders will get off laughing, other will be throwing up. His prescription for the post-election blues? A strong dose of no TV, radio, social media and Internet coverage for a week or two.

“People need to be more accepting and less emotional about the results and realize that, in the short-term the election will not affect them,” said Shah, chief of Psychiatry at Harris Health Ben Taub Hospital and associate professor of the Menninger Department of Psychiatry at Baylor College of Medicine. “If you wake up and go to work or take your child to school the next day, you will still need to do those things as part of your life after the election.”

Emotionally charged politics

It's natural to feel something after an election but Shah notes that politics has become more emotionally charged in recent years with the rise of social media and information outlets that reflect either a liberal or conservative point of view. For those who are more invested in a particular outcome, the results could affect their mental health and well-being.

Shah says emotional reactions are normal and expected, but people with bouts of depression, anger and anxiety that last more than two weeks and cause functional impairments should seek medical care. He warns that people with outbursts tinged with threats of harming oneself or others also should be referred for help.

In 2004, Taiwan faced a hotly contested election. It affected the population greatly, Shah says. Psychiatrists later diagnosed about 10 percent of the population with depression and anxiety and subsequently coined the phrase -- post-election stress syndrome.

Also that year many liberal supporters of Sen. John Kerry (D-MA) became despondent when President Bush won re-election.

“You don’t see a lot of people who are able to accept a decision so quickly that goes against them,” Shah says. “And just telling people on the losing side, ‘Oh don’t worry, everything will be OK,’ doesn’t help. It just might make things worse.”

Coping advice

So, if your guy loses on Tuesday, here's what Shah says you should do:

• Turn off all TV, radio and Internet coverage (if necessary, listen only to non-partisan coverage)
• Avoid conflict by not bringing up the topic
• Change topic when it comes up
• Realize that things aren’t changing in the short-term no matter who wins
• Concentrate on day-to-day activities that are part of life

In addition, Shah recommends finding some pleasant distractions, like exercising, watching comedies, cooking, gardening or sporting events to distract from politics. But be careful when it comes to comfort food -- that could easily pack on some pounds and increase your depression.

As a general rule, Shah subscribes to the idea of never mixing friendships with any discussions of sensitive topics like politics and religion.

“You save a lot of friendships and relationships that way,” he adds.

Relief has begun to arrive for some homeowners who unjustly lost their homes to foreclosure. In the last few weeks various states have begun handing out checks from the historic $25 billion settlement with lenders signed earlier this year.

But at least one state attorney general who was a party to the settlement is warning that “unscrupulous” companies are now trying to get a piece of the settlement by misleading eligible homeowners.

All benefits under the settlement are free, but West Virginia Attorney General Darrell McGraw says some operators are misleading consumers into thinking they must pay to obtain their checks. McGraw has gone to court to stop one such company, Murray, LLP, from doing so.

Seeks injunction

McGraw’s office sued Texas-based Murray and four individuals in state court, asking the court to issue an injunction blocking Murray from taking 20 percent of consumers’ money as a fee for completing a simple claim form. The suit also seeks to block Murray from charging fees for other alleged services relating to wrongful foreclosures.

"This sort of conduct is unacceptable in West Virginia," said McGraw. "It is my duty to enforce our consumer laws so that consumers, who have already lost their homes, are not victimized again by a group that charges for a service that was designed to be simple and free. Consumers should not be fooled into thinking anyone can advance their claim, because they can’t. Consumers with questions about the National Mortgage Settlement claim process are urged to call my Consumer Protection Hotline for more information. All of our services are free."

Simple one-page form

McGraw says a customized single page claim form was sent out to 5,222 West Virginians who were already determined to be eligible for the expected payment of approximately $1,500 to $2,000. He says the forms are extremely simple and easy to complete. The deadline for claim submission is January 18, 2013. If consumers have questions they can call a toll-free number for help.

But McGraw says that even before the first claim form was sent, the recently created "law firm" Murray LLP, registered in San Antonio, Texas, began marketing its services to foreclosure victims entitled to payment by offering to "push their claim forward" with the settlement administrator for 20 percent of the total payout.

McGraw cites what he calls a sophisticated nationwide advertising scheme on cable television and its Website as the source of confusion. Consumers, he says, get the idea they are hiring a lawyer to file their claim and will gain an advantage in the claims process by doing so.

Meanwhile, McGraw says he has received more foreclosure complaints from the Eastern Panhandle that any other part of the state. He says his office has received more than 800 written complaints requesting help with their home loans as part of a "Save Our Homes" initiative launched earlier this year.

The economic impact of a heart attack and other forms of acute coronary syndrome goes beyond the hospital to the home and workplace.

According to research presented at the American Heart Association's Scientific Sessions 2012, men and women with acute coronary syndrome face additional economic burdens in lost time and income from work and possible inability to return to work.

Acute coronary syndrome (ACS) is an umbrella term for situations in which blood supplied to the heart muscle is suddenly blocked. It includes heart attack and angina or chest pain.

Using data from Integrated Benefits Institutes' Health and Productivity Benchmarking Databases and IMS Lifelink, researchers analyzed medical, pharmacy and short- and long-term disability claims to calculate direct and indirect costs for more than 37,000 employees and their dependents from 2007 to 2010. Of the total, 77 percent were men and 95 percent were younger than 65.

Stark economic impact

The researchers found:

• Annual healthcare cost for each worker, including out-of-pocket expenses, was $8,170. Of that, $7,545 was for hospitalizations and other medical care and $625 for pharmacy costs.
• Workers with ACS lost 60.2 days of work in the short term and 397 days in the long term.
• For employers, disability costs outweighed direct costs. The estimated per claim productivity loss for short-term disability was $7,943 and $52,473 for long-term disability.
• Hospitalizations accounted for 75 percent of total annual costs.

"ACS can have devastating effects from an economic standpoint on employers in terms of lost productivity, but more importantly on costs to the employee reflected in the average lost time per incident," said Robert L. Page II, Pharm.D., M.S.P.H., the study's lead author. The study is unique because 95 percent of participants were under age 65.

Younger patients

"About 47 percent of all ACS patients are younger than 65, so we were looking at a working class population," said Page, an associate professor of clinical pharmacy and physical medicine and a clinical specialist in the Division of Cardiology at the University of Colorado School of Pharmacy in Aurora, Colo.

ACS has non-cardiac and cardiac complications such as possible structural heart damage or depression.

"We want to target individuals early on in terms of risk factor modification for ACS, including smoking cessation, weight loss, appropriate diet, pharmacotherapy for high cholesterol and high blood pressure," Page said.

Champion Power Equipment of Santa Fe Springs, CA, is recalling about 8,600 portable generators. Fuel can leak from the generator's carburetor, posing a fire hazard.

There have been 11 reports of fuel leaking from the generators, including eight reports of the generators catching fire and two of property damage.

This recall involves two models of Champion Power Equipment portable generators. Both models have a black frame with black and yellow control panels, a bar handle and two wheels.

Model number 41332 has an open frame. The words "Champion Power Equipment" are on the control panel and "8250 starting watts" and "6500 running watts" are on the side of the fuel tank.

Model number 41532 has side panels that cover the long sides of the fuel tank. The words "Champion Power Equipment" are on the side panel above the control panel, and "9000 starting watts" and "7000 running watts" are on the control panel.

The model number and serial number are located on the side of the generator with the handle, on a tag on the crossbar above the yellow generator end cap.

The generators, made in China were sold exclusively at Costco Wholesale stores nationwide from December 2011 through July 2012 for about $699.

Consumers should stop using the recalled generators immediately and contact Champion Power Equipment for a free repair kit to be installed by an authorized dealer. The consumer may also return the unit to Costco for a full refund.

Consumers may contact Champion Power Equipment toll-free at (855) 236-9424, from 8:30 a.m. to 5 p.m. PT Monday through Friday or by e-mail at support@cpeauto.com.

Wayne Farms of Decatur, AL, is recalling approximately 28,528 pounds of frozen, fully cooked, chicken products because they may contain foreign materials -- pieces of a plastic pen.

The products subject to recall include:

• 900-lb. combo cases containing thirty, 30-lb. bags of Wayne Farms, FULLY COOKED GRILL MARKED WHITE MEAT CHICKEN STRIPS

The products were produced on Oct. 3, 2012, and bear the USDA mark of inspection and the case codes “372277174001” through “372277254005” on the label. Three combo cases, one each from Sept. 6, 2012, Sept. 19, 2012, and Sept. 24, 2012 are also affected. The products were distributed to a facility in Kentucky for further processing into potential retail products.

The company received complaints from a customer, who discovered the foreign matter while preparing to further process the product. U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS) and the company have received no reports of injury associated with consumption of this product. .

Consumers with questions about the recall should contact Alan Sterling, the company’s director of marketing and communications, at (678) 450-3092.  

The Internet continues to become mobile, meaning in the future even more consumers will use their smartphones and tablets for online banking. Most banks have already rolled out mobile apps and are encouraging customers to use them.

But how secure are they? A new report from Reportlinker.com suggests mobile banking is fairly secure for now. Its Mobile Banking Security Insight Report suggests the financial services industry will continue to benefit from the immediacy that smart mobile devices (SMDs) offer but there are significant risks that must be counteracted before consumers are confident in accepting them.

Banks like mobile banking because it's good business. Mobile customers are generally young and affluent. In other words, the same people who want the latest gadgets – smartphones and tablets – are the very people the banks want as customers.

Risks

But what are the risks?

“Anyone who has access to your cell phone has access to your identity in a few clicks,” said Elizabeth Baker, an assistant professor at Wake Forest University and an expert in information system security issues. “Often, credit card companies limit your financial responsibility if your card is stolen and fraud is committed. This is not true for your checking and savings bank accounts. Money fraudulently withdrawn can be costly.”

The new report acknowledges this growing risk. It notes that while the current level of risk is probably still lower than using online banking on your PC, criminals are quickly turning their attention to the mobile platform as more consumers start using mobile devices.

“As the mobile device becomes the number one screen for our daily lives it conversely becomes an increased target for malicious activity,” the report finds. “Mobile devices are increasingly being attacked.”

Potential

But the report, compiled by Goode Intelligence, says the mobile banking platform has the potential to be much more secure than your desktop. That's because it can also be used as a security token.

If a consumer registers a specific phone to the bank account the authentication process can be simplified for the user who merely has to enter a private PIN or passcode to prove they are in possession of the registered phone.

At the same time, the report says smart phones have the potential to offer stronger authentication. Geolocation, voice recognition, built-in cameras and fingerprint readers could all be used, if required, to offer additional layers of security when authenticating users.

Seamless security

The report suggests this could all be done seamlessly, so that mobile banking is both secure and convenient for the consumer.

Most importantly, all these extra measures could be added without spoiling the user experience. It means that mobile banking can offer better security and better user convenience at the same time.

To reach that level of security, however, it says banks should create an encrypted communication channel between user and bank. It should then create a security protocol that only allows the registered phone to access the account and ensures that the person using the phone is the registered customer.

That security layer is currently lacking. Experts like Baker worry that smartphone users currently are not taking enough steps to secure their phones with password protections, in the event they are lost or stolen.

The power is off over wide areas and gasoline remains in short supply as the Northeast enters its second post-Sandy week. In New Jersey, state officials have announced a widespread probe of alleged price gouging.

The New Jersey Division of Consumer Affairs said it has issued subpoenas to 65 businesses across the state, stepping up its investigation into more than 500 consumer complaints about alleged price gouging.

"Having visited some of the hardest-hit areas of our state, and having seen firsthand the suffering people are experiencing, I assure New Jersey's residents and retailers that we are taking a zero-tolerance approach to price gouging," said Governor Chris Christie. "Fuel, electricity, food, and a place to sleep are not luxuries, certainly not for individuals who have been displaced from their homes and in many cases have limited resources at their disposal. We are not asking businesses to function as charities. We require that they obey New Jersey's laws - or pay significant penalties."

The price gouging complaints have rolled in from all sections of the hard-hit state, but are particularly numerous from Bergen, Essex, Middlesex, Monmouth, Ocean, and Passaic counties. The top category of complaints concerns gasoline prices. In some cases stations reportedly raised prices by more than $1 a gallon after the storm.

Gas station violations

The state has also received complaints about gas stations charging more to fill up hand-held canisters than to fill car gas tanks, in apparent violation of state Motor Fuels Act protections related to fuel prices.

While regional oil refineries were spared all but minor damage from the storm, many stations are still without power and cannot pump fuel. Those that are still operating are being overwhelmed, creating temporary supply bottlenecks.

In addition to gasoline, New Jersey officials say they are investigating reports that the price of generators, batteries and propane doubled after the storm. They are also looking into food prices, including reports of unexpectedly high prices at convenience stores and restaurants in certain areas, affecting consumers who are unable to cook a hot meal at home due to power outages.

New Jersey Attorney General Jeffrey Chiesa says his office has deployed 45 investigators around the state and expects the number of subpoenas to exceed 100 by early this week.

Hyundai and Kia say they mistakenly overstated the estimated fuel economy on more than 900,000 cars sold in the U.S. over the past two years and will compensate owners for the faulty claims.

A lawsuit filed in July claimed Hyundai misled consumers about the gas mileage of the 2011 and 2012 Elantra, using a high-powered advertising campaign to capitalize on public concern over escalating gas prices.

"I feel like Hyundai took advantage of me. Hyundai's advertisements about the ‘40 MPG’ gas mileage of the Elantra instantly caught my attention. I bought the car thinking I would be seeing major savings at the pump and getting over 500 miles per tank, but Hyundai fooled me," said Louis Bird of Sacramento, a 2011 Elantra owner who is representing other consumers in the class-action lawsuit and meticulously documents his mileage.

Hyundai today said it is retracting its claim that it leads the industry in fuel economy with four models that get 40 miles per gallon on the highway. The estimated highway mileages of most 2013 Accent, Veloster and Elantra models will fall to 37 or 38 mpg.

The errors were uncovered in an audit by the U.S. Environmental Protection Agency (EPA). They echo complaints made by Hyundai and Kia owners like Jamie of Morristown, N.J.

Today's disclosure brings to mind claims in a 2004 class-action lawsuit that said Hyundai and Kia overstated the horsepower of their vehicles by as much as 10%. The company blamed those misstatements -- which affected nearly half the Hyundai-Kia cars in sold in the U.S. from the mid-1980s until late 2002 -- on "mistakes and disorganization" within Hyundai.

"Procedural errors"

This time the companies say it was "procedural errors" at their joint testing operations in Korea that led to incorrect fuel economy ratings for select vehicle lines. As part of Hyundai/Kia’s corrective actions, the fuel economy ratings for vehicles currently in showrooms are being voluntarily relabeled. With these changes, the 2012 Hyundai/Kia fleet fuel economy level is reduced by an average of 3 percent – from 27 to 26 MPG.

“I sincerely apologize to all affected Hyundai and Kia customers, and I regret these errors occurred,” said Dr. W. C. Yang, chief technology officer of Hyundai/Kia research and development. “Following up on the EPA’s audit results, we have taken immediate action to make the necessary rating changes and process corrections.”

Reimbursement plan

Both companies say they are putting in place a comprehensive reimbursement program for affected current and former vehicle owners to cover the additional fuel costs associated with the fuel economy rating change. Customers will receive a personalized debit card that will reimburse them for their difference in the EPA combined fuel economy rating, based on the fuel price in their area and their own actual miles driven.

In addition, as an acknowledgement of the inconvenience this may cause, Hyundai and Kia said they will add an extra 15 percent to the reimbursement amount. Current owners will be able to refresh their debit card for as long as they own the vehicle. Prior owners of affected vehicles who have already sold their cars will also be reimbursed using the same formula.

For more information about reimbursement and a complete list of eligible vehicles, customers can visit www.HyundaiMPGinfo.com and www.KiaMPGinfo.com.

"Got your back"

Hyundai Motor America CEO John Krafcik said Hyundai has identified the source of discrepancies between its testing method and the EPA's recommended approach.

"Given the importance of fuel efficiency to all of us, we're extremely sorry about these errors," Krafcik said in a prepared statement. "When we say to Hyundai owners, 'We've got your back,' that's an assurance we don't take lightly. We're going to make this right for everyone, and we'll be more driven than ever to ensure our vehicles deliver outstanding fuel economy."

The errors were found during routine EPA audits. The EPA audits about 15 percent of vehicles annually. Staff engineers at the EPA's vehicle and fuel emission laboratory in Ann Arbor, Mich., included the Elantra in an annual fuel economy audit.

In the 2009 romance film "500 Days of Summer", there’s a scene where the main characters Tom and Summer visit an IKEA at the height of their courtship.

It’s one of the best scenes in the movie, not so much because anything really special happens, but because most people in a relationship have strolled through an IKEA  together at some point when first getting together, making the scene extremely relatable.

Going to IKEA is sort of a rite of passage for new couples. When you and your mate go to the massive store it sort of says, “Okay, we’re shopping for home furniture together--we must be planning some sort of future.”

Apparently, IKEA is thinking about the future too, as the company recently announced it will become energy-independent and help millions of people around the globe live more sustainably at home--through a new initiative it wants to complete by 2012.

People & Planet Positive

The initiative is called People & Planet Positive and IKEA wants to not only affect its customers, staff and suppliers, it also wants to help those communities where it does business.

The company plans to encourage sustainable living by creating greener products, while also starting a series of programs that will carry out its green agenda.

“We want to create a better every day for the many people. A better life includes living more sustainably,” said IKEA President and CEO Mikael Ohlsson, in an advertisement about the company’s new mission. “We have been working towards that goal for many years and have already done a lot, and we are now ready to take the next big step.”

“People & Planet Positive will help us to do that. Transforming our business and having an even greater positive impact on the world,” he added.

Which means ...

What specifically is IKEA is going to do?  

The company says it will first tweak some of its products so they better reduce waste and use less water and energy, like its lights for example. IKEA says it will convert all of its lighting to LED which should last 20 years and use up to 85 percent less electricity.

Over the next several years, IKEA plans to invest nearly $2 billion in developing wind and solar projects, and says it will eventually produce as much renewable energy as it uses in all of its stores and other properties.

The company also said it will obtain 70 percent of its energy needs from renewable sources within the next three years, and will encourage its suppliers to take on that same goal.

How about a little help?

That's fine but many of the IKEA customers we hear from would be happy if they could just get a little help when things go wrong.

Take Joe of Berea, Ohio. He bought a Luftig Range Fan Extractor from IKEA. When the contractor opened the box to install the unit, it was missing a parts bag, Joe said.

"I called IKEA number which is actually Whirlpool's number and was told I would have to buy the part since the unit was not installed within a month of purchase, and then told that they would have to get back with me next week as they had to research which parts came in the parts bag," Joe said in a posting to ConsumerAffairs. "I sent an email to Mr. Ohlsson, CEO of IKEA and another email to Mr. Fettig, CEO of Whirlpool" but at last word Joe was still waiting for satisfaction.

Sharekh of Atlanta also fell victim to missing parts. 

"I purchased a MALM 3 drawer chest from IKEA Atlanta on 09/21/12. While setting up the drawer, one of the back panels was missing. I called up IKEA Atlanta and after all the computer-generated options, finally someone named Virginia picked up the call.

"When I told her that the back panel was missing, all she could say was, 'We are sorry, please come and pick it up' from their store and that there is nothing that they can do," Sharkh said. A supervisor later told her the same thing.

"This is not my mistake. Why should I come to IKEA and pick up? I live quite a distance from IKEA and this is not right. So every time I come to IKEA and buy something, there is no guarantee that all the components would be there in the package and there is no way to make sure! This is so bad and the IKEA after-sales service sucks," Sharekh said.

Cheap & green

IKEA says it will keep prices low on its greener products, which the company believes will encourage consumers even more towards living more sustainably.

“We believe that sustainability should not be a luxury good, it should be affordable for everyone,” said IKEA’s Chief Sustainability Officer Steve Howard in a recent statement.

 “With over 770 million visitors to our stores, we are excited by the opportunity to help our customers fulfill their dreams at home with beautiful products that help them save money on their household bills by reducing energy and water use, as well as reducing waste”

“People & Planet Positive will also enable us to take our responsibilities in the supply chain further over the coming years by, for example, only using renewable energy to power our building and advocating for children’s rights,”  Howard said.

Recyclable furniture

In addition, the company says all of its furniture will be recyclable, even the packaging--and by 2012 the company expects to reach its goal of helping households live more sustainably, by selling greener products.

It will be interesting to see how close the company comes to achieving this goal, and how diligently it will work at keeping its promises.

But either way you have to take your hat off to IKEA, even though the company has frustrated consumers in the past with some of its products and services.

And even if IKEA doesn’t encourage the world to live more sustainably, it will probably always be the place that new couples go to buy their first pieces of furniture. Just like in the movies.

Read more about IKEA

The New York City Marathon has been canceled. 

Mayor Michael Bloomberg bowed to complaints that it was unseemly to divert police resources to the marathon while millions of New Yorkers are still suffering in the wake of Hurricane Sandy.

Since the massive East Coast storm nearly toppled the five boroughs along with the neighboring state of New Jersey, New York has been divided on whether the marathon should be held this coming Sunday or not.

With nearly half of the city still without power or heat, residents were furious about Bloomberg’s plan to use generators, auxiliary police, and the other resources it would require to accommodate the race, its participants and the tens of thousands of spectators.

After initially saying the marathon had to go on despite the widespread suffering in the city, Bloomberg changed his position and said he didn’t want controversy and the city’s growing division on the matter, to taint the marathon and what it usually stands for.

“The Marathon has been an integral part of New York City’s life for 40 years and is an event tens of thousands of New Yorkers participate in and millions more watch,” said Bloomberg in a statement. “While holding the race would not require diverting resources from the recovery effort, it is clear that it has become the source of controversy and division.”

“The marathon has always brought our city together and inspires us with stories of courage and determination,” he added. "We would not want a cloud to hang over the race or its participants, and so we have decided to cancel it."

"We cannot allow a controversy over an athletic event—even one as meaningful as this—to distract attention away from all the critically important work that is being done to recover from the storm and get our city back on track.”

No power

The number of generators it would take to accommodate the race while many still go without electricity—including a lot of the elderly and children—is arguably what infuriated critics the most.

Also, the New York City Marathon typically starts in the outer borough of Staten Island, which has seen tremendous devastation from Sandy, as 80,000 residents still remain without power.

The fact that the city would hold a huge celebratory event in one of the most ravaged boroughs in New York was simply ludicrous to a lot of people.

And since just about all of the New York City Police Departmentis involved in the recovery efforts, it would be inevitable that some of them would have been removed from those efforts to provide security for the marathon.

New York City hasn't only been the city that never sleeps, it has also been the city that never quits, and usually no matter what the city endures the pace of New York doesn’t seem to let up.

Never sleeps

So far neither blackout, spike in crime, nor terrorist attack have been able to completely stop the city, and apparently Bloomberg was eager to preserve that reputation.

In an earlier public statement the Mayor spoke in tough cowboy talk about how the city must trudge forward as it has done in the past.

Of course many residents--and even a lot of the runners in the marathon—believed the tough talk was just a front for the amount of money the city would lose if the race didn’t happen.

In fact, Bloomberg did state that New York needed the dollars from the race to make up for the financial losses caused by the storm, but-the-city-trudging-forward-and the being-resilient-talk seemed to be his main reason for initially moving forward with the race.

It’s been reported that the New York City Marathon brings in close to $350 million each year from advertisers and tourists, and some supporters of the race said that large amount of money could have helped with recovery efforts a great deal. It’s safe to assume that New York residents will continue to be divided on this issue, even though the decision has been made.

As far as how this will affect the Mayor’s political legacy, the cancelation of the race is likely to win him a few points for listening and responding to residents. Others will say he only had dollar signs and the city’s reputation in his eyes, and he shouldn’t have tried to move forward with the race in the first place.

Residents of Pennsylvania who suffered damage in Hurricane Sandy have gotten some good news. Insurance companies will not enforce hurricane deductibles that normally bear on homeowners' policies.

"Insurance deductibles could have added significant costs to Pennsylvanians already struggling to clean up and rebuild after Hurricane Sandy," said Pennsylvania Gov. Tom Corbett. "Insurance companies have deployed catastrophe teams to Pennsylvania and they have been advised that hurricane deductibles should not be applied to any homeowner's insurance claims."

This is a departure from the norm. Most homeowners' policies carry special "hurricane," "tropical storm" or "named storm" deductibles based on a percentage of a property's insured value. These deductibles typically range from one percent of a home's insured value to five percent.

Proactive response

"We are very pleased with the initial, proactive response we're seeing from insurance companies and their commitment to helping Pennsylvanians recover," Pennsylvania Insurance Commissioner Michael Consedine said. "Insurance companies are experts in managing risk and responding to disaster. We will actively monitor the insurance industry to ensure they are fulfilling their commitments to their policyholders."

That doesn't mean there won't be any out-of-pocket costs. Homeowners, by and large, will still be responsible for paying their standard homeowner deductibles for wind and storm-related claims. They won't be hit with higher hurricane costs.

Regardless of whether you live in Pennsylvania or another northeast state that was in Sandy's path, if you have property damage from the storm you should contact your insurance company as soon as possible.

Here are some additional tips to help when filing a claim:

• Before calling your insurance company, try to locate your policy number and other relevant information. Your company representative will prepare a "Notice of Loss" form and an adjuster will be assigned to assist you. Ask for a timeline on when your agent can help you.
• Take photographs/video before clean-up or repairs. If you have already taken your damaged items out of the house, take pictures of the debris. After you've documented the damage, make the repairs necessary to prevent further damage, but do not make any permanent repairs until an adjuster or company representative is able to inspect the damage and your carrier approves the repairs.
• Save all receipts. Keep a diary of all discussions with your agent or carrier. Cooperate fully with the insurance company. Ask what documents, forms and data you will need to file the claim.

Searching for online coupons and deals got easier this week with the launch of Couponomatic, a browser toolbar released by Boston-based BeFrugal.com, a coupon site.

The browser add-on is available for free download at BeFrugal.com/addon. Once added to your browser, it more or less automates your search for coupons.

It automatically gives shoppers coupon codes during checkout when shopping online at more than 40,000 retailers. Shoppers no longer need to copy and paste codes from one site to another.

Demonstration

In a demonstration for ConsumerAffairs, BeFrugal founder Jon Lal showed how it works, clicking on an online merchant and shopping for a pair of boots. Selecting a pair, he then went to check out.

"Anytime you are placing an online order you'll see a box where you can enter a promotion code, with a drop down arrow," Lal said. "When you click on that you'll see coupon codes that might apply to this order, and these are live coupon codes that are updated daily."

In the on-screen example of the boots purchase, there was a coupon for 25 percent off an order of $75 or more.

"So I click the coupon, hit 'apply,' and now I've just saved $25," he said.

It's easier than searching online for a coupon before visiting the shoe retailer. It's also a lot easier than going through the Sunday paper looking for deals.

Organized electronically

"These ads are similar to the Sunday fliers you would get in your newspaper, except we have them organized electronically," Lal said.

If you sign up for the free BeFrugal membership and download the toolbar, you are also eligible for cash back at more than 3,000 stores. Lal says the average money-back offer across the 3,000 stores is about seven percent.

"You're doubling up," Lal said. "You're getting the savings from the coupons and you're also getting an average seven percent cash back, which is added to your account."

The system also has a crowd-source function. If a shopper entered a coupon code that isn't in the drop down menu, the toolbar remembers that code and as long as it's a successful sale, it's added to the list for future shoppers.

Currently Couponomatic just works on desktops, though Lal says he's working to develop a mobile app. The toolbar works with Internet Explorer, Firefox and Chrome.

If you purchased “Wal-Born” – a Walgreens’ brand dietary supplement, the Federal Trade Commission wants you to know that you may be eligible for a refund.

Walgreens agreed to pay nearly $6 million in 2010, to settle FTC charges that it deceptively advertised that its “Wal-Born” line could effectively prevent colds, fight germs, and boost the immune system.  The money will be used to provide refunds.

Walgreens sold the supplements under its store name, and touted their similarity to supplements sold by Airborne Health, Inc., which settled similar deceptive advertising charges by the FTC in 2008.  According to the FTC’s complaint, Walgreens advertised its Wal-Born supplements online, in newspaper circulars nationwide, and on packaging. 

The FTC settlement with Walgreens bars the company from claiming that its products prevent or treat cold or flu symptoms, or protect against cold and flu viruses by boosting the immune system, unless there is scientific evidence to back up these claims.

Refunds available

Consumers who bought “Wal-Born” supplements between December 1, 2004 and March 29, 2010 can submit a claim for a refund.  Some advertisements announcing the refund have incorrectly stated that consumers had to have purchased the supplements by June 30, 2009. 

Consumers are eligible to receive up to $5 for each product purchased, for a total of six products or up to $30.  The deadline to file a claim is February 4, 2013, and checks will be mailed no later than April 2013.  For more information about the refund program, call 1-800-598-3025, or visitwww.ftc.gov/Walgreens.

Consumers should carefully evaluate advertising claims for vitamins and other dietary supplements.  For more information see:  Who Cares:  Dietary Supplements.

The Federal Trade Commission has pulled the plug on five companies based in Arizona and Florida that were allegedly responsible for millions of illegal pre-recorded calls from “Rachel” and others from “Cardholder Services.”  State agencies in Arizona, Arkansas, and Florida also took legal action against similar companies.

Federal courts granted the agency’s request to temporarily halt five robocall operations that allegedly deceived consumers into paying hundreds or thousands of dollars by making phony claims that they could reduce credit card interest rates in return for an upfront fee.

“At the FTC, Rachel from Cardholder Services is public enemy number one,” said FTC Chairman Jon Leibowitz.  “We’re cracking down on illegal robocalls by bringing law enforcement actions and pursuing technical solutions to the problem.”

The FTC gets more than 200,000 complaints each month about telemarketing robocalls, including calls from “Rachel” that pitch consumers with a supposedly easy way to save money by reducing their credit card interest rates.  After collecting an up-front fee, however, the FTC believes that the companies do little if anything to fulfill their promises.

At the recent Robocall Summit, the FTC issued a challenge to the public offering a $50,000 cash prize for the best technical solution to block illegal robocalls on landlines and mobile phones.

Hi, I'm Rachel

In the robocall cases announced today, the FTC alleges that the defendants place automated calls to consumers, typically with a prerecorded message from “Rachel” or someone else from “Cardholder Services.”  

The calls purport to have an “important message” regarding an opportunity to reduce high credit card interest rates.  Consumers are urged to “press 1” to connect with a live representative, or “press 2” to discontinue getting such calls.  Consumers who press 1 are connected to live telemarketers. 

Most consumers have no way to screen the calls using Caller ID, as the incoming number allegedly is often “spoofed,” or displayed as a false number.  In many cases, the name displayed on the Caller ID is so generic, such as “Card Services,” that it provides little information about who is calling.

Deceptive offers

According to the FTC, consumers who reach a live telemarketer are then pitched allegedly deceptive offers to have their credit card interest rates substantially reduced, sometimes to as low as 6.9 or even zero percent. 

The telemarketers allegedly guarantee that lowering card interest rates will save the consumers thousands of dollars in finance charges in a short period of time and will allow them to pay off the balances more quickly.  Some telemarketers allegedly claim that consumers will save at least $2,500 in finance charges and will be able to pay off their balances two to three times faster, without increasing their monthly payments.

In some cases, according to the FTC, the telemarketers claim to be calling from the consumer’s credit card company.  In other cases, they use “Cardholder Services” to suggest a relationship with a bank or credit card company. 

If the consumer expresses an interest in the rate reduction offer, the telemarketer sometimes conducts a purported “audit” to determine whether the consumer qualifies.  Consumers provide their financial and personal information, and are then put on hold while the “audit” is completed.  According to the FTC, the “audit” typically is used only to determine whether consumers have enough credit available on their credit cards to pay the company’s fee.

After consumers have been “approved” for the program, according to the FTC, the telemarketer informs them that there is an up-front fee, typically ranging from several hundred dollars to nearly $3,000.  To convince them to pay the fee, telemarketers often say that it will be more than offset by the money the consumer will save through the program.  

In some cases, the FTC alleges that consumers’ credit cards were charged even if they did not agree to pay for the service.  In other cases, the defendants allegedly do not disclose a fee at all, or claim there will be no fee.